[Federal Register Volume 61, Number 122 (Monday, June 24, 1996)]
[Proposed Rules]
[Pages 32401-32410]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 96-15403]



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OFFICE OF PERSONNEL MANAGEMENT

48 CFR Parts 1602, 1604, 1615, 1616, 1622, 1631, 1644, 1652, and 
1653

RIN 3206-AH45


Federal Employees Health Benefits Program Acquisition Regulation; 
Truth in Negotiations Act and Related Changes

AGENCY: Office of Personnel Management.

ACTION: Proposed rule.

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SUMMARY: The Office of Personnel Management (OPM) is issuing a proposed 
regulation that would amend the Federal Employees Health Benefits 
Acquisition Regulation (FEHBAR) to implement those portions of the 
Federal Acquisition Streamlining Act of 1994 (FASA) that impact on the 
FEHB Program.

DATES: Comments must be received on or before July 24, 1996.

ADDRESSES: Written comments may be sent to Lucretia F. Myers, Assistant 
Director for Insurance Programs, Retirement and Insurance Service, 
Office of Personnel Management, P.O.

[[Page 32402]]

Box 57, Washington, DC 20044; delivered to OPM, Room 3451, 1900 E 
Street NW., Washington, DC.; or FAXed to (202) 606-0633.

FOR FURTHER INFORMATION CONTACT: Mary Ann Mercer, (202) 606-0004.

SUPPLEMENTARY INFORMATION: The Federal Acquisition Streamlining Act of 
1994 (FASA), Public Law 103-355, effective October 13, 1994, amends 
Section 304A of the Truth in Negotiations Act (TINA) by increasing the 
threshold for Federal contractors and subcontractors submitting cost or 
pricing data from $100,000 to $500,000. FASA also amends other 
provisions of TINA affecting the submission of cost or pricing data.
    This proposed regulation would amend the FEHBAR to conform to FASA 
by:
    <bullet> Increasing the threshold for the submission of certified 
cost or pricing data for FEHB Program community rated contracts, and 
for the submission of certified cost or pricing data for FEHB Program 
experience rated contracts, subcontracts, and contract modifications, 
from $100,000 to $500,000;
    <bullet> Ensuring uniform treatment of cost or pricing data as 
intended by FASA; and,
    <bullet> Conforming the FEHBAR to these and other FASA changes.

Effect of FASA on Community Rated Contracts

    A number of changes made by FASA and the implementing Federal 
Acquisition Regulation (FAR) provisions impact on the way OPM has 
treated FEHB Program community rated contracts in the past, 
specifically with regard to contract type and establishing the 
reasonableness of the carriers' rates. For example, TINA provides for 
special exceptions to the submission of cost or pricing data for 
contracts based on adequate price competition, contracts based on 
established catalog or market price of commercial items, and contracts 
for which prices are set by law or regulation.
    FEHB Program contracts do not have price competition because the 
contracts are not subject to the competitive bidding requirements of 
Title 41 of the United States Code; nor are prices set by law or 
regulation. However, the FEHBAR identifies community rated contracts as 
contracts based on established market price. Under TINA, the 
contracting officer may not require a contractor to submit cost or 
pricing data for contracts based on established market prices of 
commercial items sold in substantial quantities to the general public.
    The FAR clarifies the standards for determining an established 
market price [48 CFR 15.804-1(b)(1)(ii)] and the definitions of 
commercial items [48 CFR Part 12] and cost or pricing data [48 CFR 
15.801]. As a result of these clarifications, we reevaluated our 
treatment of community rated contracts, as well as the entire process 
by which we require cost or pricing data, and the definitions of terms 
in the FEHBAR.
    The FEHBAR has, since it was initially published, provided that 
community rated contracts are based on established market price. OPM 
has deemed community rated contracts to be based on market price in the 
past in an attempt to fit them neatly into a standard FAR 
classification. However, after reevaluating the concept of established 
market price, we do not believe that it really reflects the way in 
which community rates are established; nor do we believe the contracts 
can be considered contracts for commercial items or services.
    Contrary to what many outside the health insurance industry 
believe, a community rate is not a single rate that an HMO (also known 
as a ``comprehensive medical plan'' or ``CMP'') charges all of its 
groups. The theory and practice of community rating has always been 
complex. In 1988, the enactment of the Health Maintenance Organization 
(HMO) Amendments of 1988 made community rating even more complicated. 
The HMO Amendments of 1988 authorized community rated plans to use a 
new rating method called ``Adjusted Community Rating.'' In spite of its 
name, ACR is actually a form of experience rating (prospective 
experience rating). The HMO Amendments of 1988 so radically altered the 
traditional concept of community rating that it is no longer 
appropriate to call the community rate a ``market price'' as that term 
is intended to apply to Federal procurement.
    In carrying out its responsibility under the FEHB Program's 
statutory mandate to ensure that the FEHB Program premium rates 
``reasonably and equitably reflect the cost of the benefits provided'' 
[5 U.S.C. 8902(i)], OPM requires cost or pricing data. Cost or pricing 
data is fundamental to the development of the FEHB Program premium 
rate. The primary purpose of cost or pricing data as it relates to FEHB 
Program contracts is to determine whether the rating method used for 
the FEHB Program is consistent with the rating methods used for the 
carrier's two similarly sized subscriber groups (SSSGs). For example, 
if the rate for an SSSG is based on experience, if it incorporates 
claims and administrative cost loadings, or any combination of these 
and other elements, OPM verifies that the carrier has used the same 
methodology for the FEHB Program rate. In addition, there are a 
multiplicity of requirements specific to the FEHB Program group that 
differentiate the needs of our Program from a carrier's other clients 
and for which we require cost or pricing data: physical therapy, 
infertility, prescription drugs, heart transplants, coverage for 
newborns on self-only enrollments, and no coinsurance, to name a few.
    While the FEHB Program premium rates are price driven, competition 
in the FEHB Program is not based on price, as it is with competitively 
bid procurements. In the FEHB Program, competition is based on the 
employees' choice of health plans, considering their personal health 
care needs. The only way OPM can ensure price reasonableness in lieu of 
price competition is through obtaining cost or pricing data. Without 
cost or pricing data, OPM would be unable to ensure a fair and 
reasonable premium rate for Federal enrollees. The practice of asking 
for this cost or pricing data is widely accepted in the insurance 
industry. Although we have required this data for over 20 years, no 
FEHB Program carrier has advised us that it was burdensome.
    For a number of years, OPM has been trying to determine the best 
way to apply the FAR cost and pricing requirements. We have tried to 
learn from our experience and understand how we might apply the FAR 
requirements to community rated contracts, while remaining in 
compliance with the FEHB law. We have modified our acquisition 
regulations on a number of occasions in an attempt to achieve the most 
appropriate implementation of the FAR, given the unique features of 
community rated health benefits contracts, as compared to the more 
common types of contracts entered into by Federal agencies. While we 
have in the past defined FEHB Program community rated contracts as 
contracts based on established market price and classified them as 
fixed price with economic price adjustment, we have consistently asked 
for cost or pricing data because of our statutory mandate to ensure 
that rates reasonably and equitably reflect the benefits provided.
    In view of the above, and after evaluating the revised definitions 
and cost and pricing data requirements pursuant to FASA and case law, 
we have concluded that the determination that community rated contracts 
are based on established market price is no

