        DEPARTMENT OF THE INTERIOR
        Fish and Wildlife Service
        50 CFR Part 17
        RIN 1018-AH40
        Endangered and Threatened Wildlife and Plants; Proposed Endangered Status for the Sacramento Mountains Checkerspot Butterfly and Proposed Designation of Critical Habitat

          AGENCY:
          Fish and Wildlife Service, Interior.

          ACTION:
          Proposed rule; reopening of public comment period, notice of availability of draft economic analysis and draft environmental assessment.

          SUMMARY:

          We, the U.S. Fish and Wildlife Service (Service), announce the availability of the draft economic analysis and draft environmental assessment for the proposal to designate critical habitat for the Sacramento Mountains checkerspot butterfly (Euphydryas anicia cloudcrofti) (butterfly) under the Endangered Species Act of 1973, as amended (Act). We are reopening the public comment period for the proposal to list this species as endangered with critical habitat to allow all interested parties to comment on the proposed listing and critical habitat designation, as well as the associated draft economic analysis and draft environmental assessment. Comments previously submitted on the September 6, 2001 (66 FR 46575), proposed rule to list the butterfly as endangered with critical habitat need not be resubmitted as they have been incorporated into the public record and will be fully considered in preparation of the final listing and critical habitat determination. We invite all interested parties to submit comments on this proposal.

          DATES:
          Comments must be submitted directly to the Service (see
            ADDRESSES
            section) on or before November 29, 2004.

          ADDRESSES:
          If you wish to comment, you may submit your comments and materials by any one of several methods:
          1. You may submit written comments and information to the Field Supervisor, New Mexico Ecological Services Field Office, 2105 Osuna Road NE., Albuquerque, New Mexico 87113.
          2. You may hand-deliver written comments and information to our New Mexico Ecological Services Field Office, at the above address, or fax your comments to 505-346-2542.

          3. You may send your comments by electronic mail (e-mail) to R2FWE_AL@fws.gov. For directions on how to submit electronic filing of comments, see the “Public Comments Solicited” section below.
          You may obtain copies of the draft economic analysis and draft environmental assessment by mail, review comments and materials received, and review supporting documentation used in preparation of this proposed rule, by appointment, during normal business hours, at the above address.

          FOR FURTHER INFORMATION CONTACT:
          Susan MacMullin, Field Supervisor, New Mexico Ecological Services Field Office (telephone 505-761-4706, facsimile 505-346-2542).

        SUPPLEMENTARY INFORMATION:
        Public Comments Solicited
        We intend that any final action resulting from this proposal will be as accurate and as effective as possible. Therefore, we solicit comments or suggestions from the public, other concerned governmental agencies, the scientific community, industry, or any other interested party concerning this proposed rule, the draft economic analysis, and the draft environmental assessment. On the basis of public comment, during the development of our final determination we may find that areas proposed are not essential, are appropriate for exclusion under section 4(b)(2), or not appropriate for exclusion; in all of these cases, this information would be incorporated into our final determination. We particularly seek comments concerning:
        (1) The reasons why any habitat should or should not be determined to be critical habitat as provided by section 4 of the Act, including whether the benefits of designation will outweigh any threats to the species resulting from designation;
        (2) Specific information on the distribution of the butterfly, the amount and distribution of the species' habitat, and which habitat is essential to the conservation of the species, and why;
        (3) Land use designations and current or planned activities in the subject area and their possible impacts on the species or proposed critical habitat;
        (4) Whether our approach to listing or critical habitat designation could be improved or modified in any way to provide for greater public participation and understanding, or to assist us in accommodating public concerns and comments;
        (5) Any foreseeable economic, environmental, or other impacts resulting from the proposed designation of critical habitat or coextensively from the proposed listing, and in particular, any impacts on small entities or families;
        (6) Whether the economic analysis identifies all State and local costs. If not, what other costs should be included;
        (7) Whether the economic analysis makes appropriate assumptions regarding current practices and likely regulatory changes imposed as a result of the listing of the species or the designation of critical habitat;
        (8) Whether the economic analysis correctly assesses the effect on regional costs associated with land use controls that derive from the designation;
        (9) Whether the designation will result in disproportionate economic impacts to specific areas that should be evaluated for possible exclusion from the final designation; and
        (10) Whether the economic analysis appropriately identifies all costs that could result from the designation or coextensively from the listing.

        If you wish to comment, you may submit your comments and materials concerning this proposal by any one of several methods (see
          ADDRESSES section). Please submit electronic comments in ASCII file format and avoid the use of special characters or any form of encryption. Please also include “Attn: RIN 1018-AH40” in your e-mail subject header and your name and return address in the body of your message. If you do not receive a confirmation from the system that we have received your Internet message, contact us directly by calling our New Mexico Ecological Services Field Office at (505) 346-2525.
        Our practice is to make comments, including names and home addresses of respondents, available for public review during regular business hours. Individual respondents may request that we withhold their home addresses from the rulemaking record, which we will honor to the extent allowable by law. There also may be circumstances in which we would withhold from the rulemaking record a respondent's identity, as allowable by law. If you wish us to withhold your name and/or address, you must state this prominently at the beginning of your comment. However, we will not consider anonymous comments. We will make all submissions from organizations or businesses, and from individuals identifying themselves as representatives or officials of organizations or businesses, available for public inspection in their entirety. Comments and materials received will be available for public inspection, by appointment, during normal business hours at the above address.
        Background
        The butterfly is restricted to meadows within the mixed-conifer forest at approximate elevations between 2,450 and 2,750 meters (m) (8,000 and 9,000 feet (ft)) in the vicinity of the Village of Cloudcroft, Otero County, New Mexico. Our proposed critical habitat designation includes the area found within an approximate 140 square km (54 square mi) polygon centered around the Village of Cloudcroft, Otero County, New Mexico, south of the Mescalero Apache Nation boundary. In the proposed rule, we determined that the butterfly was in danger of extinction throughout all or a significant portion of its range because much of the remaining suitable habitat and the long term persistence of the butterfly were threatened. At that time, the known threats included: commercial and private development, Forest Service (FS) projects, fire suppression activities, highway reconstruction, off-highway vehicle use, and overgrazed range conditions. Additional background information is available in the September 6, 2001, proposed rule (66 FR 46575).

        On September 8, 2003, the Center for Biological Diversity (Center) filed a complaint pursuant to the Act, challenging the failure of the Service to publish a final listing rule for the butterfly within the 1-year statutory deadline set by section 4 of the Act. The Service and the Center reached settlement in this case that was adopted as an order by the District Court for the District of New Mexico on June 3, 2004. The terms of the settlement agreement require us to submit a final listing and critical habitat determination for the butterfly to the Federal Register on or before December 15, 2004.

        Section 4 of the Act requires that we consider economic and other relevant impacts prior to making a final decision on what areas to designate as critical habitat. We have developed a draft economic analysis and draft environmental assessment for the proposal to designate certain areas as critical habitat for the butterfly. We solicit data and comments from the public on these draft documents, as well as on all aspects of the proposal (see “Public Comments Solicited” section above).
        Our draft economic analysis suggests that the present value of future conservation measures associated with the butterfly is expected to range from $5.6 million to $8.6 million over 20 years, or $533,000 to $816,000 annually. Approximately 55 percent of these costs result from anticipated project modifications primarily associated with utility projects, agriculture and ranching, and U.S. Forest Service land management. The remaining costs are generally administrative in nature.

