[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: 94-4395]


[[Page Unknown]]

[Federal Register: March 10, 1994]


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DEPARTMENT OF DEFENSE
48 CFR Parts 33, 42, and 52

[FAC 90-20; FAR Case 92-301/91-62; Item XIV]
RIN 9000-AF35/9000-AE96

 

Federal Acquisition Regulation; Federal Courts Administration Act

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 to an interim rule revising 
the claim certification procedures and the Alternative Means of Dispute 
Resolution (ADR) procedures in the FAR. The rule also implements 
subsection 907(a) of the Federal Courts Administration Act of 1992 and 
further revises existing ADR coverage. Accordingly, the interim rule 
published as FAR case 91-62, Item III, in the Federal Register at 56 FR 
67412, December 30, 1991, concerning Alternative Dispute Resolution, is 
hereby closed and superseded by this rule.

DATES: Effective date: March 10, 1994, except (FAR) 48 CFR 33.201, 
33.207(c), (e), and (f), 33.208, and 33.211(e) which are effective as 
of October 29, 1992. Applicability dates: The revisions to FAR 33.201 
(definition of ``defective certification''), 33.207(e) and (f), and 
33.211(e) are applicable with respect to all claims filed before, on, 
or after October 29, 1992. However, these revisions do not apply to 
claims that were the subject of an appeal to an agency board of 
contract appeals or a suit filed in the United States Claims Court 
prior to October 29, 1992, unless the claim is dismissed without 
prejudice and is subsequently refiled. Section 33.207(c) is applicable 
to those certifications executed more than 60 days after publication of 
this rule in the Federal Register. For certifications executed prior to 
that date, the reference to 33.207(c) in the revised 33.210 definition 
of ``defective certification'' shall be deemed to be a reference to 
prior 33.207(a). 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 4035, Attn: Ms. Beverly Fayson, Washington, DC 
20405.
    Please cite FAC 90-20, FAR case 92-301 in all correspondence 
related to this case.

FOR FURTHER INFORMATION CONTACT:Mr. Jack O'Neill at (202) 501-3856 in 
reference to this FAR case. For general information, contact the FAR 
Secretariat, room 4035, GS Building, Washington, DC 20405 (202) 501-
4755. Please cite FAC 90-20, FAR case 92-301.

SUPPLEMENTARY INFORMATION:

A. Background

    Subsection 907(a) of the Federal Courts Administration Act of 1992 
(Pub. L. 102-572) requires that the person certifying a claim under the 
Contract Disputes Act (CDA) (41 U.S.C. 601-613) be duly authorized to 
bind the contractor; specifies the conditions under which a contracting 
officer does not have to issue a final decision; provides that 
certifications are not jurisdictional; and provides for payment of 
interest from the date of initial receipt of the claim or enactment of 
Public Law 102-572, whichever is later. Public Law 102-572 was enacted 
on October 29, 1992. This rule revises FAR 33.201, 33.207, 33.208, 
33.211, and the clause at 52.233-1, and further revises ADR coverage at 
33.202, 33.204, 33.210, 33.214, and 42.302.

B. Regulatory Flexibility Act

    The interim revisions may have a significant beneficial economic 
impact on a substantial number of small entities within the meaning of 
the Regulatory Flexibility Act, 5 U.S.C. 601 et seq., because they 
simplify existing policies and procedures for the certification of 
claims submitted by contractors and are intended to reduce the need for 
costly litigation which has arisen under the existing regulations. 
Moreover, the regulatory impact on small entities flows directly from 
subsection 907(a) of the Federal Courts Administration Act of 1992 
(Pub. L. 102-572) which serves as the basis for this interim rule. 
Comments are invited. Comments from small entities concerning the 
affected FAR subpart will be considered in accordance with 5 U.S.C. 
610. Such comments must be submitted separately and cite 5 U.S.C. 601, 
et seq. (FAR Case 92-301), in correspondence.

