Federal Register / Vol. 74, No. 197 / Wednesday, October 14, 2009 / Rules and Regulations 52853 

compelling reasons exist to promulgate 

this interim rule without prior 

opportunity for public comment. This 

action is necessary because the rule 

implements section 868 of the Duncan 

Hunter National Defense Authorization 

Act (Pub. L. 110–417), which was 

signed on October 14, 2008, and 

requires amending the FAR not later 

than 180 days after the date of 

enactment of the Act. However, 

pursuant to Public Law 98–577 and FAR 

1.501, the Councils will consider public 

comments received in response to this 

interim rule in the formation of the final 

rule. 

List of Subjects in 48 CFR Part 15 

Government procurement. 

Dated: October 5, 2009. 

Al Matera, 

Director, Acquisition Policy Division. 

■ Therefore, DoD, GSA, and NASA 

amend 48 CFR part 15 as set forth 

below: 

PART 15—CONTRACTING BY 

NEGOTIATION 

■ 1. The authority citation for 48 CFR 

part 15 continues to read as follows: 

Authority: 40 U.S.C. 121(c); 10 U.S.C. 

chapter 137; and 42 U.S.C. 2473(c). 

■ 2. Amend section 15.403–1 by 

redesignating paragraphs (c)(3)(ii) and 

(c)(3)(iii) as (c)(3)(iii) and (c)(3)(iv), 

respectively, and adding a new 

paragraph (c)(3)(ii) to read as follows: 

15.403–1 Prohibition on obtaining cost or 

pricing data (10 U.S.C. 2306a and 41 U.S.C. 

254b). 

* * * * * 

(c) * * * 

(3) * * * 

(ii) In accordance with section 868 of 

Pub. L. 110–417: 

(A) When purchasing services that are 

not offered and sold competitively in 

substantial quantities in the commercial 

marketplace, but are of a type offered 

and sold competitively in substantial 

quantities in the commercial 

marketplace, they may be considered 

commercial items (thus meeting the 

purpose of 41 U.S.C 254b and 10 U.S.C. 

2306a for truth in negotiations) only if 

the contracting officer determines in 

writing that the offeror has submitted 

sufficient information to evaluate, 

through price analysis, the 

reasonableness of the price of such 

services. 

(B) In order to make this 

determination, the contracting officer 

may request the offeror to submit prices 

paid for the same or similar commercial 

items under comparable terms and 

conditions by both Government and 

commercial customers; and 

(C) If the contracting officer 

determines that the information 

described in paragraph (c)(3)(ii)(B) of 

this section is not sufficient to 

determine the reasonableness of price, 

other relevant information regarding the 

basis for price or cost, including 

information on labor costs, material 

costs and overhead rates may be 

requested. 

* * * * * 

■ 3. Amend section 15.403–3 by adding 

paragraph (c)(3) to read as follows: 

15.403–3 Requiring information other than 

cost or pricing data. 

* * * * * 

(c) * * * 

(3) For services that are not offered 

and sold competitively in substantial 

quantities in the commercial 

marketplace, but are of a type offered 

and sold competitively in substantial 

quantities in the commercial 

marketplace, see 15.403–1(c)(3)(ii). 

[FR Doc. E9–24570 Filed 10–13–09; 8:45 am] 

BILLING CODE 6820–EP–S 

DEPARTMENT OF DEFENSE 

GENERAL SERVICES 

ADMINISTRATION 

NATIONAL AERONAUTICS AND 

SPACE ADMINISTRATION 

48 CFR Parts 15, 31, and 52 

[FAC 2005–37; FAR Case 2008–031; Item 

V; Docket 2009–0034, Sequence 1] 

RIN 9000–AL27 

Federal Acquisition Regulation; FAR 

Case 2008–031, Limitations on PassThrough Charges 

AGENCIES: Department of Defense (DoD), 

General Services Administration (GSA), 

and National Aeronautics and Space 

Administration (NASA). 

ACTION: Interim rule with request for 

comments. 

