66472 Federal Register / Vol. 60, No. 245 / Thursday, December 21, 1995 / Proposed Rules

DEPARTMENT OF DEFENSE

GENERAL SERVICES

ADMINISTRATION

NATIONAL AERONAUTICS AND

SPACE ADMINISTRATION

48 CFR Part 52

[FAR Case 93–024]

RIN 9000–AG74

Federal Acquisition Regulation;

Allowable Cost and Payment Clause

AGENCIES Department of Defense (DOD),

General Services Administration (GSA),

and National Aeronautics and Space

Administration (NASA).

ACTION: Proposed rule.

SUMMARY: The Civilian Agency

Acquisition Council and the Defense

Acquisition Regulations Council are

proposing changes to the Federal

Acquisition Regulation (FAR) to clarify

payment provisions for large business

prime contractors which are awarded

cost-type contracts. This regulatory

action was not subject to Office of

Management and Budget review under

Executive Order 12866, dated

September 30, 1993.

DATES: Comments should be submitted

on or before February 20, 1996 to be

considered in the formulation of a final

rule.

ADDRESSES: Interested parties should

submit written comments on: General

Services Administration, FAR

Secretariat (VRS), 18th and F Streets,

NW, Room 4037, Washington, DC

20405.

Please cite FAR case 93–024 in all

correspondence related to this case.

FOR FURTHER INFORMATION CONTACT:

Jeremy F. 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 FAR case 93–024.

SUPPLEMENTARY INFORMATION:

A. Background

The Office of Federal Procurement

Policy SWAT Team on Civilian Agency

Contracting in its report of December

1992, entitled ‘‘Improving Contracting

Practices and Management Controls on

Cost-Type Federal Contracts’’,

recommended several FAR revisions

which were viewed to have

Government-wide benefit.

One area identified for clarification

included the payment provisions in

FAR clauses 52.216–7, Allowable Cost

and payment, and 52.232–7, Payment

Under Time-and-Materials and LaborHour Contracts. The SWAT Team

concluded that these clauses did not

clearly convey the Government’s intent

that payments to subcontractors by large

business prime contractors were not

billable to the Government until the

contractor had actually paid the

subcontractors. The proposed rule

amends these payment clauses to clarify

that, on cost-type contracts,payments to

subcontractors are not billable by large

business prime contractors until the

subcontractors have been paid by the

prime contractor.

B. Regulatory Flexibility Act

This 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 only applies to large

business entities who wish to be

reimbursed under cost-type contracts.

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 cite (FAR case 93–024),

in correspondence.

C. Paperwork Reduction Act

The Paperwork Reduction Act does

not apply because the proposed 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 52

Government procurement.

Dated: December 15, 1995.

Edward C. Loeb,

Acting Director, Office of Federal Acquisition

Policy.

Therefore, it is proposed that 48 CFR

Part 52 be amended as set forth below:

PART 52—SOLICITATION PROVISIONS

AND CONTRACT CLAUSES

1. The authority citation for 48 CFR

Part 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).

2. Section 52.216–7 is amended by

revising the clause date and paragraph

(b)(i)(iii) to read as follows:

52.216–7 Allowable cost and payment.

* * * * *

Allowable Cost and Payment (Date)

* * * * *

(b) * * *

(1) * * *

(iii) The amount of progress and other

payments that have been paid by cash, check

or other form of payment to the Contractor’s

subcontractors under similar cost standards.

* * * * *

3. Section 52.232–7 is amended by

revising the clause date and the second

sentence of paragraph (b)(2) to read as

follows:

52.232–7 Payments under time-andmaterials and labor-hour contracts.

* * * * *

Payments Under Time-and-Materials and

Labor-Hour Contracts (Date)

* * * * *

(b) * * *

(2) * * * Reimbursable costs in

connection with subcontracts shall be limited

to the amounts paid to the subcontractor for

items and services purchased directly for the

contract only when cash, checks, or other

form of payment has been made for such

purchased items or services; however, this

requirement shall not apply to a Contractor

that is a small business concern. * * *

* * * * *

[FR Doc. 95–30996 Filed 12–20–95; 8:45 am]

BILLING CODE 6820–EP–M

DEPARTMENT OF DEFENSE

GENERAL SERVICES

ADMINISTRATION

NATIONAL AERONAUTICS AND

SPACE ADMINISTRATION

48 CFR Part 44

[FAR Case 94–605]

[RIN 9000–AG75]

Federal Acquisition Regulation;

Contractors’ Purchasing Systems

Reviews

AGENCY: Department of Defense (DOD),

General Services Administration

(GSA),and National Aeronautics and

Space Administration (NASA).

ACTION: Proposed rule.

SUMMARY: The Civilian Agency

Acquisition Council and the Defense

Acquisition Regulations Council

(Councils) are proposing a revision to

the Federal Acquisition Regulation

(FAR) concerning requirements under

Contractors’ Purchasing Systems

Reviews (CPSR’s). This regulatory

action was not subject to Office of

Management and Budget review under