[Federal Register Volume 61, Number 120 (Thursday, June 20, 1996)]
[Rules and Regulations]
[Page 31658]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 96-14537]



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DEPARTMENT OF DEFENSE
48 CFR Parts 32 and 52

[FAC 90-39; FAR Case 92-046; Item XXII]
RIN 9000-AF41


Federal Acquisition Regulation; Prompt Payment Overseas

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

ACTION: Interim rule adopted as final.

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SUMMARY: The Civilian Agency Acquisition Council and the Defense 
Acquisition Regulations Council have agreed to convert the interim rule 
published in the Federal Register at 59 FR 11379, March 10, 1994, and 
amended by FAR case 94-770 (60 FR 34741, July 3, 1995), to a final 
rule. This rule amends the Federal Acquisition Regulation (FAR) to 
reflect that the Prompt Payment Act applies to overseas contracts. 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: June 20, 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 92-046.

SUPPLEMENTARY INFORMATION:

A. Background

    On January 13, 1992, the Armed Services Board of Contract Appeals 
(ASBCA), in Held & Francke Baukittengesellschaft (ASBCA Nos. 42463 and 
42464), held that FAR 32.901 improperly excluded applicability of the 
Prompt Payment Act (31 U.S.C. 3901, et seq.) to contracts awarded to 
foreign contractors for work performed outside the United States. As a 
result of the ASBCA decision, an interim rule was issued which, in 
effect, makes the Government liable for payment of interest and 
interest penalties under the Act for contracts with foreign contractors 
for work performed or supplies delivered overseas.
    Section 32.901 and the clauses at 52.232-25, 52.232-26, and 52.232-
27 were amended by the interim rule to remove the statements that no 
interest penalty will be paid on contracts awarded to foreign vendors 
outside the United States for work performed outside the United States 
and to remove the definition of ``foreign vendor'' from the clauses. 
That interim rule, as amended on July 3, 1995, is now converted 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 rule only applies 
to contracts with foreign contractors for work performed overseas by 
extending the Government's liability to pay interest and penalties 
under the Prompt Payment Act to such entities. 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, 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.

Interim Rule Adopted as Final Without Change

    Accordingly, the interim rule amending CFR Parts 32 and 52, which 
was published at 59 FR 11379, March 10, 1994 (FAC 90-20, Item XIII), 
and further amended by FAR case 94-770 (60 FR 34741, July 3, 1995), is 
adopted as a final rule without further change.
    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).

    Dated: June 4, 1996.
Edward C. Loeb,
Director, Federal Acquisition Policy Division.
[FR Doc. 96-14537 Filed 6-19-96; 8:45 am]
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