Federal Employees Health Benefits Program Acquisition Regulation; Truth in Negotiations Act and Related Changes

OFFICE OF PERSONNEL MANAGEMENT

48 CFR Parts 1602, 1603, 1604, 1615, 1616, 1629, 1631, 1643, 1644,

1645, 1649, 1652, and 1653

RIN 3206-AH45

Federal Employees Health Benefits Program Acquisition Regulation;

Truth in Negotiations Act and Related Changes

AGENCY: Office of Personnel Management.

ACTION: Final rulemaking.

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SUMMARY: The Office of Personnel Management (OPM) is issuing a final

regulation amending the Federal Employees Health Benefits Acquisition

Regulation (FEHBAR) to implement those portions of the Federal

Acquisition Streamlining Act of 1994 (FASA) that impact on the FEHB

Program.

EFFECTIVE DATE: October 10, 1997.

FOR FURTHER INFORMATION CONTACT: Mary Ann Mercer, (202) 606-0004.

SUPPLEMENTARY INFORMATION: On June 24, 1996, OPM issued a proposed

regulation in the Federal Register [61 FR 32401] to inform Federal

Employees Health Benefits (FEHB) Program carriers, Federal agencies,

and the public how it intends to implement those portions of the

Federal Acquisition Streamlining Act of 1994 (FASA), Public Law 103-

355, effective October 13, 1994, affecting the FEHB Program. The

changes proposed also reflect how OPM intends to implement sections

4201 through 4204 of the Federal Acquisition Reform Act of 1996 (FARA),

Public Law 104-106, enacted on February 10, 1996.

OPM received comments from one private citizen and five

organizations: Two FEHBP carriers, a trade association representing

health maintenance organizations (HMOs), preferred provider

organizations (PPOs), and other network plans, an association that

represents FEHB Program fee-for-service carriers, and a contract law

group. We appreciate the observations and suggestions offered and have

taken them into consideration in these regulations.

The majority of the comments were favorable toward OPM's efforts to

[[Page 47570]]

implement the provisions of the Truth in Negotiations Act (TINA) as

amended by FASA to the extent that the regulation brings the FEHBAR

into conformance with the Federal Acquisition Regulation (FAR).

Nevertheless, there were a number of concerns regarding provisions on

the submission of cost or pricing data, as well as those concerning

Similarly Sized Subscriber Groups (SSSGs). These, as well as other

comments, are addressed as follows.

Effective Date of the Regulation

One of the comments concerned a perceived inconsistency in the

proposed effective date and the application of the regulation with

regard to SSSGs. The regulation will be applicable to the rate

instructions issued for the 1998 FEHB contract year. In the opinion of

the commenter, however, it appeared that OPM had already implemented

many of the changes administratively through the rate instructions for

the 1997 contract year. We would like to clarify any misconception that

OPM issues policy material in the FEHBP rate instructions. The rate

instructions contain guidance, clarifying information and examples that

elaborate on and describe how the policy in existing regulations is to

be implemented. The regulations introduce no changes in OPM's policy

with respect to SSSGs. The treatment of multi-year contracts and the

requirement that groups with point of service (POS) plans and separate

lines of business be included for consideration as SSSGs have been the

long standing practice under the SSSG concept.

Intent of FASA/TINA

Two commenters believe OPM has overlooked the intent of FASA to

minimize burdensome requirements, such as the requirement to submit

cost or pricing data, placed on Federal contractors. OPM understands

the commenters' concerns; however, we believe they overlook the fact

that Congress continues to recognize the need for cost or pricing data

where necessary to determine reasonableness of a price. Accordingly,

when the Government purchases a product or service that is not a

commercial item offered to the Government without modification and in

the same form in which it is sold in the commercial marketplace, it is

appropriate under the FAR and TINA to require cost or pricing data to

establish price reasonableness. As we stated in the preamble to the

proposed rule, with the complexities of the FEHB Program carriers'

rating systems, it is inaccurate to say that OPM is buying a commercial

off-the-shelf item or that the product that OPM purchases is purchased

at a market or catalog price. Thus, the FEHB Program community rated

contracts are neither contracts for commercial items, nor are they

catalog or market price contracts as those terms are intended by FASA,

FARA, and the FAR.

One commenter noted that the purchase of insurance and HMO services

is typically governed by State insurance regulators and that OPM, in

obtaining cost or pricing data, is not only acting as a purchasing

agent, but is also performing a regulatory function akin to that of a

State insurance regulator. The commenter believes that the application

of the principles embodied in the proposed regulation to the FEHB

Program contracts is the minimum that OPM should require of contractors

given the substantial responsibilities placed upon OPM to obtain the

best possible terms, conditions, price and value for the Government and

enrollees in the FEHB Program.

Cost or Pricing Data

Prior to the enactment of Public Law 100-517, the Health

Maintenance Organization Amendments of 1988, community rated contracts

resembled market price contracts. Consequently, for lack of a more

precise fit with any other contract type, OPM identified the community

rated contracts as market price contracts when it initially published

regulations to implement the Act. These regulations were effective

January 1, 1990, before OPM had been able to assess the impact of the

1988 amendments.

Historically, a community rate was more analogous to a market price

and services under FEHB Program contracts were more commonly thought of

as commercial items, because the community rate was often a single rate

that an HMO charged all of its groups. This is no longer true today.

The 1988 HMO amendments introduced a new level of complexity into the

community rating process. The 1988 HMO amendments authorized community

rated plans to use a new rating method called Adjusted Community Rating

(ACR). In spite of its name, ACR is actually a form of experience

rating, that is, prospective experience rating.

Determining the reasonableness of the rates under ACR requires cost

or pricing data. Moreover, cost or pricing data is fundamental to the

development of the FEHB Program premiums. OPM has a responsibility

under the FEHB law to ensure that the FEHB Program premiums

``reasonably and equitably reflect the cost of benefits provided'' [5

U.S.C. 8902(i)]. In carrying out this statutory mandate, OPM needs cost

or pricing data to achieve a fair and reasonable premium rate for

Federal enrollees. There are almost 400 plans in the Program, and the

premium is divided, with an average of 28% being paid by enrollees and

72% being paid from Government funds. Thus, both parties have a major

financial interest in the reasonableness of the rates.

Furthermore, we would like to point out that the FEHB Program

premiums, once transmitted to OPM, are placed in a trust and are trust

fund monies which OPM has a statutory mandate to protect. OPM places

the premium monies collected in the U.S. Treasury for payment to the

FEHB Program carriers. The FEHB law authorizes the Secretary of the

Treasury to invest and reinvest the monies, as well as the interest

earned on their investments. Because of the nature of these monies, OPM

has a fiduciary responsibility to ensure a reasonable and equitable

rate for Federal enrollees as well as for the Government. One of the

ways OPM accomplishes this is to require the same discounts for the

FEHB Program that are enjoyed by the SSSGs; and analyzing cost or

pricing data is the only way OPM can achieve accountability. The

practice of requesting the data is widely accepted in the insurance

industry and, although we have requested this data for over 20 years,

no FEHB Program carrier has advised us that it was burdensome.

By these regulations, we are implementing FASA, FARA, and the FAR

in the manner which best enables us to comply with the responsibility

that the FEHB law places on OPM. One has only to trace the FEHBAR

amendments over the years to understand that OPM has been trying, to

the maximum extent it could, to reconcile the Congressional intent

behind the HMO amendments with the FEHB law. OPM has attempted to fit

FEHB Program contracts into existing contract types under the FAR,

which lists contract types that were never entirely appropriate to our

situation. Accordingly, because of the unique nature of the FEHB

Program contracts, we are categorizing them as negotiated benefits

contracts to reflect more accurately their actual nature.

One commenter suggested that OPM require pricing data only, and

that cost analysis is not an aspect of establishing the price of health

benefits coverage with large group purchasers. We disagree. Cost data,

the most fundamental of which is claims data, prescription drug,

hospital, and office visit benefits utilization data, and trend

[[Page 47571]]

data, are essential in evaluating the rate under ACR (experience

rating). The same commenter believes that, traditionally, when OPM has

asked for cost information it has generally been to examine the

derivation of the price for a specific benefit or loading. Prior to the

1988 HMO amendments, this was true. To a certain extent, OPM's rate

review was fairly straightforward before the 1988 HMO amendments

authorized alternative methods of community rating. Before 1981,

community rating was relatively simple, in that a group's rates were

normally based on the same underlying capitation rate (i.e., per member

per month rate). But, even under this early version of community

rating, a group's rates could not properly be thought of as a market

price. This is because, from the enactment of the HMO Act of 1973

onward, the community rating theory has always allowed for various

demographic adjustments that caused each group's rates to be uniquely

related to the characteristics of the group.

In 1981, when the HMO Act of 1973 was amended to allow Federally

qualified plans to use Community Rating by Class (CRC), the situation

became much more complex. Under CRC, the plan could adjust the

community rates by a CRC factor which was derived by partitioning the

group into classes and applying so-called utilization factors, which

predicted differences in the use of HMO services by individuals or

families in each class.

But, in 1988, the 1988 HMO amendments radically altered the nature

of community rating by allowing Federally qualified plans to use

Adjusted Community Rating (ACR). In retrospect, we have come to realize

that no rate based on ACR can possibly be construed to be a market

price. After the legislation was enacted and OPM's 1990 regulations

were published, OPM began to experience difficulties in verifying the

carriers' community rate. We continue to ask for cost and pricing data

for computing the rates under Traditional Community Rating (TCR) and

CRC. And, for ACR, we ask for all of the data developed for both the

FEHB Program and the SSSGs, which includes cost data.

Contrary to the commenter's beliefs, these carriers using ACR do

not derive their rates from a single rate. Rather, these carriers base

their rate directly on the past experience of the Federal group. In no

sense can such a rate be considered a market price. The Act stated

that, under ACR, the rate for a particular group could be based on the

organization's revenue requirements for providing service to the group.

This means that ACR is a form of experience rating and, as such,

requires cost data. Thirty-five percent of the FEHB plans use ACR to

rate the Federal group, and the number of these plans is increasing

each year. Approximately thirty percent of the plans currently in the

FEHB Program use CRC to rate the Federal group.

