DFARS CHANGE NOTICE 20080110

[Federal Register: January 10, 2008 (Volume 73, Number 7)]

DEPARTMENT OF DEFENSE

Defense Acquisition Regulations System

Defense Federal Acquisition Regulation Supplement; Functions Exempt From Private Sector Performance (DFARS Case 2007-D019)

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 address procedures for preparation of the written determination required by the Federal Acquisition Regulation (FAR), that none of the functions to be performed by contract are inherently governmental.

DATES: Effective Date: January 10, 2008.

FOR FURTHER INFORMATION CONTACT: Mr. Michael Benavides, Defense Acquisition Regulations System, OUSD (AT&L) DPAP(DARS), IMD 3D139, 3062 Defense Pentagon, Washington, DC 20301-3062. Telephone 703-602-1302; facsimile 703-602-7887. Please cite DFARS Case 2007-D019.

SUPPLEMENTARY INFORMATION:

A. Background This final rule amends the DFARS to address procedures for preparation of the written determination required by FAR 7.503(e), that none of the functions to be performed by contract are inherently governmental. The rule requires DoD personnel to prepare the determination using DoD Instruction 1100.22, Guidance for Determining Workforce Mix, and to also include a determination that none of the functions to be performed are exempt from private sector performance, as addressed in DoD Instruction 1100.22.

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 under 41 U.S.C. 418b 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 2007-D019.

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 207 and 237

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

Therefore, 48 CFR parts 207 and 237 are amended as follows:

1. The authority citation for 48 CFR parts 207 and 237 continues to read as follows:

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

PART 207--ACQUISITION PLANNING

2. Section 207.503 is amended by adding paragraph (e) to read as follows:

207.503 Policy.

(e) The written determination required by FAR 7.503(e), that none of the functions to be performed by contract are inherently governmental--

(i) Shall be prepared using DoD Instruction 1100.22, Guidance for Determining Workforce Mix; and

(ii) Shall include a determination that none of the functions to be performed are exempt from private sector performance, as addressed in DoD Instruction 1100.22.

* * * * *

PART 237--SERVICE CONTRACTING

3. Section 237.102 is added to read as follows:

237.102 Policy.

(c) In addition to the prohibition on award of contracts for the performance of inherently governmental functions, contracting officers shall not award contracts for functions that are exempt from private sector performance. See 207.503(e) for the associated documentation requirement.

[Federal Register: January 10, 2008 (Volume 73, Number 7)]

DEPARTMENT OF DEFENSE

Defense Acquisition Regulations System

48 CFR Parts 239 and 252

Defense Federal Acquisition Regulation Supplement; Information Assurance Contractor Training and Certification (DFARS Case 2006-D023)

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 address training requirements that apply to contractor personnel who perform information assurance functions for DoD. Contractor personnel accessing information systems must meet applicable training and certification requirements.

DATES: Effective Date: January 10, 2008.

FOR FURTHER INFORMATION CONTACT: Ms. Felisha Hitt, Defense Acquisition Regulations System, OUSD (AT&L) DPAP (DARS), IMD 3D139, 3062 Defense Pentagon, Washington, DC 20301-3062. Telephone 703-602-0310; facsimile 703-602-7887. Please cite DFARS Case 2006-D023.

SUPPLEMENTARY INFORMATION:

A. Background This final rule implements requirements of the Federal Information Security Management Act of 2002 (44 U.S.C. 3541, et seq.); DoD Directive 8570.1, Information Assurance Training, Certification, and Workforce Management; and DoD Manual 8570.01-M, Information Assurance Workforce Improvement Program. The rule contains a clause for use in contracts involving contractor performance of information assurance functions. The clause requires the contractor to ensure that personnel accessing information systems are properly trained and certified.

DoD published a proposed rule at 71 FR 2644 on January 22, 2007. Seven sources submitted comments on the proposed rule. A discussion of the comments is provided below:

1. Comment: One respondent recommended a change to DFARS 239.7102-3(b) to allow contractors to meet information assurance training certification requirements in a manner suitable to the service or agency chief information officer.

DoD Response: Basic information assurance training certification requirements have been established by the Assistant Secretary of Defense for Networks and Information Integration/DoD Chief Information Officer. These requirements are applicable DoD-wide. However, in accordance with 44 U.S.C. 3541, et seq., and DoD policy, departments and agencies may establish additional requirements as needed.

2. Comment: One respondent stated that DoD Manual 8570.01-M, Information Assurance Workforce Improvement Program, already requires contractors to comply with DoD Directive 8570.1, Information Assurance Training, Certification, and Workforce Management.

DoD Response: DoD Directive 8570.1 requires the development of DFARS clauses to reflect the requirements of the Directive relating to contracts and contractors. This DFARS rule provides a uniform means of specifying the training and certification requirements in DoD contracts.

3. Comment: One respondent suggested that DoD address some of the information assurance training restrictions encountered by capable contractors attempting to gain compliance with the new training and certification requirements.

DoD Response: DoD is not aware of any information assurance training restrictions. DoD training is provided by the National Defense University and other training sources such as the Defense Information Systems Agency computer-based training module. Training is also available in multiple commercial venues outside of the DoD training structure.

4. Comment: One respondent expressed concern as to how the new training and certification requirements will affect competition of future service contracts, specifically when the contractor already has its personnel trained and certified on unique programs and systems and other competitors have not worked on those systems. The respondent further questioned whether the Government will fund and provide training and certification to contractors who wish to compete for follow-on service contracts.

