[Federal Register Volume 61, Number 93 (Monday, May 13, 1996)]
[Rules and Regulations]
[Pages 21973-21975]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 96-11887]
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DEPARTMENT OF DEFENSE
48 CFR Part 231
[DFARS Case 96-D303]
Defense Federal Acquisition Regulation Supplement; Cost
Reimbursement Rules for Indirect Costs--Private Sector
AGENCY: Department of Defense (DoD).
ACTION: Interim rule with request for comments.
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SUMMARY: The Director of Defense Procurement has issued an interim rule
amending the Defense Federal Acquisition Regulation Supplement to
permit the DoD to enter into a defense
[[Page 21974]]
capability preservation agreement with a defense contractor where it
would facilitate the achievement of the policy objectives relating to
defense reinvestment, diversification, and conversion set forth in 10
U.S.C. 2501(b).
DATES: Effective date: May 13, 1996.
Comment date: Comments on the interim rule and the associated
information collection requirement should be submitted in writing to
the address shown below on or before July 12, 1996, to be considered in
the formulation of the final rule.
ADDRESSES: Interested parties should submit written comments to:
Defense Acquisition Regulations Council, Attn: Ms. Sandra G. Haberlin,
PDUSD (A&T)DP(DAR), IMD 3D139, 3062 Defense Pentagon, Washington, DC
20301-3062. Telefax number (703) 602-0350. Please cite DFARS Case 96-
D303 in all correspondence related to this issue.
FOR FURTHER INFORMATION CONTACT:
Ms. Sandra G. Haberlin, (703) 602-0131.
SUPPLEMENTARY INFORMATION:
A. Background
This interim rule adds Subsection 231.205-71 to the Defense Federal
Acquisition Regulation Supplement (DFARS) to implement Section 808 of
the National Defense Authorization Act for Fiscal Year 1996 (Pub. L.
104-106). Section 808 permits the DoD to enter into a defense
capability preservation agreement with a defense contractor where it
would facilitate the achievement of the policy objectives relating to
defense reinvestment, diversification, and conversion set forth in 10
U.S.C. 2501(b). Such an agreement would permit the contractor to claim
certain indirect costs, attributable to its private sector work, on its
defense contracts.
B. Determination to Issue an Interim Rule
A determination has been made under the authority of the Secretary
of Defense to issue this rule as an interim rule. Compelling reasons
exist to promulgate this rule without prior opportunity for public
comment. This rule implements Section 808 of the National Defense
Authorization Act for Fiscal Year 1996 (Pub. L. 104-106), which was
effective upon enactment on February 10, 1996. However, comments
received in response to the publication of this interim rule will be
considered in formulating the final rule.
C. Regulatory Flexibility Act
The interim rule is not expected to 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 are awarded on a competitive fixed-
price basis and do not require application of the cost principles
contained in this rule. An initial regulatory flexibility analysis has
therefore not been performed. Comments are invited from small
businesses and other interested parties. Comments from small entities
concerning the affected DFARS subpart will also 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. (DFARS Case 96-D303), in
correspondence.
D. Paperwork Reduction Act
The Paperwork Reduction Act of 1995 (Pub. L. 104-13) applies
because the interim rule contains a new information collection
requirement. A request for approval of a new information collection
requirement, under the emergency processing provisions of Section
3502(j) of the Paperwork Reduction Act, was submitted to the Office of
Management and Budget and approved through July 31, 1996, under OMB
Number 0704-0387. The necessary regular request for approval of the
information collection requirement has been submitted to the Office of
Management and Budget under Section 3507(d) of the Act.
Comments are invited. Particular comments are solicited on:
a. Whether the collection of information is necessary for the
proper performance of the functions of the agency, including whether
the information will have practical utility;
b. The accuracy of the agency's estimate of the burden of the
information collection;
c. Ways to enhance the quality, utility, and clarity of the
information to be collected; and
d. Ways to minimize the burden of the information collection on
respondents, including the use of automated collection techniques or
other forms of information technology.
Title, Associated Form, and OMB Number: Defense Preservation
Capability Agreements, DFARS Subsection 231.205-71, OMB Number 0704-
0387.
Needs and Uses: This information collection requirement is a direct
result of Section 808 of the National Defense Authorization Act for
Fiscal Year 1996 (Pub. L. 104-106). Section 808 and this interim rule
permit the Department of Defense (DoD) to enter into a defense
capability preservation agreement with a defense contractor. This
agreement would permit the contractor to claim certain indirect costs
attributable to its private sector work as allowable costs on its
defense contracts. Before such an agreement may be entered into, DoD
must make a determination that the agreement would facilitate DoD's
achievement of the policy objectives relating to defense reinvestment,
diversification, and conversion set forth in 10 U.S.C. 2501(b). In
order to make this determination, DoD must obtain supporting
information from the contractor requesting the agreement. The
informational copy to be provided to the cognizant administrative
contracting officer (ACO) will facilitate early involvement of the ACO,
who will be a key player in compiling data for evaluation of the
request.
Affected Public: Businesses or other for profit.
Annual Burden Hours: 4,000.
Number of Respondents: 50.
Average Burden Per Response: 80 Hours.
Frequency: On occasion.
Supplementary Information:
Summary of Information Collection
The collection of information is required each time a defense
contractor requests to enter into a defense capability preservation
agreement with DoD, in accordance with Section 808 of Pub. L. 104-106.
Such an agreement would permit the contractor to claim certain indirect
costs attributable to its private sector work as allowable costs on its
defense contracts. The law does not require contractors to submit the
information. The law does require, however, that before a defense
capability preservation agreement may be entered into, DoD must make a
determination that such an agreement would facilitate DoD's achievement
of the policy objectives relating to defense reinvestment,
diversification, and conversion set forth in 10 U.S.C. 2501(b). In
order to make this determination, DoD must obtain supporting
information from the contractor requesting the agreement. The rule also
recommends that the contractor submit a copy of any request for such an
agreement to the cognizant administrative contracting officer.
[[Page 21975]]
List of Subjects in 48 CFR Part 231
Government procurement.
Michele P. Peterson,
Executive Editor, Defense Acquisition Regulations Council.
Therefore, 48 CFR Part 231 is amended as follows:
PART 231--CONTRACT COST PRINCIPLES AND PROCEDURES
1. The authority citation for 48 CFR Part 231 continues to read as
follows:
Authority: 41 U.S.C. 421 and 48 CFR Chapter 1.
2. Section 231.205-71 is added to read as follows:
231.205-71 Defense capability preservation agreements.
(a) Scope and authority. Where it would facilitate the achievement
of the policy objectives relating to defense reinvestment,
diversification, and conversion set forth in 10 U.S.C. 2501(b), DoD may
enter into a ``defense capability preservation agreement'' with a
contractor. As authorized by Section 808 of the National Defense
Authorization Act for Fiscal Year 1996 (Public Law 104-106), such an
agreement would permit the contractor to claim certain indirect costs
attributable to its private sector work as allowable costs on its
defense contracts.
(b) Procedure. A contractor may submit a request for such an
agreement, together with appropriate justification, through the
Assistant Secretary of Defense for Economic Security, to the Under
Secretary of Defense for Acquisition and Technology, who has exclusive
approval or disapproval authority. The contractor should also provide
an informational copy of any such request to the cognizant
administrative contracting officer.
[FR Doc. 96-11887 Filed 5-10-96; 8:45 am]
BILLING CODE 5000-04-M
