26766 Federal Register / Vol. 61, No. 103 / Tuesday, May 28, 1996 / Proposed Rules

DEPARTMENT OF DEFENSE

GENERAL SERVICES

ADMINISTRATION

NATIONAL AERONAUTICS AND

SPACE ADMINISTRATION

48 CFR Parts 42 and 52

[FAR Case 95–018]

RIN 9000–AG88

Federal Acquisition Regulation; Final

Indirect Cost Rates

AGENCIES: Department of Defense (DOD),

General Services Administration (GSA),

and National Aeronautics and Space

Administration (NASA).

ACTION: Proposed rule.

SUMMARY: The Civilian Agency

Acquisition Council and the Defense

Acquisition Regulations Council are

proposing to amend the Federal

Acquisition Regulation (FAR) to revise

the procedures relating to final indirect

cost rates. This regulatory action was

not subject to Office of Management and

Budget review under Executive Order

12866, dated September 30, 1993. This

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

DATES: Comments should be submitted

on or before July 29, 1996 to be

considered in the formulation of a final

rule.

ADDRESSES: Interested parties should

submit written comments to: General

Services Administration, FAR

Secretariat (VRS),18th & F Streets, NW.,

Room 4037, Washington, DC 20405.

Please cite FAR case 95–018 in all

correspondence related to this case.

FOR FURTHER INFORMATION CONTACT: Ms.

Linda Klein at (202) 501–3775 in

reference to this FAR case. For general

information, contact the FAR

Secretariat, Room 4037, GS Building,

Washington, DC 20405 (202) 501–4755.

Please cite FAR case 95–018.

SUPPLEMENTARY INFORMATION:

A. Background

This proposed rule amends FAR

Subpart 42.7 to permit, with certain

restrictions, increased interim payments

to contractors under certain

circumstances. FAR 42.704 is amended

to permit, with certain restrictions,

contractor use of billing rates contained

in certified final indirect cost rate

proposals. The clauses at FAR 52.216–

7 and 52.216–13 are revised to establish

a timeframe for contractor submission of

final vouchers. The clauses at 52.216–8

through 52.216–10 are revised to require

release of 75 percent of all fee withholds

under physically completed cost-type

contracts, and to permit release of 90

percent of all withholds in certain

circumstances.

B. Regulatory Flexibility Act

This proposed rule is not expected to

have a significant economic impact on

a substantial number of small entities

within the meaning of the Regulatory

Flexibility Act, 5 U.S.C. 601 et seq.,

because most contracts awarded to

small business are awarded on the basis

of firm-fixed-price, and settlement of

final indirect cost rates is, therefore, not

an issue. Furthermore, any impact of

this rule would be to reduce cost and

administrative burdens on both

contractors and Government. An Initial

Regulatory Flexibility Analysis has,

therefore, not been performed.

Comments from small entities

concerning the affected FAR subpart

will be considered in accordance with 5

U.S.C. 610 of the Act. Such comments

must be submitted separately and

should cite 5 U.S.C. 601 et seq. (FAR

case 95–018), in correspondence.

C. Paperwork Reduction Act

The Paperwork Reduction Act does

not apply because the proposed 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 Parts 42 and

52

Government procurement.

Dated: May 21, 1996.

Edward C. Loeb,

Director, Federal Acquisition Policy Division.

Therefore, it is proposed that 48 CFR

Parts 42 and 52 be amended as set forth

below:

1. The authority citation for 48 CFR

Parts 42 and 52 continues to read as

follows:

Authority: 40 U.S.C. 486(c); 10 U.S.C. 2301

to 2331; and 42 U.S.C. 2473(c).

PART 42—CONTRACTOR

ADMINISTRATION

2. Section 42.704 is amended by

adding paragraph (e) to read as follows:

42.704 Billing rates.

* * * * *

(e) When the contractor provides to

the cognizant contracting officer the

certified final indirect cost rate proposal

in accordance with 42.705–1(b) or

42.705–2(b), the contractor may bill the

proposed indirect cost rates, as

approved by the Government to reflect

historically disallowed amounts from

prior years’ audits, until the proposal

has been audited and settled. The

historical decrement will be determined

by either the cognizant contracting

officer (42.705–1(b)) or the cognizant

auditor (42.705–2(b)).

3. Section 42.705 is revised to read as

follows:

42.705 Final indirect cost rates.

(a) Final indirect cost rates shall be

established on the basis of—

(1) Contracting officer determination

procedure (see 42.705–1) or

(2) Auditor determination procedure

(see 42.705–2).

