[Federal Register Volume 59, Number 59 (Monday, March 28, 1994)]
[Unknown Section]
[Page ]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 94-6899]


[Federal Register: March 28, 1994]


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DEPARTMENT OF DEFENSE
48 CFR Part 31

[FAR Case 91-112]


Federal Acquisition Regulation; Civil Defense Costs, Plant 
Protection Costs, and Recruitment Costs

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

ACTION: Proposed rule.

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SUMMARY: The Civilian Agency Acquisition Council and the Defense 
Acquisition Regulations Council are proposing amendments to the Federal 
Acquisition Regulation (FAR) by removing and reserving regulations on 
Civil defense costs and Plant protection costs, and by revising 
regulations on Recruitment costs. These proposed changes represent the 
second in a series resulting from the Councils' ongoing review of 
industry recommendations concerning FAR regulations on Contract Cost 
Principles and Procedures. This regulatory action was not subject to 
Office of Management and Budget review pursuant to Executive Order No. 
12866 dated September 30, 1993.

DATES: Comments should be submitted on or before May 27, 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, Washington, DC 20405.
    Please cite FAR case 91-112 in all correspondence related to this 
case.

FOR FURTHER INFORMATION CONTACT:
Mr. Jeremy 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 FAR case 91-
112.

SUPPLEMENTARY INFORMATION: 

A. Background

    As part of the Defense Management Review, the Office of the 
Secretary of Defense requested comments from industry concerning 
improvements to the Government's procurement regulations. The Council 
of Defense and Space Industry Associations (CODSIA) responded with 
several proposals, including one to revise FAR part 31, Contract Cost 
Principles and Procedures. CODSIA grouped its recommendations into six 
areas. Proposed rule changes will be published for comment as the 
Councils complete their incremental reviews of CODSIA's recommendations 
in each of these groupings. However, all resultant final rule changes 
will be published at one time, at the end of this effort. This proposed 
rule represents the second of these six groupings.
    The Councils believe deletion of FAR 31.205-5, Civil defense costs, 
is warranted because any ``extraordinary'' expenditures in planning 
for, and protecting life and property against, the possible effects of 
enemy attack (including terrorist attacks) can be subjected to the 
``reasonableness'' criteria under FAR 31.201-3 or made the subject of 
an advance agreement under FAR 31.109. Likewise, removing FAR 31.204-
29, Plant protection costs, is warranted because such costs are common 
and necessary expenses incurred by all contractors and can also be 
subjected to the ``reasonableness'' criteria under FAR 31.201-3. 
Paragraph (c) of FAR 31.205-34 is revised to clarify the allowability 
of offering any excessive compensation costs or any special emoluments 
(such as signing bonuses) to attract prospective employees from other 
Government contractors. In addition, paragraph FAR 31.205-34(b)(5) is 
deleted and the existing paragraph (b)(6) is redesignated as (b)(5) 
because the subject matter is discussed in the revised paragraph (c). 
We believe the proposed language at FAR 31.205-34(c) more effectively 
articulates the Government's long-standing policy against ``pirating''.

B. Regulatory Flexibility Act

    The proposed rule is 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., because most 
contracts awarded to small entities are awarded on a competitive, 
fixed-price basis and the cost principles do not apply. An Initial 
Regulatory Flexibility Analysis has, therefore, not been performed. 
Comments are invited from small businesses and other interested 
parties. Comments from small entities concerning the affected FAR 
subpart will also be considered in accordance with 5 U.S.C. 610. Such 
comments must be submitted separately and should cite 5 U.S.C. 601, et 
seq. (FAR case 91-112), in correspondence.

C. Paperwork Reduction Act

    The Paperwork Reduction Act does not apply because the proposed 
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.

List of Subjects in 48 CFR Part 31

    Government procurement.

    Dated: March 18, 1994.
Albert A. Vicchiolla,
Director, Office of Federal Acquisition Policy.

    Therefore, it is proposed that 48 CFR part 31 be amended as set 
forth below:

PART 31--CONTRACT COST PRINCIPLES AND PROCEDURES

    1. The authority citation for 48 CFR part 31 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).


31.205-5   [Removed and reserved]

    2. Section 31.205-5 is removed and reserved.


31.205-29   [Removed and reserved]

    3. Section 31.205-29 is removed and reserved.
    4. Section 31.205-34 is amended in paragraph (b)(4) by inserting at 
the end of the paragraph the word ``or''; removing paragraph (b)(5) and 
redesignating paragraph (b)(6) as (b)(5); and revising paragraph (c) to 
read as follows:


31.205-34   Recruitment costs.

* * * * *
    (c) Compensation costs offered by a contractor to prospective 
employees working for another Government contractor which are in excess 
of those normally offered to its employees with substantially the same 
training and experience are unallowable. Such costs shall remain 
unallowable as long as they are in excess of normal compensation costs. 
For the purpose of this cost principle, compensation costs include 
total compensation for personal services (as defined in 31.205-6(a)) 
and any special emoluments associated with the recruitment.

[FR Doc. 94-6899 Filed 3-25-94; 8:45 am]
BILLING CODE 6820-34-M