[Federal Register Volume 74, Number 85 (Tuesday, May 5, 2009)]
[Proposed Rules]
[Pages 20666-20667]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: E9-10351]





48 CFR Part 52

[FAR Case 2008-015; Docket 2009-0015; Sequence 1]
RIN: 9000-AL26

Federal Acquisition Regulation; FAR Case 2008-015, Payments Under 
Fixed-Price Architecture and Engineering Contracts

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

ACTION: Proposed rule with request for comments.


SUMMARY: The Civilian Agency Acquisition Council (CAAC) and the Defense 
Acquisition Regulations Council (DARC) propose to amend the Federal 
Acquisition Regulation (FAR) to revise the withholding-of-payment 
requirements under FAR clause 52.232-10, Payments Under Fixed-Price 
Architect-Engineer Contracts.

DATES: Interested parties should submit written comments to the 
Regulatory Secretariat on or before July 6, 2009 to be considered in 
the formulation of a final rule.

ADDRESSES: Submit comments identified by FAR case 2008-015 by any of 
the following methods:
     Regulations.gov: http://www.regulations.gov.
    Submit comments via the Federal eRulemaking portal by inputting 
``FAR Case 2008-015'' under the heading ``Comment or Submission''. 
Select the link ``Send a Comment or Submission'' that corresponds with 
FAR Case 2008-015. Follow the instructions provided to complete the 
``Public Comment and Submission Form''. Please include your name, 
company name (if any), and ``FAR Case 2008-015'' on your attached 
     Fax: 202-501-4067.
     Mail: General Services Administration, Regulatory 
Secretariat (VPR), 1800 F Street NW, Room 4041, Washington, DC 20405, 
ATTN: Hada Flowers.
    Instructions: Please submit comments only and cite FAR case 2008-
015 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 Ms. Meredith Murphy, Procurement 
Analyst, at (202) 208-6925 for clarification of content. For 
information pertaining to status or publication schedules, contact the 
Regulatory Secretariat at (202) 501-4755. Please cite FAR case 2008-


A. Background

    The Federal Acquisition Regulation (FAR) 52.232-10, Payments under 
Fixed-Price Architecture-Engineer Contracts, currently requires the 
contracting officer to withhold 10% of the amounts due on each voucher; 
however, payment may be made in full during any month in which the 
contracting officer determines the performance to be satisfactory. The 
Government retains the withhold amount until the contracting officer 
determines that the work has been satisfactorily completed. The 
contracting officer may release excess withhold amounts to the 
contractor when it is determined that work is substantially complete 
and when the contracting officer determines that the amount retained is 
in excess of the amount adequate for the protection of the Governments 
    This rule proposes to revise FAR 52.232-10 to permit contracting 
officers to use their judgment regarding the amount of payment withhold 
to apply under fixed-price architecture-engineer contracts (based on an 
assessment of the contractor's performance under the contract) so that 
the withhold amount will be applied at the level necessary to protect 
the Government's interests. This is in contrast to the current 
requirement that contracting officers withhold 10 percent on all 
payments. Thus, the rule proposes to revise paragraphs (b) and (c) of 
the contract clause at FAR 52.232-10 to state that the contracting 
officer may (rather than shall) withhold up to 10 percent of the 
payment amount due and that the amount of withhold shall be determined 
based upon the contractor's performance record. The rule also makes 
several related editorial changes including one that clarifies that the 
contractor will be paid any unpaid balance due to include withhold 
amounts at the successful completion of the design work.
    This case originated from a recommendation in the Small Business 
Administration's Regulatory Review and Reform (r3) initiative. The 
current withholding provisions negatively impact the cash flow of 
architect-engineer contractors and may, in some instances, result in 
the withholding of amounts that exceed reasonable amounts to protect 
the Government's interests.
    This is not a significant regulatory action and, therefore, is not 
subject to review under Section 6(b) of Executive Order 12866, 
Regulatory Planning and Review, dated September 30, 1933. 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, at 5 U.S.C. 601, et seq., 
because the rule does not impose any additional requirements on small 
businesses. There are approximately 230,000 architect-engineer firms, 
many of which are small businesses. This rule actually eases the impact 
on such firms. Therefore, an Initial Regulatory Flexibility Analysis 
has 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 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 2008-015) in 

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 52

    Government Procurement.

    Dated: April 28, 2009.
Al Matera
Director, Office of Acquisition Policy.
    Therefore, DoD, GSA, and NASA propose to amend 48 CFR part 52 as 
set forth below:


    1. The authority citation for 48 CFR part 52 is revised to read as 

[[Page 20667]]

    Authority: 40 U.S.C. 121(c); 10 U.S.C. chapter 137; and 42 
U.S.C. 2473(c).
    2. Amend section 52.232-10 by revising the date of the clause; by 
revising the last sentence or paragraph (a), and by revising paragraphs 
(b) and (c) to read as follows:

52.232-10   Payments under Fixed-Price Architect-Engineer Contracts.

* * * * *


    (a) * * * The estimates, along with any supporting data required by 
the Contracting Officer, shall be prepared by the Contractor and 
submitted along with its voucher.
    (b) After receipt of each substantiated voucher the Government 
shall pay the voucher as approved by the Contracting Officer or 
authorized representative. The Contracting Officer may require a 
withhold of up to 10 percent of the amounts due under paragraph (a) of 
this clause in order to protect the Government's interest and ensure 
satisfactory completion of the contract. The amount of withhold shall 
be determined based upon the contractor's performance record under this 
contract. Whenever the Contracting Officer determines that the work is 
substantially complete and that the amount retained is in excess of the 
amount adequate for the protection of the Government, the Contracting 
Officer may release the excess amount to the Contractor.
    (c) Upon satisfactory completion by the Contractor and final 
acceptance by the Contracting Officer of all design work done by the 
Contractor under the ``Statement of Architect-Engineer Services'', the 
Contractor will be paid the unpaid balance of any money due for design 
work under the statement, including all withheld amounts.
* * * * *
    (End of clause)
[FR Doc. E9-10351 Filed 5-4-09; 8:45 am]