DoD Response: Having an appropriately trained workforce is one of many ways prospective contractors can become competitive for any acquisition. Information assurance training is available through a variety of sources and is available to all prospective contractors. In accordance with FAR 31.205-44, the costs of training and education that are related to the field in which the employee is working or may reasonably be expected to work are allowable (with exceptions).

5. Comment: One respondent questioned how the new certification requirements reconcile with Section 813 of the National Defense Authorization Act for Fiscal Year 2001 (Pub. L. 106-398).

DoD Response: Section 813 of Public Law 106-398 discusses the appropriate use of requirements for experience and education of contractor personnel in the procurement of information technology services. DoD needs the assurance that a contractor is qualified to perform the information system security functions required to protect DoD networks, as permitted by Section 813(b). The training certifications required by this DFARS rule provide that assurance to DoD.

6. Comment: One respondent suggested that DFARS 239.7103(b) be clarified to identify any thresholds, breadth of coverage, and applicability, and include examples of when to use the clause.

DoD Response: DFARS 239.7103(b) specifies that the clause at 252.239-7001 must be used in solicitations and contracts involving performance of information assurance functions as described in DoD 8570.01-M. The contracting officer will rely on the requiring activity to identify information assurance requirements and to ensure that the certification status of all contractor personnel complies with DoD 8570.01-M.

7. Comment: One respondent suggested that the effective date of the rule allow a period of time for contractor and DoD training certification in order to effectively implement the requirements.

DoD Response: The rule is effective upon publication, and will apply to solicitations issued on or after the effective date, consistent with the implementation plan in DoD 8570.01-M.

8. Comment: One respondent suggested that the rule include guidance on requirements of DoD 8570.01-M relating to modification of existing contracts, the designated approving authority, waivers, and reporting requirements.

DoD Response: A paragraph has been added to the DFARS companion resource, Procedures, Guidance, and Information (PGI), to inform contracting officers of the phased implementation plan in DoD 8570.01-M, which addresses modification of existing contracts. The other issues raised by the respondent apply primarily to requirements personnel and need not be addressed in the DFARS or PGI.

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 a final regulatory flexibility analysis consistent with 5 U.S.C. 604. 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 DoD Directive 8570.1, Information Assurance Training, Certification, and Workforce Management, and DoD Manual 8570.01-M, Information Assurance Workforce Improvement Program, with regard to DoD contractor personnel. The DoD Directive and Manual are based on the provisions of the Federal Information Security Management Act of 2002 (44 U.S.C. 3541, et seq.), which requires proper training and oversight of personnel with information security responsibilities. The objective of the rule is to ensure that contractor personnel who have access to DoD information systems are properly trained and managed. The rule will apply to entities that perform information assurance functions for DoD. Approximately 83 small business concerns fall into this category annually. DoD contractors performing information assurance functions will be required to ensure that personnel accessing information systems have the proper and current information assurance certification to perform information assurance functions, in accordance with DoD 8570.01-M.

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

2. Section 239.7102-1 is amended by revising paragraphs (a)(5) and (6) and adding paragraphs (a)(7) and (8) to read as follows:

239.7102-1 General.

(a) * * *

(5) DoD Directive 8500.1, Information Assurance;

(6) DoD Instruction 8500.2, Information Assurance Implementation;

(7) DoD Directive 8570.1, Information Assurance Training, Certification, and Workforce Management; and

(8) DoD Manual 8570.01-M, Information Assurance Workforce Improvement Program.

* * * * *

3. Section 239.7102-3 is added to read as follows:

239.7102-3 Information assurance contractor training and certification.

(a) For acquisitions that include information assurance functional services for DoD information systems, or that require any appropriately cleared contractor personnel to access a DoD information system to perform contract duties, the requiring activity is responsible for providing to the contracting officer

(1) A list of information assurance functional responsibilities for DoD information systems by category (e.g., technical or management) and level (e.g., computing environment, network environment, or enclave); and

(2) The information assurance training, certification, certification maintenance, and continuing education or containment training required for the information assurance functional responsibilities.

(b) After contract award, the requiring activity is responsible for ensuring that the certifications and certification status of all contractor personnel performing information assurance functions as described in DoD 8570.01-M, Information Assurance Workforce Improvement Program, are in compliance with the manual and are identified, documented, and tracked.

(c) The responsibilities specified in paragraphs (a) and (b) of this section apply to all DoD information assurance duties supported by a contractor, whether performed full-time or part-time as additional or embedded duties, and when using a DoD contract, or a contract or agreement administered by another agency (e.g., under an interagency agreement).

(d) See PGI 239.7102-3 for guidance on documenting and tracking certification status of contractor personnel, and for additional information regarding the requirements of DoD 8570.01-M.

4. Section 239.7103 is revised to read as follows:

239.7103 Contract clauses.

(a) Use the clause at 252.239-7000, Protection Against Compromising Emanations, in solicitations and contracts involving information technology that requires protection against compromising emanations.

(b) Use the clause at 252.239-7001, Information Assurance Contractor Training and Certification, in solicitations and contracts involving contractor performance of information assurance functions as described in DoD 8570.01-M.

PART 252--SOLICITATION PROVISIONS AND CONTRACT CLAUSES

252.239-7000 [Amended]

5. Section 252.239-7000 is amended in the introductory text by removing ``239.7103'' and adding in its place ``239.7103(a)''.

6. Section 252.239-7001 is added to read as follows:

252.239-7001 Information Assurance Contractor Training and Certification.

