Federal Register / Vol. 62, No. 228 / Wednesday, November 26, 1997 / Proposed Rules 63047

ENVIRONMENTAL PROTECTION

AGENCY

40 CFR Part 52

[IL162–1b; FRL–5926–7]

Approval and Promulgation of State

Implementation Plan; Illinois

AGENCY: Environmental Protection

Agency (EPA).

ACTION: Proposed rule.

SUMMARY: The Environmental Protection

Agency (EPA) is proposing to approve a

September 8, 1997, State

Implementation Plan (SIP) revision

request submitted by the State of Illinois

to tighten Volatile Organic Material

regulations for cold cleaning degreasing

operations in the Chicago and MetroEast ozone nonattainment areas. In the

final rules section of this Federal

Register, the EPA is approving this

action as a direct final rule without

prior proposal because EPA views this

as a noncontroversial action and

anticipates no adverse written

comments. A detailed rationale for the

approval is set forth in the direct final

rule. If no adverse written comments are

received in response to that direct final

rule, no further activity is contemplated

in relation to this proposed rule. If EPA

receives adverse written comments, the

direct final rule will be withdrawn and

all written public comments received

will be addressed in a subsequent final

rule based on the proposed rule. Any

parties interested in commenting on this

document should do so at this time.

DATES: Written comments on this

proposed rule must be received on or

before December 26, 1997.

ADDRESSES: Written comments should

be mailed to: J. Elmer Bortzer, Chief,

Regulation Development Section, Air

Programs Branch (AR–18J),

Environmental Protection Agency,

Region 5, 77 West Jackson Boulevard,

Chicago, Illinois 60604.

Copies of the State submittal are

available for inspection at: Regulation

Development Section, Air Programs

Branch (AR–18J), Environmental

Protection Agency, Region 5, 77 West

Jackson Boulevard, Chicago, Illinois

60604.

FOR FURTHER INFORMATION CONTACT:

Mark J. Palermo, Environmental

Protection Specialist, Regulation

Development Section, Air Programs

Branch (AR–18J), Environmental

Protection Agency, Region 5, 77 West

Jackson Boulevard, Chicago, Illinois

60604, (312) 886–6082.

SUPPLEMENTARY INFORMATION: For

additional information see the direct

final rule published in the rules section

of this Federal Register.

Dated: November 7, 1997.

David A. Ullrich,

Acting Regional Administrator.

[FR Doc. 97–31140 Filed 11–25–97; 8:45 am]

BILLING CODE 6560–50–F

DEPARTMENT OF DEFENSE

48 CFR Parts 214 and 215

[DFARS Case 97–D011]

Defense Federal Acquisition

Regulation Supplement; Distribution of

Contract Financing Payments

AGENCY: Department of Defense (DoD).

ACTION: Proposed rule with request for

comments.

SUMMARY: The Director of Defense

Procurement is proposing to amend the

Defense Federal Acquisition Regulation

Supplement (DFARS) to specify that,

when a contract contains multiple

accounting classification reference

numbers and a clause for progress

payments, the contracting officer shall

provide instructions to enable the

paying office to distribute the progress

payments in proportions that reasonably

reflect the performance of work under

the contract. This policy was originally

scheduled for implementation on

October 1, 1997; implementation has

been delayed pending a more complete

review of the resource implications of

the Department’s planned manner of

distributing progress payments. This

regulatory action was subject to Office

of Management and Budget review

under Executive Order 12866, dated

September 30, 1993. The Administrator

of the Office of Information and

Regulatory Affairs has determined that

this is a major rule under 5 U.S.C. 804.

DATES: Comments on the proposed rule

and the associated information

collection requirements should be

submitted in writing to the addresses

specified below on or before January 26,

1998, to be considered in the

formulation of the final rule.

ADDRESSES: Interested parties should

submit written comments on the

proposed rule to: Defense Acquisition

Regulations Council, Attn: Ms. Sandra

G. Haberlin, PDUSD (A&T) DP (DAR),

IMD 3D139, 3062 Defense Pentagon,

Washington, DC 20301–3062. Telefax

number (703) 602–0350. E-mail

comments submitted over the Internet

should be addressed to:

dfars@acq.osd.mil. Please cite DFARS

Case 97–D011 in all correspondence

related to this issue. E-mail

correspondence should cite DFARS

Case 97–D011 in the subject line.

Interested parties should submit

written comments on the associated

information collection requirements to:

Office of Information and Regulatory

Affairs, Office of Management and

Budget, Attn: Mr. Peter N. Weiss, Desk

Officer, Room 10236, New Executive

Office Building, Washington, DC 20503,

with a copy to the Defense Acquisition

Regulations Council at the address

specified above.

