[Federal Register Volume 63, Number 21 (Monday, February 2, 1998)]
[Rules and Regulations]
[Pages 5272-5276]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 98-2049]
=======================================================================
-----------------------------------------------------------------------
DEPARTMENT OF ENERGY
48 CFR Parts 932 and 970
RIN 1991-AB29
Acquisition Regulation: Contract Financing; Management and
Operating Contracts
AGENCY: Department of Energy.
ACTION: Final rule.
-----------------------------------------------------------------------
SUMMARY: The Department of Energy (DOE) amends its Acquisition
Regulation to incorporate coverage required by the Federal Acquisition
Streamlining Act of 1994. These amendments will clarify the
allowability of costs reimbursed under Department of Energy contracts
and establish the responsibilities of the remedy coordination official
within the Department.
DATES: This final rule is effective March 4, 1998.
FOR FURTHER INFORMATION CONTACT: Terrence D. Sheppard, Office of Policy
(HR-51), Office of Procurement and Assistance Policy, Department of
Energy, 1000 Independence Avenue S.W., Washington, D.C. 20585, (202)
586-8193 (Phone), (202) 586-0545 (Facsimile), [email protected]
(Internet).
SUPPLEMENTARY INFORMATION:
I. Background
II. Resolution of Comments
III. Procedural Requirements
A. Review Under Executive Order 12866
B. Review Under Executive Order 12988
C. Review Under the Regulatory Flexibility Act
D. Review Under the Paperwork Reduction Act
E. Review Under the National Environmental Policy Act
F. Review Under Executive Order 12612
G. Review Under Small Business Regulatory Enforcement Fairness
Act of 1996
H. Review Under the Unfunded Mandates Reform Act of 1995
I. Background
On June 4, 1997 the Department of Energy published in the Federal
Register (62 FR 30558) a notice of proposed rulemaking to amend the
Department's acquisition regulations based on selected provisions in
Sections 2051, 2151, and 2192 of the Federal Acquisition Streamlining
Act of 1994 (the Act). These amendments establish certification of cost
submissions and assessment of penalties on unallowable costs; a remedy
coordination official for payment requests suspected to be based on
substantial evidence of fraud; parameters for resolution of questioned
costs; guidance for application of cost principles; general
prohibitions on severance payments to foreign nationals and
compensation costs associated with a change in management control or
ownership; clarification of employee morale, recreation, entertainment,
executive branch lobbying, company furnished automobiles, and insurance
costs which protect the contractor against defects in material or
workmanship.
The public comment period closed August 4, 1997. The Department
received comments from three entities. Today's final rulemaking adopts
the amendments in the notice of proposed rulemaking with certain
changes discussed under the Resolution of Comments section.
II. Resolution of Comments
Three entities responded with 20 total comments. A comment
resolution package has been prepared and is part of the file. The
Department has considered and evaluated all the comments received
during the comment period. Comments that resulted in changes to the
proposed rulemaking are summarized below.
Comment: It was stated that, as written, the proposed language
under Political Activity Costs addressing unallowable costs associated
with attempting to influence executive or legislative actions could be
construed to make unallowable the costs of negotiations.
Response: Concur. DOE has modified its coverage by deleting a
portion of the last sentence of the proposed coverage. The final rule
makes the following changes to the June 4, 1997, proposed rulemaking:
970.3102-7(b), 970.5204-13(e)(31)(ii), 970.5204-14(e)(29)(ii), and
970.5204-17(a)(6) were revised by deleting language which addressed
costs associated with proposals.
Comment: Proposed changes to the Payments and Advances clause,
970.5204-16, would complicate other DOE efforts at streamlining.
Response: Concur. The proposed change has been deleted from the
final rulemaking.
Comment: As written, DOE appears to disallow the cost of local
travel at 970.3102-17.
