[Federal Register Volume 61, Number 246 (Friday, December 20, 1996)]
[Rules and Regulations]
[Pages 67425-67426]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 96-32012]


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DEPARTMENT OF DEFENSE
48 CFR Parts 46 and 52

[FAC 90-43; FAR Case 92-035; Item XII]
RIN 9000-AG76


Federal Acquisition Regulation; Clause Flowdown

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 to a final rule to amend 
the Federal Acquisition Regulation (FAR) to reduce the number of 
contract clauses requiring flowdown to subcontractors. 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 92-035.

SUPPLEMENTARY INFORMATION:

A. Background

    The Councils conducted an extensive review of all FAR clauses 
requiring flowdown to subcontractors in an effort to eliminate any 
unnecessary flowdown requirements. This final rule eliminates the 
requirement for flowdown of the clauses at FAR 52.215-26, 52.216-5, 
52.216-6, 52.216-16, 52.216-17, 52.222-1, 52.236-21, 52.244-2, 52.246-
23, 52.246-24, and 52.246-25.
    A proposed rule was published in the Federal Register on December 
27, 1995, at 60 FR 67024. Three 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 elimination of the 
mandatory flowdown requirements from the amended FAR clauses does not 
eliminate the ability of prime contractors and subcontractors to agree 
to similar clauses in appropriate circumstances.

C. Paperwork Reduction Act

    The Paperwork Reduction Act does not apply because the changes to 
the FAR do not impose any new 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 46 and 52

    Government procurement.

    Dated: December 11, 1996.
Edward C. Loeb,
Director, Federal Acquisition Policy Division.
    Therefore, 48 CFR Parts 46 and 52 are amended as set forth below:
    1. The authority citation for 48 CFR Parts 46 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 46--QUALITY ASSURANCE


46.806  [Removed]

    2. Section 46.806 is removed.

PART 52--SOLICITATION PROVISIONS AND CONTRACT CLAUSES


52.215-26  [Amended]

    3. Section 52.215-26 is amended by revising the clause date to read 
``(FEB 1997)'', and by removing paragraph (d).
    4. Section 52.216-5 is amended by revising the introductory 
paragraph, the clause date, and paragraph (i) to read as follows:


52.216-5  Price Redetermination--Prospective.

    As prescribed in 16.205-4, insert the following clause:

PRICE REDETERMINATION--PROSPECTIVE (FEB 1997)

* * * * *

[[Page 67426]]

    (i) Subcontracts. No subcontract placed under this contract may 
provide for payment on a cost-plus-a-percentage-of-cost basis.
* * * * *

(End of clause)

    5. Section 52.216-6 is amended by revising the clause date and 
paragraph (h) to read as follows:


52.216-6  Price Redetermination--Retroactive.

* * * * *

PRICE REDETERMINATION--RETROACTIVE (FEB 1997)

* * * * *
    (h) Subcontracts. No subcontract placed under this contract may 
provide for payment on a cost-plus-a-percentage-of-cost basis.
* * * * *

(End of clause)

    6. Section 52.216-16 is amended by revising the introductory 
paragraph, the clause date, and paragraph (h) to read as follows:


52.216-16  Incentive Price Revision--Firm Target.

    As prescribed in 16.405(a), insert the following clause:

INCENTIVE PRICE REVISION--FIRM TARGET (FEB 1997)

* * * * *
    (h) Subcontracts. No subcontract placed under this contract may 
provide for payment on a cost-plus-a-percentage-of-cost basis.
* * * * *

(End of clause)

* * * * *
    7. Section 52.216-17 is amended by revising the introductory 
paragraph, the clause date, and paragraph (j) to read as follows:


52.216-17  Incentive Price Revision--Successive Targets.

    As prescribed in 16.405(b), insert the following clause:

INCENTIVE PRICE REVISION--SUCCESSIVE TARGETS (FEB 1997)

* * * * *
    (j) Subcontracts. No subcontract placed under this contract may 
provide for payment on a cost-plus-a-percentage-of-cost basis.
* * * * *

(End of clause)

* * * * *
    8. Section 52.222-1 is amended by revising the introductory 
paragraph and the clause date; by removing the paragraph designation 
``(a)''; and by removing paragraph (b). The revised text reads as 
follows:


52.222-1  Notice to the Government of Labor Disputes.

    As prescribed in 22.103-5(a), insert the following clause:

NOTICE TO THE GOVERNMENT OF LABOR DISPUTES (FEB 1997)

* * * * *

(End of clause)


52.236-21  [Amended]

    9. Section 52.236-21 is amended by revising the clause date to read 
``(FEB 1997)'', and by removing paragraph (h).


52.244-2  [Amended]

    10. Section 52.244-2 is amended by revising the clause date to read 
``(FEB 1997)'', by removing paragraph (i); and by redesignating 
paragraphs (j) and (k) as (i) and (j), respectively.


52.246-23  [Amended]

    11. Section 52.246-23 is amended by revising the clause date to 
read ``(FEB 1997)'', and by removing paragraph (d).


52.246-24  [Amended]

    12. Section 52.246-24 is amended by revising the clause date to 
read ``(FEB 1997)'', and by removing paragraphs (f) and (g).


52.246-25  [Amended]

    13. Section 52.246-25 is amended by revising the clause date to 
read ``(FEB 1997)'', and by removing paragraph (d).

[FR Doc. 96-32012 Filed 12-19-96; 8:45 am]
BILLING CODE 6820-EP-P