[Federal Register Volume 61, Number 83 (Monday, April 29, 1996)]
[Rules and Regulations]
[Pages 18921-18922]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 96-10431]



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DEPARTMENT OF DEFENSE
48 CFR Parts 32 and 52

[FAC 90-38; FAR Case 92-045; Item IV]
RIN 9000-AF44


Federal Acquisition Regulation; Interest Clause; Revisions

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

ACTION: Final rule.

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SUMMARY: The Civilian Agency Acquisition Council and the Defense 
Acquisition Regulations Council have agreed on a final rule amending 
the Federal Acquisition Regulation (FAR) to clarify that certain Cost 
Accounting Standards (CAS) clauses provide for the use of differing 
interest rates under differing circumstances. This regulatory action 
was not 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.

EFFECTIVE DATE: June 28, 1996.

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 (202) 501-
4755. Please cite FAC 90-38, FAR case 92-045.

SUPPLEMENTARY INFORMATION:

A. Background

    Under the CAS clauses at 52.230-2, Cost Accounting Standards, 
52.230-3, Disclosure and Consistency of Cost Accounting Practices, and 
52.230-4, Consistency in Cost Accounting Practices, interest charges 
associated with contract price adjustments resulting from CAS 
noncompliance are computed at the annual interest rate established 
under section 6621 of the Internal Revenue Code of 1986 (26 U.S.C. 
6621), as required by subsection 5(h)(4) of the Office of Federal 
Procurement Policy Act Amendments of 1988 (Public Law 100-679). The 
clauses at 52.230-2 and 52.230-3 also specify that disputes are subject 
to the Contract Disputes Act which, in contrast, uses the semiannual 
interest rate established by the Secretary of the Treasury for the 
Renegotiation Board pursuant to Public Law 92-41. This rule revises FAR 
32.610(b)(2), 32.613(h)(3), 32.614-1(c), and the clause at 52.232-17 to 
clarify that the CAS clauses at 52.230-2 and 52.230-3 provide for the 
use of differing interest rates under differing circumstances.

B. Regulatory Flexibility Act

    The final rule does not constitute a significant FAR revision 
within the meaning of FAR 1.501 and Public Law 98-577, and publication 
for public comments is not required. Therefore, the Regulatory 
Flexibility Act does not apply. However, 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 92-045), in correspondence.

[[Page 18922]]

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.

List of Subjects in 48 CFR Parts 32 and 52

    Government procurement.

    Dated: April 19, 1996.
Edward C. Loeb,
Director, Federal Acquisition Policy Division.

    Therefore, 48 CFR Parts 32 and 52 are amended as set forth below:

PART 32--CONTRACT FINANCING

    1. The authority citation for 48 CFR Parts 32 and 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 32.610 is amended by revising paragraph (b)(2) to read 
as follows:


32.610  Demand for payment of contract debt.

* * * * *
    (b) * * *
    (2) Notification that any amounts not paid within 30 days from the 
date of the demand will bear interest from the date of the demand, or 
from any earlier date specified in the contract, and that the interest 
rate shall be the rate established by the Secretary of the Treasury, 
for the period affected, under Public Law 92-41. In the case of a debt 
arising from a price reduction for defective pricing, or as 
specifically set forth in a Cost Accounting Standards (CAS) clause in 
the contract, that interest will run from the date of overpayment by 
the Government until repayment by the contractor at the underpayment 
rate established by the Secretary of the Treasury, for the periods 
affected, under 26 U.S.C. 6621(a)(2).
* * * * *
    3. Section 32.613 is amended by revising paragraph (h)(3) to read 
as follows:


32.613  Deferment of collection.

* * * * *
    (h) * * *
    (3) Notice of an interest charge, in conformity with FAR 32.614 and 
the clause at FAR 52.232-17, Interest; or, in the case of a debt 
arising from a defective pricing or a CAS noncompliance overpayment, 
interest, as prescribed by the applicable Price Reduction for Defective 
Cost or Pricing Data or CAS clause.
* * * * *
    4. Section 32.614-1 is amended by revising the first sentence of 
paragraph (c) introductory text to read as follows:


32.614-1  Interest charges.

* * * * *
    (c) Unless specified otherwise in the clause at FAR 52.232-17, the 
interest charge shall be at the rate established by the Secretary of 
the Treasury under Public Law 92-41 for the period in which the amount 
becomes due. * * *
* * * * *

PART 52--SOLICITATION PROVISIONS AND CONTRACT CLAUSES

    5. Section 52.232-17 is amended by revising the date of the clause 
and the first sentence of paragraph (a) to read as follows:


52.232-17  Interest.

* * * * *

INTEREST (JUNE 1996)

    (a) Except as otherwise provided in this contract under a Price 
Reduction for Defective Cost or Pricing Data clause or a Cost 
Accounting Standards clause, all amounts that become payable by the 
Contractor to the Government under this contract (net of any 
applicable tax credit under the Internal Revenue Code (26 U.S.C. 
1481)) shall bear simple interest from the date due until paid 
unless paid within 30 days of becoming due. * * *
* * * * *
[FR Doc. 96-10431 Filed 4-26-96; 8:45 am]
BILLING CODE 6820-EP-P