81 FR 45852 - Federal Acquisition Regulation; OMB Circular Citation Update

DEPARTMENT OF DEFENSE
GENERAL SERVICES ADMINISTRATION
NATIONAL AERONAUTICS AND SPACE ADMINISTRATION

Federal Register Volume 81, Issue 135 (July 14, 2016)

Page Range		45852-45854
FR Document		2016-16246
DoD, GSA, and NASA are issuing a final rule amending the Federal Acquisition Regulation (FAR) to update outdated Office of Management and Budget (OMB) Circular citation references.
Federal Register, Volume 81 Issue 135 (Thursday, July 14, 2016)
[Federal Register Volume 81, Number 135 (Thursday, July 14, 2016)]
[Rules and Regulations]
[Pages 45852-45854]
From the Federal Register Online  [www.thefederalregister.org]
[FR Doc No: 2016-16246]



[[Page 45852]]

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DEPARTMENT OF DEFENSE

GENERAL SERVICES ADMINISTRATION

NATIONAL AERONAUTICS AND SPACE ADMINISTRATION

48 CFR Parts 2, 15, 16, 31, 42, and 52

[FAC 2005-89; FAR Case 2014-023; Item II; Docket No. 2014-0023, 
Sequence No. 1]
RIN 9000-AN17


Federal Acquisition Regulation; OMB Circular Citation Update

AGENCY: Department of Defense (DoD), General Services Administration 
(GSA), and National Aeronautics and Space Administration (NASA).

ACTION: Final rule.

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SUMMARY: DoD, GSA, and NASA are issuing a final rule amending the 
Federal Acquisition Regulation (FAR) to update outdated Office of 
Management and Budget (OMB) Circular citation references.

DATES: Effective: August 15, 2016.

FOR FURTHER INFORMATION CONTACT: Ms. Kathlyn J. Hopkins, Procurement 
Analyst, at 202-969-7226, for clarification of content. For information 
pertaining to status or publication schedules, contact the Regulatory 
Secretariat Division at 202-501-4755. Please cite FAC 2005-89, FAR Case 
2014-023.

SUPPLEMENTARY INFORMATION: 

I. Background

    On December 26, 2013, the Office of Management and Budget (OMB) 
published new guidance at 2 CFR part 200 entitled Uniform 
Administrative Requirements, Cost Principles, and Audit Requirements 
for Federal Awards (OMB Uniform Guidance); this became effective on 
December 26, 2014, after Federal agencies adopted the guidance as a set 
of binding regulations. This new OMB Uniform Guidance supersedes and 
streamlines requirements from OMB Circulars A-21, A-87, A-89, A-102, A-
110, A-122, and A-133, and the guidance in Circular A-50 on Audit 
Followup. As such, this final rule replaces OMB citations in the FAR to 
the circulars cited above that have been replaced by this new OMB 
Uniform Guidance, and cross references to new terminology in the OMB 
Uniform Guidance.
    The cost principles under OMB's Uniform Guidance apply to contracts 
with non-profits, educational institutions, state and local 
governments, and Indian tribal governments. All other FAR contractual 
requirements (e.g., contract administration, audit) take precedence 
over the OMB Uniform Guidance when there is a conflict.
    This rule also creates a definition with an abbreviated title in 
FAR section 2.101 for FAR citations to this OMB Uniform Guidance.

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 a significant regulatory action and, therefore, was 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. Publication of This Final Rule for Public Comment Is Not Required 
by Statute

    ``Publication of proposed regulations,'' 41 U.S.C. 1707, is the 
statute that applies to the publication of the FAR. Paragraph (a)(1) of 
the statute requires that a procurement policy, regulation, procedure, 
or form (including an amendment or modification thereof) must be 
published for public comment if it relates to the expenditure of 
appropriated funds, and has either a significant effect beyond the 
internal operating procedures of the agency issuing the policy, 
regulation, procedure, or form, or has a significant cost or 
administrative impact on contractors or offerors. This final rule is 
not required to be published for public comment, because it merely 
replaces outdated OMB Circular references in the FAR with current 
references that do not have a significant effect on contractors or 
offerors.

IV. Regulatory Flexibility Act

    The Regulatory Flexibility Act does not apply to this rule because 
this final rule does not constitute a significant FAR revision within 
the meaning of FAR 1.501-1 and 41 U.S.C. 1707 and does not require 
publication for public comment.

V. Paperwork Reduction Act

    The rule does not contain any 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).

List of Subjects in 48 CFR Parts 2, 15, 16, 31, 42, and 52

    Government procurement.

    Dated: June 30, 2016.
William F. Clark,
Director, Office of Government-wide Acquisition Policy, Office of 
Acquisition Policy, Office of Government-wide Policy.

    Therefore, DoD, GSA, and NASA amend 48 CFR parts 2, 15, 16, 31, 42, 
and 52 as set forth below:

0
1. The authority citation for 48 CFR parts 2, 15, 16, 31, 42, and 52 
continues to read as follows:

    Authority:  40 U.S.C. 121(c); 10 U.S.C. chapter 137; and 51 
U.S.C. 20113.

