[Federal Register Volume 72, Number 244 (Thursday, December 20, 2007)]
[Proposed Rules]
[Pages 72325-72326]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: E7-24730]


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DEPARTMENT OF DEFENSE

GENERAL SERVICES ADMINISTRATION

NATIONAL AERONAUTICS AND SPACE ADMINISTRATION

48 CFR Part 31

[FAR Case 2006-024; Docket 2007-0001; Sequence 12]
RIN: 9000-AK86


Federal Acquisition Regulation; FAR Case 2006-024, Travel Costs

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 change the travel cost 
principle to ensure a consistent application of the limitation on 
allowable contractor airfare costs.

DATES: Interested parties should submit written comments to the FAR 
Secretariat on or before February 19, 2008 to be considered in the 
formulation of a final rule.

ADDRESSES: Submit comments identified by FAR case 2006-024 by any of 
the following methods:
    Federal eRulemaking Portal: http://www.regulations.gov.
     To search for any document, first select under ``Step 1,'' 
``Documents with an Open Comment Period'' and select under ``Optional 
Step 2,'' ``Federal Acquisition Regulation'' as the agency of choice. 
Under ``Optional Step 3,'' select ``Proposed Rules''. Under ``Optional 
Step 4,'' from the drop down list, select ``Document Title'' and type 
the FAR case number ``2006-024''. Click the ``Submit'' button. Please 
include your name and company name (if any) inside the document.
    You may also search for any document by clicking onthe ``Search for 
Documents'' tab at the top of the screen. Select from the agency field 
``Federal Acquisition Regulation'', and type ``2006-024'' in the 
``Document Title'' field. Select the ``Submit'' button.

[[Page 72326]]

     Fax: 202-501-4067.
     Mail: General Services Administration, Regulatory 
Secretariat (VIR), 1800 F Street, NW, Room 4035, ATTN: Diedra Wingate, 
Washington, DC 20405.
    Instructions: Please submit comments only and cite FAR case 2006-
024 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 Mr. Edward Chambers, Procurement 
Analyst, at (202) 501-3221 for clarification of content. For 
information pertaining to status or publication schedules, contact the 
FAR Secretariat at (202) 501-4755. Please cite FAR case 2006-024.

SUPPLEMENTARY INFORMATION:

A. Background

    The travel cost principle at FAR 31.205-46(b) currently limits 
allowable contractor airfare costs to ``the lowest customary standard, 
coach, or equivalent airfare offered during normal business hours.'' 
The Councils are aware that this limitation is being interpreted 
inconsistently, either as lowest coach fare available to the contractor 
or lowest coach fare available to the general public, and these 
inconsistent interpretations can lead to confusion regarding what costs 
are allowable.
    The Councils agreed that the current language at FAR 31.205-46(b) 
does not promote consistency in the application of the cost principle 
and that, accordingly, the cost principle requires clarification. The 
Councils considered three alternative approaches to revising the cost 
principle:
    1. Do nothing, leaving FAR 31.205-46 unchanged;
    2. Amend FAR 31.205-46(b) to explicitly state that allowable 
contractor airfare costs are limited to the lowest standard or coach 
fare available to the general public; or
    3. Amend FAR 31.205-46(b) to explicitly state that allowable 
contractor airfare costs are limited to the lowest standard or coach 
fare available to the contractor.
    With regard to the first option, the Councils do not believe that 
the cost principle can be left unchanged based on the different 
interpretations of which the Councils have become aware. The Councils 
also believe that establishing the lowest coach fare available to the 
general public as the benchmark for cost allowability is not a feasible 
option in practice. Under such a standard, contractors could 
potentially be required to continuously monitor a fluctuating fare 
market to determine what was the lowest fare available on a given day. 
Likewise, Government auditors could not reasonably recreate the 
competitive fare market for each instance of a contractor's travel in 
determining compliance with the cost principle.
    Accordingly, the Councils believe that the reasonable standard to 
apply in determining the allowability of airfares is the lowest coach 
fare available to the contractor. It is not prudent to allow the costs 
of the lowest coach fares available to the general public when 
contractors have obtained lower fares as a result of direct 
negotiation.
    Furthermore, the Councils believe that the cost principle should be 
clarified to omit the term ``standard'' from the description of the 
classes of allowable airfares since that term does not describe actual 
classes of airline service. The Councils believe that ``customary 
coach, or equivalent'' more accurately describes the classes of service 
for which the cost will be considered allowable.
    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 most contracts awarded to small entities use simplified 
acquisition procedures or are awarded on a competitive, fixed-price 
basis, and do not require application of the cost principles and 
procedures discussed in this rule. 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 Part 
31 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 
2006-024), 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 Part 31

    Government procurement.

    Dated: December 10, 2007.
Al Matera,
Director, Office of Acquisition Policy.
    Therefore, DoD, GSA, and NASA propose amending 48 CFR part 31 as 
set forth below:

PART 31--CONTRACT COST PRINCIPLES AND PROCEDURES

    1. The authority citation for 48 CFR part 31 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 31.205-46 by revising paragraph (b) to read as 
follows:


31.205-46  Travel costs.

* * * * *
    (b) Airfare costs, in excess of the lowest priced coach class, or 
equivalent, airfare available to the contractor during normal business 
hours are unallowable except when such accommodations require 
circuitous routing, require travel during unreasonable hours, 
excessively prolong travel, result in increased cost that would offset 
transportation savings, are not reasonably adequate for the physical or 
medical needs of the traveler, or are not reasonably available to meet 
mission requirements. However, in order for airfare costs in excess of 
the above airfare to be allowable, the applicable condition(s) set 
forth above must be documented and justified.
* * * * *
[FR Doc. E7-24730 Filed 12-19-07; 8:45 am]
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