SUMMARY: The Civilian Agency 

Acquisition Council and the Defense 

Acquisition Regulations Council 

(Councils) are issuing an interim rule 

amending the Federal Acquisition 

Regulation (FAR) to implement section 

866 of the Duncan Hunter National 

Defense Authorization Act (NDAA) for 

Fiscal Year (FY) 2009 which applies to 

Executive Agencies other than DoD. The 

DoD is subject to section 852 of the John 

Warner NDAA for FY 2007 which is 

also being implemented in this interim 

rule. Section 866 requires the Councils 

to amend the FAR and section 852 

requires the Secretary of Defense to 

prescribe regulations to minimize 

excessive pass-through charges by 

contractors from subcontractors, or of 

tiers of subcontractors, that add no or 

negligible value, and to ensure that 

neither a contractor nor a subcontractor 

receives indirect costs or profit/fee (i.e., 

pass-through charges) on work 

performed by a lower-tier subcontractor 

to which the higher-tier contractor or 

subcontractor adds no, or negligible, 

value. Since both statutory provisions 

address excessive pass-through charges 

and the multiple tiering of 

subcontracting, the Councils decided to 

combine both provisions in this FAR 

rule. 

DATES: Effective Date: October 14, 2009. 

Comment Date: Interested parties 

should submit written comments to the 

Regulatory Secretariat on or before 

December 14, 2009 to be considered in 

the formulation of a final rule. 

ADDRESSES: Submit comments 

identified by FAC 2005–37, FAR case 

2008–031, by any of the following 

methods: 

•Regulations.gov: http:// 

www.regulations.gov. 

Submit comments via the Federal 

eRulemaking portal by inputting ‘‘FAR 

Case 2008–031’’ under the heading 

‘‘Comment or Submission’’. Select the 

link ‘‘Send a Comment or Submission’’ 

that corresponds with FAR Case 2008– 

031. Follow the instructions provided to 

complete the ‘‘Public Comment and 

Submission Form’’. Please include your 

name, company name (if any), and 

‘‘FAR Case 2008–031’’ on your attached 

document. 

• Fax: 202–501–4067. 

• Mail: General Services 

Administration, Regulatory Secretariat 

(VPR), 1800 F Street, NW., Room 4041, 

ATTN: Hada Flowers, Washington, DC 

20405. 

Instructions: Please submit comments 

only and cite FAC 2005–37, FAR case 

2008–031, in all correspondence related 

to this case. All comments received will 

be posted without change to http:// 

www.regulations.gov, including any 

personal and/or business confidential 

information provided. 

FOR FURTHER INFORMATION CONTACT: Mr. 

Edward Chambers, Procurement 

Analyst, at (202) 501–3221 for 

clarification of content. For information 

pertaining to status or publication 

schedules, contact the Regulatory 

Secretariat at (202) 501–4755. Please 

cite FAC 2005–37, FAR case 2008–031. 

SUPPLEMENTARY INFORMATION: 

mstockstill on DSKH9S0YB1PROD with RULES2

52854 Federal Register / Vol. 74, No. 197 / Wednesday, October 14, 2009 / Rules and Regulations 

A. Background 

This interim rule is published to 

implement section 866 of the Duncan 

Hunter National Defense Authorization 

Act for Fiscal Year 2009 (Pub. L. 110– 

417) as well as section 852 of the John 

Warner National Defense Authorization 

Act for Fiscal Year 2007 (Pub. L. 109– 

364). Section 866 requires the Councils 

to amend the FAR to minimize 

excessive pass-through charges by 

contractors from subcontractors, or of 

tiers of subcontractors, that add no or 

negligible value, and to ensure that 

neither a contractor nor a subcontractor 

receives indirect costs or profit/fee (i.e., 

pass-through charges) on work 

performed by a lower-tier subcontractor 

to which the higher-tier contractor or 

subcontractor adds no, or negligible, 

value. 