PART 2--DEFINITIONS OF WORDS AND TERMS

0
2. Amend section 2.101 in paragraph (b)(2) by adding in alphabetical 
order the definition ``OMB Uniform Guidance at 2 CFR part 200'' to read 
as follows:


2.101   [Amended]

* * * * *
    (b) * * *
    (2) * * *
    OMB Uniform Guidance at 2 CFR part 200 is the abbreviated title for 
Uniform Administrative Requirements, Cost Principles, and Audit 
Requirements for Federal Awards (2 CFR part 200), which supersedes OMB 
Circulars A-21, A-87, A-89, A-102, A-110, A-122, and A-133, and the 
guidance in Circular A-50 on Audit Followup.
* * * * *

PART 15--CONTRACTING BY NEGOTIATION


15.209   [Amended]

0
3. Amend section 15.209 by removing from paragraph (b)(1) introductory 
text, ``OMB Circular No. A-133'' and adding ``Audit Requirements in the 
OMB Uniform Guidance at 2 CFR part 200, subpart F'' in its place.

PART 16--TYPES OF CONTRACTS


16.307   [Amended]

0
4. Amend section 16.307 by removing from paragraph (a)(5) ``OMB 
Circular No. A-122'' and adding ``the OMB Uniform Guidance at 2 CFR 
part 200, appendix VIII'' in its place.

[[Page 45853]]

PART 31--CONTRACT COST PRINCIPLES AND PROCEDURES

0
5. Amend section 31.104 by revising the introductory text to read as 
follows:


31.104   Contracts with educational institutions.

    This category includes all contracts and contract modifications for 
research and development, training, and other work performed by 
educational institutions (defined as institutions of higher educations 
in the OMB Uniform Guidance at 2 CFR part 200, subpart A, and 20 U.S.C. 
1001).
* * * * *


31.105   [Amended]

0
6. Amend section 31.105 by removing from paragraph (a) ``OMB Circular 
A-122 (see 31-108)'' and adding ``OMB Uniform Guidance at 2 CFR part 
200, appendix VIII (see 31.108)'' in its place.

0
7. Revise section 31.108 to read as follows:


31.108   Contracts with nonprofit organizations.

    Subpart 31.7 provides principles and standards for determining 
costs applicable to contracts with nonprofit organizations other than 
educational institutions (see subpart 31.3), State and local 
governments (see subpart 31.6), and those nonprofit organizations 
exempted under the OMB Uniform Guidance at 2 CFR part 200, appendix 
VIII (see subpart 31.2 for the cost principles applicable to nonprofit 
organizations exempt from the cost principles in the OMB Uniform 
Guidance at 2 CFR part 200).

0
8. Revise section 31.302 to read as follows:


31.302   General.

    The OMB Uniform Guidance at 2 CFR part 200, subpart E and appendix 
III, provides principles for determining the costs applicable to 
research and development, training, and other work performed by 
educational institutions (defined as institutions of higher education 
in the OMB Uniform Guidance at 2 CFR part 200, subpart A, and 20 U.S.C. 
1001) under contracts with the Government.

0
9. Amend section 31.303 by revising paragraph (a) to read as follows:


31.303   Requirements.

    (a) Contracts that refer to this subpart 31.3 for determining 
allowable costs under contracts with educational institutions (defined 
as institutions of higher education in the OMB Uniform Guidance at 2 
CFR part 200, subpart A, and 20 U.S.C. 1001) shall be deemed to refer 
to, and shall have the allowability of costs determined by the 
contracting officer in accordance with, the OMB Uniform Guidance at 2 
CFR part 200, subpart E and appendix III, in effect on the date of the 
contract.
* * * * *


31.602   [Amended]

0
10. Amend section 31.602 by removing ``Office of Management and Budget 
(OMB) Circular No. A-87, Cost Principles for State and Local 
Governments, Revised,'' and adding ``The OMB Uniform Guidance at 2 CFR 
part 200, subpart E and appendices V and VII'' in its place.


31.603   [Amended]

0
11. Amend section 31.603 by removing from paragraph (a) ``the revision 
of OMB Circular A-87 which is'' and adding ``the OMB Uniform Guidance 
at 2 CFR part 200, subpart E and appendices V and VII,'' in its place.

0
12. Revise section 31.702 to read as follows:
    The OMB Uniform Guidance at 2 CFR part 200, subpart E and appendix 
IV, sets forth principles for determining the costs applicable to work 
performed by nonprofit organizations (as defined in the OMB Uniform 
Guidance at 2 CFR part 200) under contracts (as well as grants and 
other agreements) with the Government. See 31.108 for exceptions to the 
cost principles for nonprofit organizations.


31.703   [Amended]

0
13. Amend section 31.703 by removing from paragraph (a) ``the revision 
of OMB circular A-122'' and adding ``the OMB Uniform Guidance at 2 CFR 
part 200, subpart E and appendix IV'' in its place.

