[Federal Register Volume 71, Number 1 (Tuesday, January 3, 2006)]
[Rules and Regulations]
[Pages 225-226]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 05-24554]
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DEPARTMENT OF DEFENSE
GENERAL SERVICES ADMINISTRATION
NATIONAL AERONAUTICS AND SPACE ADMINISTRATION
48 CFR Parts 44 and 52
[FAC 2005-07 FAR Case 2003-024, Item IX]
RIN 9000-AK39
Federal Acquisition Regulation; Elimination of Certain
Subcontract Notification Requirements
AGENCIES: Department of Defense (DoD), General Services Administration
(GSA), and National Aeronautics and Space Administration (NASA).
ACTION: Final rule.
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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 modify the
language regarding advance notification requirements. This change is
required to implement Section 842 of the National Defense Authorization
Act for Fiscal Year 2004, Public Law 108-136, which resulted in
revisions to 10 U.S.C. 2306(e).
DATES: Effective Date: January 3, 2006.
FOR FURTHER INFORMATION CONTACT: For clarification of content, contact
Ms. Rhonda Cundiff, Procurement Analyst, at (202) 501-0044. Please cite
FAC 2005-07, FAR case 2003-024. For information pertaining to status or
publication schedules, contact the FAR Secretariat at (202) 501-4755.
SUPPLEMENTARY INFORMATION:
A. Background
DoD, GSA, and NASA published an interim rule in the Federal
Register at 70 FR 11761, March 9, 2005, with a request for comments by
May 9, 2005. The interim rule revised FAR 44.201-2, Advance
notification requirements, and amended Alternate I of FAR clause
52.244-2, Subcontracts. The change is required in order to implement
Section 842 of the National Defense Authorization Act for Fiscal Year
2004,
[[Page 226]]
Public Law 108-136. Section 842 removes the requirement for contractors
under cost-reimbursement contracts with the Department of Defense
(DoD), Coast Guard, and National Aeronautics and Space Administration
(NASA) to notify the agency before the award of any cost-plus-fixed-fee
subcontract or any fixed-price subcontract that exceeds the greater of
the simplified acquisition threshold or 5 percent of the total
estimated cost of the contract if the contractor maintains a purchasing
system approved by the contracting officer for the contract.
The final rule differs from the interim rule in that it deletes
Alternate I in its entirety. The Councils adopted the suggestion in a
public comment that deletion of Alternate I would be a less confusing
means of implementing the statute than amending Alternate I.
Renumbering has occurred in FAR 44.204 and 52.244-2 as a result of the
deletion of Alternate I.
In addition, the interim rule made a technical amendment to
Alternate II of the FAR clause at 52.244-2, Subcontracts. The interim
rule deleted the reference to paragraph (c) from paragraph (f)(2) of
Alternate II (now renumbered Alternate I in the final rule) because
paragraph (c) applies to fixed-price type contracts, whereas Alternate
II (now renumbered Alternate I in the final rule) applies to cost-
reimbursement contracts.
Two comments were received from one respondent.
Comment: The respondent noted that the purpose of the FAR change
is, in the case of DoD, the Coast Guard, and NASA, to eliminate the
requirement for the contractor to notify the agency before award of
certain subcontracts when the contractor has an approved purchasing
system. The respondent stated that the language in the interim rule is
confusing and suggested eliminating Alternate I of 52.244-2 instead.
Response: Concur. The final rule deletes Alternate I.
Comment: The respondent suggested rewriting Alternate II of the FAR
clause at 52.244-2 and FAR 44.201-2 to have the language match what is
in 52.244-2(d)(1).
Response: Nonconcur. Paragraph (d)(1) of the FAR clause at 52.244-2
specifies the contract types--cost-reimbursement, time-and-materials,
and labor-hour--subject to subcontract consent requirements. Alternate
II specifies the contract types--cost-plus-fixed-fee and fixed-price--
subject to advance notification requirements even when subcontract
consent is not required. These two procedures are separate statutory
requirements and apply to different contract types.
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 it will have a small
positive effect. Small businesses do not usually hold prime contracts
which are cost-reimbursement contracts, so this section would not apply
to them, and any change would not apply.
C. 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.
List of Subjects in 48 CFR Parts 44 and 52
Government procurement.
Dated: December 22, 2005.
Gerald Zaffos,
Director, Contract Policy Division.
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Therefore, DoD, GSA, and NASA amend 48 CFR parts 44 and 52 as set forth
below:
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1. The authority citation for 48 CFR parts 44 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 44--SUBCONTRACTING POLICIES AND PROCEDURES
0
2. Amend section 44.204 by revising paragraph (a)(2) to read as
follows:
44.204 Contract clauses.
(a)(1) * * *
(2) If a cost-reimbursement contract is contemplated, for civilian
agencies other than the Coast Guard and the National Aeronautics and
Space Administration, the contracting officer shall use the clause with
its Alternate I.
* * * * *
PART 52--SOLICITATION PROVISIONS AND CONTRACT CLAUSES
0
3. Amend section 52.244-2 by--
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a. Removing Alternate I; and
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b. Redesignating Alternate II as Alternate I; and revising the
introductory paragraph to read as follows:
52.244-2 Subcontracts.
* * * * *
Alternate I (JAN 2006). As prescribed in 44.204(a)(2),
substitute the following paragraph (f)(2) for paragraph (f)(2) of
the basic clause:
* * * * *
[FR Doc. 05-24554 Filed 12-30-05; 8:45 am]
BILLING CODE 6820-EP-S