[Federal Register Volume 62, Number 51 (Monday, March 17, 1997)]
[Rules and Regulations]
[Pages 12703-12704]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 97-6317]
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DEPARTMENT OF DEFENSE
GENERAL SERVICES ADMINISTRATION
NATIONAL AERONAUTICS AND SPACE ADMINISTRATION
48 CFR Part 31
[FAC 90-46; FAR Case 95-021; Item VIII]
RIN 9000-AH04
Federal Acquisition Regulation; Allowability of Foreign Selling
Costs
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 remove the ceiling on
allowable foreign selling costs. 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.
DATES: Effective May 16, 1997.
FOR FURTHER INFORMATION CONTACT: Mr. Ralph DeStefano at (202) 501-1758
in reference to this FAR case. For general information, contact the FAR
Secretariat, Room 4037, GS Building, Washington, DC 20405, (202) 501-
4755.
[[Page 12704]]
Please cite FAC 90-46, FAR case 95-021.
SUPPLEMENTARY INFORMATION:
A. Background
This final rule revises FAR 31.205-38(c)(2) by removing the ceiling
on allowable foreign selling costs. The rule also revises FAR 31.205-1,
Public relations and advertising costs, by deleting reference to the
ceiling limitation, and further revises FAR 31.205-38(c)(2) by deleting
obsolete language. A proposed rule was published in the Federal
Register at 61 FR 31800, June 20, 1996. The proposed rule retained an
allowability ceiling but increased the threshold for its application
from $2.5 million to $5.0 million.
Two sources submitted public comments in response to the proposed
rule. All comments were considered in developing the final rule. The
final rule removes the ceiling on allowable foreign selling costs in
lieu of the proposed rule's doubling of the present threshold for its
application, i.e., $2.5 million to $5.0 million. The final rule
achieves a greater reduction in the administrative burden of
contractors than would result from retaining a ceiling but doubling the
threshold for its applicability. In addition, elimination of the
allowability ceiling further promotes the Government's policy of
stimulating the export of U.S. products.
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 most contracts awarded
to small entities use simplified acquisition procedures or are awarded
on a competitive, fixed-price basis, and do not require application of
the FAR cost principles. In addition, this rule applies to only those
entities that incur foreign selling costs.
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 31
Government procurement.
Dated: March 7, 1997.
Edward C. Loeb,
Director, Federal Acquisition Policy Division.
Therefore, 48 CFR Part 31 is amended as set forth below:
PART 31--CONTRACT COST PRINCIPLES AND PROCEDURES
1. The authority citation for 48 CFR Part 31 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 31.205-1 is amended in paragraph (d)(2) by revising the
second sentence to read as follows:
31.205-1 Public relations and advertising costs.
* * * * *
(d) * * *
(2) * * * Such costs are allowable, notwithstanding paragraphs
(f)(1), (f)(3), (f)(4)(ii), and (f)(5) of this subsection. * * *
* * * * *
3. Section 31.205-38 is amended by revising paragraph (c)(2) to
read as follows:
31.205-38 Selling costs.
* * * * *
(c) * * *
(2) The costs of broadly targeted and direct selling efforts and
market planning other than long-range, that are incurred in connection
with a significant effort to promote export sales of products normally
sold to the U.S. Government, including the costs of exhibiting and
demonstrating such products, are allowable on contracts with the U.S.
Government provided the costs are allocable, reasonable, and otherwise
allowable under this subpart 31.2.
* * * * *
[FR Doc. 97-6317 Filed 3-14-97; 8:45 am]
BILLING CODE 6820-EP-P
