Federal Register / Vol. 62, No. 236 / Tuesday, December 9, 1997 / Rules and Regulations 64915

2. Section 2.101 is amended in the

definition of ‘‘Information technology’’

by revising paragraph (c) to read as

follows:

2.101 Definitions.

* * * * *

Information technology * * *

* * * * *

(c) The term information technology

does not include—

(1) Any equipment that is acquired by

a contractor incidental to a contract; or

(2) Any equipment that contains

imbedded information technology that

is used as an integral part of the

product, but the principal function of

which is not the acquisition, storage,

manipulation, management, movement,

control, display, switching, interchange,

transmission, or reception of data or

information. For example, HVAC

(heating, ventilation, and air

conditioning) equipment such as

thermostats or temperature control

devices, and medical equipment where

information technology is integral to its

operation, are not information

technology.

* * * * *

[FR Doc. 97–31815 Filed 12–8–97; 8:45 am]

BILLING CODE 6820–EP–P

DEPARTMENT OF DEFENSE

GENERAL SERVICES

ADMINISTRATION

NATIONAL AERONAUTICS AND

SPACE ADMINISTRATION

48 CFR Parts 4, 42, and 52

[FAC 97–03; FAR Case 95–017; Item III]

RIN 9000–AG87

Federal Acquisition Regulation; Final

Overhead Settlement

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 have

agreed on a final rule amending the

Federal Acquisition Regulation (FAR) to

improve the process of final settlement

of contractor overhead rates. This

regulatory action was not subject to

Office of Management and Budget

review under Executive Order 12866,

dated September 30, 1993, and is not a

major rule under 5 U.S.C. 804.

EFFECTIVE DATE: February 9, 1998.

FOR FURTHER INFORMATION CONTACT: The

FAR Secretariat, Room 4035, GS

Building, Washington, DC 20405, (202)

501–4755, for information pertaining to

status or publication schedules. For

clarification of content, contact Ms.

Linda Klein, Procurement Analyst, at

(202) 501–3775. Please cite FAC 97–03,

FAR case 95–017.

SUPPLEMENTARY INFORMATION:

A. Background

This final rule amends FAR Parts 4,

42, and 52 to improve the process of

final settlement of contractor indirect

cost rates under cost-reimbursement

contracts by—

• Extending the time period within

which a contractor must submit an

indirect cost rate proposal from 90 days

to 6 months after the end of the

contractors fiscal year;

• Permitting extensions to the 6-

month time period for exceptional

circumstances only; and

• Providing a specific reference to the

Defense Contract Audit Agency

pamphlet that contains guidance on

what generally constitutes an adequate

final indirect cost rate proposal and

supporting data.

A proposed rule was published in the

Federal Register on July 29, 1996 (61 FR

39518). Fourteen sources submitted

comments. All comments were

considered in the development of the

final rule.

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 most

contracts awarded to small entities are

awarded on a competitive, fixed-price

basis and do not require settlement of

contractor indirect cost rates.

C. Paperwork Reduction Act

The Paperwork Reduction Act does

not apply because the changes to the

FAR do not impose recordkeeping or

information collection requirements, or

collections of information from offerors,

contractors, or members of the public

which 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 4, 42,

and 52

Government procurement.

Dated: December 1, 1997.

Edward C. Loeb,

Director, Federal Acquisition Policy Division.

Therefore, 48 CFR Parts 4, 42, and 52

are amended as set forth below:

1. The authority citation for 48 CFR

Parts 4, 42, and 52 continues to read as

follows:

Authority: 40 U.S.C. 486(c); 10 U.S.C.

chapter 137; and 42 U.S.C. 2473(c).

PART 4—ADMINISTRATIVE MATTERS

4.703 [Amended]

2. Section 4.703 is amended in

paragraph (b)(3) by removing ‘‘90-day’’

each time it appears (twice).

PART 42—CONTRACT

ADMINISTRATION

3. Section 42.705–1 is amended by

revising paragraph (b)(1) to read as

follows:

42.705–1 Contracting officer determination

procedure.

* * * * *

(b) Procedures. (1) In accordance with

the Allowable Cost and Payment clause

at 52.216–7 or 52.216–13, the contractor

shall submit to the contracting officer

and to the cognizant auditor a final

indirect cost rate proposal. The required

content of the proposal and supporting

data will vary depending on such

factors as business type, size, and

accounting system capabilities. The

contractor, contracting officer, and

auditor must work together to make the

proposal, audit, and negotiation process

as efficient as possible. Accordingly,

each contractor shall submit an

adequate proposal to the contracting

officer and auditor within the 6-month

period following the expiration of each

of its fiscal years. Reasonable

extensions, for exceptional

circumstances only, may be requested in

writing by the contractor and granted in

writing by the contracting officer. A

contractor shall support its proposal

with adequate supporting data. For

guidance on what generally constitutes

an adequate final indirect cost rate

proposal and supporting data,

contractors should refer to the Model

Incurred Cost Proposal in Chapter 5 of

the Defense Contract Audit Agency

Pamphlet (DCAAP) No. 7641.90,

Information for Contractors. The Model

can be obtained by—

(i) Contacting Internet address http://

www.dtic.mil/dcaa;

(ii) Sending a telefax request to

Headquarters DCAA, ATTN: CMO,

Publications Officer, at (703) 767–1061;

(iii) Sending an E-Mail request to

*CMO@hql.dcaa.mil; or
64916 Federal Register / Vol. 62, No. 236 / Tuesday, December 9, 1997 / Rules and Regulations

(iv) Writing to: Headquarters DCAA,

ATTN: CMO, Publications Officer, 8725

John J. Kingman Road, Suite 2135, Fort

Belvoir, VA 22060–6219.

