DFARS CHANGE NOTICE 20060711

[Federal Register: July 11, 2006 DEPARTMENT OF DEFENSE

Defense Acquisition Regulations System

48 CFR Part 216

[DFARS Case 2003-D078]

Defense Federal Acquisition Regulation Supplement; Types of Contracts

AGENCY: Defense Acquisition Regulations System, Department of Defense (DoD).

ACTION: Final rule.

SUMMARY: DoD has issued a final rule amending the Defense Federal Acquisition Regulation Supplement (DFARS) to update text on the selection and use of contract types. This rule is a result of a transformation initiative undertaken by DoD to dramatically change the purpose and content of the DFARS.

EFFECTIVE DATE: July 11, 2006.

FOR FURTHER INFORMATION CONTACT: Ms. Robin Schulze, Defense Acquisition Regulations System, OUSD (AT&L) DPAP (DARS), IMD 3C132, 3062 Defense Pentagon, Washington, DC 20301-3062. Telephone (703) 602-0326; facsimile (703) 602-0350. Please cite DFARS Case 2003-D078.

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/dars/dfars/transformation/index.htm.

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

Streamline text on the use of economic price adjustment clauses;

Increase, from 3 to 5 years, the standard maximum ordering period under basic ordering agreements;

Delete obsolete text on the use of cost-plus-fixed-fee contracts for environmental restoration;

Delete unnecessary text on design stability and use of incentive provisions; and

Delete procedures for selecting contract type and for use of special economic price adjustment clauses, incentive contracts, and basic ordering agreements. Text on these subjects has been relocated to the DFARS companion resource, Procedures, Guidance, and Information (PGI), available at http:// www. acq.osd.mil/ dpap/ dars/pgi.

DoD published a proposed rule at 70 FR 54694 on September 16, 2005. DoD received no comments on the proposed rule. 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 rule updates and streamlines DFARS text, but makes no significant change to DoD contracting policy.

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 216

Government procurement.

Michele P. Peterson, Editor, Defense Acquisition Regulations System.

Therefore, 48 CFR part 216 is amended as follows:

PART 216--TYPES OF CONTRACTS

1. The authority citation for 48 CFR part 216 continues to read as follows:

Authority: 41 U.S.C. 421 and 48 CFR Chapter 1.

216.104 [Removed]

2. Section 216.104 is removed.

3. Section 216.104-70 is revised to read as follows:

Sec. 216.104-70 Research and development.

Follow the procedures at PGI 216.104-70 for selecting the appropriate research and development contract type.

4. Section 216.203-4 is revised to read as follows:

Sec. 216.203-4 Contract clauses.

(1) Generally, use the clauses at FAR 52.216-2, Economic Price Adjustment--Standard Supplies, FAR 52.216-3, Economic Price Adjustment--Semistandard Supplies, and FAR 52.216-4, Economic Price Adjustment--Labor and Material, only when--

(i) The total contract price exceeds the simplified acquisition threshold; and

(ii) Delivery or performance will not be completed within 6 months after contract award.

(2) Follow the procedures at PGI 216.203-4 when using an economic price adjustment clause based on cost indexes of labor or material.

5. Section 216.306 is amended by revising paragraph (c)(ii) to read as follows:

216.306 Cost-plus-fixed-fee contracts.

(c) * * *

(ii) The prohibition in paragraph (c)(i) of this section does not apply to contracts specifically approved in writing, setting forth the reasons therefor, in accordance with the following:

(A) The Secretaries of the military departments are authorized to approve such contracts that are for environmental work only, provided the environmental work is not classified as construction, as defined by 10 U.S.C. 2801.

(B) The Secretary of Defense or designee must approve such contracts that are not for environmental work only or are for environmental work classified as construction.

6. Sections 216.402-2 through 216.403-2 are revised to read as follows:

216.402-2 Technical performance incentives.

See PGI 216.402-2 for guidance on establishing performance incentives.

216.403 Fixed-price incentive contracts.

216.403-2 Fixed-price incentive (successive targets) contracts.

See PGI 216.403-2 for guidance on the use of fixed-price incentive (successive targets) contracts.

216.404 [Removed]

7. Section 216.404 is removed.

8. Section 216.405-1 is revised to read as follows:

216.405-1 Cost-plus-incentive-fee contracts.

See PGI 216.405-1 for guidance on the use of cost-plus-incentive-fee contracts.

9. Section 216.405-2 is revised to read as follows:

216.405-2 Cost-plus-award-fee contracts.

