[Federal Register Volume 60, Number 185 (Monday, September 25, 1995)]
[Proposed Rules]
[Page 49358]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 95-23551]



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DEPARTMENT OF DEFENSE

48 CFR Part 225


Defense Federal Acquisition Regulation Supplement; Offset 
Implementation Costs

AGENCY: Department of Defense (DoD).

ACTION: Proposed rule with request for comment.

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SUMMARY: The Director of Defense Procurement is proposing to amend the 
Defense Federal Acquisition Regulation Supplement (DFARS) to change the 
phrase ``offset administrative costs'' to ``offset implementation 
costs'' in order to clarify the scope of costs which may be recovered 
by a U.S. defense contractor if the foreign military sale Letter of 
Offer and Acceptance is financed wholly with customer cash or repayable 
foreign finance credits. The proposed rule also deletes the examples of 
offset administrative costs.

DATES: Comment Date: Comments on the proposed rule should be submitted 
in writing to the address below on or before November 24, 1995, to be 
considered in the formulation of the final rule.

ADDRESSES: Interested parties should submit written comments to: 
Defense Acquisition Regulations Council, Attn: Ms. Amy Williams, PDUS 
(AT&T) DP (DAR), IMD 3D139, 3062 Defense Pentagon, Washington, DC 
20301-3062. Telefax number (703) 602-0350. Please cite DFARS Case 95-
D019 in all correspondence related to this issue.

FOR FURTHER INFORMATION CONTACT:
Ms. Amy Williams, (703) 602-0131.

SUPPLEMENTARY INFORMATION:

A. Background

    This proposed rule amends language in the Defense Federal 
Acquisition Regulation Supplement (DFARS) 225.7303-2(a)(3) to change 
``offset administrative costs'' to ``offset implementation costs,'' and 
also changes ``administer specific requirements of'' to ``implement'' 
in 225.7303-2(a)(3)(i). The examples at 225.7303-2(a)(3)(iii) are 
deleted. These changes are proposed in order to clarify that the U.S. 
contractor may recover the full cost necessary to implement an offset 
agreement.

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 the 
change in terminology from ``administrative'' to ``implementation'' is 
intended only to clarify the scope of costs covered. Furthermore, most 
companies involved in offset arrangements are not small business 
entities. An Initial Regulatory Flexibility Analysis has therefore not 
been prepared. Comments are invited from small businesses and other 
increased parties. Comments from small entities concerning the affected 
DFARS Subpart will be considered in accordance with section 610 of the 
Act. Such comments must be submitted separately and cite DFARS Case 95-
D019 in correspondence.

C. Paperwork Reduction Act

    The Paperwork Reduction Act does not apply because the rule does 
not impose any additional information collection requirements 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 225

    Government procurement.

Michele P. Peterson,
Executive Editor, Defense Acquisition Regulations Council.

    Therefore, 48 CFR Part 225 is proposed to be amended as follows:

PART 225--FOREIGN ACQUISITION

    1. The authority citation for 48 CFR Part 225 continues to read as 
follows:

    Authority: 41 U.S.C. 421 and 48 CFR Chapter 1.

    2. Section 225.7303-2 is amended by revising paragraph (a)(3) to 
read as follows:


225.7303-2  Cost of doing business with a foreign government or an 
international organization.

    (a) * * *
    (3) Offset implementation costs.
    (i) A U.S. defense contractor may recover costs incurred to 
implement its offset agreement with a foreign government or 
international organization if the foreign military sale Letter of Offer 
and Acceptance is financed wholly with customer cash or repayable 
foreign military finance credits.
    (ii) The U.S. Government assumes no obligation to satisfy or 
administer the offset requirement or to bear any of the associated 
costs.
* * * * *
[FR Doc. 95-23551 Filed 9-22-95; 8:45 am]
BILLING CODE 5000-04-M