83 FR 33146 - Cost Accounting Standards: Revision of the Exemption From Cost Accounting Standards for Contracts and Subcontracts for the Acquisition of Commercial Items

OFFICE OF MANAGEMENT AND BUDGET
Office of Federal Procurement Policy

Federal Register Volume 83, Issue 137 (July 17, 2018)

Page Range		33146-33148
FR Document		2018-15176
The Office of Federal Procurement Policy (OFPP), Cost Accounting Standards (CAS) Board, is publishing a final rule revising the exemption for contracts or subcontracts for the acquisition of commercial items. This final rule clarifies the types of contracts that are exempt from the application of Cost Accounting Standards when acquiring commercial items.
Federal Register, Volume 83 Issue 137 (Tuesday, July 17, 2018)
[Federal Register Volume 83, Number 137 (Tuesday, July 17, 2018)]
[Rules and Regulations]
[Pages 33146-33148]
From the Federal Register Online  [www.thefederalregister.org]
[FR Doc No: 2018-15176]


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OFFICE OF MANAGEMENT AND BUDGET

Office of Federal Procurement Policy

48 CFR Part 9903


Cost Accounting Standards: Revision of the Exemption From Cost 
Accounting Standards for Contracts and Subcontracts for the Acquisition 
of Commercial Items

AGENCY: Cost Accounting Standards Board, Office of Federal Procurement 
Policy, Office of Management and Budget.

ACTION: Final rule.

-----------------------------------------------------------------------

SUMMARY: The Office of Federal Procurement Policy (OFPP), Cost 
Accounting Standards (CAS) Board, is publishing a final rule revising 
the exemption for contracts or subcontracts for the acquisition of 
commercial items. This final rule clarifies the types of contracts that 
are exempt from the application of Cost Accounting Standards when 
acquiring commercial items.

DATES: Effective August 16, 2018.

FOR FURTHER INFORMATION CONTACT: Raymond Wong, Staff Director, Cost 
Accounting Standards Board (telephone: 202-395-6805; email: 
rwong@omb.eop.gov).

SUPPLEMENTARY INFORMATION: This final rule revises the exemption 48 CFR 
9903.201-1(b)(6) for contracts or subcontracts for the acquisition of 
commercial items (hereafter referred to as the ``(b)(6) commercial item 
exemption'').

A. Regulatory Process--Changes to 48 CFR Part 9903

    The CAS Board's regulations and Standards are codified at 48 CFR 
chapter 99. This final rule amends a CAS Board regulation other than a 
Standard and, as such, is not subject to the statutorily prescribed 
rulemaking process for the promulgation of a Standard at 41 U.S.C. 
1502(c) [formerly, 41 U.S.C. 422(g)].