PART 42--CONTRACT ADMINISTRATION AND AUDIT SERVICES

0
14. Amend section 42.003 by revising paragraph (a) to read as follows:


42.003   Cognizant Federal agency.

    (a) For contractors other than educational institutions and 
nonprofit organizations, the cognizant Federal agency normally will be 
the agency with the largest dollar amount of negotiated contracts, 
including options. For educational institutions (defined as 
institutions of higher education in the OMB Uniform Guidance at 2 CFR 
part 200, subpart A, and 20 U.S.C. 1001) and nonprofit organizations 
(as defined in the OMB Uniform Guidance at 2 CFR part 200), the 
cognizant Federal agency for indirect costs is established according to 
the OMB Uniform Guidance at 2 CFR part 200, appendices III and IV, 
respectively.
* * * * *

0
15. Amend section 42.101 by revising paragraph (b) to read as follows:


42.101   Contract audit responsibilities.

* * * * *
    (b) Normally, for contractors other than educational institutions 
and nonprofit organizations, the Defense Contract Audit Agency (DCAA) 
is the responsible Government audit agency. However, there may be 
instances where an agency other than DCAA desires cognizance of a 
particular contractor. In those instances, the two agencies shall agree 
on the most efficient and economical approach to meet contract audit 
requirements. For educational institutions (defined as institutions of 
higher education in the OMB Uniform Guidance at 2 CFR part 200, subpart 
A, and 20 U.S.C. 1001) and nonprofit organizations (as defined in the 
OMB Uniform Guidance at 2 CFR part 200), audit cognizance will be 
determined according to the provisions of the OMB Uniform Guidance at 2 
CFR part 200, subpart F.

0
16. Amend section 42.703-2 by revising paragraphs (b)(2)(ii) through 
(iv) to read as follows:


42.703-2   Certificate of indirect costs.

* * * * *
    (b) * * *
    (2) * * *
    (ii) A State or local government subject to the OMB Uniform 
Guidance at 2 CFR part 200, subpart E and appendices V and VII;
    (iii) An educational institution (defined as an institution of 
higher education in the OMB Uniform Guidance at 2 CFR part 200, subpart 
A, and 20 U.S.C. 1001) subject to the OMB Uniform Guidance at 2 CFR 
part 200, subpart E and appendix III; and
    (iv) A nonprofit organization (as defined in the OMB Uniform 
Guidance at 2 CFR part 200) subject to the OMB Uniform Guidance at 2 
CFR part 200, subpart E and appendix IV.
* * * * *

0
17. Amend section 42.705-3 by revising paragraphs (a)(2) and (3); and 
adding paragraph (b)(8) to read as follows:


42.705-3   Educational institutions.

    (a) * * *
    (2) The OMB Uniform Guidance at 2 CFR part 200, appendix III 
assigns each educational institution (defined as an institution of 
higher education in the OMB Uniform Guidance at 2 CFR part

[[Page 45854]]

200, subpart A, and 20 U.S.C. 1001) to a single Government agency for 
the negotiation of indirect cost rates and provides that those rates 
shall be accepted by all Federal agencies. Cognizant Government 
agencies and educational institutions are listed in the Directory of 
Federal Contract Audit Offices (see 42.103).
    (3) The cognizant agency for indirect costs shall establish the 
billing rates and final indirect cost rates at the educational 
institution (defined as an institution of higher education in 2 CFR 
200, subpart A, and 20 U.S.C. 1001) consistent with the requirements of 
this subpart, Subpart 31.3, and the OMB Uniform Guidance at 2 CFR part 
200, subpart E and appendix III. The agency shall follow the procedures 
outlined in 42.705-1(b).
* * * * *
    (b) * * *
    (8) The OMB Uniform Guidance at 2 CFR part 200, subpart E and 
appendix III, provides additional guidance on how long predetermined 
rates may be used.
0
18. Revise section 42.705-4 to read as follows:


42.705-4   State and local governments.

    The OMB Uniform Guidance at 2 CFR part 200, subpart E and appendix 
V, concerning cost principles for state and local governments (see 
Subpart 31.6) establishes the cognizant agency concept and the 
procedures for determining a cognizant agency for approving State and 
local government indirect costs associated with federally-funded 
programs and activities. The indirect cost rates negotiated and 
approved by the cognizant agency for indirect costs will be used by all 
Federal agencies that also award contracts to these same State and 
local governments.


42.705-5   [Amended]

0
19. Amend section 42.705-5 by removing ``OMB Circular No. A-122'' and 
adding ``the OMB Uniform Guidance at 2 CFR part 200, subpart E and 
appendix IV; but see appendix VIII for nonprofit organizations exempt 
from subpart E)'' in its place.

PART 52--SOLICITATION PROVISIONS AND CONTRACT CLAUSES

0
20. Amend section 52.215-2 by revising the date of Alternate II and 
paragraph (h) to read as follows:


52.215-2   Audit and Records-Negotiation.