[[Page 32403]]

longer appropriate and fails to meet our current requirements. 
Similarly, the exemption of FEHB Program contracts from competitive 
bidding requirements, the fact that the health services under community 
rated contracts are not commercial services, and the fact that FEHB 
premiums are not set by law or regulation have caused OPM to conclude 
that none of the FAR exceptions to the submission of cost or pricing 
data contained in FAR 15.804-1 apply to the community rated contracts. 
Accordingly, the cost or pricing provisions of FASA are applicable.
    To clarify any perceived incongruity and inconsistency between the 
FEHBAR, the FAR, and FASA, we are withdrawing our determination that 
the community rated contracts are based on established market price, 
and we will more closely follow the cost and pricing data requirements 
in the FAR. Community rated contracts in reality fit neither of the two 
categories of negotiated contracts provided in the FAR, that is, fixed 
price and cost reimbursement. Given all the relevant information, we 
have made a determination to classify community rated contracts simply 
as ``negotiated benefits contracts.''
    We are also clarifying an anomaly in the FEHBAR regarding cost or 
pricing data on which community rated carriers justify their community 
rate. The capitation rates, utilization and trend data, and other 
information that we require from health benefits carriers are not 
traditional cost or pricing data used in the more common types of 
Government contracting. Traditional cost and pricing data consists of 
costs for raw materials and for processing, such as, hours worked, 
overtime rates, and unit costs.
    FASA states that cost or pricing data are all the facts that a 
prudent buyer or seller would reasonably expect to affect price 
negotiations significantly. The term does not include information that 
is judgmental, but does include the factual information from which a 
judgment was derived. In the FEHB Program, we must obtain factual and 
verifiable pricing data that can be reasonably expected to contribute 
to the soundness of estimates of future costs and to the validity of 
determinations of costs already incurred in order to set a fair and 
reasonable premium rate for FEHB Program enrollees. We consider the 
specialized rating data used by carriers in computing a rate that is 
appropriate for the Federal group and the similarly sized subscriber 
groups (SSSGs) to be relevant cost and pricing data for the FEHB 
Program contracts. Such data includes, but is not limited to, 
capitation rates; utilization data for prescription drug, hospital, and 
office visit benefits utilization; trend data; rating methodologies for 
other groups; standardized presentation of the plan's rating method 
(age, sex, etc.) showing that the factor predicts utilization; tiered 
rates information; ``step-up'' factors information; demographics such 
as family size; special benefit loading capitations; and adjustment 
factors for capitation.
    OPM's approach over the years has simply been an attempt to fit the 
community rated contracts into the context of the FAR and utilize the 
provisions of the FAR requiring cost or pricing data. OPM has modified 
the FEHBAR in this area over time, and at this point we have concluded 
that we should define in regulation ``cost or pricing data'' as it 
relates to FEHB Program contracts. OPM will not burden carriers with 
new FEHBAR requirements related to cost or pricing data. We intend to 
follow the requirements of the FAR. To clarify unequivocally that FEHB 
Program community rated carriers must comply with the FASA cost and 
pricing provisions, the regulation specifically defines the data that 
OPM requires for community rated contracts of $500,000 and over as 
``cost and pricing data.''
    Further, the regulation classifies the community rated plans into 
two categories, large and small, with the number of enrollee contracts 
distinguishing the categories. However, because FASA sets a threshold 
of $500,000 for collecting cost or pricing data, there are two types of 
small plans.

Small Plans

    (a) Plans having less than 1500 enrollee contracts at the time of 
the rate proposal and whose FEHBP premiums are less than $500,000 for 
the contract term.
    (b) Plans having less than 1500 enrollee contracts at the time of 
the rate proposal and whose FEHBP premiums are $500,000 or more for the 
contract term.

Large Plans

    Plans having 1500 or more enrollee contracts at the time of the 
rate proposal and whose FEHBP premiums are $500,000 or more for the 
contract term.
    The regulation provides that the amount and nature of the back-up 
documentation for small plan rate proposals differs from the large plan 
requirements. All carriers must derive their Federal group rates 
according to OPM community rating principles. Under FASA, OPM cannot 
require community rated carriers with FEHBP contracts in which the 
income from the Federal group will be under $500,000 to submit cost or 
pricing data, although they may submit it voluntarily. Carriers with 
small plans in which the Federal group income is less than $500,000 
must submit only a rate proposal and abbreviated utilization data for 
the applicable contract year. Since carriers of small plans having 
fewer than 1,500 enrollee contracts will not submit detailed 
documentation, OPM will evaluate the proposed rates by performing a 
basic reasonableness test on the information submitted. Rates failing 
this test will be subject to further review.
    Carriers with small plans in which the Federal group income is 
$500,000 or more must submit cost or pricing data consisting of a rate 
proposal, a certificate of accurate pricing, and utilization data for 
the applicable contract year. These carriers must complete proposed 
net-to-carrier rate sheets and the community rate questionnaire and 
keep them on file for OPM review. The OPM auditors will examine the 
documents during plan audits, and OPM may also periodically review the 
documents. OPM will evaluate the proposed rates by performing a basic 
reasonableness test on the information submitted.
    Large plan carriers must submit proposed net-to-carrier rate 
sheets, certificate of accurate pricing, community rate questionnaire, 
and detailed utilization data. OPM will evaluate the information for 
consistency with the requirements of 48 CFR Chapter 16 (FEHBAR).
    All contracts for $500,000 or more will be subject to the interest 
and penalty assessments for defective rates enacted by FASA. Consistent 
with FASA and FEHBAR 1652.215-70, OPM will assess simple interest using 
the quarterly rate determinations by the Secretary of the Treasury 
under the authority of 26 U.S.C. 6621(a)(2).

Effect of FASA on Experience Rated Contracts

    OPM has determined that cost or pricing data are required for FEHB 
Program experience rated contracts in which the income from the Federal 
group will be $500,000 or more. Cost or pricing data are also required 
for FEHB Program negotiated subcontracts at any tier, if the contractor 
and each higher tier subcontractor were required to furnish cost or 
pricing data, as well as for the modification of any FEHB Program 
contract (whether or not cost or pricing data were initially required) 
or subcontracts if the subcontractor was

[[Page 32404]]

required to submit cost or pricing data, if the subcontract or 
modification will equal or exceed $500,000.
    Cost or pricing data for experience rated plans includes 
information such as claims data; actual or negotiated benefits payments 
made to providers of medical services for the provision of health care 
such as capitation not adjusted for specific groups, per diems, and 
Diagnostic Related Group (DRG) payments; cost data; utilization data; 
actuarial estimates; and administrative expenses and retentions.
    All contracts for $500,000 or more will be subject to the interest 
and penalty assessments for defective rates enacted by FASA.
    In the past, we have classified experience rated contracts as a 
combination of negotiated fixed-price contracts with provisions for a 
form of retroactive price redetermination. Like community rated 
contracts, experience rated contracts do not fit either of the two 
categories of negotiated contracts provided in the FAR (fixed price and 
cost reimbursement). Therefore, for consistency, we have decided to use 
the same contract type for all FEHBP contracts. Thus, the regulation 
provides that both community rated and experience rated contracts will 
be ``negotiated benefits contracts.'' This is a change in terminology 
only. OPM has added no new requirements or clauses as a result of this 
change in terminology. For experience rated contracts, we will continue 
to use FAR provisions applicable to cost analysis; and for community 
rated contracts, we will continue to use FAR provisions applicable to 
price analysis. We will continue to apply the cost principles in FAR 
Part 31 to experience rated contracts.

