DCN 20040608

[Federal Register: June 8, 2004 (Volume 69, Number 110)]

[Rules and Regulations]

DEPARTMENT OF DEFENSE

48 CFR Part 219

[DFARS Case 2003-D105]

Defense Federal Acquisition Regulation Supplement; Contracting for Architect-Engineer Services

AGENCY: Department of Defense (DoD).

ACTION: Interim rule with request for comments.

SUMMARY: DoD has issued an interim rule amending the Defense Federal Acquisition Regulation Supplement (DFARS) to implement Section 1427 of the National Defense Authorization Act for Fiscal Year 2004. Section 1427 increases, from $85,000 to $300,000, the threshold below which acquisitions for architect-engineer services for military construction or family housing projects are set aside for small business concerns.

DATES: Effective Date: June 8, 2004. Comments on the interim rule should be submitted in writing to the address shown below on or before August 9, 2004, to be considered in the formation of the final rule.

ADDRESSES: You may submit comments, identified by DFARS Case 2003-D105, using any of the following methods:

Federal eRulemaking Portal: http://www.regulations.gov.

Follow the instructions for submitting comments.

Defense Acquisition Regulations Web Site: http://emissary.acq.osd.mil/dar/dfars.nsf/pubcomm.

Follow the instructions for submitting comments.

E-mail: dfars@osd.mil. Include DFARS Case 2003-D105 in the subject line of the message.

Fax: (703) 602-0350.

Mail: Defense Acquisition Regulations Council, Attn: Mr. Euclides Barrera, OUSD (AT&L) DPAP (DAR), IMD 3C132, 3062 Defense Pentagon, Washington, DC 20301-3062.

Hand Delivery/Courier: Defense Acquisition Regulations Council, Crystal Square 4, Suite 200A, 241 18th Street, Arlington, VA 22202-3402.

All comments received will be posted to http://emissary.acq.osd.mil/dar/dfars.nsf.

FOR FURTHER INFORMATION CONTACT: Mr. Euclides Barrera, (703) 602-0296.

SUPPLEMENTARY INFORMATION:

A. Background

This interim rule amends DFARS part 219 to implement section 1427 of the National Defense Authorization Act for Fiscal Year 2004 (Pub. L. 108-136). Section 1427 amends 10 U.S.C. 2855 to increase, from $85,000 to $300,000, the threshold below which acquisitions for architect-engineer services for military construction or family housing projects are set aside for small business concerns.

This rule was not subject to Office of Management and Budget review under Executive Order 12866, dated September 30, 1993.

B. Regulatory Flexibility Act

DoD has prepared an initial regulatory flexibility analysis, which is summarized as follows:

The objective of the rule is to establish a new dollar threshold of $300,000 for use in determining whether DoD acquisitions for architect-engineer services for military construction or family housing projects will be set aside for small business concerns. The legal basis for the rule is 10 U.S.C. 2855, as amended by section 1427 of Pub. L. 108-136. In accordance with 10 U.S.C. 2855, acquisitions below the stated threshold must be set aside for small business concerns, and acquisitions at or above the threshold may not be set aside for small business concerns. The rule will apply to small entities that perform architect-engineer services. The rule will increase opportunities for these entities to receive DoD contract awards. 10 U.S.C. 2855 permits the Secretary of Defense to revise the dollar threshold specified within the statute, to ensure that small business concerns receive a reasonable share of contracts for architect-engineer services for military construction or family housing projects. The new statutory threshold of $300,000 is considered to be appropriate at this time.

A copy of the analysis may be obtained from the point of contact specified herein. DoD invites comments from small businesses and other interested parties. DoD also will consider comments from small entities concerning the affected DFARS subparts in accordance with 5 U.S.C. 610. Such comments should be submitted separately and should cite DFARS Case 2003-D105.

C. Paperwork Reduction Act

The Paperwork Reduction Act does not apply, because the 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 implements section 1427 of the National Defense Authorization Act for Fiscal Year 2004 (Pub. L. 108-136). Section 1427 amends 10 U.S.C. 2855 to increase, from $85,000 to $300,000, the threshold below which acquisitions for architect-engineer services for military construction or family housing projects are set aside for small business concerns. Section 1427 became effective upon enactment on November 24, 2003. Comments received in response to this interim rule will be considered in the formation of the final rule.

List of Subjects in 48 CFR Part 219

Government procurement.

Michele P. Peterson,

Executive Editor, Defense Acquisition Regulations Council.

Contracting for Architect-Engineer Services

DFARS Case 2003-D105

Interim Rule

PART 219—SMALL BUSINESS PROGRAMS

* * * * *

SUBPART 219.5--SET-ASIDES FOR SMALL BUSINESS

219.502-1 Requirements for setting aside acquisitions.

Do not set aside acquisitions for—

(1) Supplies which were developed and financed, in whole or in part, by Canadian sources under the U.S.-Canadian Defense Development Sharing Program; or

(2) Architect-engineer services for military construction or family housing projects of $85,000 [$300,000] or more (10 U.S.C. 2855), including indefinite delivery and indefinite quantity contracts if the value of all anticipated orders is expected to total $85,000 [$300,000] or more.

219.502-2 Total set-asides.

(a) Unless the contracting officer determines that the criteria for set-aside cannot be met, set aside for small business concerns acquisitions for—

(i) Construction, including maintenance and repairs, under $2 million;

(ii) Dredging under $1 million; and

(iii) Architect-engineer services for military construction or family housing projects of under $85,000 [$300,000].

* * * * *

SUBPART 219.10--SMALL BUSINESS COMPETITIVENESS DEMONSTRATION PROGRAM

219.1005 Applicability.

(a)(i) Architect-engineering services in support of military construction projects or military family housing projects are exempt from the Small Business Competitiveness Demonstration Program, except for the emerging small business (ESB) set-aside requirements. Accordingly, these shall—

(A) Be reviewed for possible award under the 8(a) Program regardless of dollar value.

(B) Not be set-aside for small business if the estimated value is $85,000 [$300,000] or more (including indefinite delivery-indefinite quantity contracts if the value of all anticipated orders exceeds $85,000 [$300,000]).

(C) Be considered for ESB set-aside if the estimated value is both less than the emerging small business reserve amount and less than $85,000 [$300,000].

(D) Be considered for small business set-aside if the estimated value is less than $85,000 [$300,000], regardless of whether small business set-asides for other architect-engineer services are prohibited under the Small Business Competitiveness Demonstration Program, when an ESB set-aside is not appropriate.

