OFFICE OF THE UNDER SECRETARY OF DEFENSE
13000 DEFENSE PENTAGON
WASHINGTON, DC 203O1-3000
July 29, 1998
MEMORANDUM FOR DIRECTORS OF DEFENSE AGENCIES DEPUTY FOR ACQUISITION AND BUSINESS MANAGEMENT
ASN CRD&A) /ABM
DEPUTY ASSISTANT SECRETARY OF THE AIR FORCE (CONTRACTING), SAF/AQC
DEPUTY ASSISTANT SECRETARY OF THE ARMY (PROCUREMENT) DEPUTY DIRECTOR (ACQUISITION), DEFENSE LOGISTICS AGENCY
SUBJECT: Contractor Insurance/Pension Reviews (CIPRs)
We have amended the Defense Federal Acquisition Regulation Supplement (DFARS) to clarify requirernents for conducting a CIPR, to eliminate the requirement for conducting a CIPR at least every 2 years, and to require a special CIPR only under certain circumstances.
The attached final DFARS rule is effective immediately and will be published in a future Defense Acquisition Circular.
Eleanor K. Spector Director, Defense Procurenent
[Federal Register: July 29, 1998 (Volume 63, Number 145)]
DEPARTMENT OF DEFENSE
48 CFR Part 242
Defense Federal Acquisition Regulation Supplement; Contractor
AGENCY: Department of Defense (DoD).
ACTION: Final rule.
SUMMARY: The Director of Defense Procurement has issued a final rule amending the Defense Federal Acquisition Regulation Supplement (DFARS) to revise guidance pertaining to the conduct of Contractor Insurance/Pension Reviews (CIPRs). The rule clarifies requirements for conducting a CIPR, eliminates the requirement to conduct a CIPR at least every 2 years, and requires the performance of a special CIPR under certain circumstances.
FOR FURTHER INFORMATION CONTACT:
Rick Layser, Defense Acquisition Regulations Council, PDUSD (A&T) DP
(DAR), IMD 3D139, 3062 Defense Pentagon, Washington, DC 20301-3062.
Telephone (703) 602-0131; telefax (703) 602-0350. Please cite DFARS
This final rule revises the guidance in DFARS Subpart 242.73 pertaining to the conduct of CIPRs. A proposed rule was published in the Federal Register on August 20, 1997 (62 FR 44249). Ten respondents submitted comments on the proposed rule. All comments were considered in the development of the final rule.
B. Regulatory Flexibility Act
The Department of Defense certifies 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 applies only to contractors whose annual
qualifying sales to the Government exceed $40 million, and no small entities are known to meet this criterion.
C. Paperwork Reduction Act
The Paperwork Reduction Act does not apply because the final rule does not impose any 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 242 Government procurement. Michele P. Peterson, Executive Editor, Defense Acquisition Regulations Council.
Therefore, 48 CFR Part 242 is amended as follows:
1. The authority citation for 48 CFR Part 242 continues to read as follows:
Authority: 41 U.S.C. 421 and 48 CFR Chapter 1.
2. Sections 242.7301 and 242.7303 are revised to read as follows:
(a) The administrative contracting officer (ACO) is responsible for determining the[ ] [allowability] of insurance/pension costs in Government contracts. [Defense Logistics Agency (DLA) i]nsurance/pension specialists [and Defense Contract Audit Agency (DCAA) auditors] assist ACOs in making these determinations by conducting CIPRs.
[ (1)] A CIPR is an in-depth evaluation of a contractor's--
[(i)] Insurance program;
[(ii)] Pension plans;
[ (iii)] Other deferred compensation plans; and
[ (iv)] Related policies, procedures, practices, and costs.
[ (2) A special CIPR is a joint DLA/DCAA review that concentrates on specific areas of the contractor's insurance program, pension plan, or other deferred compensation plan.]
(b) [ ]DLA is the DoD Executive Agency for the performance of all CIPRs conducted under 242.7302.]
(a)[(1)] A CIPR shall be conducted [only when--
[ (2)] Qualifying sales are sales for which [ ] cost or pricing data were required under 10 U.S.C. 2306[a], as implemented in [ ] FAR 15., or[ ][ that] are [ ]contracts [priced on other than a firm-fixed-price or fixed-price with economic price adjustment basis]. Sales include prime contracts, subcontracts, and modifications to such contracts and subcontracts.
(a) The [ ][ACO] is responsible for--
(1) Determining the need for a CIPR [ ]under 242.7302;
(2) Requesting and scheduling the reviews with the appropriate [ ][ DLA] activity;
(3) Notifying the contractor of the proposed date and purpose of the review, and obtaining any preliminary data needed by the [DLA] insurance/pension specialist [or the DCAA auditor];
(4) Reviewing the CIPR report, advising the contractor of the [ ] [recommendations contained therein, considering contractor comments, and rendering a decision on those recommendations];
(5) providing other interested contracting officers copies of documents related to the CIPR[ ];
(6) Ensuring adequate follow-up on all CIPR recommendations[; and] [ (7) Performing contract administration responsibilities related to Cost Accounting Standards administration as described in FAR Subparts 30.2 and 30.6.]
(b) The [DLA] insurance/pension specialist is responsible for--
(1) Preparing and maintaining the schedule of CIPRs to be performed during the next 12 months and providing the military departments and [ ][DCAA] a copy of the schedule;
[(2) Issuing a technical report on the contractor's insurance/ pension plans for incorporation into the final CIPR report based on an analysis of the contractor's pension program, insurance program, and other related data;
[(ii)] To the extent possible, resolving discrepancies between audit reports and CIPR draft reports prior to releasing the final CIPR report;
[(iii)] Preparing and distributing the final CIPR report;
[(iv)] Providing the final audit report [and/or the insurance/pension specialist's report] as an attachment to the CIPR report;[ and]
[(4)] When requested, advising administrative contracting officers and other Government representatives concerning contractor insurance/pension matters.
(c) [The DCAA] auditor is responsible for--
(1) Participating as a member of the CIPR team [or serving as the team leader (see paragraph (b)(3) of this section)];
[ (3) Performing contract audit responsibilities related to Cost Accounting Standards administration as described in FAR Subparts 30.2 and 30.6.]