Two commenters were concerned that proposed FEHBAR 1602.170-5 does

not define cost or pricing data, but simply refers to the rate

instruction package. One of these commenters believes that the list of

cost or pricing data should be identified in regulation because the FAR

does not give agencies authority to set price guidelines outside the

scope of the regulation.

In placing clarifying details in the rate instructions, OPM was

simply conforming to the principles of the Administration's National

Performance Review (NPR). A key element of the NPR is the replacing of

agency rules with policy directives and instructions, where

appropriate. Nevertheless, to assist the carriers in understanding what

OPM considers cost or pricing data, we have decided to cite in the

regulation some examples of the types of data that OPM considers to be

cost or pricing data. Like the examples listed in the FAR, the list is

illustrative and is not exhaustive. Additional data may be requested in

the rate instructions as deemed necessary by OPM for a particular

contract year. Again, this type of detail is merely clarifying

information and does not represent policy change. It conforms to the

definition of cost or pricing data in TINA and is information that OPM

has frequently requested in the past.

One commenter noted that in the Supplementary Information to the

proposed rule OPM included actuarial estimates in its description of

cost or pricing data. The commenter stated that actuarial estimates are

judgmental and not factual and suggested that OPM remove these from

consideration as cost or pricing data. We are aware that FAR 15.801

defines ``cost or pricing data'' as factual and not judgmental, and we

believe that we are in compliance with the definition. OPM uses

actuarial estimates not to question what judgment the carrier used in

its actuarial estimates, but to verify, for example, that if an

actuarial estimate of 10% increase in claims was used for the FEHBP

group, the methodology used to establish that estimate was also used in

setting the SSSGs rates. In other words, OPM is not questioning what

judgment the carrier has applied in its projections, but the facts upon

which its projections are based.

One commenter is concerned that the regulation will authorize OPM

to collect data that are difficult to collect and submit and that are

not directly related to OPM's responsibility to evaluate the

reasonableness of the prices given to the SSSGs. The respondent noted

that the FAR authorizes agencies to obtain ``other than cost or pricing

data,'' which the commenter believes is sufficient to verify prices. We

would like to reiterate that OPM will not ask for different data than

it currently requests in the rate setting process. However, the kind of

data that we ask for will be determined by the plan with regard to how

it chooses to rate its SSSGs. We look only at data directly related to

our responsibility under the FEHB law to evaluate a proposed rate in

order to ensure that the FEHBP rates accurately reflect the cost of

benefits provided. OPM neither requests nor desires information that is

irrelevant to this objective. Further, OPM disagrees with the commenter

that data other than cost or pricing data are sufficient to verify

prices.

SSSGs

One commenter is concerned that the legitimacy of a loading can be

based on non-SSSG rating practices. The commenter believes that this is

inconsistent with the SSSG concept. As stated in the OPM Reconciliation

Guidelines, the OPM audit staff may examine the rates and benefit

loadings of non-SSSG groups. The purpose of such analysis is to make

certain that the Federal group rates are fair in relation to the SSSG

rates. As one example (given in the guidelines), if an SSSG had a

special benefit not included in the Federal group benefit package, OPM

would compare what the plan charged the SSSG with what it charged non-

SSSG groups for the benefit. Only by examining the non-SSSG groups

would we be able to determine if the SSSG had been given a discount to

its overall rates via a discount to the special loading. We do,

however, agree with the commenter that another example given in the

guidelines pertaining to late payment loadings is not a good example to

justify the principle of examining non-SSSG groups. We will remove this

example from future guideline documents.

Another commenter believes that OPM fails to consider the contract

requirement that the FEHB rate be reconciled to the SSSG rates after

the contract period has begun. As part of the reconciliation process,

the contractor must provide information related to the rates offered to

the five groups closest in size to the Federal group. The commenter

believes that requiring cost

[[Page 47572]]

or pricing data for these contracts is entirely inconsistent with the

purpose of the reconciliation process.

For non-SSSGs, OPM simply asks the carriers to list the plans they

did not select as SSSGs. However, OPM may ask the carrier to explain

why it did not select one or more as an SSSG. OPM has stated over the

years that it reserves the right to examine the rate development of

non-SSSG groups. OPM looks at a carrier's other groups only if all the

necessary information is not in the SSSG. For example, verifying that

there is no group closer in size to the Federal group than the plan's

chosen SSSGs could require analysis of non-SSSG groups. OPM will verify

such things as differences in loading and whether the carrier has

hidden a discount in a loading. We want to emphasize that the sole

purpose of such analysis is to make certain that the Federal group's

rates are equivalent to the SSSGs' rates. However, if we find that the

SSSG is not closest in size or if an SSSG had a special benefit (e.g.,

dental benefit) not included in the Federal group benefit package, we

would compare what the carrier charged the SSSG with what it charged

other groups for this benefit. The purpose would be to verify that the

SSSG received no discount. Carriers need not be concerned that an OPM

review of a non-SSSG commercial group makes it a potential SSSG. We

would like to point out, though, that such comparisons with non-SSSGs

could work to the carrier's advantage as well as to its disadvantage if

a non-SSSG was not given a discount.

SSSGs/Regional Rating Areas

One of the commenters noted that a carrier may have to select an

SSSG from an entirely different area within a State even if that group

has no Federal employees in the rating area. This concerned the

commenter since the group rates in one regional rating area may be

significantly different than the rates in another area. The commenter

stated that it is unclear how OPM would adjust the rates of an SSSG in

one area to measure the Federal group in another area and suggests that

OPM limit its SSSG analysis to groups within a single FEHBP rating

area. This type of situation is not new to us. In such cases, we focus

on whether the carrier gave the groups a discount and whether it is

applying the rating method consistently. The rating method or benefit

structure may be entirely different and is, in fact, irrelevant.

SSSGs/Purchasing Alliances

One commenter suggested that OPM either remove the limitation on

the maximum number of employees allowable in a purchasing alliance, or

increase the number to 200, because some States offer voluntary

alliances in which the State may also dictate the rates. In addition,

two commenters believe that no State mandated purchasing alliance

should be treated as an SSSG because the alliances are not voluntary

and are usually a condition of doing business in the State, which

distinguishes them from the carriers' normal lines of business. After

considering the comments, we have adopted the suggestion that all

alliances be excluded from consideration as SSSGs where the State

mandates how the rate is set.

We are also confirming that POS plans whose rate-setting is

mandated by the State may be excluded from consideration as SSSGs.

However, a POS plan whose rate-setting is not State-mandated must be

considered as an SSSG, even though it is primarily experience rated.

Usually the plan uses ACR and should not be excluded, regardless of the

portion of its services provided out of plan. We have had comparable

experience with ACR plans since 1988, and the rate setting for POS

plans with a large percentage of out-of-plan services is no more

difficult to accomplish than ACR. As we have said before, experience

shows that we have to be inclusive in considering plans as SSSGs. OPM

has always recognized that the rating method for the Federal group is

not necessarily the same as its SSSGs.

OPM received a few plan-specific questions about SSSGs, which we

are reluctant to answer without more information. We will answer these

types of questions on an individual basis at the time of the rate

reconciliation.

One commenter believes that the regulations should establish audit

standards that restrict OPM's Inspector General (IG) auditors to

comparing the prices charged to the SSSGs and to reviewing the

information necessary to verify that the SSSGs are appropriate. By

statute, OPM's Inspector General operates independently of OPM, and OPM

is not authorized to regulate to restrict its authority. We would like

to point out, however, that the IG looks only at data directly related

to OPM's responsibility under the FEHB law to evaluate a proposed rate

in order to ensure that the rates accurately reflect the cost of

benefits provided. The kind of data that the auditors would look at

will be determined by the plan with respect to how it chooses to rate

its SSSGs.

SSSGs/Multi-year contracts

One commenter believes OPM should not be allowed to isolate a

specific year in a multi-year contract to determine that a discount

occurred. Our intent is that if a plan's rates are affected by the

length of time the group signs up with the plan, then we simply want to

be able to capture that data. If the rates are affected, then we have

to make our analysis based on all the years that affect the rate.

A commenter asked that OPM confirm its understanding that if the

aggregate revenues on a per member per month (PMPM) basis for the

Federal group are equivalent to or less than the corresponding

aggregate revenues for the SSSG, the carrier will be in compliance with

its community rating requirements with respect to that SSSG. OPM

confirms that under this scenario the carrier would be in compliance

with its community rating requirements.

The same commenter would also like clarification of OPM's policy

with regard to multi-year contracts in which the group has the option

of renewing the agreement in any given year and does not renew. OPM

considers the contracts to be single-year agreements if the group

terminates the contract.

Miscellaneous

We converted FAR clauses 52.229-6, Taxes--Foreign Fixed-Price

Contracts, 52.243-1, Changes--Fixed Price, 52.245-2, Government

Property (Fixed-Price Contracts), 52.249-2, Termination for Convenience

of the Government (Fixed-Price), and 52.249-8, Default (Fixed-Price

Supply and Service) to FEHBAR clauses and have deleted language that

does not apply to negotiated benefits contracts.

We have clarified the cost principle at 1631.205-75(b) pertaining

to selling costs to provide that personnel and related travel costs are

allowable for attendance at Open Season Health Fairs and other similar

activities where carriers give enrollees information about their

choices among health plans. Such events are not limited to those

sponsored by Government agencies, but may be sponsored by other groups

as well.

