[Federal Register Volume 63, Number 243 (Friday, December 18, 1998)]
[Rules and Regulations]
[Pages 70290-70291]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 98-33520]


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DEPARTMENT OF DEFENSE

GENERAL SERVICES ADMINISTRATION

NATIONAL AERONAUTICS AND SPACE ADMINISTRATION

48 CFR Part 48

[FAC 97-10; FAR Case 96-011; Item VIII]
RIN 9000-AH37


Federal Acquisition Regulation; No-Cost Value Engineering Change 
Proposals

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

ACTION: Interim rule adopted as final without change.

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SUMMARY: The Civilian Agency Acquisition Council and the Defense 
Acquisition Regulations Council have agreed to convert the interim rule 
published as Item X of Federal Acquisition Circular 97-05 at 63 FR 
34078, June 22, 1998, to a final rule without change. The rule amends 
the Federal Acquisition Regulation (FAR) to clarify that no-cost value 
engineering change proposals (VECPs) may be used when, in the 
contracting officer's judgment, reliance on other VECP approaches 
likely would not be more cost-effective, and the no-cost settlement 
would provide adequate consideration to the Government.

EFFECTIVE DATE: December 18, 1998.

FOR FURTHER INFORMATION CONTACT: The FAR Secretariat, Room 4035, GS

[[Page 70291]]

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 96-011.

SUPPLEMENTARY INFORMATION:

A. Background

    An interim rule was published at 63 FR 34078, June 22, 1998, to 
clarify that the no-cost VECP guidance at FAR 48.104-3 permits the use 
of no-cost settlements when the contracting officer has balanced the 
administrative costs of negotiating a settlement against the 
anticipated savings; and when, in the contracting officer's judgment, 
reliance on other VECP approaches likely would not be more cost-
effective, and the no-cost settlement would provide adequate 
consideration to the Government. The no-cost VECP alternative was not 
intended for use when significant cost savings are anticipated on the 
instant contract.
    No public comments were received in response to the interim FAR 
rule. Therefore, the interim FAR rule is being converted to a final 
rule without change.
    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 Regulatory Flexibility Act, 5 U.S.C. 601 et seq. applies to 
this final rule. A Final Regulatory Flexibility Analysis (FRFA) has 
been performed and is summarized as follows:

    This rule clarifies that the guidance at FAR 48.104-3, Sharing 
alternatives--no-cost settlement method, permits use of no-cost VECP 
settlements when the contracting officer has balanced the 
administrative costs of negotiating a settlement against the 
anticipated savings; and, in the contracting officer's judgment, 
reliance on other VECP approaches likely would not be more cost-
effective, and the no-cost settlement would provide adequate 
consideration to the Government. The no-cost VECP alternative was 
not intended for use when significant cost savings are anticipated 
on the instant contract.

    The FRFA has been provided to the Chief Counsel for Advocacy of the 
Small Business Administration. A copy of the FRFA may be obtained from 
the FAR Secretariat.

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 48

    Government procurement.

    Dated: December 14, 1998.
Ralph DeStefano,
Acting Director, Federal Acquisition Policy Division.

Interim Rule Adopted as Final Without Change

    Accordingly, the interim rule amending 48 CFR Part 48, which was 
published at 63 FR 34078, June 22, 1998, is adopted as a final rule 
without change.

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

[FR Doc. 98-33520 Filed 12-16-98; 8:45 am]
BILLING CODE 6820-EP-P