Federal Acquisition Regulation; Subcontract Proposal Audits

DEPARTMENT OF DEFENSE

48 CFR Part 15

[FAR Case 92-2]

Federal Acquisition Regulation; Subcontract Proposal Audits

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

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

ACTION: Proposed rule.

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SUMMARY: The Civilian Agency Acquisition Council and the Defense

Acquisition Regulations Council are proposing amendments to the Federal

Acquisition Regulation (FAR) to add two additional examples of when

field pricing support audits of subcontract proposals may be

appropriate. This regulatory action was not subject to Office of

Management and Budget review pursuant to Executive Order No. 12866

dated September 30, 1993.

DATES: Comments should be submitted on or before May 27, 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 4035, Attn: Ms. Beverly Fayson, Washington, DC

20405.

Please cite FAR case 92-2 in all correspondence related to this

case.

FOR FURTHER INFORMATION CONTACT:

Jeremy F. Olson at (202) 501-3221 in reference to this FAR case. For

general information, contact the FAR Secretariat, room 4035, GS

Building, Washington, DC 20405, (202) 501-4755. Please cite FAR case

92-2.

SUPPLEMENTARY INFORMATION:

A. Background

The DOD Inspector General's final report of December 11, 1991,

Review of Actions Taken on 42 Contractor Estimating System Cited as

Inadequate by the General Accounting Office (Report No. AFU 92-1),

found that estimating system deficiencies warrant additional management

attention. Expanded regulatory guidance governing contracting officer's

requests for assist audits of subcontractor cost proposals was

recommended.

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 certified cost or pricing data and field pricing

support are 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 section 610 of the Act. Such comments must be submitted separately

and should cite 5 U.S.C. 601, et seq., FAR case 92-2, 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 15

Government procurement.

Albert A. Vicchiolla,

Director, Office of Federal Acquisition Policy.

Therefore, it is proposed that 48 CFR part 15 be amended as set

forth below:

PART 15--CONTRACTING BY NEGOTIATION

1. The authority citation for 48 CFR part 15 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 15.806-3 is amended in paragraph (a)(3) by removing the

word ``or''; in paragraph (a)(4) by removing the period and inserting a

semicolon in its place; and adding paragraphs (a)(5) and (a)(6) to read

as follows:

Sec. 15.806-3 Field pricing reports.

(a) * * *

(5) The contractor or higher tier subcontractor has been cited for

having significant estimating system deficiencies in the area of

subcontract pricing, especially the failure to perform adequate cost

analyses of proposed subcontract costs or to perform subcontract

analyses prior to negotiation of the prime contract with the

Government; or

(6) A lower tier subcontractor has been cited as having significant

estimating system deficiencies.

* * * * *

[FR Doc. 94-6901 Filed 3-25-94; 8:45 am]

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