Federal Acquisition Regulation; Revision of Cost Accounting Standards Threshold

AGENCY:

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

ACTION:

Final rule.

SUMMARY:

DoD, GSA, and NASA are issuing a final rule amending the Federal Acquisition Regulation (FAR) to revise the threshold for applicability of cost accounting standards in order to implement a recent rule of the Cost Accounting Standards Board and statutory requirements.

DATES:

Effective Date: May 10, 2012.

FOR FURTHER INFORMATION CONTACT:

Mr. Edward N. Chambers, Procurement Analyst, at 202-501-3221 for clarification of content. For information pertaining to status or publication schedules, contact the Regulatory Secretariat at 202-501-4755. Please cite FAC 2005-59, FAR Case 2012-003.

SUPPLEMENTARY INFORMATION:

I. Background

The Cost Accounting Standards (CAS) Board published a final rule in the Federal Register at 76 FR 79545, on December 22, 2011, which revised the threshold for the application of CAS from “$650,000” to “the Truth in Negotiations Act (TINA) threshold, as adjusted for inflation (41 U.S.C. 1908 and 41 U.S.C. 1502(b)(1)(B))” in the CAS provisions and clauses at 48 CFR parts 9901 and 9903. The TINA threshold is adjusted every 5 years for inflation, as required by 41 U.S.C. 1908. Title 41 U.S.C. 1502(b)(1)(B) ties the CAS applicability threshold to the dollar value of the TINA threshold (currently $700,000). The FAR cites the TINA threshold at FAR 15.403-4(a)(1).

II. Discussion and Analysis

This final rule revises the CAS applicability threshold from $650,000 to $700,000 at FAR 30.201-4 and the CAS clauses in the FAR at 52.230-1 through 50.230-5. The FAR replaced “$650,000” with “$700,000” rather than the phrase “the Truth in Negotiations Act (TINA) threshold, as adjusted for inflation (41 U.S.C. 1908 and 41 U.S.C. 1502(b)(1)(B))” (the phrase used by the CAS Board in its rule) as applicable. The FAR made this change from the CAS Board's rule for improved clarity of FAR 30.201-4 and the CAS clauses in the FAR—stating the specific dollar value of the TINA threshold, rather than a reference to the TINA threshold as was done in the CAS Board's final rule. In so doing, no further action will be required by the CAS Board to implement further adjustments for inflation in the future as permitted by the CAS Board's rule; the CAS applicability thresholds in the FAR will be revised every 5 years in the future, whenever the TINA threshold is revised in the FAR as part of the statutory revision of the acquisition thresholds.

Publication of This Final Rule for Public Comment Is Not Required by Statute

“Publication of proposed regulations,” 41 U.S.C. 1707, is the statute which applies to the publication of the FAR. Paragraph (a)(1) of the statute requires that a procurement policy, regulation, procedure or form (including an amendment or modification thereof) must be published for public comment if it relates to the expenditure of appropriated funds, and has either a significant effect beyond the internal operating procedures of the agency issuing the policy, regulation, procedure or form, or has a significant cost or administrative impact on contractors or offerors. This final rule is not required to be published for public comment, because it recognizes actions taken by the Cost Accounting Standards Board that have already been published for public comment; the changes in this rule are made to conform the FAR to the CAS Board final rule published in the Federal Register at 76 FR 79545, on December 22, 2011.

III. Executive Orders 12866 and 13563

Executive Orders (E.O.s) 12866 and 13563 direct agencies to assess all costs and benefits of available regulatory alternatives and, if regulation is necessary, to select regulatory approaches that maximize net benefits (including potential economic, environmental, public health and safety effects, distributive impacts, and equity). E.O. 13563 emphasizes the importance of quantifying both costs and benefits, of reducing costs, of harmonizing rules, and of promoting flexibility. This is not a significant regulatory action and, therefore, was not subject to review under section 6(b) of E.O. 12866, Regulatory Planning and Review, dated September 30, 1993. This rule is not a major rule under 5 U.S.C. 804.

IV. Regulatory Flexibility Act

The Regulatory Flexibility Act does not apply to this rule because this final rule does not constitute a significant FAR revision within the meaning of FAR 1.501-1 and 41 U.S.C. 1707 and does not require publication for public comment.

V. Paperwork Reduction Act

This rule does not contain any information collection requirements that require the approval of the Office of Management and Budget under the Paperwork Reduction Act (44 U.S.C. chapter 35).

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 by removing from paragraph (b)(1) “$650,000” and adding “$700,000” 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 “(MAY 2012)”; and removing from paragraph (a) of the Disclosure Statement I “$650,000” and adding “$700,000” in its place.

4. Amend section 52.230-2 by revising the date of the clause to read “(MAY 2012)”; and removing from paragraph (d) “$650,000” and adding “$700,000” in its place.

5. Amend section 52.230-3 by revising the date of the clause to read “(MAY 2012)”; and removing from paragraph (d)(2) “$650,000” and adding “$700,000” in its place.

6. Amend section 52.230-4 by revising the date of the clause to read “(MAY 2012)”; and removing from paragraph (d)(2) “$650,000” and adding “$700,000” in its place.

7. Amend section 52.230-5 by revising the date of the clause to read “(MAY 2012)”; and removing from paragraph (d)(2) “$650,000” and adding “$700,000” in its place.