[Federal Register Volume 61, Number 145 (Friday, July 26, 1996)]
[Rules and Regulations]
[Pages 39221-39224]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 96-18512]


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DEPARTMENT OF DEFENSE

GENERAL SERVICES ADMINISTRATION

NATIONAL AERONAUTICS AND SPACE ADMINISTRATION

48 CFR Parts 49 and 52

[FAC 90-40; FAR Case 94-003; Item XV]
RIN 9000-AG13


Federal Acquisition Regulation; Termination Inventory Schedules

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) concerning termination of 
contracts to preclude excessive delays in processing terminations for 
the convenience of the Government. The amendments will require 
contractors to prepare and submit termination inventory schedules 
within 120 days from the effective date of termination, unless 
otherwise extended by the Termination Contracting Officer (TCO). This 
will enable the TCO to initiate early inventory screening and final 
disposition, thereby substantially reducing the time required to 
achieve termination settlement. 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: September 24, 1996.

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 FAC 90-40, FAR case 94-003.

SUPPLEMENTARY INFORMATION:

A. Background-

    When inventory schedules required for contracts terminated for the 
convenience of the Government are not submitted in a timely manner by 
the terminated contractor(s), unnecessary delays are experienced both 
in effecting redistribution and disposal of the termination inventory 
and in reaching final settlement of those contracts.-
    In an attempt to preclude excessive delays in processing 
terminations for the convenience of the Government, a proposed rule was 
published in the Federal Register at 59 FR 61734, December 1, 1994, 
with a request for comment. As a result of the comments received under 
the proposed rule, the following changes to the final rule have been 
made:

--The reference to ``provisions'' in the first sentence of both FAR 
49.206-3 and 49.303-2 has been revised to read ``terms'';-
--The word ``must'' in the last sentence of FAR 49.206-3 and 49.303-2 
is changed to read ``shall''; -
--The events described in the clauses at 52.249-2 (c) and (d), 52.249-3 
(c) and (d), 52.249-6 (d) and (e), and 52.249-11 (c) and (d) have been 
reversed to reflect the order in which the events occur; and-
--Several references have been updated.

B. Regulatory Flexibility Act-

    A Final Regulatory Flexibility Analysis (FRFA) has been prepared 
and will be provided to the Chief Counsel for Advocacy of the Small 
Business Administration. A copy of the FRFA 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 90-40, FAR Case 94-003), 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. Submission of 
termination inventory schedules is an existing requirement; this rule 
merely changes the timing for submission of those schedules.

List of Subjects in 48 CFR Parts 49 and 52

    Government procurement.

    Dated: July 16, 1996.
Edward C. Loeb,
Director, Federal Acquisition Policy Division.

    Therefore, 48 CFR Parts 49 and 52 are amended as set forth below:-
    1. The authority citation for 48 CFR Parts 49 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).

PART 49--TERMINATION OF CONTRACTS


49.105  [Amended]-

    2. Section 49.105(c)(13) is amended by adding ``(see 49.206-3 and 
49.303-2)'' to the end of the sentence.-
    3. Section 49.206-3 is added to read as follows:


49.206-3  Submission of inventory schedules.-

    Subject to the terms of the termination clause and whenever 
termination inventory is involved, the contractor shall submit complete 
inventory schedules, to the TCO, reflecting inventory that is allocable 
to the terminated portion of the contract. The inventory schedules 
shall be submitted within 120 days from the effective date of 
termination unless otherwise extended by the TCO based on a written 
justification to support the extension. The inventory schedules shall 
be prepared on the forms prescribed in 49.602-2 and in accordance with 
45.606-5.


49.303-2, 49.303-3, 49.303-4  [Redesignated as 49.303-3 through 49.303-
5].-

    4. Sections 49.303-2, 49.303-3, and 49.303-4 are redesignated as 
49.303-3, 49.303-4, and 49.303-5, respectively, and a new 49.303-2 is 
added to read as follows:


49.303-2  Submission of inventory schedules.-

    Subject to the terms of the termination clause and whenever 
termination inventory is involved, the contractor shall submit complete 
inventory schedules, to the TCO, reflecting inventory that is allocable 
to the terminated portion of the contract. The inventory schedules 
shall be submitted within 120 days from the effective date of 
termination unless otherwise extended by the TCO based on a written 
justification to support the extension. The inventory schedules shall 
be prepared on the forms prescribed in

[[Page 39222]]

49.602-2 and in accordance with 45.606-5.


