Federal Acquisition Regulation: Modifications to Cost or Pricing Data Reporting Requirements, 52428-52432 [2019-20797]

Download as PDF 52428 ■ Federal Register / Vol. 84, No. 191 / Wednesday, October 2, 2019 / Proposed Rules e. Adding paragraph (b)(7)(iii). The additions read as follows: 16.505 Ordering. * * * * * (b) * * * (1) * * * (ii) * * * (F) Except for DoD, ensure the criteria at 15.101–2(c)(1)–(5) are met when using the lowest price technically acceptable source selection process; and (G) Except for DoD, avoid using the lowest price technically acceptable source selection process to acquire certain supplies and services in accordance with 15.101–2(d). * * * * * (7) * * * (iii) Except for DoD, the contracting officer shall document in the contract file a justification for use of the lowest price technically acceptable source selection process, when applicable. * * * * * PART 37—SERVICE CONTRACTING 7. Amend section 37.102 by adding paragraph (j) to read as follows: ■ 37.102 Policy. * * * * * (j) Except for DoD, see 15.101–2(d) for limitations on the use of the lowest price technically acceptable source selection process to acquire certain services. [FR Doc. 2019–20798 Filed 10–1–19; 8:45 am] BILLING CODE 6820–EP–P DEPARTMENT OF DEFENSE GENERAL SERVICES ADMINISTRATION NATIONAL AERONAUTICS AND SPACE ADMINISTRATION 48 CFR Parts 14, 15, 30, and 52 [FAR Case 2018–005; Docket No. FAR– 2018–0006, Sequence No. 1] RIN 9000–AN69 Federal Acquisition Regulation: Modifications to Cost or Pricing Data Reporting Requirements Department of Defense (DoD), General Services Administration (GSA), and National Aeronautics and Space Administration (NASA). ACTION: Proposed rule. khammond on DSKJM1Z7X2PROD with PROPOSALS AGENCY: DoD, GSA, and NASA are proposing to amend the Federal Acquisition Regulation (FAR) to implement a section of the National SUMMARY: VerDate Sep<11>2014 16:10 Oct 01, 2019 Jkt 250001 Defense Authorization Act for Fiscal Year 2018 to increase the threshold for requiring certified cost or pricing data. DATES: Interested parties should submit written comments to the Regulatory Secretariat Division at one of the addresses shown below on or before December 2, 2019 to be considered in the formation of the final rule. ADDRESSES: Submit comments in response to FAR Case 2018–005 by any of the following methods: • Regulations.gov: http:// www.regulations.gov. Submit comments via the Federal eRulemaking portal by searching for ‘‘FAR Case 2018–005’’. Select the link ‘‘Comment Now’’ that corresponds with ‘‘FAR Case 2018– 005’’. Follow the instructions provided on the screen. Please include your name, company name (if any), and ‘‘FAR Case 2018–005’’ on your attached document. • Mail: General Services Administration, Regulatory Secretariat Division (MVCB), ATTN: Lois Mandell, 1800 F Street NW, 2nd Floor, Washington, DC 20405. Instructions: Please submit comments only and cite ‘‘FAR Case 2018–005’’, in all correspondence related to this case. All comments received will be posted without change to http:// www.regulations.gov, including any personal and/or business confidential information provided. To confirm receipt of your comment(s), please check www.regulations.gov, approximately two to three days after submission to verify posting (except allow 30 days for posting of comments submitted by mail). FOR FURTHER INFORMATION CONTACT: Ms. Zenaida Delgado, Procurement Analyst, at 202–969–7207 or zenaida.delgado@ gsa.gov for clarification of content. For information pertaining to status or publication schedules, contact the Regulatory Secretariat Division at 202– 501–4755. Please cite ‘‘FAR Case 2018– 005’’. SUPPLEMENTARY INFORMATION: I. Background Cost or Pricing Data: Truth in Negotiations, 10 U.S.C. 2306a, and Required cost or pricing data and certification, 41 U.S.C. 3502, require that the Government obtain certified cost or pricing data for certain contract actions listed at 15.403–4(a)(1), such as negotiated contracts, certain subcontracts and certain contract modifications. Section 811 of the National Defense Authorization Act (NDAA) for Fiscal Year (FY) 2018 amends 10 U.S.C. 2306a and 41 U.S.C. 3502 to increase the threshold for PO 00000 Frm 00045 Fmt 4702 Sfmt 4702 requesting certified cost or pricing data from $750,000 to $2 million for contracts entered into after June 30, 2018. II. Discussion and Analysis DoD, GSA and NASA are proposing to amend the FAR to implement section 811 of the NDAA for FY 2018 to increase the threshold for requesting certified cost or pricing data from $750,000 to $2 million for contracts entered into after June 30, 2018. In the case of a change or modification made to a prime contract that was entered into before July 1, 2018, the threshold for obtaining certified cost or pricing data remains $750,000, with the following exception. Upon the request of a contractor that was required to submit certified cost or pricing data in connection with a prime contract entered into before July 1, 2018, the contracting officer shall modify the contract without requiring consideration to reflect a $2 million threshold for obtaining certified cost or pricing data from subcontractors. Similarly for sealed bidding, upon request by a contractor, the contracting officer shall modify the contract without requiring consideration to replace the relevant clause. The proposed changes to the FAR are summarized in the following paragraphs. A. Subpart 14.2, Solicitation of Bids, is revised to add the prescription for Alternate I of the clause at FAR 52.214– 28, Subcontractor Certified Cost or Pricing Data-Modifications-Sealed Bidding. The Alternate I will be used in the circumstances described at FAR 14.201–7(c)(1)(ii). B. Subpart 15.4, Contract Pricing, is revised to incorporate the revised threshold for obtaining certified cost or pricing data at FAR 15.403–4(a)(1). The example provided of a price adjustment is also revised to reflect the increased threshold. A new paragraph (a)(3) is added to allow a contractor with a prime contract entered into before July 1, 2018, to request that the contracting officer modify the contract without requiring consideration to reflect a $2 million threshold for obtaining certified cost or pricing data on subcontracts entered on and after July 1, 2018, by replacing the following clauses, as applicable. The prescriptions at FAR 15.408 will instruct the contracting officer to: • Replace FAR clause 52.215–12, Subcontractor Certified Cost or Pricing Data, with its Alternate I. • Replace FAR clause 52.215–13, Subcontractor Certified Cost or Pricing E:\FR\FM\02OCP1.SGM 02OCP1 Federal Register / Vol. 84, No. 191 / Wednesday, October 2, 2019 / Proposed Rules Data—Modifications, with its Alternate I. C. Subpart 30.2, CAS Program Requirements, is revised to reflect the new $2 million threshold for inserting the FAR clause at 52.230–3, Disclosure and Consistency of Cost Accounting Practices, in negotiated contracts. The threshold for Cost Accounting Standards (CAS) applicability is required by 41 U.S.C. 1502(b)(1)(B) to be the same as the threshold at FAR 15.403–4(a)(1). Thus, changes are made to adjust the thresholds. Conforming changes are also made to the thresholds in FAR provision at 52.230–1, Cost Accounting Standards Notices and Certification; and the clauses at 52.230– 2, Cost Accounting Standards; 52.230–3, Disclosure and Consistency of Cost Accounting Practices; 52.230–4, Disclosure and Consistency of Cost Accounting Practices—Foreign Concerns; and 52.230–5, Cost Accounting Standards—Educational Institution. III. Applicability to Contracts at or Below the Simplified Acquisition Threshold and for Commercial Items, Including Commercially Available Offthe-Shelf Items The proposed changes are not applicable to contracts at or below the simplified acquisition threshold or to contracts for the acquisition of commercial items. khammond on DSKJM1Z7X2PROD with PROPOSALS IV. Expected Cost Savings DoD, GSA, and NASA have performed a regulatory cost analysis on this rule. The following is a summary of the estimated public and Government cost savings. This rule will impact large and small businesses which currently compete on solicitations issued using FAR part 15 negotiation procedures and are valued between $750,000 and $2 million as these firms will no longer be required to submit certified cost or pricing data between those amounts. In addition, because of the comparable increase in the cost accounting standards threshold, fewer contractors will be required to comply with FAR clauses that implement the cost accounting standards. The following is a summary of the estimated cost savings to the public calculated in perpetuity in 2016 dollars at a 7 percent discount rate: Present Value Cost Savings .............................. Annualized Cost Savings Annualized Value Cost Savings as of 2016 if Year 1 is 2020 ............ VerDate Sep<11>2014 16:10 Oct 01, 2019 ¥$588,988,385 ¥$ 41,229,187 ¥$ 31,453,549 Jkt 250001 The following is a summary of the estimated cost savings to the Government calculated in perpetuity in 2016 dollars at a 7 percent discount rate: Present Value Cost Savings .............................. Annualized Cost Savings Annualized Value Cost Savings as of 2016 if Year 1 is 2020 ............ ¥$90,669,628 ¥$6,346,874 ¥$4,841,999 The Councils welcome comments on both the methodology and the analysis during the public comment period on this rule. To access the full Regulatory Cost Analysis for this rule, go to the Federal eRulemaking Portal at www.regulations.gov, search for ‘‘FAR Case 2018–005,’’ click ‘‘Open Docket,’’ and view ‘‘Supporting Documents.’’ V. Executive Orders 12866 and 13563 Executive Orders (E.O.s) 12866 and 13563 direct agencies to assess all costs and benefits of available regulatory alternatives and, if regulation is necessary, to select approaches that maximize net benefits (including potential economic, environmental, public health and safety effects, distributive impacts, and equity). E.O. 13563 emphasizes the importance of quantifying both costs and benefits, of reducing costs, of harmonizing rules, and of promoting flexibility. This is not a significant regulatory action and, therefore, is not subject to review under section 6(b) of E.O. 12866, Regulatory Planning and Review, dated September 30, 1993. This rule is not a major rule under 5 U.S.C. 804. VI. Executive Order 13771 This proposed rule is expected to be an E.O. 13771 deregulatory action. Information on the estimated cost savings of this rule are discussed in the ‘‘Expected Cost Savings’’ section of this preamble. VII. Regulatory Flexibility Act The changes in this rule are not expected to have a significant economic impact on a substantial number of small entities within the meaning of the Regulatory Flexibility Act 5 U.S.C. 601, et seq. However, an Initial Regulatory Flexibility Analysis (IRFA) has been performed and it is summarized as follows: DoD, GSA, and NASA are proposing to amend the FAR to increase the threshold for requiring certified cost or pricing data from $750,000 to $2 million. The objective is to implement section 811 of the National Defense Authorization Act for Fiscal Year 2018 which amends 10 U.S.C. PO 00000 Frm 00046 Fmt 4702 Sfmt 4702 52429 2306a and 41 U.S.C. 3502 to increase the threshold for requesting certified cost or pricing data from $750,000 to $2 million. This rule will impact small entities who compete on solicitations issued using FAR part 15, Contracting by Negotiation, valued between $750,000 and $2 million. It also impacts subcontracts and contract modifications, including those contracts awarded under sealed bidding procedures, valued between $750,000 and $2 million. Offerors and contractors under the revised threshold will no longer be required to submit ‘‘certified cost or pricing data’’ and will now submit ‘‘data other than certified cost or pricing data,’’ which takes less time to prepare. In order to calculate the savings due to the increased threshold, the same FY 2016 Federal Procurement Data System (FPDS) data was utilized that was used to calculate information collection burdens associated with submission of certified cost or pricing data and of data other than certified cost or pricing data under the Office of Management and Budget (OMB) Control Number 9000– 0013, which was cleared in January 2018. For contracts and orders awarded using FAR part 15 that were valued between $750,000 and $2 million, reflecting the actions impacted by the increase in the threshold, there were 2,697 contract awards/orders issued, 636 modifications to contracts or orders, an estimated 1,288 subcontracts awarded, and 592 subcontract modifications. Of these responses, 3,364 were from small entities. Of the 1,871 small entities that were awarded contract or issued orders, 1,501 were unique small entities (about 1.25 contracts/orders per small entity). We estimate a comparable ratio of actions to entities in the other categories. This ratio is less than the overall ratio of actions to entities because this is just a small slice of the total range covered by the information collection clearance. The cost accounting standards do not apply to small entities, therefore that threshold change only affects other than small entities. The proposed rule does not include additional reporting or record keeping requirements. The rule does not duplicate, overlap, or conflict with any other Federal rules. There are no available alternatives to the proposed rule to accomplish the desired objective of the statute. However, the impact on small entities will be beneficial, as it will relieve them of the requirement to provide certified cost or pricing data when the acquisition is less than $2 million. Instead, they may submit data other than certified cost or pricing data which is estimated to save 40 hours of labor effort and related cost savings for each submission not requiring certification. The Regulatory Secretariat Division has submitted a copy of the IRFA to the Chief Counsel for Advocacy of the Small Business Administration. A copy of the IRFA may be obtained from the Regulatory Secretariat Division. DoD, GSA and NASA invite comments from small business concerns and other interested parties on the expected impact of this rule on small entities. E:\FR\FM\02OCP1.SGM 02OCP1 52430 Federal Register / Vol. 84, No. 191 / Wednesday, October 2, 2019 / Proposed Rules DoD, GSA, and NASA will also consider comments from small entities concerning the existing regulations in subparts affected by the rule in accordance with 5 U.S.C. 610. Interested parties must submit such comments separately and should cite 5 U.S.C. 610 (FAR Case 2018–005), in correspondence. VIII. Paperwork Reduction Act The Paperwork Reduction Act (44 U.S.C. Chapter 35) does apply. However, DoD, GSA, and NASA believe the changes proposed by this rule will result in a reduction to the paperwork burden approved under the following two OMB Control Numbers: 9000–0013, Certified Cost or Pricing Data and Data Other Than Certified Cost or Pricing Data, and 9000–0129, Cost Accounting Standards Administration. khammond on DSKJM1Z7X2PROD with PROPOSALS OMB Control Number 9000–0013 OMB Control Number 9000–0013 covers the paperwork burden for submitting cost or pricing data and certified cost or pricing data. With this proposed rule, the public reporting burden for this collection is expected to decrease from 9,759,813 hours to 9,160,160 as fewer contractors will be required to submit certified cost or pricing data. Based on this proposed rule, the revised annual reporting burden has been estimated as follows: FAR Clause 52.214–28: Respondents 2 Total annual responses 2 Response burden hours 320 FAR Clause 52.215–12: Respondents 2,544 Total annual responses 2,544 Response burden hours 407,040 FAR Clause 52.215–13: Respondents 700 Total annual responses 700 Response burden hours 112,000 FAR Clause 52.215–20: Respondents 25,853 Total annual responses 117,225 Response burden hours 6,259,120 FAR Clause 52.215–21: Respondents 8,440 Total annual responses 27,623 Response burden hours 2,381,680 As part of this proposed rulemaking, the FAR Council is soliciting comments from the public in order to: (1) Evaluate whether the proposed revisions to this collection of information are necessary for the proper performance of the functions of the FAR Council, including whether the information will have practical utility; (2) Evaluate the accuracy of the FAR Council’s estimate of the burden of the VerDate Sep<11>2014 16:10 Oct 01, 2019 Jkt 250001 revised collection of information, including the validity of the methodology and assumptions used; (3) Enhance the quality, utility, and clarity of the information to be collected; and (4) Minimize the burden of the collection of information on those who are to respond, including through the use of appropriate collection techniques. Organizations and individuals desiring to submit comments on the information collection requirements associated with this rulemaking should submit comments not later than December 2, 2019 to: FAR Desk Officer, OMB, Room 