[Federal Register Volume 59, Number 179 (Friday, September 16, 1994)]
[Unknown Section]
[Page 0]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 94-23027]


[[Page Unknown]]

[Federal Register: September 16, 1994]


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DEPARTMENT OF DEFENSE
48 CFR Part 31

[FAR Case 93-20]

 

Federal Acquisition Regulation; Records Retention

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 changes to the Federal 
Acquisition Regulation (FAR) to explicitly state that contractors must 
maintain adequate cost records in order to be reimbursed for all 
claimed costs. This regulatory action was subject to Office of 
Management and Budget (OMB) review pursuant to Executive Order 12866 
dated September 30, 1993.

DATES: Comments should be submitted on or before November 15, 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 93-
20 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 93-
20.

SUPPLEMENTARY INFORMATION: 

A. Background

    The guidance for determining cost allowability at FAR 31.201-2 
currently does not explicitly state that contractors must maintain 
adequate cost records in order to be reimbursed for all claimed costs 
nor does it specifically state that the contracting officer has the 
authority to disallow costs which are determined to be inadequately 
supported. This requirement and authority have, heretofore, been 
considered to be implicit in the cost principles. However, the Councils 
are proposing that the FAR explicitly address these issues because the 
Office of Federal Procurement Policy SWAT Team on Civilian Agency 
Contracting in its report of December 3, 1992, ``Improving Contracting 
Practices and Management Controls on Cost-Type Federal Contracts,'' 
found that agencies are having difficulty because the FAR is silent on 
these issues. A new paragraph (d) is proposed for FAR 31.201-2 to 
explicitly state that costs claimed for reimbursement must be 
adequately supported and that the contracting officer may disallow 
costs which are inadequately supported.

B. Regulatory Flexibility Act

    This proposed rule clarifies a condition of cost allowability for 
contractors who wish to be reimbursed under Government contracts 
subject to FAR 31.2. The Regulatory Flexibility Act, 5 U.S.C. 601, et 
seq., applies but the rule is not expected to have a significant 
economic impact on a substantial number of small entities 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 from small entities concerning the affected FAR subpart will 
be considered in accordance with 5 U.S.C. 610 of the Act. Such comments 
must be submitted separately and should cite 5 U.S.C. 601, et seq. (FAR 
case 93-20), 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: September 13, 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).

    2. Section 31.201-2 is amended by adding paragraph (d) to read as 
follows:


31.201-2  Determining allowability.

* * * * *
    (d) A contractor is responsible for accounting for costs 
appropriately and for maintaining records, including supporting 
documentation, adequate to demonstrate that costs claimed have been 
incurred, are allocable to the contract, and comply with applicable 
cost principles in this subpart and agency supplements. The contracting 
officer may disallow all or part of a claimed cost which is 
inadequately supported.

[FR Doc. 94-23027 Filed 9-15-94; 8:45 am]
BILLING CODE 6820-34-M