B. Background and Summary

    In November 2012, the CAS Board issued a proposed rule to clarify 
the exemption from CAS when acquiring commercial items. 77 FR 69422. 
The exemption enumerates the contract types that are authorized when 
procuring commercial items. Over the years, the CAS Board has issued 
several rules addressing the exemption to reflect statutory changes 
regarding the types of contracts that may be used in commercial item 
acquisitions. See 61 FR 39360 (providing an exemption for firm-fixed-
price contracts and subcontracts for the acquisition of commercial 
items as authorized by section 4305 of the Clinger-Cohen Act of 1996 
(FARA), Pub. L. 104-106); 62 FR 31294 (adding fixed-price contracts 
with economic price adjustments other than those based on actual 
incurred costs for labor and materials); and 72 FR 36367 (expanding the 
list of exempt contract types to include time-and-material and labor- 
hour contracts, in response to changes made by section 1432 of the 
Services Acquisition Reform Act of 2003, Pub. L. 108-136, which 
authorized these types of contracts for the acquisition of commercial 
items).
    Since enactment of the Federal Acquisition Streamlining Act in 1994 
(Pub. L. 103-355), the Federal Acquisition Regulation (FAR) has 
included an enumerated list of contract types authorized for use in 
acquiring commercial items. See 48 CFR part 12.207. Similar to the CAS 
Board, the Federal Acquisition Regulatory Council has amended FAR 
12.207 several times to reflect statutory changes and clarify the 
intent of the regulation. An inconsistency has developed between the 
list of contract types recognized for use in acquiring commercial items 
set forth in paragraph (b)(6) and that commercial item exemption and 
contract types reflected in FAR 12.207. For example, FAR 12.207 allows 
the use of firmed fixed price contracts in conjunction with award fee 
incentives or performance or delivery incentives, known as fixed-price 
incentive (FPI) contracts, when the award fee or incentive is based 
solely on factors other than cost. However, the (b)(6) exemption does 
not expressly recognize FPI contracts on the enumerated list of exempt 
contracts. Because of this discrepancy, some commenters on a prior CAS 
Board rulemaking expressed concern that these types of FPI contracts 
might be excluded under a literal reading of the (b)(6) exemption. See 
72 FR 36367.
    In its proposed rule, the CAS Board sought to address the 
inconsistencies between the lists in the (b)(6) exemption and FAR 
12.207 by removing reference to specific contract types in the (b)(6) 
exemption and instead making simple reference to ``contracts and 
subcontracts for the acquisition of commercial items.'' The CAS Board 
explained that this generalized language would ``obviate the continuing 
need to update and keep current a detailed listing of permissible 
contract types for the acquisition of commercial items, which continues 
to evolve with the passage of time.'' 77 FR 69424. The CAS Board 
further explained that this language tracks the exemption set forth in 
its authorizing statute at 41 U.S.C. 1502(b)(1)(C)(i) as well as the 
language in section 4205 of the Clinger-Cohen Act.
    The CAS Board received several comments in response to the proposed 
rule. A discussion of the comments and the Board's responses are set 
forth in section C. Of particular note, some commenters raised concern 
that more general language may perpetuate ambiguities regarding what 
contract types are covered by the exemption. After review of the public 
comments and further deliberation, the CAS Board has concluded that the 
desired goal of clarification can be more effectively achieved by 
adding language to the exemption that cross references to FAR 12.207 
and its enumeration of contract types authorized for the acquisition of 
commercial items. The CAS Board

[[Page 33147]]

believes this approach has multiple benefits. This linkage will 
eliminate disparities between the FAR and CAS Board rules regarding the 
description of contract types authorized for commercial item 
acquisitions. In addition, by maintaining reference to an enumerated 
list of authorized contract types for commercial item acquisitions, 
this formulation will avoid the ambiguity that could have been created 
if the more generalized language in proposed rule were adopted. The CAS 
Board also hopes that this change will avoid the need for additional 
CAS Board rulemakings in the event of future statutory actions 
addressing allowable contract types for commercial item procurements.
    Accordingly, this final rule amends the language at 9903.201-
1(b)(6) to exempt contracts and subcontracts authorized in 48 CFR 
12.207 for the acquisition of commercial items. The CAS Board intends 
to monitor the effectiveness of this rule in achieving the intent of 
the law regarding CAS exemptions.

