[Federal Register Volume 72, Number 114 (Thursday, June 14, 2007)]
[Rules and Regulations]
[Pages 32809-32813]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: E7-11328]


=======================================================================
-----------------------------------------------------------------------

OFFICE OF MANAGEMENT AND BUDGET

Office of Federal Procurement Policy

48 CFR Parts 9901 and 9903


Cost Accounting Standards Board (CAS) Changes to Acquisition 
Thresholds

AGENCY: Cost Accounting Standards Board, Office of Federal Procurement 
Policy, OMB.

ACTION: Final rule.

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

SUMMARY: The Office of Federal Procurement Policy, Cost Accounting 
Standards (CAS) Board, is revising the threshold for the application of 
CAS to negotiated Government contracts. This rulemaking is authorized 
pursuant to Section 26 of the Office of Federal Procurement Policy Act. 
The Board is taking final action on this topic in order to adjust the 
CAS applicability threshold in accordance with Section 822 of the 2006 
National Defense Authorization Act (Pub. L. 109-163). Section 822 
amended 41 U.S.C. 422(f)(2)(A) to require that the threshold for CAS 
applicability be the same as the threshold for compliance with the 
Truth in Negotiations Act (TINA).

DATES: This final rule is effective June 14, 2007.

FOR FURTHER INFORMATION CONTACT: Laura Auletta, Manager, Cost 
Accounting Standards Board, 725 17th Street, NW., Room 9013, 
Washington, DC 20503 (telephone: 202-395-3256).

SUPPLEMENTARY INFORMATION:

A. Background

    On December 15, 2005, the CAS Board issued a proposed rule with 
request for comment (70 FR 73423) for the purpose of implementing Sec. 
807 of the Ronald W. Reagan National Defense Authorization Act for 
Fiscal Year 2005, Pub. L. 108-375, ``Inflation Adjustment of 
Acquisition-Related Dollar Thresholds.'' Section 807 of Pub. L. 108-375 
requires the periodic adjustment of acquisition-related thresholds 
contained in statutes that were in effect on October 1, 2000, with 
certain exceptions. The Federal Acquisition Regulation (FAR) Council is 
authorized to adjust these thresholds based on increases in the 
Consumer Price Index for all-urban consumers (CPI) and as prescribed in 
the Public Law.
    Based on further review, the Board has determined that its 
thresholds are not subject to the provisions of Section 807 of the Pub. 
L 108-375 because these thresholds are not ``acquisition related,'' as 
defined by Section 807. Therefore, this final rule does not adjust the 
CAS thresholds to reflect the provisions of Section 807.
    However, subsequent to the issuance of the CAS Board's proposed 
rule, Section 822 of the 2006 National Defense Authorization Act (Pub. 
L. 109-163) amended 41 U.S.C. 422(f)(2)(A) to require that the 
threshold for CAS applicability be the same as the threshold for 
compliance with the Truth in Negotiations Act (TINA). The TINA 
threshold is currently $650,000 (71 FR 57363). Accordingly, the Board 
is increasing the CAS applicability threshold to $650,000 to comply 
with Public Law 109-163.

B. Public Comments

    The Board received three sets of public comments in response to the 
proposed rule.

1. PL 108-375 Does Not Require Threshold Adjustments

    Comment: Two commenters opined that Section 807 of Public Law 108-
375 does not apply to statutory thresholds in the Board's rules, 
regulations and standards. These commenters asserted that the law 
applies only to acquisition-related statutory dollar thresholds 
contained in the FAR. Thus, the Board is not required to adjust its 
statutory thresholds in response to Pub. L. 108-375.
    Response: After further review of this issue, the Board agrees that 
Section 807 does not apply to the CAS thresholds. Section 807 of Public 
Law 108-375 requires the Federal Acquisition Regulatory Council to 
adjust each ``acquisition-related dollar threshold.'' Section 807 
defines an acquisition-related dollar threshold as ``a dollar threshold 
that is specified in law as a factor in defining the scope of the 
applicability of a policy, procedure, requirement, or restriction 
provided in that law to the procurement of property or services by an 
executive agency, as determined by the Federal Acquisition Regulatory 
Council.'' The scope and applicability of the CAS is within the sole 
purview of the CAS Board. The Federal Acquisition Regulatory Council 
does not determine the scope or applicability of the Cost Accounting 
Standards. Therefore, for purposes of applying Section 807, the 
thresholds in the CAS do not meet the definition of an ``acquisition 
threshold.'' Thus, the requirements of Public Law 108-375 do not apply 
to the CAS thresholds. However, the Board is issuing a final rule to 
adjust the CAS applicability threshold required by Public Law 109-163.

