[Federal Register Volume 83, Number 84 (Tuesday, May 1, 2018)]
[Rules and Regulations]
[Pages 19149-19150]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2018-09169]
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DEPARTMENT OF DEFENSE
GENERAL SERVICES ADMINISTRATION
NATIONAL AERONAUTICS AND SPACE ADMINISTRATION
48 CFR Part 49
[FAC 2005-98, FAR Case 2015-039; Item IV; Docket No. 2015-0039,
Sequence No. 1]
RIN 9000-AN26
Federal Acquisition Regulations: Audit of Settlement Proposals
AGENCY: Department of Defense (DoD), General Services Administration
(GSA), and National Aeronautics and Space Administration (NASA).
ACTION: Final rule.
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SUMMARY: DoD, GSA, and NASA are issuing a final rule 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 align with the threshold for
obtaining certified cost or pricing data.
DATES: Effective: May 31, 2018.
FOR FURTHER INFORMATION CONTACT: Ms. Zenaida Delgado, Procurement
Analyst, at 202-969-7207, for clarification of content. For information
pertaining to status or publication schedules, contact the Regulatory
Secretariat Division at 202-501-4755. Please cite FAC 2005-98, FAR Case
2015-039.
SUPPLEMENTARY INFORMATION:
I. Background
DOD, GSA, and NASA published a proposed rule in the Federal
Register at 81 FR 63158 on September 14, 2016, 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, 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.
II. Discussion and Analysis
No public comments were submitted in response to the proposed rule.
Therefore, there are no changes from the proposed rule made in the
final rule.
[[Page 19150]]
III. Expected Cost Savings
This final rule impacts contractors subject to audits of their
termination settlement proposals. The rule is administrative in nature,
because it raises a threshold. This rule eliminates termination
settlements audits between $100,000 and the threshold for obtaining
certified cost or pricing data, currently $750,000. Contractors will
save costs associated with the preparation and support for the
termination settlement audits. This will also enable faster final
settlement payments to contractors, thereby improving contractor cash
flow.
IV. Applicability to Contracts at or Below the Simplified Acquisition
Threshold and for Commercial Items, Including Commercially Available
Off-the-Shelf Items
This rule does not add any new solicitation provisions or clauses,
or impact any existing provisions or clauses.
V. 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.
VI. Executive Order 13771
Pursuant to E.O. 13771, this rule is a deregulatory action.
Information on the expected cost savings of this action can be found in
section III of the preamble.
VII. Regulatory Flexibility Act
DoD, GSA, and NASA have prepared a final regulatory flexibility
analysis (FRFA) consistent with the Regulatory Flexibility Act, 5
U.S.C. 601, et seq. The FRFA is summarized as follows:
This final rule amends FAR 49.107, Audit of prime contract
settlement proposals and subcontract settlements, to raise the
dollar threshold for the audit of prime contract settlement
proposals and subcontract settlements submitted in the event of
contract termination from $100,000 to the threshold for obtaining
certified cost or pricing data set forth in FAR 15.403-4(a)(1),
which is currently $750,000. The rule is necessary to reduce the
administrative burdens associated with termination settlement
proposals.
No public comments were received in response to the initial
regulatory flexibility analysis.
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.
Since the rule raises the audit threshold, even fewer small
businesses will be subject to audits of their termination settlement
proposals. It is estimated that an average of 4 small entities per
year will be relieved from the requirements of supporting an audit
of a contract settlement proposal, which is a minute fraction of all
contracts awarded to small businesses in a typical year.
The rule imposes no reporting, recordkeeping, or other
information collection requirements.
There are no known significant alternatives to the rule. The
impact of this rule on small business is not expected to be
significant.
Interested parties may obtain a copy of the FRFA from the
Regulatory Secretariat Division. The Regulatory Secretariat Division
has submitted a copy of the FRFA to the Chief Counsel for Advocacy of
the Small Business Administration.
VIII. Paperwork Reduction Act
This 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: April 25, 2018.
William F. Clark,
Director, Office of Government-wide Acquisition Policy, Office of
Acquisition Policy, Office of Government-wide Policy.
Therefore, DoD, GSA, and NASA amend 48 CFR part 49 as set forth
below:
PART 49--TERMINATION OF CONTRACTS
0
1. The authority citation for 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.
0
2. Amend section 49.107 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. 2018-09169 Filed 4-30-18; 8:45 am]
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