[Federal Register Volume 77, Number 244 (Wednesday, December 19, 2012)]
[Proposed Rules]
[Pages 75089-75091]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2012-30550]


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DEPARTMENT OF DEFENSE

GENERAL SERVICES ADMINISTRATION

NATIONAL AERONAUTICS AND SPACE ADMINISTRATION

48 CFR Parts 12, 32, and 52

[FAR Case 2012-031; Docket 2012-0031, Sequence 1]
RIN 9000-AM37


Federal Acquisition Regulation; Accelerated Payments to Small 
Business Subcontractors

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

ACTION: Proposed rule.

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SUMMARY: DoD, GSA, and NASA are proposing to amend the Federal 
Acquisition Regulation (FAR) to implement the temporary policy provided 
by Office of Management and Budget (OMB) Policy Memorandum M-12-16, 
dated July 11, 2012, by adding a

[[Page 75090]]

new clause to provide for the accelerated payments to small business 
subcontractors.

DATES: Interested parties should submit written comments to the 
Regulatory Secretariat at one of the addresses shown below on or before 
February 19, 2013 to be considered in the formation of the final rule.

ADDRESSES: Submit comments in response to FAR Case 2012-031 by any of 
the following methods:
     Regulations.gov: http://www.regulations.gov. Submit 
comments via the Federal eRulemaking portal by searching for ``FAR Case 
2012-031''. Select the link ``Submit a Comment'' that corresponds with 
FAR Case 2012-031. Follow the instructions provided at the ``Submit a 
Comment'' screen. Please include your name, company name (if any), and 
``FAR Case 2012-031'' on your attached document.
     Fax: 202-501-4067.
     Mail: General Services Administration, Regulatory 
Secretariat (MVCB), ATTN: Hada Flowers, 1275 First Street NE., 7th 
Floor, Washington, DC 20417.
    Instructions: Please submit comments only and cite FAR case 2012-
031, 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 N. Chambers, Procurement 
Analyst, at 202-501-3221 for clarification of content. For information 
pertaining to status or publication schedules, contact the Regulatory 
Secretariat at 202-501-4755. Please cite FAR Case 2012-031.

SUPPLEMENTARY INFORMATION:

I. Background

    DoD, GSA, and NASA are proposing to revise the FAR to implement a 
temporary policy that will provide for the acceleration of payments to 
small business subcontractors. On July 11, 2012, OMB released Policy 
Memorandum M-12-16, Providing Prompt Payment to Small Business 
Subcontractors, that outlined steps agencies shall take to ensure that 
prime contractors pay their small business subcontractors as promptly 
as possible. The temporary OMB policy of accelerating payments ends on 
July 10, 2013.

II. Discussion and Analysis

    The proposed rule establishes a new FAR clause at 52.232-XX, 
Providing Accelerated Payments to Small Business Subcontractors, which 
will require the prime contractor, upon receipt of accelerated payments 
from the Government, to make accelerated payments to small business 
subcontractors, to the maximum extent practicable, after receipt of a 
proper invoice and all proper documentation from small business 
subcontractors. The clause will be inserted into all new solicitations 
issued after the effective date of the final rule and resultant 
contracts, including solicitations and contracts for the acquisition of 
commercial items. This proposed rule does not provide any new rights 
under the Prompt Payment Act and does not affect the application of the 
Prompt Payment Act late payment interest provisions.

III. Executive Orders 12866 and 13563

    Executive Orders (E.O.s) 12866 and 13563 direct agencies to assess 
all costs and benefits of available regulatory alternatives and, if 
regulation is necessary, to select regulatory approaches that maximize 
net benefits (including potential economic, environmental, public 
health and safety effects, distributive impacts, and equity). E.O. 
13563 emphasizes the importance of quantifying both costs and benefits, 
of reducing costs, of harmonizing rules, and of promoting flexibility. 
This is a significant regulatory action and, therefore, was subject to 
review under section 6(b) of E.O. 12866, Regulatory Planning and 
Review, dated September 30, 1993. This rule is not a major rule under 5 
U.S.C. 804.

IV. Regulatory Flexibility Act

    The change may 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 small business 
subcontractors should be paid more expeditiously by their prime 
contractors, improving small business cash flow overall. Therefore, an 
Initial Regulatory Flexibility Analysis (IRFA) has been prepared 
consistent with 5 U.S.C. 603, and is summarized as follows:

    This proposed rule implements the temporary policy provided by 
OMB Policy Memorandum M-12-16, Providing Prompt Payment to Small 
Business Subcontractors, dated July 11, 2012, which is designed to 
accelerate payment from Federal contractors to their small business 
subcontractors. The rule imposes no reporting, recordkeeping, or 
other information collection requirements. The rule does not 
duplicate, overlap, or conflict with any other Federal rules, and 
there are no known significant alternatives to the rule.

