18916 Federal Register / Vol. 61, No. 83 / Monday, April 29, 1996 / Rules and Regulations

modify contracts without requiring

consideration to incorporate changes

authorized by FASA amendments into

existing contracts. Contracting officers

are encouraged, if appropriate, to

modify contracts without requiring

consideration to incorporate these new

policies. The contract modification

should be accomplished by inserting

into the contract, as a minimum, the

current version of the applicable FAR

clauses.

[FR Doc. 96–10428 Filed 4–26–96; 8:45 am]

BILLING CODE 6820–EP–P

48 CFR Parts 1, 30, 42, and 52

[FAC 90–38; FAR Case 95–002; Item II]

RIN 9000–AG71

Federal Acquisition Regulation;

Application of Cost Accounting

Standards Board Regulations to

Educational Institutions

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

implement changes made to the Cost

Accounting Standards (CAS). The final

rule applies to educational institutions

receiving a negotiated Federal contract

or subcontract award in excess of

$500,000 (excluding contracts awarded

for the operation of Federally Funded

Research and Development Centers

(FFRDCs) which are already subject to

CAS Board regulations), and requires

that such educational institutions

comply with certain specified CAS

Board rules, regulations and standards.

The revisions to the FAR are based on

the CAS Board’s amendments to 48 CFR

Chapter 99. This regulatory action was

not subject to Office of Management and

Budget review under Executive Order

12866, dated September 30, 1993. It is

not a major rule under 5 U.S.C. 804.

EFFECTIVE DATE: April 29, 1996.

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 90–38, FAR case 95–

002.

SUPPLEMENTARY INFORMATION:

A. Background

The Office of Federal Procurement

Policy, Cost Accounting Standards

Board (CASB), has amended the

regulatory provisions contained at 48

CFR Chapter 99. The amendments apply

to educational institutions receiving a

negotiated Federal contract or

subcontract award in excess of $500,000

(excluding contracts awarded for the

operation of Federally Funded Research

and Development Centers (FFRDCs)

which are already subject to CASB

regulations) and require that such

educational institutions comply with

certain specified CASB rules,

regulations, and Cost Accounting

Standards (CAS). The CAS final rule

was published in the Federal Register

on November 8, 1994, at 59 FR 55746,

and became effective on January 9,

1995, and is authorized pursuant to

section 26 of the Office of Federal

Procurement Policy Act. The Board has

taken action on this topic in order to

promote uniformity and consistency in

educational institutions’ cost accounting

practices.

B. Regulatory Flexibility Act

The final rule does not constitute a

significant FAR revision within the

meaning of FAR 1.501 and Public Law

98–577 and publication for public

comment is not required because the

requirements for the regulation were

published by the CASB and codified at

48 CFR Chapter 99. Therefore, the

Regulatory Flexibility Act does not

apply. However, comments from small

entities concerning the affected FAR

subparts will be considered in

accordance with Section 610 of the Act.

Such comments must be submitted

separately and cite 5 U.S.C. 601, et seq.,

(FAC 90–38, FAR Case 95–002).

C. Paperwork Reduction Act

The information collection aspects of

this rule have been approved by the

Office of Management and Budget and

assigned Control Number 0348–0055.

D. Public Comments

Public comments are not necessary

because the policies and procedures

contained in this regulation have

already been publicized in the Federal

Register by the Office of Federal

Procurement Policy Cost Accounting

Standards Board’s Notice of Proposed

Rulemaking made available for public

comment in the Federal Register, at 57

FR 60503, on December 21, 1992.

List of Subjects in 48 CFR Parts 1, 30,

42, and 52

Government procurement.

Dated: April 18, 1996.

Edward C. Loeb,

Director, Federal Acquisition Policy Division.

Therefore, 48 CFR Parts 1, 30, 42, and

52 are amended as set forth below:

PART 1—FEDERAL ACQUISITION

REGULATIONS SYSTEM

1. The authority citation for 48 CFR

Parts 1, 30, 42, 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).

1.106 [Amended]

2. Section 1.106 is amended in the

FAR segment column by removing

‘‘52.230–5’’ and inserting ‘‘52.230–6’’ in

its place.

PART 30—COST ACCOUNTING

STANDARDS ADMINISTRATION

30.000 [Amended]

3. Section 30.000 is amended by

removing ‘‘(appendix B, FAR loose-leaf

edition))’’ and inserting ‘‘(FAR appendix

B)’’ in its place, and by removing ‘‘(see

48 CFR chapter 99 (appendix B, FAR

loose-leaf edition), Subpart 9903.201–

1(b),’’ and inserting ‘‘(see 48 CFR

9903.201–1(b) (FAR appendix B)’’ in its

place.

