[Federal Register Volume 63, Number 243 (Friday, December 18, 1998)]
[Rules and Regulations]
[Page 70288]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 98-33517]


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DEPARTMENT OF DEFENSE

GENERAL SERVICES ADMINISTRATION

NATIONAL AERONAUTICS AND SPACE ADMINISTRATION

48 CFR Part 44

[FAC 97-10; FAR Case 97-016; Item V]
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: 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 eliminate unnecessary 
contractor purchasing system reviews (CPSRs).

EFFECTIVE DATE: February 16, 1999.

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 FAC 97-10, FAR case 97-016.

SUPPLEMENTARY INFORMATION:

A. Background

    This final rule amends--
    (1) FAR 44.302 to exclude competitively awarded firm-fixed-price 
and competitively awarded fixed-price with economic price adjustment 
contracts, and sales of commercial items pursuant to FAR Part 12, from 
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 Government contracts that are competitively 
awarded firm-fixed-price, competitively awarded fixed-price with 
economic price adjustment, or awarded for commercial items pursuant to 
FAR Part 12, from evaluation during a CPSR.
    A proposed rule was published in the Federal Register at 63 FR 649, 
January 6, 1998. Two respondents submitted comments on the proposed 
rule. All comments were considered in the development of the final 
rule.
    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.

B. Regulatory Flexibility Act

    The Department of Defense, the General Services Administration, and 
the National Aeronautics and Space Administration certify that this 
final rule will not 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 contractors with sales to the Government (excluding competitively 
awarded firm fixed-price and competitively awarded fixed-price with 
economic price adjustment contracts and sales of commercial items 
pursuant to FAR Part 12) that are expected to exceed $25 million during 
the next 12 months, and no small entities meet this criterion.

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 44

    Government procurement.

    Dated: December 14, 1998.
Ralph DeStefano,
Director, Federal Acquisition Policy Division.
    Therefore, 48 CFR Part 44 is 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 and sales of commercial items pursuant to Part 12) are 
expected to exceed $25 million during the next 12 months, 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 three 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 text 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 Government contracts that are competitively 
awarded firm-fixed-price, competitively awarded fixed-price with 
economic price adjustment, or awarded for commercial items pursuant to 
part 12. 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. 98-33517 Filed 12-16-98; 8:45 am]
BILLING CODE 6820-EP-P