[Federal Register Volume 59, Number 47 (Thursday, March 10, 1994)] [Unknown Section] [Page 0] From the Federal Register Online via the Government Publishing Office [www.gpo.gov] [FR Doc No: 94-4395] [[Page Unknown]] [Federal Register: March 10, 1994] ======================================================================= ----------------------------------------------------------------------- DEPARTMENT OF DEFENSE 48 CFR Parts 33, 42, and 52 [FAC 90-20; FAR Case 92-301/91-62; Item XIV] RIN 9000-AF35/9000-AE96 Federal Acquisition Regulation; Federal Courts Administration Act AGENCIES: Department of Defense (DOD), General Services Administration (GSA), and National Aeronautics and Space Administration (NASA). ACTION: Interim rule with request for comment. ----------------------------------------------------------------------- SUMMARY: The Civilian Agency Acquisition Council and the Defense Acquisition Regulations Council have agreed to an interim rule revising the claim certification procedures and the Alternative Means of Dispute Resolution (ADR) procedures in the FAR. The rule also implements subsection 907(a) of the Federal Courts Administration Act of 1992 and further revises existing ADR coverage. Accordingly, the interim rule published as FAR case 91-62, Item III, in the Federal Register at 56 FR 67412, December 30, 1991, concerning Alternative Dispute Resolution, is hereby closed and superseded by this rule. DATES: Effective date: March 10, 1994, except (FAR) 48 CFR 33.201, 33.207(c), (e), and (f), 33.208, and 33.211(e) which are effective as of October 29, 1992. Applicability dates: The revisions to FAR 33.201 (definition of ``defective certification''), 33.207(e) and (f), and 33.211(e) are applicable with respect to all claims filed before, on, or after October 29, 1992. However, these revisions do not apply to claims that were the subject of an appeal to an agency board of contract appeals or a suit filed in the United States Claims Court prior to October 29, 1992, unless the claim is dismissed without prejudice and is subsequently refiled. Section 33.207(c) is applicable to those certifications executed more than 60 days after publication of this rule in the Federal Register. For certifications executed prior to that date, the reference to 33.207(c) in the revised 33.210 definition of ``defective certification'' shall be deemed to be a reference to prior 33.207(a). Comment date: Comments should be submitted to the FAR Secretariat at the address shown below on or before May 9, 1994 to be considered in the formulation of a final rule. ADDRESSES: Interested parties should submit written comments to: General Services Administration, FAR Secretariat (VRS), 18th & F Streets, NW., room 4035, Attn: Ms. Beverly Fayson, Washington, DC 20405. Please cite FAC 90-20, FAR case 92-301 in all correspondence related to this case. FOR FURTHER INFORMATION CONTACT:Mr. Jack O'Neill at (202) 501-3856 in reference to this FAR case. For general information, contact the FAR Secretariat, room 4035, GS Building, Washington, DC 20405 (202) 501- 4755. Please cite FAC 90-20, FAR case 92-301. SUPPLEMENTARY INFORMATION: A. Background Subsection 907(a) of the Federal Courts Administration Act of 1992 (Pub. L. 102-572) requires that the person certifying a claim under the Contract Disputes Act (CDA) (41 U.S.C. 601-613) be duly authorized to bind the contractor; specifies the conditions under which a contracting officer does not have to issue a final decision; provides that certifications are not jurisdictional; and provides for payment of interest from the date of initial receipt of the claim or enactment of Public Law 102-572, whichever is later. Public Law 102-572 was enacted on October 29, 1992. This rule revises FAR 33.201, 33.207, 33.208, 33.211, and the clause at 52.233-1, and further revises ADR coverage at 33.202, 33.204, 33.210, 33.214, and 42.302. B. Regulatory Flexibility Act The interim revisions may have a significant beneficial economic impact on a substantial number of small entities within the meaning of the Regulatory Flexibility Act, 5 U.S.C. 601 et seq., because they simplify existing policies and procedures for the certification of claims submitted by contractors and are intended to reduce the need for costly litigation which has arisen under the existing regulations. Moreover, the regulatory impact on small entities flows directly from subsection 907(a) of the Federal Courts Administration Act of 1992 (Pub. L. 102-572) which serves as the basis for this interim rule. Comments are invited. Comments from small entities concerning the affected FAR subpart will be considered in