30.201 [Amended]

4. Section 30.201 is amended in the

first sentence by removing ‘‘48 CFR

chapter 99 (appendix B, FAR loose-leaf

edition), Subpart 9903.201–1,’’ and

inserting ‘‘48 CFR 9903.201–1 (FAR

appendix B)’’ in its place, in the second

sentence by removing ‘‘subpart’’ and

inserting ‘‘48 CFR’’ in its place, and in

the last sentence by removing ‘‘48 CFR

chapter 99 (appendix B, FAR loose-leaf

edition), Subpart 9903.201–2.’’ and

inserting ‘‘48 CFR 9903.201–2 (FAR

appendix B).’’ in its place.

5. Section 30.201–1 is revised to read

as follows:

30.201–1 CAS applicability.

See 48 CFR 9903.201–1 (FAR

appendix B).

6. Section 30.201–2 is revised to read

as follows:

30.201–2 Types of CAS coverage.

See 48 CFR 9903.201–2 (FAR

appendix B).

7. Section 30.201–3 is revised to read

as follows:
Federal Register / Vol. 61, No. 83 / Monday, April 29, 1996 / Rules and Regulations 18917

30.201–3 Solicitation provisions.

(a) The contracting officer shall insert

the provision at 52.230–1, Cost

Accounting Standards Notices and

Certification, in solicitations for

proposed contracts subject to CAS as

specified in 48 CFR 9903.201 (FAR

appendix B).

(b) If an award to an educational

institution is contemplated prior to July

1, 1997, the contracting officer shall

insert the basic provision set forth at

52.230–1 with its Alternate I, unless the

contract is to be performed by a

Federally Funded Research and

Development Center (FFRDC) (see 48

CFR 9903.201–2(c)(5) (FAR appendix

B)), or the provision at 48 CFR

9903.201–2(c)(6) (FAR appendix B)

applies.

8. Section 30.201–4 is revised to read

as follows:

30.201–4 Contract clauses.

(a) Cost Accounting Standards. (1)

The contracting officer shall insert the

clause at FAR 52.230–2, Cost

Accounting Standards, in negotiated

contracts, unless the contract is

exempted (see 48 CFR 9903.201–1 (FAR

appendix B)), the contract is subject to

modified coverage (see 48 CFR

9903.201–2 (FAR appendix B)), or the

clause prescribed in paragraph (c) of

this subsection is used.

(2) The clause at FAR 52.230–2

requires the contractor to comply with

all CAS specified in 48 CFR part 9904

(FAR appendix B), to disclose actual

cost accounting practices (applicable to

CAS-covered contracts only), and to

follow disclosed and established cost

accounting practices consistently.

(b) Disclosure and Consistency of Cost

Accounting Practices. (1) The

contracting officer shall insert the clause

at FAR 52.230–3, Disclosure and

Consistency of Cost Accounting

Practices, in negotiated contracts when

the contract amount is over $500,000,

but less than $25 million, and the

offeror certifies it is eligible for and

elects to use modified CAS coverage

(see 48 CFR 9903.201–2 (FAR appendix

B), unless the clause prescribed in

paragraph (c) of this subsection is used).

(2) The clause at FAR 52.230–3

requires the contractor to comply with

48 CFR 9904.401, 9904.402, 9904.405,

and 9904.406 (FAR appendix B) to

disclose (if it meets certain

requirements) actual cost accounting

practices, and to follow consistently its

established cost accounting practices.

(c) Consistency in Cost Accounting

Practices. The contracting officer shall

insert the clause at FAR 52.230–4,

Consistency in Cost Accounting

Practices, in negotiated contracts that

are exempt from CAS requirements

solely on the basis of the fact that the

contract is to be awarded to a United

Kingdom contractor and is to be

performed substantially in the United

Kingdom (see 48 CFR 9903.201–1(b)(12)

(FAR appendix B)).

(d) Administration of Cost Accounting

Standards. (1) The contracting officer

shall insert the clause at FAR 52.230–6,

Administration of Cost Accounting

Standards, in contracts containing any

of the clauses prescribed in paragraphs

(a), (b), or (e) of this subsection.

(2) The clause at FAR 52.230–6

specifies rules for administering CAS

requirements and procedures to be

followed in cases of failure to comply.

