Federal Acquisition Regulation: Modifications to Cost or Pricing Data Requirements, 40071-40074 [2020-12765]
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Federal Register / Vol. 85, No. 128 / Thursday, July 2, 2020 / Rules and Regulations
(b) * * *
Qualifying offeror, as used in 13.106–
1 and 15.304, means an offeror that is
determined to be a responsible source,
submits a technically acceptable
proposal that conforms to the
requirements of the solicitation, and the
contracting officer has no reason to
believe would be likely to offer other
than fair and reasonable pricing (10
U.S.C. 2305(a)(3)(D)).
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PART 4—ADMINISTRATIVE AND
INFORMATION MATTERS
3. Amend section 4.1005–2 by
revising paragraph (a)(2) to read as
follows:
■
4.1005–2
Exceptions.
(a) * * *
(2) Indefinite-delivery indefinitequantity (IDIQ) and requirements
contracts. (i) IDIQ and requirements
contracts may omit the quantity at the
line item level for the base award
provided that the total contract
minimum and maximum, or the
estimate, respectively, is stated.
(ii) Multiple-award IDIQ contracts
awarded using the procedures at
13.106–1(a)(2)(iv)(A) or
15.304(c)(1)(ii)(A) may omit price or
cost at the line item or subline item
level for the contract award, provided
that the total contract minimum and
maximum is stated (see 16.504(a)(1)).
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PART 13—SIMPLIFIED ACQUISITION
PROCEDURES
4. Amend section 13.106–1 by
revising paragraph (a)(2) to read as
follows:
■
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13.106–1
Soliciting competition.
(a) * * *
(2)(i) When soliciting quotations or
offers, the contracting officer shall
notify potential quoters or offerors of the
basis on which award will be made
(price alone or price and other factors,
e.g., past performance and quality).
(ii) Contracting officers are
encouraged to use best value.
(iii) Solicitations are not required to
state the relative importance assigned to
each evaluation factor and subfactor,
nor are they required to include
subfactors.
(iv) In accordance with 10 U.S.C.
2305(a)(3), for DoD, NASA, and the
Coast Guard—
(A) The contracting officer may
choose not to include price or cost as an
evaluation factor for award when a
solicitation—
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(1) Has an estimated value above the
simplified acquisition threshold;
(2) Will result in multiple-award
contracts (see subpart 16.5) that are for
the same or similar services; and
(3) States that the Government intends
to make an award to each and all
qualifying offerors (see 2.101).
(B) If the contracting officer chooses
not to include price or cost as an
evaluation factor for the contract award,
in accordance with paragraph
(a)(2)(iv)(A) of this section, the
contracting officer shall consider price
or cost as one of the factors in the
selection decision for each order placed
under the contract.
(C) The exception in paragraph
(a)(2)(iv)(A) of this section shall not
apply to solicitations for multiple-award
contracts that provide for sole source
orders pursuant to section 8(a) of the
Small Business Act (15 U.S.C. 637(a)).
PART 15—CONTRACTING BY
NEGOTIATION
5. Amend section 15.304 by revising
paragraph (c)(1) and paragraph (e)
introductory text to read as follows:
■
15.304 Evaluation factors and significant
subfactors.
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(c) * * *
(1)(i) Price or cost to the Government
shall be evaluated in every source
selection (10 U.S.C. 2305(a)(3)(A)(ii) and
41 U.S.C. 3306(c)(1)(B)) (also see part 36
for architect-engineer contracts), subject
to the exception listed in paragraph
(c)(1)(ii)(A) of this section for use by
DoD, NASA, and the Coast Guard.
(ii) In accordance with 10 U.S.C.
2305(a)(3), for DoD, NASA, and the
Coast Guard—
(A) The contracting officer may
choose not to include price or cost as an
evaluation factor for award when a
solicitation—
(1) Has an estimated value above the
simplified acquisition threshold;
(2) Will result in multiple-award
contracts (see subpart 16.5) that are for
the same or similar services; and
(3) States that the Government intends
to make an award to each and all
qualifying offerors (see 2.101).
(B) If the contracting officer chooses
not to include price or cost as an
evaluation factor for the contract award,
in accordance with paragraph
(c)(1)(ii)(A) of this section, the
contracting officer shall consider price
or cost as one of the factors in the
selection decision for each order placed
under the contract.
