Federal Register / Vol. 75, No. 186 / Monday, September 27, 2010 / Proposed Rules 59195 

Flooding source(s) Location of referenced elevation 

* Elevation in feet (NGVD) 

+ Elevation in feet (NAVD) 

# Depth in feet above 

ground 

∧Elevation in meters 

(MSL) 

Communities affected 

Effective Modified 

** BFEs to be changed include the listed downstream and upstream BFEs, and include BFEs located on the stream reach between the referenced locations above. Please refer to the revised Flood Insurance Rate Map located at the community map repository (see below) for 

exact locations of all BFEs to be changed. 

Send comments to Roy E. Wright, Deputy Director, Risk Analysis Division, Federal Insurance and Mitigation Administration, Federal Emergency 

Management Agency, 500 C Street, SW., Washington, DC 20472. 

ADDRESSES 

Township of Brady 

Maps are available for inspection at the Brady Township Building, 141 West Liberty Road, Slipery Rock, PA 16057. 

Township of Perry 

Maps are available for inspection at the Perry Township Building, 5687 Doc Walker Road, Parker, PA 16049. 

Township of Richland 

Maps are available for inspection at the Richland Township Building, 511 Dittman Road, Emlenton, PA 16373. 

Township of Toby 

Maps are available for inspection at the Toby Township Building, 37 Simmons Road, Rimersburg, PA 16248. 

(Catalog of Federal Domestic Assistance No. 

97.022, ‘‘Flood Insurance.’’) 

Dated: September 13, 2010. 

Sandra K. Knight, 

Deputy Federal Insurance and Mitigation 

Administrator, Mitigation, Department of 

Homeland Security, Federal Emergency 

Management Agency. 

[FR Doc. 2010–24148 Filed 9–24–10; 8:45 am] 

BILLING CODE 9110–12–P 

DEPARTMENT OF DEFENSE 

GENERAL SERVICES 

ADMINISTRATION 

NATIONAL AERONAUTICS AND 

SPACE ADMINISTRATION 

48 CFR Parts 8, 12, and 16 

[FAR Case 2009–043; Docket 2010–0100; 

Sequence 1] 

RIN: 9000–AL74 

Federal Acquisition Regulation; Timeand-Materials (T&M) and Labor-Hour 

(LH) Contracts for Commercial Items 

AGENCY: 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 (the 

Councils) are proposing to amend the 

Federal Acquisition Regulation (FAR) to 

implement recommendations of the 

Government Accountability Office 

(GAO) Report 09–579 dated June 2009 

to Congressional Committees on 

‘‘Minimal Compliance with New 

Safeguards for Time-and-Materials 

Contracts for Commercial Services and 

Safeguards Have Not Been Applied to 

GSA Schedules Program.’’ 

DATES: Interested parties should submit 

written comments to the Regulatory 

Secretariat on or before November 26, 

2010 to be considered in the 

formulation of a final rule. 

ADDRESSES: Submit comments 

identified by FAR Case 2009–043 by any 

of the following methods: 

• Regulations.gov: http:// 

www.regulations.gov. Submit comments 

via the Federal eRulemaking portal by 

inputting ‘‘FAR Case 2009–043’’ under 

the heading ‘‘Enter Keyword or ID’’ and 

selecting ‘‘Search’’. Select the link 

‘‘Submit a Comment’’ that corresponds 

with ‘‘FAR Case 2009–043’’. Follow the 

instructions provided at the ‘‘Submit a 

Comment’’ screen. Please include your 

name, company name (if any), and ‘‘FAR 

Case 2009–043’’ on your attached 

document. 

• Fax: 202–501–4067. 

• Mail: General Services 

Administration, Regulatory Secretariat 

(MVCB), Attn: Hada Flowers, 1800 F 

Street, NW., Room 4041, Washington, 

DC 20405. 

Instructions: Please submit comments 

only and cite FAR Case 2009–043, in all 

correspondence related to this case. All 

comments received will be posted 

without change to http:// 

www.regulations.gov, including any 

personal and/or business confidential 

information provided. 

FOR FURTHER INFORMATION CONTACT: Mr. 

Warren Blankenship, Procurement 

Analyst, at (202) 501–1900, for 

clarification of content. For information 

pertaining to status or publication 

schedules, contact the Regulatory 

Secretariat at (202) 501–4755. Please 

cite FAR case 2009–043. 

