[Federal Register Volume 65, Number 250 (Thursday, December 28, 2000)]
[Proposed Rules]
[Pages 82875-82876]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 00-33047]

[[Page 82875]]


Part V

Department of Defense

General Services Administration

National Aeronautics and Space Administration


48 CFR Part 31

Federal Acquisition Regulation; Signing and Retention of High-
Technology Workers; Proposed Rule

Federal Register / Vol. 65, No. 250 / Thursday, December 28, 2000 / 
Proposed Rules

[[Page 82876]]





48 CFR Part 31

[FAR Case 2000-014]
RIN 9000-AJ00

Federal Acquisition Regulation; Signing and Retention of High-
Technology Workers

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

ACTION: Proposed rule.


SUMMARY: The Civilian Agency Acquisition Council and the Defense 
Acquisition Regulations Council (Councils) are proposing to amend the 
Federal Acquisition Regulation (FAR) to explicitly make allowable 
signing and retention bonuses that defense contractors often must offer 
in order to recruit and retain workers that have critical technical 

DATES: Interested parties should submit comments in writing on or 
before February 26, 2001 to be considered in the formulation of a final 
rule. As this rule is intended only to clarify existing regulation, the 
Councils are specifically interested in comments as to whether this 
rule has Federal cost implications which have not been identified.

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]
    At this stage of the rulemaking process, we do not believe this is 
a major rule under 5 U.S.C. 804. However, the Councils seek comment on 
whether there are Federal cost implications which have not been 

Building, Washington, DC, 20405, at (202) 501-4755 for information 
pertaining to status or publication schedules. For clarification of 
content, contact Mr. Jeremy Olson, Procurement Analyst, at (202) 501-
0692. Please cite FAR case 2000-014.


A. Background

    The Government increasingly is contracting for technical services. 
This is driven by the need to maximize the use of technology to improve 
the efficiency and effectiveness of Government performance. Due to the 
tight labor market, companies doing business with the Government often 
must provide recruitment and retention bonuses to compete with 
predominantly non-Government firms to attract personnel with critical 
technical skills. This practice is analogous to the practice in the 
public sector of permitting signing bonuses for difficult-to-fill 
positions and retention allowances for essential Government employees.
    The proposed rule revises FAR 31.205-34, Recruitment costs, to 
explicitly allow signing bonuses to recruit, as well as retention 
bonuses to retain, employees with critical skills (such as scientists 
and engineers in the software and systems integration fields). The 
Councils view this revision as a clarification since the FAR currently 
does not disallow these type of expenses. In addition, the rule moves 
the current limitations on help-wanted advertising costs from FAR 
31.205-34(b) to the paragraph that addresses these costs (currently FAR 
31.205-34(a)(1)), and makes several related editorial changes.
    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 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 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. An Initial Regulatory Flexibility Analysis has, 
therefore, not been performed. We invite comments from small businesses 
and other interested parties. The Councils will consider comments from 
small entities concerning the affected FAR Part 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 2000-014), in 

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 Part 31

    Government procurement.

    Dated: December 21, 2000.
Al Matera,
Acting Director, Federal Acquisition Policy Division.
    Therefore, DoD, GSA, and NASA propose that 48 CFR part 31 be 
amended as set forth below:


    1. The authority citation for 48 CFR part 31 continues to read as 

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

    2. Revise section 31.205-34 to read as follows:

31.205-34  Recruitment and retention costs.

    The following costs are allowable:
    (a) Costs of help-wanted advertising. However, these costs are 
unallowable if the advertising--
    (1) Does not describe specific positions or classes of positions; 
    (2) Includes material that is not relevant for recruitment 
purposes, such as extensive illustrations or descriptions of the 
company's products or capabilities.
    (b) Costs of operating an employment office needed to secure and 
maintain an adequate labor force.
    (c) Costs of operating an aptitude and educational testing program.
    (d) Travel costs of employees engaged in recruiting personnel.
    (e) Travel costs of applicants for interviews.
    (f) Costs for employment agencies, not in excess of standard 
commercial rates.
    (g) Signing bonuses needed to recruit employees with critical 
skills (such as scientists and engineers in fields like software and 
systems integration), if comparable to the signing bonuses being 
offered by firms engaged in predominantly non-Government work to 
attract similar job skills.
    (h) Periodic retention bonuses needed to retain employees with 
critical skills (such as scientists and engineers in fields like 
software and systems integration), if comparable to the periodic 
retention bonuses being paid by firms engaged in predominantly non-
Government work to retain similar job skills.

[FR Doc. 00-33047 Filed 12-27-00; 8:45 am]