31656 Federal Register / Vol. 61, No. 120 / Thursday, June 20, 1996 / Rules and Regulations

SUPPLEMENTARY INFORMATION:

A. Background

The guidance for determining cost

allowability at FAR 31.201–2 previously

did not explicitly state that contractors

must maintain adequate cost records in

order to be reimbursed for all claimed

costs nor did it specifically state that the

contracting officer has the authority to

disallow costs which are determined to

be inadequately supported. This

requirement and authority have,

heretofore, been considered to be

implicit in the cost principles. However,

the Councils are revising the FAR to

explicitly address these issues because

the Office of Federal Procurement

Policy SWAT Team on Civilian Agency

Contracting in its report of December 3,

1992, ‘‘Improving Contracting Practices

and Management Controls on Cost-Type

Federal Contracts,’’ found that agencies

were having difficulty because the FAR

was silent on these issues. A new

paragraph (d) is added to FAR 31.201–

2 to explicitly state that costs claimed

for reimbursement must be adequately

supported and that the contracting

officer may disallow costs which are

inadequately supported. A proposed

rule was published in the Federal

Register at 59 FR 47776 on September

16, 1994. After evaluation of public

comments, the Councils agreed to

convert the proposed rule to a final rule

without further change.

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 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. No comments were received on

the impact of this rule on small entities

during the public comment period.

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 44

U.S.C. 3501, et seq.

List of Subjects in 48 CFR Part 31

Government procurement.

Dated: June 4, 1996.

Edward C. Loeb,

Director, Federal Acquisition Policy Division.

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 31.201–2 is amended by

adding paragraph (d) to read as follows:

31.201–2 Determining allowability.

* * * * *

(d) A contractor is responsible for

accounting for costs appropriately and

for maintaining records, including

supporting documentation, adequate to

demonstrate that costs claimed have

been incurred, are allocable to the

contract, and comply with applicable

cost principles in this subpart and

agency supplements. The contracting

officer may disallow all or part of a

claimed cost which is inadequately

supported.

[FR Doc. 96–14534 Filed 6–19–96; 8:45 am]

BILLING CODE 6820–EP–P

48 CFR Part 31

[FAC 90–39; FAR Case 93–006; Item XX]

RIN 9000–AF98

Federal Acquisition Regulation;

Legislative Lobbying Costs

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)

cost principles concerning lobbying

costs. This regulatory action was not

subject to Office of Management and

Budget review under Executive Order

12866, dated September 30, 1993, and is

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

EFFECTIVE DATE: August 19, 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 90–39, FAR case 93–

006.

SUPPLEMENTARY INFORMATION:

A. Background

This FAR case was opened to address

issues raised by the Office of

Management and Budget SWAT team

concerning the requirement to maintain

records which are in addition to normal

records maintained to record lobbying

costs under FAR 31.205–22(f). The FAR

rule deletes 31.205–22(f) because it

conflicts with the recordkeeping

requirements in 31.201–6(c), 31.205–

22(e), and Cost Accounting Standards

(CAS) 405, Accounting for Unallowable

Costs (48 CFR 9904.405–50(a)). In

addition, the Councils believe that

31.205–22(f) is inconsistent with the

clause at 52.203–12, Limitation on

Payments to Influence Certain Federal

Transactions, which requires

contractors to disclose lobbying

activities. The reporting of such

activities must necessarily be based

upon certain contractor records which

support the disclosures. The rule also

removes the prohibition against

reimbursing executive lobbying costs at

31.205–50 and adds it to the list of

specifically unallowable lobbying costs

at 31.205–22(a). A proposed rule was

published in the Federal Register at 59

FR 47776 on September 16, 1994. After

evaluation of public comments, the

Councils agreed to convert the proposed

rule to a final rule without further

change.

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 within the

meaning of the Regulatory Flexibility

Act, 5 U.S.C. 601, et seq., because the

revisions clarify a condition of

allowability for contractors who wish to

be reimbursed under Government

contracts. The revisions eliminate a

subsection which may be misinterpreted

in its application and more accurately

describe the subject matter of the cost

principle. Further, most contracts

awarded to small entities are awarded

on a competitive, fixed-price basis and

the cost principles do not apply. No

comments were received on the impact

of this rule on small entities during the

public comment period.