49.403  [Amended]-

    5. Section 49.403 is amended in paragraph (b)(1) by removing 
``(g)(3)'' and inserting ``(h)(3)''; and in paragraph (b)(2) by 
removing ``(g)(4)'' and inserting ``(h)(4)''.


49.502  [Amended]-

    6. Section 49.502 is amended in paragraph (e)(1) by removing 
``paragraph (c)'' and inserting ``paragraph (d)''; and in paragraph 
(e)(2) by removing ``paragraph (g)'' and inserting ``paragraph (h)''.


49.503  [Amended]-

    7. Section 49.503 is amended in paragraph (c) by removing 
``paragraphs (d), (i), and (m)'' and inserting ``paragraphs (e), (j), 
and (n)''.

PART 52--SOLICITATION PROVISIONS AND CONTRACT CLAUSES-

    5. Section 52.249-2 is amended by revising the introductory text 
and clause date; by redesignating paragraphs (c) through (m) as (d) 
through (n), respectively, and adding a new (c); and by redesignating 
paragraph (f) of Alternates I and III as (g), to read as follows:


52.249-2  Termination for Convenience of the Government (Fixed-Price).-

    As prescribed in 49.502(b)(1)(i), insert the following clause:

TERMINATION FOR CONVENIENCE OF THE GOVERNMENT (FIXED-PRICE) (SEP 1996)

* * * * *-
    (c) The Contractor shall submit complete termination inventory 
schedules no later than 120 days from the effective date of 
termination, unless extended in writing by the Contracting Officer 
upon written request of the Contractor within this 120-day period.
* * * * *


52.249-2  [Amended]-

    5b. In addition to the amendments set forth above, 52.249-2 is 
amended in the newly designated paragraphs by revising internal 
references to read as follows:

------------------------------------------------------------------------
            Paragraph                   Remove              Insert      
------------------------------------------------------------------------
(b)(9), 1st sentence............  ``subparagraph (6)  ``subparagraph    
                                   above''.            (b)(6) of this   
                                                       clause''         
(f), 1st sentence...............  ``paragraph (d)''.  ``paragraph (e)'' 
(f), 3rd sentence...............  ``paragraph (e) or  ``paragraph (f) or
                                   paragraph (f)''.    paragraph (g)''  
                                  ``subparagraph      ``subparagraph    
                                   (f)(3)''.           (g)(3)''         
(f), last sentence..............  ``Paragraph (f)''.  ``Paragraph (g)'' 
(g), introductory text..........  ``paragraph (e)     ``paragraph (f) of
                                   above''.            this clause''    
(g)(1)..........................  ``subparagraph      ``subparagraph    
                                   (b)(9) above''.     (b)(9) of this   
                                                       clause''         
(g)(2)(i).......................  ``subparagraph      ``subparagraph    
                                   (f)(1) above''.     (g)(1) of this   
                                                       clause''         
(g)(2) (ii) and (iii)...........  ``subdivision (i)   ``subdivision     
                                   above''.            (g)(2)(i) of this
                                                       clause''         
(h).............................  ``paragraph (f)     ``paragraph (g) of
                                   above''.            this clause''    
(j).............................  ``paragraph (d),    ``paragraph (e),  
                                   (f), or (k)''.      (g), or (l)''    
                                  ``paragraph (d) or  ``paragraph (e) or
                                   (k)''.              (l)''            
Alternate I heading and           ``(APR 1984)''      ``(SEP 1996)''    
 introductory text.                ``paragraph (f)     ``paragraph (g)  
                                   for paragraph       for paragraph    
                                   (f)''.              (g)''            
Alternate I.....................  Paragraph ``(f)''   Paragraph ``(g)'' 
                                   designation.        designation      
Alternate I, (g) introductory     ``paragraph (e)     ``paragraph (f) of
 paragraph.                        above''.            this clause''    
Alternate I, (g)(1)(ii).........  ``subdivision (i)   ``subdivision     
                                   above''.            (g)(1)(i) of this
                                                       clause''         
Alternate I, (g)(1)(iii)........  ``(i) above''.....  ``subdivision     
                                                       (g)(1)(i) of this
                                                       clause''         
Alternate II....................  ``(APR 1984)''....  ``(SEP 1996)''    
Alternate II....................  ``subparagraph      ``subparagraph    
                                   (l)(2)''.           (m)(2)''         
Alternate III heading...........  ``(APR 1984)''....  ``(SEP 1996)''    
Alternate III introductory text.  ``(f) for           ``(g) for         
                                   paragraph (f)''.    paragraph (g)''  
                                  ``Subparagraph      ``Subparagraph    
                                   (l)(2)''.           (m)(2)''         
Alternate III...................  Paragraph ``(f)''   Paragraph ``(g)'' 
                                   designation.        designation      
Paragraph (g) of Alternate III..  ``Paragraph (e)     ``Paragraph (f) of
                                   above''.            this clause''    
Alternate III, (g)(1)(ii).......  ``subdivision (i)   ``subdivision     
                                   above''.            (g)(1)(i) of this
                                                       clause''         
Alternate III, (g)(1)(iii)......  ``(i) above''.....  ``subdivision     
                                                       (g)(1)(i) of this
                                                       clause           
------------------------------------------------------------------------

