[Federal Register Volume 76, Number 223 (Friday, November 18, 2011)]

[Rules and Regulations]

From the Federal Register Online via the Government Printing Office [www.gpo.gov]

[FR Doc No: 2011-29900]

DEPARTMENT OF DEFENSE

Defense Acquisition Regulations System

48 CFR Parts 212 and 252

RIN 0750-AH46Defense Federal Acquisition Regulation Supplement; Transition to the System for Award Management (DFARS Case 2011-D053)

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

ACTION: Final rule.

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SUMMARY: DoD is issuing a final rule amending the Defense Federal Acquisition Regulation Supplement for the transition of the Integrated Acquisition Environment systems to the new System for Award Management architecture.

DATES: Effective date: November 18, 2011.

FOR FURTHER INFORMATION CONTACT: Mr. Julian E. Thrash, (703) 602-0310.

SUPPLEMENTARY INFORMATION:

I. Background

The Integrated Acquisition Environment (IAE) is an electronic Government initiative that aggregates Federal acquisition content by providing one Web site for regulations, systems, resources, opportunities, and training. The Web site at https://www.acquisition.gov was designed to create an easily navigable resource that is both more efficient and transparent.

The transition of the IAE to the new System for Award Management (SAM) architecture has begun. Phase One will transition the Central Contractor Registration (CCR), the Excluded Parties List System (EPLS), and Online Representations and Certifications Application (ORCA) to the new SAM architecture. This rule provides the first step in updating the DFARS for these changes by updating Web address in the DFARS for two references to ORCA to show that the application is now available through https://www.acquisition.gov. Future DFARS cases are anticipated to actually change the names of the systems to SAM once the transition is complete, as well as to begin the transition of the remaining IAE systems.

A related FAR case, 2011-021, Transition to the System for Award Management, is revising the Federal Acquisition Regulation references for the CCR, EPLS, and ORCA databases as being accessible through https://www.acquisition.gov.

DoD has issued this rule as a final rule because this rule is administrative as it only updates existing Web page addresses does not have a significant cost or administrative impact on contractors or offerors. Therefore, public comment is not required in accordance with 41 U.S.C. 1707.

II. DFARS Changes

This rule makes the following DFARS changes to reflect that the relevant database references for ORCA shown in the DFARS references are accessible through the new Web site, https://www.acquisition.gov:

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

252.204-7007 Alternate A, Annual Representations and Certifications.

III. Executive Orders 12866 and 13563

Executive Orders (E.O.s) 12866 and 13563 direct agencies to assess all costs and benefits of available regulatory alternatives and, if regulation is necessary, to select regulatory approaches that maximize net benefits (including potential economic, environmental, public health and safety effects, distributive impacts, and equity). E.O. 13563 emphasizes the importance of quantifying both costs and benefits, of reducing costs, of harmonizing rules, and of promoting flexibility. This is not a significant regulatory action and, therefore, was not subject to review under section 6(b) of E.O. 12866, Regulatory Planning and Review, dated September 30, 1993. This rule is not a major rule under 5 U.S.C. 804.

IV. Regulatory Flexibility Act

The Regulatory Flexibility Act does not apply to this rule because this final rule does not constitute a significant DFARS revision within the meaning of FAR 1.501-1 and 41 U.S.C. 1707 and does not require publication for public comment.

V. Paperwork Reduction Act

The rule does not contain any information collection requirements that require the approval of the Office of Management and Budget under the Paperwork Reduction Act (44 U.S.C. chapter 35).

List of Subjects in 48 CFR Parts 212 and 252

Government procurement.

Mary Overstreet,

Editor, Defense Acquisition Regulations System.

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

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

Authority: 41 U.S.C. 1303 and 48 CFR chapter 1.

PART 212-ACQUISITION OF COMMERCIAL ITEMS

2. Amend section 212.301 paragraph (f) introductory text by removing the Internet address ``https://orca.bpn.gov'' and adding in its place ``https://www.acquisition.gov/''.

PART 252--SOLICITATION PROVISIONS AND CONTRACT CLAUSES

3. Amend section 252.204-7007 by--

(a) Amending the clause date by removing ``(SEP 2011)'' and adding in its place ``(NOV 2011)''; and

(b) Amending paragraph (e) by removing the Internet address ``https://orca.bpn.gov/'' and adding in its place ``https://www.acquisition.gov/''.

[FR Doc. 2011-29900 Filed 11-17-11; 8:45 am]

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[Federal Register Volume 76, Number 223 (Friday, November 18, 2011)]

[Rules and Regulations]

From the Federal Register Online via the Government Printing Office [www.gpo.gov]

[FR Doc No: 2011-29894]

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DEPARTMENT OF DEFENSE

Defense Acquisition Regulations System

48 CFR Part 215

RIN 0750-AH30

Defense Federal Acquisition Regulation Supplement: Management of Manufacturing Risk in Major Defense Acquisition Programs (DFARS Case 2011-D031)

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

ACTION: Final rule.

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SUMMARY: DoD is adopting as final, without change, an interim rule amending the Defense Federal Acquisition Regulation Supplement to implement a section of National Defense Authorization Act for Fiscal Year 2011 requiring appropriate consideration of the manufacturing readiness and manufacturing-readiness processes of potential contractors and subcontractors as a part of the source selection process for major defense acquisition programs.

DATES: Effective Date: November 18, 2011.

FOR FURTHER INFORMATION CONTACT: Mr. Dustin Pitsch, telephone 703-602-0289.

SUPPLEMENTARY INFORMATION:

I. Background

DoD published an interim rule in the Federal Register at 76 FR 38050 on June 29, 2011, to amend Defense Federal Acquisition Regulation Supplement (DFARS) 215.304(c) by adding paragraph (iv) to state that the manufacturing readiness and manufacturing-readiness processes of potential contractors and subcontractors shall be considered as a part of the source selection process for major defense acquisition programs. No public comments were submitted in response to the interim rule.

II. Executive Orders 12866 and 13563

Executive Orders (E.O.s) 12866 and 13563 direct agencies to assess all costs and benefits of available regulatory alternatives and, if regulation is necessary, to select regulatory approaches that maximize net benefits (including potential economic, environmental, public health and safety effects, distributive impacts, and equity). E.O. 13563 emphasizes the importance of quantifying both costs and benefits, of reducing costs, of harmonizing rules, and of promoting flexibility. This is not a significant regulatory action and, therefore, was not subject to review under section 6(b) of E.O. 12866, Regulatory Planning and Review, dated September 30, 1993. This rule is not a major rule under 5 U.S.C. 804.

III. Regulatory Flexibility Act

A Final Regulatory Flexibility Analysis has been prepared consistent with the Regulatory Flexibility Act, 5 U.S.C. 601, et seq., and is summarized as follows:

This final rule amends the DFARS to implement section 812 of the National Defense Authorization Act for Fiscal Year 2011, (10 U.S.C. 2430 note). Section 812(b)(5) requires appropriate consideration of the manufacturing readiness and manufacturing-readiness processes of potential contractors and subcontractors as a part of the source selection process for major defense acquisition programs.

No public comments were received in response to the initial regulatory flexibility analysis. No comments were filed by the Chief Counsel for Advocacy of the Small Business Administration in response to the interim rule.

The rule will apply to DoD Major Defense Acquisition Program contractors and subcontractors. Most major defense acquisition programs are awarded to large concerns as these programs are of a scope too large for any small business to perform. As such, it is not expected that this rule will have a significant impact on a significant number of small entities.

The final rule imposes no reporting, recordkeeping, or other information collection requirements.

There are no known significant alternatives to the rule that would meet the requirements of the statute. The impact on small entities is expected to be positive.

IV. Paperwork Reduction Act

The rule does not contain any information collection requirements that require the approval of the Office of Management and Budget under the Paperwork Reduction Act (44 U.S.C. chapter 35).

List of Subjects in 48 CFR Part 215

Government procurement.

Mary Overstreet,

Editor, Defense Acquisition Regulations System.

Interim Rule Adopted as Final Without Change

Accordingly, the interim rule amending 48 CFR part 215, which was published at 76 FR 38050 on June 29, 2011, is adopted as a final rule without change.

[FR Doc. 2011-29894 Filed 11-17-11; 8:45 am]

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[Federal Register Volume 76, Number 223 (Friday, November 18, 2011)]

[Rules and Regulations]

From the Federal Register Online via the Government Printing Office [www.gpo.gov]

[FR Doc No: 2011-29903]

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DEPARTMENT OF DEFENSE

Defense Acquisition Regulations System

48 CFR Part 216

RIN 0750-AG66

Defense Federal Acquisition Regulations Supplement; Notification Requirements for Awards of Single-Source Task- or Delivery-Order Contracts (DFARS Case 2009-D036)

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

ACTION: Final rule.

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SUMMARY: DoD is adopting as final, with changes, an interim rule amending the Defense Federal Acquisition Regulation Supplement to implement the National Defense Authorization Act for Fiscal Year 2010 regarding the notification requirements to Congress when awarding a single-award task- or delivery-order contract in excess of $103 million.

DATES: Effective date: November 18, 2011.

FOR FURTHER INFORMATION CONTACT: Mr. Manuel Quinones, telephone (703) 602-8383.

SUPPLEMENTARY INFORMATION:

I. Background

DoD published an interim rule at 75 FR 40716 on July 13, 2010, to implement section 814 of the National Defense Authorization Act (NDAA) for Fiscal Year (FY) 2010, (Pub. L. 111-84, enacted October 28, 2009). The public comment period closed on September 13, 2010. Three respondents submitted comments in response to the interim rule.

The interim rule requires the head of the agency to notify the

congressional defense committees within 30 days after any determination made under FAR 16.504(c)(ii)(D)(1), and to provide a copy of the determination and notification to the Deputy Director, Defense Procurement and Acquisition Policy. If the single-award task- or delivery-order contract award concerns intelligence or intelligence-related activities of DoD, notification shall also be provided to the Select Committee on Intelligence of the Senate and Permanent Select Committee on Intelligence of the House of Representatives.