(C) The exception in paragraph
(c)(1)(ii)(A) of this section shall not
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40071
apply to solicitations for multiple-award
contracts that provide for sole source
orders pursuant to section 8(a) of the
Small Business Act (15 U.S.C. 637(a)).
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(e) Unless the exception at paragraph
(c)(1)(ii)(A) of this section applies, the
solicitation shall also state, at a
minimum, whether all evaluation
factors other than cost or price, when
combined, are—
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PART 16—TYPES OF CONTRACTS
16.504
[Amended]
6. Amend section 16.504 by removing
from paragraph (c)(1)(ii)(B)(5) ‘‘is less
than the simplified’’ and adding ‘‘is at
or below the simplified’’ in its place.
■ 7. Amend section 16.505 by adding
paragraph (b)(2)(i)(G); and removing
from paragraph (b)(2)(ii)(B)(10)
‘‘(b)(2)(i)(A) through (E) of’’ and adding
‘‘(b)(2)(i)(A) through (E) and (G) of’’ in
its place.
The addition reads as follows:
■
16.505
Ordering.
*
*
*
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*
(b) * * *
(2) * * *
(i) * * *
(G) For DoD, NASA, and the Coast
Guard, the order satisfies one of the
exceptions permitting the use of other
than full and open competition listed in
6.302 (10 U.S.C. 2304c(b)(5)). The
public interest exception shall not be
used unless Congress is notified in
accordance with 10 U.S.C. 2304(c)(7).
*
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[FR Doc. 2020–12764 Filed 7–1–20; 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
[FAC 2020–07; FAR Case 2018–005; Item
IV; Docket No. FAR–2018–0006, Sequence
No. 1]
RIN 9000–AN69
Federal Acquisition Regulation:
Modifications to Cost or Pricing Data
Requirements
Department of Defense (DoD),
General Services Administration (GSA),
and National Aeronautics and Space
Administration (NASA).
AGENCY:
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40072
ACTION:
Federal Register / Vol. 85, No. 128 / Thursday, July 2, 2020 / Rules and Regulations
Final rule.
DoD, GSA, and NASA are
issuing a final rule amending 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:
Effective: August 3, 2020.
Applicability: 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. (See FAR 14.201–7(c)(1)(ii) and
15.408).
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 or GSARegSec@gsa.gov.
Please cite FAC 2020–07, FAR Case
2018–005.
SUPPLEMENTARY INFORMATION:
SUMMARY:
I. Background
DoD, GSA, and NASA published a
proposed rule on October 2, 2019, at 84
FR 52428, 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. The threshold for Cost Accounting
Standards applicability is required by
41 U.S.C. 1502(b)(1)(B) to be the same
threshold as the one for requesting
certified cost or pricing data.
This FAR change implements section
811 of the National Defense
Authorization Act (NDAA) for Fiscal
Year (FY) 2018 (Pub. L. 115–91) that
amends 10 U.S.C. 2306a and 41 U.S.C.
3502. 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. Two respondents
submitted comments on the proposed
rule.
II. Discussion and Analysis
The Civilian Agency Acquisition
Council and the Defense Acquisition
Regulations Council (the Councils)
reviewed the public comments in the
development of the final rule. A
discussion of the comments is provided
as follows:
A. Summary of Changes
There are no changes as a result of
comments on the proposed rule.
B. Analysis of Public Comments
Comment: One respondent opposed
the proposed rule and believed it will
result in higher prices to the
Government.
Response: This FAR change is
required to implement section 811 of
Summary
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IV. Applicability to Contracts at or
Below the Simplified Acquisition
Threshold and for Commercial Items,
Including Commercially Available Offthe-Shelf Items
The changes are not applicable to
contracts at or below the simplified
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C. Other Changes
Some changes included in the
proposed rule are no longer necessary
because of publication of the final rule
under FAR Case 2018–007, FAC 2020–
006, on May 6, 2020, effective June 5,
2020.
III. Expected Impact of the Final Rule
and Proposed 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
calculated in 2016 dollars at a 7-percent
discount rate and in perpetuity:
Public
Present Value Cost Savings ......................................................................................
Annualized Cost Savings ...........................................................................................
Annualized Value Cost Savings as of 2016 if Year 1 is 2020 ..................................