C. Paperwork Reduction Act

    The Paperwork Reduction Act does not apply because the changes to 
the FAR do not impose recordkeeping or information collection 
requirements, or collections of information from offerors, contractors, 
or members of the public which require the approval of the Office of 
Management and Budget 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 subsection 907(a) of the Federal Courts Administration Act of 
1992 (Pub. L. 102-572), which amended the certification requirements 
for contractor claims filed pursuant to the Contract Disputes Act 
(CDA), is intended to resolve many of the problems that have arisen 
under existing CDA procedures. Subsection 907(a) also contains specific 
effective dates for implementation. However, pursuant to Public Law 98-
577 and FAR 1.501, public comments received in response to this interim 
rule will be considered in formulating the final rule.

List of Subjects in 48 CFR Parts 33, 42, and 52

    Government procurement.

    Dated: February 15, 1994.
Albert A. Vicchiolla,

Director, Office of Federal Acquisition Policy.
    Therefore, 48 CFR parts 33, 42, and 52 are amended as set forth 
below:
    1. The authority citation for 48 CFR parts 33, 42, 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 33--PROTESTS, DISPUTES, AND APPEALS

    2. Section 33.201 is amended by revising the definition title 
``Alternative dispute resolution'' to read ``Alternative means of 
dispute resolution (ADR)'', and inserting the word ``assisted'' before 
``settlement'' in the second sentence; adding, in alphabetical order, 
the definition ``Defective certification''; and revising the definition 
``Issue in controversy'' to read as follows:


33.201  Definitions.

* * * * *
    Defective certification, as used in this subpart, means a 
certificate which alters or otherwise deviates from the language in 
33.207(c) or which is not executed by a person duly authorized to bind 
the contractor with respect to the claim. Failure to certify shall not 
be deemed to be a defective certification.
    Issue in controversy means a material disagreement between the 
Government and the contractor which (1) may result in a claim or (2) is 
all or part of an existing claim.
* * * * *
    3. Section 33.202 is amended by revising the first sentence of the 
paragraph to read as follows:


33.202  Contract Disputes Act of 1978.

    The Contract Disputes Act of 1978, as amended (41 U.S.C. 601-613) 
(the Act), establishes procedures and requirements for asserting and 
resolving claims subject to the Act. * * *
    4. Section 33.204 is revised to read as follows:


33.204  Policy.

    The Government's policy is to try to resolve all contractual issues 
in controversy by mutual agreement at the contracting officer's level. 
Reasonable efforts should be made to resolve controversies prior to the 
submission of a claim. Agencies are encouraged to use ADR procedures to 
the maximum extent practicable. Certain factors, however, may make the 
use of ADR inappropriate (see 5 U.S.C. 572(b)). Except for arbitration 
conducted pursuant to the Administrative Dispute Resolution Act (ADRA), 
Public Law 100-522, agencies have authority which is separate from that 
provided by the ADRA to use ADR procedures to resolve issues in 
controversy. Agencies may also elect to proceed under the authority and 
requirements of the ADRA.
    5. Sections 33.207 and 33.208 are revised to read as follows:


33.207  Contractor certification.

    (a) Contractors shall provide the certification specified in 
33.207(c) when submitting any claim--
    (1) Exceeding $50,000; or
    (2) Regardless of the amount claimed when using--
    (i) Arbitration conducted pursuant to 5 U.S.C. 575-580; or
    (ii) Any other ADR technique that the agency elects to handle in 
accordance with the ADRA.
    (b) The certification requirement does not apply to issues in 
controversy that have not been submitted as all or part of a claim.
    (c) The certification shall state as follows:

    I certify that the claim is made in good faith; that the 
supporting data are accurate and complete to the best of my 
knowledge and belief; that the amount requested accurately reflects 
the contract adjustment for which the contractor believes the 
Government is liable; and that I am duly authorized to certify the 
claim on behalf of the contractor.

    (d) The aggregate amount of both the increased and decreased costs 
shall be used in determining when the dollar thresholds requiring 
certification are met (see example in 15.804-2(a)(1)(ii) regarding cost 
or pricing data).
    (e) The certification may be executed by any person duly authorized 
to bind the contractor with respect to the claim.
    (f) A defective certification shall not deprive a court or an 
agency BCA of jurisdiction over that claim. Prior to the entry of a 
final judgment by a court or a decision by an agency BCA, however, the 
court or agency BCA shall require a defective certification to be 
corrected.