* * * * *

[Federal Register: June 8, 2004 (Volume 69, Number 110)]

[Rules and Regulations]

DEPARTMENT OF DEFENSE

48 CFR Parts 225 and 252

[DFARS Case 2002-D034]

Defense Federal Acquisition Regulation Supplement; Fish, Shellfish, and Seafood Products

AGENCY: Department of Defense (DoD).

ACTION: Final rule.

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SUMMARY: DoD has adopted as final, with changes, an interim rule amending the Defense Federal Acquisition Regulation Supplement (DFARS) to implement section 8136 of the DoD Appropriations Act for Fiscal Year 2003 and similar sections in subsequent DoD appropriations acts. Section 8136 requires the acquisition of domestic fish, shellfish, and seafood, to include fish, shellfish, and seafood manufactured or processed, or contained in foods manufactured or processed, in the United States.

EFFECTIVE DATE: June 8, 2004.

FOR FURTHER INFORMATION CONTACT: Ms. Amy Williams, Defense Acquisition Regulations Council, OUSD (AT&L) DPAP (DAR), IMD 3C132, 3062 Defense Pentagon, Washington, DC 20301-3062. Telephone (703) 602-0328; facsimile (703) 602-0350. Please cite DFARS Case 2002-D034.

SUPPLEMENTARY INFORMATION:

A. Background

DoD published an interim rule at 68 FR 7441 on February 14, 2003, to implement section 8136 of the DoD Appropriations Act for Fiscal Year 2003 (Pub. L. 107-248). Section 8136 relates to application of 10 U.S.C. 2533a (the Berry Amendment), which prohibits DoD from acquiring certain items unless they are grown, reprocessed, reused, or produced in the United States. 10 U.S.C. 2533a(f) provides an exception to this prohibition for foods manufactured or processed in the United States. Section 8136 of Pub. L. 107-248 made the exception at 10 U.S.C. 2533a(f) inapplicable to fish, shellfish, and seafood products. The interim rule published on February 14, 2003, amended DFARS 225.7002-2 and the clause at DFARS 252.225-7012 to add requirements for the acquisition of domestic fish, shellfish, and seafood in accordance with section 8136 of Pub. L. 107-248.

As a result of public comments received on the interim rule, DoD published a proposed rule at 68 FR 53945 on September 15, 2003, to clarify what ``produced in the United States'' means with regard to fish, shellfish, and seafood. DoD received no comments on the proposed rule. Therefore, DoD has adopted the proposed rule as a final rule, with an update to the statutory reference at DFARS 225.7002-2 to reflect the recurrence of this provision in section 8118 of the DoD Appropriations Act for Fiscal Year 2004 (Pub. L. 108-87).

This rule was not subject to Office of Management and Budget review under Executive Order 12866, dated September 30, 1993.

B. Regulatory Flexibility Act

This rule may 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. DoD has prepared a final regulatory flexibility analysis. A copy of the analysis may be obtained from the point of contact specified herein. The analysis is summarized as follows:

This final rule amends the DFARS to implement section 8136 of the DoD Appropriations Act for Fiscal Year 2003 and similar sections in subsequent DoD appropriations acts. Section 8136 makes 10 U.S.C. 2533a(f) inapplicable to fish, shellfish, and seafood products. 10 U.S.C. 2533a(f) is an exception to domestic source requirements that applies to foods manufactured or processed in the United States. The objective of the rule is to prohibit DoD acquisition of foreign fish, shellfish, and seafood, even if processed or manufactured in the United States. The rule applies to all suppliers, processors, and manufacturers of seafood products sold to DoD. There were no public comments on the initial regulatory flexibility analysis. As a result of public comments received on the interim rule, the final rule clarifies what ``produced in the United States'' means with regard to fish, shellfish, and seafood. The rule should have a beneficial impact on domestic suppliers of fish, shellfish, and seafood.

C. Paperwork Reduction Act

The Paperwork Reduction Act does not apply because the 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.

List of Subjects in 48 CFR Parts 225 and 252

Government procurement.

Michele P. Peterson,

Executive Editor, Defense Acquisition Regulations Council.

Fish, Shellfish, and Seafood Products

DFARS Case 2002-D034

Final Rule

PART 225—FOREIGN ACQUISITION

* * * * *

SUBPART 225.70—AUTHORIZATION ACTS, APPROPRIATIONS ACTS, AND OTHER STATUTORY RESTRICTIONS ON FOREIGN ACQUISITION

* * * * *

225.7002-2 Exceptions.

Acquisitions in the following categories are not subject to the restrictions in 225.7002-1:

* * * * *

(l) Acquisitions of foods manufactured or processed in the United States, regardless of where the foods (and any component if applicable) were grown or produced[.], except that [However], in accordance with Section 8136 of the DoD Appropriations Act for Fiscal Year 2003 (Pub. L. 107-248) [and similar sections in subsequent DoD appropriations acts], the following foods are subject to the restrictions in 225.7002-1: [this exception does not apply to] F[f]ish, shellfish, or seafood manufactured or processed in the United States; and [or] fish, shellfish, or seafood contained in foods manufactured or processed in the United States.

* * * * *

PART 252—SOLICITATION PROVISIONS AND CONTRACT CLAUSES

* * * * *

252.212-7001 Contract Terms and Conditions Required to Implement Statutes or Executive Orders Applicable to Defense Acquisitions of Commercial Items.

As prescribed in 212.301(f)(iii), use the following clause:

CONTRACT TERMS AND CONDITIONS REQUIRED TO IMPLEMENT STATUTES OR EXECUTIVE ORDERS APPLICABLE TO DEFENSE ACQUISITIONS OF COMMERCIAL ITEMS (MAY 2004 [JUN 2004])

* * * * *

(b) The Contractor agrees to comply with any clause that is checked on the following list of Defense FAR Supplement clauses which, if checked, is included in this contract by reference to implement provisions of law or Executive orders applicable to acquisitions of commercial items or components.

* * * * *

____ 252.225-7012

Preference for Certain Domestic Commodities (MAY 2004 [JUN 2004])

(10 U.S.C. 2533a).

* * * * *

252.225-7012 Preference for Certain Domestic Commodities.