        The Service, Otero County, New Mexico, Village of Cloudcroft, New Mexico, FS, and other stakeholders have completed a conservation plan for the butterfly. A notice of availability of this draft document published in the Federal Register on October 7, 2004 (69 FR 60178). The goal of this strategy is to establish conservation measures needed for the conservation of the butterfly. Section 4 of the Act (16 U.S.C. 1533) and implementing regulations at 50 CFR part 424 set forth procedures for adding species to the Federal List of Endangered and Threatened Wildlife. A species may be determined to be endangered or threatened due to one or more of the five factors described in section 4(a)(1) of the Act. Our final listing determination will analyze these factors and their application to the butterfly to evaluate whether the species meets the definition of an endangered or threatened species.

          Authority:

          The authority for this action is the Endangered Species Act of 1973 (16 U.S.C. 1531 et seq.).

          Dated: November 2, 2004.
          Craig Manson,
          Assistant Secretary for Fish and Wildlife and Parks.

      [FR Doc. 04-24869 Filed 11-5-04; 8:45 am]
      BILLING CODE 4310-55-U


        ENVIRONMENTAL PROTECTION AGENCY
        40 CFR Part 62
        [R01-OAR-2005-ME-0005; FRL-7956-5]
        Approval and Promulgation of State Plans for Designated Facilities and Pollutants: Maine; Negative Declaration

          AGENCY:
          Environmental Protection Agency (EPA).

          ACTION:
          Proposed rule.

          SUMMARY:
          EPA proposes to approve the sections 111(d) and 129 negative declaration submitted by the Maine Department of Environmental Protection (MEDEP) on May 2, 2005. This negative declaration adequately certifies that there are no existing hospital/medical/infectious waste incinerators (HMIWIs) located within the boundaries of the state of Maine.

          DATES:
          EPA must receive comments in writing by September 19, 2005.

          ADDRESSES:
          Submit your comments, identified by Regional Material in EDocket (RME) ID Number R01-OAR-2005-ME-0005 by one of the following methods:
          1. Federal eRulemaking Portal: http://www.regulations.gov. Follow the on-line instructions for submitting comments.
          2. Agency Web site: http://docket.epa.gov/rmepub/. Regional Material in EDocket (RME), EPA's electronic public docket and comment system, is EPA's preferred method for receiving comments. Once in the system, select “quick search,” then key in the appropriate RME Docket identification number. Follow the on-line instructions for submitting comments.
          3. E-mail: brown.dan@epa.gov.
          4. Fax: (617) 918-0048.
          5. Mail: “RME ID Number R01-OAR-2005-ME-0005”, Daniel Brown, Chief, Air Permits, Toxics & Indoor Programs Unit, Office of Ecosystem Protection, U.S. EPA, One Congress Street, Suite 1100 (CAP), Boston, Massachusetts 02114-2023.
          6. Hand Delivery or Courier. Deliver your comments to: Daniel Brown, Chief, Air Permits, Toxics & Indoor Programs Unit, Office of Ecosystem Protection, U.S. EPA, One Congress Street, Suite 1100 (CAP), Boston, Massachusetts 02114-2023. Such deliveries are only accepted during the Regional Office's normal hours of operation. The Regional Office's official hours of business are Monday through Friday, 8:30 to 4:30 excluding federal holidays.

          Please see the direct final rule which is located in the Rules Section of this Federal Register for detailed instructions on how to submit comments.

          Copies of documents relating to this proposed rule are available for public inspection during normal business hours at the following locations. The interested persons wanting to examine these documents should make an appointment with the appropriate office at least 24 hours before the day of the visit.
          Environmental Protection Agency, Air Permits, Toxics & Indoor Programs Unit, Office of Ecosystem Protection, Suite 1100 (CAP), One Congress Street, Boston, Massachusetts 02114-2023.
          Maine Department of Environmental Protection, Bureau of Air Quality, 17 State House Station, Augusta, Maine 04333-0017, (207) 287-2437.

          FOR FURTHER INFORMATION CONTACT:

          John Courcier, Office of Ecosystem Protection (CAP), EPA-New England, Region 1, Boston, Massachusetts 02203, telephone number (617) 918-1659, fax number (617) 918-0659, email courcier.john@epa.gov.

        SUPPLEMENTARY INFORMATION:
        In the Final Rules Section of this Federal Register, EPA is approving the Maine Negative Declaration submittal as a direct final rule without prior proposal because the Agency views this as a noncontroversial submittal and anticipates no adverse comments. A detailed rationale for the approval is set forth in the direct final rule. If no adverse comments are received in response to this action, no further activity is contemplated. If EPA receives adverse comments, the direct final rule will be withdrawn and all public comments received will be addressed in a subsequent final rule based on this proposed rule. EPA will not institute a second comment period. Any parties interested in commenting on this action should do so at this time. Please note that if EPA receives adverse comment on an amendment, paragraph, or section of this rule and if that provision may be severed from the remainder of the rule, EPA may adopt as final those provisions of the rule that are not the subject of an adverse comment.

        For additional information, see the direct final rule which is located in the Rules Section of this Federal Register.

          Dated: August 11, 2005.
          Ira W. Leighton,
          Acting Regional Administrator, EPA New England.

      [FR Doc. 05-16483 Filed 8-18-05; 8:45 am]
      BILLING CODE 6560-50-P


        ENVIRONMENTAL PROTECTION AGENCY
        40 CFR Part 52
        [EPA-R04-OAR-2020-0156; FRL-10008-17-Region 4]
        Air Plan Approval; KY: Jefferson County Performance Tests

          AGENCY:
          Environmental Protection Agency (EPA).

          ACTION:
          Proposed rule.

          SUMMARY:
          The Environmental Protection Agency (EPA) is proposing to approve changes to the Jefferson County portion of the Kentucky State Implementation Plan (SIP), submitted by the Commonwealth of Kentucky, through the Energy and Environment Cabinet (Cabinet), Division of Air Quality (DAQ), through a letter dated September 5, 2019. The changes were submitted by the Cabinet on behalf of the Louisville Metro Air Pollution Control District (District, also referred to herein as Jefferson County). The SIP revision includes changes to Jefferson County regulations regarding performance tests.

          DATES:
          Comments must be received on or before May 28, 2020.

          ADDRESSES:

          Submit your comments, identified by Docket ID No. EPA-R04-OAR-2020-0156 at www.regulations.gov. Follow the online instructions for submitting comments. Once submitted, comments cannot be edited or removed from Regulations.gov. EPA may publish any comment received to its public docket. Do not submit electronically any information you consider to be Confidential Business Information (CBI) or other information whose disclosure is restricted by statute. Multimedia submissions (audio, video, etc.) must be accompanied by a written comment. The written comment is considered the official comment and should include discussion of all points you wish to make. EPA will generally not consider comments or comment contents located outside of the primary submission (i.e., on the web, cloud, or other file sharing system). For additional submission methods, the full EPA public comment policy, information about CBI or multimedia submissions, and general guidance on making effective comments, please visit www2.epa.gov/dockets/commenting-epa-dockets.

          FOR FURTHER INFORMATION CONTACT:

          D. Brad Akers, Air Regulatory Management Section, Air Planning and Implementation Branch, Air and Radiation Division, U.S. Environmental Protection Agency, Region 4, 61 Forsyth Street SW, Atlanta, Georgia 30303-8960. Mr. Akers can be reached via electronic mail at akers.brad@epa.gov or via telephone at (404) 562-9089.