As prescribed in 239.7103(b), use the following clause:

Information Assurance Contractor Training and Certification (JAN 2008)

(a) The Contractor shall ensure that personnel accessing information systems have the proper and current information assurance certification to perform information assurance functions in accordance with DoD 8570.01-M, Information Assurance Workforce Improvement Program. The Contractor shall meet the applicable information assurance certification requirements, including--

(1) DoD-approved information assurance workforce certifications appropriate for each category and level as listed in the current version of DoD 8570.01-M; and

(2) Appropriate operating system certification for information assurance technical positions as required by DoD 8570.01-M.

(b) Upon request by the Government, the Contractor shall provide documentation supporting the information assurance certification status of personnel performing information assurance functions.

(c) Contractor personnel who do not have proper and current certifications shall be denied access to DoD information systems for the purpose of performing information assurance functions.

(End of clause)

[Federal Register: January 10, 2008 (Volume 73, Number 7)]

DEPARTMENT OF DEFENSE

Defense Acquisition Regulations System

48 CFR Parts 207, 209, 234, 235, and 252

Defense Federal Acquisition Regulation Supplement; Lead System Integrators (DFARS Case 2006-D051)

AGENCY: Defense Acquisition Regulations System, 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 807 of the National Defense Authorization Act for Fiscal Year 2007. Section 807 places limitations on contractors acting as lead system integrators in the acquisition of major DoD systems. Such contractors may have no direct financial interest in the development or construction of any individual system or element of any system of systems unless an exception applies.

DATES: Effective date: January 10, 2008.

Comment date: Comments on the interim rule should be submitted in writing to the address shown below on or before March 10, 2008, to be considered in the formation of the final rule.

ADDRESSES: You may submit comments, identified by DFARS Case 2006-D051, using any of the following methods:

Federal eRulemaking Portal: http://www.regulations.gov. Follow the instructions for submitting comments.

E-mail: dfars@osd.mil. Include DFARS Case 2006-D051 in the subject line of the message.

Fax: 703-602-7887.

Mail: Defense Acquisition Regulations System, Attn: Mr. Michael Benavides, OUSD(AT&L)DPAP(DARS), IMD 3D139, 3062 Defense Pentagon, Washington, DC 20301-3062.

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

Comments received generally will be posted without change to http://www.regulations.gov, including any personal information provided.

FOR FURTHER INFORMATION CONTACT: Mr. Michael Benavides, 703-602-1302.

SUPPLEMENTARY INFORMATION:

A. Background This interim rule implements Section 807 of the National Defense Authorization Act for Fiscal Year 2007 (Pub. L. 109-364). Section 807 provides that, with certain exceptions, no entity performing lead system integrator functions in the acquisition of a major system by DoD may have any direct financial interest in the development or construction of any individual system or element of any system of systems. The interim rule adds DFARS policy, and a corresponding solicitation provision and contract clause, to implement the requirements of Section 807 of Public Law 109-364.

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 application of the rule is limited to contractors performing lead system integrator functions for major DoD systems. 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 2006-D051.

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 807 of the National Defense Authorization Act for Fiscal Year 2007 (Pub. L. 109-364). Section 807 places limitations on contractors acting as lead system integrators in the acquisition of major DoD systems. Such contractors may have no direct financial interest in the development or construction of any individual system or element of any system of systems unless an exception applies. Section 807 requires DoD to update the acquisition regulations to address these limitations. 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 207, 209, 234, 235, and 252

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

Therefore, 48 CFR parts 207, 209, 234, 235, and 252 are amended as follows:

1. The authority citation for 48 CFR parts 207, 209, 234, 235, and 252 continues to read as follows:

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

PART 207--ACQUISITION PLANNING

2. Section 207.106 is amended by adding paragraph (S-71) to read as follows:

207.106 Additional requirements for major systems.

* * * * *

(S-71) See 209.570 for policy applicable to acquisition strategies that consider the use of lead system integrators.

PART 209--CONTRACTOR QUALIFICATIONS

3. Subpart 209.5 is added to read as follows:

Subpart 209.5--Organizational and Consultant Conflicts of InterestSec.

209.570 Limitations on contractors acting as lead system integrators.

209.570-1 Definitions.

209.570-2 Policy.

209.570-3 Procedures.

209.570-4 Solicitation provision and contract clause.

Subpart 209.5--Organizational and Consultant Conflicts of Interest

209.570 Limitations on contractors acting as lead system integrators.

209.570-1 Definitions.

Lead system integrator, as used in this section, is defined in the clause at 252.209-7007, Prohibited Financial Interests for Lead System Integrators. See PGI 209.570-1 for additional information.

209.570-2 Policy.

(a) Except as provided in paragraph (b) of this subsection, 10 U.S.C. 2410p prohibits any entity performing lead system integrator functions in the acquisition of a major system by DoD from having any direct financial interest in the development or construction of any individual system or element of any system of systems.

(b) The prohibition in paragraph (a) of this subsection does not apply if--

(1) The Secretary of Defense certifies to the Committees on Armed Services of the Senate and the House of Representatives that--

(i) The entity was selected by DoD as a contractor to develop or construct the system or element concerned through the use of competitive procedures; and

(ii) DoD took appropriate steps to prevent any organizational conflict of interest in the selection process; or

(2) The entity was selected by a subcontractor to serve as a lower-tier subcontractor, through a process over which the entity exercised no control.

209.570-3 Procedures.