To enable agencies to ensure that 

pass-through charges are not excessive, 

this interim rule includes a solicitation 

provision and a contract clause 

requiring offerors and contractors to 

identify the percentage of work that will 

be subcontracted, and when subcontract 

costs will exceed 70 percent of the total 

cost of work to be performed, to provide 

information on indirect costs and profit/ 

fee and value added with regard to the 

subcontract work. Seventy percent was 

selected as the threshold for this 

information requirement, because it 

represents a substantial amount of 

subcontracting. 

The rule is intended to protect the 

interests of the Government when there 

appears to be an agreement with a 

contractor to perform the contract scope 

of work, including managing 

subcontractors, then after award, the 

contractor subcontracts substantially all 

the effort without providing the 

required value-added subcontract 

management functions that were 

expected. There is no intent in this rule 

to disrupt the subcontracting process or 

other arrangements for firms that 

furnish supplies and services. 

To ensure that the Government can 

make a determination as to whether or 

not pass-through charges are excessive, 

the rule incorporates a reporting 

threshold that affords the contracting 

officer the ability to understand what 

functions the contractor will perform 

(e.g., consistent with the contractor’s 

disclosed practice) and thus will 

provide added value, whether it be 

before award, or if the contractor 

subsequently decides to subcontract 

substantially all of the effort. The rule 

provides a recovery mechanism for 

those situations in which a contractor 

subcontracts all, or substantially all, of 

the performance of the contract, and 

does not perform the subcontract 

management functions, or other valueadded functions, that were charged to 

the Government through indirect costs 

and related profit/fee. 

The intent of the reporting threshold 

is for the contracting officer to make a 

determination that pass-through charges 

at the time of award are not excessive, 

when at least 70 percent of the work 

will be subcontracted, based on 

contractor demonstrated functions. It 

also incorporates a requirement for the 

contractor to notify the contracting 

officer, in writing, if the contractor 

decides after award to subcontract more 

than 70 percent of the total cost of the 

work to be performed, and to verify in 

that document that the contractor will 

add value consistent with the definition 

in the contract clause. If the contractor 

does not perform the demonstrated 

functions or does not add value, the rule 

makes the excessive pass-through 

charges unallowable and provides for 

recoupment of the excessive passthrough charges consistent with the 

legislation. A further intent of the 

reporting threshold is to avoid requiring 

the contracting officer to re-address this 

determination during contract 

performance. To that end, this interim 

rule includes an Alternate I to the clause 

at FAR 52.215–23 to address those 

instances in which the contracting 

officer has made a determination prior 

to contract award. 

The rule is to be applied consistent 

with existing Cost Accounting Standard 

(CAS) and FAR rules related to 

subcontract management, indirect cost 

allocation, and profit analysis. While 

the definitions in the provisions are 

similar, the applicability differs. 

For civilian agencies the rule applies 

to any cost-reimbursement type 

contract, task or delivery order in an 

amount greater than the simplified 

acquisition threshold (as defined by 

section 4 of the Office of Federal 

Procurement Policy Act (41 U.S.C. 

403)). 

For DoD, this rule applies to an 

amount greater than the threshold to 

obtain cost or pricing data in FAR 

15.403–3 and cost-reimbursement type 

contracts as well as fixed-price contracts 

in accordance with section 852 of the 

FY 2007 NDAA. 

This is a significant regulatory action 

and, therefore, was subject to review 

under section 6(b) of Executive Order 

12866, Regulatory Planning and Review, 

dated September 30, 1993. This rule is 

not a major rule under 5 U.S.C. 804. 

B. Regulatory Flexibility Act 

This 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 the Councils do not expect a 

significant number of entities to propose 

excessive pass-through charges under 

contracts or subcontracts, and the 

information required from offerors and 

contractors regarding pass-through 

charges is minimal. Therefore, an Initial 

Regulatory Flexibility Analysis has not 

been performed. The Councils will 

consider comments from small entities 

concerning the affected FAR parts 15, 

31, and 52 in accordance with 5 U.S.C. 