        SUPPLEMENTARY INFORMATION:
        I. What action is EPA proposing?
        EPA is proposing to approve changes to the Jefferson County portion of the Kentucky SIP that were provided to EPA through DAQ via a letter dated September 5, 2019.1

           EPA is proposing to approve the changes to Jefferson County's Regulation 1.04, Performance Tests.
          2
           The September 5, 2019, SIP revision first makes minor changes to Regulation 1.04 that do not alter the meaning of the regulation such as clarifying changes to its notification requirements under the SIP. In addition, other changes strengthen the SIP by adding a specific reporting requirement to communicate results from any required performance testing. The SIP revision updates the current SIP-approved version of Regulation 1.04 (Version 6) to Version 7. The changes to this rule and EPA's rationale for proposing approval are described in more detail in Section II of this notice of proposed rulemaking.

            1 In 2003, the City of Louisville and Jefferson County governments merged and the “Jefferson County Air Pollution Control District” was renamed the “Louisville Metro Air Pollution Control District.” See The History of Air Pollution Control in Louisville, available at https://louisvilleky.gov/government/air-pollution-control-district/history-air-pollution-control-louisville. However, each of the regulations in the Jefferson County portion of the Kentucky SIP still has the subheading “Air Pollution Control District of Jefferson County.” Thus, to be consistent with the terminology used in the SIP, we refer throughout this notice to regulations contained in the Jefferson County portion of the Kentucky SIP as the “Jefferson County” regulations.

            2 EPA notes that the Agency received several submittals revising the Jefferson County portion of the Kentucky SIP transmitted with the same September 5, 2019, cover letter. EPA will be considering action for these other SIP revisions in separate rulemakings.

        II. EPA's Analysis of the Commonwealth's Submittal

        As mentioned in Section I of this proposed action, the September 5, 2019, SIP revision that EPA is proposing to approve makes changes to Jefferson County Air Quality Regulations at Regulation 1.04, Performance Tests. The changes to Section 2, Test Requirements, makes several ministerial language changes throughout to include “the Administrator of the EPA” in place of “EPA” 3

           and similar minor edits which do not alter the meaning of the regulation. As approved into the SIP before this revision, EPA has a role in approving alternative testing procedures, including changes in methodology or equivalent methods for use. In some instances, the Administrator of the EPA is now included where the provision only referred previously to the District. Specifically, the changes clarify that that EPA has the authority to require or conduct performance testing in addition to the District. Section 2 is then modified to move a noticing requirement ahead of starting testing to Section 3, Testing Notification, to streamline the regulation. This change also results in renumbering of the remainder of Section 2.

            3 EPA is proposing to approve the SIP revision with the understanding that these provisions referencing the “Administrator of the EPA” include any EPA official with the delegated authority to take the actions described in Section 2.

        Section 2 is also modified with additional language under 2.10 to describe the limited circumstances under which a person conducting a test may halt the test in progress. This language allows for halting the test only if: (1) There is a forced shutdown; (2) there is failure of an irreplaceable portion of the sampling train; (3) there are extreme meteorological conditions; or (4) there are unforeseen circumstances beyond the owner's or operator's control. Next, halting a test is specifically not allowed for the purpose of adjusting the parameters of the performance test. SIP-approved Section 2.11 already lists items 2.10.1—2.10.3 as potential causes of halting a test run. Therefore, the changes to Section 2.10 are intended to clarify when it is appropriate to halt a test run and when it is not allowed. Importantly, all data, including from halted test runs, is required to be reported in newly added Section 5. EPA proposes that these changes to Section 2 are clarifying and minor in nature.
        Section 3, Testing Notification, is modified first by reorganizing the section. Section 3.1 is moved from former 3.1.1, and the requirement to submit an intent to test at least 25 working days ahead of the projected start of a performance test is modified to require a test protocol at least 30 calendar days ahead of the projected start. These changes are clarifying and strengthening in nature, requiring a full test protocol—which Jefferson County describes as a site-specific testing plan—rather than an intent to test. Section 3.2 is modified to note that a pre-test conference may be arranged, but is not required. This conference is no longer specifically necessary since Section 3.1 now requires further advance notice of the performance test along with a site-specific testing protocol. Section 3.2 is also changed to remove the requirement that a pre-test “survey,” which was undefined, must accompany the conference. This requirement is superseded with the requirement to submit a protocol under 3.1. Next, Section 3.3 is added to include the 10-day notification of the intent to test to the District that was previously included in Section 2. EPA preliminarily finds these changes to Section 3 to be administrative, minor, and clarifying in nature.
        Section 4, Notification Waiver, is modified to correct a typographical error, restructure and renumber a provision, and eliminate language which is no longer necessary. The pre-test survey previously referenced in Section 4.2 is no longer required by Section 3 and is removed accordingly from the list of items for which notification is waived in the case of an emergency or malfunction.

        Finally, the September 5, 2019, SIP revision adds Section 5, Test Report, to provide specific instruction on submitting a final test report following the test. Section 5.1 provides that a report shall be submitted within 60 days of the completion of any performance test, and Section 5.2 provides that the report shall include all data, including any data from aborted or rejected test runs and any other specified data in the test protocol. EPA proposes that the submission of a report at the end of a performance test is appropriate for communicating the results of any required testing pursuant to Regulation 1.04, and that the inclusion of Section 5 in the SIP is SIP-strengthening.
        These rule changes do not change any applicable emissions limitations or relax requirements for affected sources. EPA proposes that the changes serve to strengthen and clarify the SIP. Therefore, EPA has made the preliminary determination that the aforementioned changes will not have a negative impact on air quality in the area and is therefore proposing to approve Version 7 of Regulation 1.04 into the Jefferson County portion of the Kentucky SIP.
        III. Incorporation by Reference

        In this document, EPA is proposing to include in a final EPA rule regulatory text that includes incorporation by reference. In accordance with requirements of 1 CFR 51.5, EPA is proposing to incorporate by reference Jefferson County's Regulation 1.04, Performance Tests, Version 7, state effective June 19, 2019, which makes minor and ministerial changes for consistent language throughout the regulation and includes a new requirement for submitting reports on the conducted performances tests. EPA has made, and will continue to make, these materials generally available through www.regulations.gov and at the EPA Region 4 office (please contact the person identified in the “For Further Information Contact” section of this preamble for more information).
        IV. Proposed Action
        EPA is proposing to approve changes to the Jefferson County portion of the Kentucky SIP included in a September 5, 2019, SIP revision. Specifically, EPA is proposing to approve the District's Regulation 1.04 Version 7 into the SIP. The September 5, 2019, SIP revision makes minor and ministerial changes for consistent language throughout the regulation and includes a new requirement for submitting reports on the conducted performances tests. EPA believes these changes are consistent with the Clean Air Act (CAA or Act), and this rule adoption will not impact the national ambient air quality standards or interfere with any other applicable requirement of the Act.
        V. Statutory and Executive Order Reviews

        Under the CAA, the Administrator is required to approve a SIP submission that complies with the provisions of the Act and applicable Federal regulations. See 42 U.S.C. 7410(k); 40 CFR 52.02(a). Thus, in reviewing SIP submissions, EPA's role is to approve state choices, provided that they meet the criteria of the CAA. This action merely proposes to approve state law as meeting Federal requirements and does not impose additional requirements beyond those imposed by state law. For that reason, this proposed action:
        • Is not a significant regulatory action subject to review by the Office of Management and Budget under Executive Orders 12866 (58 FR 51735, October 4, 1993) and 13563 (76 FR 3821, January 21, 2011);
        • Is not an Executive Order 13771 (82 FR 9339, February 2, 2017) regulatory action because SIP approvals are exempted under Executive Order 12866;

        • Does not impose an information collection burden under the provisions of the Paperwork Reduction Act (44 U.S.C. 3501 et seq.);