In making a responsibility determination before awarding a contract for the acquisition of a major system, the contracting officer shall--

(a) Determine whether the prospective contractor meets the definition of ``lead system integrator'';

(b) Consider all information regarding the prospective contractor's direct financial interests in view of the prohibition at 209.570-2(a); and

(c) Follow the procedures at PGI 209.570-3.

209.570-4 Solicitation provision and contract clause.

(a) Use the provision at 252.209-7006, Limitations on Contractors Acting as Lead System Integrators, in solicitations for the acquisition of a major system when the acquisition strategy envisions the use of a lead system integrator.

(b) Use the clause at 252.209-7007, Prohibited Financial Interests for Lead System Integrators--

(1) In solicitations that include the provision at 252.209-7006; and

(2) In contracts when the contractor will fill the role of a lead system integrator for the acquisition of a major system.

PART 234--MAJOR SYSTEM ACQUISITION

4. Section 234.004 is added to read as follows:

234.004 Acquisition strategy.

See 209.570 for policy applicable to acquisition strategies that consider the use of lead system integrators.

PART 235--RESEARCH AND DEVELOPMENT CONTRACTING

5. Section 235.008 is added to read as follows:

235.008 Evaluation for award.

See 209.570 for limitations on the award of contracts to contractors acting as lead system integrators.

PART 252--SOLICITATION PROVISIONS AND CONTRACT CLAUSES

6. Sections 252.209-7006 and 252.209-7007 are added to read as follows:

252.209-7006 Limitations on Contractors Acting as Lead System Integrators.

As prescribed in 209.570-4(a), use the following provision:Limitations on Contractors Acting As Lead System Integrators (JAN 2008)

(a) Definitions. Lead system integrator, lead system integrator with system responsibility, and lead system integrator without system responsibility, as used in this provision, have the meanings given in the clause of this solicitation entitled ``Prohibited Financial Interests for Lead System Integrators'' (DFARS 252.209-7007).

(b) General. Unless an exception is granted, no contractor performing lead system integrator functions in the acquisition of a major system by the Department of Defense may have any direct financial interest in the development or construction of any individual system or element of any system of systems.

(c) Representations. (1) The offeror represents that it does [ ] does not [ ] propose to perform this contract as a lead system integrator with system responsibility.

(2) The offeror represents that it does [ ] does not [ ] propose to perform this contract as a lead system integrator without system responsibility.

(3) If the offeror answered in the affirmative in paragraph (c)(1) or (2) of this provision, the offeror represents that it does [ ] does not [ ] have any direct financial interest as described in paragraph

(b) of this provision with respect to the system(s), subsystem(s), system of systems, or services described in this solicitation.

(d) If the offeror answered in the affirmative in paragraph (c)(3) of this provision, the offeror should contact the Contracting Officer for guidance on the possibility of submitting a mitigation plan and/or requesting an exception.

(e) If the offeror does have a direct financial interest, the offeror may be prohibited from receiving an award under this solicitation, unless the offeror submits to the Contracting Officer appropriate evidence that the offeror was selected by a subcontractor to serve as a lower-tier subcontractor through a process over which the offeror exercised no control.

(f) This provision implements the requirements of 10 U.S.C. 2410p, as added by section 807 of the National Defense Authorization Act for Fiscal Year 2007 (Pub. L. 109-364).

(End of provision)

252.209-7007 Prohibited Financial Interests for Lead System Integrators.

As prescribed in 209.570-4(b), use the following clause:Prohibited Financial Interests for Lead System Integrators (JAN 2008)

(a) Definitions. As used in this clause--

(1) Lead system integrator includes lead system integrator with system responsibility and lead system integrator without system responsibility.

(2) Lead system integrator with system responsibility means a prime contractor for the development or production of a major system if the prime contractor is not expected at the time of award, as determined by the Contracting Officer, to perform a substantial portion of the work on the system and the major subsystems.

(3) Lead system integrator without system responsibility means a contractor under a contract for the procurement of services whose primary purpose is to perform acquisition functions closely associated with inherently governmental functions (see section 7.503(d) of the Federal Acquisition Regulation) with regard to the development or production of a major system.

(b) Limitations. The Contracting Officer has determined that the Contractor meets the definition of lead system integrator with [ ] without [ ] system responsibility. Unless an exception is granted, the Contractor shall not have any direct financial interest in the development or construction of any individual system or element of any system of systems while performing lead system integrator functions in the acquisition of a major system by the Department of Defense under this contract.

(c) Agreement. The Contractor agrees that during performance of this contract it will not acquire any direct financial interest as described in paragraph (b) of this clause, or, if it does acquire or plan to acquire such interest, it will immediately notify the Contracting Officer. The Contractor further agrees to provide to the Contracting Officer all relevant information regarding the change in financial interests so that the Contracting Officer can determine whether an exception applies or whether the Contractor will be allowed to continue performance on this contract. If a direct financial interest cannot be avoided, eliminated, or mitigated to the Contracting Officer's satisfaction, the Contracting Officer may terminate this contract for default for the Contractor's material failure to comply with the terms and conditions of award or may take other remedial measures as appropriate in the Contracting Officer's sole discretion.

(d) Notwithstanding any other clause of this contract, if the Contracting Officer determines that the Contractor misrepresented its financial interests at the time of award or has violated the agreement in paragraph (c) of this clause, the Government may terminate this contract for default for the Contractor's material failure to comply with the terms and conditions of award or may take other remedial measures as appropriate in the Contracting Officer's sole discretion. (e) This clause implements the requirements of 10 U.S.C. 2410p, as added by section 807 of the National Defense Authorization Act for Fiscal Year 2007 (Pub. L. 109-364).

