Acquisition Regulation; Remittance of Industrial Funding Fee in U.S. Dollars Under Federal Supply Schedules Program

GENERAL SERVICES ADMINISTRATION

48 CFR Part 552

[APD 2800.12A, CHGE 75]

RIN 3090-AG30

Acquisition Regulation; Remittance of Industrial Funding Fee in

U.S. Dollars Under Federal Supply Schedules Program

AGENCY: Office of Acquisition Policy, GSA.

ACTION: Final rule.

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SUMMARY: The General Services Administration Acquisition Regulation

(GSAR) is amended to revise the contract clauses at 552.238-72 and

552.238-77 to require remittance of the industrial funding fee under

Federal Supply Schedules (FSS) program in U.S. dollars, define the

basis for converting the value of sales in foreign currency, update

references to termination for cause, and clarify reporting and

remittance requirements.

DATES: Effective Date July 18, 1997.

FOR FURTHER INFORMATION CONTACT: Gloria Sochon, GSA Acquisition Policy

Division, (202) 208-6726.

SUPPLEMENTARY INFORMATION:

A. Background

The General Services Administration's FSS program charges ordering

activities an industrial funding fee (IFF) to recoup the program's

operating costs. The IFF is included in contract prices, collected by

contractors, and remitted quarterly to GSA. Some contractors under the

International Federal Supply Schedule have remitted the IFF in foreign

currency. This practice causes many problems, particularly impeding

GSA's ability to meet U.S. Department of the Treasury requirements to

record deposits timely. Checks in foreign currency require significant

processing, often taking several weeks to complete the deposit. The

government loses interest on the funds during this delay.

The revised contract clauses require payment of the IFF in U.S.

dollars. It also establishes standards for conversion to address

fluctuations in rates of exchange. Contractors will use the U.S.

Department of the Treasury, ``Treasury Reporting Rates of Exchange,''

in effect on the last day of the reporting period to convert the value

of sales in foreign currency to U.S. dollars. In addition, the

references to termination for cause are revised, as different clauses

now apply in different situations. It also clarifies reporting and

remittance requirements by defining the close-out report, defining how

the contractor is to provide supporting information when reimbursing

GSA by check, and updating information on electronic funds transfers.

B. Executive Order 12866

This rule was submitted to the Office of Management and Budget

(OMB) under Executive Order 12866.

C. Regulatory Flexibility Act

This final 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. The rule requires

only that FSS contractors use U.S. dollars to report the value of sales

and to remit the IFF to GSA. The only additional administrative burden

on contractors is the need to calculate the conversion of sales made in

foreign currency once each quarter. Most of the contractors affected by

this rule will be foreign entities, with their place of business

located outside of the U.S.

D. Paperwork Reduction Act

The revised clause at 552.238-72, Contractor's Report of Sales,

contains an information collection requirement subject to the Paperwork

Reduction Act (44 U.S.C. 3501 et seq.). However, the revisions to the

clause made by this rule do not affect the information collection

requirement which was approved previously by OMB and assigned control

number 3090-0121.

The revised clause at 552.238-77, Industrial Funding Fee, contains

an information collection requirement

[[Page 38476]]

subject to the Paperwork Reduction Act (44 U.S.C. 3501 et seq.).

However, the revisions to the clause made by this rule do not affect

the information collection requirement previously approved under GSA's

blanket approval under control number 3090-0250 from OMB for

information collections with a zero burden estimate.

E. Small Business Regulatory Enforcement Fairness Act of 1996

This rule is not a major rule under 5 U.S.C. 804. This rule was

submitted to Congress and GAO under 5 U.S.C. 804.

F. Determination to Issue a Final Rule

GSA expects this rule will have no significant cost or

administrative burden on contractors or offerors. The only additional

administrative burden on contractors is the need to calculate the

conversion of sales made in foreign currency once each quarter.

Therefore, GSA is promulgating this final rule without prior

opportunity for public comment.

List of Subjects in 48 CFR Part 552

Government procurement.

Accordingly, 48 CFR 552 is amended as follows:

1. The authority citation for 48 CFR Part 552 continues to read as

follows:

Authority: 40 U.S.C. 486(c).

PART 552--SOLICITATION PROVISIONS AND CONTRACT CLAUSES

2. Section 552.238-72 is amended by revising the clause date;

revising paragraph (a); redesignating paragraphs (b), (c), and (d) as

(c), (d), and (e) respectively; adding a new paragraph (b);

redesignating paragraph (e) in Alternate I as paragraph (f) and

revising the reference ``paragraph (e)'' in Alternate I introductory

text to read ``paragraph (f)''; and revising the Alternate I date to

read ``May 1997''; and revising paragraphs (c) and (d) to read as

follows:

552.238-72 Contractor's report of sales.