    6. Section 52.249-3 is amended by revising the introductory text 
and clause date; redesignating paragraphs (c) through (m) as (d) 
through (n), respectively, and adding a new paragraph (c) to read as 
follows:


52.249-3  Termination for Convenience of the Government (Dismantling, 
Demolition, or Removal of Improvements).

    As prescribed in 49.502(b)(2), insert the following clause:

TERMINATION FOR CONVENIENCE OF THE GOVERNMENT (DISMANTLING, DEMOLITION, 
OR REMOVAL OF IMPROVEMENTS) (SEP 1996)

* * * * *
    (c) The Contractor shall submit complete termination inventory 
schedules no later than 120 days from the effective date of 
termination, unless extended in writing by the Contracting Officer 
upon written request of the Contractor within this 120-day period.
* * * * *


52.249-3  [Amended]

    6b. In addition to the amendments set forth above, 52.249-3 is 
further amended in the newly designated paragraphs by revising internal 
references to read as follows:

------------------------------------------------------------------------
            Paragraph                   Remove              Insert      
------------------------------------------------------------------------
(b)(9), 1st sentence............  ``subparagraph (6)  ``subparagraph    
                                   above''.            (b)(6) of this   
                                                       clause''         
(f), 1st sentence...............  ``paragraph (d)     ``paragraph (e) of
                                   above''.            this clause''    
(f), 3rd sentence...............  ``paragraph (e) or  ``paragraph (f) or
                                   paragraph (f)       paragraph (g) of 
                                   below''.            this clause''    
(f), last sentence..............  ``Paragraph (f)     ``Paragraph (g) of
                                   below''.            this clause''    
(g), introductory text..........  ``paragraph (e)     ``paragraph (f) of
                                   above''.            this clause''    

[[Page 39223]]

                                                                        
(g)(1)(ii)......................  ``subdivision (i)   ``subdivision     
                                   above''.            (g)(1)(i) of this
                                                       clause''         
(g)(1)(iii).....................  ``subdivision (i)   ``subdivision     
                                   above''.            (g)(1)(i) of this
                                                       clause''         
(g)(2)(iii).....................  ``subparagraph      ``subparagraph    
                                   (b)(8) above''.     (b)(8) of this   
                                                       clause''         
(h).............................  ``paragraph (f)     ``paragraph (g) of
                                   above''.            this clause''    
(j).............................  ``paragraph (d),    ``paragraph (e),  
                                   (f), or (k)''       (g), or (l) of   
                                   both times it       this clause''    
                                   appears.                             
                                  ``paragraph (d) or  ``paragraph (e) or
                                   (k)''.              (l)''            
Alternate I.....................  ``(APR 1984)''....  ``(SEP 1996)''    
                                  ``subparagraph      ``subparagraph    
                                   (1)(2)''.           (m)(2)''         
------------------------------------------------------------------------


    7. Section 52.249-5 is amended by revising the introductory text 
and clause date; redesignating paragraphs (c) through (g) as (d) 
through (h), respectively, and adding a new paragraph (c) to read as 
follows:


52.249-5  Termination for Convenience of the Government (Educational 
and Other Nonprofit Institutions).

