[Federal Register Volume 61, Number 146 (Monday, July 29, 1996)]
[Rules and Regulations]
[Pages 39360-39361]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 96-19067]
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OFFICE OF MANAGEMENT AND BUDGET
Office of Federal Procurement Policy
48 CFR Part 9903
Cost Accounting Standards Board; Applicability of Cost Accounting
Standards Coverage
AGENCY: Cost Accounting Standards Board, Office of Federal Procurement
Policy, OMB.
ACTION: Interim rule with request for comment.
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SUMMARY: The Cost Accounting Standards (CAS) Board is revising the
applicability criteria for application of CAS to negotiated Federal
contracts. This rulemaking is authorized pursuant to Section 26 of the
Office of Federal Procurement Policy Act, 41 U.S.C. 422. The Board is
taking action on this topic to adjust CAS applicability requirements in
accordance with Section 4205 of Pub. L. 104-106, the ``Federal
Acquisition Reform Act of 1996.''
EFFECTIVE DATES: This rule is effective July 29, 1996. Comments upon
this interim rule must be in writing and must be received by September
27, 1996.
ADDRESSES: Comments should be addressed to Richard C. Loeb, Executive
Secretary, Cost Accounting Standards Board, Office of Federal
Procurement Policy, 725 17th Street, NW., Room 9001, Washington, DC
20503. Attn: CASB Docket No. 96-01.
FOR FURTHER INFORMATION CONTACT: Richard C. Loeb, Executive Secretary,
Cost Accounting Standards Board (telephone: 202-395-3254).
SUPPLEMENTARY INFORMATION:
A. Background
Section 4205 of Pub. L. 104-106, the ``Federal Acquisition Reform
Act of 1996,'' amends 41 U.S.C. Sec. 422(f)(2)(B) to revise clause (i)
and delete clause (iii). The phrase ``contracts or subcontracts where
the price negotiated is based on established catalog or market prices
of commercial items sold in substantial quantities to the general
public'' has been substituted with the phrase ``contracts or
subcontracts for the acquisition of commercial items.'' The CAS Board
is today amending its applicability regulations, solicitation provision
and contract clauses in recognition of this change. As amended, firm
fixed-price contracts and subcontracts for the acquisition of
commercial items (see 48 CFR, Chap. 1, part 12) will be exempt from CAS
requirements. Consequently, the Board's December 18, 1995 ``Memorandum
for Agency Senior Procurement Executives'' authorizing CAS waivers for
individual firm fixed-price contracts for the acquisition of commercial
items when cost or pricing data is not obtained is hereby rescinded.
To accomplish these changes, the Board is amending Section
9903.201-1(b)(6) of its rules. Additionally, the solicitation provision
found at 9903.201-3, the contract clauses at 9903.201-4, and the
definition found at 9903.301 are amended to reflect this change.
The conference report to Pub. L. 104-106 directs the CAS Board, in
consultation with the Director of the Defense Contract Audit Agency, to
issue guidance, consistent with commercial accounting systems and
practices, to ensure that contractors appropriately assign costs to
commercial item contracts, other than firm fixed-price commercial item
contracts. At the present time, however, commercial item contracts are
limited by regulation to the fixed-price variety. Accordingly, after
consideration and review of this issue, the Board has concluded that
development of the requested guidance should appropriately await the
time when other than fixed-price commercial item contracts are
authorized, or until another need for such guidance arises. At the time
that a need arises for guidance to address the allocation of costs to
other than firm fixed-price commercial item contracts, the Board will,
of course, pursue the development of guidance to address the issue.
B. Paperwork Reduction Act
The Paperwork Reduction Act, Public Law 96-511, does not apply to
this
[[Page 39361]]
rulemaking, because this rule imposes no paperwork burden on offerors,
affected contractors and subcontractors, or members of the public which
require the approval of OMB under 44 U.S.C. 3501, et seq.
C. Executive Order 12866 and the Regulatory Flexibility Act
The economic impact of this rule on contractors and subcontractors
is expected to be minor. As a result, the Board has determined that
this final rule will not result in the promulgation of a ``major rule''
under the provisions of Executive Order 12866, and that a regulatory
impact analysis will not be required. Furthermore, this rule will not
have a significant impact on a substantial number of small businesses
because small businesses are exempt from the application of the Cost
Accounting Standards. Therefore, this rule does not require a
regulatory flexibility analysis under the Regulatory Flexibility Act of
1980.
D. Public Comments
Interested persons are invited to participate by submitting data,
views or arguments with respect to this interim rule. All comments must
be in writing and submitted to the address indicated in the Addresses
section.
List of Subjects in 48 CFR Part 9903
Cost accounting standards, Government procurement.
Richard C. Loeb,
Executive Secretary, Cost Accounting Standards Board.
For the reasons set forth in this preamble, chapter 99 of title 48
of the Code of Federal Regulations is amended as set forth below:
PART 9903--CONTRACT COVERAGE
Subpart 9903.2--CAS Program Requirements
1. The authority citation for part 9903 of chapter 99 of title 48
continues to read as follows:
Authority: Pub. L. 100-679, 102 Stat 4056, 41 U.S.C. Sec. 422.
2. Section 9903.201-1 is amended by revising paragraph (b)(6) to
read as follows:
9903.201-1 CAS applicability.
* * * * *
(b) * * *
(6) Firm fixed-price contracts and subcontracts for the acquisition
of commercial items.
* * * * *
3. Section 9903.201-3 is amended by revising the clause heading and
Part I (a) of the clause to read as follows:
9903.201-3 Solicitation provisions.
* * * * *
COST ACCOUNTING STANDARDS NOTICES AND CERTIFICATIONS (JULY 1996)
* * * * *
I. Disclosure Statement--Cost Accounting Practices and
Certifications
(a) Any contract in excess of $500,000 resulting from this
solicitation, except for those contracts which are exempt as
specified in 9903.201-1
* * * * *
4. Section 9903.201-4 is amended by revising the clause headings
and paragraphs (d) of the clause entitled Cost Accounting Standards;
(d)(2) of the clause entitled Disclosure and Consistency of Cost
Accounting Practices; and by revising paragraph (d)(2) and adding
paragraph (d)(3) to the clause entitled Cost Accounting Standards--
Educational Institutions, to read as follows:
9903.201-4 Contract clauses.
* * * * *
COST ACCOUNTING STANDARDS (JULY 1996)
* * * * *
(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
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. This requirement shall apply only to negotiated
subcontracts in excess of $500,000, except that the requirement shall
not apply to negotiated subcontracts otherwise exempt from the
requirement to include a CAS clause as specified in 9903.201-1.
(End of clause)
* * * * *
DISCLOSURE AND CONSISTENCY OF COST ACCOUNTING PRACTICES (JULY 1996)
* * * * *
(d) * * *
(2) This requirement shall apply only to negotiated subcontracts
in excess of $500,000.
* * * * *
COST ACCOUNTING STANDARDS--EDUCATIONAL INSTITUTIONS (JULY 1996)
* * * * *
(d) * * *
(2) This requirement shall apply only to negotiated subcontracts
in excess of $500,000.
(3) The requirement shall not apply to negotiated subcontracts
otherwise exempt from the requirement to include a CAS clause as
specified in 9903.201-1.
(End of clause)
Subpart 9903.3--CAS Rules and Regulations
Sec. 9903.301 Definitions.
5. Section 9903.301 is amended by deleting the definition for
Established catalog or market price of commercial items sold in
substantial quantities to the general public.
[FR Doc. 96-19067 Filed 7-26-96; 8:45 am]
BILLING CODE 3110-01-P
