[Federal Register Volume 61, Number 83 (Monday, April 29, 1996)]
[Rules and Regulations]
[Pages 18916-18920]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 96-10429]
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DEPARTMENT OF DEFENSE
48 CFR Parts 1, 30, 42, and 52
[FAC 90-38; FAR Case 95-002; Item II]
RIN 9000-AG71
Federal Acquisition Regulation; Application of Cost Accounting
Standards Board Regulations to Educational Institutions
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 to amend
the Federal Acquisition Regulation (FAR) to implement changes made to
the Cost Accounting Standards (CAS). The final rule applies to
educational institutions receiving a negotiated Federal contract or
subcontract award in excess of $500,000 (excluding contracts awarded
for the operation of Federally Funded Research and Development Centers
(FFRDCs) which are already subject to CAS Board regulations), and
requires that such educational institutions comply with certain
specified CAS Board rules, regulations and standards. The revisions to
the FAR are based on the CAS Board's amendments to 48 CFR Chapter 99.
This regulatory action was not subject to Office of Management and
Budget review under Executive Order 12866, dated September 30, 1993. It
is not a major rule under 5 U.S.C. 804.
EFFECTIVE DATE: April 29, 1996.
FOR FURTHER INFORMATION CONTACT: Mr. Jeremy Olson at (202) 501-3221 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 90-38, FAR case 95-002.
SUPPLEMENTARY INFORMATION:
A. Background
The Office of Federal Procurement Policy, Cost Accounting Standards
Board (CASB), has amended the regulatory provisions contained at 48 CFR
Chapter 99. The amendments apply to educational institutions receiving
a negotiated Federal contract or subcontract award in excess of
$500,000 (excluding contracts awarded for the operation of Federally
Funded Research and Development Centers (FFRDCs) which are already
subject to CASB regulations) and require that such educational
institutions comply with certain specified CASB rules, regulations, and
Cost Accounting Standards (CAS). The CAS final rule was published in
the Federal Register on November 8, 1994, at 59 FR 55746, and became
effective on January 9, 1995, and is authorized pursuant to section 26
of the Office of Federal Procurement Policy Act. The Board has taken
action on this topic in order to promote uniformity and consistency in
educational institutions' cost accounting practices.
B. Regulatory Flexibility Act
The 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 comment is not required because the requirements for the
regulation were published by the CASB and codified at 48 CFR Chapter
99. Therefore, the Regulatory Flexibility Act does not apply. However,
comments from small entities concerning the affected FAR subparts will
be considered in accordance with Section 610 of the Act. Such comments
must be submitted separately and cite 5 U.S.C. 601, et seq., (FAC 90-
38, FAR Case 95-002).
C. Paperwork Reduction Act
The information collection aspects of this rule have been approved
by the Office of Management and Budget and assigned Control Number
0348-0055.
D. Public Comments
Public comments are not necessary because the policies and
procedures contained in this regulation have already been publicized in
the Federal Register by the Office of Federal Procurement Policy Cost
Accounting Standards Board's Notice of Proposed Rulemaking made
available for public comment in the Federal Register, at 57 FR 60503,
on December 21, 1992.
List of Subjects in 48 CFR Parts 1, 30, 42, and 52
Government procurement.
Dated: April 18, 1996.
Edward C. Loeb,
Director, Federal Acquisition Policy Division.
Therefore, 48 CFR Parts 1, 30, 42, and 52 are amended as set forth
below:
PART 1--FEDERAL ACQUISITION REGULATIONS SYSTEM
1. The authority citation for 48 CFR Parts 1, 30, 42, and 52
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).
1.106 [Amended]
2. Section 1.106 is amended in the FAR segment column by removing
``52.230-5'' and inserting ``52.230-6'' in its place.
