[Federal Register Volume 81, Number 178 (Wednesday, September 14, 2016)]
[Proposed Rules]
[Pages 63158-63159]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2016-22070]
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DEPARTMENT OF DEFENSE
GENERAL SERVICES ADMINISTRATION
NATIONAL AERONAUTICS AND SPACE ADMINISTRATION
48 CFR Part 49
[FAR Case 2015-039; Docket No. 2015-0039, Sequence No. 1]
RIN 9000-AN26
Federal Acquisition Regulation: Audit of Settlement Proposals
AGENCY: Department of Defense (DoD), General Services Administration
(GSA), and the 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 raise the dollar threshold requirement
for the audit of prime contract settlement proposals and subcontract
settlements from $100,000 to $750,000.
DATES: Interested parties should submit written comments to the
Regulatory Secretariat Division at one of the addresses shown below on
or before November 14, 2016 to be considered in the formation of the
final rule.
ADDRESSES: Submit comments in response to FAR case 2015-039 by any of
the following methods:
Regulations.gov: http://www.regulations.gov. Submit
comments via the Federal eRulemaking portal by searching for ``FAR Case
2015-039''. Select the link ``Comment Now'' that corresponds with ``FAR
Case 2015-039.'' Follow the instructions provided on the screen. Please
include your name, company name (if any), and ``FAR Case 2015-039'' on
your attached document.
Mail: General Services Administration, Regulatory
Secretariat Division (MVCB), ATTN: Ms. Flowers, 1800 F Street NW., 2nd
Floor, Washington, DC 20405.
Instructions: Please submit comments only and cite FAR Case 2015-039,
in all
[[Page 63159]]
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. To confirm
receipt of your comment(s), please check www.regulations.gov,
approximately two to three days after submission to verify posting
(except allow 30 days for posting of comments submitted by mail).
FOR FURTHER INFORMATION CONTACT: Ms. Kathlyn Hopkins, Procurement
Analyst, at 202-969-7226 for clarification of content. For information
pertaining to status or publication schedules, contact the Regulatory
Secretariat Division at 202-501-4755. Please cite FAR Case 2015-039.
SUPPLEMENTARY INFORMATION:
I. Background
DOD, GSA, and NASA are proposing to amend FAR 49.107 to increase
the dollar threshold for the audit of prime contract settlement
proposals and subcontract settlements, submitted in the event of
contract termination. The threshold is increased from $100,000 to align
with the threshold in FAR 15.403-4(a)(1) for obtaining certified cost
or pricing data, which is currently $750,000. Other than the dollar
amount, there will be no link between the requirements for certified
cost or pricing data and the audit threshold for termination settlement
proposals.
The proposed amendment will help alleviate contract close-out
backlogs and enable contracting officers to more quickly deobligate
excess funds from terminated contracts.
Under FAR 49.001, a ``settlement proposal'' is a proposal for
effecting settlement of a contract terminated in whole or in part,
submitted by a contractor or subcontractor in the form, and supported
by the data, required by FAR part 49. Termination clauses and other
contract clauses authorize contracting officers to terminate contracts
for convenience or for default, and to enter into settlement
agreements.
II. 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 not a significant regulatory action and, therefore, was not
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.
III. Regulatory Flexibility Act
DoD, GSA, and NASA do not expect this 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
the rule raises the threshold for audit requirements, thus reducing
burdens on all types of businesses. However, an Initial Regulatory
Flexibility Analysis (IRFA) has been performed and it is summarized as
follows:
Of all contracts awarded to small businesses in a typical year,
the number terminated and subject to FAR part 49 procedures is less
than one-fifth of one percent. Moreover, since the rule raises the
audit threshold, even fewer small businesses will be subject to
audits of their termination settlement proposals.
The Regulatory Secretariat Division has submitted 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 Division. DoD, GSA, and NASA invite comments from small
business concerns and other interested parties on the expected impact
of this proposed rule on small entities.
DoD, GSA, and NASA will also consider comments from small entities
concerning the existing regulations in subparts affected by the
proposed rule consistent with 5 U.S.C. 610. Interested parties must
submit such comments separately and should cite 5 U.S.C. 610 (FAR Case
2015-039), in correspondence.
IV. Paperwork Reduction Act
The 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 Part 49
Government procurement.
Dated: September 9, 2016.
William F. Clark,
Director, Office of Government-wide Acquisition Policy, Office of
Acquisition Policy, Office of Government-wide Policy.
Therefore, DoD, GSA, and NASA are proposing to amend 48 CFR part 49
as set forth below:
PART 49--TERMINATION OF CONTRACTS
0
1. The authority citation for 48 CFR part 49 continues to read as
follows:
Authority: 40 U.S.C. 121(c); 10 U.S.C. chapter 137; and 51
U.S.C. 20113.
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2. Amend section 16.505 by revising paragraphs (a) and (b) to read as
follows:
49.107 Audit of prime contract settlement proposals and subcontract
settlements.
(a) The TCO shall refer each prime contractor settlement proposal
valued at or above the threshold for obtaining certified cost or
pricing data set forth in FAR 15.403-4(a)(1) to the appropriate audit
agency for review and recommendations. The TCO may submit settlement
proposals of less than the threshold for obtaining certified cost or
pricing data to the audit agency. Referrals shall indicate any specific
information or data that the TCO considers relevant and shall include
facts and circumstances that will assist the audit agency in performing
its function. The audit agency shall develop requested information and
may make any further accounting reviews it considers appropriate. After
its review, the audit agency shall submit written comments and
recommendations to the TCO. When a formal examination of settlement
proposals valued under the threshold for obtaining certified cost or
pricing data is not warranted, the TCO will perform or have performed a
desk review and include a written summary of the review in the
termination case file.
(b) The TCO shall refer subcontract settlements received for
approval or ratification to the appropriate audit agency for review and
recommendations when:
(1) The amount exceeds the threshold for obtaining certified cost
or pricing data; or
(2) The TCO determines that a complete or partial accounting review
is advisable. The audit agency shall submit written comments and
recommendations to the TCO. The review by the audit agency does not
relieve the prime contractor or higher tier subcontractor of the
responsibility for performing an accounting review.
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[FR Doc. 2016-22070 Filed 9-13-16; 8:45 am]
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