FOR FURTHER INFORMATION CONTACT:

Ms. Sandra G. Haberlin, (703) 602–0131.

SUPPLEMENTARY INFORMATION:

A. Background

A proposed DFARS rule was

published in the Federal Register on

June 5, 1997 (62 FR 30829). The rule

required a contracting officer to provide

payment instructions to enable the

paying office to distribute financing

payments to the contract line item

number (CLIN)/subline item number

(SLIN) that reflects the work performed

during the period covered by the

contractor’s financing request. Public

comments were received from seven

sources. All comments were considered.

This DFARS rule differs significantly

from the proposed DFARS rule

published in the Federal Register on

June 5, 1997. Therefore, this second

proposed rule is being published to

obtain further public comments, prior to

promulgation of a final rule. One of the

main differences is that this revised rule

raises the level to which actual funds

usage must be identified. The

previously published proposed rule

required contracting officers to provide

distribution instructions at the contract

line item or subline item level. DoD has

concluded that instructions by CLIN or

SLIN are not necessary, in particular, in

cases where several CLINs/SLINs are

funded with the same accounting

classification reference number (ACRN).

Consequently, this DFARS rule requires

distribution instructions by ACRN,

rather than by CLIN/SLIN. Each

appropriation or subdivision thereof is

reflected in the contract by a distinct

ACRN.

A second difference between the two

proposed rules is that this revised rule

no longer requires the contracting

officer to use one of four alternative

approaches for developing the payment

instructions. However, for research and

development contracts, the rule does

retain the approach of using oldest

funds first, absent conflicting

information.

This proposed rule also differs from

the June 5, 1997, proposed rule by
63048 Federal Register / Vol. 62, No. 228 / Wednesday, November 26, 1997 / Proposed Rules

clarifying that the rule applies to the

progress payments type of financing;

and that contractors, when asked by

contracting officers to provide

information, need to provide best

estimates of funding distribution by

ACRN, based on existing accounting

systems.

B. Regulatory Flexibility Act

The proposed rule is not expected to

have a significant economic impact on

a substantial number of small entities

within the meeting of the Regulatory

Flexibity Act, 5 U.S.C. 601, et seq.,

because most contracts awarded to

small entities have a dollar value less

than the simplified acquisition

threshold, and, therefore, do not use the

progress payments method of financing.

An initial regulatory flexibility analysis

has therefore not been performed.

Comments are invited from small

businesses and other interested parties.

Comments from small entities

concerning the affected DFARS subparts

will also be considered in accordance

with 5 U.S.C. 610. Such comments

should be submitted separately and

should cite 5 U.S.C. 601, et seq. (DFARS

Case 97–D011), in correspondence.

C. Paperwork Reduction Act

The Paperwork Reduction Act, 44

U.S.C. 3501, et seq., applies because the

proposed rule contains information

collection requirements. A new

information collection requirement has

been submitted to the Office of

Management and Budget (OMB) for

review under 44 U.S.C. 3507(d)(1)(A).

1. Title, Associated Form, and OMB

Number: A new information collection

requirement, ‘‘Distribution of Contract

Financing Payments,’’ has been

submitted to OMB for review. An OMB

Number has not yet been assigned.

2. Needs and Uses: 31 U.S.C. 1301(a)

provides that ‘‘Appropriations shall be

applied only to the objects for which the

appropriations were made except as

otherwise provided by law.’’ To

facilitate compliance, the Under

Secretary of Defense (Comptroller)

(USD(C)) has directed paying offices to

begin charging progress payments to the

obligations that correspond to the

deliverables for which costs were

incurred during the period covered by

the progress payment request. In order

to implement this direction, contracting

officers must provide progress payment

distribution instructions to paying

offices. One possible source of

information for devising distribution

instructions is the contractor, by means

of a contract requirement for estimates

of distributions by ACRN.

Affected Public: Businesses or other

for profit.

Annual Burden Hours: 1,440,000.

Number of Respondents: 2,000.

Average Burden Per Response: 60

hours.

Frequency: On occasion.

3. Supplementary Information:

Summary of Information Collection. The

collection of information from

contractors will be required only to the

extent deemed necessary by contracting

officers if they are unable to devise

payment distribution instructions using

other available information. Compliance

with 31 U.S.C. 1301(a) does not require

submission of information by

contractors. However, in order to better

meet the requirements of the law,

contracting officers may need to obtain

certain information from contractors in

the form of contractor estimates of

payment distribution by ACRN, based

on actual or anticipated contract

performance. When obtained from

contractors, the frequency of submittal

of distribution information will be

determined by the frequency of the

contractor’s submission of progress

payment requests, but may not be more

frequent than monthly.