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.’’
the NDAA for FY 2018 that amends 10
U.S.C. 2306a and 41 U.S.C. 3502.
Comment: One respondent suggested
revision of FAR 15.403–4(a)(3) to reflect
the $2 million threshold for both prime
contracts and subcontracts entered into
on and after July 1, 2018, to ensure
consistency across the entire Truth in
Negotiations Act certification process.
Response: The Councils cannot accept
the suggestion because it is not
consistent with the statute being
implemented.
¥$588,988,385
¥41,229,187
¥31,453,549
acquisition threshold or to contracts for
the acquisition of commercial items.
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
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Government
¥$90,669,628
¥6,346,874
¥4,841,999
Total
¥$679,658,013
¥47,576,061
¥36,295,548
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 final rule is considered to be an
E.O. 13771 deregulatory action. The
total annualized value of the cost
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savings is ¥$36,295,548 (as of 2016 if
Year 1 is 2020). Details on the estimated
cost savings can be found in section III
of this preamble.
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VII. Regulatory Flexibility Act
DoD, GSA, and NASA have prepared
a Final Regulatory Flexibility Analysis
(FRFA) consistent with the Regulatory
Flexibility Act, 5 U.S.C. 601, et seq. The
FRFA is summarized as follows:
This rule is required 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. The
threshold for Cost Accounting Standards
applicability is required by 41 U.S.C.
1502(b)(1)(B) to be the same threshold as the
one for requesting certified cost or pricing
data.
There were no significant issues raised by
the public in response to the initial
regulatory flexibility analysis.
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
contracts 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 rule does not include additional
reporting or record keeping requirements.
There are no available alternatives to the
rule to accomplish the desired objective of
the statute. However, the impact on small
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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, in most cases
they would 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.
Interested parties may obtain a copy
of the FRFA from the Regulatory
Secretariat Division. The Regulatory
Secretariat Division has submitted a
copy of the FRFA to the Chief Counsel
for Advocacy of the Small Business
Administration.
VIII. Paperwork Reduction Act
The Paperwork Reduction Act (44
U.S.C. Chapter 35) does apply. The rule
contains information collection
requirements. OMB has cleared this
information collection requirement
under 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.
No comments were received on the
revision to OMB Control Number 9000–
0013 that was provided in the proposed
rule. The annual reporting burden under
OMB Control Number 9000–0129 was
revised using the $2 million threshold;
a 30-day notice was published on
October 8, 2019, at 84 FR 53727.
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
amend 48 CFR parts 14, 15, 30, and 52
as set forth below:
■ 1. The authority citation for 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.
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(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
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40073
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.
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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 revisions and addition read 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
prime contracts awarded on or after July
1, 2018. * * *
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(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).
* * *
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*
(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.
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■ 4. Amend section 15.408 by revising
paragraphs (d) and (e) to read as follows:
15.408 Solicitation provisions and
contract clauses.
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*
(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
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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.
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PART 30—COST ACCOUNTING
STANDARDS ADMINISTRATION
30.201–4
[Amended]
5. Amend section 30.201–4, in
paragraph (b)(1), by removing
‘‘$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 ‘‘14.201–7(c)’’ and adding
‘‘14.201–7(c)(1)(i)’’ in its place; and
■ b. Adding Alternate I.
The addition reads as follows:
■
■
52.214–28 Subcontractor Certified Cost or
Pricing Data—Modifications—Sealed
Bidding.
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Subcontractor Certified Cost or Pricing
Data—Modifications—Sealed Bidding (May
2020)
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Alternate I (AUG 20). 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
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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 ‘‘15.408(d)’’ and adding
‘‘15.408(d)(1)’’ in its place; and
■ b. Adding Alternate I.
The addition reads as follows:
■
■
52.215–12 Subcontractor Certified Cost or
Pricing Data.
*
*
*
*
*
Subcontractor Certified Cost or Pricing Data
(May 2020)
*
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*
*
Alternate I (AUG 20). 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 ‘‘15.408(e)’’ and adding
‘‘15.408(e)(1)’’ in its place; and
■ b. Adding Alternate I.
The addition reads as follows:
■
■
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)—
(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.