(b) Application. The cost-plus-award-fee (CPAF) contract may include provisional award fee payments. A provisional award fee payment is a payment made within an evaluation period prior to a final evaluation for that period. The contracting officer may include provisional award fee payments in a CPAF contract on a case-by-case basis, provided those payments--

(i) Are made no more frequently than monthly;

(ii) Are limited to no more than--

(A) For the initial award fee evaluation period, 50 percent of the award fee available for that period; and

(B) For subsequent award fee evaluation periods, 80 percent of the evaluation score for the prior evaluation period times the award fee available for the current period, e.g., if the contractor received 90 percent of the award fee available for the prior evaluation period, provisional payments for the current period shall not exceed 72 percent (90 percent x 80 percent) of the award fee available for the current period;

(iii) Are superseded by an interim or final award fee evaluation for the applicable evaluation period. If provisional payments have exceeded the payment determined by the evaluation score for the applicable period, the contracting officer shall collect the debt in accordance with FAR 32.606; and

(iv) May be discontinued, or reduced in such amounts deemed appropriate by the contracting officer, when the contracting officer determines that the contractor will not achieve a level of performance commensurate with the provisional payment. The contracting officer shall notify the contractor in writing of any discontinuance or reduction in provisional award fee payments.

(c) Limitations.

(i) The CPAF contract shall not be used--

(A) To avoid--

(1) Establishing cost-plus-fixed-fee contracts when the criteria for cost-plus-fixed-fee contracts apply; or

(2) Developing objective targets so a cost-plus-incentive-fee contract can be used; or

(B) For either engineering development or operational system development acquisitions that have specifications suitable for simultaneous research and development and production, except a CPAF contract may be used for individual engineering development or operational system development acquisitions ancillary to the development of a major weapon system or equipment, where--

(1) It is more advantageous; and

(2) The purpose of the acquisition is clearly to determine or solve specific problems associated with the major weapon system or equipment.

(ii) Do not apply the weighted guidelines method to CPAF contracts for either the base (fixed) fee or the award fee.

(iii) The base fee shall not exceed 3 percent of the estimated cost of the contract exclusive of the fee.

(S-70) See PGI 216.405-2 for guidance on the use of CPAF contracts.

10. Section 216.470 is revised to read as follows:

216.470 Other applications of award fees.

See PGI 216.470 for guidance on other applications of award fees.

11. Section 216.703 is revised to read as follows:

216.703 Basic ordering agreements.

(c) Limitations. The period during which orders may be placed against a basic ordering agreement may not exceed 5 years.

(d) Orders. Follow the procedures at PGI 216.703(d) for issuing orders under basic ordering agreements.

DEPARTMENT OF DEFENSE

Defense Acquisition Regulations System

48 CFR Parts 212, 225, and 252

[DFARS Case 2006-D003]

Defense Federal Acquisition Regulation Supplement; Relocation of Subpart 225.6 to 225.76

AGENCY: Defense Acquisition Regulations System, Department of Defense (DoD).

ACTION: Final rule.

SUMMARY: DoD has issued a final rule amending the Defense Federal Acquisition Regulation Supplement (DFARS) to relocate text addressing trade sanctions, to reflect the removal of the corresponding subpart of the Federal Acquisition Regulation.

EFFECTIVE DATE: July 11, 2006.

FOR FURTHER INFORMATION CONTACT: Ms. Amy Williams, Defense Acquisition Regulations System, OUSD (AT&L) DPAP (DARS), IMD 3C132, 3062 Defense Pentagon, Washington, DC 20301-3062. Telephone (703) 602-0328; facsimile (703) 602-0350. Please cite DFARS Case 2006-D003.

SUPPLEMENTARY INFORMATION:

A. Background Item VII of Federal Acquisition Circular 2005-09, published at 71 FR 20305 on April 19, 2006, removed FAR Subpart 25.6, Trade Sanctions. Therefore, this final rule removes the corresponding DFARS subpart. The text formerly included in DFARS Subpart 225.6, addressing DoD statutory restrictions relating to the Secondary Arab Boycott of Israel, is relocated to a new DFARS Subpart 225.76 with no substantive change in content.

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 will not have a significant cost or administrative impact on contractors or offerors, or a significant effect beyond the internal operating procedures of DoD. Therefore, publication for public comment is not required. However, DoD will consider comments from small entities concerning the affected DFARS subparts in accordance with 5 U.S.C. 610. Such comments should cite DFARS Case 2006-D003.

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 212, 225, and 252

Government procurement.

Michele P. Peterson, Editor, Defense Acquisition Regulations System.

