[Federal Register: February 8, 2002 (Volume 67, Number 27)]
[Rules and Regulations]
[Page 6118-6119]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr08fe02-20]
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DEPARTMENT OF DEFENSE
GENERAL SERVICES ADMINISTRATION
NATIONAL AERONAUTICS AND SPACE ADMINISTRATION
48 CFR Parts 42 and 52
[FAC 2001-04; FAR Case 1999-026;
Item VI]
RIN 9000-AI86
Federal Acquisition Regulation; Final Contract Voucher Submission
AGENCIES: Department of Defense (DoD), General Services Administration
(GSA), and National Aeronautics and Space Administration (NASA).
ACTION: Final rule.
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SUMMARY: The Civilian Agency Acquisition Council and the Defense
Acquisition Regulations Council (Councils) have agreed on a final rule
amending the Federal Acquisition Regulation (FAR) to explicitly state
the right of the contracting officer to unilaterally determine the
final contract payment amount when the contractor does not submit the
final invoice or voucher within the time specified in the contract.
DATES: Effective Date: February 20, 2002.
FOR FURTHER INFORMATION CONTACT: The FAR Secretariat, Room 4035, GS
Building, Washington, DC, 20405, (202) 501-4755, for information
pertaining to status or publication schedules. For clarification of
content, contact Ms. Linda Klein, Procurement Analyst, at (202) 501-
3775. Please cite FAC 2001-04, FAR case 1999-026.
SUPPLEMENTARY INFORMATION:
A. Background
DoD, GSA, and NASA published a proposed rule in the Federal
Register at 65 FR 46332, July 27, 2000, with a request for comment. The
proposed rule amended FAR 42.705, Final indirect cost rates, and FAR
52.216-7, Allowable Cost and Payment, to--
Explicitly state that the contracting officer may issue a
unilateral modification that reflects the contracting officer's
determination of the amounts due to the contractor under the contract.
The contracting officer may make this determination if the contractor
fails to submit a completion invoice or voucher within the time
specified (normally 120 days after settlement of the final indirect
cost rates but may be longer, if approved in writing by the contracting
officer); and
Make the contracting officer's determination not subject
to appeal under the Disputes clause of the contract.
Thirteen respondents submitted public comments to the proposed
rule. The Councils considered all comments when developing the final
rule, which was modified as a result. The following issues merit
noting:
1. Almost half of the respondents questioned the language in
paragraphs 42.705(c)(2) and 52.216-7(d)(6)(ii) of the proposed rule
that stated that the contracting officer's decision would not be
subject to appeal under the Disputes clause. The Councils agreed that
precluding the right to appeal is not equitable and may result in
inaccurate financial payment decisions. The rule has been revised by
making the contracting officer's decision final and
[[Page 6119]]
binding, but does not preclude contractor appeal under the Disputes
clause.
2. Several respondents disagreed with the conclusion that
contractor failure to submit a final voucher is the leading reason
contract closeouts are not accomplished in a timely manner. The
Councils agreed that there are many causes for delays in contract
closeout and that it would be helpful to list examples of circumstances
a contracting officer should consider in deciding whether or not to
extend the time for submission of a final voucher or to issue a final
decision regarding final payment. The rule has been revised at
42.705(b) by providing examples of extenuating circumstances that may
justify the contracting officer's extension of the 120-day due date for
submission of a completion invoice or voucher.
3. Several respondents indicated that the rule should define when
settlement of final indirect rates takes place. The Councils did not
concur since the actual date of settlement depends on the circumstances
of the negotiation. Establishing a universal definition of settlement
date is unnecessary and would reduce the flexibility of both
contractors and contracting officers.
4. One respondent stated that the rule should include a provision
requiring the contracting officer to provide written notice to the
contractor and to provide an opportunity to respond before the issuance
of a unilateral determination of amounts due. The Councils did not
agree. The requirement to submit a timely final invoice is already
stated in FAR 52.216-7, Allowable Cost and Payment. Therefore, the
contractor is already responsible for complying with this requirement
or communicating with the contracting officer if the requirement cannot
be met. It is unnecessary to repeat contract requirements in separate
notices.
