[Federal Register Volume 75, Number 115 (Wednesday, June 16, 2010)]
[Rules and Regulations]
[Pages 34283-34285]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2010-14175]
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DEPARTMENT OF DEFENSE
GENERAL SERVICES ADMINISTRATION
NATIONAL AERONAUTICS AND SPACE ADMINISTRATION
48 CFR Parts 30 and 52
[FAC 2005-42; FAR Case 2009-025; Item IX; Docket 2010-0087, Sequence 1]
RIN 9000-AL58
Federal Acquisition Regulation; FAR Case 2009-025, Disclosure and
Consistency of Cost Accounting Practices for Contracts Awarded to
Foreign Concerns
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) are issuing an interim rule
amending the Federal Acquisition Regulation (FAR) to align the FAR with
the revised Cost Accounting Standards (CAS) Board clause, Disclosure
and Consistency of Cost Accounting Practices-Foreign Concerns.
DATES: Effective Date: June 16, 2010.
Comment Date: Interested parties should submit written comments to
the Regulatory Secretariat on or before August 16, 2010 to be
considered in the formulation of a final rule.
ADDRESSES: Submit comments identified by FAC 2005-42, FAR Case 2009-
025, by any of the following methods:
* Regulations.gov: http://www.regulations.gov.
Submit comments via the Federal eRulemaking portal by inputting
``FAR Case 2009-025'' under the heading ``Enter Keyword or ID'' and
selecting ``Search''. Select the link ``Submit a Comment'' that
corresponds with ``FAR Case 2009-025''. Follow the instructions
provided at the ``Submit a Comment'' screen. Please include your name,
company name (if any), and ``FAR Case 2009-025'' on your attached
document.
* Fax: 202-501-4067.
* Mail: General Services Administration, Regulatory Secretariat
(MVCB), 1800 F Street, NW., Room 4041, ATTN: Hada Flowers, Washington,
DC 20405.
Instructions: Please submit comments only and cite FAC 2005-42, FAR
Case 2009-025, in all correspondence related to this case. All comments
received will be posted without change to http://www.regulations.gov,
including any personal and/or business confidential information
provided.
FOR FURTHER INFORMATION CONTACT: Mr. Edward N. Chambers, Procurement
Analyst, at (202) 501-3221 for clarification of content. For
information pertaining to status or publication schedules, contact the
Regulatory Secretariat at (202) 501-4755. Please cite FAC 2005-42, FAR
Case 2009-025.
SUPPLEMENTARY INFORMATION:
A. Background
On March 26, 2008, the CAS Board published a final rule in the
Federal Register at 73 FR 15939 to utilize the clause, Disclosure and
Consistency of Cost Accounting Practices-Foreign Concerns, in CAS-
covered contracts and subcontracts awarded to foreign concerns.
In order to maintain consistency between CAS and FAR in matters
relating to the administration of CAS, the Councils are amending the
FAR as follows:
1. FAR 30.201-4(c)(1) and (2), the prescription for use of FAR
clause 52.230-4 is revised to reflect the amendments promulgated by the
CAS Board on March 26, 2008.
2. FAR 30.201-4(d) is revised to include use of FAR clause 52.230-
6, Administration of Cost Accounting Standards, in all contracts
containing FAR clause 52.230-4 which is necessary based upon changes
promulgated by the CAS Board on March 26, 2008.
3. FAR clause 52.230-4 is replaced in its entirety and re-titled
``Disclosure and Consistency of Cost Accounting Practices--Foreign
Concerns'' to reflect the amendments promulgated by the CAS Board on
March 26, 2008.
4. FAR clause 52.230-6, Administration of Cost Accounting
Standards, is revised to include reference to FAR clause 52.230-4 based
on changes promulgated by the CAS Board on March 26, 2008.
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.
[[Page 34284]]
B. Regulatory Flexibility Act
The Councils do not expect this interim 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 contracts and subcontracts with small businesses are exempt
from the application of the Cost Accounting Standards. Therefore, an
Initial Regulatory Flexibility Analysis has not been performed. The
Councils invite comments from small business concerns and other
interested parties on the expected impact of this rule on small
entities.
The Councils will also consider comments from small entities
concerning the existing regulations in parts affected by this rule in
accordance with 5 U.S.C. 610. Interested parties must submit such
comments separately and should cite 5 U.S.C. 610 (FAC 2005-42, FAR Case
2009-025) in all correspondence.