        • Is certified as not having a significant economic impact on a substantial number of small entities under the Regulatory Flexibility Act (5 U.S.C. 601 et seq.);
        • Does not contain any unfunded mandate or significantly or uniquely affect small governments, as described in the Unfunded Mandates Reform Act of 1995 (Public Law 104-4);
        • Does not have Federalism implications as specified in Executive Order 13132 (64 FR 43255, August 10, 1999);
        • Is not an economically significant regulatory action based on health or safety risks subject to Executive Order 13045 (62 FR 19885, April 23, 1997);
        • Is not a significant regulatory action subject to Executive Order 13211 (66 FR 28355, May 22, 2001);
        • Is not subject to requirements of Section 12(d) of the National Technology Transfer and Advancement Act of 1995 (15 U.S.C. 272 note) because application of those requirements would be inconsistent with the CAA; and
        • Does not provide EPA with the discretionary authority to address, as appropriate, disproportionate human health or environmental effects, using practicable and legally permissible methods, under Executive Order 12898 (59 FR 7629, February 16, 1994).
        The SIP is not approved to apply on any Indian reservation land or in any other area where EPA or an Indian tribe has demonstrated that a tribe has jurisdiction. In those areas of Indian country, the rule does not have tribal implications as specified by Executive Order 13175 (65 FR 67249, November 9, 2000), nor will it impose substantial direct costs on tribal governments or preempt tribal law.

          List of Subjects in 40 CFR Part 52
          Environmental protection, Air pollution control, Incorporation by reference, Intergovernmental relations, Reporting and recordkeeping requirements.

          Authority:
          42 U.S.C. 7401 et seq.

          Mary Walker,
          Regional Administrator, Region 4.

      [FR Doc. 2020-08666 Filed 4-27-20; 8:45 am]
      BILLING CODE 6560-50-P


        DEPARTMENT OF DEFENSE
        GENERAL SERVICES ADMINISTRATION
        NATIONAL AERONAUTICS AND SPACE ADMINISTRATION
        48 CFR Parts 12, 13, 32, 33, 36, 42, and 52
        [FAR Case 2005-018]
        RIN: 9000-AK59: Docket 2006-0020; Sequence 11
        Federal Acquisition Regulation; FAR Case 2005-018, Contract Debts

          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 (Councils) are proposing to amend the Federal Acquisition Regulation (FAR) to revise the policies and procedures for contract debts.

          DATES:
           Interested parties should submit written comments to the FAR Secretariat on or before December 26, 2006 to be considered in the formulation of a final rule.

          ADDRESSES:
           Submit comments identified by FAR case 2005-018 by any of the following methods:
          • Federal eRulemaking Portal: http://www.regulations.gov. Search for any document by first selecting the proper document types and selecting “Federal Acquisition Regulation” as the agency of choice. At the “Keyword” prompt, type in the FAR case number (for example, FAR Case 2006-001) and click on the “Submit” button. You may also search for any document by clicking on the “Advanced search/document search” tab at the top of the screen, selecting from the agency field “Federal Acquisition Regulation”, and typing the FAR case number in the keyword field. Select the “Submit” button.
          • Fax: 202-501-4067.
          • Mail: General Services Administration, Regulatory Secretariat (VIR), 1800 F Street, NW, Room 4035, ATTN: Laurieann Duarte, Washington, DC 20405.

            Instructions: Please submit comments only and cite FAR case 2005-018 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. Jeremy Olson at (202) 501-3221 for clarification of content. For information pertaining to status or publication schedules, contact the FAR Secretariat at (202) 501-4755. Please cite FAR case 2005-018.

        SUPPLEMENTARY INFORMATION:
        A. Background
        In 2003, the DoD Comptroller established the DoD Accounts Receivable Workgroup to evaluate the processes and procedures for reporting accounts receivables. This Workgroup concluded that contracting officers may not be properly reporting contract debts. Based on the Workgroup’s recommendations, DoD established a Contract Debt Integrated Process Team (IPT).
        The mission of the IPT was to evaluate the adequacy of DoD’s existing controls and procedures for ensuring that contract debts are identified and recovered in a timely manner, properly accounted for in DoD’s books and records, and properly coordinated with the appropriate Government Officials. Contract debts result from compliance, or a failure to comply, with the terms of a contract and include debts identified by auditors, contracting officers, disbursing officials, and contractors. On May 26, 2005, a final report was issued that included a number of recommended FAR changes to improve contract debt controls and procedures, and to ensure consistency within/between existing regulations.
        The Councils established this case to evaluate the DoD recommendations. As a result of this review, the Councils are proposing the revisions discussed below. In addition, the Councils are considering whether the current provisions regarding interest provisions are sufficient. In particular, concerns have been expressed over the current timeline for computing interest. The Councils agreed to defer this issue for consideration to a later date (including a possible public meeting).
        1. Reorganize FAR Subpart 32.6. Reorganizes FAR Subpart 32.6 to add clarity and provide a logical sequence. The Subpart has been reorganized as follows:
        32.600 Scope of subpart.
        32.601 General.
        32.602 Responsibilities.
        32.603 Debt determination.
        32.604 Demand for payment.
        32.605 Final decisions.
        32.606 Debt collection.
        32.607 Installment payments and deferment of collection.
        32.607-1Installment payments.
        32.607-2Deferment of collection.
        32.608Interest.
        32.608-1Interest charges.
        32.608-2Interest credits.
        32.609 Delays in receipt of notices or demands.
        32.610 Compromising debts.
        32.611 Contract clause.
        2. Scope of Subpart. Revise FAR 32.600 to provide a more accurate description of the scope of this FAR subpart. FAR 32.6 prescribes policies and procedures for identifying, collecting, and deferring contract debts (including interest, if applicable).
        3. Responsible Official. Replace the term “responsible official” with the specific individual/organization responsible for fulfilling the FAR requirement. Some of the responsibilities currently listed are assigned to one individual/organization (e.g., the Procuring Contracting Officer) and other responsibilities are assigned to another individual/organization (e.g., the payment office). To assure a clear understanding of the process and applicable duties, the proposed rule specifies the responsible party for each required action(e.g., the Procuring Contracting Officer, the Administrative Contracting Officer, the payment office, etc.) rather than referring to all parties as “responsible officials.”
        4. Contract Debt - General. Revise FAR 32.601 to specify what constitutes a contract debt, rather than how a contract debt may arise. In addition, amend this section to include payments determined to be in excess of contract limitations for commercial financing, since such payments constitute a contract debt.
        5. Contract Debt Responsibilities - Identifying, Demanding Payment, Collecting, and Liquidating. Add a section to clearly define the responsibilities of the contracting officer and the payment officials to assure an efficient and non-duplicative process. Under the proposed rule the--