10102, NEOB, Washington, DC 20503, and a copy to the General Services Administration, Regulatory Secretariat Division (MVCB). The copy to GSA can be submitted by either of the following methods: • Federal eRulemaking Portal: This website provides the ability to type short comments directly into the comment field or attach a file for lengthier comments. Go to http:// www.regulations.gov and follow the instructions on the site. • Mail: General Services Administration, Regulatory Secretariat Division (MVCB), 1800 F Street NW, 2nd Floor, Washington, DC 20405. ATTN: Lois Mandell/IC 9000–0013, Certified Cost or Pricing Data and Data Other Than Certified Cost or Pricing Data. Instructions: All items submitted must cite Information Collection 9000– 0013, Certified Cost or Pricing Data and Data Other Than Certified Cost or Pricing Data. Comments received generally will be posted without change to http://www.regulations.gov, including any personal and/or business confidential information provided. To confirm receipt of your comment(s), please check www.regulations.gov, approximately two to three days after submission to verify posting (except allow 30 days for posting of comments submitted by mail). OMB Control Number 9000–0129 OMB Control Number 9000–0129 requires contractors performing CAScovered contracts to submit notifications and descriptions of certain cost accounting practice changes, including revisions to their Disclosure Statements, if applicable. With this proposed rule, the public reporting burden for this collection is expected to decrease from 474,075 to 314,475 hours as fewer contracts will be over the threshold for CAS applicability, which is the same as the threshold for obtaining certified cost or pricing data. PO 00000 Frm 00047 Fmt 4702 Sfmt 4702 A request for public comment on a revision and extension of OMB Control Number 9000–0129 was published on August 2, 2019. List of Subjects in 48 CFR Parts 14, 15, 30, and 52 Government procurement. William F. Clark, Director, Office of Government-wide Acquisition Policy, Office of Acquisition Policy, Office of Government-wide Policy. Therefore, DoD, GSA, and NASA are proposing to amend 48 CFR parts 14, 15, 30, and 52 as set forth below: ■ 1. The authority citation for 48 CFR parts 14, 15, 30, and 52 continues to read as follows: Authority: 40 U.S.C. 121(c); 10 U.S.C. chapter 137; and 51 U.S.C. 20113. PART 14—SEALED BIDDING 2. Amend section 14.201–7 by revising paragraph (c)(1) to read as follows: ■ 14.201–7 Contract clauses. * * * * * (c)(1) When contracting by sealed bidding, the contracting officer shall— (i) Insert the clause at 52.214–28, Subcontractor Certified Cost or Pricing Data—Modifications—Sealed Bidding, in solicitations and contracts if the contract amount is expected to exceed the threshold for submission of certified cost or pricing data at 15.403–4(a)(1); or (ii) Upon request of a contractor in connection with a prime contract entered into before July 1, 2018, the contracting officer shall modify the contract without requiring consideration to replace clause 52.214–28, Subcontractor Certified Cost or Pricing Data—Modifications—Sealed Bidding, with its Alternate I. * * * * * PART 15—CONTRACTING BY NEGOTIATION 3. Amend section 15.403–4 by— a. Revising the third sentence of paragraph (a)(1) introductory text; ■ b. Revising the second sentence of paragraph (a)(1)(iii) introductory text; and ■ c. Adding paragraph (a)(3). The revised and added text reads as follows: ■ ■ 15.403–4 Requiring certified cost or pricing data (10 U.S.C. 2306a and 41 U.S.C. chapter 35). (a)(1) * * * The threshold for obtaining certified cost or pricing data is $750,000 for prime contracts awarded before July 1, 2018, and $2 million for E:\FR\FM\02OCP1.SGM 02OCP1 Federal Register / Vol. 84, No. 191 / Wednesday, October 2, 2019 / Proposed Rules prime contracts awarded on or after July 1, 2018. * * * * * (iii) * * * Price adjustment amounts must consider both increases and decreases (e.g., a $500,000 modification resulting from a reduction of $1,500,000 and an increase of $1,000,000 is a $2,500,000 pricing adjustment exceeding the $2,000,000 threshold). * * * * * * * * (3) Upon the request of a contractor that was required to submit certified cost or pricing data in connection with a prime contract entered into before July 1, 2018, the contracting officer shall modify the contract, without requiring consideration, to reflect a $2 million threshold for obtaining certified cost or pricing data on subcontracts entered on and after July 1, 2018. See 15.408. ■ 4. Amend section 15.408 by revising paragraphs (d) and (e) to read as follows: 15.408 Solicitation provisions and contract clauses. khammond on DSKJM1Z7X2PROD with PROPOSALS * * * * * (d) Subcontractor Certified Cost or Pricing Data. The contracting officer shall— (1) Insert the clause at 52.215–12, Subcontractor Certified Cost or Pricing Data, in solicitations and contracts when the clause prescribed in paragraph (b) of this section is included; or (2) Upon the request of a contractor that was required to submit certified cost or pricing data in connection with a prime contract entered into before July 1, 2018, the contracting officer shall modify the contract without requiring consideration, to replace clause 52.215– 12, Subcontractor Certified Cost or Pricing Data, with its Alternate I. (e) Subcontractor Certified Cost or Pricing Data—Modifications. The contracting officer shall— (1) Insert the clause at 52.215–13, Subcontractor Certified Cost or Pricing Data—Modifications, in solicitations and contracts when the clause prescribed in paragraph (c) of this section is included; or (2) Upon the request of a contractor that was required to submit certified cost or pricing data in connection with a prime contract entered into before July 1, 2018, the contracting officer shall modify the contract without requiring consideration, to replace clause 52.215– 13, Subcontractor Certified Cost or Pricing Data—Modifications, with its Alternate I. * * * * * VerDate Sep<11>2014 16:10 Oct 01, 2019 Jkt 250001 PART 30—COST ACCOUNTING STANDARDS ADMINISTRATION 30.201–4 [Amended] 5. Amend section 30.201–4 by removing from paragraph (b)(1) ‘‘$750,000’’ and adding ‘‘$2 million’’ in its place. ■ PART 52—SOLICITATION PROVISIONS AND CONTRACT CLAUSES 6. Amend section 52.214–28 by— a. Removing from the clause prescription reference ‘‘14.201–7(c)’’ and adding ‘‘14.201–7(c)(1)(i)’’ in its place; ■ b. Adding the Alternate I to the basic clause. The revised text reads as follows: ■ ■ 52.214–28 Subcontractor Certified Cost or Pricing Data—Modifications—Sealed Bidding. * * * * * Alternate I (DATE). As prescribed in 14.201–7(c)(1)(ii), substitute the following paragraph (b) in place of paragraph (b) of the basic clause: (b) Unless an exception under FAR 15.403–1(b) applies, the Contractor shall require the subcontractor to submit certified cost or pricing data (actually or by specific identification in writing), as part of the subcontractor’s proposal in accordance with FAR 15.408, Table 15– 2 (to include any information reasonably required to explain the subcontractor’s estimating process such as the judgmental factors applied and the mathematical or other methods used in the estimate, including those used in projecting from known data, and the nature and amount of any contingencies included in the price)— (1) Before modifying any subcontract that was awarded prior to July 1, 2018, involving a pricing adjustment expected to exceed $750,000; or (2) Before awarding any subcontract expected to exceed $2 million on or after July 1, 2018, or modifying any subcontract that was awarded on or after July 1, 2018, involving a pricing adjustment expected to exceed $2 million. ■ 7. Amend section 52.215–12 by— ■ a. Removing from the clause prescription reference ‘‘15.408(d)’’ and adding ‘‘15.408(d)(1)’’ in its place; ■ b. Revising the clause date; ■ c. Removing from the clause ‘‘15.403– 4’’ and replacing it with ‘‘15.403– 4(a)(1)’’, twice; and ■ d. Adding the Alternate I to the basic clause. The revised text reads as follows: 52.215–12 Subcontractor Certified Cost or Pricing Data. * PO 00000 * * Frm 00048 * Fmt 4702 * Sfmt 4702 52431 Subcontractor Certified Cost or Pricing Data (Date) * * * * * Alternate I (Date). As prescribed in 15.408(d)(2), substitute the following paragraph (a) in place of paragraph (a) of the basic clause: (a) Unless an exception under FAR 15.403– 1 applies, the Contractor shall require the subcontractor to submit certified cost or pricing data (actually or by specific identification in writing), in accordance with FAR 15.408, Table 15–2 (to include any information reasonably required to explain the subcontractor’s estimating process such as the judgmental factors applied and the mathematical or other methods used in the estimate, including those used in projecting from known data, and the nature and amount of any contingencies included in the price)— (1) Before modifying any subcontract that was awarded prior to July 1, 2018, involving a pricing adjustment expected to exceed $750,000; or (2) Before awarding any subcontract expected to exceed $2 million on or after July 1, 2018, or modifying any subcontract that was awarded on or after July 1, 2018, involving a pricing adjustment expected to exceed $2 million. 