[Federal Register: October 3, 2006 (Volume 71, Number 191)]
[Proposed Rules]
[Page 58336-58338]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr03oc06-32]
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DEPARTMENT OF DEFENSE
GENERAL SERVICES ADMINISTRATION
NATIONAL AERONAUTICS AND SPACE ADMINISTRATION
48 CFR Part 30
[FAR Case 2005-027; Docket 2006-0020; Sequence 9]
RIN 9000-AK60
Federal Acquisition Regulation; FAR Case 2005-027, FAR Part 30--
CAS Administration
AGENCIES: Department of Defense (DoD), General Services Administration
(GSA), and National Aeronautics and Space Administration (NASA).
ACTION: Proposed rule.
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SUMMARY: The Civilian Agency Acquisition Council and the Defense
Acquisition Regulations Council (Councils) are proposing to amend the
Federal Acquisition Regulation (FAR) to implement recommendations to
change the regulations related to the
[[Page 58337]]
administration of the Cost Accounting Standards (CAS).
DATES: Interested parties should submit written comments to the FAR
Secretariat on or before December 4, 2006 to be considered in the
formulation of a final rule.
ADDRESSES: Submit comments identified by FAR case 2005-027 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. Search for any document by first
selecting the proper document types and selecting ``Federal Acquisition
Regulation'' as the agency of choice. At the ``Keyword'' prompt, type
in the FAR case number (for example, FAR Case 2006-001) and click on
the ``Submit'' button. You may also search for any document by clicking
on the ``Advanced search/document search'' tab at the top of the
screen, selecting from the agency field ``Federal Acquisition
Regulation'', and typing the FAR case number in the keyword field.
Select the ``Submit'' button.
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 FAR case 2005-
027 in all correspondence related to this case. All comments received
will be posted without change to http://frwebgate.access.gpo.gov/cgi-bin/leaving.cgi?from=leavingFR.html&log=linklog&to=http://www.regulations.gov, including
any personal and/or business confidential information provided.
FOR FURTHER INFORMATION CONTACT For clarification of content, contact
Mr. Jeremy Olson, at (202) 501-3221. For information pertaining to
status or publication schedules, contact the FAR Secretariat at (202)
501-4755. Please cite FAR case 2005-027.
SUPPLEMENTARY INFORMATION:
A. Background
On March 9, 2005, the Councils issued a final rule (FAR case 1999-
025) revising FAR Part 30, ``CAS Administration'' which significantly
streamlined the process for submitting, negotiating, and resolving cost
impacts resulting from a change in cost accounting practice or
noncompliance with stated practices. Subsequent to this, a number of
recommended changes to FAR Part 30 have been submitted by both
government and industry representatives. These recommendations have
been evaluated and, where warranted, changes are being proposed herein.
B. Discussion
The Councils are proposing to revise the following FAR provisions:
1. FAR 30.001 includes minor changes to the definitions of a number
of terms. Related changes are made to the FAR clause at 52.230-6(a).
These changes are made to ensure that each term is consistently defined
in both locations.
2. FAR 30.601(c) is added to require that the cognizant Federal
agency official (CFAO) request and consider the advice of the auditor,
as appropriate, when administering the Cost Accounting Standards. As a
result, the phrase ``with the assistance of the auditor'' is deleted
from several other sections of FAR Part 30.
3. FAR 30.602(d) is revised to include references to FAR 30.603,
30.604, and 30.605.
4. FAR 30.604(g) and 30.605(f) are revised to specify that the CFAO
must evaluate the Detailed Cost Impact (DCI) proposal for cost
accounting practice changes or noncompliances when a contractor is
required to submit a DCI.
5. FAR 30.604(h)(4) is revised to indicate that the Changes clause
is to be used to negotiate equitable adjustments related to required or
desirable changes.
6. 30.605(h)(6) is added (and the current (h)(6) is redesignated as
(h)(7)) to specify that the cost impact of a noncompliance that affects
both cost estimating and cost accumulation shall be determined by
combining the separate cost impacts of both the cost estimating and
cost accumulation noncompliances.
Two other related issues were considered by the Councils no changes
will be made in response to those recommendations. These include the
following:
Issue: The Councils were informed of a concern about precluding
contract awards when a contractor has submitted a revised Disclosure
Statement, but that Disclosure Statement has not yet been determined
adequate by the contracting officer.
Councils' Position: The Councils believe that the regulations
currently provide adequate flexibility to address any such
circumstances that may arise, including the waiver authority contained
in the CAS/FAR. Furthermore, to date the Councils are unaware of any
instances in which awards have been delayed pending determinations
about the adequacy and/or compliance of revised Disclosure Statements.
Issue: Currently, FAR 30.606(a) prohibits combining the cost
impacts of two unilateral accounting changes unless they both result in
increased costs. The Councils were informed that such a rule may reduce
contracting officer flexibility and may be contrary to established
practices.
Councils' Position: FAR 30.606(a) is consistent with current
statutory requirements which do not permit the combining of cost
impacts for two or more unilateral changes. The Councils note that the
contracting officer in such cases should separately determine whether
each change is desirable, based on the criteria in FAR Part 30. Should
the contracting officer determine that certain of the changes are
desirable, the contracting officer would then have the authority to
combine the cost impacts of those changes in determining the amount of
the equitable adjustment resulting from the desirable changes.
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.