Miscellaneous Changes

Clarification of SSSGs

    We have made a number of clarifications to the definition of SSSGs 
[1602.170-12]. The regulation is intended to describe the methodology 
OPM uses. Specific instructions on SSSGs will be included in the annual 
FEHB Program rate instructions to community rated carriers.
    We have clarified how OPM determines which SSSGs it will select as 
a basis for determining the FEHBP rate. Specifically, after reviewing 
the rating methods used for the SSSGs to determine whether the rating 
method the carrier used for the FEHBP is appropriate, OPM determines 
the FEHBP rate on the basis of the lower of the rates produced by 
applying--to the FEHB Program--rating methods consistant with those 
used for the SSSGs.
    In addition, we have clarified that any group with which a carrier 
enters into an agreement to provide health care services must be 
considered as a potential SSSG, and we have listed examples of groups 
that the carrier may not consider as SSSGs. For example, while health 
care purchasing alliances must be considered as potential SSSGs, OPM 
will not consider purchasing alliances mandated by state or local 
government which restrict membership to groups of less than 100 
employees as SSSGs. OPM excludes groups from the SSSG pool based solely 
on the types of alliances.
    We have also clarified that groups having multi-year contracts are 
potential SSSGs. Therefore, in selecting SSSGs, the duration of the 
contract term is not a factor. OPM will look at the rate year by year 
in determining the rate that will be applicable to the FEHB group.
    These additions to the regulations are simply clarifications. 
Although OPM's requirements for SSSGs have not changed, as practices 
within the insurance industry have evolved we find it necessary to 
clarify our treatment of SSSGs so that there will be no question as to 
OPM's intent. The annual FEHB Program rate instructions incorporate 
these requirements; however, we have placed them in regulation because 
there appears to be confusion on the part of some of the carriers, and 
we wanted to clear up any misunderstanding.
    The SSSG clarifications in Sec. 1602.170-12 of the regulation will 
be applicable for the rate instructions for the 1998 contract year.

Contract Clauses

    Because of the many changes to the FAR brought about by FASA, we 
have found it necessary to amend a number of FEHBAR clauses and certain 
references to FAR clauses listed in the FEHBAR Clause Matrix [FEHBAR 
Part 1652.3]. We have also made a number of editorial changes to the 
Matrix and conforming changes to the applicable FAR clauses listed in 
Part 1652. For clarity of presentation, we have reproduced the entire 
Matrix. The changes are discussed below.
    We have amended the Clause Matrix in Part 1652.3 to: 1) Add FAR 
clause 52.242-3, Penalties for Unallowable Costs, as a result of FASA; 
and, 2) Drop the following FAR clauses deleted by FASA: Sec. 52.203-1, 
Officials Not to Benefit; Sec. 52.215-1, Examination of Records by 
Comptroller General; Sec. 52.219-13, Utilization of Women-Owned Small 
Businesses; and Sec. 52.220-3, Utilization of Labor Surplus Area 
Concerns.
    The names of the following FAR clauses have been changed to conform 
to FASA: Sec. 52.215-2, Audit & Records--Negotiation; and Sec. 52.219-
8, Utilization of Small, Small Disadvantaged and Women-Owned Small 
Business Concerns. FEHBAR clause 1652.204-70, ``Contractor Records 
Retention,'' has been changed to reflect FASA threshold and reference 
changes.
    We have added Sec. 1652.204-72, Filing Health Benefit Claims/Court 
Review of Disputed Claims to the Matrix to conform to OPM's regulation 
change of March 29, 1995 [60 FR 16037].
    In light of our new understanding brought about by FASA, we have 
reconsidered the application of the FAR cost or pricing data clauses in 
FAR section 52.215. We have decided to discontinue using FAR 52.215-23, 
Price Reduction For Defective Cost Or Pricing Data--Modifications, and 
will rely solely on FEHBAR 1652.215-70, Price Reduction for Defective 
Pricing or Defective Cost or Pricing Data. FEHBAR 1652.215-70 captures 
all of the defective cost or pricing data elements of the FAR and FASA 
as they relate to the FEHB Program. Accordingly, there will be only one 
clause on defective cost or pricing data applicable to community rated 
contracts.
    We have dropped the requirement for the following FAR clauses for 
community rated carriers: Sec. 52.215-25, Subcontractor Cost or Pricing 
Data--Modifications, Sec. 52.244-5, Competition in Subcontracting, 
Sec. 1652.244-70, Subcontracts. These clauses have no practical 
application for community rated carriers. Subcontracts negotiated by 
community rated carriers generally are applicable to a community of 
participants. Any cost for subcontracts is generally factored into the 
rates of all the carrier's employer groups and cannot be split out for 
any single employer group.
    We have added novation and change of name to the list of events in 
the Notice of Significant Events clause at Sec. 1652.222-70. While the 
list of events in the clause is not exhaustive, OPM considers a 
novation or change of name sufficiently important to include on the 
list of events that might reasonably be expected to have a material 
effect upon the carrier's ability to meet its obligations under the 
contract.
    We have amended Sec. 1644.170, Policy for FEHBP Subcontracting 
Consent, by stating that the clause applies to subcontracts or 
modifications to subcontracts when the amount charged against the 
contract exceeds $100,000 and is 25% of the total cost of the

[[Page 32405]]

subcontract. The inclusion of the 25% requirement makes the policy 
statement consistent with OPM's long-established practice and conforms 
to the contract clause at Sec. 1652.244-70.
    We have changed the method, frequency, and rate of calculating 
interest in FEHBAR clause 1652.215-71, Investment Income, to simple 
interest on lost investment income at the quarterly rate determined by 
the Secretary of the Treasury under the authority of 16 U.S.C. 
6621(a)(2) to make it consistent with the treatment of interest under 
Sec. 1652.215-70, Rate Reduction for Defective Pricing or Defective 
Cost or Pricing Data.
    We have dropped the applicability of the following clauses to 
community rated contracts because they apply only to contracts based on 
cost analysis: Sec. 52.215-27, Termination of Defined Benefit Pension 
Plans; Sec. 52.215-39, Reversion or Adjustment of Plans for 
Postretirement Benefits Other Than Pensions (PRB); Sec. 1652.232-71, 
Payments--Contracts With Letter of Credit Payment Arrangements.
    We have dropped the application of Sec. 1652.232-70, Payments--
Contracts Without Letter of Credit Payment Arrangements, to experience 
rated contracts because it applies only to contracts based on price 
analysis. In addition, we have dropped the application of 
Sec. 1652.232-71, Payments--Contracts with Letter of Credit Payment 
Arrangements, to community rated contracts because it applies only to 
contracts based on cost analysis.
    FEHBAR 1652.216-70, Accounting and Price Adjustment has been 
amended to delete references to market price and to accommodate new 
industry trends in community rating.
    In keeping with the spirit of the FAR, OPM is adopting FAR 52.222-
21, Certification of Nonsegregated Facilities, and FAR 52.222-25, 
Affirmative Action Compliance for the FEHB Program. A technical change 
has been made to the clauses to replace the word ``offeror'' with the 
word ``contractor'' to reflect the fact that the statutory provisions 
of 5 U.S.C. chapter 89 obviate the issuance of solicitations.
    We have added the following clauses because we have determined that 
they are applicable to FEHB Program contracts: Sec. 52.222-37, 
Employment Reports on Special Disabled Veterans and Veterans of the 
Vietnam Era; Sec. 52.227-1, Authorization and Consent; Sec. 52.227-2, 
Notice and Assistance Regarding Patent and Copyright Infringement; 
Sec. 52.232-28, Electronic Funds Transfer Payment Methods.
    To conform with FEHBAR 1632.617, we have indicated in the Matrix 
that FAR 52.232-17, Interest, applies to experience rated contracts as 
well as to community rated contracts.
    We have deleted the FAR clause dates in FEHBAR 1652.000. FAR 
clauses become outdated over time and, if the FAR clause dates are 
contained in the FEHBAR, OPM must continually revise the FEHBAR to keep 
it up-to-date. It has always been OPM's intent to apply to the 
contracts the most current FAR clause in effect at the beginning of 
each contract term. The FAR clause dates will continue to be included 
in the contract so that there will be no question as to which FAR 
clause version is applicable.
    Three FEHBAR clause dates have been added in Subpart 1652.2 because 
they had been inadvertently omitted. The clauses are Sec. 1652.232-70, 
Payments--community rated contracts, Sec. 1652.232-71, Payments--
experience rated contracts, and Sec. 1652.204-72, Filing Health Benefit 
Claims/Court Review of Disputed Claims.
    OPM has also updated a number of references in the proposed 
regulation.