PART 30--COST ACCOUNTING STANDARDS ADMINISTRATION
30.000 [Amended]
3. Section 30.000 is amended by removing ``(appendix B, FAR loose-
leaf edition))'' and inserting ``(FAR appendix B)'' in its place, and
by removing ``(see 48 CFR chapter 99 (appendix B, FAR loose-leaf
edition), Subpart 9903.201-1(b),'' and inserting ``(see 48 CFR
9903.201-1(b) (FAR appendix B)'' in its place.
30.201 [Amended]
4. Section 30.201 is amended in the first sentence by removing ``48
CFR chapter 99 (appendix B, FAR loose-leaf edition), Subpart 9903.201-
1,'' and inserting ``48 CFR 9903.201-1 (FAR appendix B)'' in its place,
in the second sentence by removing ``subpart'' and inserting ``48 CFR''
in its place, and in the last sentence by removing ``48 CFR chapter 99
(appendix B, FAR loose-leaf edition), Subpart 9903.201-2.'' and
inserting ``48 CFR 9903.201-2 (FAR appendix B).'' in its place.
5. Section 30.201-1 is revised to read as follows:
30.201-1 CAS applicability.
See 48 CFR 9903.201-1 (FAR appendix B).
6. Section 30.201-2 is revised to read as follows:
30.201-2 Types of CAS coverage.
See 48 CFR 9903.201-2 (FAR appendix B).
7. Section 30.201-3 is revised to read as follows:
[[Page 18917]]
30.201-3 Solicitation provisions.
(a) The contracting officer shall insert the provision at 52.230-1,
Cost Accounting Standards Notices and Certification, in solicitations
for proposed contracts subject to CAS as specified in 48 CFR 9903.201
(FAR appendix B).
(b) If an award to an educational institution is contemplated prior
to July 1, 1997, the contracting officer shall insert the basic
provision set forth at 52.230-1 with its Alternate I, unless the
contract is to be performed by a Federally Funded Research and
Development Center (FFRDC) (see 48 CFR 9903.201-2(c)(5) (FAR appendix
B)), or the provision at 48 CFR 9903.201-2(c)(6) (FAR appendix B)
applies.
8. Section 30.201-4 is revised to read as follows:
30.201-4 Contract clauses.
(a) Cost Accounting Standards. (1) The contracting officer shall
insert the clause at FAR 52.230-2, Cost Accounting Standards, in
negotiated contracts, unless the contract is exempted (see 48 CFR
9903.201-1 (FAR appendix B)), the contract is subject to modified
coverage (see 48 CFR 9903.201-2 (FAR appendix B)), or the clause
prescribed in paragraph (c) of this subsection is used.
(2) The clause at FAR 52.230-2 requires the contractor to comply
with all CAS specified in 48 CFR part 9904 (FAR appendix B), to
disclose actual cost accounting practices (applicable to CAS-covered
contracts only), and to follow disclosed and established cost
accounting practices consistently.
(b) Disclosure and Consistency of Cost Accounting Practices. (1)
The contracting officer shall insert the clause at FAR 52.230-3,
Disclosure and Consistency of Cost Accounting Practices, in negotiated
contracts when the contract amount is over $500,000, but less than $25
million, and the offeror certifies it is eligible for and elects to use
modified CAS coverage (see 48 CFR 9903.201-2 (FAR appendix B), unless
the clause prescribed in paragraph (c) of this subsection is used). -
(2) The clause at FAR 52.230-3 requires the contractor to comply
with 48 CFR 9904.401, 9904.402, 9904.405, and 9904.406 (FAR appendix B)
to disclose (if it meets certain requirements) actual cost accounting
practices, and to follow consistently its established cost accounting
practices.