* * * * *
    Alternate II (Aug 2016). * * *
    (h) The provisions of the OMB Uniform Guidance at 2 CFR part 200, 
subpart F apply to this contract.
* * * * *

0
21. Amend section 52.230-5 by revising the date of the clause and 
paragraphs (a)(1) and (2) and (a)(4)(iv) to read as follows:


52.230-5   Cost Accounting Standards--Educational Institution.

* * * * *

Cost Accounting Standards--Educational Institution (Aug 2016)

    (a) * * *
    (1) (CAS-covered Contracts only). If a business unit of an 
educational institution (defined as an institution of higher 
education in the OMB Uniform Guidance at 2 CFR part 200, subpart A 
and 20 U.S.C. 1001) is required to submit a Disclosure Statement, 
disclose in writing the Contractor's cost accounting practices as 
required by 48 CFR 9003.202-1 through 9903.202-5, including methods 
of distinguishing direct costs from indirect costs and the basis 
used for accumulating and allocating indirect costs. The practices 
disclosed for this contract shall be the same as the practices 
currently disclosed and applied on all other contracts and 
subcontracts being performed by the Contractor and which contain a 
Cost Accounting Standards (CAS) clause. If the Contractor has 
notified the Contracting Officer that the Disclosure Statement 
contains trade secrets, and commercial or financial information 
which is privileged and confidential, the Disclosure Statement shall 
be protected and shall not be released outside of the Government.
    (2) Follow consistently the Contractor's cost accounting 
practices in accumulating and reporting contract performance cost 
data concerning this contract. If any change in cost accounting 
practices is made for the purposes of any contract or subcontract 
subject to CAS requirements, the change must be applied 
prospectively to this contract and the Disclosure Statement, if 
required, must be amended accordingly. If an accounting principle 
change mandated under OMB Uniform Guidance at 2 CFR part 200, 
subpart E and appendix III, requires that a change in the 
Contractor's cost accounting practices be made after the date of 
this contract award, the change must be applied prospectively to 
this contract and the Disclosure Statement, if required, must be 
amended accordingly. If the contract price or cost allowance of this 
contract is affected by such changes, adjustment shall be made in 
accordance with paragraph (a)(4) or (a)(5) of this clause, as 
appropriate.
* * * * *
    (4) * * *
    (iv) Agree to an equitable adjustment as provided in the Changes 
clause of this contract, if the contract cost is materially affected 
by an accounting principle amendment required under the OMB Uniform 
Guidance at 2 CFR part 200, subpart E and appendix III, which, on 
becoming effective after the date of contract award, requires the 
Contractor to make a change to the Contractor's established cost 
accounting practices.
* * * * *

0
22. Amend section 52.249-5 by revising the date of the clause and 
paragraph (f) to read as follows:


52.249-5   Termination for Convenience of the Government (Educational 
and Other Nonprofit Institutions).

* * * * *

Termination for Convenience of the Government (Educational and Other 
Nonprofit Institutions) (Aug 2016)

* * * * *
    (f) The cost principles and procedures in subpart 31.3 of the 
Federal Acquisition Regulation (FAR), Contracts with Educational 
Institutions (defined as institutions of higher education in the OMB 
Uniform Guidance in 2 CFR part 200, subpart A, and 20 U.S.C. 1001), 
as in effect on the date of the contract, shall govern all costs 
claimed, agreed to, or determined under this clause; however, if the 
Contractor is not an educational institution and is a nonprofit 
organization (as defined in the OMB Uniform Guidance at 2 CFR part 
200), the cost principles and procedures in subpart 31.7 of the FAR, 
Contracts with Nonprofit Organizations, shall apply; unless the 
Contractor is a nonprofit institution listed in the OMB Uniform 
Guidance at 2 CFR part 200, appendix VIII, as exempted from the cost 
principles in subpart E, in which case the cost principles at FAR 
31.2 for commercial organizations shall apply to such contractor.
[FR Doc. 2016-16246 Filed 7-13-16; 8:45 am]
 BILLING CODE 6820-EP-P
45852 Federal Register / Vol. 81, No. 135 / Thursday, July 14, 2016 / Rules and Regulations