One comment concerned 1652.215-70(b)(1)(iii), which states that if

the contracting officer determines that a price or cost reduction

should be made, the carrier may not raise as a defense the argument

that the contract was based on an agreement about the total cost of the

contract and there was no agreement about the cost of each item

procured under the contract. The commenter states that community rated

contracts

[[Page 47573]]

are based on price, not cost, analysis and cites FAR 15.803(c), which

provides that price negotiation does not require that agreement be

reached on every element of cost. The commenter believes, therefore,

that individual components of cost should not be subject to revision on

audit. OPM classified its review as price analysis pursuant to the HMO

amendments because it had been working with a simplified form of price

analysis up to that point, although technically even these community

rated contracts included an element of cost. But, after we gained some

experience with ACR (experience rating), we began to look not only at

special benefits loadings, but also at elements of the basic community

rate, such as demographic factors. Our approach has been consistent

with the FAR definition of ``price,'' which states that price is cost

plus any fee or profit applicable to the contract type. For the reasons

stated earlier, OPM is no longer classifying FEHB contracts as market

price, and OPM will collect both cost and pricing data. The new

regulations reflect this fact by clarifying that community rated

contracts are based on a combination of cost and price analysis. FEHBAR

1652.216-70(b)(1)(iii) is taken verbatim from FAR 52.215-22(c)(1)(iii)

and is appropriate when both cost and pricing data are required.

The same commenter took exception to the requirement in 1652.215-

70(b)(2)(ii)(A), which restricts a carrier's right to claim an offset

to an audit finding when the understated data was known by the carrier

to be understated at the time the certificate of current cost or

pricing data was signed. The commenter believes this provision is

inconsistent with FEHBAR 1652.215-70(b)(2)(i)(B) which allows a carrier

to revise a price following an audit finding if it proves that the cost

or pricing data were available before the date of agreement on the

price of the contract and that the data were not submitted before such

date. We would like to point out that these provisions are not

inconsistent with the FAR. In fact, they are repeated verbatim from the

FAR. Section 1652.215-70(b)(2)(ii)(A) prohibits an offset if the

carrier deliberately understated the data at the time the certificate

of current cost or pricing data was signed. OPM would not allow an

offset under these circumstances. In FEHBAR 1652.215-70(b)(2)(i)(B),

however, the carrier is allowed to prove that the data were not

submitted before the date of agreement on the price because of a

mistake on its part. OPM would allow the offset if the proof offered by

the carrier was clear and convincing.

One commenter suggested that OPM increase the threshold for

preapproval of subcontracts to $200,000 to account for inflation since

the FEHBAR was first published in 1987. OPM has decided not to increase

the threshold at this time, but will consider doing so in a future

amendment to the FEHBAR.

We are withdrawing our proposal to insert FAR 52.222-25,

Affirmative Action Compliance, in the Matrix because the clause is a

preaward clause that is intended to be inserted in solicitations. FEHB

Program contracts, by law, are exempted from competitive bidding

requirements, and OPM uses alternative methods of inviting health

benefits carriers to apply for participation in the FEHB Program.

We are withdrawing our proposal to add a requirement in 1652.222-

70, Notice of Significant Events, that carriers should inform OPM at

the time of a novation or change of name, rather than after the

novation or change of name occurs. OPM has determined that FEHBAR

1642.1204 and 1642.1205 sufficiently address OPM's concerns that

carriers are required to notify OPM of a novation and/or a change of

name in a timely manner.

We have made a technical correction to 1652.232-71(c) that was

inadvertently omitted from OPM's interim regulation of April 20, 1992,

and published as a final rule on November 16, 1992 [57 FR 53981]. That

is, we have removed from the regulation the reference to the ability of

underwriters to make drawdowns from carriers' letter of credit (LOC)

accounts. OPM guidelines allow a carrier to delegate its authority to

make drawdowns from its LOC account to the underwriter of its plan.

We have also included in the final regulations minor technical and

editorial changes and minor changes to the definitions of ``Carrier''

and ``Health benefits plan'' to more closely align them with the

definitions contained in the National Association of Insurance

Commissioners (NAIC) guidelines.

Regulatory Flexibility Act

I certify that this regulation will not have a significant economic

impact on a substantial number of small entities because all of the

small plan FEHB Program contracts fall below the threshold for

submitting cost or pricing data.

List of Subjects in 48 CFR Parts 1602, 1603, 1604, 1615, 1616,

1629, 1631, 1643, 1644, 1645, 1649, 1652, and 1653

Administrative practice and procedure, Government employees, Health

facilities, Health insurance, Health professions, Hostages, Iraq,

Kuwait, Lebanon, Reporting and recordkeeping requirements, Retirement.

Office of Personnel Management.

James B. King,

Director.

Accordingly, OPM is amending Chapter 16 of Title 48, Code of

Federal Regulations, as follows:

CHAPTER 16--OFFICE OF PERSONNEL MANAGEMENT FEDERAL EMPLOYEES HEALTH

BENEFITS ACQUISITION REGULATION

1. The authority citation for 48 CFR Parts 1602, 1603, 1604, 1615,

1616, 1631, 1644, 1649, 1652, and 1653 continues to read as follows:

Authority: 5 U.S.C. 8913; 40 U.S.C. 486(c); 48 CFR 1.301.

PART 1602--DEFINITIONS OF WORDS AND TERMS

2. Section 1602.170-1 is revised to read as follows:

1602.170-1 Carrier.

Carrier means a voluntary association, corporation, partnership, or

other nongovernmental organization which is lawfully engaged in

providing, delivering, paying for, or reimbursing the cost of health

care services under group insurance policies or contracts, medical or

hospital service agreements, membership or subscription contracts,

including a health maintenance organization, a nonprofit hospital and

health service corporation, or any other entity providing a plan of

health insurance, health benefits or health services, in consideration

of premiums or other periodic charges payable to the carrier.

3. In Sec. 1602.170-2, paragraph (a) is revised to read as follows:

1602.170-2 Community rate.

(a) Community rate means a rate of payment based on a per member

per month capitation rate or its equivalent that applies to a

combination of the subscriber groups for a comprehensive medical plan

carrier. References in this subchapter to ``a combination of cost and

price analysis'' relating to the applicability of policy and contract

clauses refer to comprehensive medical plan carriers using community

rates.

* * * * *

[[Page 47574]]

4. Sections 1602.170-10 through 1602.170-12 are redesignated as

Secs. 1602.170-12 through 1602.170-14 respectively, Secs. 1602.170-5

through 1602.170-9 are redesignated as Secs. 1602.170-6 through

1602.170-10, new Secs. 1602.170-5 and 1602.170-11 are added, and newly

redesignated Secs. 1602.170-9 and 1602.170-13 are revised to read as

follows:

1602.170-5 Cost or pricing data.

(a) Experience rated carriers. Cost or pricing data for experience

rated carriers includes information such as claims data; actual or

negotiated benefits payments made to providers of medical services for

the provision of health care such as capitation not adjusted for

specific groups, per diems, and Diagnostic Related Group (DRG)

payments; cost data; utilization data; and administrative expenses and

retentions.

(b) Community rated carriers. Cost or pricing data for community

rated carriers is the specialized rating data used by carriers in

computing a rate that is appropriate for the Federal group and the

similarly sized subscriber groups (SSSGs). Such data include, but are

not limited to, capitation rates; prescription drug, hospital, and

office visit benefits utilization data; trend data; actuarial data;

rating methodologies for other groups; standardized presentation of the

carrier's rating method (age, sex, etc.) showing that the factor

predicts utilization; tiered rates information; ``step-up'' factors

information; demographics such as family size; special benefit loading

capitations; and adjustment factors for capitation.

* * * * *

1602.170-9 Health benefits plan.

Health benefits plan means a group insurance policy, contract,

medical or hospital service agreement, membership or subscription

contract, or similar group arrangements provided by a carrier for the

purpose of providing, arranging for, delivering, paying for, or

reimbursing any of the costs of health care services.

* * * * *

1602.170-11 Negotiated benefits contracts.

Negotiated benefits contracts are FEHBP contracts in which benefits

provided and subscription income are based on either community rating

or experience rating.

* * * * *

1602.170-13 Similarly sized subscriber groups.

(a) Similarly sized subscriber groups (SSSGs) are a comprehensive

medical plan carrier's two employer groups that:

(1) As of the date specified by OPM in the rate instructions, have

a subscriber enrollment closest to the FEHBP subscriber enrollment;

and,

(2) Use any rating method other than retrospective experience

rating; and,

(3) Meet the criteria specified in the rate instructions issued by

OPM.

(b) Any group with which an FEHB carrier enters into an agreement

to provide health care services is a potential SSSG (including separate

lines of business, government entities, groups that have multi-year

contracts, and groups having point-of-service products).

(c) Exceptions to the general rule stated in paragraph (b) of this

section are (and the following groups must be excluded from SSSG

consideration):

(1) Groups the carrier rates by the method of retrospective

experience rating;

(2) Groups consisting of the carrier's own employees;

(3) Medicaid groups, Medicare groups, and groups that have only a

stand alone benefit (such as dental only);

(4) A purchasing alliance whose rate-setting is mandated by the

State or local government.

(d) OPM shall determine the FEHBP rate by selecting the lower of

the two rates derived by using rating methods consistent with those

used to derive the SSSG rates.

PART 1603--IMPROPER BUSINESS PRACTICES AND PERSONAL CONFLICTS OF

INTEREST

Subpart 1603.70 [Amended]

5. In subpart 1603.70, sections 1603.701, 1603.702, and 1603.703

are redesignated as sections 1603.7001, 1603.7002, and 1603.7003

respectively.

PART 1604--ADMINISTRATIVE MATTERS

1604.705 [Amended]

6. In subpart 1604.7, section 1604.705 is amended by removing the

words ``Audit--Negotiation,'' and adding in its place ``Audit &

Records--Negotiation.''

PART 1615--CONTRACTING BY NEGOTIATION

7. Section 1615.802 is revised to read as follows:

1615.802 Policy.

Pricing of FEHB contracts is governed by 5 U.S.C. 8902(i), 5 U.S.C.

8906, and other applicable law. FAR subpart 15.8 shall be implemented

by applying the policies and procedures--to the extent practicable--as

follows:

(a) For both experience rated and community rated contracts for

which the FEHBP premiums for the contract term will be less than

$500,000, OPM shall not require the carrier to provide cost or pricing

data in the rate proposal for the following contract term.

(b) Cost analysis shall be used for contracts where premiums and

subscription income are determined on the basis of experience rating.

(c)(1) A combination of cost and price analysis shall be used for

contracts where premiums and subscription income are based on community

rates. For contracts for which the FEHBP premiums for the contract term

will be less than $500,000, OPM shall not require the carrier to

provide cost or pricing data. The carrier must submit only a rate

proposal and abbreviated utilization data for the applicable contract

year. OPM will evaluate the proposed rates by performing a basic

reasonableness test on the information submitted. Rates failing this

test will be subject to further review.

