[Federal Register Volume 85, Number 230 (Monday, November 30, 2020)]
[Rules and Regulations]
[Page 76487]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2020-26118]

[[Page 76487]]



48 CFR Part 532

[GSAR Case 2020-G521 Docket No. 2020-0017; Sequence No. 1]
RIN 3090-AK25

General Services Administration Acquisition Regulation; Remove 
Office of General Counsel Review for Final Payments; Withdrawal

AGENCY: Office of Acquisition Policy, General Services Administration 

ACTION: Direct final rule; withdrawal.


SUMMARY: On October 1, 2020, GSA published in the Federal Register a 
direct final rule entitled Remove Office of General Counsel Review for 
Final Payments. The rule revised internal agency approval procedures 
for processing a final payment for construction and building service 
contracts where, after 60 days, a contracting officer is unable to 
obtain a release of claims from a contractor. This action withdraws the 
rule because GSA received an adverse comment.

DATES: The direct final rule published at 85 FR 61871, October 1, 2020, 
is withdrawn effective November 30, 2020.

Policy Division, at [email protected], for clarification of content. 
For information pertaining to status or publication schedules, contact 
the Regulatory Secretariat at 202-501-4755. Please cite GSAR Case 2020-


I. Background

    On October 1, 2020, GSA published a direct final rule (85 FR 
61871). The rule, to have become effective November 30, 2020, was 
intended to streamline the process for certain contract final payments. 
GSA stated in the direct final rule that if it received adverse 
comments, it would publish a timely withdrawal in the Federal Register 
informing the public that the rule will not take effect.
    As part of GSA's regulatory reform efforts, GSA determined that 
GSAR 532.905-70 should no longer require contracting officers to obtain 
approval of legal counsel before processing final payments for 
construction and building service contracts where, after 60 days, the 
contracting officers are unable to obtain releases of claims from 
contractors. Legal review is not a statutory requirement, and the 
decision to process final payments in such cases is a business 
decision, rather than a legal one.
    The comment period for the direct final rule closed on November 2, 

II. Discussion of Comment

    GSA received two comments to the direct final rule from anonymous 
commenters. One of the comments was adverse to the direct final rule. 
The other comment was not applicable to the text or purpose of the 
direct final rule.
    The adverse commenter expressed concern about the lack of 
analytical data regarding the administrative burden related to the 
legal review process. Further, the commenter suggested that decisions 
related to contracts are legal questions, not business decisions.
    GSA does not agree with the adverse comment because, in the absence 
of a statutory requirement for the contracting officer to receive legal 
approval prior to processing the final payment, the authority to 
process any payment resides in the warranted contracting officer, 
except for the instant clause regarding final payments referenced in 
the clause at 532.905-70(c). GSA has determined that the clause at 
532.905-70 no longer works in the best interest of the Government or 
contractors because, among other things: (i) Approval by legal counsel 
does not preclude the contracting officer from denying such payments, 
and (ii) approval by legal counsel does not insulate the Government 
from any potential liabilities should the contracting officer process 
the payment.

III. Reason for Withdrawal

    In consideration of the comment to the direct final rule, GSA has 
determined that the rule should be withdrawn in its entirety. This will 
allow more time to further examine the issues raised and determine the 
best course of action.
    Accordingly, GSA withdraws the rule published at 85 FR 61871 on 
October 1, 2020. However, withdrawal of this rule does not preclude GSA 
from issuing another rule on the subject matter in the future or 
committing the agency to any future course of action.

List of Subjects in 48 CFR Part 532

    Government procurement.

Jeffrey A. Koses,
Senior Procurement Executive, Office of Acquisition Policy.
[FR Doc. 2020-26118 Filed 11-27-20; 8:45 am]