(e) Cost Accounting Standards—

Educational Institutions. (1) The

contracting officer shall insert the clause

at FAR 52.230–5, Cost Accounting

Standards—Educational Institution, in

negotiated contracts awarded to

educational institutions, unless the

contract is exempted (see 48 CFR

9903.201–1 (FAR appendix B)), the

contract is to be performed by an FFRDC

(see 48 CFR 9903.201–2(c)(5) (FAR

appendix B)), or the provision at 48 CFR

9903.201–2(c)(6) (FAR appendix B)

applies.

(2) The clause at FAR 52.230–5

requires the educational institution to

comply with all CAS specified in 48

CFR part 9905 (FAR appendix B), to

disclose actual cost accounting practices

as required by 48 CFR 9903.202–1(f)

(FAR appendix B), and to follow

disclosed and established cost

accounting practices consistently.

9. Section 30.201–5 is revised to read

as follows:

30.201–5 Waiver.

In some instances, contractors or

subcontractors may refuse to accept all

or part of the requirements of the CAS

clauses (FAR 52.230–2, Cost Accounting

Standards, FAR 52.230–3, Disclosure

and Consistency of Cost Accounting

Practices, and FAR 52.230–5, Cost

Accounting Standards—Educational

Institution). If the contracting officer

determines that it is impractical to

obtain the materials, supplies, or

services from any other source, the

contracting officer shall prepare a

request for waiver in accordance with

48 CFR 9903.201–5 (FAR appendix B).

10. Sections 30.201–6 and 30.201–7

are added to read as follows:

30.201–6 Findings.

See 48 CFR 9903.201–6 (FAR

appendix B).

30.201–7 Cognizant Federal agency

responsibilities.

See 48 CFR 9903.201–7 (FAR

appendix B).

11. Section 30.202–1 is revised to read

as follows:

30.202–1 General requirements.

See 48 CFR 9903.202–1 (FAR

appendix B).

12. Section 30.202–2 is revised to read

as follows:

30.202–2 Impracticality of submission.

See 48 CFR 9903.202–2 (FAR

appendix B).

13. Section 30.202–3 is revised to read

as follows:

30.202–3 Amendments and revisions.

See 48 CFR 9903.202–3 (FAR

appendix B).

14. Section 30.202–4 is revised to read

as follows:

30.202–4 Privileged and confidential

information.

See 48 CFR 9903.202–4 (FAR

appendix B).

15. Section 52.202–5 is revised to read

as follows:

30.202–5 Filing Disclosure Statements.

See 48 CFR 9903.202–5 (FAR

appendix B).

30.202–6 [Amended]

16. Section 30.202–6(a) is amended by

removing ‘‘48 CFR chapter 99 (appendix

B, FAR loose-leaf edition), Subparts

9903.201–3 and 9903.202.’’ and

inserting ‘‘48 CFR 9903.201–3 and

9903.202 (FAR appendix B).’’ in its

place.

17. Section 30.202–7 is amended in

paragraph (a) by revising the first and

third sentences; and in the first sentence

of (b) by inserting the word ‘‘cognizant’’

before the word ‘‘auditor’’, and

removing the word ‘‘determine’’ and

inserting ‘‘ascertain’’ in its place. The

revised text reads as follows:

30.202–7 Determinations.

(a) Adequacy determination. As

prescribed by 48 CFR 9903.202–6 (FAR

appendix B), the cognizant auditor shall

conduct a review of the Disclosure

Statement to ascertain whether it is

current, accurate, and complete and

shall report the results to the cognizant

ACO, who shall determine whether or

not it adequately describes the offeror’s

cost accounting practices. * * * If the

Disclosure Statement is adequate, the

ACO shall notify the offeror in writing,

with copies to the cognizant auditor and

contracting officer. * * *

* * * * *
18918 Federal Register / Vol. 61, No. 83 / Monday, April 29, 1996 / Rules and Regulations

18. Section 30.202–8 is amended in

the second sentence of paragraph (a) by

removing ‘‘ACO’s’’ and inserting in its

place ‘‘The ACO’’; and by revising (b) to

read as follows:

30.202–8 Subcontractor Disclosure

Statements.

* * * * *

(b) Any determination that it is

impractical to secure a subcontractor’s

Disclosure Statement must be made in

accordance with 48 CFR 9903.202–2

(FAR appendix B).

