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###### Department of Defense

###### General Services Administration

###### National Aeronautics and Space Administration

          - 48 CFR Part 52
          - [FAR Case 2009-034; Docket 2010-0098; Sequence 1]
          - RIN: 9000-AL73

# 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 (the Councils) are proposing to amend the Federal Acquisition Regulation (FAR) to revise the clauses at FAR 52.214-27, 52.215-10 and 52.215-11 to require compound interest calculations be applied to Government overpayments as a result of defective cost or pricing data.

# DATES:

Interested parties should submit written comments to the Regulatory Secretariat on or before November 22, 2010 to be considered in the formulation of a final rule.

# ADDRESSES:

Submit comments identified by FAR Case 2009-034 by any of the following methods:
      -  Regulations.gov: http://www.regulations.gov.                          Submit comments via the Federal eRulemaking portal by inputting “FAR Case 2009-034” under the heading “Enter Keyword or ID” and selecting “Search”. Select the link “Submit a Comment” that corresponds with “FAR Case 2009-034”. Follow the instructions provided at the “Submit a Comment” screen. Please include your name, company name (if any), and “FAR Case 2009-034” 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 2009-034, 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. Edward Chambers, Procurement Analyst, at (202) 501-3221 for clarification of content. For information pertaining to status or publication schedules, contact the Regulatory Secretariat at (202) 501-4755. Please cite FAR case 2009-034.

# SUPPLEMENTARY INFORMATION:

## A. Background

                    On September 14, 2009, the U.S. Court of Appeals for the Federal Circuit (CAFC) issued a decision regarding the method of interest calculation on Cost Accounting Standards (CAS) cost impacts (                    *See GATES*                     v.                     *Raytheon Co.,*                     584 F.3d 1062 (Fed. Cir. 2009)). The interest on CAS cost impacts is set by reference in the enabling statute to 26 U.S.C. 6621. The CAFC ruled that the citation led to calculation of the interest using daily compounding. The Truth in Negotiation Act (TINA) also references 26 U.S.C. 6621 for interest calculation. This proposed rule replaces the term “simple interest” as the requirement for calculating interest for TINA cost impacts with the phrase “Interest compounded daily as required by 26 U.S.C. 6622.” Thus, compound interest calculations will be applied to Government overpayments as a result of defective cost or pricing data.                

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 merely clarifies the statutory method for calculating interest in the rare instances when a contractor is found to be in violation of TINA. Since TINA requirements generally do not apply to contracts with small entities,                           ( print page 57720)                        and since the numbers of contractors found to have submitted defective cost or pricing data are a minute subset of contractors to whom TINA applies, the rule is not expected to apply to a substantial number of small entities. Furthermore, the differential in interest computing methods is not expected to amount to a significant economic impact. 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 Part 52 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 2009-034), 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.*

# List of Subjects in 48 CFR Part 52

      - Government procurement

Dated: September 15, 2010.

Edward Loeb,

Director, Acquisition Policy Division.

Therefore, DoD, GSA, and NASA propose amending 48 CFR part 52 as set forth below:

# PART 52—SOLICITATION PROVISIONS AND CONTRACT CLAUSES

1. The authority citation for 48 CFR part 52 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).

2. Amend section 52.214-27 by—

a. Revising the date of the clause; and

b. Removing from paragraph (e)(1) “Simple interest” and adding “Interest compounded daily, as required by 26 U.S.C. 6622,” in its place.

The revised text reads as follows:

52.214-27 

* * * * *

## Price Reduction for Defective Cost or Pricing Data—Modifications—Sealed Bidding (Date)

* * * * *

3. Amend section 52.215-10 by—

a. Revising the date of the clause; and

b. Removing from paragraph (d)(1) “Simple interest” and adding “Interest compounded daily, as required by 26 U.S.C. 6622,” in its place.

The revised text reads as follows:

52.215-10 

* * * * *

## Price Reduction for Defective Cost or Pricing Data (Date)

* * * * *

4. Amend section 52.215-11 by—

a. Revising the date of the clause; and

b. Removing from paragraph (e)(1) “Simple interest” and adding “Interest compounded daily, as required by 26 U.S.C. 6622,” in its place.

The revised text reads as follows:

52.215—11

* * * * *

## Price Reduction for Defective Cost or Pricing Data-Modifications (Date)

* * * * *

[FR Doc. 2010-23589 Filed 9-21-10; 8:45 am]

BILLING CODE 6820-EP-P