(c) Consistency in Cost Accounting Practices. The contracting
officer shall insert the clause at FAR 52.230-4, Consistency in Cost
Accounting Practices, in negotiated contracts that are exempt from CAS
requirements solely on the basis of the fact that the contract is to be
awarded to a United Kingdom contractor and is to be performed
substantially in the United Kingdom (see 48 CFR 9903.201-1(b)(12) (FAR
appendix B)).-
(d) Administration of Cost Accounting Standards. (1) The
contracting officer shall insert the clause at FAR 52.230-6,
Administration of Cost Accounting Standards, in contracts containing
any of the clauses prescribed in paragraphs (a), (b), or (e) of this
subsection.
(2) The clause at FAR 52.230-6 specifies rules for administering
CAS requirements and procedures to be followed in cases of failure to
comply.
(e) Cost Accounting Standards--Educational Institutions. (1) The
contracting officer shall insert the clause at FAR 52.230-5, Cost
Accounting Standards--Educational Institution, in negotiated contracts
awarded to educational institutions, unless the contract is exempted
(see 48 CFR 9903.201-1 (FAR appendix B)), the contract is to be
performed by an FFRDC (see 48 CFR 9903.201-2(c)(5) (FAR appendix B)),
or the provision at 48 CFR 9903.201-2(c)(6) (FAR appendix B) applies.
(2) The clause at FAR 52.230-5 requires the educational institution
to comply with all CAS specified in 48 CFR part 9905 (FAR appendix B),
to disclose actual cost accounting practices as required by 48 CFR
9903.202-1(f) (FAR appendix B), and to follow disclosed and established
cost accounting practices consistently.
9. Section 30.201-5 is revised to read as follows:
30.201-5 Waiver.
In some instances, contractors or subcontractors may refuse to
accept all or part of the requirements of the CAS clauses (FAR 52.230-
2, Cost Accounting Standards, FAR 52.230-3, Disclosure and Consistency
of Cost Accounting Practices, and FAR 52.230-5, Cost Accounting
Standards--Educational Institution). If the contracting officer
determines that it is impractical to obtain the materials, supplies, or
services from any other source, the contracting officer shall prepare a
request for waiver in accordance with 48 CFR 9903.201-5 (FAR appendix
B).
10. Sections 30.201-6 and 30.201-7 are added to read as follows:
30.201-6 Findings.
See 48 CFR 9903.201-6 (FAR appendix B).
30.201-7 Cognizant Federal agency responsibilities.
See 48 CFR 9903.201-7 (FAR appendix B).
11. Section 30.202-1 is revised to read as follows:
30.202-1 General requirements.
See 48 CFR 9903.202-1 (FAR appendix B).
12. Section 30.202-2 is revised to read as follows:
30.202-2 Impracticality of submission.
See 48 CFR 9903.202-2 (FAR appendix B).
13. Section 30.202-3 is revised to read as follows:
30.202-3 Amendments and revisions.
See 48 CFR 9903.202-3 (FAR appendix B).
14. Section 30.202-4 is revised to read as follows:
30.202-4 Privileged and confidential information.
See 48 CFR 9903.202-4 (FAR appendix B).
15. Section 52.202-5 is revised to read as follows:
30.202-5 Filing Disclosure Statements.
See 48 CFR 9903.202-5 (FAR appendix B).
30.202-6 [Amended]
16. Section 30.202-6(a) is amended by removing ``48 CFR chapter 99
(appendix B, FAR loose-leaf edition), Subparts 9903.201-3 and
9903.202.'' and inserting ``48 CFR 9903.201-3 and 9903.202 (FAR
appendix B).'' in its place.
17. Section 30.202-7 is amended in paragraph (a) by revising the
first and third sentences; and in the first sentence of (b) by
inserting the word ``cognizant'' before the word ``auditor'', and
removing the word ``determine'' and inserting ``ascertain'' in its
place. The revised text reads as follows:
30.202-7 Determinations.-
(a) Adequacy determination. As prescribed by 48 CFR 9903.202-6 (FAR
appendix B), the cognizant auditor shall conduct a review of the
Disclosure Statement to ascertain whether it is current, accurate, and
complete and shall report the results to the cognizant ACO, who shall
determine whether or not it adequately describes the offeror's cost
accounting practices. * * * If the Disclosure Statement is adequate,
the ACO shall notify the offeror in writing, with copies to the
cognizant auditor and contracting officer. * * *
* * * * *
[[Page 18918]]
18. Section 30.202-8 is amended in the second sentence of paragraph
(a) by removing ``ACO's'' and inserting in its place ``The ACO''; and
by revising (b) to read as follows:
30.202-8 Subcontractor Disclosure Statements.