        (a) The contracting officer is responsible for identifying a contract debt and demanding payment of a contract debt. The contracting officer is prohibited from collecting contract debts or otherwise liquidating contract debts (e.g., offsetting the amount of the debt against existing unpaid bills due the contractor or allowing contractors to retain contract debts to cover amounts that may be payable to the contractor in the future).
        (b) The payment office is responsible for collecting payment of the contract debt and liquidating the contract debt.
        6. Contract Debt Determinations Consolidate all discussions of contract debt determinations in FAR 32.603, Debt Determinations, including the responsibility of the contracting officer in making debt determinations.
        7. Tax Credit. Delete the current FAR 32.607 because the referenced tax credit (Sec. 1481) was repealed on November 5, 1990, by Public Law 101-508.
        8. Demand for Payment. Consolidate all discussions of the demand for payment in a single section, at FAR 32.604, Demand for Payment to include:
        (a) A requirement to issue the demand letter except in specific circumstances.
        (b) A requirement that the demand letter include accounting information to enable the payment office to correctly record the amounts in the proper accounts.
        (c) A requirement that the demand letter include the amount of interest owed under statutes that require interest assessments from the date of noncompliance to the date of re-payment (CAS and TINA).
        (d) A paragraph implementing the requirements of 31 U.S.C. 3717(e)(1) and the Debt Collection Improvement Act of 1996; and
        (e) A paragraph addressing instances where overpayments exist but a demand for payment is not necessary.
        9. Final Decisions. Consolidate all discussions of final decisions in a single section at FAR 32.605, Final Decisions, to include:
        (a) When a final decision must be issued;
        (b) A statement that the due date for a demand letter is not extended simply because a final decision is being issued;
        (c) A need to obtain evidence of receipt by the contractor to establish the starting date for interest computations and the statute of limitations.
        10. Debt Collection. Consolidate all discussions of debt collection in a single section, at FAR 32.606, Debt Collection, to include:
        (a) The current requirements at 32.612;
        (b) The current requirements for transferring debts to the Department of Treasury; and
        (c) A requirement to assure the debt is being collected by maintaining communication between the contracting officer and the payment office.
        11. Installment Payments and Deferment of Collection. Clarify procedures for processing installment payments and deferment of collection requests.
        12. Interest. Consolidate and simplify all discussions of interest in a single section at FAR 32.608, Interest, to include:
        (a) The substance of the current language at 32.614;
        (b) Computing interest on overpayments.

        13. FAR 12.215 and 32.008 - Notification of Overpayment. Revise FAR 32.008 to specifically state the responsibilities of the contracting officer when notified by the contractor of a duplicate payment or that the Government has otherwise overpaid. In addition, amend FAR 12.215 to include reference to the requirement in FAR 32.604.
        14. FAR Contract Clauses - Payment. Revise the contract clauses at FAR 52.212-4(i)(5)and (6); 52.232-25(d); 52.232-26(c); and FAR 52.232-27(l) to assure that the contractor remits payment to the payment office (rather than the contracting officer) and the payment office is able to properly account for the remittance.
        15. FAR 52.232-17, Interest. Revise FAR 52.232-17 to conform with the other proposed revisions.
        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 regulatory changes are predominantly internal operating procedures for contracting officers and will not significantly change duties of small entities under their contracts. 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(s) 12, 13, 32, 33, 36, 42, and 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 2005-018), 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. 3501, et seq.

          List of Subjects in 48 CFR Parts 12, 13, 32, 33, 36, 42, and 52

        Government procurement.

          Dated: October 6, 2006.
          Ralph De Stefano,
          Director, Contract Policy Division.

        Therefore, DoD, GSA, and NASA propose amending 48 CFR parts 12, 13, 32, 33, 36, 42, and 52  as set forth below:
        1. The authority citation for 48 CFR parts 12, 13, 32, 33, 36, 42, and 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).

          PART 12—ACQUISITION OF COMMERCIAL ITEMS
          2. Revise section 12.215 to read as follows:

            12.215
            Notification of Overpayment.
            If the contractor notifies the contracting officer of a duplicate payment or that the Government has otherwise overpaid, the contracting officer shall follow the procedures at 32.604.

          PART 13—SIMPLIFIED ACQUISITION PROCEDURES
          3. Revise section 13.401 (b) to read as follows:

            13.401
            General.
            (b) The contracting officer shall be primarily responsible for determining the amount of debts resulting from failure of contractors to properly replace, repair, or correct supplies lost, damaged, or not conforming to purchase requirements (see 32.602 and 32.603).

          PART 32—CONTRACT FINANCING

        4. Revise section 32.008 to read as follows:

          32.008
          Notification of Overpayment.
          If the contractor notifies the contracting officer of a duplicate payment or that the Government has otherwise overpaid, the contracting officer shall follow the procedures at 32.604.
          5. Revise subpart 32.6 to read as follows:

              Subpart 32.6—Contract Debts
              Sec.
              32.600
              Scope of subpart.
              32.601
              General.
              32.602
              Responsibilities.
              32.603
              Debt determination.
              32.604
              Demand for payment.
              32.605
              Final decisions.
              32.606
              Debt collection.
              32.607
              Installment payments and deferment of collection.
              32.607-1
              Installment payments.
              32.607-2
              Deferment of collection.
              32.608
              Interest.
              32.608-1
              Interest charges.
              32.608-2
              Interest credits.
              32.609
              Delays in receipt of notices or demands.
              32.610
              Compromising debts.
              32.611
              Contract clause.

          32.600
          Scope of Subpart.

        This subpart prescribes policies and procedures for identifying, collecting, and deferring contract debts(including interest, if applicable). Sections 32.607, 32.608, and 32.610 of this subpart do not apply to claims against common carriers for transportation overcharges and freight and cargo losses (31 U.S.C. 3726).

          32.601
          General.

        (a) Contract debts are amounts that—
        (1) Have been paid to a contractor to which the contractor is not currently entitled under the terms and conditions of the contract; or
        (2) Are otherwise due from the contractor under the terms and conditions of the contract.(b) Contract debts include, but are not limited to, the following:
        (1) Billing and price reductions resulting from contract terms for price redetermination or for determination of prices under incentive type contracts.
        (2) Price or cost reductions for defective cost or pricing data.
        (3) Financing payments determined to be in excess of the contract limitations at 52.232-16(a)(7), Progress Payments, or 52.232-32(d)(2), Performance-Based Payments, or any contract clause for commercial item financing.
        (4) Increases to financing payment liquidation rates.
        (5) Overpayments disclosed by quarterly statements required under price redetermination or incentive contracts.
        (6) Price adjustments resulting from Cost Accounting Standards (CAS) noncompliances or changes in cost accounting practice.
        (7) Reinspection costs for nonconforming supplies or services.
        (8) Duplicate or erroneous payments.
        (9) Damages or excess costs related to defaults in performance.
        (10) Breach of contract obligations concerning progress payments, performance based payments, advance payments, commercial item financing, or Government-furnished property.
        (11) Government expense of correcting defects.
        (12) Overpayments related to errors in quantity or billing or deficiencies in quality.

        (13) Delinquency in contractor payments due under agreements or arrangements for deferral or postponement of collections.

        (14) Reimbursement of amounts due under 33.102(b)(3) and 33.104(h)(8).

          32.602
          Responsibilities.

          (a) The contracting officer has primary responsibility for identifying and demanding payment of contract debts except those resulting from errors made by the payment office. The contracting officer shall not collect contract debts or otherwise agree to liquidate contract debts (e.g. offset the amount of the debt against existing unpaid bills due the contractor, or allow contractors to retain contract debts to cover amounts that may become payable in future periods.
          (b) The payment office has primary responsibility for—
          (1) Collecting contract debts identified by contracting officers;
          (2) Identifying and collecting duplicate and erroneous payments; and
          (3) Authorizing the liquidation of contract debts in accordance with agency procedures.

          32.603
           Debt determination.
          (a) If the contracting officer has any indication that a contractor owes money to the Government under a contract, the contracting officer shall determine promptly whether an actual debt is due and the amount. Any unnecessary delay may contribute to—
          (1) Loss of timely availability of the funds to the program for which the funds were initially provided;
          (2) Increased difficulty in collecting the debt; or
          (3) Actual monetary loss to the Government.
          (b) The amount of indebtedness determined unilaterally by the contracting officer shall be an amount that—
          (1) Is based on the merits of the case; and
          (2) Is consistent with the contract terms.

