Federal Register / Vol. 65, No. 115 / Wednesday, June 14, 2000 / Proposed Rules 37335

a prerequisite to marketing and

importation. The reporting and

recordkeeping requirements associated

with these equipment authorizations

would not be changed by the proposals

contained in this Notice. These changes

to the regulations would permit the

introduction of an entirely new category

of radio transmitters. All radio

equipment manufacturers, large and

small, would be provided with the

opportunity to produce this equipment.

E. Steps Taken To Minimize Significant

Economic Impact on Small Entities, and

Significant Alternatives Considered

The RFA requires an agency to

describe any significant alternatives that

it has considered in reaching its

proposed approach, which may include

the following four alternatives: (1) The

establishment of differing compliance or

reporting requirements or timetables

that take into account the resources

available to small entities; (2) the

clarification, consolidation, or

simplification of compliance or

reporting requirements under the rule

for small entities; (3) the use of

performance, rather than design,

standards; and (4) an exemption from

coverage of the rule, or any part thereof,

for small entities. We do not expect that

the rules proposed in this Notice of

Proposed Rule Making will have a

significant economic impact on small

entities.

In response to the Notice of Inquiry,

in this proceeding no party raised small

entity issues. We have considered

several alternatives to the proposed

standards, however. For example, in

response to some of the comments, we

considered the possibility of prohibiting

all UWB operation below 2 GHz, (except

for ground penetrating radar systems) in

order to provide additional interference

protection to the authorized radio

services operating below this frequency.

Instead, we have indicated our concerns

about operation below 2 GHz and have

stated that such operation would be

considered provided test results and

technical analysis demonstrated that

there was no risk of harmful

interference to other authorized entities

(which would include small authorized

entities). Similar issues were considered

for all of the standards proposed in this

Notice of Proposed Rule Making. The

proposed standards are intended to

accommodate most of the systems

presented to us without favoring any

particular manufacturer’s design.

F. Federal Rules That May Duplicate,

Overlap, or Conflict With the Proposed

Rule

None.

18. The proposed action is authorized

under sections 4(i), 301, 302, 303(e),

303(f), 303(r), 304 and 307 of the

Communications Act of 1934, as

amended, 47 U.S.C. 154(i), 301, 302,

303(e), 303(f), 303(r), 304, and 307.

Federal Communications Commission.

Magalie Roman Salas,

Secretary.

[FR Doc. 00–14982 Filed 6–13–00; 8:45 am]

BILLING CODE 6712–01–P

DEPARTMENT OF ENERGY

48 CFR Part 970

RIN 1991–AB46

Acquisition Regulation: Changes to

Department of Energy Cost Principles

and Various Clauses

AGENCY: Energy.

ACTION: Notice of proposed rulemaking.

SUMMARY: The Department of Energy

(DOE) proposes to amend its

Acquisition Regulation to delete those

cost principles and related provisions of

Department of Energy Acquisition

Regulation (DEAR) that are adequately

covered by the Federal Acquisition

Regulation (FAR) and retaining only

that coverage which supplements the

FAR. There is one policy change in this

rulemaking. Cost of Money, a previously

unallowable cost, is proposed as an

allowable cost. This proposed

rulemaking results from a special review

performed by DOE and it will be

finalized concurrently with another

recently proposed rule published March

13, 2000. The two rules will result in a

complete reissuance of the DEAR.

DATES: Written comments must be

submitted no later than August 14,

2000.

ADDRESSES: Comments (3 copies) should

be addressed to: Terrence D. Sheppard,

Office of Procurement and Assistance

Management, Office of Procurement and

Assistance Policy (MA–51), Department

of Energy, 1000 Independence Avenue

S.W., Washington, D.C. 20585.

FOR FURTHER INFORMATION CONTACT:

Terrence D. Sheppard (202) 586–8193;

e-mail terry.sheppard@hq.doe.gov; fax

(202) 586–0545.

SUPPLEMENTARY INFORMATION:

I. Background

II. Section by Section Analysis

III. Public Comments

IV. Procedural Requirements

A. Review Under Executive Order 12866

B. Review Under Executive Order 12988

C. Review Under the Regulatory Flexibility

Act

D. Review Under the Paperwork Reduction

Act

E. Review Under the National

Environmental Policy Act

F. Review Under Executive Order 12612

G. Review Under the Unfunded Mandates

Reform Act of 1995

H. Review Under the Treasury and general

Government Appropriations Act, 1999

I. Background

The Department of Energy (DOE) and

its predecessor agencies have

traditionally accomplished their defense

and energy research mission

responsibilities through the use of

management and operating (M&O)

contracts. Although M&O contracts are

authorized by the Federal Acquisition

Regulation (FAR) at Part 17.6, FAR

policies generally do not provide the

special terms and conditions for award

and contract administration processes

tailored to the M&O contracting

environment. Accordingly, the

Department has established specific

policies and procedures at Department

of Energy Acquisition Regulation

(DEAR) Parts 917 and 970. Included

among these policies and procedures is

a unique set of cost principles which

govern the allowability of costs under

M&O contracts.

Last year DOE conducted a review of

the policies and procedures governing

the award and administration of M&O

contracts. One of the objectives of the

review was to determine whether

current DEAR cost principle coverage

could be eliminated and reliance placed

on similar coverage contained in the

FAR. As a result of a comparative

analysis between the FAR and the DEAR

cost principles and related procedures,

the review concluded that the FAR cost

principles adequately addressed DOE

interests, and that supplemental

coverage was necessary only in a

limited number of cases.

In this notice DOE proposes to amend

the DEAR to implement the results of a

comparative analysis of the FAR, Part

31, and DEAR 970.31, and 970.52. The

amendments will delete those cost

principles and related provisions of

DEAR 970 that are adequately covered

by the FAR and renumber those cost

principles supplemented in the DEAR to

conform to the FAR numbering.

One exception is the ‘‘Travel costs’’

cost principle (FAR 31.205–46 and

DEAR 970.3102–17). DOE has retained

separate coverage, although identical to

the current FAR coverage, because there

is a proposed change to the FAR section

on travel costs that will change the

government-wide standard of travel cost

allowability to a ‘‘reasonableness’’

standard. If the FAR change is made,

DOE will need to retain the current

37336 Federal Register / Vol. 65, No. 115 / Wednesday, June 14, 2000 / Proposed Rules

travel cost requirements mandated by

Congress. Section 309, Pub. L. 106–60,

Energy and Water Appropriations Act,

2000, requires DOE to limit travel cost

reimbursement to the ‘‘rates and

amounts’’ that apply to federal

employees.