Response: It was not our intent to disallow the costs of local
business travel and we do not believe we have done so. However, the
coverage could be clearer. Accordingly, DOE has modified its proposed
coverage to ensure a distinction between company-furnished automobiles
used for company business, which can be allowable if approved by the
contracting officer and personal use of company
[[Page 5273]]
furnished automobiles. It does prohibit, as does FAR 31.205-46(f), that
portion of the costs that relate to personal use. DEAR 970.3102-
17(b)(3) was revised by clarifying the distinction between costs of
company-furnished automobiles that can be allowable if approved by the
contracting officer and the cost of company-furnished automobiles.
III. Procedural Requirements
A. Review Under Executive Order 12866
Today's regulatory action has been determined not to be a
``significant regulatory action'' under Executive Order 12866,
``Regulatory Planning and Review,'' (58 FR 51735, October 4, 1993).
Accordingly, this action was not subject to review under that Executive
Order by the Office of Information and Regulatory Affairs of the Office
of Management and Budget (OMB).
B. Review Under Executive Order 12988
With respect to the review of existing regulations and the
promulgation of new regulations, section 3(a) of Executive Order 12988,
``Civil Justice Reform,'' 61 FR 4729 (February 7, 1996), imposes on
Executive agencies the general duty to adhere to the following
requirements: (1) eliminate drafting errors and ambiguity; (2) write
regulations to minimize litigation: and (3) provide a clear legal
standard for affected conduct rather than a general standard and
promote simplification and burden reduction. With regard to the review
required by section 3(a), section 3(b) of Executive Order 12988
specifically requires that Executive agencies make every reasonable
effort to ensure that the regulation: (1) clearly specifies the
preemptive effect, if any; (2) clearly specifies any effect on existing
Federal law or regulation; (3) provides a clear legal standard for
affected conduct while promoting simplification and burden reduction;
(4) specifies the retroactive effect, if any; (5) adequately defines
key terms; and (6) addresses other important issues affecting clarity
and general draftmenship under any guidelines issued by the Attorney
General. Section 3(c) of Executive Order 12988 requires Executive
agencies to review regulations in light of applicable standards in
section 3(a) and section 3(b) to determine whether they are met or it
is unreasonable to meet one or more of them. The Department of Energy
has completed the required review and determined that, to the extent
permitted by law, the regulations meet the relevant standards of
Executive Order 12988.
C. Review Under the Regulatory Flexibility Act
This rule was reviewed under the Regulatory Flexibility Act of 1980
(Pub. L. 96-354) which requires preparation of a regulatory flexibility
analysis for any rule which is likely to have significant economic
impact on a substantial number of small entities. DOE certifies that
this rule will not have a significant economic impact on a substantial
number of small entities, and, therefore, no regulatory flexibility
analysis has been prepared.
D. Review Under the Paperwork Reduction Act
No new information or recordkeeping requirements are imposed by
this rulemaking. Accordingly, no OMB clearance is required under the
Paperwork Reduction Act of 1980 (44 U.S.C. 3501 et seq.).
E. Review Under the National Environmental Policy Act
DOE has concluded that promulgation of this rule falls into a class
of actions which would not individually or cumulatively have
significant impact on the human environment, as determined by DOE's
regulations (10 CFR Part 1021, Subpart D) implementing the National
Environmental Policy Act of 1969 (NEPA) (42 U.S.C. 4321 et seq.).
Specifically, this rule is categorically excluded from NEPA review
because the proposed amendments to the DEAR do not change the
environmental effect of the rule being amended (categorical exclusion
A5). Therefore, this rule does not require an environmental impact
statement or environmental assessment pursuant to NEPA.
F. Review Under Executive Order 12612
Executive Order 12612 (52 FR 41685, October 30, 1987) requires that
regulations, rules, legislation, and any other policy actions be
reviewed for any substantial direct effects on States, on the
relationship between the National Government and the States, or in the
distribution of power and responsibilities among the various levels of
Government. If there are sufficient substantial direct effects, then
the Executive Order requires the preparation of a federalism assessment
to be used in all decisions involved in promulgating and implementing a
policy action. This rule, when finalized, will revise certain policy
and procedural requirements. States which contract with DOE will be
subject to this rule. However, DOE has determined that this rule will
not have a substantial direct effect on the institutional interests or
traditional functions of the States.