19. Subpart 30.3 is revised to read as

follows:

Subpart 30.3—CAS Rules and

Regulations [Reserved]

Note: See 48 CFR 9903.3 (FAR appendix

B).

20. Subpart 30.4 is revised to read as

follows:

Subpart 30.4—Cost Accounting

Standards [Reserved]

Note: See 48 CFR part 9904 (FAR appendix

B).

21. Subpart 30.5 is revised to read as

follows:

Subpart 30.5—Cost Accounting

Standards for Educational Institutions

[Reserved]

Note: See 48 CFR part 9905 (FAR appendix

B).

30.602 [Amended]

22. Section 30.602 is amended in the

introductory text by removing ‘‘48 CFR

chapter 99 (appendix B, FAR loose-leaf

edition), subpart 9903.305.’’ and

inserting ‘‘48 CFR 9903.305 (FAR

appendix B).’’ in its place.

30.602–1 [Amended]

23. Section 30.602–1 is amended in

the first sentence of paragraph (a)(2) by

inserting after the word ‘‘Standards,’’

the phrase ‘‘or FAR 52.230–5, Cost

Accounting Standards—Educational

Institution,’’; in the third sentence of

(a)(2) by inserting after ‘‘52.230–2’’ the

phrase ‘‘or 52.230–5’’; in paragraph

(b)(1) by revising the citation ‘‘52.230–

5’’ to read ‘‘FAR 52.230–6’’; in the first

sentence of (b)(2) by inserting after the

word ‘‘ACO’’ the phrase ‘‘, with the

assistance of the auditor,’’.

30.602–2 [Amended]

24. Section 30.602–2 is amended as

follows:

a. In paragraph (a)(1) and the first

sentence of paragraph (d)(1) by inserting

the word ‘‘cognizant’’ before the word

‘‘auditor’’ the first time it appears;

b. In paragraphs (a)(3), (b)(1), and

(c)(1), by revising the citation ‘‘52.230–

5’’ to read ‘‘FAR 52.230–6’’;

c. In the second sentence of paragraph

(c)(2) by inserting after the word

‘‘Standards,’’ the phrase ‘‘or FAR

52.230–5, Cost Accounting Standards—

Educational Institution,’’; and

d. In paragraph (d)(3) by inserting

after the word ‘‘Standards,’’ the phrase

‘‘52.230–5, Cost Accounting

Standards—Educational Institution,’’.

30.602–3 [Amended]

25. Section 30.602–3 is amended in

paragraph (b)(1) by revising the citation

‘‘52.230–5’’ to read ‘‘ FAR 52.230–6’’; in

the first sentence of (b)(2) by adding

after the word ‘‘ACO’’ the phrase ‘‘, with

the assistance of the cognizant auditor,’’;

and in the first sentence of (d)(1) by

adding before the word ‘‘auditor’’ the

word ‘‘cognizant’’.

30.603 [Amended]

26. Section 30.603 is amended in the

first sentence by removing the word

‘‘his’’ and inserting ‘‘the’’ in its place;

and in the second sentence by removing

‘‘ACO’s’’ and inserting ‘‘The ACOs’’ in

its place.

PART 42—CONTRACT

ADMINISTRATION

42.302 [Amended]

27. Section 42.302 is amended in

paragraph (a)(11) by removing ‘‘48 CFR

chapter 99)’’ and inserting ‘‘48 CFR

chapter 99 (FAR appendix B))’’ in its

place, and in (a)(11)(iv) by removing

‘‘and 52.230–5’’ and inserting in its

place ‘‘52.230–5 and 52.230–6.’’

PART 52—SOLICITATION PROVISIONS

AND CONTRACT CLAUSES

28. Section 52.230–1 is amended by:

(a) Revising the clause date;

(b) Adding a third paragraph

following the NOTE under the clause

heading;

(c) Removing from paragraph (a)(2)

the phrase ‘‘48 CFR parts 9903 and

9904’’ and inserting ‘‘the Cost

Accounting Standards Board (48 CFR

Chapter 99)’’ in its place, and removing

the phrase ‘‘48 CFR, Subpart’’ and

inserting ‘‘48 CFR’’ in its place;

(d) Removing in the first sentence of

paragraph (b) the phrase ‘‘, parts 9903

and 9904’’ and inserting ‘‘Chapter 99’’

in its place, and removing the phrase

‘‘48 CFR, Subpart’’ and inserting ‘‘48

CFR’’ in its place; and in the second

sentence by removing ‘‘The’’ and

inserting ‘‘When required, the’’ in its

place;