As prescribed in 225.7002-3(a), use the following clause:

PREFERENCE FOR CERTAIN DOMESTIC COMMODITIES (MAY 2004 [JUN 2004])

(a) Definitions. As used in this clause—

* * * * *

[(3) “United States” means the 50 States, the District of Columbia, and outlying areas.

(4) “U.S.-flag vessel” means a vessel of the United States or belonging to the United States, including any vessel registered or having national status under the laws of the United States.]

(b) The Contractor shall deliver under this contract only such of the following items, either as end products or components, that have been grown, reprocessed, reused, or produced in the United States, its possessions, or Puerto Rico:

(c) This clause does not apply—

* * * * *

(4) To foods[, other than fish, shellfish, or seafood,] that have been manufactured or processed in the United States, its possessions, or Puerto Rico, regardless of where the foods (and any component if applicable) were grown or produced[.], except that this clause does apply to f[F]ish, shellfish, or seafood manufactured or processed in the United States and fish, shellfish, or seafood contained in foods manufactured or processed in the United States [shall be provided in accordance with paragraph (d) of this clause];

* * * * *

[(d)(1) Fish, shellfish, and seafood delivered under this contract, or contained in foods delivered under this contract—

(i) Shall be taken from the sea by U.S.-flag vessels; or

(ii) If not taken from the sea, shall be obtained from fishing within the United States; and

(2) Any processing or manufacturing of the fish, shellfish, or seafood shall be performed on a U.S.-flag vessel or in the United States.]

(End of clause)

DEPARTMENT OF DEFENSE

48 CFR Part 206

[DFARS Case 2002-D023]

Defense Federal Acquisition Regulation Supplement; Follow-On Production Contracts for Products Developed Pursuant to Prototype Projects

AGENCY: Department of Defense (DoD).

ACTION: Final rule.

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SUMMARY: DoD has issued a final rule amending the Defense Federal Acquisition Regulation Supplement (DFARS) to provide an exception from competition requirements to apply to contracts awarded under the authority of section 822 of the National Defense Authorization Act for Fiscal Year 2002. Section 822 provides for award of a follow-on production contract, without competition, to participants in an ``other transaction'' agreement for a prototype project, if the agreement was entered into through use of competitive procedures, provided for at least one-third non-Federal cost share, and meets certain other conditions of law.

EFFECTIVE DATE: June 8, 2004.

FOR FURTHER INFORMATION CONTACT: Mr. Thaddeus Godlewski, Defense Acquisition Regulations Council, OUSD(AT&L)DPAP(DAR), IMD 3C132, 3062 Defense Pentagon, Washington, DC 20301-3062. Telephone (703) 602-2022; facsimile (703) 602-0350. Please cite DFARS Case 2002-D023.

SUPPLEMENTARY INFORMATION:

A. Background

Section 845 of the National Defense Authorization Act for Fiscal Year 1994 (Pub. L. 103-160; 10 U.S.C. 2371 note) provides authority for DoD to enter into transactions other than contracts, grants, or cooperative agreements, in certain situations, for prototype projects that are directly relevant to weapons or weapon systems proposed to be acquired or developed by DoD. Such transactions are commonly referred to as ``other transaction'' (OT) agreements for prototype projects.

Section 822 of the National Defense Authorization Act for Fiscal Year 2002 (Pub. L. 107-107) permits award of a follow-on production contract, without competition, to participants in an OT agreement for a prototype project if--

(1) The OT agreement provided for a follow-on production contract;

(2) The OT agreement provided for at least one-third non-Federal cost share for the prototype project;

(3) Competitive procedures were used for the selection of parties for participation in the OT agreement;

(4) The participants in the OT agreement successfully completed the prototype project;

(5) The number of units provided for in the follow-on production contract does not exceed the number of units specified in the OT agreement for such a follow-on production contract; and

(6) The prices established in the follow-on production contract do not exceed the target prices specified in the OT agreement for such a follow-on production contract.

DoD published amendments to the ``Other Transactions'' regulations at 32 CFR part 3 on March 30, 2004 (69 FR 16481), to implement section 822. This DFARS rule provides the corresponding exemption from competition requirements for follow-on production contracts awarded under the authority of section 822.

DoD published a proposed DFARS rule at 68 FR 33057 on June 3, 2003. Two sources submitted comments on the proposed rule. A discussion of the comments is provided below. The difference between the proposed and final rules is addressed in the discussion of Comment 3 below.

1. Comment: A company may submit a proposal below cost for production during the initial competition in hopes of recovering costs in a sole source environment. The Government should not facilitate recovery of these costs, and this should be addressed prior to finalizing the rule.

DoD Response: This concern is not unique to this rule, but exists in any competition where only one offeror is selected for award. The companion rule at 32 CFR 3.9 requires that the offered prices for production be evaluated during the original competition. This, coupled with the inherent responsibility of a contracting officer to ensure that contractors honor their commitments, obviates the need for any special DFARS text regarding this concern.

2. Comment: The requirement for production may change such that the prototype no longer represents a clear solution to the Government's needs and, in such a case, other companies should be afforded the opportunity to offer solutions for the production phase. The rule should specify the procedures to be used for such a follow-on competition (e.g., solicit only original competitors, open solicitation).

DoD Response: The companion rule at 32 CFR 3.9 outlines the upfront limitations for use of this authority and specifies in paragraph (c) that the authority should be used only when the risk of the prototype project permits realistic production pricing without placing undue risks on the awardee. This limits use of the authority for higher-risk prototype projects where the production requirement, and thus the pricing, may be less certain. This limitation, coupled with the inherent responsibility of a contracting officer regarding scope determinations, obviates the need to specify any unique scope determination for use of this follow-on authority. Additionally, if the contracting officer determines that the follow-on production is beyond the scope of that originally contemplated, the contracting officer must then develop an acquisition strategy for the new requirement. The contracting officer must determine, in accordance with the FAR and the particulars of the acquisition, the appropriate acquisition strategy. It is not practicable to stipulate in regulation what constitutes a new requirement, nor the nature of any follow-on competition for such a new requirement.

3. Comment: The reference in the parenthetical at 206.001(S-70)(2) should be corrected from ``32 CFR 3.9(c)'' to ``32 CFR 3.9(d)''.

DoD Response: Concur. The correction has been incorporated into the final rule.

This rule was not subject to Office of Management and Budget review under Executive Order 12866, dated September 30, 1993.

B. Regulatory Flexibility Act

DoD certifies that this final rule 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 the rule applies only to production contracts for DoD weapons and weapon systems. Such contracts typically are not awarded to small business concerns.