Therefore, 48 CFR parts 212, 225, and 252 are amended as follows:

1. The authority citation for 48 CFR parts 212, 225, and 252 continues to read as follows:

Authority: 41 U.S.C. 421 and 48 CFR Chapter 1.

PART 212--ACQUISITION OF COMMERCIAL ITEMS

212.301 [Amended]

2. Section 212.301 is amended in paragraph (f)(ii), in the second sentence, by removing ``(see 225.670-3)'' and adding in its place ``(see 225.7603)''.

PART 225--FOREIGN ACQUISITION

Subpart 225.6--[Removed]

3. Subpart 225.6 is removed.

225.1103 [Amended]

4. Section 225.1103 is amended as follows:0

a. By removing paragraph (2); and0

b. By redesignating paragraphs (3) and (4) as paragraphs (2) and (3) respectively.

5. Subpart 225.76 is added to read as follows:

Subpart 225.76--Secondary Arab Boycott of Israel

Sec.

225.7601 Restriction.

225.7602 Procedures.

225.7603 Exceptions.

225.7604 Waivers.

225.7605 Solicitation provision.

Subpart 225.76--Secondary Arab Boycott of Israel

225.7601 Restriction.

In accordance with 10 U.S.C. 2410i, do not enter into a contract with a foreign entity unless it has certified that it does not comply with the secondary Arab boycott of Israel.

225.7602 Procedures.

For contracts awarded to the Canadian Commercial Corporation (CCC), the CCC will submit a certification from its proposed subcontractor with the other required precontractual information (see 225.870).

225.7603 Exceptions.

This restriction does not apply to--

(a) Purchases at or below the simplified acquisition threshold;

(b) Contracts for consumable supplies, provisions, or services for the support of United States forces or of allied forces in a foreign country; or

(c) Contracts pertaining to the use of any equipment, technology, data, or services for intelligence or classified purposes, or to the acquisition or lease thereof, in the interest of national security.

225.7604 Waivers.

The Secretary of Defense may waive this restriction on the basis of national security interests. Forward waiver requests to the Director, Defense Procurement and Acquisition Policy, ATTN: OUSD(AT&L)DPAP(PAIC), 3060 Defense Pentagon, Washington, DC 20301-3060.

225.7605 Solicitation provision.

Unless an exception applies or a waiver has been granted in accordance with 225.7604, use the provision at 252.225-7031, Secondary Arab Boycott of Israel, in all solicitations.

PART 252--SOLICITATION PROVISIONS AND CONTRACT CLAUSES

252.225-7031 [Amended]

6. Section 252.225-7031 is amended in the introductory text by removing ``225.1103(2)'' and adding in its place ``225.7605''.

252.225-7041 [Amended]

7. Section 252.225-7041 is amended in the introductory text by removing ``225.1103(3)'' and adding in its place ``225.1103(2)''.

252.225-7042 [Amended]

8. Section 252.225-7042 is amended in the introductory text by removing ``225.1103(4)'' and adding in its place ``225.1103(3)''.

DEPARTMENT OF DEFENSE

Defense Acquisition Regulations System

48 CFR Part 239

[DFARS Case 2003-D094]

Defense Federal Acquisition Regulation Supplement; Exchange or Sale of Government-Owned Information Technology

AGENCY: Defense Acquisition Regulations System, Department of Defense (DoD).

ACTION: Final rule.

SUMMARY: DoD has issued a final rule amending the Defense Federal Acquisition Regulation Supplement (DFARS) to delete obsolete procedures for the exchange or sale of Government-owned information technology. This rule is a result of a transformation initiative undertaken by DoD to dramatically change the purpose and content of the DFARS.

DATES: Effective Date: July 11, 2006.

FOR FURTHER INFORMATION CONTACT: Mr. Bill Sain, Defense Acquisition Regulations System, OUSD (AT&L) DPAP (DARS), IMD 3C132, 3062 Defense Pentagon, Washington, DC 20301-3062. Telephone (703) 602-0293; facsimile (703) 602-0350. Please cite DFARS Case 2003-D094.

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/dars/dfars/transformation/index.htm.

This final rule is a result of the DFARS Transformation initiative. The rule revises DFARS Subpart 239.70 to delete obsolete procedures for the exchange or sale of Government-owned information technology. DoD now handles the exchange or sale of information technology equipment in the same manner as other personal property, in accordance with DoD 4140.1-R, DoD Supply Chain Materiel Management Regulation. The rule includes a reference to DoD 4140.1-R, at DFARS 239.7001.

DoD published a proposed rule at 70 FR 54697 on September 16, 2005. DoD received no comments on the proposed rule. 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 rule deletes procedures that have become obsolete with regard to the exchange or sale of Government-owned information technology.

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 239

Government procurement.

Michele P. Peterson, Editor, Defense Acquisition Regulations System.

Therefore, 48 CFR part 239 is amended as follows:

PART 239-ACQUISITION OF INFORMATION TECHNOLOGY

1. The authority citation for 48 CFR part 239 continues to read as follows:

Authority: 41 U.S.C. 421 and 48 CFR Chapter 1.

2. Subpart 239.70 is revised to read as follows:

Subpart 239.70--Exchange or Sale of Information Technology

239.7001 Policy.

Agencies shall follow the procedures in DoD 4140.1-R, DoD Supply Chain Materiel Management Regulation, Chapter 9, Section C9.5, when considering the exchange or sale of Government-owned information technology.

DEPARTMENT OF DEFENSE

Defense Acquisition Regulations System

48 CFR Parts 239 and 252

[DFARS Case 2003-D068]

Defense Federal Acquisition Regulation Supplement; Acquisition of Information Technology

AGENCY: Defense Acquisition Regulations System, Department of Defense (DoD).

ACTION: Final rule.

SUMMARY: DoD has issued a final rule amending the Defense Federal Acquisition Regulation Supplement (DFARS) to update text on the acquisition of information technology. This rule is a result of a transformation initiative undertaken by DoD to dramatically change the purpose and content of the DFARS.

EFFECTIVE DATE: July 11, 2006.

FOR FURTHER INFORMATION CONTACT: Mr. Bill Sain, Defense Acquisition Regulations System, OUSD (AT&L) DPAP (DARS), IMD 3C132, 3062 Defense Pentagon, Washington, DC 20301-3062. Telephone (703) 602-0293; facsimile (703) 602-0350. Please cite DFARS Case 2003-D068.

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/dars/dfars/ transformation/ index. htm.

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

Remove text that is obsolete or unnecessary;

Clarify text addressing charges for special construction or assembly related to telecommunications services;

Clarify the text of clauses used in basic agreements for telecommunications services; and

Remove text addressing the acquisition of telecommunications services from foreign carriers and examples of instances where additional information may be necessary to determine price reasonableness. Text on these subjects has been relocated to the DFARS companion resource, Procedures, Guidance, and Information (PGI), available at http://www. acq.osd.mil/ dpap/dars/pgi.

DoD published a proposed rule at 70 FR 54698 on September 16, 2005. DoD received no comments on the proposed rule. DoD has adopted the proposed rule as a final rule, with an additional change at DFARS 239.7406(c) to add a reference to PGI text containing examples of instances where additional information may be necessary to determine price reasonableness.

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 updates and clarifies DFARS text, but makes no significant change to DoD policy for the acquisition of information technology.

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 239 and 252

Government procurement.

Michele P. Peterson, Editor, Defense Acquisition Regulations System.

Therefore, 48 CFR parts 239 and 252 are amended as follows:

1. The authority citation for 48 CFR parts 239 and 252 continues to read as follows:

Authority: 41 U.S.C. 421 and 48 CFR Chapter 1.

PART 239--ACQUISITION OF INFORMATION TECHNOLOGY

239.7200 [Removed]

2. Section 239.7200 is removed.

3. Section 239.7201 is added to read as follows:

239.7201 Solicitation requirements.

Contracting officers shall ensure that all applicable Federal Information Processing Standards are incorporated into solicitations.

239.7202 [Removed]

4. Section 239.7202 is removed.

5. Section 239.7400 is amended by revising the second sentence to read as follows:

239.7400 Scope.

* * * Telecommunications services meet the definition of information technology.

6. Section 239.7402 is amended by revising paragraph (a) and adding paragraph (c) to read as follows:

239.7402 Policy.

(a) Acquisition. DoD policy is to acquire telecommunications services from common and noncommon telecommunications carriers--

(1) On a competitive basis, except when acquisition using other than full and open competition is justified;

(2) Recognizing the regulations, practices, and decisions of the Federal Communications Commission (FCC) and other governmental regulatory bodies on rates, cost principles, and accounting practices; and

(3) Making provision in telecommunications services contracts for adoption of--

(i) FCC approved practices; or

(ii) The generally accepted practices of the industry on those issues concerning common carrier services where--

(A) The governmental regulatory body has not expressed itself;

(B) The governmental regulatory body has declined jurisdiction; or

(C) There is no governmental regulatory body to decide.