8. Amend section 52.215–13 by— a. Removing from the clause prescription reference ‘‘15.408(e)’’ and adding ‘‘15.408(e)(1)’’ in its place; ■ b. Revising the clause date; ■ c. Removing from the clause ‘‘15.403– 4’’ and replacing it with ‘‘15.403– 4(a)(1)’’, four times; and ■ d. Adding the Alternate I to the basic clause. The revised text reads as follows: ■ ■ 52.215–13 Subcontractor Certified Cost or Pricing Data—Modifications. * * * * * Subcontractor Certified Cost or Pricing Data—Modifications (Date) * * * * * Alternate I (DATE). As prescribed in 15.408(e)(2), substitute the following paragraphs (a), (b), and (d) for paragraphs (a), (b), and (d) of the basic clause: (a) The requirements of paragraphs (b) and (c) of this clause shall— (1) Become operative only for any modification to this contract involving aggregate increases and/or decreases in costs, plus applicable profits, expected to exceed the threshold for submission of certified cost or pricing data at FAR 15.403–4(a)(1); and (2) Be limited to such modifications. (b) Unless an exception under FAR 15.403– 1 applies, the Contractor shall require the subcontractor to submit certified cost or pricing data (actually or by specific identification in writing), in accordance with FAR 15.408, Table 15–2 (to include any information reasonably required to explain the subcontractor’s estimating process such as the judgmental factors applied and the mathematical or other methods used in the estimate, including those used in projecting from known data, and the nature and amount of any contingencies included in the price)— E:\FR\FM\02OCP1.SGM 02OCP1 52432 Federal Register / Vol. 84, No. 191 / Wednesday, October 2, 2019 / Proposed Rules (1) Before modifying any subcontract that was awarded prior to July 1, 2018, involving a pricing adjustment expected to exceed $750,000; or (2) Before modifying any subcontract that was awarded on or after July 1, 2018, involving a pricing adjustment expected to exceed $2 million. (d) The Contractor shall insert the substance of this clause, including this paragraph (d), in each subcontract that exceeds $2 million. 9. Amend section 52.230–1 by— a. Removing from the provision prescription reference ‘‘30.201–3’’ and the word ‘‘provisions’’, adding ‘‘30.201– 3(a)’’ and ‘‘provision’’ in its place respectively; ■ b. Revising the date of the provision; and ■ c. Removing from paragraph (a) ‘‘$750,000’’ and adding ‘‘$2 million’’ in its place. The revision reads as follows: ■ ■ 52.230–1 Cost Accounting Standards Notices and Certification. * * * * The revision reads as follows: 52.230–4 Disclosure and Consistency of Cost Accounting Practices—Foreign Concerns. * * * * * Disclosure and Consistency of Cost Accounting Practices—Foreign Concerns ([DATE]) * * * * * 13. Amend section 52.230–5 by— a. Removing from the clause prescription reference ‘‘30.201–4(e)’’ and adding ‘‘30.201–4(e)(1)’’ in its place; ■ b. Revising the date of the clause; and ■ c. Removing from paragraph (d)(2) ‘‘$750,000’’ and adding ‘‘$2 million’’ in its place. The revision reads as follows: ■ ■ 52.230–5 Cost Accounting Standards— Educational Institution. * * * * * Cost Accounting Standards—Educational Institution ([DATE]) * * Cost Accounting Standards Notices and Certification ([DATE]) * * * * [FR Doc. 2019–20797 Filed 10–1–19; 8:45 am] BILLING CODE 6820–EP–P * * * * * ■ 10. Amend section 52.230–2 by— ■ a. Removing from the clause prescription reference ‘‘30.201–4(a)’’ and adding ‘‘30.201–4(a)(1)’’ in its place; ■ b. Revising the date of the clause; and ■ c. Removing from paragraph (d) ‘‘$750,000’’ and adding ‘‘$2 million’’ in its place. The revision reads as follows: 52.230–2 * * Cost Accounting Standards. * * * * * * * * 11. Amend section 52.230–3 by revising the date of the clause, and removing from paragraph (d)(2) ‘‘$750,000’’ and adding ‘‘$2 million’’ in its place. The revision reads as follows: ■ 52.230–3 Disclosure and Consistency of Cost Accounting Practices. * * * * khammond on DSKJM1Z7X2PROD with PROPOSALS Disclosure and Consistency of Cost Accounting Practices ([DATE]) * * * * * 12. Amend section 52.230–4 by— a. Removing from the clause prescription reference ‘‘30.201–4(c)’’ and adding ‘‘30.201–4(c)(1)’’ in its place; ■ b. Revising the date of the clause; and ■ c. Removing from paragraph (d)(2) ‘‘$750,000’’ and adding ‘‘$2 million’’ in its place. ■ ■ VerDate Sep<11>2014 16:10 Oct 01, 2019 Jkt 250001 Federal Motor Carrier Safety Administration 49 CFR Part 385 [Docket No. FMCSA–2019–0068] RIN 2126–AC28 Incorporation by Reference; North American Standard Out-of-Service Criteria; Hazardous Materials Safety Permits Cost Accounting Standards ([DATE]) * DEPARTMENT OF TRANSPORTATION Federal Motor Carrier Safety Administration (FMCSA), DOT. ACTION: Notice of proposed rulemaking. AGENCY: FMCSA proposes to amend its Hazardous Materials Safety Permits regulations to incorporate by reference the updated Commercial Vehicle Safety Alliance (CVSA) handbook. The Out-ofService Criteria provide enforcement personnel nationwide, including FMCSA’s State partners, with uniform enforcement tolerances for roadside inspections. Currently, the regulations reference the April 1, 2018, edition of the handbook. Through this document, FMCSA proposes to incorporate by reference the April 1, 2019, edition. DATES: Comments on this document must be received on or before November 1, 2019. ADDRESSES: You may submit comments identified by Docket Number FMCSA– SUMMARY: PO 00000 Frm 00049 Fmt 4702 Sfmt 4702 2019–0068 using any of the following methods: • Federal eRulemaking Portal: http:// www.regulations.gov. Follow the online instructions for submitting comments. • Mail: Docket Management Facility, U.S. Department of Transportation, 1200 New Jersey Avenue SE, West Building, Ground Floor, Room W12–140, Washington, DC 20590–0001. • Hand Delivery or Courier: West Building, Ground Floor, Room W12– 140, 1200 New Jersey Avenue SE, Washington, DC, between 9 a.m. and 5 p.m., Monday through Friday, except Federal holidays. • Fax: 202–493–2251. To avoid duplication, please use only one of these four methods. See the ‘‘Public Participation and Request for Comments’’ portion of the SUPPLEMENTARY INFORMATION section for instructions on submitting comments, including collection of information comments for the Office of Information and Regulatory Affairs, OMB. FOR FURTHER INFORMATION CONTACT: Mr. Michael Huntley, Chief, Vehicle and Roadside Operations Division, Federal Motor Carrier Safety Administration, 1200 New Jersey Avenue SE, Washington, DC 20590–0001 by telephone at (202) 366–9209 or by email at michael.huntley@dot.gov. If you have questions on viewing or submitting material to the docket, contact Docket Services, telephone (202) 366–9826. SUPPLEMENTARY INFORMATION: This notice of proposed rulemaking (NPRM) is organized as follows: I. Public Participation and Request for Comments A. Submitting Comments B. Viewing Comments and Documents C. Privacy Act D. Advance Notice of Proposed Rulemaking Not Required II. Executive Summary III. Legal Basis for the Rulemaking IV. Background V. Discussion of Proposed Rulemaking VI. International Impacts VII. Section-by-Section Analysis VIII. Regulatory Analyses A. E.O. 12866 (Regulatory Planning and Review), E.O. 13563 (Improving Regulation and Regulatory Review), and DOT Regulatory Policies and Procedures B. E.O. 13771 Reducing Regulation and Controlling Costs C. Regulatory Flexibility Act (Small Entities) D. Assistance for Small Entities E. Unfunded Mandates Reform Act of 1995 F. Paperwork Reduction Act G. E.O. 13132 (Federalism) H. E.O. 12988 (Civil Justice Reform) I. E.O. 13045 (Protection of Children) J. E.O. 12630 (Taking of Private Property) K. Privacy L. E.O. 12372 (Intergovernmental Review) E:\FR\FM\02OCP1.SGM 02OCP1