C. Regulatory Flexibility Act
The Councils do not expect this proposed 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.,
because contracts and subcontracts awarded to small businesses are
exempt from the Cost Accounting Standards. An Initial Regulatory
Flexibility Analysis has, therefore, not been performed. We invite
comments from small businesses and other interested parties. The
Councils will consider comments from small entities concerning the
affected FAR Part 30 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. (FAR case 2005-027), in correspondence.
D. Paperwork Reduction Act
The Paperwork Reduction Act does not apply because the proposed
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 Part 30
Government procurement.
Dated: September 22, 2006.
Ralph De Stefano,
Director, Contract Policy Division.
Therefore, DoD, GSA, and NASA propose amending 48 CFR part 30 as
set forth below:
[[Page 58338]]
PART 30--COST ACCOUNTING STANDARDS ADMINISTRATION
1. The authority citation for 48 CFR part 30 continues to read as
follows:
Authority: 40 U.S.C. 121(c); 10 U.S.C. chapter 137; and 42
U.S.C. 2473(c).
2. Amend section 30.001 by--
a. Adding to the definition ``Cognizant Federal agency official
(CFAO)'' ``the '' following ``administer'';
b. Removing from the definition ``Desirable change'' ``unilateral''
and adding ``compliant'' in its place; and
c. Revising paragraph (1) of the definition ``Required change'' to
read as follows:
30.001 Definitions.
* * * * *
Required change means--
(1) A change in cost accounting practice that a contractor is
required to make in order to comply with applicable Standards,
modifications or interpretations thereto, that subsequently becomes
applicable to an existing CAS-covered contract or subcontract due to
the receipt of another CAS-covered contract or subcontract; or
* * * * *
3. Amend section 30.601 by removing from paragraph (b) ``52.230-
6(b)'' and adding ``52.230-6(l)'' in its place; and by adding paragraph
(c) to read as follows:
30.601 Responsibility.
* * * * *
(c) In performing CAS administration, the CFAO shall request and
consider the advice of the auditor as appropriate (see also 1.602-2).
4. Amend section 30.602 by revising paragraph (d) to read as
follows:
30.602 Materiality.
* * * * *
(d) For required, unilateral, and desirable changes, and CAS
noncompliances, when the amount involved is material, the CFAO shall
follow the applicable provisions in 30.603, 30.604, 30.605, and 30.606.
5. Amend section 30.604 by--
a. Removing from the introductory text of paragraphs (b) and (f)
``, with the assistance of the auditor,'';
b. Revising the introductory text of paragraph (g);
c. Revising the introductory text of paragraph (h)(4) and removing
paragraphs (h)(4)(i) and (h)(4)(ii); and
d. Removing from paragraph (i)(1) ``With the assistance of the
auditor, estimate'' and adding ``Estimate'' in its place.
The revised text reads as follows:
30.604 Processing changes to disclosed or established cost accounting
practices.
* * * * *
(g) Detailed cost-impact proposal. If the contractor is required to
submit a DCI proposal, the CFAO shall promptly evaluate the DCI
proposal and follow the procedures at 30.606 to negotiate and resolve
the cost impact. The DCI proposal--
* * * * *
(h) * * *
(4) For required or desirable changes, negotiate an equitable
adjustment as provided in the Changes clause of the contract.
* * * * *
6. Amend section 30.605 by--
a. Removing from the introductory text of paragraph (c)(2) ``, with
the assistance of the auditor,'';
b. Revising the introductory text of paragraph (f); and
c. Redesignating paragraph (h)(6) as (h)(7) and adding a newly
designated paragraph (h)(6).
The revised text reads as follows:
30.605 Processing noncompliances.
* * * * *
(f) Detailed cost-impact proposal. If the contractor is required to
submit a DCI proposal, the CFAO shall promptly evaluate the DCI
proposal and follow the procedures at 30.606 to negotiate and resolve
the cost impact. The DCI proposal--
* * * * *
(h) * * *
(6) The cost impact of each noncompliance that affects both cost
estimating and cost accumulation shall be determined by combining the
cost impacts in paragraphs (h)(3), (h)(4), and (h)(5) of this section;
and
* * * * *
PART 52--SOLICITATIONS PROVISIONS AND CONTRACT CLAUSES
7. Amend section 52.230-6 by--
a. Revising the date of the clause;
b. Removing from the definition ``Fixed-price contracts and
subcontracts'' the word ``FAR'' each time it appears (4 times);
c. Amending the definition ``Flexibly-priced contracts and
subcontracts'' by revising paragraph (1); and by removing from
paragraphs (2) through (5) the word ``FAR''; and
d. Revising paragraph (1) of the definition ``required change''.
The revised text reads as follows:
52.230-6 Administration of Cost Accounting Standards.
* * * * *
ADMINISTRATION OF COST ACCOUNTING STANDARDS (DATE)
* * * * *
(a) * * *
Flexibly-priced contracts and subcontracts means--
(1) Fixed-price contracts and subcontracts described at 16.203-
1(a)(2), 16.204, 16.205, and 16.206;
* * * * *
Required change means--
(1) A change in cost accounting practice that a Contractor is
required to make in order to comply with applicable Standards,
modifications or interpretations thereto, that subsequently become
applicable to existing CAS-covered contracts or subcontracts due to the
receipt of another CAS-covered contract or subcontract; or
* * * * *
(End of clause)
[FR Doc. 06-8425 Filed 10-2-06; 8:45 am]
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