FAC 2001-08
[Federal Register: June 27, 2002 (Volume 67, Number 124)]
[Rules and Regulations]
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Part V
Department of Defense
General Services Administration
National Aeronautics and Space Administration
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48 CFR Chapter 1, et al.
Federal Acquisition Circular 2001-08; Final Rule
[[Page 43512]]
DEPARTMENT OF DEFENSE
GENERAL SERVICES ADMINISTRATION
NATIONAL AERONAUTICS AND SPACE ADMINISTRATION
48 CFR Chapter 1
Federal Acquisition Circular 2001-08; Introduction
AGENCIES: Department of Defense (DoD), General Services Administration
(GSA), and National Aeronautics and Space Administration (NASA).
ACTION: Summary presentation of final rules, and technical amendments
and corrections.
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SUMMARY: This document summarizes the Federal Acquisition Regulation
(FAR) rules agreed to by the Civilian Agency Acquisition Council and
the Defense Acquisition Regulations Council in this Federal Acquisition
Circular (FAC) 2001-08. A companion document, the Small Entity
Compliance Guide (SECG), follows this FAC. The FAC, including the SECG,
is available via the Internet at http://www.arnet.gov/far.
DATES: For effective dates and comment dates, see separate documents
which follow.
FOR FURTHER INFORMATION CONTACT: The FAR Secretariat, Room 4035, GS
Building, Washington, DC 20405, (202) 501-4755, for information
pertaining to status or publication schedules. For clarification of
content, contact the analyst whose name appears in the table below in
relation to each FAR case or subject area. Please cite FAC 2001-08 and
specific FAR case number(s). Interested parties may also visit our
website at http://www.arnet.gov/far.
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Item Subject FAR case Analyst
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I... Definition of "Claim" and 2000-406 Klein.
Terms Relating to Termination.
II.. Federal Supply Schedule Order 1999-614 Nelson.
Disputes and Incidental Items.
III. Relocation Costs............. 1997-032 Olson.
IV....Technical Amendments
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SUPPLEMENTARY INFORMATION: Summaries for each FAR rule follow. For the
actual revisions and/or amendments to these FAR cases, refer to the
specific item number and subject set forth in the documents following
these item summaries.
FAC 2001-08 amends the FAR as specified below:
Item I--Definition of "Claim" and Terms Relating to Termination (FAR
Case 2000-406)
The purpose of this final rule is to clarify the applicability of
definitions, eliminate redundant or conflicting definitions, and
streamline the process for locating definitions. This rule is not
intended to change the meaning of any FAR text or clause. Movement of
various definitions to FAR 2.101 is not intended to change the
operation of the cost principles and, specifically, the movement of the
definition of "claim" to FAR 2.101 is not intended to change the
scope or context of FAR 31.205-47(f)(1).
This final rule--
Revises and moves the definitions of "claim" from FAR
33.201; "continued portion of the contract," "partial termination,"
"terminated portion of the contract" from FAR 49.001; and
"termination for convenience" from FAR 17.103;
Adds a definition of "termination for default" at FAR
2.101 and a new paragraph (d) at FAR 17.104 that explains the
distinction between "termination for convenience" and
"cancellation" that was deleted from the definition of "termination
for convenience" that was moved from FAR 17.103;
Revises FAR 33.213(a) to clarify the distinction between
claims "arising under a contract" and claims "relating to a
contract"
Revises the definition of "claim" in the FAR clause at
52.233-1 to conform to the definition at FAR 2.101; and
Makes other editorial revisions for clarity.
Item II--Federal Supply Schedule Order Disputes and Incidental Items
(FAR Case 1999-614)
This final rule amends the FAR to add policies on disputes and
incidental items under Federal Supply Schedule contracts and to remove
the requirement to notify GSA when a schedule contractor refuses to
honor an order placed by a Government contractor. This rule affects all
ordering offices acquiring supplies or services subject to the
procedures of FAR Subpart 8.4.
Item III--Relocation Costs (FAR Case 1997-032)
This final rule amends the relocation cost principle at FAR 31.205-
35. The rule will only affect contracting officers that price contracts
using cost analysis, or that are required by a contract clause to use
cost principles for the determination, negotiation, or allowance of
costs.
The relocation cost principle addresses the allowability of costs
incurred by an existing contractor employee incident to the permanent
change of the employee's assigned work location for a period of 12
months or more, or upon recruitment of a new employee. The final rule
revises the cost principle by making allowable payments for spouse
employment assistance and for increased employee income and Federal
Insurance Contributions Act taxes incident to allowable reimbursed
relocation costs, increasing the ceiling for allowance of miscellaneous
costs of relocation, and making a number of editorial changes.
Item IV--Technical Amendments
These amendments update sections and make editorial changes at FAR
52.202-1, 52.212-3, and 52.225-11.
Dated: June 19, 2002.
Al Matera,
Director, Acquisition Policy Division.
Federal Acquisition Circular
Federal Acquisition Circular (FAC) 2001-08 is issued under the
authority of the Secretary of Defense, the Administrator of General
Services, and the Administrator for the National Aeronautics and Space
Administration.
Unless otherwise specified, all Federal Acquisition Regulation
(FAR) and other directive material contained in FAC 2001-08 are
effective July 24, 2002.
[[Page 43513]]
Dated: June 18, 2002.
Deidre A. Lee,
Director, Defense Procurement.
Dated: June 10, 2002.
David A. Drabkin,
Deputy Associate Administrator, Office of Acquisition Policy, General
Services Administration.
Dated: June 10, 2002.
Tom Luedtke,
Assistant Administrator for Procurement, National Aeronautics and Space
Administration.
[FR Doc. 02-15939 Filed 6-26-02; 8:45 am]
BILLING CODE 6820-EP-P
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[Rules and Regulations]
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DEPARTMENT OF DEFENSE
GENERAL SERVICES ADMINISTRATION
NATIONAL AERONAUTICS AND SPACE ADMINISTRATION
48 CFR Parts 2, 17, 31, 33, 49, and 52
[FAC 2001-08; FAR Case 2000-406; Item I]
RIN 9000-AJ19
Federal Acquisition Regulation; Definition of "Claim" and Terms
Relating to Termination
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 clarify and move
the definitions of "claim" and certain terms relating to termination
to the FAR part regarding definitions.
DATES: Effective Date: July 29, 2002.
