2024-14352. General Services Administration Acquisition Regulation; Removing the GSA Payments Clause for Non-Commercial Contracts

AGENCY:

Office of Acquisition Policy, General Services Administration (GSA).

ACTION:

Final rule.

SUMMARY:

The General Services Administration is amending the General Services Administration Acquisition Regulation (GSAR) to remove clause 552.232-1 Payments. This clause requires the Government to pay a contractor without submission of an invoice or voucher for non-commercial fixed price contracts for supplies or services.

DATES:

Effective: August 2, 2024.

FOR FURTHER INFORMATION CONTACT:

For clarification of content, contact Ms. Taylor McDaniels, Procurement Analyst; Mr. J. Curtis Hauschildt, Procurement Analyst; or Mr. Bryon Boyer, Procurement Analyst, at [e-mail] or 817-850-5580. For information pertaining to status or publication schedules, contact the Regulatory Secretariat Division at [e-mail] or 202-501-4755. Please cite GSAR Case 2022-G513.

SUPPLEMENTARY INFORMATION:

I. Background

This final rule amends the General Services Administration Acquisition Regulation to remove clause 552.232-1 Payments. The General Services Administration conducts routine reviews of its acquisition regulations to identify outdated content and to ensure there is no unnecessary duplication of or conflict with the Federal Acquisition Regulation (FAR), pursuant to FAR 1.304. Through one of these reviews in Fiscal Year (FY) 2022, GSA identified that GSAR clause 552.232-1 Payments conflicts with FAR clause 52.232-1 Payments and should be removed. As this GSAR clause is over 10 years old, GSA does not have any historical information that explains why the GSAR clause was initially created. This rule seeks to rectify the issue.

II. Discussion and Analysis

A. Summary of Significant Changes

There are no changes from the proposed rule in this final rule.

B. Analysis of Public Comments

A proposed rule was submitted for public comment on February 28, 2023, and no comments were received by the closing date of May 1, 2023.

C. Expected Cost Impact to the Public

This rule removes one conflicting GSAR clause regarding payments for non-commercial fixed price contracts for supplies or services. GSA believes the exception to invoicing in the GSAR clause is not currently followed, and applicable contractors are already following the invoice requirements of the FAR clause. However, GSA conducted the analysis below demonstrating that the expected impact of this rule is not significant.

With this change, contractors with non-commercial, fixed-price, contracts for supplies or services will now have to submit proper invoices in order to receive payments in accordance with FAR 52.232-1 Payments. Information generated from the System for Award Management ( SAM.gov) for FY 2023 reflects approximately 142,120 GSA contracts were awarded for non-commercial fixed price contracts for supplies or services across approximately 735 separate contractors.

Consistent with the methodology and analysis for the FAR clause information collection ^[1] , the affected contracts on average are estimated to have 6 invoices per contract per year, for a total of 852,720 total responses. Each response is estimated to require 0.25 hours, for a total of 213,180 hours of total burden. Applying a GS-12 pay rate, the total cost is estimated to be $12,517,930 ^[2] , or approximately $17,031 per contractor which is not significant.

III. Executive Orders 12866, 13563 and 14904

Executive Order (E.O.) 12866 (Regulatory Planning and Review) directs agencies to assess all costs and benefits of available regulatory alternatives and, if regulation is necessary, to select regulatory approaches that maximize net benefits (including potential economic, environmental, public health and safety effects, distributive impacts, and equity). E.O. 13563 (Improving Regulation and Regulatory Review) emphasizes the importance of quantifying both costs and benefits, of reducing costs, of harmonizing rules, and of promoting flexibility. E.O. 14094 (Modernizing Regulatory Review) supplements and reaffirms the principles, structures, and definitions governing contemporary regulatory review established in E.O. 12866 and E.O. 13563. OIRA has determined this rule to not be a significant regulatory action and, therefore, is not subject to review under section 6(b) of E.O. 12866, Regulatory Planning and Review, dated September 30, 1993.

IV. Congressional Review Act

OIRA has determined that this rule is not a major rule under 5 U.S.C. 804(2). Subtitle E of the Small Business Regulatory Enforcement Fairness Act of 1996 (codified at 5 U.S.C. 801-808), also known as the Congressional Review Act or CRA, generally provides that before a “major rule” may take effect, the agency promulgating the rule must submit a rule report, which includes a copy of the rule, to each House of the Congress and to the Comptroller General of the United States. The General Services Administration will submit a report containing this rule and other required information to the U.S. Senate, the U.S. House of Representatives, and the Comptroller General of the United States. A major rule under the CRA cannot take effect until 60 days after it is published in the Federal Register .

V. Regulatory Flexibility Act

GSA does not expect this rule 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 this is a noncontroversial action that only impacts the agency's internal operating procedures, and GSA anticipates no significant adverse comments. Therefore, a Final Regulatory Flexibility Analysis has not been prepared.

VI. Paperwork Reduction Act

The Paperwork Reduction Act (44 U.S.C. chapter 35) does apply; however, these changes to the GSAR do not impose additional information collection requirements to the paperwork burden previously approved under the Office of Management and Budget Control Number 9000-0073, Certain Federal Acquisition Regulation Part 32 Requirements.

List of Subjects in 48 CFR Parts 532 and 552

• Government procurement

Jeffrey A. Koses,

Senior Procurement Executive, Office of Acquisition Policy, Office of Government-wide Policy, General Services Administration.

Therefore, GSA amends 48 CFR parts 532 and 552 as set forth below:

1. The authority citation for 48 CFR parts 532 and 552 continues to read as follows:

Authority: 40 U.S.C. 121(c).

PART 532—CONTRACT FINANCING

2. Revise section 532.111 to read as follows:

532.111

Contract Clauses for non-commercial purchases.

Construction contracts. Insert the clause at 552.232-5, Payments under Fixed-Price Construction Contracts, in solicitations and contracts when a fixed-price construction contract is contemplated.

PART 552—SOLICITATION PROVISIONS AND CONTRACT CLAUSES

552.232-1

[Removed and Reserved]

3. Remove and reserve section 552.232-1.

552.232-5

[Amended]

4. Amend section 552.232-5 by removing from the introductory text “552.111(b)” and adding “532.111” in its place.

Footnotes

1.  Office of Management and Budget Control Number 9000-0073, Certain Federal Acquisition Regulation Part 32 Requirements.

2.  The hourly rate for GS-12 is $58.72 ($43.10 as a GS-12/step 5 salary OPM 2023 pay scale Rest of US, with a 36.25% fringe factor pursuant to OMB memorandum M-08-13).