Federal Acquisition Regulation: Clarification of Submission of Cost or Pricing Data on Non-Commercial Modifications of Commercial Items

Federal Register: March 19, 2010 (Volume 75, Number 53)

Rules and Regulations

Page 13414-13415

From the Federal Register Online via GPO Access [wais.access.gpo.gov]

DOCID:fr19mr10-14

DEPARTMENT OF DEFENSE

GENERAL SERVICES ADMINISTRATION

NATIONAL AERONAUTICS AND SPACE ADMINISTRATION 48 CFR Part 15

FAC 2005-39; FAR Case 2008-012; Item II; Docket 2008-0001, Sequence 23

RIN 9000-AL12

Federal Acquisition Regulation; FAR Case 2008-012, Clarification of Submission of Cost or Pricing Data on Non-Commercial Modifications of Commercial Items

AGENCIES: Department of Defense (DoD), General Services Administration

(GSA), and National Aeronautics and Space Administration (NASA).

ACTION: Final rule.

SUMMARY: The Civilian Agency Acquisition Council and the Defense

Acquisition Regulations Council (Councils) have adopted as final, with minor changes, an interim rule which amended the Federal Acquisition

Regulation (FAR) to implement section 814 of the National Defense

Authorization Act (NDAA) for Fiscal Year (FY) 2008. Section 814 required the harmonization of the thresholds for cost or pricing data.

Specifically, section 814 required alignment of the threshold for cost or pricing data on non-commercial modifications of commercial items with the Truth In Negotiation Act (TINA) threshold for cost or pricing data.

DATES: Effective Date: March 19, 2010.

FOR FURTHER INFORMATION CONTACT: Mr. Edward Chambers, Procurement

Analyst, at (202) 501-3221 for clarification of content. For information pertaining to status or publication schedules, contact the

FAR Secretariat at (202) 501-4755. Please cite FAC 2005-39, FAR case 2008-012.

SUPPLEMENTARY INFORMATION:

1. Background

   DoD, GSA, and NASA published an interim rule in the Federal

   Register at 74 FR 11826 on March 19, 2009, to implement section 814 of the NDAA for FY 2008. Section 814 implemented two areas of clarification with regards to the submission of cost or pricing data on non-commercial modifications of commercial items.

   The comment period closed on May 18, 2009, with one comment received. The respondent opined that the addition of the new FAR text

   ``at the time of contract award'' was unclear. The respondent indicated that a contract's initial price subsequently changes based upon modifications and inquired if the total price ``at time of contract award'' included subsequent modifications that changed the initial contract price. The respondent also highlighted the example of an indefinite delivery-indefinite quantity (IDIQ) contract where orders are issued and inquired whether ``at the time of contract award'' related to issuance of the IDIQ contract or individual orders placed under this IDIQ contract. The respondent also offered examples of possible revised language.

   The Councils believe that, with minor changes, the language in the interim rule is appropriate. Section 814 of the NDAA for FY 2008 required the insertion of the language ``at time of contract award'' after the language ``total price of contract'', which is already contained in FAR 15.403-1. This language is being added to clarify at what point during the life of the contract that the cost or pricing threshold should be applied under FAR 15.403-1. The Councils believe that the language ``at the time of contract award'' clearly indicates that subsequent modifications, other than those which meet the triggering thresholds of TINA themselves, that change a contract's price are not factored into determining when the cost or pricing threshold should be applied under FAR 15.403-1. In the case of IDIQ contracts, it is commonly understood that it is the estimated total value of orders for the specified period at the time of contract award, as well as the individual value of any subsequent discrete orders, to which the TINA thresholds apply. Consequently, the final rule language reflects only minor editorial changes.

   This is a significant regulatory action and therefore, was 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.

2. Regulatory Flexibility Act

   The Department of Defense, the General Services Administration, and the National Aeronautics and Space Administration certify that this 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., since it is harmonizing FAR 15.403-1 with other parts of the FAR and should actually reduce the administrative burden on contractors by not requiring them to track two separate dollar thresholds for submitting cost or pricing data. It is also increasing this dollar threshold relative to the submittal of cost or pricing data in this situation and thus contractors will experience a reduced administrative burden since they no longer will be required to submit cost or pricing data on this lower threshold amount.

3. 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.

   List of Subjects in 48 CFR Part 15

   Government procurement.

   Dated: March 15, 2010.

   Al Matera,

   Director, Acquisition Policy Division. 0

   Accordingly, the interim rule published in the Federal Register at 74

   FR 11826 on March 19, 2009, is adopted as a final rule with the following changes:

   PART 15--CONTRACTING BY NEGOTIATION 0 1. The authority citation for 48 CFR part 15 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 15.403-1 by revising paragraphs (c)(3)(iii)(B) and

   (c)(3)(iii)(C) to read as follows:

   Page 13415

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

   * * * * *

   (c) * * *

   (3) * * *

   (iii) * * *

   (B) For acquisitions funded by DoD, NASA, or the Coast Guard, such modifications of a commercial item are exempt from the requirement for submission of cost or pricing data provided the total price of all such modifications under a particular contract action does not exceed the greater of the threshold for obtaining cost or pricing data in 15.403-4 or 5 percent of the total price of the contract at the time of contract award.

   (C) For acquisitions funded by DoD, NASA, or the Coast Guard, such modifications of a commercial item are not exempt from the requirement for submission of cost or pricing data on the basis of the exemption provided for at FAR 15.403-1(c)(3) if the total price of all such modifications under a particular contract action exceeds the greater of the threshold for obtaining cost or pricing data in 15.403-4 or 5 percent of the total price of the contract at the time of contract award.

   * * * * *

   FR Doc. 2010-5986 Filed 3-18-10; 8:45 am

   BILLING CODE 6820-EP-S