DFARS Part 215 Negotiation

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Federal Register / Vol. 78, No. 95 / Thursday, May 16, 2013 / Proposed Rules

proposed price is fair and reasonable [U.S.
Contracting Officer to provide description of
the data required in accordance with FAR
15.403–3(a)(1) with the notification].
(4) As specified in FAR 15.403–3(a)(4), an
offeror who does not comply with a
requirement to submit data that the U.S.
Contracting Officer has deemed necessary to
determine price reasonableness or cost
realism is ineligible for award unless the
head of the contracting activity determines
that it is in the best interest of the
Government to make the award to that
offeror.
(d) If negotiations are conducted, the
negotiated price should not exceed the
offered price.

(End of provision)
[FR Doc. 2013–11399 Filed 5–15–13; 8:45 am]
BILLING CODE 5001–06–P

DEPARTMENT OF DEFENSE
Defense Acquisition Regulations
System
48 CFR Part 215
RIN 0750–AH86

Defense Federal Acquisition
Regulation Supplement; Forward
Pricing Rate Proposal Adequacy
Checklist (DFARS Case 2012–D035)
Defense Acquisition
Regulations System, Department of
Defense (DoD).
ACTION: Proposed rule.
AGENCY:

DoD is proposing to amend
the Defense Federal Acquisition
Regulation Supplement (DFARS) to
provide guidance to contractors for the
submittal of forward pricing rate
proposals to ensure the adequacy of
forward pricing rate proposals
submitted to the Government.
DATES: Comments on the proposed rule
should be submitted in writing to the
address shown below on or before July
15, 2013, to be considered in the
formation of the final rule.
ADDRESSES: Submit comments,
identified by DFARS Case 2012–D035,
using any of the following methods:
Regulations.gov: http://
www.regulations.gov. Submit comments
via the Federal eRulemaking portal by
inserting ‘‘DFARS Case 2012–D035’’
under the heading ‘‘Enter keyword or
ID’’ and selecting ‘‘Search.’’ Select the
link ‘‘Submit a Comment’’ that
corresponds with ‘‘DFARS Case 2012–
D035.’’ Follow the instructions provided
at the ‘‘Submit a Comment’’ screen.
Please include your name, company
name (if any), and ‘‘DFARS Case 2012–
D035’’ on your attached document.

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SUMMARY:

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Follow the instructions for submitting
comments.
Email: [email protected]. Include DFARS
Case 2012–D035 in the subject line of
the message.
Fax: 571–372–6094.
Mail: Defense Acquisition Regulations
System, Attn: Mr. Mark Gomersall,
OUSD(AT&L)DPAP(DARS), Room
3B855, 3060 Defense Pentagon,
Washington, DC 20301–3060.
Comments received generally will be
posted without change to http://
www.regulations.gov, including any
personal information provided. To
confirm receipt of your comment(s),
please check www.regulations.gov
approximately two to three days after
submission to verify posting (except
allow 30 days for posting of comments
submitted by mail).
FOR FURTHER INFORMATION CONTACT: Mr.
Mark Gomersall, 571–372–6099.
SUPPLEMENTARY INFORMATION:
I. Background
DoD is proposing to revise the DFARS
at 215.403–5 by adding instructions to
contracting officers to request
contractors to submit the proposed
forward pricing rate proposal adequacy
checklist at Table 215–XX with forward
pricing rate proposals. This proposed
rule provides guidance to contractors for
the submittal of forward pricing rate
proposals by requesting that contractors
submit a proposed forward pricing rate
proposal adequacy checklist with their
forward pricing rate proposals to ensure
submission of thorough, accurate, and
complete proposals.
II. Executive Orders 12866 and 13563
Executive Orders (E.O.s) 12866 and
13563 direct agencies to assess all costs
and benefits of available regulatory
alternatives and, if regulation is
necessary, to select regulatory
approaches that maximize net benefits
(including potential economic,
environmental, public health and safety
effects, distributive impacts, and
equity). E.O. 13563 emphasizes the
importance of quantifying both costs
and benefits, of reducing costs, of
harmonizing rules, and of promoting
flexibility. This is not a significant
regulatory action and, therefore, was not
subject to review under section 6(b) of
E.O. 12866, Regulatory Planning and
Review, dated September 30, 1993. This
rule is not a major rule under 5 U.S.C.
804.
III. Regulatory Flexibility Act
DoD does not expect this proposed
rule to have a significant economic
impact on a substantial number of small
entities within the meaning of the

