RULES and REGULATIONS

DEPARTMENT OF DEFENSE

GENERAL SERVICES ADMINISTRATION

NATIONAL AERONAUTICS AND SPACE ADMINISTRATION

48 CFR Parts 14, 15, and 52

[FAC 90-22; FAR Case 94-720]

RIN 9000-AG19

Federal Acquisition Regulation; Certified Cost or

Pricing Data Threshold

AGENCIES: Department of Defense (DOD),

General Services Administration (GSA), and National Aeronautics

and Space Administration (NASA).

ACTION: Interim rule with request for comment.

SUMMARY: The Department of Defense, the

General Services

Administration, and the National Aeronautics

and Space

Administration have agreed to an interim rule to

increase the

threshold for certified cost or pricing data from

$100,000 to

$500,000 for civilian agencies and to remove the

requirements for

commercial pricing certificates. This regulatory action was not subject to Office of Management and Budget review under Executive Order 12866, dated September 30, 1993.

Effective Date: December 5, 1994.

Comment Date: Comments should be submitted to the FAR






Secretariat at the address shown below on or before February 3, 1995, to be considered in the formulation of a final rule.

ADDRESSES: Interested parties should submit written comments to:

General Services Administration, FAR Secretariat

(VRS), 18th & F

Streets, NW, Room 4037, Washington, DC 20405, Phone:

(202) 501-

4755.

Please cite FAC 90-22, FAR case 94-720 in all correspondence related to this case.

FOR FURTHER INFORMATION CONTACT: Mr. Al Winston,

Truth in Negotiations Act (TINA) Team Leader, at (703) 602-2119 in

reference to this FAR case. For general information, contact the FAR Secretariat, Room

4037, GS Building, Washington, DC 20405, (202) 501-4755. Please cite FAC 90-22,

FAR case94-720.

SUPPLEMENTARY INFORMATION:

A. Background

The Federal Acquisition Streamlining Act of 1994 (the Act),

Pub. L. 103-355, provides authorities that streamline the acquisition process and

minimize burdensome government-unique requirements. Major changes that can be

expected in the acquisition process as a result of the Act's implementation include

changes in the areas of Commercial Item Acquisition, Simplified Acquisition Procedures,

the Truth in Negotiations Act, and introduction of the Federal Acquisition Computer

Network. This notice announces FAR revisions developed under FAR case94-720, which

was based on provisions in the Act that increased the threshold for obtaining certified cost or

pricing data from $100,000 to $500,000 for civilian agencies. This matches the threshold

previously applicable only to the Department of Defense, the National Aeronautics

and Space Administration, and the Coast Guard. The Act also repealed the requirements

to obtain commercial pricing certification for certain items under civilian agency contracts.

This interim rule is intended solely to make the changes necessary to implement those

limited portions of the Act. Further, more extensive changes to implement other portions

of the Act will be made subsequently. The FAR Council is interested in an exchange

of ideas and opinions with respect to the regulatory implementation of the

Act. For that reason, the FAR Council is conducting a series of public meetings.

However, the FAR Council has not scheduled a public meeting on this rule (FAR case

94-720) because of the clarity and non-controversial nature of the rule. If

the public believes such a meeting is needed with respect to this rule, a

letter requesting a public meeting and outlining the nature of the requested meeting shall

be submitted to and received by the FAR Secretariat (see ADDRESSES caption, above) on

or before January 4, 1995. The FAR Council will consider such requests in determining

whether a public meeting on this rule should be scheduled. B. Regulatory Flexibility Act

The interim rule is not expected 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 nearly all contracts awarded to small business are awarded on the basis

of competition for a firm fixed price and submittal of cost or pricing data is not required.

An Initial Regulatory Flexibility Analysis has, therefore, not been performed. Comments

from small entities concerning the affected FAR subpart will be considered in accordance

with 5U.S.C. 610.Such comments must be submitted separately and cite 5 U.S.C601, et seq.

A(FAC 90-22, FAR case 94-720), in correspondence.

C. Paperwork Reduction Act

The paperwork burden estimate applicable to requirements for certified cost or pricing data

(9000-0013) has been reduced to reflect the reduced numbers of submittals of certified cost

or pricing data by civilian agency contractors. The reduction in the estimated burden for

cost or pricing data requirements stems from the reduced number of submittals of cost or

pricing data due to the increase in the threshold from $100,000 to $500,000. The paperwork burden applicable to the Commercial Pricing Certification requirements (9000-0105) has been eliminated. Inquiries should be directed to the FAR Secretariat, Room 4037, GS Building, Washington, DC 20405, (202) 501- 4755 and cite FAC 90-22, OMB Clearance No. 9000-0013 or 9000-0105.