DEPARTMENT OF DEFENSE governments. All other FAR contractual V. Paperwork Reduction Act
requirements (e.g., contract The rule does not contain any
GENERAL SERVICES administration, audit) take precedence
ADMINISTRATION information collection requirements that
over the OMB Uniform Guidance when require the approval of the Office of
there is a conflict. Management and Budget under the
NATIONAL AERONAUTICS AND
This rule also creates a definition Paperwork Reduction Act (44 U.S.C.
SPACE ADMINISTRATION
with an abbreviated title in FAR section chapter 35).
2.101 for FAR citations to this OMB
48 CFR Parts 2, 15, 16, 31, 42, and 52 List of Subjects in 48 CFR Parts 2, 15,
Uniform Guidance.
[FAC 2005–89; FAR Case 2014–023; Item 16, 31, 42, and 52
II; Docket No. 2014–0023, Sequence No. 1] II. Executive Orders 12866 and 13563 Government procurement.
RIN 9000–AN17 Executive Orders (E.O.s) 12866 and Dated: June 30, 2016.
13563 direct agencies to assess all costs William F. Clark,
Federal Acquisition Regulation; OMB and benefits of available regulatory Director, Office of Government-wide
Circular Citation Update alternatives and, if regulation is Acquisition Policy, Office of Acquisition
AGENCY: Department of Defense (DoD), necessary, to select regulatory Policy, Office of Government-wide Policy.
General Services Administration (GSA), approaches that maximize net benefits Therefore, DoD, GSA, and NASA
and National Aeronautics and Space (including potential economic, amend 48 CFR parts 2, 15, 16, 31, 42,
Administration (NASA). environmental, public health and safety and 52 as set forth below:
ACTION: Final rule. effects, distributive impacts, and
■ 1. The authority citation for 48 CFR
equity). E.O. 13563 emphasizes the
SUMMARY: DoD, GSA, and NASA are importance of quantifying both costs parts 2, 15, 16, 31, 42, and 52 continues
issuing a final rule amending the to read as follows:
and benefits, of reducing costs, of
Federal Acquisition Regulation (FAR) to harmonizing rules, and of promoting Authority: 40 U.S.C. 121(c); 10 U.S.C.
update outdated Office of Management flexibility. This is a significant chapter 137; and 51 U.S.C. 20113.
and Budget (OMB) Circular citation regulatory action and, therefore, was
references. PART 2—DEFINITIONS OF WORDS
subject to review under section 6(b) of
AND TERMS
DATES: Effective: August 15, 2016. E.O. 12866, Regulatory Planning and
FOR FURTHER INFORMATION CONTACT: Ms. Review, dated September 30, 1993. This ■ 2. Amend section 2.101 in paragraph
Kathlyn J. Hopkins, Procurement rule is not a major rule under 5 U.S.C. (b)(2) by adding in alphabetical order
Analyst, at 202–969–7226, for 804. the definition ‘‘OMB Uniform Guidance
clarification of content. For information at 2 CFR part 200’’ to read as follows:
III. Publication of This Final Rule for
pertaining to status or publication
Public Comment Is Not Required by 2.101 [Amended]
schedules, contact the Regulatory
Statute * * * * *
Secretariat Division at 202–501–4755.
Please cite FAC 2005–89, FAR Case ‘‘Publication of proposed (b) * * *
2014–023. regulations,’’ 41 U.S.C. 1707, is the (2) * * *
SUPPLEMENTARY INFORMATION: statute that applies to the publication of OMB Uniform Guidance at 2 CFR part
the FAR. Paragraph (a)(1) of the statute 200 is the abbreviated title for Uniform
I. Background Administrative Requirements, Cost
requires that a procurement policy,
On December 26, 2013, the Office of regulation, procedure, or form Principles, and Audit Requirements for
Management and Budget (OMB) (including an amendment or Federal Awards (2 CFR part 200), which
published new guidance at 2 CFR part modification thereof) must be published supersedes OMB Circulars A–21, A–87,
200 entitled Uniform Administrative for public comment if it relates to the A–89, A–102, A–110, A–122, and A–
Requirements, Cost Principles, and expenditure of appropriated funds, and 133, and the guidance in Circular A–50
Audit Requirements for Federal Awards has either a significant effect beyond the on Audit Followup.
(OMB Uniform Guidance); this became internal operating procedures of the * * * * *
effective on December 26, 2014, after agency issuing the policy, regulation,
Federal agencies adopted the guidance PART 15—CONTRACTING BY
procedure, or form, or has a significant
as a set of binding regulations. This new NEGOTIATION
cost or administrative impact on
OMB Uniform Guidance supersedes and
contractors or offerors. This final rule is 15.209 [Amended]
streamlines requirements from OMB
not required to be published for public
Circulars A–21, A–87, A–89, A–102, A– ■ 3. Amend section 15.209 by removing
comment, because it merely replaces
110, A–122, and A–133, and the from paragraph (b)(1) introductory text,
outdated OMB Circular references in the
guidance in Circular A–50 on Audit ‘‘OMB Circular No. A–133’’ and adding
FAR with current references that do not
Followup. As such, this final rule ‘‘Audit Requirements in the OMB
replaces OMB citations in the FAR to have a significant effect on contractors
Uniform Guidance at 2 CFR part 200,
the circulars cited above that have been or offerors.
subpart F’’ in its place.
replaced by this new OMB Uniform IV. Regulatory Flexibility Act
Guidance, and cross references to new PART 16—TYPES OF CONTRACTS
mstockstill on DSK3G9T082PROD with RULES2

terminology in the OMB Uniform The Regulatory Flexibility Act does
16.307 [Amended]
Guidance. not apply to this rule because this final
The cost principles under OMB’s rule does not constitute a significant ■ 4. Amend section 16.307 by removing
Uniform Guidance apply to contracts FAR revision within the meaning of from paragraph (a)(5) ‘‘OMB Circular
with non-profits, educational FAR 1.501–1 and 41 U.S.C. 1707 and No. A–122’’ and adding ‘‘the OMB
institutions, state and local does not require publication for public Uniform Guidance at 2 CFR part 200,
governments, and Indian tribal comment. appendix VIII’’ in its place.

