[Federal Register Volume 62, Number 51 (Monday, March 17, 1997)]
[Rules and Regulations]
[Pages 12718-12719]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 97-6321]
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DEPARTMENT OF DEFENSE
GENERAL SERVICES ADMINISTRATION
NATIONAL AERONAUTICS AND SPACE ADMINISTRATION
48 CFR Part 44
[FAC 90-46; FAR Case 94-605; Item XII]
RIN 9000-AG75
Federal Acquisition Regulation; Contractors' Purchasing Systems
Reviews
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 have agreed on a final rule amending
the Federal Acquisition Regulation (FAR) to revise the requirements
relating to Contractors' Purchasing Systems Reviews (CPSRs). This
regulatory action was not subject to Office of Management and Budget
review under Executive Order 12866, dated September 30, 1993. This is
not a major rule under 5 U.S.C. 804.
EFFECTIVE DATE: May 16, 1997.
FOR FURTHER INFORMATION CONTACT: Ms. Linda Klein at (202) 501-3775 in
reference to this FAR case. For general information, contact the FAR
Secretariat, Room 4037, GS Building, Washington, DC 20405, (202) 501-
4755. Please cite FAC 90-46, FAR case 94-605.
SUPPLEMENTARY INFORMATION:
A. Background
This final rule amends FAR section 44.302, to (1) add a requirement
for the cognizant contract administration agency to determine the need
for a CPSR based on, but not limited to, the past performance of the
contractor; and volume, complexity, and dollar value of the
subcontracting activity, and (2) delete the requirement for a CPSR to
be performed initially and at least every 3 years thereafter, for
contractors over a certain sales level. In addition, sections 44.303
through 44.307 are amended to conform to the revisions at 44.302.
A proposed rule was published in the Federal Register at 60 FR
66472, December 21, 1995. Three sources submitted public comments. The
public comments were considered in the development of the final rule.
[[Page 12719]]
B. Regulatory Flexibility Act
The Department of Defense, the General Services Administration, and
the National Aeronautics and Space Administration certify that this
final rule will not 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 rule applies to
only those contractors whose sales (excluding sales under sealed bid
procedures and sales of commercial items) are expected to exceed $25
million during the subsequent year.
C. Paperwork Reduction Act
The Paperwork Reduction Act does not apply because the changes to
the FAR do not impose recordkeeping or information collection
requirements, or collections of information from offerors, contractors,
or members of the public which 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 44
Government procurement.
Dated: March 7, 1997.
Edward C. Loeb
Director, Federal Acquisition Policy Division.
Therefore, 48 CFR Part 44 is amended as set forth below:
PART 44--SUBCONTRACTING POLICIES AND PROCEDURES
1. The authority citation for 48 CFR Part 44 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).
2. Section 44.302 is revised to read as follows:
44.302 Requirements.
(a) Determine the need for a CPSR based on, but not limited to, the
past performance of the contractor, and volume, complexity and dollar
value of the subcontracting activity. If a contractor's sales to the
Government (excluding sales under sealed bid procedures and sales of
commercial items pursuant to part 12) are expected to exceed $25
million during the next year, perform a review to determine if a CPSR
is needed. Such sales include those represented by prime contracts,
subcontracts under Government prime contracts, and modifications.
Generally, a CPSR is not performed for a specific contract. The head of
the agency responsible for contract administration may raise or lower
the $25 million review level if such action is considered to be in the
Government's best interest.
(b) Once an initial determination has been made under paragraph (a)
of this section, at least every 3 years the cognizant contract
administration activity will determine whether a purchasing system
review is necessary. If necessary, the cognizant contract
administration activity will conduct a purchasing system review.
3. Section 44.303 is amended by revising the introductory text to
read as follows:
44.303 Extent of review.
A CPSR requires an evaluation of the contractor's purchasing
system. This evaluation shall not include subcontracts awarded by the
contractor exclusively in support of Government contracts awarded to
the contractor that used sealed bid procedures or that are for
commercial items pursuant to part 12. The considerations listed in
44.202-2 for consent evaluation of particular subcontracts also shall
be used to evaluate the contractor's purchasing system, including the
contractor's policies, procedures, and performance under that system.
Special attention shall be given to--
* * * * *
4. Section 44.304 is amended by revising paragraph (a) to read as
follows:
44.304 Surveillance.
(a) The ACO shall maintain a sufficient level of surveillance to
ensure that the contractor is effectively managing its purchasing
program.
* * * * *
5. Section 44.305-1 is revised to read as follows:
44.305-1 Responsibilities.
The cognizant ACO is responsible for granting, withholding, or
withdrawing approval of a contractor's purchasing system. The ACO
shall--
(a) Approve a purchasing system only after determining that the
contractor's purchasing policies and practices are efficient and
provide adequate protection of the Government's interests; and
(b) Promptly notify the contractor in writing of the granting,
withholding, or withdrawal of approval.
6. Section 44.305-2 is amended by revising paragraph (a) to read as
follows:
44.305-2 Notification.
(a) The notification granting system approval shall include--
(1) Identification of the plant or plants covered by the approval;
(2) The effective date of approval; and
(3) A statement that system approval--
(i) Applies to all Federal Government contracts at that plant to
the extent that cross-servicing arrangements exist;
(ii) Waives the contractual requirement for advance notification in
fixed-price contracts, but not for cost-reimbursement contracts;
(iii) Waives the contractual requirement for consent to
subcontracts in fixed-price contracts and for specified subcontracts in
cost-reimbursement contracts but not for those subcontracts, if any,
selected for special surveillance and identified in the contract
Schedule; and
(iv) May be withdrawn at any time at the ACO's discretion.
* * * * *
7. Sections 44.306 and 44.307 are revised to read as follows:
44.306 Disclosure of approval status.
Upon request, the ACO may inform a contractor that the purchasing
system of a proposed subcontractor has been approved or disapproved,
but shall caution that the Government will not keep the contractor
advised of any changes in the approval status. If the proposed
subcontractor's purchasing system has not been reviewed, the contractor
shall be so advised.
44.307 Reports.
The ACO shall distribute copies of CPSR reports; notifications
granting, withholding, or withdrawing system approval; and Government
recommendations for improvement of an approved system, including the
contractor's response, to at least--
(a) The cognizant contract audit office;
(b) Activities prescribed by the cognizant agency; and
(c) The contractor (except that furnishing copies of the
contractor's response is optional).
[FR Doc. 97-6321 Filed 3-14-97; 8:45 am]
BILLING CODE 6820-EP-P
