[Federal Register Volume 61, Number 103 (Tuesday, May 28, 1996)]
[Proposed Rules]
[Pages 26766-26767]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 96-13247]
[[Page 26765]]
_______________________________________________________________________
Part VI
Department of Defense
General Services Administration
National Aeronautics and Space Administration
_______________________________________________________________________
48 CFR Parts 42 and 52
Federal Acquisition Regulation; Final Indirect Cost Rates; Proposed
Rule
Federal Register / Vol. 61, No. 103 / Tuesday, May 28, 1996 /
Proposed Rules
[[Page 26766]]
DEPARTMENT OF DEFENSE
GENERAL SERVICES ADMINISTRATION
NATIONAL AERONAUTICS AND SPACE ADMINISTRATION
48 CFR Parts 42 and 52
[FAR Case 95-018]
RIN 9000-AG88
Federal Acquisition Regulation; Final Indirect Cost Rates
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 and the Defense
Acquisition Regulations Council are proposing to amend the Federal
Acquisition Regulation (FAR) to revise the procedures relating to final
indirect cost rates. This regulatory action was not subject to Office
of Management and Budget review under Executive Order 12866, dated
September 30, 1993. This is not a major rule under 5 U.S.C. 804.
DATES: Comments should be submitted on or before July 29, 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 95-018 in all correspondence related to this
case.
FOR FURTHER INFORMATION CONTACT: Ms. Linda Klein at (202) 501-3775 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 95-018.
SUPPLEMENTARY INFORMATION:
A. Background
This proposed rule amends FAR Subpart 42.7 to permit, with certain
restrictions, increased interim payments to contractors under certain
circumstances. FAR 42.704 is amended to permit, with certain
restrictions, contractor use of billing rates contained in certified
final indirect cost rate proposals. The clauses at FAR 52.216-7 and
52.216-13 are revised to establish a timeframe for contractor
submission of final vouchers. The clauses at 52.216-8 through 52.216-10
are revised to require release of 75 percent of all fee withholds under
physically completed cost-type contracts, and to permit release of 90
percent of all withholds in certain circumstances.
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 business are awarded on the basis of firm-
fixed-price, and settlement of final indirect cost rates is, therefore,
not an issue. Furthermore, any impact of this rule would be to reduce
cost and administrative burdens on both contractors and Government. 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 should cite 5 U.S.C. 601
et seq. (FAR case 95-018), 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 Parts 42 and 52
Government procurement.
Dated: May 21, 1996.
Edward C. Loeb,
Director, Federal Acquisition Policy Division.
Therefore, it is proposed that 48 CFR Parts 42 and 52 be amended as
set forth below:
1. The authority citation for 48 CFR Parts 42 and 52 continues to
read as follows:
Authority: 40 U.S.C. 486(c); 10 U.S.C. 2301 to 2331; and 42
U.S.C. 2473(c).
PART 42--CONTRACTOR ADMINISTRATION
2. Section 42.704 is amended by adding paragraph (e) to read as
follows:
42.704 Billing rates.
* * * * *
(e) When the contractor provides to the cognizant contracting
officer the certified final indirect cost rate proposal in accordance
with 42.705-1(b) or 42.705-2(b), the contractor may bill the proposed
indirect cost rates, as approved by the Government to reflect
historically disallowed amounts from prior years' audits, until the
proposal has been audited and settled. The historical decrement will be
determined by either the cognizant contracting officer (42.705-1(b)) or
the cognizant auditor (42.705-2(b)).
3. Section 42.705 is revised to read as follows:
42.705 Final indirect cost rates.
(a) Final indirect cost rates shall be established on the basis
of--
(1) Contracting officer determination procedure (see 42.705-1) or
(2) Auditor determination procedure (see 42.705-2).
(b) Within 120 days after settlement of the final indirect cost
rates, the contractor shall submit a completion invoice or voucher
reflecting the settled amounts and rates on all contracts physically
completed in the year covered by the proposal.