SUPPLEMENTARY INFORMATION: 

A. Background 

This rule proposes to amend the FAR 

to implement the recommendations of 

GAO’s Report to Congressional 

Committees 09–579 dated June 2009 on 

‘‘Minimal Compliance with New 

Safeguards for Time-and-Materials 

Contracts for Commercial Services and 

Safeguards Have Not Been Applied to 

the GSA Schedules Program.’’ GAO was 

directed by the National Defense 

Authorization Act of Fiscal Year 2004 

conference report to review the use of 

the new authority being authorized in 

section 1432 of the Act, the extent to 

which it had been used, the types of 

contracts for which the authority had 

been used, and the degree to which such 

use was in compliance with the 

safeguards included in section 1432 

(including the requirement that timeand-material and labor-hour contracts 

be used only where no other contract 

type was suitable). 

GAO reviewed contract files, 

interviewed contracting and 

procurement policy officials, and 

utilized legal interpretations of the 

applicability of the determination and 

findings (D&F) requirement to the GSA 

Schedules program. GAO believes that 

the evidence and findings obtained 

during its audit substantiates the 

conclusions and associated 

recommendations in the report. The 


emcdonald on DSK2BSOYB1PROD with PROPOSALS
59196 Federal Register / Vol. 75, No. 186 / Monday, September 27, 2010 / Proposed Rules 

GAO audit revealed that, 

Governmentwide, contracting officers 

had the mistaken impression that the 

fixed labor rates in the time-andmaterial/labor-hour contracts make 

them fixed price type contracts. The 

audit further revealed that there was a 

general lack of awareness of the FAR 

part 12 determinations and findings 

requirement among contracting officers 

across all Government agencies in their 

review of contract actions more than 

two (2) years after the determinations 

and findings requirement was 

implemented in the FAR. There was a 

failure of management to detect the lack 

of compliance with these safeguards. 

GAO recommended that further action 

was required for the use of time-andmaterial contracts to acquire 

commercial services in order to help 

ensure that this contract type is used 

only when no other contract type is 

suitable and instill discipline in the 

determination of contract type with a 

view toward managing the risk to the 

Government. Therefore, GAO 

recommended that the following steps 

be taken: 

• Amend FAR Subpart 16.6 (Timeand-Materials, Labor-Hour, and Letter 

Contracts) and FAR Subpart 16.2 (FixedPrice Contracts) to make it clear that 

contracts with a fixed hourly labor rate 

and an estimated ceiling price are timeand-materials or labor-hour contracts, 

not fixed-price type contracts; 

• Amend FAR Subpart 8.4 (pertaining 

to the Schedules program) to explicitly 

require the same safeguards for 

commercial time-and-materials services, 

i.e., the FAR part 12 determination and 

findings and the justification for 

changes to the ceiling price, that are 

required in FAR 12.207; and 

• Provide guidance to contracting 

officials on the requirements in FAR 

12.207 for the detailed determination 

and findings for time-and-materials or 

labor-hour contracts for commercial 

services and encourage agencies to 

provide training regarding the 

determination and findings 

requirement. 

The requirement for executing a 

determination and findings when 

acquiring commercial services on a 

time-and-material or labor-hour basis is 

not new. The FAR used to prohibit the 

use of any other contract type except 

fixed price for the acquisition of 

commercial items. However, in 2003, 

the Services Acquisition Reform Act 

(SARA), amended Section 8002(d) of 

Federal Acquisition Streamlining Act of 

1994 (FASA) to explicitly provide that 

the FAR shall include the authority for 

the use of time-and-materials and laborhour contracts for the procurement of 

certain commercial services (the 

commercial services in such a category 

are ‘‘of a type’’ of commercial services 

that are commonly sold to the general 

public through the use of time-andmaterials and labor-hour contracts). 

FAR Case 2003–027 was published in 

the Federal Register at 71 FR 74667 on 

December 12, 2006, modified FAR 

12.207, FAR 16.601, and FAR 52.212–4 

to include an Alternate I, to permit the 

use of time-and-materials and laborhour contracts for commercial services 

when no other contract type is suitable. 

When using a time-and-materials or 

labor-hour contract, a ceiling price must 

be included in time-and-material and 

labor-hour contracts, it must incorporate 

Alternate I to payment clause FAR 

52.212–4 to safeguard records and audit 

rights, provide insight into contractor 

costs, and ensure that costs are 

monitored by the Government due to 

the inherent risks associated with timeand-materials and labor-hour types of 

contracts. This FAR case proposes to 

modify FAR 8.405–2 and 12.207 to 

require the contracting officer, when 

acquiring commercial services using a 

time-and-materials or labor-hour order, 

to execute a determination and findings 

explaining why no other contract type is 

suitable for the acquisition; and FAR 

16.201 and 16.600 to state explicitly that 

time-and-materials/labor-hour contracts 

are not fixed price contracts. The 

determination and findings is required 

to contain several elements, including a 

description of the market research 

performed for the acquisition and a 

description of the actions planned to 

maximize the use of fixed-price 

contracts on future or follow-on 

acquisitions. This is similar to the 

requirements in FAR 12.207 for a timeand-materials/labor-hour contract for 

commercial services. Currently, neither 

FAR 12.207 nor FAR subpart 8.4 

explicitly mentions the requirement for 

the contracting officer to execute a 

determination and findings when 

placing orders against Schedules under 

FAR subpart 8.4. GSA establishes 

contracts for commercial supplies and 

services against which Government 

agencies can issue orders. 

