[Federal Register Volume 75, Number 53 (Friday, March 19, 2010)]
[Rules and Regulations]
[Pages 13414-13415]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2010-5986]


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

DEPARTMENT OF DEFENSE

GENERAL SERVICES ADMINISTRATION

NATIONAL AERONAUTICS AND SPACE ADMINISTRATION

48 CFR Part 15

[FAC 2005-39; FAR Case 2008-012; Item II; Docket 2008-0001, Sequence 
23]
RIN 9000-AL12


Federal Acquisition Regulation; FAR Case 2008-012, Clarification 
of Submission of Cost or Pricing Data on Non-Commercial Modifications 
of Commercial Items

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

ACTION: Final rule.

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

SUMMARY: The Civilian Agency Acquisition Council and the Defense 
Acquisition Regulations Council (Councils) have adopted as final, with 
minor changes, an interim rule which amended the Federal Acquisition 
Regulation (FAR) to implement section 814 of the National Defense 
Authorization Act (NDAA) for Fiscal Year (FY) 2008. Section 814 
required the harmonization of the thresholds for cost or pricing data. 
Specifically, section 814 required alignment of the threshold for cost 
or pricing data on non-commercial modifications of commercial items 
with the Truth In Negotiation Act (TINA) threshold for cost or pricing 
data.

DATES: Effective Date: March 19, 2010.

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 FAC 2005-39, FAR case 
2008-012.

SUPPLEMENTARY INFORMATION:

A. Background

    DoD, GSA, and NASA published an interim rule in the Federal 
Register at 74 FR 11826 on March 19, 2009, to implement section 814 of 
the NDAA for FY 2008. Section 814 implemented two areas of 
clarification with regards to the submission of cost or pricing data on 
non-commercial modifications of commercial items.
    The comment period closed on May 18, 2009, with one comment 
received. The respondent opined that the addition of the new FAR text 
``at the time of contract award'' was unclear. The respondent indicated 
that a contract's initial price subsequently changes based upon 
modifications and inquired if the total price ``at time of contract 
award'' included subsequent modifications that changed the initial 
contract price. The respondent also highlighted the example of an 
indefinite delivery-indefinite quantity (IDIQ) contract where orders 
are issued and inquired whether ``at the time of contract award'' 
related to issuance of the IDIQ contract or individual orders placed 
under this IDIQ contract. The respondent also offered examples of 
possible revised language.
    The Councils believe that, with minor changes, the language in the 
interim rule is appropriate. Section 814 of the NDAA for FY 2008 
required the insertion of the language ``at time of contract award'' 
after the language ``total price of contract'', which is already 
contained in FAR 15.403-1. This language is being added to clarify at 
what point during the life of the contract that the cost or pricing 
threshold should be applied under FAR 15.403-1. The Councils believe 
that the language ``at the time of contract award'' clearly indicates 
that subsequent modifications, other than those which meet the 
triggering thresholds of TINA themselves, that change a contract's 
price are not factored into determining when the cost or pricing 
threshold should be applied under FAR 15.403-1. In the case of IDIQ 
contracts, it is commonly understood that it is the estimated total 
value of orders for the specified period at the time of contract award, 
as well as the individual value of any subsequent discrete orders, to 
which the TINA thresholds apply. Consequently, the final rule language 
reflects only minor editorial changes.
    This is a significant regulatory action and therefore, was 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 Department of Defense, the General Services Administration, and 
the National Aeronautics and Space Administration certify that this 
rule will not 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., since it is harmonizing FAR 
15.403-1 with other parts of the FAR and should actually reduce the 
administrative burden on contractors by not requiring them to track two 
separate dollar thresholds for submitting cost or pricing data. It is 
also increasing this dollar threshold relative to the submittal of cost 
or pricing data in this situation and thus contractors will experience 
a reduced administrative burden since they no longer will be required 
to submit cost or pricing data on this lower threshold amount.

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. 
chapter 35, et seq.

List of Subjects in 48 CFR Part 15

    Government procurement.

    Dated: March 15, 2010.
Al Matera,
Director, Acquisition Policy Division.

0
Accordingly, the interim rule published in the Federal Register at 74 
FR 11826 on March 19, 2009, is adopted as a final rule with the 
following changes:

PART 15--CONTRACTING BY NEGOTIATION

0
1. The authority citation for 48 CFR part 15 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).

0
2. Amend section 15.403-1 by revising paragraphs (c)(3)(iii)(B) and 
(c)(3)(iii)(C) to read as follows:

[[Page 13415]]

15.403-1  Prohibition on obtaining cost or pricing data (10 U.S.C. 
2306a and 41 U.S.C. 254b).

* * * * *
    (c) * * *
    (3) * * *
    (iii) * * *
    (B) For acquisitions funded by DoD, NASA, or the Coast Guard, such 
modifications of a commercial item are exempt from the requirement for 
submission of cost or pricing data provided the total price of all such 
modifications under a particular contract action does not exceed the 
greater of the threshold for obtaining cost or pricing data in 15.403-4 
or 5 percent of the total price of the contract at the time of contract 
award.
    (C) For acquisitions funded by DoD, NASA, or the Coast Guard, such 
modifications of a commercial item are not exempt from the requirement 
for submission of cost or pricing data on the basis of the exemption 
provided for at FAR 15.403-1(c)(3) if the total price of all such 
modifications under a particular contract action exceeds the greater of 
the threshold for obtaining cost or pricing data in 15.403-4 or 5 
percent of the total price of the contract at the time of contract 
award.
* * * * *
[FR Doc. 2010-5986 Filed 3-18-10; 8:45 am]
BILLING CODE 6820-EP-S