VerDate Sep<11>2014 18:51 Jul 13, 2016 Jkt 238001 PO 00000 Frm 00022 Fmt 4701 Sfmt 4700 E:\FR\FM\14JYR2.SGM 14JYR2
Federal Register / Vol. 81, No. 135 / Thursday, July 14, 2016 / Rules and Regulations 45853

PART 31—CONTRACT COST refer to, and shall have the allowability according to the OMB Uniform
PRINCIPLES AND PROCEDURES of costs determined by the contracting Guidance at 2 CFR part 200, appendices
officer in accordance with, the OMB III and IV, respectively.
■ 5. Amend section 31.104 by revising Uniform Guidance at 2 CFR part 200, * * * * *
the introductory text to read as follows: subpart E and appendix III, in effect on ■ 15. Amend section 42.101 by revising
the date of the contract. paragraph (b) to read as follows:
31.104 Contracts with educational
institutions. * * * * *
42.101 Contract audit responsibilities.
This category includes all contracts 31.602 [Amended]
and contract modifications for research * * * * *
and development, training, and other ■ 10. Amend section 31.602 by (b) Normally, for contractors other
work performed by educational removing ‘‘Office of Management and than educational institutions and
institutions (defined as institutions of Budget (OMB) Circular No. A–87, Cost nonprofit organizations, the Defense
higher educations in the OMB Uniform Principles for State and Local Contract Audit Agency (DCAA) is the
Guidance at 2 CFR part 200, subpart A, Governments, Revised,’’ and adding responsible Government audit agency.
and 20 U.S.C. 1001). ‘‘The OMB Uniform Guidance at 2 CFR However, there may be instances where
part 200, subpart E and appendices V an agency other than DCAA desires
* * * * * and VII’’ in its place. cognizance of a particular contractor. In
31.105 [Amended] those instances, the two agencies shall
31.603 [Amended]
■ 6. Amend section 31.105 by removing agree on the most efficient and
from paragraph (a) ‘‘OMB Circular A– ■ 11. Amend section 31.603 by economical approach to meet contract
122 (see 31–108)’’ and adding ‘‘OMB removing from paragraph (a) ‘‘the audit requirements. For educational
Uniform Guidance at 2 CFR part 200, revision of OMB Circular A–87 which institutions (defined as institutions of
appendix VIII (see 31.108)’’ in its place. is’’ and adding ‘‘the OMB Uniform higher education in the OMB Uniform
Guidance at 2 CFR part 200, subpart E Guidance at 2 CFR part 200, subpart A,
■ 7. Revise section 31.108 to read as
and appendices V and VII,’’ in its place. and 20 U.S.C. 1001) and nonprofit
follows:
■ 12. Revise section 31.702 to read as organizations (as defined in the OMB
31.108 Contracts with nonprofit follows: Uniform Guidance at 2 CFR part 200),
organizations. The OMB Uniform Guidance at 2 CFR audit cognizance will be determined
Subpart 31.7 provides principles and part 200, subpart E and appendix IV, according to the provisions of the OMB
standards for determining costs sets forth principles for determining the Uniform Guidance at 2 CFR part 200,
applicable to contracts with nonprofit costs applicable to work performed by subpart F.
organizations other than educational nonprofit organizations (as defined in ■ 16. Amend section 42.703–2 by
institutions (see subpart 31.3), State and the OMB Uniform Guidance at 2 CFR revising paragraphs (b)(2)(ii) through
local governments (see subpart 31.6), part 200) under contracts (as well as (iv) to read as follows:
and those nonprofit organizations grants and other agreements) with the
exempted under the OMB Uniform Government. See 31.108 for exceptions 42.703–2 Certificate of indirect costs.
Guidance at 2 CFR part 200, appendix to the cost principles for nonprofit * * * * *
VIII (see subpart 31.2 for the cost organizations. (b) * * *
principles applicable to nonprofit (2) * * *
31.703 [Amended] (ii) A State or local government
organizations exempt from the cost
principles in the OMB Uniform ■ 13. Amend section 31.703 by subject to the OMB Uniform Guidance
Guidance at 2 CFR part 200). removing from paragraph (a) ‘‘the at 2 CFR part 200, subpart E and
revision of OMB circular A–122’’ and appendices V and VII;
■ 8. Revise section 31.302 to read as
adding ‘‘the OMB Uniform Guidance at (iii) An educational institution
follows: 2 CFR part 200, subpart E and appendix (defined as an institution of higher
31.302 General. IV’’ in its place. education in the OMB Uniform
The OMB Uniform Guidance at 2 CFR Guidance at 2 CFR part 200, subpart A,
PART 42—CONTRACT and 20 U.S.C. 1001) subject to the OMB
part 200, subpart E and appendix III, ADMINISTRATION AND AUDIT
provides principles for determining the Uniform Guidance at 2 CFR part 200,
SERVICES subpart E and appendix III; and
costs applicable to research and
development, training, and other work ■ 14. Amend section 42.003 by revising (iv) A nonprofit organization (as
performed by educational institutions paragraph (a) to read as follows: defined in the OMB Uniform Guidance
(defined as institutions of higher at 2 CFR part 200) subject to the OMB
education in the OMB Uniform 42.003 Cognizant Federal agency. Uniform Guidance at 2 CFR part 200,
Guidance at 2 CFR part 200, subpart A, (a) For contractors other than subpart E and appendix IV.
and 20 U.S.C. 1001) under contracts educational institutions and nonprofit * * * * *
with the Government. organizations, the cognizant Federal ■ 17. Amend section 42.705–3 by
■ 9. Amend section 31.303 by revising agency normally will be the agency with revising paragraphs (a)(2) and (3); and
paragraph (a) to read as follows: the largest dollar amount of negotiated adding paragraph (b)(8) to read as
contracts, including options. For follows:
31.303 Requirements. educational institutions (defined as
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(a) Contracts that refer to this subpart institutions of higher education in the 42.705–3 Educational institutions.
31.3 for determining allowable costs OMB Uniform Guidance at 2 CFR part (a) * * *
under contracts with educational 200, subpart A, and 20 U.S.C. 1001) and (2) The OMB Uniform Guidance at 2
institutions (defined as institutions of nonprofit organizations (as defined in CFR part 200, appendix III assigns each
higher education in the OMB Uniform the OMB Uniform Guidance at 2 CFR educational institution (defined as an
Guidance at 2 CFR part 200, subpart A, part 200), the cognizant Federal agency institution of higher education in the
and 20 U.S.C. 1001) shall be deemed to for indirect costs is established OMB Uniform Guidance at 2 CFR part

