[Federal Register Volume 65, Number 144 (Wednesday, July 26, 2000)]
[Rules and Regulations]
[Pages 46071-46072]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 00-18674]


-----------------------------------------------------------------------

DEPARTMENT OF DEFENSE

GENERAL SERVICES ADMINISTRATION

NATIONAL AERONAUTICS AND SPACE ADMINISTRATION

48 CFR Part 31

[FAC 97-19; FAR Case 1999-013; Item VII]
RIN 9000-AI62


Federal Acquisition Regulation; Deferred Research and Development 
(R&D) Costs

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

ACTION: Final rule.

-----------------------------------------------------------------------

SUMMARY: The Civilian Agency Acquisition Council and the Defense 
Acquisition Regulations Council (Councils) have agreed on a final rule 
amending the Federal Acquisition Regulation (FAR) to clarify and 
simplify the ``Deferred research and development costs'' cost 
principle.

DATES: Effective Date: September 25, 2000.

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 97-19, FAR case 1999-013.

SUPPLEMENTARY INFORMATION:

A. Background

    DoD, GSA, and NASA published a proposed rule in the Federal 
Register at 65 FR 4328, January 26, 2000. The proposed rule clarified 
and simplified the cost principle at FAR 31.205-48, Deferred research 
and development costs, by--
     Deleting the second sentence addressing precontract costs, 
as these types of costs are adequately addressed at FAR 31.205-32, 
Precontract costs;
     Revising the last sentence to more clearly indicate that 
incurred costs in excess of the contract price or grant amount for 
research and development (R&D) effort are unallowable and

[[Page 46072]]

accordingly, not reimbursable by the Government; and
     Making several editorial changes.
    Three respondents submitted public comments to the proposed rule. 
The Councils considered all comments before agreeing to convert the 
proposed rule to a final rule without change.
    This is not a significant regulatory action and, therefore, was not 
subject to review under Section 6(b) of Executive Order 12866, 
Regulatory Planning and Review, dated September 30, 1993. This rule 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 most contracts awarded 
to small entities use simplified acquisition procedures or are awarded 
on a competitive, fixed-price basis, and do not require application of 
the cost principle contained in this rule.

C. Paperwork Reduction Act

    The Paperwork Reduction Act does not apply because the changes to 
the FAR do not impose information collection requirements that 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 31

    Government procurement.

    Dated: July 19, 2000.
Edward C. Loeb,
Director, Federal Acquisition Policy Division.

    Therefore, DoD, GSA, and NASA amend 48 CFR part 31 as set forth 
below:

PART 31--CONTRACT COST PRINCIPLES AND PROCEDURES

    1. The authority citation for 48 CFR part 31 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. Revise section 31.205-48 to read as follows:

31.205-48  Deferred research and development costs.

    Research and development, as used in this section, means the type 
of technical effort described in 31.205-18 but sponsored by a grant or 
required in the performance of a contract. When costs are incurred in 
excess of either the price of a contract or amount of a grant for 
research and development effort, the excess is unallowable under any 
other Government contract.
[FR Doc. 00-18674 Filed 7-25-00; 8:45 am]
BILLING CODE 6820-EP-P