[Federal Register Volume 80, Number 100 (Tuesday, May 26, 2015)]

[Rules and Regulations]

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

[FR Doc No: 2015-12341]

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DEPARTMENT OF DEFENSE

Defense Acquisition Regulations System

48 CFR Part 216

RIN 0750-AI56

Defense Federal Acquisition Regulation Supplement: Approval Threshold for Time-and-Materials and Labor-Hour Contracts (DFARS Case 2014-D020)

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 establish the level of approval required for a determination and findings for time-and-materials and labor-hour contracts, or portions of contracts, exceeding $1 million.

DATES: Effective May 26, 2015.

FOR FURTHER INFORMATION CONTACT: Ms. Jennifer Johnson, telephone 571-

SUPPLEMENTARY INFORMATION:

I. Background

DoD is issuing a final rule amending the DFARS to establish the level of approval required for a determination and findings (D&F) for time-and-materials and labor-hour contracts, or portions of contracts, exceeding $1 million. The D&F must address why cost-plus-fixed-fee and other contract types are not appropriate. The approval requirements in this rule do not apply to contracts that support contingency or peacekeeping operations, or that provide humanitarian assistance, disaster relief, or recovery from conventional, nuclear, biological, chemical, or radiological attack.

II. Publication of This Final Rule for Public Comment Is Not Required by Statute

``Publication of proposed regulations'', 41 U.S.C. 1707, is the statute which applies to the publication of the Federal Acquisition Regulation. Paragraph (a)(1) of the statute requires that a procurement policy, regulation, procedure or form (including an amendment or modification thereof) must be published for public comment if it relates to the expenditure of appropriated funds, and has either a significant effect beyond the internal operating procedures of the agency issuing the policy, regulation, procedure or form, or has a significant cost or administrative impact on contractors or offerors. This final rule is not required to be published for public comment because it pertains to requirements for internal documentation within DoD, specifically, determination and findings for use of the time-and-materials and labor-hour contract types. These requirements affect only the internal operating procedures of the Government. This final rule is not required to be published for public comment, because it has no effect beyond the internal operating procedures of DoD, and has no cost or administrative impact on contractors or offerors.

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 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 Part 216

Government procurement.

Amy G. Williams,

Editor, Defense Acquisition Regulations System.

Therefore, 48 CFR part 216 is amended as follows:

PART 216--TYPES OF CONTRACTS

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

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

2. Section 216.601 is amended by revising paragraph (d) to read as follows:

216.601 Time-and-materials contracts.

(d) Limitations.

(i)(A) Approval of determination and findings for time-and-materials or labor-hour contracts.

(1) Base period plus any option periods is three years or less.

(i) For contracts (including indefinite-delivery contracts) and orders in which the portion of the requirement performed on a time-and-materials or labor-hour basis exceeds $1 million, the approval authority for the determination and findings shall be the senior contracting official within the contracting activity. This authority may not be delegated.

(ii) For contracts (including indefinite-delivery contracts) and orders in which the portion of the requirement performed on a time-and-materials or labor-hour basis is less than or equal to $1 million, the determination and findings shall be approved one level above the contracting officer.

(2) Base period plus any option periods exceeds three years. The authority of the head of the contracting activity to approve the determination and findings may not be delegated.

(3) Exception. The approval requirements in paragraphs (d)(i)(A)(1) and (2) of this section do not apply to contracts that--

(i) Support contingency or peacekeeping operations; or

(ii) Provide humanitarian assistance, disaster relief, or recovery from conventional, nuclear, biological, chemical, or radiological attack.

(B) Content of determination and findings. The determination and findings shall contain sufficient facts and rationale to justify that no other contract type is suitable. At a minimum, the determination and findings shall--

(1) Include a description of the market research conducted;

(2) Establish that it is not possible at the time of placing the contract or order to accurately estimate the extent or duration of the work or to anticipate costs with any reasonable degree of certainty;

(3) Address why a cost-plus-fixed-fee term or other cost-reimbursement, incentive, or fixed-price contract or order is not appropriate; for contracts (including indefinite-delivery contracts) and orders for noncommercial items awarded to contractors with adequate accounting systems, a cost-plus-fixed-fee term contract type shall be preferred over a time-and-materials or labor-hour contract type;

(4) Establish that the requirement has been structured to minimize the use of time-and-materials and labor-hour requirements (e.g., limiting the value or length of the time-and-materials or labor-hour portion of the contract or order; establishing fixed prices for portions of the requirement); and

(5) Describe the actions planned to minimize the use of time-and-materials and labor-hour contracts on future acquisitions for the same requirements.