610. Interested parties must submit such 

comments separately and should cite 5 

U.S.C 601, et seq. (FAC 2005–37, FAR 

case 2008–031), in all correspondence. 

C. Paperwork Reduction Act 

The Paperwork Reduction Act (Pub. 

L. 104–13) applies because the interim 

rule contains information collection 

requirements. Accordingly, the 

Regulatory Secretariat has forwarded an 

emergency request for approval of a new 

information collection requirement 

concerning ‘‘Limitations on PassThrough Charges’’ to the Office of 

Management and Budget (OMB) under 

44 U.S.C. Chapter 35, et seq. The OMB 

has preapproved this information 

collection under OMB Control Number 

9000–0173. 

Annual Reporting Burden: 

To enable contracting officers to 

verify that pass-through charges are not 

excessive, this FAR revision will 

include a requirement for an offeror 

submitting a proposal for a contract, 

task order, or delivery order to provide 

the following information with its 

proposals: 

(1) The cost of work the offeror 

intends to perform and the cost of work 

expected to be performed by each 

subcontractor. 

(2) If the offeror intends to 

subcontract more than 70 percent of the 

total cost of work to be performed— 

(i) The amount of the offeror’s indirect 

costs and profit/fee applicable to the 

work to be performed by the 

subcontractor(s); and 

(ii) A description of the value added 

by the offeror as related to the work to 

be performed by the subcontractor(s). 

(3) If any subcontractor intends to 

subcontract to a lower-tier subcontractor 

more than 70 percent of the total cost of 

work to be performed under its 

subcontract— 

(i) The amount of the subcontractor’s 

indirect costs and profit/fee applicable 

to the work to be performed by the 

lower-tier subcontractor(s); and 

(ii) A description of the added value 

provided by the subcontractor as related 

mstockstill on DSKH9S0YB1PROD with RULES2

Federal Register / Vol. 74, No. 197 / Wednesday, October 14, 2009 / Rules and Regulations 52855 

to the work to be performed by the 

lower-tier subcontractor(s). 

In addition, if the amount of the effort 

to be subcontracted by the contractor or 

a subcontractor changes from the 

amount identified in the proposal such 

that it exceeds 70 percent of the total 

cost of work to be performed, the 

contractor must provide the revised cost 

of effort and verification that the 

contractor (or subcontractor) will 

provide added value. 

The annual reporting burden is 

estimated as follows: 

Respondents: 25,380. 

Responses per respondent: 1. 

Total annual responses: 25,760. 

Preparation hours per response: .5. 

Total response burden hours: 13,260. 

D. Request for Comments Regarding 

Paperwork Burden 

Submit comments, including 

suggestions for reducing this burden, 

not later than December 14, 2009 to: 

FAR Desk Officer, OMB, Room 10102, 

NEOB, Washington, DC 20503, and a 

copy to the General Services 

Administration, Regulatory Secretariat 

(VPR), 1800 F Street, NW., Room 4041, 

Washington, DC 20405. 

Public comments are particularly 

invited on: whether this collection of 

information is necessary for the proper 

performance of functions of the FAR, 

and will have practical utility; whether 

our estimate of the public burden of this 

collection of information is accurate, 

and based on valid assumptions and 

methodology; ways to enhance the 

quality, utility, and clarity of the 

information to be collected; and ways in 

which we can minimize the burden of 

the collection of information on those 

who are to respond, through the use of 

appropriate technological collection 

techniques or other forms of information 

technology. 

Requester may obtain a copy of the 

justification from the General Services 

Administration, Regulatory Secretariat 

(VPR), Room 4041, Washington, DC 

20405, telephone (202) 501–4755. Please 

cite OMB Control Number 9000–0173 in 

all correspondence. 