Also, DOE has conducted a separate

review of the Department’s policies

addressing home office/corporate

allocations, bid and proposal costs, and

cost of money. This separate review

resulted in a determination that existing

policy relative to home office/corporate

allocations remains valid and that the

individual locations should continue to

determine appropriate home office/

corporate allocations. The review also

determined that bid and proposal costs

should remain unallowable due to the

unique nature of the M&O arrangement.

For cost of money, DOE policy will be

amended to state that such costs are

allowable, rather than unallowable. This

change should have little impact on

DOE as most facilities are governmentowned. Accordingly, the existing

language which makes this cost

unallowable is deleted. The result of

this deletion is to make this an

allowable cost under indirect and

overhead cost allocations.

In summary, DOE chooses to adopt all

of the FAR cost principles except as

supplemented in the areas identified:

TREATMENT OF CURRENT SECTIONS

Section No. Section Title Retain Delete Amend Relocate

Subpart 970.25—Foreign Acquisition

970.2501 .................................... Severance payments for foreign nationals .................................... ✔

Subpart 970.31—Contract Cost Principles and Procedures

970.3100 .................................... Scope and applicability of subpart ................................................ ✔

970.3100–1 ................................ Definitions ...................................................................................... ✔

970.3100–2 ................................ Responsibilities .............................................................................. ✔

970.3100–3 ................................ Deviation ........................................................................................ ✔

970.3101 .................................... General policy ................................................................................ ✔

970.3101–1 ................................ Actual cost basis ........................................................................... ✔

970.3101–2 ................................ Direct and indirect costs ................................................................ ✔

970.3101–3 ................................ General basis for reimbursement of costs .................................... ✔

970.3101–4 ................................ Cost determination based on audit ............................................... ✔

970.3101–5 ................................ Contractor’s system of accounting ................................................ ✔

970.3101–6 ................................ Advance understandings on 1 particular cost items ...................... ✔✔✔

970.3101–7 ................................ Cost submission, certification, penalties, and waivers .................. ✔

970.3102 .................................... Application of cost principles ......................................................... ✔

970.3102–1 ................................ General and administrative expenses ........................................... ✔

970.3102–2 ................................ Compensation for personal services ............................................. ✔ ✔

970.3102–3 ................................ Cost of money ............................................................................... ✔

970.3102–4 ................................ Depreciation ................................................................................... ✔

970.3102–5 ................................ Employee morale, health, welfare, food service, and dormitory

costs.

✔

970.3102–6 ................................ Facilities (plant and equipment) .................................................... ✔

970.3102–7 ................................ Political activity costs ..................................................................... ✔ ✔

970.3102–8 ................................ Membership in trade, business and professional organizations ... ✔

970.3102–9 ................................ Outside technical and professional consultants ............................ ✔

970.3102–10 .............................. Overtime, shift, and holiday premiums .......................................... ✔

970.3102–11 .............................. Page charges in scientific journals ................................................ ✔

970.3102–12 .............................. Plant reconversion costs ............................................................... ✔

970.3102–13 .............................. Precontract costs ........................................................................... ✔

970.3102–14 .............................. Preparatory and make-ready costs ............................................... ✔

970.3102–15 .............................. Procurement: Subcontracts, contractor-affiliated sources, and

leases.

✔

970.3102–16 .............................. Relocation costs ............................................................................ ✔

970.3102–17 .............................. Travel costs ................................................................................... ✔ ✔

970.3102–18 .............................. Special funds in the construction industry .................................... ✔

970.3102–19 .............................. Public relations and advertising .................................................... ✔

970.3102–20 .............................. Cost prohibitions related to legal and other proceedings ............. ✔

970.3102–21 .............................. Fines and penalties ....................................................................... ✔

970.3103 .................................... Contract clauses ............................................................................ ✔

970.5204–4 ................................ New Mexico Gross Receipts ......................................................... ✔

970.5204–13 .............................. Allowable costs and fixed-fee (Management and Operating contracts).✔

970.5204–14 .............................. Allowable costs and fixed-fee (support contracts) ........................ ✔

970.5204–15 .............................. Obligation of funds ........................................................................ ✔

970.5204–16 .............................. Payments and advances ............................................................... ✔

970.5204–17 .............................. Political activity cost prohibition ..................................................... ✔

970.5204–61 .............................. Cost prohibitions related to legal and other proceedings ............. ✔

970.5204–75 .............................. Preexisting conditions .................................................................... ✔

970.5204–84 .............................. Waiver of limitations on severance payments to foreign nationals ✔

1Footnote: This subject heading has been moved to 970.3101–9, but all of the original text has been deleted and replaced with new text.

Federal Register / Vol. 65, No. 115 / Wednesday, June 14, 2000 / Proposed Rules 37337

ORGANIZATION OF NEW SECTIONS

New Section No.* Section title (FAR headings where

appropriate) Summary of supplemental coverage/references

970.3100–1 ............................... Scope of subpart .............................................. Coverage relocated from current 970.3100–2.

970.3101–1 ............................... Objectives ......................................................... Coverage relocated from current 970.3100–3.

970.3101–3 ............................... Home Office Expenses .................................... The coverage addressing Home Office expenses is rewritten

in terms of allocability rather than allowability (moved from

970.3102–1(b)).

970.3101–9 ............................... Advance Agreements ....................................... CO may identify selected cost items requiring CO approval.

970.3101–10 ............................. Indirect cost rate certification and penalties on

unallowable costs.

Coverage relocated from current 970.3101–7.

970.3102–4 ............................... Bonding Costs .................................................. References DEAR 970.5204–31.

970.3102–6 ............................... Compensation .................................................. —Personnel costs determined in accordance with personnel

appendix

—Limits on executive compensation.

970.3102–18 ............................. Bid and Proposal costs .................................... B&P costs unallowable.

970.3102–19 ............................. Insurance and indemnification ......................... References DEAR 970.5204–31.

970.3102–20 ............................. Interest and Other Financial Costs .................. Imputed interest on capital leases allowable.

970.3102–22 ............................. Lobbying and Political Activity Costs ............... Addresses costs for transportation, lodging, and meals associated with providing information, advice etc.

970.3102–28 ............................. Other Business Expense ................................. Establishment and maintenance of financial institution accounts; allowable (moved from 970.5204–13(d)(15).

970.3102–46 ............................. Travel costs ...................................................... Section 309 of Pub. L. 106–60, Energy and Water Development Appropriations Act 2000 requires the Department to

limit travel cost reimbursement to the ‘‘rates and amounts’’

that apply to Federal employees.

Revise documentation threshold from $25 to $75.

970.3102–53 ............................. Preexisting conditions ...................................... References DEAR 970.5204–75.

970.4207–1 ............................... Contracting Officer Determination procedure .. Identifies procedures associated with cost resolution (moved

from 970.3101–3(b)).

970.4207–2 ............................... Certificate of costs. .......................................... Addresses procedures for cost certification, assessment and

waiver of penalties (moved entire 970.3101–7).

