SUPPLEMENTARY INFORMATION:

A. Background

DoD, GSA, and NASA published an interim rule in the Federal Register at 74 FR 11826 on March 19, 2009, to implement section 814 of the NDAA for FY 2008. Section 814 implemented two areas of clarification with regards to the submission of cost or pricing data on non-commercial modifications of commercial items.

The comment period closed on May 18, 2009, with one comment received. The respondent opined that the addition of the new FAR text “at the time of contract award” was unclear. The respondent indicated that a contract's initial price subsequently changes based upon modifications and inquired if the total price “at time of contract award” included subsequent modifications that changed the initial contract price. The respondent also highlighted the example of an indefinite delivery-indefinite quantity (IDIQ) contract where orders are issued and inquired whether “at the time of contract award” related to issuance of the IDIQ contract or individual orders placed under this IDIQ contract. The respondent also offered examples of possible revised language.

The Councils believe that, with minor changes, the language in the interim rule is appropriate. Section 814 of the NDAA for FY 2008 required the insertion of the language “at time of contract award” after the language “total price of contract”, which is already contained in FAR 15.403-1. This language is being added to clarify at what point during the life of the contract that the cost or pricing threshold should be applied under FAR 15.403-1. The Councils believe that the language “at the time of contract award” clearly indicates that subsequent modifications, other than those which meet the triggering thresholds of TINA themselves, that change a contract's price are not factored into determining when the cost or pricing threshold should be applied under FAR 15.403-1. In the case of IDIQ contracts, it is commonly understood that it is the estimated total value of orders for the specified period at the time of contract award, as well as the individual value of any subsequent discrete orders, to which the TINA thresholds apply. Consequently, the final rule language reflects only minor editorial changes.

This is a significant regulatory action and therefore, was subject to review under Section 6(b) of Executive Order 12866, Regulatory Planning and Review, dated September 30, 1993. This rule is not a major rule under 5 U.S.C. 804.

B. Regulatory Flexibility Act

The Department of Defense, the General Services Administration, and the National Aeronautics and Space Administration certify that this rule will not 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., since it is harmonizing FAR 15.403-1 with other parts of the FAR and should actually reduce the administrative burden on contractors by not requiring them to track two separate dollar thresholds for submitting cost or pricing data. It is also increasing this dollar threshold relative to the submittal of cost or pricing data in this situation and thus contractors will experience a reduced administrative burden since they no longer will be required to submit cost or pricing data on this lower threshold amount.

C. Paperwork Reduction Act

The Paperwork Reduction Act does not apply because the changes to the FAR do not impose information collection requirements that require the approval of the Office of Management and Budget under 44 U.S.C. chapter 35, et seq.

Accordingly, the interim rule published in the Federal Register at 74 FR 11826 on March 19, 2009, is adopted as a final rule with the following changes:

1. The authority citation for 48 CFR part 15 continues to read as follows:

Authority: 40 U.S.C. 121(c); 10 U.S.C. chapter 137; and 42 U.S.C. 2473(c).

2. Amend section 15.403-1 by revising paragraphs (c)(3)(iii)(B) and (c)(3)(iii)(C) to read as follows: