Class Deviation 2011-O0006 - Utilities Privatization-Class Deviation from FAR Part 31

Status: Active

Date Issued: 2010-08-31

Scope: All DoD contracting officers

Applies to DAF/Air Force: Yes

Authority: 10 U.S.C. § 2688, Utility Systems: Conveyance Authority

Summary

This deviation allows the Head of the Contracting Activity to waive Federal Acquisition Regulation (FAR) Part 31 cost principles for qualified utility privatization contracts. Eligible contracts must be fixed-price types and meet CAS exemption or waiver conditions. It replaces the prior deviation issued under CPF Tracking Number 2007-000007.

Required Contracting Officer Actions

Determine whether the contract qualifies under Attachment A conditions before applying the deviation.
Document in writing any waivers of FAR 31.205-20 (Interest) or FAR 31.205-41 (Taxes) per Attachment A Sections 2 and 3.
Report quarterly to Defense Procurement and Acquisition Policy/CPF on all contracts awarded using this deviation within 30 days of each quarter's end.
Include contract number, contractor name, award date, award amount and CAS waiver indication in each quarterly report.
Ensure FPPPR contracts include FAR 52.215-2 and the clause specified in Attachment B condition 6.

Affected Provisions and Clauses

52.215-2, (Clause)

Prescribed in: 15.209(b)
Change type: MODIFIED
Action: Modify clause 52.215-2

Notes

Retroactive Applicability: This deviation applies to all qualified contracts awarded as of August 31, 2010. COs should review prior awards for compliance.

CAS Waiver: The CAS Board waiver dated September 2, 2004 is a separate document at Attachment B. Contracts must meet all conditions in that waiver to qualify under Section 1.b.(ii).

Duration: The deviation remains in effect until incorporated into the DFARS or rescinded. No expiration date is set.

Interest Rate Cap: Allowable interest costs under FAR 31.205-20 are capped at 600 basis points above the Contract Disputes Act rate. COs must verify this at the time of capital expenditure.

CIAC Tax: Contracts should be structured to avoid Contribution in Aid of Construction taxes where practical. The HCA must document in writing the basis for allowing CIAC as an allowable cost.