* * * * *

(c) Foreign carriers. For information on contracting with foreign carriers, see PGI 239.7402(c).

239.7403 and 239.7404 [Removed and Reserved]

7. Sections 239.7403 and 239.7404 are removed and reserved.

8. Section 239.7406 is amended by revising paragraph (c) to read as follows:

239.7406 Cost or pricing data and information other than cost or pricing data.

* * * * *

(c) Contracting officers shall obtain sufficient information to determine that the prices are reasonable in accordance with FAR 15.403-3 or 15.403-4. See PGI 239.7406 for examples of instances where additional information may be necessary to determine price reasonableness.

9. Section 239.7408-1 is amended in paragraph (e) by revising the last sentence to read as follows:

239.7408-1 General.

* * * * *

(e) * * * The contracting officer must approve special construction charges before final payment.

10. Section 239.7408-2 is amended by revising paragraph (a) to read as follows:

239.7408-2 Applicability of construction labor standards for special construction.

(a) The construction labor standards in FAR Subpart 22.4 ordinarily do not apply to special construction. However, if the special construction includes construction, alteration, or repair (as defined in FAR 22.401) of a public building or public work, the construction labor standards may apply. Determine applicability under FAR 22.402.

* * * * *

11. Section 239.7409 is amended in paragraph (b) by revising the second sentence to read as follows:

239.7409 Special assembly.

* * * * *

(b) * * * The contracting officer should negotiate special assembly rates and charges before starting service. * * *

12. Section 239.7411 is amended by revising paragraph (d) to read as follows:

239.7411 Contract clauses.

* * * * *

(d) Use the clause at 252.239-7016, Telecommunications Security Equipment, Devices, Techniques, and Services, in solicitations and contracts when performance of a contract requires secure telecommunications.

Subpart 239.75 [Removed]

13. Subpart 239.75 is removed.

PART 252--SOLICITATION PROVISIONS AND CONTRACT CLAUSES

14. Section 252.239-7013 is revised to read as follows:

252.239-7013 Obligation of the Government.

As prescribed in 239.7411(c), use the following clause:

OBLIGATION OF THE GOVERNMENT (JUL 2006)

(a) This basic agreement is not a contract. The Government incurs no monetary liability under this agreement.

(b) The Government incurs liability only upon issuance of a communication service authorization, which is the contract and incorporates the terms of this agreement.

(End of clause)

15. Section 252.239-7015 is revised to read as follows:

252.239-7015 Continuation of communication service authorizations.

As prescribed in 239.7411(c), use the following clause:

CONTINUATION OF COMMUNICATION SERVICE AUTHORIZATIONS (JUL 2006)

(a) All communication service authorizations issued by------incorporating Basic Agreement Number ------, dated ------, are modified to incorporate this basic agreement.

(b) Communication service authorizations currently in effect which were issued by the activity in paragraph (a) of this clause incorporating other agreements with the Contractor may also be modified to incorporate this agreement.

(c) This basic agreement is not a contract.

(End of clause)

DEPARTMENT OF DEFENSE

Defense Acquisition Regulations System

48 CFR Parts 208, 225, 252, 253, and Chapter 2

[DFARS Case 2003-D072]

Defense Federal Acquisition Regulation Supplement; Required Sources of Supply

AGENCY: Defense Acquisition Regulations System, Department of Defense (DoD).

ACTION: Final rule.

SUMMARY: DoD has issued a final rule amending the Defense Federal Acquisition Regulation Supplement (DFARS) to update text addressing acquisitions made through Government supply sources. This rule is a result of a transformation initiative undertaken by DoD to dramatically change the purpose and content of the DFARS.

DATES: Effective Date: July 11, 2006.

FOR FURTHER INFORMATION CONTACT: Ms. Robin Schulze, Defense Acquisition Regulations System, OUSD (AT&L) DPAP (DARS), IMD 3C132, 3062 Defense Pentagon, Washington, DC 20301-3062. Telephone (703) 602-0326; facsimile (703) 602-0350. Please cite DFARS Case 2003-D072.

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/dars/dfars/transformation/index.htm.