G. Review Under Small Business Regulatory Enforcement Fairness Act of
1996
As required by 5 U.S.C. 801, the Department of Energy will report
to Congress promulgation of the rule prior to its effective date. The
report will state that it has been determined that the rule is not a
``major rule'' as defined by 5 U.S.C. 804(3).
H. Review Under the Unfunded Mandates Reform Act of 1995
The Unfunded Mandates Reform Act of 1995 (Pub. L. 104-4) generally
requires a Federal agency to perform a detailed assessment of costs and
benefits of any rule imposing a Federal Mandate with costs to State,
local or tribal governments, or to the private sector, of $100 million
or more.
This rulemaking only affects private sector entities, and the
impact is less than $100 million.
List of Subjects in 48 CFR Parts 932 and 970
Government procurement.
Issued in Washington, D.C. on January 5, 1998.
Richard H. Hopf,
Deputy Assistant Secretary for
Procurement and Assistance Management.
For the reasons set out in the preamble, Chapter 9 of Title 48 of
the Code of Federal Regulations is amended as set forth below.
1. The authority citation for Part 932 continues to read as
follows:
Authority: 42 U.S.C. 7254; 40 U.S.C. 486(c)
PART 932--CONTRACT FINANCING
2. Section 932.006-4 is added before Subpart 932.1 to read as
follows:
932.006-4 Procedures.
(a) The remedy coordination official shall follow the procedures
identified in FAR 32.006-4.
(b) [Reserved]
3. The authority citation for Part 970 continues to read as
follows:
Authority: Sec. 161 of the Atomic Energy Act of 1954 (42 U.S.C.
2201), sec 644 of the Department of Energy Organization Act, Pub. L.
95-91 (42 U.S.C. 7254).
PART 970--DOE MANAGEMENT AND OPERATING CONTRACTS
4. Subpart 970.25 is added to read as follows:
[[Page 5274]]
970.25 Foreign acquisition.
970.2501 Severance payments for foreign nationals.
970.2501 Severance payments for foreign nationals.
(a) The Head of the Contracting Activity may waive the application
of the provisions of 48 CFR 970.3102-2(i)(2)(iv) and (v) in accordance
with 41 U.S.C. 256(e)(2) if:
(1) The application of the provisions would adversely affect the
continuation of a program, project, or activity that provides
significant support services for Department of Energy employees posted
outside the United States;
(2) The contractor has taken, or plans to take, appropriate actions
within its control to minimize the amount and number of incidents of
payment of severance pay to employees under the contract who are
foreign nationals; and
(3) The payment of severance pay under the contract is necessary to
comply with a law that is generally applicable to a significant number
of businesses in the country in which the foreign national receiving
the payment performed services or is necessary to comply with a
collective bargaining agreement.
(b) Solicitation provision and contract clause. The solicitation
provision at 970.5204-84, Waiver of Limitations on Severance Payments
to Foreign Nationals, shall be included in solicitations and resulting
contracts involving support services for Department of Energy
operations outside of the United States expected to exceed $500,000,
when, prior to the solicitation, the limitations on severance to
foreign nationals has been waived. Use the Alternate 1 contract clause
in solicitations and resulting contracts, when the Head of the
Contracting Activity may waive the limitations on severance to foreign
nationals after contract award.
5. Section 970.3101-3 is amended by adding paragraphs (b), (c), and
(d) to read as follows:
970.3101-3 General basis for reimbursement of costs.
* * * * *
(b) A contracting officer shall not resolve any questioned costs
until the contracting officer has obtained:
(1) Adequate documentation with respect to such costs; and
(2) The opinion of the Department of Energy's auditor on the
allowability of such costs.
