DFARS Change Notice 19981120

The following DFARS interim rule has been published with a request for public comments. The changes made by this interim rule will be are effective for all solicitations issued on or after January 1, 1999, and all Mentor-Protégé agreements entered into on or after January 1, 1999. The changes will be incorporated into the DFARS on January 1, 1999.

Reform of Affirmative Action in Federal Procurement, Part II (DFARS Case 98-D021)

This interim rule amends DFARS guidance concerning programs for small disadvantaged business concerns. The amendments conform to a Department of Justice proposal to reform affirmative action in Federal procurement, and

are consistent with the changes made to the Federal Acquisition Regulation in Federal Acquisition Circular 97-07, dated July 1, 1998, effective January 1, 1999. See the Federal Register notice .

Also, eight DFARS interim rules have been converted to final rules without change.

No changes to the text of the DFARS result from these conversions. The Federal Register notice finalizing these rules is here. The rules are:

List of Firms Not Eligible for Defense Contracts (DFARS Case 97-D325)

The interim rule issued by Departmental Letter 98-007 on March 26, 1998, is converted to a final rule without change. The rule amended DFARS Parts 209 and 252 to implement Section 843 of the National Defense

Authorization Act for Fiscal Year 1998 (Public Law 105-85). Section 843 requires that (1) the Secretary of Defense maintain a list of all firms that the Secretary has identified as being subject to a prohibition on contract award due to ownership or control of the firm by the government of a terrorist country, and (2) DoD contractors be prohibited from entering into subcontracts with firms on the list unless there is a compelling reason to do so.

Direct Award of 8(a) Contracts (DFARS Case 98-D011)

The interim rule issued by Departmental Letter 98-015 on June 19, 1998, is converted to a final rule without change. The rule amended DFARS Parts 213, 219, 252, and 253 to implement a Memorandum of Understanding (MOU)

dated May 6, 1998, between the Small Business Administration (SBA) and DoD. The MOU streamlines the processing procedures for contract awards under SBA's 8(a) Program by authorizing DoD to award contracts directly to

8(a) concerns.

Comprehensive Subcontracting Plans (DFARS Case 97-D323)

The interim rule issued by Departmental Letter 98-006 on March 27, 1998, is converted to a final rule without change. The rule amended DFARS 219.702 to reflect revisions made to the DoD Test Program for Negotiation

of Comprehensive Small Business Subcontracting Plans, as required by Section 822 of the National Defense Authorization Act for Fiscal Year 1998 (Public Law 105-85). Section 822 extends, from September 30, 1998, to

September 30, 2000, the expiration date for the test program; and provides for use of comprehensive subcontracting plans by participating contractors that are performing as subcontractors under DoD contracts.

Waiver of 10 U.S.C. 2534-United Kingdom (DFARS Case 98-D016)

The interim rule issued by Departmental Letter 98-019 on August 17, 1998, is converted to a final rule without change. The rule amended DFARS Subpart 225.70 and the clauses at 252.225-7016 and 252.225-7029 to

implement a waiver of the domestic source restrictions of 10 U.S.C. 2534(a) for certain items manufactured in the United Kingdom. The waiver was signed by the Under Secretary of Defense (Acquisition and Technology) on

June 19, 1998, and became effective on August 4, 1998.

Allowability of Costs for Restructuring Bonuses (DFARS Case 97-D312)

The interim rule issued by Departmental Letter 97-021 on November 26, 1997, is converted to a final rule without change. The rule amended DFARS 231.205-6 to implement Section 8083 of the National Defense Appropriations

Act for Fiscal Year 1998 (Public Law 105-56). Section 8083 prohibits the use of fiscal year 1998 funds to reimburse a contractor for costs paid to an employee for a bonus or other payment in excess of the normal salary

paid to the employee, when such payment is part of restructuring costs associated with a business combination.

Restructuring Costs (DFARS Case 97-D313)

The interim rule issued by Departmental Letter 98-003 on February 13, 1998, is converted to a final rule without change. The rule amended DFARS 231.205-70 to implement Section 8092 of the National Defense Appropriations

Act for Fiscal Year 1998 (Public Law 105-56) and Section 804 of the National Defense Authorization Act for Fiscal Year 1998 (Public Law 105-85). Sections 8092 and 804 restrict the reimbursement of restructuring costs associated with a business combination undertaken by a defense contractor unless certain conditions are met.

Streamlined Research and Development Contracting (DFARS Case 97-D002)

The interim rule issued by Departmental Letter 98-016 on June 25, 1998, is converted to a final rule without change. The rule revised DFARS Subpart 235.70 to implement streamlined solicitation and contracting procedures for research and development acquisitions. The procedures use a standard solicitation and contract format, and use the World Wide Web to disseminate the standard format and publish the resulting solicitations.

Construction in Foreign Countries (DFARS Case 97-D307)

The interim rule published as Item XXIII of Defense Acquisition Circular 91-13 on March 9, 1998, is converted to a final rule without change. The rule amended DFARS Part 236 and added a new provision at 252.236-7012 to implement Section 112 of the Military Construction Appropriations Act for Fiscal Year 1998 (Public Law 105-45). Section 112 provides that no military construction appropriations may be used to award, to a foreign contractor, any contract estimated to exceed $1,000,000 for military construction in the United States territories and possessions in

the Pacific and on Kwajalein Atoll, or in countries bordering the Arabian Gulf, except for (1) contract awards for which the lowest responsive and responsible bid of a United States firm exceeds the lowest responsive and responsible bid of a foreign firm by more than 20 percent, and (2) contract awards for military construction on Kwajalein Atoll for which the lowest responsive and responsible bid is submitted by a Marshallese firm.

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From the Federal Register Online via GPO Access [wais.access.gpo.gov]

DEPARTMENT OF DEFENSE

48 CFR Parts 215, 217, 219, 226, 236, 252, and Appendix I to Chapter 2 Defense Federal Acquisition Regulation Supplement; Reform of Affirmative Action in Federal Procurement, Part II AGENCY: Department of Defense (DoD).

ACTION: Interim rule with request for comments.

SUMMARY: The Director of Defense Procurement has issued an interim rule amending the Defense Federal Acquisition Regulation Supplement (DFARS) guidance concerning programs for small disadvantaged business (SDB)

concerns. These amendments conform to a Department of Justice (DoJ) proposal to reform affirmative action in Federal procurement, and are consistent with the changes made to the Federal Acquisition Regulation (FAR) in Federal Acquisition Circular (FAC) 97-07. DoJ's proposal is designed to ensure compliance with the constitutional standards established by the Supreme Court in Adarand Constructors, Inc. v. Pena, 115 S. Ct. 2097 (1995).

DATES: Effective Date: January 1, 1999.

Applicability Date: The policies, provisions, and clauses of this interim rule are effective for all solicitations issued on or after January 1, 1999, and all Mentor-Protege agreements entered into on or after January 1, 1999.

Comment Date: Comments on the interim rule should be submitted in writing to the address shown below on or before January 19, 1999, to be considered in the formulation of the final rule.

ADDRESSES: Interested parties should submit written comments to: Defense Acquisition Regulations Council, Attn: Ms. Susan Schneider, PDUSD(A&T)DP(DAR), IMD 3D139, 3062 Defense Pentagon, Washington, DC

20301-3062, telefax (703) 602-0350. E-mail comments submitted over the Internet should be addressed to:

dfars@acq.osd.mil. Please cite DFARS Case 98-D021 in all correspondence related to

this issue. E-mail comments should cite DFARS Case 98-D021 in the subject line.

FOR FURTHER INFORMATION CONTACT:

Ms. Susan Schneider, PDUSD(A&T)DP(DAR), (703) 602-0131, or Mr. Mike Sipple, PDUSD(A&T)DP(CPA), (703) 695-8567. Please cite DFARS Case 98- D021.

SUPPLEMENTARY INFORMATION:

A. Background In Adarand, the Supreme Court extended strict judicial scrutiny to Federal affirmative action programs that use racial or ethnic criteria as a basis for decisionmaking. In procurement, this means that any use

of race in the decision to award a contract is subject to strict scrutiny. Under strict scrutiny, any Federal programs that make race a basis for contract decisionmaking must be narrowly tailored to serve a compelling Government interest.