E. Determination to Issue an Interim 

Rule 

A determination has been made under 

the authority of the Secretary of Defense 

(DoD), the Administrator of General 

Services (GSA), and the Administrator 

of the National Aeronautics and Space 

Administration (NASA) that urgent and 

compelling reasons exist to promulgate 

this interim rule without prior 

opportunity for public comment. This 

action is necessary because section 866 

of the FY 2009 NDAA, which was 

enacted October 14, 2008, requires that 

the FAR be revised to implement this 

provision no later than one year after 

the date of enactment. If this change is 

not implemented agencies will not be 

able to comply with section 866 of the 

FY 2009 NDAA. However, pursuant to 

Pub. L. 98–577 and FAR 1.501, the 

Councils will consider public comments 

received in response to this interim rule 

in the formation of the final rule. 

List of Subjects in 48 CFR Parts 15, 31, 

and 52 

Government procurement. 

Dated: October 5, 2009. 

Al Matera, 

Director, Acquisition Policy Division. 

■ Therefore, DoD, GSA, and NASA 

amend 48 CFR parts 15, 31, and 52 as 

set forth below: 

■ 1. The authority citation for 48 CFR 

parts 15, 31, and 52 continues to read 

as follows: 

Authority: 40 U.S.C. 121(c); 10 U.S.C. 

chapter 137; and 42 U.S.C. 2473(c). 

PART 15—CONTRACTING BY 

NEGOTIATION 

■ 2. Amend section 15.408 by adding 

paragraph (n) to read as follows: 

15.408 Solicitation provisions and 

contract clauses. 

* * * * * 

(n) Limitations on Pass-Through 

Charges. (1) The contracting officer shall 

insert the provision at 52.215–22, 

Limitations on Pass-Through Charges— 

Identification of Subcontract Effort, in 

solicitations containing the clause at 

52.215–23. 

(2)(i) Except as provided in paragraph 

(n)(2)(ii) of this section, the contracting 

officer shall insert the clause 52.215–23, 

Limitations on Pass-Through Charges, in 

solicitations and contracts including 

task or delivery orders as follows: 

(A) For civilian agencies, insert the 

clause when— 

(1) The total estimated contract or 

order value exceeds the simplified 

acquisition threshold as defined in 

section 2.101 and 

(2) The contemplated contract type is 

expected to be a cost-reimbursement 

type contract as defined in Subpart 16.3; 

or 

(B) For DoD, insert the clause when— 

(1) The total estimated contract or 

order value exceeds the threshold for 

obtaining cost or pricing data in 15.403– 

4; and 

(2) The contemplated contract type is 

expected to be any contract type 

except— 

(i) A firm-fixed-price contract 

awarded on the basis of adequate price 

competition; 

(ii) A fixed-price contract with 

economic price adjustment awarded on 

the basis of adequate price competition; 

(iii) A firm-fixed-price contract for the 

acquisition of a commercial item; or 

(iv) A fixed-price contract with 

economic price adjustment, for the 

acquisition of a commercial item. 

(ii) The clause may be used when the 

total estimated contract or order value is 

below the thresholds identified in 

15.408(n)(2)(i) and for any contract type, 

when the contracting officer determines 

that inclusion of the clause is 

appropriate. 

(iii) Use the clause 52.215–23 with its 

Alternate I when the contracting officer 

determines that the prospective 

contractor has demonstrated that its 

functions provide added value to the 

contracting effort and there are no 

excessive pass-through charges. 

* * * * * 

PART 31—CONTRACT COST 

PRINCIPLES AND PROCEDURES 

■ 3. Amend section 31.203 by adding 

paragraph (i) to read as follows: 

31.203 Indirect costs. 

* * * * * 

(i) Indirect costs that meet the 

definition of ‘‘excessive pass-through 

charge’’ in 52.215–23, are unallowable. 

PART 52—SOLICITATION PROVISIONS 

AND CONTRACT CLAUSES 

■ 4. Add sections 52.215–22 and 

52.215–23 to read as follows: 

52.215–22 Limitations on Pass-Through 

Charges—Identification of Subcontract 

Effort. 