2. Consistency Between CAS Applicability and TINA Thresholds

    Comment: One commenter recommended that the CAS applicability 
threshold be modified to adopt the Truth in Negotiations Act (TINA) 
threshold for requiring cost or pricing data (FAR 15.403-4) since it 
will be very difficult to administer the impact of CAS issues 
associated with such contracts.
    Response: As previously noted, shortly after the publication of the 
proposed rule, 41 U.S.C. 422(f)(2)(A)

[[Page 32810]]

was amended to require that the CAS applicability threshold be equal to 
the TINA threshold. Accordingly, this final rule adjusts the CAS 
applicability threshold to $650,000, which is the current TINA 
threshold.

3. Advisability of Adjusting CAS Thresholds

    Comment: One commenter asserted that the proposed threshold 
adjustments represent bad public policy and that previous increases in 
these thresholds have been ``simply astounding, and far in excess of 
any inflationary increases, no matter how measured.''
    Response: Consistent with the intent of the proposed rule, the 
final rule includes only those adjustments of the CAS applicability 
threshold that are statutorily required. As such, the Board does not 
believe the commenter's assertion regarding the adjustments in the 
final rule has any merit.

4. Failure To Track CAS Thresholds to Inflation Expands CAS 
Applicability Beyond Its Original Intent

    Comment: One commenter recommended that the Board independently 
review its thresholds to determine whether ``economic factors have 
caused more contractors to have become subject to CAS coverage'' and 
``consider if there are now contractors covered in 2006 that the Board 
did not intend to cover in 1992.''
    Response: The purpose of the proposed and final rules was to adjust 
the CAS thresholds to reflect statutory requirements. As such, the 
Board is confining the adjustment of CAS thresholds in this final rule 
to those adjustments required by statute. The Board will consider the 
commenter's recommendation to review the other CAS thresholds when 
formulating its agenda for future actions.

C. Paperwork Reduction Act

    The Paperwork Reduction Act, Public Law 96-511, does not apply to 
this rulemaking, because this rule imposes no paperwork burden on 
offerors, affected contractors and subcontractors, or members of the 
public which requires the approval of OMB under 44 U.S.C. 3501, et seq.

D. Executive Order 12866 and the Regulatory Flexibility Act

    The Board certifies that this rule will not have a significant 
effect on a substantial number of small entities within the meaning of 
the Regulatory Flexibility Act, 5 U.S.C. 601, et seq., because small 
businesses are exempt from the application of the Cost Accounting 
Standards.

List of Subjects in 48 CFR Part 9903

    Accounting, Government procurement.

Paul A. Denett,
Administrator, Office of Federal Procurement Policy.

0
For the reasons set forth in this preamble, Chapter 99 of Title 48 of 
the Code of Federal Regulations is amended as set forth below:

PART 9901--RULES AND PROCEDURES

0
1. The authority citation for part 9901 continues to read as follows:

    Authority: Pub. L. 100-679, 102 Stat. 4056, 41 U.S.C. 422.


0
2. Revise section 9901.306 to read as follows:


9901.306   Standards applicability.

    Cost Accounting Standards promulgated by the Board shall be 
mandatory for use by all executive agencies and by contractors and 
subcontractors in estimating, accumulating, and reporting costs in 
connection with pricing and administration of, and settlement of 
disputes concerning, all negotiated prime contract and subcontract 
procurements with the United States Government in excess of $650,000, 
other than contracts or subcontracts that have been exempted by the 
Board's regulations.

