73498 Federal Register / Vol. 79, No. 238 / Thursday, December 11, 2014 / Rules and Regulations 

CONTRACTOR FORWARD PRICING RATE PROPOSAL ADEQUACY CHECKLIST—Continued 

Submission item Proposal page No. 

(if applicable) 

If not provided, 

explain (may use 

continuation pages) 

11. Does the proposal identify planned or anticipated changes in the composition of labor 

rates, labor categories, union agreements, headcounts, or other factors that could significantly impact the direct labor rates? 

Indirect Rates (Fringe, Overhead, G&A, etc.) 

12. Indirect Rates Methodology and Basis of Each Estimate. 

a. Does the proposal identify the basis of each estimate and provide an explanation of 

the methodology used to develop the indirect rates? 

b. Does the proposal include or identify the location of the supporting documents for 

the proposed rates? 

13. Does the proposal identify indirect expenses by burden center, by cost element, by 

year (including any voluntary deletions, if applicable) in a format that is consistent with 

the accounting system used to accumulate actual expenses? 

14. Does the proposal identify any contingencies? 

15. Does the proposal identify planned or anticipated changes in the nature, type, or level 

of indirect costs, including fringe benefits? 

16. Does the proposal identify corporate, home office, shared services, or other incoming 

allocated costs and the source for those costs, including location and point of contact 

(custodian) name, phone number, and email address? 

17. Does the proposal separately identify all intermediate cost pools and provide a reconciliation to show where the costs will be allocated? 

18. Does the proposal identify the escalation factors used to escalate indirect costs for the 

out-years, the costs to which escalation is applicable, and the basis of each factor used? 

19. Does the proposal provide details of the development of the allocation base? 

20. Does the proposal include or reference the supporting data for the allocation base such 

as program budgets, negotiation memoranda, proposals, contract values, etc.? 

21. Does the proposal identify how the proposed allocation bases reconcile with its long 

range plans, strategic plan, operating budgets, sales forecasts, program budgets, etc.? 

Cost of Money (COM) 

22. Cost of Money. 

a. Are Cost of Money rates submitted on Form CASB–CMF, with the Treasury Rate 

used to compute COM identified and a summary of the net book value of assets, 

identified as distributed and non-distributed? 

b. Does the proposal identify the support for the Form CASB–CMF, for example, the 

underlying reports and records supporting the net book value of assets contained in 

the form? 

Other 

23. Does the proposal include a comparison of prior forecasted costs to actual results in 

the same format as the proposal and an explanation/analysis of any differences? 

24. If this is a revision to a previous rate proposal or a forward pricing rate agreement, 

does the new proposal provide a summary of the changes in the circumstances or the 

facts that the contractor asserts require the change to the rates? 

[FR Doc. 2014–28811 Filed 12–10–14; 8:45 am] 

BILLING CODE 5001–06–P 

DEPARTMENT OF DEFENSE 

Defense Acquisition Regulations 

System 

48 CFR Parts 225 and 236 

RIN 0750–AI33 

Defense Federal Acquisition 

Regulation Supplement: Use of Military 

Construction Funds in Countries 

Bordering the Arabian Sea (DFARS 

Case 2014–D016) 

AGENCY: Defense Acquisition 

Regulations System, Department of 

Defense (DoD). 

ACTION: Final rule. 

SUMMARY: DoD has adopted as final, 

without change, an interim rule 

amending the Defense Federal 

Acquisition Regulation Supplement 

(DFARS) to implement sections of the 

Military Construction and Veterans 

Affairs, and Related Agencies 

Appropriations Act, 2014, that restricts 

use of military construction funds in 

various countries, including countries 

bordering the Arabian Sea. 

DATES: Effective December 11, 2014. 

FOR FURTHER INFORMATION CONTACT: Ms. 

Amy G. Williams, telephone 571–372– 

6106. 

SUPPLEMENTARY INFORMATION: 


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Federal Register / Vol. 79, No. 238 / Thursday, December 11, 2014 / Rules and Regulations 73499 

I. Background 

DoD published an interim rule in the 

Federal Register at 79 FR 44314 on July 

31, 2014, to implement sections of the 

Military Construction and Veterans 

Affairs, and Related Agencies 

Appropriations Act, 2014, that restricts 

use of military construction funds in 

various countries, including countries 

bordering the Arabian Sea. Since 1997, 

sections 111 and 112 of the annual 

military construction appropriations 

acts restrict use of military construction 

funds for acquisitions exceeding certain 

dollar thresholds of architect-engineer 

services and military construction to be 

performed in certain countries. With 

some exceptions, these restrictions 

require award to a U.S. firm or provide 

a preference for award to a U.S. firm. 

One respondent submitted a public 

comment in response to the interim 

rule. 

II. Discussion and Analysis 

DoD reviewed the public comment in 

the development of the final rule. The 

comment did not result in any changes 

in the final rule. A discussion of the 

comment is provided, as follows: 

Comment: The respondent disagreed 

with the substitution of ‘‘Arabian Sea’’ 

for the ‘‘Arabian Gulf’’ for the following 

reasons: 

• The respondent viewed the rule as 

a ‘‘degradation of the intent of the law.’’ 

