[Federal Register Volume 60, Number 109 (Wednesday, June 7, 1995)]
[Rules and Regulations]
[Pages 30002-30006]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 95-13436]
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DEPARTMENT OF ENERGY
48 CFR Parts 915, 931, 942, 951, 952, and 970
RIN 1991-AB12
Independent Research and Development and Bid and Proposal Costs
Policy
AGENCY: Department of Energy.
ACTION: Final rule.
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SUMMARY: The Department of Energy (DOE) amends its Acquisition
Regulation to effect changes to Independent Research and Development
(IR&D) and Bid and Proposal Costs (B&P); and reflect Federal
Acquisition Regulation (FAR) changes to the Cost Accounting Standards
(CAS). Additionally, there are technical changes updating references,
correcting editorial errors, and clarifying language.
EFFECTIVE DATE: June 7, 1995.
FOR FURTHER INFORMATION CONTACT: Terrence D. Sheppard (202) 586-8174,
Business and Financial Policy Division (HR-51), Office of Procurement
and Assistance Management, Department of Energy, 1000 Independence
Avenue, SW., Washington, D.C., 20585.
SUPPLEMENTARY INFORMATION:
I. Background
II. Procedural Requirements
A. Review Under Executive Order 12866
B. Review Under Executive Order 12778
C. Review Under the Regulatory Flexibility Act
D. Review Under the Paperwork Reduction Act
E. Review Under the National Environmental Policy Act
F. Review Under Executive Order 12612
I. Background
DOE published a notice of proposed rulemaking in the Federal
Register on October 31, 1994. The public comment period closed December
30, 1994. No public comments were received. However, those portions of
the proposed rule which addressed reimbursement of contractor travel
costs (sections 970.3102-17(c)(7), 970.5204-13(e)(35), and 970.5204-
14(e)(33)) have been withdrawn from this final rule, because section
2191 of the Federal Acquisition Streamlining Act of 1994, Pub. L. 103-
355, repealed the statutory basis for the policy. A detailed list of
changes follows:
1. The authority citation for Parts 915, 931, 942, 951, and 952 is
restated.
2. Subsection 915.805-5 is amended to delete the requirement in
paragraph (c)(1) that a copy of the audit request be sent to the DOE
Inspector General (IG). Pursuant to interagency agreements, the
[[Page 30003]] DOE contract audit agency is the Defense Contract Audit
Agency (DCAA); the Department of Health and Human Services (HHS) has
audit cognizance for most educational institutions.
3. Subparagraph 915.970-8(d)(1) is revised to add a reference to
the relocation of the CAS to FAR Appendix B (Federal Acquisition
Circular (FAC) 90-12, August 31, 1992).
4. Subsection 931.205-18 is revised to add the acronyms ``IR&D''
and ``B&P'' to the title. The DEAR reference to the FAR is changed from
(c)(3) to (c)(2), because the FAR amendment (FAC 90-13, September 24,
1992) deleted FAR (c)(3). Paragraph (c)(4) is deleted in its entirety,
except for a portion of the first sentence of (c)(4) which was moved to
(c)(2). Also, FAC 90-13 replaced the requirement for separate advance
agreements with temporary limits (for a 3-year period) on allowable
IR&D/B&P costs. DOE has chosen not to institute the temporary limits,
but rather to allow for full recovery, immediately. Thus, the text was
amended to reflect the DOE policy that generally IR&D costs are
allowable if reasonable, allocable, and they have a potential benefit
or relationship to the DOE program. B&P costs are generally allowable
if they are reasonable and allocable.
5. Section 942.003, paragraph (a) is revised to delete references
to the Department of Defense (DOD) services; the services no longer
have individual plant residencies. This revision reflects the current
DOD structure for contract administration.
6. Section 942.101 is amended by deleting the reference to the Air
Force Contract Management Division (AFCMD) and the DOE IG in paragraphs
(a)(2) and (c), respectively. The AFCMD no longer exists and the Office
of Procurement and Assistance Management now negotiates the interagency
agreements with DCAA and HHS. Paragraph (a)(3) is redesignated as
(a)(2) to accommodate the deletion of AFCMD.
7. Subsection 942.705-1 is revised at paragraph (a)(3) by deleting
the statement that a listing of business units, for which DOE has final
indirect cost rate negotiation responsibility, is published in the DOE
Order System. The listing is no longer published in the DOE Order
System. The revised paragraph (b)(1) clarifies the proscription that
contractors shall neither be required nor directed to submit final
indirect cost rate proposals to the auditor.