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Regulatory Flexibility Act, 5 U.S.C. 601,
et seq. However, an initial regulatory
flexibility analysis has been performed
and is summarized as follows:
This rule amends the DFARS at
215.403–5 by adding instructions to
contracting officers to request
contractors to submit the proposed
forward pricing rate proposal adequacy
checklist with forward pricing rate
proposals. The objective is to provide
guidance to contractors for the submittal
of forward pricing rate proposals.
DoD does not expect this proposed
rule to have a significant economic
impact on a substantial number of small
because it only a small percentage of
Government contractors are requested to
submit a forward pricing rate proposal,
as set forth at FAR 42.1701(a). The
Government will ask only those
contractors with a significant volume of
Government contracts to submit such
proposals.
The proposed rule does not duplicate,
overlap, or conflict with any other
Federal rules.
IV. Paperwork Reduction Act
The rule contains information
collection requirements that require the
approval of the Office of Management
and Budget under the Paperwork
Reduction Act (44 U.S.C. chapter 35).
Accordingly, DoD has submitted a
request for approval of a new
information collection requirement
concerning Defense Federal Acquisition
Regulation Supplement; Forward
Pricing Rate Proposal Adequacy
Checklist (DFARS Case 2012–D035) to
the Office of Management and Budget.
A. Public reporting burden for this
collection of information is estimated to
average 4 hours per response, including
the time for reviewing instructions,
searching existing data sources,
gathering and maintaining the data
needed, and completing and reviewing
the collection of information.
The annual reporting burden
estimated as follows:
Respondents: 160.
Responses per respondent: 1.
Total annual responses: 160.
Preparation hours per response: 4
hours
Total response Burden Hours: 640
hours.
B. Request for Comments Regarding
Paperwork Burden.
Written comments and
recommendations on the proposed
information collection, including
suggestions for reducing this burden,
should be sent to Ms. Jasmeet Seehra at
the Office of Management and Budget,
Desk Officer for DoD, Room 10236, New
Executive Office Building, Washington,

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Federal Register / Vol. 78, No. 95 / Thursday, May 16, 2013 / Proposed Rules
DC 20503, or email
[email protected], with a
copy to the Defense Acquisition
Regulations System, Attn: Mark
Gomersall, OUSD(AT&L)DPAP/DARS,
Room 3B855, 3060 Defense Pentagon,
Washington, DC 20301–3060.
Comments can be received from 30 to 60
days after the date of this notice, but
comments to OMB will be most useful
if received by OMB within 30 days after
the date of this notice.
Public comments are particularly
invited on: whether this collection of
information is necessary for the proper
performance of functions of the DFARS,
and will have practical utility; whether
our estimate of the public burden of this
collection of information is accurate,
and based on valid assumptions and
methodology; ways to enhance the
quality, utility, and clarity of the
information to be collected; and ways in
which we can minimize the burden of
the collection of information on those
who are to respond, through the use of
appropriate technological collection
techniques or other forms of information
technology.
To request more information on this
proposed information collection or to
obtain a copy of the proposal and

associated collection instruments,
please write to the Defense Acquisition
Regulations System, Attn: Mark
Gomersall, OUSD(AT&L)DPAP/DARS,
Room 3B855, 3060 Defense Pentagon,
Washington, DC 20301–3060, or email
[email protected]. Include DFARS Case
2012–D035 in the subject line of the
message.
List of Subjects in 48 CFR Part 215
Government procurement.
Manuel Quinones,
Editor, Defense Acquisition Regulations
System.