          32.604
          Demand for payment.

        (a) Except as provided in paragraph (c) of this section, the contracting officer shall take the following actions:
        (1) Issue the demand for payment as soon as the contracting officer has determined that an actual debt is due the Government and the amount.
        (2) Issue a demand for payment even if—
        (i) The debt is or will be the subject of a bilateral modification;
        (ii) The contractor is otherwise obligated to pay the money under the existing contract terms; or
        (iii) The contractor has agreed to repay the debt.
        (3) Issue the demand for payment as a part of the final decision, if a final decision is required by 32.605(a).
        (b) The demand for payment shall include the following:
        (1) A description of the debt, including the debt amount.
        (2) A distribution of the principal amount of the debt by line(s) of accounting subject to the following:
        (i) If the debt affects multiple lines of accounting, the contracting officer shall, to the maximum extent practicable, identify all affected lines of accounting. If it is not practicable to identify all affected lines of accounting, the contracting officer may select representative lines of accounting in accordance with paragraph (b)(2)(ii) of this section.
        (ii) In selecting representative lines of accounting, the contracting officer shall—
        (A) Consider the affected departments or agencies, years of appropriations, and the predominant types of appropriations;
        (B) Not distribute to any line of accounting an amount of the principal in excess of the total obligation for the line of accounting; and
        (iii) Include the lines of accounting even if the associated funds are expired or cancelled. While cancelled funds will be deposited in a miscellaneous receipt account of the Treasury if collected, the funds are tracked under the closed year appropriation(s) to comply with the Anti-Deficiency Act.
        (iv) If the debt affects multiple contracts and the lines of accounting are not readily available, the contracting officer shall—
        (A) Issue the demand for payment without the distribution of the principal amount to the affected lines of accounting;
        (B) Include a statement in the demand for payment advising when the distribution will be provided; and
        (C) Provide the distribution by the date identified in the demand for payment.
        (3) The basis for and amount of any accrued interest or penalty.
        (4)(i) For debts resulting from specific contract terms (e.g., debts resulting from incentive clause provisions, Quarterly Limitation on Payments Statement, Cost Accounting Standards, price reduction for defective pricing), a notification stating that payment should be made promptly, and that interest is due in accordance with the terms of the contract. Interest shall be computed from the date specified in the applicable contract clause until repayment by the contractor. The interest rate shall be the rate specified in the applicable contract clause.
        (ii) For all other contract debts, a notification stating that any amounts not paid within 30 days from the date of the demand for payment will bear interest. Interest shall be computed from the date of the demand for payment until repayment by the contractor. The interest rate shall be the interest rate established by the Secretary of the Treasury, as provided in Section 611 of the Contract Disputes Act of 1978 (Public Law 95-563), which is applicable to the period in which the amount becomes due, and then at the rate applicable for each six-month period as established by the Secretary until the amount is paid.
        (iii) In the case of a debt arising from a price reduction for defective pricing, or as specifically set forth in a Cost Accounting Standards (CAS) clause in the contract, interest is computed from the date of overpayment by the Government until repayment by the contractor at the underpayment rate established by the Secretary of the Treasury, for the periods affected, under 26 U.S.C. 6621(a)(2).
        (5) A statement advising the contractor—
        (i) To contact the contracting officer if the contractor believes the debt is invalid or the amount is incorrect; and
        (ii) To remit a check payable to the “Treasurer of the United States” annotated with the contract number along with a copy of the demand for payment to the payment office identified in the contract or as otherwise specified in the demand letter in accordance with agency procedures.
        (6) Notification that the payment office may offset the debt against any payments otherwise due the contractor.
        (7) Notification that the debt is subject to administrative charges in accordance with the requirements of 31 U.S.C. 3717(e) and the Debt Collection Improvement Act of 1996.
        (8) A notification that the contractor may submit a request for installment payments or deferment of collection if immediate payment is not practicable or if the amount is disputed.
        (c) Except as provided in paragraph (d) of this section, the contracting officer should not issue a demand for payment if the contracting officer only becomes aware of the debt when the contractor—
        (1) Provides a lump sum payment or submits a credit invoice. (A credit invoice is a contractor’s request to liquidate the debt against existing unpaid bills due the contractor); or

        (2) Notifies the contracting officer that the payment office overpaid on an invoice payment. When the contractor provides the notification, the contracting officer shall notify the payment office of the overpayment.

        (d) If a demand for payment was not issued as provided for in paragraph (c) of this section, the contracting officer shall issue a demand for payment no sooner than 30 days after the contracting officer becomes aware of the debt unless—
        (i) The contractor has liquidated the debt;
        (ii) The contractor has requested an installment payment agreement; or
        (iii) The payment office has issued a demand for payment.
        (e) The contracting officer shall—
        (1) Furnish a copy of the demand for payment to the contractor by certified mail, return receipt requested, or by any other method that provides evidence of receipt; and
        (2) Forward a copy of the demand to the payment office.

          32.605
          Final decisions.
          (a) The contracting officer shall issue a final decision as required by 33.211 if-
          (1) The contracting officer and the contractor are unable to reach agreement on the existence or amount of a debt in a timely manner;
          (2) The contractor fails to liquidate a debt previously demanded by the contracting officer within the timeline specified in the demand for payment unless the amounts were not repaid because the contractor has requested an installment payment agreement; or
          (3) The contractor requests a deferment of collection on a debt previously demanded by the contracting officer (see 32.607-2).
          (b) If a demand for payment was previously issued for the debt, the demand for payment included in the final decision shall identify the same due date as the original demand for payment.
          (c) The contracting officer shall-
          (1) Furnish the decision to the contractor by certified mail, return receipt requested, or by any other method that provides evidence of receipt; and
          (2) Forward a copy to the payment office identified in the contract.

          32.606
          Debt collection.
          (a) If the contractor has not liquidated the debt within 30 days of the date due or requested installment payments or deferment of collection, the payment office initiates withholding of principal, interest, penalties, and administrative charges. In the event the contract is assigned under the Assignment of Claims Act of 1940 (31 U.S.C. 3727 and 41 U.S.C. 15), the rights of the assignee will be scrupulously respected and withholding of payments shall be consistent with those rights. For additional information on assignment of claims, see Subpart 32.8.
          (b) As provided for in the Debt Collection Improvement Act of 1996, payment offices are required to transfer any debt that is delinquent more than 180 days to the Department of Treasury for collection.
          (c) The contracting officer shall periodically follow up with the payment office to determine whether the debt has been collected and credited to the correct appropriation(s).

          32.607
          Installment payments and deferment of collection.

        (a) The contracting officer shall not approve or deny a contractor’s request for installment payments or deferment of collections. The office designated in agency procedures is responsible for approving or denying requests for installment payments or deferment of collections.
        (b) If a contractor has not appealed the debt or filed an action under the Disputes clause of the contract and the contractor has submitted a proposal for debt deferment or installment payments-
        (1) The office designated in agency procedures may arrange for deferment/installment payments if the contractor is unable to pay at once in full or the contractor’s operations under national defense contracts would be seriously impaired. The arrangement shall include appropriate covenants and securities and should be limited to the shortest practicable maturity; and
        (2) The deferment/installment agreement shall include a specific schedule or plan for payment. It should permit the Government to make periodic financial reviews of the contractor and to require payments earlier than required by the agreement if the Government considers the contractor’s ability to pay improved. It should also provide for required stated or measurable payments on the occurrence of specific events or contingencies that improve the contractor’s ability to pay.
        (c) If not already applicable under the contract terms, interest on contract debt shall be made an element of any agreement entered into an installment payment or deferment of collection agreement.

          32.607-1
          Installment payments.

        If a contractor requests an installment payment agreement, the contracting officer shall notify the contractor to send a written request for installment payments to the office designated in agency procedures.

          32.607-2
          Deferment of collection.