Regulatory Flexibility Act

    I certify that this regulation will not have a significant economic 
impact on a substantial number of small entities because all of the 
small plan FEHB Program contracts fall below the threshold for 
submitting cost or pricing data.

List of Subjects in 48 CFR Parts 1602, 1604, 1615, 1616, 1622, 1631, 
1644, 1652, and 1653

    Administrative practice and procedure, Government employees, Health 
facilities, Health insurance, Health professions, Hostages, Iraq, 
Kuwait, Lebanon, Reporting and recordkeeping requirements, Retirement.

Office of Personnel Management.
James B. King,
Director.

    Accordingly, OPM is proposing to amend Chapter 16 of Title 48, Code 
of Federal Regulations, as follows:
CHAPTER 16--OFFICE OF PERSONNEL MANAGEMENT FEDERAL EMPLOYEES HEALTH 
BENEFITS ACQUISITION REGULATION
    1. The authority citation for 48 CFR Parts 1602, 1604, 1615, 1616, 
1622, 1631, 1644, 1652, and 1653 continues to read as follows:

    Authority: 5 U.S.C. 8913; 40 U.S.C. 486(c); 48 CFR 1.301.

PART 1602--DEFINITIONS OF WORDS AND TERMS

    2. In section 1602.170-2 paragraph (a) is revised to read as 
follows:


1602.170-2   Community rate.

    (a) Community rate means a rate of payment based on a per member 
per month capitation rate or its equivalent that applies to a 
combination of the subscriber groups for a comprehensive medical plan. 
References in this subchapter to ``price analysis'' relating to the 
applicability of policy and contract clauses refer to comprehensive 
medical plan carriers using community rates.
* * * * *
    3. Sections 1602.170-5 through 1602.170-12 are redesignated as 
sections 1602.170-6 through 1602.170-13 respectively, a new section 
1602.170-5 is added and newly redesignated section 1602.170-12 is 
revised to read as follows:


1602.170-5   Cost or pricing data.

    (a) Experience rated plans. Cost or pricing data is the data OPM 
requests in in the carrier's rate submission for the applicable 
contract period.
    (b) Community rated plans. Cost or pricing data is the specialized 
rating data used by carriers in computing a rate that is appropriate 
for the Federal group and the similarly sized subscriber groups (SSSGs) 
and requested by OPM in the rate instructions for the applicable 
contract period.
* * * * *


1602.170-12   Similarly sized subscriber groups.

    (a) Similarly sized subscriber groups (SSSGs) are a comprehensive 
medical plan's two employer groups that:
    (1) As of the date specified by OPM in the rate instructions, have 
a subscriber enrollment closest to the FEHBP subscriber enrollment; 
and,
    (2) Use any rating method other than retrospective experience 
rating; and,
    (3) Meet the criteria specified in the rate instructions issued by 
OPM.
    (b) Any group with which an FEHB carrier enters into an agreement 
to provide health care services is a potential SSSG (including separate 
lines of business, government entities, groups that have multi-year 
contracts, and groups having point-of-service products).
    (c) Exceptions to the general rule stated in paragraph (b) of this 
section are (and the following groups must be excluded from SSSG 
consideration):
    (1) Groups the carrier rates by the method of retrospective 
experience rating;

[[Page 32406]]

    (2) Groups consisting of the plan's own employees;
    (3) Medicaid groups, Medicare groups, and groups that have only a 
stand alone benefit (such as dental only);
    (4) A purchasing alliance mandated by state or local government 
which restricts membership to groups of less than 100 employees.
    (d) OPM shall determine the FEHBP rate by selecting the lower of 
the two rates derived by using rating methods consistent with those 
used to derive the SSSG rates.

PART 1604--ADMINISTRATIVE MATTERS


1604.705   [Amended]

    4. In subpart 1604.7, section 1604.705 is amended by removing the 
words ``Audit--Negotiation,'' and adding in its place ``Audit & 
Records--Negotiation.''

PART 1615--CONTRACTING BY NEGOTIATION

    5. Section 1615.802 is revised to read as follows:


1615.802   Policy.

    Pricing of FEHB contracts is governed by 5 U.S.C. 8902(i), 5 U.S.C. 
8906, and other applicable law. FAR subpart 15.8 shall be implemented 
by applying the policies and procedures--to the extent practicable--as 
follows:
    (a) For both experience rated and community rated contracts for 
which the FEHBP premiums for the contract term will be less than 
$500,000, OPM shall not require the carrier to provide cost or pricing 
data in the rate proposal for the following contract term.
    (b)(1) Cost analysis shall be used for contracts where premiums and 
subscription income are determined on the basis of experience rating.
    (2) The application of FAR 15.802(b)(2) should not be construed to 
prohibit the consideration of preceding year surpluses or deficits in 
carrier-held reserves in the rate adjustments for subsequent year 
renewals of contracts based on cost analysis.
    (c)(1) Price analysis for contracts where premiums and subscription 
income are based on community rates. For contracts for which the FEHBP 
premiums for the contract term will be less than $500,000, OPM shall 
not require the carrier to provide cost or pricing data. The carrier 
must submit only a rate proposal and abbreviated utilization data for 
the applicable contract year. OPM will evaluate the proposed rates by 
performing a basic reasonableness test on the information submitted. 
Rates failing this test will be subject to further review.
    (2) For contracts with fewer than 1,500 enrollee contracts for 
which the FEHBP premiums for the contract term will be $500,000 or 
more, OPM shall require the carrier to submit its rate proposal, 
utilization data, and the certificate of accurate cost or pricing data 
required in Sec. 1615.804-70. In addition, OPM shall require the 
carrier to complete the proposed rates form containing cost and pricing 
data, and the Community Rate Questionnaire, but shall not require the 
carrier to send these documents to OPM. The carrier shall keep the 
documents on file for periodic auditor and actuarial review in 
accordance with Sec. 1652.204-70. OPM shall perform a basic 
reasonableness test on the data submitted. Rates that do not pass this 
test shall be subject to further OPM review.
    (3) For contracts with 1,500 or more enrollee contracts for which 
the FEHBP premiums for the contract term will be at least $500,000, OPM 
shall require the carrier to provide the data and methodology used to 
determine the FEHBP rates. OPM shall also require the data and 
methodology used to determine the rates for the plan's similarly sized 
subscriber groups. The carrier shall provide cost or pricing data 
required by OPM in its rate instructions for the applicable contract 
period. OPM shall evaluate the data to ensure that the rate is 
reasonable and consistent with the requirements in this chapter. If 
necessary, OPM may require the carrier to provide additional 
documentation.
    (4) Contracts shall be subject to a downward price adjustment if 
OPM determines that the Federal group was charged more than it would 
have been charged using a methodology consistent with that used for the 
SSSGs. Such adjustments shall be based on the lower of the two rates 
determined by using the methodology (including discounts) the Carrier 
used for the two SSSGs.
    (5) FEHBP community rated carriers shall comply with SSSG criteria 
provided by OPM in the rate instructions for the applicable contract 
period.
    6. Section 1615.804-70 is revised to read as follows:


1615.804-70   Certificate of cost or pricing data for community rated 
plans.