Agencies

[Federal Register Volume 84, Number 191 (Wednesday, October 2, 2019)]
[Proposed Rules]
[Pages 52428-52432]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2019-20797]


-----------------------------------------------------------------------

DEPARTMENT OF DEFENSE

GENERAL SERVICES ADMINISTRATION

NATIONAL AERONAUTICS AND SPACE ADMINISTRATION

48 CFR Parts 14, 15, 30, and 52

[FAR Case 2018-005; Docket No. FAR-2018-0006, Sequence No. 1]
RIN 9000-AN69


Federal Acquisition Regulation: Modifications to Cost or Pricing 
Data Reporting Requirements

AGENCY: Department of Defense (DoD), General Services Administration 
(GSA), and National Aeronautics and Space Administration (NASA).

ACTION: Proposed rule.

-----------------------------------------------------------------------

SUMMARY: DoD, GSA, and NASA are proposing to amend the Federal 
Acquisition Regulation (FAR) to implement a section of the National 
Defense Authorization Act for Fiscal Year 2018 to increase the 
threshold for requiring certified cost or pricing data.

DATES: Interested parties should submit written comments to the 
Regulatory Secretariat Division at one of the addresses shown below on 
or before December 2, 2019 to be considered in the formation of the 
final rule.

ADDRESSES: Submit comments in response to FAR Case 2018-005 by any of 
the following methods:
     Regulations.gov: http://www.regulations.gov. Submit 
comments via the Federal eRulemaking portal by searching for ``FAR Case 
2018-005''. Select the link ``Comment Now'' that corresponds with ``FAR 
Case 2018-005''. Follow the instructions provided on the screen. Please 
include your name, company name (if any), and ``FAR Case 2018-005'' on 
your attached document.
     Mail: General Services Administration, Regulatory 
Secretariat Division (MVCB), ATTN: Lois Mandell, 1800 F Street NW, 2nd 
Floor, Washington, DC 20405.
    Instructions: Please submit comments only and cite ``FAR Case 2018-
005'', in all correspondence related to this case. All comments 
received will be posted without change to http://www.regulations.gov, 
including any personal and/or business confidential information 
provided. To confirm receipt of your comment(s), please check 
www.regulations.gov, approximately two to three days after submission 
to verify posting (except allow 30 days for posting of comments 
submitted by mail).

FOR FURTHER INFORMATION CONTACT: Ms. Zenaida Delgado, Procurement 
Analyst, at 202-969-7207 or [email protected] for clarification 
of content. For information pertaining to status or publication 
schedules, contact the Regulatory Secretariat Division at 202-501-4755. 
Please cite ``FAR Case 2018-005''.

SUPPLEMENTARY INFORMATION: 

I. Background

    Cost or Pricing Data: Truth in Negotiations, 10 U.S.C. 2306a, and 
Required cost or pricing data and certification, 41 U.S.C. 3502, 
require that the Government obtain certified cost or pricing data for 
certain contract actions listed at 15.403-4(a)(1), such as negotiated 
contracts, certain subcontracts and certain contract modifications. 
Section 811 of the National Defense Authorization Act (NDAA) for Fiscal 
Year (FY) 2018 amends 10 U.S.C. 2306a and 41 U.S.C. 3502 to increase 
the threshold for requesting certified cost or pricing data from 
$750,000 to $2 million for contracts entered into after June 30, 2018.

II. Discussion and Analysis

    DoD, GSA and NASA are proposing to amend the FAR to implement 
section 811 of the NDAA for FY 2018 to increase the threshold for 
requesting certified cost or pricing data from $750,000 to $2 million 
for contracts entered into after June 30, 2018.
    In the case of a change or modification made to a prime contract 
that was entered into before July 1, 2018, the threshold for obtaining 
certified cost or pricing data remains $750,000, with the following 
exception. Upon the request of a contractor that was required to submit 
certified cost or pricing data in connection with a prime contract 
entered into before July 1, 2018, the contracting officer shall modify 
the contract without requiring consideration to reflect a $2 million 
threshold for obtaining certified cost or pricing data from 
subcontractors. Similarly for sealed bidding, upon request by a 
contractor, the contracting officer shall modify the contract without 
requiring consideration to replace the relevant clause.
    The proposed changes to the FAR are summarized in the following 
paragraphs.
    A. Subpart 14.2, Solicitation of Bids, is revised to add the 
prescription for Alternate I of the clause at FAR 52.214-28, 
Subcontractor Certified Cost or Pricing Data-Modifications-Sealed 
Bidding. The Alternate I will be used in the circumstances described at 
FAR 14.201-7(c)(1)(ii).
    B. Subpart 15.4, Contract Pricing, is revised to incorporate the 
revised threshold for obtaining certified cost or pricing data at FAR 
15.403-4(a)(1). The example provided of a price adjustment is also 
revised to reflect the increased threshold. A new paragraph (a)(3) is 
added to allow a contractor with a prime contract entered into before 
July 1, 2018, to request that the contracting officer modify the 
contract without requiring consideration to reflect a $2 million 
threshold for obtaining certified cost or pricing data on subcontracts 
entered on and after July 1, 2018, by replacing the following clauses, 
as applicable. The prescriptions at FAR 15.408 will instruct the 
contracting officer to:
     Replace FAR clause 52.215-12, Subcontractor Certified Cost 
or Pricing Data, with its Alternate I.
     Replace FAR clause 52.215-13, Subcontractor Certified Cost 
or Pricing

[[Page 52429]]

Data--Modifications, with its Alternate I.
    C. Subpart 30.2, CAS Program Requirements, is revised to reflect 
the new $2 million threshold for inserting the FAR clause at 52.230-3, 
Disclosure and Consistency of Cost Accounting Practices, in negotiated 
contracts. The threshold for Cost Accounting Standards (CAS) 
applicability is required by 41 U.S.C. 1502(b)(1)(B) to be the same as 
the threshold at FAR 15.403-4(a)(1). Thus, changes are made to adjust 
the thresholds. Conforming changes are also made to the thresholds in 
FAR provision at 52.230-1, Cost Accounting Standards Notices and 
Certification; and the clauses at 52.230-2, Cost Accounting Standards; 
52.230-3, Disclosure and Consistency of Cost Accounting Practices; 
52.230-4, Disclosure and Consistency of Cost Accounting Practices--
Foreign Concerns; and 52.230-5, Cost Accounting Standards--Educational 
Institution.

