42.705-2  Auditor determination procedure.

4.  Amend section 42.705-2 by--

a.  Revising the introductory text of paragraph (b)(2) and (b)(2)(i); and

b.  Redesignating paragraphs (b)(2)(ii) through (iv) as paragraphs (b)(2)(iii) through (v), respectively; and adding a new paragraph (b)(2)(ii) to read as follows:

42.705-2  Auditor determination procedure.

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(b) * * *

(2)  Once a proposal has been determined to be adequate for audit in support of negotiating final indirect cost rates, the auditor shall--

(i)  Audit the proposal and prepare an advisory audit report, including a listing of any relevant advance agreements or restrictive terms of specific contracts;

(ii)  Seek agreement on indirect costs with the contractor;

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