    The contracting officer shall require a carrier with a contract 
meeting the requirements in Sec. 1615.802(c)(2) or Sec. 1615.802(c)(3) 
to execute the Certificate of Accurate Cost or Pricing Data contained 
in this section. A carrier with a contract meeting the requirements in 
Sec. 1615.802(c)(2) shall complete the Certificate and keep it on file 
at the plan in accordance with Sec. 1652.204-70. A carrier with a 
contract meeting the requirements in Sec. 1615.802(c)(3) shall submit 
the Certificate to OPM along with its rate reconciliation, which is 
submitted during the first quarter of the applicable contract year.

Certificate of Accurate Cost and Pricing Data for Community Rated Plans

    This is to certify that, to the best of my knowledge and belief: 
(1) the cost or pricing data submitted (or, if not submitted, 
maintained and identified by the carrier as supporting 
documentation) to the Contracting Officer or the Contracting 
Officer's representative or designee, in support of the ________ * 
FEHBP rates were developed in accordance with the requirements of 48 
CFR Chapter 16 and the FEHBP contract and are accurate, complete, 
and current as of the date this certificate is executed; and (2) the 
FEHBP rates were developed in a manner consistent with the 
methodology used to rate the plan's similarly sized subscriber 
groups and approved by OPM.
---------------------------------------------------------------------------

    * Insert the year for which the rates apply. Normally, this will 
be the year for which the rates are being reconciled.

Firm:------------------------------------------------------------------
Name:------------------------------------------------------------------
Signature:-------------------------------------------------------------
Date of Execution:-----------------------------------------------------
(End of Certificate)


1615.804-71  [Removed and reserved]

    7. Section 1615.804-71 is removed and reserved, and section 
1615.804-72 is revised to read as follows:


1615.804-72  Rate reduction for defective pricing or defective cost or 
pricing data.

    The clause set forth in Sec. 1652.215-70 shall be inserted in FEHBP 
contracts for $500,000 or more that are based on price analysis.

PART 1616--TYPES OF CONTRACTS

    8. Section 1616.102, is revised to read as follows:


1616.102  Policies.

    All FEHBP contracts shall be negotiated benefits contracts.

Subpart 1616.2--[Removed]

    9. Subpart 1616.2 is removed and Subpart 1616.70 is added to read 
as follows:


Subpart 1616.70--Negotiated Benefits Contracts

1616.7001  Clause--contracts based on price analysis (community rate).

    The clause at Sec. 1652.216-70 shall be inserted in all FEHBP 
contracts based on price analysis.

[[Page 32407]]

1616.7002  Clause--contracts based on cost analysis (experience rate).

    The clause at Sec. 1652.216-71 shall be inserted in all FEHBP 
contracts based on cost analysis.

PART 1622--APPLICATION OF LABOR LAWS TO GOVERNMENT ACQUISITIONS

    10.-11. In subpart 1622.8, sections 1622.810-70 and 1622.810-71 are 
added to read as follows:

Subpart 1622.8--Equal Employment Opportunity.


1622.810-70  Contract clause.

    The statutory provisions of 5 U.S.C. Chapter 89 obviate the 
issuance of solicitations. Nevertheless, FAR clause 52.222-21, 
Certification of Nonsegregated Facilities, shall be inserted in all 
FEHBP contracts, and the contracting officer shall replace the word 
``offeror'' with the word ``contractor'' wherever it appears in the 
clause.


1622.810-71  Contract clause.

    The statutory provisions of 5 U.S.C. Chapter 89 obviate the 
issuance of solicitations. Nevertheless, FAR clause 52.222-25, 
Affirmative Action Compliance shall be inserted in all FEHBP contracts, 
and the contracting officer shall replace the word ``offeror'' with the 
word ``contractor'' wherever it appears in the clause.

PART 1631--CONTRACT COST PRINCIPLES AND PROCEDURES

    12. In subpart 1631.2, section 1631.205-75, paragraph (b), is 
revised to read as follows:


1631.205-75  Selling costs.

* * * * *
    (b) Selling costs are allowable costs to FEHBP contracts to the 
extent that they are necessary for conducting annual contract 
negotiations with the Government and for liaison activities necessary 
for ongoing contract administration. Personnel and related travel costs 
are allowable for attendance at Open Season Health fairs and other 
similar activities sponsored by Government agencies (but see FAR 
31.205-1 ``Public relations and advertising costs'', and The Federal 
Employees Health Benefits Handbook for Personnel and Payroll Offices, 
Subchapter S2-3(f) ``Controlling contacts between employees and 
carriers'').

PART 1644--SUBCONTRACTING POLICIES AND PROCEDURES

    13. In Subpart 1644.1, section 1644.170 is revised to read as 
follows:


1644.170  Policy for FEHBP subcontracting consent.

    For all experience rated FEHBP contracts, advance approval shall be 
required on subcontracts or modifications to subcontracts when the 
amount charged against the FEHBP contract exceeds $100,000 and is 25% 
of the total cost of the subcontract.
    14. In subpart 1644.2, section 1644.270 is revised to read as 
follows:


1644.270   FEHBP contract clause.

    The clause set forth at Sec. 1652.244-70 shall be inserted in all 
experience rated FEHBP contracts.

SUBCHAPTER H--CLAUSES AND FORMS

PART 1652--CONTRACT CLAUSES

    15. In part 1652, section 1652.000 is revised to read as follows:


1652.000   Applicable clauses.

    The clauses of FAR subpart 52.2 shall be applicable to FEHBP 
contracts as specified in the FEHBAR Clause Matrix in subpart 1652.3.

Section and Clause Title

52.202-1  Definitions.
52.203-3  Gratuities.
52.203-5  Covenant Against Contingent Fees.
52.203-7  Anti-Kickback Procedures.
52.203-9  Requirement for Certificate of Procurement Integrity--
Modification.
52.203-12  Limitation on Payments to Influence Certain Federal 
Transactions.
52.209-6  Protecting the Government's Interest When Subcontracting 
With Contractors Debarred, Suspended, or Proposed for Debarment.
52.215-2  Audit and Records--Negotiation.
52.215-22  Price Reduction for Defective Cost or Pricing Data.
52.215-24  Subcontractor Cost or Pricing Data.
52.215-27  Termination of Defined Benefit Pension Plans.
52.215-30  Facilities Capital Cost of Money.
52.215-31  Waiver of Facilities Capital Cost of Money.
52.215-39  Reversion or Adjustment of Plans for Postretirement 
Benefits Other Than Pensions (PRB).
52.219-8  Utilization of Small, Small Disadvantaged and Women-Owned 
Small Business Concerns.
52.222-1  Notice to the Government of Labor Disputes.
52.222-3  Convict Labor.
52.222-4  Contract Work Hours and Safety Standards Act--Overtime 
Compensation--General.
52.222-21  Certification of Nonsegregated Facilities.
52.222-25  Affirmative Action Compliance.
52.222-26  Equal Opportunity.
52.222-28  Equal Opportunity Preaward Clearance of Subcontracts.
52.222-29  Notification of Visa Denial.
52.222-35  Affirmative Action for Special Disabled and Vietnam Era 
Veterans.
52.222-36  Affirmative Action for Handicapped Workers.
52.222-37  Employment Reports on Special Disabled Veterans and 
Veterans of the Vietnam Era.
52.223-2  Clean Air and Water.
52.223-6  Drug-Free Workplace.
52.227-1  Authorization and Consent.
52.227-2  Notice and Assistance Regarding Patent and Copyright 
Infringement.
52.229-3  Federal, State,and Local Taxes.
52.229-4  Federal, State, and Local Taxes (Noncompetitive Contract).
52.229-5  Taxes--Contracts Performed in U.S. Possessions or Puerto 
Rico.
52.229-6  Taxes--Foreign Fixed-Price Contracts.
52.230-2  Cost Accounting Standards.
52.230-3  Disclosure and Consistency of Cost Accounting Practices.
52.230-5  Administration of Cost Accounting Standards.
52.232-8  Discounts for Prompt Payment.
52.232-17  Interest.
52.232-23  Assignment of Claims.
52.232-28  Electronic Funds Transfer Payment Methods.
52.233-1  Disputes.
52.242-1  Notice of Intent to Disallow Costs.
52.242-3  Penalties for Unallowable Costs.
52.242-13  Bankruptcy.
52.243-1  Changes--Fixed Price--Alternate I.
52.244-5  Competition in Subcontracting.
52.245-2  Government Property (Fixed-Price Contracts).
52.246-25  Limitation of Liability--Services.
52.247-63  Preference for U.S.-Flag Air Carriers.
52.249-2  Termination for Convenience of the Government (Fixed-
Price).
52.249-8  Default (Fixed-Price Supply and Service).
52.251-1  Government Supply Sources.
52.232-2  Clauses Incorporated by Reference.
52.252-4  Alterations in Contract.
52.252-6  Authorized Deviations in Clauses.