8. Subsection 942.705-3 is revised to correct the statement that
negotiated rates are ``centrally maintained'' when, in fact, they are
only ``distributed'' by the Office of Policy.
9. Subsection 942.705-4 is revised to correct the statement that
negotiated rates are maintained by the Office of Policy, when, in fact,
they are only distributed by the Office.
10. Subsection 942.705-5 is revised to correct the statement that
negotiated rates are maintained by the Office of Policy, when, in fact,
they are only distributed by the Office.
11. Subpart 942.10 is removed as a result of concomitant changes to
the IR&D/B&P advance agreements (see item 4, foregoing). There is no
longer a requirement to negotiate advance agreements; thus, the
coverage is removed in its entirety.
12. Subsection 942.7003-6 is revised to add the word
``Administration'' to the title of FAR Part 30, which was changed as a
result of FAC 90-12, August 31, 1992. Additionally, the reference to
Public Law 91-379, which established the CAS, is deleted due to the
subsequent incorporation of the CAS in FAR Appendix B and their
application to civilian agencies pursuant to Public Law 100-679.
13. Subsection 942.7004 is revised at paragraph (a) to incorporate
the results of the interagency agreements between the Office of
Procurement and Assistance Management and DCAA and HHS. References to
the DOE IG are deleted. Paragraphs (b), (c), and (d) are deleted as
they describe internal operating procedures that, in large part, are no
longer valid.
14. Subsection 951.7000 is revised to delete the reference to
outdated General Services Administration (GSA) Bulletin A-95. The
reference to the Federal Property Management Regulations (FPMRs) is
sufficient.
15. Subsection 951.7001 is revised to delete the reference to
outdated GSA Bulletin A-95 in the introductory paragraph. Paragraphs
(a), (b), and (c) are deleted as they duplicate information contained
in clause 952.251-70.
16. Subsection 952.251-70 is amended to correct a referenced
citation at paragraph (a) from ``Property Management Regulation (FPMR),
Temporary Regulation A-30'' to ``Travel Regulation (FTR), Part 301-15,
Travel Management Programs.''
17. The authority citation for Part 970 is restated.
18. Subsection 970.3001-1 is revised to reflect the relocation of
the CAS, within the FAR, from Part 30 to Appendix B.
19. Subsection 970.3001-2 is revised to correct the cross reference
from ``970.3102-10'' to ``970.3102-3.''
20. Subsection 970.3102-17 is amended by revising paragraph
(c)(2)(i) and adding a new paragraph (c)(6). In (c)(2)(i), line 1, the
letter ``s'' is deleted from the word ``Regulations'' to reflect the
new title. New subparagraph (c)(6) is added to reflect changes in FAR
31.205-46, ``Travel costs'' as a result of FAC 90-7 which provided for
downward adjustments to the maximum per diem rates when no lodging
costs are incurred or on partial travel days.
21. Subsection 970.7104-33 is revised to reflect the relocation of
the Cost Accounting Standards, within the FAR, from Part 30 to Appendix
B.
II. Procedural Requirements
A. Review Under Executive Order 12866
Today's regulatory action has been determined not to be a
``significant regulatory action'' under Executive Order 12866,
``Regulatory Planning and Review,'' (58 FR 51735, October 4, 1993).
Accordingly, this action was not subject to review under that Executive
Order by the Office of Information and Regulatory Affairs of the Office
of Management and Budget (OMB).
B. Review Under Executive Order 12778
Section 2 of Executive Order 12778 instructs agencies to adhere to
certain requirements in promulgating new regulations and reviewing
existing regulations. These requirements, set forth in Sections 2(a)
and (b), include eliminating drafting errors and needless ambiguity,
drafting the regulations to minimize litigation, providing clear and
certain legal standards for affected conduct, and promoting
simplification and burden reduction. Agencies are also instructed to
make every reasonable effort to ensure that the regulation: specifies
clearly any preemptive effect; describes any administrative proceedings
to be available prior to judicial review and any provisions for the
exhaustion of such administrative proceedings; and defines key terms.
DOE certifies that today's rule meets the requirements of sections 2(a)
and (b) of Executive Order 12778.
C. Review Under the Regulatory Flexibility Act
This rule was reviewed under the Regulatory Flexibility Act of
1980, Public Law 96-354, which requires preparation of a regulatory
flexibility analysis for any rule which is likely to have significant
economic impact on a substantial number of small entities. DOE
certifies that this rule will not have a significant economic impact on
a substantial number of small entities, [[Page 30004]] and, therefore,
no regulatory flexibility analysis has been prepared.
