12704 Federal Register / Vol. 62, No. 51 / Monday, March 17, 1997 / Rules and Regulations

Please cite FAC 90–46, FAR case 95–

021.

SUPPLEMENTARY INFORMATION:

A. Background

This final rule revises FAR 31.205–

38(c)(2) by removing the ceiling on

allowable foreign selling costs. The rule

also revises FAR 31.205–1, Public

relations and advertising costs, by

deleting reference to the ceiling

limitation, and further revises FAR

31.205–38(c)(2) by deleting obsolete

language. A proposed rule was

published in the Federal Register at 61

FR 31800, June 20, 1996. The proposed

rule retained an allowability ceiling but

increased the threshold for its

application from $2.5 million to $5.0

million.

Two sources submitted public

comments in response to the proposed

rule. All comments were considered in

developing the final rule. The final rule

removes the ceiling on allowable foreign

selling costs in lieu of the proposed

rule’s doubling of the present threshold

for its application, i.e., $2.5 million to

$5.0 million. The final rule achieves a

greater reduction in the administrative

burden of contractors than would result

from retaining a ceiling but doubling the

threshold for its applicability. In

addition, elimination of the allowability

ceiling further promotes the

Government’s policy of stimulating the

export of U.S. products.

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 use

simplified acquisition procedures or are

awarded on a competitive, fixed-price

basis, and do not require application of

the FAR cost principles. In addition,

this rule applies to only those entities

that incur foreign selling costs.

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 Part 31

Government procurement.

Dated: March 7, 1997.

Edward C. Loeb,

Director, Federal Acquisition Policy Division.

Therefore, 48 CFR Part 31 is amended

as set forth below:

PART 31—CONTRACT COST

PRINCIPLES AND PROCEDURES

1. The authority citation for 48 CFR

Part 31 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 31.205–1 is amended in

paragraph (d)(2) by revising the second

sentence to read as follows:

31.205–1 Public relations and advertising

costs.

* * * * *

(d) * * *

(2) * * * Such costs are allowable,

notwithstanding paragraphs (f)(1), (f)(3),

(f)(4)(ii), and (f)(5) of this subsection.

* * *

* * * * *

3. Section 31.205–38 is amended by

revising paragraph (c)(2) to read as

follows:

31.205–38 Selling costs.

* * * * *

(c) * * *

(2) The costs of broadly targeted and

direct selling efforts and market

planning other than long-range, that are

incurred in connection with a

significant effort to promote export sales

of products normally sold to the U.S.

Government, including the costs of

exhibiting and demonstrating such

products, are allowable on contracts

with the U.S. Government provided the

costs are allocable, reasonable, and

otherwise allowable under this subpart

31.2.

* * * * *

[FR Doc. 97–6317 Filed 3–14–97; 8:45 am]

BILLING CODE 6820–EP–P

DEPARTMENT OF DEFENSE

GENERAL SERVICES

ADMINISTRATION

NATIONAL AERONAUTICS AND

SPACE ADMINISTRATION

48 CFR Part 31

[FAC 90–46; FAR Case 95–024; Item IX]

RIN 9000–AH03

Federal Acquisition Regulation;

Independent Research and

Development/Bid and Proposal Costs

in Cooperative Arrangements

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

permit contractor contributions of

independent research and development

(IR&D) costs under NASA cooperative

arrangements to be treated as allowable

indirect costs. 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 DATES: Effective May 16,

1997.

FOR FURTHER INFORMATION CONTACT: Mr.

Jeremy Olson at (202) 501–3221 in

reference to this FAR case. For general

information, contact the FAR

Secretariat, Room 4035, GS Building,

Washington, DC 20405 (202) 501–4755.

Please cite FAC 90–46, FAR case 95–

024.

SUPPLEMENTARY INFORMATION:

A. Background

NASA published a class deviation

(final rule) in the Federal Register at 59

FR 46359, September 8, 1994. The class

deviation eliminates the prohibition at

FAR 31.205–18(e) against treatment of

contractor IR&D contributions under

NASA cooperative arrangements as

allowable indirect costs. This final rule

eliminates the need for the NASA class

deviation.

A proposed rule was published in the

Federal Register at 61 FR 31796, June

20, 1996. Two sources submitted public

comments. All comments were

considered in developing 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 use

simplified acquisition procedures or are

awarded on a competitive, fixed-price

basis, and do not require application of

the FAR cost principles. In addition,

this rule affects only those entities that

perform independent research and

development effort under NASA

cooperative arrangements.
Federal Register / Vol. 62, No. 51 / Monday, March 17, 1997 / Rules and Regulations 12705

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 Part 31

Government procurement.

Dated: March 7, 1997.

Edward C. Loeb,

Director, Federal Acquisition Policy Division.