FOR FURTHER INFORMATION CONTACT: The FAR Secretariat, Room 4035, GS
Building, Washington, DC, 20405, (202) 501-4755, for information
pertaining to status or publication schedules. For clarification of
content, contact Ms. Linda Klein, Procurement Analyst, at (202) 501-
3775. Please cite FAC 2001-08, FAR case 2000-406.
SUPPLEMENTARY INFORMATION:
A. Background
The purpose of this rule is to clarify the applicability of
definitions, eliminate redundant or conflicting definitions, and
streamline the process for locating definitions. This rule is not
intended to change the meaning of any FAR text or clause. Movement of
various definitions to FAR 2.101 is not intended to change the
operation of the cost principles, and specifically the movement of the
definition of "claim" to FAR 2.101 is not intended to change the
scope or context of FAR 31.205-47(f)(1).
This final rule--
Revises and moves the definitions of "claim" from
33.201; "continued portion of the contract," "partial termination,"
"terminated portion of the contract" from FAR 49.001; and
"termination for convenience" from FAR 17.103;
Adds a definition of "termination for default" at FAR
2.101 and a new paragraph 17.104(d) that explains the distinction
between "termination for convenience" and "cancellation" that was
deleted from the definition of "termination for convenience" that was
moved from FAR 17.103;
Revises FAR 33.213(a) to clarify the distinction between
claims "arising under a contract" and claims "relating to a
contract";
Revises the definition of "claim" in the clause at FAR
52.233-1 to conform to the definition at FAR 2.101; and
Makes other editorial revisions for clarity.
DoD, GSA, and NASA published a proposed rule in the Federal
Register at 66 FR 42922, August 15, 2001, with a request for comment.
One respondent submitted two comments to the proposed rule. The
Councils considered and accepted both comments. The rule was modified
as a result. The first comment recommended that the parenthetical
reference at FAR 31.205(f)(1) be changed to reflect the new location of
the definition of "claim" at FAR 2.101. This was done. The second
comment recommended that a clarifying statement be added to the Federal
Register notice stating that the movement of the various definitions to
FAR 2.101 is not intended to change the operation of the cost
principles, and specifically the movement of the definition of
"claim" to FAR 2.101 is not intended to change the scope of FAR
31.205-47(f)(1). This was also done.
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 the rule does not
change policy. We did not receive any comments regarding this
determination as a result of publication of the proposed rule in the
Federal Register on August 15, 2001 (66 FR 42922).
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 2, 17, 31, 33, 49, and 52
Government procurement.
Dated: June 19, 2002.
Al Matera,
Director, Acquisition Policy Division.
Therefore, DoD, GSA, and NASA amend 48 CFR parts 2, 17, 31, 33, 49,
and 52 as set forth below:
1. The authority citation for 48 CFR parts 2, 17, 31, 33, 49, and
52 continues to read as follows:
Authority: 40 U.S.C. 486(c); 10 U.S.C. chapter 137; and 42
U.S.C. 2473(c).
PART 2--DEFINITIONS OF WORDS AND TERMS
2. Amend section 2.101 by adding, in alphabetical order, the
definitions "Claim," "Continued portion of the contract," "Partial
termination," "Termination for convenience," "Termination for
default," and "Terminated portion of the contract" to read as
follows:
2.101 Definitions.
* * * * *
Claim means a written demand or written assertion by one of the
contracting parties seeking, as a matter of right, the payment of money
in a sum certain, the adjustment or interpretation of contract terms,
or other relief arising under or relating to the contract. However, a
written demand or written assertion by the contractor seeking the
payment of money exceeding $100,000 is not a claim under the Contract
Disputes Act of 1978 until certified as required by the Act. A voucher,
invoice, or other routine request for payment that is not in dispute
when submitted is not a claim. The submission may be converted to a
claim, by written notice to the contracting officer as provided in
[[Page 43514]]
33.206(a), if it is disputed either as to liability or amount or is not
acted upon in a reasonable time.
* * * * *
Continued portion of the contract means the portion of a contract
that the contractor must continue to perform following a partial
termination.
* * * * *
Partial termination means the termination of a part, but not all,
of the work that has not been completed and accepted under a contract.
* * * * *
Termination for convenience means the exercise of the Government's
right to completely or partially terminate performance of work under a
contract when it is in the Government's interest.
Termination for default means the exercise of the Government's
right to completely or partially terminate a contract because of the
contractor's actual or anticipated failure to perform its contractual
obligations.
Terminated portion of the contract means the portion of a contract
that the contractor is not to perform following a partial termination.
For construction contracts that have been completely terminated for
convenience, it means the entire contract, notwithstanding the
completion of, and payment for, individual items of work before
termination.
* * * * *
PART 17--SPECIAL CONTRACTING METHODS
17.103 [Amended]
3. Amend section 17.103 by removing the definition "Termination
for convenience."
4. Amend section 17.104 by adding paragraph (d) to read as follows:
17.104 General.
* * * * *
(d) The termination for convenience procedure may apply to any
Government contract, including multiyear contracts. As contrasted with
cancellation, termination can be effected at any time during the life
of the contract (cancellation is effected between fiscal years) and can
be for the total quantity or partial quantity (where as cancellation
must be for all subsequent fiscal years' quantities).
PART 31--CONTRACT COST PRINCIPLES AND PROCEDURES
31.205-47 [Amended]
5. Amend section 31.205-47 in paragraph (f)(1) by removing "(see
33.201)" and adding "(see 2.101)" in its place.
PART 33--PROTESTS, DISPUTES, AND APPEALS
33.201 [Amended]
6. Amend section 33.201 by removing the definition "Claim."
7. Amend section 33.213 by revising paragraph (a) to read as
follows:
33.213 Obligation to continue performance.
(a) In general, before passage of the Act, the obligation to
continue performance applied only to claims arising under a contract.
However, the Act, at 41 U.S.C. 605(b), authorizes agencies to require a
contractor to continue contract performance in accordance with the
contracting officer's decision pending a final resolution of any claim
arising under, or relating to, the contract. (A claim arising under a
contract is a claim that can be resolved under a contract clause, other
than the clause at 52.233-1, Disputes, that provides for the relief
sought by the claimant; however, relief for such claim can also be
sought under the clause at 52.233-1. A claim relating to a contract is
a claim that cannot be resolved under a contract clause other than the
clause at 52.233-1.) This distinction is recognized by the clause with
its Alternate I (see 33.215).
* * * * *
PART 49--TERMINATION OF CONTRACTS
49.001 [Amended]
8. Amend section 49.001 by removing the definitions "Claim,"
"Continued portion of the contract," "Partial termination," and
"Terminated portion of the contract."
PART 52--SOLICITATION PROVISIONS AND CONTRACT CLAUSES
52.213-4 [Amended]
9. Amend section 52.213-4 by revising the date of the clause to
read "(7/02)"; and by removing from paragraph (a)(2)(v) "(Dec
1998)" and adding "7/02" in its place.
