[Federal Register Volume 67, Number 124 (Thursday, June 27, 2002)]
[Rules and Regulations]
[Pages 43513-43514]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 02-15940]


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

DEPARTMENT OF DEFENSE

GENERAL SERVICES ADMINISTRATION

NATIONAL AERONAUTICS AND SPACE ADMINISTRATION

48 CFR Parts 2, 17, 31, 33, 49, and 52

[FAC 2001-08; FAR Case 2000-406; Item I]
RIN 9000-AJ19


Federal Acquisition Regulation; Definition of ``Claim'' and Terms 
Relating to Termination

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 move 
the definitions of ``claim'' and certain terms relating to termination 
to the FAR part regarding definitions.

DATES: Effective Date: July 29, 2002.

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 Klein, Procurement Analyst, at (202) 501-
3775. Please cite FAC 2001-08, FAR case 2000-406.

SUPPLEMENTARY INFORMATION:

A. Background

    The purpose of this rule is to clarify the applicability of 
definitions, eliminate redundant or conflicting definitions, and 
streamline the process for locating definitions. This rule is not 
intended to change the meaning of any FAR text or clause. Movement of 
various definitions to FAR 2.101 is not intended to change the 
operation of the cost principles, and specifically the movement of the 
definition of ``claim'' to FAR 2.101 is not intended to change the 
scope or context of FAR 31.205-47(f)(1).
    This final rule--
     Revises and moves the definitions of ``claim'' from 
33.201; ``continued portion of the contract,'' ``partial termination,'' 
``terminated portion of the contract'' from FAR 49.001; and 
``termination for convenience'' from FAR 17.103;
     Adds a definition of ``termination for default'' at FAR 
2.101 and a new paragraph 17.104(d) that explains the distinction 
between ``termination for convenience'' and ``cancellation'' that was 
deleted from the definition of ``termination for convenience'' that was 
moved from FAR 17.103;
      Revises FAR 33.213(a) to clarify the distinction between 
claims ``arising under a contract'' and claims ``relating to a 
contract'';
     Revises the definition of ``claim'' in the clause at FAR 
52.233-1 to conform to the definition at FAR 2.101; and
     Makes other editorial revisions for clarity.
    DoD, GSA, and NASA published a proposed rule in the Federal 
Register at 66 FR 42922, August 15, 2001, with a request for comment. 
One respondent submitted two comments to the proposed rule. The 
Councils considered and accepted both comments. The rule was modified 
as a result. The first comment recommended that the parenthetical 
reference at FAR 31.205(f)(1) be changed to reflect the new location of 
the definition of ``claim'' at FAR 2.101. This was done. The second 
comment recommended that a clarifying statement be added to the Federal 
Register notice stating that the movement of the various definitions to 
FAR 2.101 is not intended to change the operation of the cost 
principles, and specifically the movement of the definition of 
``claim'' to FAR 2.101 is not intended to change the scope of FAR 
31.205-47(f)(1). This was also done.
    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 the rule does not 
change policy. We did not receive any comments regarding this 
determination as a result of publication of the proposed rule in the 
Federal Register on August 15, 2001 (66 FR 42922).

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 Parts 2, 17, 31, 33, 49, and 52

    Government procurement.

    Dated: June 19, 2002.
Al Matera,
Director, Acquisition Policy Division.

    Therefore, DoD, GSA, and NASA amend 48 CFR parts 2, 17, 31, 33, 49, 
and 52 as set forth below:
    1. The authority citation for 48 CFR parts 2, 17, 31, 33, 49, 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 2--DEFINITIONS OF WORDS AND TERMS

    2. Amend section 2.101 by adding, in alphabetical order, the 
definitions ``Claim,'' ``Continued portion of the contract,'' ``Partial 
termination,'' ``Termination for convenience,'' ``Termination for 
default,'' and ``Terminated portion of the contract'' to read as 
follows:


2.101  Definitions.

* * * * *
    Claim means a written demand or written assertion by one of the 
contracting parties seeking, as a matter of right, the payment of money 
in a sum certain, the adjustment or interpretation of contract terms, 
or other relief arising under or relating to the contract. However, a 
written demand or written assertion by the contractor seeking the 
payment of money exceeding $100,000 is not a claim under the Contract 
Disputes Act of 1978 until certified as required by the Act. A voucher, 
invoice, or other routine request for payment that is not in dispute 
when submitted is not a claim. The submission may be converted to a 
claim, by written notice to the contracting officer as provided in

[[Page 43514]]