accordance with 5 U.S.C. 610. Such comments must be submitted separately and cite 5 U.S.C. 601, et seq. (FAR Case 92-301), in correspondence. C. Paperwork Reduction Act The Paperwork Reduction Act does not apply because the changes to the FAR do not impose recordkeeping or information collection requirements, or collections of information from offerors, contractors, or members of the public which require the approval of the Office of Management and Budget under 44 U.S.C. 3501, et seq. D. Determination to Issue an Interim Rule A determination has been made under the authority of the Secretary of Defense (DOD), the Administrator of General Services (GSA), and the Administrator of the National Aeronautics and Space Administration (NASA) that compelling reasons exist to promulgate this interim rule without prior opportunity for public comment. This action is necessary because subsection 907(a) of the Federal Courts Administration Act of 1992 (Pub. L. 102-572), which amended the certification requirements for contractor claims filed pursuant to the Contract Disputes Act (CDA), is intended to resolve many of the problems that have arisen under existing CDA procedures. Subsection 907(a) also contains specific effective dates for implementation. However, pursuant to Public Law 98- 577 and FAR 1.501, public comments received in response to this interim rule will be considered in formulating the final rule. List of Subjects in 48 CFR Parts 33, 42, and 52 Government procurement. Dated: February 15, 1994. Albert A. Vicchiolla, Director, Office of Federal Acquisition Policy. Therefore, 48 CFR parts 33, 42, and 52 are amended as set forth below: 1. The authority citation for 48 CFR parts 33, 42, and 52 continues to read as follows: Authority: 40 U.S.C. 486(c); 10 U.S.C. chapter 137; and 42 U.S.C. 2473(c). PART 33--PROTESTS, DISPUTES, AND APPEALS 2. Section 33.201 is amended by revising the definition title ``Alternative dispute resolution'' to read ``Alternative means of dispute resolution (ADR)'', and inserting the word ``assisted'' before ``settlement'' in the second sentence; adding, in alphabetical order, the definition ``Defective certification''; and revising the definition ``Issue in controversy'' to read as follows: 33.201 Definitions. * * * * * Defective certification, as used in this subpart, means a certificate which alters or otherwise deviates from the language in 33.207(c) or which is not executed by a person duly authorized to bind the contractor with respect to the claim. Failure to certify shall not be deemed to be a defective certification. Issue in controversy means a material disagreement between the Government and the contractor which (1) may result in a claim or (2) is all or part of an existing claim. * * * * * 3. Section 33.202 is amended by revising the first sentence of the paragraph to read as follows: 33.202 Contract Disputes Act of 1978. The Contract Disputes Act of 1978, as amended (41 U.S.C. 601-613) (the Act), establishes procedures and requirements for asserting and resolving claims subject to the Act. * * * 4. Section 33.204 is revised to read as follows: 33.204 Policy. The Government's policy is to try to resolve all contractual issues in controversy by mutual agreement at the contracting officer's level. Reasonable efforts should be made to resolve controversies prior to the submission of a claim. Agencies are encouraged to use ADR procedures to the maximum extent practicable. Certain factors, however, may make the use of ADR inappropriate (see 5 U.S.C. 572(b)). Except for arbitration conducted pursuant to the Administrative Dispute Resolution Act (ADRA), Public Law 100-522, agencies have authority which is separate from that provided by the ADRA to use ADR procedures to resolve issues in controversy. Agencies may also elect to proceed under the authority and requirements of the ADRA. 5. Sections 33.207 and 33.208 are revised to read as follows: 33.207 Contractor certification. (a) Contractors shall provide the certification specified in 33.207(c) when submitting any claim-- (1) Exceeding $50,000; or (2) Regardless of the amount claimed when using-- (i) Arbitration conducted pursuant to 5 U.S.C. 575-580; or (ii) Any other ADR technique that the agency elects to handle in accordance with the ADRA. (b) The certification requirement does not apply to issues in controversy that have not been submitted as all or part of a claim. (c) The certification shall state as follows: I certify that the claim is made in good faith; that the supporting data are accurate and complete to the best of my knowledge and belief; that the amount requested accurately reflects the