33.208  Interest on claims.

    (a) The Government shall pay interest on a contractor's claim on 
the amount found due and unpaid from the date that--
    (1) The contracting officer receives the claim (certified if 
required by 33.207(a)); or
    (2) Payment otherwise would be due, if that date is later, until 
the date of payment.
    (b) Simple interest on claims shall be paid at the rate, fixed by 
the Secretary of the Treasury as provided in the Act, which is 
applicable to the period during which the contracting officer receives 
the claim and then at the rate applicable for each 6-month period as 
fixed by the Treasury Secretary during the pendency of the claim. (See 
32.614 for the right of the Government to collect interest on its 
claims against a contractor).
    (c) With regard to claims having defective certifications, as 
defined in 33.201, interest shall be paid from either the date that the 
contracting officer initially receives the claim or October 29, 1992, 
whichever is later. However, if a contractor has provided a proper 
certificate prior to October 29, 1992, after submission of a defective 
certificate, interest shall be paid from the date of receipt by the 
Government of a proper certificate.
    6. Section 33.210 is amended by revising the introductory text to 
read as follows:


33.210  Contracting officer's authority.

    Except as provided in this section, contracting officers are 
authorized, within any specific limitations of their warrants, to 
decide or resolve all claims arising under or relating to a contract 
subject to the Act. In accordance with agency policies and 33.214, 
contracting officers are authorized to use ADR procedures to resolve 
claims. The authority to decide or resolve claims does not extend to--
* * * * *
    7. Section 33.211 is amended by revising paragraph (a)(4)(v); 
redesignating paragraphs (e), (f), and (g) as (f), (g), and (h); and 
adding a new paragraph (e) to read as follows:


33.211  Contracting officer's decision.

    (a) * * *
    (4) * * *
    (v) Paragraph substantially as follows:
``This is the final decision of the Contracting Officer. You may appeal 
this decision to the agency board of contract appeals. If you decide to 
appeal, you must, within 90 days from the date you receive this 
decision, mail or otherwise furnish written notice to the agency board 
of contract appeals and provide a copy to the Contracting Officer from 
whose decision this appeal is taken. The notice shall indicate that an 
appeal is intended, reference this decision, and identify the contract 
by number. With regard to appeals to the agency board of contract 
appeals, you may, solely at your election, proceed under the board's 
small claim procedure for claims of $10,000 or less or its accelerated 
procedure for claims of $50,000 or less. Instead of appealing to the 
agency board of contract appeals, you may bring an action directly in 
the United States Court of Federal Claims (except as provided in the 
Contract Disputes Act of 1978, 41 U.S.C. 603, regarding Maritime 
Contracts) within 12 months of the date you receive this decision''; 
and
* * * * *
    (e) The contracting officer shall have no obligation to render a 
final decision on any claim exceeding $50,000 which contains a 
defective certification, if within 60 days after receipt of the claim, 
the contracting officer notifies the contractor, in writing, of the 
reasons why any attempted certification was found to be defective.
* * * * *
    8. Section 33.214 is amended by revising the section heading, the 
first sentence of the introductory text of paragraph (a), paragraphs 
(a)(5) and (b), and by adding paragraph (d) to read as follows:


33.214  Alternative dispute resolution (ADR).

    (a) The objective of using ADR procedures is to increase the 
opportunity for relatively inexpensive and expeditious resolution of 
issues in controversy. * * *
    (5) Certification by the contractor in accordance with 33.207 when 
using ADR procedures to resolve all or part of a claim under the 
authority of the ADRA.
    (b) ADR procedures may be used at any time that the contracting 
officer has authority to resolve the issue in controversy. If a claim 
has been submitted, ADR procedures may be applied to all or a portion 
of the claim. When ADR procedures are used subsequent to the issuance 
of a contracting officer's final decision, their use does not alter any 
of the time limitations or procedural requirements for filing an appeal 
of the contracting officer's final decision and does not constitute a 
reconsideration of the final decision.
* * * * *
    (d) The confidentiality of ADR proceedings shall be protected 
consistent with 5 U.S.C. 574.

