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Panoptic Enterprises' FEDERAL CONTRACTS DISPATCH

DATE: July 7, 2003

SUBJECT: Federal Acquisition Regulation (FAR); Gains and Losses, Maintenance and Repair Costs, and Material Costs

SOURCE: Federal Register, July 7, 2003, Vol. 68, No. 129, page 40465

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 Subpart 31.2, Contracts with Commercial Organizations, be amended to revise the cost principles regarding gains and losses on disposition or impairment of depreciable property or other capital assets, delete the cost principle regarding maintenance and repair costs, and revise the language concerning material costs.

EDITOR'S NOTE: For more on the public meetings that were held to discuss potential opportunities to streamline the provisions of FAR Part 31, Contract Cost Principles and Procedures, see the March 7, 2001, FEDERAL CONTRACTS DISPATCH "Department of Defense; Public Meetings on Streamlining Cost Measurement, Assignment, and Allocation."

For more on other proposed rules produced by the special interagency ad hoc committee, see the February 4, 2003, FEDERAL CONTRACTS DISPATCH "Federal Acquisition Regulation (FAR); General Provisions of the Cost Principles"; the May 22, 2003, FEDERAL CONTRACTS DISPATCH "Federal Acquisition Regulation (FAR); Application of Cost Principles and Procedures, and Accounting for Unallowable Costs"; and the June 3, 2003, FEDERAL CONTRACTS DISPATCH "Federal Acquisition Regulation (FAR); Deferred Compensation and Postretirement Benefits Other Than Pensions."

DATES: Comments should be submitted on or before September 5, 2003.

ADDRESSES: Submit written comments on proposed rule to General Services Administration, FAR Secretariat (MVA), 1800 F Street, NW, Room 4035, Attn: Laurie Duarte, Washington, DC 20405. Submit e-mail comments to: farcase.2002-008@gsa.gov. Cite "FAR case 2002-008" when referring to this proposed rule.

FOR FURTHER INFORMATION CONTACT: Edward Loeb, 202-501-0650.

SUPPLEMENTAL INFORMATION: In 2001, Director of Defense Procurement Deidre Lee established a special interagency ad hoc committee to perform a comprehensive review of policies and procedures in FAR Part 31 related to cost measurement, assignment, and allocation to assess the need for each specific requirement in light of the evolution of generally accepted accounting principles (GAAP) and experience gained from implementation.

Public meetings were held on April 19, 2001, May 10-11, 2001, and June 12, 2001, to discuss potential opportunities to streamline the provisions of FAR Part 31. The meetings included representatives from industry, government, and other interested parties who provided their views. The ad hoc committee reviewed the cost principles and procedures and the public comments; identified potential changes to the FAR; and submitted draft proposed rules to the Civilian Agency Acquisition Council (CAAC) and the Defense Acquisition Regulations Council (DARC) for consideration.

The Councils are proposing the following revisions to FAR Subpart 31.2:

FOR FURTHER INFORMATION CONTACT: Panoptic Enterprises at 703-451-5953 or by e-mail to Panoptic@FedGovContracts.com.

Copyright 2003 by Panoptic Enterprises. All Rights Reserved.

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