contract adjustment for which the contractor believes the Government is liable; and that I am duly authorized to certify the claim on behalf of the contractor. (d) The aggregate amount of both the increased and decreased costs shall be used in determining when the dollar thresholds requiring certification are met (see example in 15.804-2(a)(1)(ii) regarding cost or pricing data). (e) The certification may be executed by any person duly authorized to bind the contractor with respect to the claim. (f) A defective certification shall not deprive a court or an agency BCA of jurisdiction over that claim. Prior to the entry of a final judgment by a court or a decision by an agency BCA, however, the court or agency BCA shall require a defective certification to be corrected. 33.208 Interest on claims. (a) The Government shall pay interest on a contractor's claim on the amount found due and unpaid from the date that-- (1) The contracting officer receives the claim (certified if required by 33.207(a)); or (2) Payment otherwise would be due, if that date is later, until the date of payment. (b) Simple interest on claims shall be paid at the rate, fixed by the Secretary of the Treasury as provided in the Act, which is applicable to the period during which the contracting officer receives the claim and then at the rate applicable for each 6-month period as fixed by the Treasury Secretary during the pendency of the claim. (See 32.614 for the right of the Government to collect interest on its claims against a contractor). (c) With regard to claims having defective certifications, as defined in 33.201, interest shall be paid from either the date that the contracting officer initially receives the claim or October 29, 1992, whichever is later. However, if a contractor has provided a proper certificate prior to October 29, 1992, after submission of a defective certificate, interest shall be paid from the date of receipt by the Government of a proper certificate. 6. Section 33.210 is amended by revising the introductory text to read as follows: 33.210 Contracting officer's authority. Except as provided in this section, contracting officers are authorized, within any specific limitations of their warrants, to decide or resolve all claims arising under or relating to a contract subject to the Act. In accordance with agency policies and 33.214, contracting officers are authorized to use ADR procedures to resolve claims. The authority to decide or resolve claims does not extend to-- * * * * * 7. Section 33.211 is amended by revising paragraph (a)(4)(v); redesignating paragraphs (e), (f), and (g) as (f), (g), and (h); and adding a new paragraph (e) to read as follows: 33.211 Contracting officer's decision. (a) * * * (4) * * * (v) Paragraph substantially as follows: ``This is the final decision of the Contracting Officer. You may appeal this decision to the agency board of contract appeals. If you decide to appeal, you must, within 90 days from the date you receive this decision, mail or otherwise furnish written notice to the agency board of contract appeals and provide a copy to the Contracting Officer from whose decision this appeal is taken. The notice shall indicate that an appeal is intended, reference this decision, and identify the contract by number. With regard to appeals to the agency board of contract appeals, you may, solely at your election, proceed under the board's small claim procedure for claims of $10,000 or less or its accelerated procedure for claims of $50,000 or less. Instead of appealing to the agency board of contract appeals, you may bring an action directly in the United States Court of Federal Claims (except as provided in the Contract Disputes Act of 1978, 41 U.S.C. 603, regarding Maritime Contracts) within 12 months of the date you receive this decision''; and * * * * * (e) The contracting officer shall have no obligation to render a final decision on any claim exceeding $50,000 which contains a defective certification, if within 60 days after receipt of the claim, the contracting officer notifies the contractor, in writing, of the reasons why any attempted certification was found to be defective. * * * * * 8. Section 33.214 is amended by revising the section heading, the first sentence of the introductory text of paragraph (a), paragraphs (a)(5) and (b), and by adding paragraph (d) to read as follows: 33.214 Alternative dispute resolution (ADR). (a) The objective of using ADR procedures is to increase the opportunity for relatively inexpensive and expeditious resolution of issues in controversy. * * * (5) Certification by the contractor in accordance with 33.207 when