FedGovContracts.com

Panoptic Enterprises' FEDERAL CONTRACTS DISPATCH

DATE: August 29, 2002

SUBJECT: Federal Acquisition Regulation (FAR); Selling Cost Principle

SOURCE: Federal Register, August 29, 2002, Vol. 67, No. 168, page 55681

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 31.205-38, Selling Costs, be amended to increase clarity and to remove excessive wording and details.

DATES: Comments on the proposed rule must be submitted no later than October 28, 2002.

ADDRESSES: Submit comments to General Services Administration, FAR Secretariat (MVP), 1800 F Street, NW, Room 4035, ATTN: Laurie Duarte, Washington, DC 20405, or by e-mail to farcase.2001-024@gsa.gov. Cite FAR case 2001-024 in all correspondence related to this proposed rule.

FOR FURTHER INFORMATION CONTACT: Jeremy Olson at 202-501-3221.

SUPPLEMENTAL INFORMATION: The following changes are being proposed to FAR 31.205-38:

• Paragraph (a) would be revised to remove the list of selling activities; to add and revise current paragraph (d) as a new sentence ("The costs of any selling efforts other than those addressed in this cost principle are unallowable"); and to add and revise the last sentence of current paragraph (b) as the last sentence ("Costs of activities that are correctly classified and disallowed under cost principles referenced in paragraph (b) are not to be reconsidered for reimbursement under any other provision of this subsection").
  
  
• Paragraph (b) would be revised by combining the list of selling activities removed from current paragraph (a) with the more detailed guidance about the allowability of these costs in current paragraphs (b) and (c)(1). Also, the references to reasonableness in current paragraphs (b) and (c)(1) would be removed because this general allowability standard is already addressed in FAR 31.201-2, Determining Allowability, and FAR 31.201-3, Determining Reasonableness.
  
  
• Current paragraph (c)(2), which addresses foreign selling costs, would be removed as unnecessary since there is no longer any reason to distinguish between the allowability of foreign and domestic selling costs involving direct selling and other market planning efforts. This would eliminate the current requirement that, in order to be allowable, these export sales costs must be related to products normally sold to the U.S. government. While the policy reasons for distinguishing between foreign and domestic broadly targeted sales efforts are still valid, the allowability of these costs is adequately covered in paragraph (d)(2) of FAR 31.205-1, Public Relations and Advertising Costs.
  
  
• Current paragraph (e), which addresses the identification and segregation of unallowable selling costs, would be removed since it is duplicative of the guidance in FAR 31.201-6, Accounting for Unallowable Costs, and paragraph (c) of FAR 31.204, Application of Principles and Procedures.

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

Return to the Dispatches Library.

Return to the Main Page.