28430 Federal Register / Vol. 74, No. 113 / Monday, June 15, 2009 / Rules and Regulations 

use of equivalent domestic or designated 

country construction material other than 

Bahrainian, Mexican, or Omani construction 

material. 

* * * * * 

[FR Doc. E9–13978 Filed 6–12–09; 8:45 am] 

BILLING CODE 6820–EP–S 

DEPARTMENT OF DEFENSE 

GENERAL SERVICES 

ADMINISTRATION 

NATIONAL AERONAUTICS AND 

SPACE ADMINISTRATION 

48 CFR Parts 32, 43, 52, and 53 

[FAC 2005–33; FAR Case 2005–032; Item 

II; Docket 2008–0002; Sequence 1] 

RIN 9000–AI47 

Federal Acquisition Regulation; FAR 

Case 2005–032, Contractor’s Request 

for Progress Payments 

AGENCIES: Department of Defense (DoD), 

General Services Administration (GSA), 

and National Aeronautics and Space 

Administration (NASA). 

ACTION: Final rule. 

SUMMARY: The Civilian Agency 

Acquisition Council and the Defense 

Acquisition Regulations Council 

(Councils) have agreed on a final rule 

amending the Federal Acquisition 

Regulation (FAR) to incorporate 

improvements related to requests for 

progress payments and the Standard 

Form (SF) 1443, Contractor’s Request for 

Progress Payments, used to request 

those progress payments. Changes made 

to the Standard Form as published in 

the proposed rule include correction of 

misspellings, and an editorial change 

made at Item 4 to better describe the 

order number. 

DATES: Effective Date: July 15, 2009. 

FOR FURTHER INFORMATION CONTACT: For 

clarification of content, contact Ms. 

Meredith Murphy, Procurement 

Analyst, at (202) 208–6925. For 

information pertaining to status or 

publication schedules, contact the 

Regulatory Secretariat, 1800 F Street, 

NW, Room 4041, Washington, DC 

20405, (202) 501–4755. Please cite FAC 

2005–33, FAR case 2005–032. 

SUPPLEMENTARY INFORMATION: 

A. Background 

The Councils published a proposed 

rule in the Federal Register at 73 FR 

19035 on April 8, 2008, to (1) address 

revisions necessary to implement the 

paid-cost rule and (2) simplify the SF 

1443 and related regulations and 

instructions to improve clarity. 

No comments were received by the 

close of the public comment period on 

June 9, 2008. Subsequently, one 

comment was received from one 

commenter. The commenter specifically 

took no issue with the proposed FAR 

changes, but objected to the costs that 

would be incurred by its member 

companies to make programming 

changes that ensue from altering the SF 

1443. The commenter reasoned that 

‘‘(s)ince DOD’s goal is to significantly 

expand the use of performance based 

payments, it would appear to be more 

cost effective not to incur significant 

expenditures on changes to a form (i.e., 

SF 1443) that is part of a system 

(progress payments) that is no longer the 

preferred system for providing financing 

payments.’’ 

The Councils were puzzled at the 

commenter’s cost estimate of $87,000 to 

update software to use the new SF 1443 

because the changes incorporated into 

the SF 1443 by this case were, generally, 

necessitated by prior changes to the 

paid-cost rule and other changes to FAR 

Part 32. These changes had been in 

effect for some time, so contractors 

using SF 1443 to request progress 

payments have already made changes to 

their software to conform their progress 

payment requests to the updated FAR 

text. 

The commenter, an association 

representing large defense aerospace 

corporations, was requested to provide 

the cost analysis upon which it based its 

estimate of the cost to reprogram 

software in order to enable electronic 

generation and submittal of the SF 1443 

to request a progress payment. The 

commenter subsequently provided data 

supporting its estimate of approximately 

$87,000 per contractor. This estimate 

and the supporting data were forwarded 

to the Small Business Administration 

(SBA) Office of Advocacy for review 

specifically to determine the impact of 

modifying the SF 1443 on small 

businesses. Two independent reviews 

were conducted, one by the SBA’s 

regulatory economist and one by an 

outside small business expert selected 

by the SBA. Neither of these reviews 

discovered a substantial economic 

impact on a significant number of small 

entities. 

Further, the Councils did not find the 

commenter’s rationale regarding 

performance-based payments 

convincing. While it is the goal of 

Federal Government agencies, not just 

DoD, to use performance-based 

payments wherever possible, there 

remain many circumstances in which 

progress payments are an important 

financing mechanism. Therefore, the 

Councils approved this case as a final 

rule. 

During a final review by the Councils’ 

Acquisition Finance Team, it was 

discovered that the last item in the 

‘‘INSTRUCTIONS’’ section of the form 

on page 2 was labeled in error as 

pertaining to ‘‘Item 26.’’ However, the 

instruction actually refers to paragraph 

(f) of the ‘‘CERTIFICATION’’ section. 

That correction has been made to the 

form. In addition, a sentence was added 

to the SF 1443 instructions for Items 

14a–14e to clarify that the ‘‘financing 

payments’’ to be included do not 

include interim payments under a cost 

reimbursement contract. 

