[Federal Register Volume 61, Number 83 (Monday, April 29, 1996)]
[Rules and Regulations]
[Pages 18915-18916]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 96-10428]



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DEPARTMENT OF DEFENSE
48 CFR Part 43

[FAC 90-38; FAR Case 94-723; Item I]
RIN 9000-AG90


Federal Acquisition Regulation; Modification of Existing 
Contracts

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

ACTION: Interim rule.

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SUMMARY: This interim rule is issued pursuant to the Federal 
Acquisition Streamlining Act of 1994 (FASA) (Public Law 103-355) to 
amend the Federal Acquisition Regulation (FAR). It implements Section 
10002 of FASA which authorizes regulations to provide for modification 
of existing contracts without requiring consideration, upon request of 
the contractor, to incorporate changes authorized by FASA. This 
regulatory action was subject to Office of Management and Budget review 
under Executive Order 12866, dated September 30, 1993. It is not a 
major rule under 5 U.S.C. 804.

DATES: Effective Date: April 29, 1996.
    Comment Date: Comments should be submitted to the FAR Secretariat 
at the address shown below on or before June 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, Attn: Ms. Beverly Fayson, Washington, DC 20405.
    Please cite FAC 90-38, FAR case 94-723, in all correspondence 
related to this case.

FOR FURTHER INFORMATION CONTACT: Mr. Al Winston at (703) 602-2119 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 FAC 90-38, FAR case 94-723.

SUPPLEMENTARY INFORMATION:

A. Background

    Section 10002 of FASA states that regulations implementing FASA may 
provide for modification of existing contracts without consideration, 
upon request of the contractor, to incorporate changes authorized by 
FASA. Section 10002 also states that nothing in FASA requires the 
renegotiation or modification of existing contracts to incorporate 
changes authorized by FASA. The interim rule adopts the policy of 
encouraging, but not requiring, appropriate modifications without 
consideration, upon the request of the contractor. If the contracting 
officer determines that modification of an existing contract is 
appropriate to incorporate changes authorized by FASA, the modification 
should insert the current version of the applicable FAR clauses.

B. Regulatory Flexibility Act

    The changes may 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 it will require 
contractors seeking to amend existing contracts to so notify the 
contracting officer. An Initial Regulatory Flexibility Analysis (IRFA) 
has been prepared. A copy of the IRFA may be obtained from the FAR 
Secretariat. Comments are invited. Comments from small entities 
concerning the affected FAR subparts will be considered in accordance 
with 5 U.S.C. 610. Such comments must be submitted separately and cite 
5 U.S.C. 601, et seq. (FAC 90-38, FAR case 94-723), in correspondence.

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. Determination To Issue an Interim Rule

    A determination has been made under the authority of the Secretary 
of Defense (DOD), the Administrator of General Services (GSA), and the 
Administrator of the National Aeronautics and Space Administration 
(NASA) that compelling reasons exist to promulgate this interim rule 
without prior opportunity for public comment. This action is necessary 
because immediate implementation as an interim rule will provide 
significant benefits to industry and the Government. Section 10002 of 
FASA, authorizes contracting officers, if requested by the prime 
contractor to modify contracts without requiring consideration, to 
incorporate changes authorized by FASA. The regulatory implementation 
of FASA has been a success for both industry and the Government. 
Implementation of FASA Section 10002 as an interim rule will enable 
industry and the Government to gain immediate benefits, including the 
potential reduction of procurement costs. The interim rule authorizes 
the adoption of any of the FASA rules that will benefit the contracting 
parties. The interim rule should involve no substantial risk to 
industry, since contractors must affirmatively request adoption of the 
FASA rules to an existing contract. It has been through the process of 
the consideration and adoption of the FAR rules to implement FASA, that 
the potential benefits from this interim rule became apparent. However, 
pursuant to Public Law 98-577 and FAR 1.501, public comments received 
in response to this interim rule will be considered in the formulation 
of the final rule.

List of Subjects in 48 CFR Part 43

    Government procurement.

     Dated: April 18, 1996.
 Edward C. Loeb,
Deputy Project Manager for Implementation of the Federal Acquisition 
Streamlining Act of 1994.

    Therefore, 48 CFR Part 43 is amended as set forth below:

PART 43--CONTRACT MODIFICATIONS

    1. The authority citation for 48 CFR Part 43 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 43.102 is amended by adding paragraph (c) to read as 
follows:


43.102  Policy.

* * * * *
    (c) The Federal Acquisition Streamlining Act of 1994, Public Law 
103-355 (FASA), authorizes, but does not require, contracting officers, 
if requested by the prime contractor, to

[[Page 18916]]

modify contracts without requiring consideration to incorporate changes 
authorized by FASA amendments into existing contracts. Contracting 
officers are encouraged, if appropriate, to modify contracts without 
requiring consideration to incorporate these new policies. The contract 
modification should be accomplished by inserting into the contract, as 
a minimum, the current version of the applicable FAR clauses.

[FR Doc. 96-10428 Filed 4-26-96; 8:45 am]
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