        (a) All requests for deferment of collection must be submitted in writing to the contracting officer.
        (1) If the contractor has appealed the debt under the procedures of the Disputes clause of the contract, the information with the request for deferment may be limited to an explanation of—
        (i) The contractor’s financial condition; and
        (ii) Whether deferment of the debt collection is advisable to avoid possible overcollection.
        (2) If there is no appeal pending or action filed under the Disputes clause of the contract, the following information about the contractor should be submitted with the request:
        (i) Financial condition.
        (ii) Contract backlog.
        (iii) Projected cash receipts and requirements.
        (iv) The feasibility of immediate payment of the debt.
        (v) The probable effect on operations of immediate payment in full.
        (vi) Whether deferment of the debt collection is advisable to avoid possible over collection.
        (b) Upon receipt of the contractor’s written request, the contracting officer shall promptly provide a notification to the payment office and advise the payment office that the contractor’s request is under consideration. Prompt notification is required to ensure that the payment office does not begin collection while the deferment request is being considered.
        (c)(1) The contracting officer shall forward the following to the office designated in agency procedures for a decision:
        (i) A copy of the contractor’s request for a deferment of collection.
        (ii) A written recommendation on the request and the basis for the recommendation including the advisability of deferment to avoid possible overcollections.
        (iii) A statement as to whether the contractor has an appeal pending or action filed under the Disputes clause of the contract and the docket number if the appeal has been filed.
        (iv) A copy of the contracting officer’s final decision (see 32.605).
        (2) The contracting officer should consider any information necessary to develop a recommendation on the deferment request.

        (d) The office designated in agency procedures may authorize a deferment pending the resolution of appeal to avoid possible overcollections. The agency is required to use current year unexpired funds to pay interest on overcollections.

        (e) Deferments pending disposition of appeal may be granted to small business concerns and financially weak contractors, with a reasonable balance of the need for Government security against loss and undue hardship on the contractor.
        (f) Contracts and arrangements for deferment shall not provide that a claim of the Government will not become due and payable pending mutual agreement on the amount of the claim or, in the case of a dispute, until the decision is reached.
        (g) At a minimum, the deferment agreement shall contain the following:
        (1) A description of the debt.
        (2) The date of first demand for payment.
        (3) Notice of an interest charge, in conformity with FAR 32.608 and the FAR clause at 52.232-17, Interest; or, in the case of a debt arising from a defective pricing or a CAS noncompliance overpayment, interest, as prescribed by the applicable Price Reduction for Defective Cost or Pricing Data or CAS clause.
        (4) Identification of the office to which the contractor is to send debt payments.
        (5) A requirement for the contractor to submit financial information requested by the Government and for reasonable access to the contractor’s records and property by Government representatives.
        (6) Provision for the Government to terminate the deferment agreement and accelerate the maturity of the debt if the contractor defaults or if bankruptcy or insolvency proceedings are instituted by or against the contractor.
        (7) Protective requirements that are considered by the Government to be prudent and feasible in the specific circumstances. The coverage of protective terms at 32.409 and 32.501-5 may be used as a guide.
        (h) If a contractor appeal of the debt determination is pending, the deferment agreement shall also include a requirement that the contractor shall —;
        (1) Diligently prosecute the appeal; and
        (2) Pay the debt in full when the appeal is decided, or when the parties reach agreement on the debt amount.
        (i) The deferment agreement may provide for the right to make early payments without prejudice, for refund of overpayments, and for crediting of interest.
        (j) Actions filed by contractors under the Disputes clause shall not suspend or delay collection. Until the action is decided, deferments shall only be granted if, within 30 days after the filing of such action, the contractor presents to the office designated in agency procedures a good and sufficient bond, or other acceptable collateral, in the amount of the claim, and the deferment is approved by the office designated in agency procedures. Any amount collected by the Government in excess of the amount found to be due on appeal under the Disputes clause of the contract shall be refunded to the contractor with interest thereon from the date of collection by the Government until the date the monies are remitted to the contractor at the annual rate established by the Secretary of Treasury under Public Law 92-41. Simple interest shall be calculated to reflect each 6-month period change in the rates established by the Secretary.

          32.608
          Interest.

          32.608-1
          Interest charges.
          (a) Unless specified otherwise in the FAR clause at 52.232-17—
          (1) Interest charges shall apply to any contract debt unpaid after 30 days from the issuance of a demand for payment or from any earlier date specified in the contract unless—
          (i) The contract is a kind excluded under 32.611; or
          (ii) The contract or debt has been exempted from interest charges under agency procedures.
          (2) The interest charge shall be at the rate established by the Secretary of the Treasury under Public Law 92-41 for the period in which the amount becomes due. The interest charge shall be computed for the actual number of calendar days involved beginning on the due date and ending on—
          (i) The date on which the designated office receives payment from the contractor;
          (ii) The date of issuance of a Government check to the contractor from which an amount otherwise payable has been withheld as a credit against the contract debt; or
          (iii) The date on which an amount withheld and applied to the contract debt would otherwise have become payable to the contractor.
          (b) If not already applicable under the contract terms, interest on contract debt shall be made an element of any agreement entered into on installment payment and deferment of collection agreements.

          32.608-2
          Interest credits.
          (a) An equitable interest credit shall be applied under the following circumstances:

          (1) When the amount of debt initially determined is subsequently reduced; e.g., through a successful appeal.
          (2) When the collection procedures followed in a given case result in an over collection of the debt due.
          (3) When the responsible official determines that the Government has unduly delayed payments to the contractor on the same contract at some time during the period to which the interest charge applied, provided an interest penalty was not paid for such late payment.
          (b) Any appropriate interest credits shall be computed under the following procedures:
          (1) Interest at the rate under paragraph (b) of the FAR clause at 52.232-17 and 32.608-1(a)(2) shall be charged on the reduced debt from the date specified in the first demand made for payment of the higher debt.
          (2) Interest may not be reduced for any time between the due date under the demand and the period covered by a deferment of collection, unless the contract includes an interest clause; e.g., the clause prescribed in 32.611.
          (3) Interest shall not be credited in an amount that, when added to other amounts refunded or released to the contractor, exceeds the total amount that has been collected, or withheld for the purpose of collecting the debt. This limitation shall be further reduced by the amount of any limitation applicable under paragraph (b)(2) of this subsection.

          32.609
          Delays in receipt of notices or demands.

        If interest is accrued based on the date of the demand letter and delivery of the demand letter is delayed by the Government (e.g., undue delay after dating at the originating office or delays in the mail), the date of the debt and accrual of interest shall be extended to a time that is fair and reasonable under the particular circumstances.

          32.610
          Compromising debts.

        For debts under $100,000, excluding interest, if further collection is not practicable or would cost more than the amount of recovery, the designated agency official may compromise the debt. Compromise is authorized by the Federal Claims Collection Act (31 U.S.C. 3711). Compromise shall conform to Federal Claims Collection Standards 31 CFR part 900), and agency regulations. Unless specifically authorized by agency procedures, contracting officers can not compromise debts.

          32.611
          Contract clause.

        (a) The contracting officer shall insert the clause at 52.232-17, Interest, in solicitations and contracts unless it is contemplated that the contract will be in one or more of the following categories:
        (1) Contracts at or below the simplified acquisition threshold.
        (2) Contracts with Government agencies.
        (3) Contracts with a State or local government or instrumentality.
        (4) Contracts with a foreign government or instrumentality.
        (5) Contracts without any provision for profit or fee with a nonprofit organization.
        (6) Contracts described in Subpart 5.5, Paid Advertisements.
        (7) Any other exceptions authorized under agency procedures.
        (b) The contracting officer may insert the FAR clause at 52.232-17, Interest, in solicitations and contracts when it is contemplated that the contract will be in any of the categories specified in 32.611(a).

