Federal Acquisition Regulation; Termination Inventory Schedules; Proposed Rules DEPARTMENT OF DEFENSE

SUMMARY: The Civilian Agency Acquisition Council and the Defense

Acquisition Regulations Council are proposing changes concerning

termination of contracts to preclude excessive delays in processing

terminations for the convenience of the Government. The proposed change

will require contractors to prepare and submit termination inventory

schedules within 120 days from the effective date of termination,

unless otherwise extended by the Termination Contracting Officer (TCO).

This will enable the TCO to initiate early inventory screening and

final disposition, thereby substantially reducing the time required to

achieve termination settlement.

DATES: Comments should be submitted on or before January 30, 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.

Please cite FAR case 94-3 in all correspondence related to this

case.

FOR FURTHER INFORMATION CONTACT: Ms. Linda Klein at (202) 501-3775 in

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

Secretariat, Room 4037, GS Building, Washington, DC 20405, Telephone:

(202) 501-4755. Please cite FAR case 94-3.

SUPPLEMENTARY INFORMATION:

A. Background

When inventory schedules required for contracts terminated for the

convenience of the Government are not submitted in a timely manner by

the terminated contractors, unnecessary delays are experienced both in

effecting redistribution and disposal of the termination inventory and

in reaching final settlement of those contracts. DOD's Inspector

General has recommended the imposition of a new contractor requirement

to submit inventory schedules within 120 days, unless an extension is

justified.

B. Regulatory Flexibility Act

The proposed changes are 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 the

change will require contractors to prepare and submit termination

inventory schedules within 120 days from the effective date of

termination, unless otherwise extended by the Termination Contracting

Officer. Only the timing of the submission of the inventory schedule

has changed; the requirement to submit a schedule is a long-standing

one. Due to the length of time currently required to settle

terminations, it is anticipated that the proposed expedited procedure

will lessen any adverse financial impact generally experienced by small

and medium sized firms.

An Initial Regulatory Flexibility Analysis (IRFA) has been prepared

and will be provided to the Chief Counsel for Advocacy for the Small

Business Administration. A copy of the IRFA may be obtained from the

FAR Secretariat. Comments are invited. Comments from small entities

concerning the affected FAR subpart will be considered in accordance

with 5 U.S.C. 610. Such comments must be submitted separately and

should cite 5 U.S.C. 601, et seq. (FAR case 94-3), 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. Only the

timing of the submission of the inventory schedule is changed; the

requirement to submit a schedule is a long-standing one.

List of Subjects in 48 CFR Parts 49 and 52

Government procurement.

Dated: November 18, 1994.

Albert A. Vicciolla,

Director, Office of Federal Acquisition Policy.

Therefore, it is proposed that 48 CFR Parts 49 and 52 be amended as

set forth below:

PART 49--TERMINATION OF CONTRACTS

1. The authority citation for 48 CFR Parts 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).

49.105 [Amended]

2. Section 49.105(c)(13) is amended by adding ``(see 49.206-3 and

49.303-2)'' to the end of the sentence.

3. Section 49.206-3 is added to read as follows:

49.206-3 Submission of inventory schedules.

Subject to the provisions of the termination clause and whenever

termination inventory is involved, the contractor shall submit complete

inventory schedules, to the TCO, reflecting inventory that is allocable

to the terminated portion of the contract. The inventory schedules must

be submitted within 120 days from the effective date of termination

unless otherwise extended by the TCO based on a written justification

to support the extension. The inventory schedules must be prepared on

the forms prescribed in 49.602-2 and in accordance with 45.605-5.

4. Sections 49.303-2, 49.303-3, and 49.303-4 are redesignated as

49.303-3, 49.303-4, and 49.303-5, respectively, and a new section

49.303-2 is added to read as follows:

49.303-2 Submission of inventory schedules.

Subject to the provisions of the termination clause and whenever

termination inventory is involved, the contractor shall submit complete

inventory schedules, to the TCO, reflecting inventory that is allocable

to the terminated portion of the contract. The inventory schedules must

be submitted within 120 days from the effective date of termination

unless otherwise extended by the TCO based on a written justification

to support the extension. The inventory schedules must be prepared on

the forms prescribed in 49.602-2 and in accordance with 45.606-5.