(End of clause)

[Federal Register: January 10, 2008 (Volume 73, Number 7)]

DEPARTMENT OF DEFENSE

Defense Acquisition Regulations System 48 CFR Part 252

Defense Federal Acquisition Regulation Supplement; New Designated Countries (DFARS Case 2006-D062)

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

ACTION: Final rule.

SUMMARY: DoD has adopted as final, without change, an interim rule amending the Defense Federal Acquisition Regulation Supplement (DFARS) to implement the Dominican Republic-Central America-United States Free Trade Agreement with respect to the Dominican Republic. The rule also includes Bulgaria and Romania on the list of countries covered by the World Trade Organization Government Procurement Agreement.

DATES: Effective Date: January 10, 2008.

FOR FURTHER INFORMATION CONTACT: Ms. Amy Williams, Defense Acquisition Regulations System, OUSD (AT&L) DPAP (DARS), IMD 3D139, 3062 Defense Pentagon, Washington, DC 20301-3062. Telephone 703-602-0328; facsimile 703-602-7887. Please cite DFARS Case 2006-D062.

SUPPLEMENTARY INFORMATION:

A. Background DoD published an interim rule at 72 FR 14242 on March 27, 2007, to implement the Dominican Republic-Central America-United States Free Trade Agreement with respect to the Dominican Republic, and to add Bulgaria and Romania to the list of countries covered by the World Trade Organization Government Procurement Agreement.

DoD received no comments on the interim rule. Therefore, DoD has adopted the interim 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. Although the rule opens up DoD procurement to the products of Bulgaria, the Dominican Republic, and Romania, there will be no significant impact on U.S. small businesses. DoD applies the trade agreements to only those non-defense items listed at DFARS 225.401-70, and procurements that are set aside for small businesses are exempt from application of the trade agreements.

C. Paperwork Reduction Act This rule affects the certification and information collection requirements in the provisions at DFARS 252.225-7020 and 252.225-7035, currently approved under Office of Management and Budget Control Number 0704-0229. The impact, however, is negligible.

List of Subjects in 48 CFR Part 252

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

Interim Rule Adopted as Final Without Change

Accordingly, the interim rule amending 48 CFR Part 252, which was published at 72 FR 14242 on March 27, 2007, is adopted as a final rule without change.

[Federal Register: January 10, 2008 (Volume 73, Number 7)]

DEPARTMENT OF DEFENSE

Defense Federal Acquisition Regulation Supplement; DoD

Representations and Certifications in the Online Representations and Certifications Application (DFARS Case 2006-D032)

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 address the DFARS provisions included in the Online Representations and Certifications Application (ORCA). Use of ORCA eliminates the need for offerors to repetitively submit the same information in response to Government solicitations.

DATES: Effective Date: January 10, 2008.

FOR FURTHER INFORMATION CONTACT: Ms. Felisha Hitt, Defense Acquisition Regulations System, OUSD (AT&L) DPAP (DARS), IMD 3D139, 3062 Defense Pentagon, Washington, DC 20301-3062. Telephone 703-602-0310; facsimile 703-602-7887. Please cite DFARS Case 2006-D032.

SUPPLEMENTARY INFORMATION:

A. Background Subpart 4.12 of the Federal Acquisition Regulation (FAR) requires prospective contractors to complete electronic annual representations and certifications in ORCA, in conjunction with required registration in the Central Contractor Registration database. FAR 4.1202 prescribes use of the solicitation provision at 52.204-8, Annual Representations and Certifications; provides a list of the FAR representations and certifications in ORCA; and provides direction to the contracting officer to exclude those representations and certifications from solicitations that contain the clause at FAR 52.204-7, Central Contractor Registration.

Similarly, this DFARS rule contains a list of the DFARS representations and certifications in ORCA, and provides direction to the contracting officer to exclude those representations and certifications when using the provision at FAR 52.204-8. In addition, the DFARS rule contains a substitute paragraph (c) for use with the provision at FAR 52.204-8 to permit inclusion of information relating to both the FAR and the DFARS. An offeror must include information in paragraph (c) only if changes to the offeror's annual representations and certifications apply to a particular solicitation.

DoD published a proposed rule at 72 FR 6515 on February 12, 2007. DoD received comments from one respondent. A discussion of the comments is provided below.

1. Comment: The respondent suggested administrative changes to the organization of the contents of ORCA to enhance the certification process.

DoD Response: The comment is outside the scope of this DFARS case. However, the comment has been forwarded to the Government officials responsible for managing the ORCA system.

2. Comment: The respondent recommended revision of the introductory statement at 204.1202(2), from ``Do not include the following representations and certifications'' to ``Do not include the following representations and certifications in solicitations and contracts.''

DoD Response: DoD believes that the direction in the introductory statement is clear as written, and that the additional phrase is unnecessary.

3. Comment: The respondent recommended amendment of the second sentence in the introductory text at 212.301(f) pertaining to commercial item solicitations, to change ``may'' to ``shall'' with regard to direction to the contracting officer to consider the information in ORCA.

DoD Response: DoD has retained ``may'' in this sentence to provide flexibility to the contracting officer in the review of representations and certifications.

