[Federal Register Volume 67, Number 168 (Thursday, August 29, 2002)]
[Proposed Rules]
[Pages 55675-55677]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 02-21617]



[[Page 55675]]

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Part VII





Department of Defense

General Services Administration

National Aeronautics and Space Administration





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48 CFR Parts 12, 32, and 52



Federal Acquisition Regulation; Notification of Overpayment, Contract 
Financing Payments; Proposed Rule

Federal Register / Vol. 67, No. 168 / Thursday, August 29, 2002 / 
Proposed Rules

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DEPARTMENT OF DEFENSE

GENERAL SERVICES ADMINISTRATION

NATIONAL AERONAUTICS AND SPACE ADMINISTRATION

48 CFR Parts 12, 32, and 52

[FAR Case 2001-005]
RIN 9000-AJ20


Federal Acquisition Regulation; Notification of Overpayment, 
Contract Financing Payments

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 the contractor to 
notify the contracting officer if the Government overpays the 
contractor when making an invoice payment or a contract financing 
payment under both commercial item and non-commercial item contracts.

DATES: Interested parties should submit comments in writing on or 
before October 28, 2002 to be considered in the formulation of a final 
rule.

ADDRESSES: Submit written comments to: General Services Administration, 
FAR Secretariat (MVA), 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 2001-005 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 Mr. Jeremy Olson, at (202) 501-3221. Please cite FAR 
case 2001-005.

SUPPLEMENTARY INFORMATION:

A. Background

    In July 1999, the General Accounting Office (GAO) published a 
report (GAO/NSIAD-99-131) entitled Greater Attention Needed to Identify 
and Recover Overpayments. After examining the process for identifying 
and collecting overpayments, GAO concluded in their report that ``Under 
current law, there is no requirement for contractors who have been 
overpaid to notify the Government of overpayments or to return 
overpayments prior to the Government issuing a demand letter'' (i.e., 
formal notification to the contractor to pay money owed to the 
Government). One of the recommendations of the report was that DoD 
requires contractors to promptly notify the Government of overpayments 
made to them.
    DoD, GSA, and NASA published a proposed FAR rule 1999-023, in the 
Federal Register at 65 FR 52244, August 28, 2000. The rule proposed 
modifying the prompt payment clauses at FAR 52.232-25, Prompt Payment; 
FAR 52.232-26, Prompt Payment for Fixed-Price Architect-Engineer 
Contracts; and FAR 52.232-27, Prompt Payment for Construction 
Contracts, to require the contractor to notify the contracting officer 
if the contractor becomes aware of an overpayment. A final rule, FAR 
Case 1999-023, was published in the Federal Register at 66 FR 65353, 
December 18, 2001.
    One of the respondents that submitted public comments in response 
to the proposed rule recommended that overpayments on financing 
payments should be provided similar treatment as overpayments on 
invoice payments, i.e., the contractor should be required to 
immediately notify the contracting officer of a duplicate payment or 
overpayment on contract financing payments. The Councils have opened 
FAR Case 2001-005 to consider this recommendation. Accordingly, the 
proposed rule further modifies the FAR to extend the policy regarding 
notification of overpayments to contract financing payments. The 
proposed rule also makes the policy applicable to both contract 
financing and invoice payments under contracts for commercial items.
    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 it is not expected that this change will impact a substantial 
number of small entities since the overpayments cited by GAO in its 
report GAO/NSIAD-99-131, were all related to large businesses. 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 12, 32 and 52 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 2001-005), 
in correspondence.

C. Paperwork Reduction Act

    The Paperwork Reduction Act (Pub. L. 104-13) applies because the 
proposed rule contains information collection requirements. The rule 
requires the contractor to notify the contracting officer if the 
contractor becomes aware that the Government has overpaid on a 
financing payment under a contract for noncommercial items, and on 
financing and invoice payments under a contract for commercial items. 
Although this estimated burden requires approval under the Act, it is 
so small that it does not impact the estimated total burden under OMB 
Control Number 9000-0070.
    Annual Reporting Burden: Public reporting burden for this 
collection of information is estimated to average .5 hours per 
response, including the time for reviewing instructions, searching 
existing data sources, gathering and maintaining the data needed, and 
completing and reviewing the collection of information.
    The annual reporting burden is estimated as follows:
    Respondents: 840.
    Responses per respondent: 1.
    Total annual responses: 420.
    Preparation hours per response: .5.
    Total response burden hours: 420.

D. Request for Comments Regarding Paperwork Burden

    Submit comments, including suggestions for reducing this burden, 
not later than October 28, 2002 to: FAR Desk Officer, OMB, Room 10102, 
NEOB, Washington, DC 20503, and a copy to the General Services 
Administration, FAR Secretariat (MVA), 1800 F Street, NW, Room 4035, 
Washington, DC 20405.
    Public comments are particularly invited on: whether this 
collection of information is necessary for the proper performance of 
functions of the FAR, and will have practical utility; whether our 
estimate of the public burden of this collection of information is 
accurate, and based on valid assumptions and methodology; ways to 
enhance the quality, utility, and clarity of the information to be 
collected; and ways in which we can minimize the burden of the 
collection of information on those who are to respond, through the use 
of

[[Page 55677]]

appropriate technological collection techniques or other forms of 
information technology.
    Requester may obtain a copy of the justification from the General 
Services Administration, FAR Secretariat (MVA), Room 4035, Washington, 
DC 20405, telephone (202) 501-4755. Please cite OMB Control Number 
9000-0070, FAR Case 2001-005, Notification of Overpayment, Contract 
Financing Payments, in all correspondence.

