[Federal Register Volume 59, Number 232 (Monday, December 5, 1994)]
[Unknown Section]
[Page 0]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 94-29811]


[[Page Unknown]]

[Federal Register: December 5, 1994]


_______________________________________________________________________

Part IV

Department of Defense

General Services Administration

National Aeronautics and Space Administration
_______________________________________________________________________



48 CFR Parts 14, 15, and 52




Federal Acquisition Regulation; Certified Cost or Pricing Data 
Threshold; Interim Rule
DEPARTMENT OF DEFENSE

GENERAL SERVICES ADMINISTRATION

NATIONAL AERONAUTICS AND SPACE ADMINISTRATION

48 CFR Parts 14, 15, and 52

[FAC 90-22; FAR Case 94-720]
RIN 9000-AG19

 
Federal Acquisition Regulation; Certified Cost or Pricing Data 
Threshold

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 Department of Defense, the General Services 
Administration, and the National Aeronautics and Space Administration 
have agreed to an interim rule to increase the threshold for certified 
cost or pricing data from $100,000 to $500,000 for civilian agencies 
and to remove the requirements for commercial pricing certificates. 
This regulatory action was not subject to Office of Management and 
Budget review under Executive Order 12866, dated September 30, 1993.

DATES: Effective Date: December 5, 1994.
    Comment Date: Comments should be submitted to the FAR Secretariat 
at the address shown below on or before February 3, 1995, 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, Phone: (202) 501-4755.
    Please cite FAC 90-22, FAR case 94-720 in all correspondence 
related to this case.

FOR FURTHER INFORMATION CONTACT: Mr. Al Winston, Truth in Negotiations 
Act (TINA) Team Leader, at (703) 602-2119 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-
22, FAR case 94-720.

SUPPLEMENTARY INFORMATION:

A. Background

    The Federal Acquisition Streamlining Act of 1994 (the Act), Pub. L. 
103-355, provides authorities that streamline the acquisition process 
and minimize burdensome government-unique requirements. Major changes 
that can be expected in the acquisition process as a result of the 
Act's implementation include changes in the areas of Commercial Item 
Acquisition, Simplified Acquisition Procedures, the Truth in 
Negotiations Act, and introduction of the Federal Acquisition Computer 
Network.
    This notice announces FAR revisions developed under FAR case 94-
720, which was based on provisions in the Act that increased the 
threshold for obtaining certified cost or pricing data from $100,000 to 
$500,000 for civilian agencies. This matches the threshold previously 
applicable only to the Department of Defense, the National Aeronautics 
and Space Administration, and the Coast Guard. The Act also repealed 
the requirements to obtain commercial pricing certification for certain 
items under civilian agency contracts. This interim rule is intended 
solely to make the changes necessary to implement those limited 
portions of the Act. Further, more extensive changes to implement other 
portions of the Act will be made subsequently.
    The FAR Council is interested in an exchange of ideas and opinions 
with respect to the regulatory implementation of the Act. For that 
reason, the FAR Council is conducting a series of public meetings. 
However, the FAR Council has not scheduled a public meeting on this 
rule (FAR case 94-720) because of the clarity and non-controversial 
nature of the rule. If the public believes such a meeting is needed 
with respect to this rule, a letter requesting a public meeting and 
outlining the nature of the requested meeting shall be submitted to and 
received by the FAR Secretariat (see ADDRESSES caption, above) on or 
before January 4, 1995. The FAR Council will consider such requests in 
determining whether a public meeting on this rule should be scheduled.

B. Regulatory Flexibility Act

    The interim 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 nearly 
all contracts awarded to small business are awarded on the basis of 
competition for a firm fixed price and submittal of cost or pricing 
data is not required. 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. Such comments must be submitted separately and cite 5 U.S.C 601, 
et seq. (FAC 90-22, FAR case 94-720), in correspondence.

C. Paperwork Reduction Act

    The paperwork burden estimate applicable to the requirements for 
certified cost or pricing data (9000-0013) has been reduced to reflect 
the reduced numbers of submittals of certified cost or pricing data by 
civilian agency contractors. The reduction in the estimated burden for 
cost or pricing data requirements stems from the reduced number of 
submittals of cost or pricing data due to the increase in the threshold 
from $100,000 to $500,000. The paperwork burden applicable to the 
Commercial Pricing Certification requirements (9000-0105) has been 
eliminated. Inquiries should be directed to the FAR Secretariat, Room 
4037, GS Building, Washington, DC 20405, (202) 501-4755 and cite FAC 
90-22, OMB Clearance No. 9000-0013 or 9000-0105.

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 the portion of the Federal Acquisition Streamlining Act of 1994 
that increases the certified cost or pricing data threshold for 
civilian agencies is effective upon enactment. Additionally, the Act 
repeals the requirements for commercial pricing certifications and the 
unnecessary regulatory burden related to commercial pricing 
certificates should be eliminated as quickly as possible to reduce 
administrative costs within the Government and at contractor locations.