    The Regulatory Secretariat will be submitting a copy of the IRFA to 
the Chief Counsel for Advocacy of the Small Business Administration. A 
copy of the IRFA may be obtained from the Regulatory Secretariat. DoD, 
GSA, and NASA invite comments from small business concerns and other 
interested parties on the expected impact.
    DoD, GSA, and NASA will also consider comments from small entities 
concerning the existing regulations in subparts affected by this 
proposed rule in accordance with 5 U.S.C. 610. Interested parties must 
submit such comments separately and should cite 5 U.S.C. 610 (FAR case 
2012-031) in correspondence.

V. Paperwork Reduction Act

    The proposed rule does not contain any information collection 
requirements that require the approval of the Office of Management and 
Budget under the Paperwork Reduction Act (44 U.S.C. chapter 35).

List of Subjects in 48 CFR Parts 12, 32, and 52

    Government procurement.

    Dated: December 14, 2012.
Laura Auletta,
Director, Office of Governmentwide Acquisition Policy, Office of 
Acquisition Policy, Office of Governmentwide Policy.

    Therefore, DoD, GSA, and NASA propose amending 48 CFR parts 12, 32, 
and 52 as set forth below:

    1. The authority citation for 48 CFR parts 12, 32, and 52 are 
revised or continue to read as follows:


    Authority: 40 U.S.C. 121(c); 10 U.S.C. chapter 137; 42 U.S.C. 
2473(c); and 51 U.S.C. 20113.

PART 12--ACQUISITION OF COMMERCIAL ITEMS

    2. Amend section 12.301 by adding paragraph (d)(4) to read as 
follows:


12.301  Solicitation provisions and contract clauses for the 
acquisition of commercial items.

* * * * *
    (d) * * *
    (4) Insert the clause at 52.232-XX, Providing Accelerated Payments 
to Small Business Subcontractors, as prescribed in 32.009-2.
* * * * *

PART 32--CONTRACT FINANCING


32.002  [Amended]

    3. Amend section 32.002 by removing from paragraph (a)(1) 
``32.005'' and adding ``32.009'' in its place.
    4. Add section 32.009 to read as follows:

[[Page 75091]]

32.009  Providing accelerated payments to small business 
subcontractors.


32.009-1  General.

    Pursuant to the policy provided by OMB Memorandum M-12-16, Agencies 
shall take measures to ensure that prime contractors pay small business 
subcontractors on an accelerated timetable to the maximum extent 
practicable, and upon receipt of accelerated payments from the 
Government. This acceleration does not provide any new rights under the 
Prompt Payment Act and does not affect the application of the Prompt 
Payment Act late payment interest provisions.


32.009-2  Contract clause.

    Insert clause 52.232-XX, Providing Accelerated Payments to Small 
Business Subcontractors, in all solicitations and contracts.

PART 52--SOLICITATION PROVISIONS AND CONTRACT CLAUSES

    5. Amend section 52.213-4 by--
    a. Revising the date of the clause;
    b. Redesignating paragraphs (a)(2)(v) through (vii) as paragraphs 
(a)(2)(vi) through (viii), respectively; and
    c. Adding a new paragraph (a)(2)(v).
    The revision and addition read as follows:


52.213-4  Terms and Conditions--Simplified Acquisitions (Other Than 
Commercial Items).

* * * * *

Terms and Conditions--Simplified Acquisitions (Other Than Commercial 
Items) (Date)

    (a) * * *
    (2) * * *
    (v) 52.232-XX, Providing Accelerated Payments to Small Business 
Subcontractors (DATE).
* * * * *
    6. Add section 52.232-XX to read as follows:


52.232-XX  Providing Accelerated Payments to Small Business 
Subcontractors.

    As prescribed in 32.009-2, insert the following clause:

Providing Accelerated Payments to Small Business Subcontractors (Date)

    (a) Upon receipt of accelerated payments from the Government, 
the Contractor shall make accelerated payments to a small business 
subcontractor, to the maximum extent practicable and prior to when 
such payment is otherwise required under the applicable contract or 
subcontract, after receipt of a proper invoice and all other 
required documentation from the small business subcontractor.
    (b) The acceleration of payments under this clause does not 
provide any new rights under the Prompt Payment Act.
    (c) Include the substance of this clause, including this 
paragraph (c), in all subcontracts with small business concerns, 
including subcontracts with small business concerns for the 
acquisition of commercial items.
(End of Clause)

[FR Doc. 2012-30550 Filed 12-18-12; 8:45 am]
BILLING CODE 6820-EP-P