[Federal Register Volume 62, Number 145 (Tuesday, July 29, 1997)]
[Rules and Regulations]
[Pages 40471-40473]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 97-19907]
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DEPARTMENT OF DEFENSE
48 CFR Parts 204, 215, 216, 232, 239, and 252
[DFARS Case 95-D708]
Defense Federal Acquisition Regulations Supplement; Truth in
Negotiations and Related Changes
AGENCY: Department of Defense (DoD).
ACTION: Final rule.
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SUMMARY: The Director of Defense Procurement has issued a final rule
amending the Defense Federal Acquisition Regulation Supplement (DFARS)
to conform to amendments to the Federal Acquisition Regulation (FAR)
pertaining to cost or pricing data requirements.
EFFECTIVE DATE: July 29, 1997.
FOR FURTHER INFORMATION CONTACT: Ms. Amy Williams, PDUSD (A&T) DP
(DAR), IMD 3D139, 3062 Defense Pentagon, Washington, DC 20301-3062.
Telephone (703) 602-0131; telefax (703) 602-1031.
SUPPLEMENTARY INFORMATION:
A. Background
A proposed rule was published in the Federal Register on October
23, 1995 (60 FR 54326). The rule proposed amendments to the DFARS to
conform to FAR amendments that implemented requirements of the Federal
Acquisition Streamlining Act of 1994 (FASA) (Public Law 103-355)
pertaining to the submission of cost or pricing data by offerors and
contractors. The rule also proposed to remove DFARS language pertaining
to work measurement systems, as Section 2201(b) of FASA repealed 10
U.S.C. 2406, the primary statute covering work measurement systems.
Additional changes in the final rule include--
Removal of the proposed language at DFARS 215.804-
1(b)(1)(B)(3) to conform to FAR standards for adequate price
competition.
Amendments to DFARS 216.203-4-70 and the clauses at
252.216-7000 and 252.216-7001 to remove obsolete FAR references.
Amendments to DFARS Part 239 and removal of the clauses at
252.239-7009 and 252.239-7010 to eliminate special cost or pricing data
and audit requirements for telecommunications services.
Retention of the clause at DFARS 252.215-7000, as the
clause is considered to be a useful supplementation of the clauses at
FAR 52.215-23, 52.215-24, and 52.215-25.
Public comments were received from four respondents. All comments
were considered in the development of the final rule.
B. Regulatory Flexibility Act
DoD certifies 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 the rule primarily consists of conforming DFARS amendments to
reflect existing FAR requirements for submission of cost or pricing
data, and because most prime contracts, as well as subcontracts, with
small businesses do not require the submission of cost or pricing data.
C. Paperwork Reduction Act
This rule does not add any new information collection requirements
that require approval of the Office of Management and Budget (OMB)
under 44 U.S.C. 3501, et seq. However, it is estimated that elimination
of the clause at 252.239-7009 will reduce annual paperwork burden
requirements by
[[Page 40472]]
4,400 hours (previously approved under OMB Clearance 0704-0187).
List of Subjects in 48 CFR Parts 204, 215, 216, 232, 239, and 252
Government procurement.
Michele P. Peterson,
Executive Editor, Defense Acquisition Regulations Council.
Therefore, 48 CFR Parts 204, 215, 216, 232, 239, and 252 are
amended as follows:
1. The authority citation for 48 CFR Parts 204, 215, 216, 232, 239,
and 252 continues to read as follows:
Authority: 41 U.S.C. 421 and 48 CFR Chapter 1.
PART 204--ADMINISTRATIVE MATTERS
204.805 [Amended]
2. Section 204.805 is amended in the first sentence of paragraph
(5) by removing the words ``certification of''.
PART 215--CONTRACTING BY NEGOTIATION
215.801 [Removed]
3. Section 215.801 is removed.
4. Sections 215.804 and 215.804-1 are revised to read as follows:
215.804 Cost or pricing data and information other than cost or
pricing data.
215.804-1 Prohibition on obtaining cost or pricing data.
(b) Standards for exceptions from cost or pricing data
requirements. (1) Adequate price competition. (A) An example of a price
``based on'' adequate price competition is exercise of a priced option
in a contract where adequate price competition existed, if the
contracting officer has determined that the option price is reasonable
in accordance with FAR 17.207(d);
(B) Dual or multiple source programs.
(1) In dual or multiple source programs, the determination of
adequate price competition must be made on a case-by-case basis.
Contracting officers must exercise deliberation and thorough review in
making the determination. Even when adequate price competition exists,
in certain cases it may be appropriate to obtain additional information
to assist in price analysis.
(2) Adequate price competition normally exists when--
(i) Prices are solicited across a full range of step quantities,
normally including a 0-100 percent split, from at least two offerors
that are individually capable of producing the full quantity; and
(ii) The reasonableness of all prices awarded is clearly
established on the basis of price analysis (see FAR 15.805-2).