C. Paperwork Reduction Act

The Paperwork Reduction Act does not apply because the 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.

List of Subjects in 48 CFR Part 206

Government procurement.

Michele P. Peterson,

Executive Editor, Defense Acquisition Regulations Council.

0

Therefore, 48 CFR part 206 is amended as follows:

Follow-On Production Contracts for Products Developed

Pursuant to Prototype Projects

DFARS Case 2002-D023

Final Rule

Follow-On Production Contracts for Products Developed

Pursuant to Prototype Projects

DFARS Case 2002-D023

Final Rule

PART 206—COMPETITION REQUIREMENTS

* * * * *

206.001 Applicability.

(b) Contracts awarded using the procedures in 237.104(b)(ii) are expressly authorized by 10 U.S.C. 1091.

[(S-70) Also excepted from this part are follow-on production contracts for products developed pursuant to the “other transactions” authority of 10 U.S.C. 2371 for prototype projects when—

(1) The other transaction agreement includes provisions for a follow-on production contract;

(2) The contracting officer receives sufficient information from the agreements officer and the project manager for the prototype other transaction agreement, which documents that the conditions set forth in 10 U.S.C. 2371 note, subsections (f)(2)(A) and (B) (see 32 CFR 3.9(d)), have been met; and

(3) The contracting officer establishes quantities and prices for the follow-on production contract that do not exceed the quantities and target prices established in the other transaction agreement.]

* * * * *

PART 206—COMPETITION REQUIREMENTS

* * * * *

206.001 Applicability.

(b) Contracts awarded using the procedures in 237.104(b)(ii) are expressly authorized by 10 U.S.C. 1091.

[(S-70) Also excepted from this part are follow-on production contracts for products developed pursuant to the “other transactions” authority of 10 U.S.C. 2371 for prototype projects when—

(1) The other transaction agreement includes provisions for a follow-on production contract;

(2) The contracting officer receives sufficient information from the agreements officer and the project manager for the prototype other transaction agreement, which documents that the conditions set forth in 10 U.S.C. 2371 note, subsections (f)(2)(A) and (B) (see 32 CFR 3.9(d)), have been met; and

(3) The contracting officer establishes quantities and prices for the follow-on production contract that do not exceed the quantities and target prices established in the other transaction agreement.]

* * * * *

[Federal Register: June 8, 2004 (Volume 69, Number 110)]

[Rules and Regulations]

DEPARTMENT OF DEFENSE

48 CFR Part 242

[DFARS Case 2002-D015]

Defense Federal Acquisition Regulation Supplement; Production Surveillance and Reporting

AGENCY: Department of Defense (DoD).

ACTION: Final rule.

SUMMARY: DoD has issued a final rule amending the Defense Federal Acquisition Regulation Supplement (DFARS) to eliminate requirements for contract administration offices to perform production surveillance on contractors that have only Criticality Designator C (low-urgency) contracts. This change will permit contract administration offices to devote more resources to critical and high-risk contracts.

EFFECTIVE DATE: June 8, 2004.

FOR FURTHER INFORMATION CONTACT: Mr. Steven Cohen, Defense Acquisition Regulations Council, OUSD(AT&L)DPAP(DAR), IMD 3C132, 3062 Defense Pentagon, Washington, DC 20301-3062. Telephone (703) 602-0293; facsimile (703) 602-0350. Please cite DFARS Case 2002-D015.

SUPPLEMENTARY INFORMATION:

A. Background

This final rule revises DFARS 242.1104 to eliminate requirements for contract administration offices to perform production surveillance on contractors that have only Criticality Designator C (low-urgency) contracts, and for monitoring of progress on any Criticality Designator C contract, unless production surveillance or contract monitoring is specifically requested by the contracting officer. This change will enable contract administration offices to use production surveillance resources in a more effective manner.

DoD published a proposed rule at 68 FR 50495 on August 21, 2003. One respondent submitted comments on the proposed rule. The respondent disagreed with the proposed change, because a Criticality Designator C ontract could become more critical at a later date. DoD agrees that this situation could occur. However, DoD does not believe the general policy should be driven by exceptional situations. The rule provides flexibility for contracting officers to request production surveillance and contract monitoring when deemed necessary. Therefore, DoD has adopted the proposed rule as a final rule without change.

This rule was not subject to Office of Management and Budget review under Executive Order 12866, dated September 30, 1993.

B. Regulatory Flexibility Act

DoD certifies that this final rule 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 the DFARS changes in this rule primarily affect the allocation of Government resources to production surveillance functions.

C. Paperwork Reduction Act

The Paperwork Reduction Act does not apply, because the 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.

List of Subjects in 48 CFR Part 242

Government procurement.

Michele P. Peterson,

Executive Editor, Defense Acquisition Regulations Council.

Therefore, 48 CFR Part 242 is amended as follows:

Production Surveillance and Reporting

DFARS Case 2002-D015

Final Rule

PART 242—CONTRACT ADMINISTRATION AND AUDIT SERVICES

* * * * *

242.1104 Surveillance requirements.

(a) The cognizant contract administration office (CAO) must

[(i) Shall perform production surveillance on all contractors that have Criticality Designator A or B contracts;

(ii) Shall not perform production surveillance on contractors that have only Criticality Designator C contracts, unless specifically requested by the contracting officer; and

(iii) When production surveillance is required, shall—]

(i)[(A)] Conduct a periodic risk assessment of each [the] contractor to determine the degree of production surveillance needed for [all] contracts awarded to that contractor. The risk assessment must [shall] consider information provided by the contractor and the contracting officer;

(ii)[(B)] Develop a production surveillance plan based on the risk level determined during the [a] risk assessment;

(iii)[(C)] Modify the production surveillance plan to incorporate any special surveillance requirements for individual contracts, including any requirements identified by the contracting officer; and

(iv)[(D)] Monitor contract progress and identify potential contract delinquencies in accordance with the production surveillance plan. [Contracts with Criticality Designator C are exempt from this requirement unless specifically requested by the contracting officer.]

* * * * *

[Federal Register: June 8, 2004 (Volume 69, Number 110)]

[Rules and Regulations]

DEPARTMENT OF DEFENSE

48 CFR Parts 227 and 252

[DFARS Case 2003-D104]

Defense Federal Acquisition Regulation Supplement; Written Assurance of Technical Data Conformity

AGENCY: Department of Defense (DoD).