III. Applicability to Contracts at or Below the Simplified Acquisition 
Threshold and for Commercial Items, Including Commercially Available 
Off-the-Shelf Items

    The proposed changes are not applicable to contracts at or below 
the simplified acquisition threshold or to contracts for the 
acquisition of commercial items.

IV. Expected Cost Savings

    DoD, GSA, and NASA have performed a regulatory cost analysis on 
this rule. The following is a summary of the estimated public and 
Government cost savings. This rule will impact large and small 
businesses which currently compete on solicitations issued using FAR 
part 15 negotiation procedures and are valued between $750,000 and $2 
million as these firms will no longer be required to submit certified 
cost or pricing data between those amounts. In addition, because of the 
comparable increase in the cost accounting standards threshold, fewer 
contractors will be required to comply with FAR clauses that implement 
the cost accounting standards. The following is a summary of the 
estimated cost savings to the public calculated in perpetuity in 2016 
dollars at a 7 percent discount rate:

 
------------------------------------------------------------------------
 
------------------------------------------------------------------------
Present Value Cost Savings...........................      -$588,988,385
Annualized Cost Savings..............................      -$ 41,229,187
Annualized Value Cost Savings as of 2016 if Year 1 is      -$ 31,453,549
 2020................................................
------------------------------------------------------------------------

    The following is a summary of the estimated cost savings to the 
Government calculated in perpetuity in 2016 dollars at a 7 percent 
discount rate:

 
------------------------------------------------------------------------
 
------------------------------------------------------------------------
Present Value Cost Savings...........................       -$90,669,628
Annualized Cost Savings..............................        -$6,346,874
Annualized Value Cost Savings as of 2016 if Year 1 is        -$4,841,999
 2020................................................
------------------------------------------------------------------------

    The Councils welcome comments on both the methodology and the 
analysis during the public comment period on this rule. To access the 
full Regulatory Cost Analysis for this rule, go to the Federal 
eRulemaking Portal at www.regulations.gov, search for ``FAR Case 2018-
005,'' click ``Open Docket,'' and view ``Supporting Documents.''

V. Executive Orders 12866 and 13563

    Executive Orders (E.O.s) 12866 and 13563 direct agencies to assess 
all costs and benefits of available regulatory alternatives and, if 
regulation is necessary, to select approaches that maximize net 
benefits (including potential economic, environmental, public health 
and safety effects, distributive impacts, and equity). E.O. 13563 
emphasizes the importance of quantifying both costs and benefits, of 
reducing costs, of harmonizing rules, and of promoting flexibility. 
This is not a significant regulatory action and, therefore, is not 
subject to review under section 6(b) of E.O. 12866, Regulatory Planning 
and Review, dated September 30, 1993. This rule is not a major rule 
under 5 U.S.C. 804.

VI. Executive Order 13771

    This proposed rule is expected to be an E.O. 13771 deregulatory 
action. Information on the estimated cost savings of this rule are 
discussed in the ``Expected Cost Savings'' section of this preamble.

VII. Regulatory Flexibility Act

    The changes in this rule are not expected to have a significant 
economic impact on a substantial number of small entities within the 
meaning of the Regulatory Flexibility Act 5 U.S.C. 601, et seq. 
However, an Initial Regulatory Flexibility Analysis (IRFA) has been 
performed and it is summarized as follows:

    DoD, GSA, and NASA are proposing to amend the FAR to increase 
the threshold for requiring certified cost or pricing data from 
$750,000 to $2 million.
    The objective is to implement section 811 of the National 
Defense Authorization Act for Fiscal Year 2018 which amends 10 
U.S.C. 2306a and 41 U.S.C. 3502 to increase the threshold for 
requesting certified cost or pricing data from $750,000 to $2 
million.
    This rule will impact small entities who compete on 
solicitations issued using FAR part 15, Contracting by Negotiation, 
valued between $750,000 and $2 million. It also impacts subcontracts 
and contract modifications, including those contracts awarded under 
sealed bidding procedures, valued between $750,000 and $2 million. 
Offerors and contractors under the revised threshold will no longer 
be required to submit ``certified cost or pricing data'' and will 
now submit ``data other than certified cost or pricing data,'' which 
takes less time to prepare.
    In order to calculate the savings due to the increased 
threshold, the same FY 2016 Federal Procurement Data System (FPDS) 
data was utilized that was used to calculate information collection 
burdens associated with submission of certified cost or pricing data 
and of data other than certified cost or pricing data under the 
Office of Management and Budget (OMB) Control Number 9000-0013, 
which was cleared in January 2018. For contracts and orders awarded 
using FAR part 15 that were valued between $750,000 and $2 million, 
reflecting the actions impacted by the increase in the threshold, 
there were 2,697 contract awards/orders issued, 636 modifications to 
contracts or orders, an estimated 1,288 subcontracts awarded, and 
592 subcontract modifications. Of these responses, 3,364 were from 
small entities. Of the 1,871 small entities that were awarded 
contract or issued orders, 1,501 were unique small entities (about 
1.25 contracts/orders per small entity). We estimate a comparable 
ratio of actions to entities in the other categories. This ratio is 
less than the overall ratio of actions to entities because this is 
just a small slice of the total range covered by the information 
collection clearance. The cost accounting standards do not apply to 
small entities, therefore that threshold change only affects other 
than small entities.
    The proposed rule does not include additional reporting or 
record keeping requirements.
    The rule does not duplicate, overlap, or conflict with any other 
Federal rules.
    There are no available alternatives to the proposed rule to 
accomplish the desired objective of the statute. However, the impact 
on small entities will be beneficial, as it will relieve them of the 
requirement to provide certified cost or pricing data when the 
acquisition is less than $2 million. Instead, they may submit data 
other than certified cost or pricing data which is estimated to save 
40 hours of labor effort and related cost savings for each 
submission not requiring certification.

    The Regulatory Secretariat Division has submitted a copy of the 
IRFA to the Chief Counsel for Advocacy of the Small Business 
Administration. A copy of the IRFA may be obtained from the Regulatory 
Secretariat Division. DoD, GSA and NASA invite comments from small 
business concerns and other interested parties on the expected impact 
of this rule on small entities.

[[Page 52430]]

    DoD, GSA, and NASA will also consider comments from small entities 
concerning the existing regulations in subparts affected by the rule in 
accordance with 5 U.S.C. 610. Interested parties must submit such 
comments separately and should cite 5 U.S.C. 610 (FAR Case 2018-005), 
in correspondence.