C. Public Comments

    The CAS Board published a Notice of Proposed Rulemaking (NPR) on 
November 19, 2012, proposing to revise the (b)(6) commercial item 
exemption to read: ``[c]ontracts and subcontracts for the acquisition 
of commercial items,'' (77 FR 69422). In response to the NPR, the CAS 
Board received comments from four entities, one of which supported the 
proposed rule without change and three of which raised concerns. A 
summary of concerns and the CAS Board's response are below.
    1. Lack of clarity. Three commenters raised concern that deletion 
of the more detailed explanation of what contract types are exempt from 
CAS will increase confusion. One commenter stated that the change ``may 
be confusing to the inexperienced, including both contractors and 
Government representatives'' who may not immediately understand how to 
interpret the phrase ``contracts and subcontracts for the acquisition 
of commercial items'' without further explanation. This commenter 
suggested that the exemption include a specific cross reference to 
statute or regulation so that the reader could more easily determine 
the exempt contract types. Other commenters warned that a blanket 
exemption could lead to overpayment. One of these commenters admonished 
the Board on the need to preserve a more tailored exemption that 
continues to clarify that the exemption does not apply to specific 
contract types that involve reimbursement or pricing based on actual 
costs.
    Response: The Board agrees that readers need to be made aware of 
the specific contracts that are covered by the exemption. This 
specificity will help ensure easy, clear, and consistent application. 
As explained above, the Board believes that reference to FAR 12.207, 
which identifies contract types that may be used to acquire commercial 
items should accomplish this objective. In this regard, the CAS Board 
notes that amendments to the CAS Board's authorizing statute made by 
section 820 of the National Defense Authorization Act for FY 2017 make 
clear that the Board bears a responsibility to ``minimize the burden on 
contractors while protecting the interests of the Federal Government.'' 
The Board believes this goal is shared by the FAR Council, especially 
in light of direction provided in Executive Order (E.O.) 13771, 
Reducing Regulation and Controlling Regulatory Costs, which directs 
agencies to ``manage costs associated with the governmental imposition 
of private expenditures required to comply with Federal regulations.''
    The Board intends to monitor the effectiveness of this final rule 
in achieving the intent of the law regarding CAS exemptions and retains 
the right to change the approach in the future should any changes to 
FAR 12.207 that the Board believes are inconsistent with this objective 
occur.
    2. Disclosure statements. Two commenters recommended the CAS Board 
develop Cost Accounting Standards and Disclosure Statement requirements 
for commercial item acquisitions, as Congress had required in the 
Clinger-Cohen Act. One of those commenters stated that such steps were 
needed before the permissible contract types are expanded to include 
certain cost type contracts.
    Response: Creating CAS and Disclosure Statements for commercial 
item acquisitions would be outside the scope of this rulemaking effort. 
The CAS Board is aware of the direction contained in the Conference 
Report to the Federal Acquisition Streamlining Act to ``establish 
guidance, consistent with commercial accounting systems and practices, 
to ensure that contractors appropriately assign costs to contracts 
(other than firm, fixed-price contracts) that are covered by the 
exemption for contracts or subcontracts where the price negotiated is 
based on established catalog or market prices of commercial items sold 
in substantial quantities to the general public.'' That assessment was 
made by the CAS Board when promulgating the 1997 final rule. However, 
since the law currently prohibits the use of cost type contracts for 
the acquisition of commercial items, the Board believes there is little 
to be gained from developing and imposing Cost Accounting Standards and 
Disclosure Statement requirements at this time. However, the CAS Board 
continues to reserve the right to issue such cost accounting standards 
and disclosure statement requirements should the need arise in the 
future.
    3. Hybrid and indefinite-delivery-indefinite-quantity (IDIQ) 
contracts. One commenter raised the question of how to determine 
whether CAS is triggered on a ``hybrid'' contract that contains 
contract line item numbers (CLINs) for both commercial items and non-
commercial items where the total value of the contract exceeds the CAS 
applicability threshold. The commenter suggested that CAS be clarified 
to ensure CLINs for commercial items on a hybrid contract are not 
covered by CAS, irrespective of the value of the contract. The 
commenter further recommended clarification of the CAS triggers for 
IDIQ contracts, which are often used to acquire commercial items--in 
particular whether to value the contract based on the size of orders or 
the size of the umbrella contract.
    Response: While issues related to the applicability of CAS to 
hybrid and IDIQ contracts are outside the scope of this rulemaking 
effort, the CAS Board takes note of these issues. The Board intends to 
review these issues more carefully to determine whether clarification 
of its rules is needed to ensure appropriate application of CAS 
coverage.

D. Paperwork Reduction Act

    The Paperwork Reduction Act (44 U.S.C. Chapter 35, Subchapter I) 
does not apply to this rulemaking, because this rule will impose no 
paperwork burden on offerors, affected contractors and subcontractors, 
or members of the public which requires the approval of OMB under 44 
U.S.C. 3501, et seq. The purpose of this rule is to clarify the 
application of CAS to contracts for commercial items. In addition, this 
rule is consistent with the intent of the objectives of the 
``Streamlined Applicability of Cost Accounting Standards'' set forth in 
Section 802 of the National Defense Authorization Act for Fiscal Year 
2000 (Pub. L. 106-65).

E. Executive Orders 12866 and 13771, the Congressional Review Act, and 
the Regulatory Flexibility Act

    This rule provides technical clarification on the application of 
exemptions from CAS for commercial

[[Page 33148]]

item acquisitions consistent with authorities in the Clinger-Cohen Act. 
By cross referencing FAR 12.207 and its enumeration of contract types 
authorized for the acquisition of commercial items, the CAS Board 
expects to eliminate disparities between the FAR and CAS Board rules 
that has created confusion for contractors and subcontractors. The 
economic impact on contractors and subcontractors is, therefore, 
expected to be minor. As a result, the Board has determined that this 
rule will not result in the promulgation of an ``economically 
significant rule'' under the provisions of Executive Order 12866, and 
that a regulatory impact analysis will not be required, and the 
requirements of E.O. 13771, Reducing Regulation and Controlling 
Regulatory Costs, do not apply. For the same reason, this final rule is 
not a ``major rule'' under the Congressional Review Act, 5 U.S.C. 
Chapter 8. Finally, this rule does not have a significant effect on a 
substantial number of small entities because small businesses are 
exempt from the application of the Cost Accounting Standards. 
Therefore, this rule does not require a regulatory flexibility analysis 
under the Regulatory Flexibility Act of 1980, 5 U.S.C. Chapter 6.