52.230–2
[Amended]
9. Amend section 52.230–2 by
removing from the clause prescription
‘‘30.201–4(a)’’ and adding ‘‘30.201–
4(a)(1)’’ in its place.
■
52.230–4
[Amended]
10. Amend section 52.230–4 by
removing from the clause prescription
‘‘30.201–4(c)’’ and adding ‘‘30.201–
4(c)(1)’’ in its place.
■
52.230–5
[Amended]
11. Amend section 52.230–5 by
removing from the clause prescription
‘‘30.201–4(e)’’ and adding ‘‘30.201–
4(e)(1)’’ in its place.
■
[FR Doc. 2020–12765 Filed 7–1–20; 8:45 am]
BILLING CODE 6820– EP–P
52.215–13 Subcontractor Certified Cost or
Pricing Data—Modifications.
*
*
*
*
*
Subcontractor Certified Cost or Pricing
Data—Modifications (May 2020)
*
*
*
*
*
Alternate I (AUG 20). As prescribed in
15.408(e)(2), substitute the following
PO 00000
Frm 00016
Fmt 4701
Sfmt 9990
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02JYR3
]]>Agencies
[Federal Register Volume 85, Number 128 (Thursday, July 2, 2020)]
[Rules and Regulations]
[Pages 40071-40074]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2020-12765]
-----------------------------------------------------------------------
DEPARTMENT OF DEFENSE
GENERAL SERVICES ADMINISTRATION
NATIONAL AERONAUTICS AND SPACE ADMINISTRATION
48 CFR Parts 14, 15, 30, and 52
[FAC 2020-07; FAR Case 2018-005; Item IV; Docket No. FAR-2018-0006,
Sequence No. 1]
RIN 9000-AN69
Federal Acquisition Regulation: Modifications to Cost or Pricing
Data Requirements
AGENCY: Department of Defense (DoD), General Services Administration
(GSA), and National Aeronautics and Space Administration (NASA).
[[Page 40072]]
ACTION: Final rule.
-----------------------------------------------------------------------
SUMMARY: DoD, GSA, and NASA are issuing a final rule amending 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:
Effective: August 3, 2020.
Applicability: 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. (See FAR
14.201-7(c)(1)(ii) and 15.408).
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
or [email protected]. Please cite FAC 2020-07, FAR Case 2018-005.
SUPPLEMENTARY INFORMATION:
I. Background
DoD, GSA, and NASA published a proposed rule on October 2, 2019, at
84 FR 52428, 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. The threshold for Cost Accounting Standards
applicability is required by 41 U.S.C. 1502(b)(1)(B) to be the same
threshold as the one for requesting certified cost or pricing data.
This FAR change implements section 811 of the National Defense
Authorization Act (NDAA) for Fiscal Year (FY) 2018 (Pub. L. 115-91)
that amends 10 U.S.C. 2306a and 41 U.S.C. 3502. 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. Two respondents
submitted comments on the proposed rule.
II. Discussion and Analysis
The Civilian Agency Acquisition Council and the Defense Acquisition
Regulations Council (the Councils) reviewed the public comments in the
development of the final rule. A discussion of the comments is provided
as follows:
A. Summary of Changes
There are no changes as a result of comments on the proposed rule.
B. Analysis of Public Comments
Comment: One respondent opposed the proposed rule and believed it
will result in higher prices to the Government.
Response: This FAR change is required to implement section 811 of
the NDAA for FY 2018 that amends 10 U.S.C. 2306a and 41 U.S.C. 3502.
Comment: One respondent suggested revision of FAR 15.403-4(a)(3) to
reflect the $2 million threshold for both prime contracts and
subcontracts entered into on and after July 1, 2018, to ensure
consistency across the entire Truth in Negotiations Act certification
process.
Response: The Councils cannot accept the suggestion because it is
not consistent with the statute being implemented.
C. Other Changes
Some changes included in the proposed rule are no longer necessary
because of publication of the final rule under FAR Case 2018-007, FAC
2020-006, on May 6, 2020, effective June 5, 2020.
III. Expected Impact of the Final Rule and Proposed 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 calculated in 2016 dollars at a 7-percent
discount rate and in perpetuity:
----------------------------------------------------------------------------------------------------------------
Summary Public Government Total
----------------------------------------------------------------------------------------------------------------
Present Value Cost Savings............................. -$588,988,385 -$90,669,628 -$679,658,013
Annualized Cost Savings................................ -41,229,187 -6,346,874 -47,576,061
Annualized Value Cost Savings as of 2016 if Year 1 is -31,453,549 -4,841,999 -36,295,548
2020..................................................
