[Federal Register Volume 61, Number 120 (Thursday, June 20, 1996)]
[Rules and Regulations]
[Pages 31656-31657]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 96-14535]



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DEPARTMENT OF DEFENSE
48 CFR Part 31

[FAC 90-39; FAR Case 93-006; Item XX]
RIN 9000-AF98


Federal Acquisition Regulation; Legislative Lobbying Costs

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 to amend 
the Federal Acquisition Regulation (FAR) cost principles concerning 
lobbying costs. This regulatory action was not subject to Office of 
Management and Budget review under Executive Order 12866, dated 
September 30, 1993, and is not a major rule under 5 U.S.C. 804.

EFFECTIVE DATE: August 19, 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 90-39, FAR case 93-006.

SUPPLEMENTARY INFORMATION:

A. Background

    This FAR case was opened to address issues raised by the Office of 
Management and Budget SWAT team concerning the requirement to maintain 
records which are in addition to normal records maintained to record 
lobbying costs under FAR 31.205-22(f). The FAR rule deletes 31.205-
22(f) because it conflicts with the recordkeeping requirements in 
31.201-6(c), 31.205-22(e), and Cost Accounting Standards (CAS) 405, 
Accounting for Unallowable Costs (48 CFR 9904.405-50(a)). In addition, 
the Councils believe that 31.205-22(f) is inconsistent with the clause 
at 52.203-12, Limitation on Payments to Influence Certain Federal 
Transactions, which requires contractors to disclose lobbying 
activities. The reporting of such activities must necessarily be based 
upon certain contractor records which support the disclosures. The rule 
also removes the prohibition against reimbursing executive lobbying 
costs at 31.205-50 and adds it to the list of specifically unallowable 
lobbying costs at 31.205-22(a). A proposed rule was published in the 
Federal Register at 59 FR 47776 on September 16, 1994. After evaluation 
of public comments, the Councils agreed to convert the proposed rule to 
a final rule without further change.

B. Regulatory Flexibility Act

    The Department of Defense, the General Services Administration, and 
the National Aeronautics and Space Administration certify that this 
final rule will not 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 revisions clarify a 
condition of allowability for contractors who wish to be reimbursed 
under Government contracts. The revisions eliminate a subsection which 
may be misinterpreted in its application and more accurately describe 
the subject matter of the cost principle. Further, most contracts 
awarded to small entities are awarded on a competitive, fixed-price 
basis and the cost principles do not apply. No comments were received 
on the impact of this rule on small entities during the public comment 
period.

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,

[[Page 31657]]

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 31

    Government procurement.

    Dated: June 4, 1996.
Edward C. Loeb,
Director, Federal Acquisition Policy Division.

    Therefore, 48 CFR Part 31 is amended as set forth below:

PART 31--CONTRACT COST PRINCIPLES AND PROCEDURES

    1. The authority citation for 48 CFR Part 31 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 31.205-22 is amended by revising the section heading; at 
the end of paragraph (a)(4) by removing the word ``or''; at the end of 
paragraph (a)(5) by removing the period and inserting ``;or''; by 
adding paragraph (a)(6); and by removing paragraph (f) and 
redesignating paragraph (g) as (f) to read as follows:


31.205-22  Lobbying and political activity costs.

    (a) * * *
    (6) Costs incurred in attempting to improperly influence (see 
3.401), either directly or indirectly, an employee or officer of the 
Executive branch of the Federal Government to give consideration to or 
act regarding a regulatory or contract matter.
* * * * *


31.205-50  [Reserved]

    3. Section 31.205-50 is removed and reserved.

[FR Doc. 96-14535 Filed 6-19-96; 8:45 am]
BILLING CODE 6820-EP-P