10. Amend section 52.233-1 by revising the date and paragraph (c)
of the clause; and by revising the introductory paragraph of Alternate
I to read as follows:
52.233-1 Disputes.
* * * * *
Disputes (7/02)
* * * * *
(c) Claim, as used in this clause, means a written demand or
written assertion by one of the contracting parties seeking, as a
matter of right, the payment of money in a sum certain, the
adjustment or interpretation of contract terms, or other relief
arising under or relating to this contract. However, a written
demand or written assertion by the Contractor seeking the payment of
money exceeding $100,000 is not a claim under the Act until
certified. A voucher, invoice, or other routine request for payment
that is not in dispute when submitted is not a claim under the Act.
The submission may be converted to a claim under the Act, by
complying with the submission and certification requirements of this
clause, if it is disputed either as to liability or amount or is not
acted upon in a reasonable time.
* * * * *
Alternate I (Dec 1991). As prescribed in 33.215, substitute the
following paragraph (i) for paragraph (i) of the basic clause:
* * * * *
[FR Doc. 02-15940 Filed 6-26-02; 8:45 am]
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DEPARTMENT OF DEFENSE
GENERAL SERVICES ADMINISTRATION
NATIONAL AERONAUTICS AND SPACE ADMINISTRATION
48 CFR Parts 8 and 51
[FAC 2001-08; FAR Case 1999-614; Item II]
RIN 9000-AJ01
Federal Acquisition Regulation; Federal Supply Schedule Order
Disputes and Incidental Items
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 incorporate
policies for disputes in schedule contracts and the handling of
incidental items, and to remove the requirement to notify GSA when a
schedule contractor refuses to honor an order placed by a Government
contractor.
DATES: Effective Date: July 29, 2002.
FOR FURTHER INFORMATION CONTACT: The FAR Secretariat, Room 4035, GS
Building, Washington, DC, 20405, (202) 501-4755, for information
pertaining to status or publication schedules. For clarification of
content, contact Ms. Linda Nelson, Procurement Analyst, at (202) 501-
1900. Please cite FAC 2001-08, FAR case 1999-614.
[[Page 43515]]
SUPPLEMENTARY INFORMATION:
A. Background
DoD, GSA, and NASA published a proposed rule in the Federal
Register at 65 FR 79702, December 19, 2000. Nine respondents submitted
comments in response to the Federal Register notice. The public
comments were received from contractors, professional associations, and
Federal agencies. Clarifying revisions have been made to FAR 8.401(d)
and 8.405-7(d) of the rule as a result of the public comments. A
summary of the significant comments and concerns expressed by
respondents is summarized below.
Addition of Open Market, Noncontract Items on a Schedule
Order. Some respondents believed that the intent regarding the
incorporation of open market, noncontract items on a schedule order
needed further clarification and recommended alternative language. The
Councils agreed that absent a definition of "open market" or
"noncontract" items in the FAR further clarification is needed.
Accordingly, it has substituted the expression "items not on the
Federal Supply Schedule" to best characterize what these items mean.
Inclusion of FAR Part 19 in the Listing of Applicable
Acquisition Regulations. One respondent expressed concern regarding the
omission of a reference to FAR Part 19, Small Business Programs, in the
proposed language in FAR 8.401(d) for adding open market, noncontract
items to a Federal Supply Schedule BPA. The respondent believes that
the omission of FAR Part 19 in the list of applicable acquisition
regulations an agency must follow will allow ordering offices to
circumvent the requirement that all procurements valued between $2,500
and $100,000 be set aside for small business concerns.
The Councils agreed that FAR Part 19 should be included in the list
of applicable regulations in FAR 8.401(d)(1). Even though FAR
13.003(b)(1) addresses small business set-asides for acquisitions above
the micro-purchase threshold, the inclusion of FAR Part 19, in addition
to FAR Part 13, further emphasizes that ordering offices must consider
small business programs when acquiring items not on the Federal Supply
Schedule.
FAR Reference to Alternative Dispute Resolution (ADR)
Procedures for Schedule Disputes. One respondent suggested that in lieu
of the proposed language in FAR 8.405-7(d) ("The contracting officer
should use the alternative dispute resolution (ADR) procedures, when
appropriate (see 33.214)"), the language should be revised to cite the
policy statement as it is set forth in FAR 33.204, that ADR should be
used "to the maximum extent practicable." The respondent further
suggested that either FAR 33.204 be cited alone, or that 33.204 be
cited in addition to 33.214. Since the language in FAR 33.204 speaks to
policy regarding the use of ADR, while 33.214 provides additional
information regarding ADR, the Councils agreed that, for clarity, both
citations be included in the final rule, and that the language in FAR
8.405-7(d) be revised.
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 the rule addresses
internal Government administrative procedures and does not impose any
additional requirements on Government offerors or contractors.
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 8 and 51
Government procurement.
Dated: June 19, 2002.
Al Matera,
Director, Acquisition Policy Division.
Therefore, DoD, GSA, and NASA amend 48 CFR parts 8 and 51 as set
forth below:
1. The authority citation for 48 CFR parts 8 and 51 continues to
read as follows:
Authority: 40 U.S.C. 486(c); 10 U.S.C. chapter 137; and 42
U.S.C. 2473(c).
PART 8--REQUIRED SOURCES OF SUPPLIES AND SERVICES
2. Amend section 8.401 by adding paragraph (d) to read as follows:
8.401 General.
* * * * *
(d) For administrative convenience, an ordering office contracting
officer may add items not on the Federal Supply Schedule (also referred
to as open market items) to a Federal Supply Schedule blanket purchase
agreement (BPA) or an individual task or delivery order only if--
(1) All applicable acquisition regulations pertaining to the
purchase of the items not on the Federal Supply Schedule have been
followed (e.g., publicizing (Part 5), competition requirements (Part
6), acquisition of commercial items (Part 12), contracting methods
(Parts 13, 14, and 15), and small business programs (Part 19));
(2) The ordering office contracting officer has determined the
price for the items not on the Federal Supply Schedule is fair and
reasonable;
(3) The items are clearly labeled on the order as items not on the
Federal Supply Schedule; and
(4) All clauses applicable to items not on the Federal Supply
Schedule are included in the order.
3. Revise section 8.405-7 to read as follows:
8.405-7 Disputes.
(a) Disputes pertaining to the performance of orders under a
schedule contract. (1) Under the Disputes clause of the schedule
contract, the ordering office contracting officer may--
(i) Issue final decisions on disputes arising from performance of
the order (but see paragraph (b) of this section); or
(ii) Refer the dispute to the schedule contracting officer.
(2) The ordering office contracting officer shall notify the
schedule contracting officer promptly of any final decision.
