[Federal Register Volume 62, Number 138 (Friday, July 18, 1997)]
[Rules and Regulations]
[Pages 38475-38476]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 97-18944]


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GENERAL SERVICES ADMINISTRATION

48 CFR Part 552

[APD 2800.12A, CHGE 75]
RIN 3090-AG30


Acquisition Regulation; Remittance of Industrial Funding Fee in 
U.S. Dollars Under Federal Supply Schedules Program

AGENCY: Office of Acquisition Policy, GSA.

ACTION: Final rule.

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SUMMARY: The General Services Administration Acquisition Regulation 
(GSAR) is amended to revise the contract clauses at 552.238-72 and 
552.238-77 to require remittance of the industrial funding fee under 
Federal Supply Schedules (FSS) program in U.S. dollars, define the 
basis for converting the value of sales in foreign currency, update 
references to termination for cause, and clarify reporting and 
remittance requirements.

DATES: Effective Date July 18, 1997.

FOR FURTHER INFORMATION CONTACT: Gloria Sochon, GSA Acquisition Policy 
Division, (202) 208-6726.

SUPPLEMENTARY INFORMATION:

A. Background

    The General Services Administration's FSS program charges ordering 
activities an industrial funding fee (IFF) to recoup the program's 
operating costs. The IFF is included in contract prices, collected by 
contractors, and remitted quarterly to GSA. Some contractors under the 
International Federal Supply Schedule have remitted the IFF in foreign 
currency. This practice causes many problems, particularly impeding 
GSA's ability to meet U.S. Department of the Treasury requirements to 
record deposits timely. Checks in foreign currency require significant 
processing, often taking several weeks to complete the deposit. The 
government loses interest on the funds during this delay.
    The revised contract clauses require payment of the IFF in U.S. 
dollars. It also establishes standards for conversion to address 
fluctuations in rates of exchange. Contractors will use the U.S. 
Department of the Treasury, ``Treasury Reporting Rates of Exchange,'' 
in effect on the last day of the reporting period to convert the value 
of sales in foreign currency to U.S. dollars. In addition, the 
references to termination for cause are revised, as different clauses 
now apply in different situations. It also clarifies reporting and 
remittance requirements by defining the close-out report, defining how 
the contractor is to provide supporting information when reimbursing 
GSA by check, and updating information on electronic funds transfers.

B. Executive Order 12866

    This rule was submitted to the Office of Management and Budget 
(OMB) under Executive Order 12866.

C. Regulatory Flexibility Act

    This final rule is not expected to 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. The rule requires 
only that FSS contractors use U.S. dollars to report the value of sales 
and to remit the IFF to GSA. The only additional administrative burden 
on contractors is the need to calculate the conversion of sales made in 
foreign currency once each quarter. Most of the contractors affected by 
this rule will be foreign entities, with their place of business 
located outside of the U.S.

D. Paperwork Reduction Act

    The revised clause at 552.238-72, Contractor's Report of Sales, 
contains an information collection requirement subject to the Paperwork 
Reduction Act (44 U.S.C. 3501 et seq.). However, the revisions to the 
clause made by this rule do not affect the information collection 
requirement which was approved previously by OMB and assigned control 
number 3090-0121.
    The revised clause at 552.238-77, Industrial Funding Fee, contains 
an information collection requirement

[[Page 38476]]

subject to the Paperwork Reduction Act (44 U.S.C. 3501 et seq.). 
However, the revisions to the clause made by this rule do not affect 
the information collection requirement previously approved under GSA's 
blanket approval under control number 3090-0250 from OMB for 
information collections with a zero burden estimate.

E. Small Business Regulatory Enforcement Fairness Act of 1996

    This rule is not a major rule under 5 U.S.C. 804. This rule was 
submitted to Congress and GAO under 5 U.S.C. 804.

F. Determination to Issue a Final Rule

    GSA expects this rule will have no significant cost or 
administrative burden on contractors or offerors. The only additional 
administrative burden on contractors is the need to calculate the 
conversion of sales made in foreign currency once each quarter. 
Therefore, GSA is promulgating this final rule without prior 
opportunity for public comment.

List of Subjects in 48 CFR Part 552

    Government procurement.

    Accordingly, 48 CFR 552 is amended as follows:
    1. The authority citation for 48 CFR Part 552 continues to read as 
follows:

    Authority: 40 U.S.C. 486(c).

PART 552--SOLICITATION PROVISIONS AND CONTRACT CLAUSES

    2. Section 552.238-72 is amended by revising the clause date; 
revising paragraph (a); redesignating paragraphs (b), (c), and (d) as 
(c), (d), and (e) respectively; adding a new paragraph (b); 
redesignating paragraph (e) in Alternate I as paragraph (f) and 
revising the reference ``paragraph (e)'' in Alternate I introductory 
text to read ``paragraph (f)''; and revising the Alternate I date to 
read ``May 1997''; and revising paragraphs (c) and (d) to read as 
follows:


552.238-72  Contractor's report of sales.