(C) Indefinite-delivery contracts. For indefinite-delivery contracts, the contracting officer shall structure contracts that authorize time-and-materials orders or labor-hour orders to also authorize orders on a cost-reimbursement, incentive, or fixed-price basis, to the maximum extent practicable.

* * * * *

[FR Doc. 2015-12341 Filed 5-22-15; 8:45 am]

BILLING CODE 5001-06-P

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[Federal Register Volume 80, Number 100 (Tuesday, May 26, 2015)]

[Rules and Regulations]

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

[FR Doc No: 2015-12340]

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DEPARTMENT OF DEFENSE

Defense Acquisition Regulations System

48 CFR Part 217

RIN 0750-AI37

Defense Federal Acquisition Regulation Supplement: Multiyear Contracts--Statutory References and Cancellation Ceiling Threshold (DFARS Case 2014-D019)

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 update the cancellation ceiling threshold for multiyear contracts and to correct statutory references.

DATES: Effective May 26, 2015.

FOR FURTHER INFORMATION CONTACT: Jennifer Hawes, telephone 571-372-6115.

SUPPLEMENTARY INFORMATION:

I. Background

DoD published a proposed rule in the Federal Register at 79 FR 65331 on September 19, 2014, to amend the DFARS regarding multiyear contracts to update the cancellation ceiling threshold at DFARS 217.170(e)(1)(iv) for consistency with the Federal Acquisition Regulation and correct statutory references. The rule also corrects references to 10 U.S.C. 2306b, 10 U.S.C. 2306c, and section 8008a of Public Law 105-56 throughout DFARS subpart 217.1.

No public comments were submitted in response to the proposed rule.

II. Discussion

There are only minor editorial changes in the final rule from the proposed rule. Cross references contained within some paragraphs required revision since several paragraphs were redesignated and renumbered due to relocation of text or the addition of new text.

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 amends the Defense Federal Acquisition Regulation Supplement (DFARS) regarding multiyear contracts to ensure consistency with the Federal Acquisition Regulation (FAR) and the underlying statutes. The objective of this rule is to increase the cancellation ceiling threshold at DFARS 217.170(e)(1)(iv) from $100 million to $125 million to ensure consistency with the threshold at FAR 17.108(b).

In addition, this rule corrects references to 10 U.S.C. 2306b, 10 U.S.C. 2306c, and section 8008a of Pub. L. 105-56 throughout DFARS subpart 217.1 and makes the following clarifications:

Requests for increased funding or reprogramming for procurement of a major system is relocated under DFARS 217.172(j) since it is in reference to a type of multiyear supply contract.

A multiyear contract for supplies in excess of $500 million must be specifically authorized by law in an Act other than an appropriations Act in accordance with 10 U.S.C. 2306b(i)(3).

A multiyear procurement contract for any system (or component thereof) with a value greater than $500 million must be specifically authorized in an appropriations act in accordance with 10 U.S.C. 2306b(l)(3).

No comments were received from the public in response to initial regulatory flexibility analysis published in the proposed rule.

Small businesses will not be affected by this rule. The rule will only impact procedures and authorities internal to the Government for multiyear contracts that require a cancellation ceiling up to $125 million or multiyear contracts for supplies with a value in excess of $500 million.

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

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 217

Government procurement.

Amy G. Williams,

Editor, Defense Acquisition Regulations System.

Therefore, 48 CFR part 217 is amended as follows:

PART 217--SPECIAL CONTRACTING METHODS

1. The authority citation for 48 CFR part 217 continues to read as follows:

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

217.103 [Amended]

2. Amend section 217.103, in the definition for ``Military installation,'' by removing ``(10 U.S.C. 2801(c)(2))'' and adding ``(10 U.S.C. 2801(c)(4))'' in its place.

3. Amend section 217.170 by--

a. Removing paragraph (b);

b. Redesignating paragraphs (c), (d), and (e) as paragraphs (b), (c), and (d), respectively;

c. Revising newly redesignated paragraphs (d)(1)(ii), (iii), and (iv);

d. In newly redesignated paragraph (d)(2), removing ``(e)(1)(i)'' and adding ``(d)(1)(i)'' in its place;

e. In newly redesignated paragraph (d)(3), removing ``(e)(2)'' and adding ``(d)(2)'' in its place;

f. In newly redesignated paragraph (d)(4), removing ``(e)(1)'' and adding ``(d)(1)'' in its place;

g. In newly redesignated paragraph (d)(5) introductory text, removing ``$100 million'' and adding ``$125 million'' in its place; and

h. In newly redesignated paragraph (d)(5)(i) introductory text, removing ``(e)(1)'' and adding ``(d)(1)'' in its place.

