Federal Register / Vol. 62, No. 145 / Tuesday, July 29, 1997 / Rules and Regulations 40471

‘‘non-commercial’’ before the word

‘‘contracts’’.

752.7015 [Amended]

72. Section 752.7015 is amended by

revising the introductory paragraph, the

clause heading, paragraph (a)(2), and

paragraph (a)(4) of the clause to read as

follows:

752.7015 Use of pouch facilities.

For use in all USAID non-commercial

contracts exceeding the simplified

acquisition threshold and involving

performance overseas.

Use of Pouch Facilities (April 1996)

(a) * * *

(2) U.S. citizen employees of U.S.

contractors are authorized use of the pouch

for personal mail up to a maximum of one

pound per shipment (but see paragraph (a)(3)

of this clause).

* * * * *

(4) Official mail as authorized by paragraph

(a)(1) of this clause should be addressed as

follows: Individual or Organization name,

followed by the symbol ‘‘C’’, city Name of

Post, U.S. Agency for International

Development, Washington, DC 20523–0001.

* * * * *

752.7017 [Removed]

73. Section 752.7017 is removed and

reserved.

752.7027 [Amended]

74. Section 752.7027 is amended by

adding ‘‘services’’ before the word

‘‘contracts’’ in the first sentence of the

introductory paragraph and by revising

‘‘or’’ to read ‘‘of’’ in the heading of

paragraph (c) of the clause.

752.7029 [Amended]

75. Section 752.7029 is amended by

adding ‘‘non-commercial’’ before the

word ‘‘contracts’’ in the introductory

paragraph.

752.7033 [Amended]

76. Section 752.7033 is amended by

revising ‘‘, and assigned Control No.

0412–0356’’ in the second sentence of

paragraph (b) to read ‘‘(see 701.105(a))’’,

and by revising the clause heading and

paragraph (a) to read as follows:

752.7033 Physical Fitness.

* * * * *

Physical Fitness (May 1997)

* * * * *

(a) Assignments of less than 60 days in the

Cooperating Country. The contractor shall

require employees being assigned to the

Cooperating Country for less than 60 days to

be examined by a licensed doctor of

medicine. The contractor shall require the

doctor to provide to the contractor a written

statement that in his/her medical opinion,

the employee is physically qualified to

engage in the type of activity for which he/

she is employed and the employee is

physically able to reside in the country to

which he/she is assigned. Under a cost

reimbursement contract, if the contractor has

no written statement of medical opinion on

file prior to the departure for the Cooperating

Country of any employee and such employee

is unable to perform the type of activity for

which he/she is employed or cannot

complete his/her tour of duty because of any

physical disability (other than physical

disability arising from an accident while

employed under this contract), the contractor

shall be responsible for returning the

disabled employee to his/her point of hire

and providing a replacement at no additional

cost to the Government. In addition, in the

case of a cost reimbursement contract, the

contractor shall not be entitled to

reimbursement for any additional costs

attributable to delays or other circumstances

caused by the employee’s inability to

complete his/her tour of duty.

* * * * *

PART 753—FORMS

753.107 [Amended]

77. Section 753.107 is amended by

revising ‘‘M/AS/PP/PP’’ to read ‘‘M/AS/

ISS’’.

78. Chapter 7 is amended by removing

Appendices A, C, G, and H and

reserving each.

Dated: May 13, 1997.

Marcus L. Stevenson,

Procurement Executive.

[FR Doc. 97–18603 Filed 7–28–97; 8:45 am]

BILLING CODE 6116–01–M

DEPARTMENT OF DEFENSE

48 CFR Parts 204, 215, 216, 232, 239,

and 252

[DFARS Case 95–D708]

Defense Federal Acquisition

Regulations Supplement; Truth in

Negotiations and Related Changes

AGENCY: Department of Defense (DoD).

ACTION: Final rule.

SUMMARY: The Director of Defense

Procurement has issued a final rule

amending the Defense Federal

Acquisition Regulation Supplement

(DFARS) to conform to amendments to

the Federal Acquisition Regulation

(FAR) pertaining to cost or pricing data

requirements.

EFFECTIVE DATE: July 29, 1997.

FOR FURTHER INFORMATION CONTACT: Ms.

Amy Williams, PDUSD (A&T) DP

(DAR), IMD 3D139, 3062 Defense

Pentagon, Washington, DC 20301–3062.

Telephone (703) 602–0131; telefax (703)

602–1031.