5. Several respondents requested that the rule explicitly preclude
the application of the proposed revised closeout procedures to existing
contracts. The Councils did not concur. Contracting officers already
have the authority to determine final voucher payment amounts and issue
final decisions. While the new language in this rule makes that
authority explicit, it does not, and should not, impact the contracting
officer's authority under existing contracts.
This is not a significant regulatory action and, therefore, was not
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
final 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., because this rule does not
change the current policies at FAR 42.705 that require the contractor
to submit a completion invoice or voucher within 120 days (or longer
period, if approved in writing by the contracting officer) after
settlement of the final indirect costs rates. The rule simply makes it
explicit that if the contractor fails to submit the completion invoice
or voucher within the time required, the contracting officer may
determine the amounts due the contractor and record this determination
in a unilateral modification.
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.
3501, et seq.
List of Subjects in 48 CFR Parts 42 and 52
Government procurement.
Dated: February 1, 2002.
Al Matera,
Director, Acquisition Policy Division.
Therefore, DoD, GSA, and NASA amend 48 CFR parts 42 and 52 as set
forth below:
1. The authority citation for 48 CFR parts 42 and 52 continues to
read as follows:
Authority: 40 U.S.C. 486(c); 10 U.S.C. chapter 137; and 42
U.S.C. 2473(c).
PART 42--CONTRACT ADMINISTRATION AND AUDIT SERVICES
2. Amend section 42.705 by revising paragraph (b) and by adding
paragraph (c) to read as follows:
42.705 Final indirect cost rates.
* * * * *
(b) Within 120 days (or longer period, if approved in writing by
the contracting officer,) after settlement of the final annual indirect
cost rates for all years of a physically complete contract, the
contractor must submit a completion invoice or voucher reflecting the
settled amounts and rates. To determine whether a period longer than
120 days is appropriate, the contracting officer should consider
whether there are extenuating circumstances, such as the following:
(1) Pending closeout of subcontracts awaiting Government audit.
(2) Pending contractor, subcontractor, or Government claims.
(3) Delays in the disposition of Government property.
(4) Delays in contract reconciliation.
(5) Any other pertinent factors.
(c)(1) If the contractor fails to submit a completion invoice or
voucher within the time specified in paragraph (b) of this section, the
contracting officer may--
(i) Determine the amounts due to the contractor under the contract;
and
(ii) Record this determination in a unilateral modification to the
contract.
(2) This contracting officer determination must be issued as a
final decision in accordance with 33.211.
PART 52--SOLICITATION PROVISIONS AND CONTRACT CLAUSES
3. Amend section 52.216-7 in paragraph (d) by redesignating
paragraph (d)(4) as (d)(5) and paragraph (d)(5) as (d)(4),
respectively; revising the newly designated (d)(5); adding paragraph
(d)(6); and by amending paragraph (h)(1) by removing ``paragraph
(d)(4)'' and adding ``paragraph (d)(5)'' in its place. The revised text
reads as follows:
52.216-7 Allowable cost and payment
* * * * *
Allowable Cost and Payment (Feb 2002)
* * * * *
(d) * * *
(5) Within 120 days (or longer period if approved in writing by
the Contracting Officer) after settlement of the final annual
indirect cost rates for all years of a physically complete contract,
the Contractor shall submit a completion invoice or voucher to
reflect the settled amounts and rates.
(6)(i) If the Contractor fails to submit a completion invoice or
voucher within the time specified in paragraph (d)(5) of this
clause, the Contracting Officer may--
(A) Determine the amounts due to the Contractor under the
contract; and
(B) Record this determination in a unilateral modification to
the contract.
(ii) This determination constitutes the final decision of the
Contracting Officer in accordance with the Disputes clause.
* * * * *
[FR Doc. 02-2918 Filed 2-7-02; 8:45 am]
BILLING CODE 6820-EP-P