(e) Capitalizing all letters in the word

‘‘Caution:’’ in the CAUTION paragraph

following paragraphs (b), (c)(4), and in

Part II;

(f) Revising paragraphs (c) (1) and (2);

(g) Removing in paragraph (c)(4)(ii)

under Part I the phrase ‘‘48 CFR,

Subpart’’ and inserting ‘‘48 CFR’’ in its

place;

(h) Removing in the first sentences of

the first and second paragraphs in Part

II the phrase ‘‘48 CFR subpart’’ and

inserting ‘‘48 CFR’’ in its place; and

(i) Adding Alternate I. The added and

revised text reads as follows:

52.230–1 Cost Accounting Standards

Notices and Certification.

* * * * *

COST ACCOUNTING STANDARDS

NOTICES AND CERTIFICATION (APR 1996)

* * * * *

Note: * * *

If the offeror is an educational institution,

Part II does not apply unless the

contemplated contract will be subject to full

or modified CAS coverage pursuant to 48

CFR 9903.201–2(c)(5) or 9903.201–2(c)(6),

respectively.

I. DISCLOSURE STATEMENT-COST

ACCOUNTING PRACTICES AND

CERTIFICATION

* * * * *

(c) * * *

(1) Certificate of Concurrent Submission

of Disclosure Statement.

The offeror hereby certifies that, as a part

of the offer, copies of the Disclosure

Statement have been submitted as follows: (i)

original and one copy to the cognizant

Administrative Contracting Officer (ACO) or

cognizant Federal agency official authorized

to act in that capacity (Federal official), as

applicable, and (ii) one copy to the cognizant

Federal auditor.

(Disclosure must be on Form No. CASB

DS–1 or CASB DS–2, as applicable. Forms

may be obtained from the cognizant ACO or

Federal official and/or from the loose-leaf

version of the Federal Acquisition

Regulation.)

Date of Disclosure Statement:

lllllllllllllllllllll

Name and Address of Cognizant ACO or

Federal Official Where Filed:

lllllllllllllllllllll

The offeror further certifies that the

practices used in estimating costs in pricing

this proposal are consistent with the cost

accounting practices disclosed in the

Disclosure Statement.

(2) Certificate of Previously Submitted

Disclosure Statement.

The offeror hereby certifies that the

required Disclosure Statement was filed as

follows:

Date of Disclosure Statement:

lllllllllllllllllllll

Name and Address of Cognizant ACO or

Federal Official Where Filed:

lllllllllllllllllllll

The offeror further certifies that the

practices used in estimating costs in pricing

this proposal are consistent with the cost
Federal Register / Vol. 61, No. 83 / Monday, April 29, 1996 / Rules and Regulations 18919

accounting practices disclosed in the

applicable Disclosure Statement.

* * * * *

(End of provision)

Alternate I (APR 1996). As prescribed in

30.201–3(b), add the following subparagraph

(c)(5) to Part I of the basic provision:

b (5) Certificate of Disclosure Statement

Due Date by Educational Institution. If the

offeror is an educational institution that,

under the transition provisions of 48 CFR

9903.202–1(f), is or will be required to

submit a Disclosure Statement after receipt of

this award, the offeror hereby certifies that

(check one and complete):

b (i) A Disclosure Statement Filing Due

Date of lllllllll has been

established with the cognizant Federal

agency.

(ii) The Disclosure Statement will be

submitted within the 6-month period ending

lllllll months after receipt of this

award.

Name and Address of Cognizant ACO or

Federal Official Where Disclosure

Statement is to be Filed:

lllllllllllllllllllll

52.230–2 [Amended]

29. Section 52.230–2 is amended by

revising the clause date to read ‘‘(Apr

1996)’’, and by removing in paragraph

(a) in the introductory text the phrase

‘‘48 CFR subparts’’ and inserting ‘‘48

CFR’’ in its place; in (a)(1) removing the

phrase ‘‘48 CFR subpart’’ and inserting

‘‘48 CFR’’ in its place, in (a)(3) removing

the phrase ‘‘48 CFR part 9904,

(appendix B, FAR loose-leaf edition),’’

and inserting ‘‘48 CFR Part 9904,’’ in its

place, and in (d)(2) removing the phrase

‘‘48 CFR subpart’’ and inserting ‘‘48

CFR’’ in its place.

