[Federal Register Volume 81, Number 31 (Wednesday, February 17, 2016)]
[Proposed Rules]
[Pages 8031-8033]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2016-03044]


=======================================================================
-----------------------------------------------------------------------

DEPARTMENT OF DEFENSE

GENERAL SERVICES ADMINISTRATION

NATIONAL AERONAUTICS AND SPACE ADMINISTRATION

48 CFR Part 31

[FAR Case 2015-016; Docket 2015-0016; Sequence 1]
RIN 9000-AM97


Federal Acquisition Regulation; Prohibition on Reimbursement for 
Congressional Investigations and Inquiries

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

ACTION: Proposed rule.

-----------------------------------------------------------------------

SUMMARY: DoD, GSA, and NASA are proposing to amend the Federal 
Acquisition Regulation (FAR) to implement section 857 of the Carl Levin 
and Howard P. `Buck' McKeon National Defense Authorization Act for 
Fiscal Year 2015. This section provides additional requirements 
relative to the allowability of costs incurred by a contractor in 
connection with a congressional investigation or inquiry.

DATES: Interested parties should submit written comments to the 
Regulatory Secretariat on or before April 18, 2016 to be considered in 
the formulation of a final rule.

ADDRESSES: Submit comments in response to FAR Case 2015-016 by any of 
the following methods:
    <bullet> Regulations.gov: http://www.regulations.gov. Submit 
comments via the Federal eRulemaking portal by searching for ``FAR Case 
2015-016''. Select the link ``Comment Now'' that corresponds with FAR 
Case 2015-016. Follow the instructions provided at the ``Comment Now'' 
screen. Please include your name, company name (if any), and ``FAR Case 
2015-016'' on your attached document.
    <bullet> Mail: General Services Administration, Regulatory 
Secretariat (MVCB), ATTN: Ms. Flowers, 1800 F Street NW., 2nd Floor, 
Washington, DC 20405.
    Instructions: Please submit comments only and cite FAR Case 2015-
016, in all correspondence related to this case. Comments received 
generally will be posted without change to http://www.regulations.gov, 
including any personal and/or business confidential information 
provided. To confirm receipt of your comment(s), please

[[Page 8032]]

check www.regulations.gov, approximately two to three days after 
submission to verify posting (except allow 30 days for posting of 
comments submitted by mail).

FOR FURTHER INFORMATION CONTACT: Ms. Kathlyn Hopkins, Procurement 
Analyst, at 202-969-7226 for clarification of content. For information 
pertaining to status or publication schedules, contact the Regulatory 
Secretariat Division at 202-501-4755. Please cite FAR case 2015-016.

SUPPLEMENTARY INFORMATION:

I. Background

    Section 857 of the Carl Levin and Howard P. `Buck' McKeon National 
Defense Authorization Act for Fiscal Year 2015 (Pub. L. 113-291) 
amended 10 U.S.C. 2324(e)(1) to disallow costs incurred by a contractor 
in connection with a Congressional investigation or inquiry into an 
issue that is the subject matter of a proceeding resulting in a 
disposition as described in 10 U.S.C. 2324(k)(2).
    While Section 857 only applies to contracts with the DoD, NASA, and 
the Coast Guard, for the purpose of promoting consistency in the 
accounting systems of Federal contractors, it was decided to apply the 
section's requirements to all agencies subject to the FAR.
    Additionally, conforming language on unallowable costs is proposed 
for FAR 31.603-16, as well as for 31.603-15 (to update language 
associated with Whistleblower complaints).

II. Executive Orders 12866 and 13563

    Executive Orders (E.O.s) 12866 and 13563 direct agencies to assess 
all costs and benefits of available regulatory alternatives and, if 
regulation is necessary, to select regulatory approaches that maximize 
net benefits (including potential economic, environmental, public 
health and safety effects, distributive impacts, and equity). E.O. 
13563 emphasizes the importance of quantifying both costs and benefits, 
of reducing costs, of harmonizing rules, and of promoting flexibility. 
This is a significant regulatory action and, therefore, was subject to 
review under Section 6(b) of Executive Order 12866, Regulatory Planning 
and Review, dated September 30, 1993. This rule is not a major rule 
under 5 U.S.C. 804.

