[Federal Register Volume 76, Number 128 (Tuesday, July 5, 2011)]
[Rules and Regulations]
[Pages 39242-39243]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2011-16677]
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DEPARTMENT OF DEFENSE
GENERAL SERVICES ADMINISTRATION
NATIONAL AERONAUTICS AND SPACE ADMINISTRATION
48 CFR Part 52
[FAC 2005-53; FAR Case 2009-034; Item VI; Docket 2010-0098, Sequence 1]
RIN 9000-AL73
Federal Acquisition Regulation; TINA Interest Calculations
AGENCIES: Department of Defense (DoD), General Services Administration
(GSA), and National Aeronautics and Space Administration (NASA).
ACTION: Final rule.
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SUMMARY: DoD, GSA, and NASA are issuing a final rule amending the
Federal Acquisition Regulation (FAR) to revise the FAR clauses on price
reduction for defective pricing to require compound interest
calculations be applied to Government overpayments as a result of
defective cost or pricing data.
DATES: Effective Date: August 4, 2011.
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 2005-53, FAR
Case 2009-034.
SUPPLEMENTARY INFORMATION:
I. Background
On September 14, 2009, the U.S. Court of Appeals for the Federal
Circuit (CAFC) issued a decision regarding the method of interest
calculation on Cost Accounting Standards (CAS) cost impacts (see GATES
v. Raytheon Co., 584 F.3d 1062 (Fed. Cir. 2009)). The interest on CAS
cost impacts is set by reference in the enabling statute to 26 U.S.C.
6621. The CAFC ruled that the citation led to calculation of the
interest using daily compounding. The Truth in Negotiation Act (TINA)
also references 26 U.S.C. 6621 for interest calculation. (See 41 U.S.C.
3507 and 10 U.S.C. 2306a).
A proposed rule was published on September 22, 2010, (75 FR 57719)
with regard to the application of compound interest calculations to
Government overpayments as a result of defective cost or pricing data.
This rule replaces the term ``simple interest'' as the requirement for
calculating interest for Truth in Negotiations Act cost impacts with
the phrase ``Interest compounded daily as required by 26 U.S.C. 6622.''
Thus, compound interest calculations will be applied to Government
overpayments as a result of defective cost or pricing data. DoD, GSA,
and NASA received no comments on the proposed rule.
II. Executive Orders 12866 and 13563
Executive Orders (E.O.s) 12866 and 13563 direct agencies to assess
all costs and benefits of available regulatory alternatives and, if
regulation is necessary, to select regulatory approaches that maximize
net benefits (including potential economic, environmental, public
health and safety effects, distributive impacts, and equity). E.O.
13563 emphasizes the importance of quantifying both costs and benefits,
of reducing costs, of harmonizing rules, and of promoting flexibility.
This is not a significant regulatory action and, therefore, was not
subject to review under section 6(b) of E.O. 12866, Regulatory Planning
and Review, dated September 30, 1993. This rule is not a major rule
under 5 U.S.C. 804.
III. Regulatory Flexibility Act
The Department of Defense, the General Services Administration, and
the National Aeronautics and Space Administration certify that this
final rule will not have a significant economic impact on a substantial
number of small entities within the meaning of the Regulatory
Flexibility Act, 5 U.S.C. 601, et seq., because the rule merely
clarifies the statutory method for calculating interest in the rare
instances when a contractor is found to be in violation of TINA. Since
TINA requirements generally do not apply to contracts with small
entities, and since the numbers of contractors found to have submitted
defective cost or pricing data are a minute subset of contractors to
whom TINA applies, the rule is not expected to apply to a substantial
number of small entities. Furthermore, the differential in interest
computing methods is not expected to amount to a significant economic
impact.
IV. Paperwork Reduction Act
The final rule does not contain any information collection
requirements that require the approval of the Office of Management and
Budget under the Paperwork Reduction Act (44 U.S.C. chapter 35).
List of Subjects in 48 CFR Part 52
Government procurement.
Dated: June 28, 2011.
Laura Auletta,
Acting Director, Office of Governmentwide Acquisition Policy, Office of
Acquisition Policy.
Therefore, DoD, GSA, and NASA amend 48 CFR part 52 as set forth
below:
PART 52--SOLICITATION PROVISIONS AND CONTRACT CLAUSES
0
1. The authority citation for 48 CFR part 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).
0
2. Amend section 52.214-27 by revising the date of the clause and
paragraph (e)(1) to read as follows:
52.214-27 Price Reduction for Defective Certified Cost or Pricing
Data--Modifications--Sealed Bidding.
* * * * *
Price Reduction for Defective Certified Cost or Pricing Data--
Modifications--Sealed Bidding (AUG 2011)
* * * * *
(e) * * *
(1) Interest compounded daily, as required by 26 U.S.C. 6622, on
the amount of such overpayment to be computed from the date(s) of
overpayment to the Contractor to the date the Government is repaid
by the Contractor at the applicable underpayment rate effective for
each quarter prescribed by the Secretary of the Treasury under 26
U.S.C. 6621(a)(2); and
* * * * *
0
3. Amend section 52.215-10 by revising the date of the clause and
paragraph (d)(1) to read as follows:
52.215-10 Price Reduction for Defective Certified Cost or Pricing
Data.
* * * * *
Price Reduction for Defective Certified Cost or Pricing Data (AUG 2011)
* * * * *
(d) * * *
(1) Interest compounded daily, as required by 26 U.S.C. 6622, on
the amount of such overpayment to be computed from the date(s)
[[Page 39243]]
of overpayment to the Contractor to the date the Government is
repaid by the Contractor at the applicable underpayment rate
effective for each quarter prescribed by the Secretary of the
Treasury under 26 U.S.C. 6621(a)(2); and
* * * * *
0
4. Amend section 52.215-11 by revising the date of the clause and
paragraph (e)(1) to read as follows:
52.215-11 Price Reduction for Defective Certified Cost or Pricing
Data--Modifications.
* * * * *
Price Reduction for Defective Certified Cost or Pricing Data--
Modifications (AUG 2011)
* * * * *
(e) * * *
(1) Interest compounded daily, as required by 26 U.S.C. 6622, on
the amount of such overpayment to be computed from the date(s) of
overpayment to the Contractor to the date the Government is repaid
by the Contractor at the applicable underpayment rate effective for
each quarter prescribed by the Secretary of the Treasury under 26
U.S.C. 6621(a)(2); and
* * * * *
[FR Doc. 2011-16677 Filed 7-1-11; 8:45 am]
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