    As prescribed in 49.502(d), insert the following clause:

TERMINATION FOR CONVENIENCE OF THE GOVERNMENT (EDUCATIONAL AND OTHER 
NONPROFIT INSTITUTIONS) (SEP 1996)

* * * * *
    (c) The Contractor shall submit complete termination inventory 
schedules no later than 120 days from the effective date of 
termination, unless extended in writing by the Contracting Officer 
upon written request of the Contractor within this 120-day period.
* * * * *


52.249-5  [Amended]

    7b. In addition to the amendments set forth above, 52.249-5 is 
further amended in the newly designated paragraphs by revising internal 
references to read as follows:

------------------------------------------------------------------------
            Paragraph                   Remove              Insert      
------------------------------------------------------------------------
(b)(9)..........................  ``subparagraph (6)  ``subparagraph    
                                   above''.            (b)(6) of this   
                                                       clause''         
(e).............................  ``paragraph (c)     ``paragraph (d) of
                                   above''.            this clause''    
(h).............................  ``paragraph (c)''.  ``paragraph (d) of
                                                       this clause''    
------------------------------------------------------------------------

    8. Section 52.249-6 is amended in the clause by revising the clause 
date; redesignating paragraphs (d) through (m) as (e) through (n), 
respectively; by adding a new paragraph (d); by redesignating paragraph 
(g) of Alternates (IV) and (V) as paragraph (h) to read as follows:


52.249-6  Termination (Cost-Reimbursement).

* * * * *

TERMINATION (COST-REIMBURSEMENT) (SEP 1996)

* * * * *
    (d) The Contractor shall submit complete termination inventory 
schedules no later than 120 days from the effective date of 
termination, unless extended in writing by the Contracting Officer 
upon written request of the Contractor within this 120-day period.
* * * * *


52.249-6  [Amended]

    8b. In addition to the amendments set forth above, 52.249-6 is 
further amended in the newly designated paragraphs by revising internal 
references to read as follows:

