[Federal Register Volume 70, Number 109 (Wednesday, June 8, 2005)]
[Rules and Regulations]
[Pages 33659-33660]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 05-11188]


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DEPARTMENT OF DEFENSE

GENERAL SERVICES ADMINISTRATION

NATIONAL AERONAUTICS AND SPACE ADMINISTRATION

48 CFR Part 15

[FAC 2005-04; FAR Case 2004-035; Item IV]
RIN 9000-AK17


Federal Acquisition Regulation; Submission of Cost or Pricing 
Data on Noncommercial Modifications of Commercial Items

AGENCIES:  Department of Defense (DoD), General Services Administration 
(GSA), and National Aeronautics and Space Administration (NASA).

ACTION:  Interim rule with request for comments.

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SUMMARY:  The Civilian Agency Acquisition Council and the Defense 
Acquisition Regulations Council (Councils) have agreed on an interim 
rule amending the Federal Acquisition Regulation (FAR) regarding 
prohibition on obtaining cost or pricing data to implement Section 818 
of Public Law 108-375, the Ronald W. Reagan National Defense 
Authorization Act for Fiscal Year 2005.

DATES: Effective Date: June 8, 2005.
    Comment Date: Interested parties should submit comments to the FAR 
Secretariat at the address shown below on or before August 8, 2005 to 
be considered in the formulation of a final rule.

ADDRESSES:  Submit comments identified by FAC 2005-04, FAR case 2004-
035, by any of the following methods:
     Federal eRulemaking Portal: http://www.regulations.gov. 
Follow the instructions for submitting comments.
     Agency Web Site: http://www.acqnet.gov/far/ProposedRules/proposed.htm. Click on the FAR case number to submit comments.
     E-mail: [email protected]. Include FAC 2005-04, FAR 
case 2004-035, in the subject line of the message.
     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 FAC 2005-04, FAR 
case 2004-035, in all correspondence related to this case. All comments 
received will be posted without change to http://

[[Page 33660]]

www.acqnet.gov/far/ProposedRules/proposed.htm, including any personal 
information provided.

FOR FURTHER INFORMATION CONTACT:  The FAR Secretariat at (202) 501-
4755, for information pertaining to status or publication schedules. 
For clarification of content, contact Mr. Jeremy Olson at (202) 501-
3221. Please cite FAC 2005-04, FAR case 2004-035.

SUPPLEMENTARY INFORMATION:

A. Background

    Section 818, Submission of Cost or Pricing Data on Noncommercial 
Modifications of Commercial Items, of the Ronald W. Reagan National 
Defense Authorization Act for Fiscal Year 2005, amends 10 U.S.C. 2306a. 
10 U.S.C. 2306a provides exceptions to the requirement for submission 
of cost or pricing data, including an exception for commercial items. 
Section 818 states that the exception for a commercial item does not 
apply to noncommercial modifications of a commercial item that are 
expected to cost, in the aggregate, more than $500,000 or 5 percent of 
the total price of the contract, whichever is greater. Section 818 
applies to offers submitted, and to modifications of contracts or 
subcontracts made, on or after June 1, 2005.

B. Discussion

    The Councils are revising the commercial item discussion in 
paragraph (c)(3) of FAR 15.403-1, Prohibition on Obtaining Cost or 
Pricing Data, to reflect the requirements of Section 818. This includes 
inserting a new paragraph (3)(ii). This new paragraph provides the 
exception to the requirement for cost or pricing data for minor 
modifications that do not change the item from a commercial item to a 
noncommercial item. The exception applies to all such minor 
modifications for acquisitions funded by agencies other than DoD, NASA, 
and Coast Guard. For acquisitions funded by DoD, NASA, and Coast Guard, 
the exceptions apply to all such modifications if the total cost of the 
modifications do not exceed the greater of $500,000 or 5 percent of the 
total price of the contract.
    This new policy applies only to acquisitions funded by DoD, NASA, 
or the Coast Guard, since the statute amends 10 U.S.C. 2306a, which 
only applies to DoD, NASA, and the Coast Guard. The new language does 
not apply to acquisitions funded by other than DoD, NASA, or the Coast 
Guard because Section 818 did not amend 41 U.S.C. 254b, which prohibits 
obtaining cost or pricing data for commercial items. However, the new 
policy applies to contracts awarded or task or delivery orders placed 
on behalf of DoD, NASA, or the Coast Guard by an official of the United 
States outside of those agencies, because the statutory requirement of 
section 818 applies to the funds provided by DoD, NASA, or the Coast 
Guard.

