13586 Federal Register / Vol. 72, No. 55 / Thursday, March 22, 2007 / Rules and Regulations 

DEPARTMENT OF DEFENSE 

GENERAL SERVICES 

ADMINISTRATION 

NATIONAL AERONAUTICS AND 

SPACE ADMINISTRATION 

48 CFR Part 13 

[FAC 2005–16; FAR Case 2005–029; Item 

II;Docket 2006–0020, Sequence 21] 

RIN 9000–AK46 

Federal Acquisition Regulation; FAR 

Case 2005–029, Termination or 

Cancellation of Purchase Orders 

AGENCIES: Department of Defense (DoD), 

General Services Administration (GSA), 

and National Aeronautics and Space 

Administration (NASA). 

ACTION: Final rule. 

SUMMARY: The Civilian Agency 

Acquisition Council and the Defense 

Acquisition Regulations Council 

(Councils) have agreed on a final rule 

amending the Federal Acquisition 

Regulation (FAR) to correct the 

inadvertent omission of an appropriate 

reference pertaining to the termination 

for cause procedures for purchase orders 

that have been accepted in writing. 

DATES: Effective Date: March 22, 2007. 

FOR FURTHER INFORMATION CONTACT: For 

clarification of content, contact Mr. 

Michael Jackson, Procurement Analyst, 

at (202) 208–4949. Please cite FAC 

2005–16, FAR case 2005–029. For 

information pertaining to status or 

publication schedules, contact the FAR 

Secretariat at (202) 501–4755. 

SUPPLEMENTARY INFORMATION: 

A. Background 

This final rule amends the Federal 

Acquisition Regulation to amend FAR 

13.302–4 by reinstating the appropriate 

coverage for termination for cause of 

commercial purchase orders. For 

commercial purchase orders that have 

been accepted in writing by the 

contractor, current references to FAR 

12.403(d) and FAR 52.212–4(l) as stated 

in 13.302–4(a) address termination for 

convenience. The current FAR language 

at 13.302–4(a) was established under 

FAC 97–3, published in the Federal 

Register at 62 FR 64912 on December 9, 

1997, and became effective on February 

9, 1998. This change constituted a 

complete rewrite and reorganization of 

FAR Part 13. Previously, FAR Part 13 

identified both termination for cause as 

well as for convenience as the 

termination methods available to 

contracting officers. Furthermore, FAR 

12.403 permits the Government to 

terminate a contract for commercial 

items either for the convenience of the 

Government or for cause, and makes no 

distinction based on the dollar value of 

the commercial item contract, nor the 

contractual method utilized to procure 

the commercial item. Therefore, this 

final rule amends FAR Part 13.302–4(a) 

by reinstating the appropriate coverage 

for and references to termination for 

cause of commercial purchase orders. 

DoD, GSA, and NASA published a 

proposed rule in the Federal Register at 

71 FR 14445 on March 22, 2006. The 

60–day comment period for the 

proposed rule ended May 22, 2006. One 

respondent provided a comment. This 

comment is discussed below. 

Public Comment 

Comment: The commenter suggests 

that the words ‘‘in writing by the 

contractor’’ be deleted. The commenter 

asserts that the beginning of 

performance of work under a purchase 

order should be recognized as contractor 

acceptance of the purchase order, which 

in most cases, begins on the date of 

award. 

Response: The scope of this case is 

the correction of an administrative error 

to re-establish the FAR language for 

termination for cause procedures for 

purchase orders that have been accepted 

in writing. To revise the case now to 

include all purchase orders, whether 

accepted in writing or not, would 

exceed the scope of what was published 

in the proposed rule. The Councils 

recognize that this issue requires 

additional review and will set up a 

separate case to address it. 

Summary of Changes 

FAR 13.302–4(a) is revised to 

reinstitute references to procedures for 

termination for cause as well as 

termination for convenience under FAR 

12.403 and 52.212–4(l) or (m). 

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 Department of Defense, the 

General Services Administration, and 

the National Aeronautics and Space 

Administration certify that this final 

rule will not 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 

rule does not change the Government’s 

existing termination rights but merely 

clarifies those rights by correcting an 

inadvertent error in the FAR. 

C. Paperwork Reduction Act 

The Paperwork Reduction Act does 

not apply because the 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 Part 13 

Government procurement. 

Dated: March 15, 2007 

Ralph De Stefano, 

Director, Contract Policy Division. 

■ Therefore, DoD, GSA, and NASA 

amend 48 CFR part 13 as set forth 

below: 

PART 13—SIMPLIFIED ACQUISITION 

METHODS 

■ 1. The authority citation for 48 CFR 

part 13 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 13.302–4 by 

revising paragraphs (a)(1) and (b)(2) to 

read as follows: 

13.302–4 Termination or cancellation of 

purchase orders. 

(a) * * * 

(1) 12.403 and 52.212–4(l) or (m) for 

commercial items; or 

* * * * * 

(b) * * * 

(2) If the contractor does not accept 

the cancellation or claims that costs 

were incurred as a result of beginning 

performance under the purchase order, 

the contracting officer shall process the 

action as a termination prescribed in 

paragraph (a) of this subsection. 

[FR Doc. 07–1356 Filed 3–21–07; 8:45 am] 

BILLING CODE 6820–EP–S 

DEPARTMENT OF DEFENSE 

GENERAL SERVICES 

ADMINISTRATION 

NATIONAL AERONAUTICS AND 

SPACE ADMINISTRATION 

48 CFR Parts 22 and 52 

[FAC 2005–16; FAR Case 2006–019; Item 

III Docket 2006–0020, Sequence 12] 

RIN 9000–AK66 

Federal Acquisition Regulation; FAR 

Case 2006–019, Contracts with 

Religious Entities 

AGENCIES: Department of Defense (DoD), 

General Services Administration (GSA), 

and National Aeronautics and Space 

Administration (NASA). 


sroberts on PROD1PC70 with RULES