As prescribed in 15.408(n)(1), use the 

following provision: 

LIMITATIONS ON PASS-THROUGH 

CHARGES—IDENTIFICATION OF 

SUBCONTRACT EFFORT (OCT 2009) 

(a) Definitions. Added value, excessive 

pass-through charge, subcontract, and 

subcontractor, as used in this provision, are 

defined in the clause of this solicitation 

entitled ‘‘Limitations on Pass-Through 

Charges’’ (FAR 52.215–23). 

(b) General. The offeror’s proposal shall 

exclude excessive pass-through charges. 

(c) Performance of work by the Contractor 

or a subcontractor. (1) The offeror shall 

identify in its proposal the total cost of the 

work to be performed by the offeror, and the 

total cost of the work to be performed by each 

subcontractor, under the contract, task order, 

or delivery order. 

(2) If the offeror intends to subcontract 

more than 70 percent of the total cost of work 

to be performed under the contract, task 

order, or delivery order, the offeror shall 

identify in its proposal— 

mstockstill on DSKH9S0YB1PROD with RULES2

52856 Federal Register / Vol. 74, No. 197 / Wednesday, October 14, 2009 / Rules and Regulations 

(i) The amount of the offeror’s indirect 

costs and profit/fee applicable to the work to 

be performed by the subcontractor(s); and 

(ii) A description of the added value 

provided by the offeror as related to the work 

to be performed by the subcontractor(s). 

(3) If any subcontractor proposed under the 

contract, task order, or delivery order intends 

to subcontract to a lower-tier subcontractor 

more than 70 percent of the total cost of work 

to be performed under its subcontract, the 

offeror shall identify in its proposal— 

(i) The amount of the subcontractor’s 

indirect costs and profit/fee applicable to the 

work to be performed by the lower-tier 

subcontractor(s); and 

(ii) A description of the added value 

provided by the subcontractor as related to 

the work to be performed by the lower-tier 

subcontractor(s). 

(End of provision) 

52.215–23 Limitations on Pass-Through 

Charges. 

As prescribed in 15.408(n)(2), use the 

following clause: 

LIMITATIONS ON PASS-THROUGH 

CHARGES (OCT 2009) 

(a) Definitions. As used in this 

clause— 

Added value means that the 

Contractor performs subcontract 

management functions that the 

Contracting Officer determines are a 

benefit to the Government (e.g., 

processing orders of parts or services, 

maintaining inventory, reducing 

delivery lead times, managing multiple 

sources for contract requirements, 

coordinating deliveries, performing 

quality assurance functions). 

Excessive pass-through charge, with 

respect to a Contractor or subcontractor 

that adds no or negligible value to a 

contract or subcontract, means a charge 

to the Government by the Contractor or 

subcontractor that is for indirect costs or 

profit/fee on work performed by a 

subcontractor (other than charges for the 

costs of managing subcontracts and any 

applicable indirect costs and associated 

profit/fee based on such costs). 

No or negligible value means the 

Contractor or subcontractor cannot 

demonstrate to the Contracting Officer 

that its effort added value to the contract 

or subcontract in accomplishing the 

work performed under the contract 

(including task or delivery orders). 

Subcontract means any contract, as 

defined in FAR 2.101, entered into by a 

subcontractor to furnish supplies or 

services for performance of the contract 

or a subcontract. It includes but is not 

limited to purchase orders, and changes 

and modifications to purchase orders. 

Subcontractor, as defined in FAR 

44.101, means any supplier, distributor, 

vendor, or firm that furnishes supplies 

or services to or for a prime Contractor 

or another subcontractor. 

(b) General. The Government will not 

pay excessive pass-through charges. The 

Contracting Officer shall determine if 

excessive pass-through charges exist. 

(c) Reporting. Required reporting of 

performance of work by the Contractor 

or a subcontractor. The Contractor shall 

notify the Contracting Officer in writing 

if— 

(1) The Contractor changes the 

amount of subcontract effort after award 

such that it exceeds 70 percent of the 

total cost of work to be performed under 

the contract, task order, or delivery 

order. The notification shall identify the 

revised cost of the subcontract effort and 

shall include verification that the 

Contractor will provide added value; or 

(2) Any subcontractor changes the 

amount of lower-tier subcontractor 

effort after award such that it exceeds 70 

percent of the total cost of the work to 

be performed under its subcontract. The 

notification shall identify the revised 

cost of the subcontract effort and shall 

include verification that the 

subcontractor will provide added value 

as related to the work to be performed 

by the lower-tier subcontractor(s). 

