[Federal Register Volume 63, Number 35 (Monday, February 23, 1998)]
[Rules and Regulations]
[Pages 9053-9054]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 98-4296]


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DEPARTMENT OF DEFENSE

GENERAL SERVICES ADMINISTRATION

NATIONAL AERONAUTICS AND SPACE ADMINISTRATION

48 CFR Parts 12 and 52

[FAC 97-04; FAR Case 97-020; Item V]
RIN 9000-AH89


Federal Acquisition Regulation; Applicability of Cost Accounting 
Standards (CAS) Coverage

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 revise the criteria for 
application of Cost Accounting Standards (CAS) to negotiated Government 
contracts. This regulatory action was not subject to Office of 
Management and Budget (OMB) review under Executive Order 12866, dated 
September 30, 1993, and is not a major rule under 5 U.S.C. 804.

EFFECTIVE DATE: April 24, 1998.

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 Nelson, Procurement Analyst, at (202) 501-
1900. Please cite FAC 97-04, FAR case 97-020.

SUPPLEMENTARY INFORMATION:

A. Background

    On June 6, 1997, the CAS Board published a final rule, 
Applicability of CAS Coverage, in the Federal Register (62 FR 31294). 
The CAS rule implemented Section 4205 of Public Law 104-106, the 
Clinger-Cohen Act, by exempting contracts and subcontracts for the 
acquisition of commercial items from CAS requirements when these 
contracts and subcontracts are firm-

[[Page 9054]]

fixed-price or fixed-price with economic price adjustment (provided 
that the price adjustment is not based on actual costs incurred).
    This final rule amends FAR Subpart 12.2, Special Requirements for 
the Acquisition of Commercial Items, and the clauses at 52.230-2, Cost 
Accounting Standards, and 52.230-3, Disclosure and Consistency of Cost 
Accounting Practices, to conform the FAR to the revised CAS.

B. Regulatory Flexibility Act

    This final rule does not constitute a significant FAR revision 
within the meaning of FAR 1.501 and Public Law 98-577, and publication 
for public comments is not required. However, comments from small 
entities concerning the affected FAR subparts will be considered in 
accordance with 5 U.S.C. 610. Such comments must be submitted 
separately and should cite 5 U.S.C. 601, et seq. (FAC 97-04, FAR case 
97-020), in correspondence.

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 OMB under 44 
U.S.C. 3501, et seq.

List of Subjects in 48 CFR Parts 12 and 52

    Government procurement.

    Dated: February 13, 1998.
Edward C. Loeb,
Director, Federal Acquisition Policy Division.

    Therefore, 48 CFR Parts 12 and 52 are amended as set forth below:
    1. The authority citation for 48 CFR Parts 12 and 52 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).

PART 12--ACQUISITION OF COMMERCIAL ITEMS

    2. Section 12.214 is revised to read as follows:


12.214  Cost Accounting Standards.

    Cost Accounting Standards (CAS) do not apply to contracts and 
subcontracts for the acquisition of commercial items when these 
contracts and subcontracts are firm-fixed-price or fixed-price with 
economic price adjustment (provided that the price adjustment is not 
based on actual costs incurred). See 48 CFR 30.201-1 for CAS 
applicability to fixed-price with economic price adjustment contracts 
and subcontracts for commercial items when the price adjustment is 
based on actual costs incurred. When CAS applies, the contracting 
officer shall insert the appropriate provisions and clauses as 
prescribed in 48 CFR 30.201.

PART 52--SOLICITATION PROVISIONS AND CONTRACT CLAUSES

    3. Section 52.230-2 is amended by revising the clause date and 
paragraph (d) to read as follows:


52.230-2  Cost Accounting Standards.

* * * * *

Cost Accounting Standards (Apr 1998)

* * * * *
    (d) The Contractor shall include in all negotiated subcontracts 
which the Contractor enters into, the substance of this clause, except 
paragraph (b), and shall require such inclusion in all other 
subcontracts, of any tier, including the obligation to comply with all 
CAS in effect on the subcontractor's award date or if the subcontractor 
has submitted cost or pricing data, on the date of final agreement on 
price as shown on the subcontractor's signed Certificate of Current 
Cost or Pricing Data. If the subcontract is awarded to a business unit 
which pursuant to 48 CFR 9903.201-2 is subject to other types of CAS 
coverage, the substance of the applicable clause set forth in 
subsection 30.201-4 of the Federal Acquisition Regulation shall be 
inserted. This requirement shall apply only to negotiated subcontracts 
in excess of $500,000, except that the requirement shall not apply to 
negotiated subcontracts otherwise exempt from the requirement to 
include a CAS clause as specified in 48 CFR 9903.201-1.

(End of clause)

    4. Section 52.230-3 is amended by revising the clause date and 
paragraphs (d)(1), (2) and (3) to read as follows:


52.230-3  Disclosure and Consistency of Cost Accounting Practices.

* * * * *

Disclosure and Consistency of Cost Accounting Practices (Apr 1998)

* * * * *
    (d) * * *
    (1) If the subcontract is awarded to a business unit which 
pursuant to 48 CFR 9903.201-2 is subject to other types of CAS 
coverage, the substance of the applicable clause set forth in 
subsection 30.201-4 of the Federal Acquisition Regulation shall be 
inserted.
    (2) This requirement shall apply only to negotiated subcontracts 
in excess of $500,000.
    (3) The requirement shall not apply to negotiated subcontracts 
otherwise exempt from the requirement to include a CAS clause as 
specified in 48 CFR 9903.201-1.

(End of clause)

[FR Doc. 98-4296 Filed 2-20-98; 8:45 am]
BILLING CODE 6820-EP-P