DoJ developed a proposed structure to reform affirmative action in Federal procurement designed to ensure compliance with the constitutional standards established by the Supreme Court in Adarand. the DoJ proposal was published for public notice and comment (61 FR 26042, May 23, 1996). DoJ issued a notice that provided a response to

the public comments (62 FR 25648, May 9, 1997). To implement the DoJ concept, two interim FAR rules and an interim DFARS rule were issued: FAC 97-06, effective October 1, 1998, implements a price evaluation adjustment for SDB concerns (63 FR 35719, June 30, 1998); FAC 97-07, effective January 1, 1999, implements an SDB participation program (63 FR 36120, July 1, 1998); and the rule published on August 6, 1998 (63 FR 41972), effective October 1, 1998, conforms the DFARS to FAC 97-06. This interim rule contains the revisions necessary to conform the DFARS

to the interim FAR rule in FAC 97-07, and to the DoJ proposal implemented by the FAR rule.

B. Regulatory Flexibility Act

This interim rule is not expected 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 of the changes merely conform the DFARS to the FAR rule in FAC 97-07. Two source selection considerations for SDB concerns currently in the DFARS, but not in the FAR, are amended by this rule to conform to the DoJ model: Leader company contracting (DFARS 217.401); and architect-engineer (A-E) services (DFARS 236.602). These two changes are not expected to have a significant economic impact on a substantial number of small entities since: (1) Leader company contracting is infrequently used by DoD; and (2) the primary factor in A-E selection is the determination of the most highly qualified firm; the SDB consideration is one of several secondary source selection factors. Therefore, an initial regulatory flexibility analysis has not been performed. Comments are invited from small businesses and other interested

parties. Comments from small entities concerning the affected DFARS subparts also will be considered in accordance with 5 U.S.C. 610. Such comments should be submitted separately and should cite DFARS Case 98-D021 in correspondence.

C. Paperwork Reduction Act

The Paperwork Reduction Act does not apply because the interim rule does not impose any information collection requirements that require the approval of the Office of Management and Budget under 44 U.S.C. 3501, et seq.

D. Determination To Issue an Interim Rule

A determination has been made under the authority of the Secretary of Defense that urgent and compelling reasons exist to publish an interim rule prior to affording the public an opportunity to comment. This interim rule amends the DFARS to conform it to the requirements of FAC 97-07, dated July 1, 1998, effective January 1, 1999. FAC 97-07

contains an interim rule amending the FAR to implement a DoJ proposal for reform of affirmative action in Federal procurement to ensure compliance with the constitutional standards established by the Supreme Court in Adarand Constructors, Inc. v. Pena, 115, S. Ct. 2097 (1995). The FAR rule contains an SDB participation program. Publication of an interim DFARS rule is necessary to conform the DFARS to the interim FAR rule effective January 1, 1999, and to the DoJ proposal implemented by the FAR rule. Comments received in response to the publication of this

interim rule will be considered in formulating the final rule.List of Subjects in 48 CFR Parts 215, 217, 219, 226, 236, and 252

Government procurement. Michele P. Peterson, Executive Editor, Defense Acquisition Regulations Council.

Therefore, 48 CFR Parts 215, 217, 219, 226, 236, 252, and Appendix I to Chapter 2 are amended as follows:

1. The authority citation for 48 CFR Parts 215, 217, 219, 226, 236, 252, and Appendix I to subchapter I continue to read as follows: Authority: 41 U.S.C. 421 and 48 CFR Chapter 1.

PART 215--CONTRACTING BY NEGOTIATION

2. Section 215.304 is revised to read as follows:

215.304 Evaluation factors and significant subfactors.

(c)(i) In acquisitions that require use of the clause at FAR 52.219-9, Small, Small Disadvantaged and Women-Owned Small Business Subcontracting Plan, other than those based on the lowest price technically acceptable source selection process (see FAR 15.101-2), the extent of participation of small businesses and historically black

colleges or universities and minority institutions in performance of the contract shall be addressed in source selection. The contracting officer shall evaluate the extent to which offerors identify and commit to small business and historically black college or university and minority institution performance of the contract, whether as a joint

venture, teaming arrangement, or subcontractor.

(A) Evaluation factors may include--

(1) The extent to which such firms are specifically identified in

proposals;

(2) The extent of commitment to use such firms (for example, enforceable commitments are to be weighted more heavily than non-enforceable ones);

(3) The complexity and variety of the work small firms are to perform;

(4) The realism of the proposal;

(5) Past performance of the offerors in complying with requirements of the clauses at FAR 52.219-8, Utilization of Small, Small Disadvantaged and Women-Owned Small Business Concerns, and 52.219-9, Small, Small Disadvantaged and Women-Owned Small Business Subcontracting Plan; and

(6) The extent of participation of such firms in terms of the value of the total acquisition.