SUPPLEMENTARY INFORMATION:

A. Background

A proposed rule was published in the

Federal Register on October 23, 1995

(60 FR 54326). The rule proposed

amendments to the DFARS to conform

to FAR amendments that implemented

requirements of the Federal Acquisition

Streamlining Act of 1994 (FASA)

(Public Law 103–355) pertaining to the

submission of cost or pricing data by

offerors and contractors. The rule also

proposed to remove DFARS language

pertaining to work measurement

systems, as Section 2201(b) of FASA

repealed 10 U.S.C. 2406, the primary

statute covering work measurement

systems.

Additional changes in the final rule

include—

• Removal of the proposed language

at DFARS 215.804–1(b)(1)(B)(3) to

conform to FAR standards for adequate

price competition.

• Amendments to DFARS 216.203–4–

70 and the clauses at 252.216–7000 and

252.216–7001 to remove obsolete FAR

references.

• Amendments to DFARS Part 239

and removal of the clauses at 252.239–

7009 and 252.239–7010 to eliminate

special cost or pricing data and audit

requirements for telecommunications

services.

• Retention of the clause at DFARS

252.215–7000, as the clause is

considered to be a useful

supplementation of the clauses at FAR

52.215–23, 52.215–24, and 52.215–25.

Public comments were received from

four respondents. All comments were

considered in the development of the

final rule.

B. Regulatory Flexibility Act

DoD certifies 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 primarily consists of

conforming DFARS amendments to

reflect existing FAR requirements for

submission of cost or pricing data, and

because most prime contracts, as well as

subcontracts, with small businesses do

not require the submission of cost or

pricing data.

C. Paperwork Reduction Act

This rule does not add any new

information collection requirements that

require approval of the Office of

Management and Budget (OMB) under

44 U.S.C. 3501, et seq. However, it is

estimated that elimination of the clause

at 252.239–7009 will reduce annual

paperwork burden requirements by
40472 Federal Register / Vol. 62, No. 145 / Tuesday, July 29, 1997 / Rules and Regulations

4,400 hours (previously approved under

OMB Clearance 0704–0187).

List of Subjects in 48 CFR Parts 204,

215, 216, 232, 239, and 252

Government procurement.

Michele P. Peterson,

Executive Editor, Defense Acquisition

Regulations Council.

Therefore, 48 CFR Parts 204, 215, 216,

232, 239, and 252 are amended as

follows:

1. The authority citation for 48 CFR

Parts 204, 215, 216, 232, 239, and 252

continues to read as follows:

Authority: 41 U.S.C. 421 and 48 CFR

Chapter 1.

PART 204—ADMINISTRATIVE

MATTERS

204.805 [Amended]

2. Section 204.805 is amended in the

first sentence of paragraph (5) by

removing the words ‘‘certification of’’.

PART 215—CONTRACTING BY

NEGOTIATION

215.801 [Removed]

3. Section 215.801 is removed.

4. Sections 215.804 and 215.804–1 are

revised to read as follows:

215.804 Cost or pricing data and

information other than cost or pricing data.

215.804–1 Prohibition on obtaining cost or

pricing data.

(b) Standards for exceptions from cost

or pricing data requirements. (1)

Adequate price competition. (A) An

example of a price ‘‘based on’’ adequate

price competition is exercise of a priced

option in a contract where adequate

price competition existed, if the

contracting officer has determined that

the option price is reasonable in

accordance with FAR 17.207(d);

(B) Dual or multiple source programs.

(1) In dual or multiple source

programs, the determination of adequate

price competition must be made on a

case-by-case basis. Contracting officers

must exercise deliberation and thorough

review in making the determination.

Even when adequate price competition

exists, in certain cases it may be

appropriate to obtain additional

information to assist in price analysis.

(2) Adequate price competition

normally exists when—

(i) Prices are solicited across a full

range of step quantities, normally

including a 0–100 percent split, from at

least two offerors that are individually

capable of producing the full quantity;

and

(ii) The reasonableness of all prices

awarded is clearly established on the

basis of price analysis (see FAR 15.805–

2).

(4) Exceptional cases.

(A) The DoD has exempted the

Canadian Commercial Corporation and

its subcontractors from submission and

certification of cost or pricing data on

all acquisitions.

(B) The DoD has waived certain cost

or pricing data requirements for

nonprofit organizations (including

educational institutions) on costreimbursement-no-fee contracts. The

contracting officer shall require—

(1) Submission of information other

than cost or pricing data to the extent

necessary to determine price

reasonableness and cost realism; and

(2) Cost or pricing data from

subcontractors that are not nonprofit

organizations.