(b) Disputes pertaining to the terms and conditions of schedule
contracts. The ordering office contracting officer shall refer all
disputes that relate to the contract terms and conditions to the
schedule contracting officer for resolution under the Disputes clause
of the contract and notify the schedule contractor of the referral.
(c) Appeals. Contractors may appeal final decisions to either the
Board of Contract Appeals servicing the agency that issued the final
decision or the U.S. Court of Federal Claims.
(d) Alternative dispute resolution. The contracting officer should
use the alternative dispute resolution (ADR) procedures, to the maximum
extent practicable (see 33.204 and 33.214).
[[Page 43516]]
PART 51--USE OF GOVERNMENT SOURCES BY CONTRACTORS
51.103 [Amended]
4. Amend section 51.103 by removing paragraph (b); and by
redesignating paragraph (c) as (b).
[FR Doc. 02-15941 Filed 6-26-02; 8:45 am]
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DEPARTMENT OF DEFENSE
GENERAL SERVICES ADMINISTRATION
NATIONAL AERONAUTICS AND SPACE ADMINISTRATION
48 CFR Part 31
[FAC 2001-08; FAR Case 1997-032; Item III]
RIN 9000-AH96
Federal Acquisition Regulation; Relocation Costs
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) "relocation costs"
cost principle by making allowable payments for spouse employment
assistance and for increased employee income and Federal Insurance
Contributions Act (FICA) (26 U.S.C. chapter 21) taxes incident to
allowable reimbursed relocation costs, increasing the ceiling for
allowance of miscellaneous costs of relocation, and making a number of
editorial changes.
DATES: Effective Date: July 29, 2002.
FOR FURTHER INFORMATION CONTACT: The FAR Secretariat, Room 4035, GS
Building, Washington, DC, 20405, (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
2001-08, FAR case 1997-032.
SUPPLEMENTARY INFORMATION:
A. Background
DoD, GSA, and NASA published a proposed rule in the Federal
Register at 64 FR 28330, May 25, 1999, that revised the cost principle
at FAR 31.205-35, Relocation costs, to--
Remove the numerous ceilings imposed on individual
relocation cost elements;
Recognize the growing commercial practice of reimbursing
relocation costs on a lump-sum basis in certain situations;
Make allowable payments for employment assistance for
spouses and for increased employee income and FICA taxes incident to
allowable reimbursed relocation costs;
Increase the ceiling for allowable miscellaneous
relocation costs; and
Make a number of editorial changes. The final rule amends
the FAR to--
Increase the limit for miscellaneous expenses when a lump-
sum approach is used. The current FAR requires the reimbursement of
miscellaneous expenses to be limited to actual expenses or $1,000 (if
the lump-sum approach is used). The proposed rule removed the $1,000
limitation in its entirety. To reduce the Government's risk in this
area, the final rule maintains a ceiling for miscellaneous expenses
when a contractor uses the lump-sum payment method, but increases the
limit from $1,000 to $5,000. The cost principle continues to have no
ceiling for miscellaneous expenses when reimbursement is based on
actual expenses;
Add two new categories of allowable relocation costs.
Consistent with the proposed rule, the final rule makes allowable two
categories of expenses that are currently unallowable: (1) Payments for
increased employee income and FICA taxes incident to allowable
reimbursed relocations costs, and (2) payments for spouse employee
assistance. Since contractors incur these types of costs in a good
faith effort to keep transferred employees from being adversely
affected by the relocation, it appears equitable to reimburse
contractors for these types of costs. In addition, the Employee
Relocation Council (ERC) data showed that it is a common industry
practice to reimburse relocating employees for both of these costs; and
Make a number of editorial changes, including revising the
"compensation for personal services" cost principle at FAR 31.205-
6(e)(2) to clarify that the differential allowances paid to compensate
for increased taxes on employee compensation is unallowable, but that
the payments to compensate for increased taxes incident to allowable
reimbursed relocation costs is allowable.
Twenty-two respondents submitted public comments. The Councils
considered all comments when developing the final rule. A discussion of
the major comments follows:
Inadequate Analysis. One commenter expressed the opinion
that "the proposed changes to FAR 31.205-35 have not been adequately
researched and the potential impact has not been documented." The
commenter went on to suggest that all of the proposed changes, except
for the lump-sum payment option, have been carefully considered by the
FAR drafters in the past and that those previous decisions should not
be overturned lightly and without thorough research and documentation
that demonstrate how the conditions have changed to make previously
rejected proposed changes now acceptable. In a related comment, another
commenter cautioned that "the councils should carefully review the
information provided in response to the questions directed to industry
respondents to determine that the administrative time and cost savings
will offset increased costs before eliminating the ceilings."
Response to Comments: As an integral part of its review of the
public comments submitted in response to this proposed rule, current
industry relocation practices were carefully analyzed (primarily using
data compiled by the ERC in its 1998 report entitled "Relocation
Assistance:
Transferred Employees"), together with the past regulatory history
of the relocation cost principle.
Disagree With Removing Ceilings. Four commenters opposed
the removal of the current ceilings on individual relocation cost
elements, while two of them added that "if the current limitations are
not adequate, they should be adjusted but not eliminated." These two
commenters disagreed with the Federal Register justification that the
"ceilings represent unnecessary micromanagement of contractor business
practices." One stated that "cost ceilings are a means of controlling
business expenses reimbursed with taxpayer dollars," and the other
argued that "the ceilings merely represent the maximum the Government
believes is reasonable." The commenter continued: "The FAR ceilings
were initially implemented to assure that reasonableness determinations
were consistently applied to all contractors and that unreasonable
costs would not be paid because the cost principle is too general or
unenforceable."
One commenter stated that "the ceilings * * * are necessary to
protect the Government from liability for reimbursement of excessive
costs." Another maintained that since the 14 percent limitation on
closing costs and
[[Page 43517]]
the continuing costs of ownership of a former residence (FAR 31.205-
35(a)(3) and (4)) and the 5 percent limitation on costs for purchasing
a new home (FAR 31.205-35(a)(6)(ii)) were based on commercial industry
standards, there is no justification for their removal. Another stated
that these 14 percent and 5 percent caps appeared reasonable, but added
that waivers "may be acceptable on a case-by-case basis."
Response to Comments: Three alternatives were evaluated during
consideration of this issue: removal of the ceilings, adjustment of the
ceilings, and retention of the current ceilings. The alternatives are
discussed below:
Alternative 1--Remove Ceilings as Reflected in the Proposed Rule.