D. Determination to Issue an Interim Rule

determination has been made under the authority of the Secretary of Defense (DOD),

the Administrator of General Services (GSA), and the Administrator of the National

Aeronautics and Space Administration (NASA) that compelling reasons exist to

promulgate this interim rule without prior opportunity for public comment. This action is

necessary because the portion of the Federal Acquisition Streamlining Act of 1994

that increases the certified cost or pricing data threshold for civilian agencies is

effective upon enactment Additionally, the Act repeals the requirements for commercial

pricing certifications and the unnecessary regulatory burden related to commercial

pricing certificates should be eliminated as quickly as possible to reduce administrative

costs within the Government and at contractor locations.

List of Subjects in 48 CFR Parts 14, 15 and 52:

Government procurement. Dated: November 29, 1994. Capt. Barry L. Cohen, SC, USN,

Project Manager for the Implementation of the Federal Acquisition Streamlining Act of 1994.

Unless otherwise specified, all Federal Acquisition Regulation (FAR) and other

directive material contained in FAC 90-22 are effective December 5, 1994. Dated: November

17, 1994. Albert A. Vicchiolla Acting Associate Administrator, Office of Acquisition

Policy, General Services Administration.

Dated: November 23, 1994. Thomas Luedtke, Deputy Associate Administrator for

Procurement, NASA. Dated: November 28, 1994.

Eleanor R. Spector, Director, Defense Procurement. Therefore, 48 CFR Parts 14,

15 and 52 are amended as set forth below:

  • 1. The authority citation for 48 CFR Parts 14, 15 and 52 continues to read as follows: Authority: 40 U.S.C. 486©; 10 U.S.C. chapter 137; and 42 U.S.C. 2473©.
  • PART 14--SEALED BIDDING

    2. Section 14.201-7 is amended in paragraphs (a), (b)(1), and ©(1) by

    removing "$100,000, or for the Department of Defense, the National Aeronautics and Space

    Administration, and the Coast Guard, is expected to exceed $500,000." and inserting "the

    threshold for submission of cost or pricing data at 15.804- 2(a)(1)." in its place,

    by redesignating paragraph(d) as (e), and adding a new (d) to read as follows:

    14.201-7 Contract clauses.

    * * * * *

    (d) Contracting officers shall, if requested by the prime contractor, modify contracts to

    change the threshold in the contract to the cost or pricing data threshold in15.804-2(a)(1),

    without requiring consideration. The modification shall be accomplished by inserting

    into the contract the current version of clauses 52.214-27, Price Reduction for Defective

    Costor Pricing Data-Modifications-Sealed Bidding, and52.214-28Subcontractor Cost or

    Pricing Data-Modifications-Sealed Bidding. These new contract clauses shall apply only

    to contract modifications and subcontracts for which agreement on price occurs after

    the contracting officer has inserted the new clauses.

    * * * * *

    14.214 [Reserved]

    3. Section 14.214 is removed and reserved.

    PART 15--CONTRACTING BY NEGOTIATION

    4. Section 15.804-2 is amended by revising paragraphs (a)(1) and (2) to read as follows:

    15.804-2 Requiring cost or pricing data.

    (a)(1) The threshold for obtaining cost or pricing data$500,000. This amount will

    be subject to adjustment, effective October 1, 1995, and every five years thereafter. Except

    as provided in 15.804-3, certified cost or pricing data are required before accomplishing any

    of the following actions expected to exceed the threshold in effect at time of agreement on price

    or, in the case of existing contracts, the threshold specified in the contract-

    (i) The award of any negotiated contract (except for undefinitized actions such as

    letter contracts);

    (ii) The award of a subcontract at any tier, if the contractor and each higher tier

    subcontractor have been required to furnish cost or pricing data (see 15.804-3(i); or

    (iii) The modification of any sealed bid or negotiated contract

    (whether or not cost or pricing data were initially required) or subcontract covered by

    paragraph (a)(1)(ii) of this subsection. Price adjustment amounts shall consider both

    increases and decreases. (For example, a $150,000 modification resulting from a reduction

    of $350,000 and an increase of $200,000 is a pricing adjustment exceeding $500,000.) This requirement does not apply when unrelated and separately priced changes for which cost or pricing data would not otherwise be required included for administrative convenience in the same modification.

    (2) Contracting officers shall, if requested by the prime contractor, modify

    contracts to change the threshold in the contract to the cost or pricing data threshold in

    paragraph (a)(1) of this subsection, without requiring consideration. The contract

    modification shall be accomplished by inserting into contract the current version of the

    clauses 52.215-23, Price Reduction for Defective Cost or Pricing Data-Modifications,

    and52.215-25, Subcontractor Cost or Pricing Data-Modifications, or 52.215-24,

    Subcontractor Cost or Pricing Data, as applicable.

    These new contract clauses shall apply only to contract modifications and

    subcontracts for which agreement on price occurs after the contracting officer has

    inserted the new clauses.

    * * * * *

    15.813 [Reserved]

    5. Section 15.813 is removed and reserved, and subsections 15.813-1 through 15.813-7 are

    removed.

