[Federal Register Volume 60, Number 130 (Friday, July 7, 1995)]
[Proposed Rules]
[Pages 35454-35455]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 95-16718]
[[Page 35453]]
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Part II
Department of Housing and Urban Development
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48 CFR Parts 32 and 52
Federal Acquisition Regulation (FAR); Contract Financing, Proposed Rule
Federal Register / Vol. 60, No. 130 / Friday, July 7, 1995 /
Proposed Rules
[[Page 35454]]
DEPARTMENT OF DEFENSE
GENERAL SERVICES ADMINISTRATION
NATIONAL AERONAUTICS AND SPACE ADMINISTRATION
48 CFR Parts 32 and 52
[FAR Case 94-764]
RIN 9000-AG36
Federal Acquisition Regulation; Contract Financing
AGENCIES: Department of Defense (DOD), General Services Administration
(GSA), and National Aeronautics and Space Administration (NASA).
ACTION: Extension of comment period and notice of public meeting.
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SUMMARY: This notice is issued to familiarize the public with the
status of the rulemaking effort on FAR Case 94-764, Contract Financing,
which implements the Federal Acquisition Streamlining Act of 1994
(FASA), to extend the period for public comment, and to provide notice
of a public meeting. The Contract Financing drafting team has made some
refinements to the proposed rule that was published in the March 15,
1995, Federal Register. The revised coverage has been mailed to the
public commenters on FAR Case 94-764 and copies may be obtained by
other interested parties.
DATES: Comment Date: Comments should be submitted to the FAR
Secretariat at the address shown below on or before July 31, 1995.
Meeting Date: The meeting will be held at 1:00 p.m. on July 17,
1995.
ADDRESSES: A copy of the revised coverage may be obtained by calling
the FAR Secretariat at 202-501-4755. Interested parties should submit
written comments to: General Services Administration, FAR Secretariat
(VRS), 18th and F Streets NW., Room 4037, Washington, DC 20405.
The public meeting will be held at: Office of Personnel Management,
1900 E Street NW., Room 1350, Washington, DC.
Please cite FAR case 94-764 in all correspondence related to this
case.
FOR FURTHER INFORMATION CONTACT: Mr. John Galbraith, Contract
Financing/Payment Team leader, at (703) 697-6710 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 94-764.
SUPPLEMENTARY INFORMATION:
A. Background
On March 15, 1995, a proposed rule was published in the Federal
Register (60 FR 14156). The proposed rule afforded the public a 60-day
comment period. During that time, 21 organizations submitted more than
263 comments. A public meeting was also held on this rule on April 28,
1995. Based upon comments received, the financing drafting team has
refined the coverage. The FAR Council wants to afford the public and
Federal agencies the opportunity to comment on the refinements to the
proposed rule. Accordingly, a copy of the revised coverage has been
mailed to previous public commenters on FAR case 94-764. Other
interested parties may obtain a copy by contacting the FAR Secretariat.
B. Case Summary
FAR Case 94-764 implements Sections 2001 and 2051 of the Federal
Acquisition Streamlining Act of 1994 (Pub. L. 103-355), which
substantially changed the statutory authorities for Government
financing of contracts. Subsections 2001(f) and 2051(e) provide
specific authority for Government financing of purchases of commercial
items, and subsections 2001(b) and 2051(b) substantially revised the
authority for Government financing of purchases of non-commercial
items.
Subsections 2001(f) and 2051(e) provide specific authority for
Government financing of purchases of commercial items. These sections
amended 10 U.S.C. 2307 and 41 U.S.C. 255 by adding a new paragraph,
Conditions for Payments for Commercial Items, to each. These paragraphs
authorize the Government to provide contract financing with certain
limitations:
The financing must be in the best interest of the
Government;
The financing cannot exceed 15 percent until some
performance of work under the contract;
The terms and conditions must be appropriate or customary
in the commercial marketplace.
The above statutory provisions also remove from financing of
commercial purchases certain restrictions applicable to financing of
non-commercial purchases by other provisions of 10 U.S.C. 2307 and 41
U.S.C. 255. Subsections 2001(b) and 2051(b) amend the authority for
Government financing of non-commercial purchases by authorizing
financing on the basis of certain classes of measures of performance.
To implement these changes, the DOD, NASA, and GSA propose to amend
the FAR by revising Subparts 32.0, 32.1, 32.4, and 32.5; by adding new
Subparts 32.2 and 32.10; and by adding new clauses to 52.232. The
statutory changes create a fundamental distinction between financing of
purchases of commercial and non-commercial items. As a result, the
subparts of Part 32, Contract Financing, fall into three logical
categories:
Subparts applicable to both commercial and non-commercial
financing;
Subparts applicable to only commercial financing; and
Subparts applicable to only non-commercial financing.
C. Summary of Changes
The following are highlights of changes that have been made to the
proposed rule as a result of the written comments received during the
comment period and other issues that were raised at the public hearing
held on April 28, 1995:
Simplify rule--The team significantly rewrote, clarified
and shortened the coverage on financing of commercial item contracts.
Complexity of process--The team eliminated or made
optional many of the complex requirements that had applied to both
contracting officers and to contractors.
Access to records--The team eliminated the government's
access to records for contract financing of commercial items.
Certification--The team eliminated the certification
requirement that had applied to requests for payments under the
commercial financing clause.
Reduction of commercial financing--The team revised the
clause to eliminate its authority for the Government to take back
previously provided finance payments under certain conditions.
Market research--The team made market research optional
for commercial financing.
Contractor financial condition as adequate security--The
team restructured the policy on security for commercial item financing
to promote reliance on a healthy contractor's financial condition in
place of hard assets as security.
Financing rate--The team increased the maximum permissible
financing rate for performance based financing from 75% to 90%.
Payment of financing under dispute--The team added new
coverage permitting performance-based financing payments to be paid
under certain
[[Page 35455]]
circumstances, even though prior events had been delayed.
Payment of financing under government caused delay--The
team added specific authority to renegotiate performance-based
financing to mitigate the effects of government caused delay.
D. Presentations at the Public Meeting
To allow the public to present its views on the refinements to this
proposed rule, a public meeting will be held at the Office of Personnel
Management on July 17, 1995. Persons or organizations wishing to make
presentations will be allowed 10 minutes to present their views,
provided they notify the FAR Secretariat at (202) 501-4745 and provide
an advance copy of their remarks not later than July 14, 1995.
Dated: July 3, 1995.
Jeremy Olson,
Acting Deputy Project Manager for the Implementation of the Federal
Acquisition Streamlining Act.
[FR Doc. 95-16718 Filed 7-6-95; 8:45 am]
BILLING CODE 6820-EP-M