[Federal Register Volume 62, Number 51 (Monday, March 17, 1997)]
[Rules and Regulations]
[Pages 12704-12705]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 97-6318]


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DEPARTMENT OF DEFENSE

GENERAL SERVICES ADMINISTRATION

NATIONAL AERONAUTICS AND SPACE ADMINISTRATION

48 CFR Part 31

[FAC 90-46; FAR Case 95-024; Item IX]
RIN 9000-AH03


Federal Acquisition Regulation; Independent Research and 
Development/Bid and Proposal Costs in Cooperative Arrangements

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) to permit contractor 
contributions of independent research and development (IR&D) costs 
under NASA cooperative arrangements to be treated as allowable indirect 
costs. 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 DATES: Effective May 16, 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 90-46, FAR case 95-024.

SUPPLEMENTARY INFORMATION:

A. Background

    NASA published a class deviation (final rule) in the Federal 
Register at 59 FR 46359, September 8, 1994. The class deviation 
eliminates the prohibition at FAR 31.205-18(e) against treatment of 
contractor IR&D contributions under NASA cooperative arrangements as 
allowable indirect costs. This final rule eliminates the need for the 
NASA class deviation.
    A proposed rule was published in the Federal Register at 61 FR 
31796, June 20, 1996. 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. In addition, this rule affects only those 
entities that perform independent research and development effort under 
NASA cooperative arrangements.

[[Page 12705]]

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: March 7, 1997.
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 31.205-18(e) is revised to read as follows:


31.205-18   Independent research and development and bid and proposal 
costs.

* * * * *
    (e) Cooperative arrangements. (1) IR&D costs may be incurred by 
contractors working jointly with one or more non-Federal entities 
pursuant to a cooperative arrangement (for example, joint ventures, 
limited partnerships, teaming arrangements, and collaboration and 
consortium arrangements). IR&D costs also may include costs contributed 
by contractors in performing cooperative research and development 
agreements, or similar arrangements, entered into under--
    (i) Section 12 of the Stevenson-Wydler Technology Transfer Act of 
1980 (15 U.S.C. 3710(a));
    (ii) Sections 203(c) (5) and (6) of the National Aeronautics and 
Space Act of 1958, as amended (42 U.S.C. 2473(c) (5) and (6));
    (iii) 10 U.S.C. 2371 for the Defense Advanced Research Projects 
Agency; or
    (iv) Other equivalent authority.
    (2) IR&D costs incurred by a contractor pursuant to these types of 
cooperative arrangements should be considered as allowable IR&D costs 
if the work performed would have been allowed as contractor IR&D had 
there been no cooperative arrangement.

[FR Doc. 97-6318 Filed 3-14-97; 8:45 am]
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