II. Discussion and Analysis of Public Comments

A discussion of the comments received and the changes made to the final rule as a result of those comments are provided as follows:

A. Analysis of Public Comments

Comment: Two respondents wrote that the interim rule's preamble was confusing and would lead to misinterpretations. One of the respondents stated that ``(t)here is a difference between a `single-source' and a `sole-source'.'' Further, the respondent stated that the ``Indefinite Quantity Contract itself is the subject of DFARS 216.505, not the resulting delivery or task orders issued under the contract.''

Response: The respondent correctly states that there is a difference between single-source and sole-source, and the preamble of this final rule clarifies the intent of the rule by using the terms ``single-award'' or ``single-source'' contracts, as used in the statute, in lieu of sole-source. In response to the other comment, individual task orders and delivery orders are the subject of DFARS 216.505, Ordering; however, this rule addresses limitations on single-award contracts, and DoD confirms that the rule text is correctly located at DFARS 216.504, Indefinite Quantity Contracts.

Comment: A respondent requested that the preamble to the interim rule be amended to add ``contract'' or ``contracts'' where appropriate in order to better convey the intent of the existing and new regulations. The preamble for the interim rule appears to this respondent to change the reporting requirement from ``task or delivery order contracts'' to ``task or delivery orders.''

Response: In response to the first comment, the title of this final rule has been amended to include ``Contracts'' in the title to more clearly convey the intent of the rule. Concerning the second comment, the agency-head determination and congressional notification are required, in accordance with 10 U.S.C. 2304a(d)(3), only for single-source indefinite-delivery contracts estimated to exceed $100 million (now $103 million). DoD has reviewed and confirms that the interim rule changes at DFARS 216.504(c)(1)(ii)(D) correctly implemented the statutory requirements for single-source contracts, notwithstanding minor clarifications made in this final rule concerning reporting requirements.

Comment: A respondent pointed out that there is a ``disconnect'' between the interim rule published in the Federal Register and the on-line version of the DFARS. The on-line version includes, at the end of DFARS 216.504(c)(1)(ii)(d)(2), the sentence ``A copy of any determination made in accordance with FAR 16.504(c)(1)(ii)(D) shall be submitted to: Deputy Director, Defense Procurement (Contract Policy and International Contracting), OUSD (AT&L) DPAP (CPIC), 3060 Defense Pentagon, Washington, DC 20301-3060.'' The respondent notes that this appears to duplicate the same statement that is made earlier in the same paragraph.

Response: In response to this comment, the rule text format, numbering, notification and reporting requirements are clarified in this final DFARS rule and in changes made to the DFARS Procedures Guidance and Information. Agency heads are required to provide a copy of each determination and congressional notification to the Office of the Under Secretary of Defense (Acquisition, Technology, and Logistics) Defense Procurement and Acquisition Policy (DPAP) Contract Policy and International Contracting (CPIC). This enables a single office to oversee and manage the DoD-wide use of single-award task- and delivery-order contracts.

Comment: A respondent submitted an editorial comment, asking that DoD add ``216.504, Indefinite-quantity contracts'' with a link to DFARS 216, Table of Contents.

Response: The ability to hyperlink is available in the HTML version of each DFARS subpart.

B. Other Changes

The final rule at DFARS 216.504(c)(1)(ii)(D)(i) is revised to clarify that the authority to make any determination authorized by FAR 16.504(c)(1)(ii)(D)(1) shall not be delegated below the level of the senior procurement executive. Previously, this limitation on the delegation of approval authority only applied to determinations made because it was necessary in the public interest to award the contract to a single source due to exceptional circumstances, and these determinations had to be reported to Congress. Since the statue and the resultant interim rule expand the reporting requirement to require that any determination made under FAR 16.504(c)(1)(ii)(D)(1) be reported to Congress, the limitation on delegation of approval authority is revised to be commensurate with the expanded reporting requirement.

III. Executive Orders 12866 and 13563

Executive Orders (E.O.s) 12866 and 13563 direct agencies to assess all costs and benefits of available regulatory alternatives and, if regulation is necessary, to select regulatory approaches that maximize net benefits (including potential economic, environmental, public health and safety effects, distributive impacts, and equity). E.O. 13563 emphasizes the importance of quantifying both costs and benefits, of reducing costs, of harmonizing rules, and of promoting flexibility. This is not a significant regulatory action and, therefore, was not subject to review under section 6(b) of E.O. 12866, Regulatory Planning and Review, dated September 30, 1993. This rule is not a major rule under 5 U.S.C. 804.

IV. 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 change solely impacts internal Government operating procedures and will therefore not have a significant cost or administrative impact on contractors, subcontractors, or offerors. The notification requirements are within DoD and between DoD agencies and the Congress. An initial regulatory flexibility analysis was not performed. No comments were received from small entities on this rule.

V. Paperwork Reduction Act

The rule does not contain any information collection requirements that require the approval of the Office of Management and Budget under the Paperwork Reduction Act (44 U.S.C. chapter 35).

List of Subjects in 48 CFR Part 216

Government procurement.

Mary Overstreet,

Editor, Defense Acquisition Regulations System.

Therefore, the Defense Acquisition Regulations System confirms as final the interim rule published at 75 FR 40716 on July 13, 2010, with the following changes:

PART 216--TYPES OF CONTRACTS

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

Authority: 41 U.S.C. 1303 and 48 CFR chapter 1.

2. Revise section 216.504 to read as follows:

216.504 Indefinite-quantity contracts.

(c)(1)(ii)(D) Limitation on single-award contracts.

(i) The authority to make the determination authorized in FAR 16.504(c)(1)(ii)(D)(1) shall not be delegated below the level of the senior procurement executive.

(ii) The head of the agency must notify the congressional defense committees within 30 days after making any determination under FAR 16.504(c)(1)(ii)(D)(1). If the award concerns intelligence or intelligence-related activities of DoD, notification shall also be provided to the Select Committee on Intelligence of the Senate and Permanent Select Committee on Intelligence of the House of Representatives. (See sample notification at PGI 216.504(c)(1)(ii)(D)(iv).)

(iii) A copy of each determination made in accordance with FAR 16.504(c)(1)(ii)(D) and each congressional notice shall be submitted in accordance with PGI 216.504(c)(1)(ii)(D)(iii).

[FR Doc. 2011-29903 Filed 11-17-11; 8:45 am]

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[Federal Register Volume 76, Number 223 (Friday, November 18, 2011)]

[Rules and Regulations]

From the Federal Register Online via the Government Printing Office [www.gpo.gov]

[FR Doc No: 2011-29897]

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DEPARTMENT OF DEFENSE

Defense Acquisition Regulations System

48 CFR Part 219 and Appendix I to Chapter 2

RIN 0750-AH44

Defense Federal Acquisition Regulation Supplement; Extension of Department of Defense Mentor-Protégé Pilot Program (DFARS Case 2011-D050)

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

ACTION: Final rule.

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SUMMARY: DoD is issuing a final rule amending the Defense Federal Acquisition Regulation Supplement to extend the date for submittal of applications under the DoD Mentor-Protégé Pilot Program for new mentor-Protégé agreements and the date mentors may incur costs and/or receive credit towards fulfilling their small business subcontracting goals through an approved mentor-Protégé agreement.

DATES: Effective Date: November 18, 2011.

FOR FURTHER INFORMATION CONTACT: Ms. Lee Renna, telephone 703-602-0764.

SUPPLEMENTARY INFORMATION:

I. Background

This Defense Federal Acquisition Regulation Supplement (DFARS) case implements section 8016 of the National Defense Appropriations Act (NDAA) for Fiscal Year (FY) 2011 (Pub. L. 112-10). The NDAA for FY 2011 was signed into law on April 15, 2011. Section 8016 amends the DoD Mentor-Protégé Pilot Program (DoD MPP), section 831 of Public Law 110-510 (10 U.S.C. 2302, note), by changing the--

Acceptance date for new DoD MPP agreements from September 30, 2010, to September 30, 2011; and

Eligibility date DoD mentors may incur costs for the purposes of receiving cost reimbursement or credit toward attainment of subcontracting goals, from September 30, 2013, to September 30, 2014.

This final rule implements these changes in the corresponding DFARS regulations: 219.704(b) and (d); and I-103(a) and (b).

DoD is issuing a final rule because this rule does not have a significant effect beyond the internal operating procedures of DoD and does not have a significant cost or administrative impact on contractors or offerors. This final rule merely extends the effective dates for an existing DoD program. These dates have already been extended by law.

II. Executive Orders 12866 and 13563

Executive Orders (E.O.s) 12866 and 13563 direct agencies to assess all costs and benefits of available regulatory alternatives and, if regulation is necessary, to select regulatory approaches that maximize net benefits (including potential economic, environmental, public health and safety effects, distributive impacts, and equity). E.O. 13563 emphasizes the importance of quantifying both costs and benefits, of reducing costs, of harmonizing rules, and of promoting flexibility. This is not a significant regulatory action and, therefore, was not subject to review under section 6(b) of E.O. 12866, Regulatory Planning and Review, dated September 30, 1993. This rule is not a major rule under 5 U.S.C. 804.

III. Regulatory Flexibility Act

The Regulatory Flexibility Act does not apply to this rule because this final rule does not constitute a significant DFARS revision within the meaning of FAR 1.501-1 and 41 U.S.C. 1707 and does not require publication for public comment.

IV. Paperwork Reduction Act

The rule does not contain any information collection requirements that require the approval of the Office of Management and Budget under the Paperwork Reduction Act (44 U.S.C. chapter 35).

List of Subjects in 48 CFR Part 219 and Appendix I to Chapter 2

Government procurement.

Mary Overstreet,

Editor, Defense Acquisition Regulations System.

Therefore, 48 CFR part 219 and 48 CFR chapter 2 appendix I are amended as follows:

1. The authority citation for 48 CFR part 219 and Appendix I continue to read as follows:

Authority: 41 U.S.C. 1303 and 48 CFR chapter 1.

PART 219--SMALL BUSINESS PROGRAMS

219.7104 [Amended]

2. Section 219.7104 is amended--

(a) In paragraph (b), by removing the year ``2013'' and adding in its place ``2014''; and

(b) In paragraph (d), by removing the year ``2013'' and adding in its place ``2014''.

