[Federal Register Volume 60, Number 245 (Thursday, December 21, 1995)]
[Proposed Rules]
[Page 66472]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 95-30996]
[[Page 66471]]
_______________________________________________________________________
Part III
Department of Defense
General Services Administration
National Aeronautics and Space Administration
_______________________________________________________________________
48 CFR Parts 52 and 44
Allowable Cost and Payment Clause and Contractors' Purchasing Systems
Reviews; Proposed Rule
Federal Register / Vol. 60, No. 245 / Thursday, December 21, 1995 /
Proposed Rules
[[Page 66472]]
DEPARTMENT OF DEFENSE
GENERAL SERVICES ADMINISTRATION
NATIONAL AERONAUTICS AND SPACE ADMINISTRATION
48 CFR Part 52
[FAR Case 93-024]
RIN 9000-AG74
Federal Acquisition Regulation; Allowable Cost and Payment Clause
AGENCIES Department of Defense (DOD), General Services Administration
(GSA), and National Aeronautics and Space Administration (NASA).
ACTION: Proposed rule.
-----------------------------------------------------------------------
SUMMARY: The Civilian Agency Acquisition Council and the Defense
Acquisition Regulations Council are proposing changes to the Federal
Acquisition Regulation (FAR) to clarify payment provisions for large
business prime contractors which are awarded cost-type contracts. This
regulatory action was not subject to Office of Management and Budget
review under Executive Order 12866, dated September 30, 1993.
DATES: Comments should be submitted on or before February 20, 1996 to
be considered in the formulation of a final rule.
ADDRESSES: Interested parties should submit written comments on:
General Services Administration, FAR Secretariat (VRS), 18th and F
Streets, NW, Room 4037, Washington, DC 20405.
Please cite FAR case 93-024 in all correspondence related to this
case.
FOR FURTHER INFORMATION CONTACT:
Jeremy F. Olson at (202) 501-3221 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 93-
024.
SUPPLEMENTARY INFORMATION:
A. Background
The Office of Federal Procurement Policy SWAT Team on Civilian
Agency Contracting in its report of December 1992, entitled ``Improving
Contracting Practices and Management Controls on Cost-Type Federal
Contracts'', recommended several FAR revisions which were viewed to
have Government-wide benefit.
One area identified for clarification included the payment
provisions in FAR clauses 52.216-7, Allowable Cost and payment, and
52.232-7, Payment Under Time-and-Materials and Labor-Hour Contracts.
The SWAT Team concluded that these clauses did not clearly convey the
Government's intent that payments to subcontractors by large business
prime contractors were not billable to the Government until the
contractor had actually paid the subcontractors. The proposed rule
amends these payment clauses to clarify that, on cost-type
contracts,payments to subcontractors are not billable by large business
prime contractors until the subcontractors have been paid by the prime
contractor.
B. Regulatory Flexibility Act
This 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 rule
only applies to large business entities who wish to be reimbursed under
cost-type contracts. 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 of the Act. Such comments must be submitted separately and cite
(FAR case 93-024), in correspondence.
C. Paperwork Reduction Act
The Paperwork Reduction Act does not apply because the proposed
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.
List of Subjects in 48 CFR Part 52
Government procurement.
Dated: December 15, 1995.
Edward C. Loeb,
Acting Director, Office of Federal Acquisition Policy.
Therefore, it is proposed that 48 CFR Part 52 be amended as set
forth below:
PART 52--SOLICITATION PROVISIONS AND CONTRACT CLAUSES
1. The authority citation for 48 CFR Part 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).
2. Section 52.216-7 is amended by revising the clause date and
paragraph (b)(i)(iii) to read as follows:
52.216-7 Allowable cost and payment.
* * * * *
Allowable Cost and Payment (Date)
* * * * *
(b) * * *
(1) * * *
(iii) The amount of progress and other payments that have been
paid by cash, check or other form of payment to the Contractor's
subcontractors under similar cost standards.
* * * * *
3. Section 52.232-7 is amended by revising the clause date and the
second sentence of paragraph (b)(2) to read as follows:
52.232-7 Payments under time-and-materials and labor-hour contracts.
* * * * *
Payments Under Time-and-Materials and Labor-Hour Contracts (Date)
* * * * *
(b) * * *
(2) * * * Reimbursable costs in connection with subcontracts
shall be limited to the amounts paid to the subcontractor for items
and services purchased directly for the contract only when cash,
checks, or other form of payment has been made for such purchased
items or services; however, this requirement shall not apply to a
Contractor that is a small business concern. * * *
* * * * *
[FR Doc. 95-30996 Filed 12-20-95; 8:45 am]
BILLING CODE 6820-EP-M