PART 42--CONTRACT ADMINISTRATION

    9. Section 42.302 is amended by revising paragraph (a)(10) to read 
as follows:


42.302  Contract administration functions.

    (a) * * *
    (10) Attempt to resolve issues in controversy, using ADR procedures 
when appropriate (see subpart 33.2); prepare findings of fact and issue 
decisions under the Disputes clause on matters in which the 
administrative contracting officer (ACO) has the authority to take 
definitive action.
* * * * *

PART 52--SOLICITATION PROVISIONS AND CONTRACT CLAUSES

    10. Section 52.233-1 is amended by revising the date of the clause 
to read ``(MAR 1994)'' and revising paragraphs (d) through (h) to read 
as follows:


52.233-1  Disputes.

* * * * *

Disputes (Mar 1994)

* * * * *
    (d)(1) A claim by the Contractor shall be made in writing and 
submitted to the Contracting Officer for a written decision. A claim 
by the Government against the Contractor shall be subject to a 
written decision by the Contracting Officer.
    (2)(i) Contractors shall provide the certification specified in 
subparagraph (d)(2)(iii) of this clause when submitting any claim--
    (A) Exceeding $50,000; or
    (B) Regardless of the amount claimed, when using--
    (1) Arbitration conducted pursuant to 5 U.S.C. 575-580; or
    (2) Any other alternative means of dispute resolution (ADR) 
technique that the agency elects to handle in accordance with the 
Administrative Dispute Resolution Act (ADRA).
    (ii) The certification requirement does not apply to issues in 
controversy that have not been submitted as all or part of a claim.
    (iii) The certification shall state as follows: ``I certify that 
the claim is made in good faith; that the supporting data are 
accurate and complete to the best of my knowledge and belief; that 
the amount requested accurately reflects the contract adjustment for 
which the Contractor believes the Government is liable; and that I 
am duly authorized to certify the claim on behalf of the 
Contractor.''
    (3) The certification may be executed by any person duly 
authorized to bind the Contractor with respect to the claim.
    (e) For Contractor claims of $50,000 or less, the Contracting 
Officer must, if requested in writing by the Contractor, render a 
decision within 60 days of the request. For Contractor-certified 
claims over $50,000, the Contracting Officer must, within 60 days, 
decide the claim or notify the Contractor of the date by which the 
decision will be made.
    (f) The Contracting Officer's decision shall be final unless the 
Contractor appeals or files a suit as provided in the Act.
    (g) At the time a claim by the Contractor is submitted to the 
Contracting Officer or a claim by the Government is presented to the 
Contractor, the parties, by mutual consent, may agree to use ADR. 
When using arbitration conducted pursuant to 5 U.S.C. 575-580, or 
when using any other ADR technique that the agency elects to handle 
in accordance with the ADRA, any claim, regardless of amount, shall 
be accompanied by the certification described in subparagraph 
(d)(2)(iii) of this clause, and executed in accordance with 
subparagraph (d)(3) of this clause.
    (h) The Government shall pay interest on the amount found due 
and unpaid from (1) the date that the Contracting Officer receives 
the claim (certified, if required); or (2) the date that payment 
otherwise would be due, if that date is later, until the date of 
payment. With regard to claims having defective certifications, as 
defined in (FAR) 48 CFR 33.201, interest shall be paid from the date 
that the Contracting Officer initially receives the claim. Simple 
interest on claims shall be paid at the rate, fixed by the Secretary 
of the Treasury as provided in the Act, which is applicable to the 
period during which the Contracting Officer receives the claim and 
then at the rate applicable for each 6-month period as fixed by the 
Treasury Secretary during the pendency of the claim.
* * * * *
[FR Doc. 94-4395 Filed 3-9-94; 8:45 am]
BILLING CODE 6820-34-M