* * * * *
(b) Any determination that it is impractical to secure a
subcontractor's Disclosure Statement must be made in accordance with 48
CFR 9903.202-2 (FAR appendix B).
19. Subpart 30.3 is revised to read as follows:
Subpart 30.3--CAS Rules and Regulations [Reserved]
Note: See 48 CFR 9903.3 (FAR appendix B).
20. Subpart 30.4 is revised to read as follows:
Subpart 30.4--Cost Accounting Standards [Reserved]
Note: See 48 CFR part 9904 (FAR appendix B).
21. Subpart 30.5 is revised to read as follows:
Subpart 30.5--Cost Accounting Standards for Educational
Institutions [Reserved]
Note: See 48 CFR part 9905 (FAR appendix B).
30.602 [Amended]
22. Section 30.602 is amended in the introductory text by removing
``48 CFR chapter 99 (appendix B, FAR loose-leaf edition), subpart
9903.305.'' and inserting ``48 CFR 9903.305 (FAR appendix B).'' in its
place.
30.602-1 [Amended]
23. Section 30.602-1 is amended in the first sentence of paragraph
(a)(2) by inserting after the word ``Standards,'' the phrase ``or FAR
52.230-5, Cost Accounting Standards--Educational Institution,''; in the
third sentence of (a)(2) by inserting after ``52.230-2'' the phrase
``or 52.230-5''; in paragraph (b)(1) by revising the citation ``52.230-
5'' to read ``FAR 52.230-6''; in the first sentence of (b)(2) by
inserting after the word ``ACO'' the phrase ``, with the assistance of
the auditor,''.
30.602-2 [Amended]
24. Section 30.602-2 is amended as follows:
a. In paragraph (a)(1) and the first sentence of paragraph (d)(1)
by inserting the word ``cognizant'' before the word ``auditor'' the
first time it appears;
b. In paragraphs (a)(3), (b)(1), and (c)(1), by revising the
citation ``52.230-5'' to read ``FAR 52.230-6'';
c. In the second sentence of paragraph (c)(2) by inserting after
the word ``Standards,'' the phrase ``or FAR 52.230-5, Cost Accounting
Standards--Educational Institution,''; and
d. In paragraph (d)(3) by inserting after the word ``Standards,''
the phrase ``52.230-5, Cost Accounting Standards--Educational
Institution,''.
30.602-3 [Amended]
25. Section 30.602-3 is amended in paragraph (b)(1) by revising the
citation ``52.230-5'' to read `` FAR 52.230-6''; in the first sentence
of (b)(2) by adding after the word ``ACO'' the phrase ``, with the
assistance of the cognizant auditor,''; and in the first sentence of
(d)(1) by adding before the word ``auditor'' the word ``cognizant''.
30.603 [Amended]
26. Section 30.603 is amended in the first sentence by removing the
word ``his'' and inserting ``the'' in its place; and in the second
sentence by removing ``ACO's'' and inserting ``The ACOs'' in its place.
PART 42--CONTRACT ADMINISTRATION
42.302 [Amended]
27. Section 42.302 is amended in paragraph (a)(11) by removing ``48
CFR chapter 99)'' and inserting ``48 CFR chapter 99 (FAR appendix B))''
in its place, and in (a)(11)(iv) by removing ``and 52.230-5'' and
inserting in its place ``52.230-5 and 52.230-6.''