The ERC data indicated that some of the current FAR ceilings on
individual relocation cost elements were too low. One alternative to
eliminating this relationship is for the ceilings to be eliminated as
shown in the proposed rule, rather than adjusted. This alternative
would be a fundamental shift in how the Government evaluates the
allowability of contractor relocation costs. An argument can be made
that this change is consistent with promoting greater acceptance of
commercial practices. Under this approach, the Government would place
greater reliance upon contractors' individual corporate relocation
policies to limit such costs to reasonable amounts, rather than
continuing to micromanage contractor business practices. This would
involve a systems approach requiring greater use of professional
judgment by our auditors and contracting officers to ensure that
relocation costs in total are reasonable, which is more difficult than
utilizing a series of caps to determine cost allowability. This
alternative would tend to satisfy those who believe that the various
ceilings on individual relocation cost elements have made the current
cost principle unnecessarily detailed.
Alternative 2--Retain Ceilings With Appropriate Adjustments. This
alternative is more consistent with the argument that the rationale
behind the numerous past decisions to retain the ceilings was sound.
That is, (1) industry practice varies widely, (2) reasonableness
determinations should be consistently applied to all contractors, and
(3) the cost principle without ceilings is too general and
unenforceable. Further, the Federal procurement process argues for the
retention of the ceilings. Without these stated ceilings, contracting
officers would be put in the unenviable position of determining what
constitutes reasonable relocation costs without ready access to the
necessary information to make this determination. By performing the
necessary market research and setting reasonable ceilings in this cost
principle, the Government avoids the inefficient process of having
hundreds of different procurement personnel performing various levels
of research and making inconsistent determinations. The ceilings should
be set at a level that allows contractors to be reimbursed for
reasonable relocation costs that are not unallowable.
Alternative 3--Retain Current Ceilings but Reevaluate.
The basis for this alternative is that the rationale supporting a
shift either to eliminate or to adjust the ceilings is incomplete, and
a reasoned policy change cannot be made at this time. There is
sufficient information to justify evaluation of whether a policy change
should be considered, but there is not sufficient information to
determine what a better policy might be. This is the approach adopted
by the FAR Council.
Lump-Sum Approach.
Lump-Sum Approach Would Result in Savings. Nine commenters argued
that an expanded lump-sum approach would result in significant savings
for contractors and the Government. One stated that at a Government
business segment using a lump-sum approach, instead of an actual and
reasonable method, savings achieved for the temporary living portion of
relocation costs averaged $4,432 per relocated employee for a total
savings on Government contracts of almost $200,000 per year. Similarly,
another indicated that it is experiencing savings of $6.4 million per
year by offering a lump-sum option for reimbursement of temporary
living expenses to relocated employees in its commercial segments. This
commenter projected that it has "the potential to save an additional
$1 million per year by offering the same option within its businesses
that sell goods and services to the U. S. Government." Another
commenter indicated an estimated saving of between $400,000 and
$500,000 per year due to the lump-sum relocation option.
Disagree With Lump-Sum Approach. One commenter objected "to the
lump-sum payment as proposed because it would increase administrative
cost with no evident benefit for the Government." The commenter added
that "few contractors use a lump-sum approach for total relocation
cost," and expressed concern that "expanding the lump-sum approach
beyond miscellaneous expenses (for which a lump-sum up to $1,000 is
already permitted) would make it virtually impossible to assure that
the lump-sum payment does not include unallowable costs." While not
directly opposing an expanded use of the lump-sum approach, three other
commenters expressed concerns that "in the absence of a database that
establishes what constitutes reasonable relocation expenses in various
locations, contracting officers will have difficulty negotiating
advance agreements on a broad range of relocation expenses." One
commenter added: "Without some objective data, it is unreasonable to
impose the burden of determining reasonableness on the contracting
officer."
Response to Comments: Review of the ERC data found that there is no
current industry practice of using lump-sum reimbursements for the
purchase or sale of a home. It appears inappropriate for the cost
principle to recognize lump-sum payments for these types of relocation
costs if there is no evidence of such an industry practice.
Additionally, an industry association commenter noted that in its
survey of member companies, "no respondent used the lump-sum approach
on all relocation costs." Accordingly, the broad lump-sum
reimbursement approach was removed from the rule.
The lump-sum reimbursement approach covering miscellaneous expenses
only that is currently in the FAR was retained, but the ceiling amount
was increased from $1,000 to $5,000. An unlimited lump-sum for
miscellaneous expenses could easily become a sub rosa vehicle for
reimbursing unallowable costs (such as a loss on the sale of a home) or
for awarding a hidden bonus to the relocating employee. While some
commenters contend that contractors and the Government will share in
cost reductions through use of lump-sum payments, others believe the
opposite will occur. No convincing data were found one way or the
other. This is further bolstered by indications from ERC that companies
use lump-sum reimbursements primarily to improve employee morale and to
reduce administrative costs. The net cost impact is unclear. This issue
may be pursued again in a separate FAR case to determine if there is a
clear answer justifying adoption of a broader lump-sum approach.
Remove Mandatory Advance Agreement Requirement for Lump-
Sum Approach. Eight commenters recommended that the requirement for an
advance agreement with the Government prior to using the lump-sum
payment option be eliminated.
[[Page 43518]]
Some argued that "the requirement for an advance agreement is not
necessary" because "lump-sum payments are an accepted commercial
practice" and "are more cost effective than actual cost tracking."
One added that "at times, whether or not an advance agreement is
executed depends on subjective rather than objective factors." It
added that "inconsistent actions concerning the execution of an
advance agreement on lump-sum payments could put companies on an
unequal footing when bidding on Government contracts." Another
observed that "formal acceptance by the contracting officer of what is
likely to be a case-by-case implementation of lump-sums is not
consistent with streamlining or acceptance of commercial practices."
Another stated that the mandatory advance agreement requirement "is
contrary to the spirit of Acquisition Reform" and "creates another
administrative burden."
Response to Comments: The original rationale for including a
mandatory advance agreement requirement in the proposed rule was to
give the Government additional control over the broadly worded lump-sum
guidance. However, we have revised paragraph (b)(2) of FAR 31.205-35 to
delete the mandatory advance agreement requirement, since we have
removed the lump-sum approach from the rule.
Disagree/Agree With Removing Mortgage Interest
Differential and Rental Differential Payments. Two commenters saw no
reason for removing the specific references to mortgage interest
differential and rental differential payments currently found at
paragraphs (a)(7) and (a)(8) of FAR 31.205-35. One stated: "Our survey
data, along with analysis of published relocation survey data, did not
demonstrate any significant difference in conditions that exist now
versus conditions that existed when these provisions were included in
the cost principle. Therefore, we cannot determine the basis for the
statement that coverage of these types of costs is no longer needed."