(c) The contracting officer shall ensure that the documentation
supporting the final settlement addresses the amount of the questioned
costs and the subsequent disposition of such questioned costs.
(d) The contracting officer shall ensure, to the maximum extent
practicable, that the Department of Energy's auditor is afforded an
opportunity to attend any negotiation or meeting with the contractor
regarding a determination of allowability.
6. Section 970.3101-7 is added to read as follows:
970.3101-7 Cost submission, certification, penalties, and waivers.
(a) The contracting officer shall require that management and
operating contractors provide a submission for settlement of costs
incurred during the period stipulated on the submission and a
certification that the costs included in the submission are allowable.
The contracting officer shall assess a penalty if unallowable costs are
included in the submission. Unallowable costs are either expressly
unallowable or determined unallowable.
(1) An expressly unallowable cost is a particular item or type of
cost which, under the express provisions of an applicable law,
regulation, or this contract, is specifically named and stated to be
unallowable.
(2) A cost determined unallowable is one which, for that contractor
(i) Was subject to a contracting officer's final decision and not
appealed;
(ii) The Department's Board of Contract Appeals or a court has
previously ruled as unallowable; or
(iii) Was mutually agreed to be unallowable.
(b) If, during the review of the submission, the contracting
officer determines that the submission contains an expressly
unallowable cost or a cost determined to be unallowable prior to the
submission, the contracting officer shall assess a penalty.
(c) If the contracting officer determines that a cost submitted by
the contractor in its submission for settlement is
(1) Expressly unallowable, then the contracting officer shall
assess a penalty in an amount equal to the disallowed cost allocated to
this contract plus interest on the paid portion of the disallowed cost.
Interest shall be computed from the date of overpayment to the date of
repayment using the interest rate specified by the Secretary of the
Treasury pursuant to 50 U.S.C. 1215.
(2) Determined unallowable, then the contracting officer shall
assess a penalty in an amount equal to two times the amount of the
disallowed cost allocated to this contract.
(d) The contracting officer may waive the penalty provisions when
(1) The contractor withdraws the submission before the formal
initiation of an audit of the submission and submits a revised
submission;
(2) The amount of the unallowable costs allocated to covered
contracts is $10,000 or less; or
(3) The contractor demonstrates to the contracting officer's
satisfaction that:
(i) It has established appropriate policies, personnel training,
and an internal control and review system that provides assurances that
unallowable costs subject to penalties are precluded from the
contractor's submission for settlement of costs; and
(ii) The unallowable costs subject to the penalty were
inadvertently incorporated into the submission.
(e) The Head of the Contracting Activity may waive the
certification when--
(1) It is determined that it would be in the best interest to waive
such certification; and
(2) The Head of the contracting Activity states in writing the
reasons for that determination and makes such determination available
to the public.
7. Section 970.3102 is amended by removing the last sentence of the
existing paragraph, designating the existing paragraph as (a) and
adding a new paragraph (b) to read as follows.
970.3102 Application of cost principles.
* * * * *
(b) This section does not cover every element of cost. Failure to
include any item of cost does not imply that it is either allowable or
unallowable. The determination of allowability shall be based on the
principles and standards in this subpart and the treatment of similar
or related items. When more than one paragraph in this section is
relevant to a contractor cost, the cost shall be apportioned among the
applicable subsections, and the determination of allowability of each
portion shall be based on the guidance contained in the applicable
subsection. As an example, the cost of meals while in a travel status
would normally be allowable if reasonable. However, the cost of
alcoholic beverages associated with a meal would be unallowable. In no
case shall costs made specifically unallowable under one cost principle
be made allowable under another cost principle.
8. Section 970.3102-2 is amended by adding a sentence at the end of
paragraph (i)(2) introductory text and adding new paragraphs
(i)(2)(iv), (v), (vi), and (p) to read as follows:
[[Page 5275]]
970.3102-2 Compensation for personal services.
