[Federal Register Volume 61, Number 62 (Friday, March 29, 1996)]
[Proposed Rules]
[Page 14216]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 96-7687]




[[Page 14215]]

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Part III

Department of Defense

General Services Administration

National Aeronautics and Space Administration
_______________________________________________________________________



48 CFR Part 31



Federal Acquisition Regulation; Contractor Overhead Certification; 
Proposed Rule

  Federal Register / Vol. 61, No. 62 / Friday, March 29, 1996 / 
Proposed Rules  

[[Page 14216]]


DEPARTMENT OF DEFENSE

GENERAL SERVICES ADMINISTRATION

NATIONAL AERONAUTICS AND SPACE ADMINISTRATION

48 CFR Part 31

[FAR Case 92-613]
RIN 9000-AG85


Federal Acquisition Regulation; Contractor Overhead Certification

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

ACTION: Proposed rule.

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SUMMARY: The Civilian Agency Acquisition Council (CAAC) and the Defense 
Acquisition Regulations Council (DARC) are considering revisions to the 
Federal Acquisition Regulation to clarify the allowability of certain 
costs. 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 May 28, 1996, to be 
considered in the formulation of a final rule.

ADDRESSES: Interested parties should submit written comments to: 
General Services Administration, FAR Secretariat, (VRS), 18th & F 
Streets NW., Room 4037, Washington, DC 20405.
    Please cite FAR case 92-613 in all correspondence related to this 
case.

FOR FURTHER INFORMATION CONTACT: Mr. 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; telephone: 
(202) 501-4755. Please cite FAR case 92-613.

SUPPLEMENTARY INFORMATION:

A. Background

    The General Accounting Office (GAO), in its report GAO/NSIAD-93-79, 
``CONTRACT PRICING: Unallowable Costs Charged to Defense Contracts,'' 
dated November 20, 1992, reported many instances where contractors had 
proposed costs for gifts and entertainment that appeared to be 
questionable. Some of those costs appeared to be unallowable under the 
existing cost principles and others, while not specifically 
unallowable, appeared to be unreasonable. GAO recommended that FAR 
31.205-1, 31-205-13, and 31.205-14 be revised to eliminate confusion as 
to which cost principle was controlling. The December 1992 OMB SWAT 
summary report on civilian agency contracting practices also 
recommended these cost principles be made more explicit.
    This proposed rule removes from paragraph (f)(5) of the cost 
principle at FAR 31.205-1, Public relations and advertising costs, the 
parenthetical reference to other cost principles to eliminate any 
confusion as to which cost principle governs. Other recommendations 
made by GAO and the OMB SWAT concerning further revisions to the cost 
principles have now been overtaken by the implementation of the Federal 
Acquisition Streamlining Act of 1994 (FASA), Public Law 103-355. These 
include revisions to FAR 31.205-13 and 31.205-14, which were published 
as final in the Federal Register at 60 FR 42648, August 16, 1995, under 
FAR Case 94-750, Entertainment, Gift, and Recreation Costs for 
Contractor Employees. FAR Case 94-750 implements section 2192 of FASA. 
Revisions to FAR Parts 42 and 52, requiring contractors to certify that 
indirect cost rate proposals do not contain unallowable costs, were 
published as a final rule in the Federal Register at 60 FR 42663, 
August 16, 1995, under FAR Case 94-752, Contractor Overhead 
Certification, which implements section 2151 of FASA.

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 most 
contracts awarded to small businesses are awarded through sealed 
bidding on a firm fixed-price basis. The cost principles apply only 
where contracts are based on cost or pricing data. 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 section 610 of the Act. Such comments 
must be submitted separately and should cite 5 U.S.C. 601, et seq., 
(FAR case 92-613), 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. 5 CFR 
1320.7(j)(1) provides an exclusion for certifications when they entail 
no burden other than necessary to identify the respondent, the date, 
the respondent's address and the nature of the instrument.

List of Subjects in 48 CFR Part 31

    Government procurement.

    Dated: March 25, 1996.
Edward C. Loeb,
Director, Federal Acquisition Policy Division.

    Therefore, it is proposed that 48 CFR part 31 be amended as set 
forth below:
    1. The authority citation for 48 CFR part 31 continues to read as 
follows:

PART 31--CONTRACT COST PRINCIPLES AND PROCEDURES

    Authority: 40 U.S.C. 486(c); 10 U.S.C. chapter 137; and 42 
U.S.C. 2473(c).


31.205-1  [Amended]

    2. Section 31.205-1(f)(5) is amended by removing the parenthetical.

[FR Doc. 96-7687 Filed 3-28-96; 8:45 am]
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