4. Comments: Particular comments

are solicited on:

a. Whether the collection of

information is necessary for the proper

performance of the functions of the

agency, including whether the

information will have practical utility;

b. The accuracy of the agency’s

estimate of the burden of the

information collection;

c. Ways to enhance the quality,

utility, and clarity of the information to

be collected; and

d. Ways to minimize the burden of the

information collection on respondents,

including the use of automated

collection techniques or other forms of

information technology.

List of Subjects in 48 CFR Parts 214 and

215

Government procurement.

Michele P. Peterson,

Executive Editor, Defense Acquisition

Regulations Council.

Therefore, 48 CFR Parts 214 and 215

are proposed to be amended as follows:

1. The authority citation for 48 CFR

parts 214 and 215 continues to read as

follows:

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

Chapter 1.

PART 214—SEALED BIDDING

2. Sections 214.201, 214.201–2, and

214.201–9 are added to read as follows:

214.201 Preparation of invitations for bids.

214.201–2 Part I—the Schedule.

(g) Section G, Contract administration

data.

(i) When a contract contains multiple

accounting classification reference

numbers (ACRNs) (see 204.7101) and

includes a clause for progress payments,

the contracting officer shall provide

instructions to enable the paying office

to distribute progress payments to the

ACRNs in proportions that reasonably

reflect the performance of the work on

the contract. Payment instructions shall

represent a best estimate based on

available information, and shall be

updated as necessary.

(ii) The contracting officer may

provide payment distribution

instructions to the paying office with

each progress payment request, or as an

extended schedule for application to

multiple requests on one contract. If

provided as an extended schedule, the

instructions must be furnished before

the first progress payment is to be paid.

(iii) For incrementally funded

research and development (R&D)

contracts, or contract line items funded

with R&D appropriations, the

contracting officer may assume

contractor work will be performed for

the benefit of ACRNs with the earliest

fiscal year’s funding (i.e., using oldest

funds first), unless there is information

to the contrary available.

(iv) For non-R&D contracts, the

contracting officer should provide

distribution instructions using the best

information available, including

information based upon—

(A) Contract funds status reports

provided under a contract requirement

for contractor cost reporting;

(B) The contract delivery schedule; or

(C) A profile of anticipated contractor

expenditures based on historical

spending patterns, or other knowledge

of contractor performance of similar

efforts.

(v) If the type of information set forth

in paragraph (g)(iv) of this subsection is

not available, or the contracting officer

is not able to develop distribution

instructions based on available

information, the contracting officer may

develop a best estimate of the

contractor’s anticipated work progress

based on a general knowledge of the

contractor or industry practices.

Alternatively, the contracting officer

may require the contractor to furnish

distribution instructions in accordance

with a contract requirement. However, if

such a requirement is included in a

contract, the contracting officer shall—

(A) Require the contractor to provide

its best estimate of work performed by
Federal Register / Vol. 62, No. 228 / Wednesday, November 26, 1997 / Proposed Rules 63049

ACRN, in accordance with the guidance

provided in DFARS 214.201–2(g), and

inform the contractor that this

information is not considered to be an

attachment to the Standard Form 1443,

Contractor’s Request for Progress

Payment.

(B) Provide information to the

contractor on total obligations by ACRN,

including their relationship with each

contract line item/subline item, and

maintain that information as required by

contract changes. A matrix such as the

following may be used for this purpose:

AA AB AC

0001 ............................................................................................................................................................................ $500 .............. ..............

0002 ............................................................................................................................................................................ 1,000 .............. ..............

0003AA ....................................................................................................................................................................... .............. $600 ..............

0003AB ....................................................................................................................................................................... .............. 800 ..............

0004 ............................................................................................................................................................................ .............. .............. $400

Total ................................................................................................................................................................. 1,500 1,400 400

(C) Not require the contractor to revise

its accounting system to account for or

accumulate costs by ACRN.

(vi) The overall limit on progress

payments on a contract, established

through application of the contract

progress payment rate and, if applicable,

a loss ratio, shall continue to govern the

total amount of progress payments that

may be paid on a contract. These limits

should continue to be applied on a total

contract basis. Progress payments will

be liquidated at the ACRN level.

214.201–9 Simplified contract format.

(b) Contract schedule.

(8) See 214.210–2(g) for contracts that

contain multiple accounting

classification reference numbers and

include a clause for progress payments.

PART 215—CONTRACTING BY

NEGOTIATION

3. Section 215.406–2 is revised to read

as follows:

215.406–2 Part I—The Schedule.