APPENDIX I--POLICY AND PROCEDURES FOR THE DOD PILOT MENTOR-PROTÉGÉ PROGRAM

3. Section I-103 is amended--

(a) In paragraph (a) by removing the year ``2010'' and adding in its place ``2011''; and

(b) In paragraph (b) introductory text by removing the year ``2013'' and adding in its place ``2014''.

[FR Doc. 2011-29897 Filed 11-17-11; 8:45 am]

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[Federal Register Volume 76, Number 223 (Friday, November 18, 2011)]

[Rules and Regulations]

From the Federal Register Online via the Government Printing Office [www.gpo.gov]

[FR Doc No: 2011-29859]

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DEPARTMENT OF DEFENSE

Defense Acquisition Regulations System

48 CFR Part 232

RIN 0750-AH19

Defense Federal Acquisition Regulation Supplement: Accelerate Small Business Payments (DFARS Case 2011-D008)

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

ACTION: Final rule.

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SUMMARY: DoD is adopting as final, without change, an interim rule amending the Defense Federal Acquisition Regulation Supplement to accelerate payments to all small business concerns.

DATES: Effective Date: November 18, 2011.

FOR FURTHER INFORMATION CONTACT: Ms. Lee Renna, telephone 703-602-0764.

SUPPLEMENTARY INFORMATION:

I. Background

DoD published an interim rule in the Federal Register at 76 FR 23505 on April 27, 2011, amending the Defense Federal Acquisition Regulation Supplement (DFARS) to provide accelerated payments for all small business concerns. The rule removes the term ``disadvantaged'' from the language at DFARS 232.903 and DFARS 232.906(a)(ii), thereby extending the accelerated payment policy uniformly to all small business concerns.

In combination with the change to the regulations, DoD immediately began a phased implementation to update the entitlement and payment systems so that they could accommodate accelerated payments. During the initial phase, the Defense Finance and Accounting Service modified DoD's largest system, the Mechanization of Contract Administration Services (MOCAS) system. MOCAS processes approximately 57 percent of the dollars paid through DFAS. The upgrades to MOCAS were completed on June 1, 2011. Over the course of the next year, subsequent legacy entitlement and payment system upgrades are scheduled for completion and deployment.

Two respondents submitted public comments. DoD reviewed the comments in the development of the final rule. A discussion of the comments is provided as follows.

II. Discussion and Analysis of the Public Comments

Comment: The first respondent commented that the rule would ensure their company had adequate cash flow to promptly pay its vendors.

Response: This positive endorsement of the rule is noted.

Comment: The second respondent stated that the wording of the rule is ambiguous. Rather than stating it is DoD policy to pay small business concerns ``* * * as soon as possible * * *'', the respondent recommended that the rule should specify the number of days for processing payments to small business.

Response: The authority for DoD's payment policy is the Office of Management and Budget's (OMB's) Prompt Payment Regulations at part 1315 of title 5 of the Code of Federal Regulations. The phrase ``* * * as quickly as possible * * *'' was taken verbatim from those regulations.

III. Executive Orders 12866 and 13563

Executive Orders (E.O.s) 12866 and 13563 direct agencies to assess all costs and benefits of available regulatory alternatives and, if regulation is necessary, to select regulatory approaches that maximize net benefits (including potential economic, environmental, public health and safety effects, distributive impacts, and equity). E.O. 13563 emphasizes the importance of quantifying both costs and benefits, of reducing costs, of harmonizing rules, and of promoting flexibility. This is a significant regulatory action and, therefore, was subject to review under section 6(b) of E.O. 12866, Regulatory Planning and Review, dated September 30, 1993. This rule is not a major rule under 5 U.S.C. 804.

IV. Regulatory Flexibility Act

A final regulatory flexibility analysis (FRFA) has been prepared consistent with the Regulatory Flexibility Act, 5 U.S.C. 601, et seq., and is summarized as follows:

This final rule adopts as final, without change, the interim rule that revised DFARS 232.903 and 232.906(a)(ii) to allow accelerated payment processes for all small business concerns. The objective of the rule is to pay small businesses as quickly as possible.

There were no significant issues raised by the public in response to the initial regulatory flexibility analysis.

There were no comments filed by the Chief Counsel for Advocacy of the Small Business Administration in response to the rule.

Analysis of the Federal Procurement Data System indicates that approximately 60,000 small businesses had active contracts in Fiscal Year 2010. It is reasonable to assume a similar number of small businesses will be positively affected by the use of accelerated payment procedures.

This final rule imposes no new reporting or recordkeeping requirements on the small business community.

DoD expects this rule to have a significant positive economic impact on all small entities within the meaning of the Regulatory Flexibility Act, 5 U.S.C. 601, et seq., because it extends accelerated payments to all small business concerns. There were no significant alternatives identified that would meet the objectives of the rule.

V. Paperwork Reduction Act

This final rule does not contain any information collection requirements that require the approval of the Office of Management and Budget under the Paperwork Burden Act (44 U.S.C. chapter 35).

List of Subjects in 48 CFR Part 232

Government procurement.

Mary Overstreet,

Editor, Defense Acquisition Regulations System.

Interim Rule Adopted as Final Without Change

Accordingly, the interim rule amending 48 CFR part 232, which was published at 76 FR 23505 on April 27, 2011, is adopted as a final rule without change.

[FR Doc. 2011-29859 Filed 11-17-11; 8:45 am]

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[Federal Register Volume 76, Number 223 (Friday, November 18, 2011)]

[Rules and Regulations]

From the Federal Register Online via the Government Printing Office [www.gpo.gov]

[FR Doc No: 2011-29416]

Vol. 76 Friday, No. 223 November 18, 2011

Part V

Department of Defense

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Defense Acquisition Regulation System

48 CFR Parts 202, 203, 211, et al.

Defense Federal Acquisition Regulation Supplements; Final Rules

Federal Register / Vol. 76, No. 223 / Friday, November 18, 2011 /

Rules and Regulations

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DEPARTMENT OF DEFENSE

Defense Acquisition Regulations System

48 CFR Part 245

RIN 0750-AG94

Defense Federal Acquisition Regulation Supplement: Responsibility and Liability for Government Property (DFARS Case 2010-D018)

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

ACTION: Final rule.

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SUMMARY: DoD is issuing a final rule amending the Defense Federal Acquisition Regulation Supplement (DFARS) to extend the Government self-insurance policy to Government property provided under negotiated fixed-price contracts that are awarded on a basis other than submission of certified cost or pricing data.

DATES: Effective Date: November 18, 2011.

FOR FURTHER INFORMATION CONTACT: Meredith Murphy, telephone (703) 602-1302.

SUPPLEMENTARY INFORMATION:

I. Background

DoD published a proposed rule at 76 FR 21852 on April 19, 2011. Twenty comments were received from one respondent in response to the proposed rule. None of the comments took issue with the regulatory flexibility analysis in the proposed rule.

II. Discussion and Analysis of the Public Comments

DoD reviewed the public comments in the formation of the final rule. A discussion of the comments is provided below. No changes were made in the rule as a result of those comments.

A. Change Should Be Made at the FAR Level

Comment: The respondent concluded that the proposed revision is being improperly undertaken at the agency level and should instead be undertaken by the FAR Council.

Response: FAR subpart 1.3 authorizes agency regulations that supplement the FAR. These agency regulations may provide additional policies to satisfy the specific needs of the agency. Further, FAR 1.404 authorizes DoD to deviate from the FAR in accordance with the DFARS. DoD has complied with the requirements of FAR subparts 1.3 and 1.4 and DFARS subparts 201.3 and 201.4.

B. The Proposed Rule Is Inconsistent With the FAR

Comment: According to the respondent, the proposed rule violates FAR 16.202-1 and 1.304. The respondent stated that FAR 45.104(a) and FAR 45.201(b) are clearly coupled, while the proposed rule uncouples them.

Response: FAR 16.202-1 states that a firm-fixed-price contract places maximum risk on the contractor and full responsibility for all costs and resulting profit and loss. The FAR already provides that contractors are not liable for loss of Government property under fixed-price contracts awarded on the basis of submission of certified cost or pricing data. The purpose of the DFARS rule is to standardize policy for negotiated fixed-price contracts, whether or not the contract involved the submission of certified cost or pricing data. DoD does not intend to eliminate the need for Alternate I of the clause at FAR 52.245-1. The Government's general practice of self-insuring its risks of loss or damage to Government-furnished property is based on policy, not statute (55 Comp Gen 1321 (1976)), and Government self-insurance of Government property is not universal. There are many examples of contractors retaining responsibility and liability for property loss, e.g., property acquired by contractors by virtue of progress payments is tied to the Government's financing of the contract under the provisions of FAR part 32. It is a well-established and acceptable practice for contractors to retain responsibility and liability for progress payment inventory, because it would make little sense for the Government to both finance the contract and self-insure against property loss.

There is no regulation that affirmatively prohibits the purchase of insurance. The Government Accountability Office (GAO) has held that exceptions to the general rule can be made when (1) the economy sought to be obtained under this policy would be defeated; (2) sound business practice indicates that a savings can be effected; or (3) services or benefits not otherwise available can be obtained by purchasing insurance (see GAO-04-261SP, Principles of Appropriations Law, Volume I, section 10a, ``The Self-Insurance Rule''). The DFARS language is not inconsistent with established practice; i.e., to self-insure Government property where it makes sense to do so. To the extent that 245.104 may be inconsistent with FAR 45.104, such inconsistency is authorized by FAR 1.304, in accordance with FAR subpart 1.4 and DFARS subpart 201.4.

With regard to the comment on ``coupling'' FAR 45.104(a) and FAR 45.201(b), the former reference reads as follows:

(a) Generally, contractors are not held liable for ``loss, theft, damage or destruction of Government property'' under the following types of contracts:

(1) Cost-reimbursement contracts.

(2) Time-and-material contracts.

(3) Labor-hour contracts.

(4) Fixed-price contracts awarded on the basis of submission of certified cost or pricing data.

FAR 45.201(b) states that, (w)hen Government property is offered for use in a competitive acquisition, solicitations should specify that the contractor is responsible for all ``costs related to making the property available for use, such as payment of all transportation, installation, or rehabilitation costs.'' The latter paragraph makes no reference to liability for loss or damage to Government property and is, therefore, not coupled or inconsistent with the former reference, FAR 45.104(a). Each FAR subpart describes policy for different aspects of procurement.