Therefore, DoD proposes to amend 48
CFR part 215 as follows:
PART 215—CONTRACTING BY
NEGOTIATION
1. The authority citation for part 215
continues to read as follows:

■

Authority: 41 U.S.C. 1303 and 48 CFR
chapter 1.
■

2. Add 215.403–5 to read as follows:

215.403–5 Instructions for submissions of
certified cost or pricing data or data other
than cost or pricing data pursuant to the
procedures in FAR 42.1701(b).

28791

FAR 31.2, if the contracting officer
determines that a forward pricing rate
proposal should be obtained pursuant to
FAR 42.1701, the contracting officer
shall require that the forward pricing
rate proposals comply with FAR 15.408,
Table 15–2, and DFARS 252.215–7002.
The contracting officer should request
that the proposal be submitted to the
Government at least 90 days prior to the
implementation date for the proposed
rates. To ensure the proposal is
complete, the contracting officer shall
request the contractor complete the
contractor forward pricing rate proposal
adequacy checklist at Table 215–XX,
and submit it with the forward pricing
rate proposal.
Table 215–XX—Contractor Forward
Pricing Rate Proposal Adequacy
Checklist
The contractor should complete the
following checklist, providing location
of requested information, or an
explanation of why the requested
information is absent.

(b)(3) For contractors following the
commercial contract cost principles in

CONTRACTOR FORWARD PRICING RATE PROPOSAL ADEQUACY CHECKLIST
References

Proposal page
No.

Submission item

GENERAL INSTRUCTIONS
1. FAR 15.408, Table 15–2, Section
I.A.

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2. FAR 15.407–1 and FAR 15.408,
Table 15–2, Section I.A.(8).

3. FAR 15.408, Table 15–2, Section
I.B.
4. DFARS 252.215–7002(d)(4)(iv) ........

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Is there a properly completed first page of the proposal or
a summary format as specified by the contracting officer?
Does the proposal disclose known or anticipated changes
in business activities or processes that could materially
impact the costs (if not previously provided)? For example:
a. Management initiatives to reduce costs;
Changes in management objectives as a result of
economic conditions and increased competitiveness;
c. Changes in accounting policies, procedures, and
practices including:
(i) reclassification of expenses from direct to indirect
or vice versa; (ii) new methods of accumulating and
allocating indirect costs and the related impact and
(iii) advance agreements;
d. Company reorganizations (including acquisitions or
divestitures);
e. Shutdown of facilities;
f. Changes in business volume and/or contract mix/
type.
Does the proposal include a table of contents (index) identifying and referencing all supporting data accompanying
or identified in the proposal?
For supporting documentation not provided with the proposal, does the basis of estimate in the proposal include
the location of the documentation and the point of contact (custodian) name, phone number, and email address?

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If not provided
EXPLAIN
(may use continuation
pages)

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Federal Register / Vol. 78, No. 95 / Thursday, May 16, 2013 / Proposed Rules
CONTRACTOR FORWARD PRICING RATE PROPOSAL ADEQUACY CHECKLIST—Continued
Proposal page
No.

References

Submission item

5. FAR 15.408, Table 15–2, Section
I.C.(2)(i).
6. FAR 15.408, Table 15–2, Section
I.C.(2)(i) and DFARS 252.215–
7002(d)(4)(iv).

Is the proposal mathematically correct and does it reconcile to the supporting data referenced?
Do proposed costs based on judgmental factors include an
explanation of the estimating processes and methods
used; including those used in projecting from known
data?
Is the proposal internally consistent (for example, is the direct labor base used for labor overhead consistent with
direct labor in the G&A allocation base)?
Does the proposal show trends and budgetary data? Is an
explanation of how the data was used provided, including any adjustments to the data?

7. FAR 15.408, Table 15–2, Section
I.D.
8. FAR 15.408, Table 15–2. Section
II.C.
and
DFARS
252.215–
7002(d)(4)(iv).

Direct Labor
9. FAR 15.408, Table 15–2, Section
II.B.
10. DFARS 252.215(d)(4)(iv) ................