Therefore, 48 CFR Part 31 is amended

as set forth below:

PART 31—CONTRACT COST

PRINCIPLES AND PROCEDURES

1. The authority citation for 48 CFR

Part 31 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 31.205–18(e) is revised to

read as follows:

31.205–18 Independent research and

development and bid and proposal costs.

* * * * *

(e) Cooperative arrangements. (1)

IR&D costs may be incurred by

contractors working jointly with one or

more non-Federal entities pursuant to a

cooperative arrangement (for example,

joint ventures, limited partnerships,

teaming arrangements, and

collaboration and consortium

arrangements). IR&D costs also may

include costs contributed by contractors

in performing cooperative research and

development agreements, or similar

arrangements, entered into under—

(i) Section 12 of the StevensonWydler Technology Transfer Act of

1980 (15 U.S.C. 3710(a));

(ii) Sections 203(c) (5) and (6) of the

National Aeronautics and Space Act of

1958, as amended (42 U.S.C. 2473(c) (5)

and (6));

(iii) 10 U.S.C. 2371 for the Defense

Advanced Research Projects Agency; or

(iv) Other equivalent authority.

(2) IR&D costs incurred by a

contractor pursuant to these types of

cooperative arrangements should be

considered as allowable IR&D costs if

the work performed would have been

allowed as contractor IR&D had there

been no cooperative arrangement.

[FR Doc. 97–6318 Filed 3–14–97; 8:45 am]

BILLING CODE 6820–EP–P

DEPARTMENT OF DEFENSE

GENERAL SERVICES

ADMINISTRATION

NATIONAL AERONAUTICS AND

SPACE ADMINISTRATION

48 CFR Parts 32 and 52

[FAC 90–46; FAR Case 91–091; Item X]

RIN 9000–AF61

Federal Acquisition Regulation;

Prompt Payment

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

incorporate changes required by the

Prompt Payment Act Amendments of

1988. This regulatory action was not

subject to Office of Management and

Budget (OMB) review under Executive

Order 12866, dated September 30, 1993,

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

804.

EFFECTIVE DATE: May 16, 1997.

FOR FURTHER INFORMATION CONTACT: Mr.

Jeremy Olson at (202) 501–3221 in

reference to this FAR case. For general

information, contact the FAR

Secretariat, Room 4035, GS Building,

Washington, DC 20405, (202) 501–4755.

Please cite FAC 90–46, FAR case 91–

091.

SUPPLEMENTARY INFORMATION:

A. Background

Federal Acquisition Circular (FAC)

84–45 contained a final rule which was

published in the Federal Register at 54

FR 13332, March 31, 1989, to

incorporate changes required by the

Prompt Payment Act Amendments of

1988 (Public Law 100–496). OMB

implemented the statutory requirements

by revising OMB Circular A–125,

Prompt Payment. The OMB Circular

was published as a final rule in the

Federal Register on December 21, 1989,

and became effective 30 days after

publication. OMB’s final guidance

differed somewhat from earlier

proposed coverage which served as the

basis for the FAR changes published in

FAC 84–45. This final rule amends the

FAR to reflect the changes in the OMB

circular.

A proposed FAR rule to implement

the guidance published in OMB Circular

A–125 (Revised) was published in the

Federal Register at 59 FR 23776, May 6,

1994. Ten sources submitted public

comments. These comments were

considered in developing the final rule.

B. Regulatory Flexibility Act

A Final Regulatory Flexibility

Analysis (FRFA) has been performed. A

copy of the FRFA may be obtained from

the FAR Secretariat. The FRFA is

summarized as follows:

The need for, and the objectives of, the

final rule, are to implement changes made in

Office of Management and Budget (OMB)

Circular A–125 (Revised), dated December

12, 1989, to comply with the Prompt

Payment Act Amendments of 1988 (Public

Law 100–496). The Prompt Payment Act, as

amended, requires Executive departments

and agencies to make payments on time, to

pay interest penalties when payments are

late, and to take discounts only when

payments are made on or before the discount

date. We did not receive any public

comments in response to the Initial

Regulatory Flexibility Analysis. This rule

will apply to all small entities that are

awarded Government contracts, except

contracts with payment terms and late

payment penalties established by other

Governmental authority (e.g., tariffs). The

rule will also apply to all small entities that

enter into construction contracts with

contractors holding prime Federal

construction contracts. To date, no

supporting data has been collected; therefore,

there is no available estimate of the number

of small businesses that will be subject to the

rule. The Federal Procurement Data System

Federal Procurement Report for Fiscal Year

(FY) 1995 states that 203,241 awards and

contract modifications valued at more than

$25,000 were placed with small entities in

FY 1995. However, information is not

available as to the number of small entities

that received these awards, the number of

small entities that receive awards not subject

to this rule, or the number of small entities

that enter into construction contracts with

contractors holding prime Federal

construction contracts. The corresponding

information for actions valued at $25,000 or

less is also not available. There are no

significant alternatives that could accomplish

the objectives of this rule.

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 32 and

52

Government procurement.