List of Subjects in 48 CFR Part 9903

    Cost Accounting Standards, Government procurement.

Lesley A. Field,
Acting Chair, Cost Accounting Standards Board.

    For the reasons set forth in this preamble, 48 CFR part 9903 is 
amended as follows:

PART 9903--CONTRACT COVERAGE

0
1. The authority citation for part 9903 continues to read as follows:

    Authority:  Pub. L. 111-350, 124 Stat. 3677, 41 U.S.C. 1502.


0
2. Section 9903.201-1 is amended by revising paragraph (b)(6) to read 
as follows:


9903.201-1   CAS applicability.

* * * * *
    (b) * * *
    (6) Contracts and subcontracts authorized in 48 CFR 12.207 for the 
acquisition of commercial items.
* * * * *

[FR Doc. 2018-15176 Filed 7-16-18; 8:45 am]
 BILLING CODE 3110-01-P
33146 Federal Register / Vol. 83, No. 137 / Tuesday, July 17, 2018 / Rules and Regulations

encouraged to rescan their receivers for This final rule clarifies the types of commercial items. See 48 CFR part
new channel assignments. contracts that are exempt from the 12.207. Similar to the CAS Board, the
Next Gen TV Broadcaster Written application of Cost Accounting Federal Acquisition Regulatory Council
Notices to MVPDs (Third-Party Standards when acquiring commercial has amended FAR 12.207 several times
Disclosure Requirement; 47 CFR items. to reflect statutory changes and clarify
73.3801(h), 73.6029(h), and 74.782(i)): DATES: Effective August 16, 2018. the intent of the regulation. An
Next Gen TV stations relocating their inconsistency has developed between
FOR FURTHER INFORMATION CONTACT:
ATSC 1.0 signals (e.g., moving to a the list of contract types recognized for
Raymond Wong, Staff Director, Cost
temporary host station’s facilities, use in acquiring commercial items set
Accounting Standards Board (telephone:
subsequently moving to a different host, forth in paragraph (b)(6) and that
202–395–6805; email: rwong@
or returning to its original facility) must commercial item exemption and
omb.eop.gov).
provide notice to MVPDs that: (i) No contract types reflected in FAR 12.207.
longer will be required to carry the SUPPLEMENTARY INFORMATION: This final For example, FAR 12.207 allows the use
station’s ATSC 1.0 signal due to the rule revises the exemption 48 CFR of firmed fixed price contracts in
relocation; or (ii) carry and will 9903.201–1(b)(6) for contracts or conjunction with award fee incentives
continue to be obligated to carry the subcontracts for the acquisition of or performance or delivery incentives,
station’s ATSC 1.0 signal from the new commercial items (hereafter referred to known as fixed-price incentive (FPI)
location. Broadcaster notices to as the ‘‘(b)(6) commercial item contracts, when the award fee or
multichannel video programming exemption’’). incentive is based solely on factors other
distributors (MVPDs) will be used to A. Regulatory Process—Changes to 48 than cost. However, the (b)(6)
notify MVPDs that carry a Next Gen TV CFR Part 9903 exemption does not expressly recognize
broadcast station about channel changes FPI contracts on the enumerated list of
and facility information. The CAS Board’s regulations and exempt contracts. Because of this
Local Simulcasting Agreements Standards are codified at 48 CFR discrepancy, some commenters on a
(Recordkeeping Requirement; 47 CFR chapter 99. This final rule amends a prior CAS Board rulemaking expressed
73.3801(e), 73.6029(e), and 74.782(f)): CAS Board regulation other than a concern that these types of FPI contracts
Broadcasters must maintain a written Standard and, as such, is not subject to might be excluded under a literal
copy of any local simulcasting the statutorily prescribed rulemaking reading of the (b)(6) exemption. See 72
agreement and provide it to the process for the promulgation of a FR 36367.