List of Subjects in 48 CFR Parts 12, 32, and 52

    Government procurement.

    Dated: August 20, 2002.
Al Matera,
Director, Acquisition Policy Division.
    Therefore, DoD, GSA, and NASA propose amending 48 CFR parts 12, 32, 
and 52 as set forth below:
    1. The authority citation for 48 CFR parts 12, 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 12--ACQUISITION OF COMMERCIAL ITEMS

    2. Add section 12.215 to read as follows:


12.215  Notification of overpayment.

    If the Contractor notifies the contracting officer of a duplicate 
contract financing or invoice payment or that the Government has 
otherwise overpaid on a contract financing or invoice payment, the 
contracting officer must provide instructions to the contractor, in 
coordination with the cognizant payment office, regarding disposition 
of the overpayment.
    3. Add section 32.008 to read as follows:

PART 32--CONTRACT FINANCING


32.008  Notification of overpayment.

    If the Contractor notifies the contracting officer of a duplicate 
contract financing or invoice payment or that the Government has 
otherwise overpaid on a contract financing or invoice payment, the 
contracting officer must provide instructions to the contractor, in 
coordination with the cognizant payment office, regarding disposition 
of the overpayment.

PART 52--SOLICITATION PROVISIONS AND CONTRACT CLAUSES

    4. Amend section 52.212-4 by revising the date of the clause and 
paragraph (i) to read as follows:


52.212-4  Contract Terms and Conditions--Commercial Items.

* * * * *

Contract Terms and Conditions--Commercial Items (Date)

* * * * *
    (i) Payment. (1) Items accepted. Payment shall be made for items 
accepted by the Government that have been delivered to the delivery 
destinations set forth in this contract.
    (2) Prompt payment. The Government will make payment in 
accordance with the Prompt Payment Act (31 U.S.C. 3903) and Prompt 
Payment regulations at 5 CFR part 1315.
    (3) Electronic Funds Transfer (EFT). If the Government makes 
payment by (EFT), see 52.212-5(b) for the appropriate EFT clause.
    (4) Discount. In connection with any discount offered for early 
payment, time shall be computed from the date of the invoice. For 
the purpose of computing the discount earned, payment shall be 
considered to have been made on the date which appears on the 
payment check or the specified payment date if an electronic funds 
transfer payment is made.
    (5) Overpayments. If the Contractor becomes aware of a duplicate 
contract financing or invoice payment or that the Government has 
otherwise overpaid on a contract financing or invoice payment, the 
Contractor shall immediately notify the Contracting Officer and 
request instructions for disposition of the overpayment.
* * * * *
    5. Amend section 52.213-4 by revising the date of the clause and 
paragraph (a)(2)(iv) to read as follows:


52.213-4  Terms and Conditions--Simplified Acquisitions (Other Than 
Commercial Items).

* * * * *

Terms and Conditions--Simplified Acquisitions (Other Than Commercial 
Items) (Date)

    (a) * * *
    (2) * * *
    (iv) 52.232-25, Prompt Payment (Date).
* * * * *
    6. Amend section 52.232-25 by revising the date of the clause and 
paragraph (d) to read as follows:


52.232-25  Prompt Payment.

* * * * *

Prompt Payment (Date)

* * * * *
    (d) Overpayments. If the Contractor becomes aware of a duplicate 
contract financing or invoice payment or that the Government has 
otherwise overpaid on a contract financing or invoice payment, the 
Contractor shall immediately notify the Contracting Officer and 
request instructions for disposition of the overpayment. (End of 
clause)

    7. Amend section 52.232-26 by revising the date of the clause and 
paragraph (c) to read as follows:


52.232-26  Prompt Payment for Fixed-Price Architect-Engineer Contracts.

* * * * *

Prompt Payment for Fixed-Price Architect-Engineer Contracts (Date)

* * * * *
    (c) Overpayments. If the Contractor becomes aware of a duplicate 
contract financing or invoice payment or that the Government has 
otherwise overpaid on a contract financing or invoice payment, the 
Contractor shall immediately notify the Contracting Officer and 
request instructions for disposition of the overpayment. (End of 
clause)

    8. Amend section 52.232-27 by revising the date of the clause and 
paragraph (l) to read as follows:


52.232-27  Prompt Payment for Construction Contracts.

* * * * *

Prompt Payment for Construction Contracts (Date)

* * * * *
    (l) Overpayments. If the Contractor becomes aware of a duplicate 
contract financing or invoice payment or that the Government has 
otherwise overpaid on a contract financing or invoice payment, the 
Contractor shall immediately notify the Contracting Officer and 
request instructions for disposition of the overpayment. (End of 
clause)

[FR Doc. 02-21617 Filed 8-28-02; 8:45 am]
BILLING CODE 6820-EP-P