----------------------------------------------------------------------------------------------------------------
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.''
IV. Applicability to Contracts at or Below the Simplified Acquisition
Threshold and for Commercial Items, Including Commercially Available
Off-the-Shelf Items
The changes are not applicable to contracts at or below the
simplified acquisition threshold or to contracts for the acquisition of
commercial items.
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 final rule is considered to be an E.O. 13771 deregulatory
action. The total annualized value of the cost
[[Page 40073]]
savings is -$36,295,548 (as of 2016 if Year 1 is 2020). Details on the
estimated cost savings can be found in section III of this preamble.
VII. Regulatory Flexibility Act
DoD, GSA, and NASA have prepared a Final Regulatory Flexibility
Analysis (FRFA) consistent with the Regulatory Flexibility Act, 5
U.S.C. 601, et seq. The FRFA is summarized as follows:
This rule is required 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. The threshold for Cost Accounting Standards applicability
is required by 41 U.S.C. 1502(b)(1)(B) to be the same threshold as
the one for requesting certified cost or pricing data.
There were no significant issues raised by the public in
response to the initial regulatory flexibility analysis.
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
contracts 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 rule does not include additional reporting or record keeping
requirements.
There are no available alternatives to the 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, in most cases they
would 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.
Interested parties may obtain a copy of the FRFA from the
Regulatory Secretariat Division. The Regulatory Secretariat Division
has submitted a copy of the FRFA to the Chief Counsel for Advocacy of
the Small Business Administration.
VIII. Paperwork Reduction Act
The Paperwork Reduction Act (44 U.S.C. Chapter 35) does apply. The
rule contains information collection requirements. OMB has cleared this
information collection requirement under 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. No comments were received on the revision to OMB
Control Number 9000-0013 that was provided in the proposed rule. The
annual reporting burden under OMB Control Number 9000-0129 was revised
using the $2 million threshold; a 30-day notice was published on
October 8, 2019, at 84 FR 53727.
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 amend 48 CFR parts 14, 15, 30, and 52
as set forth below:
0
1. The authority citation for 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 revisions and addition read 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 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
[[Page 40074]]
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, in paragraph (b)(1), by removing
``$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 ``14.201-7(c)'' and adding
``14.201-7(c)(1)(i)'' in its place; and
0
b. Adding Alternate I.
The addition reads as follows:
52.214-28 Subcontractor Certified Cost or Pricing Data--
Modifications--Sealed Bidding.
* * * * *
Subcontractor Certified Cost or Pricing Data--Modifications--Sealed
Bidding (May 2020)
* * * * *
Alternate I (AUG 20). 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 ``15.408(d)'' and adding
``15.408(d)(1)'' in its place; and
0
b. Adding Alternate I.
The addition reads as follows:
52.215-12 Subcontractor Certified Cost or Pricing Data.
* * * * *
Subcontractor Certified Cost or Pricing Data (May 2020)
* * * * *
Alternate I (AUG 20). 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 ``15.408(e)'' and adding
``15.408(e)(1)'' in its place; and
0
b. Adding Alternate I.
The addition reads as follows:
52.215-13 Subcontractor Certified Cost or Pricing Data--
Modifications.
* * * * *
Subcontractor Certified Cost or Pricing Data--Modifications (May 2020)
* * * * *
Alternate I (AUG 20). 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)--
(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.
52.230-2 [Amended]
0
9. Amend section 52.230-2 by removing from the clause prescription
``30.201-4(a)'' and adding ``30.201-4(a)(1)'' in its place.
52.230-4 [Amended]
0
10. Amend section 52.230-4 by removing from the clause prescription
``30.201-4(c)'' and adding ``30.201-4(c)(1)'' in its place.
52.230-5 [Amended]
0
11. Amend section 52.230-5 by removing from the clause prescription
``30.201-4(e)'' and adding ``30.201-4(e)(1)'' in its place.
[FR Doc. 2020-12765 Filed 7-1-20; 8:45 am]
BILLING CODE 6820- EP-P