The revisions read as follows:

217.170 General.

* * * * *

(d)(1) * * *

(ii) Employ economic order quantity procurement in excess of $20 million in any one year of the contract (see 10 U.S.C. 2306b(l)(1)(B)(i)(I) and section 8008(a) of Pub. L. 105-56 and similar sections in subsequent DoD appropriations acts);

(iii) Involve a contract for advance procurement leading to a multiyear contract that employs economic order quantity procurement in excess of $20 million in any one year (see 10 U.S.C. 2306b(l)(1)(B)(ii) and section 8008(a) of Pub. L. 105-56 and similar sections in subsequent DoD appropriations acts); or

(iv) Include a cancellation ceiling in excess of $125 million (see 10 U.S.C. 2306c(d)(4) and 10 U.S.C. 2306b(g)(1)).

* * * * *

217.171 [Amended]

4. Amend section 217.171 by--

a. In paragraph (a) introductory text, removing ``(10 U.S.C. 2306c)'' and adding ``(10 U.S.C. 2306c(a))'' in its place;

b. In paragraph (a)(5)(iii), adding ``(10 U.S.C. 2306c(b))'' at the end of the sentence, before the period;

c. In paragraph (b)(3), adding ``(10 U.S.C. 2306c(c))'' at the end of the sentence, before the period.

d. In paragraph (c)(3), adding ``(10 U.S.C. 2306c(a))'' at the end of the sentence, before the period; and

e. In paragraph (d), removing ``(10 U.S.C. 2306(c))'' and adding ``(10 U.S.C. 2306c(d)(2))'' in its place.

5. Amend section 217.172 by--

a. Revising paragraph (c);

b. Redesignating paragraphs (d) through (h) as paragraphs (e) through (i), respectively;

c. Adding a new paragraph (d);

d. In newly redesignated paragraph (f)(1), adding a parenthesis to close the parenthetical phrase ``(when entered into or extended)'' and removing ``(10 U.S.C. 2306b(1)(5))'' and adding ``(10 U.S.C. 2306b(l)(5))'' in its place;

e. In newly redesignated paragraph (f)(2)--

i. Removing ``(g)(2)(i)'' and adding ``(h)(2)(i)'' in its place;

ii. Removing ``(g)(2)'' and adding ``(h)(2)'' in its place; and

iii. Removing the parenthetical reference ``(10 U.S.C. 2306b(a)(1)(7))'';

f. In newly redesignated paragraph (g)(1), adding the parenthetical reference ``(10 U.S.C. 2306b(h)(1))'' before the semicolon;

g. In newly redesignated paragraph (g)(2)--

i. Removing ``217.172(g)(3) and (4)'' and adding ``paragraphs (h)(3) and (4) of this section'' in its place; and

ii. Adding the parenthetical reference ``(10 U.S.C. 2306b(h)(2))'' at the end of the first sentence, before the period;

h. In newly redesignated paragraph (h)(2) introductory text--

i. Removing ``(g)(2)(i)'' and adding ``(h)(2)(i)'' in its place; and

ii. Removing the word ``are'';

i. In newly redesignated paragraph (h)(2)(ii), removing ``(g)(2)(i)'' and adding ``(h)(2)(i)'' in its place;

j. In newly redesignated paragraph (h)(2)(vii)--

i. Adding the parenthetical reference ``(10 U.S.C. 2306b(i)(1)(G))'' at the end of the first sentence before the period, and removing the parenthetical reference ``(10 U.S.C. 2306b(i)(1)(G))'' from the end of the second sentence; and

ii. Removing ``USD(C)(P/B)'' and adding ``OUSD(C)(P/B)'' in its place;

k. In newly redesignated paragraph (h)(2)(viii) introductory text, removing ``USD(C)(P/B)'' and adding ``OUSD(C)(P/B)'' in its place;

l. In newly redesignated paragraph (h)(5), removing ``(g)(2)'' and adding ``(h)(2)'' in its place;

m. In newly redesignated paragraph (h)(6)--

i. Removing ``(g)(2)'' and adding ``(h)(2)'' in its place; and

ii. Removing ``(g)(5)'' and adding ``(h)(5)'' in its place;

n. In newly redesignated paragraph (h)(8) introductory text, removing the parenthetical reference ``(10 U.S.C. 2306b(i)(2))''; and

o. Adding a new paragraph (j).

