[Federal Register Volume 71, Number 191 (Tuesday, October 3, 2006)]
[Proposed Rules]
[Pages 58338-58340]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 06-8413]





48 CFR Parts 30 and 52

[FAR Case 2006-004; Docket 2006-0020; Sequence 10]
RIN 9000-AK58

Federal Acquisition Regulation; FAR Case 2006-004, FAR Part 30 - 
CAS Administration

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 implement recommendations to 
revise the regulations related to the administration of the Cost 
Accounting Standards (CAS).

DATES: Interested parties should submit written comments to the FAR 
Secretariat on or before December 4, 2006 to be considered in the 
formulation of a final rule.

ADDRESSES: Submit comments identified by FAR case 2006-004 by any of 
the following methods:

[[Page 58339]]

     Federal eRulemaking Portal: http://www.regulations.gov. 
Search for any document by first selecting the proper document types 
and selecting ``Federal Acquisition Regulation'' as the agency of 
choice. At the ``Keyword'' prompt, type in the FAR case number (for 
example, FAR Case 2006-001) and click on the ``Submit'' button. You may 
also search for any document by clicking on the ``Advanced search/
document search'' tab at the top of the screen, selecting from the 
agency field ``Federal Acquisition Regulation'', and typing the FAR 
case number in the keyword field. Select the ``Submit'' button.
     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 FAR case 2006-
004 in all correspondence related to this case. All comments received 
will be posted without change to http://www.regulations.gov, including 
any personal and/or business confidential information provided.

FOR FURTHER INFORMATION CONTACT: For clarification of content, contact 
Jeremy Olson, at (202) 501-3221. For information pertaining to status 
or publication schedules, contact the FAR Secretariat at (202) 501-
4755. Please cite FAR case 2006-004.


A. Background

    On May 23, 2005, the Cost Accounting Standards Board published an 
interim rule in the Federal Register at 70 FR 29457 revising the 
applicability of CAS to U.K. contracts and subcontracts. The interim 
rule effected three changes in this regard:
     Amendment of 48 CFR 9903.202-1(e) to add the U.K. to the 
list of countries whose contractors may file a disclosure form adopted 
by an agency of their own government in lieu of the CASB-DS-1. As a 
result, U.K. contractors are permitted to file the U.K. ``Questionnaire 
on Method of Allocation of Costs'' and ``Supplemental QMAC.''
     Deletion of the CAS exemption at 48 CFR 9902.201-1(b)(12). 
Henceforth, all foreign contracts and subcontracts, including U.K. 
contracts and subcontracts, are subject to the requirements at 48 CFR 
9903.201-1(b)(4) and must comply with CAS 401 and 402.
     Deletion of 48 CFR 9903.201-4(d), Consistency in Cost 
Accounting Practices. This contract clause is no longer appropriate for 
inclusion in contracts with U.K. concerns.
    In order to retain consistency between CAS and FAR in matters 
relating to the administration of CAS, the Councils are proposing FAR 
revisions as outlined below:
    1. FAR 30.201-4(c), Consistency in Cost Accounting Practices. This 
part is renamed as Disclosure and Consistency of Cost Accounting 
Practices for Contracts Awarded to Foreign Concerns. It is also being 
revised to delete the language related to contracts awarded to United 
Kingdom contracts and to add language that addresses contracts subject 
to CAS 401 and 402 under 48 CFR 9903.201-(1)(b)(4).
    2. FAR 52.230-4, Consistency in Cost Accounting Practices. The 
clause is renamed as Disclosure and Consistency of Cost Accounting 
Practices for Contracts Awarded to Foreign Concerns. The clause is also 
revised to specify that it applies to contracts awarded to foreign 
concerns who are subject to CAS 401 and 402.
    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 contracts and subcontracts awarded to small businesses are 
exempt from the Cost Accounting Standards. 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 30 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 2006-004), 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 30 and 52

    Government procurement.

    Dated: September 26, 2006.
Ralph De Stefano
Director, Contract Policy Division.
    Therefore, DoD, GSA, and NASA propose amending 48 CFR parts 30 and 
52 as set forth below:
    1. The authority citation for 48 CFR parts 30 and 52 continues to 
read as follows:

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


    2. Amend section 30.201-4 by revising paragraph (c) to read as 

30.201-4  Contract clauses.

* * * * *
    (c) Disclosure and Consistency of Cost Accounting Practices for 
Contracts Awarded to Foreign Concerns. The contracting officer shall 
insert the clause at FAR 52.230-4, Disclosure and Consistency of Cost 
Accounting Practices for Contracts Awarded to Foreign Concerns, in 
negotiated contracts that are subject to CAS 401 and 402 under 48 CFR 
* * * * *


    3. Amend section 52.230-4 by revising the section and clause 
headings and the clause to read as follows:

52.230-4  Disclosure and Consistency of Cost Accounting Practices for 
Contracts Awarded to Foreign Concerns.

* * * * *
    The Contractor agrees that it will consistently follow the cost 
accounting practices disclosed on FORM CASB DS-1 or other disclosure 
form as permitted by 48 CFR 9903.202-1(e) in estimating, 
accumulating, and reporting costs under this contract, and comply 
with the requirements of CAS 401, Consistency in Estimating, 
Accumulating, and Reporting Costs, and CAS 402, Consistency in 
Allocating Costs Incurred for the Same Purpose. In the event the 
Contractor fails to follow such practices, or comply consistently 
with CAS 401 and 402, it agrees that the contract price shall be 
adjusted, together with interest, if such failure results in 
increased cost paid by the U.S. Government. Interest shall be 
computed at the annual rate of interest established under section 
6621 of the Internal Revenue Code of 1986 (26 U.S.C. 6621) from the 
time payment by the Government was made to the time adjustment is 
effected. The Contractor agrees that the Disclosure Statement or 
other form permitted, pursuant to 48 CFR 9903.202-1(e) shall be 
available for inspection and use by authorized

[[Page 58340]]

representatives of the United States Government.
    (End of clause)
[FR Doc. 06-8413 Filed 10-2-06; 8:45 am]