64914 Federal Register / Vol. 62, No. 236 / Tuesday, December 9, 1997 / Rules and Regulations

regulations have been removed from

FAR part 30 and promulgated separately

by the CASB in 48 CFR Chapter 99.

B. Regulatory Flexibility Act

The final rule does not constitute a

significant FAR revision within the

meaning of FAR 1.501 and Pub. L. 98–

577, and publication for public

comments is not required. However,

comments from small entities

concerning the affected FAR subpart

will be considered in accordance with 5

U.S.C. 610. Such comments must be

submitted separately and should cite 5

U.S.C. 601, et seq. (FAC 97–03, FAR

case 97–014), in correspondence.

C. Paperwork Reduction Act

The Paperwork Reduction Act does

not apply because the change to the

FAR does 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 Part 1

Government procurement.

Dated: December 1, 1997.

Edward C. Loeb,

Director, Federal Acquisition Policy Division.

Therefore, 48 CFR part 1 is amended

as set forth below:

PART 1—FEDERAL ACQUISITION

REGULATION SYSTEM

1. The authority citation for 48 CFR

part 1 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).

2. Section 1.402 is amended by

revising the penultimate sentence to

read as follows:

1.402 Policy.

* * * Deviations are not authorized

with respect to 30.201–3 and 30.201–4,

or the requirements of the Cost

Accounting Standards Board (CASB)

rules and regulations (48 CFR Chapter

99 (FAR Appendix)). * * *

[FR Doc. 97–31814 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 2, 5, 7, 8, 9, 12, 13, 16,

17, 19, 22, 32, 33, 34, 37, 38, 39, 45, 46,

51, 52, and 53

[FAC 97–03; FAR Case 96–319; Item II]

RIN 9000–AH75

Federal Acquisition Regulation;

Information Technology Management

Reform Act of 1996

AGENCIES: Department of Defense (DoD),

General Services Administration (GSA),

and National Aeronautics and Space

Administration (NASA).

ACTION: Interim rule adopted as final

with change.

SUMMARY: The Civilian Agency

Acquisition Council and the Defense

Acquisition Regulations Council have

agreed to adopt as final, with change,

the interim rule published as Item I of

Federal Acquisition Circular 90–41 on

August 8, 1996. The rule amends the

Federal Acquisition Regulation (FAR) to

implement the Information Technology

Management Reform Act (ITMRA) of

1996, Division E of Pub. L. 104–106.

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 Nelson, Procurement Analyst, at

(202) 501–1900. Please cite FAC 97–03,

FAR case 96–319.

SUPPLEMENTARY INFORMATION:

A. Background

An interim rule was published in the

Federal Register at 61 FR 41467, August

8, 1996. Twelve comments from four

respondents were received during the

public comment period. All comments

were considered in the development of

the final rule. In response to public

comments on the interim rule, the

definition of ‘‘information technology’’

at FAR 2.101 has been clarified.

B. Regulatory Flexibility Act

A Final Regulatory Flexibility

Analysis (FRFA) has been prepared and

will be provided to the Chief Counsel

for Advocacy of the Small Business

Administration. The analysis is

summarized as follows:

ITMRA requires a simplified, clear, and

understandable process in the FAR for

acquiring information technology. No issues

were raised in response to the Initial

Regulatory Flexibility Analysis. The rule

applies to all entities, large and small, that

propose to perform, or are awarded,

Government contracts for information

technology. There are no statistics available

on the exact number of small businesses that

submit bids or proposals for contracts for

information technology. However, based on

information provided by the Federal

Procurement Data System, a total of 29,879

awards were made to small businesses during

fiscal year 1996 under information

technology product codes with a total dollar

value of $4,443,176,000. The rule imposes no

new reporting, recordkeeping, or other

compliance requirements. There are no

practical alternatives that will effectively

implement ITMRA. The final rule simplifies

and streamlines the process of acquiring

information technology, and minimizes the

economic burden of such acquisitions, while

expanding opportunities for small entities to

participate in Federal information technology

contracts.

A copy of the FRFA may be obtained

from the FAR Secretariat.

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 2, 5, 7,

8, 9, 12, 13, 16, 17, 19, 22, 32, 33, 34,

37, 38, 39, 45, 46, 51, 52, and 53

Government procurement.

Dated: December 1, 1997.

Edward C. Loeb,

Director, Federal Acquisition Policy Division.

Interim Rule Adopted as Final With

Change

Accordingly, the interim rule

amending 48 CFR Parts 2, 5, 7, 8, 9, 12,

13, 16, 17, 19, 22, 32, 33, 34, 37, 38, 39,

45, 46, 51, 52, and 53, which was

published at 61 FR 41467, August 8,

1996, is adopted as a final rule with the

following change:

PART 2—DEFINITIONS OF WORDS

AND TERMS

1. The authority citation for 48 CFR

Part 2 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).
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