30. Section 52.230–3 is amended by:

(a) Revising the clause date and

paragraph (a)(1);

(b) Removing in paragraph (a)(2) the

phrase ‘‘48 CFR subparts’’ and inserting

‘‘48 CFR’’ in its place; and

(c) Removing in paragraphs (a)(3)(ii),

(d)(1) and (d)(3) the phrase ‘‘48 CFR

subpart’’ and inserting ‘‘48 CFR’’ in its

place. The revised text reads as follows:

52.230–3 Disclosure and Consistency of

Cost Accounting Practices.

* * * * *

DISCLOSURE AND CONSISTENCY OF

COST ACCOUNTING PRACTICES (APR

1996)

(a) * * *

(1) Comply with the requirements of 48

CFR 9904.401, Consistency in Estimating,

Accumulating, and Reporting Costs; 48 CFR

9904.402, Consistency in Allocating Costs

Incurred for the Same Purpose; 48 CFR

9904.405, Accounting for Unallowable Costs;

and 48 CFR 9904.406, Cost Accounting

Standard-Cost Accounting Period, in effect

on the date of award of this contract as

indicated in 48 CFR Part 9904.

* * * * *

52.230–5 [Redesignated as 52.230–6]

31. Section 52.230–5 is redesignated

as 52.230–6 and a new section 52.230–

5 is added to read as follows:

52.230–5 Cost Accounting Standards—

Educational Institution.

As prescribed in 30.201–4(e), insert the

following clause:

COST ACCOUNTING STANDARDS—

EDUCATIONAL INSTITUTION (APR 1996)

(a) Unless the contract is exempt under 48

CFR 9903.201–1 and 9903.201–2, the

provisions of 48 CFR Part 9903 are

incorporated herein by reference and the

Contractor, in connection with this contract,

shall—

(1) (CAS-covered contracts only). If a

business unit of an educational institution

required to submit a Disclosure Statement,

disclose in writing the Contractor’s cost

accounting practices as required by 48 CFR

9903.202–1 through 9903.202–5, including

methods of distinguishing direct costs from

indirect costs and the basis used for

accumulating and allocating indirect costs.

The practices disclosed for this contract shall

be the same as the practices currently

disclosed and applied on all other contracts

and subcontracts being performed by the

Contractor and which contain a Cost

Accounting Standards (CAS) clause. If the

Contractor has notified the Contracting

Officer that the Disclosure Statement

contains trade secrets, and commercial or

financial information which is privileged and

confidential, the Disclosure Statement shall

be protected and shall not be released outside

of the Government.

(2) Follow consistently the Contractor’s

cost accounting practices in accumulating

and reporting contract performance cost data

concerning this contract. If any change in

cost accounting practices is made for the

purposes of any contract or subcontract

subject to CAS requirements, the change

must be applied prospectively to this

contract and the Disclosure Statement, if

required, must be amended accordingly. If an

accounting principle change mandated under

Office of Management and Budget (OMB)

Circular A–21, Cost Principles for

Educational Institutions, requires that a

change in the Contractor’s cost accounting

practices be made after the date of this

contract award, the change must be applied

prospectively to this contract and the

Disclosure Statement, if required, must be

amended accordingly. If the contract price or

cost allowance of this contract is affected by

such changes, adjustment shall be made in

accordance with subparagraph (a)(4) or (a)(5)

of this clause, as appropriate.

(3) Comply with all CAS, including any

modifications and interpretations indicated

thereto contained in 48 CFR Part 9905 in

effect on the date of award of this contract

or, if the Contractor has submitted cost or

pricing data, on the date of final agreement

on price as shown on the Contractor’s signed

certificate of current cost or pricing data. The

Contractor shall also comply with any CAS

(or modifications to CAS) which hereafter

become applicable to a contract or

subcontract of the Contractor. Such

compliance shall be required prospectively

from the date of applicability to such contract

or subcontract.

(4) (i) Agree to an equitable adjustment as

provided in the Changes clause of this

contract if the contract cost is affected by a

change which, pursuant to subparagraph

(a)(3) of this clause, the Contractor is

required to make to the Contractor’s

established cost accounting practices.

(ii) Negotiate with the Contracting Officer

to determine the terms and conditions under

which a change may be made to a cost

accounting practice, other than a change

made under other provisions of subparagraph

(a)(4) of this clause; provided that no

agreement may be made under this provision

that will increase costs paid by the United

States.

(iii) When the parties agree to a change to

a cost accounting practice, other than a

change under subdivision (a)(4)(i) or (a)(4)(iv)

of this clause, negotiate an equitable

adjustment as provided in the Changes clause

of this contract.