C. The Change Would Eliminate the $700,000 Threshold

Comment: The respondent stated that ``(c)learly the wording indicates that the proposed rule would only apply additionally to negotiated fixed-price contracts awarded below the current certified cost/price data submittal threshold of $700,000.'' Therefore, according to the respondent, ``the intent of FAR 45.104(a)(4) is that contractors awarded fixed-price contracts on the basis * * * of submission of certified cost or pricing data (all awards over $700,000) will not be held liable for loss, theft, damage, destruction of Government property.''

Response: The intent of the proposed rule was to standardize Government-property policy for negotiated fixed-price contracts, whether or not the submission of certified cost or pricing data was required. The rule does not impact the threshold for submission of certified cost or pricing data either positively or negatively.

D. The Proposed Rule Would Revise Applicability

Comment: According to the respondent, the proposed policy change omitted ``all of the competitively awarded contracts that may include Government property.'' The respondent said that ``it should not be assumed that these contracts will require `negotiation' and therefore fall under the proposed rule. Contracts may in fact be awarded without discussion (negotiations) if so stipulated in the solicitation even if Government property is included in the solicitation and anticipated contract.''

Response: Whether or not discussions are held, a contract awarded using FAR part 15 procedures is still a negotiated contract. Reference is made to (1) The title of FAR part 15, ``Contracting by Negotiation,'' and (2) the instructions at FAR 15.209, particularly paragraph (a) of that section: ``When contracting by negotiation * * * the contracting officer shall insert the provision at 52.215-1, Instructions to Offerors--Competitive Acquisition, in all competitive solicitations where the Government intends to award a contract without discussions.''

Comment: According to the respondent, it ``would make more sense if this proposed rule banned provision of Government property under firm-fixed-price contracts, thereby upholding the integrity of the contact type and being more consistent with FAR * * * 45.102(a) & (b).''

Response: The respondent proposed prohibiting the use of Government-furnished property on all firm-fixed-price contracts, which is outside the scope of this rule. The proposed rule did not address the provision of, or need for, Government-furnished property, but rather whether responsibility and liability for loss of, or damage to, Government property should be treated differently depending on whether a negotiated fixed-price contract was awarded with, or without, submission of certified cost or pricing data. Regardless of contract type, contracting officers are still required to consider the risk of loss or damage prior to providing Government-furnished property (see PGI 245.103-70).

E. The Proposed Rule Would Shift Risk to the Government

Comment: The respondent stated that the proposed rule shifted risk away from the contractor and onto the Government by requiring that DoD competitive fixed-price contracts bearing Government property would be required to convey Limited Risk of Loss, thereby shifting this risk to the Government.

Response: The intent of this rule is to standardize the treatment of negotiated fixed-price contracts, whether or not certified cost or pricing data was required. The contract type used can never completely eliminate the Government's inherent risk of providing property to contractors. Contracting officers are still required to consider risks prior to providing Government-furnished property.

The Government retains the option of revoking its assumption of risk under FAR 45.105(b)(1). DoD's policy, consistent with FAR 45.104 (see PGI 245.103-70), is to provide Government property only after determining that (1) It is in the Government's best interest and (2) providing the property does not substantially increase the Government's risk.

F. The Change Would Increase the Government's Administrative Burden Comment: The respondent stated that the proposed rule would increase administrative burden rather than minimize it, as conceptualized in FAR 16.202-1, Description (of fixed-price contracts). Further, according to the respondent, the proposed rule is outside of, and therefore inconsistent with, the intent of a firm-fixed price contract instrument.

Response: The intent of this rule is to standardize policy treatment for negotiated FAR part 15 fixed-price contracts. This change decreases the administrative burden associated with the current non-standard treatment of negotiated fixed-price contracts.

G. Insurance Is an Unallowable Cost

Comment: The respondent stated that the cost of insurance is an unallowable cost unless otherwise agreed to in the contract, and, by the very nature of a fixed-price contract, this fact would minimize, if not negate, insurance costs passed on to the Government.

Response: Paragraph (d) of the cost principle at FAR 31.205-19, Insurance and indemnification, states that purchased insurance costs are allowable, subject to certain limitations.

III. Executive Orders 12866 and 13563

Executive Orders (E.O.s) 12866 and 13563 direct agencies to assess all costs and benefits of available regulatory alternatives and, if regulation is necessary, to select regulatory approaches that maximize net benefits (including potential economic, environmental, public health and safety effects, distributive impacts, and equity). E.O. 13563 emphasizes the importance of quantifying both costs and benefits, of reducing costs, of harmonizing rules, and of promoting flexibility. This is a significant regulatory action and, therefore, was subject to review under section 6(b) of E.O. 12866, Regulatory Planning and Review, dated September 30, 1993. This rule is not a major rule under 5 U.S.C. 804.

IV. Regulatory Flexibility Act

A final regulatory flexibility analysis has been prepared consistent with the Regulatory Flexibility Act, 5 U.S.C. 601, et seq., and is summarized as follows:

DoD is amending the Defense Federal Acquisition Regulation Supplement (DFARS) to address the inclusion of negotiated fixed-price contracts awarded on the basis of adequate competition to the list of contract types in which contractors are not held liable for loss, damage, destruction, or theft of Government property. The Government generally self-insures against contractor loss, damage, destruction, or theft of Government-furnished property acquired or provided under Government contracts (``assumption of risk''). The current exception to this policy (see FAR 45.104) is for negotiated fixed-price contracts awarded based on adequate competition, i.e., without submission of certified cost or pricing data. For negotiated fixed-price competitive contracts, the contractor, in the past, has been held liable for loss (except for reasonable fair wear and tear). This policy was invoked by use of the clause at FAR 52.245-1, Government Property, with its Alternate I. Government Accountability Office (GAO) decisions (see GAO-04-261SP, Principles of Appropriations Law, Volume I, section 10a, ``The Self-Insurance Rule'') support the basic premise that the Government should self-insure Government-furnished property. Any impact to small entities is expected to be beneficial in the form of lower insurance costs and higher deductibles.

No public comments were received in response to the publication of the initial regulatory flexibility analysis. No comments were received from the Chief Counsel for Advocacy of the Small Business Administration in response to the rule. There are no reporting, recordkeeping, or other compliance requirements associated with this rule. This rule will align DoD policy on assumption of risk with the GAO policy. There are no known alternatives to this final rule. The rule will not have a significant economic impact on a substantial number of small entities.

V. Paperwork Reduction Act

The rule does not contain any information collection requirements that require the approval of the Office of Management and Budget under the Paperwork Reduction Act (44 U.S.C. chapter 35).

List of Subjects in 48 CFR Part 245

Government procurement.

Ynette R. Shelkin,

Editor, Defense Acquisition Regulations System.

Therefore, 48 CFR part 245 is amended as follows:

PART 245--GOVERNMENT PROPERTY

1. The authority citation for 48 CFR part 245 continues to read as follows:

Authority: 41 U.S.C. 1303 and 48 CFR chapter 1.

2. Add section 245.104 to read as follows:

245.104 Responsibility and liability for Government property.

In addition to the contract types listed at FAR 45.104, contractors are not held liable for loss of Government property under negotiated fixed-price contracts awarded on a basis other than submission of certified cost or pricing data.

3. Amend section 245.107 by redesignating paragraphs (a) through (e) as paragraphs (1) through (5) and adding paragraph (6) to read as follows:

245.107 Contract clauses.

* * * * *

(6) For negotiated fixed-price contracts awarded on a basis other than submission of certified cost or pricing data for which Government property is provided, use the clause at FAR 52.245-1, Government Property, without its Alternate I.

[FR Doc. 2011-29416 Filed 11-17-11; 8:45 am]

BILLING CODE 5001-06-P

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[Federal Register Volume 76, Number 223 (Friday, November 18, 2011)]

[Rules and Regulations]

From the Federal Register Online via the Government Printing Office [www.gpo.gov]

[FR Doc No: 2011-29421]

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DEPARTMENT OF DEFENSE

Defense Acquisition Regulations System

48 CFR Parts 203 and 252

RIN 0750-AG99

Defense Federal Acquisition Regulation Supplement: Representation Relating to Compensation of Former DoD Officials (DFARS Case 2010-D020)

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

ACTION: Final rule.

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SUMMARY: DoD is amending the DFARS to require offerors to represent whether former DoD officials who are employees of the offeror are in compliance with post-employment restrictions.

DATES: Effective Date: November 18, 2011.

FOR FURTHER INFORMATION CONTACT: Ms. Meredith Murphy, 703-602-1302.

SUPPLEMENTARY INFORMATION:

I. Background

DoD published a proposed rule at 76 FR 32846 on June 6, 2011, that proposed adding a requirement for offerors submitting proposals to DoD to represent whether former DoD officials employed by the offeror are in compliance with post-employment restrictions. Four respondents submitted public comments on the proposed rule.

A. Post-Employment Statutory Restrictions and Regulatory Implementation The principal statutory restrictions concerning post-Government employment for DoD officials after leaving Government employment are at 18 U.S.C. 207 and 41 U.S.C. 2104 (formerly 41 U.S.C. 423) and 5 CFR parts 2637 and 2641.

1. FAR 3.104 implements 41 U.S.C 2104 and 18 U.S.C. 207.

2. DFARS 203.104 implements the Procurement Integrity Act for DoD.

3. DFARS 203.171-3 implements section 847 of the National Defense Authorization Act (NDAA) for Fiscal Year (FY) 2008.

B. General Accountability Office (GAO) Study GAO-08-485

The Congress included a provision in the NDAA for FY 2007 (section 851 of Pub. L. 109-364) requiring the GAO to report on recent employment of former DoD officials by major defense contractors. In May 2008, the GAO issued its report, entitled ``Defense Contracting: Post-Government Employment of Former DoD Officials Needs Greater Transparency'' (GAO-08-485). The GAO found that contractors significantly under-reported the employment of former DoD officials and concluded that defense contractors may employ a substantial number of former DoD officials on assignments related to their former positions. GAO further concluded that greater transparency is needed by DoD with respect to former senior and acquisition executives to ensure compliance with applicable post-employment restrictions. The GAO recommended that DoD ask potential offerors to certify that the former DoD officials employed by the offeror are in compliance with post-employment restrictions when contracts are being awarded and that contracting officers consider continuing certifications throughout the performance of the contract.

