[Federal Register Volume 63, Number 3 (Tuesday, January 6, 1998)]
[Proposed Rules]
[Page 649]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 98-250]



  Federal Register / Vol. 63, No. 3 / Tuesday, January 6, 1998 / 
Proposed Rules  

[[Page 649]]


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DEPARTMENT OF DEFENSE

GENERAL SERVICES ADMINISTRATION

NATIONAL AERONAUTICS AND SPACE ADMINISTRATION

48 CFR Part 44

[FAR Case 97-016]
RIN 9000-AH82


Federal Acquisition Regulation; Contractor Purchasing System 
Review Exclusions

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

ACTION: Proposed rule.

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SUMMARY: The Civilian Agency Acquisition Council and the Defense 
Acquisition Regulations Council are proposing to amend the Federal 
Acquisition Regulation (FAR) to eliminate unnecessary contractor 
purchasing system reviews (CPSRs). This regulatory action was not 
subject to Office of Management and Budget review under Executive Order 
12866, dated September 30, 1993. This is not a major rule under 5 
U.S.C. 804.

DATES: Comments should be submitted on or before March 9, 1998 to be 
considered in the formulation of a final rule.

ADDRESSES: Interested parties should submit written comments to: 
General Services Administration, FAR Secretariat (MVRS), 1800 F Street, 
NW, Room 4035, Washington, DC 20405.
    E-mail comments submitted over Internet should be addressed to: 
[email protected].
    Please cite FAR case 97-016 in all correspondence related to this 
case.

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 Ms. Linda Klein, 
Procurement Analyst, at (202) 501-3775. Please cite FAR case 97-016.

SUPPLEMENTARY INFORMATION: 

A. Background

    This proposed rule amends (1) FAR 44.302 to exclude competitively 
awarded firm-fixed-price and competitively awarded fixed-price with 
economic price adjustment contracts for the dollar amount used to 
determine if a contractor's level of sales to the Government warrants 
the conduct of a CPSR; and (2) FAR 44.303 to exclude subcontracts 
awarded by a contractor exclusively in support of competitively awarded 
firm-fixed-price and competitively awarded fixed-price with economic 
price adjustment contracts from evaluation during a CPSR.

B. Regulatory Flexibility Act

    This proposed 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., because the rule 
only applies to a contractor if its sales to the Government (excluding 
competitively awarded firm-fixed-price and competitively awarded fixed-
price with economic price adjusted contracts) are expected to exceed 
$25 million during the next year. and no small entities meet this 
criteria. Therefore, an Initial Regulatory Flexibility Analysis has not 
been performed. Comments from small entities concerning the affected 
FAR subpart will be considered in accordance with 5 U.S.C. 610 of the 
Act. Such comments must be submitted separately and should cite 5 
U.S.C. 601, et seq. (FAR case 97-016), in correspondence.

C. Paperwork Reduction Act

    The Paperwork Reduction Act does apply not apply because the 
proposed 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 44

    Government procurement.

    Dated: December 30, 1997.
Linda Klein,
Acting Director, Federal Acquisition Policy Division.
    Therefore, it is proposed that 48 CFR Part 44 be amended as set 
forth below:

PART 44--SUBCONTRACTING POLICIES AND PROCEDURES

    1. The authority citation for 48 CFR Part 44 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 44.302 is revised to read as follows:


44.302   Requirements.

    (a) The ACO shall determine the need for a CPSR based on, but not 
limited to, the past performance of the contractor, and the volume, 
complexity and dollar value of subcontracts. If a contractor's sales to 
the Government (excluding competitively awarded firm-fixed price and 
competitively awarded fixed-price with economic price adjustment 
contracts) are expected to exceed $25 million during the next year, 
perform a review to determine if a CPSR is needed. Sales include those 
represented by prime contracts, subcontracts under Government prime 
contracts, and modifications. Generally, a CPSR is not performed for a 
specific contract. The head of the agency responsible for contract 
administration may raise or lower the $25 million review level if it is 
considered to be in the Government's best interest.
    (b) Once an initial determination has been made under paragraph (a) 
of this section, at least every 3 years the ACO shall determine whether 
a purchasing system review is necessary. If necessary, the cognizant 
contract administration office will conduct a purchasing system review.
    3. Section 44.303 is amended by revising the introductory paragraph 
to read as follows:


44.303   Extent of review.

    A CPSR requires an evaluation of the contractor's purchasing 
system. Unless segregation of subcontracts is impracticable, this 
evaluation shall not include subcontracts awarded by the contractor 
exclusively in support of competitively awarded firm-fixed price or 
competitively awarded fixed-price with economic price adjustment 
Government contracts. The considerations listed in 44.202-2 for consent 
evaluation of particular subcontracts also shall be used to evaluate 
the contractor's purchasing system, including the contractor's 
policies, procedures, and performance under that system. Special 
attention shall be given to--
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[FR Doc. 98-250 Filed 1-5-98; 8:45 am]
BILLING CODE 6820-EP-U