[Federal Register: June 8, 2005 (Volume 70, Number 109)]
[Rules and Regulations]
[Page 33659-33660]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr08jn05-32]
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DEPARTMENT OF DEFENSE
GENERAL SERVICES ADMINISTRATION
NATIONAL AERONAUTICS AND SPACE ADMINISTRATION
48 CFR Part 15
[FAC 2005-04; FAR Case 2004-035; Item IV]
RIN 9000-AK17
Federal Acquisition Regulation; Submission of Cost or Pricing
Data on Noncommercial Modifications of Commercial Items
AGENCIES: Department of Defense (DoD), General Services Administration
(GSA), and National Aeronautics and Space Administration (NASA).
ACTION: Interim rule with request for comments.
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SUMMARY: The Civilian Agency Acquisition Council and the Defense
Acquisition Regulations Council (Councils) have agreed on an interim
rule amending the Federal Acquisition Regulation (FAR) regarding
prohibition on obtaining cost or pricing data to implement Section 818
of Public Law 108-375, the Ronald W. Reagan National Defense
Authorization Act for Fiscal Year 2005.
DATES: Effective Date: June 8, 2005.
Comment Date: Interested parties should submit comments to the FAR
Secretariat at the address shown below on or before August 8, 2005 to
be considered in the formulation of a final rule.
ADDRESSES: Submit comments identified by FAC 2005-04, FAR case 2004-
035, by any of the following methods:
Federal eRulemaking Portal: http://frwebgate.access.gpo.gov/cgi-bin/leaving.cgi?from=leavingFR.html&log=linklog&to=http://www.regulations.gov.
Follow the instructions for submitting comments.
Agency Web Site: http://frwebgate.access.gpo.gov/cgi-bin/leaving.cgi?from=leavingFR.html&log=linklog&to=http://www.acqnet.gov/far/ProposedRules/proposed.htm.
Click on the FAR case number to submit comments. E-mail: farcase.2004-035@gsa.gov. Include FAC 2005-04, FAR
case 2004-035, in the subject line of the message.
Fax: 202-501-4067.
Mail: General Services Administration, Regulatory
Secretariat (VIR), 1800 F Street, NW, Room 4035, ATTN: Laurieann
Duarte, Washington, DC 20405.
Instructions: Please submit comments only and cite FAC 2005-04, FAR
case 2004-035, in all correspondence related to this case. All comments
[[Page 33660]]
http://frwebgate.access.gpo.gov/cgi-bin/leaving.cgi?from=leavingFR.html&log=linklog&to=http://www.acqnet.gov/far/ProposedRules/proposed.htm, including any personal
information provided.
FOR FURTHER INFORMATION CONTACT: The FAR Secretariat at (202) 501-
4755, for information pertaining to status or publication schedules.
For clarification of content, contact Mr. Jeremy Olson at (202) 501-
3221. Please cite FAC 2005-04, FAR case 2004-035.
SUPPLEMENTARY INFORMATION:
A. Background
Section 818, Submission of Cost or Pricing Data on Noncommercial
Modifications of Commercial Items, of the Ronald W. Reagan National
Defense Authorization Act for Fiscal Year 2005, amends 10 U.S.C. 2306a.
10 U.S.C. 2306a provides exceptions to the requirement for submission
of cost or pricing data, including an exception for commercial items.
Section 818 states that the exception for a commercial item does not
apply to noncommercial modifications of a commercial item that are
expected to cost, in the aggregate, more than $500,000 or 5 percent of
the total price of the contract, whichever is greater. Section 818
applies to offers submitted, and to modifications of contracts or
subcontracts made, on or after June 1, 2005.
B. Discussion
The Councils are revising the commercial item discussion in
paragraph (c)(3) of FAR 15.403-1, Prohibition on Obtaining Cost or
Pricing Data, to reflect the requirements of Section 818. This includes
inserting a new paragraph (3)(ii). This new paragraph provides the
exception to the requirement for cost or pricing data for minor
modifications that do not change the item from a commercial item to a
noncommercial item. The exception applies to all such minor
modifications for acquisitions funded by agencies other than DoD, NASA,
and Coast Guard. For acquisitions funded by DoD, NASA, and Coast Guard,
the exceptions apply to all such modifications if the total cost of the
modifications do not exceed the greater of $500,000 or 5 percent of the
total price of the contract.