Commission upon request. FCC staff Standard at 41 U.S.C. 1502(c) [formerly, In its proposed rule, the CAS Board
will review the local simulcasting 41 U.S.C. 422(g)]. sought to address the inconsistencies
agreement (when applicable) to B. Background and Summary between the lists in the (b)(6) exemption
determine compliance with FCC rules and FAR 12.207 by removing reference
and to determine whether the public In November 2012, the CAS Board to specific contract types in the (b)(6)
interest would be served by grant of the issued a proposed rule to clarify the exemption and instead making simple
application for a Next Gen TV station exemption from CAS when acquiring reference to ‘‘contracts and subcontracts
license. commercial items. 77 FR 69422. The for the acquisition of commercial
exemption enumerates the contract items.’’ The CAS Board explained that
Federal Communications Commission. types that are authorized when this generalized language would
Marlene Dortch, procuring commercial items. Over the ‘‘obviate the continuing need to update
Secretary. years, the CAS Board has issued several and keep current a detailed listing of
[FR Doc. 2018–15156 Filed 7–16–18; 8:45 am] rules addressing the exemption to permissible contract types for the
BILLING CODE 6712–01–P reflect statutory changes regarding the acquisition of commercial items, which
types of contracts that may be used in continues to evolve with the passage of
commercial item acquisitions. See 61 FR time.’’ 77 FR 69424. The CAS Board
OFFICE OF MANAGEMENT AND 39360 (providing an exemption for firm- further explained that this language
BUDGET fixed-price contracts and subcontracts tracks the exemption set forth in its
for the acquisition of commercial items authorizing statute at 41 U.S.C.
Office of Federal Procurement Policy as authorized by section 4305 of the 1502(b)(1)(C)(i) as well as the language
Clinger-Cohen Act of 1996 (FARA), Pub. in section 4205 of the Clinger-Cohen
48 CFR Part 9903 L. 104–106); 62 FR 31294 (adding fixed- Act.
price contracts with economic price The CAS Board received several
Cost Accounting Standards: Revision adjustments other than those based on comments in response to the proposed
of the Exemption From Cost actual incurred costs for labor and rule. A discussion of the comments and
Accounting Standards for Contracts materials); and 72 FR 36367 (expanding the Board’s responses are set forth in
and Subcontracts for the Acquisition the list of exempt contract types to section C. Of particular note, some
of Commercial Items include time-and-material and labor- commenters raised concern that more
AGENCY: Cost Accounting Standards hour contracts, in response to changes general language may perpetuate
Board, Office of Federal Procurement made by section 1432 of the Services ambiguities regarding what contract
Policy, Office of Management and Acquisition Reform Act of 2003, Pub. L. types are covered by the exemption.
Budget. 108–136, which authorized these types After review of the public comments
ACTION: Final rule. of contracts for the acquisition of and further deliberation, the CAS Board
daltland on DSKBBV9HB2PROD with RULES

commercial items). has concluded that the desired goal of
SUMMARY: The Office of Federal Since enactment of the Federal clarification can be more effectively
Procurement Policy (OFPP), Cost Acquisition Streamlining Act in 1994 achieved by adding language to the
Accounting Standards (CAS) Board, is (Pub. L. 103–355), the Federal exemption that cross references to FAR
publishing a final rule revising the Acquisition Regulation (FAR) has 12.207 and its enumeration of contract
exemption for contracts or subcontracts included an enumerated list of contract types authorized for the acquisition of
for the acquisition of commercial items. types authorized for use in acquiring commercial items. The CAS Board