PART 9903--CONTRACT COVERAGE

0
3. The authority citation for part 9903 continues to read as follows:

    Authority: Pub. L. 100-679, 102 Stat. 4056, 41 U.S.C. 422.

Subpart 9903.2--CAS Program Requirements

0
4. Section 9903.201-1 is amended by revising paragraph (b)(2) to read 
as follows:


9903.201-1  CAS applicability.

* * * * *
    (b) * * *
    (2) Negotiated contracts and subcontracts not in excess of 
$650,000. For purposes of this paragraph (b)(2) an order issued by one 
segment to another segment shall be treated as a subcontract.
* * * * *

0
5. Section 9903.201-2 is amended by revising paragraphs (c)(3) and 
(c)(5) to read as follows:


9903.201-2  Types of CAS coverage.

    (c) * * *
    (3) Applicable standards. Coverage for educational institutions 
requires that the business unit comply with all of the CAS specified in 
part 9905 that are in effect on the date of the contract award and with 
any CAS that become applicable because of later award of a CAS-covered 
contract. This coverage applies to business units that receive 
negotiated contracts in excess of $650,000, except for CAS-covered 
contracts awarded to FFRDCs operated by an educational institution.
* * * * *
    (5) Contract clauses. The contract clause at 9903.201-4(e) shall be 
incorporated in each negotiated contract and subcontract awarded to an 
educational institution when the negotiated contract or subcontract 
price exceeds $650,000. For CAS-covered contracts awarded to an FFRDC 
operated by an educational institution, however, the full or modified 
CAS contract clause specified at 9903.201-4(a) or (c), as applicable, 
shall be incorporated.
* * * * *

0
6. Section 9903.201-3 is amended by revising the provision heading and 
by revising paragraph (a) in Part I of the provision to read as 
follows:


9903.201-3  Solicitation provisions.

* * * * *

Cost Accounting Standards Notices and Certification (June 2007)

* * * * *
    I. Disclosure Statement--Cost Accounting Practices and 
Certification
    (a) Any contract in excess of $650,000 resulting from this 
solicitation, except for those contracts which are exempt as 
specified in 9903.201-1.
* * * * *

0
7. Section 9903.201-4 is revised to read as follows:


9903.201-4  Contract clauses.

    (a) Cost Accounting Standards. (1) The contracting officer shall 
insert the clause set forth below, Cost Accounting Standards, in 
negotiated contracts, unless the contract is exempted (see 9903.201-1), 
the contract is subject to modified coverage (see 9903.201-2), or the 
clause prescribed in paragraph (e) of this section is used.
    (2) The clause below requires the contractor to comply with all CAS 
specified in part 9904, to disclose actual cost accounting practices 
(applicable to CAS-covered contracts only), and to follow disclosed and 
established cost accounting practices consistently.

Cost Accounting Standards (June 2007)

    (a) Unless the contract is exempt under 9903.201-1 and 9903.201-
2, the provisions

[[Page 32811]]