970.5204–4 ............................... New Mexico Gross Receipts. ........................... Change cross reference.

970.5204–16 ............................. Payments and Advances ................................. Adds paragraph (k) to reference FAR 31 and DEAR 970.31

970.5204–31 ............................. Insurance-litigation and claims ......................... Changes reference in Paragraph (h) to FAR 31.2.

Adds –13/–14 (d)(4) language at paragraph (m)

970.5204-xx .............................. Penalties for unallowable costs ....................... Clause for assessment of penalties (repeats part of

970.4207–2).

* Proposed section numbers correspond directly with the numbering of FAR coverage being supplemented.

II. Section-by-Section Analysis

1. Subpart 970.25, Foreign

Acquisitions, and the coverage

contained in Section 970.2501,

Severance payments for foreign

nationals, would be removed because

FAR 31.205–6(g)(3) provides coverage.

2. We propose to revise subpart

970.31 and remove current sections

970.3100 through 970.3103. They would

be replaced by the following sections:

A. Section 970.3100–1, Scope of

subpart, prescribes the responsibilities

and roles of the Procurement Executive

and the Head of the Contracting

Activity.

B. Section 970.3101–1, Objectives,

identifies the procedures for deviations

to the cost principles.

C. Section 970.3101–3, Home Office

Expenses, is moved from 970.3102–1,

renamed, and rewritten in plain

language.

D. Section 970.3101–9, Advance

agreements, establishes the contracting

officer’s authority to require the

contracting officer’s approval on

selected items of cost.

E. Section 970.3101–10, Indirect cost

rate certification and penalties on

unallowable costs, addresses the

requirement for a cost certification and

penalties associated with unallowable

costs.

F. Section 970.3102–4, Bonding costs,

paragraph (d) references the clause at

970.5204–31, Insurance-litigation and

claims.

G. Section 970.3102–6(a) and (p)

establish the requirement for a

personnel appendix and set limits on

the allowability of compensation costs

for certain contractor personnel.

H. Section 970.3102–18(c),

Independent research and development

and bid and proposal costs, addresses

the allowability of bid and proposal

costs.

I. Section 970.3102–19, Insurance and

indemnification, references 970.5204—

31, Insurance–litigation and claims.

J. Section 970.3102–20, Interest and

other financial costs, addresses the

allowability of interest relating to

capital leases.

K. Section 970.3102–22(b)(1),

Lobbying and political activity costs,

addresses the allowability of costs of

transportation, lodging, and/or meals

associated with providing technical

information.

L. Section 970.3102–28(i), Other

business expense, addresses the the

maintenance of financial institution

accounts. (Moved from 970.5204–

13(d)(15)).

M. Section 970.3102–46, Travel costs,

is retained as Section 309 of Pub. L.

106–60, Energy and Water Development

Appropriations Act, 2000, requires the

Department to limit travel cost

reimbursement to the ‘‘rates and

amounts’’ that apply to Federal

employees.

Documentation threshold to support

actual costs are revised from $25 to $75.

N. Section 970.3102–53, Preexisting

conditions, references 970.5204–75,

Preexisting conditions.

3. Section 970.4207–1, Contracting

officer determination procedure,

identifies procedures associated with

the resolution of questioned costs.

4. Section 970.4207–2, Cost

certification, identifies administrative

37338 Federal Register / Vol. 65, No. 115 / Wednesday, June 14, 2000 / Proposed Rules

procedures associated with the cost

certification.

5. Section 970.5204–4, New Mexico

gross receipts and compensating tax,

would be revised by changing cross

reference from ‘‘Allowable costs and

fixed fee’’ which would be removed by

this rulemaking and is replaced by a

reference to ‘‘Payments and advances.’’

6. Section 970.5204–13, Allowable

costs and fixed-fee (Management and

Operating contracts), would be removed

and reserved.

7. Section 970.5204–14, Allowable

costs and fixed-fee (support contracts),

would be removed and reserved.

8. Section 970.5204–16 would be

revised to add language referencing FAR

Part 31 coverage and DEAR

supplemental coverage.

9. Section 970.5204–17, Political

activity cost prohibition, would be

removed and reserved. This section

would be addressed in new section

970.3102–22.

10. Section 970.5204–31, Insurancelitigation and claims, would be revised

by deleting the paragraph (h) cross

reference to DEAR 970.3101–3 and

replacing with a reference to FAR Part

31 and DEAR 970.31, and adding a new

paragraph (m) addressing the DOE

approved contractor legal management

procedures.

11. Section 970.5204–61, Cost

prohibitions related to legal and other

proceedings, would be removed and

reserved.

12. Section 970.5204–84, Waiver of

limitations on severance payments to

foreign nationals, would be removed

and reserved.

13. Section 970.5204–XX, Penalties

for unallowable costs, explains the

penalty provisions associated with the

submission of unallowable costs.

III. Public Comments

Interested persons are invited to

participate by submitting data, views, or

arguments with respect to the proposed

DEAR amendments set forth in this

notice. Three copies of written

comments should be submitted to the

address indicated in the ADDRESSES

section of this notice. All comments

received will be available for public

inspection in the DOE Reading Room,

Room lE–190, Forrestal Building, 1000

Independence Avenue, SW.,

Washington, D.C. 20585, between the

hours of 9 a.m. and 4 p.m., Monday

through Friday, except Federal holidays.

All written comments received by the

date indicated in the DATES section of

this notice and all other relevant

information in the record will be

carefully assessed and fully considered

prior to publication of the final rule.

Any information considered to be

confidential must be so identified and

submitted in writing, one copy only.

DOE reserves the right to determine the

confidential status of the information

and to treat it according to our

determination (See 10 CFR 1004.11).

The Department has concluded that

this proposed rule does not involve a

substantial issue of fact or law and that

the proposed rule should not have

substantial impact on the nation’s

economy or a large number of

individuals or businesses. Therefore,

pursuant to Public Law 95–91, the DOE

Organization Act, and the

Administrative Procedure Act (5 U.S.C.

553), the Department does not plan to

hold a public hearing on this proposed

rule.

IV. Procedural Requirements

A. Review Under Executive Order 12866

Today’s regulatory action has been

determined not to be a ‘‘significant

regulatory action’’ under Executive

Order 12866, ‘‘Regulatory Planning and

Review,’’ (58 FR 51735, October 4,

1993). Accordingly, this action was not

subject to review under that Executive

Order by the Office of Information and

Regulatory Affairs of the Office of

Management and Budget (OMB).