This proposed rule therefore builds 

on the existing Services Acquisition 

Reform Act (SARA) Panel 

recommendation to permit the use of 

time-and-materials and labor-hour 

contracts or orders when acquiring 

commercial services as long as a 

determination and findings is executed 

by the contracting officer consistent 

with FAR 12.207 and FAR 16.601 when 

ordering services under Schedules. 

Therefore, the determination and 

findings requirement is proposed to be 

added to FAR subpart 8.4 for Schedule 

orders to make it clear that contracting 

officers must execute, prior to placing 

the order, a determination and findings 

that a fixed-price order is not suitable. 

The FAR is proposed to be further 

revised as follows: 

(1) At FAR 8.405–2, Ordering 

procedures for services requiring a 

statement of work, paragraph (e), Use of 

time-and-materials and labor-hour 

orders for services, is added to 

incorporate the requirement for a 

determination and findings consistent 

with FAR 12.207 and 16.601(d). 

(2) Section 12.207(b)(4) is added as a 

cross-reference to 8.405–2(e) for 

determination and findings when using 

Federal Supply Schedules. 

(3) Section 16.201, which sets forth 

the general description of a fixed-price 

contract, has been modified to clarify 

that time-and-materials and labor-hour 

contracts are not fixed-price contracts. 

(4) Section 16.600, which sets forth 

the scope of time-and-materials and 

labor-hour contracts, is added to clarify 

that time-and-materials and labor-hour 

contracts are not fixed price contracts. 

This is not a significant regulatory 

action and, therefore, was not subject to 

review under Section 6(b) of Executive 

Order 12866, Regulatory Planning and 

Review, dated September 30, 1993. This 

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

804. 

B. Regulatory Flexibility Act 

The Councils do not expect this 

proposed rule 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 the 

rule does not impose any additional 

requirements on small businesses. An 

Initial Regulatory Flexibility Analysis 

has, therefore, not been performed. We 

invite comments from small businesses 

and other interested parties. The 

Councils will consider comments from 

small entities concerning the affected 

FAR Parts 8, 12, and 16 in accordance 

with 5 U.S.C. 610. Interested parties 

must submit such comments separately 

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

(FAR case 2009–043), in 

correspondence. 

C. Paperwork Reduction Act 

The Paperwork Reduction Act does 

not apply because the proposed changes 

to the FAR do not impose information 

collection requirements that require the 

approval of the Office of Management 

and Budget under 44 U.S.C. Chapter 35, 

et seq. 


emcdonald on DSK2BSOYB1PROD with PROPOSALS
Federal Register / Vol. 75, No. 186 / Monday, September 27, 2010 / Proposed Rules 59197 

List of Subjects in 48 CFR Parts 8, 12, 

and 16 

Government procurement. 

Dated: September 20, 2010. 

Edward Loeb, 

Director, Acquisition Policy Division. 

Therefore, DoD, GSA, and NASA 

propose amending 48 CFR parts 8, 12, 

and 16 as set forth below: 

1. The authority citation for 48 CFR 

parts 8, 12, and 16 continues to read as 

follows: 

Authority: 40 U.S.C. 121(c); 10 U.S.C. 

chapter 137; and 42 U.S.C. 2473(c). 

PART 8—REQUIRED SOURCES OF 

SUPPLIES AND SERVICES 

2. Amend section 8.405–2 by 

redesignating paragraph (e) as paragraph 

(f); and adding a new paragraph (e) to 

read as follows: 

8.405–2 Ordering procedures for services 

requiring a statement of work. 

* * * * * 

(e) Use of time-and-materials and 

labor-hour orders for services. (1) Except 

as provided in paragraph (e)(2) of this 

section, agencies shall use fixed-price 

orders for the acquisition of commercial 

services to the maximum extent 

practicable. 

(2) A time-and-materials or labor-hour 

order may be used for the acquisition of 

commercial services only when— 

(i) It is not possible at the time of 

placing the order to estimate accurately 

the extent or duration of the work or to 

anticipate costs with any reasonable 

degree of confidence; and 

(ii) The agency acquires the services 

through a competitive procedure under 

paragraph (c). 