(4) Exceptional cases.
(A) The DoD has exempted the Canadian Commercial Corporation and
its subcontractors from submission and certification of cost or pricing
data on all acquisitions.
(B) The DoD has waived certain cost or pricing data requirements
for nonprofit organizations (including educational institutions) on
cost-reimbursement-no-fee contracts. The contracting officer shall
require--
(1) Submission of information other than cost or pricing data to
the extent necessary to determine price reasonableness and cost
realism; and
(2) Cost or pricing data from subcontractors that are not nonprofit
organizations.
215.804-3 [Removed]
5. Section 215.804-3 is removed.
215.804-6 Amended]
6. Section 215.804-6 is amended by redesignating paragraphs
(b)(2)(A) and (B) as paragraphs (b)(1)(A) and (B), respectively.
7. Section 215.05-5 is amended by revising paragraph (a)(1)(A) to
read as follows:
215.805-5 Field pricing support.
(a)(1)(A) Contracting officers shall request field pricing reports
for--
(1) Fixed-price proposals exceeding the cost or pricing data
threshold at FAR 15.804-2(a)(1);
(2) Cost-type proposals exceeding the cost or pricing data
threshold at FAR 15.804-2(a) (1) from offerors with significant
estimating system deficiencies (see 215.811-70(a)(3) and (c)(2)(i); or
* * * * *
8. Section 215.805-70 is amended by revising paragraph (b) to read
as follows:
215.805-70 Cost realism analysis.
* * * * *
(b) The contracting officer should determine what information other
than cost or pricing data is necessary for the cost realism analysis
during acquisition planning and development of the solicitation. Unless
such information is already available from Government sources, the
contracting officer will need to ask the offerors for it.
(1) Request only necessary data; and
(2) Do not request submission of cost or pricing data.
9. Section 215.811-70 is amended by revising paragraphs (b)(2),
(g)(3)(ii), and (h) to read as follows:
215.811-70 Disclosure, maintenance, and review requirements.
* * * * *
(b) * * *
(2) A large business contractor is subject to estimating system
disclosure, maintenance, and review requirements if--
(i) In its preceding fiscal year, the contractor received DoD prime
contracts or subcontracts totaling $50 million or more for which cost
or pricing data were required; or
(ii) In its preceding fiscal year, the contractor received DoD
prime contracts or subcontracts totaling $10 million or more (but less
than $50 million) for which cost or pricing data were required and the
contracting officer, with concurrence or at the request of the
administrative contracting officer, determines it to be in the best
interest of the Government (e.g., significant estimating problems are
believed to exist or the contractor's sales are predominantly
Government).
* * * * *
(g) * * *
(3) * * *
(ii) Indicate a specific time or subsequent event by which the
contractor will submit a supplemental proposal, including cost or
pricing data, identifying the cost impact adjustment necessitated by
the deficient estimating system;
* * * * *
(h) Contract clause. Use the clause at 252.215-7002, Cost
Estimating System Requirements, in all solicitations and contracts to
be awarded on the basis of cost or pricing data.
215.872 [Removed and Reserved]
10. Section 215.872 is removed and reserved.
215.872-1 through 215.872-4 [Removed]
11. Sections 215.872-1 through 215.872-4 are removed.
PART 216--TYPES OF CONTRACTS
216.203-4 [Amended]
12. Section 216.203-4 is amended in the first sentence of paragraph
(d)(xvi) by revising the reference ``15.804-3'' to read ``15.804-1''.
13. Section 216.203-4-70 is amended by revising paragraph (a); by
removing paragraphs (b)(4) and (b)(6), and by redesignating paragraphs
(b)(5) and (b)(7) as paragraphs (b)(4) and (b)(5), respectively. The
revised text reads as follows:
216.203-4-70 Additional clauses.
(a) Price adjustment for basic steel, aluminum, brass, bronze, or
copper mill products.
[[Page 40473]]
(1) The price adjustment clause at 252.216-7000, Economic Price
Adjustment--Basic Steel, Aluminum, Brass, Bronze, or Copper Mill
Products, may be used in fixed-price supply contracts for basic steel,
aluminum, brass, bronze, or copper mill products, such as sheets,
plates, and bars, when an established catalog or market price exists
for the particular product being acquired.
(2) The 10 percent figure in paragraph (d)(1) of the clause shall
not be exceeded unless approval is obtained at a level above the
contracting officer.
* * * * *
PART 232--CONTRACT FINANCING
14. Section 232.502-1-71 is amended by revising paragraph (b)(3) to
read as follows:
232.502-1-71 Customary flexible progress payments.