PART 52--SOLICITATION PROVISIONS AND CONTRACT CLAUSES
28. Section 52.230-1 is amended by:
(a) Revising the clause date;-
(b) Adding a third paragraph following the NOTE under the clause
heading;
(c) Removing from paragraph (a)(2) the phrase ``48 CFR parts 9903
and 9904'' and inserting ``the Cost Accounting Standards Board (48 CFR
Chapter 99)'' in its place, and removing the phrase ``48 CFR, Subpart''
and inserting ``48 CFR'' in its place;
(d) Removing in the first sentence of paragraph (b) the phrase ``,
parts 9903 and 9904'' and inserting ``Chapter 99'' in its place, and
removing the phrase ``48 CFR, Subpart'' and inserting ``48 CFR'' in its
place; and in the second sentence by removing ``The'' and inserting
``When required, the'' in its place;
(e) Capitalizing all letters in the word ``Caution:'' in the
CAUTION paragraph following paragraphs (b), (c)(4), and in Part II;
(f) Revising paragraphs (c) (1) and (2);
(g) Removing in paragraph (c)(4)(ii) under Part I the phrase ``48
CFR, Subpart'' and inserting ``48 CFR'' in its place;
(h) Removing in the first sentences of the first and second
paragraphs in Part II the phrase ``48 CFR subpart'' and inserting ``48
CFR'' in its place; and
(i) Adding Alternate I. The added and revised text reads as
follows:
52.230-1 Cost Accounting Standards Notices and Certification.
* * * * *
COST ACCOUNTING STANDARDS NOTICES AND CERTIFICATION (APR 1996)
* * * * *
Note: * * *
If the offeror is an educational institution, Part II does not
apply unless the contemplated contract will be subject to full or
modified CAS coverage pursuant to 48 CFR 9903.201-2(c)(5) or
9903.201-2(c)(6), respectively.
I. DISCLOSURE STATEMENT-COST ACCOUNTING PRACTICES AND CERTIFICATION
* * * * *
(c) * * *
(1) Certificate of Concurrent Submission of Disclosure
Statement.
The offeror hereby certifies that, as a part of the offer,
copies of the Disclosure Statement have been submitted as follows:
(i) original and one copy to the cognizant Administrative
Contracting Officer (ACO) or cognizant Federal agency official
authorized to act in that capacity (Federal official), as
applicable, and (ii) one copy to the cognizant Federal auditor.
(Disclosure must be on Form No. CASB DS-1 or CASB DS-2, as
applicable. Forms may be obtained from the cognizant ACO or Federal
official and/or from the loose-leaf version of the Federal
Acquisition Regulation.)
Date of Disclosure Statement:
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Name and Address of Cognizant ACO or Federal Official Where Filed:
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The offeror further certifies that the practices used in
estimating costs in pricing this proposal are consistent with the
cost accounting practices disclosed in the Disclosure Statement.
(2) Certificate of Previously Submitted Disclosure Statement.
The offeror hereby certifies that the required Disclosure
Statement was filed as follows:
Date of Disclosure Statement:
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Name and Address of Cognizant ACO or Federal Official Where Filed:
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The offeror further certifies that the practices used in
estimating costs in pricing this proposal are consistent with the
cost
[[Page 18919]]
accounting practices disclosed in the applicable Disclosure
Statement.
* * * * *
(End of provision)
Alternate I (APR 1996). As prescribed in 30.201-3(b), add the
following subparagraph (c)(5) to Part I of the basic provision:
{time} (5) Certificate of Disclosure Statement Due Date by
Educational Institution. If the offeror is an educational
institution that, under the transition provisions of 48 CFR
9903.202-1(f), is or will be required to submit a Disclosure
Statement after receipt of this award, the offeror hereby certifies
that (check one and complete):
{time} (i) A Disclosure Statement Filing Due Date of
__________________ has been established with the cognizant Federal
agency.