    16. In subpart 1652.2, sections 1652.204-70 and 1652.215-70 are 
revised, and section 1652.204-72 is amended by adding ``(MAR 1995)'' in 
the title of the clause after the words ``Disputed Claims'' and before 
the period to read as follows:


1652.204-70   Contractor records retention.

    As prescribed in 1604.705, the following clause shall be inserted 
in all FEHBP contracts.

Contractor Records Retention (Jan 1997)

    Notwithstanding the provisions of section 5.7 (FAR 52.215-2(f)) 
``Audit and Records-Negotiation,'' the Carrier will retain and make 
available all records applicable to a contract term that support the 
annual statement of operations and, for contracts that exceed the 
threshold at FAR 15.804-

[[Page 32408]]

2(a)(1), the rate submission for that contract term for a period of 5 
years after the end of the contract term to which the records relate, 
except that individual enrollee and/or patient claim records shall be 
maintained for 3 years after the end of the contract term to which the 
claim records relate.

(End of Clause)


1652.215-70   Rate Reduction for Defective Pricing or Defective Cost or 
Pricing Data.

    As prescribed in 1615.804-72, the following clause shall be 
inserted in FEHBP contracts exceeding the threshold at FAR 15.804-
2(a)(1) that are based on price analysis.

Rate Reduction for Defective Pricing or Defective Cost or Pricing Data 
(Jan 1997)

    (a) If any rate established in connection with this contract was 
increased because (1) the Carrier submitted, or kept in its files in 
support of the FEHBP rate, cost or pricing data that were not 
complete, accurate, or current as certified in the Certificate of 
Accurate Cost or Pricing Data (FEHBAR 1615.804-70); (2) the Carrier 
submitted, or kept in its files in support of the FEHBP rate, cost 
or pricing data that were not accurate as represented in the rate 
proposal documents; (3) the Carrier developed FEHBP rates with a 
rating methodology and structure inconsistent with that used to 
develop rates for similarly sized subscriber groups (see FEHBAR 
1602.170-12) as certified in the Certificate of Accurate Cost or 
Pricing Data for Community Rated Plans; or (4) the Carrier submitted 
or, or kept in its files in support of the FEHBP rate, data or 
information of any description that were not complete, accurate, and 
current--then, the rate shall be reduced in the amount by which the 
price was increased because of the defective data or information.
    (b)(1) If the Contracting Officer determines under paragraph (a) 
of this clause that a price or cost reduction should be made, the 
Carrier agrees not to raise the following matters as a defense:
    (i) The Carrier was a sole source supplier or otherwise was in a 
superior bargaining position and thus the price of the contract 
would not have been modified even if accurate, complete, and current 
cost or pricing data had been submitted or maintained and 
identified.
    (ii) The Contracting Officer should have known that the cost or 
pricing data in issue were defective even though the Carrier took no 
affirmative action to bring the character of the data to the 
attention of the Contracting Officer.
    (iii) The contract was based on an agreement about the total 
cost of the contract and there was no agreement about the cost of 
each item procured under the contract.
    (iv) The Carrier did not submit a Certificate of Current Cost or 
Pricing Data.
    (2)(i) Except as prohibited by subdivision (b)(2)(ii) of this 
clause, an offset in an amount determined appropriate by the 
Contracting Officer based upon the facts shall be allowed against 
the amount of a contract price reduction if--
    (A) The Carrier certifies to the Contracting Officer that, to 
the best of the Carrier's knowledge and belief, the Carrier is 
entitled to the offset in the amount requested; and
    (B) The Carrier proves that the cost or pricing data were 
available before the date of agreement on the price of the contract 
(or price of the modification) and that the data were not submitted 
before such date.
    (ii) An offset shall not be allowed if--
    (A) The understated data was known by the Carrier to be 
understated when the Certificate of Current Cost or Pricing Data was 
signed; or
    (B) The Government proves that the facts demonstrate that the 
contract price would not have increased in the amount to be offset 
even if the available data had been submitted before the date of 
agreement on price.
    (c) When the Contracting Officer determines that the rates shall 
be reduced and the Government is thereby entitled to a refund, the 
Carrier shall be liable to and shall pay the FEHB Fund at the time 
the overpayment is repaid--
    (1) Simple interest on the amount of the overpayment from the 
date the overpayment was paid from the FEHB Fund to the Carrier 
until the date the overcharge is liquidated. In calculating the 
amount of interest due, the quarterly rate determinations by the 
Secretary of the Treasury under the authority of 26 U.S.C. 
6621(a)(2) applicable to the periods the overcharge was retained by 
the Carrier shall be used; and,
    (2) A penalty equal to the amount of overpayment, if the Carrier 
knowingly submitted cost or pricing data which was incomplete, 
inaccurate, or noncurrent.

(End of Clause)

    17. Section 1652.215-71 is amended by removing ``(JAN 1991)'' from 
the clause heading and adding in its place ``(JAN 1997)'' and by 
revising paragraph (f) to read as follows:


1652.215-71   Investment Income.

* * * * *
    (f) The Carrier shall credit the Special Reserve for income due 
in accordance with this clause. All amounts payable shall bear 
simple interest on lost investment income at the quarterly rate 
determined by the Secretary of the Treasury under the authority of 
16 U.S.C. 6621(a)(2) applicable to the periods in which the amount 
becomes due, as provided in paragraphs (d) and (e) of this clause.
* * * * *
    18. Section 1652.216-70 is revised to read as follows:


1652.216-70   Accounting and price adjustment.

    As prescribed in 1616.7001, the following clause shall be inserted 
in all FEHBP contracts based on price analysis.