B. Review Under Executive Order 12988

With respect to the review of existing

regulations and the promulgation of

new regulations, section 3(a) of

Executive Order 12988, ‘‘Civil Justice

Reform, ‘‘ 61 FR 4729 (February 7,

1996), imposes on Executive agencies

the general duty to adhere to the

following requirements: (1) Eliminate

drafting errors and ambiguity; (2) write

regulations to minimize litigation; and

(3) provide a clear legal standard for

affected conduct rather than a general

standard and promote simplification

and burden reduction. With regard to

the review required by section 3(a),

section 3(b) of Executive Order 12988

specifically requires that Executive

agencies make every reasonable effort to

ensure that the regulation: (1) Clearly

specifies the preemptive effect, if any;

(2) clearly specifies any effect on

existing Federal law or regulation; (3)

provides a clear legal standard for

affected conduct while promoting

simplification and burden reduction; (4)

specifies the retroactive effect, if any; (5)

adequately defines key terms; and (6)

addresses other important issues

affecting clarity and general

draftmenship under any guidelines

issued by the Attorney General. Section

3(c) of Executive Order 12988 requires

Executive agencies to review regulations

in light of applicable standards in

section 3(a) and section 3(b) to

determine whether they are met or it is

unreasonable to meet one or more of

them. The Department of Energy has

completed the required review and

determined that, to the extent permitted

by law, the regulations meet the relevant

standards of Executive Order 12988.

C. Review Under the Regulatory

Flexibility Act

This proposed rule was reviewed

under the Regulatory Flexibility Act, 5

U.S.C. 601 et seq., which requires

preparation of a regulatory flexibility

analysis for any rule which is likely to

have significant economic impact on a

substantial number of small entities.

Today’s proposed rule streamlines the

cost principles that apply to DOE M&O

contracts. M&O contractors are not

small entities. Accordingly, DOE

certifies that this rule will not have a

significant economic impact on a

substantial number of small entities,

and, therefore, no regulatory flexibility

analysis has been prepared.

D. Review Under the Paperwork

Reduction Act

No new information or recordkeeping

requirements are imposed by this

rulemaking. Accordingly, no OMB

clearance is required under the

Paperwork Reduction Act (44 U.S.C.

3501 et seq.).

E. Review Under the National

Environmental Policy Act

DOE has concluded that promulgation

of this rule falls into a class of actions

which would not individually or

cumulatively have significant impact on

the human environment, as determined

by DOE’s regulations (10 CFR Part 1021,

Subpart D) implementing the National

Environmental Policy Act of 1969

(NEPA) (42 U.S.C. 4321 et seq.).

Specifically, this rule is categorically

excluded from NEPA review because

the proposed amendments to the DEAR

do not change the environmental effect

of the rule being amended (categorical

exclusion A5). Therefore, this rule does

not require an environmental impact

statement or environmental assessment

pursuant to NEPA.

F. Review Under Executive Order 12612

Executive Order 12612 (52 FR 41685,

October 30, 1987) requires that

regulations, rules, legislation, and any

other policy actions be reviewed for any

substantial direct effects on States, on

the relationship between the National

Government and the States, or in the

distribution of power and

responsibilities among the various

Federal Register / Vol. 65, No. 115 / Wednesday, June 14, 2000 / Proposed Rules 37339

levels of Government. If there are

sufficient substantial direct effects, then

the Executive Order requires the

preparation of a federalism assessment

to be used in all decisions involved in

promulgating and implementing a

policy action. This proposed rule, when

finalized, will revise certain policy and

procedural requirements. States which

contract with DOE will be subject to this

rule. However, DOE has determined that

this rule will not have a substantial

direct effect on the institutional

interests or traditional functions of the

States.

G. Review Under the Unfunded

Mandates Reform Act of 1995

The Unfunded Mandates Reform Act

of 1995 (Pub. L. 104–4) generally

requires a Federal agency to perform a

detailed assessment of costs and

benefits of any rule imposing a Federal

Mandate with costs to state, local or

tribal governments, or to the private

sector, of $100 million or more. This

rulemaking affects private sector

entities, and the impact is less than

$100 million.

H. Treasury and General Government

Appropriations Act, 1999

Section 654 of the Treasury and

General Government Appropriations

Act, 1999 (Pub. L. 105–277) requires

Federal agencies to issue a Family

Policymaking Assessment for any

proposed rule that may affect family

well-being. Today’s proposal would not

have any impact on the autonomy or

integrity of the family as in institution.

Accordingly, DOE has concluded that it

is not necessary to prepare a Family

Policymaking Assessment.

List of Subjects in 48 CFR Part 970

Government procurement.

Issued in Washington, D.C. on June 6,

2000.

Richard H. Hopf,

Director, Office of Procurement and

Assistance Management.

For the reasons set out in the

preamble, Chapter 9 of Title 48 of the

Code of Federal Regulations is proposed

to be amended as set forth below.

1. The authority citation for Part 970

continues to read as follows:

Authority: Atomic Energy Act of 1954 (42

U.S.C. 2201); Department of Energy

Organization Act (42 U.S.C. 7101); National

Nuclear Security Administration Act (50

U.S.C. 2401, et seq.).

PART 970—DOE MANAGEMENT AND

OPERATING CONTRACTS

Subpart 970.25 [Removed]

2. Subpart 970.25 consisting of

970.2501 is removed.

3. Subpart 970.31, Contract Cost

Principles and Procedures, is revised to

read as follows:

Sec.

970.3100–1 Scope of subpart.

970.3101–1 Objectives.

970.3101–3 Home office expenses

970.3101–9 Advance agreements.

970.3101–10 Cost certification.

970.3102–4 Bonding costs.

970.3102–6 Compensation for personal

services.

970.3102–18 Independent research and

development and bid and proposal costs.

970.3102–19 Insurance and

indemnification.

970.3102–20 Interest and other financial

costs.

970.3102–22 Lobbying and political activity

costs.

970.3102–28 Other business expenses.

970.3102–46 Travel costs.

970.3102–53 Preexisting conditions.

Subpart 970.31—Contract cost

principles and procedures

970.3100–1 Scope of subpart.

(a) The Procurement Executive is

responsible for developing and revising

the policy and procedures for the

determination of allowable costs

reimbursable under a management and

operating contract, and for coordination

with other Headquarters’ offices having

joint interests.

(b) The Head of the Contracting

Activity is responsible for following the

policy, principles and standards set

forth in this subpart in establishing the

compensation and reimbursement

provisions of contracts and subcontracts

and for submission of deviations for

Headquarters consideration and

approval.

970.3101–1 Objectives.

Deviations from the policy and

principles set forth in this subpart shall

not be made unless such action is

authorized by the Procurement

Executive, on the basis of a written

justification stating clearly the special

circumstances involved.

970.3101–3, Home office expenses.

(a) For on-site work, DOE’s fee for

management and operating contract,

determined under the policy of and

calculated per the procedures in

970.15404–4, provides adequate

compensation for home or corporate

office general and administrative

expenses incurred in the general

management of the contractor’s business

as a whole.

