[Federal Register: May 15, 2002 (Volume 67, Number 94)]
[Proposed Rules]               
[Page 34809-34811]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]

[[Page 34809]]


Part III

Department of Defense

General Services Administration

National Aeronautics and Space Administration


48 CFR Part 31

Federal Acquisition Regulation; Training and Education Cost Principle; 
Proposed Rule

[[Page 34810]]





48 CFR Part 31

[FAR Case 2001-021]
RIN 9000-AJ38

Federal Acquisition Regulation; Training and Education Cost 

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

ACTION: Proposed rule.


SUMMARY: The Civilian Agency Acquisition Council and the Defense 
Acquisition Regulations Council (Councils) are proposing to amend the 
Federal Acquisition Regulation (FAR) ``Training and Education Costs'' 
cost principle.

DATES: Interested parties should submit comments in writing on or 
before July 15, 2002 to be considered in the formulation of a final 

ADDRESSES: Submit written comments to: General Services Administration, 
FAR Secretariat (MVP), 1800 F Street, NW, Room 4035, ATTN: Laurie 
Duarte, Washington, DC 20405.
    Submit electronic comments via the Internet to: farcase.2001-
021@gsa.gov. Please submit comments only and cite FAR case 2001-021 in 
all correspondence related to this case.

Building, Washington, DC, 20405, at (202) 501-4755 for information 
pertaining to status or publication schedules. For clarification of 
content, contact Mr. Jeremy Olson at (202) 501-3221. Please cite FAR 
case 2001-021.


A. Background

    Currently, FAR 31.205-44, Training and education costs, is somewhat 
restrictive in that the cost principle--
     Differentiates between vocational training, part-time 
college level education, full-time education, and specialized programs 
with numerous specific limitations on the allowability of costs 
associated with each of these categories. Historically, most of these 
specific allowability limitations were intended to reflect industry 
practices, e.g., the 156 hours per year limit on compensation for part-
time college level education, the 2-year limitation on full-time 
graduate education, and the 16 weeks per year limit for specialized 
programs; and
     Requires full-time education courses or degrees be 
``related to the field in which the employee is working or may 
reasonably be expected to work.'' The Councils propose to eliminate the 
current or future job relationship requirement since the associated 
costs represent minimal risk to the Government; and the standard is 
difficult to enforce, and counter to Government initiatives supporting 
upward mobility, job retraining, and educational advancement.
    The proposed rule makes the costs associated with training and 
education generally allowable, subject to five public policy exceptions 
that are retained from the current cost principle. Except for these 
five expressly unallowable cost exceptions, the reasonableness of 
specific contractor training and education costs can best be assessed 
by reference to FAR 31.201-3, Determining reasonableness.
    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 most contracts awarded to small entities use simplified 
acquisition procedures or are awarded on a competitive, fixed-price 
basis, and do not require application of the cost principle discussed 
in this rule. 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 Part 31 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 2001-021), in 

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 Part 31

    Government procurement.

    Dated: May 9, 2002.
Al Matera,
Director, Acquisition Policy Division.

    Therefore, DoD, GSA, and NASA propose amending 48 CFR part 31 as 
set forth below:


    1. The authority citation for 48 CFR part 31 continues to read as 

    Authority: 40 U.S.C. 486(c); 10 U.S.C. chapter 137; and 42 
U.S.C. 2473(c).

    2. Revise section 31.205-44 to read as follows:

31.205-44  Training and education costs.

    Training and education costs are allowable, except as follows:
    (a) Overtime compensation for training and education is 
    (b)(1) Full-time college level education. Costs of tuition, fees, 
training materials and textbooks, subsistence, salary, and any other 
emoluments in connection with full-time college level education, 
including that provided at the contractor's own facilities, are 
unallowable at--
    (i) An undergraduate level; and
    (ii) A postgraduate level, except where the course or degree 
pursued is related to the field in which the employee is working or may 
reasonably be expected to work and is limited to a total period not to 
exceed 2 school years or the length of the degree program, whichever is 
less, for each employee so trained.
    (2) Part-time college level education. The cost of salaries for 
attending undergraduate or graduate level classes on a part-time basis 
is unallowable, except for attending such classes during working hours 
where circumstances do not permit attendance at these classes before or 
after regular working hours.
    (c) Grants to educational or training institutions, including the 
donation of facilities or other properties, scholarships, and 
fellowships, are considered contributions and are unallowable.

[[Page 34811]]

    (d) Training or education costs for other than bona fide employees 
are unallowable, except that the costs incurred for educating employee 
dependents (primary and secondary level studies) when the employee is 
working in a foreign country where suitable public education is not 
available may be included in overseas differential pay.

    (e) Costs of college plans for employee dependents are unallowable.

[FR Doc. 02-12079 Filed 5-14-02; 8:45 am]