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,
Federal Register / Vol. 61, No. 120 / Thursday, June 20, 1996 / Rules and Regulations 31657

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 31

Government procurement.

Dated: June 4, 1996.

Edward C. Loeb,

Director, Federal Acquisition Policy Division.

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 31.205–22 is amended by

revising the section heading; at the end

of paragraph (a)(4) by removing the

word ‘‘or’’; at the end of paragraph (a)(5)

by removing the period and inserting

‘‘;or’’; by adding paragraph (a)(6); and by

removing paragraph (f) and

redesignating paragraph (g) as (f) to read

as follows:

31.205–22 Lobbying and political activity

costs.

(a) * * *

(6) Costs incurred in attempting to

improperly influence (see 3.401), either

directly or indirectly, an employee or

officer of the Executive branch of the

Federal Government to give

consideration to or act regarding a

regulatory or contract matter.

* * * * *

31.205–50 [Reserved]

3. Section 31.205–50 is removed and

reserved.

[FR Doc. 96–14535 Filed 6–19–96; 8:45 am]

BILLING CODE 6820–EP–P

48 CFR Part 31

[FAC 90–39; FAR Case 93–022; Item XXI]

RIN 9000–AG00

Federal Acquisition Regulation; Travel

Costs

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 (CAAC) and the

Defense Acquisition Regulations

Council (DARC) have agreed on a final

rule to amend the Federal Acquisition

Regulation (FAR) to specify the

documentation required to support the

allowability of contractors’ claimed

travel costs. 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: August 19, 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 90–39, FAR case 93–

022.

SUPPLEMENTARY INFORMATION:

A. Background

A proposed rule was published in the

Federal Register at 59 FR 47777,

September 16, 1994, because the CAAC

and the DARC determined that the FAR

did not adequately specify what

documentation is required to support

travel costs incurred under Government

contracts. The rule reflects a

recommendation made by the Office of

Federal Procurement Policy SWAT

Team on Civilian Agency Contracting in

its report of December 3, 1992, entitled

‘‘Improving Contracting Practices and

Management Controls on Cost-Type

Federal Contracts,’’ which found that

agencies were having difficulty because

the travel cost principle is silent on the

documentation requirements.

The rule amends FAR 31.205–46 by

adding paragraph (a)(7) which sets forth

specific documentation criteria for

travel costs. The major difference

between the final rule and the proposed

rule is that the final rule strikes the

reference to ‘‘time’’ and adds a

parenthetical after ‘‘place’’ in (a)(7)(i) to

make the rule consistent with similar

requirements already imposed by

section 274 of the Internal Revenue

Code for claiming costs for Federal tax

purposes (26 U.S.C. 274(d)). The final

rule also coincides with guidance

currently contained in the Defense

Contract Audit Manual (CAM) at CAM

7–1002.2.

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 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. No comments were received on

the impact of this rule on small entities

during the public comment period.

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 44

U.S.C. 3501, et seq.

List of Subjects in 48 CFR Part 31

Government procurement.

Dated: June 4, 1996.

Edward C. Loeb,

Director, Federal Acquisition Policy Division.

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 31.205–46 is amended—

(a) By adding a heading to paragraph

(a) and by revising paragraph (a)(1);

(b) By revising the first sentence of

paragraph (a)(3)(iv); and

(c) By adding paragraph (a)(7)

immediately preceding paragraph (b) to

read as follows:

31.205–46 Travel costs.

(a) Costs for transportation, lodging,

meals, and incidental expenses. (1)

Costs incurred by contractor personnel

on official company business are

allowable, subject to the limitations

contained in this subsection. Costs for

transportation may be based on mileage

rates, actual costs incurred, or on a

combination thereof, provided the

method used results in a reasonable

charge. Costs for lodging, meals, and

incidental expenses may be based on

per diem, actual expenses, or a

combination thereof, provided the

method used results in a reasonable

charge.

* * * * *

(3) * * *

(iv) Documentation to support actual

costs incurred shall be in accordance

with the contractor’s established

practices, subject to paragraph (a)(7) of

this subsection, and provided that a

receipt is required for each expenditure

in excess of $25.00. * * *

* * * * *