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.
chapter 35, et seq.
D. Determination to Issue an Interim Rule
A determination has been made under the authority of the Secretary
of Defense, the Administrator of General Services, and the
Administrator of the National Aeronautics and Space Administration that
urgent and compelling reasons exist to promulgate this interim rule
without prior opportunity for public comment. This action is necessary
because this rule implements a final rule promulgated by the CAS Board
which went into effect on April 25, 2008. Further, the CAS Board rule
already went through the public rulemaking process. However, pursuant
to Public Law 98-577 and FAR 1.501-3(b), 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 Parts 30 and 52
Government procurement.
Dated: June 2, 2010.
Edward Loeb,
Acting Director, Acquisition Policy Division.
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Therefore, DoD, GSA, and NASA amend 48 CFR parts 30 and 52 as set forth
below:
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1. The authority citation for 48 CFR parts 30 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 30--COST ACCOUNTING STANDARDS ADMINISTRATION
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2. Amend section 30.201-4 by revising paragraph (c), and removing from
paragraph (d)(1) ``(b), or (e)'' and adding ``(b), (c), or (e)'' in its
place. The revised text to read as follows:
30.201-4 Contract clauses.
* * * * *
(c) Disclosure and Consistency of Cost Accounting Practices--
Foreign Concerns. (1) The contracting officer shall insert the clause
at 52.230-4, Disclosure and Consistency of Cost Accounting Practices--
Foreign Concerns, in negotiated contracts with foreign concerns, unless
the contract is otherwise exempt from CAS (see 48 CFR 9903.201-1).
Foreign concerns do not include foreign governments or their agents or
instrumentalities.
(2) The clause at 52.230-4 requires the contractor to comply with
48 CFR 9904.401 and 48 CFR 9904.402 to disclose (if it meets certain
requirements) actual cost accounting practices, and to follow
consistently its disclosed and established cost accounting practices.
* * * * *
PART 52--SOLICITATION PROVISIONS AND CONTRACT CLAUSES
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3. Revise section 52.230-4 to read as follows:
52.230-4 Disclosure and Consistency of Cost Accounting Practices--
Foreign Concerns.
As prescribed in 30.201-4(c), insert the following clause:
DISCLOSURE AND CONSISTENCY OF COST ACCOUNTING PRACTICES--FOREIGN
CONCERNS (JUN 2010)
(a) The Contractor, in connection with this contract, shall--
(1) Comply with the requirements of 48 CFR 9904.401, Consistency in
Estimating, Accumulating, and Reporting Costs; and 48 CFR 9904.402,
Consistency in Allocating Costs Incurred for the Same Purpose, in
effect on the date of award of this contract, as indicated in 48 CFR
9904.
(2) (Cost Accounting Standard (CAS)-covered Contracts Only). If it
is a business unit of a company required to submit a Disclosure
Statement, disclose in writing its cost accounting practices as
required by 48 CFR 9903.202-1 through 48 CFR 9903.202-5. If the
Contractor has notified the Contracting Officer that the Disclosure
Statement contains trade secrets and commercial or financial
information which is privileged and confidential, the Disclosure
Statement shall be protected and shall not be released outside of the
U.S. Government.
(3)(i) Follow consistently the Contractor's cost accounting
practices. A change to such practices may be proposed, however, by
either the U.S. Government or the Contractor, and the Contractor agrees
to negotiate with the Contracting Officer the terms and conditions
under which a change may be made. After the terms and conditions under
which the change is to be made have been agreed to, the change must be
applied prospectively to this contract, and the Disclosure Statement,
if affected, must be amended accordingly.
(ii) The Contractor shall, when the parties agree to a change to a
cost accounting practice and the Contracting Officer has made the
finding required in 48 CFR 9903.201-6(c) that the change is desirable
and not detrimental to the interests of the U.S. Government, negotiate
an equitable adjustment as provided in the Changes clause of this
contract. In the absence of the required finding, no agreement may be
made under this contract clause that will increase costs paid by the
U.S. Government.
(4) Agree to an adjustment of the contract price or cost allowance,
as appropriate, if the Contractor or a subcontractor fails to comply
with the applicable CAS or to follow any cost accounting practice, and
such failure results in any increased costs paid by the U.S.
