The changes made in this rule are intended to facilitate greater use of FAR Part 12 for commercial services acquisitions by providing the contract type flexibility embodied in statute.

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 Councils do not expect this proposed rule to 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 changes made by the rule primarily clarify language pertaining to the contract types currently authorized by statute for commercial item acquisitions and does not change existing policy. An Initial Regulatory Flexibility Analysis has, therefore, not been performed. We invite comments from small businesses and other interested parties. The Councils will consider comments from small entities concerning the affected FAR parts 12 and 16 in accordance with 5 U.S.C. 610. Interested parties must submit such comments separately and should cite 5 U.S.C. 601, et seq. (FAR case 2000013), in correspondence. C. Paperwork Reduction Act

The Paperwork Reduction Act does not apply because the proposed 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 12 and 16

Government procurement.

Dated: December 22, 2000.
Al Matera,

Acting Director, Federal Acquisition Policy Division.

Therefore, DoD, GSA, and NASA propose that 48 CFR parts 12 and 16 be amended as set forth below:

1. The authority citation for 48 CFR parts 12 and 16 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).

PART 12ACQUISITION OF COMMERCIAL ITEMS

2. In section 12.207, remove the undesignated paragraph.

3. Add sections 12.2071 and 12.2072 to read as follows: 12.2071 Authorized contract types.
(a) Agencies must use, to the maximum extent practicable, firm fixedprice contracts or fixedprice contracts with economic price adjustment for the acquisition of commercial items. These contract types may be used in conjunction with an award fee incentive and performance or delivery incentives when the award fee or incentive is based solely on factors other than cost (see 16.2021 and 16.2031). (b) Agencies may use indefinitedelivery contracts (see 16.5) when the task or delivery orders are issued under one of the authorized contract types in paragraph (a) of this subsection. Contracting officers must follow the procedures in 16.505 when placing orders. (c) Use of costtype contracts or contracts with incentives based on cost is prohibited.
12.2072 Commercial services available on a timeandmaterial or laborhour basis.

Some services are available in the commercial market on a timeand material or laborhour basis. Contracting officers may acquire these types of services under part 12 by using the following pricing strategies when costeffective and consistent with commercial practice: (a) An indefinitedelivery contract with established fixed hourly rates that permit negotiating orders (including any required material) under one of the authorized contract types in 12.2071.
(b) Sequential contract actions that acquire the requirement in modular components using the authorized contract types in 12.2071 (e.g., a preliminary firmfixedprice ``diagnostic'' effort allowing the contractor to understand the scope of work sufficiently to propose the large requirement on a firmfixedprice basis).
[[Page 83293]]

PART 16TYPES OF CONTRACTS

4. In section 16.2021, add the following sentences to the end of the paragraph to read as follows:
16.2021 Description.
* * * The contracting officer may use a fixedprice contract in conjunction with an awardfee incentive (see 16.404) and performance or delivery incentives (see 16.4022 and 16.4023) when the award fee or incentive is based solely on factors other than cost. The contract type remains firmfixedprice when used with these incentives.

5. In section 16.2031, redesignate the introductory text as paragraph (a), and paragraphs (a) through (c) as (1) through (3), respectively; and add paragraph (b) to read as follows:
16.2031 Description.
* * * * *
(b) The contracting officer may use a fixedprice contract with economic price adjustment in conjunction with an awardfee incentive (see 16.404) and performance or delivery incentives (see 16.4022 and 16.4023) when the award fee or incentive is based solely on factors other that cost. The contract type remains fixedprice with economic price adjustment when used with these incentives.
[FR Doc. 0033153 Filed 122800; 8:45 am] BILLING CODE 6820EPP

FOR FURTHER INFORMATION CONTACT The FAR Secretariat, Room 4035, GS Building, Washington, DC, 20405, at (202) 5014755 for information pertaining to status or publication schedules. For clarification of content, contact Ms. Victoria Moss, Procurement Analyst, at (202) 501 4764. Please cite FAR case 2000013.