C. DFARS Rule

This DFARS rule implements the recommendation of the GAO by adding a new representation for offerors to complete and provide as part of each proposal, including proposals for commercial items. DoD elected to employ a representation rather than a certification and have the representation submitted by offerors as part of the proposal process. The representation will be required only one time rather than continuously throughout contract performance. The provision will not be included in the annual representations and certifications.

The solicitation provision at DFARS 252.203-7005, entitled ``Representation Relating to Compensation of Former DoD Officials,'' is a representation that all of the offeror's employees who are former DoD officials are in compliance with the post-employment restrictions at 18 U.S.C. 207, 41 U.S.C. 2101-2107, and 5 CFR parts 2637 and 2641, as well as FAR 3.104-2.

II. Discussion and Analysis of the Public Comments

DoD reviewed the public comments received in response to the proposed rule in the formation of the final rule. A discussion of the comments and the changes made to the rule as a result of those comments follows.

A. Contractor Compliance Responsibility

Comment: Two respondents noted that compliance with ethics rules is the responsibility of the covered officials, not the contractor employing them. According to the respondents, although contractors instruct and train employees to observe all post-government employment restrictions, contractors have no official compliance responsibility regarding employees' post-government employment restrictions.

Response: FAR subpart 3.10, entitled ``Contractor Code of Business Ethics and Conduct,'' requires, among other things, that contractors exercise due diligence to prevent and detect criminal conduct and otherwise promote an organizational culture that encourages ethical conduct and a commitment to compliance with the law. Contractors must also timely disclose to the Government any credible evidence of a violation of criminal law, which would include, for example, a violation of 18 U.S.C. 207 (post-Government employment restrictions). Accordingly, contractors, as employers of covered officials, have an affirmative compliance responsibility regarding employees' post-Government employment restrictions. Contractors must ensure their employees avoid engaging in criminal conduct while carrying out duties on the contractor's behalf. Stated individuals' resumes generally do not include every particular matter on which they worked. Hiring contractors have a duty to interview their new hires who formerly worked for DoD and screen their work experiences for relevant particular matters.

Comment: Two respondents asserted that implementation of the proposed rule would require contractors to establish compliance systems to identify, track, educate, and require periodic certifications from employees and consultants across their businesses (rather than those specific to a contract) to identify former DoD covered officials. According to the respondents, such systems would require additional compliance mechanisms and personnel to design, implement, execute, test, and evaluate, thereby raising overhead costs for contractors, which could ultimately increase costs to the Government.

Response: Contractors should know on what particular matters covered officials worked and already ensure employees are not assigned to work on those matters because there are current requirements to maintain and track this information. FAR subpart 3.10 requires contractors to be aware of employees who are covered officials and any existing prohibitions and requirements relating to their employment. In addition, when contractors hire covered DoD officials, DFARS 252.203-7000(b) requires them to determine whether the covered officials sought and received advice regarding post-employment restrictions on behalf of the contractor. This rule does not require the creation of new compliance systems, and additional costs should not be incurred.

Comment: Two respondents asserted that the proposed rule would require contractors to certify compliance involving matters unrelated and unknown to the offeror, because the proposed regulation provides no limitation related to the contractors' business and the covered officials' other activities or employment. Respondents suggested limiting the proposed representation to ``work related to this offer'' or ``activities that the official is expected to undertake on behalf of the contractor.''

Response: DFARS 252.203-7000(b) provides ``(t)he Contractor shall not knowingly provide compensation to a covered DoD official within 2 years after the official leaves DoD service, without first determining that the official has sought and received, or has not received after 30 days of seeking, a written opinion from the appropriate DoD ethics counselor regarding the applicability of post-employment restrictions to the activities that the official is expected to undertake on behalf of the Contractor.'' It would be reasonable to include a similar limitation in the representation, e.g., ``that all covered DoD officials employed by, or otherwise receiving compensation from the offeror, and who are expected to undertake activities on behalf of the offeror for any resulting contract, are presently in compliance with--* * *.'' Appropriate revision has been made in the final rule to the DFARS provision at 252.203-7005(b).

B. Contractor Identification of ``Covered Officials'' and ``Particular Matters''

Comment: One respondent stated that ``identifying which job applicants are `covered officials' is not trivial.'' This respondent explained that ``resumes are often tailored to the job being sought: Certain items are highlighted, others omitted entirely. Consequently, while it is usually simple to tell if a potential candidate was a `senior official,' it is often difficult to identify if he or she was an `acquisition executive'.''

Response: The term ``covered DoD official'' is defined in DFARS 252.203-7000(a) as an individual who ``left DoD service on or after January 28, 2008,'' and either ``participated personally and substantially in an acquisition as defined in 41 U.S.C. 131 with a value in excess of $10 million'' and who served in specifically highlighted positions or served within DoD as ``program manager, deputy program manager, procuring contracting officer, administrative contracting officer, source selection authority, member of the source selection evaluation board, or chief of a financial or technical evaluation team for a contract in an amount in excess of $10 million.'' Contractors need to seek clarification with job applicants and employees as to whether the applicant meets the DFARS definition in order to ensure employees are in compliance with DoD post-employment restrictions.

Comment: A respondent highlighted potential difficulties in identifying ``particular matters'' on which the job applicant worked. The respondent stated that ethics opinions rarely identify the ``particular matters'' upon which the former DoD official worked and to which post-employment restrictions apply. The respondent concluded that failure to identify ``particular matters'' is ``a significant problem for individuals (and their employers) whose government portfolio was substantially broader'' than simply working on one program during their Government career.

Response: It is not feasible or practicable to expect that a Government ethics official list all ``particular matters'' for a Government employee. The most likely, and probably only, source for this type of information is the Government official requesting the post-employment restrictions opinion from the ethics official. Failure of the Government employee to provide a comprehensive list would inappropriately limit the scope of the ethics opinion to those items listed. The former Government official is in the best position to (1) recall the particular matters that he or she worked during his or her Government tenure and (2) advise future employers of his or her involvement in ``particular matters'' when the employer provides work assignments. The Code of Federal Regulations contains a definition of ``particular matter,'' as well as examples of what a ``particular matter'' is. The examples provide guidance for the types of situations and circumstances covered by the term. It is unrealistic to expect a finite set of examples listed in the regulations to cover all possible circumstances and situations that could arise regarding what constitutes a ``particular matter''.

C. Contractor Certification ``to the Best of Its Knowledge and Belief'' Comment: A respondent stated that there is no generally accepted definition of ``to the best of its knowledge or belief.'' This respondent explained that ``(s)ometimes it means simply that the person making the representation has no information to the contrary and is not willfully refusing to see a problem. At other times, it has been held to imply a duty to investigate before making the representation.''

Response: The standard, ``to the best of its knowledge and belief,'' is a recognized legal term of art, and one that has been used in numerous statutes over decades, e.g., The Truth in Negotiations Act has been in effect since 1963. (``A person required, as an offeror, contractor, or subcontractor, to submit cost or pricing data under paragraph (1) * * * shall be required to certify that, to the best of the person's knowledge and belief, the cost or pricing data submitted are accurate, complete, and current.'' (10 U.S.C. 2306a, paragraph (a)(2)).

D. Consequences of the Rule

Comment: Two respondents suggested that the rule may have several adverse effects, including deterring: (1) Small companies from competing for Government contracts; (2) contractors from hiring ``covered DoD officials;'' and (3) Federal employees who would be subject to the rule from seeking employment with DoD.

Response: This rule requires offerors to verify compliance with existing laws and regulations and, therefore, is unlikely to have the suggested deterrent effects unless the business was not otherwise ensuring compliance and/or did not intend to comply in the future. In that event, deterring non-compliance is consistent with the purposes underlying the rule. Further, to the extent one of the respondents was suggesting that small business concerns be exempted from the rule, such an exemption would substantially undermine its purpose of improving compliance, as available data indicates that small business concerns are likely to hire a large majority of ``covered DoD officials'' (see Regulatory Flexibility Act section).

E. Relationship to Existing Statutes and Regulations, Including the Clinger/Cohen Act Ban on New Certifications That Are Not Required by Law

Comment: Two respondents concluded that there was no need for this rule because (1) the Congress already addressed the concerns underlying the GAO report by enacting section 847 of the NDAA for FY 2009 (Pub. L. 110-417, enacted October 14, 2008); (2) FAR subpart 3.10, Contractor Code of Business Ethics and Conduct, already requires contractors to monitor post-employment compliance with 18 U.S.C. 207; and (3) the responsibility for post-employment compliance should rest primarily with former DoD employees. One of these respondents stated that the representation violates the Clinger/Cohen Act ban on new contractor certifications that are not required by law.

Response: (1) Section 847 of the NDAA for FY 2008 is entitled ``Requirements for Senior Department of Defense Officials Seeking Employment with Defense Contractors.'' The provision applies to defense contractors by prohibiting such contractors from knowingly providing compensation to a former DoD official ``within two years after such former official leaves (DoD), without first determining that the former official has sought and received (or has not received after 30 days of seeking) a written opinion from the appropriate ethics counselor regarding the applicability of post-employment restrictions to the activities that the former official is expected to undertake on behalf of the contractor.'' While there is some relationship to section 847, the representation in the rule addresses the broader arena of post-employment restrictions (see paragraph A in the Background section of this notice for the listing). Further, the prohibition against providing compensation (section 847) was implemented by adding the clause at DFARS 252.203-7000, Requirements Relating to Compensation of Former DoD Officials (see the interim rule at 74 FR 2408, dated January 15, 2009, and the final rule at 74 FR 59913, dated November 19, 2009; DFARS Case 2008-D007).