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 Department of Defense, the 

General Services Administration, and 

the National Aeronautics and Space 

Administration certify that this final 

rule will not have a significant 

economic impact on a substantial 

number of small entities within the 

meaning of the Regulatory Flexibility 

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

changes are designed to simplify the 

form and improve clarity. (See also, the 

Background section above for a 

thorough discussion of lack of impact 

on small entities.) 

C. Paperwork Reduction Act 

The Paperwork Reduction Act does 

apply; however, these changes to the 

FAR do not impose additional 

information collection requirements to 

the paperwork burden previously 

approved under OMB Control Number 

9000–0010. 

List of Subjects in 48 CFR Parts 32, 43, 

52, and 53 

Government procurement. 

Dated: June 9, 2009. 

Al Matera, 

Director, Office of Acquisition Policy. 

■ Therefore, DoD, GSA, and NASA 

amend 48 CFR parts 32, 43, 52, and 53 

as set forth below: 

■ 1. The authority citation for 48 CFR 

parts 32, 43, 52, and 53 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). 


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Federal Register / Vol. 74, No. 113 / Monday, June 15, 2009 / Rules and Regulations 28431 

PART 32—CONTRACT FINANCING 

■ 2. Amend section 32.001 by adding, in 

alphabetical order, the definition 

‘‘Liquidate’’ to read as follows: 

32.001 Definitions. 

* * * * * 

Liquidate means to decrease a 

payment for an accepted supply item or 

service under a contract for the purpose 

of recouping financing payments 

previously paid to the contractor. 

* * * * * 

■ 3. Amend section 32.501–3 by 

revising paragraph (a)(1) and the first 

sentence of paragraph (a)(3) to read as 

follows: 

32.501–3 Contract price. 

(a) * * * 

(1) Under firm-fixed price contracts, 

the contract price is the current amount 

fixed by the contract plus the not-toexceed amount for any unpriced 

modifications. 

* * * * * 

(3) Under a fixed-price incentive 

contract, the contract price is the target 

price plus the not-to-exceed amount of 

unpriced modifications. * * * 

* * * * * 

32.503–1 [Removed and Reserved] 

■ 4. Remove and reserve section 

32.503–1. 

■ 5. Amend section 32.503–6 by 

revising paragraphs (a)(3), (f), and 

(g)(1)(i) to read as follows: 

32.503–6 Suspension or reduction of 

payments. 

(a) * * * 

(3) In all cases, the contracting officer 

shall— 

(i) Act fairly and reasonably; 

(ii) Base decisions on substantial 

evidence; and 

(iii) Document the contract file. 

Findings made under paragraph (c) of 

the Progress Payments clause shall be in 

writing. 

* * * * * 

(f) Fair value of undelivered work. 

Progress payments must be 

commensurate with the fair value of 

work accomplished in accordance with 

contract requirements. The contracting 

officer must adjust progress payments 

when necessary to ensure that the fair 

value of undelivered work equals or 

exceeds the amount of unliquidated 

progress payments. On loss contracts, 

the application of a loss ratio as 

provided at paragraph (g) of this 

subsection constitutes this adjustment. 

(g) * * * 

(1) * * * 

(i) Revise the current contract price 

used in progress payment computations 

(the current ceiling price under fixedprice incentive contracts) to include the 

not-to-exceed amount for any pending 

change orders and unpriced orders. 

* * * * * 

PART 43—CONTRACT 

MODIFICATIONS 

43.102 [Amended] 

■ 6. Amend section 43.102 by removing 

from paragraph (b) the word 

‘‘maximum’’ and adding the word 

‘‘ceiling’’ in its place. 

PART 52—SOLICITATION PROVISIONS 

AND CONTRACT CLAUSES 

■ 7. Amend section 52.232–16 by 

revising the date of the clause; adding 

paragraph (a)(9); and revising 

paragraphs (c)(5) and (g) to read as 

follows: 

52.232–16 Progress Payments. 

* * * * * 

Progress Payments (JUL 2009) 

* * * * * 

(a) * * * 

(9) The costs applicable to items delivered, 

invoiced, and accepted shall not include 

costs in excess of the contract price of the 

items. 

* * * * * 

(c) * * * 

(5) The fair value of the undelivered work 

is less than the amount of unliquidated 

progress payments for that work. 

* * * * * 

(g) Reports, forms, and access to records. 

(1) The Contractor shall promptly furnish 

reports, certificates, financial statements, and 

other pertinent information (including 

estimates to complete) reasonably requested 

by the Contracting Officer for the 

administration of this clause. Also, the 

Contractor shall give the Government 

reasonable opportunity to examine and verify 

the Contractor’s books, records, and 

accounts. 

(2) The Contractor shall furnish estimates 

to complete that have been developed or 

updated within six months of the date of the 

progress payment request. The estimates to 

complete shall represent the Contractor’s best 

estimate of total costs to complete all 

remaining contract work required under the 

contract. The estimates shall include 

sufficient detail to permit Government 

verification. 