ACTION: Interim rule with request for comments.

SUMMARY: DoD has issued an interim rule amending the Defense Federal Acquisition Regulation Supplement (DFARS) to implement Section 844 of the National Defense Authorization Act for Fiscal Year 2004. Section 844 eliminates the requirement for a contractor to furnish written assurance that technical data delivered to the Government is complete and accurate and satisfies the requirements of the contract.

DATES: Effective date: June 8, 2004.

Comment date: Comments on the interim rule should be submitted to the address shown below on or before August 9, 2004, to be considered in the formation of the final rule.

ADDRESSES: You may submit comments, identified by DFARS Case 2003-D104, using any of the following methods:

Federal eRulemaking Portal: http://www.regulations.gov.

Follow the instructions for submitting comments.

Defense Acquisition Regulations Web site: http://emissary.acq.osd.mil/dar/dfars.nsf/pubcomm.

Follow the instructions for submitting comments.

E-mail: dfars@osd.mil. Include DFARS Case 2003-D104 in the subject line of the message.

Fax: (703) 602-0350.

Mail: Defense Acquisition Regulations Council, Attn: Ms. Amy Williams, OUSD(AT&L)DPAP(DAR), IMD 3C132, 3062 Defense Pentagon, Washington, DC 20301-3062.

Hand Delivery/Courier: Defense Acquisition Regulations Council, Crystal Square 4, Suite 200A, 241 18th Street, Arlington, VA 22202-3402.

All comments received will be posted to http://emissary.acq.osd.mil/dar/dfars.nsf.

FOR FURTHER INFORMATION CONTACT: Ms. Amy Williams, (703) 602-0328.

SUPPLEMENTARY INFORMATION:

A. Background

This interim rule amends DFARS Subpart 227.71 and removes the clause at DFARS 252.227-7036, Declaration of Technical Data Conformity, to implement Section 844 of the National Defense Authorization Act for Fiscal Year 2004 (Public Law 108-136). Section 844 amended 10 U.S.C. 2320(b) to eliminate the requirement for contractors to furnish written assurance that delivered technical data is complete and accurate and satisfies the requirements of the contract. This change reduces paperwork for contractors, but does not diminish the contractor's obligation to provide technical data that is complete and adequate, and that complies with contract requirements.

This rule was not subject to Office of Management and Budget review under Executive Order 12866, dated September 30, 1993.

B. Regulatory Flexibility Act

DoD does not expect this rule 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 elimination of the requirement for a contractor to provide a written declaration of technical data conformity does not diminish the contractor's obligation to provide technical data that is complete and accurate and satisfies contract requirements. Therefore, DoD has not performed an initial regulatory flexibility analysis. DoD invites comments from small businesses and other interested parties. DoD also will consider comments from small entities concerning the affected DFARS subparts in accordance with 5 U.S.C. 610. Such comments should be submitted separately and should cite DFARS Case 2003-D104.

C. Paperwork Reduction Act

The information collection requirements of the clause at DFARS 252.227-7036, Declaration of Technical Data Conformity, are currently approved under Office of Management and Budget Control Number 0704-0369. Elimination of this clause will reduce estimated annual public reporting burden by 126,886 hours (estimated 507,545 declarations annually at .25 hours per declaration).

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 implements Section 844 of the National Defense Authorization Act for Fiscal Year 2004 (Public Law 108-136). Section 844 amended 10 U.S.C. 2320(b) to eliminate the requirement for contractors to furnish written assurance that delivered technical data is complete and accurate and satisfies the requirements of the contract. Section 844 became effective upon enactment on November 24, 003. Comments received in response to this interim rule will be considered in the formation of the final rule.

List of Subjects in 48 CFR Parts 227 and 252

Government procurement.

Michele P. Peterson,

Executive Editor, Defense Acquisition Regulations Council

Therefore, 48 CFR Parts 227 and 252 are amended as follows:

Written Assurance of Technical Data Conformity

DFARS Case 2003-D104

Interim Rule

PART 227—PATENTS, DATA, AND COPYRIGHTS

* * * * *

SUBPART 227.71—RIGHTS IN TECHNICAL DATA

* * * * *

227.7103-6 Contract clauses.

* * * * *

(e) Use the following clauses in solicitations and contracts that include the clause at 252.227-7013:

(1) 252.227-7016, Rights in Bid or Proposal Information;

(2) 252.227-7030, Technical Data--Withholding of Payment; [and]

(3) 252.227-7036, Declaration of Technical Data Conformity; and

(4[3]) 252.227-7037, Validation of Restrictive Markings on Technical Data (paragraph (e) of the clause contains information that must be included in a challenge).

* * * * *

227.7103-14 Conformity, acceptance, and warranty of technical data.

(a) Statutory requirements. 10 U.S.C. 2320—

(1) Requires contractors to furnish written assurance, at the time technical data are delivered or are made available to the Government, that the technical data are complete, accurate, and satisfy the requirements of the contract concerning such data;

(2[1]) Provides for the establishment of remedies applicable to technical data found to be incomplete, inadequate, or not to satisfy the requirements of the contract concerning such data; and

(3[2]) Authorizes agency heads to withhold payments (or exercise such other remedies an agency head considers appropriate) during any period if the contractor does not meet the requirements of the contract pertaining to the delivery of technical data.

* * * * *

227.7104 Contracts under the Small Business Innovation Research (SBIR) Program.

* * * * *

(e) Use the following provision and clauses in SBIR solicitations and contracts that include the clause at 252.227-7018:

(1) 252.227-7016, Rights in Bid or Proposal Information;

(2) 252.227-7017, Identification and Assertion of Use, Release, or Disclosure Restrictions;

(3) 252.227-7019, Validation of Asserted Restrictions--Computer Software;

(4) 252.227-7030, Technical Data--Withholding of Payment; [and]

(5) 252.227-7036, Declaration of Technical Data Conformity; and

(6[5]) 252.227-7037, Validation of Restrictive Markings on Technical Data (paragraph (e) of the clause contains information that must be included in a challenge).

* * * * *

PART 252—SOLICITATION PROVISIONS AND CONTRACT CLAUSES

* * * * *

252.227-7036 Declaration of Technical Data Conformity [Reserved].