(2) There is some relationship to FAR subpart 3.10. However, the FAR policy (FAR 3.1002(b)) states that contractors ``should have a written code of business ethics and conduct'' and ``should have an internal control system.'' (A contractor is not required to have an internal control system unless the procurement is over $5 million and it is not a small business concern (see FAR 3.1004(a) and 52.203-13(c)(2)). Further, the proposed rule is applicable exclusively to DoD procurements, and it is narrower than FAR subpart 3.10, in that it is concerned exclusively with post-employment restrictions for former DoD officials.

(3) The former DoD employee should be primarily responsible for his or her compliance with post-employment restrictions. However, businesses should support the highest ethical standards (see FAR 3.1002(a)) and should not hire former DoD officials who have not complied with the law or assign them to work on projects that are barred to them by the nature of their DoD assignments. The representation at DFARS 252.203-7005 in the final rule is intended to ensure that DoD does business with companies that are committed to the highest ethical standards.

(4) The Clinger/Cohen Act prohibited the creation of contractor certifications that are not required by law. The FAR and DFARS regularly employ the distinction between a representation and a certification, and representations have regularly been deemed not subject to the Clinger/Cohen Act ban.

F. Strengthen the Rule by Adding Five Requirements

Comment: One respondent expressed support for the proposed rule, but suggested that it be strengthened by adding the following five requirements for--

(1) The offeror to expressly state, when true, that it is compensating former DoD employees who have not received a written ethics opinion within the 30-day timeframe;

(2) The DoD IG to audit annually a stratified random sample of contracts and the contractor's list of former employees to determine whether contractors are in full compliance with post-employment restrictions asserted, whether former Government employees are in full compliance with post-employment restrictions, and whether DoD ethics officers have issued said written opinions within 30 days of being sought;

(3) DoD to sanction contractors and former DoD employees identified by the DoD IG as having violated the requirements;

(4) DoD to take appropriate action to ensure ethics opinions are issued within the 30-day timeframe; and

(5) DoD to make public the following information: (a) The database of ethics opinions required pursuant to section 847(b)(1); (b) the names of contractors and former DoD officials identified by the DoD IG as not being in compliance with the requirements of the proposed rule; (c) the actions taken by DoD to seek sanctions for each non-compliant contractor and former DoD official; and (d) what, if any, sanctions were actually imposed on the identified contractors and former DoD officials.

Response: All of the above recommendations are outside the scope of the GAO study and this rule.

G. Scope

Comment: A respondent stated that ``due to its broad scope'', implementation of substantial compliance programs is required.

Response: Contractors should already have programs in place that comply with standards of conduct and ethics program requirements as described in FAR 3.10 and more specifically, in DFARS clause 252.203-7000, included in all DoD solicitations and contracts. All companies, whether large or small, should have knowledge of the former defense employees that are proposed to work on specific solicitations.

H. Application to New Task or Delivery Orders

Comment: One respondent stated that the proposed rule does not specify whether contracts would need to include the post-employment representation in task and delivery orders and proposed the rule ``be amended to clarify that such representation would only be required at the time the umbrella indefinite-delivery, indefinite-quantity contract is awarded, and not for each task or delivery order.''

Response: The final rule clarifies the requirement. The prescription, at DFARS 203.171-4, requires the provision at DFARS 252.203-7005, Representation Relating to Compensation of Former DoD Officials, ``in all solicitations, including solicitations for task and delivery orders.''

III. Executive Orders 12866 and 13563

Executive Orders (E.O.s) 12866 and 13563 direct agencies to assess all costs and benefits of available regulatory alternatives and, if regulation is necessary, to select regulatory approaches that maximize net benefits (including potential economic, environmental, public health and safety effects, distributive impacts, and equity). E.O. 13563 emphasizes the importance of quantifying both costs and benefits, of reducing costs, of harmonizing rules, and of promoting flexibility. This is not a significant regulatory action and, therefore, was not subject to review under section 6(b) of E.O. 12866, Regulatory Planning and Review, dated September 30, 1993. This rule is not a major rule under 5 U.S.C. 804.

IV. Regulatory Flexibility Act

A final regulatory flexibility analysis has been prepared consistent with the Regulatory Flexibility Act, 5 U.S.C. 601, et seq., and is summarized as follows:

This rule is being issued in response to a study by the General Accountability Office (GAO), entitled ``Defense Contracting: Post-Government Employment of Former DoD Officials Needs Greater Transparency'' (GAO-08-485), issued in May 2008. The GAO found that contractors under-reported the employment of former DoD officials to the extent that the contractors employed almost twice as many former DoD officials as had been reported. The GAO report showed that major defense contractors are not currently ensuring that former DoD senior officials and acquisition executives working on contracts are complying with post-employment restrictions.

The final rule requires offerors to submit, as part of the proposal, a representation that all former DoD officials who will be working on any resultant contract are in compliance with post-employment restrictions at 18 U.S.C. 207, 41 U.S.C. 2101-2107, and 5 CFR parts 2637 and 2641, as well as FAR 3.104-2.

The rule requires a representation from all offerors responding to a DoD solicitation, including commercial item acquisitions. A ``covered DoD official'' is already defined in the clause at DFARS 252.203-7000, Requirements Relating to Compensation of Former DoD Employees. That same clause also implements section 847 of the National Defense Authorization Act for Fiscal Year 2008 by prohibiting any DoD contractor from knowingly providing compensation to a covered DoD official within two years after the official leaves DoD service. There is no impact on an offeror from this new representation unless the contractor has not been monitoring its employees who are former covered DoD officials to ensure compliance with DFARS 252.203-7000.

No comments from small entities were received in response to the Federal Register Notice of the proposed rule, published June 6, 2011, at 76 FR 32846. However, a ``think tank'' requested the ``addition of language making it clear that the offeror has no duty to establish systems and procedures to police and define compliance * * *'' No language has been added in response to this request. Companies are prohibited, pursuant to subsection 3 of DFARS 203.171, entitled ``Senior DoD officials seeking employment with defense contractors,'' from ``knowingly provid(ing) compensation to a covered DoD official within two years after the official leaves DoD service unless the contractor first determines that the official has received * * * the post-employment ethics opinion'' pursuant to section 847 of the National Defense Authorization Act for Fiscal Year 2008 (Pub. L. 110-181).

In the period of 2001-2006, 1.85 million former military and civilian personnel left DoD service. A ``covered DoD official'' is defined to include former DoD officials who held certain positions and who left DoD within the past two years (see DFARS 203.171-3(a) and 252.203-7000). The GAO found that the 1.85 million personnel who had left DoD service over a six-year period included only 35,192 who had served in the type of senior or acquisition official positions that made them subject to post-Government employment restrictions, if they were subsequently hired by defense contractors. Dividing 35,192 by three (to reduce the six-year period to a two-year period), we estimate that 11,730 of those officials would have left within the last two years. We estimate that 7,635 of these former officials may accept employment with a defense contractor (about 65 percent). The GAO study found that 2,435 of these covered officials were employed by 52 major defense contractors. Of the remaining 5,200 former officials covered by the Procurement Integrity Act, we estimate that 3,900 (75 percent) of them may work for small business concerns.

There were no comments filed by the Chief Counsel for Advocacy of the Small Business Administration in response to the rule.

There is no reporting, recordkeeping, or other compliance requirement associated with this rule. Offerors make the representation by submission of an offer. By the terms of the representation, an offeror is prohibited from submitting an offer if it cannot make the representation. In order to submit an offer, small entities that hire a former DoD official covered by the Procurement Integrity Act will have to check the compliance of such employees with various applicable post-employment restrictions. DFARS clause 252.203-7000, Requirements Relating to Compensation of Former DoD Officials, already requires contractors to determine that a covered DoD official has sought and received, or has not received after 30 days of seeking, a written opinion from the appropriate DoD ethics counselor, regarding the applicability of post-employment restrictions to the activities that the official is expected to undertake on behalf of the contractor. This representation of compliance does not impose an additional burden on the offeror.

There were no known significant alternatives identified that would achieve the objectives of the rule.

V. Paperwork Reduction Act

The rule does not contain any information collection requirements that require the approval of the Office of Management and Budget under the Paperwork Reduction Act (44 U.S.C. chapter 35).

List of Subjects in 48 CFR Parts 203 and 252

Government procurement.

Ynette R. Shelkin,

Editor, Defense Acquisition Regulations System.

Therefore, 48 CFR parts 203 and 252 are amended as follows:

1. The authority citation for 48 CFR parts 203 and 252 continues to read as follows:

Authority: 41 U.S.C. 1303 and 48 CFR chapter 1.

PART 203--IMPROPER BUSINESS PRACTICES AND PERSONAL CONFLICTS OF INTEREST

2. Revise section 203.171-4 to read as follows:

203.171-4 Solicitation provision and contract clause.

(a) Use the clause at 252.203-7000, Requirements Relating to Compensation of Former DoD Officials, in all solicitations and contracts.

(b) Use the provision at 252.203-7005, Representation Relating to Compensation of Former DoD Officials, in all solicitations, including solicitations for task and delivery orders.

PART 252--SOLICITATION PROVISIONS AND CONTRACT CLAUSES

3. Add section 252.203-7005 to read as follows:

252.203-7005 Representation Relating to Compensation of Former DoD Officials.

As prescribed in 203.171-4(b), insert the following provision:

REPRESENTATION RELATING TO COMPENSATION OF FORMER DOD OFFICIALS (NOV 2011)

(a) Definition. Covered DoD official is defined in the clause at 252.203-7000, Requirements Relating to Compensation of Former DoD Officials.

(b) By submission of this offer, the offeror represents, to the best of its knowledge and belief, that all covered DoD officials employed by or otherwise receiving compensation from the offeror, and who are expected to undertake activities on behalf of the offeror for any resulting contract, are presently in compliance with all post-employment restrictions covered by 18 U.S.C. 207, 41 U.S.C. 2101-2107, and 5 CFR parts 2637 and 2641, including Federal Acquisition Regulation 3.104-2.

(End of provision)

[FR Doc. 2011-29421 Filed 11-17-11; 8:45 am]

BILLING CODE 5001-06-P

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[Federal Register Volume 76, Number 223 (Friday, November 18, 2011)]

[Rules and Regulations]

From the Federal Register Online via the Government Printing Office [www.gpo.gov]

[FR Doc No: 2011-29426]

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DEPARTMENT OF DEFENSE

Defense Acquisition Regulations System

48 CFR Part 242

RIN 0750-AH41

Defense Federal Acquisition Regulation Supplement: Administering Trafficking in Persons Regulations (DFARS Case 2011-D051)

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

ACTION: Final rule.