VIII. Paperwork Reduction Act

    The Paperwork Reduction Act (44 U.S.C. Chapter 35) does apply. 
However, DoD, GSA, and NASA believe the changes proposed by this rule 
will result in a reduction to the paperwork burden approved under the 
following two OMB Control Numbers: 9000-0013, Certified Cost or Pricing 
Data and Data Other Than Certified Cost or Pricing Data, and 9000-0129, 
Cost Accounting Standards Administration.
OMB Control Number 9000-0013
    OMB Control Number 9000-0013 covers the paperwork burden for 
submitting cost or pricing data and certified cost or pricing data. 
With this proposed rule, the public reporting burden for this 
collection is expected to decrease from 9,759,813 hours to 9,160,160 as 
fewer contractors will be required to submit certified cost or pricing 
data.
    Based on this proposed rule, the revised annual reporting burden 
has been estimated as follows:

FAR Clause 52.214-28:
    Respondents 2
    Total annual responses 2
    Response burden hours 320
FAR Clause 52.215-12:
    Respondents 2,544
    Total annual responses 2,544
    Response burden hours 407,040
FAR Clause 52.215-13:
    Respondents 700
    Total annual responses 700
    Response burden hours 112,000
FAR Clause 52.215-20:
    Respondents 25,853
    Total annual responses 117,225
    Response burden hours 6,259,120
FAR Clause 52.215-21:
    Respondents 8,440
    Total annual responses 27,623
    Response burden hours 2,381,680

    As part of this proposed rulemaking, the FAR Council is soliciting 
comments from the public in order to:
    (1) Evaluate whether the proposed revisions to this collection of 
information are necessary for the proper performance of the functions 
of the FAR Council, including whether the information will have 
practical utility;
    (2) Evaluate the accuracy of the FAR Council's estimate of the 
burden of the revised collection of information, including the validity 
of the methodology and assumptions used;
    (3) Enhance the quality, utility, and clarity of the information to 
be collected; and
    (4) Minimize the burden of the collection of information on those 
who are to respond, including through the use of appropriate collection 
techniques.
    Organizations and individuals desiring to submit comments on the 
information collection requirements associated with this rulemaking 
should submit comments not later than December 2, 2019 to: FAR Desk 
Officer, OMB, Room 10102, NEOB, Washington, DC 20503, and a copy to the 
General Services Administration, Regulatory Secretariat Division 
(MVCB). The copy to GSA can be submitted by either of the following 
methods:
     Federal eRulemaking Portal: This website provides the 
ability to type short comments directly into the comment field or 
attach a file for lengthier comments. Go to http://www.regulations.gov 
and follow the instructions on the site.
     Mail: General Services Administration, Regulatory 
Secretariat Division (MVCB), 1800 F Street NW, 2nd Floor, Washington, 
DC 20405. ATTN: Lois Mandell/IC 9000-0013, Certified Cost or Pricing 
Data and Data Other Than Certified Cost or Pricing Data.
    Instructions: All items submitted must cite Information Collection 
9000-0013, Certified Cost or Pricing Data and Data Other Than Certified 
Cost or Pricing Data. Comments received generally will be posted 
without change to http://www.regulations.gov, including any personal 
and/or business confidential information provided. To confirm receipt 
of your comment(s), please check www.regulations.gov, approximately two 
to three days after submission to verify posting (except allow 30 days 
for posting of comments submitted by mail).
OMB Control Number 9000-0129
    OMB Control Number 9000-0129 requires contractors performing CAS-
covered contracts to submit notifications and descriptions of certain 
cost accounting practice changes, including revisions to their 
Disclosure Statements, if applicable. With this proposed rule, the 
public reporting burden for this collection is expected to decrease 
from 474,075 to 314,475 hours as fewer contracts will be over the 
threshold for CAS applicability, which is the same as the threshold for 
obtaining certified cost or pricing data. A request for public comment 
on a revision and extension of OMB Control Number 9000-0129 was 
published on August 2, 2019.

List of Subjects in 48 CFR Parts 14, 15, 30, and 52

    Government procurement.

William F. Clark,
Director, Office of Government-wide Acquisition Policy, Office of 
Acquisition Policy, Office of Government-wide Policy.

    Therefore, DoD, GSA, and NASA are proposing to amend 48 CFR parts 
14, 15, 30, and 52 as set forth below:

0
1. The authority citation for 48 CFR parts 14, 15, 30, and 52 continues 
to read as follows:

    Authority:  40 U.S.C. 121(c); 10 U.S.C. chapter 137; and 51 
U.S.C. 20113.

PART 14--SEALED BIDDING

0
2. Amend section 14.201-7 by revising paragraph (c)(1) to read as 
follows:


14.201-7   Contract clauses.

* * * * *
    (c)(1) When contracting by sealed bidding, the contracting officer 
shall--
    (i) Insert the clause at 52.214-28, Subcontractor Certified Cost or 
Pricing Data--Modifications--Sealed Bidding, in solicitations and 
contracts if the contract amount is expected to exceed the threshold 
for submission of certified cost or pricing data at 15.403-4(a)(1); or
    (ii) Upon request of a contractor in connection with a prime 
contract entered into before July 1, 2018, the contracting officer 
shall modify the contract without requiring consideration to replace 
clause 52.214-28, Subcontractor Certified Cost or Pricing Data--
Modifications--Sealed Bidding, with its Alternate I.
* * * * *

PART 15--CONTRACTING BY NEGOTIATION

0
3. Amend section 15.403-4 by--
0
 a. Revising the third sentence of paragraph (a)(1) introductory text;
0
 b. Revising the second sentence of paragraph (a)(1)(iii) introductory 
text; and
0
 c. Adding paragraph (a)(3).
    The revised and added text reads as follows:


15.403-4   Requiring certified cost or pricing data (10 U.S.C. 2306a 
and 41 U.S.C. chapter 35).

    (a)(1) * * * The threshold for obtaining certified cost or pricing 
data is $750,000 for prime contracts awarded before July 1, 2018, and 
$2 million for

[[Page 52431]]

prime contracts awarded on or after July 1, 2018.
* * * * *
    (iii) * * * Price adjustment amounts must consider both increases 
and decreases (e.g., a $500,000 modification resulting from a reduction 
of $1,500,000 and an increase of $1,000,000 is a $2,500,000 pricing 
adjustment exceeding the $2,000,000 threshold). * * *
* * * * *
    (3) Upon the request of a contractor that was required to submit 
certified cost or pricing data in connection with a prime contract 
entered into before July 1, 2018, the contracting officer shall modify 
the contract, without requiring consideration, to reflect a $2 million 
threshold for obtaining certified cost or pricing data on subcontracts 
entered on and after July 1, 2018. See 15.408.
0
4. Amend section 15.408 by revising paragraphs (d) and (e) to read as 
follows:


15.408   Solicitation provisions and contract clauses.

* * * * *
    (d) Subcontractor Certified Cost or Pricing Data. The contracting 
officer shall--
    (1) Insert the clause at 52.215-12, Subcontractor Certified Cost or 
Pricing Data, in solicitations and contracts when the clause prescribed 
in paragraph (b) of this section is included; or
    (2) Upon the request of a contractor that was required to submit 
certified cost or pricing data in connection with a prime contract 
entered into before July 1, 2018, the contracting officer shall modify 
the contract without requiring consideration, to replace clause 52.215-
12, Subcontractor Certified Cost or Pricing Data, with its Alternate I.
    (e) Subcontractor Certified Cost or Pricing Data--Modifications. 
The contracting officer shall--
    (1) Insert the clause at 52.215-13, Subcontractor Certified Cost or 
Pricing Data--Modifications, in solicitations and contracts when the 
clause prescribed in paragraph (c) of this section is included; or
    (2) Upon the request of a contractor that was required to submit 
certified cost or pricing data in connection with a prime contract 
entered into before July 1, 2018, the contracting officer shall modify 
the contract without requiring consideration, to replace clause 52.215-
13, Subcontractor Certified Cost or Pricing Data--Modifications, with 
its Alternate I.
* * * * *

PART 30--COST ACCOUNTING STANDARDS ADMINISTRATION 30.201-4 
[Amended]

0
5. Amend section 30.201-4 by removing from paragraph (b)(1) 
``$750,000'' and adding ``$2 million'' in its place.