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

Delete informational text on GSA Federal Supply Schedules that is unnecessary for inclusion in the DFARS;

Delete text on the Defense National Stockpile and the acquisition of helium. These issues are adequately addressed in the Federal Acquisition Regulation at 8.003 and Subpart 8.5;

Delete obsolete text on the DoD Industrial Preparedness Production Planning Program. There is no longer a DoD-wide Program; and

Delete procedures for ordering from central nonprofit agencies; for acquisition of items under the DoD Coordinated Acquisition Program; for contracting or performing field service functions for NASA; for use of the DoD Precious Metals Recovery Program; and for use of enterprise software agreements for acquiring commercial software and related services. Text on these subjects has been relocated to the DFARS companion resource, Procedures, Guidance, and Information (PGI), available at http://www.acq.osd.mil/dpap/dars/pgi

DoD published a proposed rule at 70 FR 73187 on December 9, 2005. One source submitted comments on the proposed rule. That source recommended establishment of separate Federal supply class (FSC) commodity codes for Americans with Disabilities Act (ADA) and Occupational Safety and Health Administration (OSHA) compliant products, to distinguish the ADA or OSHA compliant products from similar products that are not ADA or OSHA compliant (e.g., ramps, landings, steps, decks). Although DoD includes certain FSC commodity codes in its publications, the codes are established and maintained by the General Services Administration (GSA). Therefore, DoD has forwarded the respondent's recommendation to GSA for consideration. DoD has adopted the proposed rule as a final rule, with an additional change at DFARS 225.7005-1 to remove a reference to DFARS Subpart 208.72, which has been eliminated by this 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 deletes obsolete, unnecessary, or procedural DFARS text, but makes no significant change to DoD contracting policy.

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 208, 225, 252, and 253

Government procurement.

Michele P. Peterson, Editor, Defense Acquisition Regulations System.

Therefore, 48 CFR parts 208, 225, 252, and 253 and Appendix B to Chapter 2 are amended as follows:

1. The authority citation for 48 CFR parts 208, 225, 252, and 253 and Appendix B to subchapter I continues to read as follows:

Authority: 41 U.S.C. 421 and 48 CFR Chapter 1.

PART 208--REQUIRED SOURCES OF SUPPLIES AND SERVICES

2. Section 208.002 is revised to read as follows:

208.002 Priorities for use of Government supply sources.

(a)(1)(v) See Subpart 208.70, Coordinated Acquisition, and Subpart 208.74, Enterprise Software Agreements.

208.003 [Removed]

3. Section 208.003 is removed.

4. Section 208.705 is revised to read as follows:

208.705 Procedures.

Follow the procedures at PGI 208.705 when placing orders with central nonprofit agencies.

208.7000 [Amended]

5. Section 208.7000 is amended in paragraph (a), in the parenthetical, by removing ``appendix B'' and adding in its place ``PGI 208.7006''.

6. Sections 208.7002-1 and 208.7002-2 are revised to read as follows:

208.7002-1 Acquiring department responsibilities.

See PGI 208.7002-1 for the acquiring department's responsibilities.

208.7002-2 Requiring department responsibilities.

See PGI 208.7002-2 for the requiring department's responsibilities.

7. Section 208.7003-1 is amended by revising paragraph (a) introductory text and paragraph (b) to read as follows:

208.7003-1 Assignments under integrated materiel management (IMM).

(a) Acquire all items assigned for IMM from the IMM manager except--

* * * * *

(b) Follow the procedures at PGI 208.7003-1(b) when an item assigned for IMM is to be acquired by the requiring department in accordance with paragraph (a)(3) of this subsection.

8. Section 208.7004 is revised to read as follows:

208.7004 Procedures.

Follow the procedures at PGI 208.7004 for processing coordinated acquisition requirements.

208.7004-1 through 208.7004-10 [Removed]

9. Sections 208.7004-1 through 208.7004-10 are removed.

10. Sections 208.7005 and 208.7006 are revised to read as follows:

208.7005 Military interdepartmental purchase requests.

Follow the procedures at--

(a) PGI 253.208-1 when using DD Form 448, Military Interdepartmental Purchase Request; and

(b) PGI 253.208-2 when using DD Form 448-2, Acceptance of MIPR.

208.7006 Coordinated acquisition assignments.

See PGI 208.7006 for coordinated acquisition assignments.

11. Sections 208.7101 and 208.7102 are revised to read as follows:

208.7101 Policy.

Departments and agencies shall cooperate fully with NASA in making acquisition services, equipment, personnel, and facilities available on the basis of mutual agreement.

208.7102 Procedures.

Follow the procedures at PGI 208.7102 when contracting or performing services for NASA.

208.7103 through 208.7105 [Removed]

12. Sections 208.7103 through 208.7105 are removed.

Subpart 208.72 [Removed and Reserved]

13. Subpart 208.72 is removed and reserved.

208.7301 [Amended]

14. Section 208.7301 is amended by removing the definitions of ``Dual pricing evaluation procedure'' and ``Precious Metals Indicator Code (PMIC)''.