(1) DOE recognizes that some Home

Office Expenses are incurred for the

benefit of a management and operating

contract. DOE has elected to recognize

that benefit through fee due to the

difficulty of determining the dollar

value applicable to any management

and operating contract. The difficulty

arises because:

(i) The general construct of a

management and operating contract

results in minimal Home Office

involvement in the contract work, and

(ii) Conventional Home Office

Expense allocation techniques that use

bases such as total operating costs, labor

dollars, hours etc., are not appropriate

because they inherently assume

significant contractor investment (in

terms of its own resources, such as,

labor, material, overhead, etc.).

Contractor investments are minimal

under DOE’s operating and management

contracts. The contracts are totally

financed by DOE advance payments,

and DOE provides government-owned

facilities, property, and other needed

resources.

(2) From time to time, the fee for a

management and operating contract may

not be adequate compensation for Home

Office Expenses incurred for the benefit

of the contract. An indication that such

a case exists is the need for significant

home office support to deal with issues

at the site that occur without the fault

or negligence of the contractor, for

example, the need for home office legal

support to deal with third party,

environmental, safety, or health issues.

(3) In such a case, the contracting

officer, after obtaining the HCA’s

approval, may consider a contractor

request for additional compensation.

The contractor may request:

(i) Fee in addition to its normal fee;

or

(ii) Compensation on the basis of

actual cost.

(4) Because the contract’s fee provides

some compensation for Home Office

Expenses, the contractor’s request for

additional compensation must always

be for an amount less than the Home

Office Expenses that are incurred for the

benefit of the management and

operating contract.

(b) For off-site work, the DOE allows

Home Office Expenses under architectengineer, supply and research contracts

with commercial contractors performing

the work in their own facilities. Home

Office Expenses may, however, be

included for reimbursement under such

DOE off-site architect-engineer, supply

and research contracts, only to the

extent that they are determined, after

careful examination, to be allowable,

reasonable, and properly allocable to the

37340 Federal Register / Vol. 65, No. 115 / Wednesday, June 14, 2000 / Proposed Rules

work. Work performed in a contractor’s

own facilities under a management and

operating or construction contract may

likewise be allowed to bear the properly

allocable portion of allowable Home

Office Expenses.

970.3101–9 Advance agreements. (DOE

coverage-paragraph (i))

(i) At any time, the contracting officer

may institute an advance approval

requirement for any cost item under a

contract.

970.3101–10 Cost certification.

(a) Certain contracts require

certification of the costs proposed for

final payment purposes. Section

970.4207–2 states the administrative

procedures for the certification

provisions and the related contract

clause prescription. (b) If unallowable costs are included

in final cost settlement proposals,

penalties may be assessed. Section

970.4207–2 states the administrative

procedures for penalty assessment

provisions and the related clause

prescription.

970.3102–4 Bonding costs. (DOE

coverage-paragraph (d))

(d) The allowability of bonding costs

shall be determined pursuant to

970.5204–31, Insurance-litigation and

claims.

970.3102–6 Compensation for personal

services. (DOE coverage-paragraphs (a)

and (p))

(a)(6) In determining the

reasonableness of compensation, the

compensation of each individual

contractor employee normally need not

be subjected to review and approval.

Generally, the compensation paid

individual employees should be left to

the judgment of contractors subject to

the limitations of DOE-approved

compensation policies, programs,

classification systems, and schedules,

and amounts of money authorized for

wage and salary increases for groups of

employees. However, the contracting

officer shall designate a compensation

threshold appropriate for the particular

situation. The contract shall specifically

provide that contracting officer approval

is required for compensating an

individual contractor employee above

the threshold if a total of 50 percent or

more of such compensation is

reimbursed under DOE cost-type

contracts. For purposes of designating

the threshold, total compensation

includes only the employee’s salary and

cash bonus or incentive compensation. (7)(i) Reimbursable costs for

compensation for personal services are

to be set forth in a personnel appendix

which is a part of the contract. This

personnel appendix shall be negotiated

using the principles and policies of FAR

31.205–6, Compensation, as

supplemented by this section,

970.3102–6, and other pertinent parts of

the DEAR. Costs that are unallowable

under other contract terms shall not be

allowable as compensation for

personnel services. (ii) The personnel appendix sets forth

in detail personnel costs and related

expenses allowable under the contract

and documents personnel policies,

practices and plans which have been

found acceptable by the contracting

officer. The contractor will advise DOE

of any proposed changes in any matters

covered by these policies, practices or

plans which relate to personnel costs.

The personnel appendix may be

modified from time to time in writing by

mutual agreement of the contractor and

DOE without execution of an

amendment to the contract. Such

modifications shall be evidenced by

execution of written numbered approval

letters from the contracting officer or his

representative. Types of personnel costs

and related expenses addressed in the

personnel appendix, or amendments

thereto, are as follows: salaries and

wages; bonuses and incentive

compensation; overtime, shift

differential, holiday, and other premium

pay for time worked; welfare benefits

and retirement programs; paid time off,

and salaries and wages to employees in

their capacity as union stewards and

committeemen for time spent in

handling grievances, or serving on labor

management (contractor) committees.

Provided, however, that the contracting

officer’s approval is required in each

instance of total compensation to an

individual employee above an annual

rate as specified in the personnel

appendix. (p)(1) Notwithstanding paragraph (a)

of this section, costs incurred for

compensation of a senior executive in

excess of the benchmark compensation

amount determined applicable for the

contractor fiscal year by the

Administrator, Office of Federal

Procurement Policy, are unallowable.

Allowable costs of executive

compensation shall be determined

pursuant to Federal Acquisition

Regulation 31.205–6(p).

970.3102–18 Independent research and

development and bid and proposal costs.

(DOE coverage-paragraph (c))

(c) Bid and Proposal costs are

unallowable.

970.3102–19 Insurance and

indemnification.

The supplemental material on the

costs of insurance and indemnification

is found in 970.5204–31, Insurancelitigation and claims.

970.3102–20 Interest and other financial

costs.

Imputed interest costs relating to

leases classified and accounted for as

capital leases under generally accepted

accounting principles (GAAP) are

allowable when the decision to enter

into a capital leasing arrangement has

been specifically authorized and

approved by the DOE in accordance

with applicable procedures and such

interest costs are recorded in a DOE

account established for such purpose.