33.206(a), if it is disputed either as to liability or amount or is not 
acted upon in a reasonable time.
* * * * *
    Continued portion of the contract means the portion of a contract 
that the contractor must continue to perform following a partial 
termination.
* * * * *
    Partial termination means the termination of a part, but not all, 
of the work that has not been completed and accepted under a contract.
* * * * *
    Termination for convenience means the exercise of the Government's 
right to completely or partially terminate performance of work under a 
contract when it is in the Government's interest.
    Termination for default means the exercise of the Government's 
right to completely or partially terminate a contract because of the 
contractor's actual or anticipated failure to perform its contractual 
obligations.
    Terminated portion of the contract means the portion of a contract 
that the contractor is not to perform following a partial termination. 
For construction contracts that have been completely terminated for 
convenience, it means the entire contract, notwithstanding the 
completion of, and payment for, individual items of work before 
termination.
* * * * *

PART 17--SPECIAL CONTRACTING METHODS


17.103  [Amended]

    3. Amend section 17.103 by removing the definition ``Termination 
for convenience.''

    4. Amend section 17.104 by adding paragraph (d) to read as follows:


17.104  General.

* * * * *
    (d) The termination for convenience procedure may apply to any 
Government contract, including multiyear contracts. As contrasted with 
cancellation, termination can be effected at any time during the life 
of the contract (cancellation is effected between fiscal years) and can 
be for the total quantity or partial quantity (where as cancellation 
must be for all subsequent fiscal years' quantities).

PART 31--CONTRACT COST PRINCIPLES AND PROCEDURES


31.205-47  [Amended]

    5. Amend section 31.205-47 in paragraph (f)(1) by removing ``(see 
33.201)'' and adding ``(see 2.101)'' in its place.

PART 33--PROTESTS, DISPUTES, AND APPEALS


33.201  [Amended]

    6. Amend section 33.201 by removing the definition ``Claim.''

    7. Amend section 33.213 by revising paragraph (a) to read as 
follows:


33.213  Obligation to continue performance.

    (a) In general, before passage of the Act, the obligation to 
continue performance applied only to claims arising under a contract. 
However, the Act, at 41 U.S.C. 605(b), authorizes agencies to require a 
contractor to continue contract performance in accordance with the 
contracting officer's decision pending a final resolution of any claim 
arising under, or relating to, the contract. (A claim arising under a 
contract is a claim that can be resolved under a contract clause, other 
than the clause at 52.233-1, Disputes, that provides for the relief 
sought by the claimant; however, relief for such claim can also be 
sought under the clause at 52.233-1. A claim relating to a contract is 
a claim that cannot be resolved under a contract clause other than the 
clause at 52.233-1.) This distinction is recognized by the clause with 
its Alternate I (see 33.215).
* * * * *

PART 49--TERMINATION OF CONTRACTS


49.001  [Amended]

    8. Amend section 49.001 by removing the definitions ``Claim,'' 
``Continued portion of the contract,'' ``Partial termination,'' and 
``Terminated portion of the contract.''

PART 52--SOLICITATION PROVISIONS AND CONTRACT CLAUSES


52.213-4  [Amended]

    9. Amend section 52.213-4 by revising the date of the clause to 
read ``(7/02)''; and by removing from paragraph (a)(2)(v) ``(Dec 
1998)'' and adding ``7/02'' in its place.

    10. Amend section 52.233-1 by revising the date and paragraph (c) 
of the clause; and by revising the introductory paragraph of Alternate 
I to read as follows:


52.233-1  Disputes.

* * * * *

Disputes (7/02)

* * * * *

    (c) Claim, as used in this clause, means a written demand or 
written assertion by one of the contracting parties seeking, as a 
matter of right, the payment of money in a sum certain, the 
adjustment or interpretation of contract terms, or other relief 
arising under or relating to this contract. However, a written 
demand or written assertion by the Contractor seeking the payment of 
money exceeding $100,000 is not a claim under the Act until 
certified. A voucher, invoice, or other routine request for payment 
that is not in dispute when submitted is not a claim under the Act. 
The submission may be converted to a claim under the Act, by 
complying with the submission and certification requirements of this 
clause, if it is disputed either as to liability or amount or is not 
acted upon in a reasonable time.
* * * * *
    Alternate I (Dec 1991). As prescribed in 33.215, substitute the 
following paragraph (i) for paragraph (i) of the basic clause:
* * * * *


[FR Doc. 02-15940 Filed 6-26-02; 8:45 am]
BILLING CODE 6820-EP-P