[Federal Register Volume 65, Number 176 (Monday, September 11, 2000)]
[Proposed Rules]
[Pages 54940-54941]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 00-23120]


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DEPARTMENT OF DEFENSE

GENERAL SERVICES ADMINISTRATION

NATIONAL AERONAUTICS AND SPACE ADMINISTRATION

48 CFR Parts 2, 31, and 35

[FAR Case 2000-401]
RIN 9000-AI91


Federal Acquisition Regulation; Definitions of ``Applied 
Research'' and ``Development''

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

ACTION: Proposed rule.

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SUMMARY: The Civilian Agency Acquisition Council and the Defense 
Acquisition Regulations Council (Councils) are proposing to amend the 
Federal Acquisition Regulation (FAR) to move the definitions of 
``Applied Research'' and ``Development'' from separate areas of the FAR 
into the same FAR section pertaining to definitions.

DATES: Interested parties should submit comments in writing on or 
before November 13, 2000 to be considered in the formulation of a final 
rule.

ADDRESSES: Submit written comments to: General Services Administration, 
FAR Secretariat (MVRS), 1800 F Street, NW, Room 4035, ATTN: Laurie 
Duarte, Washington, DC 20405. Submit electronic comments via the 
Internet to: [email protected]
    Please submit comments only and cite FAR case 2000-401 in all 
correspondence related to this case.

FOR FURTHER INFORMATION CONTACT: The FAR Secretariat, Room 4035, GS 
Building, Washington, DC, 20405, at (202) 501-4755 for information 
pertaining to status or publication schedules. For clarification of 
content, contact Ralph De Stefano, Procurement Analyst, at (202) 501-
1757. Please cite FAR case 2000-401.

SUPPLEMENTARY INFORMATION:

A. Background

    This rule amends FAR Subpart 2.1 to consolidate the definitions of 
``Applied Research'' and ``Development'' found in 31.205-18 and 35.001 
into the definitions section at FAR 2.101 and makes editorial changes 
for clarity. The Councils' amendments are intended to reorganize, 
simplify, and clarify FAR language. The Councils do not intend any 
substantive changes to the FAR by these amendments.
    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 is not a 
major rule under 5 U.S.C. 804.

B. Regulatory Flexibility Act

    The Councils do not expect this proposed rule 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, while we have made changes in accordance with plain language 
guidelines, we have not substantively changed procedures for award and 
administration of contracts. Therefore, we have not prepared an Initial 
Regulatory Flexibility Analysis. We invite comments from small 
businesses and other interested parties. We will consider comments from 
small entities concerning the affected FAR parts in accordance with 5 
U.S.C. 610. Interested parties must submit such comments separately and 
should cite 5 U.S.C. 601, et seq. (FAR case 2000-401), in 
correspondence.

C. Paperwork Reduction Act

    The Paperwork Reduction Act does not apply because the proposed 
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 Parts 2, 31, and 35

    Government procurement.

    Dated: September 5, 2000.
Edward C. Loeb,
Director, Federal Acquisition Policy Division.
    Therefore, DoD, GSA, and NASA propose that 48 CFR parts 2, 31, and 
35 be amended as set forth below:
    1. The authority citation for 48 CFR parts 2, 31, and 35 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 2--DEFINITIONS OF WORDS AND TERMS

    2. Amend section 2.101 by adding the definitions ``Applied 
research'' and ``Development'' to read as follows:


2.101  Definitions.

* * * * *
    Applied research--(1) Means effort that--
    (i) Normally follows basic research, but may not be severable from 
the related basic research;
    (ii) Attempts to determine and exploit the potential of scientific 
discoveries or

[[Page 54941]]

improvements in technology, materials, processes, methods, devices, or 
techniques; and
    (iii) Attempts to advance the state of the art.
    (2) Does not include efforts whose principle aim is design, 
development, or test of specific items or services to be considered for 
sale.
* * * * *
    Development--(1) Means the systematic use, under whatever name, of 
scientific and technical knowledge in the design, development, test, or 
evaluation of a potential new product or service (or of an improvement 
in an existing product or service) for the purpose of meeting specific 
performance requirements or objectives.
    (2) Includes the functions of design engineering, prototyping, and 
engineering testing, but does not include--
    (i) Subcontracted technical effort that is for the sole purpose of 
developing an additional source for an existing product; or
    (ii) Development effort for manufacturing or production materials, 
systems, processes, methods, equipment, tools, and techniques not 
intended for sale.
* * * * *

PART 31--CONTRACT COST PRINCIPLES AND PROCEDURES

    3. Amend section 31.205-18 by revising paragraph (a), removing the 
definitions ``Applied research'' and ``Development'' and removing ``as 
used in this subsection'' from the definitions of ``Basic research'', 
``Bid and proposal (B&P) costs'', ``Company'', ``Independent research 
and development (IR&D)'', and ``Systems and other concept formulation 
studies''. The revised text reads as follows:


31.205-18  Independent research and development and bid and proposal 
costs.

    (a) Definitions. As used in this subsection--
* * * * *
    4. Revise paragraph (b)(1) of section 31.205-25 to read as follows:


31.205-25  Manufacturing and production engineering costs.

* * * * *
    (b) * * *
    (1) Basic research and applied research efforts related to new 
technology, materials, systems, processes, methods, equipment, tools 
and techniques. Such technical effort is governed by 31.205-18, 
Independent research and development and bid and proposal costs; and
* * * * *

PART 35--RESEARCH AND DEVELOPMENT CONTRACTING


35.001  [Amended]

    5. Amend section 35.001 by removing the definitions ``Applied 
research'' and ``Development''.

[FR Doc. 00-23120 Filed 9-8-00; 8:45 am]
BILLING CODE 6820-EP-P