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Federal Register / Vol. 83, No. 137 / Tuesday, July 17, 2018 / Rules and Regulations 33147

believes this approach has multiple that involve reimbursement or pricing promulgating the 1997 final rule.
benefits. This linkage will eliminate based on actual costs. However, since the law currently
disparities between the FAR and CAS Response: The Board agrees that prohibits the use of cost type contracts
Board rules regarding the description of readers need to be made aware of the for the acquisition of commercial items,
contract types authorized for specific contracts that are covered by the Board believes there is little to be
commercial item acquisitions. In the exemption. This specificity will gained from developing and imposing
addition, by maintaining reference to an help ensure easy, clear, and consistent Cost Accounting Standards and
enumerated list of authorized contract application. As explained above, the Disclosure Statement requirements at
types for commercial item acquisitions, Board believes that reference to FAR this time. However, the CAS Board
this formulation will avoid the 12.207, which identifies contract types continues to reserve the right to issue
ambiguity that could have been created that may be used to acquire commercial such cost accounting standards and
if the more generalized language in items should accomplish this objective. disclosure statement requirements
proposed rule were adopted. The CAS In this regard, the CAS Board notes that should the need arise in the future.
Board also hopes that this change will amendments to the CAS Board’s 3. Hybrid and indefinite-delivery-
avoid the need for additional CAS Board authorizing statute made by section 820 indefinite-quantity (IDIQ) contracts. One
rulemakings in the event of future of the National Defense Authorization commenter raised the question of how
statutory actions addressing allowable Act for FY 2017 make clear that the to determine whether CAS is triggered
contract types for commercial item Board bears a responsibility to on a ‘‘hybrid’’ contract that contains
procurements. ‘‘minimize the burden on contractors contract line item numbers (CLINs) for
Accordingly, this final rule amends while protecting the interests of the both commercial items and non-
the language at 9903.201–1(b)(6) to Federal Government.’’ The Board commercial items where the total value
exempt contracts and subcontracts believes this goal is shared by the FAR of the contract exceeds the CAS
authorized in 48 CFR 12.207 for the Council, especially in light of direction applicability threshold. The commenter
acquisition of commercial items. The provided in Executive Order (E.O.) suggested that CAS be clarified to
CAS Board intends to monitor the 13771, Reducing Regulation and ensure CLINs for commercial items on
effectiveness of this rule in achieving Controlling Regulatory Costs, which a hybrid contract are not covered by
the intent of the law regarding CAS directs agencies to ‘‘manage costs CAS, irrespective of the value of the
exemptions. associated with the governmental contract. The commenter further
imposition of private expenditures recommended clarification of the CAS
C. Public Comments required to comply with Federal triggers for IDIQ contracts, which are
regulations.’’ often used to acquire commercial
The CAS Board published a Notice of The Board intends to monitor the
Proposed Rulemaking (NPR) on items—in particular whether to value
effectiveness of this final rule in the contract based on the size of orders
November 19, 2012, proposing to revise achieving the intent of the law regarding
the (b)(6) commercial item exemption to or the size of the umbrella contract.
CAS exemptions and retains the right to Response: While issues related to the
read: ‘‘[c]ontracts and subcontracts for change the approach in the future applicability of CAS to hybrid and IDIQ
the acquisition of commercial items,’’ should any changes to FAR 12.207 that contracts are outside the scope of this
(77 FR 69422). In response to the NPR, the Board believes are inconsistent with rulemaking effort, the CAS Board takes
the CAS Board received comments from this objective occur. note of these issues. The Board intends
four entities, one of which supported 2. Disclosure statements. Two to review these issues more carefully to
the proposed rule without change and commenters recommended the CAS determine whether clarification of its
three of which raised concerns. A Board develop Cost Accounting rules is needed to ensure appropriate
summary of concerns and the CAS Standards and Disclosure Statement application of CAS coverage.
Board’s response are below. requirements for commercial item
1. Lack of clarity. Three commenters acquisitions, as Congress had required D. Paperwork Reduction Act
raised concern that deletion of the more in the Clinger-Cohen Act. One of those The Paperwork Reduction Act (44
detailed explanation of what contract commenters stated that such steps were U.S.C. Chapter 35, Subchapter I) does
types are exempt from CAS will needed before the permissible contract not apply to this rulemaking, because
increase confusion. One commenter types are expanded to include certain this rule will impose no paperwork
stated that the change ‘‘may be cost type contracts. burden on offerors, affected contractors
confusing to the inexperienced, Response: Creating CAS and and subcontractors, or members of the
including both contractors and Disclosure Statements for commercial public which requires the approval of
Government representatives’’ who may item acquisitions would be outside the OMB under 44 U.S.C. 3501, et seq. The
not immediately understand how to scope of this rulemaking effort. The CAS purpose of this rule is to clarify the
interpret the phrase ‘‘contracts and Board is aware of the direction application of CAS to contracts for
subcontracts for the acquisition of contained in the Conference Report to commercial items. In addition, this rule
commercial items’’ without further the Federal Acquisition Streamlining is consistent with the intent of the
explanation. This commenter suggested Act to ‘‘establish guidance, consistent objectives of the ‘‘Streamlined
that the exemption include a specific with commercial accounting systems Applicability of Cost Accounting
cross reference to statute or regulation and practices, to ensure that contractors Standards’’ set forth in Section 802 of
so that the reader could more easily appropriately assign costs to contracts the National Defense Authorization Act
determine the exempt contract types. (other than firm, fixed-price contracts) for Fiscal Year 2000 (Pub. L. 106–65).
Other commenters warned that a that are covered by the exemption for
daltland on DSKBBV9HB2PROD with RULES

blanket exemption could lead to contracts or subcontracts where the E. Executive Orders 12866 and 13771,
overpayment. One of these commenters price negotiated is based on established the Congressional Review Act, and the
admonished the Board on the need to catalog or market prices of commercial Regulatory Flexibility Act
preserve a more tailored exemption that items sold in substantial quantities to This rule provides technical
continues to clarify that the exemption the general public.’’ That assessment clarification on the application of
does not apply to specific contract types was made by the CAS Board when exemptions from CAS for commercial

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33148 Federal Register / Vol. 83, No. 137 / Tuesday, July 17, 2018 / Rules and Regulations

item acquisitions consistent with DEPARTMENT OF COMMERCE regulations for Atlantic HMS are at 50
authorities in the Clinger-Cohen Act. By CFR part 635.
cross referencing FAR 12.207 and its National Oceanic and Atmospheric
Administration Background
enumeration of contract types
authorized for the acquisition of The regulations at 50 CFR part 635 are
commercial items, the CAS Board 50 CFR Part 635 promulgated under ATCA and the
Magnuson-Stevens Act for the
expects to eliminate disparities between [Docket No. 180205129–8129–01] conservation and management of
the FAR and CAS Board rules that has
RIN 0648–BH50 Atlantic highly migratory species,
created confusion for contractors and including species of tunas, billfish,
subcontractors. The economic impact on Atlantic Highly Migratory Species sharks, and swordfish. In 2006, NMFS
contractors and subcontractors is, consolidated Atlantic HMS management
therefore, expected to be minor. As a AGENCY: National Marine Fisheries into one fishery management plan, the
result, the Board has determined that Service (NMFS), National Oceanic and 2006 Consolidated HMS FMP. Since
this rule will not result in the Atmospheric Administration (NOAA), then, NMFS has amended the FMP ten
promulgation of an ‘‘economically Commerce. times through the fishery management
significant rule’’ under the provisions of ACTION: Final rule; technical plan amendment process and has made
Executive Order 12866, and that a amendments. numerous other regulatory changes
regulatory impact analysis will not be through framework actions. With this
required, and the requirements of E.O. SUMMARY: This final rule makes editorial volume of regulatory action, some small
13771, Reducing Regulation and corrections amending the regulations for grammatical and other errors have
Controlling Regulatory Costs, do not Atlantic highly migratory species accumulated over time. As described in
(HMS). This final action will make the the sections below, this technical
apply. For the same reason, this final
rules easier to use by making the cross- amendment corrects grammatical,
rule is not a ‘‘major rule’’ under the
references in the regulations accurate, punctuation, consistency, cross-
Congressional Review Act, 5 U.S.C.
correcting grammatical and punctuation reference errors in the HMS regulations
Chapter 8. Finally, this rule does not issues, and reformatting the regulations
have a significant effect on a substantial at 50 CFR part 635. As explained in the
where needed to be consistent with Consistency section below, it also
number of small entities because small Federal Register guidelines. The action
businesses are exempt from the simplifies regulatory text by removing
also in several instances simplifies unnecessary language in several limited
application of the Cost Accounting regulatory text by removing unnecessary
Standards. Therefore, this rule does not instances.
language. The rule is administrative in
require a regulatory flexibility analysis nature and does not make any change Typographical Corrections
under the Regulatory Flexibility Act of with substantive effect to the regulations The following grammatical,
1980, 5 U.S.C. Chapter 6. for HMS fisheries. punctuation, or clerical errors (i.e.,
List of Subjects in 48 CFR Part 9903 DATES: This final rule is effective on July typographical errors) in the HMS
17, 2018. regulations are corrected by this final
Cost Accounting Standards, ADDRESSES: Documents related to HMS rule:
Government procurement. fisheries management, such as the 2006 The definition of ‘‘CK’’ at § 635.2 does
Consolidated HMS Fishery Management not spell out the words for which it is
Lesley A. Field, an acronym. This final action therefore
Plan (FMP) and its amendments, are
Acting Chair, Cost Accounting Standards adds ‘‘Cleithrum to Caudal Keel’’ before
Board.
available from the HMS Management
Division website at https:// the acronym ‘‘CK.’’ The definition of
www.fisheries.noaa.gov/topic/atlantic- ‘‘Hammerhead Sharks’’ at § 635.2
For the reasons set forth in this
highly-migratory-species or upon capitalizes the word ‘‘shark(s).’’ This
preamble, 48 CFR part 9903 is amended
request from the HMS Management final action changes to lowercase the
as follows:
Division at 1315 East-West Highway, word ‘‘shark(s).’’ The regulation at
PART 9903—CONTRACT COVERAGE Silver Spring, MD 20910. § 635.4(l)(2)(viii) does not capitalize the
word ‘‘tunas’’ in the permit title,
FOR FURTHER INFORMATION CONTACT:
‘‘Atlantic Tunas Longline category
■ 1. The authority citation for part 9903 Lauren Latchford, Larry Redd, or Karyl LAP.’’ This final action capitalizes the
continues to read as follows: Brewster-Geisz by phone at 301–427– word ‘‘Tunas.’’ The regulation at
Authority: Pub. L. 111–350, 124 Stat. 8503. § 635.5(b)(1)(i) has commas incorrectly
3677, 41 U.S.C. 1502. SUPPLEMENTARY INFORMATION: Atlantic after the words ‘‘all’’ and ‘‘swordfish’’ in
HMS are managed under the dual the sentence, ‘‘All reports must be
■ 2. Section 9903.201–1 is amended by authority of the Magnuson-Stevens species-specific and must include the
revising paragraph (b)(6) to read as Fishery Conservation and Management required information about all,
follows: Act, 16 U.S.C. 1801 et seq., (Magnuson- swordfish, and sharks received by the
9903.201–1 CAS applicability. Stevens Act) and the Atlantic Tunas dealer.’’ This final action removes the
Convention Act, 16 U.S.C. 971 et seq., misplaced commas. The regulation at
* * * * * (ATCA). On October 2, 2006, NMFS § 635.5(c)(2) is missing apostrophes and
(b) * * * published in the Federal Register (71 has extra parentheses in three places
FR 58058) regulations implementing the where the text should read, ‘‘owner’s
daltland on DSKBBV9HB2PROD with RULES