(ii) The Disclosure Statement will be submitted within the 6-
month period ending ______________ months after receipt of this
award.
Name and Address of Cognizant ACO or Federal Official Where
Disclosure Statement is to be Filed:
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52.230-2 [Amended]
29. Section 52.230-2 is amended by revising the clause date to read
``(Apr 1996)'', and by removing in paragraph (a) in the introductory
text the phrase ``48 CFR subparts'' and inserting ``48 CFR'' in its
place; in (a)(1) removing the phrase ``48 CFR subpart'' and inserting
``48 CFR'' in its place, in (a)(3) removing the phrase ``48 CFR part
9904, (appendix B, FAR loose-leaf edition),'' and inserting ``48 CFR
Part 9904,'' in its place, and in (d)(2) removing the phrase ``48 CFR
subpart'' and inserting ``48 CFR'' in its place.
30. Section 52.230-3 is amended by:
(a) Revising the clause date and paragraph (a)(1);
(b) Removing in paragraph (a)(2) the phrase ``48 CFR subparts'' and
inserting ``48 CFR'' in its place; and
(c) Removing in paragraphs (a)(3)(ii), (d)(1) and (d)(3) the phrase
``48 CFR subpart'' and inserting ``48 CFR'' in its place. The revised
text reads as follows:
52.230-3 Disclosure and Consistency of Cost Accounting Practices.
* * * * *
DISCLOSURE AND CONSISTENCY OF COST ACCOUNTING PRACTICES (APR 1996)
(a) * * *
(1) Comply with the requirements of 48 CFR 9904.401, Consistency
in Estimating, Accumulating, and Reporting Costs; 48 CFR 9904.402,
Consistency in Allocating Costs Incurred for the Same Purpose; 48
CFR 9904.405, Accounting for Unallowable Costs; and 48 CFR 9904.406,
Cost Accounting Standard-Cost Accounting Period, in effect on the
date of award of this contract as indicated in 48 CFR Part 9904.
* * * * *-
52.230-5 [Redesignated as 52.230-6]
31. Section 52.230-5 is redesignated as 52.230-6 and a new section
52.230-5 is added to read as follows:
52.230-5 Cost Accounting Standards--Educational Institution.
As prescribed in 30.201-4(e), insert the following clause:
COST ACCOUNTING STANDARDS--EDUCATIONAL INSTITUTION (APR 1996)
(a) Unless the contract is exempt under 48 CFR 9903.201-1 and
9903.201-2, the provisions of 48 CFR Part 9903 are incorporated
herein by reference and the Contractor, in connection with this
contract, shall--
(1) (CAS-covered contracts only). If a business unit of an
educational institution required to submit a Disclosure Statement,
disclose in writing the Contractor's cost accounting practices as
required by 48 CFR 9903.202-1 through 9903.202-5, including methods
of distinguishing direct costs from indirect costs and the basis
used for accumulating and allocating indirect costs. The practices
disclosed for this contract shall be the same as the practices
currently disclosed and applied on all other contracts and
subcontracts being performed by the Contractor and which contain a
Cost Accounting Standards (CAS) clause. If the Contractor has
notified the Contracting Officer that the Disclosure Statement
contains trade secrets, and commercial or financial information
which is privileged and confidential, the Disclosure Statement shall
be protected and shall not be released outside of the Government.
(2) Follow consistently the Contractor's cost accounting
practices in accumulating and reporting contract performance cost
data concerning this contract. If any change in cost accounting
practices is made for the purposes of any contract or subcontract
subject to CAS requirements, the change must be applied
prospectively to this contract and the Disclosure Statement, if
required, must be amended accordingly. If an accounting principle
change mandated under Office of Management and Budget (OMB) Circular
A-21, Cost Principles for Educational Institutions, requires that a
change in the Contractor's cost accounting practices be made after
the date of this contract award, the change must be applied
prospectively to this contract and the Disclosure Statement, if
required, must be amended accordingly. If the contract price or cost
allowance of this contract is affected by such changes, adjustment
shall be made in accordance with subparagraph (a)(4) or (a)(5) of
this clause, as appropriate.