(2) For contracts with fewer than 1,500 enrollee contracts for

which the FEHBP premiums for the contract term will be $500,000 or

more, OPM shall require the carrier to submit its rate proposal,

utilization data, and the certificate of accurate cost or pricing data

required in 1615.804-70. In addition, OPM shall require the carrier to

complete the proposed rates form containing cost and pricing data, and

the Community Rate Questionnaire, but shall not require the carrier to

send these documents to OPM. The carrier shall keep the documents on

file for periodic auditor and actuarial review in accordance with

1652.204-70. OPM shall perform a basic reasonableness test on the data

submitted. Rates that do not pass this test shall be subject to further

OPM review.

(3) For contracts with 1,500 or more enrollee contracts for which

the FEHBP premiums for the contract term will be at least $500,000, OPM

shall require the carrier to provide the data and methodology used to

determine the FEHBP rates. OPM shall also require the data and

methodology used to determine the rates for the carrier's similarly

sized subscriber groups. The carrier shall provide cost or pricing data

required by OPM in its rate instructions for the applicable contract

period. OPM shall evaluate the data to ensure that the

[[Page 47575]]

rate is reasonable and consistent with the requirements in this

chapter. If necessary, OPM may require the carrier to provide

additional documentation.

(4) Contracts shall be subject to a downward price adjustment if

OPM determines that the Federal group was charged more than it would

have been charged using a methodology consistent with that used for the

SSSGs. Such adjustments shall be based on the lower of the two rates

determined by using the methodology (including discounts) the Carrier

used for the two SSSGs.

(5) FEHBP community rated carriers shall comply with SSSG criteria

provided by OPM in the rate instructions for the applicable contract

period.

(d) The application of FAR 15.802(b)(2) should not be construed to

prohibit the consideration of preceding year surpluses or deficits in

carrier-held reserves in the rate adjustments for subsequent year

renewals of contracts based, in whole or in part, on cost analysis.

8. Section 1615.804-70 is revised to read as follows:

1615.804-70 Certificate of cost or pricing data for community rated

carriers.

The contracting officer shall require a carrier with a contract

meeting the requirements in 1615.802(c)(2) or 1615.802(c)(3) to execute

the Certificate of Accurate Cost or Pricing Data contained in this

section. A carrier with a contract meeting the requirements in

1615.802(c)(2) shall complete the Certificate and keep it on file at

the carrier's place of business in accordance with 1652.204-70. A

carrier with a contract meeting the requirements in 1615.802(c)(3)

shall submit the Certificate to OPM along with its rate reconciliation,

which is submitted during the first quarter of the applicable contract

year.

Certificate of Accurate Cost or Pricing Data for Community Rated

Carriers

This is to certify that, to the best of my knowledge and belief:

(1) The cost or pricing data submitted (or, if not submitted,

maintained and identified by the carrier as supporting

documentation) to the Contracting Officer or the Contracting

Officer's representative or designee, in support of the __________*

FEHBP rates were developed in accordance with the requirements of 48

CFR Chapter 16 and the FEHBP contract and are accurate, complete,

and current as of the date this certificate is executed; and (2) the

methodology used to determine the FEHBP rates is consistent with the

methodology used to determine the rates for the carrier's Similarly

Sized Subscriber Groups.

Firm:------------------------------------------------------------------

Name:------------------------------------------------------------------

Signature:-------------------------------------------------------------

Date of Execution:-----------------------------------------------------

*Insert the year for which the rates apply. Normally, this will

be the year for which the rates are being reconciled.

(End of Certificate)

1615.804-7 [Removed and reserved]

9. Section 1615.804-71 is removed and reserved.

10. Section 1615.804-72 is revised to read as follows:

1615.804-72 Rate reduction for defective pricing or defective cost or

pricing data.

The clause set forth in section 1652.215-70 shall be inserted in

FEHBP contracts for $500,000 or more that are based on a combination of

cost and price analysis (community rated).

11. Paragraph (a) of section 1615.805-70 is revised to read as

follows:

1615.805-70 Carrier investment of FEHB funds.

(a) This paragraph does not apply to contracts based on a

combination of cost and price analysis (community rated).

* * * * *

PART 1616--TYPES OF CONTRACTS

12. Section 1616.102, is revised to read as follows:

1616.102 Policies.

All FEHBP contracts shall be negotiated benefits contracts.

Subpart 1616.2 [Removed]

13. Subpart 1616.2 is removed and subpart 1616.70 is added to read

as follows:

Subpart 1616.70--Negotiated Benefits Contracts

1616.7001 Clause--contracts based on a combination of cost and price

analysis (community rated).

The clause at section 1652.216-70 shall be inserted in all FEHBP

contracts based on a combination of cost and price analysis (community

rated).

1616.7002 Clause--contracts based on cost analysis (experience rated).

The clause at section 1652.216-71 shall be inserted in all FEHBP

contracts based on cost analysis (experience rated).

SUBCHAPTER E--GENERAL CONTRACTING REQUIREMENTS

14. In Subchapter E, part 1629 is added to read as follows:

PART 1629--TAXES

Subpart 1629.4--Contract Clauses

Sec.

1629.402 Foreign contracts.

Authority: 5 U.S.C. 8913; 40 U.S.C. 486(c); 48 CFR 1.301.

Subpart 1629.4--Contract Clauses

1629.402 Foreign contracts.

The clause set forth in section 1652.229-70 shall be inserted in

all FEHBP contracts performed outside the United States, its

possessions, and Puerto Rico.

PART 1631--CONTRACT COST PRINCIPLES AND PROCEDURES

15. In subpart 1631.2, section 1631.205-75, paragraph (b), is

revised to read as follows:

1631.205-75 Selling costs.

* * * * *

(b) Selling costs are allowable costs to FEHBP contracts to the

extent that they are necessary for conducting annual contract

negotiations with the Government and for liaison activities necessary

for ongoing contract administration. Personnel and related travel costs

are allowable for attendance at Open Season Health fairs and other

similar activities at which carriers give enrollees information about

their choices among health plans (but see FAR 31.205-1 ``Public

relations and advertising costs'', and The Federal Employees Health

Benefits Handbook for Personnel and Payroll Offices, Subchapter S2-3(f)

``Controlling contacts between employees and carriers'').

SUBCHAPTER G--CONTRACT MANAGEMENT

16. In Subchapter G, part 1643 is added to read as follows:

PART 1643--CONTRACT MODIFICATIONS

Subpart 1643.2--Changes

Sec.

1643.205-70 Contract clause.

Authority: 5 U.S.C. 8913; 40 U.S.C. 486(c); 48 CFR 1.301.

Subpart 1643.2--Changes

1643.205-70 Contract clause.

The clause set forth in section 1652.243-70 shall be inserted in

all FEHB Program contracts.

PART 1644--SUBCONTRACTING POLICIES AND PROCEDURES

17. In Subpart 1644.1, section 1644.170 is revised to read as

follows:

1644.170 Policy for FEHBP subcontracting consent.

For all experience rated FEHBP contracts, advance approval shall be

[[Page 47576]]

required on subcontracts or modifications to subcontracts when the

amount charged against the FEHBP contract exceeds $100,000 and is at

least 25 percent of the total cost of the subcontract.

18. In Subpart 1644.2, section 1644.270 is revised to read as

follows:

1644.270 FEHBP contract clause.

The clause set forth at section 1652.244-70 shall be inserted in

all experience rated FEHBP contracts.

19. Part 1645 is added to read as follows:

PART 1645--GOVERNMENT PROPERTY

Subpart 1645.3--Providing Equipment

Sec.

1645.303-70 Contract clause.

Authority: 5 U.S.C. 8913; 40 U.S.C. 486(c); 48 CFR 1.301.

Subpart 1645.3--Providing Equipment

1645.303-70 Contract clause.

The clause set forth in section 1652.245-70 shall be inserted in

all FEHB Program contracts.

PART 1649--TERMINATION OF CONTRACTS

20. In subpart 1649.1, sections 1649.101-71 and 1649.101-72 are

added to read as follows:

1649.101-71 FEHBP termination for convenience clause.

The clause set forth in 1652.249-71 shall be inserted in all FEHBP

contracts.

1649.101-72 FEHBP termination for default clause.

The clause set forth in 1652.249-72 shall be inserted in all FEHBP

contracts.

SUBCHAPTER H--CLAUSES AND FORMS

PART 1652--CONTRACT CLAUSES

21. In part 1652, section 1652.000 is revised to read as follows:

1652.000 Applicable clauses.

The clauses of FAR subpart 52.2 shall be applicable to FEHBP

contracts as specified in the FEHBAR Clause Matrix in subpart 1652.3.

Section and Clause Title

52.202-1 Definitions.

52.203-3 Gratuities.

52.203-5 Covenant Against Contingent Fees.

52.203-7 Anti-Kickback Procedures.

52.203-12 Limitation on Payments to Influence Certain Federal

Transactions.

52.209-6 Protecting the Government's Interest When Subcontracting

With Contractors Debarred, Suspended, or Proposed for Debarment.

52.215-2 Audit and Records--Negotiation.

52.215-22 Price Reduction for Defective Cost or Pricing Data.

52.215-24 Subcontractor Cost or Pricing Data.

52.215-27 Termination of Defined Benefit Pension Plans.

52.215-30 Facilities Capital Cost of Money.

52.215-31 Waiver of Facilities Capital Cost of Money.

52.215-39 Reversion or Adjustment of Plans for Postretirement

Benefits Other Than Pensions (PRB).

52.219-8 Utilization of Small, Small Disadvantaged and Women-Owned

Small Business Concerns.

52.222-1 Notice to the Government of Labor Disputes.

52.222-3 Convict Labor.

52.222-4 Contract Work Hours and Safety Standards Act--Overtime

Compensation--General.

52.222-21 Certification of Nonsegregated Facilities.

52.222-26 Equal Opportunity.