PART 52--SOLICITATION PROVISIONS AND CONTRACT CLAUSES

5. Section 52.249-2 is amended in the clause by:

(a) Revising the clause date;

(b) Redesignating paragraphs (d) through (m) as (e) through (n),

respectively; and

(c) Adding a new paragraph (d) to read as follows:

52.249-2 Termination for Convenience of the Government (Fixed-Price).

* * * * *

TERMINATION FOR CONVENIENCE OF THE GOVERNMENT (FIXED-PRICE) (XXX 1994)

* * * * *

(d) The Contractor shall submit complete termination inventory

schedules no later than 120 days from the effective date of

termination, unless extended in writing by the Contracting Officer

upon written request of the Contractor within this 120 day period.

* * * * *

6. Section 52.249-3 is amended in the clause by:

(a) Revising the clause date;

(b) Redesignating paragraphs (d) through (m) as (e) through (n),

respectively; and

(c) Adding a new paragraph (d) to read as follows:

52.249-3 Termination for Convenience of the Government (Dismantling,

Demolition, or Removal of Improvements).

* * * * *

TERMINATION FOR CONVENIENCE OF THE GOVERNMENT (DISMANTLING, DEMOLITION,

OR REMOVAL OF IMPROVEMENTS) (XXX 1994)

* * * * *

(d) The Contractor shall submit complete termination inventory

schedules no later than 120 days from the effective date of

termination, unless extended in writing by the Contracting Officer

upon written request of the Contractor within this 120 day period.

* * * * *

7. Section 52.249-5 is amended in the clause by:

(a) Revising the clause date;

(b) Redesignating paragraphs (c) through (g) as (d) through (h),

respectively; and

(c) Adding a new paragraph (c) to read as follows:

52.249-5 Termination for Convenience of the Government (Educational

and Other Nonprofit Institutions).

* * * * *

TERMINATION FOR CONVENIENCE OF THE GOVERNMENT (EDUCATIONAL AND OTHER

NONPROFIT INSTITUTIONS) (XXX 1994)

* * * * *

(c) The Contractor shall submit complete termination inventory

schedules no later than 120 days from the effective date of

termination, unless extended in writing by the Contracting Officer

upon written request of the Contractor within this 120 day period.

* * * * *

8. Section 52.249-6 is amended in the clause by:

(a) Revising the clause date;

(b) Redesignating paragraphs (e) through (m) as (f) through (n),

respectively; and

(c) Adding a new paragraph (e) to read as follows:

52.249-6 Termination (Cost-Reimbursement).

* * * * *

TERMINATION (COST-REIMBURSEMENT) (XXX 1994)

* * * * *

(e) The Contractor shall submit complete termination inventory

schedules no later than 120 days from the effective date of

termination, unless extended in writing by the Contracting Officer

upon written request of the Contractor within this 120 day period.

* * * * *

9. Section 52.249-11 is amended in the clause by:

(a) Revising the clause date;

(b) Redesignating paragraphs (d) through (k) as (e) through (l),

respectively; and

(c) Adding a new paragraph (d) to read as follows:

52.249-11 Termination of Work (Consolidated Facilities or Facilities

Acquisition).

* * * * *

TERMINATION OF WORK (CONSOLIDATED FACILITIES OR FACILITIES ACQUISITION)

(XXX 1994)

* * * * *

(d) The Contractor shall submit complete termination inventory

schedules no later than 120 days from the effective date of

termination, unless extended in writing by the Contracting Officer

upon written request of the Contractor within this 120 day period.

* * * * *

10. In addition to the amendments set forth above, newly-

redesignated paragraphs in sections 52.249-2, 52.249-3, 52.249-5,

52.249-6, and 52.249-11 are further amended by updating the internal

references and dates as follows:

SECTION REMOVE INSERT

52.249-2(f);

first sentence........................ ``(d)'' ``(e)''

third sentence........................ ``(e)'' ``(f)''

``(f)'' ``(g)''

``(f)(3)'' ``(g)(3)''

fourth sentence....................... ``(f)'' ``(g)''

52.249-2(g)-.............................. ``(e)'' ``(f)''

52.249-2(g)(2)(i)......................... ``(f)(l)'' ``(g)(l)''