D. Review Under the Paperwork Reduction Act
No new information or recordkeeping requirements are imposed by
this rulemaking. Accordingly, no OMB clearance is required under the
Paperwork Reduction Act of 1980 (44 U.S.C. 3501, et seq.).
E. Review Under the National Environmental Policy Act
DOE has concluded that promulgation of this rule falls into a class
of actions which would not individually or cumulatively have
significant impact on the human environment, as determined by DOE's
regulations (10 CFR Part 1021, Subpart D) implementing the National
Environmental Policy Act (NEPA) of 1969 (42 U.S.C. 4321 et seq.).
Specifically, this rule is categorically excluded from NEPA review
because the amendments to the DEAR do not change the environmental
effect of the rule being amended (categorical exclusion A5). Therefore,
this rule does not require an environmental impact statement or
environmental assessment pursuant to NEPA.
F. Review Under Executive Order 12612
Executive Order 12612 (52 FR 41685, October 30, 1987), requires
that regulations, rules, legislation, and any other policy actions be
reviewed for any substantial direct effects on States, on the
relationship between the National Government and the States, or in the
distribution of power and responsibilities among the various levels of
Government. If there are sufficient substantial direct effects, then
the Executive Order requires the preparation of a federalism assessment
to be used in all decisions involved in promulgating and implementing a
policy action. This rule revises certain policy and procedural
requirements. States which contract with DOE will be subject to this
rule. However, DOE has determined that this rule will not have a
substantial direct effect on the institutional interests or traditional
functions of the States.
List of Subjects in 48 CFR Parts 915, 931, 942, 951, 952, and 970
Government procurement.
Richard H. Hopf,
Deputy Assistant Secretary for Procurement and Assistance Management.
For the reasons set out in the preamble, Chapter 9 of Title 48 of
the Code of Federal Regulations is amended as set forth below.
PART 915--CONTRACTING BY NEGOTIATION
1. The authority citation for Parts 915, 931, 942, and 951
continues to read as follows:
Authority: 42 U.S.C. 7254; 40 U.S.C. 486(c).
2. Subsection 915.805-5 is amended by revising paragraph (c)(1) to
read as set forth below:
915.805-5 Field pricing support.
* * * * *
(c)(1) When an audit is required pursuant to 915.805-70, ``Audit as
an aid in proposal analysis,'' the request for audit shall be sent
directly to the Federal audit office assigned cognizance of the offeror
or prospective contractor. When the cognizant agency is other than the
Defense Contract Audit Agency or the Department of Health and Human
Services, and an appropriate interagency agreement has not been
established, the need for audit assistance shall be coordinated with
the Office of Policy, within the Headquarters procurement organization.
* * * * *
3. Section 915.970-8(d) is amended by revising paragraph (d)(1)
introductory text to read as set forth below:
915.970-8 Weighted guidelines application considerations.
* * * * *
(d) Capital investment (facilities). (1) This element relates to
the consideration to be given in the profit objective in recognition of
the investment risk associated with the facilities employed by the
contractor. Measurement of the amount of facilities capital employed is
discussed in (FAR Appendix B) 48 CFR 9904.414. Five to twenty percent
of the net book value of facilities capital allocated to the contract
is the normal range of weight for this profit factor. The key factors
that the negotiating official shall consider in evaluating this factor
are:
* * * * *
PART 931--CONTRACT COST PRINCIPLES AND PROCEDURES
4. Subsection 931.205-18 is revised to read as follows:
931.205-18 Independent research and development (IR&D) and bid and
proposal (B&P) costs.
(c)(2) IR&D costs are recoverable under DOE contracts to the extent
they are reasonable, allocable, not otherwise unallowable, and have
potential benefit or relationship to the DOE program. The term ``DOE
program'' encompasses the DOE total mission and its objectives. B&P
costs are recoverable under DOE contracts to the extent they are
reasonable, allocable, and not otherwise unallowable.
PART 942--CONTRACT ADMINISTRATION
5. Section 942.003 is amended by revising paragraph (a) as set
forth below:
942.003 Organizational structure.
(a) The Department of Defense has initiated a formal system of
independent organizations responsible for performance of post-award
management functions. A field structure of Contract Administration
Offices (CAO) responsible for contract management and administration of
contracts for major defense contractors has been established. DOD has
organized plant residencies of contract management specialists for
specific DOD contractors and their various business units. The Defense
Logistics Agency performs contract management functions both at onsite
residencies of contractors and on a mobile basis from centrally located
management areas for other defense contractors. A complete listing of
the DOD contract administration service components is contained in the
Defense Directory cited in (FAR) 48 CFR 42.102.