(3) Prior to the issuance of a time-andmaterials or labor-hour order, the 

contracting officer shall— 

(i) Execute a determination and 

findings (D&F) for the order, in 

accordance with paragraph (e)(4) of this 

section that a fixed price order is not 

suitable; 

(ii) Include a ceiling price in the order 

that the contractor exceeds at its own 

risk; and 

(iii) Authorize any subsequent change 

in the order ceiling price only upon a 

determination, documented in the order 

file, that it is in the best interest of the 

procuring agency to change the ceiling 

price, and the change does not affect the 

scope of the task order as awarded (see 

12.207(b)(1)(ii)). 

(4) The D&F required by paragraph 

(e)(3) of this section shall contain 

sufficient facts and rationale to justify 

that a fixed-price order is not suitable. 

At a minimum, the D&F shall— 

(i) Include a description of the market 

research conducted (see 8.404(c), 

Acquisition planning, and 10.002(e)); 

(ii) Establish that it is not possible at 

the time of placing the order to 

accurately estimate the extent or 

duration of the work or anticipate costs 

with any reasonable degree of certainty; 

(iii) Establish that the current 

requirement has been structured to 

maximize the use of fixed-price orders 

(e.g., by limiting the value or length of 

the time-and-materials/labor-hour order; 

establishing fixed prices for portions of 

the requirement) on future acquisitions 

for the same or similar requirements; 

and 

(iv) Describe actions to maximize the 

use of fixed-price orders on future 

acquisitions for the same requirements 

(see 12.207(b)(2)). 

(5) Additional approval is required for 

orders with a total performance period, 

including options, of more than three 

years: 

(i) The D&F prepared in accordance 

with paragraph (e)(3) of this section 

shall be signed by the contracting officer 

and approved by the head of the 

contracting activity prior to the 

execution of the base period; and 

(ii) The order shall include a ceiling 

price that the contractor exceeds at its 

own risk. The contracting officer shall 

document the order file to justify the 

reasons for and amount of any 

subsequent change in the ceiling price. 

* * * * * 

PART 12—ACQUISITION OF 

COMMERCIAL ITEMS 

3. Amend section 12.207 by adding 

paragraph (b)(4) to read as follows: 

12.207 Contract type. 

* * * * * 

(b) * * * 

(4) See 8.405–2(e) for requirement for 

determination and findings when using 

Federal Supply Schedules. 

* * * * * 

PART 16—TYPES OF CONTRACTS 

4. Revise section 16.201 to read as 

follows: 

16.201 General. 

(a) Fixed-price types of contracts 

provide for a firm price or, in 

appropriate cases, an adjustable price. 

Fixed-price contracts providing for an 

adjustable price may include a ceiling 

price, a target price (including target 

cost), or both. Unless otherwise 

specified in the contract, the ceiling 

price or target price is subject to 

adjustment only by operation of contract 

clauses providing for equitable 

adjustment or other revision of the 

contract price under stated 

circumstances. The contracting officer 

shall use firm-fixed-price or fixed-price 

with economic price adjustment 

contracts when acquiring commercial 

items. 

(b) Time-and-materials contracts and 

labor-hour contracts are not fixed-price 

contracts. 

5. Add section 16.600 to read as 

follows: 

16.600 Scope. 

Time-and-materials contracts and 

labor-hour contracts are not fixed-price 

contracts. 

[FR Doc. 2010–24104 Filed 9–24–10; 8:45 am] 

BILLING CODE 6820–EP–P 

DEPARTMENT OF TRANSPORTATION 

Pipeline and Hazardous Materials 

Safety Administration 

49 CFR Part 177 

[Docket No. PHMSA–2010–0221 (HM–256)] 

RIN 2137–AE63 

Hazardous Materials: Limiting the Use 

of Electronic Devices by Highway 

AGENCY: Pipeline and Hazardous 

Materials Safety Administration 

(PHMSA), DOT. 

ACTION: Notice of proposed rulemaking 

(NPRM). 

SUMMARY: The Pipeline and Hazardous 

Materials Safety Administration 

(PHMSA) proposes to prohibit texting 

on electronic devices by drivers during 

the operation of a motor vehicle 

containing a quantity of hazardous 

materials requiring placarding under 

part 172 of the 49 CFR or any quantity 

of a select agent or toxin listed in 42 

CFR part 73. Additionally, in 

accordance with requirements 

published today by the Federal Motor 

Carrier Safety Administration (FMCSA), 

motor carriers are prohibited from 

requiring or allowing drivers of covered 

motor vehicles to engage in texting 

while driving. This rulemaking would 

improve health and safety on the 

Nation’s highways by reducing the 

prevalence of distracted driving-related 

crashes, fatalities, and injuries involving 

drivers of commercial motor vehicles. 

DATES: Comments must be received by 

October 27, 2010. 

ADDRESSES: You may submit comments 

identified by the docket number 

PHMSA–2010–0221 by any of the 

following methods: 


emcdonald on DSK2BSOYB1PROD with PROPOSALS