[Federal Register Volume 70, Number 45 (Wednesday, March 9, 2005)]
[Rules and Regulations]
[Pages 11761-11762]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 05-4092]


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DEPARTMENT OF DEFENSE

GENERAL SERVICES ADMINISTRATION

NATIONAL AERONAUTICS AND SPACE ADMINISTRATION

48 CFR Parts 44 and 52

[FAC 2005-01; FAR Case 2003-024; Item VII]
RIN 9000-AK10


Federal Acquisition Regulation; Elimination of Certain 
Subcontract Notification Requirements

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

ACTION: Interim rule with request for comments.

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SUMMARY: The Civilian Agency Acquisition Council and the Defense 
Acquisition Regulations Council (the Councils) have agreed to amend the 
Federal Acquisition Regulation language regarding advance notification 
requirements. This change is required to implement Section 842 of the 
National Defense Authorization Act for Fiscal Year 2004, Public Law 
108-136, which resulted in revisions to 10 U.S.C. 2306(e).

DATES: Effective Date: March 9, 2005.
    Comment Date: Interested parties should submit comments to the FAR 
Secretariat at the address shown below on or before May 9, 2005 to be 
considered in the formulation of a final rule.

ADDRESSES: Submit comments identified by FAC 2005-01, FAR case 2003-024 
by any of the following methods:
     Federal eRulemaking Portal: http://www.regulations.gov. 
Follow the instructions for submitting comments.
     Agency Web Site: http://www.acqnet.gov/far/ProposedRules/proposed.htm. Click on the FAR case number to submit comments.
     E-mail: [email protected]. Include FAC 2005-01, FAR 
case 2003-024 in the subject line of the message.
     Fax: 202-501-4067.
     Mail: General Services Administration, Regulatory 
Secretariat (VIR), 1800 F Street, NW., Room 4035, ATTN: Laurieann 
Duarte, Washington, DC 20405.
    Instructions: Please submit comments only and cite FAC 2005-01, FAR 
case 2003-024, in all correspondence related to this case. All comments 
received will be posted without change to http://www.acqnet.gov/far/ProposedRules/proposed.htm, including any personal information 
provided.

FOR FURTHER INFORMATION CONTACT The FAR Secretariat at (202) 501-4755, 
for information pertaining to status or publication schedules. For 
clarification of content, contact Ms. Rhonda Cundiff, at (202) 501-
0044. Please cite FAC 2005-01, FAR case 2003-024.

SUPPLEMENTARY INFORMATION:

A. Background

    This rule revises FAR 44.201-2, Advance notification requirements, 
and amends Alternate I of FAR clause 52.244-2, Subcontracts. This 
change is required in order to implement Section 842 of the National 
Defense Authorization Act for Fiscal Year 2004, Public Law 108-136. 
Section 842

[[Page 11762]]

removes the requirement for contractors under cost-reimbursement 
contracts with the Department of Defense (DoD), Coast Guard, and 
National Aeronautics and Space Administration (NASA) to notify the 
agency before the award of any cost-plus-fixed-fee subcontract or any 
fixed-price subcontract that exceeds the greater of the simplified 
acquisition threshold or 5 percent of the total estimated cost of the 
contract if the contractor maintains a purchasing system approved by 
the contracting officer for the contract.
    In addition, the rule makes a technical amendment to Alternate II 
of FAR clause 52.244-2, Subcontracts. The rule deletes the reference to 
paragraph (c) from paragraph (f)(2) of Alternate II because paragraph 
(c) applies to fixed price type contracts, whereas Alternate II applies 
to cost-reimbursement contracts.
    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

    This interim rule is not expected 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 will 
have a small positive effect. Also, small businesses do not usually 
hold prime contracts which are cost-reimbursement contracts, so this 
section would not apply to them, and any changes would not apply. 
Therefore, an Initial Regulatory Flexibility Analysis has not been 
performed. We invite comments from small business concerns and other 
interested parties. The Councils will consider comments from small 
entities concerning the affected FAR Parts 44 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. (FAC 2005-01, FAR case 2003-024), 
in correspondence.

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.

D. Determination to Issue an Interim Rule

    A determination has been made under the authority of the Secretary 
of Defense (DoD), the Administrator of General Services (GSA), and the 
Administrator of the National Aeronautics and Space Administration 
(NASA) that urgent and compelling reasons exist to promulgate this 
interim rule without prior opportunity for public comment. This action 
is necessary to implement Section 842 of the National Defense 
Authorization Act for Fiscal Year 2004, Public Law 108-136, which went 
into effect November 24, 2003, and which resulted in revisions to 10 
U.S.C. 2306 (e). However, pursuant to Public Law 98-577 and FAR 1.501, 
the Councils will consider public comments received in response to this 
interim rule in the formation of the final rule.

List of Subjects in 48 CFR Parts 44 and 52

    Government procurement.

    Dated: February 24, 2005.
Rodney P. Lantier,
Director, Contract Policy Division.

0
Therefore, DoD, GSA, and NASA amend 48 CFR parts 44 and 52 as set forth 
below:
0
1. The authority citation for 48 CFR parts 44 and 52 is revised to read 
as follows:

    Authority:  40 U.S.C. 121(c); 10 U.S.C. chapter 137; and 42 
U.S.C. 2473(c).

PART 44--SUBCONTRACTING POLICIES AND PROCEDURES

0
2. Revise section 44.201-2 to read as follows:


44.201-2  Advance notification requirements.

    Under cost-reimbursement contracts, the contractor is required by 
statute to notify the contracting officer as follows:
    (a) For the Department of Defense, the Coast Guard, and the 
National Aeronautics and Space Administration, unless the contractor 
maintains an approved purchasing system, 10 U.S.C. 2306 requires 
notification before the award of any cost-plus-fixed-fee subcontract, 
or any fixed-price subcontract that exceeds the greater of the 
simplified acquisition threshold or 5 percent of the total estimated 
cost of the contract.
    (b) For civilian agencies other than the Coast Guard and the 
National Aeronautics and Space Administration, even if the contractor 
has an approved purchasing system, 41 U.S.C. 254(b) requires 
notification before the award of any cost-plus-fixed-fee subcontract, 
or any fixed-price subcontract that exceeds either the simplified 
acquisition threshold or 5 percent of the total estimated cost of the 
contract.

PART 52--SOLICITATION PROVISIONS AND CONTRACT CLAUSES

0
3. Amend section 52.244-2--
0
a. In Alternate I, by removing ``(Aug 1998)'' and adding ``(MAR 2005)'' 
in its place, and revising the first sentence of paragraph (f)(2); and
0
b. In Alternate II, by removing ``(Aug 1998)'' and adding ``(MAR 
2005)'' in its place, and in paragraph (f)(2) by removing ``(c), (d),'' 
and adding ``(d)'' in its place. The revised text reads as follows:


52.244-2  Subcontracts.

* * * * *
    Alternate I * * *
    (f)(2) Unless the Contractor maintains an approved purchasing 
system, the Contractor shall notify the Contracting Officer reasonably 
in advance of entering into any (i) cost-plus-fixed-fee subcontract, or 
(ii) fixed-price subcontract that exceeds the greater of the simplified 
acquisition threshold or 5 percent of the total estimated cost of this 
contract. * * *
[FR Doc. 05-4092 Filed 3-8-05; 8:45 am]
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