[Federal Register Volume 62, Number 51 (Monday, March 17, 1997)]
[Rules and Regulations]
[Pages 12719-12720]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 97-6322]


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DEPARTMENT OF DEFENSE

GENERAL SERVICES ADMINISTRATION

NATIONAL AERONAUTICS AND SPACE ADMINISTRATION

48 CFR Part 52

[FAC 90-46; FAR Case 96-005; Item XIII]
RIN 9000-AH22


Federal Acquisition Regulation; Performance-Based Payments

AGENCIES: Department of Defense (DOD), General Services Administration 
(GSA), and National Aeronautics and Space Administration (NASA).


[[Page 12720]]


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 address title to residual 
material and certain liability provisions concerning performance-based 
payments. 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: 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 96-005.

SUPPLEMENTARY INFORMATION:

A. Background

    The clause at 52.232-32, Performance-Based Payments, addresses a 
method of contract financing, and was printed in Federal Acquisition 
Circular 90-33, and published in the Federal Register at 60 FR 49707, 
September 26, 1995. Paragraph (f), Title, of the clause was intended to 
be functionally equivalent to paragraph (d) of FAR clause 52.232-16, 
Progress Payments, which addresses another type of contract financing. 
However, the topics of title to residual material and liability for 
Government-furnished property acquired under the contract, addressed in 
paragraphs (d) (6) and (7) of the Progress Payments clause, were 
inadvertently omitted from the Performance-Based Payments clause. This 
rule amends FAR 52.232-32 by adding paragraphs (f) (6) and (7) to 
address these topics.
    A proposed rule was published in the Federal Register at 61 FR 
47798, September 10, 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 basis, and, therefore, do not use the performance-
based method of contract financing.

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 52

    Government procurement.

    Dated: March 7, 1997.
Edward C. Loeb,
Director, Federal Acquisition Policy Division.

    Therefore, 48 CFR Part 52 amended as set forth below:

PART 52--SOLICITATION PROVISIONS AND CONTRACT CLAUSES

    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 52.232-32 is amended by revising the clause date; 
redesignating the heading of paragraph (f)(1) as the heading of 
paragraph (f), and adding new paragraphs (f) (6) and (7) to read as 
follows:


52.232-32  Performance-Based Payments.

* * * * *

PERFORMANCE-BASED PAYMENTS (MAY 1997)

* * * * *
    (f) Title. * * *
* * * * *
    (6) When the Contractor completes all of the obligations under 
this contract, including liquidation of all performance-based 
payments, title shall vest in the Contractor for all property (or 
the proceeds thereof) not--
    (i) Delivered to, and accepted by, the Government under this 
contract; or
    (ii) Incorporated in supplies delivered to, and accepted by, the 
Government under this contract and to which title is vested in the 
Government under this clause.
    (7) The terms of this contract concerning liability for 
Government-furnished property shall not apply to property to which 
the Government acquired title solely under this clause.
* * * * *
[FR Doc. 97-6322 Filed 3-14-97; 8:45 am]
BILLING CODE 6820-EP-P