List of Subjects in 48 CFR Parts 14, 15 and 52

    Government procurement.

    Dated: November 29, 1994.
Capt. Barry L. Cohen, SC, USN,
Project Manager for the Implementation of the Federal Acquisition 
Streamlining Act of 1994.

    Unless otherwise specified, all Federal Acquisition Regulation 
(FAR) and other directive material contained in FAC 90-22 are effective 
December 5, 1994.

    Dated: November 17, 1994.
Albert A. Vicchiolla
Acting Associate Administrator, Office of Acquisition Policy, General 
Services Administration.
    Dated: November 23, 1994.
Thomas Luedtke,
Deputy Associate Administrator for Procurement, NASA.
    Dated: November 28, 1994.
Eleanor R. Spector,
Director, Defense Procurement.

    Therefore, 48 CFR Parts 14, 15 and 52 are amended as set forth 
below:
    1. The authority citation for 48 CFR Parts 14, 15 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 14--SEALED BIDDING

    2. Section 14.201-7 is amended in paragraphs (a), (b)(1), and 
(c)(1) by removing ``$100,000, or for the Department of Defense, the 
National Aeronautics and Space Administration, and the Coast Guard, is 
expected to exceed $500,000.'' and inserting ``the threshold for 
submission of cost or pricing data at 15.804-2(a)(1).'' in its place, 
by redesignating paragraph (d) as (e), and adding a new (d) to read as 
follows:


14.201-7  Contract clauses.

* * * * *
    (d) Contracting officers shall, if requested by the prime 
contractor, modify contracts to change the threshold in the contract to 
the cost or pricing data threshold in 15.804-2(a)(1), without requiring 
consideration. The contract modification shall be accomplished by 
inserting into the contract the current version of clauses 52.214-27, 
Price Reduction for Defective Cost or Pricing Data--Modifications--
Sealed Bidding, and 52.214-28, Subcontractor Cost or Pricing Data--
Modifications--Sealed Bidding. These new contract clauses shall apply 
only to contract modifications and subcontracts for which agreement on 
price occurs after the contracting officer has inserted the new 
clauses.
* * * * *


14.214  [Reserved]

    3. Section 14.214 is removed and reserved.

PART 15--CONTRACTING BY NEGOTIATION

    4. Section 15.804-2 is amended by revising paragraphs (a)(1) and 
(2) to read as follows:


15.804-2  Requiring cost or pricing data.

    (a)(1) The threshold for obtaining cost or pricing data is 
$500,000. This amount will be subject to adjustment, effective October 
1, 1995, and every five years thereafter. Except as provided in 15.804-
3, certified cost or pricing data are required before accomplishing any 
of the following actions expected to exceed the threshold in effect at 
time of agreement on price or, in the case of existing contracts, the 
threshold specified in the contract--
    (i) The award of any negotiated contract (except for undefinitized 
actions such as letter contracts);
    (ii) The award of a subcontract at any tier, if the contractor and 
each higher tier subcontractor have been required to furnish cost or 
pricing data (see 15.804-3(i); or
    (iii) The modification of any sealed bid or negotiated contract 
(whether or not cost or pricing data were initially required) or 
subcontract covered by paragraph (a)(1)(ii) of this subsection.
    Price adjustment amounts shall consider both increases and 
decreases. (For example, a $150,000 modification resulting from a 
reduction of $350,000 and an increase of $200,000 is a pricing 
adjustment exceeding $500,000.) This requirement does not apply when 
unrelated and separately priced changes for which cost or pricing data 
would not otherwise be required are included for administrative 
convenience in the same modification.
    (2) Contracting officers shall, if requested by the prime 
contractor, modify contracts to change the threshold in the contract to 
the cost or pricing data threshold in paragraph (a)(1) of this 
subsection, without requiring consideration. The contract modification 
shall be accomplished by inserting into the contract the current 
version of the clauses 52.215-23, Price Reduction for Defective Cost or 
Pricing Data--Modifications, and 52.215-25, Subcontractor Cost or 
Pricing Data--Modifications, or 52.215-24, Subcontractor Cost or 
Pricing Data, as applicable. These new contract clauses shall apply 
only to contract modifications and subcontracts for which agreement on 
price occurs after the contracting officer has inserted the new 
clauses.
* * * * *


15.813  [Reserved]

    5. Section 15.813 is removed and reserved, and subsections 15.813-1 
through 15.813-7 are removed.

PART 52--SOLICITATION PROVISIONS AND CONTRACT CLAUSES

    6. Section 52.214-27 is amended by revising the clause date and the 
introductory text of paragraph (a) to read as follows:


52.214-27  Price Reduction for Defective Cost or Pricing Data--
Modifications--Sealed Bidding

* * * * *

Price Reduction for Defective Cost or Pricing Data--Modifications--
Sealed Bidding (Nov 1994)

    (a) This clause shall become operative only for any modification 
to this contract involving aggregate increases and/or decreases in 
costs, plus applicable profits, of more than the threshold for 
submission of cost or pricing data at (FAR) 48 CFR 15.804-2(a)(1), 
except that this clause does not apply to any modification for which 
the price is--
* * * * *
    7. Section 52.214-28 is amended:
    (a) By revising the clause date and the introductory text of 
paragraph (b);
    (b) In paragraph (a) by removing ``$100,000, or for the Department 
of Defense, the National Aeronautics and Space Administration, and the 
Coast Guard, expected to exceed $500,000'' and inserting ``the 
threshold for submission of cost or pricing data at (FAR) 48 CFR 
15.804-2(a)(1)'' in its place; and
    (c) In (d) by removing ``$100,000, or for the Department of 
Defense, the National Aeronautics and Space Administration, and the 
Coast Guard, in each subcontract that exceeds $500,000'' and inserting 
``the threshold for submission of cost or pricing data at (FAR) 48 CFR 
15.804-2(a)(1)'' in its place.
    The revised text is to read as follows:


52.214-28  Subcontractor Cost or Pricing Data--Modifications--Sealed 
Bidding.

* * * * *

Subcontractor Cost or Pricing Data--Modifications--Sealed Bidding (Nov 
1994)

* * * * *
    (b) Before awarding any subcontract expected to exceed the 
threshold for submission of cost or pricing data at (FAR) 48 CFR 
15.804-2(a)(1) when entered into, or pricing any subcontract 
modification involving aggregate increases and/or decreases in 
costs, plus applicable profits, expected to exceed the threshold for 
submission of cost or pricing data at (FAR) 48 CFR 15.804-2(a)(1), 
the Contractor shall require the subcontractor to submit cost or 
pricing data (actually or by specific identification in writing), 
unless the price is--
* * * * *


52.214-29  [Amended]

    8. Section 52.214-29 is amended in the introductory paragraph by 
revising ``14.201-7(d)'' to read ``14.201-7(e)''.


52.215-23  [Amended]

    9. Section 52.215-23 is amended by revising the clause date to read 
``(NOV 1994)'' and in the introductory text of paragraph (a) by 
removing ``$100,000, or for the Department of Defense, the National 
Aeronautics and Space Administration, and the Coast Guard, expected to 
exceed $500,000'' and inserting ``the threshold for submission of cost 
or pricing data at FAR 15.804-2(a)(1)'' in its place.


52.215-24  [Amended]

    10. Section 52.215-24 is amended by revising the clause date to 
read ``(NOV 1994)'' and twice in the introductory text of paragraph (a) 
and once in the introductory text of (c) by removing ``$100,000, or for 
the Department of Defense, the National Aeronautics and Space 
Administration, and the Coast Guard, expected to exceed $500,000'' and 
inserting ``the threshold for submission of cost or pricing data at FAR 
15.804-2(a)(1)'' in its place.
    11. Section 52.215-25 is amended by revising the clause date, 
paragraph (a), the introductory text of (b), and (d) to read as 
follows:


52.215-25  Subcontractor Cost or Pricing Data--Modifications.

* * * * *

Subcontractor Cost or Pricing Data--Modifications (Nov 1994)

    (a) The requirements of paragraphs (b) and (c) of this clause 
shall (1) become operative only for any modification to this 
contract involving a pricing adjustment expected to exceed the 
threshold for submission of cost or pricing data at (FAR) 48 CFR 
15.804-2(a)(1); and (2) be limited to such modifications.
    (b) Before awarding any subcontract expected to exceed the 
threshold for submission of cost or pricing data at (FAR) 48 CFR 
15.804-2(a)(1) when entered into, or pricing any subcontract 
modification involving a pricing adjustment expected to exceed the 
threshold for submission of cost or pricing data at (FAR) 48 CFR 
15.804-2(a)(1), the Contractor shall require the subcontractor to 
submit cost or pricing data (actually or by specific identification 
in writing), unless the price is--
* * * * *
    (d) The Contractor shall insert the substance of this clause, 
including this paragraph (d), in each subcontract that exceeds the 
threshold for submission of cost or pricing data at (FAR) 48 CFR 
15.804-2(a)(1), when entered into.

(End of clause)


52.215-32  [Removed and Reserved]

    12. Section 52.215-32 is removed and reserved.


52.215-37  [Removed and Reserved]

    13. Section 52.215-37 is removed and reserved.

[FR Doc. 94-29811 Filed 12-2-94; 8:45 am]
BILLING CODE 6820-34-U