of 9903 are incorporated herein by reference and the Contractor in 
connection with this contract, shall--
    (1) (CAS-covered Contracts Only) By submission of a Disclosure 
Statement, disclosed in writing the Contractor's cost accounting 
practices as required by 9903.202-1 through 9903.202-5 including 
methods of distinguishing direct costs from indirect costs and the 
basis used for allocating indirect costs. The practices disclosed 
for this contract shall be the same as the practices currently 
disclosed and applied on all other contracts and subcontracts being 
performed by the Contractor and which contain a Cost Accounting 
Standards (CAS) clause. If the Contractor has notified the 
Contracting Officer that the Disclosure Statement contains trade 
secrets, and commercial or financial information which is privileged 
and confidential, the Disclosure Statement shall be protected and 
shall not be released outside of the Government.
    (2) Follow consistently the Contractor's cost accounting 
practices in accumulating and reporting contract performance cost 
data concerning this contract. If any change in cost accounting 
practices is made for the purposes of any contract or subcontract 
subject to CAS requirements, the change must be applied 
prospectively to this contract and the Disclosure Statement must be 
amended accordingly. If the contract price or cost allowance of this 
contract is affected by such changes, adjustment shall be made in 
accordance with subparagraph (a)(4) or (a)(5) of this clause, as 
appropriate.
    (3) Comply with all CAS, including any modifications and 
interpretations indicated thereto contained in part 9904, in effect 
on the date of award of this contract or, if the Contractor has 
submitted cost or pricing data, on the date of final agreement on 
price as shown on the Contractor's signed certificate of current 
cost or pricing data. The Contractor shall also comply with any CAS 
(or modifications to CAS) which hereafter become applicable to a 
contract or subcontract of the Contractor. Such compliance shall be 
required prospectively from the date of applicability of such 
contract or subcontract.
    (4)(i) Agree to an equitable adjustment as provided in the 
Changes clause of this contract if the contract cost is affected by 
a change which, pursuant to subparagraph (a)(3) of this clause, the 
Contractor is required to make to the Contractor's established cost 
accounting practices.
    (ii) Negotiate with the Contracting Officer to determine the 
terms and conditions under which a change may be made to a cost 
accounting practice, other than a change made under other provisions 
of subparagraph (a)(4) of this clause; provided that no agreement 
may be made under this provision that will increase costs paid by 
the United States.
    (iii) When the parties agree to a change to a cost accounting 
practice, other than a change under subdivision (a)(4)(i) of this 
clause, negotiate an equitable adjustment as provided in the Changes 
clause of this contract.
    (5) Agree to an adjustment of the contract price or cost 
allowance, as appropriate, if the Contractor or a subcontractor 
fails to comply with an applicable Cost Accounting Standard, or to 
follow any cost accounting practice consistently and such failure 
results in any increased costs paid by the United States. Such 
adjustment shall provide for recovery of the increased costs to the 
United States, together with interest thereon computed at the annual 
rate established under section 6621(a)(2) of the Internal Revenue 
Code of 1986 (26 U.S.C. 6621(a)(2)) for such period, from the time 
the payment by the United States was made to the time the adjustment 
is effected. In no case shall the Government recover costs greater 
than the increased cost to the Government, in the aggregate, on the 
relevant contracts subject to the price adjustment, unless the 
Contractor made a change in its cost accounting practices of which 
it was aware or should have been aware at the time of price 
negotiations and which it failed to disclose to the Government.
    (b) If the parties fail to agree whether the Contractor or a 
subcontractor has complied with an applicable CAS in part 9904 or a 
CAS rule or regulation in part 9903 and as to any cost adjustment 
demanded by the United States, such failure to agree will constitute 
a dispute under the Contract Disputes Act (41 U.S.C. 601).
    (c) The Contractor shall permit any authorized representatives 
of the Government to examine and make copies of any documents, 
papers, or records relating to compliance with the requirements of 
this clause.
    (d) The Contractor shall include in all negotiated subcontracts 
which the Contractor enters into, the substance of this clause, 
except paragraph (b), and shall require such inclusion in all other 
subcontracts, of any tier, including the obligation to comply with 
all CAS in effect on the subcontractor's award date or if the 
subcontractor has submitted cost or pricing data, on the date of 
final agreement on price as shown on the subcontractor's signed 
Certificate of Current Cost or Pricing Data. If the subcontract is 
awarded to a business unit which pursuant to 9903.201-2 is subject 
to other types of CAS coverage, the substance of the applicable 
clause set forth in 9903.201-4 shall be inserted. This requirement 
shall apply only to negotiated subcontracts in excess of $650,000, 
except that the requirement shall not apply to negotiated 
subcontracts otherwise exempt from the requirement to include a CAS 
clause as specified in 9903.201-1.