* * * * *
(i) * * *
(2) * * * In addition, paragraphs (i)(2)(iv) and (v) of this
section apply if the severance cost is for foreign nationals employed
outside the United States.
* * * * *
(iv) Notwithstanding the provision of paragraph (c) of this
section, which references geographic area, under 41 U.S.C.
256(e)(1)(M), the costs of severance payments to foreign nationals
employed under a service contract performed outside the United States
are unallowable to the extent that such payments exceed amounts
typically paid to employees providing similar services in the same
industry in the United States.
(v) Further, under 41 U.S.C. 256(e)(1)(N), the costs of severance
payments referred to in paragraph (i)(2)(iv) of this section are
unallowable if the termination of employment is the result of the
closing of, or curtailment of, activities at a United States facility
in that country at the request of the government of that country.
(vi) The Head of the Contracting Activity may waive the application
of the provisions of paragraphs (i)(2)(iv) and (v) of this section
under the conditions specified in subpart 970.25.
* * * * *
(p) Special compensation. The following costs are unallowable:
(1) Special compensation to employees pursuant to agreements which
permit payments in excess of the contractor's normal severance pay
practices, if their employment terminates following a change in the
management control over, or ownership of, the contractor or a
substantial portion of its assets.
(2) Special compensation to employees pursuant to agreements which
permit payments resulting from a change, whether actual or prospective,
in the management control over, or ownership of, the contractor or a
portion of its assets which is contingent upon the employee remaining
with the contractor for a stated period of time.
9. Section 970.3102-5 is revised to read as follows:
970.3102-5 Employee morale, health, welfare, food service, and
dormitory costs.
(a) Employee morale, health, and welfare activities are those
services or benefits provided by the contractor to its employees to
improve working conditions, employer-employee relations, employee
morale, and employee performance. These activities include such items
as house or employee publications, health or first-aid clinics,
wellness/fitness centers, employee counseling services, awards for
performance or awards made in recognition of employee achievements
pursuant to an established contractor plan or policy, and, for the
purpose of this section, food service and dormitory costs. However,
these activities do not include, and should be differentiated from
compensation for personal services as defined in 970.3102-2. Food and
dormitory services include operating or furnishing facilities for
cafeterias, dining rooms, canteens, lunch wagons, vending machines,
living accommodations, or similar types of services for the
contractor's employees at or near the contractor's facilities or site
of the contract work.
(b) Costs of recreation, registration fees of employees
participating in competitive fitness promotions, team activities, and
sporting events are unallowable, except for the costs of employees'
participation in company sponsored intramural sports teams or employee'
organizations designed to improve company loyalty, team work, or
physical fitness.
(c) Except as limited by paragraph (d) of this section, the
aggregate of costs incurred on account of all activities mentioned in
paragraph (a) of this section, less income generated by all such
activities, is allowable to the extent that the net aggregate cost of
all such activities, as well as the net cost of each individual
activity, is reasonable and allocable to the contract work.
Additionally, advance understandings with respect to the costs
mentioned in paragraph (a) of this section are to be reached prior to
the incurrence of these costs as required in 48 CFR 970.3101-6.
(d) Losses from the operation of food or dormitory services may be
included as costs incurred under paragraph (c) of this section only if
the contractor's objective is to operate such services at least on a
break-even basis. Losses sustained because food services or lodging
accommodations are furnished without charge or at prices or rates which
obviously would not be conducive to operation on a break-even basis are
not allowable, except in those instances where the contractor can
demonstrate that unusual circumstances exist, such that, even with
efficient management, operation of the services on a break-even basis
would require charging inordinately high prices, or prices or rates
higher than those charged by commercial establishments offering the
same services in the same geographical areas. Typical examples of such
unusual circumstances are:
(1) Where the contractor must provide food or dormitory services at
remote locations where adequate commercial facilities are not
reasonably available, or
(2) Where it is necessary to operate a facility at a lower volume
than the facility could economically support. Cost of food and
dormitory services shall include an allocable share of indirect
expenses pertaining to these activities.