* * * * *
(b) * * *
(3) Contractors who submit cost or pricing data, as defined in FAR
15.801, for negotiated fixed-price contracts in excess of $1 million
may request flexible progress payments.
* * * * *
PART 239--ACQUISITION OF INFORMATION TECHNOLOGY
15. Section 239.7406 is revised to read as follows:
239.7406 Cost or pricing data and information other than cost or
pricing data.
(a) Common carriers are not required to submit cost or pricing data
before award of contracts for tariffed services. Rates or preliminary
estimates quoted by a common carrier for tariffed telecommunications
services are considered to be prices set by regulation within the
provisions of 10 U.S.C. 2306a. This is true even if the tariff is set
after execution of the contract.
(b) Rates or preliminary estimates quoted by a common carrier for
nontariffed telecommunications services or by a noncommon carrier for
any telecommunications service are not considered prices set by law or
regulation.
(c) Contracting officers shall obtain sufficient information to
determine that the prices are reasonable. For example, cost or pricing
data, if required in accordance with FAR 15.804-2, or information other
than cost or pricing data, if required in accordance with FAR 15.804-5,
may be necessary to support the reasonableness of--
(1) Nontariffed services;
(2) Special rates and charges not included in a tariff, whether
filed or to be filed;
(3) Special assembly rates and charges;
(4) Special construction and equipment charges;
(5) Contingent liabilities that are fixed at the outset of the
service;
(6) Proposed cancellation and termination charges under the clause
at 252.239-7007, Cancellation or Termination of Orders--Common
Carriers, and reuse arrangements under the clause at 252.239-7008,
Reuse Arrangements;
(7) Rates contained in voluntary tariffs filed by nondominant
common carriers; or
(8) A tariff, whether filed or to be filed, for new services
installed or developed primarily for Government use.
239.7411 [Amended]
16. Section 239.7411 is amended by removing paragraphs (a)(8) and
(a)(9); and in paragraph (a)(7) by removing the semicolon and inserting
a period in its place.
PART 252--SOLICITATION PROVISIONS AND CONTRACT CLAUSES
252.215-7000 [Amended]
17. Section 252.215-7000 is amended in the introductory text by
revising the reference ``215.804-8(1)'' to read ``215.804-8''.
252.215-7002 [Amended]
18. Section 252.215-7002 is amended by revising the clause date to
read ``(JUL 1997)''; and in paragraphs (c)(1) and (c)(2)(i) by removing
the word ``certified''.
19. Section 252.216-7000 is amended by revising the clause date and
paragraph (a) to read as follows:
252.216-7000 Economic Price Adjustment--Basic Steel, Aluminum, Brass,
Bronze, or Copper Mill Products.
* * * * *
Economic Price Adjustment-Basic Steel, Aluminum, Brass, Bronze, or
Copper Mill Products (Jul 1997)
(a) Definitions.
As used in this clause--
Established price means a price which is an established catalog
or market price for a commercial item sold in substantial quantities
to the general public.
Unit price excludes any part of the price which reflects
requirements for preservation, packaging, and packing beyond
standard commercial practice.
* * * * *
20. Section 252.216-7001 is amended by revising the clause date;
and in paragraph (a) by revising the definition of ``Established
price'' to read as follows:
252.216-7001 Economic Price Adjustment--Nonstandard Steel Items.
* * * * *
Economic Price Adjustment--Nonstandard Steel Items (Jul 1997)
(a) * * *
Established price is--
(1) A price which is an established catalog or market price of a
commercial item sold in substantial quantities to the general
public; and
(2) The net price after applying any applicable standard trade
discounts offered by the Contractor from its catalog, list, or
schedule price. (But see Note 6.)
* * * * *
Sec. 252.239-7006 [Amended]
21. Section 252.239-7006 is amended by revising the clause date to
read ``(Jul 1997)''; and in paragraph (a)(2) by inserting a comma after
the words ``Before filing.''
Secs. 252.239-7009 and 252.239-7010 [Removed and Reserved]
22. Sections 252.239-7009 and 252.239-7010 are removed and
reserved.
23. Section 252.243-7000 is amended by revising the clause date and
paragraph (c) to read as follows:
Sec. 252.243-7000 Engineering Change Proposals.
* * * * *
Engineering Change Proposals (Jul 1997)
* * * * *
(c) When the price** of the engineering change is $500,000 or
more, the Contractor shall submit--
(1) A completed SF 1411, Contract Pricing Proposal Cover Sheet
(Cost or Pricing Data Required); and
(2) At the time of agreement on price*, or on another date
agreed upon between the parties, a signed Certificate of Current
Cost or Pricing Data.
* * * * *
[FR Doc. 97-19907 Filed 7-28-97; 8:45 am]
BILLING CODE 5000-04-M