PART 52--SOLICITATION PROVISIONS AND CONTRACT CLAUSES
4. Section 52.216-7 is amended by revising the date of the clause;
redesignating paragraph (d)(4) as (d)(5) and adding a new paragraph
(d)(4); and revising paragraph (h)(1) to read as follows:
52.216-7 Allowable Cost and Payment.
* * * * *
Allowable Cost and Payment (Date)
(d) * * *
(4) Within 120 days after settlement of the final indirect cost
rates covering the year in which this contract is physically
complete, the Contractor shall submit a completion invoice or
voucher to reflect the settled amounts and rates.
* * * * *
(h) Final payment. (1) Upon approval of a completion invoice or
voucher submitted by the Contractor in accordance with paragraph
(d)(4) of this clause, and upon the Contractor's compliance with all
terms of this contract, the Government shall promptly pay any
balance of allowable costs and that part of the fee (if any) not
previously paid.
* * * * *
5. Section 52.216-8 is amended by revising the date and paragraph
(b) of the clause to read as follows:
52.216-8 Fixed fee.
* * * * *
Fixed-Fee (Date)
* * * * *
(b) The Contracting Officer shall release 75 percent of all fee
withholds under this contract after receipt of the certified final
indirect cost rate proposal covering the year of physical completion
of this contract, provided the Contractor has satisfied all other
contract terms and conditions,
[[Page 26767]]
including the submission of the final patent and royalty reports,
and is not delinquent in submitting final vouchers on prior years'
settlements. The Contracting Officer may release up to 90 percent of
the fee withhold under this contract based on the Contractor's past
performance related to the submission and settlement of final
indirect cost rate proposals.
(End of clause)
6. Section 52.216-9 is amended by revising the date and paragraph
(c) of the clause to read as follows:
52.216-9 Fixed-Fee--Construction.
* * * * *
Fixed-Fee--Construction (Date)
* * * * *
(c) The Contracting Officer shall release 75 percent of all fee
withholds under this contract after receipt of the certified final
indirect cost rate proposal covering the year of physical completion
of this contract, provided the Contractor has satisfied all other
contract terms and conditions, including the submission of the final
patent and royalty reports, and is not delinquent in submitting
final vouchers on prior years' settlements. The Contracting Officer
may release up to 90 percent of the fee withhold under this contract
based on the Contractor's past performance related to the submission
and settlement of final indirect cost rate proposals.
7. Section 52.216-10 is amended by revising the date of the clause;
and adding two sentences to the end of paragraph (c); to read as
follows:
52.216-10 Incentive Fee.
* * * * *
Incentive Fee (Date)
* * * * *-
(c) * * * The Contracting Officer shall release 75 percent of
all fee withholds under this contract after receipt of the certified
final indirect cost rate proposal covering the year of physical
completion of this contract, provided the Contractor has satisfied
all other contract terms and conditions, including the submission of
the final patent and royalty reports, and is not delinquent in
submitting final vouchers on prior years' settlements. The
Contracting Officer may release up to 90 percent of the fee withhold
under this contract based on the Contractor's past performance
related to the submission and settlement of final indirect cost rate
proposals.
* * * * *
(End of clause)-
8. Section 52.216-13 is amended by revising the date of the clause;
redesignating paragraph (c)(4) as (c)(5) and adding a new paragraph
(c)(4); and by revising the date and paragraph (h) of Alternate I to
read as follows:
52.216-13 Allowable Cost and Payment--Facilities.
* * * * *
Allowable Cost and Payment--Facilities (Date)
* * * * *-
(c) * * *-
(4) Within 120 days after settlement of the final indirect cost
rate covering the year in which this contract is physically
complete, the Contractor shall submit a completion invoice or
voucher to reflect the settled amounts and rates.
* * * * *
(End of clause)-
Alternate I (Date) * * *
* * * * *-
(h) Final payment. Upon approval of a completion invoice or
voucher submitted by the Contractor in accordance with paragraph
(c)(4) of this clause, and upon the Contractor's compliance with all
terms of this contract, the Government shall promptly pay any
balance of allowable costs not previously paid.
[FR Doc. 96-13247 Filed 5-24-96; 8:45 am]
BILLING CODE 6820-EP-P