(e) In those situations where the contractor has an arrangement
authorizing an employee association to provide or operate a service
such as vending machines in the contractor's plant, and retain the
profits derived therefrom, such profits shall be treated in the same
manner as if the contractor were providing the service, except as
provided in paragraph (f) of this section.
(f) Contributions by the contractor to an employee organization,
including funds set over from vending machines receipts or similar
sources, may be included as cost incurred under paragraph (c) of this
section, only to the extent that the contractor demonstrates that an
equivalent amount of the costs incurred by the employee organization
would be allowable, if incurred by the contractor directly.
10. Section 970.3102-7 is revised to read as follows:
970.3102-7 Political activity costs.
The following costs are unallowable, except for costs associated
with providing information pursuant to 970.5204-17, unless approved by
the contracting officer: Contractor costs incurred to influence either
directly or indirectly--
(a) Legislative action on any matter pending before Congress, a
State legislature, or a legislative body of a political subdivision of
a State; or
(b) Federal, State, or executive body of a political subdivision of
a State action on regulatory and contract matters.
11. Section 970.3102-17 Travel costs, is amended by revising the
paragraph heading for (b) and by adding paragraph (b)(3) to read as
follows:
970.3102-17 Travel costs.
* * * * *
(b) Government-owned, commercial rental, and company-furnished
vehicles. * * *
(3) The costs of contractor-owned or -leased vehicles include the
costs of lease, operation, maintenance, depreciation, insurance, and
other similar costs. These costs are unallowable except as approved by
the contracting officer. That portion of the
[[Page 5276]]
cost of company-furnished automobiles that relates to personal use by
employees, including transportation to and from work is unallowable.
* * * * *
12. Section 970.3103 is amended by revising paragraph (b) to read
as follows:
970.3103 Contract clauses.
* * * * *
(b) The political activity cost prohibition clause at 48 CFR
970.5204-17 shall be included in all M&O contracts.
* * * * *
13. Section 970.3272 is added to read as follows:
Subpart 970.32--Contract Financing
970.3272 Reduction or suspension of advance, partial, or progress
payments.
(a) The procedures prescribed at FAR 32.006 shall be followed.
(b) The agency head has delegated their responsibilities under this
section to the Senior Procurement Executive.
(c) The remedy coordination official is responsible for receiving,
assessing, and making recommendations to the Senior Procurement
Executive.
(d) The contracting officer shall insert the clause at 48 CFR
970.5204-85, Reduction or suspension of contract payments, in
management and operating contracts.
14. Section 970.5204-13, Allowable costs and fixed-fee (management
and operating contracts), is amended by revising clause paragraphs
(d)(8)(iv), (e)(11), (e)(31); and adding new paragraphs (e)(37) and
(38) to read as follows:
970.5204-13 Allowable costs and fixed-fee (management and operating
contracts).
* * * * *
(d) * * *
(8) * * *
(iv) Employee relations, welfare, morale, etc.; programs
including incentive or suggestion awards; employee counseling
services, health or first-aid clinics; house or employee
publications; and wellness/fitness centers;
* * * * *
(e) * * *
(11) Entertainment, including costs of amusement, diversion,
social activities; and directly associated costs such as tickets to
shows or sports events, meals, lodging, rentals, transportation, and
gratuities; costs of membership in any social, dining or country
club or organization.
* * * * *
(31) Contractor costs incurred to influence either directly or
indirectly--
(i) Legislative action on any matter pending before Congress, a
State legislature, or a legislative body of a political subdivision
of a State; or
(ii) Federal, State, or executive body of a political
subdivision of a State action on regulatory and contract matters as
described in the ``Political Activity Cost Prohibition'' clause of
this contract.
* * * * *
(37) Costs of gifts; however, gifts do not include awards for
performance or awards made in recognition of employee achievements
pursuant to an established contractor plan or policy.