(B) Proposals addressing the extent of small business and historically black college or university and minority institution performance may be separate from subcontracting plans submitted pursuant to the clause at FAR 52.219-9 and should be structured to allow for consideration of offers from small businesses.

(C) When an evaluation includes the factor in paragraph (c)(i)(B)(1) of this section, the small businesses, historically black colleges or universities and minority institutions, and women-owned small businesses considered in the evaluation shall be listed in any subcontracting plan submitted pursuant to FAR 52.219-9 to facilitate

compliance with 252.219-7003(g).

(ii) The costs or savings related to contract administration and audit may be considered when the offeror's past performance or performance risk indicates the likelihood of significant costs or savings.

PART 217--SPECIAL CONTRACTING METHODS

3. Section 217.401 is revised to read as follows:

217.401 General.

(1) When leader company contracting is to be considered, take special effort to select a small disadvantaged business (SDB) concern as the follower company if--

(i) The follower company will be a subcontractor and the Standard Industrial Classification (SIC) Major Group of the acquisition is one in which use of an evaluation factor or subfactor for participation of SDB concerns is currently authorized (see FAR 19.201(b)); or

(ii) The follower company will be a prime contractor and the SIC Major Group of the acquisition is one in which use of a price evaluation adjustment is currently authorized (see FAR 19.201(b)).

(2) If special effort is required by paragraph (1) of this section and an SDB is not selected as the follower company, the contracting officer shall document the contract file to reflect--

(i) The extent of actions taken to identify SDB concerns for participation in the acquisition; and

(ii) The rationale for selection of a non-SDB as the follower company.

PART 219--SMALL BUSINESS PROGRAMS

4. Section 219.001 is revised to read as follows:

219.001 Definitions.

Small disadvantaged business concern is defined:

(i) A higher customary progress payment rate for SDB concerns (see 232.501-1(a)(i) and 252.232-7004(c)).

(ii) A lower threshold for inclusion of customary progress payments in contracts with SDB concerns (see 232.502-1).

(iii) The prompt payment policy for SDB concerns in 232. 903 and 232.905(2).

(iv) Reporting contract actions with SDB concerns (``Type of Business'' on the DD Form 350, Individual Contracting Action Report (see 253.204-70(d)(5)(i)(A)) or ``Small Disadvantaged Business (SDB) Actions'' on the DD Form 1057, Monthly Contracting Summary of Actions $25,000 or Less (see 253.204-71(g)(2)).

5. Section 219.708 is amended by revising paragraph (c)(1) and removing paragraph (c)(2). The revised text reads as follows:

219.708 Solicitation provisions and contract clauses.

* * * * * * *

(c)(1) Do not use the clause at FAR 52.219-10, Incentive Subcontracting Program, in contracts with contractors that have comprehensive subcontracting plans approved under the test program described in 219.702(a).

6. Subpart 219.12 is added to read as follows:

Subpart 219.12--Small Disadvantaged Business Participation Program

Sec.

219.1203 Incentive subcontracting with small disadvantaged business concerns.

219.1204 Solicitation provisions and contract clauses.

219.1203 Incentive subcontracting with small disadvantaged business concerns.

The contracting officer shall encourage increased subcontracting opportunities for SDB concerns in negotiated acquisitions by providing monetary incentives in the SIC Major Groups for which use of an evaluation factor or subfactor for participation of SDB concerns is currently authorized (see FAR 19.201(b)). Incentives for exceeding SDB

subcontracting targets shall be paid only if an SDB subcontracting target was exceeded as a result of actual subcontract awards to SDBs, and not a result of developmental assistance credit under the Pilot Mentor-Protege Program (see Subpart 219.71).

219.1204 Solicitation provisions and contract clauses.

(c) The contracting officer shall, when contracting by negotiation, insert in solicitations and contracts containing the clause at FAR 52.219-25, Small Disadvantaged Business Participation Program-Disadvantaged Status and Reporting, a clause substantially the same as the clause at FAR 52.219-26, Small Disadvantaged Business Participation Program-Incentive Subcontracting, when authorized (see FAR 19.1203). The contracting officer may include an award fee rovision in lieu of the incentive; in such cases, however, the contracting officer shall not use the clause at FAR 52.219-26. Do not use award fee provisions in contracts with contractors that have comprehensive subcontracting plans

approved under the test program described in 219.702(a).