(iv) Agree to an equitable adjustment as

provided in the Changes clause of this

contract, if the contract cost is materially

affected by an OMB Circular A–21

accounting principle amendment which, on

becoming effective after the date of contract

award, requires the Contractor to make a

change to the Contractor’s established cost

accounting practices.

(5) Agree to an adjustment of the contract

price or cost allowance, as appropriate, if the

Contractor or a subcontractor fails to comply

with an applicable Cost Accounting

Standard, or to follow any cost accounting

practice consistently and such failure results

in any increased costs paid by the United

States. Such adjustment shall provide for

recovery of the increased costs to the United

States, together with interest thereon

computed at the annual rate established

under section 6621 of the Internal Revenue

Code of 1986 (26 U.S.C. 6621) for such

period, from the time the payment by the

United States was made to the time the

adjustment is effected. In no case shall the

Government recover costs greater than the

increased cost to the Government, in the

aggregate, on the relevant contracts subject to

the price adjustment, unless the Contractor

made a change in its cost accounting

practices of which it was aware or should

have been aware at the time of price

negotiations and which it failed to disclose

to the Government.

(b) If the parties fail to agree whether the

Contractor or a subcontractor has complied

with an applicable CAS or a CAS rule or

regulation in 48 CFR Part 9903, and as to any

cost adjustment demanded by the United

States, such failure to agree will constitute a

dispute under the Contract Disputes Act (41

U.S.C. 601).

(c) The Contractor shall permit any

authorized representatives of the Government

to examine and make copies of any

documents, papers, or records relating to

compliance with the requirements of this

clause.
18920 Federal Register / Vol. 61, No. 83 / Monday, April 29, 1996 / Rules and Regulations

(d) The Contractor shall include in all

negotiated subcontracts which the Contractor

enters into, the substance of this clause,

except paragraph (b), and shall require such

inclusion in all other subcontracts, of any

tier, including the obligation to comply with

all applicable CAS in effect on the

subcontractor’s award date or, if the

subcontractor has submitted cost or pricing

data, on the date of final agreement on price

as shown on the subcontractor’s signed

Certificate of Current Cost or Pricing Data,

except that—

(1) If the subcontract is awarded to a

business unit which pursuant to 48 CFR

9903.201–2 is subject to other types of CAS

coverage, the substance of the applicable

clause set forth in 48 CFR 9903.201–4 shall

be inserted; and

(2) This requirement shall apply only to

negotiated subcontracts in excess of $500,000

where the price negotiated is not based on—

(i) Established catalog or market prices of

commercial items sold in substantial

quantities to the general public; or

(ii) Prices set by law or regulation, and

except that the requirement shall not apply

to negotiated subcontracts otherwise exempt

from the requirement to include a CAS clause

as specified in 48 CFR 9903.201–1.

(End of clause)

32. Newly designated section 52.230–

6 is amended:

(a) By revising the date of the clause

to read ‘‘(APR 1996)’’;

(b) In paragraph (a)(1) by removing

the phrase ‘‘to comply with a new or

modified CAS’’; and removing the

comma after the word ‘‘Standards’’ and

inserting in its place ‘‘; or subparagraph

(a)(3) and subdivisions (a)(4)(i) or

(a)(4)(iv) of the clause at FAR 52.230–5,

Cost Accounting Standards-Educational

Institution;’’;

(c) In paragraph (a)(2) by adding an

‘‘s’’ to the end of the word ‘‘clause’’ the

first time it appears; and adding after

the word ‘‘Standards,’’ the phrase ‘‘and

FAR 52.230–5, Cost Accounting

Standards-Educational Institution;’’;

(d) In paragraph (a)(3) by adding after

the word ‘‘Standards,’’ the phrase ‘‘and

FAR 52.230–5, Cost Accounting

Standards-Educational Institution;’’;

(e) In the introductory text of

paragraph (b) by adding after the word

‘‘ACO’’ the phrase ‘‘, or cognizant

Federal agency official,’’;

(f) By revising paragraphs (b)(1) and

(b)(2);

(g) In paragraph (b)(3) by adding an

‘‘s’’ at the end of the word ‘‘clause’’ the

first time it appears; and adding after

the word ‘‘Standards,’’ the phrase ‘‘and

FAR 52.230–5, Cost Accounting

Standards-Educational Institution;’’

(h) In paragraph (d) by removing

‘‘CAS clause’’ and inserting ‘‘clauses’’ in

its place; and adding after the citation

‘‘52.230–2,’’ the phrase ‘‘and 52.230–

5;’’;

(i) By revising the introductory text of

paragraph (e) and the first sentence of

paragraph (e)(2)(iv); and

(j) In paragraph (g) by removing ‘‘CAS

clause,’’ and inserting in its place

‘‘clauses at FAR 52.230–2 or 52.230–5,’’.