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SUMMARY: DoD is issuing a final rule amending the Defense Federal Acquisition Regulation Supplement (DFARS) to add to the list of contract administration functions a requirement to maintain surveillance over contractor compliance with duties and responsibilities pertaining to trafficking in persons when they are incorporated in contracts.

DATES: Effective Date: November 18, 2011.

FOR FURTHER INFORMATION CONTACT: Meredith Murphy, telephone (703) 602-1302.

SUPPLEMENTARY INFORMATION:

I. Background

The current FAR, at section 22.1705, entitled ``Contract clause,'' prescribes use of the clause at FAR 52.222-50, Combating Trafficking in Persons, in all solicitations and contracts. When the contract will be performed outside the United States, the clause must be used with its Alternate I, as prescribed in FAR 22.1705(b). The clause requires contractors to inform employees of the Government's zero-tolerance policy and the actions that will be taken against them for violations of the policy. In addition, contractors are required to notify the contracting officer immediately of any information received about an employee's conduct that violates this policy and also of actions taken against an employee as a result of the violation.

While the clause at FAR 52.222-50, Combating Trafficking in Persons, has been in effect since February 2009, the listing of Government contract administration functions was not modified at that time to add surveillance of a contractor's compliance with the clause requirements. Because the addition of this contract administration function is internal to DoD and will not impact current contract requirements or contract clauses, this is not a significant revision as defined at FAR 1.501-1. Therefore, under the authority at FAR 1.501-3(a), this rule can be published as a final rule without first obtaining public comment.

III. Executive Orders 12866 and 13563

Executive Orders (E.O.s) 12866 and 13563 direct agencies to assess all costs and benefits of available regulatory alternatives and, if regulation is necessary, to select regulatory approaches that maximize net benefits (including potential economic, environmental, public health and safety effects, distributive impacts, and equity). E.O. 13563 emphasizes the importance of quantifying both costs and benefits, of reducing costs, of harmonizing rules, and of promoting flexibility. This is a significant regulatory action and, therefore, was subject to review under section 6(b) of E.O. 12866, Regulatory Planning and Review, dated September 30, 1993. This rule is not a major rule under 5 U.S.C. 804.

IV. Regulatory Flexibility Act

The Regulatory Flexibility Act does not apply to this rule because an initial regulatory flexibility analysis is only required for proposed or interim rules that require publication for public comment (5 U.S.C. 603) and a final regulatory flexibility analysis is only required for final rules that were previously published for public comment, and for which an initial regulatory flexibility analysis was prepared (5 U.S.C. 604).

This final rule does not constitute a significant DFARS revision as defined at FAR 1.501-1 because 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 the Government. Therefore, publication for public comment under 41 U.S.C. 1707 is not required.

V. Paperwork Reduction Act

The rule does not contain any information collection requirements that require the approval of the Office of Management and Budget under the Paperwork Reduction Act (44 U.S.C. chapter 35).

List of Subjects in 48 CFR Part 242

Government procurement.

Ynette R. Shelkin,

Editor, Defense Acquisition Regulations System.

Therefore, 48 CFR part 242 is amended as follows:

PART 242--CONTRACT ADMINISTRATION AND AUDIT SERVICES

1. The authority citation for 48 CFR part 242 continues to read as follows:

Authority: 41 U.S.C. 1303 and 48 CFR chapter 1.

2. Amend section 242.302 by adding paragraph (a)(S-73) to read as follows:

242.302 Contract administration functions.

(a) * * *

(S-73) Maintain surveillance over contractor compliance with trafficking in persons requirements for all DoD contracts for services incorporating the clause at FAR 52.222-50, Combating Trafficking in Persons, and, when necessary, its Alternate I, as identified in the clause prescription at FAR 22.1705. (See PGI 222.1703.)

[FR Doc. 2011-29426 Filed 11-17-11; 8:45 am]

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[Federal Register Volume 76, Number 223 (Friday, November 18, 2011)]

[Rules and Regulations]

From the Federal Register Online via the Government Printing Office [www.gpo.gov]

[FR Doc No: 2011-29428]

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DEPARTMENT OF DEFENSE

Defense Acquisition Regulations System

48 CFR Parts 211 and 225

RIN 0750-AH22

Defense Federal Acquisition Regulation Supplement: Fire-Resistant Fiber for Production of Military Uniforms (DFARS Case 2011-D021)

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

ACTION: Final rule.

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SUMMARY: DoD is adopting as final, with changes, an interim rule amending the Defense Federal Acquisition Regulation Supplement (DFARS) to implement the section of the National Defense Authorization Act for Fiscal Year 2011 that prohibits specification of the use of fire-resistant rayon fiber in solicitations issued before January 1, 2015.

DATES: Effective Date: November 18, 2011.

FOR FURTHER INFORMATION CONTACT: Ms. Amy G. Williams, telephone 703-602-0328.

SUPPLEMENTARY INFORMATION:

I. Background

DoD published an interim rule in the Federal Register at 76 FR 32843 on June 6, 2011, to implement section 821 of the National Defense Authorization Act for Fiscal Year 2011. Section 821 prohibits specification of the use of fire-resistant rayon fiber in solicitations issued before January 1, 2015.

Ten respondents submitted public comments in response to the interim rule. Nine of the respondents (manufacturers, suppliers, or distributors of fire-resistant fibers, yarns, fabrics, or military uniforms) submitted comments that were essentially the same.

II. Discussion and Analysis of the Public Comments

DoD reviewed the public comments in the development of the final rule. A discussion of the comments and the changes made to the rule as a result of those comments are provided as follows:

A. Implements Law as Written

Comment: One respondent stated that the DFARS interim rule implements the statute as written.

Response: Noted.

B. Selection of Fire-Resistant Rayon Fiber

Comment: Nine respondents stated that the law only requires that DoD solicitations prior to January 1, 2015, not specify the use of fire-resistant rayon fiber. The law does not restrict DoD's selection and use of fabrics containing fire-resistant rayon fiber. The respondents recommended that the DFARS final rule make clear that the rule does not prohibit DoD from selecting fabrics that include fire-resistant rayon fibers.

Response: These responses have correctly stated the requirements of the law. The DFARS interim rule correctly reflected the statute. However, DoD has added clarification to the title and text of section 225.7016, that it is the requirement that is prohibited, not the voluntary offer and use.

C. Specification of Other Fire-Resistant Fibers

Comment: Nine respondents stated that the law is narrow in its application only to fire-resistant rayon fibers. According to the respondents, the law does not address DoD's ability to specify inherently flame-resistant cellulosic fibers; this broader category includes any manmade cellulosic fiber that has fire resistance added to its slurry before fiber extrusion, such as acetate, rayon, lyocell, etc. The respondents recommended that the DFARS final rule make it clear that the prohibition applies only to DoD's ability to specify the use of fire-resistant rayon fibers, and not to any other categories of fibers.

Response: The DoD interim rule clearly reflected the statutory prohibition on requiring the use of fire-resistant rayon fiber in a specification. However, it would be contrary to the intent of the statute to state the requirements of the solicitation in such a way as to exclude categories of fire-resistant fiber (such as polymers) from consideration.

D. Specification of Branded Products

Comment: Eight respondents stated that the law does not restrict the specification of branded products. The respondents recommended that the DFARS rule not include any mention of branded commercial products.

Response: The interim DFARS rule did not make any mention of branded commercial products. However, if a solicitation specifies the use of a branded commercial product that contains fire-resistant rayon fibers, then it would be in violation of the prohibition not to specify the use of fire-resistant rayon fiber.

E. Domestic Nonavailability Determinations (DNADs) or Waivers

Comment: Nine respondents recommended that the DFARS rule should make clear that it does not prohibit DoD's ability to source foreign fibers under its DNAD authority or a legislated waiver to the Berry Amendment.

Response: There is nothing in the interim or final rule that would, in any way, affect DoD's ability to source foreign fibers under its DNAD authority or a legislated waiver to the Berry Amendment.

F. Inequity in the Treatment of Foreign Fibers

Comment: Nine respondents stated that the law produces inequity in the treatment of foreign fibers that are specified by DoD and are purchased under DoD's authority to waive the Berry Amendment. The respondents cited various foreign fibers, none of which are ``restricted for specification.''

Response: Noted. However, the DFARS rule must implement the statute as enacted.

G. Impact on Small Business

Comment: Nine respondents disagreed with the statement in the initial regulatory flexibility analysis that the impact on small businesses will be minimal. The respondents cited two points on which they disagree with the analysis:

1. According to the respondents, Nomex is not a substitute for fire-resistant rayon fiber for the manufacture of all types of military uniforms. The respondents stated that Nomex is widely used in flight suits, but not in ground troop uniforms, unless used with cotton. Cotton requires topical fire resistant treatment, which is not permanent for the life of the fiber. According to the respondents, the alternatives to the use of fire-resistant rayon are ``next best'' as a permanent fire-resistant solution in hot and humid environments and are also more expensive.

2. Dozens of small businesses currently supply DoD with uniforms made using fire-resistant rayon fibers. The impact on small business can be significant if designing new products and producing existing programs becomes restrained by availability of raw materials.

Response: Although small businesses may be involved in providing military uniforms using fire-resistant rayon fibers, there is nothing in this rule that prohibits the use of fire-resistant rayon fibers. If fire-resistant rayon is as superior to the alternative fire-resistant fibers as stated by the respondents, then competition from alternative fibers should have little impact on small business because there will likely be small businesses engaged in the manufacture of the military uniforms containing an alternative fiber. Furthermore, there is nothing in this final rule that would restrain the availability of raw materials. See also section V of this Federal Register notice.

H. End of Statutory Restriction

Comment: One respondent expressed concern over what will happen when the statutory restriction ends in January 2015. The respondent requested a dialog regarding extension of this date, as the date does not seem relevant to the ability of the military textile industrial base to meet DoD demand for flame-resistant protective apparel products. Furthermore, the respondent noted that performance-based specifications are already required to the maximum extent possible pursuant to FAR section 11.002(a)(2)(i)(A)-(B).

