[Federal Register Volume 61, Number 246 (Friday, December 20, 1996)]
[Rules and Regulations]
[Pages 67422-67423]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 96-32009]


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DEPARTMENT OF DEFENSE
48 CFR Part 31

[FAC 90-43; FAR Case 92-613; Item IX]
RIN 9000-AG85


Federal Acquisition Regulation; Morale, Health, Welfare Costs/
Contractor Overhead Certification

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 principle for public 
relations and

[[Page 67423]]

advertising costs to eliminate confusion as to which cost principle 
governs. 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: February 18, 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 92-613.

SUPPLEMENTARY INFORMATION:

A. Background

    The General Accounting Office (GAO), in its report GAO/NSIAD-93-79, 
``CONTRACT PRICING: Unallowable Costs Charged to Defense Contracts'', 
dated November 20, 1992, recommended that the cost principles at FAR 
31.205-1, 31.205-13, and 31.205-14 be revised to eliminate confusion as 
to which cost principle was controlling. The December 1992 OMB SWAT 
summary report on civilian agency contracting practices also 
recommended these cost principles be made more explicit.
    Revisions to FAR 31.205-13 and 31.205-14, based on recommendations 
of the GAO and OMB SWAT, and implementation of the Federal Acquisition 
Streamlining Act of 1994, Public Law 103-355, were published as a final 
rule in the Federal Register (60 FR 42662) on August 16, 1995.
    This final rule amends the third cost principle cited in the GAO 
and the OMB SWAT reports. The rule amends the cost principle at FAR 
31.205-1, Public relations and advertising costs, by removing from 
paragraph (f)(5) the parenthetical reference to other cost principles 
to eliminate any confusion as to which cost principle governs. A 
proposed rule was published in the Federal Register on March 29, 1996 
(61 FR 14216). Two sources submitted public comments. All comments were 
considered in developing 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 most contracts awarded 
to small entities use simplified acquisition procedures or are awarded 
on a competitive, fixed-price basis, and do not require application of 
the FAR cost principles.

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 31

    Government procurement.

    Dated: September 11, 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 31.205-1(f)(5) is revised to read as follows:


31.205-1  Public relations and advertising costs.

* * * * *
    (f) * * *
    (5) Costs of promotional material, motion pictures, videotapes, 
brochures, handouts, magazines, and other media that are designed to 
call favorable attention to the contractor and its activities.
* * * * *
[FR Doc. 96-32009 Filed 12-19-96; 8:45 am]
BILLING CODE 6820-EP-P