11. FAR 15.408 Table 15–2, Section
I.C(2)(i);
DFARS
252.215–
7002(d)(4)(iv).
12. FAR 15.407–1 ................................

Does the proposal include an explanation of the methodology used to develop the direct labor rates and identify
the basis of estimate?
Does the proposal include or identify the location of the
supporting documents for the base-year labor rates
(e.g., payroll records)?
Does the proposal identify escalation factors for the out
years, the costs to which escalation is applicable, and
the basis of the factors used?
Does the proposal identify planned or anticipated changes
in the composition of labor rates, labor categories, union
agreements, headcounts, or other factors that could significantly impact the direct labor rates?
Indirect Rates (Fringe, Overhead, G&A, etc.)

13. FAR 15.408, Table 15–2, Section
II.C.
14. FAR 15.408, Table 15–2, Section
I.B.
15. FAR 15.408 Table 15–2, Section
I.D.

16. FAR 15.408, Table 15–2, Section
I.C.(2)(ii).
17. FAR 15.407–1 ................................

18. DFARS 252.215–7002(d)(4)(iv) ......

19. FAR 15.408 Table 15–2, Section
II.C.; DFARS 252.215–7002(d)(4)(iv).

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20. FAR 15.408 Table 15–2, Section
I.C(2)(i);
DFARS
252.215–
7002(d)(4)(iv).
21.DFARS 252.215–7002(d)(4)(iv) .......
22. FAR 15.408 Table 15–2, Section
I.B., DFARS 252.215–7002(d)(4)(xi).
23. DFARS 252.215–7002(d)(4)(xi) ......

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Does the proposal identify the basis of estimate and provide an explanation of the methodology used to develop
the indirect rates?
Does the proposal include or identify the location of the
supporting documents for the proposed rates?
Does the proposal identify indirect expenses by burden
center, by cost element, by year (including any voluntary
deletions, if applicable) in a format that is consistent with
the accounting system used to accumulate actual expenses?
Does the proposal identify any contingencies?
Does the proposal identify planned or anticipated changes
in the nature, type or level of indirect costs, including
fringe benefits?
Does the proposal identify corporate, home office, shared
services, or other incoming allocated costs and the
source for those costs, including location and point of
contact (custodian) name, phone number, and email address?
Does the proposal separately identify all intermediate cost
pools and provide a reconciliation to show where the
costs were allocated?
Does the proposal identify the escalation factors for the
out years, the costs to which escalation is applicable,
and the basis of the factors used?
Does the proposal provide appropriate details of the development of the allocation base?
Does the proposal include or reference the supporting data
for the allocation base such as program budgets, negotiation memorandums, proposals, contract values, etc.?
Does the proposal identify how the proposed allocation
base reconciles with its long range plans, strategic plan,
operating budgets, sales forecasts, program budgets,
etc.?

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If not provided
EXPLAIN
(may use continuation
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Federal Register / Vol. 78, No. 95 / Thursday, May 16, 2013 / Proposed Rules
CONTRACTOR FORWARD PRICING RATE PROPOSAL ADEQUACY CHECKLIST—Continued
References

Proposal page
No.

Submission item

If not provided
EXPLAIN
(may use continuation
pages)

Cost of Money (COM)
24. FAR 15.408, Table 15–2, Section
II.F.
25. DFARS 252.215–7002(d)(4)(iv) ......

Are Cost of Money rates submitted on Form CASB–CMF,
with the Treasury Rate used to compute COM identified
and a summary of the net book value of assets, identified as distributed & non-distributed?
Does the proposal identify the support for the Form
CASB–CMF, for example, the underlying reports and
records supporting the net book value of assets contained in the form?
OTHER

26. DFARS 252.215–7002(d)(4)(xiii) ....
27. DFARS 252.215–7002(d)(4)(xiv) ....

Does the proposal include a comparison of prior forecasted costs to actual results in the same format as the
proposal and an explanation/analysis of any differences?
If this is a revision to a previous rate proposal or an FPRA,
does the new proposal provide a summary of the
changes in the circumstances or the facts that the contractor asserts require the change to the rates?

