[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]
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