PART 226--OTHER SOCIOECONOMIC PROGRAMS

7. Section 226.7007 is amended by revising paragraph (b) to read as follows:

226.7007 Goals and incentives for subcontracting with HBCU/MIs.

* * * * *

(b) The contracting officer may, when contracting by negotiation, insert in solicitations and contracts a clause similar to the clause at FAR 52.219-10, Incentive Subcontracting Program, when a subcontracting plan is required, and inclusion of a monetary incentive is, in the judgment of the contracting officer, necessary to increase subcontracting opportunities for historically black colleges or universities and minority institutions. The clause should include a separate goal for historically black colleges or universities and minority institutions.

PART 236--CONSTRUCTION AND ARCHITECT-ENGINEER CONTRACTS

8. Section 236.602-1 is amended by revising paragraph (a)(i)(6)(C) to read as follows:

236.602-1 Selection criteria.

(a) * * *

(i) * * *

(6) * * *

(C) Consider the extent to which potential contractors identify and commit to small business, to small disadvantaged business (SDB) if the Standard Industrial Classification Major Group of the subcontracted effort is one in which use of an evaluation factor or subfactor for participation of SDB concerns is currently authorized (see FAR 19.210(b)), and to historically black college or university and minority institution performance as subcontractors.

PART 252--SOLICITATION PROVISIONS AND CONTRACT CLAUSES

252.212-7001 [Amended]

9. Section 252.212-7001 is amended by revising the clause date to read ``(JAN 1999)'', and by removing the entry at 252.219-7005.

252.219-7005 [Removed and Reserved]

10. Section 252.219-7005 is removed and reserved.

Appendix I to Chapter 2--[Amended]

11. Appendix I to Chapter 2 is amended by revising Section I-104 to read as follows:

Appendix I--Policy and Procedures for the DOD Pilot Mentor-Protege Program

* * * * *

I-104 Eligibility requirements for a protege firm.

(a) An entity may qualify as a protege firm if it is--

(1) An SDB concern as defined at 219.001, paragraph (1) of the definition of ``small disadvantaged business concern,'' which is--

(i) Eligible for the award of Federal contracts; and

(ii) A small business according to the SBA size standard for the Standard Industrial Classification (SIC) code that represents the contemplated supplies or services to be provided by the protege firm

to the mentor firm; or

(2) A qualified organization employing the severely disabled as defined in Pub. L. 102-172, section 8064A.

(b) A protege firm may self-certify to a mentor firm that it meets the eligibility requirements in paragraph (a) (1) or (2) of this section. Mentor firms may rely in good faith on a written representation that the entity meets the requirements of paragraph (a) (1) or (2) of this section, except for a protégé's status as a small disadvantaged business concern (see FAR 19.703(b)).

(c) A protégé firm may have only one active mentor-protégé agreement.

[Federal Register: November 20, 1998 (Volume 63, Number 224)]

From the Federal Register Online via GPO Access [wais.access.gpo.gov]

DEPARTMENT OF DEFENSE

48 CFR Parts 209, 213, 219, 225, 231, 235, 236, 252, and 253

Defense Federal Acquisition Regulation Supplement; Adoption of Interim Rules as Final Rules Without Change

AGENCY: Department of Defense (DoD).

ACTION: Final rules.

SUMMARY: The Director of Defense Procurement is adopting as final, without change, eight interim rules that amended the Defense Federal Acquisition Regulation Supplement (DFARS). The rules pertain to contractor responsibility, awards to small disadvantaged business concerns, small business subcontracting plans, domestic source

restrictions, restructuring costs, research and development contracting, and construction in foreign countries.

EFFECTIVE DATE: November 20, 1998.

FOR FURTHER INFORMATION CONTACT: Ms. Michelle Peterson, (703) 602-0131.

Supplementary Information:

A. Background

The following is a summary of the eight interim rules that are adopted as final without change. DoD published the interim rules in the Federal Register for public comment and considered all comments received.