    (End of Clause)
    (b) [Reserved]
    (c) Disclosure and Consistency of Cost Accounting Practices. (1) 
The Contracting Officer shall insert the clause set forth below, 
Disclosure and Consistency of Cost Accounting Practices, in negotiated 
contracts when the contract amount is over $650,000 but less than $50 
million, and the offeror certifies it is eligible for and elects to use 
modified CAS coverage (see 9903.201-2, unless the clause prescribed in 
paragraph (d) of this subsection is used).
    (2) The clause below requires the Contractor to comply with CAS 
9904.401, 9904.402, 9904.405, and 9904.406, to disclose (if it meets 
certain requirements) actual cost accounting practices, and to follow 
consistently disclosed and established cost accounting practices.

Disclosure and Consistency of Cost Accounting Practices (June 2007)

    (a) The Contractor, in connection with this contract, shall--
    (1) Comply with the requirements of 9904.401, Consistency in 
Estimating, Accumulating, and Reporting Costs; 9904.402, Consistency 
in Allocating Costs Incurred for the Same Purpose; 9904.405, 
Accounting for Unallowable Costs; and 9904.406, Cost Accounting 
Standard--Cost Accounting Period, in effect on the date of award of 
this contract, as indicated in part 9904.
    (2) (CAS-covered Contracts Only) If it is a business unit of a 
company required to submit a Disclosure Statement, disclose in 
writing its cost accounting practices as required by 9903.202-1 
through 9903.202-5. If the Contractor has notified the Contracting 
Officer that the Disclosure Statement contains trade secrets and 
commercial or financial information which is privileged and 
confidential, the Disclosure Statement shall be protected and shall 
not be released outside of the Government.
    (3)(i) Follow consistently the Contractor's cost accounting 
practices. A change to such practices may be proposed, however, by 
either the Government or the Contractor, and the Contractor agrees 
to negotiate with the Contracting Officer the terms and conditions 
under which a change may be made. After the terms and conditions 
under which the change is to be made have been agreed to, the change 
must be applied prospectively to this contract, and the Disclosure 
Statement, if affected, must be amended accordingly.
    (ii) The Contractor shall, when the parties agree to a change to 
a cost accounting practice and the Contracting Officer has made the 
finding required in 9903.201-6(c) that the change is desirable and 
not detrimental to the interests of the Government, negotiate an 
equitable adjustment as provided in the Changes clause of this 
contract. In the absence of the required finding, no agreement may 
be made under this contract clause that will increase costs paid by 
the United States.
    (4) Agree to an adjustment of the contract price or cost 
allowance, as appropriate, if the Contractor or a subcontractor 
fails to comply with the applicable CAS or to follow any cost 
accounting practice, and such failure results in any increased costs 
paid by the United States. Such adjustment shall provide for 
recovery of the increased costs to the United States, together with 
interest thereon computed at the annual rate established under 
section 6621(a)(2) of the Internal Revenue Code of 1986 (26 U.S.C. 
6621(a)(2)) for such period, from the time the payment by the United 
States was made to the time the adjustment is effected.
    (b) If the parties fail to agree whether the Contractor has 
complied with an applicable

[[Page 32812]]

CAS rule, or regulation as specified in parts 9903 and 9904 and as 
to any cost adjustment demanded by the United States, such failure 
to agree will constitute a dispute under the Contract Disputes Act 
(41 U.S.C. 601).
    (c) The Contractor shall permit any authorized representatives 
of the Government to examine and make copies of any documents, 
papers, and records relating to compliance with the requirements of 
this clause.
    (d) The Contractor shall include in all negotiated subcontracts, 
which the Contractor enters into, the substance of this clause, 
except paragraph (b), and shall require such inclusion in all other 
subcontracts of any tier, except that--
    (1) If the subcontract is awarded to a business unit which 
pursuant to 9903.201-2 is subject to other types of CAS coverage, 
the substance of the applicable clause set forth in 9903.201-4 shall 
be inserted.
    (2) This requirement shall apply only to negotiated subcontracts 
in excess of $650,000.
    (3) The requirement shall not apply to negotiated subcontracts 
otherwise exempt from the requirement to include a CAS clause as 
specified in 9903.201-1.