* * * * *

CONTRACTOR'S REPORT OF SALES (MAY 1997)

    (a) The Contractor must furnish quarterly the dollar value (in 
U.S. dollars and rounded to the nearest whole dollar) of all sales 
under the contract during the preceding 3-month period, to include 
any partial month. The dollar value of a sale is the price paid by 
the schedule user for products and services on a schedule contract 
delivery order, as recorded by the Contractor. The reported contract 
sales value must include the industrial funding fee (see Clause 
552.238-77). The Contractor must prepare and submit a separate 
report for each National Stock Number (NSN), Special Item Number 
(SIN), or subitem, unless otherwise specified, on GSA Form 72A.
    (b) The Contractor must convert the total value of any sales 
made in foreign currency to U.S. dollars using the ``Treasury 
Reporting Rates of Exchange,'' issued by the U.S. Department of 
Treasury, Financial Management Service. The Contractor must use the 
issue of the Treasury report in effect on the last day of the 
contract quarter. The report is available from: Department of the 
Treasury, Financial Management Service, International Funds Branch, 
3700 East-West Highway, PGCII, Room 5A19, Hyattsville, MD 20782, 
Telephone: (202) 874-7994, Internet: http://www.ustreas.gov/
treasury/bureaus/finman/intn.html.
    (c) The report is due in the office specified below or specified 
at the time of award 30 days following the completion of the 
reporting period. The Contractor must provide a close-out report 
within 120 days after the expiration date of the contract. This 
close-out report must cover all sales not shown in the final 
quarterly report and reconcile all errors and credits. If the 
Contractor reported all contract sales and reconciled all errors and 
credits on the final quarterly report, then show zero sales in the 
close-out report.
    (d) The Government reserves the right to inspect without further 
notice, such records of the Contractor as pertain to sales under 
this contract. Willful failure or refusal to furnish the required 
reports, or falsification thereof, constitutes sufficient cause for 
terminating the contract for cause under the termination provisions 
of this contract.
* * * * *
    3. Section 552.238-77 is amended by revising the clause date; 
revising paragraph (a); redesignating paragraphs (b), (c), and (d) as 
(c), (d), and (e) respectively; adding a new paragraph (b); revising 
newly designated paragraphs (c), introductory text and (c)(2); and 
revising newly designated paragraph (e) to read as follows:


552.238-77  Industrial funding fee.

* * * * *

INDUSTRIAL FUNDING FEE (MAY 1997)

    (a) The Contractor must pay the Federal Supply Service, GSA, an 
Industrial Funding Fee (IFF), in U.S. dollars, at the end of each 
contract quarter. The Contractor must remit the IFF at the same time 
the GSA Form 72A, Contractor's Report of Sales, is submitted under 
clause 552.238-72, Contractor's Report of Sales. The IFF equals 
________________* of total sales reported on GSA Form 72A. The IFF 
reimburses the GSA Federal Supply Service for the costs of operating 
the Federal Supply Schedules Program and recoups its operating costs 
from ordering activities. Offerors should include the IFF in the 
prices submitted with their offer. The fee is included in the award 
price(s) and reflected in the total amount charged to ordering 
activities.
    (b) The Contractor must remit any monies due as a result of the 
close-out report required by clause 552.238-72 at the time the 
close-out report is submitted to GSA.
    (c) The IFF amount due must be paid by check or, electronic 
funds transfer through the Automated Clearing House (ACH), to the 
``General Services Administration.'' If the payment involves 
multiple special item numbers or contracts, the Contractor may 
consolidate the IFFs into one payment. To ensure that the payment is 
credited properly, the Contractor should identify the check or 
electronic transmission as an ``Industrial Funding Fee'' and include 
the following information: contract number(s); report amount(s); and 
report period(s). If the Contractor makes payment by check, provide 
this information on either the check, check stub, or remittance 
material. The GSA Form 72A is not remittance material.
* * * * *
    (2) If the IFF payment is made by electronic funds transfer 
through ACH, the Contractor must call GSA, Financial Information 
Control Branch, Receivables, Collections and Sales Section (6BCDR) 
at (contracting officer to insert phone number) to make 
arrangements.
* * * * *
    (e) Failure to submit sales reports, falsification of sales 
reports, and/or failure to pay the IFF in a timely manner may result 
in termination or cancellation of this contract. Willful failure or 
refusal to furnish the required reports, falsification of sales 
reports, or failure to make timely payment of the IFF constitutes 
sufficient cause for terminating the contract for cause under the 
termination provisions of this contract.

(End of Clause)
* * * * *
    Dated: May 15, 1997.
Ida M. Ustad,
Deputy Associate Administrator, Office of Acquisition Policy.
[FR Doc. 97-18944 Filed 7-17-97; 8:45 am]
BILLING CODE 6820-61-P