III. Regulatory Flexibility Act

    DoD, GSA and NASA do not expect this proposed rule 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 merely disallows the costs incurred in the 
extremely rare instances when a contractor incurs costs in connection 
with a congressional investigation or inquiry into an issue regarding a 
criminal, civil, or administrative proceeding relating to a violation 
of, or failure to comply with, a Federal or State statute or 
regulation. However, an initial regulatory flexibility analysis (IRFA) 
has been prepared consistent with 5 U.S.C. 603. The analysis is 
summarized as follows:

    The proposed rule will be manifested as a cost principle to 
which only select small businesses are subject. An analysis of 
contracts awarded during Fiscal Year 2014 revealed that fewer than 
200 small businesses were performing contracts subject to FAR 31. 
Given the small segment of the small business population that could 
be impacted by the rule, in concert with the low likelihood of the 
conditions being met, the impact on small businesses is 
insignificant.

    The Regulatory Secretariat Division has submitted a copy of the 
IRFA to the Chief Counsel for Advocacy of the Small Business 
Administration. A copy of the IRFA may be obtained from the Regulatory 
Secretariat Division. DoD, GSA and NASA invite comments from small 
business concerns and other interested parties on the expected impact 
of this rule on small entities. DoD, GSA, and NASA will also consider 
comments from small entities concerning the existing regulations in 
subparts affected by the rule in accordance with 5 U.S.C. 610. 
Interested parties must submit such comments separately and should cite 
5 U.S.C. 610 (FAR Case 2015-016), in correspondence.

C. Paperwork Reduction Act

    The rule does not contain any information collection requirements 
that require the approval of the Office of Management and Budget under 
44 U.S.C. chapter 35.

List of Subject in 48 CFR Part 31

    Government procurement.

William Clark,
Director, Office of Government-wide Acquisition Policy, Office of 
Acquisition Policy, Office of Government-wide Policy.

    Therefore, DoD, GSA, and NASA propose amending 48 CFR part 31 as 
set forth below:

PART 31--CONTRACT COST PRINCIPLES AND PROCEDURES

0
1. The authority citation for 48 CFR part 31 continues to read as 
follows:

    Authority:  40 U.S.C. 121(c); 10 U.S.C. chapter 137; and 51 
U.S.C. 20113.
0
2. Amend section 31.205-47 by--
0
a. In paragraph (a)--
0
i. Removing the words ``Fraudmeans--'' and adding ``Fraud means--'' in 
its place;
0
ii. Removing the words ``Penalty, does'' and adding ``Penalty does'' in 
its place; and
0
iii. Removing the words ``Proceeding, includes'' and adding 
``Proceeding includes'' in its place;
0
b. Removing from the introductory text of paragraph (b) ``employees),'' 
and adding ``employees);'' in its place; and
0
c. Adding paragraph (f)(9).
    The addition reads as follows:


31.205-47  Costs related to legal and other proceedings.

* * * * *
    (f) * * *
    (9) A Congressional investigation or inquiry into an issue that is 
the subject matter of a proceeding resulting in a disposition as 
described in paragraphs (b)(1) through (5) of this section (see 10 
U.S.C. 2324(e)(1)(Q)).
* * * * *
0
3. Amend section 31.603 by revising paragraphs (b) introductory text 
and (b)(15) and adding paragraph (b)(16) to read as follows:


31.603  Requirements.

* * * * *
    (b) Agencies are not expected to place additional restrictions on 
individual items of cost. However, under 10 U.S.C. 2324, 41 U.S.C. 
4304, 31 U.S.C. 3730, and 41 U.S.C. 4310, the following costs are 
unallowable:
* * * * *
    (15) Unless any of the exceptions at 31.205-47(c), (d) or (e) 
apply, costs incurred by a contractor in connection with any criminal, 
civil, or administrative proceedings that result in dispositions as 
described in 10 U.S.C. 2324(k) or 41 U.S.C. 4310 commenced by a 
Federal, State, local, or foreign government, or by a contractor or 
subcontractor employee submitting a whistleblower complaint of reprisal 
in accordance with 41 U.S.C. 4712 or 10 U.S.C. 2409, for violation of, 
or a failure to comply with, law or regulation by the contractor 
(including its agents or employees); or costs incurred in connection 
with any proceeding brought by a third party in the name of the United 
States under the False Claims Act, 31 U.S.C. 3730.
    (16) Costs incurred in connection with a Congressional 
investigation or inquiry into an issue that is the subject matter of a 
proceeding resulting in a disposition as described in 10 U.S.C. 2324(k) 
or 41 U.S.C. 4310, unless any of

[[Page 8033]]

the exceptions at 31.205-47(c), (d) or (e) apply.

[FR Doc. 2016-03044 Filed 2-16-16; 8:45 am]
 BILLING CODE 6820-EP-P