Accounting and Price Adjustment (Jan 1997)

    (a) Annual Accounting Statement. The Carrier, not later than 90 
days after the end of each contract period, shall furnish to OPM for 
that contract period an accounting of its operations under the 
contract. The accounting shall be in the form prescribed by OPM.
    (b) Adjustment. (1) This contract is community rated as defined 
in FEHBAR 1602.170-2.
    (2) The subscription rates agreed to in this contract shall be 
equivalent to the subscription rates given to the plan's similarly 
sized subscriber groups (SSSGs).
    (3) If, at the time of the rate reconciliation, the subscription 
rates are found to be lower than the equivalent rates for the lower 
of the two SSSGs, the carrier may include an adjustment to the 
Federal group's rates for the next contract period.
    (4) If, at the time of the rate reconciliation, the subscription 
rates are found to be higher than the equivalent rates for the lower 
of the two SSSGs, the Carrier shall reimburse the Fund, for example, 
by reducing the FEHB rates for the next contract term to reflect the 
difference between the estimated rates and the rates which are 
derived using the methodology of the lower rated SSSG.
    (5) No upward adjustment in the rate established for this 
contract will be allowed or considered by the Government or will be 
made by the Carrier in this or in any other contract period on the 
basis of actual costs incurred, actual benefits provided, or actual 
size or composition of the FEHBP group during this contract period.
    (6) In the event this contract is not renewed, neither the 
Government nor the Carrier shall be entitled to any adjustment or 
claim for the difference between the subscription rates prior to 
rate reconciliation and the actual subscription rates.

(End of Clause)

    18(a). The introductory sentence of section 1652.216-71 is revised 
to read as follows:


1652.216-71   Accounting and Allowable Cost.

    As prescribed in 1616.7002, the following clause shall be inserted 
in all FEHBP contracts based on cost analysis.
* * * * *
    19. Section 1652.222-70 is amended by removing the date ``(JAN 
1991)'' in the clause heading and adding in its place ``(JAN 1997)'' 
and by adding a new paragraph (a)(14) to read as follows:


1652.222-70   Notice of significant events.

* * * * *
    (a) * * *
    (14) A novation or change of name.
    20. Sections 1652.232-70 and 1652.232-71 are amended by adding 
dates in the clause titles to read as follows:


1652.232-70   Payments--community rated contracts.

* * * * *

Payments (Jan 1989)

* * * * *


1652.232-71   Payments--experience rated contracts.

* * * * *

[[Page 32409]]

Payments (May 1992)

* * * * *
    21. Section 1652.244-70 is amended by revising the introductory 
paragraph, clause date, and paragraph (a) of the clause to read as 
follows:


1652.244-70   Subcontracts.

    As prescribed by 1644.270, the following clause shall be inserted 
in all contracts based on cost analysis:

Subcontracts (Jan 1997)

    (a) The Carrier shall notify the Contracting Officer reasonably 
in advance of entering into any subcontract, or any subcontract 
modification, or as otherwise specified by this contract, if both 
the amount of the subcontract or modification charged to the FEHB 
Program exceeds $100,000 and is 25 percent of the total cost of the 
subcontract.
* * * * *

Subpart 1652.3--FEHBP Clause Matrix

    22. In subpart 1652.3, section 1652.370 paragraph (a) is amended by 
removing the words ``established catalog or market price'' in the first 
sentence and adding in its place the words ``price analysis;'' and by 
revising the FEHBP Clause Matrix to read as follows:


1652.370   Use of the matix.

* * * * *

                                                                   FEHBP Clause Matrix                                                                  
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                                                        Use with contracts based on     
           Clause No.                     Text Reference                     Title                Use  status    ---------------------------------------
                                                                                                                    Cost  analysis      Price  analysis 
--------------------------------------------------------------------------------------------------------------------------------------------------------
FAR 52.202-1...................  FAR 2.2........................  Definitions...............  M                   T                   T                 
FAR 52.203-3...................  FAR 3.202......................  Gratuities................  M                   T                   T                 
FAR 52.203-5...................  FAR 3.404(c)...................  Covenant Against            M                   T                   T                 
                                                                   Contingent Fees.                                                                     
FAR 52.203-7...................  FAR 3.502-3....................  Anti-Kickback Procedures..  M                   T                   T                 
FAR 52.203-9...................  FAR 3.104-10(b)................  Requirement for             M                   T                   T                 
                                                                   Certificate of                                                                       
                                                                   Procurement Integrity--                                                              
                                                                   Modification.                                                                        
FAR 52.203-12..................  FAR 3.808......................  Limitation on Payments to   M                   T                   T                 
                                                                   Influence Certain Federal                                                            
                                                                   Transactions.                                                                        
1652.203-70....................  1603.703.......................  Misleading, Deceptive, or   M                   T                   T                 
                                                                   Unfair Advertising.                                                                  
1652.204-70....................  1604.705.......................  Contractor Records          M                   T                   T                 
                                                                   Retention.                                                                           
1652.204-71....................  1604.7001......................  Coordination of Benefits..  M                   T                   T                 
1652.204-72....................  1604.7101......................  Filing Health Benefit       M                   T                   T                 
                                                                   Claims/Court Review of                                                               
                                                                   Disputed Claims.                                                                     
FAR 52.209-6...................  FAR 9.409(b)...................  Protecting the              M                   T                   T                 
                                                                   Government's Interest                                                                
                                                                   When Subcontracting With                                                             
                                                                   Contractors Debarred,                                                                
                                                                   Suspended, or Proposed                                                               
                                                                   for Debarment.                                                                       
FAR 52.215-2...................  FAR 15.105-2(b)................  Audit & Records--           M                   T                   T                 
                                                                   Negotiation.                                                                         
FAR 52.215-22..................  FAR 15.804-8(a)................  Price Reduction for         M                   T                                     
                                                                   Defective Cost or Pricing                                                            
                                                                   Data.                                                                                
FAR 52.215-24..................  FAR 15.804-8(c)................  Subcontractor Cost or       M                   T                                     
                                                                   Pricing Data.                                                                        
FAR 52.215-27..................  FAR 15.804-8(e)................  Termination of Defined      M                   T                                     
                                                                   Benefit Pension Plans.                                                               
FAR 52.215-30..................  FAR 15.904(a)..................  Facilities Capital Cost of  M                   T                                     
                                                                   Money.                                                                               
FAR 52.215-31..................  FAR 15.904(b)..................  Waiver of Facilities        A                   T                                     
                                                                   Capital Cost of Money.                                                               
FAR 52.215-39..................  FAR 15.804-8(f)................  Reversion or Adjustment of  M                   T                                     
                                                                   Plans for Post-retirement                                                            
                                                                   Benefits Other Than                                                                  
                                                                   Pensions (PRB).                                                                      
1652.215-70....................  1615.804-72....................  Rate Reduction for          M                   ..................  T                 
                                                                   Defective Pricing or                                                                 
                                                                   Defective Cost or Pricing                                                            
                                                                   Data.                                                                                
1652.215-71....................  1615.805-71....................  Investment Income.........  M                   T                   ..................
1652.216-70....................  1616.7001......................  Accounting and Price        M                   ..................  T                 
                                                                   Adjustment.                                                                          
1652.216-71....................  1616.7002......................  Accounting and Allowable    M                   T                   ..................
                                                                   Cost.                                                                                
FAR 52.219-8...................  FAR 19.708(a)..................  Utilization of Small,       M                   T                   T                 
                                                                   Small Disadvantaged and                                                              
                                                                   Women-Owned Small                                                                    
                                                                   Business Concerns.                                                                   
FAR 52.222-1...................  FAR 22.103-5(a)................  Notice to the Government    M                   T                   T                 
                                                                   of Labor Disputes.                                                                   
FAR 52.222-3...................  FAR 22.202.....................  Convict Labor.............  M                   T                   T                 
FAR 52.222-4...................  FAR 22.305(a)..................  Contract Work Hours and     M                   T                   T                 
                                                                   Safety Standards Act--                                                               
                                                                   Overtime Compensation--                                                              
                                                                   General.                                                                             
FAR 52.222-21..................  FAR 22.810(a)(1)...............  Certification of            M                   T                   T                 
                                 Modification:..................   Nonsegregated Facilities.                                                            
                                 1622.810-70....................                                                                                        
FAR 52.222-25..................  FAR 22.810(d)..................  Affirmative Action          M                   T                   T                 
                                 Modification:..................   Compliance.                                                                          
                                 1622.810-71....................                                                                                        
FAR 52.222-26..................  FAR 22.810(a)..................  Equal Opportunity.........  M                   T                   T                 
FAR 52.222-28..................  FAR 22.810(g)..................  Equal Opportunity Preaward  M                   T                   T                 
                                                                   Clearance of Subcontracts.                                                           
FAR 52.222-29..................  FAR 22.810(h)..................  Notification of Visa        A                   T                   T                 
                                                                   Denial.                                                                              
FAR 52.222-35..................  FAR 22.1308(a).................  Affirmative Action for      M                   T                   T                 
                                                                   Special Disabled and                                                                 
                                                                   Vietnam Era Veterans.                                                                
FAR 52.222-36..................  FAR 22.1408(a).................  Affirmative Action for      M                   T                   T                 
                                                                   Handicapped Workers.                                                                 
FAR 52.222-37..................  FAR 22.1308(b).................  Employment Reports on       M                   T                   T                 
                                                                   Special Disabled Veterans                                                            
                                                                   and Veterans of the                                                                  
                                                                   Vietnam Era.                                                                         
1652.222-70....................  1622.103-70....................  Notice of Significant       M                   T                   T                 
                                                                   Events.                                                                              
FAR 52.223-2...................  FAR 23.105(b)..................  Clean Air and Water.......  A                   T                   T                 
FAR 52.223-6...................  FAR 23.505(b)..................  Drug-Free Workplace.......  A                   T                   T                 
1652.224-70....................  1624.104.......................  Confidentiality of Records  M                   T                   T                 
FAR 52.227-1...................  FAR 27.201-2(a)................  Authorization and Consent.  M                   T                   T                 
FAR 52.227-2...................  FAR 27.202-2...................  Notice and Assistance       M                   T                   T                 
                                                                   Regarding Patent and                                                                 
                                                                   Copyright Infringement.                                                              