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45854 Federal Register / Vol. 81, No. 135 / Thursday, July 14, 2016 / Rules and Regulations

200, subpart A, and 20 U.S.C. 1001) to (h) The provisions of the OMB requires the Contractor to make a change to
a single Government agency for the Uniform Guidance at 2 CFR part 200, the Contractor’s established cost accounting
negotiation of indirect cost rates and subpart F apply to this contract. practices.
provides that those rates shall be * * * * * * * * * *
accepted by all Federal agencies. ■ 21. Amend section 52.230–5 by ■ 22. Amend section 52.249–5 by
Cognizant Government agencies and revising the date of the clause and revising the date of the clause and
educational institutions are listed in the paragraphs (a)(1) and (2) and (a)(4)(iv) to paragraph (f) to read as follows:
Directory of Federal Contract Audit read as follows: 52.249–5 Termination for Convenience of
Offices (see 42.103). the Government (Educational and Other
(3) The cognizant agency for indirect 52.230–5 Cost Accounting Standards—
Nonprofit Institutions).
Educational Institution.
costs shall establish the billing rates and * * * * *
final indirect cost rates at the * * * * *
educational institution (defined as an Termination for Convenience of the
Cost Accounting Standards—
institution of higher education in 2 CFR Government (Educational and Other
Educational Institution (Aug 2016)
200, subpart A, and 20 U.S.C. 1001) Nonprofit Institutions) (Aug 2016)
consistent with the requirements of this (a) * * *
(1) (CAS-covered Contracts only). If a * * * * *
subpart, Subpart 31.3, and the OMB business unit of an educational institution (f) The cost principles and procedures in
Uniform Guidance at 2 CFR part 200, (defined as an institution of higher education subpart 31.3 of the Federal Acquisition
subpart E and appendix III. The agency Regulation (FAR), Contracts with Educational
in the OMB Uniform Guidance at 2 CFR part
shall follow the procedures outlined in Institutions (defined as institutions of higher
200, subpart A and 20 U.S.C. 1001) is
education in the OMB Uniform Guidance in
42.705–1(b). required to submit a Disclosure Statement,
2 CFR part 200, subpart A, and 20 U.S.C.
* * * * * disclose in writing the Contractor’s cost
1001), as in effect on the date of the contract,
accounting practices as required by 48 CFR
(b) * * * shall govern all costs claimed, agreed to, or
9003.202–1 through 9903.202–5, including
determined under this clause; however, if the
(8) The OMB Uniform Guidance at 2 methods of distinguishing direct costs from
Contractor is not an educational institution
CFR part 200, subpart E and appendix indirect costs and the basis used for
and is a nonprofit organization (as defined in
III, provides additional guidance on accumulating and allocating indirect costs. the OMB Uniform Guidance at 2 CFR part
The practices disclosed for this contract shall
how long predetermined rates may be be the same as the practices currently
200), the cost principles and procedures in
used. subpart 31.7 of the FAR, Contracts with
disclosed and applied on all other contracts Nonprofit Organizations, shall apply; unless
■ 18. Revise section 42.705–4 to read as and subcontracts being performed by the the Contractor is a nonprofit institution listed
follows: Contractor and which contain a Cost in the OMB Uniform Guidance at 2 CFR part
Accounting Standards (CAS) clause. If the 200, appendix VIII, as exempted from the
42.705–4 State and local governments. Contractor has notified the Contracting cost principles in subpart E, in which case
Officer that the Disclosure Statement the cost principles at FAR 31.2 for
The OMB Uniform Guidance at 2 CFR
contains trade secrets, and commercial or commercial organizations shall apply to such
part 200, subpart E and appendix V, financial information which is privileged and
concerning cost principles for state and contractor.
confidential, the Disclosure Statement shall [FR Doc. 2016–16246 Filed 7–13–16; 8:45 am]
local governments (see Subpart 31.6) be protected and shall not be released outside
