[Federal Register Volume 62, Number 1 (Thursday, January 2, 1997)]
[Rules and Regulations]
[Pages 274-275]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 96-33219]


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DEPARTMENT OF DEFENSE
48 CFR Part 42

[FAC 90-45; FAR Case 96-324; Item XV]
RIN 9000-AH52


Federal Acquisition Regulation; Limitation on Indirect Cost 
Audits

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) implementing Section 808 of 
the FY 97 Defense Authorization Act (Pub. L. 104-201), which expands 
required audit reciprocity among Federal agencies to include post-award 
audits. 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. Jerry 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 90-45, FAR case 96-324.

SUPPLEMENTARY INFORMATION:

A. Background

    This FAR change implements Section 808 of the Fiscal Year 1997 
National Defense Authorization Act (Public Law 104-201). Section 808 
amends 10 U.S.C. 2313(d) and 41 U.S.C. 254d(d) to expand required audit 
reciprocity among Federal agencies to include post-award audits. 
Section 808 was effective September 23, 1996. 10 U.S.C. 2313(d) and 41 
U.S.C. 254d(d) were added by the Federal Acquisition Streamlining Act 
of 1994, Sections 2201(a)(1) and 2251(a) (Public Law 103-355), to 
include reciprocity on pre-award audits.

B. Regulatory Flexibility Act

    The final rule does not constitute a significant FAR revision 
within the meaning of FAR 1.501 and Public Law 98-577, and publication 
for public comments is not required. However, comments from small 
entities concerning the affected FAR subpart 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 90-45, FAR case 96-324), 
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.

List of Subjects in 48 CFR Part 42

    Government procurement.

    Dated: December 24, 1996.
Edward C. Loeb,
Director, Federal Acquisition Policy Division.

    Therefore, 48 CFR Part 42 amended as set forth below:

PART 42--CONTRACT ADMINISTRATION

    1. The authority citation for 48 CFR Part 42 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 42.703-1 is amended by revising paragraph (a) to read as 
follows:


42.703-1  Policy.

    (a) A single agency (see 42.705-1(a)) shall be responsible for 
establishing indirect cost rates for each business unit. These rates 
shall be binding on all agencies and their contracting offices, unless 
otherwise specifically prohibited

[[Page 275]]

by statute. An agency shall not perform an audit of indirect cost rates 
when the contracting officer determines that the objectives of the 
audit can reasonably be met by accepting the results of an audit that 
was conducted by any other department or agency of the Federal 
Government (10 U.S.C. 2313(d) and 41 U.S.C. 254d(d)).
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[FR Doc. 96-33219 Filed 12-31-96; 8:45 am]
BILLING CODE 6820-EP-P