52.222-28 Equal Opportunity Preaward Clearance of Subcontracts.

52.222-29 Notification of Visa Denial.

52.222-35 Affirmative Action for Special Disabled and Vietnam Era

Veterans.

52.222-36 Affirmative Action for Handicapped Workers.

52.222-37 Employment Reports on Special Disabled Veterans and

Veterans of the Vietnam Era.

52.223-2 Clean Air and Water.

52.223-6 Drug-Free Workplace.

52.227-1 Authorization and Consent.

52.227-2 Notice and Assistance Regarding Patent and Copyright

Infringement.

52.229-3 Federal, State,and Local Taxes.

52.229-4 Federal, State, and Local Taxes (Noncompetitive Contract).

52.229-5 Taxes--Contracts Performed in U.S. Possessions or Puerto

Rico.

52.230-2 Cost Accounting Standards.

52.230-3 Disclosure and Consistency of Cost Accounting Practices.

52.230-5 Administration of Cost Accounting Standards.

52.232-8 Discounts for Prompt Payment.

52.232-17 Interest.

52.232-23 Assignment of Claims.

52.232-33 Mandatory Information For Electronic Funds Transfer

Payment.

52.233-1 Disputes.

52.242-1 Notice of Intent to Disallow Costs.

52.242-3 Penalties for Unallowable Costs.

52.242-13 Bankruptcy.

52.244-5 Competition in Subcontracting.

52.244-6 Subcontracts for Commercial Items and Commercial

Components.

52.246-25 Limitation of Liability--Services.

52.247-63 Preference for U.S.-Flag Air Carriers.

52.251-1 Government Supply Sources.

52.232-2 Clauses Incorporated by Reference.

52.252-4 Alterations in Contract.

52.252-6 Authorized Deviations in Clauses.

22. In subpart 1652.2, section 1652.203-70 is amended by removing

the reference ``1603.703'' and adding in its place ``1603.7003,''

sections 1652.204-70 and 1652.215-70 are revised, section 1652.204-72

is amended by adding a date in the clause title.

1652.204-70 Contractor records retention.

As prescribed in 1604.705, the following clause shall be inserted

in all FEHBP contracts.

Contractor Records Retention (Jan 1998)

Notwithstanding the provisions of section 5.7 (FAR 52.215-2(f))

``Audit and Records-Negotiation,'' the Carrier shall retain and make

available all records applicable to a contract term that support the

annual statement of operations and, for contracts that exceed the

threshold at FAR 15.804-2(a)(1), the rate submission for that

contract term for a period of 5 years after the end of the contract

term to which the records relate, except that enrollee and/or

patient claim records shall be maintained for 3 years after the end

of the contract term to which the claim records relate.

(End of Clause)

* * * * *

Sec. 1652.204-72 Filing Health Benefit Claims/Court of Disputed Claims

* * * * *

Filing Health Benefit Claims/Court Review of Disputed Claims (Mar 1995)

* * * * *

1652.215-70 Rate Reduction for Defective Pricing or Defective Cost or

Pricing Data.

As prescribed in 1615.804-72, the following clause shall be

inserted in FEHBP contracts exceeding the threshold at FAR 15.804-

2(a)(1) that are based on a combination of cost and price analysis

(community rated):

Rate Reduction for Defective Pricing or Defective Cost or Pricing Data

(Jan 1998)

(a) If any rate established in connection with this contract was

increased because (1) the Carrier submitted, or kept in its files in

support of the FEHBP rate, cost or pricing data that were not

complete, accurate, or current as certified in the Certificate of

Accurate Cost or Pricing Data (FEHBAR 1615.804-70); (2) the Carrier

submitted, or kept in its files in support of the FEHBP rate, cost

or pricing data that were not accurate as represented in the rate

proposal documents; (3) the Carrier developed FEHBP rates with a

rating methodology and structure inconsistent with that used to

develop rates for similarly sized subscriber groups (see FEHBAR

1602.170-13) as certified in the Certificate of Accurate Cost or

Pricing Data for Community Rated Carriers; or (4) the Carrier

submitted or, or kept in its files in support of the FEHBP rate,

data or information of any description that were not complete,

accurate, and current--then, the rate shall be reduced in the amount

by which the price was increased because of the defective data or

information.

(b)(1) If the Contracting Officer determines under paragraph (a)

of this clause that a price

[[Page 47577]]

or cost reduction should be made, the Carrier agrees not to raise

the following matters as a defense:

(i) The Carrier was a sole source supplier or otherwise was in a

superior bargaining position and thus the price of the contract

would not have been modified even if accurate, complete, and current

cost or pricing data had been submitted or maintained and

identified.

(ii) The Contracting Officer should have known that the cost or

pricing data in issue were defective even though the Carrier took no

affirmative action to bring the character of the data to the

attention of the Contracting Officer.

(iii) The contract was based on an agreement about the total

cost of the contract and there was no agreement about the cost of

each item procured under the contract.

(iv) The Carrier did not submit or keep in its files a

Certificate of Current Cost or Pricing Data.

(2)(i) Except as prohibited by subdivision (b)(2)(ii) of this

clause, an offset in an amount determined appropriate by the

Contracting Officer based upon the facts shall be allowed against

the amount of a contract price reduction if--

(A) The Carrier certifies to the Contracting Officer that, to

the best of the Carrier's knowledge and belief, the Carrier is

entitled to the offset in the amount requested; and

(B) The Carrier proves that the cost or pricing data were

available before the date of agreement on the price of the contract

(or price of the modification) and that the data were not submitted

before such date.

(ii) An offset shall not be allowed if--

(A) The understated data was known by the Carrier to be

understated when the Certificate of Current Cost or Pricing Data was

signed; or

(B) The Government proves that the facts demonstrate that the

contract price would not have increased in the amount to be offset

even if the available data had been submitted before the date of

agreement on price.

(c) When the Contracting Officer determines that the rates shall

be reduced and the Government is thereby entitled to a refund, the

Carrier shall be liable to and shall pay the FEHB Fund at the time

the overpayment is repaid--

(1) Simple interest on the amount of the overpayment from the

date the overpayment was paid from the FEHB Fund to the Carrier

until the date the overcharge is liquidated. In calculating the

amount of interest due, the quarterly rate determinations by the

Secretary of the Treasury under the authority of 26 U.S.C.

6621(a)(2) applicable to the periods the overcharge was retained by

the Carrier shall be used; and,

(2) A penalty equal to the amount of overpayment, if the Carrier

knowingly submitted cost or pricing data which was incomplete,

inaccurate, or noncurrent.

(End of Clause)

23. Section 1652.215-71 is amended by removing ``(Jan 1991)'' from

the title Investment Income and adding in its place ``(Jan 1998)'' and

by revising paragraph (f) to read as follows:

1652.215-71 Investment Income.

* * * * *

(f) The Carrier shall credit the Special Reserve for income due

in accordance with this clause. All lost investment income payable

shall bear simple interest at the quarterly rate determined by the

Secretary of the Treasury under the authority of 26 U.S.C.

6621(a)(2) applicable to the periods in which the amount becomes

due, as provided in paragraphs (d) and (e) of this clause.

* * * * *

24. Section 1652.216-70 is revised to read as follows:

1652.216-70 Accounting and price adjustment.

As prescribed in section 1616.7001, the following clause shall be

inserted in all FEHBP contracts based on a combination of cost and

price analysis (community rated).

Accounting and Price Adjustment (JAN 1998)

(a) Annual Accounting Statement. The Carrier, not later than 90

days after the end of each contract period, shall furnish to OPM for

that contract period an accounting of its operations under the

contract. The accounting shall be in the form prescribed by OPM.

(b) Adjustment. (1) This contract is community rated as defined

in FEHBAR 1602.170-2.

(2) The subscription rates agreed to in this contract shall be

equivalent to the subscription rates given to the carrier's

similarly sized subscriber groups (SSSGs) as defined in FEHBAR

1602.170-13.

(3) If, at the time of the rate reconciliation, the subscription

rates are found to be lower than the equivalent rates for the lower

of the two SSSGs, the carrier may include an adjustment to the

Federal group's rates for the next contract period.

(4) If, at the time of the rate reconciliation, the subscription

rates are found to be higher than the equivalent rates for the lower

of the two SSSGs, the Carrier shall reimburse the Fund, for example,

by reducing the FEHB rates for the next contract term to reflect the

difference between the estimated rates and the rates which are

derived using the methodology of the lower rated SSSG.

(5) No upward adjustment in the rate established for this

contract will be allowed or considered by the Government or will be

made by the Carrier in this or in any other contract period on the

basis of actual costs incurred, actual benefits provided, or actual

size or composition of the FEHBP group during this contract period.

(6) In the event this contract is not renewed, neither the

Government nor the Carrier shall be entitled to any adjustment or

claim for the difference between the subscription rates prior to

rate reconciliation and the actual subscription rates.

(End of Clause)

25. In section 1652.216-71, the introductory sentence is revised to

read as follows:

1652.216-71 Accounting and Allowable Cost.

As prescribed in section 1616.7002, the following clause shall be

inserted in all FEHBP contracts based on cost analysis (experience

rated).

* * * * *

26. Section 1652.229-70 is added to read as follows:

1652.229-70 Taxes--Foreign Negotiated benefits contracts.

As prescribed in section 1629.402, the following clause shall be

inserted in all FEHBP contracts performed outside the United States,

its possessions, and Puerto Rico:

Taxes--Foreign Negotiated Benefits Contracts (Jan 1998)

(a) To the extent that this contract provides for performing

services outside the United States, its possessions, and Puerto

Rico, this clause applies in lieu of any Federal, State, and local

taxes clause of the contract.

(b) ``Contract date,'' as used in this clause, means the

effective date of this contract or modification.

``Country concerned,'' as used in this clause, means any

country, other than the United States, its possessions, and Puerto

Rico, in which expenditures under this contract are made.

``Tax'' and ``taxes,'' as used in this clause, include fees and

charges for doing business that are levied by the government of the

country concerned or by its political subdivisions.