Response: This comment is outside the scope of this case, which is for the purpose of implementing the existing statute.

I. Continued Collaboration

Comment: All respondents recommended continued collaboration with DoD. One respondent stated that DoD should continue to pursue strategies to create continuous collaboration between industry and the acquiring service/agencies. According to the respondent, DoD should also ensure that all expertise available within the Program Executive Office, as well as the RDT&E commands, is incorporated into the drafting of purchase descriptions to avoid over reliance on industry partners for the drafting of purchase descriptions. The other respondents stated that clarifying and simplifying the DFARS rule will result in greater collaboration and investment on behalf of the needs of the U.S. military.

Response: Noted.

III. Other Changes

Comment: One DoD respondent recommended that the coverage should be moved from part 225 (Foreign Acquisition) to part 211 (Describing Agency Needs).

Response: Because of the implication of the rule for foreign acquisition and the inter-relationship with the Berry Amendment and the DNAD and statutory waiver authority for rayon fiber, DoD has decided to retain the coverage in part 225. However, a cross reference has been added in part 211.

IV. Executive Orders 12866 and 13563

Executive Orders (E.O.s) 12866 and 13563 direct agencies to assess all costs and benefits of available regulatory alternatives and, if regulation is necessary, to select regulatory approaches that maximize net benefits (including potential economic, environmental, public health and safety effects, distributive impacts, and equity). E.O. 13563 emphasizes the importance of quantifying both costs and benefits, of reducing costs, of harmonizing rules, and of promoting flexibility. This is not a significant regulatory action and, therefore, was not subject to review under section 6(b) of E.O. 12866, Regulatory Planning and Review, dated September 30, 1993. This rule is not a major rule under 5 U.S.C. 804.

V. Regulatory Flexibility Act

A final regulatory flexibility analysis has been prepared consistent with the Regulatory Flexibility Act, 5 U.S.C. 601, et seq., and is summarized as follows:

The need for this rule is to implement section 821 of the National Defense Authorization Act for Fiscal Year 2011 (Pub. L. 111-383). Section 821 prohibits specification of the use of fire-resistant rayon fiber in solicitations issued before January 1, 2015.

The objectives of this rule are to prohibit specification of the use of fire-resistant rayon fiber in solicitations issued before January 1, 2015, as required by the statute. This will provide opportunity for offerors to propose alternative solutions to meet DoD requirements.

The legal basis for this rule is section 821 of the National Defense Authorization Act for Fiscal Year 2011 (Pub. L. 111-383).

Nine respondents disagreed with the statement in the initial regulatory flexibility analysis that the impact on small businesses will be minimal. The respondents cited two points on which they disagree with the analysis:

According to the respondents, Nomex is not a substitute for fire-resistant rayon fiber for the manufacture of all types of military uniforms. The respondents stated that Nomex is widely used in flight suits, but not in ground troop uniforms, unless used with cotton. Cotton requires topical fire resistant treatment, which is not permanent for the life of the fiber. According to the respondents, the alternatives to the use of fire-resistant rayon are ``next best'' as a permanent fire-resistant solution in hot and humid environments and are also more expensive.

The respondents stated further that dozens of small businesses currently supply DoD with uniforms made using fire-resistant rayon fibers. The impact on small business can be significant if designing new products and producing existing programs becomes restrained by availability of raw materials.

Although small businesses may be involved in providing military uniforms using fire-resistant rayon fibers, there is nothing in this rule that prohibits the use of fire-resistant rayon fibers. If fire-resistant rayon is as superior to the alternative fire-resistant fibers as stated by the respondents, then competition from alternative fibers should have little impact on small business because there will likely be small businesses engaged in the manufacture of the military uniforms containing an alternative fiber. Furthermore, there is nothing in this final rule that would restrain the availability of raw materials.

The two major sources of fire-resistant fiber used in DoD products either come from DuPont (product called Nomex) or The Lenzing Group, Austria (product called Fire Resistant Rayon). In order to manufacture a fire-resistant uniform currently being sourced by the services, three products are blended together to meet desired cost, availability, and performance criteria:

Nylon.

Para-aramid (Kevlar by DuPont or Twaron by Teijin (The Netherlands)).

Either Nomex (DuPont) or Fire Resistant Rayon (Lenzing).

DuPont is a domestic large business and the other manufacturers of fire-resistant fiber are foreign. However, small businesses are involved in the supply of the military uniforms that utilize the foreign fire-resistant rayon.

There were no comments filed by the Chief Counsel for Advocacy of the Small Business Administration in response to the rule.

There are no reporting or recordkeeping requirements.

The requirements of the rule are the minimum requirements necessary to meet the requirements of the statute. Although small businesses are involved in manufacture of the uniforms, there is nothing in this rule that prohibits the continued acquisition of military uniforms containing fire-resistant rayon fiber or that would hinder acquisition of that fire-resistant fiber from Austria. Further, if another type of fire-resistant fiber is competitively selected (such as Nomex from DuPont), there will probably still be small businesses engaged in the manufacture of the military uniforms containing that fiber.

VI. Paperwork Reduction Act

The rule does not contain any information collection requirements that require the approval of the Office of Management and Budget under the Paperwork Reduction Act (44 U.S.C. chapter 35).

List of Subjects in 48 CFR Parts 211 and 225

Government procurement.

Ynette R. Shelkin,

Editor, Defense Acquisition Regulations System.

Accordingly, the interim rule amending 48 CFR parts 211 and 225, which was published at 76 FR 32843 on June 6, 2011, is adopted as a final rule with the following changes:

1. The authority citation for 48 CFR parts 211 and 225 continues to read as follows:

Authority: 41 U.S.C. 1303 and 48 CFR chapter 1.

PART 211--DESCRIBING AGENCY NEEDS

2. Add section 211.170 to read as follows:

211.170 Requiring the use of fire-resistant rayon fiber.

See 225.7016 for the statutory prohibition on requiring the use of fire-resistant rayon fiber.

PART 225--FOREIGN ACQUISITION

3. Revise section 225.7016 to read as follows:

225.7016 Prohibition on requiring the use of fire-resistant rayon fiber.

In accordance with section 821 of the National Defense Authorization Act for Fiscal Year 2011, do not include in any solicitation issued before January 1, 2015, a requirement that proposals submitted pursuant to such solicitation shall include the use of fire-resistant rayon fiber. However, this does not preclude issuing a solicitation that allows offerors to propose the use of fire-resistant rayon fiber.

[FR Doc. 2011-29428 Filed 11-17-11; 8:45 am]

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[Federal Register Volume 76, Number 223 (Friday, November 18, 2011)]

[Rules and Regulations]

From the Federal Register Online via the Government Printing Office [www.gpo.gov]

[FR Doc No: 2011-29433]

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DEPARTMENT OF DEFENSE

Defense Acquisition Regulations System

48 CFR Parts 202 and 218

RIN 0750-AH29

Defense Federal Acquisition Regulation Supplement: Simplified Acquisition Threshold for Humanitarian or Peacekeeping Operations (DFARS Case 2011-D032)

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

ACTION: Final rule.

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SUMMARY: DoD is adopting as final, without change, an interim rule amending the Defense Federal Acquisition Regulation Supplement (DFARS) to implement the statutory authority to invoke a simplified acquisition threshold that is two times the normal amount to support a humanitarian or peacekeeping operation.

DATES: Effective Date: November 18, 2011.

FOR FURTHER INFORMATION CONTACT: Ms. Meredith Murphy, telephone 703-602-1302.

SUPPLEMENTARY INFORMATION:

I. Background

DoD published an interim rule in the Federal Register at 76 FR 44280 on July 25, 2011, to amend the Defense Federal Acquisition Regulation Supplement (DFARS) to implement the authority at 10 U.S.C. 2302(7) to invoke a simplified acquisition threshold that is two times the amount specified at 41 U.S.C 134, as amended by section 807 of the National Defense Authorization Act for Fiscal Year 2005, for the purpose of supporting a humanitarian or peacekeeping operation. The current simplified acquisition threshold is $150,000, as specified in Federal Acquisition Regulation 2.101. No respondents submitted public comments in response to the interim rule.

II. Executive Orders 12866 and 13563

Executive Orders (E.O.s) 12866 and 13563 direct agencies to assess all costs and benefits of available regulatory alternatives and, if regulation is necessary, to select regulatory approaches that maximize net benefits (including potential economic, environmental, public health and safety effects, distributive impacts, and equity). E.O. 13563 emphasizes the importance of quantifying both costs and benefits, of reducing costs, of harmonizing rules, and of promoting flexibility. This is not a significant regulatory action and, therefore, was not subject to review under section 6(b) of E.O. 12866, Regulatory Planning and Review, dated September 30, 1993. This rule is not a major rule under 5 U.S.C. 804.

III. 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 does not impose any requirements on small businesses. The statute applies only to purchases made outside the United States and only to those purchases that directly support a humanitarian or peacekeeping operation. For the definition of ``small business,'' the Regulatory Flexibility Act refers to the Small Business Act, which in turn allows the U.S. Small Business Administration (SBA) Administrator to specify detailed definitions or standards (5 U.S.C. 601(3) and 15 U.S.C. 632(a)). The SBA regulations at 13 CFR 121.105 discuss who is a small business: ``(a)(1) Except for small agricultural cooperatives, a business concern eligible for assistance from SBA as a small business is a business entity organized for profit, with a place of business located in the United States, and which operates primarily within the United States or which makes a significant contribution to the U.S. economy through payment of taxes or use of American products, materials or labor.''

IV. Paperwork Reduction Act

The rule does not contain any information collection requirements that require the approval of the Office of Management and Budget under the Paperwork Reduction Act (44 U.S.C. chapter 35).

List of Subjects in 48 CFR Parts 202 and 218

Government procurement.

Ynette R. Shelkin,

Editor, Defense Acquisition Regulations System.

Interim Rule Adopted as Final Without Change

Accordingly, the interim rule amending 48 CFR parts 202 and 218, which was published at 76 FR 44280 on July 25, 2011, is adopted as a final rule without change.

[FR Doc. 2011-29433 Filed 11-17-11; 8:45 am]

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