[[Page 32410]]

                                                                                                                                                        
FAR 52.229-3...................  FAR 29.401-3...................  Federal, State and Local    M                   T                   T                 
                                                                   Taxes.                                                                               
FAR 52.229-4...................  FAR 29.401-4...................  Federal, State and Local    M                   T                                     
                                                                   Taxes (Noncompetitive                                                                
                                                                   Contract).                                                                           
FAR 52.229-5...................  FAR 29.401-5...................  Taxes--Contracts Performed  A                   T                   T                 
                                                                   in U.S. Possessions or                                                               
                                                                   Puerto Rico.                                                                         
FAR 52.229-6...................  FAR 29.402-1(a)................  Taxes--Foreign Fixed Price  A                   T                   T                 
                                                                   Contracts.                                                                           
FAR 52.230-2...................  FAR 30.201-4(a)(1).............  Cost Accounting Standards.  A                   T                   T                 
FAR 52.230-3...................  FAR 30.201-4(b)(1).............  Disclosure and Consistency  A                   T                   T                 
                                                                   of Cost Accounting                                                                   
                                                                   Practices.                                                                           
FAR 52.230-5...................  FAR 30.201-4(d)(1).............  Administration of Cost      A                   T                   T                 
                                                                   Accounting Standards.                                                                
FAR 52.232-8...................  FAR 32.111(c)(1)...............  Discounts for Prompt        M                   T                   T                 
                                                                   Payment.                                                                             
FAR 52.232-17..................  FAR 32.617(a)..................  Interest..................  M                   T                   T                 
                                 Modification:..................                                                                                        
                                 1632.617.......................                                                                                        
FAR 52.232-23..................  FAR 32.806(a)(1)...............  Assignment of Claims......  A                   T                   T                 
FAR 52.232-28..................  FAR 32.908(d)..................  Electronic Funds Transfer   M                   T                   T                 
                                                                   Payment Methods.                                                                     
1652.232-70....................  1632.171.......................  Payments--Contracts         A                   ..................  T                 
                                                                   Without Letter of Credit                                                             
                                                                   Payment Arrangements.                                                                
1652.232-71....................  1632.172.......................  Payments--Contracts With    A                   T                                     
                                                                   Letter of Credit Payment                                                             
                                                                   Arrangements.                                                                        
1652.232-72....................  1632.772.......................  Non-Commingling of FEHBP    M                   T                                     
                                                                   Funds.                                                                               
1652.232-73....................  1632.806-70....................  Approval for Assignment of  M                   T                   T                 
                                                                   Claims.                                                                              
FAR 52.233-1...................  FAR 33.215.....................  Disputes..................  M                   T                   T                 
FAR 52.242-1...................  FAR 42.802.....................  Notice of Intent to         M                   T                                     
                                                                   Disallow Costs.                                                                      
FAR 52.242-3...................  FAR 42.709-6...................  Penalties for Unallowable   M                   T                                     
                                                                   Costs.                                                                               
FAR 52.242-13..................  FAR 42.903.....................  Bankruptcy................  M                   T                   T                 
FAR 52.243-1...................  FAR 43.205(a)(1)...............  Changes--Fixed Price--      M                   T                   T                 
                                                                   Alternate I.                                                                         
FAR 52.244-5...................  FAR 44.204(e)..................  Competition in              M                   T                                     
                                                                   Subcontracting.                                                                      
1652.244-70....................  1644.270.......................  Subcontracts..............  M                   T                                     
FAR 52.245-2...................  FAR 45.106(b)(1)...............  Government Property (Fixed  M                   T                   T                 
                                                                   Price Contracts).                                                                    
FAR 52.246-25..................  FAR 46.805(a)(4)...............  Limitation of Liability--   M                   T                                     
                                                                   Services.                                                                            
1652.246-70....................  1646.301.......................  FEHBP Inspection..........  M                   T                   T                 
FAR 52.247-63..................  FAR 47.405.....................  Preference for U.S.-Flag    M                   T                   T                 
                                                                   Air Carriers.                                                                        
FAR 52.249-2...................  FAR 49.502(b)(1)(i)............  Termination for             M                   T                   T                 
                                                                   Convenience of the                                                                   
                                                                   Government--Fixed Price.                                                             
FAR 52.249-8...................  FAR 49.504(a)(1)...............  Default (Fixed-Price        M                   T                   T                 
                                                                   Supply and Service).                                                                 
1652.249-70....................  1649.101-70....................  Renewal and Withdrawal of   M                   T                   T                 
                                                                   Approval.                                                                            
FAR 52.251-1...................  FAR 51.107.....................  Government Supply Sources.  A                   T                   ..................
FAR 52.252-2...................  FAR 52.107(b)..................  Clauses Incorporated by     M                   T                   T                 
                                                                   Reference.                                                                           
FAR 52.252-4...................  FAR 52.107(d)..................  Alterations in Contract...  M                   T                   T                 
FAR 52.252-6...................  FAR 52.107(f)..................  Authorized Deviations in    M                   T                   T                 
                                                                   Clauses.                                                                             
--------------------------------------------------------------------------------------------------------------------------------------------------------



PART 1653--FORMS [AMENDED]

    23. Part 1653 is amended by removing all references to Sec. 53.215-
2(b), Sec. 53.301-1412, and SF-1412 in the chart.

[FR Doc. 96-15403 Filed 6-21-96; 8:45 am]
BILLING CODE 6325-01-P