* * * * *

4. Section 42.705–2 is amended by

revising paragraph (b)(1) to read as

follows:

42.705–2 Auditor determination

procedures.

* * * * *

(b) Procedures. (1) The contractor

shall submit to the cognizant

contracting officer and auditor a final

indirect cost rate proposal in accordance

with 42.705–1(b)(1).

* * * * *

PART 52—SOLICITATION PROVISIONS

AND CONTRACT CLAUSES

5. Section 52.216–7 is amended by

revising the date of the clause and

paragraph (d)(2) to read as follows:

52.216–7 Allowable Cost and Payment.

* * * * *

Allowable Cost and Payment (Feb 1998)

* * * * *

(d) * * *

(2)(i) The Contractor shall submit an

adequate final indirect cost rate

proposal to the Contracting Officer and

auditor within the 6-month period

following the expiration of each of its

fiscal years. Reasonable extensions, for

exceptional circumstances only, may be

requested in writing by the Contractor

and granted in writing by the

Contracting Officer. The Contractor

shall support its proposal with adequate

supporting data.

(ii) The proposed rates shall be based

on the Contractor’s actual cost

experience for that period. The

appropriate Government representative

and the Contractor shall establish the

final indirect cost rates as promptly as

practical after receipt of the Contractor’s

proposal.

* * * * *

6. Section 52.216–13 is amended by

revising the date of the clause; in the

introductory text of paragraph (c) by

removing the word ‘‘below’’ and

inserting ‘‘of this clause’’; and by

revising paragraph (c)(2) to read as

follows:

52.216–13 Allowable Cost and Payment—

Facilities.

* * * * *

Allowable Cost and Payment Facilities

(Feb 1998)

* * * * *

(c) * * *

(2)(i) The Contractor shall submit an

adequate final indirect cost rate

proposal to the Contracting Officer and

auditor within the 6-month period

following the expiration of each of its

fiscal years. Reasonable extensions, for

exceptional circumstances only, may be

requested in writing by the Contractor

and granted in writing by the

Contracting Officer. The Contractor

shall support its proposal with adequate

supporting data.

(ii) The proposed rates shall be based

on the Contractor’s actual cost

experience for that period. The

appropriate Government representative

and the Contractor shall establish the

final indirect cost rates as promptly as

practical after receipt of the Contractor’s

proposal.

* * * * *

7. Section 52.216–15 is amended by

revising the date of the clause and

paragraph (b) to read as follows:

52.216–15 Predetermined Indirect Cost

Rates.

* * * * *

Predetermined Indirect Cost Rates (Feb

1998)

* * * * *

(b)(1) The Contractor shall submit an

adequate final indirect cost rate

proposal to the Contracting Officer and

auditor within the 6-month period

following the expiration of each of its

fiscal years. Reasonable extensions, for

exceptional circumstances only, may be

requested in writing by the Contractor

and granted in writing by the

Contracting Officer. The Contractor

shall support its proposal with adequate

supporting data.

(2) The proposed rates shall be based

on the Contractor’s actual cost

experience for that period. The

appropriate Government representative

and the Contractor shall establish the

final indirect cost rates as promptly as

practical after receipt of the Contractor’s

proposal.

* * * * *

[FR Doc. 97–31816 Filed 12–8–97; 8:45 am]

BILLING CODE 6820–EP–P

DEPARTMENT OF DEFENSE

GENERAL SERVICES

ADMINISTRATION

NATIONAL AERONAUTICS AND

SPACE ADMINISTRATION

48 CFR Parts 4, 6, 8, 12, 13, 16, 19, 32,

41, 43, 49, 52, and 53

[FAC 97–03; FAR Case 94–772; Item IV]

RIN 9000–AH24

Federal Acquisition Regulation;

Reorganization of FAR Part 13,

Simplified Acquisition Procedures

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 have

agreed on a final rule amending the

Federal Acquisition Regulation (FAR) to

reorganize part 13 for clarity and to

make other changes to facilitate the use

of electronic commerce in Government

contracting. This regulatory action was

not subject to Office of Management and

Budget review under Executive Order

12866, dated September 30, 1993. This

is not a major rule under 5 U.S.C. 804.

EFFECTIVE DATE: February 9, 1998.

FOR FURTHER INFORMATION CONTACT:

The FAR Secretariat, Room 4035, GS

Building, Washington, DC 20405, (202)

501–4755, for information pertaining to

status or publication schedules. For

clarification of content, contact Mr. Paul

Linfield, Procurement Analyst, at (202)

501–1757. Please cite FAC 97–03, FAR

case 94–772.

SUPPLEMENTARY INFORMATION:

A. Background

This final rule revises FAR part 13 to

reorganize its contents in a more

process-oriented manner and to

emphasize the use of electronic

contracting and the Governmentwide

commercial purchase card. FAR part 52

is amended to permit agency provisions

and clauses to be incorporated by

reference in solicitations and contracts,

if the full text of the provisions and

clauses may be accessed electronically

by prospective contractors. A new

clause is added at FAR 52.213–4 for use

in simplified acquisitions; the clause is

a compilation of the required and most

commonly used clauses that apply to

simplified acquisitions, and may be

used in lieu of individual clauses

prescribed in the FAR.