    (End of clause)
    (d) [Reserved]
    (e) Cost Accounting Standards--Educational Institutions. (1) The 
contracting officer shall insert the clause set forth below, Cost 
Accounting Standards--Educational Institutions, in negotiated contracts 
awarded to educational institutions, unless the contract is exempted 
(see 9903.201-1), the contract is to be performed by an FFRDC (see 
9903.201-2(c)(5)), or the provision at 9903.201-2(c)(6) applies.
    (2) The clause below requires the educational institution to comply 
with all CAS specified in part 9905, to disclose actual cost accounting 
practices as required by 9903.202-1(f), and to follow disclosed and 
established cost accounting practices consistently.

Cost Accounting Standards--Educational Institutions (June 2007)

    (a) Unless the contract is exempt under 9903.201-1 and 9903.201-
2, the provisions of part 9903 are incorporated herein by reference 
and the Contractor in connection with this contract, shall--
    (1) (CAS-covered Contracts Only) If a business unit of an 
educational institution required to submit a Disclosure Statement, 
disclose in writing the Contractor's cost accounting practices as 
required by 9903.202-1 through 9903.202-5 including methods of 
distinguishing direct costs from indirect costs and the basis used 
for accumulating and allocating indirect costs. The practices 
disclosed for this contract shall be the same as the practices 
currently disclosed and applied on all other contracts and 
subcontracts being performed by the Contractor and which contain a 
Cost Accounting Standards (CAS) clause. If the Contractor has 
notified the Contracting Officer that the Disclosure Statement 
contains trade secrets, and commercial or financial information 
which is privileged and confidential, the Disclosure Statement shall 
be protected and shall not be released outside of the Government.
    (2) Follow consistently the Contractor's cost accounting 
practices in accumulating and reporting contract performance cost 
data concerning this contract. If any change in cost accounting 
practices is made for the purposes of any contract or subcontract 
subject to CAS requirements, the change must be applied 
prospectively to this contract and the Disclosure Statement, if 
required, must be amended accordingly. If an accounting principle 
change mandated under Office of Management and Budget (OMB) Circular 
A-21, Cost Principles for Educational Institutions, requires that a 
change in the Contractor's cost accounting practices be made after 
the date of this contract award, the change must be applied 
prospectively to this contract and the Disclosure Statement, if 
required, must be amended accordingly. If the contract price or cost 
allowance of this contract is affected by such changes, adjustment 
shall be made in accordance with subparagraph (a)(4) or (a)(5) of 
this clause, as appropriate.
    (3) Comply with all CAS, including any modifications and 
interpretations indicated thereto contained in 48 CFR part 9905, in 
effect on the date of award of this contract or, if the Contractor 
has submitted cost or pricing data, on the date of final agreement 
on price as shown on the Contractor's signed certificate of current 
cost or pricing data. The Contractor shall also comply with any CAS 
(or modifications to CAS) which hereafter become applicable to a 
contract or subcontract of the Contractor. Such compliance shall be 
required prospectively from the date of applicability to such 
contract or subcontract.
    (4)(i) Agree to an equitable adjustment as provided in the 
Changes clause of this contract if the contract cost is affected by 
a change which, pursuant to subparagraph (a)(3) of this clause, the 
Contractor is required to make to the Contractor's established cost 
accounting practices.
    (ii) Negotiate with the Contracting Officer to determine the 
terms and conditions under which a change may be made to a cost 
accounting practice, other than a change made under other provisions 
of subparagraph (a)(4) of this clause; provided that no agreement 
may be made under this provision that will increase costs paid by 
the United States.
    (iii) When the parties agree to a change to a cost accounting 
practice, other than a change under subdivision (a)(4)(i) or 
(a)(4)(iv) of this clause, negotiate an equitable adjustment as 
provided in the Changes clause of this contract.
    (iv) Agree to an equitable adjustment as provided in the Changes 
clause of this contract, if the contract cost is materially affected 
by an OMB Circular A-21 accounting principle amendment which, on 
becoming effective after the date of contract award, requires the 
Contractor to make a change to the Contractor's established cost 
accounting practices.
    (5) Agree to an adjustment of the contract price or cost 
allowance, as appropriate, if the Contractor or a subcontractor 
fails to comply with an applicable Cost Accounting Standard, or to 
follow any cost accounting practice consistently and such failure 
results in any increased costs paid by the United States. Such 
adjustment shall provide for recovery of the increased costs to the 
United States, together with interest thereon computed at the annual 
rate established under section 6621(a)(2) of the Internal Revenue 
Code of 1986 (26 U.S.C. 6621(a)(2)) for such period, from the time 
the payment by the United States was made to the time the adjustment 
is effected. In no case shall the Government recover costs greater 
than the increased cost to the Government, in the aggregate, on the 
relevant contracts subject to the price adjustment, unless the 
Contractor made a change in its cost accounting practices of which 
it was aware or should have been aware at the time of price 
negotiations and which it failed to disclose to the Government.
    (b) If the parties fail to agree whether the Contractor or a 
subcontractor has complied with an applicable CAS or a CAS rule or 
regulation in 9903 and as to any cost adjustment demanded by the 
United States, such failure to agree will constitute a dispute under 
the Contract Disputes Act (41 U.S.C. 601).
    (c) The Contractor shall permit any authorized representatives 
of the Government to examine and make copies of any documents, 
papers, or records relating to compliance with the requirements of 
this clause.
    (d) The Contractor shall include in all negotiated subcontracts 
which the Contractor enters into, the substance of this clause, 
except paragraph (b), and shall require such inclusion in all other 
subcontracts, of any tier, including the obligation to comply with 
all applicable CAS in effect on the subcontractor's award date or if 
the subcontractor has submitted cost or pricing data, on the date of 
final agreement on price as shown on the subcontractor's signed 
Certificate of Current Cost or Pricing Data, except that--
    (1) If the subcontract is awarded to a business unit which 
pursuant to 9903.201-2 is subject to other types of CAS coverage, 
the substance of the applicable clause set forth in 9903.201-4 shall 
be inserted; and
    (2) This requirement shall apply only to negotiated subcontracts 
in excess of $650,000.
    (3) The requirement shall not apply to negotiated subcontracts 
otherwise exempt from the requirement to include a CAS clause as 
specified in 9903.201-1.

