Federal Acquisition Regulation; Legal Proceedings Costs

Part II

Department of Defense

General Services Administration

National Aeronautics and Space Administration

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48 CFR Part 31

Federal Acquisition Regulation, Legal Proceedings Costs; Proposed Rule

Proposed Rules

DEPARTMENT OF DEFENSE

GENERAL SERVICES ADMINISTRATION

NATIONAL AERONAUTICS AND SPACE ADMINISTRATION

48 CFR Part 31

[FAR Case 93-10]

RIN 9000-AG65

Federal Acquisition Regulation; Legal Proceedings Costs

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

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

ACTION: Proposed rule.

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SUMMARY: The Civilian Agency Acquisition Council and the Defense

Acquisition Regulations Council are proposing changes to amend the

Federal Acquisition Regulation (FAR) concerning costs related to legal

and other proceedings to make the costs of pre- or post-award protests

(except for costs incurred by an intervenor on the side of the

Government) an unallowable cost. This regulatory action was not subject

to Office of Management and Budget review under Executive Order 12866,

dated September 30, 1993.

DATES: Comments should be submitted on or before December 26, 1995 to

be considered in the formulation of a final rule.

ADDRESSES: Interested parties should submit written comments to:

General Services Administration, FAR Secretariat (VRS), 18th and F

Streets, NW, Room 4037, Washington, DC 20405.

Please cite FAR case 93-10 in all correspondence related to this

case.

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

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

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

4755. Please cite FAR case 93-10.

SUPPLEMENTARY INFORMATION:

A. Background

This proposed rule would add another category of unallowable costs

to the list at 31.205-47(f) (except for costs incurred by an intervenor

on the side of the Government) which should disallow most cost of pre-

or post-award protests. This change is being proposed after the Defense

Contract Audit Agency raised a concern that rulings by the Armed

Services Board of Contract Appeals (ASBCA) would encourage contractors

to protest Government awards (the appeal of Bos'n Towing and Salvage

Company (ASBCA 1992) No. 41357, 92-2 BCA Paragraph 24,864 and the

appeal of J.W. Cook & Sons, Inc., (ASBCA 1992) No. 39691, 92-3 BCA

Paragraph 25,053). The ASBCA had ruled that FAR 31.205-47(f)(1) only

applied to claims under the Contract Disputes Act and not to protests

under the Competition in Contracting Act and that, therefore, protest

costs were allowable as either a direct or indirect cost on Government

contracts.

B. Regulatory Flexibility Act

This proposed rule is not expected to have a significant economic

impact on a substantial number of small entities within the meaning of

the Regulatory Flexibility Act, 5 U.S.C. 601 et seq., because most

contracts awarded to small entities are awarded on a competitive,

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

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

been submitted. An Initial Regulatory Flexibility Analysis has,

therefore, not been performed. Comments from small entities concerning

the affected FAR subpart will be considered in accordance with 5 U.S.C.

610 of the Act. Such comments must be submitted separately and should

cite 5 U.S.C. 601 et seq. (FAR case 93-10), in correspondence.

C. Paperwork Reduction Act

The Paperwork Reduction Act does not apply because the proposed

changes to the FAR do not impose recordkeeping or information

collection requirements, or collections of information from offerors,

contractors, or members of the public which require the approval of the

Office of Management and Budget under 44 U.S.C. 3501 et seq.

List of Subjects in 48 CFR Part 31

Government procurement.

Dated: October 18, 1995.

Edward C. Loeb,

Acting Director, Officer of Federal Acquisition Policy.

Therefore, it is proposed that 48 CFR Part 31 be amended as set

forth below:

PART 31--CONTRACT COST PRINCIPLES AND PROCEDURES

1. The authority citation for 48 CFR Part 31 continues to read as

follows:

Authority: 40 U.S.C. 486(c); 10 U.S.C. chapter 137; and 42

U.S.C. 2473(c).

2. Section 31.205-47 is amended by adding paragraph (f)(8) to read

as follows:

31.205-47 Costs related to legal and other proceedings.

* * * * *

(f) * * *

(8) Protests of Federal Government solicitations or contract

awards, unless the costs are incurred by interested parties to defend

against such protests.

* * * * *

[FR Doc. 95-26487 Filed 10-25-95; 8:45 am]

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