(3) Each Contractor request for progress 

payment shall: 

(i) Be submitted on Standard Form 1443, 

Contractor’s Request for Progress Payment, or 

the electronic equivalent as required by 

agency regulations, in accordance with the 

form instructions and the contract terms; and 

(ii) Include any additional supporting 

documentation requested by the Contracting 

Officer. 

* * * * * 

PART 53—FORMS 

53.232 [Amended] 

■ 8. Amend section 53.232 by removing 

‘‘(10/82)’’ and adding ‘‘(JUL 2009)’’ in 

its place; and by removing ‘‘, as 

specified in 32.503.1’’. 

■ 9. Amend section 53.301–1443 by 

revising the form to read as follows: 

53.301–1443 Contractor’s Request for 

Progress Payment. 

BILLING CODE 6820–EP–S 


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28432 Federal Register / Vol. 74, No. 113 / Monday, June 15, 2009 / Rules and Regulations 


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Federal Register / Vol. 74, No. 113 / Monday, June 15, 2009 / Rules and Regulations 28433 


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28434 Federal Register / Vol. 74, No. 113 / Monday, June 15, 2009 / Rules and Regulations 

[FR Doc. E9–13977 Filed 6–12–09; 8:45 am] 

BILLING CODE 6820–EP–C 

DEPARTMENT OF DEFENSE 

GENERAL SERVICES 

ADMINISTRATION 

NATIONAL AERONAUTICS AND 

SPACE ADMINISTRATION 

48 CFR Chapter 1 

[Docket FAR 2009–0002, Sequence 4] 

Federal Acquisition Regulation; 

Federal Acquisition Circular 2005–33; 

Small Entity Compliance Guide 

AGENCIES: Department of Defense (DoD), 

General Services Administration (GSA), 

and National Aeronautics and Space 

Administration (NASA). 

ACTION: Small Entity Compliance Guide. 

SUMMARY: This document is issued 

under the joint authority of the 

Secretary of Defense, the Administrator 

of General Services and the 

Administrator of the National 

Aeronautics and Space Administration. 

This Small Entity Compliance Guide has 

been prepared in accordance with 

Section 212 of the Small Business 

Regulatory Enforcement Fairness Act of 

1996. It consists of a summary of rules 

appearing in Federal Acquisition 

Circular (FAC) 2005–33 which amend 

the FAR. Interested parties may obtain 

further information regarding these 

rules by referring to FAC 2005–33, 

which precedes this document. These 

documents are also available via the 

Internet at http://www.regulations.gov. 

FOR FURTHER INFORMATION CONTACT: Ms. 

Hada Flowers, Regulatory Secretariat, 

(202) 208–7282. For clarification of 

content, contact the analyst whose name 

appears in the table below. 

LIST OF RULES IN FAC 2005–33 

Item Subject FAR case Analyst 

I ............ Trade Agreements—Costa Rica, Oman, and Peru (Interim) .......................................................... 2008–036 Murphy. 

II ........... Contractor’s Request for Progress Payments ................................................................................. 2005–032 Murphy. 

SUPPLEMENTARY INFORMATION: 

Summaries for each FAR rule follow. 

For the actual revisions and/or 

amendments to these FAR cases, refer to 

the specific item number and subject set 

forth in the documents following these 

item summaries. 

FAC 2005–33 amends the FAR as 

specified below: 

Item I—Trade Agreements—Costa Rica, 

Oman, and Peru (FAR Case 2008–036) 

(Interim) 

This interim rule allows contracting 

officers to purchase the goods and 

services of Costa Rica, Oman, and Peru 

without application of the Buy 

American Act if the acquisition is 

subject to the applicable trade 

agreements. The free trade agreements 

with Costa Rica, Oman, and Peru join 

the North American Free Trade 

Agreement (NAFTA), the Australia, 

Bahrain, Chile, Morocco, and Singapore 

Free Trade Agreements, and the 

Dominican Republic-Central AmericaUnited States Free Trade Agreement 

(CAFTA–DR) with respect to the 

Dominican Republic, El Salvador, 

Guatemala, Honduras, and Nicaragua, 

which are already in the FAR. 

The threshold for supplies and 

services is $67,826 for the CAFTA-DR 

and $194,000 for the Oman and Peru 

FTAs. The threshold for construction is 

$7,443,000 for the CAFTA-DR and the 

Peru FTA and $8,817,449 for the Oman 

FTA. 

Item II—Contractor’s Request for 

Progress Payments (FAR Case 2005– 

032) 

This final rule converts the proposed 

rule published at 73 FR 19035 on April 

8, 2008, to a final rule with one editorial 

change. This final rule incorporates 

improvements related to requests for 

progress payments and the Standard 

Form (SF) 1443, Contractor’s Request for 

Progress Payments, used to request 

those progress payments. 

Dated: June 9, 2009. 

Al Matera, 

Director, Office of Acquisition Policy. 

[FR Doc. E9–13976 Filed 6–12–09; 8:45 am] 

BILLING CODE 6820–EP–C 


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