[FR Doc. 2013–11402 Filed 5–15–13; 8:45 am]
BILLING CODE 5001–06–P

DEPARTMENT OF DEFENSE
Defense Acquisition Regulations
System
48 CFR Part 225
RIN 0750–AH84

Defense Federal Acquisition
Regulation Supplement: Preparation of
Letter of Offer and Acceptance (DFARS
Case 2012–D048)
Defense Acquisition
Regulations System, Department of
Defense (DoD).
ACTION: Proposed rule.
AGENCY:

DoD is proposing to amend
the Defense Federal Acquisition
Regulation Supplement (DFARS) to
address the contracting officer role in
assisting the DoD implementing agency
in preparation of the letter of offer and
acceptance for a foreign military sales
program that will require an acquisition.
DATES: Comment Date: Comments on
the proposed rule should be submitted
in writing to the address shown below
on or before July 15, 2013, to be
considered in the formation of a final
rule.

erowe on DSK2VPTVN1PROD with PROPOSALS-1

SUMMARY:

Submit comments
identified by DFARS Case 2012–D048,
using any of the following methods:
Æ Regulations.gov: http://
www.regulations.gov. Submit comments
via the Federal eRulemaking portal by

ADDRESSES:

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14:45 May 15, 2013

Jkt 229001

entering ‘‘DFARS Case 2012–D048’’
under the heading ‘‘Enter keyword or
ID’’ and selecting ‘‘Search.’’ Select the
link ‘‘Submit a Comment’’ that
corresponds with ‘‘DFARS Case 2012–
D048.’’ Follow the instructions provided
at the ‘‘Submit a Comment’’ screen.
Please include your name, company
name (if any), and ‘‘DFARS Case 2012–
D048’’ on your attached document.
Æ Email: [email protected]. Include
DFARS Case 2012–D048 in the subject
line of the message.
Æ Fax: 571–372–6094.
Æ Mail: Defense Acquisition
Regulations System, Attn: Ms. Amy
Williams, OUSD(AT&L)DPAP/DARS,
Room 3B855, 3060 Defense Pentagon,
Washington, DC 20301–3060.
Comments received generally will be
posted without change to http://
www.regulations.gov, including any
personal information provided. To
confirm receipt of your comment(s),
please check www.regulations.gov,
approximately two to three days after
submission to verify posting (except
allow 30 days for posting of comments
submitted by mail).
FOR FURTHER INFORMATION CONTACT: Ms.
Amy Williams, Defense Acquisition
Regulations System,
OUSD(AT&L)DPAP/DARS, Room
3B855, 3060 Defense Pentagon,
Washington, DC 20301–3060.
Telephone 571–372–6106.
SUPPLEMENTARY INFORMATION:
I. Background
DoD is proposing to amend DFARS
225.7302 to revise and move the text at
PGI 225.7302(1) into the DFARS,

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because of potential impact on
contractors.
II. Executive Orders 12866 and 13563
Executive Orders (E.O.s) 12866 and
13563 direct agencies to assess all costs
and benefits of available regulatory
alternatives and, if regulation is
necessary, to select regulatory
approaches that maximize net benefits
(including potential economic,
environmental, public health and safety
effects, distributive impacts, and
equity). E.O. 13563 emphasizes the
importance of quantifying both costs
and benefits, of reducing costs, of
harmonizing rules, and of promoting
flexibility. This is not a significant
regulatory action and, therefore, was not
subject to review under section 6(b) of
E.O. 12866, Regulatory Planning and
Review, dated September 30, 1993. This
rule is not a major rule under 5 U.S.C.
804.
III. Regulatory Flexibility Act
DoD does not expect this rule 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.
However, DoD has prepared an Initial
Regulatory Flexibility Analysis, which
is summarized as follows:
This action is necessary because the
directions to the contracting officer at
PGI 225.7302(1) may have impact on
prospective contractors, and therefore
require relocation to the DFARS.
The objective of this rule is to provide
direction to the contracting officer on
actions required to work with the

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