[Federal Register Volume 66, Number 220 (Wednesday, November 14, 2001)]
[Proposed Rules]
[Pages 57294-57295]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 01-28230]



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Part IV





Department of Defense

General Services Administration

National Aeronautics and Space Administration

48 CFR Parts 32 and 152



Federal Acquisition Regulation; Progress Payment Requests Under 
Indefinite-Delivery Contracts; Proposed Rule

  Federal Register / Vol. 66, No. 220 / Wednesday, November 14, 2001 / 
Proposed Rules  

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DEPARTMENT OF DEFENSE

GENERAL SERVICES ADMINISTRATION

NATIONAL AERONAUTICS AND SPACE ADMINISTRATION

48 CFR Parts 32 and 52

[FAR Case 2001-006]
RIN 9000-AJ23


Federal Acquisition Regulation; Progress Payment Requests Under 
Indefinite-Delivery Contracts

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 require, under indefinite-
delivery contracts, the contractor to account for and submit progress 
payment requests under individual orders as if each order constitutes a 
separate contract, unless otherwise specified in the contract.

DATES: Interested parties should submit comments in writing on or 
before January 14, 2002 to be considered in the formulation of a final 
rule.

ADDRESSES: Submit written comments to: General Services Administration, 
FAR Secretariat (MVP), 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 2001-006 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 Jeremy Olson, Procurement Analyst, at (202) 501-3221. 
Please cite FAR case 2001-006.

SUPPLEMENTARY INFORMATION:

A. Background

    FAR 32.503-5(c) provides that under indefinite-delivery contracts, 
the contracting officer should administer progress payments made under 
each individual order as if the order constituted a separate contract, 
unless agencies provide otherwise. However, there is no related 
language in the clause at FAR 52.232-16, Progress Payments.
    The language in FAR 32.503-5(c) recognizes that funds on 
indefinite-delivery contracts are normally obligated on each individual 
order; deliveries and contract performance, which factor into progress 
payment calculations, are monitored at the order level, as opposed to 
the basic contract level; and that progress payments normally are 
administered at the order level. However, there is currently an 
inconsistency between the direction to the contracting officer at FAR 
32.503-5(c) and the provisions binding on the contractor in FAR 52.232-
16.
    This proposed rule revises--
     FAR 32.503-5, Administration of progress payments, to 
require, when the indefinite-delivery contract will be administered by 
an agency other than the awarding agency, the contracting officer to 
coordinate with the contract administration office if the 
administration of progress payments will be on a basis other than 
order-by-order; and
     FAR 52.232-16, Progress payments, to require the 
contractor to account for and submit progress payment requests under 
individual orders in indefinite-delivery contracts as if each order 
constitutes a separate contract, unless otherwise specified in the 
contract.
    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 have a dollar value 
less than the simplified acquisition threshold, and, therefore, do not 
have the progress payment type of financing. 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 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 2001-006), 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 32 and 52

    Government procurement.

    Dated: November 5, 2001.
Al Matera,
Director, Acquisition Policy Division.
    Therefore, DoD, GSA, and NASA propose amending 48 CFR parts 32 and 
52 as set forth below:
    1. The authority citation for 48 CFR parts 32 and 52 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 32--CONTRACT FINANCING

    2. Revise paragraph (c) of section 32.503-5 to read as follows:


32.503-5  Administration of progress payments.

* * * * *
    (c) Under indefinite-delivery contracts, the contracting officer 
should administer progress payments made under each individual order as 
if the order constituted a separate contract, unless agency procedures 
provide otherwise. When the contract will be administered by an agency 
other than the awarding agency, the contracting officer must coordinate 
with the contract administration office if the awarding agency wants 
the administration of progress payments to be on a basis other than 
order-by-order.

PART 52--SOLICITATION PROVISIONS AND CONTRACT CLAUSES

    3. Amend 52.232-16 by--
    a. Revising the clause date;
    b. Adding paragraph (l);
    c. Revising the introductory text of Alternate II;
    d. Redesignating paragraphs (l) and (m) of Alternate II as (m) and 
(n) respectively;
    e. Revising the introductory text of the newly designated (m), 
paragraphs (m)(3) and (n);
    f. Revising the introductory text of Alternate III; and
    g. Redesignating paragraph (l) of Alternate III as paragraph (m).


52.232-16  Progress Payments.

    As prescribed in 32.502-4(a), insert the following clause:

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PROGRESS PAYMENTS [DATE]

* * * * *
    (l) Progress Payments under indefinite-delivery contracts. The 
Contractor shall account for and submit progress payment requests 
under individual orders as if the order constituted a separate 
contract, unless otherwise specified in this contract.

(End of clause)
* * * * *
    Alternate II (DATE). If the contract is a letter contract, add 
paragraphs (m) and (n). The amount specified in paragraph (n) must 
not exceed 80 percent of the maximum liability of the Government 
under the letter contract. The contracting officer may specify 
separate limits for separate parts of the work.
    (m) The Contracting Officer will liquidate progress payments 
made under this letter contract, unless previously liquidated under 
paragraph (b) of this clause, using the following procedures:
    (1) * * *
    (2) * * *
    (3) If this letter contract is partly terminated and partly 
superseded by a contract, the Government will allocate the 
unliquidated progress payments to the terminated and unterminated 
portions as the Government deems equitable, and will liquidate each 
portion under the relevant procedure in paragraphs (m)(1) and (m)(2) 
of this clause.
* * * * *
    (n) The amount of unliquidated progress payments will not exceed 
____________ (specify dollar amount).
    Alternate III (DATE). As prescribed in 32.502-4(d), add the 
following paragraph (m) to the basic clause. If Alternate II is also 
being used, redesignate the following paragraph as paragraph (o):
* * * * *

[FR Doc. 01-28230 Filed 11-13-01; 8:45 am]
BILLING CODE 6820-EP-P