As prescribed at 227.7103-6(e)(3) or 227.7104(e)(5), use the following clause:

DECLARATION OF TECHNICAL DATA CONFORMITY (JAN 1997)

All technical data delivered under this contract shall be accompanied by the following written declaration:

The Contractor, ________________________, hereby declares that, to the best of its knowledge and belief, the technical data delivered herewith under Contract No.____________________ is complete, accurate, and complies with all requirements of the contract.

Date ____________________________________

Name and Title of Authorized Official ___________________________________

(End of clause)

* * * * *

252.227-7037 Validation of Restrictive Markings on Technical Data.

As prescribed in 227.7102-3(c), 227.7103-6(e)(4[3]), 227.7104(e)(6[5]), or 227.7203-6(f), use the following clause:

* * * * *

Federal Register: June 8, 2004 (Volume 69, Number 110)]

[Proposed Rules]

DEPARTMENT OF DEFENSE

48 CFR Part 212

[DFARS Case 2003-D074]

Defense Federal Acquisition Regulation Supplement; Acquisition of Commercial Items

AGENCY: Department of Defense (DoD).

ACTION: Proposed rule with request for comments.

SUMMARY: DoD is proposing to amend the Defense Federal Acquisition Regulation Supplement (DFARS) to update text pertaining to the acquisition of commercial items. This proposed rule is a result of an initiative undertaken by DoD to dramatically change the purpose and content of the DFARS.

DATES: Comments on the proposed rule should be submitted in writing to the address shown below on or before August 9, 2004, to be considered in the formation of the final rule.

ADDRESSES: You may submit comments, identified by DFARS Case 2003-D074, using any of the following methods:

Federal eRulemaking Portal: http://www.regulations.gov.

Follow the instructions for submitting comments.

Defense Acquisition Regulations Web Site: http://emissary.acq.osd.mil/dar/dfars.nsf/pubcomm.

Follow the instructions for

submitting comments.

E-mail: dfars@osd.mil. Include DFARS Case 2003-D074 in the subject line of the message. Fax: (703) 602-0350.

Mail: Defense Acquisition Regulations Council, Attn: Ms. Teresa Brooks, OUSD (AT&L) DPAP (DAR), IMD 3C132, 3062 Defense Pentagon, Washington, DC 20301-3062.

Hand Delivery/Courier: Defense Acquisition Regulations Council, Crystal Square 4, Suite 200A, 241 18th Street, Arlington, VA 22202-3402.

All comments received will be posted to http://emissary.acq.osd.mil/dar/dfars.nsf

FOR FURTHER INFORMATION CONTACT: Ms. Teresa Brooks, (703) 602-0326.

SUPPLEMENTARY INFORMATION:

A. Background

DFARS Transformation is a major DoD initiative to dramatically change the purpose and content of the DFARS. The objective is to improve the efficiency and effectiveness of the acquisition process, while allowing the acquisition workforce the flexibility to innovate. The transformed DFARS will contain only requirements of law, DoD-wide policies, delegations of FAR authorities, deviations from FAR requirements, and policies/procedures that have a significant effect beyond the internal operating procedures of DoD or a significant cost or administrative impact on contractors or offerors. Additional information on the DFARS Transformation initiative is available at http://www.acq.osd.mil/dpap/dfars/transf.htm.

This proposed rule is a result of the DFARS Transformation initiative. The proposed changes--

Delete unnecessary text pertaining to structuring of contracts at DFARS 212.303; and

Update a FAR reference at DFARS 212.503(c)(ii).

This rule was not subject to Office of Management and Budget review under Executive Order 12866, dated September 30, 1993.

B. Regulatory Flexibility Act

DoD does not expect this rule 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 the rule deletes unnecessary text pertaining to structuring of contracts and updates reference information, but makes no significant change to contracting policy. Therefore, DoD has not performed an initial regulatory flexibility analysis. DoD invites comments from small businesses and other interested parties. DoD also will consider comments from small entities concerning the affected DFARS subparts in accordance with 5 U.S.C. 610. Such comments should be submitted separately and should cite DFARS Case 2003-D074.

C. Paperwork Reduction Act

The Paperwork Reduction Act does not apply, because the 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.

List of Subjects in 48 CFR Part 212

Government procurement.

Michele P. Peterson,

Executive Editor, Defense Acquisition Regulations Council.

Therefore, DoD proposes to amend 48 CFR part 212 as follows:

Acquisition of Commercial Items

DFARS Case 2003-D074

Proposed Rule

PART 212—ACQUISITION OF COMMERCIAL ITEMS

* * * * *

SUBPART 212.3—SOLICITATION PROVISIONS AND CONTRACT CLAUSES FOR THE ACQUISITION OF COMMERCIAL ITEMS

* * * * *

212.303 Contract format.

Structure awards valued above the micro-purchase threshold (e.g., contract line items, delivery schedule, and invoice instructions) in a manner that will minimize the generation of invoices valued at or below the micro-purchase threshold.

* * * * *

SUBPART 212.5—APPLICABILITY OF CERTAIN LAWS TO THE ACQUISITION OF COMMERCIAL ITEMS

* * * * *

212.503 Applicability of certain laws to Executive agency contracts for the acquisition of commercial items.

* * * * *

[Federal Register: June 8, 2004 (Volume 69, Number 110)]

[Proposed Rules]

[Page 31939-31941]

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

[DOCID:fr08jn04-29]

-----------------------------------------------------------------------

DEPARTMENT OF DEFENSE

48 CFR Parts 225 and 252

[DFARS Case 2004-D001]

Defense Federal Acquisition Regulation Supplement; Reporting Contract Performance Outside the United States

AGENCY: Department of Defense (DoD).

ACTION: Proposed rule with request for comments.

-----------------------------------------------------------------------

SUMMARY: DoD is proposing to amend the Defense Federal Acquisition Regulation Supplement (DFARS) to clarify requirements for reporting of contract performance outside the United States. This proposed rule is a result of a transformation initiative undertaken by DoD to dramatically change the purpose and content of the DFARS.

DATES: Comments on the proposed rule should be submitted in writing to the address shown below on or before August 9, 2004, to be considered in the formation of the final rule.

ADDRESSES: You may submit comments, identified by DFARS Case 2004-D001, using any of the following methods:

Federal eRulemaking Portal: http://www.regulations.gov.

Follow the instructions for submitting comments.

Defense Acquisition Regulations Web site: http://emissary.acq.osd.mil/dar/dfars.nsf/pubcomm.

Follow the instructions for submitting comments.

