Federal Acquisition Regulation; Legislative Lobbying Costs

SUMMARY: The Civilian Agency Acquisition Council and the Defense

Acquisition Regulations Council are proposing changes to amend the

Federal Acqusition Regulation (FAR) cost principles concerning lobbying

costs. This regulatory action was subject to Office of Management and

Budget (OMB) review pursuant to Executive Order No. 12866 dated

September 30, 1993.

DATES: Comments should be submitted on or before November 15, 1994 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. Please cite FAR case 93-6

in all correspondence related to this case.

FOR FURTHER INFORMATION CONTACT:Mr. Jeremy Olson at (202) 501-3221 in

reference to this FAR case. For general information, contract the FAR

Secretariat, Room 4037, GS Building, Washington, DC 20405 (202) 501-

4755. Please cite FAR case 93-6.

SUPPLEMENTARY INFORMATION:

A. Background

This FAR case was opened to address issues raised by the OMB SWAT

Team concerning the requirement to maintain records which are in

addition to normal records maintained to record lobbying costs under

FAR 31.205-22(f). The proposed FAR rule would delete 31.205-22(f)

because it conflicts with the recordkeeping requirements in 31.201-

6(c), 31.205-22(e), and Cost Accounting Standards (CAS) 405, Accounting

for Unallowable Costs (48 CFR 9904.405-50(a)). In addition, the

Councils believe that 31.205-22(f) is inconsistent with the clause at

52.203-12, Limitation on Payments to Influence Certain Federal

Transactions, which requires contractors to disclose lobbying

activities. The reporting of such activities must necessarily be based

upon certain contractor records which support the disclosures. The

proposed rule also removes the prohibition against reimbursing

executive lobbying costs at 31.205-50 and adds it to the list of

specifically unallowable lobbying costs at 31.205-22(a).

B. Regulatory Flexibility Act

The proposed 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 most

contracts awarded to small entities are awarded on a competitive,

fixed-price basis and the cost principles do not apply. The cost

principles apply only to contracts for which cost or pricing data has

been submitted. An Initial Regulatory Flexibility Analysis has,

therefore, not been performed. Comments are invited from small

businesses and other interested parties. Comments from small entities

concerning the affected FAR subpart will also be considered in

accordance with 5 U.S.C. 610 of the Act. Such comments must be

submitted separately and should cite 5 U.S.C. 601, et seq. (FAR case

93-6), in correspondence.

C. Paperwork Reduction Act

The Paperwork Reduction Act does not apply because the proposed

changes to the FAR do not impose recordkeeping or information

collection requirements, or collections of information from offerors,

contractors, or members of the public which 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: September 13, 1994.

Albert A.Vicchiolla,

Director, Office of Federal Acquisition Policy.

Therefore, it is proposed that 48 CFR part 31 be amended 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. Section 31.205-22 is amended by revising the section heading; at

the end of paragraph (a)(4) by removing the word ``or''; at the end of

paragraph (a)(5) by removing the period and inserting ``; or''; by

adding paragraph (a)(6); and by removing paragraph (f) and

redesignating paragraph (g) as (f) to read as follows:

31.205-22 Lobbying and political activity costs.

(a) * * *

(6) Costs incurred in attempting to improperly influence (see FAR

3.401), either directly or indirectly, an employee or officer of the

executive branch of the Federal Government to give consideration or to

act regarding a regulatory or contract matter.

* * * * *

31.205-50 [Removed and reserved]

3. Section 31.205-50 is removed and reserved.

[FR Doc. 94-23025 Filed 9-15-94; 8:45 am]

BILLING CODE 6820-34-M