using ADR procedures to resolve all or part of a claim under the authority of the ADRA. (b) ADR procedures may be used at any time that the contracting officer has authority to resolve the issue in controversy. If a claim has been submitted, ADR procedures may be applied to all or a portion of the claim. When ADR procedures are used subsequent to the issuance of a contracting officer's final decision, their use does not alter any of the time limitations or procedural requirements for filing an appeal of the contracting officer's final decision and does not constitute a reconsideration of the final decision. * * * * * (d) The confidentiality of ADR proceedings shall be protected consistent with 5 U.S.C. 574. PART 42--CONTRACT ADMINISTRATION 9. Section 42.302 is amended by revising paragraph (a)(10) to read as follows: 42.302 Contract administration functions. (a) * * * (10) Attempt to resolve issues in controversy, using ADR procedures when appropriate (see subpart 33.2); prepare findings of fact and issue decisions under the Disputes clause on matters in which the administrative contracting officer (ACO) has the authority to take definitive action. * * * * * PART 52--SOLICITATION PROVISIONS AND CONTRACT CLAUSES 10. Section 52.233-1 is amended by revising the date of the clause to read ``(MAR 1994)'' and revising paragraphs (d) through (h) to read as follows: 52.233-1 Disputes. * * * * * Disputes (Mar 1994) * * * * * (d)(1) A claim by the Contractor shall be made in writing and submitted to the Contracting Officer for a written decision. A claim by the Government against the Contractor shall be subject to a written decision by the Contracting Officer. (2)(i) Contractors shall provide the certification specified in subparagraph (d)(2)(iii) of this clause when submitting any claim-- (A) Exceeding $50,000; or (B) Regardless of the amount claimed, when using-- (1) Arbitration conducted pursuant to 5 U.S.C. 575-580; or (2) Any other alternative means of dispute resolution (ADR) technique that the agency elects to handle in accordance with the Administrative Dispute Resolution Act (ADRA). (ii) The certification requirement does not apply to issues in controversy that have not been submitted as all or part of a claim. (iii) The certification shall state as follows: ``I certify that the claim is made in good faith; that the supporting data are accurate and complete to the best of my knowledge and belief; that the amount requested accurately reflects the contract adjustment for which the Contractor believes the Government is liable; and that I am duly authorized to certify the claim on behalf of the Contractor.'' (3) The certification may be executed by any person duly authorized to bind the Contractor with respect to the claim. (e) For Contractor claims of $50,000 or less, the Contracting Officer must, if requested in writing by the Contractor, render a decision within 60 days of the request. For Contractor-certified claims over $50,000, the Contracting Officer must, within 60 days, decide the claim or notify the Contractor of the date by which the decision will be made. (f) The Contracting Officer's decision shall be final unless the Contractor appeals or files a suit as provided in the Act. (g) At the time a claim by the Contractor is submitted to the Contracting Officer or a claim by the Government is presented to the Contractor, the parties, by mutual consent, may agree to use ADR. When using arbitration conducted pursuant to 5 U.S.C. 575-580, or when using any other ADR technique that the agency elects to handle in accordance with the ADRA, any claim, regardless of amount, shall be accompanied by the certification described in subparagraph (d)(2)(iii) of this clause, and executed in accordance with subparagraph (d)(3) of this clause. (h) The Government shall pay interest on the amount found due and unpaid from (1) the date that the Contracting Officer receives the claim (certified, if required); or (2) the date that payment otherwise would be due, if that date is later, until the date of payment. With regard to claims having defective certifications, as defined in (FAR) 48 CFR 33.201, interest shall be paid from the date that the Contracting Officer initially receives the claim. Simple interest on claims shall be paid at the rate, fixed by the Secretary of the Treasury as provided in the Act, which is applicable to the period during which the Contracting Officer receives the claim and then at the rate applicable for each 6-month period as fixed by the Treasury Secretary during the pendency of the claim. * * * * * [FR Doc. 94-4395 Filed 3-9-94; 8:45 am] BILLING CODE 6820-34-M