(3) Comply with all CAS, including any modifications and
interpretations indicated thereto contained in 48 CFR Part 9905 in
effect on the date of award of this contract or, if the Contractor
has submitted cost or pricing data, on the date of final agreement
on price as shown on the Contractor's signed certificate of current
cost or pricing data. The Contractor shall also comply with any CAS
(or modifications to CAS) which hereafter become applicable to a
contract or subcontract of the Contractor. Such compliance shall be
required prospectively from the date of applicability to such
contract or subcontract.
(4) (i) Agree to an equitable adjustment as provided in the
Changes clause of this contract if the contract cost is affected by
a change which, pursuant to subparagraph (a)(3) of this clause, the
Contractor is required to make to the Contractor's established cost
accounting practices.
(ii) Negotiate with the Contracting Officer to determine the
terms and conditions under which a change may be made to a cost
accounting practice, other than a change made under other provisions
of subparagraph (a)(4) of this clause; provided that no agreement
may be made under this provision that will increase costs paid by
the United States.
(iii) When the parties agree to a change to a cost accounting
practice, other than a change under subdivision (a)(4)(i) or
(a)(4)(iv) of this clause, negotiate an equitable adjustment as
provided in the Changes clause of this contract.
(iv) Agree to an equitable adjustment as provided in the Changes
clause of this contract, if the contract cost is materially affected
by an OMB Circular A-21 accounting principle amendment which, on
becoming effective after the date of contract award, requires the
Contractor to make a change to the Contractor's established cost
accounting practices.
(5) Agree to an adjustment of the contract price or cost
allowance, as appropriate, if the Contractor or a subcontractor
fails to comply with an applicable Cost Accounting Standard, or to
follow any cost accounting practice consistently and such failure
results in any increased costs paid by the United States. 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 of the Internal Revenue Code of
1986 (26 U.S.C. 6621) for such period, from the time the payment by
the United States was made to the time the adjustment is effected.
In no case shall the Government recover costs greater than the
increased cost to the Government, in the aggregate, on the relevant
contracts subject to the price adjustment, unless the Contractor
made a change in its cost accounting practices of which it was aware
or should have been aware at the time of price negotiations and
which it failed to disclose to the Government.
(b) If the parties fail to agree whether the Contractor or a
subcontractor has complied with an applicable CAS or a CAS rule or
regulation in 48 CFR Part 9903, and as to any cost adjustment
demanded by the United States, such failure to agree will constitute
a dispute under the Contract Disputes Act (41 U.S.C. 601).
(c) The Contractor shall permit any authorized representatives
of the Government to examine and make copies of any documents,
papers, or records relating to compliance with the requirements of
this clause.
[[Page 18920]]