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 a final regulatory flexibility analysis consistent with 5 U.S.C. 604. A copy of the analysis may be obtained from the point of contact specified herein. The analysis is summarized as follows:

The objective of the rule is to maintain a centralized location for the representation and certification information required by the DFARS, thereby eliminating the need for offerors to submit the same information to various DoD offices in response to individual solicitations. The rule will apply to prospective DoD contractors registered in the Central Contractor Registration database. FAR 4.1102 requires that prospective contractors be registered in the database before the award of a contract or agreement, with certain exceptions. Administrative personnel that have general knowledge of the contractor's business should be able to enter the applicable representation and certification information into ORCA. The rule is expected to have a positive impact on small business concerns by reducing administrative burdens.

C. Paperwork Reduction Act The information collection requirements of the representations and certifications addressed in this rule that require offerors to provide specific fill-in information have been approved by the Office of Management and Budget under Control Numbers 0704-0229, 0704-0245, and 0704-0259. This rule does not impose information collection requirements beyond those already required by existing DFARS representations and certifications.

List of Subjects in 48 CFR Parts 204, 212, and 252

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

Therefore, 48 CFR parts 204, 212, and 252 are amended as follows:0

1. The authority citation for 48 CFR parts 204, 212, and 252 continues to read as follows:

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

PART 204--ADMINISTRATIVE MATTERS

2. Subpart 204.12 is added to read as follows:

Subpart 204.12--Annual Representations and Certifications

204.1202 Solicitation provision and contract clause.

When using the provision at FAR 52.204-8, Annual Representations and Certifications--

(1) Use the provision with 252.204-7007, Alternate A, Annual Representations and Certifications; and

(2) Do not include the following representations and certifications:

(i) 252.209-7005, Reserve Officer Training Corps and Military Recruiting on Campus.

(ii) 252.212-7000, Offeror Representations and Certifications--Commercial Items.

(iii) 252.216-7003, Economic Price Adjustment--Wage Rates or Material Prices Controlled by a Foreign Government.

(iv) 252.225-7000, Buy American Act--Balance of Payments Program Certificate.

(v) 252.225-7020, Trade Agreements Certificate.

(vi) 252.225-7031, Secondary Arab Boycott of Israel.

(vii) 252.225-7035, Buy American Act--Free Trade Agreements--Balance of Payments Program Certificate.

(viii) 252.225-7042, Authorization to Perform.

(ix) 252.229-7003, Tax Exemptions (Italy).

(x) 252.229-7005, Tax Exemptions (Spain).

(xi) 252.239-7011, Special Construction and Equipment Charges.

(xii) 252.247-7022, Representation of Extent of Transportation by Sea.

PART 212--ACQUISITION OF COMMERCIAL ITEMS

3. Section 212.301 is amended by adding paragraph (f) introductory text to read as follows:

212.301 Solicitation provisions and contract clauses for the acquisition of commercial items.

(f) The following additional provisions and clauses apply to DoD solicitations and contracts for the acquisition of commercial items. If the offeror has completed the provisions listed in paragraph (f)(i) or (ii) of this section electronically as part of its annual representations and certifications at https://orca.bpn.gov, the contracting officer may consider this information instead of requiring the offeror to complete these provisions for a particular solicitation.* * * * *

PART 252--SOLICITATION PROVISIONS AND CONTRACT CLAUSES

4. Section 252.204-7007 is added to read as follows:

252.204-7007 Alternate A, Annual Representations and Certifications.

Alternate A, Annual Representations and Certifications (JAN 2008)

As prescribed in 204.1202, substitute the following paragraph (c) for paragraph (c) of the provision at FAR 52.204-8:

(c) The offeror has completed the annual representations and certifications electronically via the Online Representations and Certifications Application (ORCA) Web site at https://orca.bpn.gov/. After reviewing the ORCA database information, the offeror verifies by submission of the offer that the representations and certifications currently posted electronically have been entered or updated within the last 12 months, are current, accurate, complete, and applicable to this solicitation (including the business size standard applicable to the NAICS code referenced for this solicitation), as of the date of this offer, and are incorporated in this offer by reference (see FAR 4.1201); except for the changes identified below [offeror to insert changes, identifying change by clause number, title, date]. These amended representation(s) and/or certification(s) are also incorporated in this offer and are current, accurate, and complete as of the date of this offer.

FAR/DFARS clause No

Title

Date

Change

       

Any changes provided by the offeror are applicable to this solicitation only, and do not result in an update to the representations and certifications posted on ORCA.

[Federal Register: January 10, 2008 (Volume 73, Number 7)]

DEPARTMENT OF DEFENSE

Defense Acquisition Regulations System

48 CFR Part 252 and Appendix F to Chapter 2

Defense Federal Acquisition Regulation Supplement; Receiving Reports for Shipments (DFARS Case 2006-D024)

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 address requirements for the distribution of material inspection and receiving reports under DoD contracts. The rule clarifies that two copies of the receiving report must be distributed with each shipment.

DATES: Effective Date: January 10, 2008.

FOR FURTHER INFORMATION CONTACT: Mr. Michael Benavides, Defense Acquisition Regulations System, OUSD (AT&L) DPAP (DARS), IMD 3D139, 3062 Defense Pentagon, Washington, DC 20301-3062. Telephone 703-602-1302; facsimile 703-602-7887. Please cite DFARS Case 2006-D024.