C. Regulatory Planning and Review

    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.

D. Regulatory Flexibility Act

    The interim rule is not expected to have a significant economic 
impact on a substantial number of small entities within the meaning of 
the Regulatory Flexibility Act,5 U.S.C. 601, et seq., because the 
number of small entities providing commercial items with non-commercial 
modifications costing more than $500,000 is expected to be very low.
    Therefore, an Initial Regulatory Flexibility Analysis has not been 
performed. The Councils will consider comments from small entities 
concerning the affected FAR Part 15 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. (FAC 2005-04, FAR case 2004-035), in 
correspondence.

E. Paperwork Reduction Act

    The Paperwork Reduction Act does not apply because the 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.

F. Determination to Issue an Interim Rule

    A determination has been made under the authority of the Secretary 
of Defense (DoD), the Administrator of General Services (GSA), and the 
Administrator of the National Aeronautics and Space Administration 
(NASA) that an urgent and compelling reason exists to promulgate this 
interim rule without prior opportunity for public comment. This action 
is necessary to implement the changes resulting from the enactment of 
Section 818 of Public Law 108-375, the Ronald W. Reagan National 
Defense Authorization Act for Fiscal Year 2005 that are effective June 
1, 2005. However, pursuant to Public Law 98-577 and FAR 1.501, the 
Councils will consider public comments received in response to this 
interim rule in the formation of the final rule.

List of Subjects in 48 CFR Part 15

    Government procurement.

    Dated: May 27, 2005.
Julia B. Wise,
Director, Contract Policy Division.

0
Therefore, DoD, GSA, and NASA amend 48 CFR part 15 as set forth below:

PART 15--CONTRACTING BY NEGOTIATION

0
1. The authority citation for 48 CFR part 15 is revised to read as 
follows:

    Authority:  40 U.S.C. 121(c); 10 U.S.C. chapter 137; and 42 
U.S.C. 2473(c).

0
2. Amend section 15.403-1 by revising the first sentence of paragraph 
(c)(3)(i), redesignating paragraph (c)(3)(ii) as (c)(3)(iii), and 
adding new paragraph (c)(3)(ii) to read as follows:


15.403-1  Prohibition on obtaining cost or pricing data (10 U.S.C. 
2306a and 41 U.S.C. 254b).

* * * * *
    (c) * * *
    (3) Commercial items. (i) Any acquisition of an item that meets the 
commercial item definition in 2.101, or any modification, as defined in 
paragraph (3)(i) of that definition, that does not change the item from 
a commercial item to a noncommercial item, is exempt from the 
requirement for cost or pricing data. * * *
    (ii) The following requirements apply to minor modifications 
defined in paragraph (3)(ii) of the definition of a commercial item at 
2.101 that do not change the item from a commercial item to a 
noncommercial item:
    (A) For acquisitions funded by any agency other than DoD, NASA, or 
Coast Guard, the modifications are exempt from the requirement for 
submission of cost or pricing data.
    (B) For acquisitions funded by DoD, NASA, or Coast Guard, the 
modifications are exempt from the requirement for submission of cost or 
pricing data provided the total cost of the modifications do not exceed 
the greater of $500,000 or 5 percent of the total price of the 
contract.
    (C) For acquisitions funded by DoD, NASA, or Coast Guard where the 
total cost of the modifications exceeds the greater of $500,000 or 5 
percent of the total price of the contract and no other exception or 
waiver applies, the contracting officer must require submission of cost 
or pricing data.
* * * * *
[FR Doc. 05-11188 Filed 6-7-05; 8:45 am]
BILLING CODE 6820-EP-S