970.3102–22 Lobbying and political

activity costs. (DOE coverage—paragraph

(b))

(b) Costs of the following activities are

excepted from FAR 31.205–22,

Lobbying and political activity costs,

coverage, provided that the resultant

costs are reasonable and otherwise fall

into the following exceptions:

(1) Providing Members of Congress,

their staff members or staff of cognizant

legislative committees, in response to a

request (written or oral, prior or

contemporaneous) from Members of

Congress, their staff members or staff of

cognizant legislative committees, or as

otherwise directed by the Contracting

Officer, information or expert advice of

a factual, technical, or scientific nature,

with respect to topics directly related to

the performance of the contract or

proposed legislation. In providing this

information or expert advice, the

contractor shall indicate to the recipient

that it is not presenting the views of

DOE. Reasonable costs for

transportation, lodging or meals

incurred by contractor employees for

the purpose of providing such

information or expert advice shall also

be reimbursable, provided the request

for such information or expert advice is

a prior written request signed by a

Member of Congress.

(2) Providing State legislatures or

subdivisions thereof, their staff

members, or staff of cognizant

legislative committees, in response to a

prior written request from a State

legislator, or as otherwise directed by

the Contracting Officer, information or

expert advice of a factual, technical, or

scientific nature, with respect to topics

directly related to the performance of

the contract or proposed legislation. In

providing this information or expert

advice, the contractor shall indicate to

the recipient that it is not presenting the

views of DOE. Reasonable costs for

Federal Register / Vol. 65, No. 115 / Wednesday, June 14, 2000 / Proposed Rules 37341

transportation, lodging, or meals

incurred by contractor employees shall

be reimbursable.

970.3102–28 Other business expenses.

(DOE coverage—paragraph (i))

(i) Reasonable costs associated with

the establishment and maintenance of

financial institution accounts in

connection with the work under this

subpart are allowable, including, but not

limited to, service charges, the cost of

disbursing cash, necessary guards,

cashiers, and paymasters. If payments to

employees are made by check, facilities

and arrangements for cashing checks

may be provided without expense to the

employees, subject to the approval of

the contracting officer.

970.3102–46 Travel costs.

(a) Costs for transportation, lodging,

meals, and incidental expenses.

(1) Costs incurred by contractor

personnel on official company business

are allowable, subject to the limitations

contained in this subsection. Costs for

transportation may be based on mileage

rates, actual costs incurred, or on a

combination thereof, provided the

method used results in a reasonable

charge. Costs for lodging, meals, and

incidental expenses may be based on

per diem, actual expenses, or a

combination thereof, provided the

method used results in a reasonable

charge.

(2) Except as provided in paragraph

(a)(3) of this subsection, costs incurred

for lodging, meals, and incidental

expenses (as defined in the regulations

cited in paragraphs (a)(2)(i) through (iii)

of this subsection) shall be considered

to be reasonable and allowable only to

the extent that they do not exceed on a

daily basis the maximum per diem rates

in effect at the time of travel as set forth

in the—

(i) Federal Travel Regulation,

prescribed by the General Services

Administration, for travel in the

conterminous 48 United States,

available on a subscription basis from

the Superintendent of Documents, U.S.

Government Printing Office,

Washington, DC 20402, Stock No. 922–

002–00000–2;

(ii) Joint Travel Regulations, DoD

Civilian Personnel, Appendix A,

prescribed by the Department of

Defense, for travel in Alaska, Hawaii,

The Commonwealth of Puerto Rico, and

territories and possessions of the United

States, available on a subscription basis

from the Superintendent of Documents,

U.S. Government Printing Office,

Washington, DC 20402, Stock No. 908–

010–00000–1; or

(iii) Standardized Regulations

(Government Civilians, Foreign Areas),

section 925, ‘‘Maximum Travel Per

Diem Allowances for Foreign Areas,’’

prescribed by the Department of State,

for travel in areas not covered in

paragraphs (a)(2)(i) and (ii) of this

subsection, available on a subscription

basis from the Superintendent of

Documents, U.S. Government Printing

Office, Washington, DC 20402, Stock

No. 744–008–00000–0.

(3) In special or unusual situations,

actual costs in excess of the maximum

per diem rates are allowable provided

that such amounts do not exceed the

higher amounts authorized for Federal

civilian employees as permitted in the

regulations referenced in pargraphs

(a)(2)(i), (ii), or (iii) of this subsection.

For such higher amounts to be

allowable, all of the following

conditions must be met:

(i) One of the conditions warranting

approval of the actual expense method,

as set forth in the regulations referred in

paragraphs (a)(2)(i), (ii), or (iii) of this

subsection, must exist.

(ii) A written justification for use of

the higher amounts must be approved

by an officer of the contractor’s

organization or designee to ensure that

the authority is properly administered

and controlled to prevent abuse.

(iii) If it becomes necessary to exercise

the authority to use the higher actual

expense method repetitively or on a

continuing basis in a particular area, the

contractor must obtain advance

approval from the contracting officer.

(iv) Documentation to support actual

costs incurred shall be in accordance

with the contractor’s established

practices, subject to paragraph (a)(7) of

this subsection, and provided that a

receipt is required for each expenditure

of $75.00 or more. The approved

justification required by paragraph

(a)(3)(ii) and, if applicable, paragraph

(a)(3)(iii) of this subsection must be

retained.

(4) Paragraphs (a)(2) and (a)(3) of this

subsection do not incorporate the

regulations cited in paragraphs (a)(2)(i),

(ii), and (iii) of this subsection in their

entirety. Only the maximum per diem

rates, the definitions of lodging, meals,

and incidental expenses, and the

regulatory coverage dealing with special

or unusual situations are incorporated

in those paragraphs.

(5) An advance agreement (see FAR

31.109 and DEAR 970.3101–9) with

respect to compliance with paragraphs

(a)(2) and (a)(3) of this subsection may

be useful and desirable.

(6) The maximum per diem rates

referenced in paragraph (a)(2) of this

subsection generally would not

constitute a reasonable daily charge—

(i) When no lodging costs are

incurred; and/or

(ii) On partial travel days (e.g., day of

departure and return). Appropriate

downward adjustments from the

maximum per diem rates would

normally be required under these

circumstances. While these adjustments

need not be calculated in accordance

with the Federal Travel Regulation or

Joint Travel Regulations, they must

result in a reasonable charge.

(7) Costs shall be allowable only if the

following information is documented:

(i) Date and place (city, town, or other

similar designation) of the expenses;

(ii) Purpose of the trip; and

(iii) Name of person on trip and that

person’s title or relationship to the

contractor.

(b) Travel costs incurred in the

normal course of overall administration

of the business are allowable and shall

be treated as indirect costs.

(c) Travel costs directly attributable to

specific contract performance are

allowable and may be charged to the

contract under FAR 31.202.

(d) Airfare costs in excess of the

lowest customary standard, coach, or

equivalent airfare offered during normal

business hours are unallowable except

when such accommodations require

circuitous routing, require travel during

unreasonable hours, excessively prolong

travel, result in increased cost that

would offset transportation savings, are

not reasonably adequate for the physical

or medical needs of the traveler, or are

not reasonably available to meet mission

requirements. However, in order for

airfare costs in excess of the standard

airfare to be allowable, the applicable

condition(s) must be documented and

justified.