``All applicable taxes and duties,'' as used in this clause,

means all taxes and duties, in effect on the contract date, that the

taxing authority is imposing and collecting on the transactions

covered by this contract, pursuant to written ruling or regulation

in effect on the contract date.

``After-imposed tax,'' as used in this clause, means any new or

increased tax or duty, or tax that was exempted or excluded on the

contract date but whose exemption was later revoked or reduced

during the contract period, other than excepted tax, on the

transactions covered by this contract that the Carrier is required

to pay or bear as the result of legislative, judicial, or

administrative action taking effect after the contract date.

``After-relieved tax,'' as used in this clause, means any amount

of tax or duty, other than an excepted tax, that would otherwise

have been payable on the transactions covered by this contract, but

which the Carrier is not required to pay or bear, or for which the

Carrier obtains a refund, as the result of legislative, judicial, or

administrative action taking effect after the contract date.

``Excepted tax,'' as used in this clause, means social security

or other employment taxes, net income and franchise taxes, excess

profits taxes, capital stock taxes, transportation taxes,

unemployment compensation taxes, and property taxes. ``Excepted

tax'' does not include gross income taxes levied on or measured by

sales or receipts from sales covered by this contract, or any tax

assessed on the Carrier's possession of, interest in, or use of

property, title to which is in the U.S. Government.

[[Page 47578]]

(c) Unless otherwise provided in this contract, the contract

price includes all applicable taxes and duties, except taxes and

duties that the Government of the United States and the government

of the country concerned have agreed shall not be applicable to

expenditures in such country by or on behalf of the United States.

(d) The contract price shall be increased by the amount of any

after-imposed tax or of any tax or duty specifically excluded from

the contract price by a provision of this contract that the Carrier

is required to pay or bear, including any interest or penalty, if

the Carrier states in writing that the contract price does not

include any contingency for such tax and if liability for such tax,

interest, or penalty was not incurred through the Carrier's fault,

negligence, or failure to follow instructions of the Contracting

Officer or to comply with the provisions of paragraph (i) below.

(e) The contract price shall be decreased by the amount of any

after-relieved tax, including any interest or penalty. The

Government of the United States shall be entitled to interest

received by the Carrier incident to a refund of taxes to the extent

that such interest was earned after the Carrier was paid by the

Government of the United States for such taxes. The Government of

the United States shall be entitled to repayment of any penalty

refunded to the Carrier to the extent that the penalty was paid by

the Government.

(f) The contract price shall be decreased by the amount of any

tax or duty, other than an excepted tax, that was included in the

contract and that the Carrier is required to pay or bear, or does

not obtain a refund of, through the Carrier's fault, negligence, or

failure to follow instructions of the Contracting Officer or to

comply with the provisions of paragraph (i) below.

(g) No adjustment shall be made in the contract price under this

clause unless the amount of the adjustment exceeds $250.

(h) If the Carrier obtains a reduction in tax liability under

the United States Internal Revenue Code (Title 26, U.S. Code)

because of the payment of any tax or duty that either was included

in the contract price or was the basis of an increase in the

contract price, the amount of the reduction shall be paid or

credited to the Government of the United States as the Contracting

Officer directs.

(i) The Carrier shall take all reasonable action to obtain

exemption from or refund of any taxes or duties, including interest

or penalty, from which the United States Government, the Carrier,

any subcontractor, or the transactions covered by this contract are

exempt under the laws of the country concerned or its political

subdivisions or which the governments of the United States and of

the country concerned have agreed shall not be applicable to

expenditures in such country by or on behalf of the United States.

(j) The Carrier shall promptly notify the Contracting Officer of

all matters relating to taxes or duties that reasonably may be

expected to result in either an increase or decrease in the contract

price and shall take appropriate action as the Contracting Officer

directs. The contract price shall be equitably adjusted to cover the

costs of action taken by the Carrier at the direction of the

Contracting Officer, including any interest, penalty, and reasonable

attorneys' fees.

(End of clause)

27. Section 1652.232-70 is amended by adding a date in the clause

title to read as follows:

1652.232-70 Payments--community rated contracts.

* * * * *

Payments (Jan 1989)

* * * * *

28. In section 1652.232-71, paragraph (c) is amended by removing

``and/or underwriter'' and the clause title is amended by adding a date

to read as follows:

1652.232-71 Payments--experience rated contracts.

* * * * *

Payments (May 1992)

* * * * *

29. Section 1652.243-70 is added to read as follows:

1652.243-70 Changes--Negotiated benefits contracts.

As prescribed in section 1643.205-70, the following clause shall be

inserted in all FEHBP contracts.

Changes--Negotiated Benefits Contracts (Jan 1998)

(a) The Contracting Officer may at any time, by written order,

and without notice to the sureties, if any, make changes within the

general scope of this contract in any one or more of the following:

(1) Description of services to be performed.

(2) Time of performance (i.e., hours of the day, days of the

week, etc.).

(3) Place of performance of the services.

(b) If any such change causes an increase or decrease in the

cost of, or the time required for, performance of any part of the

work under this contract, whether or not changed by the order, the

Contracting Officer shall make an equitable adjustment in the

contract price, the delivery schedule, or both, and shall modify the

contract.

(c) The Carrier must assert its right to an adjustment under

this clause within 30 days from the date of receipt of the written

order. However, if the Contracting Officer decides that the facts

justify it, the Contracting Officer may receive and act upon a

proposal submitted before final payment of the contract.

(d) Failure to agree to any adjustment shall be a dispute under

the Disputes clause. However, nothing in this clause shall excuse

the Carrier from proceeding with the contract as changed.

(End of clause)

30. Section 1652.244-70 is amended by revising the introductory

paragraph, clause date, and paragraph (a) of the clause to read as

follows:

1652.244-70 Subcontracts.

As prescribed by 1644.270, the following clause shall be inserted

in all FEHBP contracts based on cost analysis (experience rated):

Subcontracts (Jan 1998)

(a) The Carrier shall notify the Contracting Officer reasonably

in advance of entering into any subcontract, or any subcontract

modification, or as otherwise specified by this contract, if both

the amount of the subcontract or modification charged to the FEHB

Program exceeds $100,000 and is at least 25 percent of the total

cost of the subcontract.

* * * * *

31. Section 1652.245-70 is added to read as follows:

1652.245-70 Government property (negotiated benefits contracts).

As prescribed in section 1645.303-70, the following clause shall be

inserted in all FEHBP contracts.

Government Property (Negotiated Benefits Contracts) (Jan 1998)

(a) Government-furnished property. (1) The Government shall

deliver to the Carrier, for use in connection with and under the

terms of this contract, the Government-furnished property described

in this contract together with any related data and information that

the Carrier may request and is reasonably required for the intended

use of the property (hereinafter referred to as ``Government-

furnished property'').

(2) The delivery or performance dates for this contract are

based upon the expectation that Government-furnished property

suitable for use (except for property furnished ``as-is'') will be

delivered to the Carrier at the times stated in this contract or, if

not so stated, in sufficient time to enable the Carrier to meet the

contract's performance dates.

(3) If Government-furnished property is received by the Carrier

in a condition not suitable for the intended use, the Carrier shall,

upon receipt of it, notify the Contracting Officer, detailing the

facts, and, as directed by the Contracting Officer and at Government

expense, either repair, modify, return, or otherwise dispose of the

property. After completing the directed action and upon written

request of the Carrier, the Contracting Officer shall make an

equitable adjustment as provided in paragraph (h) of this clause.

(b) Changes in Government-furnished property. (1) The

Contracting Officer may, by written notice, (i) decrease the

Government-furnished property provided or to be provided under this

contract, or (ii) substitute other Government-furnished property for

the property to be provided by the Government, or to be acquired by

the Carrier for the Government, under this contract. The Carrier

shall promptly take such action as the Contracting Officer may

direct regarding the removal, shipment, or disposal of the property

covered by such notice.

(2) Upon the Carrier's written request, the Contracting Officer

shall make an equitable

[[Page 47579]]

adjustment to the contract in accordance with paragraph (h) of this

clause, if the Government has agreed in this contract to make the

property available for performing this contract and there is any--

(i) Decrease or substitution in this property pursuant to

subparagraph (b)(1) above; or

(ii) Withdrawal of authority to use this property, if provided

under any other contract or lease.

(c) Title in Government property. (1) The Government shall

retain title to all Government-furnished property.

(2) All Government-furnished property and all property acquired

by the Carrier, title to which vests in the Government under this

paragraph (collectively referred to as ``Government property''), are

subject to the provisions of this clause. Title to Government

property shall not be affected by its incorporation into or

attachment to any property not owned by the Government, nor shall

Government property become a fixture or lose its identity as

personal property by being attached to any real property.

(d) Use of Government property. The Government property shall be

used only for performing this contract, unless otherwise provided in

this contract or approved by the Contracting Officer.

(e) Property administration. (1) The Carrier shall be

responsible and accountable for all Government property provided

under this contract and shall comply with Federal Acquisition

Regulation (FAR) subpart 45.5, as in effect on the date of this

contract.

(2) The Carrier shall establish and maintain a program for the

use, maintenance, repair, protection, and preservation of Government

property in accordance with sound industrial practice and the

applicable provisions of subpart 45.5 of the FAR.

(3) If damage occurs to Government property, the risk of which

has been assumed by the Government under this contract, the

Government shall replace the items or the Carrier shall make such

repairs as the Government directs. However, if the Carrier cannot

effect such repairs within the time required, the Carrier shall

dispose of the property as directed by the Contracting Officer. When

any property for which the Government is responsible is replaced or

repaired, the Contracting Officer shall make an equitable adjustment

in accordance with paragraph (h) of this clause.

(4) The Carrier represents that the contract price does not

include any amount for repairs or replacement for which the

Government is responsible. Repair or replacement of property for

which the Carrier is responsible shall be accomplished by the

Carrier at its own expense.

(f) Access. The Government and all its designees shall have

access at all reasonable times to the premises in which any

Government property is located for the purpose of inspecting the

Government property.

(g) Risk of loss. Unless otherwise provided in this contract,

the Carrier assumes the risk of, and shall be responsible for, any

loss or destruction of, or damage to, Government property upon its

delivery to the Carrier. However, the Carrier is not responsible for

reasonable wear and tear to Government property or for Government

property properly consumed in performing this contract.

