[Federal Register Volume 61, Number 246 (Friday, December 20, 1996)]
[Rules and Regulations]
[Page 67418]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 96-32004]



[[Page 67418]]

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DEPARTMENT OF DEFENSE
48 CFR Part 12

[FAC 90-43; FAR Case 96-310; Item IV]
RIN 9000-AH01


Federal Acquisition Regulation; Inapplicability of Cost 
Accounting Standards to Contracts and Subcontracts for Commercial Items

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) to implement Section 4205 of 
the Clinger-Cohen Act of 1996 (Public Law 104-106) (formerly the 
Federal Acquisition Reform Act (FARA)). Section 4205 amends Section 
26(f) of the Office of Federal Procurement Policy (OFPP) Act (41 U.S.C. 
422(f)) by noting the current applicability of Cost Accounting 
Standards (CAS) to contracts and subcontracts for commercial items. 
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: January 1, 1997.

FOR FURTHER INFORMATION CONTACT: Mr. Jeremy Olson at (202) 501-3221 in 
reference to this FAR case. For general information, contact the FAR 
Secretariat, Room 4035, GS Building, Washington, DC 20405 (202) 501-
4755. Please cite FAC 90-43, FAR case 96-310.

SUPPLEMENTARY INFORMATION:

A. Background

    This final rule amends FAR Part 12 to implement Section 4205 of the 
Clinger-Cohen Act of 1996 (Public Law 104-106). Section 4205 amends 
Section 26(f) of the OFPP Act (41 U.S.C. 422(f)), making the 
application of CAS to commercial items ``nonmandatory''. Therefore, the 
new coverage at FAR 12.214 indicates that CAS generally will not apply 
to commercial items unless so indicated at 48 CFR 9903.201. A cross-
reference to FAR 12.214 is added at 12.503(c) and 12.504(c), to further 
clarify the effect of Section 4205.
    A proposed rule was published in the Federal Register on June 21, 
1996 (61 FR 32312). Three sources submitted comments in response to the 
proposed rule. All comments were considered in the development of the 
final rule.

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 contracts and 
subcontracts with small businesses are exempt from Cost Accounting 
Standards requirements.

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 Part 12

    Government procurement.

    Dated: December 11, 1996.

Edward C. Loeb,
Director, Federal Acquisition Policy Division.

    Therefore, 48 CFR Part 12 is amended as set forth below:

PART 12--ACQUISITION OF COMMERCIAL ITEMS

    1. The authority citation for 48 CFR Part 12 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 12.214 is added to read as follows:


12.214  Cost Accounting Standards.

    Cost Accounting Standards (CAS) generally will not apply to 
commercial items. If CAS does apply pursuant to 48 CFR 9903.201 (FAR 
Appendix B), the contracting officer shall insert the appropriate 
provisions and clauses as prescribed in that section.
    3. Section 12.503(c)(3) is revised to read as follows:


12.503  Applicability of certain laws to Executive agency contracts for 
the acquisition of commercial items.

* * * * *
    (c) * * *
    (3) 41 U.S.C. 422, Cost Accounting Standards (48 CFR chapter 99) 
(see 12.214).
* * * * *
    4. Section 12.504(c)(3) is revised to read as follows:


12.504  Applicability of certain laws to subcontracts for the 
acquisition of commercial items.

* * * * *
    (c) * * *
    (3) 41 U.S.C. 422, Cost Accounting Standards (48 CFR chapter 99) 
(see 12.214).

[FR Doc. 96-32004 Filed 12-19-96; 8:45 am]
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