[Federal Register Volume 59, Number 47 (Thursday, March 10, 1994)]
[Unknown Section]
[Page 0]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 94-4394]


[[Page Unknown]]

[Federal Register: March 10, 1994]


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DEPARTMENT OF DEFENSE
48 CFR Parts 32 and 52

[FAC 90-20; FAR case 92-46; Item XIII]
RIN 9000-AF41

 

Federal Acquisition Regulation; Prompt Payment Overseas

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

ACTION: Interim rule with request for comment.

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SUMMARY: The Civilian Agency Acquisition Council and the Defense 
Acquisition Regulations Council have agreed on an interim rule amending 
the Federal Acquisition Regulation (FAR) to reflect a decision by the 
Armed Services Board of Contract Appeals that the Prompt Payment Act 
applies to overseas contracts.

DATES: Effective Date: March 10, 1994. Comment Date:, Comments should 
be submitted to the FAR Secretariat at the address shown below on or 
before May 9, 1994, to be considered in the formulation of a final 
rule.

ADDRESSES: Interested parties should submit written comments to: 
General Services Administration, FAR Secretariat (VRS), 18th & F 
Streets NW., room 4037, Attn: Ms. Beverly Fayson, Washington, DC 20405.

    Please cite FAC 90-20, FAR case 92-46 in all correspondence related 
to this case.
FOR FURTHER INFORMATION CONTACT:
Mr. Jeremy F. Olson at (202) 501-3221 in reference to this FAR case. 
For general information, contact the FAR Secretariat, room 4037, GS 
Building, Washington, DC 20405 (202) 501-4755. Please cite FAC 90-20, 
FAR case 92-46.

SUPPLEMENTARY INFORMATION: 

A. Background

    On January 13, 1992, the Armed Services Board of Contract Appeals 
(ASBCA), in Held & Francke Baukittengesellschaft (ASBCA Nos. 42463 and 
42464), held that FAR 32.901 improperly excluded applicability of the 
Prompt Payment Act (31 U.S.C. 3901, et seq.) to contracts awarded to 
foreign contractors for work performed outside the United States. As a 
result of the ASBCA decision, the Councils have agreed on an interim 
rule which, in effect, makes the Government liable for payment of 
interest and interest penalties under the Act for contracts with 
foreign contractors for work performed or supplies delivered overseas.
    Section 32.901 and the clauses at 52.232-25, 52.232-26, and 52.232-
27 are amended to remove the statements that no interest penalty will 
be paid on contracts awarded to foreign vendors outside the United 
States for work performed outside the United States and to remove the 
definition of ``foreign vendor'' from the clauses.

B. Regulatory Flexibility Act

    The Regulatory Flexibility Act, 5 U.S.C. 601, et seq., applies, but 
the interim rule will not significantly impact a substantial number of 
small entities within the meaning of the Act. The rule only applies to 
contracts with foreign contractors for work performed overseas by 
extending the Government's liability to pay interest and penalties 
under the Prompt Payment Act to such entities. An Initial Regulatory 
Flexibility Analysis has, therefore, not been performed. Comments from 
small entities concerning the affected FAR subpart will be considered 
in accordance with 5 U.S.C. 610; however, such comments must be 
submitted separately and cite 5 U.S.C. 601, et seq. (FAC 90-20, FAR 
case 91-46), in correspondence.

C. Paperwork Reduction Act

    The Paperwork Reduction Act does not apply because the amendments 
to the FAR do not impose recordkeeping or information collection 
requirements, or collection of information from offerors, contractors, 
or members of the public which require the approval of OMB under 44 
U.S.C. 3501, et seq.

D. Determination To Issue an Interim Rule

    A determination has been made under the authority of the Secretary 
of Defense (DOD), the Administrator of General Services (GSA), and the 
Administrator of the National Aeronautics and Space Administration 
(NASA) that compelling reasons exist to promulgate this interim rule 
without prior opportunity for public comment. This action is necessary 
because it is essential that uniform guidance on application of the 
board decision be issued in the FAR.

List of Subjects in 48 CFR Parts 32 and 52

    Government procurement.

    Dated: February 15, 1994.
Albert A. Vicchiolla,
Director, Office of Federal Acquisition Policy.

    Therefore, 48 CFR parts 32 and 52 are amended as set forth below:
    1. The authority citation for 48 CFR parts 32 and 52 continues to 
read as follows:

    Authority: 40 U.S.C. 486(c); 10 U.S.C. chapter 137; and 42 
U.S.C. 2473(c).

PART 32--CONTRACT FINANCING

    2. Section 32.901 is revised to read as follows:


32.901  Applicability.

    This subpart applies to all Government contracts (including small 
purchases as defined in subpart 13.1), except contracts with payment 
terms and late payment penalties established by other governmental 
authority (e.g., tariffs).

PART 52--SOLICITATION PROVISIONS AND CONTRACT CLAUSES


52.232-25  [Amended]

    3. Section 52.232-25 is amended in the clause heading by removing 
``(SEP 1992)'' and inserting ``(MAR 1994)'' in its place; removing the 
last sentence of the introductory text of the clause and the last 
sentence of the introductory text of paragraph (a)(5) of the clause.


52.232-26  [Amended]

    4. Section 52.232-26 is amended in the clause heading by removing 
``(APR 1989)'' and inserting ``(MAR 1994)'' in its place; removing the 
last sentence of the introductory text of the clause and the last 
sentence of the introductory text in paragraph (a)(4) of the clause.


52.232-27  [Amended]

    5. Section 52.232-27 is amended in the clause heading by removing 
``(APR 1989)'' and inserting ``(MAR 1994)'' in its place; removing the 
last sentence of the introductory text of the clause and the last 
sentence of the introductory text in paragraph (a)(3) of the clause.

[FR Doc. 94-4394 Filed 3-9-94; 8:45 am]
BILLING CODE 6820-34-M