(g) Section G, Contract administration

data.

(i) When a contract contains both

fixed-price and cost-reimbursement line

items or subline items, the contracting

officer shall provide, in Section B,

Supplies or Services and Prices/Costs,

an identification of contract type

specified for each contract line item or

subline item to facilitate appropriate

payment.

(ii) Contracts with multiple

accounting classification reference

numbers (ACRNs) and a clause for

progress payments.

(A) When a contract contains multiple

accounting classification reference

numbers (ACRNs) (see 204.7101) and

includes a clause for progress payments,

the contracting officer shall provide

instructions to enable the paying office

to distribute progress payments to the

ACRNs in proportions that reasonably

reflect the performance of the work on

the contract. Payment instructions shall

represent a best estimate based on

available information, and shall be

updated as necessary.

(B) The contracting officer may

provide payment distribution

instructions to the paying office with

each progress payment request, or as an

extended schedule for application to

multiple requests on one contract. If

provided as an extended schedule, the

instructions must be furnished before

the first progress payment is to be paid.

(C) For incrementally funded research

and development (R&D) contracts, or

contract line items funded with R&D

appropriations, the contracting officer

may assume contractor work will be

performed for the benefit of ACRNs with

the earliest fiscal year’s funding (i.e.,

using oldest fund first), unless there is

information to the contrary available.

(D) For non-R&D contracts, the

contracting officer should provide

distribution instructions using the best

information available, including

information based upon—

(1) Contract funds status reports

provided under a contract requirement

for contractor cost reporting;

(2) The contract delivery schedule; or

(3) A profile of anticipated contractor

expenditures based on historical

spending patterns, or other knowledge

of contractor performance of similar

efforts.

(E) If the type of information set forth

in paragraph (g)(ii)(D) of this subsection

is not available, or the contracting

officer is not able to develop

distribution instructions based on

available information, the contracting

officer may develop a best estimate of

the contractor’s anticipated work

progress based on a general knowledge

of the contractor or industry practices.

Alternatively, the contracting officer

may require the contractor to furnish

distribution instructions in accordance

with a contract requirement. However, if

such a requirement is included in a

contract, the contracting officer shall—

(1) Require the contractor to provide

its best estimate of work performed by

ACRN, in accordance with the guidance

provided in DFARS 215.406–2(g), and

inform the contactor that this

information is not considered to be an

attachment to the Standard Form 1443,

Contractor’s Request for Progress

Payment.

(2) Provide information to the

contractor on total obligations by ACRN,

including their relationship with each

contract line item/subline item, and

maintain that information as required by

contract changes. A matrix such as the

following may be used for this purposes:

AA AB AC

0001 ............................................................................................................................................................................ $500 .............. ..............

0002 ............................................................................................................................................................................ 1,000 .............. ..............

0003AA ....................................................................................................................................................................... .............. $600 ..............

0003AB ....................................................................................................................................................................... .............. 800 ..............

0004 ............................................................................................................................................................................ .............. .............. $400

Total ................................................................................................................................................................. 1,500 1,400 400
63050 Federal Register / Vol. 62, No. 228 / Wednesday, November 26, 1997 / Proposed Rules

(3) Not require the contractor to revise

its accounting system to account for or

accumulate costs by ACRN.

(F) The overall limit on progress

payments on a contract, established

through application of the contract

progress payment rate and, if applicable,

a loss ratio, shall continue to govern the

total amount of progress payments that

may be paid on a contract. These limits

should continue to be applied on a total

contract basis. Progress payments will

be liquidated at the ACRN level.

[FR Doc. 97–31111 Filed 11–25–97; 8:45 am]

BILLING CODE 5000–04–M

DEPARTMENT OF DEFENSE

48 CFR Parts 215 and 252

[DFARS Case 97–D018]

Defense Federal Acquisition

Regulation Supplement: Contracting

by Negotiation; Part 215 Rewrite

AGENCY: Department of Defense (DoD).

ACTION: Proposed rule with request for

comments.

SUMMARY: The Director of Defense

Procurement is proposing to amend the

Defense Federal Acquisition Regulation

Supplement (DFARS) to revise

procedures pertaining to contracting by

negotiation. These amendments

conform with amendments made to the

Federal Acquisition Regulation (FAR) in

Federal Acquisition Circular 97–02,

which was published in the Federal

Register on September 30, 1997.

DATES: Comments on the proposed rule

should be submitted in writing to the

address shown below on or before

January 26, 1998 to be considered in the

formulation of the final rule.