          PART 33—PROTESTS, DISPUTES, AND APPEALS

          33.208
          [Amended]

        6. Amend section 33.208(b) by removing “32.614’ and adding “32.608” in its place.

          33.211
          [Amended]

        7. Amend section 33.211(a)(vi)by removing “32.610(b)” and adding “32.604 and 32.605” in its place.

          PART 36—CONSTRUCTION AND ARCHITECT-ENGINEER CONTRACTS

          36.608
           [Amended]
          8. Amend section 36.608 in the fourth sentence by removing “collect” and adding “issue a demand for payment of the amount due” in its place.

          PART 42—CONTRACT ADMINISTRATION AND AUDIT SERVICES

        9. Amend section 42.302 by revising paragraph (a)(17) to read as follows:

          42.302
          Contract administration functions.

        (a) *  * *
        (17) Analyze quarterly limitation on payments statements and take action in accordance with Subpart 32.6 to recover overpayments from the contractor.

          PART 52—SOLICITATION PROVISIONS AND CONTRACT CLAUSES

        10. Amend section 52.212-4 by revising the date of the clause and paragraph (i)(5); and adding paragraph (i)(6) to read as follows:

          52.212-4
          Contract Terms and Conditions—Commercial Items.

          CONTRACT TERMS AND CONDITIONS—COMMERCIAL ITEMS-(DATE)

        (i) * * *
        (5) Overpayments. If the Contractor becomes aware of a duplicate contract financing or invoice payment or that the Government has otherwise overpaid on a contract financing or invoice payment, the Contractor shall take the following actions:
        (i) Remit the overpayment amount to the payment office cited in the contract along with a description of the overpayment including the—
        (A) Circumstances of the overpayment (e.g., duplicate payment, erroneous payment, liquidation errors, date(s) of overpayment);
        (B) Affected contract number and delivery order number if applicable;
        (C) Affected contract line item or subline item, if applicable; and
        (D) Contractor point of contact.
        (ii) Provide a copy of the remittance and supporting documentation to the Contracting Officer.
        (6) Interest. (i) All amounts that become payable by the Contractor to the Government under this contract shall bear simple interest from the date due until paid unless paid within 30 days of becoming due. The interest rate shall be the interest rate established by the Secretary of the Treasury as provided in Section 611 of the Contract Disputes Act of 1978 (Public Law 95-563), which is applicable to the period in which the amount becomes due, as provided in paragraph (b) of this clause and then at the rate applicable for each six-month period as fixed by the Secretary until the amount is paid.
        (ii) Amounts shall be due at the earliest of the following dates:
        (A) The date fixed under this contract.
        (B) The date of the first written demand for payment consistent with this contract, including any demand for payment resulting from a default termination.
        (iii) The interest charge shall be computed for the actual number of calendar days involved beginning on the due date and ending on—
        (A) The date on which the designated office receives payment from the Contractor;
        (B) The date of issuance of a Government check to the Contractor from which an amount otherwise payable has been withheld as a credit against the contract debt; or
        (C) The date on which an amount withheld and applied to the contract debt would otherwise have become payable to the Contractor.
        (iv) The interest charge made under this clause may be reduced under the procedures prescribed in 32.608-2 of the Federal Acquisition Regulation in effect on the date of this contract.
        11. Revise section 52.232-17 to read as follows:

          52.232-17
          Interest.

        As prescribed in 32.611(a) and (b), insert the following clause:

          INTEREST (DATE)

        (a) Except as otherwise provided in this contract under a Price Reduction for Defective Cost or Pricing Data clause or a Cost Accounting Standards clause, all amounts that become payable by the Contractor to the Government under this contract shall bear simple interest from the date due until paid unless paid within 30 days of becoming due. The interest rate shall be the interest rate established by the Secretary of the Treasury as provided in Section 611 of the Contract Disputes Act of 1978 (Public Law 95-563), which is applicable to the period in which the amount becomes due, as provided in paragraph (b) of this clause, and then at the rate applicable for each six-month period as fixed by the Secretary until the amount is paid.
        (b) Amounts shall be due at the earliest of the following dates:
        (1) The date fixed under this contract.
        (2) The date of the first written demand for payment consistent with this contract, including any demand for payment resulting from a default termination.
        (c) The interest charge shall be computed for the actual number of calendar days involved beginning on the due date and ending on—
        (1) The date on which the designated office receives payment from the Contractor;
        (2) The date of issuance of a Government check to the Contractor from which an amount otherwise payable has been withheld as a credit against the contract debt; or
        (3) The date on which an amount withheld and applied to the contract debt would otherwise have become payable to the Contractor.
        (d) The interest charge made under this clause may be reduced under the procedures prescribed in 32.608-2 of the Federal Acquisition Regulation in effect on the date of this contract.
        12. Amend section 52.232-25 by revising the date of the clause and paragraph (d) to read as follows:

          52.232-25
          Prompt Payment.

          PROMPT PAYMENT (DATE)

        (d) Overpayments. If the Contractor becomes aware of a duplicate contract financing or invoice payment or that the Government has otherwise overpaid on a contract financing or invoice payment, the Contractor shall—
        (1) Remit the overpayment amount to the payment office cited in the contract along with a description of the overpayment including the—
        (i) Circumstances of the overpayment (e.g., duplicate payment, erroneous payment, liquidation errors, date(s) of overpayment);
        (ii) Affected contract number and delivery order number if applicable;
        (iii) Affected contract line item or subline item, if applicable; and
        (iv) Contractor point of contact.
        (2) Provide a copy of the remittance and supporting documentation to the Contracting Officer.

          (End of clause)

        13. Amend section 52.232-26 by revising the date of the clause and paragraph (c) to read as follows:

          52.232-26
          Prompt Payment for Fixed-Price Architect-Engineer Contracts.

          PROMPT PAYMENT FOR FIXED-PRICE ARCHITECT-ENGINEER CONTRACTS (DATE)

        (c) Overpayments. If the Contractor becomes aware of a duplicate contract financing or invoice payment or that the Government has otherwise overpaid on a contract financing or invoice payment, the Contractor shall—
        (1) Remit the overpayment amount to the payment office cited in the contract along with a description of the overpayment including the—
        (i) Circumstances of the overpayment (e.g., duplicate payment, erroneous payment, liquidation errors, date(s) of overpayment);
        (ii) Affected contract number and delivery order number if applicable;
        (iii) Affected contract line item or subline item, if applicable; and
        (iv) Contractor point of contact.
        (2) Provide a copy of the remittance and supporting documentation to the Contracting Officer.

          (End of clause)

        14. Amend section 52.232-27 by revising the date of the clause and paragraph (l) to read as follows:

          52.232-27
          Prompt Payment for Construction Contracts.

          PROMPT PAYMENT FOR CONSTRUCTION CONTRACTS (DATE)

        (l) Overpayments. If the Contractor becomes aware of a duplicate contract financing or invoice payment or that the Government has otherwise overpaid on a contract financing or invoice payment, the Contractor shall—
        (1) Remit the overpayment amount to the payment office cited in the contract along with a description of the overpayment including the—
        (i) Circumstances of the overpayment (e.g., duplicate payment, erroneous payment, liquidation errors, date(s) of overpayment);
        (ii) Affected contract number and delivery order number if applicable;
        (iii) Affected contract line item or subline item, if applicable; and
        (iv) Contractor point of contact.
        (2) Provide a copy of the remittance and supporting documentation to the Contracting Officer.

          (End of clause)

      [FR Doc. 06-8806 Filed 10-23-06; 8:45 am]
      BILLING CODE 6820-EP-S