[Federal Register Volume 63, Number 208 (Wednesday, October 28, 1998)]
[Proposed Rules]
[Pages 57878-57879]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 98-28782]
[[Page 57877]]
_______________________________________________________________________
Part III
Department of Defense
General Services Administration
National Aeronautics and Space Administration
_______________________________________________________________________
48 CFR Part 46
Federal Acquisition Regulation: Conditionally Accepted Items; Proposed
Rule
Federal Register / Vol. 63, No. 208 / Wednesday, October 28, 1998 /
Proposed Rules
[[Page 57878]]
DEPARTMENT OF DEFENSE
GENERAL SERVICES ADMINISTRATION
NATIONAL AERONAUTICS AND SPACE ADMINISTRATION
48 CFR Part 46
[FAR Case 98-002]
RIN 9000-A117
Federal Acquisition Regulation; Conditionally Accepted Items
AGENCIES: Department of Defense (DOD), General Services Administration
(GSA), and National Aeronautics and Space Administration (NASA).
ACTION: Proposed rule with request for comments.
-----------------------------------------------------------------------
SUMMARY: The Civilian Agency Acquisition Council and the Defense
Acquisition Regulations Council are proposing to amend the Federal
Acquisition Regulation (FAR) to require that, when conditionally
accepting nonconforming items, amounts withheld from payments should be
at least sufficient to cover the cost and related profit to correct
deficiencies and complete unfinished work; and that the basis for the
amounts withheld shall be documented in the contract file. 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 December 28, 1998 to
be considered in the formulation of a final rule.
ADDRESSES: Interested parties should submit written comments to:
General Services Administration, FAR Secretariat (MVR), Attn: Ms Laurie
Duarte 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 98-002 in all correspondence related to this
case.
FOR FURTHER INFORMATION CONTACT: The FAR Secretariat, Room 4035, 1800 F
Street, NW, 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 98-002.
SUPPLEMENTARY INFORMATION:
A. Background
This proposed rule implements the recommendation of General
Accounting Office Report GAO/NSIAD-98-20 Defense Acquisition, Guidance
Is Needed On Payments For Conditionally Accepted Items, dated December
12, 1997. The rule amends FAR 46.101 to add a definition of
``conditional acceptance,'' and amends FAR 46.407 to provide procedures
for the conditional acceptance of supplies and services.
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 use
of conditional acceptance is not widespread. 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
98-002), in correspondence.
C. Paperwork Reduction Act
The Paperwork Reduction Act does 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 46
Government procurement.
Dated: October 22, 1998.
Edward C. Loeb,
Director, Federal Acquisition Policy Division.
Therefore, it is proposed that 48 CFR Part 46 be amended as set
forth below:
PART 46--QUALITY ASSURANCE
1. The authority citation for 48 CFR Part 46 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 46.101 is amended by adding, in alphabetical order, the
definition ``Conditional acceptance'' to read as follows:
46.101 Definitions.
* * * * *
Conditional acceptance means acceptance of supplies or services
that do not conform to contract quality requirements, or are otherwise
incomplete, that the contractor is required to correct or otherwise
complete by a specified date.
* * * * *
3. Section 46.407 is amended by revising paragraphs (c)(1) and (f)
to read as follows:
46.407 Nonconforming supplies or services.
* * * * *
(c)(1) In situations not covered by paragraph (b) of this section,
the contracting officer shall ordinarily reject supplies or services
when the nonconformance is critical or major, or the supplies or
services are otherwise incomplete. However, there may be circumstances
(e.g., reasons of economy or urgency) when acceptance or conditional
acceptance of such supplies or services is determined by the
contracting officer to be in the best interest of the Government. The
contracting officer shall make this determination based upon--
(i) Advice of the technical activity that the item is safe to use
and will perform its intended purpose;
(ii) Information regarding the nature and extent of the
nonconformance or otherwise incomplete supplies or services;
(iii) A request from the contractor for acceptance of the
nonconforming or otherwise incomplete supplies or services (if
feasible);
(iv) A recommendation for acceptance, conditional acceptance, or
rejection, with supporting rationale; and
(v) The contract adjustment considered appropriate, including any
adjustment offered by the contractor.
* * * * *
(f) When supplies or services are accepted with critical or major
nonconformances as authorized in paragraph (c) of this section, the
contract shall be modified to provide for an equitable price reduction
or other consideration. In the case of conditional acceptance, amounts
withheld from payments generally should be at least sufficient to cover
the estimated cost and related profit to correct deficiencies and
complete unfinished work. The basis for the amounts withheld shall be
documented in the contract file. For services, the contracting officer
can consider identifying the value of the individual work requirements
or tasks (subdivisions) that may be subject to price or fee reduction.
This value may be used to determine an equitable adjustment for
nonconforming services. However, when supplies or services involving
minor nonconformances are accepted, the contract need not be modified
unless it appears that the
[[Page 57879]]
savings to the contractor in fabricating the nonconforming supplies or
performing the services will exceed the cost to the Government of
processing the modification.
* * * * *
[FR Doc. 98-28782 Filed 10-27-98; 8:45 am]
BILLING CODE 6820-EP-P