Federal Acquisition Regulation; FAR Case 2007-002, Cost Accounting Standards (CAS) Administration and Associated Federal Acquisition Regulation Clauses

AGENCIES:

Department of Defense (DoD), General Services Administration (GSA), and National Aeronautics and Space Administration (NASA).

ACTION:

Interim rule with request for comments.

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) to revise the contract clauses related to the administration of the Cost Accounting Standards (CAS) to maintain consistency between the FAR and CAS.

DATES:

Effective Date: October 17, 2008.

Comment Date: Interested parties should submit written comments to the FAR Secretariat on or before November 17, 2008 to be considered in the formulation of a final rule.

ADDRESSES:

Submit comments identified by FAC 2005-27, FAR case 2007-002, by any of the following methods:

• Regulations.gov: http://www.regulations.gov . Submit comments via the Federal eRulemaking portal by inputting “FAR Case 2007-002” under the heading “Comment or Submission”. Select the link “Send a Comment or Submission” that corresponds with FAR Case 2007-002. Follow the instructions provided to complete the “Public Comment and Submission Form”. Please include your name, company name (if any), and “FAR Case 2007-002” on your attached document.
• Fax: 202-501-4067.
• Mail: General Services Administration, Regulatory Secretariat (VPR), 1800 F Street, NW., Room 4041, ATTN: Laurieann Duarte, Washington, DC 20405.

Instructions: Please submit comments only and cite FAC 2005-27, FAR case 2007-002, in all correspondence related to this case. All comments received will be posted without change to http://www.regulations.gov , including any personal and/or business confidential information provided.

FOR FURTHER INFORMATION CONTACT

Mr. Ed Chambers, Procurement Analyst, at (202) 501-3221 for clarification of content. Please cite FAC 2005-27, FAR case 2007-002. For information pertaining to status or publication schedules, contact the FAR Secretariat at (202) 501-4755.

SUPPLEMENTARY INFORMATION:

A. Background

On June 14, 2007, the CAS Board published a final rule (72 FR 32809) revising the contract clauses for CAS administration. The final rule effected the following changes:

• Amended the CAS applicability threshold to be the same as the threshold for compliance with the Truth in Negotiations Act (TINA) as required by section 822 of the 2006 National Defense Authorization Act (Pub. L. 109-163). The TINA threshold is currently $650,000.
• Changed the effective dates of 48 CFR 9903.201-3 and 48 CFR 9903.201-4(a), (c), and (e) from April 2000 and June 2000, respectively, to June 2007.

On June 14, 2000, the CAS Board published a final rule (65 FR 37470) revising the contract clauses for CAS administration. The final rule effected the following changes:

• Specified that the interest rate for overpayments by the Government under 48 CFR 9903.201-4(a), (c), and (e) shall be computed at the annual rate established under section 6621(a)(2) of the Internal Revenue Code of 1986 (26 U.S.C. 6621(a)(2)).

In order to maintain consistency between CAS and FAR in matters relating to the administration of CAS, the Councils are revising the FAR as outlined below:

1. FAR 30.201-4(b)(1), the prescription for use of the FAR clause at 52.230-3, is revised to reflect the amendments promulgated by the CAS Board on June 14, 2007.

2. FAR 52.230. The following clauses are revised to reflect the amendments promulgated by the CAS Board on June 14, 2007 and June 14, 2000:

a. FAR 52.230-2, Cost Accounting Standards.

b. FAR 52.230-3, Disclosure and Consistency of Cost Accounting Practices.

c. FAR 52.230-5, Cost Accounting Standards—Educational Institution.

3. FAR 52.230-1, Cost Accounting Standards Notices and Certification, is revised to reflect the amendments promulgated by the CAS Board on June 14, 2007.

4. FAR 52.230-4, Consistency of Cost Accounting Practices, is revised to maintain consistency with all other CAS clauses in specifying the rate to be used to compute interest on overpayments by the Government.

5. FAR 52.230-3(a)(3)(ii) is revised to correctly reference 48 CFR 9903.201-6(c), Desirable change.

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 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 contracts and subcontracts awarded to small businesses are exempt from the Cost Accounting Standards. Therefore, an Initial Regulatory Flexibility Analysis has not been performed. The Councils will consider comments from small entities concerning the affected FAR Parts 30 and 52 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 2005-27, FAR case 2007-002), 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.

D. 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 urgent and compelling reasons exist to promulgate this interim rule without prior opportunity for public comment. This action is necessary because Federal Acquisition Regulation Part 30, Cost Accounting Standards, describes policies and procedures for applying the Cost Accounting Standards Board (CASB) rules and regulations (48 CFR Chapter 99 (FAR Appendix). Without this interim rule, FAR Part 30 is inconsistent with the Cost Accounting Standards that it is to describe. 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 Parts 30 and 52

• Government procurement

Therefore, DoD, GSA, and NASA amend 48 CFR parts 30 and 52 as set forth below:

1. The authority citation for 48 CFR parts 30 and 52 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).

PART 30—COST ACCOUNTING STANDARDS ADMINISTRATION

2. Amend section 30.201-4 in paragraph (b)(1) by removing “$500,000” and adding “$650,000” in its place.

PART 52—SOLICITATION PROVISIONS AND CONTRACT CLAUSES

3. Amend section 52.230-1 by revising the date of the provision to read “(OCT 2008)”, and by removing from I. Disclosure Statement—Cost Accounting Practices and Certification, in paragraph (a) “$500,000” and adding “$650,000” in its place.

4. Amend section 52.230-2 by—

a. Revising the date of the clause to read “(OCT 2008)”;

b. Removing from paragraph (a)(5) “6621” and adding “6621(a)(2)” in its place each time it appears; and

c. Removing from paragraph (d) “$500,000” and adding “$650,000” in its place.

5. Amend section 52.230-3 by—

a. Revising the date of the clause;

b. Removing from paragraph (a)(3)(ii) “9903.201-6(b)” and adding “9903.201-6(c)” in its place;

c. Revising the second sentence of paragraph (a)(4); and

d. Removing from paragraph (d)(2) “$500,000” and adding “$650,000” in its place.

The revised text reads as follows:

DISCLOSURE AND CONSISTENCY OF COST ACCOUNTING PRACTICES (OCT 2008)

(a) * * *

(4) * * * Such adjustment shall provide for recovery of the increased costs to the United States together with interest thereon computed at the annual rate established under section 6621(a)(2) of the Internal Revenue Code of 1986 (26 U.S.C. 6621(a)(2)), from the time the payment by the United States was made to the time the adjustment is effected.

6. Amend section 52.230-4 by revising the date of the clause date to read “(OCT 2008)”; and removing “6621” and adding “6621(a)(2)” in its place each time it appears.

7. Amend section 52.230-5 by—

a. Revising the date of the clause date to read “(OCT 2008)”;

b. Removing from paragraph (a)(5) “6621” and adding “6621(a)(2)” in its place each time it appears; and

c. Removing from paragraph (d)(2) “$500,000” and adding “$650,000” in its place.