(6) Contracts and subcontracts
authorized in 48 CFR 12.207 for the 2006 Consolidated HMS FMP, which designee.’’ This final action adds
acquisition of commercial items. details the management measures for apostrophes and removes the mistaken
Atlantic HMS fisheries; these parentheses to correct this text. The
* * * * * management measures have been regulations at § 635.6(b)(1)(ii) and (c)(1)
[FR Doc. 2018–15176 Filed 7–16–18; 8:45 am] amended or otherwise modified do not capitalize the word ‘‘Arabic.’’
BILLING CODE 3110–01–P numerous times. The implementing This final action corrects this error and

VerDate Sep<11>2014 16:09 Jul 16, 2018 Jkt 244001 PO 00000 Frm 00030 Fmt 4700 Sfmt 4700 E:\FR\FM\17JYR1.SGM 17JYR1
Document Created: 2018-07-17 01:39:27
Document Modified: 2018-07-17 01:39:27
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 16, 2018.
Contact		Raymond Wong, Staff Director, Cost Accounting Standards Board (telephone: 202-395-6805; email: [email protected]).
FR Citation		83 FR 33146
CFR Associated		Cost Accounting Standards and Government Procurement
83 FR 33146 - Cost Accounting Standards: Revision of the Exemption From Cost Accounting Standards for Contracts and Subcontracts for the Acquisition of Commercial Items

OFFICE OF MANAGEMENT AND BUDGETOffice of Federal Procurement Policy

Federal Register Volume 83, Issue 137 (July 17, 2018)

OFFICE OF MANAGEMENT AND BUDGET
Office of Federal Procurement Policy