(b) Within 120 days after settlement of

the final indirect cost rates, the

contractor shall submit a completion

invoice or voucher reflecting the settled

amounts and rates on all contracts

physically completed in the year

covered by the proposal.

PART 52—SOLICITATION PROVISIONS

AND CONTRACT CLAUSES

4. Section 52.216–7 is amended by

revising the date of the clause;

redesignating paragraph (d)(4) as (d)(5)

and adding a new paragraph (d)(4); and

revising paragraph (h)(1) to read as

follows:

52.216–7 Allowable Cost and Payment.

* * * * *

Allowable Cost and Payment (Date)

(d) * * *

(4) Within 120 days after settlement of the

final indirect cost rates covering the year in

which this contract is physically complete,

the Contractor shall submit a completion

invoice or voucher to reflect the settled

amounts and rates.

* * * * *

(h) Final payment. (1) Upon approval of a

completion invoice or voucher submitted by

the Contractor in accordance with paragraph

(d)(4) of this clause, and upon the

Contractor’s compliance with all terms of this

contract, the Government shall promptly pay

any balance of allowable costs and that part

of the fee (if any) not previously paid.

* * * * *

5. Section 52.216–8 is amended by

revising the date and paragraph (b) of

the clause to read as follows:

52.216–8 Fixed fee.

* * * * *

Fixed-Fee (Date)

* * * * *

(b) The Contracting Officer shall release 75

percent of all fee withholds under this

contract after receipt of the certified final

indirect cost rate proposal covering the year

of physical completion of this contract,

provided the Contractor has satisfied all

other contract terms and conditions,
Federal Register / Vol. 61, No. 103 / Tuesday, May 28, 1996 / Proposed Rules 26767

including the submission of the final patent

and royalty reports, and is not delinquent in

submitting final vouchers on prior years’

settlements. The Contracting Officer may

release up to 90 percent of the fee withhold

under this contract based on the Contractor’s

past performance related to the submission

and settlement of final indirect cost rate

proposals.

(End of clause)

6. Section 52.216–9 is amended by

revising the date and paragraph (c) of

the clause to read as follows:

52.216–9 Fixed-Fee—Construction.

* * * * *

Fixed-Fee—Construction (Date)

* * * * *

(c) The Contracting Officer shall release 75

percent of all fee withholds under this

contract after receipt of the certified final

indirect cost rate proposal covering the year

of physical completion of this contract,

provided the Contractor has satisfied all

other contract terms and conditions,

including the submission of the final patent

and royalty reports, and is not delinquent in

submitting final vouchers on prior years’

settlements. The Contracting Officer may

release up to 90 percent of the fee withhold

under this contract based on the Contractor’s

past performance related to the submission

and settlement of final indirect cost rate

proposals.

7. Section 52.216–10 is amended by

revising the date of the clause; and

adding two sentences to the end of

paragraph (c); to read as follows:

52.216–10 Incentive Fee.

* * * * *

Incentive Fee (Date)

* * * * *

(c) * * * The Contracting Officer shall

release 75 percent of all fee withholds under

this contract after receipt of the certified final

indirect cost rate proposal covering the year

of physical completion of this contract,

provided the Contractor has satisfied all

other contract terms and conditions,

including the submission of the final patent

and royalty reports, and is not delinquent in

submitting final vouchers on prior years’

settlements. The Contracting Officer may

release up to 90 percent of the fee withhold

under this contract based on the Contractor’s

past performance related to the submission

and settlement of final indirect cost rate

proposals.

* * * * *

(End of clause)

8. Section 52.216–13 is amended by

revising the date of the clause;

redesignating paragraph (c)(4) as (c)(5)

and adding a new paragraph (c)(4); and

by revising the date and paragraph (h)

of Alternate I to read as follows:

52.216–13 Allowable Cost and Payment—

Facilities.

* * * * *

Allowable Cost and Payment—Facilities

(Date)

* * * * *

(c) * * *

(4) Within 120 days after settlement of the

final indirect cost rate covering the year in

which this contract is physically complete,

the Contractor shall submit a completion

invoice or voucher to reflect the settled

amounts and rates.

* * * * *

(End of clause)

Alternate I (Date) * * *

* * * * *

(h) Final payment. Upon approval of a

completion invoice or voucher submitted by

the Contractor in accordance with paragraph

(c)(4) of this clause, and upon the

Contractor’s compliance with all terms of this

contract, the Government shall promptly pay

any balance of allowable costs not previously

paid.

[FR Doc. 96–13247 Filed 5–24–96; 8:45 am]

BILLING CODE 6820–EP–P