* * * * *
6. Section 942.101 is amended by removing paragraph (a)(2);
redesignating paragraph (a)(3) as (a)(2); and revising paragraph (c) to
read as follows:
942.101 Policy.
* * * * *
(c) The Department of Energy has executed memoranda of
understanding with the Defense Contract Audit Agency and the Office of
Audit of the Department of Health and Human Services to provide audit
support service to the DOE in support of its procurement mission.
Procedures for acquiring these services are discussed in 942.70.
7. Subsection 942.705-1 is revised to read as follows:
942.705-1 Contracting officer determination procedure.
(a)(3) The Department of Energy shall use the contracting officer
determination procedure for all business units for which it shall be
required to negotiate final indirect cost rates. A listing of such
business units is maintained by the Office of Policy, within the
Headquarters procurement organization.
(b)(1) Pursuant to (FAR) 48 CFR 52.216-7, Allowable Cost and
Payment, [[Page 30005]] contractors shall be requested to submit their
final indirect cost rate proposals reflecting actual cost experience
during the covered periods to the cognizant contracting officers
responsible for negotiating their final indirect rates. The DOE
negotiating official shall request all needed audit service in
accordance with the procedures in 942.70, Audit Services.
8. Subsection 942.705-3 is revised to read as follows:
942.705-3 Educational institutions.
(a)(2) The negotiated rates established for the institutions cited
in OMB Circular No. A-88 are distributed, to the Cognizant DOE Office
(CDO) assigned lead office responsibility for all DOE indirect cost
matters relating to a particular contractor, by the Office of Policy,
within the Headquarters procurement organization.
9. Subsection 942.705-4 is revised to read as follows:
942.705-4 State and local governments.
A list of cognizant agencies for State/local government
organizations is periodically published in the Federal Register by the
Office of Management and Budget (OMB). The responsible agencies are
notified of such assignments. The current negotiated rates for State/
local government activities are distributed to each CDO by the Office
of Policy, within the Headquarters procurement organization.
10. Subsection 942.705-5 is revised to read as follows:
942.705-5 Nonprofit organizations other than educational and state and
local governments.
OMB Circular A-122 establishes the rules for assigning cognizant
agencies for the negotiation and approval of indirect cost rates. The
Federal agency with the largest dollar value of awards (contracts plus
Federal financial assistance dollars) will be designated as the
cognizant agency. There is no published listing of assigned agencies.
The Office of Policy, within the Headquarters procurement organization,
distributes to each CDO the rates established by the cognizant agency.
Subpart 942.10 [Removed]
11. Subpart 942.10 (including 942.1004 and 942.1008) is removed.
12. Subsection 942.7003-6 is revised to read as follows:
942.7003-6 CAS disclosure statements.
The audit activity is available and, in accordance with (FAR) 48
CFR part 30, Cost Accounting Standards Administration, is responsible
for making recommendations to the contracting officer as to whether the
CAS disclosure statement, submitted by the contractor as a condition of
the contract, adequately describes the actual or proposed cost
accounting practices and is in compliance with the Cost Accounting
Standards required under the terms of the contract. The contracting
officer shall request the auditor to review all Disclosure Statements
submitted by a contractor or potential contractor.
13. Section 942.7004 is revised to read as follows:
942.7004 Procedures.
The Department of Energy Headquarters procurement organization has
established formal interagency arrangements with the Defense Contract
Audit Agency (DCAA) and the Department of Health and Human Services,
Office of Inspector General. Audits are available to contracting
officers pursuant to terms of these arrangements. DCAA, as the DOE
cognizant auditor, is responsible for performing audits, when
requested, for all DOE prime contractors and DOE Management and
Operating contractors' subcontractors, except where another agency has
cognizance of a contractor. HHS, for example, has contract audit
cognizance for most educational institutions.