215.804–3 [Removed]

5. Section 215.804–3 is removed.

215.804–6 Amended]

6. Section 215.804–6 is amended by

redesignating paragraphs (b)(2)(A) and

(B) as paragraphs (b)(1)(A) and (B),

respectively.

7. Section 215.05–5 is amended by

revising paragraph (a)(1)(A) to read as

follows:

215.805–5 Field pricing support.

(a)(1)(A) Contracting officers shall

request field pricing reports for—

(1) Fixed-price proposals exceeding

the cost or pricing data threshold at FAR

15.804–2(a)(1);

(2) Cost-type proposals exceeding the

cost or pricing data threshold at FAR

15.804–2(a) (1) from offerors with

significant estimating system

deficiencies (see 215.811–70(a)(3) and

(c)(2)(i); or

* * * * *

8. Section 215.805–70 is amended by

revising paragraph (b) to read as follows:

215.805–70 Cost realism analysis.

* * * * *

(b) The contracting officer should

determine what information other than

cost or pricing data is necessary for the

cost realism analysis during acquisition

planning and development of the

solicitation. Unless such information is

already available from Government

sources, the contracting officer will

need to ask the offerors for it.

(1) Request only necessary data; and

(2) Do not request submission of cost

or pricing data.

9. Section 215.811–70 is amended by

revising paragraphs (b)(2), (g)(3)(ii), and

(h) to read as follows:

215.811–70 Disclosure, maintenance, and

review requirements.

* * * * *

(b) * * *

(2) A large business contractor is

subject to estimating system disclosure,

maintenance, and review requirements

if—

(i) In its preceding fiscal year, the

contractor received DoD prime contracts

or subcontracts totaling $50 million or

more for which cost or pricing data were

required; or

(ii) In its preceding fiscal year, the

contractor received DoD prime contracts

or subcontracts totaling $10 million or

more (but less than $50 million) for

which cost or pricing data were required

and the contracting officer, with

concurrence or at the request of the

administrative contracting officer,

determines it to be in the best interest

of the Government (e.g., significant

estimating problems are believed to

exist or the contractor’s sales are

predominantly Government).

* * * * *

(g) * * *

(3) * * *

(ii) Indicate a specific time or

subsequent event by which the

contractor will submit a supplemental

proposal, including cost or pricing data,

identifying the cost impact adjustment

necessitated by the deficient estimating

system;

* * * * *

(h) Contract clause. Use the clause at

252.215–7002, Cost Estimating System

Requirements, in all solicitations and

contracts to be awarded on the basis of

cost or pricing data.

215.872 [Removed and Reserved]

10. Section 215.872 is removed and

reserved.

215.872–1 through 215.872–4 [Removed]

11. Sections 215.872–1 through

215.872–4 are removed.

PART 216—TYPES OF CONTRACTS

216.203–4 [Amended]

12. Section 216.203–4 is amended in

the first sentence of paragraph (d)(xvi)

by revising the reference ‘‘15.804–3’’ to

read ‘‘15.804–1’’.

13. Section 216.203–4–70 is amended

by revising paragraph (a); by removing

paragraphs (b)(4) and (b)(6), and by

redesignating paragraphs (b)(5) and

(b)(7) as paragraphs (b)(4) and (b)(5),

respectively. The revised text reads as

follows:

216.203–4–70 Additional clauses.

(a) Price adjustment for basic steel,

aluminum, brass, bronze, or copper mill

products.
Federal Register / Vol. 62, No. 145 / Tuesday, July 29, 1997 / Rules and Regulations 40473

(1) The price adjustment clause at

252.216–7000, Economic Price

Adjustment—Basic Steel, Aluminum,

Brass, Bronze, or Copper Mill Products,

may be used in fixed-price supply

contracts for basic steel, aluminum,

brass, bronze, or copper mill products,

such as sheets, plates, and bars, when

an established catalog or market price

exists for the particular product being

acquired.

(2) The 10 percent figure in paragraph

(d)(1) of the clause shall not be

exceeded unless approval is obtained at

a level above the contracting officer.

* * * * *

PART 232—CONTRACT FINANCING

14. Section 232.502–1–71 is amended

by revising paragraph (b)(3) to read as

follows:

232.502–1–71 Customary flexible progress

payments.

* * * * *

(b) * * *

(3) Contractors who submit cost or

pricing data, as defined in FAR 15.801,

for negotiated fixed-price contracts in

excess of $1 million may request

flexible progress payments.

* * * * *

PART 239—ACQUISITION OF

INFORMATION TECHNOLOGY

15. Section 239.7406 is revised to read

as follows:

239.7406 Cost or pricing data and

information other than cost or pricing data.