This new policy applies only to acquisitions funded by DoD, NASA,
or the Coast Guard, since the statute amends 10 U.S.C. 2306a, which
only applies to DoD, NASA, and the Coast Guard. The new language does
not apply to acquisitions funded by other than DoD, NASA, or the Coast
Guard because Section 818 did not amend 41 U.S.C. 254b, which prohibits
obtaining cost or pricing data for commercial items. However, the new
policy applies to contracts awarded or task or delivery orders placed
on behalf of DoD, NASA, or the Coast Guard by an official of the United
States outside of those agencies, because the statutory requirement of
section 818 applies to the funds provided by DoD, NASA, or the Coast
Guard.
C. Regulatory Planning and Review
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.
D. Regulatory Flexibility Act
The interim rule is not expected 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
number of small entities providing commercial items with non-commercial
modifications costing more than $500,000 is expected to be very low.
Therefore, an Initial Regulatory Flexibility Analysis has not been
performed. The Councils will consider comments from small entities
concerning the affected FAR Part 15 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 2005-04, FAR case 2004-035), in
correspondence.
E. 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.
F. Determination to Issue an Interim Rule
A determination has been made under the authority of the Secretary
of Defense (DoD), the Administrator of General Services (GSA), and the
Administrator of the National Aeronautics and Space Administration
(NASA) that an urgent and compelling reason exists to promulgate this
interim rule without prior opportunity for public comment. This action
is necessary to implement the changes resulting from the enactment of
Section 818 of Public Law 108-375, the Ronald W. Reagan National
Defense Authorization Act for Fiscal Year 2005 that are effective June
1, 2005. However, pursuant to Public Law 98-577 and FAR 1.501, the
Councils will consider public comments received in response to this
interim rule in the formation of the final rule.
List of Subjects in 48 CFR Part 15
Government procurement.
Dated: May 27, 2005.
Julia B. Wise,
Director, Contract Policy Division.
0
Therefore, DoD, GSA, and NASA amend 48 CFR part 15 as set forth below:
PART 15--CONTRACTING BY NEGOTIATION
0
1. The authority citation for 48 CFR part 15 is revised to read as
follows:
Authority: 40 U.S.C. 121(c); 10 U.S.C. chapter 137; and 42
U.S.C. 2473(c).
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2. Amend section 15.403-1 by revising the first sentence of paragraph
(c)(3)(i), redesignating paragraph (c)(3)(ii) as (c)(3)(iii), and
adding new paragraph (c)(3)(ii) to read as follows:
15.403-1 Prohibition on obtaining cost or pricing data (10 U.S.C.
2306a and 41 U.S.C. 254b).
* * * * *
(c) * * *
(3) Commercial items. (i) Any acquisition of an item that meets the
commercial item definition in 2.101, or any modification, as defined in
paragraph (3)(i) of that definition, that does not change the item from
a commercial item to a noncommercial item, is exempt from the
requirement for cost or pricing data. * * *
(ii) The following requirements apply to minor modifications
defined in paragraph (3)(ii) of the definition of a commercial item at
2.101 that do not change the item from a commercial item to a
noncommercial item:
(A) For acquisitions funded by any agency other than DoD, NASA, or
Coast Guard, the modifications are exempt from the requirement for
submission of cost or pricing data.
(B) For acquisitions funded by DoD, NASA, or Coast Guard, the
modifications are exempt from the requirement for submission of cost or
pricing data provided the total cost of the modifications do not exceed
the greater of $500,000 or 5 percent of the total price of the
contract.
(C) For acquisitions funded by DoD, NASA, or Coast Guard where the
total cost of the modifications exceeds the greater of $500,000 or 5
percent of the total price of the contract and no other exception or
waiver applies, the contracting officer must require submission of cost
or pricing data.
* * * * *
[FR Doc. 05-11188 Filed 6-7-05; 8:45 am]