(h) Equitable adjustment. When this clause specifies an

equitable adjustment, it shall be made to any affected contract

provision in accordance with the procedures of the Changes clause.

When appropriate, the Contracting Officer may initiate an equitable

adjustment in favor of the Government. The right to an equitable

adjustment shall be the Carrier's exclusive remedy. The Government

shall not be liable to suit for breach of contract for--

(1) Any delay in delivery of Government-furnished property;

(2) Delivery of Government-furnished property in a condition not

suitable for its intended use;

(3) A decrease in or substitution of Government-furnished

property; or

(4) Failure to repair or replace Government property for which

the Government is responsible.

(i) Final accounting and disposition of Government property.

Upon completing this contract, or at such earlier dates as may be

fixed by the Contracting Officer, the Carrier shall submit, in a

form acceptable to the Contracting Officer, inventory schedules

covering all items of Government property (including any resulting

scrap) not consumed in performing this contract or delivered to the

Government. The Carrier shall prepare for shipment, deliver f.o.b.

origin, or dispose of the Government property as may be directed or

authorized by the Contracting Officer. The net proceeds of any such

disposal shall be credited to the contract price or shall be paid to

the Government as the Contracting Officer directs.

(j) Abandonment and restoration of Carrier's premises. Unless

otherwise provided herein, the Government--

(1) May abandon any Government property in place, at which time

all obligations of the Government regarding such abandoned property

shall cease; and

(2) Has no obligation to restore or rehabilitate the Carrier's

premises under any circumstances (e.g., abandonment, disposition

upon completion of need, or upon contract completion). However, if

the Government-furnished property is withdrawn or is unsuitable for

the intended use, or if other Government property is substituted,

then the equitable adjustment under paragraph (h) of this clause may

properly include restoration or rehabilitation costs.

(k) Communications. All communications under this clause shall

be in writing.

(l) Overseas contracts. If this contract is to be performed

outside of the United States of America, its territories, or

possessions, the words ``Government'' and ``Government-furnished''

(wherever they appear in this clause) shall be construed as ``United

States Government'' and ``United States Government-furnished'',

respectively.

(End of clause)

32. In Subpart 1652.2, new sections 1652.249-71 and 1652.249-72 are

added to read as follows:

1652.249-71 FEHBP termination for convenience of the government--

negotiated benefits contracts.

As prescribed in section 1649.101-71, the following clause shall be

inserted in all FEHBP contracts.

FEHBP Termination for Convenience of the Government--Negotiated

Benefits Contracts (Jan 1998)

(a) The Government may terminate performance of work under this

contract in whole or, from time to time, in part if the Contracting

Officer determines that a termination is in the Government's

interest. The Contracting Officer shall terminate by delivering to

the Carrier a Notice of Termination specifying the extent of

terminating and the effective date.

(b) After receipt of a Notice of Termination, and except as

directed by the Contracting Officer, the Carrier shall immediately

proceed with the following obligations, regardless of any delay in

determining or adjusting any amounts due under this clause:

(1) Stop work as specified in the notice.

(2) Place no further subcontracts except as necessary to

complete the continued portion of the contract.

(3) Terminate all subcontracts to the extent they relate to the

work terminated.

(4) Assign to the Government, as directed by the Contracting

Officer, all right, title, and interest of the Carrier under the

subcontracts terminated, in which case the Government shall have the

right to settle or to pay any termination settlement proposal

arising out of those terminations.

(5) With approval or ratification to the extent required by the

Contracting Officer, settle all outstanding liabilities and

termination settlement proposals arising from the termination of

subcontracts; the approval or ratification will be final for

purposes of this clause.

(6) As directed by the Contracting Officer, deliver to the

Government any data, reports, or studies that, if the contract had

been completed, would be required to be furnished to the Government.

(7) Complete performance of the work not terminated.

(c) After termination, the Carrier shall submit a final

termination settlement proposal to the Contracting Officer in the

form and with the certification prescribed by the Contracting

Officer. The Carrier shall submit the proposal promptly, but no

later than 1 year from the effective date of termination, unless

extended in writing by the Contracting Officer upon written request

of the Carrier within this 1-year period. However, if the

Contracting Officer determines that the facts justify it, a

termination settlement proposal may be received and acted on after 1

year or any extension. If the Carrier fails to submit the proposal

within the time allowed, the Contracting Officer may determine, on

the basis of information available, the amount, if any, due the

Carrier because of the termination and shall pay the amount

determined.

(d) Subject to paragraph (c) of this clause, the Carrier and the

Contracting Officer may agree upon the whole or any part of the

[[Page 47580]]

amount to be paid or remaining to be paid because of the

termination. The amount may include a reasonable allowance for

profit on work done. However, the agreed amount, whether under this

paragraph (d) or paragraph (e) of this clause, exclusive of costs

shown in subparagraph (e)(3) of this clause, may not exceed the

total contract price as reduced by (1) the amount of payments

previously made and (2) the contract price of work not terminated.

The contract shall be modified, and the Carrier paid the agreed

amount. Paragraph (e) of this clause shall not limit, restrict, or

affect the amount that may be agreed upon to be paid under this

paragraph.

(e) If the Carrier and the Contracting Officer fail to agree on

the whole amount to be paid because of the termination of work, the

Contracting Officer shall pay the Carrier the amounts determined by

the Contracting Officer as follows, but without duplication of any

amounts agreed on under paragraph (d) above:

(1) The contract price for completed services accepted by the

Government not previously paid for.

(2) The total of--

(i) The costs incurred in the performance of the work

terminated, including initial costs and preparatory expense

allocable thereto, but excluding any costs attributable to services

paid or to be paid under paragraph (e)(1) of this clause;

(ii) The cost of settling and paying termination settlement

proposals under terminated subcontracts that are properly chargeable

to the terminated portion of the contract if not included in

subdivision (e)(2)(i) of this clause; and

(iii) A sum, as profit on subdivision (e)(2)(i) of this clause,

determined by the Contracting Officer under 49.202 of the Federal

Acquisition Regulation, in effect on the date of this contract, to

be fair and reasonable.

(3) The reasonable costs of settlement of the work terminated,

including--

(i) Accounting, legal, clerical, and other expenses reasonably

necessary for the preparation of termination settlement proposals

and supporting data;

(ii) The termination and settlement of subcontracts (excluding

the amounts of such settlements); and

(f) The cost principles and procedures of part 31 of the Federal

Acquisition Regulation, in effect on the date of this contract,

shall govern all costs claimed, agreed to, or determined under this

clause.

(g) The Carrier shall have the right of appeal, under the

Disputes clause, from any determination made by the Contracting

Officer under paragraph (c), (e), or (i) of this clause, except that

if the Carrier failed to submit the termination settlement proposal

or request for equitable adjustment within the time provided in

paragraph (c) or (i), respectively, and failed to request a time

extension, there is no right of appeal.

(h) In arriving at the amount due the Carrier under this clause,

there shall be deducted--

(1) All unliquidated advance or other payments to the Carrier

under the terminated portion of this contract;

(2) Any claim which the Government has against the Carrier under

this contract; and

(i) If the termination is partial, the Carrier may file a

proposal with the Contracting Officer for an equitable adjustment of

the price(s) of the continued portion of the contract. The

Contracting Officer shall make any equitable adjustment agreed upon.

Any proposal by the Carrier for an equitable adjustment under this

clause shall be requested within 90 days from the effective date of

termination unless extended in writing by the Contracting Officer.

(j)(1) The Government may, under the terms and conditions it

prescribes, make partial payments and payments against costs

incurred by the Carrier for the terminated portion of the contract,

if the Contracting Officer believes the total of these payments will

not exceed the amount to which the Carrier will be entitled.

(2) If the total payments exceed the amount finally determined

to be due, the Carrier shall repay the excess to the Government upon

demand, together with interest computed at the rate established by

the Secretary of the Treasury under 50 U.S.C. App. 1215(b)(2).

Interest shall be computed for the period from the date the excess

payment is received by the Carrier to the date the excess is repaid.

(k) Unless otherwise provided in this contract or by statute,

the Carrier shall maintain all records and documents relating to the

terminated portion of this contract for 3 years after final

settlement. This includes all books and other evidence bearing on

the Carrier's costs and expenses under this contract. The Carrier

shall make these records and documents available to the Government,

at the Carrier's office, at all reasonable times, without any direct

charge. If approved by the Contracting Officer, photographs,

microphotographs, or other authentic reproductions may be maintained

instead of original records and documents.

(End of clause)

1652.249-72 FEHBP termination for default--negotiated benefits

contracts.

As prescribed in Sec. 1649.101-72, the following clause shall be

inserted in all FEHBP contracts.

FEHBP Termination for Default--Negotiated Benefits Contracts (Jan 1998)

(a) (1) The Government may, subject to paragraphs (c) and (d)

below, by written notice of default to the Carrier, terminate this

contract in whole or in part if the Carrier fails to--

(i) Perform the services within the time specified in this

contract or any extension;

(ii) Make progress, so as to endanger performance of this

contract (but see subparagraph (a)(2) below); or

(iii) Perform any of the other provisions of this contract (but

see subparagraph (a)(2) below).

(2) The Government's right to terminate this contract under

subdivisions (1)(ii) and (1)(iii) above, may be exercised if the

Carrier does not cure such failure within 10 days (or more if

authorized in writing by the Contracting Officer) after receipt of

the notice from the Contracting Officer specifying the failure.

(b) If the Government terminates this contract in whole or in

part, it may acquire, under the terms and in the manner the

Contracting Officer considers appropriate, supplies or service

similar to those terminated, and the Carrier will be liable to the

Government for any excess costs for those supplies or services.

However, the Carrier shall continue the work not terminated.

(c) Except for defaults of subcontractors at any tier, the

Carrier shall not be liable for any excess costs if the failure to

perform the contract arises from causes beyond the control and

without the fault or negligence of the Carrier. Examples of such

causes include (1) acts of God or of the public enemy, (2) acts of

the Government in either its sovereign or contractual capacity, (3)

fires, (4) floods, (5) epidemics, (6) quarantine restrictions, (7)

strikes, (8) freight embargoes, and (9) unusually severe weather. In

each instance the failure to perform must be beyond the control and

without the fault or negligence of the Carrier.

