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Barry McVay's FEDERAL CONTRACTS DISPATCH

DATE: July 27, 2000

FROM: Barry McVay, CPCM

SUBJECT: Federal Acquisition Regulation (FAR); Final Contract Voucher Submission

SOURCE: Federal Register, July 27, 2000, Vol. 65, No. 145, page 46331

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

ACTION: Proposed Rule

SYNOPSIS: It is proposed that FAR 42.705, Final Indirect Cost Rates, and FAR 52.216-7, Allowable Cost and Payment, be amended to explicitly state that the contracting officer has the right to unilaterally determine the final contract payment amount when the contractor does not submit the final invoice or voucher within the time specified in the contract, and that this contracting officer decision is final and will not be subject to appeal under the Contract Disputes Act.

DATES: Submit comments on or before September 25, 2000.

ADDRESSES: Submit comments to General Services Administration, FAR Secretariat (MVRS), 1800 F Street, NW, Room 4035, ATTN: Laurie Duarte, Washington, DC 20405, e-mail: farcase.1999-026@gsa.gov. Cite FAR case 1999-026 in all correspondence related to this proposed rule.

FOR FURTHER INFORMATION CONTACT: Linda Klein, Procurement Analyst, 202-501-3775.

SUPPLEMENTAL INFORMATION: To improve the contract closeout process and reduce associated paperwork, DOD established the Contract Close-out Working Integrated Process Team (CCWIPT). On April 7, 1999, the CCWIPT issued a report which stated that the leading reason for contracts to remain open after they are physically complete is the contractor's failure to submit a final voucher to the government. To remedy this, the CCWIPT recommended that the FAR be amended to state that the contracting officer may unilaterally determine the amounts due to the contractor under a completed contract if the contractor fails to submit any final invoice or voucher within the time provided, and that such determination is not appealable under FAR 52.233-1, Disputes. The CCWIPT's recommendation has been adopted and is reflected in this proposed rule.

The proposed rule would revise FAR 42.705 and FAR 52.216-7 by adding the following paragraph (paragraph (c) and paragraph (d)(6), respectively -- the text of FAR 42.705(c) follows):

"(c)(1) If the contractor fails to submit a completion invoice or voucher within the time specified in paragraph (b) of this section, the contracting officer may (i) determine the amounts due to the contractor under the contract; and (ii) record this determination in a unilateral modification to the contract.

"(2) This contracting officer determination is (i) final and binding upon the contractor in discharge of all obligations to the contractor arising under the contract; and (ii) not subject to the right of appeal under the Disputes clause."

In addition, the time period specified in FAR 42.705(b) and FAR 52.216-7(d)(5) would be "within 120 days (or longer period, if approved in writing by the contracting officer) after settlement of the final annual indirect cost rates for all years of a physically complete contract" -- the word "annual" would be added to the current "final indirect cost rates". Also, the proposed rule would require the contractor to submit "a completion invoice or voucher reflecting the settled amounts and rates." Currently, the contractor is required to submit "a completion invoice or voucher reflecting the settled amounts and rates on all contracts physically completed in the year covered by the proposal."

FOR FURTHER INFORMATION CONTACT: Barry McVay at 703-451-5953 or by e-mail to BarryMcVay@FedGovContracts.com.

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