[Federal Register: March 18, 2003 (Volume 68, Number 52)]
[Rules and Regulations]
[Page 13201-13202]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr18mr03-24]
[[Page 13201]]
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DEPARTMENT OF DEFENSE
GENERAL SERVICES ADMINISTRATION
NATIONAL AERONAUTICS AND SPACE ADMINISTRATION
48 CFR Parts 12 and 16
[FAC 2001-13; FAR Case 2000-013; Item I]
RIN 9000-AJ03
Federal Acquisition Regulation; Contract Types for Commercial
Item Acquisitions
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 clarify the use of
award fees and performance or delivery incentives in firm-fixed-price
contracts and fixed-price with economic price adjustment contracts.
These changes are intended to clarify how award fees and performance or
delivery incentives may be used in commercial item acquisitions where
statute prohibits use of cost-type contracts and requires use of firm-
fixed-price contracts and fixed-price contracts with economic price
adjustment to the maximum extent practicable.
DATES: Effective Date: April 17, 2003.
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. Victoria Moss, Procurement Analyst, at (202) 501-
4764. Please cite FAC 2001-13, FAR case 2000-013.
SUPPLEMENTARY INFORMATION:
A. Background
DoD, GSA, and NASA published a proposed rule in the Federal
Register at 65 FR 83292, December 29, 2000, that proposed to amend FAR
12.207 and Subpart 16.2 to clarify the contract-type requirements for
commercial item acquisitions derived from Section 8002(d) of the
Federal Acquisition Streamlining Act (FASA) (Pub. L. 103-355). FASA
states that agencies must use firm-fixed-price (FFP) contracts and
fixed-price contracts with economic price adjustments (FP/EPA) to the
maximum extent practicable for commercial item acquisitions. FASA also
prohibits the use of cost-type contracts.
The proposed rule would have amended Part 12 to address pricing
mechanisms for acquiring commercial services available on a time-and-
materials or labor-hour basis within FAR Part 12 contract-type
restrictions. Additionally, the proposed rule contained revisions to
FAR 16.202-1 and 16.203-1 to indicate that award fee and performance or
delivery incentives based solely on factors other than cost may be used
in conjunction with FFP and FP/EPA contracts without changing the FFP
or FP/EPA nature of the contract.
The 60-day comment period for the proposed rule ended February 27,
2001. Ten sources submitted comments on the proposed rule. All comments
received were considered in the formulation of this final rule. The
comments indicated significant confusion concerning the proposed
revisions to Part 12 regarding the intended application of the proposed
time-and-materials and labor-hour pricing mechanism coverage.
Consequently, the FAR Council decided that only the changes associated
with using non-cost based award fee and delivery or schedule incentives
in conjunction with FFP and FP/EPA contracts should be finalized.
Although this rule does not address the use of time-and-materials
and labor-hour contracts for commercial item acquisitions, the
Administrator, Office of Federal Procurement Policy, intends to work
with the other FAR Council members to develop appropriate revisions to
current FAR coverage to address their use, including safeguards that
are needed to effectively protect taxpayer interests when these
contractual arrangements are used under Part 12.
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 Regulatory Flexibility Act does not apply to this rule. This
final rule does not constitute a significant FAR revision within the
meaning of FAR 1.501 and Public Law 98-577, and publication for public
comments is not required. However, the Councils will consider comments
from small entities concerning the affected FAR Parts 12 and 16 in
accordance with 5 U.S.C. 610. Interested parties must submit such
comments separately and should cite 5 U.S.C. 601, et seq. (FAC 2001-13,
FAR case 2000-013), in correspondence.
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 12 and 16
Government procurement.
Dated: March 12, 2003.
Laura G. Smith,
Director, Acquisition Policy Division.
Therefore, DoD, GSA, and NASA amend 48 CFR parts 12 and 16 as set
forth below:
1. The authority citation for 48 CFR parts 12 and 16 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 12--ACQUISITION OF COMMERCIAL ITEMS
2. In section 12.207, add the following sentence to the end of the
paragraph to read as follows:
12.207 Contract type.
* * * These contract types may be used in conjunction with an award
fee and performance or delivery incentives when the award fee or
incentive is based solely on factors other than cost (see 16.202-1 and
16.203-1).
PART 16--TYPES OF CONTRACTS
3. In section 16.202-1, add the following sentences to the end of
the paragraph to read as follows:
16.202-1 Description.
* * * The contracting officer may use a firm-fixed-price contract
in conjunction with an award-fee incentive (see 16.404) and performance
or delivery incentives (see 16.402-2 and 16.402-3) when the award fee
or incentive is based solely on factors other than cost. The contract
type remains firm-fixed-price when used with these incentives.
4. In section 16.203-1, redesignate the introductory text as
paragraph (a), and paragraphs (a) through (c) as (1) through (3),
respectively; and add paragraph (b) to read as follows:
16.203-1 Description.
* * * * *
(b) The contracting officer may use a fixed-price contract with
economic
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price adjustment in conjunction with an award-fee incentive (see
16.404) and performance or delivery incentives (see 16.402-2 and
16.402-3) when the award fee or incentive is based solely on factors
other than cost. The contract type remains fixed-price with economic
price adjustment when used with these incentives.
[FR Doc. 03-6372 Filed 3-17-03; 8:45 am]