E-mail: dfars@osd.mil. Include DFARS Case 2004-D001 in the subject line of the message.

Fax: (703) 602-0350.

Mail: Defense Acquisition Regulations Council, Attn: Ms. Amy Williams, OUSD (AT&L) DPAP (DAR), IMD 3C132, 3062 Defense Pentagon, Washington, DC 20301-3062.

Hand Delivery/Courier: Defense Acquisition Regulations Council, Crystal Square 4, Suite 200A, 241 18th Street, Arlington, VA 22202-3402.

All comments received will be posted to http://emissary.acq.osd.mil/dar/dfars.nsf.

FOR FURTHER INFORMATION CONTACT: Ms. Amy Williams, (703) 602-0328.

SUPPLEMENTARY INFORMATION:

A. Background

DFARS Transformation is a major DoD initiative to dramatically change the purpose and content of the DFARS. The objective is to improve the efficiency and effectiveness of the acquisition process, while allowing the acquisition workforce the flexibility to innovate. The transformed DFARS will contain only requirements of law, DoD-wide policies, delegations of FAR authorities, deviations from FAR requirements, and policies/procedures that have a significant effect beyond the internal operating procedures of DoD or a significant cost or administrative impact on contractors or offerors. Additional information on the DFARS Transformation initiative is available at http://www.acq.osd.mil/dp/dars/transf.htm.

This proposed rule is a result of the DFARS Transformation initiative. The proposed changes clarify requirements for reporting of contract performance outside the United States; and establish two separate contract clauses to eliminate confusion between two reporting requirements presently contained in one clause.

DFARS Subpart 225.72, Reporting Contract Performance Outside the United States, implements: (1) DoD policy for contractor reporting of performance outside the United States under contracts exceeding $500,000; and (2) requirements of 10 U.S.C. 2410g for offerors and contractors to notify DoD of any intention to perform a DoD contract outside the United States and Canada, when the contract exceeds $10 million and could be performed inside the United States or Canada.

This proposed rule revises DFARS Subpart 225.72, and the corresponding solicitation provision and contract clauses, to clarify the two separate reporting requirements. In addition, the proposed rule removes text from DFARS 225.7202 related to contracting officer distribution of reports. This text will be relocated to the new DFARS companion resource, Procedures, Guidance, and Information (PGI). A proposed rule describing the purpose and structure of PGI was published at 69 FR 8145 on February 23, 2004.

This rule was not subject to Office of Management and Budget review under Executive Order 12866, dated September 30, 1993.

B. Regulatory Flexibility Act

DoD does not expect this rule 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 the rule clarifies existing reporting requirements, with no substantive change to those requirements. Therefore, DoD has not performed an initial regulatory flexibility analysis. DoD invites comments from small businesses and other interested parties. DoD also will consider comments from small entities concerning the affected DFARS subparts in accordance with 5 U.S.C. 610. Such comments should be submitted separately and should cite DFARS Case 2004-D001.

C. Paperwork Reduction Act

The proposed rule does not contain any new information collection requirements that require the approval of the Office of Management and Budget (OMB) under 44 U.S.C. 3501, et seq. The existing information collection requirements in DFARS Subpart 225.72 have been approved by OMB under Control Number 0704-0229.

List of Subjects in 48 CFR Parts 225 and 252

Government procurement.

Michele P. Peterson,

Executive Editor, Defense Acquisition Regulations Council.

Therefore, DoD proposes to amend 48 CFR Parts 225 and 252 as follows:

Reporting Contract Performance Outside the United States

DFARS Case 2004-D001

Proposed Rule

(Text that is stricken and highlighted will be relocated

to Procedures, Guidance, and Information (PGI))

PART 225—FOREIGN ACQUISITION

* * * * *

SUBPART 225.72--REPORTING CONTRACT PERFORMANCE OUTSIDE THE UNITED STATES

225.7200 Scope of subpart.

This subpart--

(a) Prescribes procedures for contractor reporting and DoD monitoring of the volume, type, and nature of contract performance outside the United States; and

(b) Implements 10 U.S.C. 2410g, for offerors and contractors to notify DoD of any intention to perform a DoD contract outside the United States and Canada when the contract could be performed inside the United States or Canada.

[This subpart addresses--

(a) The requirements of 10 U.S.C. 2410g for offerors and contractors to notify DoD of any intention to perform a DoD contract outside the United States and Canada when the contract could be performed inside the United States or Canada; and

(b) DoD requirements for contractor reporting of the volume, type, and nature of contract performance outside the United States.]

225.7201 Exception.

This subpart does not apply to contracts for commercial items, construction, ores, natural gas, utilities, petroleum products and crudes, timber (logs), or subsistence.

225.7202 [Contracting officer] D[d]istribution of reports.

Forward a copy of reports submitted in accordance with the clause at 252.225-7004, Reporting of Contract Performance Outside the United States, to the Deputy Director of Defense Procurement and Acquisition Policy (Program Acquisition and International Contracting), OUSD(AT&L)DPAP(PAIC), Washington, DC 20301-3060. This is necessary to satisfy the requirement of 10 U.S.C. 2410g that the notifications (or copies) be maintained in compiled form for 5 years after the date of submission. [Follow the procedures at PGI 225.7202 for distribution of reports submitted with offers in accordance with the provision at 252.225-7003, Report of Intended Performance Outside the United States and Canada – Submission with Offer.]

225.7203 Solicitation provision and contract clause.

Except for acquisitions described in 225.7201—

(a) Use the provision at 252.225-7003, Report of Intended Performance Outside the United States [and Canada – Submission with Offer], in solicitations with a value exceeding $500,000 [$10 million]; and

(b) Use the clause at 252.225-7004, [Immediate] Reporting of [Intended] Contract Performance Outside the United States [and Canada], in solicitations and contracts with a value exceeding $500,000 [$10 million; and

(c) Use the clause at 252.225-7XXX, Quarterly Reporting of Contract Performance Outside the United States, in solicitations and contracts with a value exceeding $500,000].

* * * * *

PART 252—SOLICITATION PROVISIONS AND CONTRACT CLAUSES

* * * * *

252.225-7003 Report of Intended Performance Outside the United States [and Canada – Submission with Offer].