------------------------------------------------------------------------
            Paragraph                   Remove              Insert      
------------------------------------------------------------------------
(c)(9)..........................  ``subparagraph (6)  ``subparagraph    
                                   above''.            (c)(6) of this   
                                                       clause''         
(g).............................  ``paragraph (e)     ``paragraph (f) of
                                   above''.            this clause''    
(h)(2)..........................  ``subparagraph (1)  ``subparagraph    
                                   above''.            (h)(1) of this   
                                                       clause''         
(h)(5)..........................  ``subparagraph      ``subparagraph    
                                   (g)(4) above''.     (h)(4) of this   
                                                       clause''         
(j), 1st sentence...............  ``paragraph (e) or  ``paragraph (f),  
                                   (g) above or        (h), or (l) of   
                                   paragraph (k)       this clause''    
                                   below''.                             
                                  ``paragraph (e)''.  ``paragraph (f)'' 
(j), 2nd sentence...............  ``paragraph (e),    ``paragraph (f),  
                                   (g), or (k)''.      (h), or (l) of   
                                                       this clause''    
Alternate I.....................  ``(APR 1984)''      ``(SEP 1996)''    
                                   ``(g)(4) for        ``(h)(4) for     
                                   subparagraph        subparagraph     
                                   (g)(4)''.           (h)(4)''         
Alternate II....................  ``(APR 1984)''      ``(SEP            
                                   ``subparagraph      1996)''``subparag
                                   (1)(2)''.           raph (m)(2)''    
Alternate III, introductory       ``(APR 1984)''....  ``(SEP 1996)''    
 heading and text.                                                      
                                  ``(g)(4) shall be   ``(h)(4) shall be 
                                   substituted for     substituted for  
                                   subparagraph        subparagraph     
                                   (g)(4)''.           (h)(4)''         
                                  ``Subparagraph      ``Subparagraph    
                                   (1)(2)''.           (m)(2)''         
Alternate IV introductory         ``(APR 1984)''....  ``(SEP 1996)''    
 heading and text.                                                      
                                  ``(g) and (k) for   ``(h) and (l) for 
                                   paragraphs (g)      paragraphs (h)   
                                   and (k)''.          and (l)''        
Alternate IV....................  Paragraph ``(g)''   Paragraph ``(h)'' 
                                   designation.        designation      
Alternate IV, (h)(1)(iv)........  ``(g)(1)(i)''.....  ``subdivision     
                                                       (h)(1)(i)''      
Alternate (IV), (h)(2)            ``(g)(1)''........  ``subparagraph    
 introductory text.                                    (h)(1)''         
Alternate IV....................  Paragraph ``(k)''   Paragraph ``(l)'' 
                                   designation.        designation      
Alternate V introductory heading  ``(APR 1984)''....  ``(SEP 1996)''    
 and text.                                                              
                                  ``the following     ``the following   
                                   paragraphs (g)      paragraphs (h)   
                                   and (k) for         and (l) for      
                                   paragraphs (g)      paragraphs (h)   
                                   and (k)''.          and (l)''        
                                  ``Subparagraph      ``Subparagraph    
                                   (l)(2)''.           (m)(2)''         
Alternate V.....................  Paragraph ``(g)''   Paragraph ``(h)'' 
                                   designation.        designation      
(h)(1)(iv) of Alternate V.......  ``(g)(1)(i)''.....  ``subdivision     
                                                       (h)(1)(i)''      
Alternate V, (h)(2) introductory  ``(1) above''.....  ``subparagraph    
 text.                                                 (h)(1) of this   
                                                       clause''         

[[Page 39224]]

                                                                        
Alternate V.....................  Paragraph ``(k)''   Paragraph ``(l)'' 
                                   designation.        designation      
------------------------------------------------------------------------


    9. Section 52.249-11 is amended by revising the introductory text 
and clause date; redesignating paragraphs (c) through (k) as (d) 
through (l), respectively; and adding a new paragraph (c) to read as 
follows:


52.249-11  Termination of Work (Consolidated Facilities or Facilities 
Acquisition).

    As prescribed in 49.505(a), insert the following clause:

TERMINATION OF WORK (CONSOLIDATED FACILITIES OR FACILITIES ACQUISITION) 
(SEP 1996)

* * * * *
    (c) The Contractor shall submit complete termination inventory 
schedules no later than 120 days from the effective date of 
termination, unless extended in writing by the Contracting Officer 
upon written request of the Contractor within this 120-day period.
* * * * *
    9b. In addition to the amendments set forth above, 52.249-11 is 
further amended in the newly designated paragraphs by revising internal 
references to read as follows:

------------------------------------------------------------------------
            Paragraph                   Remove              Insert      
------------------------------------------------------------------------
(b)(9)..........................  ``subparagraph (6)  ``subparagraph    
                                   above''.            (b)(6) of this   
                                                       clause''.        
(f).............................  ``paragraph (d)     ``paragraph (e) of
                                   above''.            this clause''.   
(g)(2)..........................  ``subparagraph (1)  ``subparagraph    
                                   above''.            (g)(1) of this   
                                                       clause''.        
(i).............................  ``paragraph (d) or  ``paragraph (e) or
                                   (f) above'' both    (g) of this      
                                   times it appears.   clause''.        
                                  ``paragraph (d)     ``paragraph (e) of
                                   above''.            this clause''.   
Alternate I.....................  ``(APR 1984)''....  ``(SEP 1996)''.   
                                  ``subparagraph      ``subparagraph    
                                   (j)(2)''.           (k)(2)''.        
------------------------------------------------------------------------

[FR Doc. 96-18512 Filed 7-25-96; 8:45 am]
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