(d) If the failure to perform is caused by the default of a

subcontractor at any tier, and if the cause of the default is beyond

the control of both the Carrier and subcontractor, and without the

fault or negligence of either, the Carrier shall not be liable for

any excess costs for failure to perform, unless the subcontracted

supplies or services were obtainable from other sources in

sufficient time for the Carrier to meet the required delivery

schedule.

(e) If this contract is terminated for default, the Government

may require the Carrier to transfer title and deliver to the

Government, as directed by the Contracting Officer, any completed or

partially completed information and contract rights that the Carrier

has specifically produced or acquired for the terminated portion of

this contract.

(f) If, after termination, it is determined that the Carrier was

not in default, or that the default was excusable, the rights and

obligations of the parties shall be the same as if the termination

had been issued for the convenience of the Government.

(g) The rights and remedies of the Government in this clause are

in addition to any other rights and remedies provided by law or

under this contract.

(End of clause)

Subpart 1652.3--FEHBP Clause Matrix

33. In subpart 1652.3, Sec. 1652.370 paragraph (a) is amended by

removing the words ``established catalog or market price'' in the first

sentence and adding in its place the words ``a combination of cost and

price analysis;'' and by revising the FEHBP Clause Matrix to read as

follows:

1652.370 Use of the matrix.

* * * * *

[[Page 47581]]

FEHBP Clause Matrix

--------------------------------------------------------------------------------------------------------------------------------------------------------

Use with experience Use with community

Clause No. Text reference Title Use status rated contracts rated contracts

--------------------------------------------------------------------------------------------------------------------------------------------------------

FAR 52.202-1...................... FAR 2.2.............. Definitions.......... M T T

FAR 52.203-3...................... FAR 3.202............ Gratuities........... M T T

FAR 52.203-5...................... FAR 3.404(c)......... Covenant Against M T T

Contingent Fees.

FAR 52.203-7...................... FAR 3.502-3.......... Anti-Kickback M T T

Procedures.

FAR 52.203-12..................... FAR 3.808............ Limitation on M T T

Payments to

Influence Certain

Federal Transactions.

1652.203-70....................... 1603.703............. Misleading, M T T

Deceptive, or Unfair

Advertising.

1652.204-70....................... 1604.705............. Contractor Records M T T

Retention.

1652.204-71....................... 1604.7001............ Coordination of M T T

Benefits.

1652.204-72....................... 1604.7101............ Filing Health Benefit M T T

Claims/Court Review

of Disputed Claims.

FAR 52.209-6...................... FAR 9.409(b)......... Protecting the M T T

Government's

Interest When

Subcontracting With

Contractors

Debarred, Suspended,

or Proposed for

Debarment.

FAR 52.215-2...................... FAR 15.105-2(b)...... Audit & Records-- M T T

Negotiations.

FAR 52.215-22..................... FAR 15.804-8(a)...... Price Reduction for M T

Defective Cost or

Pricing Data.

FAR 52.215-24..................... FAR 15.804-8(c)...... Subcontractor Cost or M T

Pricing Data.

FAR 52.215-27..................... FAR 15.804-8(e)...... Termination of M T

Defined Benefit

Pension Plans.

FAR 52.215-30..................... FAR 15.904(a)........ Facilities Capital M T

Cost of Money.

FAR 52.215-31..................... FAR 15.904(b)........ Waiver of Facilities A T

Capital Cost of

Money.

FAR 52.215-39..................... FAR 15.804-8(f)...... Reversion or M T

Adjustment of Plans

for Post Retirement

Benefits Other Than

Pensions (PRB).

FAR 52.215-70..................... 1615.804-72.......... Rate Reduction for M ...................... T

Defective Pricing or

Defective Cost or

Pricing Data.

1652.215-71....................... 1615.805-71.......... Investment Income.... M T

1652.216-70....................... 1616.7001............ Accounting and Price M T

Adjustment.

1652.216-71....................... 1616.7002............ Accounting and M T

Allowable Cost.

FAR 52.219-8...................... FAR 19.708(a)........ Utilization of Small, M T T

Small Disadvantaged

and Women-Owned

Small Business

Concerns.

FAR 52.222-1...................... FAR 22.103-5(a)...... Notice to the M T T

Government of Labor

Disputes.

FAR 52.222-3...................... FAR 22.202........... Convict Labor........ M T T

FAR 52.222-4...................... FAR 22.305(a)........ Contract Work Hours M T T

and Safety Standards

Act--Overtime

Compensation--Genera

l.

FAR 52.222-21..................... FAR 22.810(a)(1)..... Certification of M T T

Nonsegregated

Facilities.

FAR 52.222-26..................... FAR 22.810(a)........ Equal Opportunity.... M T T

FAR 52.222-28..................... FAR 22.810(g)........ Equal Opportunity M T T

Preaward Clearance

of Subcontracts.

FAR 52.222-29..................... FAR 22.810(h)........ Notification of Visa A T T

Denial.

FAR 52.222-35..................... FAR 22.1308(a)....... Affirmative Action M T T

for Special Disabled

and Vietnam Era

Veterans.

[[Page 47582]]

FAR 52.222-36..................... FAR 22.1408(a)....... Affirmative Action M T T

for Handicapped

Workers.

FAR 52.222-37..................... FAR 22.1308(b)....... Employment Reports on M T T

Special Disability

Veterans of the

Vietnam Era.

1652.222-70....................... 1622.103-70.......... Notice of Significant M T T

Events.

FAR 52.223-2...................... FAR 23.105(b)........ Clean Air and Water.. A T T

FAR 52.223-6...................... FAR 23.505(b)........ Drug-Free Workplace.. A T T

1652.224-70....................... 1624.104............. Confidentiality of M T T

Records.

FAR 52.227-1...................... FAR 27.201-2(a)...... Authorization and M T T

Consent.

FAR 52.227-2...................... FAR 27.202-2......... Notice and Assistance M T T

Regarding Patent and

Copyright

Infringement.

FAR 52.229-3...................... FAR 29.401-3......... Federal, State and M T

Local Taxes.

FAR 52.229-4...................... FAR 29.401-4......... Federal, State and M T

Local Taxes

(Noncompetitive

Contract).

FAR 52.229-5...................... FAR 29.401-5......... Taxes--Contracts A T T

Performed in U.S.

Possessions or

Puerto Rico.

1652.229-70....................... FEHBAR 1629.402...... Taxes--Foreign A T T

Negotiated Benefits

Contracts.

FAR 52.230-2...................... FAR 30.201-4(a)(1)... Cost Accounting A T T

Standards.

FAR 52.230-3-..................... FAR 30.201-4(b)(1)... Disclosure and A T T

Consistency of Cost

Accounting Practices.

FAR 52.230-6...................... FAR 30.201-4(d)(1)... Administration of A T T

Cost Accounting

Standards.

FAR 52.232-8...................... FAR 32.111(c)(1)..... Discounts for Prompt M T T

Payment.

FAR 52.232-17..................... FAR 32.617(a) Interest............. M T T

Modification:

1632.617.

FAR 52.232-23..................... FAR 32.806(a)(1)..... Assignment of Claims. A T T

FAR 52.232-33..................... FAR 32.1103(a)&(c)... Mandatory Information M T T

for Electronic Funds

Transfer Payment.

1652.232-70....................... 1632.171............. Payments--Contracts A T

Without Letter of

Credit Payment

Arrangements.

1652.323-71....................... 1632.172............. Payments--Contracts A T

With Letter of

Credit Payment

Arrangements.

1652.232-72....................... 1632.772............. Non-Commingling of M T

FEHBP Funds.

1652.232-73....................... 1632.806-70.......... Approval for M T T

Assignment of Claims.

FAR 52.233-1...................... FAR 33.215........... Disputes............. M T T

FAR 52.242-1...................... FAR 42.802........... Notice of Intent to M T T

Disallow Costs.

FAR 52.242-3...................... FAR 42.709-6......... Penalties for M T

Unallowable Costs.

FAR 52.242-13..................... FAR 42.903........... Bankruptcy........... M T T

1652.243-70....................... 1643.205-70.......... Changes--Negotiated M T T

Benefits Contracts.

FAR 52.244-5...................... FAR 44.204(e)........ Competition in M T ......................

Subcontracting.

FAR 52.244-6...................... FAR 44.403........... Subcontracts for M T

Commercial Items and

Commercial

Components.

1652.244-70....................... 1644.270............. Subcontracts......... M T

1652.245-70....................... FAR 1645.303-70...... Government Property M T T

(Negotiated Benefits

Contracts).

[[Page 47583]]

FAR 52.246-25..................... FAR 46.805(a)(4)..... Limitation of M T

Liability--Services.

1652.246-70....................... 1646.301............. FEHB Inspection...... M T T

FAR 52.247-63..................... FAR 47.405........... Preference for U.S.- M T T

Flag Carriers.

1652.249-70....................... 1649.101-70.......... Renewal and M T T

Withdrawal of

Approval.

1652.249-71....................... 1649.101-71.......... FEHBP Termination for M T T

Convenience of the

Government--Negotiat

ed Benefits

Contracts.

1652.249-72....................... 1649.101-72.......... FEHBP Termination for M T T

Default--Negotiated

Benefits Contracts.

FAR 52.251-1...................... FAR 51.107........... Government Supply M T

Sources.

FAR 52.252-4...................... FAR 52.107(d)........ Alterations in M T T

Contract.

FAR 52.252-6...................... FAR 52.107(f)........ Authorized Deviations M T T

in Clauses.

--------------------------------------------------------------------------------------------------------------------------------------------------------

PART 1653--FORMS [AMENDED]

34. Part 1653 is amended by removing all references to Sec. 53.215-

2(b), Sec. 53.301-1412, and SF-1412 in the chart.

[FR Doc. 97-23883 Filed 9-9-97; 8:45 am]

BILLING CODE 6325-01-P