52.249-2(h)-.............................. ``(f)'' ``(g)''

52.249-2(j);

first sentence........................ ``(d), (f), or (k)'' ``(e), (g), or (l)''

``(d) or (k)'' ``(e) or (l)''

second sentence....................... ``(d), (f), or (k)'' ``(e), (g), or (l)''

52.249-2, Alternate I

introductory paragraph................ ``(APR 1984)'' ``(XXX 1994)''

(twice)............................... ``(f)'' ``(g)''

paragraph (f)

designation......................... ``(f)'' ``(g)''

introductory paragraph.............. ``(e)'' ``(f)''

52.249-2, Alternate II.................... ``(APR 1984)'' ``(XXX 1994)''

``(l)(2)''- ``(m)(2)''

52.249-2, Alternate III................... ``(APR 1984)'' ``(XXX 1994)''

first sentence (twice)................ ``(f)'' ``(g)''

second sentence....................... ``(l)(2)'' ``(m)(2)''

paragraph (f)

designation-........................ ``(f)'' ``(g)''

introductory paragraph.............. ``(e)'' ``(f)''

52.249-3(f);..............................

first sentence........................ ``(d)'' ``(e)''

third sentence........................ ``(e)'' ``(f)''

``(f)'' ``(g)''

fifth sentence........................ ``(f)'' ``(g)''

52.249-3(g)-.............................. ``(e)'' ``(f)''

52.249-3(h)-.............................. ``(f)'' ``(g)''

52.249-3(j);

first sentence........................ ``(d), (f), or (k)'' ``(e), (g), or (l)''

``(d) or (k)'' ``(e) or (l)''

second sentence....................... ``(d), (f), or (k)'' ``(e), (g), or (l)

52.249-3, Alternate I..................... ``(APR 1984)'' ``(XXX 1994)''

``(l)(2)''- ``(m)(2)''

52.249-5(e)-.............................. ``(c)'' ``(d)''

52.249-5(h)-.............................. ``(c)'' ``(d)''

52.249-6(g)-.............................. ``(e)'' ``(f)''

52.249-6(h)(5)............................ ``(g)(4)''- ``(h)(4)''

52.249-6(j)-

first sentence........................ ``(c) or (g)'' ``(f) or (h),-

``(k)'' ``(l)''

``(e)''- ``(f)''

second sentence....................... ``(c), (g), or (k)'' ``(f), (h), or (l)''

52.249-6, Alternate I,.................... ``(APR 1984)'' (XXX 1994)''

``(g)(4)'' ``(h)(4)''

introductory paragraph

(twice) and subparagraph

designation (once)

52.249-6, Alternate II.................... ``(APR 1984)'' ``(XXX 1994)''

``(l)(2)'' ``(m)(2)''

52.249-6, Alternate III

introductory paragraph................ ``(APR 1984)'' ``(XXX 1994)''

(twice)............................... ``(g)(4)'' ``(h)(4)''

(once)................................ ``(l)(2)''- ``(m)(2)''

subparagraph designation.............. ``(g)(4)'' ``(h)(4)''

52.249-6, Alternate IV

introductory paragraph................ ``(APR 1984)'' ``(XXX 1994)''

(twice)............................... ``(g) and (k)'' ``(h) and (l)''

subparagraph designation.............. ``(g)'' ``(h)''

52.249-6, Alternate V

introductory paragraph................ ``(APR 1984)'' ``(XXX 1994)''

(twice)............................... ``(g) and (k)'' ``(h) and (l)''

(once)................................ ``(l)(2)''- ``(m)(2)''

subparagraph designation.............. ``(g)'' ``(h)''

subparagraph designation.............. ``(k)''- ``(l)''

52.249-11(f).............................. ``(d)'' ``(e)''

52.249-11(i)

first sentence........................ ``(d) or (f)'' ``(e) or (g)''

``(d) ``(e)''

second sentence....................... ``(d) or (f)'' ``(e) or (g)''

52.249-11, Alternate I.................... ``(APR 1984)'' ``(XXX 1994)''

``(j)(2)'' ``(k)(2)''

[FR Doc. 94-29420 Filed 11-30-94; 8:45 am]

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