[Federal Register: July 26, 2000 (Volume 65, Number 144)]
[Rules and Regulations]               
[Page 46072-46073]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]





48 CFR Parts 43 and 52

[FAC 97-19; FAR Case 1999-606; Item VIII]
RIN 9000-AI65

Federal Acquisition Regulation; Time-and-Materials or Labor-Hours

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

ACTION: Final rule.


SUMMARY: The Civilian Agency Acquisition Council and the Defense 
Acquisition Regulations Council (Councils) have agreed on a final rule 
amending the Federal Acquisition Regulation (FAR) to clarify the 
requirements regarding changes to time-and-materials and labor-hour 

DATES: Effective Date: September 25, 2000.

Building, Washington, DC, 20405, (202) 501-4755, for information 
pertaining to status or publication schedules. For clarification of 
content, contact Ms. Linda Klein, Procurement Analyst, at (202) 501-
3775. Please cite FAC 97-19, FAR case 1999-606.


A. Background

    This final rule clarifies the requirements regarding changes to 
time-and-materials and labor-hour contracts. The rule changes the 
clause at FAR 52.243-3, Changes--Time-and-Materials or Labor-Hours, to 
be consistent with Alternate II of the clause at FAR 52.243-1, 
Changes--Fixed-Price. Alternate II is used in service contracts and 
most of the work performed under time-and-materials or labor-hour 
contracts also involves services.
    DoD, GSA, and NASA published a proposed rule in the Federal 
Register at 65 FR 3762, January 24, 2000. One respondent submitted 
comments on the proposed rule. The comments were considered in the 
development of the final rule.
    This is not a significant regulatory action and, therefore, was not 
subject to review under Section 6(b) of Executive Order 12866, 
Regulatory Planning and Review, dated September 30, 1993. This rule is 
not a major rule under 5 U.S.C. 804.

B. Regulatory Flexibility Act

    The Department of Defense, the General Services Administration, and 
the National Aeronautics and Space Administration certify that this 
final rule will not have a significant economic impact on a substantial 
number of small entities within the meaning of the Regulatory 
Flexibility Act, 5 U.S.C. 601, et seq., because contractors are 
entitled to an equitable adjustment to contract terms and conditions if 
a change order is issued under the Changes clause of the contract.

C. Paperwork Reduction Act

    The Paperwork Reduction Act does not apply because the changes to 
the FAR do not impose information collection requirements that require 
the approval of the Office of Management and Budget under 44 U.S.C. 
3501, et seq.

List of Subjects in 48 CFR Parts 43 and 52

    Government procurement.

    Dated: July 19, 2000.
Edward C. Loeb,
Director, Federal Acquisition Policy Division.

    Therefore, DoD, GSA, and NASA amend 48 CFR parts 43 and 52 as set 
forth below:
    1. The authority citation for 48 CFR parts 43 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).


    2. Amend section 43.205 by revising paragraph (c) to read as 

43.205  Contract clauses.

* * * * *
    (c) Insert the clause at 52.243-3, Changes--Time-and-Materials or 
Labor-Hours, in solicitations and contracts when a time-and-materials 
or labor-hour contract is contemplated. The contracting officer may 
vary the 30-day period in paragraph (c) of the clause according to 
agency procedures.
* * * * *

[[Page 46073]]


    3. Revise section 52.243-3 to read as follows:

52.243-3  Changes--Time-and-Materials or Labor-Hours.

    As prescribed in 43.205(c), insert the following clause:

Changes--Time-and-Materials or Labor-Hours (Sept 2000)

    (a) The Contracting Officer may at any time, by written order, 
and without notice to the sureties, if any, make changes within the 
general scope of this contract in any one or more of the following:
    (1) Description of services to be performed.
    (2) Time of performance (i.e., hours of the day, days of the 
week, etc.).
    (3) Place of performance of the services.
    (4) Drawings, designs, or specifications when the supplies to be 
furnished are to be specially manufactured for the Government in 
accordance with the drawings, designs, or specifications.
    (5) Method of shipment or packing of supplies.
    (6) Place of delivery.
    (7) Amount of Government-furnished property.
    (b) If any change causes an increase or decrease in any hourly 
rate, the ceiling price, or the time required for performance of any 
part of the work under this contract, whether or not changed by the 
order, or otherwise affects any other terms and conditions of this 
contract, the Contracting Officer will make an equitable adjustment 
in any one or more of the following and will modify the contract 
    (1) Ceiling price.
    (2) Hourly rates.
    (3) Delivery schedule.
    (4) Other affected terms.
    (c) The Contractor shall assert its right to an adjustment under 
this clause within 30 days from the date of receipt of the written 
order. However, if the Contracting Officer decides that the facts 
justify it, the Contracting Officer may receive and act upon a 
proposal submitted before final payment of the contract.
    (d) Failure to agree to any adjustment will be a dispute under 
the Disputes clause. However, nothing in this clause excuses the 
Contractor from proceeding with the contract as changed.

    (End of clause)
[FR Doc. 00-18675 Filed 7-25-00; 8:45 am]