List of Firms Not Eligible for Defense Contracts (DFARS Case 97-D325) (63 FR 14836, March 27, 1998)

This rule amends DFARS Parts 209 and 252 to implement Section 843 of the National Defense Authorization Act for Fiscal Year 1998 (Public Law 105-85). Section 843 requires that the Secretary of Defense maintain a list of all firms that the Secretary has identified as being subject to a prohibition on contract award due to ownership or control

of the firm by the government of a terrorist country; and that DoD contractors be prohibited from entering into subcontracts with firms on the list unless there is a compelling reason to do so.Direct Award of 8(a) Contracts (DFARS Case 98-D011) (63 FR 33586, June 19, 1998)

This rule amends DFARS Parts 213, 219, 252, and 253 to implement a Memorandum of Understanding (MOU) dated May 6, 1998, between the Small Business Administration (SBA) and DoD. The MOU streamlines the

processing procedures for contract awards under SBA's 8(a) Program by authorizing DoD to award contracts directly to 8(a) concerns.Comprehensive Subcontracting Plans (DFARS Case 97-D323) (63 FR 14640, March 26, 1998)

This rule amends DFARS 219.702 to reflect revisions made to the DoD Test Program for Negotiation of Comprehensive Small Business Subcontracting Plans, as required by Section 822 of the National Defense Authorization Act for Fiscal Year 1998 (Public Law 105-85). Section 822 extends, from September 30, 1998, to September 30, 2000, the expiration date for the test program; and provides for use of comprehensive subcontracting plans by participating contractors that are performing as subcontractors under DoD contracts. Waiver of 10 U.S.C. 2534--United Kingdom (DFARS Case 98-D016) (63 FR 43887, August 17, 1998)

This rule amends DFARS Subpart 225.70 and the clauses at DFARS 252.225-7016 and 252.225-7029 to implement a waiver of the domestic source restrictions of 10 U.S.C. 2534(a) for certain items manufactured in the United Kingdom. The waiver was signed by the Under Secretary of Defense (Acquisition and Technology) on June 19, 1998, and became effective on August 4, 1998.

Allowability of Costs for Restructuring Bonuses (DFARS Case 97-D312) (62 FR 63035, November 26, 1997)

This rule amends DFARS 231.205-6 to implement Section 8083 of the National Defense Appropriations Act for Fiscal Year 1998 (Public Law 105-56). Section 8083 prohibits the use of fiscal year 1998 funds to reimburse a contractor for costs paid by the contractor to an employee for a bonus or other payment in excess of the normal salary paid by the contractor to the employee, when such payment is part of restructuring costs associated with a business combination.

Restructuring Costs (DFARS Case 97-D313) (63 FR 7308, February 13, 1998)

This rule amends DFARS 231.205-70 to implement Section 8092 of the National Defense Appropriations Act for Fiscal Year 1998 (Public Law 105-56) and Section 804 of the National Defense Authorization Act for Fiscal Year 1998 (Public Law 105-85). Sections 8092 and 804 restrict the reimbursement of restructuring costs associated with a business combination undertaken by a defense contractor unless certain conditions are met.

Streamlined Research and Development Contracting (DFARS Case 97-D002) (63 FR 34605, June 25, 1998)

This rule revises DFARS Subpart 235.70 to implement streamlined solicitation and contracting procedures for research and development acquisitions. The procedures use a standard solicitation and contract format, and use the World Wide Web to disseminate the standard format and publish the resulting solicitations.

Construction in Foreign Countries (DFARS Case 97-D307) (63 FR 11522,

March 9, 1998)

This rule amends DFARS Part 236 and adds a new provision at 252.236-7012 to implement Section 112 of the Military Construction Appropriations Act for Fiscal Year 1998 (Public Law 105-45). Section 112 provides that no military construction appropriations may be used to award, to a foreign contractor, any contract estimated to exceed

$1,000,000 for military construction in the United States territories and possessions in the Pacific and on Kwajalein Atoll, or in countries bordering the Arabian Gulf, except for:

(1) Contract awards for which the lowest responsive and responsible bid of a United States firm exceeds the lowest responsive and responsible bid of a foreign firm by more than 20 percent, and

(2) contract awards for military construction on Kwajalein Atoll for which the lowest responsive and responsible bid is submitted by a Marshallese firm.

B. Regulatory Flexibility Act

DoD certifies that these final rules will not 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:

List of Firms Not Eligible for Defense Contracts (DFARS Case 97-D325)--Few small entities are believed to subcontract with firms that are owned or controlled by the government of a terrorist country.