(a) Common carriers are not required

to submit cost or pricing data before

award of contracts for tariffed services.

Rates or preliminary estimates quoted

by a common carrier for tariffed

telecommunications services are

considered to be prices set by regulation

within the provisions of 10 U.S.C.

2306a. This is true even if the tariff is

set after execution of the contract.

(b) Rates or preliminary estimates

quoted by a common carrier for

nontariffed telecommunications services

or by a noncommon carrier for any

telecommunications service are not

considered prices set by law or

regulation.

(c) Contracting officers shall obtain

sufficient information to determine that

the prices are reasonable. For example,

cost or pricing data, if required in

accordance with FAR 15.804–2, or

information other than cost or pricing

data, if required in accordance with

FAR 15.804–5, may be necessary to

support the reasonableness of—

(1) Nontariffed services;

(2) Special rates and charges not

included in a tariff, whether filed or to

be filed;

(3) Special assembly rates and

charges;

(4) Special construction and

equipment charges;

(5) Contingent liabilities that are fixed

at the outset of the service;

(6) Proposed cancellation and

termination charges under the clause at

252.239–7007, Cancellation or

Termination of Orders—Common

Carriers, and reuse arrangements under

the clause at 252.239–7008, Reuse

Arrangements;

(7) Rates contained in voluntary tariffs

filed by nondominant common carriers;

or

(8) A tariff, whether filed or to be

filed, for new services installed or

developed primarily for Government

use.

239.7411 [Amended]

16. Section 239.7411 is amended by

removing paragraphs (a)(8) and (a)(9);

and in paragraph (a)(7) by removing the

semicolon and inserting a period in its

place.

PART 252—SOLICITATION

PROVISIONS AND CONTRACT

CLAUSES

252.215–7000 [Amended]

17. Section 252.215–7000 is amended

in the introductory text by revising the

reference ‘‘215.804–8(1)’’ to read

‘‘215.804–8’’.

252.215–7002 [Amended]

18. Section 252.215–7002 is amended

by revising the clause date to read ‘‘(JUL

1997)’’; and in paragraphs (c)(1) and

(c)(2)(i) by removing the word

‘‘certified’’.

19. Section 252.216–7000 is amended

by revising the clause date and

paragraph (a) to read as follows:

252.216–7000 Economic Price

Adjustment—Basic Steel, Aluminum, Brass,

Bronze, or Copper Mill Products.

* * * * *

Economic Price Adjustment-Basic Steel,

Aluminum, Brass, Bronze, or Copper Mill

Products (Jul 1997)

(a) Definitions.

As used in this clause—

Established price means a price which is

an established catalog or market price for a

commercial item sold in substantial

quantities to the general public.

Unit price excludes any part of the price

which reflects requirements for preservation,

packaging, and packing beyond standard

commercial practice.

* * * * *

20. Section 252.216–7001 is amended

by revising the clause date; and in

paragraph (a) by revising the definition

of ‘‘Established price’’ to read as

follows:

252.216–7001 Economic Price

Adjustment—Nonstandard Steel Items.

* * * * *

Economic Price Adjustment—Nonstandard

Steel Items (Jul 1997)

(a) * * *

Established price is—

(1) A price which is an established catalog

or market price of a commercial item sold in

substantial quantities to the general public;

and

(2) The net price after applying any

applicable standard trade discounts offered

by the Contractor from its catalog, list, or

schedule price. (But see Note 6.)

* * * * *

§ 252.239–7006 [Amended]

21. Section 252.239–7006 is amended

by revising the clause date to read ‘‘(Jul

1997)’’; and in paragraph (a)(2) by

inserting a comma after the words

‘‘Before filing.’’

§§ 252.239–7009 and 252.239–7010

[Removed and Reserved]

22. Sections 252.239–7009 and

252.239–7010 are removed and

reserved.

23. Section 252.243–7000 is amended

by revising the clause date and

paragraph (c) to read as follows:

§ 252.243–7000 Engineering Change

Proposals.

* * * * *

Engineering Change Proposals (Jul 1997)

* * * * *

(c) When the price** of the engineering

change is $500,000 or more, the Contractor

shall submit—

(1) A completed SF 1411, Contract Pricing

Proposal Cover Sheet (Cost or Pricing Data

Required); and

(2) At the time of agreement on price*, or

on another date agreed upon between the

parties, a signed Certificate of Current Cost or

Pricing Data.

* * * * *

[FR Doc. 97–19907 Filed 7–28–97; 8:45 am]

BILLING CODE 5000–04–M