Document Headings

                    Document headings vary by document type but may contain                    the following:                  
                -                       the agency or agencies that issued and signed a document                    
                -                       the number of the CFR title and the number of each part                      the document amends, proposes to amend, or is directly                      related to                    
                -                       the agency docket number / agency internal file number                    
                -                       the RIN which identifies each regulatory action listed in                      the Unified Agenda of Federal Regulatory and Deregulatory                      Actions                    

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###### Department of Defense

###### General Services Administration

###### National Aeronautics and Space Administration

          - 48 CFR Parts 30 and 52
          - [FAR Case 2006-004; Docket 2006-0020; Sequence 10]
          - RIN 9000-AK58

# AGENCIES:

Department of Defense (DoD), General Services Administration (GSA), and National Aeronautics and Space Administration (NASA).

# ACTION:

Proposed rule.

# SUMMARY:

The Civilian Agency Acquisition Council and the Defense Acquisition Regulations Council (Councils) are proposing to amend the Federal Acquisition Regulation (FAR) to implement recommendations to revise the regulations related to the administration of the Cost Accounting Standards (CAS).

# DATES:

Interested parties should submit written comments to the FAR Secretariat on or before December 4, 2006 to be considered in the formulation of a final rule.

# ADDRESSES:

Submit comments identified by FAR case 2006-004 by any of the following methods:
      ( print page 58339)          - Federal eRulemaking Portal: http://www.regulations.gov .  Search for any document by first selecting the proper document types and selecting “Federal Acquisition Regulation” as the agency of choice.  At the “Keyword” prompt, type in the FAR case number (for example, FAR Case 2006-001) and click on the “Submit” button.  You may also search for any document by clicking on the “Advanced search/document search” tab at the top of the screen, selecting from the agency field “Federal Acquisition Regulation”, and typing the FAR case number in the keyword field.  Select the “Submit” button.                    
      - Fax: 202-501-4067.
      - Mail: General Services Administration, Regulatory Secretariat (VIR), 1800 F Street, NW, Room 4035, ATTN: Laurieann Duarte, Washington, DC 20405.

*Instructions*:  Please submit comments only and cite FAR case 2006-004 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:

For clarification of content, contact Jeremy Olson, at (202) 501-3221.  For information pertaining to status or publication schedules, contact the FAR Secretariat at (202) 501-4755.  Please cite FAR case 2006-004.

# SUPPLEMENTARY INFORMATION:

## A.  Background

                    On May 23, 2005, the Cost Accounting Standards Board published an interim rule in the                     **Federal Register**                     at  70 FR 29457 revising the applicability of CAS to U.K. contracts and subcontracts.  The interim rule effected three changes in this regard:                
    - Amendment of 48 CFR 9903.202-1(e)  to add the U.K. to the list of countries whose contractors may file a disclosure form adopted by an agency of their own government in lieu of the CASB-DS-1.  As a result, U.K. contractors are permitted to file the U.K. “Questionnaire on Method of Allocation of Costs” and “Supplemental QMAC.”
    - Deletion of the CAS exemption at 48 CFR 9902.201-1(b)(12) .  Henceforth, all foreign contracts and subcontracts, including U.K. contracts and subcontracts, are subject to the requirements at  48 CFR 9903.201-1(b)(4)  and must comply with CAS 401 and 402.
    - Deletion of 48 CFR 9903.201-4(d) , Consistency in Cost Accounting Practices.  This contract clause is no longer appropriate for inclusion in contracts with U.K. concerns.

In order to retain consistency between CAS and FAR in matters relating to the administration of CAS, the Councils are proposing FAR revisions as outlined below:

                    1.                     *FAR 30.201-4(c), Consistency in Cost Accounting Practices*. This part is renamed as Disclosure and Consistency of Cost Accounting Practices for Contracts Awarded to Foreign Concerns.  It is also being revised to delete the language related to contracts awarded to United Kingdom contracts and to add language that addresses contracts subject to CAS 401 and 402 under 48 CFR 9903.201-(1)(b)(4).                

                    2.                     *FAR 52.230-4, Consistency in Cost Accounting Practices*. The clause is renamed as Disclosure and Consistency of Cost Accounting Practices for Contracts Awarded to Foreign Concerns.  The clause is also revised to specify that it applies to contracts awarded to foreign concerns who are subject to CAS 401 and 402.                

This is not a significant regulatory action and, therefore, was not 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

                    The Councils do not expect this proposed rule to have a significant economic impact on a substantial number of small entities within the meaning of the Regulatory Flexibility Act, 5 U.S.C. 601,                     *et seq.*, because contracts and subcontracts awarded to small businesses are exempt from the Cost Accounting Standards. An Initial Regulatory Flexibility Analysis has, therefore, not been performed.  We invite comments from small businesses and other interested parties. The Councils will consider comments from small entities concerning the affected FAR Parts 30 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.*                     (FAR case 2006-004), in correspondence.                

## C.  Paperwork Reduction Act

                    The Paperwork Reduction Act does not apply because the proposed changes to the FAR do not impose information collection requirements that require the approval of the Office of Management and Budget under 44 U.S.C. 3501,                     *et seq.*

# List of Subjects in 48 CFR Parts 30 and 52

      - Government procurement

Dated:  September 26, 2006.

Ralph De Stefano

Director, Contract Policy Division.

Therefore, DoD, GSA, and NASA propose amending 48 CFR parts 30 and 52 as set forth below:

1.  The authority citation for 48 CFR parts 30 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 30—COST ACCOUNTING STANDARDS ADMINISTRATION

2.  Amend section 30.201-4 by revising paragraph (c) to read as follows:

30.201-4

                    (c)                     *Disclosure and Consistency of Cost Accounting Practices for Contracts Awarded to Foreign Concerns*. The contracting officer shall insert the clause at FAR 52.230-4, Disclosure and Consistency of Cost Accounting Practices for Contracts Awarded to Foreign Concerns, in negotiated contracts that are subject to CAS 401 and 402 under 48 CFR 9903.201-1(b)(4).                

# PART 52—SOLICITATION PROVISIONS AND CONTRACT CLAUSES

3.  Amend section 52.230-4 by revising the section and clause headings and the clause to read as follows:

52.230-4

DISCLOSURE AND CONSISTENCY OF COST ACCOUNTING PRACTICES FOR CONTRACTS AWARDED TO FOREIGN CONCERNS (DATE)

                        The Contractor agrees that it will consistently follow the cost accounting practices disclosed on FORM CASB DS-1 or other disclosure form as permitted by 48 CFR 9903.202-1(e) in estimating, accumulating, and reporting costs under this contract, and comply with the requirements of CAS 401, Consistency in Estimating, Accumulating, and Reporting Costs, and CAS 402, Consistency in Allocating Costs Incurred for the Same Purpose. In the event the Contractor fails to follow such practices, or comply consistently with CAS 401 and 402, it agrees that the contract price shall be adjusted, together with interest, if such failure results in increased cost paid by the U.S. Government. Interest shall be computed at the annual rate of interest established under section 6621 of the Internal Revenue Code of 1986 (26 U.S.C. 6621) from the time payment by the Government was made to the time adjustment is effected. The Contractor agrees that the Disclosure Statement or other form permitted, pursuant to 48 CFR 9903.202-1(e) shall be available for inspection and use by authorized                               ( print page 58340)                            representatives of the United States Government.                    

(End of clause)

[FR Doc. 06-8413 Filed 10-2-06; 8:45 am]

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