208.7302 [Amended]

15. Section 208.7302 is amended in the first sentence by removing ``(PMRP)''.

16. Sections 208.7303 and 208.7304 are revised to read as follows:

208.7303 Procedures.

Follow the procedures at PGI 208.7303 for use of the Precious Metals Recovery Program.

208.7304 Refined precious metals.

See PGI 208.7304 for a list of refined precious metals managed by DSCP.

208.7401 [Amended]

17. Section 208.7401 is amended by removing the definitions of ``Golden Disk'' and ``Software product manager''.

18. Section 208.7403 is revised to read as follows:

208.7403 Acquisition procedures.

Follow the procedures at PGI 208.7403 when acquiring commercial software and related services.

PART 225--FOREIGN ACQUISITION

225.7005-1 [Amended]

19. Section 225.7005-1 is amended in the introductory text by removing ``(see subpart 208.72)''.

PART 252--SOLICITATION PROVISIONS AND CONTRACT CLAUSES

20. Section 252.225-7025 is amended by revising the clause date and paragraph (a)(1) to read as follows:

252.225-7025 Restriction on acquisition of forgings.

* * * * *

Restriction on Acquisition of Forgings (Jul 2006)

(a) * * *

(1) Domestic manufacture means--

(i) Manufactured in the United States or its outlying areas; or

(ii) Manufactured in Canada, if the Canadian firm normally produces similar items or is currently producing the item in support of DoD contracts (as a contractor or a subcontractor).

* * * * *

PART 253--FORMS

21. Sections 253.208-1 and 253.208-2 are revised to read as follows:

253.208-1 DD Form 448, Military Interdepartmental Purchase Request.

Follow the procedures at PGI 253.208-1 for use of DD Form 448.

253.208-2 DD Form 448-2, Acceptance of MIPR.

Follow the procedures at PGI 253.208-2 for use of DD Form 448-2.

Appendix B to Chapter 2 [Removed and Reserved]

22. Appendix B to Chapter 2 is removed and reserved.

DEPARTMENT OF DEFENSE

Defense Acquisition Regulations System

48 CFR Parts 225 and 252

Defense Federal Acquisition Regulation Supplement; Technical Amendments

AGENCY: Defense Acquisition Regulations System, Department of Defense (DoD).

ACTION: Final rule.

SUMMARY: DoD is making technical amendments to the Defense Federal Acquisition Regulation Supplement (DFARS) to add a reference to guidance documents, update an Internet address, and add paragraph designations in a contract clause.

DATES: Effective Date: July 11, 2006.

FOR FURTHER INFORMATION CONTACT: Ms. Michele Peterson, Defense Acquisition Regulations System, OUSD (AT&L) DPAP (DARS), IMD 3C132, 3062 Defense Pentagon, Washington, DC 20301-3062. Telephone (703) 602-0311; facsimile (703) 602-0350.

SUPPLEMENTARY INFORMATION: This final rule amends DFARS text as follows:

Section 225.7002-1. Adds a reference to guidance found in the DFARS companion resource, Procedures, Guidance, and Information (PGI).

Section 225.7401. Updates an Internet address.

Section 252.212-7001. Adds paragraph designations to the

DFARS clauses listed within this contract clause. No substantive change is made to the content of the clause.

List of Subjects in 48 CFR Parts 225 and 252

Government procurement.

Michele P. Peterson, Editor, Defense Acquisition Regulations System.

Therefore, 48 CFR parts 225 and 252 are amended as follows:

1. The authority citation for 48 CFR parts 225 and 252 continues to read as follows:

Authority: 41 U.S.C. 421 and 48 CFR Chapter 1.

PART 225--FOREIGN ACQUISITION

2. Section 225.7002-1 is amended in paragraph (b) by adding, after the period, a parenthetical sentence to read as follows:

225.7002-1 Restrictions.

* * * * *

(b) * * * (For guidance on dealing with noncompliance with this requirement, see PGI 225.7002-1(b).)

* * * * *

3. Section 225.7401 is amended in paragraph (b) by revising the second sentence to read as follows:

225.7401 General.

* * * * *

(b) * * * Follow the procedures in Army in Europe Regulation 715-9, available at http://www.per.hqusareur.army.mil/cpd/docper/GermanyDefault.aspx

* * * * *

PART 252--SOLICITATION PROVISIONS AND CONTRACT CLAUSES

4. Section 252.212-7001 is revised to read as follows:

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 (Jul 2006)

(a) The Contractor agrees to comply with the following Federal Acquisition Regulation (FAR) clause which, if checked, is included in this contract by reference to implement a provision of law applicable to acquisitions of commercial items or components.