(38) The costs of recreation, registration fees of employees
participating in competitive fitness promotions, team activities,
and sporting events except for the costs of employees' participation
in company sponsored intramural sports teams or employee
organizations designed to improve company loyalty, team work, or
physical fitness.
15. Section 970.5204-14 is amended by revising clause paragraphs
(d)(8)(iv), (e)(9), (e)(29); and adding new paragraphs (e)(35) and
(e)(36) to read as follows:
970.5204-14 Allowable costs and fixed-fee (support contracts).
* * * * *
(d) * * *
(8) * * *
(iv) Employee relations, welfare, morale, etc.; programs
including incentive or suggestion awards; employee counseling
services, health or first-aid clinics; and house or employee
publications; and wellness/fitness centers;
* * * * *
(e) * * *
(9) Entertainment, including costs of amusement, diversion,
social activities; and directly associated costs such as tickets to
shows or sports events, meals, lodging, rentals, transportation, and
gratuities; costs of membership in any social, dining or country
club or organization.
* * * * *
(29) Contractor costs incurred to influence either directly or
indirectly--
(i) Legislative action on any matter pending before Congress, a
State legislature, or a legislative body of a political subdivision
of a State; or
(ii) Federal, State, or local executive branch action on
regulatory and contract matters as described in the ``Political
Activity Cost Prohibition'' clause of this contract.
* * * * *
(35) Costs of gifts; however, gifts do not include awards for
performance or awards made in recognition of employee achievements
pursuant to an established contractor plan or policy.
(36) The costs of recreation, registration fees of employees
participating in competitive fitness promotions, team activities,
and sporting events except for the costs of employees' participation
in company sponsored intramural sports teams or employee
organizations designed to improve company loyalty, team work, or
physical fitness.
16. Section 970.5204-17 is amended by revising the section heading
and clause heading and adding clause paragraph (a)(6) to read as
follows:
970.5204-17 Political activity cost prohibition.
* * * * *
Political Activity Cost Prohibition (Dec. 1997)
(a) * * *
(6) Contractor costs incurred to influence (directly or
indirectly) Federal, State, or local executive branch action on
regulatory and contract matters.
* * * * *
17. Section 970.5204-84 is added to read as follows:
970.5204-84 Waiver of limitations on severance payments to foreign
nationals.
As prescribed in subpart 970.25, insert the following solicitation
provision, or its alternate 1, clause:
Waiver of Limitations on Severance Payments to Foreign Nationals
(Dec. 1997).
Pursuant to Department of Energy Acquisition Regulation (DEAR)
subpart 970.25, the cost allowability limitations in (DEAR) subpart
970.3102-2(i)(iv) and (v) are waived for this contract.
Alternate 1 (Dec. 1997). Substitute the following paragraph for
the foregoing solicitation provision when the waiver of limitations
to severance payments for foreign nationals has not been
predetermined by the Department.
Pursuant to Department of Energy Acquisition Regulation (DEAR)
subpart 970.25, the Department will consider waiving the cost
allowability limitations in (DEAR) 48 CFR 970.3102-2(i)(iv) and (v)
for this contract.
18. Section 970.5204-85 is added to read as follows:
970.5204-85 Reduction or suspension of advance, partial, or progress
payments upon finding of substantial evidence of fraud.
As prescribed in 48 CFR 970.3272, insert the following clause:
Reduction or Suspension of Advance, Partial, or Progress Payments (Dec.
1997)
(a) The contracting officer may reduce or suspend further
advance, partial, or progress payments to the contractor upon a
written determination by the Secretary that substantial evidence
exists that the contractor's request for advance, partial, or
progress payment is based on fraud.
(b) The contractor shall be afforded a reasonable opportunity to
respond in writing.
[End of Clause]
[FR Doc. 98-2049 Filed 1-30-98; 8:45 am]
BILLING CODE 6450-01-P