Conversely, another commenter expressed its belief that "eliminating
paragraphs FAR 31.205-35(a)(7) and (8) will provide the advantage of
simplification without adding costs to the Government."
Response to Comments: Although interest rates are currently very
low and the impact of interest differential is now very limited,
interest rates could increase in the future. We have added both of
these types of payments back into the paragraph (a) list of allowable
relocation costs.
Delete FAR 31.205-35 (a)(1) thru (a)(9). Three commenters,
noting that the proposed rule would remove the specific references to
mortgage interest differential and rental differential payments,
expressed concern "that Government auditors may assert that these
costs are now unallowable, notwithstanding the statements pertaining to
them included in the background section of this proposed rule." To
avoid such disputes over these and other relocation costs not
specifically mentioned under paragraph (a), they suggested that the
whole list of allowable relocation costs at FAR 31.205-35(a) (1) thru
(a)(9) be deleted.
Response to Comments: The Councils agree that removing the specific
references to mortgage interest differential and rental differential
payments from the cost principle could create confusion about the
future allowability of such costs, and they have added both of these
types of payments back into the paragraph (a) list of allowable
relocation costs. The Councils are also convinced there is great
benefit in making it absolutely clear that the listed types of
relocation costs in paragraph (a) are allowable and do not think this
list should be deleted.
Agree/Disagree With Making Spouse Employment Assistance
Payments and Tax Gross-Ups Allowable. Eight commenters agreed with the
equitable treatment rationale in the Federal Register for making two
new categories of relocation costs allowable: (1) Payments for spouse
employment assistance, and (2) payments for increased employee income
and FICA taxes incident to allowable reimbursed relocation costs
(commonly referred to as "tax gross-ups"). Several commenters
"applauded" this change which, as one commenter put it,
"acknowledges that contractors find it necessary to make such payments
to avoid unfairly penalizing the relocating employee."
On the other hand, another commenter found it "illogical" to use
the "good faith effort" rationale to allow these costs, but not the
other unallowable relocation costs. However, after noting that "there
is some evidence that spousal employment assistance is becoming a
general industry practice," that commenter stated that it does "not
object to the reconsideration of the allowability of spouse employment
assistance (subject to reasonable limitations) after adequate research
and analysis is performed."
Regarding tax gross-ups, that commenter quoted from a 1985 Cost
Principles Committee report: "We believe that there was no
Congressional intention to grant tax relief to contractor employees,
but that it was the intent to grant such relief to Federal employees in
order to reduce the out-of-pocket costs heretofore being borne by
Federal employees." That commenter also pointed out that past Cost
Principles Committee reports have concluded tax gross-ups are actually
a compensation cost, and not a relocation cost. Finally, the commenter
disagreed "with the theory that contractors should be reimbursed for
these types of costs merely because Federal employees are." In support
of this position, the commenter cited OFPP's 1986 "Study of Relocation
Costs," which found that "the policies governing the payment for
contractor relocation should remain separate from the policies
governing the relocation benefits paid to Federal employees."
Response to Comments: The ERC data showed that it is a common
industry practice to reimburse relocating employees for both of these
costs. The Councils believe they are bona fide relocation costs and
that it is fair to make them allowable now on Government contracts,
just as it was fair to begin reimbursing Federal employees for them.
Apparent Conflict Between Tax Gross-Ups and Taxes Cost
Principle. One commenter noted an apparent conflict between the new
language allowing tax gross-ups for reimbursed relocation costs and the
taxes cost principle provision that makes Federal income taxes
unallowable (FAR 31.205-41(b)(1)).
Response to Comments: The Councils do not see a conflict. The taxes
cost principle makes contractor Federal income tax payments
unallowable, not contractor reimbursements to an employee for the
relocating employee's increased tax liability.
Federal Employees Do Not Get Tax Gross-Ups on FICA. One
commenter noted that "Government employees are reimbursed income taxes
on relocation reimbursements, but not FICA. Employees, particularly
employees of private contractors, theoretically receive a future
benefit from increased FICA contributions. Therefore, reimbursement of
FICA could be considered inappropriate, and we would recommend
reimbursement of income taxes, but not FICA."
Response to Comments: The Councils disagree with this
recommendation. They do not believe the allowability of contractor
relocation costs must always parallel the treatment afforded relocating
Federal employees; nor do they see uncertain future benefits as a valid
reason for excluding FICA from
[[Page 43519]]
allowable contractor tax gross-ups. The Councils believe this is a bona
fide relocation cost, which should be made allowable.
Administrative Costs Will Decrease/Increase. Thirteen
commenters agreed with the Federal Register rationale that the proposed
rule would reduce administrative costs. As one commenter put it: "We
believe that the proposed changes would result in savings to both
contractors and the Government by reducing or eliminating a number of
burdensome administrative processes. For instance, with the elimination
of thresholds, contractors would no longer need to track applicable
costs separately and compare them to artificial thresholds. Detailed
training on how to apply the thresholds would no longer be required. We
believe that, to the extent that contractors find it otherwise
appropriate and feasible to adopt lump-sum practices, record-keeping
requirements would be reduced for both the contractor and the
relocating employee. Finally, internal and external oversight
requirements would be streamlined."
In contrast, two commenters maintained that administrative costs
would increase under the proposed rule. One argued that "audit effort
will necessarily increase (as will the contractor support of the
increased audit effort) since instead of having stated reasonableness
limitations, the auditor will now be forced to evaluate individual
contractor systems for assuring reasonableness." The commenter added
that "using a broad criterion such as reasonableness naturally leads
to differences of opinion," which "will result in increased disputes
which will increase the effort required by contractors, contracting
officers, and the courts to settle these disputes." Finally, the
commenter stated: "Our survey of Government contractors found that the
administrative cost incurred by contractors to comply with the
requirements of FAR 31.205-35 is immaterial. Any potential savings
would certainly be offset by the administrative cost involved in
obtaining an advance agreement for the use of lump-sum payments." The
other commenter expressed concern that "without the ceilings, we
anticipate contracting officers will need to perform a greater amount
of analysis to determine the reasonableness of a contractor's proposed
relocation costs."
Response to Comments: The Councils expect that adoption of the rule
will result in reduced administrative burden for contractors and
increased administrative burden for the Government; but, they have no
way to quantify these anticipated impacts. They do not consider an
increase in the Government's administrative effort, by itself, to be a
valid reason for retaining the existing FAR language.
Relocation Costs Will Increase. Three commenters argued
against the proposed rule because they believed it will result in
higher relocation costs being claimed under Government contracts. Based
on its own analysis of more than 50 Government contractors, one
commenter projected that "the proposed rule may result in more than
$130 million in additional relocation costs claimed by Government
contractors annually." However, another commenter countered that
"concerns about added costs or potential savings that may result from
a policy change should be irrelevant to the objective at hand; i.e.,
ensuring that the Government pays fair and reasonable expenses under
noncompetitive and cost reimbursable contracts."