    PART 52--SOLICITATION PROVISIONS AND CONTRACT CLAUSES

    6. Section 52.214-27 is amended by revising the clause date and the introductory text of paragraph (a) to read as follows:

    52.214-27 Price Reduction for Defective Cost or Pricing Data-

    Modifications-Sealed Bidding

    * * * * *

    Price Reduction for Defective Cost or Pricing Data-Modifications-Sealed Bidding (Nov 1994)

    (a) This clause shall become operative only for any modification to this contract

    involving aggregate increases and/or decreases in costs, plus applicable profits, of more than

    the threshold for submission of cost or pricing data at (FAR) 48 CFR 15.804-2(a)(1), except

    that this clause does not apply to any modification for which the price is-

    * * * * *

    7. Section 52.214-28 is amended:

    (a) By revising the clause date and the introductory text of paragraph (b);

    (b) In paragraph (a) by removing "$100,000or for the Department of Defense,

    the National Aeronautics and Space Administration, and the Coast Guard, expected to

    exceed $500,000" and inserting "the threshold for submission of costor pricing data at (FAR)

    48 CFR 15.804-2(a)(1)" in its place; © In

    (d) by removing "$100,000, or for the Department of Defense, the National

    Aeronautics and Space Administration, and the Coast Guard, in each subcontract that

    exceeds $500,000" and inserting "the threshold for submission of cost or pricing data at

    (FAR) 48 CFR 15.804-2(a)(1)" in its place. The revised text is to read as follows52.214-28

    Subcontractor Cost or Pricing Data-Modifications-Sealed Bidding.

    * * * * *

    SUBCONTRACTOR COST OR PRICING

    DATA-MODIFICATIONS-SEALED BIDDING (NOV1994)

    * * * * *

    (b) Before awarding any subcontract expected exceed the threshold for

    submission of cost or pricing data at (FAR) 48 CFR 15.804-2(a)(1) when entered into, or

    pricing any subcontract modification involving aggregate increases and/or decreases in

    costs, plus applicable profits, expected to exceed the threshold for submission of cost or

    pricing data at (FAR) 48 CFR 15.804-

    2(a)(1), the Contractor shall require the subcontractor to cost or pricing

    data (actually or by specific identification in writing), unless the price is-

    * * * * *

    52.214-29 [Amended]

    8. Section 52.214-29 is amended in introductory paragraph by revising "14.201-7(d)" to

    read "14.201-7(e)". 52.215-23 [Amended]

    9. Section 52.215-23 is amended by revising the clause date to read "(NOV 1994)" and in

    the introductory text of paragraph (a) by removing "$100,000, or for the Department of

    Defense, the National Aeronautics and Space Administration, and the Coast Guard,

    expected to exceed $500,000" and inserting "the threshold for submission of cost or pricing

    data at FAR 15.804- 2(a)(1)" in its place.

    52.215-24 [Amended]

    10. Section 52.215-24 is amended by revising the clause date to read "(NOV 1994)" and

    twice in the introductory text of paragraph (a) and once in the introductory text of ©

    by removing "$100,000, or for the Department of Defense the National Aeronautics and

    Space Administration, and the Coast Guard, expected to exceed $500,000" and inserting

    "the threshold for submission of cost or pricing data at FAR 15.804-2(a)(1)" in its

    place.

    11. Section 52.215-25 is amended by revising the clause date paragraph (a), the introductory

    text of (b), and (dto read as follows: 52.215-25 Subcontractor Cost or Pricing Data-

    Modifications.

    * * * * *

    Subcontractor Cost or Pricing (Nov 1994)

    (a) The requirements of paragraphs (b) and © of this clause shall (1) become operative

    only for any modification to this contract involving a pricing adjustment expected

    to exceed the threshold for submission of cost or pricing data at (FAR) 48 CFR15.804-2(a)(1); and (2) be limited to such modifications.

    (b) Before awarding any subcontract expected to exceed the threshold for submission of cost

    or pricing data at(FAR) 48 CFR15.804-2(a)(1) when entered into, or pricing any subcontract

    modification involving a pricing adjustment expected to exceed the threshold for submission

    of cost or pricing data at (FAR) 48 CFR 15.804-2(a)(1), the Contractor shall require the

    subcontractor to submit cost or pricing data (actually or by specific identification in

    writing),unless the price is-

    * * * * *

    (d) The Contractor shall insert the substance of this clause, including this paragraph (d),

    in each subcontract that exceeds the threshold for submission of cost or pricing data at

    (FAR) 48 CFR 15.804-2(a)(1), when entered into.

    (End of clause)

    52.215-32 [Removed and Reserved]

    12. Section 52.215-32 is removed and reserved.

    52.215-37 [Removed and Reserved]

    13. Section 52.215-37 is removed and reserved.