The revisions and additions read as follows:

217.172 Multiyear contracts for supplies.

* * * * *

(c) Multiyear contracts in amounts exceeding $500 million must be specifically authorized by law in an act other than an appropriations act (10 U.S.C. 2306b(i)(3)).

(d) The head of the agency may not initiate a multiyear procurement contract for any system (or component thereof) if the value of the multiyear contract would exceed $500 million unless authority for the contract is specifically provided in an appropriations act (10 U.S.C. 2306b(l)(3)).

* * * * *

(j) Any requests for increased funding or reprogramming for procurement of a major system under a multiyear contract shall be accompanied by an explanation of how the request for increased funding affects the determinations made by the Secretary of Defense under 217.172(h)(2) (10 U.S.C. 2306b(m)).

[FR Doc. 2015-12340 Filed 5-22-15; 8:45 am]

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[Federal Register Volume 80, Number 100 (Tuesday, May 26, 2015)]

[Rules and Regulations]

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

[FR Doc No: 2015-12342]

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DEPARTMENT OF DEFENSE

Defense Acquisition Regulations System

48 CFR Chapter 2

RIN 0750-AI46

Defense Federal Acquisition Regulation Supplement: Appendix F--Energy Receiving Reports (DFARS Case 2014-D024)

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 identify the Wide Area WorkFlow Energy Receiving Report as the electronic equivalent of the DD Form 250, Material Inspection and Receiving Report, for overland shipments and the DD Form 250-1, Tanker/Barge Material Inspection And Receiving Report, for waterborne shipments.

DATES: Effective May 26, 2015.

FOR FURTHER INFORMATION CONTACT: Jennifer Johnson, telephone 571-372-6176.

SUPPLEMENTARY INFORMATION:

I. Background

DoD published a proposed rule in the Federal Register at 79 FR 73539 on December 11, 2014, to amend Appendix F of the DFARS to identify the Wide Area WorkFlow (WAWF) Energy Receiving Report as the electronic equivalent of the paper DD Form 250 for overland shipments and the DD Form 250-1 for waterborne shipments. DFARS 232.7002, Policy, requires contractors to submit payment and receiving reports in electronic form, and the accepted electronic form identified in DFARS 232.7003, Procedures, is WAWF. In addition, the clause at DFARS 252.232-7003, Electronic Submission of Payment Requests and Receiving Reports, requires payment requests and receiving reports using WAWF in nearly all cases.

II. Discussion and Analysis

There were no public comments submitted in response to the proposed rule. No changes have been made from the proposed rule.

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 amends the Defense Federal Acquisition Regulation Supplement (DFARS) Appendix F to identify the Wide Area WorkFlow (WAWF) Energy Receiving Report as the electronic equivalent of the DD Form 250, Material Inspection and Receiving Report, for overland shipments and the DD Form 250-1, Tanker/Barge Material Inspection and Receiving Report, for waterborne shipments.

DFARS 232.7002, Policy, requires contractors to submit payment and receiving reports in electronic form, and the accepted electronic form is WAWF. DFARS 232.7003, Procedures, identifies WAWF as the accepted electronic form. In addition, the clause at DFARS 252.232-7003, Electronic Submission of Payment Requests and Receiving Reports, requires payment requests and receiving reports using WAWF in nearly all cases.

No comments were received from the public regarding the initial regulatory flexibility analysis.

DoD does not expect this rule to have a significant economic impact on a substantial number of small entities within the meaning of the Regulatory Flexibility Act, 5 U.S.C. 601, et seq. The rule affects all DoD contractors who are not exempt from using WAWF. Exempt classes of contracts are those that are listed under the seven categories of contracts at DFARS 232.7002, Policy.

The projected recordkeeping is limited to that required to properly record shipping and receiving information under Government contracts. Preparation of these records requires clerical and analytical skills to create the documents and input them into the electronic WAWF system.

There is no significant economic impact on small entities.

V. Paperwork Reduction Act

The rule contains 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). However, these changes to the DFARS do not impose additional information collection requirements to the paperwork burden previously approved under OMB Control Number 0704-0248, entitled Material Inspection and Receiving Report.

List of Subjects in 48 CFR Appendix F to Chapter 2

Government procurement.

Amy G. Williams,

Editor, Defense Acquisition Regulations System.

