[Federal Register Volume 60, Number 186 (Tuesday, September 26, 1995)]
[Rules and Regulations]
[Pages 49729-49730]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 95-23864]



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DEPARTMENT OF DEFENSE
48 CFR Part 32

[FAC 90-33; FAR Case 94-761, Item V]
RIN 9000-AG34


Federal Acquisition Regulation; Assignment of Claims

AGENCIES: Department of Defense (DOD), General Services Administration 
(GSA), and National Aeronautics and Space Administration (NASA).

ACTION: Final rule.

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SUMMARY: This final rule is issued pursuant to Section 2451 of the 
Federal Acquisition Streamlining Act of 1994 to implement revisions 
which expand the authority to prohibit setoffs against assignees when 
contractors assign a contract to a financial institution. This 
regulatory action was subject to Office of Management and Budget review 
under Executive Order 12866, dated September 30, 1993.

EFFECTIVE DATE: October 1, 1995.

FOR FURTHER INFORMATION CONTACT: Mr. John Galbraith, Finance/Payment 
Team Leader, at (703) 697-6710, in reference to this FAR case. For 
general information, contact the FAR 

[[Page 49730]]
Secretariat, Room 4037, GS Building, Washington, DC 20405, (202) 501-
4755. Please cite FAC 90-33, FAR case 94-761.

SUPPLEMENTARY INFORMATION:

A. Background

    The Federal Acquisition Streamlining Act of 1994, Pub. L. 103-355 
(the Act), provides authorities that streamline the acquisition process 
and minimize burdensome Government-unique requirements.
    This rule revises FAR 32.803(d) to expand the authorization of a 
no-setoff commitment in contracts which are assigned under the Act. 
Prior to the Act, the no-setoff commitment could only be included in a 
contract during time of war or national emergency. Under the Act, the 
inclusion of the no-setoff commitment is based solely on whether the 
President makes a determination of need. The Act further states that 
each determination of need by the President shall be published in the 
Federal Register. Until an agency has received such a determination of 
need, the ``No-Setoff'' Alternate I of the clause at 52.232-23, 
Assignment of Claims, shall not be used.
    The Act also resulted in a reorganization of the United States Code 
(U.S.C.) to improve the reading format. Some parts of the U.S.C. were 
deleted as a result of obsolescence, such as the inclusion of the 
Atomic Energy Commission as a designated agency which may utilize the 
no-setoff commitment in contracts. Further, the U.S.C. reference to 
contracts awarded prior to October 9, 1940, was deleted. These changes 
to 41 U.S.C. 15 did not affect the current FAR language at Subpart 
32.8.
    The FAR has also been amended to reflect the micro-purchase 
threshold, in lieu of the previous floor of $1,000, for use of the 
Assignment of Claims clause.

B. Regulatory Flexibility Act

    The Department of Defense, the General Services Administration, and 
the National Aeronautics and space Administration certify that this 
rule will not have a significant economic impact on a substantial 
number of small entities because this rule does not significantly 
change the existing procedures for use of assignment of claims and no-
setoff commitments.

C. Paperwork Reduction Act

    The Paperwork Reduction Act does not apply because the 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.

D. Public Comments

    The proposed rule was published in the Federal Register on January 
19, 1995 (60 FR 3988). Editorial and technical comments were received 
from a number of Government agencies; however, no non-Government 
comments were received. This final rule reflects appropriate changes as 
a result of those Government comments. The major change is the 
adjustment of the definition of ``designated agency'' at 32.801.

List of Subjects in 48 CFR Part 32

    Government procurement.

    Dated: September 21, 1995.
Edward C. Loeb,
Deputy Project Manager for the Implementation of the Federal 
Acquisition Streamlining Act of 1994.

    Therefore, 48 CFR Part 32 is amended as set forth below:

PART 32-CONTRACT FINANCING

    1. The authority citation for 48 CFR Part 32 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 32.801 is amended by revising the definition of 
``Designated agency'' to read as follows:


32.801  Definitions.

* * * * *
    Designated agency, as used in this subpart, means any department or 
agency of the executive branch of the United States Government (see 
32.803(d)).
* * * * *
    3. Section 32.803 is amended by revising paragraph (d) to read as 
follows:


32.803  Policies.

* * * * *
    (d) Any contract of a designated agency (see 32.801), except a 
contract under which full payment has been made, may include a no-
setoff commitment only when a determination of need is made by the 
President and after such determination has been published in the 
Federal Register.
* * * * *
    4. Section 32.806 is amended by revising paragraph (a) to read as 
follows:


32.806  Contract clauses.

    (a) (1) The contracting officer shall insert the clause at 52.232-
23, Assignment of Claims, in solicitations and contracts expected to 
exceed the micro-purchase threshold, unless the contract will prohibit 
the assignment of claims (see 32.803(b)). The use of the clause is not 
required for purchase orders. However, the clause may be used in 
purchase orders expected to exceed the micro-purchase threshold, that 
are accepted in writing by the contractor, if such use is consistent 
with agency policies and regulations.
    (2) If a no-setoff commitment has been authorized by the President 
(see 32.801 and 32.803(d)), the contracting officer shall use the 
clause with its Alternate I.
* * * * *
[FR Doc. 95-23864 Filed 9-25-95; 8:45 am]
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