* * * * *

CONTRACTOR'S REPORT OF SALES (MAY 1997)

(a) The Contractor must furnish quarterly the dollar value (in

U.S. dollars and rounded to the nearest whole dollar) of all sales

under the contract during the preceding 3-month period, to include

any partial month. The dollar value of a sale is the price paid by

the schedule user for products and services on a schedule contract

delivery order, as recorded by the Contractor. The reported contract

sales value must include the industrial funding fee (see Clause

552.238-77). The Contractor must prepare and submit a separate

report for each National Stock Number (NSN), Special Item Number

(SIN), or subitem, unless otherwise specified, on GSA Form 72A.

(b) The Contractor must convert the total value of any sales

made in foreign currency to U.S. dollars using the ``Treasury

Reporting Rates of Exchange,'' issued by the U.S. Department of

Treasury, Financial Management Service. The Contractor must use the

issue of the Treasury report in effect on the last day of the

contract quarter. The report is available from: Department of the

Treasury, Financial Management Service, International Funds Branch,

3700 East-West Highway, PGCII, Room 5A19, Hyattsville, MD 20782,

Telephone: (202) 874-7994, Internet: http://www.ustreas.gov/

treasury/bureaus/finman/intn.html.

(c) The report is due in the office specified below or specified

at the time of award 30 days following the completion of the

reporting period. The Contractor must provide a close-out report

within 120 days after the expiration date of the contract. This

close-out report must cover all sales not shown in the final

quarterly report and reconcile all errors and credits. If the

Contractor reported all contract sales and reconciled all errors and

credits on the final quarterly report, then show zero sales in the

close-out report.

(d) The Government reserves the right to inspect without further

notice, such records of the Contractor as pertain to sales under

this contract. Willful failure or refusal to furnish the required

reports, or falsification thereof, constitutes sufficient cause for

terminating the contract for cause under the termination provisions

of this contract.

* * * * *

3. Section 552.238-77 is amended by revising the clause date;

revising paragraph (a); redesignating paragraphs (b), (c), and (d) as

(c), (d), and (e) respectively; adding a new paragraph (b); revising

newly designated paragraphs (c), introductory text and (c)(2); and

revising newly designated paragraph (e) to read as follows:

552.238-77 Industrial funding fee.

* * * * *

INDUSTRIAL FUNDING FEE (MAY 1997)

(a) The Contractor must pay the Federal Supply Service, GSA, an

Industrial Funding Fee (IFF), in U.S. dollars, at the end of each

contract quarter. The Contractor must remit the IFF at the same time

the GSA Form 72A, Contractor's Report of Sales, is submitted under

clause 552.238-72, Contractor's Report of Sales. The IFF equals

________________* of total sales reported on GSA Form 72A. The IFF

reimburses the GSA Federal Supply Service for the costs of operating

the Federal Supply Schedules Program and recoups its operating costs

from ordering activities. Offerors should include the IFF in the

prices submitted with their offer. The fee is included in the award

price(s) and reflected in the total amount charged to ordering

activities.

(b) The Contractor must remit any monies due as a result of the

close-out report required by clause 552.238-72 at the time the

close-out report is submitted to GSA.

(c) The IFF amount due must be paid by check or, electronic

funds transfer through the Automated Clearing House (ACH), to the

``General Services Administration.'' If the payment involves

multiple special item numbers or contracts, the Contractor may

consolidate the IFFs into one payment. To ensure that the payment is

credited properly, the Contractor should identify the check or

electronic transmission as an ``Industrial Funding Fee'' and include

the following information: contract number(s); report amount(s); and

report period(s). If the Contractor makes payment by check, provide

this information on either the check, check stub, or remittance

material. The GSA Form 72A is not remittance material.

* * * * *

(2) If the IFF payment is made by electronic funds transfer

through ACH, the Contractor must call GSA, Financial Information

Control Branch, Receivables, Collections and Sales Section (6BCDR)

at (contracting officer to insert phone number) to make

arrangements.

* * * * *

(e) Failure to submit sales reports, falsification of sales

reports, and/or failure to pay the IFF in a timely manner may result

in termination or cancellation of this contract. Willful failure or

refusal to furnish the required reports, falsification of sales

reports, or failure to make timely payment of the IFF constitutes

sufficient cause for terminating the contract for cause under the

termination provisions of this contract.

(End of Clause)

* * * * *

Dated: May 15, 1997.

Ida M. Ustad,

Deputy Associate Administrator, Office of Acquisition Policy.

[FR Doc. 97-18944 Filed 7-17-97; 8:45 am]

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