Federal Acquisition Regulation; Independent Research and Development/Bid and Proposal in Cooperative Arrangements

Part VIII

Department of the Defense

General Services Administration

National Aeronautics and Space Administration

_______________________________________________________________________

48 CFR Part 31

Federal Acquisition Regulation; Independent Research and Development/

Bid and Proposal in Cooperative Arrangements; Proposed Rule

Proposed Rules

DEPARTMENT OF DEFENSE

GENERAL SERVICES ADMINISTRATION

NATIONAL AERONAUTICS AND SPACE ADMINISTRATION

48 CFR Part 31

[FAR Case 95-024]

RIN 9000-AH03

Federal Acquisition Regulation; Independent Research and

Development/Bid and Proposal in Cooperative Arrangements

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 Department of Defense, General Services Administration,

and National Aeronautics and Space Administration are proposing to

amend Federal Acquisition Regulation (FAR) Part 31 to permit contractor

contributions of independent research and development (IR&D) costs

under NASA cooperative arrangements to be treated as allowable indirect

costs. This regulatory action was not subject to Office of Management

and Budget review under Executive Order 12866, dated September 30,

1993. This is not a major rule under 5 U.S.C. 804.

DATES: Comments should be submitted on or before August 19, 1996 to be

considered in the formulation of a final rule.

ADDRESSES: Interested parties should submit written comments to:

General Services Administration, FAR Secretariat (MVRS), 18th & F

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

Please cite FAR case 95-024 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 95-024.

SUPPLEMENTARY INFORMATION:

A. Background

NASA published a class deviation (interim rule) in the May 2, 1994,

Federal Register (59 FR 22521) with the final rule published in the

September 8, 1994, Federal Register (59 FR 46359). The class deviation

eliminates the prohibition at FAR 31.205-18(e) against treatment of

contractor IR&D contributions under NASA cooperative arrangements as

allowable indirect costs. This proposed FAR rule would eliminate the

need for the NASA class deviation.

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

only apply 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

FAR case 95-024 in correspondence.

C. Paperwork Reduction Act-

The Paperwork Reduction Act (Pub. L. 96-511) does not apply because

the proposed rule does 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: June 6, 1996.

Edward C. Loeb,

Director, Federal Acquisition Policy Division.

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 31.205-18(e) is revised to read as follows:

31.205-18 Independent research and development and bid and proposal

costs.

* * * * *-

(e) Cooperative arrangements. IR&D costs may be incurred by

contractors working jointly with one or more non-Federal entities

pursuant to a cooperative arrangement (for example, joint ventures,

limited partnerships, teaming arrangements, and collaboration and

consortium arrangements). IR&D costs may also include costs contributed

by contractors in performing cooperative research and development

agreements, or similar arrangements, entered into under

(1) Section 12 of the Stevenson-Wydler Technology Transfer Act of

1980 (15 U.S.C. 3710(a));

(2) Sections 203(c) (5) and (6) of the National Aeronautics and

Space Act of 1958, as amended (42 U.S.C. 2473(c) (5) and (6));

(3) 10 U.S.C. 2371 for the Defense Advanced Research Projects

Agency, or

(4) Other equivalent authority. IR&D costs incurred by a contractor

pursuant to these types of cooperative arrangements should be

considered as allowable IR&D costs if the work performed would have

been allowed as contractor IR&D had there been no cooperative

arrangement.

[FR Doc. 96-14841 Filed 6-19-96; 8:45 am]

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