Government. Such adjustment shall provide for recovery of the increased
costs to the U.S. Government, together with interest thereon computed
at the annual rate established under section 6621(a)(2) of the Internal
Revenue Code of 1986 (26 U.S.C. 6621(a)(2)) for such period, from the
time the payment by the U.S. Government was made to the time the
adjustment is effected.
(b) If the parties fail to agree whether the Contractor has
complied with an applicable CAS rule, or regulation as specified in 48
CFR 9903 and 48 CFR 9904 and as to any cost adjustment demanded by the
U.S. Government, such failure to agree will constitute a dispute under
the Contract Disputes Act (41 U.S.C. 601).
(c) The Contractor shall permit any authorized representatives of
the U.S. Government to examine and make copies of any documents,
papers, and records relating to compliance with the requirements of
this clause.
[[Page 34285]]
(d) The Contractor shall include in all negotiated subcontracts,
which the Contractor enters into, the substance of this clause, except
paragraph (b), and shall require such inclusion in all other
subcontracts of any tier, except that--
(1) If the subcontract is awarded to a business unit which pursuant
to 48 CFR 9903.201-2 is subject to other types of CAS coverage, the
substance of the applicable clause prescribed in FAR 30.201-4 shall be
inserted.
(2) This requirement shall apply only to negotiated subcontracts in
excess of $650,000.
(3) The requirement shall not apply to negotiated subcontracts
otherwise exempt from the requirement to include a CAS clause as
specified in 48 CFR 9903.201-1.
(End of clause)
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4. Amend section 52.230-6 by revising the date of the clause; the
second sentence of the introductory text of paragraph (b); the first
sentence of paragraph (b)(3); the introductory text of paragraph
(b)(4); paragraph (k)(1); the introductory text of paragraph (l); and
paragraph (n) to read as follows:
52.230-6 Administration of Cost Accounting Standards.
* * * * *
ADMINISTRATION OF COST ACCOUNTING STANDARDS (JUN 2010)
* * * * *
(b) * * * If a change in cost accounting practice is implemented
without submitting the notice required by this paragraph, the CFAO may
determine the change to be a failure to follow paragraph (a)(2) of the
clause at FAR 52.230-2, Cost Accounting Standards; paragraph (a)(4) of
the clause at FAR 52.230-3, Disclosure and Consistency of Cost
Accounting Practices; paragraph (a)(4) of the clause at FAR 52.230-4,
Disclosure and Consistency of Cost Accounting Practices--Foreign
Concerns; or paragraph (a)(2) of the clause at FAR 52.230-5, Cost
Accounting Standards--Educational Institution.
* * * * *
(3) For any change in cost accounting practices proposed in
accordance with paragraph (a)(4)(ii) or (iii) of the clauses at FAR
52.230-2 and FAR 52.230-5; or with paragraph (a)(3) of the clauses at
FAR 52.230-3 and FAR 52.230-4, submit a description of the change not
less than 60 days (or such other date as may be mutually agreed to by
the CFAO and the Contractor) before implementation of the change. * * *
(4) Submit a description of the change necessary to correct a
failure to comply with an applicable CAS or to follow a disclosed
practice (as contemplated by paragraph (a)(5) of the clause at FAR
52.230-2 and FAR 52.230-5; or by paragraph (a)(4) of the clauses at FAR
52.230-3 and FAR 52.230-4)--
* * * * *
(k) * * *
(1) Contract modifications to reflect adjustments required in
accordance with paragraph (a)(4)(ii) or (a)(5) of the clauses at FAR
52.230-2 and 52.230-5; or with paragraph (a)(3)(i) or (a)(4) of the
clauses at FAR 52.230-3 and FAR 52.230-4; and
* * * * *
(l) For all subcontracts subject to the clauses at FAR 52.230-2,
52.230-3, 52.230-4, or 52.230-5--
* * * * *
(n) For subcontracts containing the clause or substance of the
clause at FAR 52.230-2, FAR 52.230-3, FAR 52.230-4, or FAR 52.230-5,
require the subcontractor to comply with all Standards in effect on the
date of award or of final agreement on price, as shown on the
subcontractor's signed Certificate of Current Cost or Pricing Data,
whichever is earlier.
[FR Doc. 2010-14175 Filed 6-15-10; 8:45 am]
BILLING CODE 6820-EP-S