Direct Award of 8(a) Contracts (DFARS Case 98-D011)--The rule only affects the administrative procedures used to award 8(a) contracts.

Comprehensive Subcontracting Plans (DFARS Case 97-D323)--Small businesses are exempt from subcontracting plan requirements, and the rule does not change the obligation of large business concerns to maximize subcontracting opportunities for small business concerns.

Waiver of 10 U.S.C. 2534--United Kingdom (DFARS Case 98-D016)--There are no known small business manufacturers of the restricted air circuit breakers; defense appropriations acts presently impose domestic

source restrictions on the acquisition of totally enclosed lifeboats and noncommercial ball and roller bearings; and the restrictions of 10 U.S.C. 2534(a) do not apply to acquisitions of commercial items incorporating ball or roller bearings.

Restructuring Costs (DFARS Case 97-D313) and Allowability of Costs for Restructuring Bonuses (DFARS Case 97-D312)--Most contracts awarded to small entities use simplified acquisition procedures or are awarded on a competitive fixed-priced basis, and do not require application of the cost principles contained in these rules. Streamlined Research and Development Contracting (DFARS Case 97-D002)--The rule merely provides an implementation of electronic

contracting procedures already authorized by the FAR. Construction in Foreign Countries (DFARS Case 97-D307)--The DFARS changes contained in this rule apply only to contracts for military construction on Kawjalein Atoll that are estimated to exceed $1,000,000; DoD awards approximately two such contracts annually.

C. Paperwork Reduction Act

The Office of Management and Budget (OMB) approved the information collection requirements associated with DFARS Case 97-D307, Construction in Foreign Countries, for use through August 31, 2001, under OMB Control Number 0704-0255. The other rules do not contain any information collection requirements that require the approval of OMB under 44 U.S.C. 3501, et seq.List of Subjects in 48 CFR Parts 209, 213, 219, 225, 231, 235, 236,

252, and 253

Government procurement.Michele P. Peterson, Executive Editor, Defense Acquisition Regulations Council. Interim Rules Adopted as Final Without Change

PART 209--CONTRACTOR QUALIFICATIONS, AND PART 252--SOLICITATION PROVISIONS AND CONTRACT CLAUSES

Accordingly, the interim rule amending 48 CFR parts 209 and 252, which was published at 63 FR 14836 on March 27, 1998, is adopted as a final rule without change.

PART 213--SIMPLIFIED ACQUISITION PROCEDURES, PART 219--SMALL BUSINESS PROGRAMS, PART 252--SOLICITATION PROVISIONS AND CONTRACT CLAUSES, AND PART 253--FORMS

Accordingly, the interim rule amending 48 CFR parts 213, 219, 252, and 253, which was published at 63 FR 33586 on June 19, 1998, is adopted as a final rule without change.

PART 219--SMALL BUSINESS PROGRAMS

Accordingly, the interim rule amending 48 CFR part 219, which was published at 63 FR 14640 on March 26, 1998, is adopted as a final rule without change.

PART 225--FOREIGN ACQUISITION, AND PART 252--SOLICITATION PROVISIONS AND CONTRACT CLAUSES

Accordingly, the interim rule amending 48 CFR parts 225 and 252, which was published at 63 FR 43887 on August 17, 1998, is adopted as a final rule without change.

PART 231--CONTRACT COST PRINCIPLES AND PROCEDURES

Accordingly, the interim rule amending 48 CFR part 231, which was published at 62 FR 63035 on November 26, 1997, is adopted as a final rule without change.

PART 231--CONTRACT COST PRINCIPLES AND PROCEDURES

Accordingly, the interim rule amending 48 CFR part 231, which was published at 63 FR 7308 on February 13, 1998, is adopted as a final rule without change.

PART 235--RESEARCH AND DEVELOPMENT CONTRACTING

Accordingly, the interim rule amending 48 CFR part 235, which was published at 63 FR 34605 on June 25, 1998, is adopted as a final rule without change.

PART 236--CONSTRUCTION AND ARCHITECT-ENGINEER CONTRACTS, AND PART 252--SOLICITATION PROVISIONS AND CONTRACT CLAUSES

Accordingly, the interim rule amending 48 CFR parts 236 and 252 at sections 236.102, 236.274, 236.570, 252.236-7010, and 252.236-7012, which was published at 63 FR 11522 on March 9, 1998, is adopted as a final rule without change.