Response to Comments: While relocation costs claimed on Government
contracts may increase if the proposed rule is adopted, that is not a
valid argument for retaining the existing FAR language. The Councils
believe the cost principles should ensure that contractors are treated
fairly, consistent with sound public policy. The cost principles should
not be used as a cost containment mechanism.
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 most contracts awarded
to small entities use simplified acquisition procedures or are awarded
on a competitive, fixed-price basis and do not require application of
the cost principles contained in this rule.
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 Part 31
Government procurement.
Dated: June 19, 2002.
Al Matera,
Director, Acquisition Policy Division.
Therefore, DoD, GSA, and NASA amend 48 CFR part 31 as set forth
below:
PART 31--CONTRACT COST PRINCIPLES AND PROCEDURES
1. The authority citation for 48 CFR part 31 continues to read as
follows:
Authority: 40 U.S.C. 486(c); 10 U.S.C. chapter 137; and 42
U.S.C. 2473(c).
2. Revise paragraph (e)(2) of section 31.205-6 to read as follows:
31.205-6 Compensation for personal services.
* * * * *
(e)(1) * * *
(2) Differential allowances for additional Federal, State, or local
income taxes resulting from domestic assignments are unallowable.
(However, payments for increased employee income or Federal Insurance
Contributions Act taxes incident to allowable reimbursed relocation
costs are allowable under 31.205-35(a)(10).)
* * * * *
3. Revise paragraphs (a), (b), (c), and (f)(1) of section 31.205-35
to read as follows:
31.205-35 Relocation costs.
(a) Relocation costs are costs incident to the permanent change of
assigned work location (for a period of 12 months or more) of an
existing employee or upon recruitment of a new employee. The following
types of relocation costs are allowable as noted, subject to the
limitations in paragraphs (b) and (f) of this subsection:
(1) Costs of travel of the employee and members of the employee's
immediate family (see 31.205-46) and transportation of the household
and personal effects to the new location.
(2) Costs of finding a new home, such as advance trips by the
employee or the spouse, or both, to locate living quarters, and
temporary lodging during the transition period for the employee and
members of the employee's immediate family.
(3) Closing costs incident to the disposition of the actual
residence owned by the employee when notified of the transfer (e.g.,
brokerage fees, legal fees, appraisal fees, points, and finance
charges), except that these costs, when
[[Page 43520]]
added to the costs described in paragraph (a)(4) of this subsection,
shall not exceed 14 percent of the sales price of the property sold.
(4) Continuing costs of ownership of the vacant former actual
residence being sold, such as maintenance of building and grounds
(exclusive of fixing up expenses), utilities, taxes, property
insurance, and mortgage interest, after the settlement date or lease
date of a new permanent residence, except that these costs, when added
to the costs described in paragraph (a)(3) of this subsection, shall
not exceed 14 percent of the sales price of the property sold.
(5) Other necessary and reasonable expenses normally incident to
relocation, such as disconnecting and connecting household appliances;
automobile registration; driver's license and use taxes; cutting and
fitting rugs, draperies, and curtains; forfeited utility fees and
deposits; and purchase of insurance against damage to or loss of
personal property while in transit.
(6) Costs incident to acquiring a home in the new work location,
except that--
(i) These costs are not allowable for existing employees or newly
recruited employees who were not homeowners before the relocation; and
(ii) The total costs shall not exceed 5 percent of the purchase
price of the new home.
(7) Mortgage interest differential payments, except that these
costs are not allowable for existing or newly recruited employees who,
before the relocation, were not homeowners and the total payments are
limited to an amount determined as follows:
(i) The difference between the mortgage interest rates of the old
and new residences times the current balance of the old mortgage times
3 years.
(ii) When mortgage differential payments are made on a lump-sum
basis and the employee leaves or is transferred again in less than 3
years, the amount initially recognized shall be proportionately
adjusted to reflect payments only for the actual time of the
relocation.
(8) Rental differential payments covering situations where
relocated employees retain ownership of a vacated home in the old
location and rent at the new location. The rented quarters at the new
location must be comparable to those vacated, and the allowable
differential payments may not exceed the actual rental costs for the
new home, less the fair market rent for the vacated home times 3 years.
(9) Costs of canceling an unexpired lease.
(10) Payments for increased employee income or Federal Insurance
Contributions Act (26 U.S.C. chapter 21) taxes incident to allowable
reimbursed relocation costs.
(11) Payments for spouse employment assistance.
(b) The costs described in paragraph (a) of this subsection must
also meet the following criteria to be considered allowable:
(1) The move must be for the benefit of the employer.
(2) Reimbursement must be in accordance with an established policy
or practice that is consistently followed by the employer and is
designed to motivate employees to relocate promptly and economically.
(3) The costs must not be otherwise unallowable under subpart 31.2.
(4) Amounts to be reimbursed shall not exceed the employee's actual
expenses, except that for miscellaneous costs of the type discussed in
paragraph (a)(5) of this subsection, a flat amount, not to exceed
$5,000, may be allowed in lieu of actual costs.
(c) The following types of costs are unallowable:
(1) Loss on the sale of a home.
(2) Costs incident to acquiring a home in the new location as
follows:
(i) Real estate brokers' fees and commissions.
(ii) Costs of litigation.
(iii) Real and personal property insurance against damage or loss
of property.
(iv) Mortgage life insurance.
(v) Owner's title policy insurance when such insurance was not
previously carried by the employee on the old residence. (However, the
cost of a mortgage title policy is allowable.)
(vi) Property taxes and operating or maintenance costs.
(3) Continuing mortgage principal payments on a residence being
sold.
(4) Costs incident to furnishing equity or nonequity loans to
employees or making arrangements with lenders for employees to obtain
lower-than-market rate mortgage loans.
* * * * *
(f) * * *
(1) The term of employment is 12 months or more;
* * * * *
[FR Doc. 02-15942 Filed 6-26-02; 8:45 am]
BILLING CODE 6820-EP-P
[Federal Register: June 27, 2002 (Volume 67, Number 124)]
[Rules and Regulations]
[Page 43520-43521]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr27jn02-23]
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DEPARTMENT OF DEFENSE
GENERAL SERVICES ADMINISTRATION
NATIONAL AERONAUTICS AND SPACE ADMINISTRATION
48 CFR Part 52
[FAC 2001-08; Item IV]
Federal Acquisition Regulation; Technical Amendments
AGENCIES: Department of Defense (DoD), General Services Administration
(GSA), and National Aeronautics and Space Administration (NASA).