• The respondent viewed the rule as 

harmful to all U.S. businesses, small 

and large, interested in construction 

projects in countries that border the 

Arabian Gulf, due to loss of the 20 

percent preference. 

The respondent suggested extension 

of the preferences for U.S. businesses 

when awarding military construction or 

architect-engineer contracts in countries 

bordering the Arabian Gulf to contracts 

in countries bordering the Arabian Sea. 

Response: The interim rule was 

issued in order to comply with the law. 

For several years, the restrictions in the 

annual military construction 

appropriations acts have applied the use 

of military construction funds in 

countries bordering the Arabian Sea, not 

the Arabian Gulf. The law does not 

provide the option to provide the 20 

percent preference to U.S. firms 

performing construction projects in 

countries that border the Arabian Gulf. 

III. Executive Orders 12866 and 13563 

Executive Orders (E.O.s) 12866 and 

13563 direct agencies to assess all costs 

and benefits of available regulatory 

alternatives and, if regulation is 

necessary, to select regulatory 

approaches that maximize net benefits 

(including potential economic, 

environmental, public health and safety 

effects, distributive impacts, and 

equity). E.O. 13563 emphasizes the 

importance of quantifying both costs 

and benefits, of reducing costs, of 

harmonizing rules, and of promoting 

flexibility. This is not a significant 

regulatory action and, therefore, was not 

subject to review under section 6(b) of 

E.O. 12866, Regulatory Planning and 

Review, dated September 30, 1993. This 

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

804. 

IV. Regulatory Flexibility Act 

A final regulatory flexibility analysis 

has been prepared consistent with the 

Regulatory Flexibility Act, 5 U.S.C. 601, 

et seq., and is summarized as follows: 

This rule is necessary to implement 

the preference for award only to U.S. 

firms when awarding certain military 

construction and architect-engineer 

contracts to be performed in countries 

bordering the Arabian Sea. 

The objective of this rule is to 

implement sections 111 and 112 of the 

Military Construction and Veterans 

Affairs, and Related Agencies 

Appropriations Act, 2014 (Division J of 

Pub. L. 113–76). This rule revises the 

preference for award to U.S. firms of 

military construction contracts that have 

an estimated value greater than 

$1,000,000 and the restriction requiring 

award only to U.S. firms for architectengineer contracts that have an 

estimated value greater than $500,000, 

to make it applicable to contracts to be 

performed in a country bordering the 

Arabian Sea, rather than a country 

bordering the Arabian Gulf (as required 

in earlier statutes). 

One respondent stated that the rule 

would cause harm to U.S. small 

business entities engaged in 

construction projects in countries 

bordering the Arabian Gulf, due to loss 

of the 20 percent preference. There was 

no change made to the rule as the result 

of this comment, because the law no 

longer provides a preference for U.S. 

businesses (small or large) performing 

construction projects in countries 

bordering the Arabian Gulf. The law 

changed the applicability of the 

preference from military construction 

projects in countries bordering the 

Arabian Gulf to military construction 

projects bordering the Arabian Sea. 

This will only apply to a very limited 

number of small entities—those entities 

that submit offers in response to 

solicitations for military construction 

contracts that have an estimated value 

greater than $1,000,000 and architectengineer contracts that have an 

estimated value greater than $500,000, 

when the contracts are to be performed 

in countries bordering the Arabian Sea. 

There is a requirement for offerors to 

indicate in their offer whether they are 

a U.S. firm. 

This rule does not impose any 

significant economic impact on small 

firms. The offeror must represent if it is 

a U.S. firm, but in return is granted a 

preference. DoD did not identify any 

alternatives that could reduce the 

burden and still meet the objectives of 

the rule. 

V. Paperwork Reduction Act 

The rule does not impose any new 

information collection requirements that 

require the approval of the Office of 

Management and Budget under the 

Paperwork Reduction Act (44 U.S.C. 

chapter 35). However, it modifies the 

prescription for use of the provision at 

DFARS 252.236–7010, Overseas 

Military Construction—Preference for 

United States Firms, currently approved 

under OMB Clearance 0704–0255, 

Defense Federal Acquisition Regulation 

Supplement (DFARS) Part 236, 

Construction and Architect-Engineer 

Contracts, an amount of less than 8 

hours. Any change in the burden hours 

due to the changed prescription is 

negligible. 

List of Subjects in 48 CFR Parts 225 and 

236 

Government procurement. 

Manuel Quinones, 

Editor, Defense Acquisition Regulations 

System. 

■ Accordingly, the interim rule 

amending 48 CFR part 225 and 236, 

which was published at 79 FR 44314 on 

July 31, 2014, is adopted as a final rule 

without change. 

[FR Doc. 2014–28815 Filed 12–10–14; 8:45 am] 

BILLING CODE 5001–06–P 

DEPARTMENT OF DEFENSE 

Defense Acquisition Regulations 

System 

48 CFR Parts 225 and 252 

RIN 0750–AI47 

Defense Federal Acquisition 

Regulation Supplement: Elimination of 

Quarterly Reporting of Actual 

Performance Outside the United States 

(DFARS Case 2015–D001) 

AGENCY: Defense Acquisition 

Regulations System, Department of 

Defense (DoD). 

ACTION: Final rule. 


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