ADDRESSES: Interested parties should

submit written comments to: Defense

Acquisition Regulations Council, Attn:

Ms. Melissa Rider, PDUSD (A&T) DP

(DAR), IMD 3D139, 3062 Defense

Pentagon, Washington DC 20301–3062.

Telefax number (703) 602–0350.

E-mail comments submitted over the

Internet should be addressed to:

dfars@acq.osd.mil

Please cite DFARS Case 97–D018 in

all correspondence related to this issue.

E-mail comments should cite DFARS

Case 97–D018 in the subject line.

FOR FURTHER INFORMATION CONTACT:

Ms. Melissa Rider, (703) 602–0131.

SUPPLEMENTARY INFORMATION:

A. Background

This proposed rule revises DFARS

part 215 to align it with the reorganized

format of FAR part 15 (FAR Case 95–

029, FAR part 15 Rewrite) that was

published as a final rule in the Federal

Register on September 30, 1997 (62 FR

51224). In addition to changes related to

format, the following changes have been

made:

• DFARS guidance on the four-step

source selection process and the

alternate source selection process have

been removed, as the new guidance at

FAR 15.101, best value continuum,

clearly allows such source selection

processes.

• DFARS requirements for obtaining

approvals before requesting second or

subsequent best and final offers have

been removed in view of the new

guidance on proposal revisions at FAR

15.307.

• DFARS guidance on cost realism

analysis has been revised to reflect the

new guidance on cost realism analysis

at FAR 15.404–1(d).

• Thresholds for requesting field

pricing assistance have been added at

DFARS 215.404–2. Similar guidance

was removed from the FAR, but is still

considered to be appropriate for DoD

activities.

• DFARS guidance on field pricing

support has been revised to conform

with the FAR revisions that eliminated

standard content requirements for field

pricing reports.

B. Regulatory Flexibility Act

The proposed rule is not expected 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 the rule primarily consists of

conforming DFARS amendments to

reflect existing FAR guidance on

contracting by negotiation. Therefore, an

Initial Regulatory Flexibility Analysis

has not been performed. Comments are

invited from small businesses and other

interested parties. Comments from small

entities concerning the affected DFARS

subparts also will be considered in

accordance with 5 U.S.C. 610. Such

comments should be submitted

separately and should cite DFARS Case

97–D018 in correspondence.

C. Paperwork Reduction Act

The Paperwork Reduction Act does

not apply because the proposed rule

does not impose any information

collection requirements that require

approval by the Office of Management

and Budget under 44 U.S.C. 3501, et

seq.

List of Subjects in 48 CFR Parts 215 and

252

Government procurement.

Michele P. Peterson,

Executive Editor, Defense Acquisition

Regulations Council.

Therefore, 48 CFR Parts 215 and 252

are proposed to be amended as follows:

1. The authority citation for 48 CFR

parts 215 and 252 continues to read as

follows:

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

Chapter 1.

PART 215—CONTRACTING BY

NEGOTIATION

2. Part 215 is revised to read as

follows:

PART 215—CONTRACTING BY

NEGOTIATION

Sec.

215.000 Scope of part.

Subpart 215.2—Solicitation and Receipt of

Proposals and Information

215.204–2 Part I—The Schedule.

Subpart 215.3—Source Selection

215.304 Evaluation factors and significant

subfactors.

215.305 Proposal evaluation.

Subpart 215.4—Contract Pricing

215.403 Obtaining cost or pricing data.

215.403–1 Prohibition on obtaining cost or

pricing data.

215.403–1–70 Waivers and exemptions.

215.403–5 Instructions for submission of

cost or pricing data or information other

than cost or pricing data.

215.404 Proposal analysis.

215.404–1 Proposal analysis techniques.

215.404–2 Information to support proposal

analysis.

215.404–3 Subcontract pricing

considerations.

215.404–4 Profit.

215.404–70 DD Form 1547, Record of

Weighted Guidelines Method

Application.

215.404–71 Weighted guidelines method.

215.404–71–1 General.

215.404–71–2 Performance risk.

215.404–71–3 Contract type risk and

working capital adjustment.

215.404–71–4 Facilities capital employed.

215.404–72 Modified weighted guidelines

method for nonprofit organizations.

215.404–73 Alternative structured

approaches.

215.404–74 Fee requirements for cost-plusaward-fee contracts.

215.404–75 Reporting profit and fee

statistics.

215.406–1 Prenegotiation objectives.

215.406–3 Documenting the negotiation.

215.407–1 Defective cost or pricing data.

215.407–2 Make-or-buy programs.

215.407–3 Forward pricing rate agreements.

215.407–4 Should-cost review.

215.407–4 Estimating systems.