02-2915. Federal Acquisition Regulation; Notification of Noncompliance With Cost Accounting Standards

AGENCIES:

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

ACTION:

Final rule.

SUMMARY:

The Civilian Agency Acquisition Council and the Defense Acquisition Regulations Council (Councils) have agreed on a final rule amending the Federal Acquisition Regulation (FAR) to remove the requirement for a contractor to notify the contracting officer when there is a cost accounting standard (CAS) noncompliance that has an immaterial cost impact.

DATES:

Effective Date: February 20, 2002.

FOR FURTHER INFORMATION CONTACT:

The FAR Secretariat, Room 4035, GS Building, Washington, DC, 20405, [phone], for information pertaining to status or publication schedules. For clarification of content, contact Mr. Jeremy Olson at [phone]. Please cite FAC 2001-04, FAR case 2001-013.

SUPPLEMENTARY INFORMATION:

A. Background

Contracting officers may require submission of cost or pricing data in the format indicated in Table 15-2, Instructions for Submitting Cost/Price Proposals When Cost or Pricing Data are Required, which is included in FAR 15.408, Solicitation provisions and contract clauses. This Table requires contractors to state whether they have been notified that they are or may be in noncompliance with the CAS. When there is a noncompliance and the cognizant Federal agency official determines the noncompliance has an immaterial cost impact, it is not necessary for the contractor to notify the contracting officer because the noncompliance will not impact the contract price. If the noncompliance is not corrected and it subsequently results in materially increased costs to the Government, the provisions of the applicable CAS clauses will continue to be enforced. Since the notification requirement is an inefficient use of resources and may cause an unnecessary delay, this rule deletes it.

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

This final rule does not constitute a significant FAR revision within the meaning of FAR 1.501 and Public Law 98-577, and publication for public comments is not required.

However, 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 2001-04, FAR case 2001-013), 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.

List of Subjects in 48 CFR Part 15

• Government procurement

Dated: February 1, 2002.

Al Matera,

Director, Acquisition Policy Division.

Therefore, DoD, GSA, and NASA amend 48 CFR part 15 as set forth below:

1. The authority citation for 48 CFR part 15 continues to read as follows:

PART 15—CONTRACTING BY NEGOTIATION

Authority: 40 U.S.C. 486(c); 10 U.S.C. chapter 137; and 42 U.S.C. 2473(c).

2. In section 15.408, amend Table 15-2, which follows paragraph (m)(4), by revising paragraph A.(8) of the General Instructions to read as follows:

15.408

Solicitation provisions and contract clauses.

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Table 15-2—Instructions for Submitting Cost/Price Proposals When Cost or Pricing Data are Required

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I. General Instructions

A. * * *

(8) Whether your organization is subject to cost accounting standards; whether your organization has submitted a CASB Disclosure Statement, and if it has been determined adequate; whether you have been notified that you are or may be in noncompliance with your Disclosure Statement or CAS (other than a noncompliance that the cognizant Federal agency official has determined to have an immaterial cost impact), and, if yes, an explanation; whether any aspect of this proposal is inconsistent with your disclosed practices or applicable CAS, and, if so, an explanation; and whether the proposal is consistent with your established estimating and accounting principles and procedures and FAR Part 31, Cost Principles, and, if not, an explanation;

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