----52.203-3, Gratuities (APR 1984) (10 U.S.C. 2207).

(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.

(1) ----252.205-7000, Provision of Information to Cooperative Agreement Holders (DEC 1991) (10 U.S.C. 2416).

(2) ----252.219-7003, Small, Small Disadvantaged and Women-Owned Small Business Subcontracting Plan (DoD Contracts) (APR 1996) (15 U.S.C. 637).

(3) ----252.219-7004, Small, Small Disadvantaged and Women-Owned Small Business Subcontracting Plan (Test Program) (JUN 1997) (15 U.S.C. 637 note).

(4) ----252.225-7001, Buy American Act and Balance of Payments Program (JUN 2005) (41 U.S.C. 10a-10d, E.O. 10582).

(5) ----252.225-7012, Preference for Certain Domestic Commodities (JUN 2004) (10 U.S.C. 2533a).

(6) ----252.225-7014, Preference for Domestic Specialty Metals (JUN 2005) (10 U.S.C. 2533a).

(7) ----252.225-7015, Restriction on Acquisition of Hand or Measuring Tools (JUN 2005) (10 U.S.C. 2533a).

(8) ----252.225-7016, Restriction on Acquisition of Ball and Roller Bearings (MAR 2006) (Section 8065 of Public Law 107-117 and the same restriction in subsequent DoD appropriations acts).

(9) ----252.225-7021, Trade Agreements (JUN 2006) (19 U.S.C. 2501-2518 and 19 U.S.C. 3301 note).

(10) ----252.225-7027, Restriction on Contingent Fees for Foreign Military Sales (APR 2003) (22 U.S.C. 2779).

(11) ----252.225-7028, Exclusionary Policies and Practices of Foreign Governments (APR 2003) (22 U.S.C. 2755).

(12)(i) ----252.225-7036, Buy American Act--Free Trade Agreements--Balance of Payments Program (JUN 2006) (41 U.S.C. 10a-10d and 19 U.S.C. 3301 note).

(ii) Alternate I (JAN 2005) of 252.225-7036.

(13) ----252.225-7038, Restriction on Acquisition of Air Circuit Breakers (JUN 2005) (10 U.S.C. 2534(a)(3)).

(14) ----252.226-7001, Utilization of Indian Organizations, Indian-Owned Economic Enterprises, and Native Hawaiian Small Business Concerns (SEP 2004) (Section 8021 of Pub. L. 107-248 and

similar sections in subsequent DoD appropriations acts).

(15) ----252.227-7015, Technical Data--Commercial Items (NOV 1995) (10 U.S.C. 2320).

(16) ----252.227-7037, Validation of Restrictive Markings on Technical Data (SEP 1999) (10 U.S.C. 2321).

(17) ----252.232-7003, Electronic Submission of Payment Requests (MAY 2006) (10 U.S.C. 2227).

(18) ----252.237-7019, Training for Contractor Personnel Interacting with Detainees (SEP 2005) (Section 1092 of Public Law 108-375).

(19) ----252.243-7002, Requests for Equitable Adjustment (MAR 1998) (10 U.S.C. 2410).

(20)(i) ----252.247-7023, Transportation of Supplies by Sea (MAY 2002) (10 U.S.C. 2631).

(ii) ----Alternate I (MAR 2000) of 252.247-7023.

(iii) ----Alternate II (MAR 2000) of 252.247-7023.

(iv) ----Alternate III (MAY 2002) of 252.247-7023.

(21) ----252.247-7024, Notification of Transportation of Supplies by Sea (MAR 2000) (10 U.S.C. 2631).

(c) In addition to the clauses listed in paragraph (e) of the Contract Terms and Conditions Required to Implement Statutes or Executive Orders--Commercial Items clause of this contract (FAR 52.212-5), the Contractor shall include the terms of the following clauses, if applicable, in subcontracts for commercial items or commercial components, awarded at any tier under this contract:

(1) 252.225-7014, Preference for Domestic Specialty Metals, Alternate I (APR 2003) (10 U.S.C. 2533a).

(2) 252.237-7019, Training for Contractor Personnel Interacting with Detainees (SEP 2005) (Section 1092 of Public Law 108-375).

(3) 252.247-7023, Transportation of Supplies by Sea (MAY 2002) (10 U.S.C. 2631).

(4) 252.247-7024, Notification of Transportation of Supplies by Sea (MAR 2000) (10 U.S.C. 2631).

(End of clause)

END OF DCN 20060711