Federal Register / Vol. 61, No. 18 / Friday, January 26, 1996 / Rules and Regulations 2641

DEPARTMENT OF DEFENSE

GENERAL SERVICES

ADMINISTRATION

NATIONAL AERONAUTICS AND

SPACE ADMINISTRATION

48 CFR Part 31

[FAC 90–37; FAR Case 92–604; Item XIV]

RIN 9000–AF85

Federal Acquisition Regulation;

Nonallowability of Excise Taxes on

Nondeductible Contributions to

Deferred Compensation Plans

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 to amend the

Federal Acquisition Regulation (FAR)

by revising the cost principle

concerning taxes. This regulatory action

was not subject to Office of Management

and Budget review under Executive

Order 12866, dated September 30, 1993.

EFFECTIVE DATE: March 26, 1996.

FOR FURTHER INFORMATION CONTACT:

Mr. 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 FAC 90–37, FAR case 92–

604.

SUPPLEMENTARY INFORMATION:

A. Background

Under the current FAR 31.205–

41(b)(6), excise taxes on accumulated

funding deficiencies or prohibited

transactions involving employee

deferred compensation plans pursuant

to sections 4971 and 4975 of the Internal

Revenue Code of 1954, as amended, are

unallowable. This reflects a longstanding Government policy that

punitive-type excise taxes are not

reimbursable costs on Government

contracts. Over the years, subsequent

legislation has added several new excise

taxes to subtitle D, chapter 43 of the

Internal Revenue Service Code such that

the Code currently lists 13 such taxes.

The Councils have agreed that it is

appropriate to revise FAR 31.205–

41(b)(6) to insert a general prohibition

on all excise taxes found at subtitle D,

chapter 43 of the Internal Revenue

Service Code. Such a general

prohibition will ensure that future

legislative changes to subtitle D, chapter

43 of the Internal Revenue Code will be

automatically reflected in the cost

principle.

A proposed rule was published in the

Federal Register at 59 FR 16393, April

6, 1994, with a request for comments.

Three responses were received. The

Councils’ analysis of those comments

did not result in any revisions to the

proposed 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 under 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.

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 55

U.S.C. 3501, et seq.

List of Subjects in 48 CFR Part 31

Government procurement.

Dated: January 11, 1996.

Edward C. Loeb,

Acting 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 31.205–41 is amended by

revising paragraph (b)(6) to read as

follows:

31.205–41 Taxes.

* * * * *

(b) * * *

(6) Any excise tax in subtitle D,

chapter 43 of the Internal Revenue Code

of 1986, as amended. That chapter

includes excise taxes imposed in

connection with qualified pension

plans, welfare plans, deferred

compensation plans, or other similar

types of plans.

* * * * *

[FR Doc. 96–1028 Filed 1–25–96; 8:45 am]

BILLING CODE 6820–EP–M

DEPARTMENT OF DEFENSE

GENERAL SERVICES

ADMINISTRATION

NATIONAL AERONAUTICS AND

SPACE ADMINISTRATION

48 CFR Parts 44 and 52

[FAC 90–37; FAR Case 92–040; Item XV]

RIN 9000–AF82

Federal Acquisition Regulation;

Contractors’ Purchasing Systems

Reviews and Subcontractor Consent

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 to amend the

Federal Acquisition Regulation (FAR) to

increase the dollar thresholds for the

performance of Contractors’ Purchasing

Systems Reviews (CPSR’s) and the

thresholds for subcontract consent. This

regulatory action was not subject to

Office of Management and Budget

review under Executive Order 12866,

dated September 30, 1993.

EFFECTIVE DATE: March 26, 1996.

FOR FURTHER INFORMATION CONTACT: Ms.

Linda Klein at (202) 501–3775 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 90–37, FAR case 92–

040.

SUPPLEMENTARY INFORMATION:

A. Background

A proposed rule was published in the

Federal Register at 59 FR 16393, April

6, 1994. The rule proposed to raise (1)

the threshold for performing CPSR’s

from $10 million to $25 million, and (2)

in the clause, Subcontracts (CostReimbursement and Letter Contracts), (i)

the $10,000 threshold for notification to

the contracting officer to $25,000, and

(ii) the $10,000 threshold requiring

additional information on certain

subcontracts to $25,000. After

evaluation of public comments, the

Councils agreed to a final rule without
2642 Federal Register / Vol. 61, No. 18 / Friday, January 26, 1996 / Rules and Regulations

change. As a result of internal review,

it was determined that FAR 44.201–

2(a)(1) should also be revised to reflect

the higher threshold.

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 under the

Regulatory Flexibility Act, 5 U.S.C. 601,

et seq., because the threshold increase

will reduce the number of contractors

meeting the criteria for CPSR’s and the

number of small businesses requesting

consent to subcontract as a result of the

increased threshold will be minimal.

C. Paperwork Reduction Act

The Paperwork Reduction Act (Public

Law 96–511) is deemed to apply

because the final rule contains

information collection requirements.

Accordingly, a request for approval of a

new information collection requirement

concerning 9000–0132 has been

approved by the Office of Management

and Budget under 44 U.S.C. 3501, et

seq., through June 30, 1997.

List of Subjects in 48 CFR Parts 44 and

52

Government procurement.

Dated: January 11, 1996.

Edward C. Loeb,

Acting Director, Office of Federal Acquisition

Policy.

Therefore, 48 CFR parts 44 and 52 are

amended as set forth below:

1. The authority citation for 48 CFR

Parts 44 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 44—SUBCONTRACTING

POLICIES AND PROCEDURES

44.201–2 [Amended]

2. Section 44.201–2 is amended in

paragraph (a)(1) by removing ‘‘$10,000’’

and inserting ‘‘$25,000’’ in its place.

44.302 [Amended]

3. Section 44.302 is amended in

paragraph (a) by removing ‘‘$10

million’’ each time (twice) it appears

and inserting ‘‘$25 million’’.

PART 52—SOLICITATION PROVISIONS

AND CONTRACT CLAUSES

52.244–2 [Amended]

4. Section 52.244–2 is amended by

revising the date of the clause heading

to read ‘‘(MAR 1996)’’; and by removing

from paragraphs (a)(4) and (b)(1)(i)

‘‘$10,000’’ and inserting ‘‘$25,000’’.

[FR Doc. 96–1029 Filed 1–25–96; 8:45 am]

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