[Federal Register Volume 60, Number 104 (Wednesday, May 31, 1995)]
[Rules and Regulations]
[Pages 28503-28504]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 95-13260]



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DEPARTMENT OF DEFENSE
DEPARTMENT OF DEFENSE

GENERAL SERVICES ADMINISTRATION

NATIONAL AERONAUTICS AND SPACE ADMINISTRATION

48 CFR Part 31

[FAC 90-27; FAR Case 94-9; Item VI]
RIN 9000-AC14


Federal Acquisition Regulation; Interdivisional Transfers

agencies: Department of Defense (DOD), General Services Administration 
(GSA), and National Aeronautics and Space Administration (NASA).

action: Interim rule with request for comment.

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summary: The Civilian Agency Acquisition Council and the Defense 
Acquisition Regulations Council have agreed to an interim rule amending 
the Federal Acquisition Regulation (FAR). The cost principle criteria 
for cost of interdivisional transfers are amended to permit 
interdivisional transfers at price rather than cost under criteria that 
more closely approximate those applied to subcontracts eligible for 
exemption or waiver of cost or pricing data.
    This regulatory action was not subject to Office of Management and 
Budget review under Executive Order 12866, dated September 30, 1993.

dates: Effective Date: May 31, 1995.
    Comment Date: Comments should be submitted to the FAR Secretariat 
at the address shown below on or before July 31, 1995 to be considered 
in the formulation of a final rule.

addresses: Interested parties should submit written comments to: 
General Services Administration, FAR Secretariat (VRS), 18th & F 
Streets, NW, Room 4035, Attn: Ms. Beverly Fayson, Washington, DC 20405.
    Please cite FAC 90-27, FAR case 94-9 in all correspondence related 
to this case.

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 4037, GS Building, Washington, DC 20405 (202) 501-
4755. Please cite FAC 90-27, FAR case 94-9.

SUPPLEMENTARY INFORMATION:

A. Background

    This interim FAR rule revises FAR 31.205-26, Material Costs, to 
make it clear that interdivisional transfers made at price should be 
treated in the same manner as subcontracts for purposes of applying the 
requirements of FAR 15.804-3.

B. Regulatory Flexibility Act

    This interim 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 most 
contracts awarded to small entities are awarded on a competitive, 
fixed-price basis and the cost principles do not apply. The cost 
principles only apply to contracts for which cost or pricing data has 
been submitted. An Initial Regulatory Flexibility Analysis has, 
therefore, not been performed. Comments from small entities concerning 
the affected FAR subpart will be considered in accordance with 5 U.S.C. 
610 of the Act. Such comments must be submitted separately and should 
cite 5 U.S.C. 601, et seq. (FAC 90-27, FAR case 94-9), in 
correspondence.

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 collection of information from offerors, contractors, 
or members of the public which require the approval of OMB under 44 
U.S.C. 3501, et seq.

D. Determination To Issue an Interim Rule

    A determination has been made under the authority of the Secretary 
of Defense (DOD), the Administrator of General Services (GSA), and the 
Administrator of the National Aeronautics and Space Administration 
(NASA) that compelling reasons exist to promulgate this interim rule 
without prior opportunity for public comment. This action is necessary 
to provide an immediate benefit to Government and Industry. The rule 
will permit interdivisional transfers at price rather than cost for 
commercial items, under criteria identical to those used in applying 
the exception provisions of the Truth in Negotiations Act to 
subcontracts. However, pursuant to Public Law 98-577 and FAR 1.501, 
public comments received in response to this interim rule will be 
considered in the formation of the final rule.

List of Subjects in 48 CFR Part 31

    Government procurement.
C. Allen Olson,
Director, Office of Federal Acquisition Policy.
    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 31.205-26 is amended by revising paragraph (e) to read 
as follows:


31.205-26  Material costs.

* * * * *
    (e) Allowance for all materials, supplies, and services that are 
sold or transferred between any divisions, subsidiaries, or affiliates 
of the contractor under a common control shall be on the basis of cost 
incurred in accordance with this subpart. However, allowance may be at 
a price when it is the established practice of the transferring 
organization to price interorganizational transfers at other than cost 
for commercial work of the contractor or any division, subsidiary, or 
affiliate of the contractor under a common control, and when--
    (1)(i) The price is based on an ``established catalog or market 
price of commercial items sold in substantial quantities to the general 
public'' in accordance with 15.804-3;
    (ii) The price is based on ``adequate price competition'' in 
accordance with 15.804-3; or
    (iii) A waiver is granted in accordance with 15.804-3(i); 
and [[Page 28504]] 
    (2) The contracting officer has not determined the price to be 
unreasonable.
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[FR Doc. 95-13260 Filed 5-30-95; 8:45 am]
BILLING CODE 6820-EPD-M