    (End of clause)

0
8. Section 9903.202-1 is amended by revising:
0
A. Paragraph (c);
0
B. Paragraph (f)(2)(i); and
0
C. Paragraphs (f)(3)(i), (ii), and (iii)
    The revisions read as follows:


9903.202-1  General requirements.

* * * * *
    (c) When a Disclosure Statement is required, a separate Disclosure

[[Page 32813]]

Statement must be submitted for each segment whose costs included in 
the total price of any CAS-covered contract or subcontract exceed 
$650,000, unless * * *
    (f) * * *
    (2) * * *
    (i) Any business unit of an educational institution that is 
selected to receive a CAS-covered contract or subcontract in excess of 
$650,000 and is part of a college or university location listed in 
Exhibit A of Office of Management and Budget (OMB) Circular A-21 shall 
submit a Disclosure Statement before award.* * *
    (3) * * *
    (i) For business units that are selected to receive a CAS-covered 
contract or subcontract in excess of $650,000 and are part of the first 
20 college or university locations (i.e., numbers 1 through 20) listed 
in Exhibit A of OMB Circular A-21, Disclosure Statements shall be 
submitted within six months after the date of contract award.
    (ii) For business units that are selected to receive a CAS-covered 
contract or subcontract in excess of $650,000 and are part of a college 
or university location that is listed as one of the institutions 
numbered 21 through 50, in Exhibit A of OMB Circular A-21, Disclosure 
Statements shall be submitted during the six month period ending twelve 
months after the date of contract award.
    (iii) For business units that are selected to receive a CAS-covered 
contract or subcontract in excess of $650,000 and are part of a college 
or university location that is listed as one of the institutions 
numbered 51 through 99, in Exhibit A of OMB Circular A-21, Disclosure 
Statements shall be submitted during the six month period ending 
eighteen months after the date of contract award.

[FR Doc. E7-11328 Filed 6-13-07; 8:45 am]
BILLING CODE 3110-01-P