PART 52--SOLICITATION PROVISIONS AND CONTRACT CLAUSES

0
6. Amend section 52.214-28 by--
0
a. Removing from the clause prescription reference ``14.201-7(c)'' and 
adding ``14.201-7(c)(1)(i)'' in its place;
0
 b. Adding the Alternate I to the basic clause.
    The revised text reads as follows:


52.214-28   Subcontractor Certified Cost or Pricing Data--
Modifications--Sealed Bidding.

* * * * *
    Alternate I (DATE). As prescribed in 14.201-7(c)(1)(ii), substitute 
the following paragraph (b) in place of paragraph (b) of the basic 
clause:
    (b) Unless an exception under FAR 15.403-1(b) applies, the 
Contractor shall require the subcontractor to submit certified cost or 
pricing data (actually or by specific identification in writing), as 
part of the subcontractor's proposal in accordance with FAR 15.408, 
Table 15-2 (to include any information reasonably required to explain 
the subcontractor's estimating process such as the judgmental factors 
applied and the mathematical or other methods used in the estimate, 
including those used in projecting from known data, and the nature and 
amount of any contingencies included in the price)--
    (1) Before modifying any subcontract that was awarded prior to July 
1, 2018, involving a pricing adjustment expected to exceed $750,000; or
    (2) Before awarding any subcontract expected to exceed $2 million 
on or after July 1, 2018, or modifying any subcontract that was awarded 
on or after July 1, 2018, involving a pricing adjustment expected to 
exceed $2 million.
0
7. Amend section 52.215-12 by--
0
 a. Removing from the clause prescription reference ``15.408(d)'' and 
adding ``15.408(d)(1)'' in its place;
0
b. Revising the clause date;
0
c. Removing from the clause ``15.403-4'' and replacing it with 
``15.403-4(a)(1)'', twice; and
0
 d. Adding the Alternate I to the basic clause.
    The revised text reads as follows:


52.215-12   Subcontractor Certified Cost or Pricing Data.

* * * * *

Subcontractor Certified Cost or Pricing Data (Date)

* * * * *
    Alternate I (Date). As prescribed in 15.408(d)(2), substitute 
the following paragraph (a) in place of paragraph (a) of the basic 
clause:
    (a) Unless an exception under FAR 15.403-1 applies, the 
Contractor shall require the subcontractor to submit certified cost 
or pricing data (actually or by specific identification in writing), 
in accordance with FAR 15.408, Table 15-2 (to include any 
information reasonably required to explain the subcontractor's 
estimating process such as the judgmental factors applied and the 
mathematical or other methods used in the estimate, including those 
used in projecting from known data, and the nature and amount of any 
contingencies included in the price)--
    (1) Before modifying any subcontract that was awarded prior to 
July 1, 2018, involving a pricing adjustment expected to exceed 
$750,000; or
    (2) Before awarding any subcontract expected to exceed $2 
million on or after July 1, 2018, or modifying any subcontract that 
was awarded on or after July 1, 2018, involving a pricing adjustment 
expected to exceed $2 million.
0
8. Amend section 52.215-13 by--
0
 a. Removing from the clause prescription reference ``15.408(e)'' and 
adding ``15.408(e)(1)'' in its place;
0
b. Revising the clause date;
0
 c. Removing from the clause ``15.403-4'' and replacing it with 
``15.403-4(a)(1)'', four times; and
0
d. Adding the Alternate I to the basic clause.
    The revised text reads as follows:


52.215-13   Subcontractor Certified Cost or Pricing Data--
Modifications.

* * * * *

Subcontractor Certified Cost or Pricing Data--Modifications (Date)

* * * * *
    Alternate I (DATE). As prescribed in 15.408(e)(2), substitute 
the following paragraphs (a), (b), and (d) for paragraphs (a), (b), 
and (d) of the basic clause:
    (a) The requirements of paragraphs (b) and (c) of this clause 
shall--
    (1) Become operative only for any modification to this contract 
involving aggregate increases and/or decreases in costs, plus 
applicable profits, expected to exceed the threshold for submission 
of certified cost or pricing data at FAR 15.403-4(a)(1); and
    (2) Be limited to such modifications.
    (b) Unless an exception under FAR 15.403-1 applies, the 
Contractor shall require the subcontractor to submit certified cost 
or pricing data (actually or by specific identification in writing), 
in accordance with FAR 15.408, Table 15-2 (to include any 
information reasonably required to explain the subcontractor's 
estimating process such as the judgmental factors applied and the 
mathematical or other methods used in the estimate, including those 
used in projecting from known data, and the nature and amount of any 
contingencies included in the price)--

[[Page 52432]]

    (1) Before modifying any subcontract that was awarded prior to 
July 1, 2018, involving a pricing adjustment expected to exceed 
$750,000; or
    (2) Before modifying any subcontract that was awarded on or 
after July 1, 2018, involving a pricing adjustment expected to 
exceed $2 million.
    (d) The Contractor shall insert the substance of this clause, 
including this paragraph (d), in each subcontract that exceeds $2 
million.

0
9. Amend section 52.230-1 by--
0
a. Removing from the provision prescription reference ``30.201-3'' and 
the word ``provisions'', adding ``30.201-3(a)'' and ``provision'' in 
its place respectively;
0
 b. Revising the date of the provision; and
0
c. Removing from paragraph (a) ``$750,000'' and adding ``$2 million'' 
in its place.
    The revision reads as follows:


52.230-1   Cost Accounting Standards Notices and Certification.

* * * * *

Cost Accounting Standards Notices and Certification ([DATE])

* * * * *
0
10. Amend section 52.230-2 by--
0
 a. Removing from the clause prescription reference ``30.201-4(a)'' and 
adding ``30.201-4(a)(1)'' in its place;
0
 b. Revising the date of the clause; and
0
 c. Removing from paragraph (d) ``$750,000'' and adding ``$2 million'' 
in its place.
    The revision reads as follows:


52.230-2   Cost Accounting Standards.

* * * * *

Cost Accounting Standards ([DATE])

* * * * *
0
11. Amend section 52.230-3 by revising the date of the clause, and 
removing from paragraph (d)(2) ``$750,000'' and adding ``$2 million'' 
in its place.
    The revision reads as follows:


52.230-3   Disclosure and Consistency of Cost Accounting Practices.

* * * * *

Disclosure and Consistency of Cost Accounting Practices ([DATE])

* * * * *
0
12. Amend section 52.230-4 by--
0
 a. Removing from the clause prescription reference ``30.201-4(c)'' and 
adding ``30.201-4(c)(1)'' in its place;
0
 b. Revising the date of the clause; and
0
c. Removing from paragraph (d)(2) ``$750,000'' and adding ``$2 
million'' in its place.
    The revision reads as follows:


52.230-4   Disclosure and Consistency of Cost Accounting Practices--
Foreign Concerns.

* * * * *

Disclosure and Consistency of Cost Accounting Practices--Foreign 
Concerns ([DATE])

* * * * *
0
13. Amend section 52.230-5 by--
0
a. Removing from the clause prescription reference ``30.201-4(e)'' and 
adding ``30.201-4(e)(1)'' in its place;
0
 b. Revising the date of the clause; and
0
 c. Removing from paragraph (d)(2) ``$750,000'' and adding ``$2 
million'' in its place.
    The revision reads as follows:


52.230-5   Cost Accounting Standards--Educational Institution.

* * * * *

Cost Accounting Standards--Educational Institution ([DATE])

* * * * *
[FR Doc. 2019-20797 Filed 10-1-19; 8:45 am]
 BILLING CODE 6820-EP-P