As prescribed in 225.7203(a), use the following provision:

REPORT OF INTENDED PERFORMANCE OUTSIDE THE

UNITED STATES [AND CANADA – SUBMISSION WITH OFFER]

(APR 2003[XXX 2004])

(a) The offeror shall submit[, with its offer,] a Report of Contract Performance Outside [a report of intended performance outside] the United States [and Canada], with its offer, if—

(1) The offer exceeds $10 million in value; and

(2) The offeror is aware that the offeror or a first-tier subcontractor intends to perform any part of the contract outside the United States and Canada that—

(i) Exceeds $500,000 in value; and

(ii) Could be performed inside the United States or Canada.

(b) Information to be reported includes that for—

(1) Subcontracts;

(2) Purchases; and

(3) Intracompany transfers when transfers originate in a foreign location.

(c) The offeror shall submit the report using—

(1) DD Form 2139, Report of Contract Performance Outside the United States; or

(2) A computer-generated report that contains all information required by DD Form 2139.

(d) The offeror may obtain a copy of DD Form 2139 from the Contracting Officer [or via the Internet at http://web1.whs.osd.mil/icdhome/forms.htm].

(End of provision)

252.225-7004 Reporting of Contract Performance Outside the United States.

As prescribed in 225.7203(b), use the following clause:

REPORTING OF CONTRACT PERFORMANCE OUTSIDE THE UNITED STATES

(APR 2003)

(a) Reporting criteria. Reporting under this clause is required for—

(1) Contracts exceeding $10 million in value, when any part that exceeds $500,000 in value could be performed inside the United States or Canada, but will be performed outside the United States and Canada. If the Contractor submitted the information with its offer, the Contractor need not resubmit the information unless it changes; and

(2) Contracts exceeding $500,000 in value, when any part that exceeds the simplified acquisition threshold in Part 2 of the Federal Acquisition Regulation will be performed outside the United States, unless—

(i) A foreign place of performance is the principal place of performance; and

(ii) The Contractor indicated the foreign place of performance in the Place of Performance provision of its offer.

(b) Information required. Information to be reported includes that for—

(1) Subcontracts;

(2) Purchases; and

(3) Intracompany transfers when transfers originate in a foreign location.

(c) Submission of reports. The Contractor—

(1) Shall submit reports required by paragraph (a)(1) of this clause to the Contracting Officer as soon as the information is known, with a copy to the addressee in paragraph (c)(2) of this clause. To the maximum extent practicable, the Contractor shall report information regarding a first-tier subcontractor at least 30 days before award of the subcontract;

(2) Shall submit reports required by paragraph (a)(2) of this clause within 10 days after the end of each Government quarter to—

(3) Shall submit reports using—

(i) DD Form 2139, Report of Contract Performance Outside the United States; or

(ii) A computer-generated report that contains all information required by DD Form 2139; and

(4) May obtain copies of DD Form 2139 from the Contracting Officer.

(d) Flowdown requirements.

(1) The Contractor shall include the substance of this clause in all first-tier subcontracts exceeding $500,000, except those for commercial items, construction, ores, natural gases, utilities, petroleum products and crudes, timber (logs), or subsistence.

(2) The Contractor shall provide the number of this contract to its subcontractors for reporting purposes.

(End of clause)

[252.225-7004 Immediate Reporting of Intended Contract Performance Outside the United States and Canada.

As prescribed in 225.7203(b), use the following clause:

IMMEDIATE REPORTING OF INTENDED CONTRACT PERFORMANCE OUTSIDE THE UNITED STATES AND CANADA (XXX 2004)

(a) Reporting requirement. The Contractor shall submit a report in accordance with this clause, if the Contractor or a first-tier subcontractor will perform any part of this contract outside the United States and Canada that—

(1) Exceeds $500,000 in value; and

(2) Could be performed inside the United States or Canada.

(b) Submission of reports. The Contractor--

(1) Shall submit a report as soon as the information is known;

(2) To the maximum extent practicable, shall submit a report regarding a first-tier subcontractor at least 30 days before award of the subcontract;

(3) Need not resubmit information submitted with its offer, unless the information changes;

(4) Shall submit all reports to the Contracting Officer; and

(5) Shall submit a copy of each report to: Deputy Director of Defense Procurement and Acquisition Policy (Program Acquisition and International Contracting), OUSD(AT&L)DPAP(PAIC), Washington, DC 20301-3060.

(c) Report format. The Contractor--

(1) Shall submit reports using—

(i) DD Form 2139, Report of Contract Performance Outside the United States; or

(ii) A computer-generated report that contains all information required by DD Form 2139; and

(2) May obtain copies of DD Form 2139 from the Contracting Officer or via the Internet at http://web1.whs.osd.mil/icdhome/forms.htm.

(End of clause)]

* * * * *

[252.225-7XXX Quarterly Reporting of Contract Performance Outside the United States.

As prescribed in 225.7203(c), use the following clause:

QUARTERLY REPORTING OF CONTRACT PERFORMANCE OUTSIDE THE UNITED STATES (XXX 2004)

(a) Reporting requirement. Except as provided in paragraph (b) of this clause, within 10 days after the end of each quarter of the Government’s fiscal year, the Contractor shall report any subcontract, purchase, or intracompany transfer that—

(1) Will be or has been performed outside the United States;

(2) Exceeds the simplified acquisition threshold in Part 2 of the Federal Acquisition Regulation; and

(3) Has not been identified in a report for a previous quarter.

(b) Exception. Reporting under this clause is not required if—

(1) A foreign place of performance is the principal place of performance; and

(2) The Contractor specified the foreign place of performance in the Place of Performance provision of its offer.

(c) Submission of reports. The Contractor shall submit the reports required by this clause to: Deputy Director of Defense Procurement and Acquisition Policy (Program Acquisition and International Contracting), OUSD(AT&L)DPAP(PAIC), Washington, DC 20301-3060.

(d) Report format. The Contractor—

(1) Shall submit reports using—

(i) DD Form 2139, Report of Contract Performance Outside the United States; or

(ii) A computer-generated report that contains all information required by DD Form 2139; and

(2) May obtain copies of DD Form 2139 from the Contracting Officer or via the Internet at http://web1.whs.osd.mil/icdhome/forms.htm.

(e) Subcontracts. The Contractor--

(1) Shall include the substance of this clause in all first-tier subcontracts exceeding $500,000, except those for commercial items, construction, ores, natural gases, utilities, petroleum products and crudes, timber (logs), or subsistence; and

(2) Shall provide the number of this contract to its subcontractors required to submit reports under this clause.

(End of clause)]

END OF DFARS CHANGE NOTICE 20040608