(d) The Contractor shall include in all negotiated subcontracts
which the Contractor enters into, the substance of this clause,
except paragraph (b), and shall require such inclusion in all other
subcontracts, of any tier, including the obligation to comply with
all applicable CAS in effect on the subcontractor's award date or,
if the subcontractor has submitted cost or pricing data, on the date
of final agreement on price as shown on the subcontractor's signed
Certificate of Current Cost or Pricing Data, except that--
(1) If the subcontract is awarded to a business unit which
pursuant to 48 CFR 9903.201-2 is subject to other types of CAS
coverage, the substance of the applicable clause set forth in 48 CFR
9903.201-4 shall be inserted; and
(2) This requirement shall apply only to negotiated subcontracts
in excess of $500,000 where the price negotiated is not based on--
(i) Established catalog or market prices of commercial items
sold in substantial quantities to the general public; or
(ii) Prices set by law or regulation, and except that the
requirement shall not apply to negotiated subcontracts otherwise
exempt from the requirement to include a CAS clause as specified in
48 CFR 9903.201-1.
(End of clause)
32. Newly designated section 52.230-6 is amended:
(a) By revising the date of the clause to read ``(APR 1996)'';
(b) In paragraph (a)(1) by removing the phrase ``to comply with a
new or modified CAS''; and removing the comma after the word
``Standards'' and inserting in its place ``; or subparagraph (a)(3) and
subdivisions (a)(4)(i) or (a)(4)(iv) of the clause at FAR 52.230-5,
Cost Accounting Standards-Educational Institution;'';
(c) In paragraph (a)(2) by adding an ``s'' to the end of the word
``clause'' the first time it appears; and adding after the word
``Standards,'' the phrase ``and FAR 52.230-5, Cost Accounting
Standards-Educational Institution;'';
(d) In paragraph (a)(3) by adding after the word ``Standards,'' the
phrase ``and FAR 52.230-5, Cost Accounting Standards-Educational
Institution;'';
(e) In the introductory text of paragraph (b) by adding after the
word ``ACO'' the phrase ``, or cognizant Federal agency official,'';
(f) By revising paragraphs (b)(1) and (b)(2);
(g) In paragraph (b)(3) by adding an ``s'' at the end of the word
``clause'' the first time it appears; and adding after the word
``Standards,'' the phrase ``and FAR 52.230-5, Cost Accounting
Standards-Educational Institution;''
(h) In paragraph (d) by removing ``CAS clause'' and inserting
``clauses'' in its place; and adding after the citation ``52.230-2,''
the phrase ``and 52.230-5;'';
(i) By revising the introductory text of paragraph (e) and the
first sentence of paragraph (e)(2)(iv); and
(j) In paragraph (g) by removing ``CAS clause,'' and inserting in
its place ``clauses at FAR 52.230-2 or 52.230-5,''.
The revised text reads as follows:
52.230-6 Administration of Cost Accounting Standards.
* * * * *
ADMINISTRATION OF COST ACCOUNTING STANDARDS (APR 1996)
* * * * *
(b) * * *
(1) Cost impact proposals submitted for changes in cost
accounting practices required in accordance with subparagraph (a)(3)
and subdivision (a)(4)(i) of the clause at FAR 52.230-2, Cost
Accounting Standards; or subparagraph (a)(3) and subdivisions
(a)(4)(i) or (a)(4)(iv) of the clause at FAR 52.230-5, Cost
Accounting Standards-Educational Institution; shall identify the
applicable standard or cost principle and all contracts and
subcontracts containing the clauses entitled Cost Accounting
Standards or Cost Accounting Standards-Educational Institution,
which have an award date before the effective date of that standard
or cost principle.
(2) Cost impact proposals submitted for any change in cost
accounting practices proposed in accordance with subdivisions (a)(4)
(ii) or (iii) of the clauses at FAR 52.230-2, Cost Accounting
Standards, and FAR 52.230-5, Cost Accounting Standards-Educational
Institution; or with subparagraph (a)(3) of the clause at FAR
52.230-3, Disclosure and Consistency of Cost Accounting Practices;
shall identify all contracts and subcontracts containing the clauses
at FAR 52.230-2, Cost Accounting Standards, FAR 52.230-5, Cost
Accounting Standards-Educational Institution, and FAR 52.230-3,
Disclosure and Consistency of Cost Accounting Practices.
* * * * *
(e) For all subcontracts subject to the clauses at FAR 52.230-2,
52.230-3, or 52.230-5--
* * * * *
(2) * * *
(iv) Any changes the subcontractor has made or proposes to make
to cost accounting practices that affect prime contracts or
subcontracts containing the clauses at FAR 52.230-2, 52.230-3, or
52.230-5, unless these changes have already been reported.
* * * * *
[FR Doc. 96-10429 Filed 4-26-96; 8:45 am]
BILLING CODE 6820-EP-P