(d) Recovery of excessive passthrough charges. If the Contracting 

Officer determines that excessive passthrough charges exist; 

(1) For other than fixed-price 

contracts, the excessive pass-through 

charges are unallowable in accordance 

with the provisions in FAR subpart 

31.2; and 

(2) For applicable DoD fixed-price 

contracts, as identified in 

15.408(n)(2)(i)(B), the Government shall 

be entitled to a price reduction for the 

amount of excessive pass-through 

charges included in the contract price. 

(e) Access to records. (1) The 

Contracting Officer, or authorized 

representative, shall have the right to 

examine and audit all the Contractor’s 

records (as defined at FAR 52.215–2(a)) 

necessary to determine whether the 

Contractor proposed, billed, or claimed 

excessive pass-through charges. 

(2) For those subcontracts to which 

paragraph (f) of this clause applies, the 

Contracting Officer, or authorized 

representative, shall have the right to 

examine and audit all the 

subcontractor’s records (as defined at 

FAR 52.215–2(a)) necessary to 

determine whether the subcontractor 

proposed, billed, or claimed excessive 

pass-through charges. 

(f) Flowdown. The Contractor shall 

insert the substance of this clause, 

including this paragraph (f), in all costreimbursement subcontracts under this 

contract that exceed the simplified 

acquisition threshold, except if the 

contract is with DoD, then insert in all 

cost-reimbursement subcontracts and 

fixed-price subcontracts, except those 

identified in 15.408(n)(2)(i)(B)(2), that 

exceed the threshold for obtaining cost 

or pricing data in accordance with FAR 

15.403–4. 

(End of clause) 

Alternate I (OCT 2009). As prescribed 

in 15.408(n)(2)(iii), substitute the 

following paragraph (b) for paragraph 

(b) of the basic clause: 

(b) General. The Government will not 

pay excessive pass-through charges. The 

Contracting Officer has determined that 

there will be no excessive pass-through 

charges, provided the Contractor 

performs the disclosed value-added 

functions. 

[FR Doc. E9–24586 Filed 10–13–09; 8:45 am] 

BILLING CODE 6820–EP–S 

DEPARTMENT OF DEFENSE 

GENERAL SERVICES 

ADMINISTRATION 

NATIONAL AERONAUTICS AND 

SPACE ADMINISTRATION 

48 CFR Part 16 

[FAC 2005–37; FAR Case 2008–008; Item 

VI; Docket 2009-0036, Sequence 1] 

RIN 9000–AL42 

Federal Acquisition Regulation; FAR 

Case 2008–008, Award Fee Language 

Revision 

AGENCIES: Department of Defense (DoD), 

General Services Administration (GSA), 

and National Aeronautics and Space 

Administration (NASA). 

ACTION: Interim rule with request for 

comments. 

SUMMARY: The Civilian Agency 

Acquisition Council and the Defense 

Acquisition Regulations Council 

(Councils) are issuing an interim rule 

amending the Federal Acquisition 

Regulation (FAR) to implement section 

814 of the John Warner National 

Defense Authorization Act for Fiscal 

Year 2007, section 867 of the Duncan 

Hunter National Defense Authorization 

Act for Fiscal Year 2009, and the Office 

of Federal Procurement Policy guidance 

memorandum dated December 4, 2007, 

entitled Appropriate Use of Incentive 

Contracts. 

DATES: Effective Date: October 14, 2009. 

Comment Date: Interested parties 

should submit written comments to the 

Regulatory Secretariat on or before 

December 14, 2009 to be considered in 

the formulation of a final rule. 

mstockstill on DSKH9S0YB1PROD with RULES2