ACTION: Final rule.
-----------------------------------------------------------------------
SUMMARY: This document makes amendments to the Federal Acquisition
Regulation in order to update references and make editorial changes.
DATES: Effective Date: July 29, 2002.
FOR FURTHER INFORMATION CONTACT: The FAR Secretariat, Room 4035, GS
Building, Washington, DC 20405, (202) 501-4755. Please cite FAC 2001-
08, Technical Amendments.
List of Subjects in 48 CFR Part 52
Government procurement.
Dated: June 19, 2002.
Al Matera,
Director, Acquisition Policy Division.
Therefore, DoD, GSA, and NASA amend 48 CFR part 52 as set forth
below:
PART 52--SOLICITATION PROVISIONS AND CONTRACT CLAUSES
1. The authority citation for 48 CFR part 52 continues to read as
follows:
Authority: 40 U.S.C. 486(c); 10 U.S.C. chapter 137; and 42
U.S.C. 2473(c).
52.202-1 [Amended]
2. Amend section 52.202-1 by removing from Alternate I "(Mar
2001)" and adding "(May 2001)" in its place.
52.212-3 [Amended]
3. Amend section 52.212-3 in the provision heading by removing
"(May 2002)" and adding "(July 2002)" in its place; removing from
paragraph (c)(10)(i) of the provision "principal place of ownership"
and adding "principal office" in its place; and removing from the
first sentence of paragraph (c)(10)(ii) "on the joint" and adding
"in the joint" in its place.
52.225-11 [Amended]
4. Amend section 52.225-11 in the clause heading by removing "(May
2002)" and adding "(July 2002)" in its
[[Page 43521]]
place; and in the third sentence of paragraph (b)(1) of the clause by
removing "and Balance of Payments Program".
[FR Doc. 02-15943 Filed 6-26-02; 8:45 am]
BILLING CODE 6820-EP-P
[Federal Register: June 27, 2002 (Volume 67, Number 124)]
[Rules and Regulations]
[Page 43521]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr27jn02-24]
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DEPARTMENT OF DEFENSE
GENERAL SERVICES ADMINISTRATION
NATIONAL AERONAUTICS AND SPACE ADMINISTRATION
48 CFR Chapter 1
Federal Acquisition Regulation; Small Entity Compliance Guide
AGENCIES: Department of Defense (DoD), General Services Administration
(GSA), and National Aeronautics and Space Administration (NASA).
ACTION: Small Entity Compliance Guide.
-----------------------------------------------------------------------
SUMMARY: This document is issued under the joint authority of the
Secretary of Defense, the Administrator of General Services and the
Administrator for the National Aeronautics and Space Administration.
This Small Entity Compliance Guide has been prepared in accordance with
Section 212 of the Small Business Regulatory Enforcement Fairness Act
of 1996 (Public Law 104-121). It consists of a summary of rules
appearing in Federal Acquisition Circular (FAC) 2001-08 which amend the
FAR. An asterisk (*) next to a rule indicates that a regulatory
flexibility analysis has been prepared in accordance with 5 U.S.C. 604.
Interested parties may obtain further information regarding these rules
by referring to FAC 2001-08 which precedes this document. These
documents are also available via the Internet at http://www.arnet.gov/
far.
FOR FURTHER INFORMATION CONTACT: Laurie Duarte, FAR Secretariat, (202)
501-4225. For clarification of content, contact the analyst whose name
appears in the table below.
List of Rules in FAC 2001-08
------------------------------------------------------------------
Item Subject FAR case Analyst
------------------------------------------------------------------
I... Definition of "Claim" and 2000-406 Klein.
Terms Relating to Termination.
II.. Federal Supply Schedule Order 1999-614 Nelson.
Disputes and Incidental Items.
III. Relocation Costs............. 1997-032 Olson.
IV....Technical Amendments
------------------------------------------------------------------
Item I--Definition of "Claim" and Terms Relating to Termination (FAR
Case 2000-406)
The purpose of this final rule is to clarify the applicability of
definitions, eliminate redundant or conflicting definitions, and
streamline the process for locating definitions. This rule is not
intended to change the meaning of any FAR text or clause. Movement of
various definitions to FAR 2.101 is not intended to change the
operation of the cost principles and, specifically, the movement of the
definition of "claim" to FAR 2.101 is not intended to change the
scope or context of FAR 31.205-47(f)(1).
This final rule--
Revises and moves the definitions of "claim" from FAR
33.201; "continued portion of the contract," "partial termination,"
"terminated portion of the contract" from FAR 49.001; and
"termination for convenience" from FAR 17.103;
Adds a definition of "termination for default" at FAR
2.101 and a new paragraph (d) at FAR 17.104 that explains the
distinction between "termination for convenience" and
"cancellation" that was deleted from the definition of "termination
for convenience" that was moved from FAR 17.103;
Revises FAR 33.213(a) to clarify the distinction between
claims "arising under a contract" and claims "relating to a
contract";
Revises the definition of "claim" in the FAR clause at
52.233-1 to conform to the definition at FAR 2.101; and
Makes other editorial revisions for clarity.
Item II--Federal Supply Schedule Order Disputes and Incidental Items
(FAR Case 1999-614)
This final rule amends the FAR to add policies on disputes and
incidental items under Federal Supply Schedule contracts and to remove
the requirement to notify GSA when a schedule contractor refuses to
honor an order placed by a Government contractor. This rule affects all
ordering offices acquiring supplies or services subject to the
procedures of FAR Subpart 8.4.
Item III--Relocation Costs (FAR Case 1997-032)
This final rule amends the relocation cost principle at FAR 31.205-
35. The rule will only affect contracting officers that price contracts
using cost analysis, or that are required by a contract clause to use
cost principles for the determination, negotiation, or allowance of
costs.
The relocation cost principle addresses the allowability of costs
incurred by an existing contractor employee incident to the permanent
change of the employee's assigned work location for a period of 12
months or more, or upon recruitment of a new employee. The final rule
revises the cost principle by making allowable payments for spouse
employment assistance and for increased employee income and Federal
Insurance Contributions Act taxes incident to allowable reimbursed
relocation costs, increasing the ceiling for allowance of miscellaneous
costs of relocation, and making a number of editorial changes.
Item IV--Technical Amendments
These amendments update sections and make editorial changes at FAR
52.202-1, 52.212-3, and 52.225-11.
Dated: June 19, 2002.
Al Matera,
Director, Acquisition Policy Division.
[FR Doc. 02-15944 Filed 6-26-02; 8:45 am]
BILLING CODE 6820-EP-P