BILLING CODE 6820–EP–P
establishes the cognizant agency of the Government.
concept and the procedures for (2) Follow consistently the Contractor’s
determining a cognizant agency for cost accounting practices in accumulating
and reporting contract performance cost data DEPARTMENT OF DEFENSE
approving State and local government
indirect costs associated with federally- concerning this contract. If any change in
cost accounting practices is made for the GENERAL SERVICES
funded programs and activities. The ADMINISTRATION
purposes of any contract or subcontract
indirect cost rates negotiated and subject to CAS requirements, the change
approved by the cognizant agency for must be applied prospectively to this NATIONAL AERONAUTICS AND
indirect costs will be used by all Federal contract and the Disclosure Statement, if SPACE ADMINISTRATION
agencies that also award contracts to required, must be amended accordingly. If an
these same State and local governments. accounting principle change mandated under 48 CFR Part 8
OMB Uniform Guidance at 2 CFR part 200,
42.705–5 [Amended] subpart E and appendix III, requires that a [FAC 2005–89; FAR Case 2016–008; Item
change in the Contractor’s cost accounting III; Docket No. 2016–0008; Sequence No 1]
■ 19. Amend section 42.705–5 by practices be made after the date of this
removing ‘‘OMB Circular No. A–122’’ RIN 9000–AN22
contract award, the change must be applied
and adding ‘‘the OMB Uniform prospectively to this contract and the
Guidance at 2 CFR part 200, subpart E Federal Acquisition Regulation; FPI
Disclosure Statement, if required, must be
and appendix IV; but see appendix VIII amended accordingly. If the contract price or Blanket Waiver Threshold
for nonprofit organizations exempt from cost allowance of this contract is affected by AGENCY: Department of Defense (DoD),
subpart E)’’ in its place. such changes, adjustment shall be made in General Services Administration (GSA),
accordance with paragraph (a)(4) or (a)(5) of
and National Aeronautics and Space
PART 52—SOLICITATION PROVISIONS this clause, as appropriate.
Administration (NASA).
AND CONTRACT CLAUSES * * * * *
ACTION: Final rule.
(4) * * *
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■ 20. Amend section 52.215–2 by (iv) Agree to an equitable adjustment as SUMMARY: DoD, GSA, and NASA are
revising the date of Alternate II and provided in the Changes clause of this issuing a final rule amending the
contract, if the contract cost is materially
paragraph (h) to read as follows: affected by an accounting principle
Federal Acquisition Regulation (FAR) to
amendment required under the OMB increase the blanket waiver threshold
52.215–2 Audit and Records-Negotiation.
Uniform Guidance at 2 CFR part 200, subpart for small dollar-value purchases from
* * * * * E and appendix III, which, on becoming Federal Prison Industries (FPI) by
Alternate II (Aug 2016). * * * effective after the date of contract award, Federal agencies.

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Document Created: 2016-07-14 01:54:55
Document Modified: 2016-07-14 01:54:55
Category		Regulatory Information
Collection		Federal Register
sudoc Class		AE 2.7: GS 4.107: AE 2.106:
Publisher		Office of the Federal Register, National Archives and Records Administration
Section		Rules and Regulations
Action		Final rule.
Dates		Effective: August 15, 2016.
Contact		Ms. Kathlyn J. Hopkins, Procurement Analyst, at 202-969-7226, for clarification of content. For information pertaining to status or publication schedules, contact the Regulatory Secretariat Division at 202-501-4755. Please cite FAC 2005-89, FAR Case 2014-023.
FR Citation		81 FR 45852
RIN Number		9000-AN17
CFR Citation		48 CFR 15 48 CFR 16 48 CFR 2 48 CFR 31 48 CFR 42 48 CFR 52
81 FR 45852 - Federal Acquisition Regulation; OMB Circular Citation Update

DEPARTMENT OF DEFENSEGENERAL SERVICES ADMINISTRATIONNATIONAL AERONAUTICS AND SPACE ADMINISTRATION

Federal Register Volume 81, Issue 135 (July 14, 2016)

DEPARTMENT OF DEFENSE
GENERAL SERVICES ADMINISTRATION
NATIONAL AERONAUTICS AND SPACE ADMINISTRATION