SUPPLEMENTARY INFORMATION:

A. Background The clause at DFARS 252.246-7000, Material Inspection and Receiving Report, contains requirements for preparing and furnishing material inspection and receiving reports to the Government. Contractors can satisfy material inspection and receiving report requirements by using DD Form 250, in a manner and to the extent required by DFARS Appendix F, or by using the Wide Area WorkFlow-Receipt and Acceptance (WAWF-RA) electronic form. This rule clarifies that two copies of the receiving report (paper copies of either the DD Form 250 or the WAWF-RA report) must be distributed with the shipment in accordance with DFARS Appendix F. Such clarification is needed to ensure proper identification of all shipments.

DoD published a proposed rule at 71 FR 65769 on November 9, 2006. Three sources submitted comments on the proposed rule. A discussion of the comments is provided below.

1. Comment: One respondent stated that the rule would increase administrative costs by significantly increasing paperwork creation, administration, and coordination. The respondent recommended that, at a minimum, alternative language be added to allow the use of contractor format DD Form 250 material inspection and receiving reports instead of WAWF-RA report printing.

DoD Response: Contractors presently are responsible for distributing DD Form 250 in accordance with DFARS Appendix F, Part 4, F-401, using the instructions in Tables 1 and 2, which require distribution of two copies with each shipment. Therefore, the requirement for contractors to print copies of the WAWF-RA report instead of the DD Form 250 will not significantly increase the cost or effort of preparing shipping documents. Only the forms already in WAWF-RA must be printed; thus this should not be a significant administrative burden. However, to allow flexibility, DoD has amended the rule to incorporate the respondent's recommendation that contractors be allowed to use the DD Form 250 instead of a printed WAWF-RA form.

2. Comment: One respondent stated that the requirement for two paper copies to be distributed with shipments would create unnecessary costs and additional administrative burdens for many vendors and would unnecessarily duplicate the electronic process, thwarting the goal of the WAWF-RA being a paperless system. The respondent further suggested that this and similar issues be addressed through the DFARS Procedures, Guidance, and Information (PGI) web page rather than as a change to the DFARS.

DoD Response: Printed copies of the receiving report are needed for each shipment to eliminate costly stocking, payment, and frustrated cargo issues now affecting both DoD and contractors. As noted in the response to Comment 1, contractors already are responsible for distributing copies of DD Form 250 with the shipment. Therefore, this rule will not significantly increase the cost or effort of preparing shipping documents. The respondent's recommendation to address this issue through PGI is not a feasible solution, since this issue relates to contractor requirements, whereas PGI addresses internal DoD procedures and guidance.

3. Comment: One respondent stated that the WAWF-RA receiving report does not include the unique identification (UID) tab, where the contractor lists UIDs and serial numbers for items requiring them.

DoD Response: The respondent's comment has been noted; however, the content of the WAWF-RA receiving report is outside the scope of this DFARS 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 makes no significant change to DoD policy for preparation and use of material inspection and receiving reports.

C. Paperwork Reduction Act The information collection requirements for DoD material inspection and receiving reports have been approved by the Office of Management and Budget, under Control Number 0704-0248, for use through March 31, 2008.

List of Subjects in 48 CFR Part 252

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

Therefore, 48 CFR part 252 and Appendix F to chapter 2 are amended as follows:

1. The authority citation for 48 CFR part 252 and Appendix F to subchapter I continues to read as follows:

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

PART 252--SOLICITATION PROVISIONS AND CONTRACT CLAUSES

2. Section 252.246-7000 is amended by revising the clause date and paragraph (b) to read as follows:

252.246-7000 Material Inspection and Receiving Report.

* * * * *

Material Inspection and Receiving Report (JAN 2008)* * * * *

(b) Contractor submission of the material inspection and receiving information required by Appendix F of the Defense FAR Supplement by using the Wide Area WorkFlow-Receipt and Acceptance (WAWF-RA) electronic form (see paragraph (b)(1) of the clause at 252.232-7003) fulfills the requirement for a material inspection and receiving report (DD Form 250). Two copies of the receiving report (paper copies of either the DD Form 250 or the WAWF-RA report) shall be distributed with the shipment, in accordance with Appendix F, Part 4, F-401, Table 1, of the Defense FAR Supplement.

3. Appendix F to chapter 2 is amended in Part 4, Section F-401, by revising paragraph (a) to read as follows:

Appendix F--Material Inspection and Receiving Report

* * * * *

F-401 Distribution

(a) The contractor is responsible for distributing the DD Form 250, including mailing and payment of postage. Use of the Wide Area WorkFlow-Receipt and Acceptance (WAWF-RA) electronic form satisfies the distribution requirements of this section, except for the copies required to accompany shipment.

* * * * *

[Federal Register: January 10, 2008 (Volume 73, Number 7)]

DEPARTMENT OF DEFENSE

Defense Acquisition Regulations System

48 CFR Parts 209, 217, and 246

Defense Federal Acquisition Regulation Supplement; Ship Critical Safety Items (DFARS Case 2007-D016)

AGENCY: Defense Acquisition Regulations System, 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 130 of the National Defense Authorization Act for Fiscal Year 2007. Section 130 requires DoD to establish a quality control policy for the procurement, modification, repair, and overhaul of ship critical safety items.

DATES: Effective date: January 10, 2008.

Comment date: Comments on the interim rule should be submitted in writing to the address shown below on or before March 10, 2008, to be considered in the formation of the final rule.

ADDRESSES: You may submit comments, identified by DFARS Case 2007-D016, using any of the following methods:

Federal eRulemaking Portal: http://www.regulations.gov. Follow the instructions for submitting comments.

E-mail: dfars@osd.mil. Include DFARS Case 2007-D016 in the subject line of the message.

Fax: 703-602-7887.

