STREAMLINED APPLICABILITY OF COST ACCOUNTING STANDARDS.

SEC. 802. STREAMLINED APPLICABILITY OF COST ACCOUNTING STANDARDS. (a) Applicability.—Paragraph (2)(B) of section 26(f) of the Office of Federal Procurement Policy Act (41 U.S.C. 422(f)(2)(B)) is amended by adding at the end the following new clauses: “(iii) Firm, fixed-price contracts or subcontracts awarded on the basis of adequate price competition without submission of certified cost or pricing data. “(iv) A contract or subcontract with a value of less than $7,500,000 if, at the time the contract or subcontract is entered into, the segment of the contractor or subcontractor that will perform the work has not been awarded at least one contract or subcontract with a value of more than $7,500,000 that is covered by the cost accounting standards.”. (b) Waiver.—Section 26(f) of that Act is further amended by adding at the end the following: “(5)(A) The head of an executive agency may waive the applicability of the cost accounting standards for a contract or subcontract with a value less than $15,000,000 if that official determines in writing that the segment of the contractor or subcontractor that will perform the work— “(i) is primarily engaged in the sale of commercial items; and “(ii) would not otherwise be subject to the cost accounting standards under this section, as in effect on or after the effective date of this paragraph. “(B) The head of an executive agency may also waive the applicability of the cost accounting standards for a contract or subcontract under exceptional circumstances when necessary to meet the needs of the agency. A determination to waive the applicability of the cost accounting standards under this subparagraph shall be set forth in writing and shall include a statement of the circumstances justifying the waiver. “(C) The head of an executive agency may not delegate the authority under subparagraph (A) or (B) to any official in the executive agency below the senior policymaking level in the executive agency. “(D) The Federal Acquisition Regulation shall include the following: “(i) Criteria for selecting an official to be delegated authority to grant waivers under subparagraph (A) or (B). “(ii) The specific circumstances under which such a waiver may be granted. “(E) The head of each executive agency shall report the waivers granted under subparagraphs (A) and (B) for that agency to the Board on an annual basis.”. (c) Regulation on Types of CAS Coverage.—(1) The Administrator for Federal Procurement Policy shall revise the rules and procedures prescribed pursuant to section 26(f) of the Office of Federal Procurement Policy Act (41 U.S.C. 422(f)) to the extent necessary to increase the thresholds established in section 9903.201–2 of title 48 of the Code of Federal Regulations from $25,000,000 to $50,000,000. (2) Paragraph (1) requires only a change of the statement of a threshold condition in the regulation referred to by section number in that paragraph, and shall not be construed as— (A) a ratification or expression of approval of—113 STAT. 702 (i) any aspect of the regulation; or (ii) the manner in which section 26 of the Office of Federal Procurement Policy Act is administered through the regulation; or (B) a requirement to apply the regulation. (d) Implementation.—The Administrator for Federal Procurement Policy shall ensure that this section and the amendments made by this section are implemented in a manner that ensures that the Federal Government can recover costs, as appropriate, in a case in which noncompliance with cost accounting standards, or a change in the cost accounting system of a contractor segment or subcontractor segment that is not determined to be desirable by the Federal Government, results in a shift of costs from contracts that are not covered by the cost accounting standards to contracts that are covered by the cost accounting standards. (e) Implementation of Requirements for Revision of Regulations.—(1) Final regulations required by subsection (c) shall be issued not later than 180 days after the date of the enactment of this Act. (2) Subsection (c) shall cease to be effective one year after the date on which final regulations issued in accordance with that subsection take effect. (f) Study of Types of CAS Coverage.—The Administrator for Federal Procurement Policy shall review the various categories of coverage of contracts for applying cost accounting standards and, not later than the date on which the President submits to Congress the budget for fiscal year 2001 under section 1105(a) of title 31, United States Code, submit to Congress a report on the results of the review. The report shall include an analysis of the matters reviewed and any recommendations that the Administrator considers appropriate regarding such matters. (g) Inapplicability of Standards to Certain Contracts.—The cost accounting standards issued pursuant to section 26(f) of the Office of Federal Procurement Policy Act (41 U.S.C. 422(f)), as amended by this section, shall not apply during fiscal year 2000 with respect to a contract entered into under the authority provided in chapter 89 of title 5, United States Code (relating to health benefits for Federal employees). (h) Construction Regarding Certain Not-For-Profit Entities.—The amendments made by subsections (a) and (b) shall not be construed as modifying or superseding, nor as intended to impair or restrict, the applicability of the cost accounting standards described in section 26(f) of the Office of Federal Procurement Policy Act (41 U.S.C. 422(f)) to— (1) any educational institution or federally funded research and development center that is associated with an educational institution in accordance with Office of Management and Budget Circular A–21, as in effect on January 1, 1999; or (2) any contract with a nonprofit entity that provides research and development and related products or services to the Department of Defense. (i) Effective Date.—The amendments made by subsections (a) and (b) shall take effect 180 days after the date of enactment of this Act, and shall apply with respect to— (1) contracts that are entered into on or after such effective date; and113 STAT. 703 (2) determinations made on or after such effective date regarding whether a segment of a contractor or subcontractor is subject to the cost accounting standards under section 26(f) of the Office of Federal Procurement Policy Act (41 U.S.C. 422(f)), regardless of whether the contracts on which such determinations are made were entered into before, on, or after such date.