[Federal Register Volume 62, Number 163 (Friday, August 22, 1997)]
[Rules and Regulations]
[Pages 44830-44831]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 97-22075]


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DEPARTMENT OF DEFENSE

GENERAL SERVICES ADMINISTRATION

NATIONAL AERONAUTICS AND SPACE ADMINISTRATION

48 CFR Part 43

[FAC 97-01; FAR Case 96-606; Item XVIII]
RIN 9000-AH44


Federal Acquisition Regulation; Modification of Existing 
Contracts Under FASA and FARA

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

ACTION: Interim rule adopted as final.

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SUMMARY: The Civilian Agency Acquisition Council and the Defense 
Acquisition Regulations Council have agreed to adopt as final, the 
interim rule published as Item VIII of Federal Acquisition Circular 90-
44 on December 31, 1996. The rule amends the Federal Acquisition 
Regulation (FAR) to implement subsection 10002(e) of the Federal 
Acquisition Streamlining Act of 1994 and subsections 4402 (d) and (e) 
of the Clinger-Cohen Act of 1996. The rule authorizes, but does not 
require, contracting officers, if requested by the contractor, to 
modify existing

[[Page 44831]]

contracts without requiring consideration to incorporate changes 
authorized by the Acts. 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.

DATES: Effective October 21, 1997.

FOR FURTHER INFORMATION CONTACT: The FAR Secretariat, Room 4035, GS 
Building, Washington, DC 20405, (202) 501-4755 for information 
pertaining to status or publication schedules. For clarification of 
content, contact Mr. Ralph De Stefano, Procurement Analyst, at (202) 
501-1758. Please cite FAC 97-01, FAR case 96-606.

SUPPLEMENTARY INFORMATION:

A. Background

    Subsection 10002(e) of the Federal Acquisition Streamlining Act of 
1994 (Public Law 103-355) (FASA) and subsection 4402(d) of the Clinger-
Cohen Act of 1996 (Public Law 104-106) (Clinger-Cohen) allow 
regulations implementing the Acts to provide for modification of an 
existing contract without consideration upon the request of the 
contractor. Subsection 10002(e) of FASA and subsection 4402(e) of 
Clinger-Cohen provide that, except as specifically provided in these 
Acts, nothing in the Acts shall be construed to require the 
renegotiation or modification of contracts in existence on the date of 
the enactment of the Acts. The rule adopts the policy of encouraging, 
but not requiring, appropriate modifications without consideration, 
upon the request of the contractor. If the contracting officer 
determines that modification of an existing contract is appropriate to 
incorporate changes authorized by these Acts, the modification should 
insert the current version of the applicable FAR clauses into the 
contract.
    No comments were received in response to the FASA interim rule 
published in the Federal Register at 61 FR 18915, April 29, 1996, and 
the Clinger-Cohen interim rule published in the Federal Register at 61 
FR 69297, December 31, 1996.

B. Regulatory Flexibility Act

    The final rule may 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 it enables 
industry and the Government to gain significant benefits, including the 
potential reduction of contract costs, by authorizing the incorporation 
into existing contracts any of the Federal Acquisition Streamlining Act 
and/or Clinger-Cohen Act changes that will benefit the contracting 
parties. A Final Regulatory Flexibility Analysis (FRFA) has been 
prepared and will be provided to the Chief Counsel for Advocacy of the 
Small Business Administration. A copy of the FRFA may be obtained from 
the FAR Secretariat. The FRFA is summarized as follows:

    There were no public comments received in response to the 
Initial Regulatory Flexibility Analysis. The rule will apply to all 
large and small entities that currently have a Government contract. 
Most likely, contractors will not request modification of contracts 
under $25,000, because the usually short period of performance under 
these contracts will discourage modification. The number of active 
contracts over $25,000 held by small entities at any point in time 
or the total in any one fiscal year is not readily available from 
the Federal Procurement Report, Fiscal Year 1996 through Fourth 
Quarter. However, in fiscal year 1996, small entities were awarded 
approximately 37,192 contracts over $25,000. The number of contract 
modifications requested by small entities to incorporate Federal 
Acquisition Streamlining Act and/or the Clinger-Cohen Act changes 
depends on whether they determine that modifications to their 
specific contracts will be advantageous. The rule imposes no new 
reporting, recordkeeping, or other compliance requirements. This 
rule is the only practical alternative to implement subsection 
10002(e) of the Federal Acquisition Streamlining Act and subsections 
4402 (d) and (e) of the Clinger-Cohen Act.

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 43

    Government procurement.

Interim Rule Adopted as Final Without Change

    Accordingly, the interim rule amending 48 CFR Part 43, which was 
published at 61 FR 69297, December 31, 1996, is hereby adopted as final 
without change.

    Authority: 40 U.S.C. 486(c); 10 U.S.C. chapter 137; and 42 
U.S.C. 2473(c).

    Dated: August 14, 1997.
Edward C. Loeb,
Director, Federal Acquisition Policy Division.
[FR Doc. 97-22075 Filed 8-21-97; 8:45 am]
BILLING CODE 6820-EP-U