(e)(1) ‘‘Cost of travel by contractorowned, -leased, or -chartered aircraft,’’

as used in this paragraph, includes the

cost of lease, charter, operation

(including personnel), maintenance,

depreciation, insurance, and other

related costs.

(2) The costs of travel by contractorowned, -leased, or -chartered aircraft are

limited to the standard airfare described

in paragraph (d) of this subsection for

the flight destination unless travel by

such aircraft is specifically required by

contract specification, term, or

condition, or a higher amount is

approved by the contracting officer. A

higher amount may be agreed to when

one or more of the circumstances for

justifying higher than standard airfare

listed in paragraph (d) of this subsection

are applicable, or when an advance

agreement under paragraph (e)(3) of this

37342 Federal Register / Vol. 65, No. 115 / Wednesday, June 14, 2000 / Proposed Rules

subsection has been executed. In all

cases, travel by contractor-owned,

-leased, or -chartered aircraft must be

fully documented and justified. For

each contractor-owned, -leased, or

-chartered aircraft used for any business

purpose which is charged or allocated,

directly or indirectly, to a Government

contract, the contractor must maintain

and make available manifest/logs for all

flights on such company aircraft. As a

minimum, the manifest/log shall

indicate—

(i) Date, time, and points of departure;

(ii) Destination, date, and time of

arrival;

(iii) Name of each passenger and

relationship to the contractor;

(iv) Authorization for trip; and

(v) Purpose of trip.

(3) Where an advance agreement is

proposed (see 31.109), consideration

may be given to the following:

(i) Whether scheduled commercial

airlines or other suitable, less costly,

travel facilities are available at

reasonable times, with reasonable

frequency, and serve the required

destinations conveniently;

(ii) Whether increased flexibility in

scheduling results in time savings and

more effective use of personnel that

would outweigh additional travel costs.

(f) Costs of contractor-owned or

-leased automobiles, as used in this

paragraph, include the costs of lease,

operation (including personnel),

maintenance, depreciation, insurance,

etc. These costs are allowable, if

reasonable, to the extent that the

automobiles are used for company

business. That portion of the cost of

company-furnished automobiles that

relates to personal use by employees

(including transportation to and from

work) is compensation for personal

services and is unallowable as stated in

FAR 31.205–6(m)(2).

970.3102–53 Preexisting conditions.

Clause 970.5204–75, Preexisting

conditions, provides guidance on

situations where this category of costs

may be allowable.

970.42 Contract Administration.

4. 970.4207–1, Contracting officer

determination procedure, is added to

read as follows:

970.4207–1 Contracting officer

determination procedure. (DOE coverageparagraph (b))

(b)(4) A contracting officer shall not

resolve any questioned costs until the

contracting officer has obtained:

(i) Adequate documentation with

respect to such costs; and

(ii) The opinion of the Department of

Energy’s auditor on the allowability of

such costs.

(5) The contracting officer shall

ensure that the documentation

supporting the final settlement

addresses the amount of the questioned

costs and the subsequent disposition of

such questioned costs.

(6) The contracting officer shall

ensure, to the maximum extent

practicable, that the Department of

Energy’s auditor is afforded an

opportunity to attend any negotiation or

meeting with the contractor regarding a

determination of allowability.

5. Section 970.4207–2, is added to

read as follows:

970.4207–2 Certificate of costs.

(a) The contracting officer shall

require that management and operating

contractors provide a submission,

pursuant to 970.5204–16(e), for

settlement of costs incurred during the

period stipulated on the submission and

a certification that the costs included in

the submission are allowable. The

contracting officer shall assess a penalty

pursuant to 970.5204–XX if unallowable

costs are included in the submission.

Unallowable costs are either expressly

unallowable or determined unallowable.

(1) An expressly unallowable cost is

a particular item or type of cost which,

under the express provisions of an

applicable law, regulation, or this

contract, is specifically named and

stated to be unallowable.

(2) A cost determined unallowable is

one which, for that contractor,

(i) Was subject to a contracting

officer’s final decision and not

appealed;

(ii) The Department’s Board of

Contract Appeals or a court has

previously ruled as unallowable; or

(iii) Was mutually agreed to be

unallowable.

(b) If, during the review of the

submission, the contracting officer

determines that the submission contains

an expressly unallowable cost or a cost

determined to be unallowable prior to

the submission, the contracting officer

shall assess a penalty.

(c) If the contracting officer

determines that a cost submitted by the

contractor in its submission for

settlement is:

(1) Expressly unallowable, then the

contracting officer shall assess a penalty

in an amount equal to the disallowed

cost allocated to the contract plus

interest on the paid portion of the

disallowed cost. Interest shall be

computed from the date of overpayment

to the date of repayment using the

interest rate specified by the Secretary

of the Treasury pursuant to Public Law

92–41 (85 Stat. 97).

(2) Determined unallowable, then the

contracting officer shall assess a penalty

in an amount equal to two times the

amount of the disallowed cost allocated

to the contract.

(d) The contracting officer may waive

the penalty provisions when:

(1) The contractor withdraws the

submission before the formal initiation

of an audit of the submission and

submits a revised submission;

(2) The amount of the unallowable

costs allocated to covered contracts is

$10,000 or less; or

(3) The contractor demonstrates to the

contracting officer’s satisfaction that:

(i) It has established appropriate

policies, personnel training, and an

internal control and review system that

provides assurances that unallowable

costs subject to penalties are precluded

from the contractor’s submission for

settlement of costs; and

(ii) The unallowable costs subject to

the penalty were inadvertently

incorporated into the submission.

(e) The Head of the Contracting

Activity may waive the certification

when—

(1) It determines that it would be in

the best interest of the United States to

waive such certification; and

(2) It states in writing the reasons for

that determination and makes such

determination available to the public.

970.5204–4 [Amended]

6. Subsection 970.5204–4 is amended

by revising the reference to ‘‘Allowable

Costs and Fixed Fee’’ to read ‘‘Payment

and advances.’’

970.5204–13 and 970.5204–14 [Removed

and Reserved]

7. Section 970.5204–13, Allowable

costs and fixed-fee (Management and

Operating contracts), is removed and

reserved.

8. Section 970.5204–14, Allowable

costs and fixed-fee (support contracts),

is removed and reserved.

9. Section 970.5204–16 is amended by

adding a new paragraph (k) to read as

follows:

970.5204–16 Payments and advances.

* * * * *

(k) Determining allowable costs. The

contracting officer shall determine allowable

costs in accordance with the Federal

Acquisition Regulation subpart 31.2 and the

Department of Energy Acquisition Regulation

subpart 970.31 in effect on the date of this

contract and other provisions of this contract.