The revised text reads as follows:

52.230–6 Administration of Cost

Accounting Standards.

* * * * *

ADMINISTRATION OF COST

ACCOUNTING STANDARDS (APR 1996)

* * * * *

(b) * * *

(1) Cost impact proposals submitted for

changes in cost accounting practices required

in accordance with subparagraph (a)(3) and

subdivision (a)(4)(i) of the clause at FAR

52.230–2, Cost Accounting Standards; or

subparagraph (a)(3) and subdivisions (a)(4)(i)

or (a)(4)(iv) of the clause at FAR 52.230–5,

Cost Accounting Standards-Educational

Institution; shall identify the applicable

standard or cost principle and all contracts

and subcontracts containing the clauses

entitled Cost Accounting Standards or Cost

Accounting Standards-Educational

Institution, which have an award date before

the effective date of that standard or cost

principle.

(2) Cost impact proposals submitted for

any change in cost accounting practices

proposed in accordance with subdivisions

(a)(4) (ii) or (iii) of the clauses at FAR 52.230–

2, Cost Accounting Standards, and FAR

52.230–5, Cost Accounting StandardsEducational Institution; or with subparagraph

(a)(3) of the clause at FAR 52.230–3,

Disclosure and Consistency of Cost

Accounting Practices; shall identify all

contracts and subcontracts containing the

clauses at FAR 52.230–2, Cost Accounting

Standards, FAR 52.230–5, Cost Accounting

Standards-Educational Institution, and FAR

52.230–3, Disclosure and Consistency of Cost

Accounting Practices.

* * * * *

(e) For all subcontracts subject to the

clauses at FAR 52.230–2, 52.230–3, or

52.230–5—

* * * * *

(2) * * *

(iv) Any changes the subcontractor has

made or proposes to make to cost accounting

practices that affect prime contracts or

subcontracts containing the clauses at FAR

52.230–2, 52.230–3, or 52.230–5, unless these

changes have already been reported.

* * * * *

[FR Doc. 96–10429 Filed 4–26–96; 8:45 am]

BILLING CODE 6820–EP–P

48 CFR Part 32

[FAC 90–38; FAR Case 94–767; Item III]

RIN 9000–AG91

Federal Acquisition Regulation;

Assignment of Claims; Presidential

Delegation

AGENCIES: Department of Defense (DOD),

General Services Administration (GSA),

and National Aeronautics and Space

Administration (NASA).

ACTION: Final rule.

SUMMARY: This final rule is issued

pursuant to the Federal Acquisition

Streamlining Act of 1994 (Public Law

103–355) (FASA) to reflect the

Presidential delegation of authority to

make determinations of need and to

provide guidance for determinations of

need made in accordance with the

Presidential delegation dated October 3,

1995. This regulatory action was subject

to Office of Management and Budget

review under Executive Order 12866,

dated September 30, 1993. It is not a

major rule under 5 U.S.C. 804.

EFFECTIVE DATE: June 28, 1996.

FOR FURTHER INFORMATION CONTACT: Mr.

John Galbraith, Finance/Payment Team

Leader, at (703) 697–6710, in reference

to this case. For general information,

contact the FAR Secretariat, Room 4037,

18th & F Streets NW., Washington, DC

20405, (202) 501–4755. Please cite FAC

90–38, FAR Case 94–767 in all

correspondence related to this case.

SUPPLEMENTARY INFORMATION:

A. Background

The statutes authorizing assignments

of claims under Federal contracts

provide authority for the Government to

make no-setoff commitments under

certain conditions. FASA established a

requirement for a determination of need

by the President. Implementation was

published in the Federal Register, at 60

FR 49729, on September 26, 1995, as

FAR Case 94–761. The President, on

October 3, 1995, delegated the authority

to make determinations of need to the

Secretaries of Defense and Energy, the

Administrator of General Services, and

the heads of all other departments or

agencies, subject to such additional

guidance as provided by the

Administrator of the Office of Federal

Procurement Policy. The Administrator

of Procurement Policy, in accordance