Mail: Defense Acquisition Regulations System, Attn: Mr. Michael Benavides, OUSD (AT&L) DPAP (DARS), IMD 3D139, 3062 Defense Pentagon, Washington, DC 20301-3062.

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

Comments received generally will be posted without change to http://www.regulations.gov, including any personal information provided.

FOR FURTHER INFORMATION CONTACT: Mr. Michael Benavides, 703-602-1302.

SUPPLEMENTARY INFORMATION:

A. Background This interim rule implements Section 130 of the National Defense Authorization Act for Fiscal Year 2007 (Pub. L. 109-364). Section 130 requires DoD to prescribe in regulations a quality control policy for the procurement of ship critical safety items and the modification, repair, and overhaul of those items.

Section 802 of the National Defense Authorization Act for Fiscal Year 2004 (Pub. L. 108-136) contained a similar requirement applicable to aviation critical safety items, which is implemented in DFARS 209.270-1 through 209.270-4. This interim rule amends DFARS 209.270-1 through 209.270-4 and related text to address ship critical safety items as well as aviation critical safety items. The rule identifies the responsibilities of the head of the design control activity with regard to quality control of critical safety items and related services.

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 primarily relates to internal DoD responsibilities for ensuring quality control of ship critical safety items. In addition, the Navy already has implemented stringent quality control programs with regard to such items. 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 2007-D016.

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 130 of the National Defense Authorization Act for Fiscal Year 2007 (Pub. L. 109-364). Section 130 requires DoD to prescribe in regulations a quality control policy for the procurement of ship critical safety items and the modification, repair, and overhaul of those items. 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 209, 217, and 246

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

Therefore, 48 CFR parts 209, 217, and 246 are amended as follows:

1. The authority citation for 48 CFR parts 209, 217, and 246 continues to read as follows:

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

PART 209--CONTRACTOR QUALIFICATIONS

2. Sections 209.202, 209.270, and 209.270-1 are revised to read as follows:

209.202 Policy.

(a)(1) Except for aviation or ship critical safety items, obtain approval in accordance with PGI 209.202(a)(1) when establishing qualification requirements. See 209.270 for approval of qualification requirements for aviation or ship critical safety items.

209.270 Aviation and ship critical safety items.

209.270-1 Scope.

This section--

(a) Implements--

(1) Section 802 of the National Defense Authorization Act for Fiscal Year 2004 (Pub. L. 108-136); and

(2) Section 130 of the National Defense Authorization Act for Fiscal Year 2007 (Pub. L. 109-364); and

(b) Prescribes policy and procedures for qualification requirements in the procurement of aviation and ship critical safety items and the modification, repair, and overhaul of those items.

3. Section 209.270-2 is amended by revising the definition of ``Design control activity'' and adding a definition of ``Ship critical safety item'' to read as follows:

209.270-2 Definitions.

* * * * *

Design control activity--(1) With respect to an aviation critical safety item, means the systems command of a military department that is specifically responsible for ensuring the air worthiness of an aviation system or equipment in which an aviation critical safety item is to be used; and

(2) With respect to a ship critical safety item, means the systems command of a military department that is specifically responsible for ensuring the seaworthiness of a ship or ship equipment in which a ship critical safety item is to be used.

Ship critical safety item means any ship part, assembly, or support equipment containing a characteristic the failure, malfunction, or absence of which could cause--

(1) A catastrophic or critical failure resulting in loss of or serious damage to the ship; or

(2) An unacceptable risk of personal injury or loss of life.

4. Section 209.270-3 is revised to read as follows:

209.270-3 Policy.

(a) The head of the contracting activity responsible for procuring an aviation or ship critical safety item may enter into a contract for the procurement, modification, repair, or overhaul of such an item only with a source approved by the head of the design control activity.

(b) The approval authorities specified in this section apply instead of those otherwise specified in FAR 9.202(a)(1), 9.202(c), or 9.206-1(c), for the procurement, modification, repair, and overhaul of aviation or ship critical safety items.

5. Section 209.270-4 is amended by revising paragraph (a) to read as follows:

209.270-4 Procedures.

(a) The head of the design control activity shall--

(1) Identify items that meet the criteria for designation as aviation or ship critical safety items. See additional information at PGI 209.270-4;

(2) Approve qualification requirements in accordance with procedures established by the design control activity; and

(3) Qualify and identify aviation and ship critical safety item suppliers and products.

* * * * *

PART 217--SPECIAL CONTRACTING METHODS

6. Section 217.7502 is amended in paragraph (b)(2) by revising the last sentence to read as follows:

217.7502 General.

* * * * *

(b) * * *

(2) * * * See 209.270 for requirements applicable to replenishment parts for aviation or ship critical safety items.

* * * * *

PART 246--QUALITY ASSURANCE

7. Section 246.407 is amended by revising paragraph (S-70) to read as follows:

246.407 Nonconforming supplies or services.

* * * * *

(S-70) The head of the design control activity is the approval authority for acceptance of any nonconforming aviation or ship critical safety items or nonconforming modification, repair, or overhaul of such items (see 209.270). Authority for acceptance of minor nonconformances in aviation or ship critical safety items may be delegated as determined appropriate by the design control activity. See additional

information at PGI 246.407.

8. Section 246.504 is revised to read as follows:

246.504 Certificate of conformance.

Before authorizing a certificate of conformance for aviation or ship critical safety items, obtain the concurrence of the head of the design control activity (see 209.270).

END OF DCN 20080110