Federal Register / Vol. 65, No. 115 / Wednesday, June 14, 2000 / Proposed Rules 37343

970.5204–17 [Removed and Reserved]

10. Section 970.5204–17, Political

activity cost prohibition is removed and

reserved.

11. Section 970.5204–31 is amended

by revising the introductory paragraph

of clause paragraph (h) and adding

clause paragraph (m) to read as follows:

970.5204–31 Insurance-litigation and

claims.

* * * * *

(h) In addition to the cost reimbursement

limitations contained in FAR part 31, as

supplemented by DEAR 970.31, and

notwithstanding any other provision of this

contract, the contractor’s liabilities to third

persons, including employees but excluding

costs incidental to worker’s compensation

actions, (and any expenses incidental to such

liabilities, including litigation costs, counsel

fees, judgments and settlements) shall not be

reimbursed if such liabilities were caused by

contractor managerial personnel:

* * * * *

(m) Reasonable litigation and other legal

expenses are allowable when incurred in

accordance with the DOE approved

contractor legal management procedures

(including cost guidelines) as such

procedures may be revised from time to time,

and if not otherwise made unallowable by

law or the provisions of this contract.

970.5204–61 [Removed and Reserved]

12. Section 970.5204–61, Cost

prohibitions related to legal and other

proceedings is removed and reserved.

970.5204–84 [Removed and Reserved]

13. Section 970.5204–84, Waiver of

limitations on severance payments to

foreign nationals, is removed and

reserved.

14. Section 970.5204–XX is added to

read as follows:

970.5204–XX Penalties for

unallowable costs.

As prescribed in 970.4207–3 use the

following clause:

Penalties for unallowable costs (APR 2000)

(a) Contractors which include unallowable

cost in a submission for settlement for cost

incurred, may be subject to penalties.

(b) If, during the review of a submission for

settlement of cost incurred, the contracting

officer determines that the submission

contains an expressly unallowable cost or a

cost determined to be unallowable prior to

the submission, the contracting officer shall

assess a penalty.

(c) Unallowable costs are either expressly

unallowable or determined unallowable.

(1) An expressly unallowable cost is a

particular item or type of cost which, under

the express provisions of an applicable law,

regulation, or this contract, is specifically

named and stated to be unallowable.

(2) A cost determined unallowable is one

which, for that contractor,

(i) Was subject to a contracting officer’s

final decision and not appealed;

(ii) The Department’s Board of Contract

Appeals or a court has previously ruled as

unallowable; or

(iii) Was mutually agreed to be

unallowable.

(d) If the contracting officer determines

that a cost submitted by the contractor in its

submission for settlement of cost incurred is:

(1) Expressly unallowable, then the

contracting officer shall assess a penalty in

an amount equal to the disallowed cost

allocated to this contract plus interest on the

paid portion of the disallowed cost. Interest

shall be computed from the date of

overpayment to the date of repayment using

the interest rate specified by the Secretary of

the Treasury pursuant to Public Law 92–41

(85 Stat. 97); or

(2) Determined unallowable, then the

contracting officer shall assess a penalty in

an amount equal to two times the amount of

the disallowed cost allocated to this contract.

(e) The contracting officer may waive the

penalty provisions when:

(1) The contractor withdraws the

submission before the formal initiation of an

audit of the submission and submits a

revised submission;

(2) The amount of the unallowable costs

allocated to covered contracts is $10,000 or

less; or

(3) The contractor demonstrates to the

contracting officer’s satisfaction that:

(i) It has established appropriate policies,

personnel training, and an internal control

and review system that provides assurances

that unallowable costs subject to penalties

are precluded from the contractor’s

submission for settlement of costs; and

(ii) The unallowable costs subject to the

penalty were inadvertently incorporated into

the submission.

(End of clause)

[FR Doc. 00–14866 Filed 6–13–00; 8:45 am]

BILLING CODE 6450–01–P

DEPARTMENT OF THE INTERIOR

Fish and Wildlife Service

50 CFR Part 17

RIN 1018–AF41

Endangered and Threatened Wildlife

and Plants; Proposal to List the

Chiricahua Leopard Frog as

Threatened With a Special Rule

AGENCY: Fish and Wildlife Service,

Interior.

ACTION: Proposed rule.

SUMMARY: We, the U.S. Fish and

Wildlife Service (Service), propose

threatened status pursuant to the

Endangered Species Act of 1973, as

amended (Act), for the Chiricahua

leopard frog (Rana chiricahuensis). The

Chiricahua leopard frog is now absent

from many historical localities and

numerous mountain ranges, valleys, and

drainages within its former range. In

areas where it is still present,

populations are often few, small, and

widely scattered. Known threats include

habitat alteration, destruction, and

fragmentation, predation by nonnative

organisms, and disease. Habitat loss

results from water diversions, dredging,

livestock grazing, mining, degraded

water quality, and groundwater

pumping. Problems associated with

small population numbers and size also

threaten the species. Evidence suggests

that adverse effects from water-borne

contaminants may also threaten this

species. This proposed rule, if made

final, would implement Federal

protection to this species and provide

funding for development and

implementation of recovery actions.

DATES: We must receive comments from

all interested parties by September 12,

2000. We must receive public hearing

requests by July 31, 2000.

ADDRESSES: Send comments and

materials to the Field Supervisor,

Arizona Ecological Services Field

Office, U.S. Fish and Wildlife Service,

2321 West Royal Palm Road, Suite 103,

Phoenix, Arizona 85021–4951.

Comments and information received

will be available for public inspection,

by appointment, during normal business

hours at the above address.

FOR FURTHER INFORMATION CONTACT: Jim

Rorabaugh, Herpetologist, at the above

address (telephone 602/640–2720;

facsimile 602/640–2730).

SUPPLEMENTARY INFORMATION:

Background

Leopard frogs (Rana pipiens

complex), long considered to consist of

a few highly variable species, are now

recognized as a diverse assemblage of

more than two dozen species (Hillis et

al. 1983), with many species described

in the last 20 years. Mecham (1968)

recognized two distinct variations of

‘‘Rana pipiens’’ in the White Mountains

of Arizona. One of these, referred to as

the ‘‘southern form,’’ was depicted as a

stocky frog with raised folds down both

sides of the back (dorsolateral folds) that

were interrupted and deflected medially

towards the rear. The other form

matched previous descriptions of Rana

pipiens. Based on morphology, mating

calls, and genetic analyses

(electrophoretic comparisons of blood

protein samples), Platz and Platz (1973)

demonstrated that at least three distinct

forms of leopard frogs occurred in

Arizona, including the southern form.

This southern form was subsequently

described as the Chiricahua leopard frog

(Rana chiricahuensis) (Platz and

Mecham 1979).