DATE: September 28, 2004

SUBJECT: Federal Acquisition Regulation (FAR); Accounting for Unallowable Costs

SOURCE: Federal Register, September 28, 2004, Vol. 69, No. 187, page 58013

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 31.201-6, Accounting for Unallowable Costs, be amended to revise the language regarding accounting for unallowable costs.

DATES: Comments should be submitted on or before November 29, 2004.

ADDRESSES: Submit comments, identified by "FAR Case 2004-006," to: (1) http://www.regulations.gov; (2) http://www.acqnet.gov/far/ProposedRules/proposed.htm; (3) e-mail: farcase.2004-006@gsa.gov; (4) fax: 202-501-4067; or (5) mail: General Services Administration, Regulatory Secretariat (MVA), 1800 F Street, NW, Room 4035, ATTN: Laurie Duarte, Washington, DC 20405.

FOR FURTHER INFORMATION CONTACT: Richard C. Loeb, 202-208-3810.

SUPPLEMENTAL INFORMATION: On May 22, 2003, a proposed rule was published to amend FAR 31.204, Application of Principles and Procedures, and FAR 31.201-6 (see the May 22, 2003, FEDERAL CONTRACTS DISPATCH "Federal Acquisition Regulation (FAR); Application of Cost Principles and Procedures, and Accounting for Unallowable Costs). No comments were received on the proposed changes to FAR 31.204, so that portion of the proposed rule was adopted as final without changes (see the June 18, 2004, FEDERAL CONTRACTS DISPATCH "Federal Acquisition Circular (FAC) 2001-24, Miscellaneous Amendments," Item (8)). However, because of the significance of the comments received pertaining to the proposed changes to FAR 31.201-6, it was decided that a second proposed rule would be published. This is that second proposed rule.

The May 22, 2003, proposed rule would have redesignated paragraph (c) ("The practices for accounting for and presentation of unallowable costs must be those described in 48 CFR 9904.405, Accounting for Unallowable Costs") as paragraph (c)(1), and added a paragraph (c)(2) to FAR 31.201-6. Paragraph (c)(2) would have stated, "Statistical sampling is an acceptable practice for accounting and presenting unallowable costs provided: (i) the statistical sampling results in an unbiased sample that accurately represents the sampling universe; and (ii) the statistical sampling permits audit verification." This second proposed rule would adopt the changes in the first proposed rule and make the following additions to FAR 31.201-6:

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

Copyright 2004 by Panoptic Enterprises. All Rights Reserved.

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