PART 951--USE OF GOVERNMENT SOURCES BY CONTRACTORS
14. Section 951.7000 is revised to read as follows:
951.7000 Scope of subpart.
The General Services Administration (GSA) and, in some cases, the
Department of Defense (DOD) Military Traffic Management Command
negotiate agreements with commercial organizations to provide certain
discounts to contractors traveling under Government cost-reimbursable
contracts. In the case of discount air fares and hotel/motel room
rates, the GSA has established agreements with certain airlines and
thousands of hotels/motels to extend discounts which were previously
only available to Federal employees on official travel status. DOD has
negotiated agreements with car rental companies for special rates with
unlimited mileage which were also to be used by only Federal employees
on official Government business. GSA Federal Property Management
Regulations (FPMRs) make these three travel discounts available to
Government cost-reimbursable contractors at the option of the vendor.
15. Section 951.7001 is revised to read as follows:
Sec. 951.7001 General policy.
Contracting officers will encourage DOE cost-reimbursable
contractors (CRCs) to use Government travel discounts to the maximum
extent practicable in accordance with contractual terms and conditions.
Vendors providing the service may require that Government contractor
employees furnish a letter of identification signed by the authorizing
contracting officer. Contracting officers shall provide CRCs with a
``Standard Letter of Identification'' when appropriate to do so. An
example of a ``Standard Letter of Identification'' is at 952.251-70(e).
PART 952--SOLICITATION PROVISIONS AND CONTRACT CLAUSES
16. The authority citation for part 952 continues to read as
follows:
Authority: 42 U.S.C. 7254; 40 U.S.C. 486(c); 42 U.S.C. 13524.
16a. Subsection 952.251-70 is amended by revising paragraph (a) of
the clause to read as follows:
952.251-70 Contractor employee travel discounts.
* * * * *
(a) Contracted airlines. Airlines participating in travel
discounts are listed in the Federal Travel Directory (FTD),
published monthly by the General Services Administration (GSA).
Regulations governing the use of contracted airlines are contained
in the Federal Travel Regulation (FTR), 41 CFR Part 301-15, Travel
Management Programs. It stipulates that cost-reimbursable contractor
employees may obtain discount air fares by use of a Government
Transportation Request (GTR), Standard Form 1169, cash or personal
credit cards. When the GTR is used, contracting officers may issue a
blanket GTR for a period of not less than two weeks nor more than
one month. In unusual circumstances, such as prolonged or
international travel, the contracting officer may extend the period
for which a blanket GTR is effective to a maximum of three months.
Contractors will ensure that their employees traveling under GTR
provide the GTR number to the contracted airlines for entry on
individual tickets and on month-end billings to the contractor.
* * * * *
PART 970--DOE MANAGEMENT AND OPERATING CONTRACTS
17. The authority citation for part 970 continues to read as
follows:
Authority: Sec. 161 of the Atomic Energy Act of 1954 (42 U.S.C.
2201), sec. 644 of the Department of Energy Organization Act, Public
Law 95-91 (42 U.S.C. 7254).
[[Page 30006]] 18. Subsection 970.3001-1 is revised to read as
follows:
970.3001-1 Applicability.
The provisions of (FAR) 48 CFR part 30 and (FAR Appendix B) 48 CFR
9904.414 shall be followed for management and operating contracts.
19. Subsection 970.3001-2 is revised to read as follows:
970.3001-2 Limitations.
Cost of money as an element of the cost of facilities capital (CAS
414) and as an element of the cost of capital assets under construction
(CAS 417) is not recognized as an allowable cost under contracts
subject to 48 CFR part 970 (See 970.3102-3).
20. Subsection 970.3102-17 is amended by revising paragraph
(c)(2)(i) and by adding paragraph (c)(6) to read as follows:
970.3102-17 Travel costs.
* * * * *
(c) * * *
(2) * * *
(i) Federal Travel Regulation prescribed by the General Services
Administration, for travel in the conterminous 48 United States.
* * * * *
(6)(i) The maximum per diem rates referenced in paragraph (c)(2) of
this section generally would not constitute a reasonable daily charge:
(A) When no lodging costs are incurred; and/or
(B) On partial travel days (e.g., same day of departure and
return).
(ii) Appropriate downward adjustments from the maximum per diem
rates would normally be required under these circumstances. While these
adjustments need not be calculated pursuant to the Federal Travel
Regulation, Joint Travel Regulations, or Standardized Regulations, they
must result in a reasonable charge.
21. Subsection 970.7104-33 is revised to read as follows:
970.7104-33 Cost Accounting Standards.
The provisions of (FAR) 48 CFR 30 and (FAR Appendix B) 48 CFR
9904.414 shall apply to purchases by management and operating
contractors.
[FR Doc. 95-13436 Filed 6-6-95; 8:45 am]
BILLING CODE 6450-01-P