D.  Adequacy of Indirect Cost Rate Proposal

The final rule includes amendments to FAR 52.216-7(d)(2)(iv) in response to comments in this category.

Comment: One respondent agrees with the proposed language at FAR 42.705-1 as positive changes.

Comment: One respondent states that the proposed rule was not clear as to whether the list of required data in FAR 52.216-7(d)(2)(iv) that "may" be submitted with the proposal will be considered in making a determination of the adequacy of the contractor's proposal. The respondent recommends clarification.

Response: The language at FAR 52.216-7(d)(2)(iv) has been revised by replacing "will" with "may"; however, clarification of FAR 42.705-1(b)(1)(ii) is not necessary. The supplemental information listed in FAR 52.216-7(d)(2)(iv) is not required for a determination on the adequacy for the contractor's proposal for audit.

Comment: One respondent states that the proposed statement at FAR 42.705-1(b)(1)(iii) "The proposal must be supported with adequate supporting data, which may be required subsequent to proposal submission" is repetitious of FAR 52.216-7(d)(iv) and unnecessary. The respondent further states that the statement adds a level of subjectivity as contractors guess at what information "may be required" subsequent to submission.

Response: The contractor's requirements are located in the clause at FAR 52.216-7(d)(2)(iv). The FAR 42.705-1(b)(1)(iv) text is directed to the contracting officer, explaining the supplemental information that is required by contract clause, FAR clause 52.216-7, Allowable Cost and Payment. The language directed to the contracting officer and the contract clause serve different purposes; therefore, both are necessary.

Comment: One respondent recommends rescinding the proposed rule and revising the approach to determining adequacy. The respondent states that the approach taken to set forth a description of an adequate final indirect cost rate proposal and supporting data fails to improve the process and unnecessarily creates additional and very significant process and administrative problems.

Response: The rule will provide uniformity and consistency. Further, the information is not new and should be readily available from the contractor's books, records, and systems.