Therefore, 48 CFR chapter 2, subchapter I, is amended in appendix F as follows:

CHAPTER 2--DEFENSE ACQUISITION REGULATIONS SYSTEM, DEPARTMENT OF DEFENSE

1. The authority citation for appendix F to chapter 2 continues to read as follows:

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

2. Amend appendix F to chapter 2 by:

a. In section F-101, revising paragraph (a) and the first sentence of paragraph (b);

b. In section F-103, revising paragraph (d) introductory text;

c. In section F-104, revising paragraph (b) introductory text;

d. Revising the part 3 heading; and

e. In section F-301, revising paragraph (b)(13).

The revisions read as follows:

Appendix F to Chapter 2--Material Inspection and Inspection and Receiving Report

* * * * *

Part 1--Introduction

F-101 General.

(a) This appendix contains procedures and instructions for the use, preparation, and distribution of the Wide Area WorkFlow (WAWF) Receiving Report, the WAWF Energy RR, and commercial shipping/packing lists used to document Government contract quality assurance. The WAWF RR is the electronic equivalent of the DD Form 250, Material Inspection and Receiving Report (MIRR). The WAWF Energy RR is the electronic equivalent of the DD Form 250 for overland shipments and DD Form 250-1, Tanker/Barge Material Inspection and Receiving Report, for waterborne shipments.

(b) The use of the DD Form 250 series documents is on an exception basis (see DFARS 232.7002(a)) because use of the WAWF RR is now required by most DoD contracts. * * *

* * * * *

F-103 Use.

* * * * *

(d) Use the WAWF Energy RR or the DD Form 250-1:

* * * * *

F-104 Application.

* * * * *

(b) WAWF Energy RR or the DD Form 250-1.

* * * * *

Part 3--Preparation of the Wide Area Workflow (WAWF) Receiving Report (RR) and WAWF Energy RR

F-301 Preparation instructions.

* * * * *

(b) * * *

(13) Marked for/code. Enter the code from the contract or shipping instructions. Only valid DoDAACs, MAPACs, or CAGE codes can be entered. Vendors should use the WAWF ``Mark for Rep'' and ``Mark for Secondary'' fields for textual marking information specified in the contract. Enter the three-character project code when provided in the contract or shipping instructions.

* * * * *

[FR Doc. 2015-12342 Filed 5-22-15; 8:45 am]

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[Federal Register Volume 80, Number 100 (Tuesday, May 26, 2015)]

[Rules and Regulations]

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

[FR Doc No: 2015-12338]

Vol. 80

Tuesday,

No. 100

May 26, 2015

Part II

Department of Defense

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Defense Acquisition Regulations System

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48 CFR Parts 212, 213, 219 et al.

Defense Federal Acquisition Regulation Supplement; Final Rules and Proposed Rule

Federal Register / Vol. 80, No. 100 / Tuesday, May 26, 2015 / Rules and Regulations

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DEPARTMENT OF DEFENSE

Defense Acquisition Regulations System

48 CFR Parts 212, 219, and 252

RIN 0750-A142

Defense Federal Acquisition Regulation Supplement: Advancing Small Business Growth (DFARS Case 2014-D009)

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 clarify that entering into a contract award may cause a small business to eventually exceed the applicable small business size standard.

DATES: Effective May 26, 2015.

FOR FURTHER INFORMATION CONTACT: Ms. Lee Renna, telephone 571-372-6095.

SUPPLEMENTARY INFORMATION:

I. Background

DoD published a proposed rule in the Federal Register at 79 FR 65917 on November 6, 2014, to implement policy to ensure that a small business contractor is made aware that entering into a covered contract conveys its acknowledgement that doing so may cause it to eventually exceed the small business size standard of the North American Industry Classification System (NAICS) code identified in the solicitation and contract. This clarification is required by section 1611 of the National Defense Authorization Act for Fiscal Year 2014, Public Law 113-66, (10 U.S.C. 2419).

There were no public comments submitted in response to the proposed rule.

II. Discussion and Analysis

Minor editorial changes have been made from the proposed rule as follows: (1) In the heading at 219.303, the acronym ``(NAICS) was removed; (2) At DFARS 219.309, paragraph (a) was renumbered as paragraph (1), and a reference was changed from ``$70,000,000'' to read ``$70 million''; and (3) DFARS 252.219-7000, paragraph (b), was revised slightly in the first sentence to reflect more standardized provision language and to spell out ``NAICS'' to reflect the North American Industry Classification System.

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 has certified that this 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. This conclusion is based on the following:

This rule does not create or alleviate any financial burden on small businesses. The purpose of the rule is only to advise small businesses that entering into a DoD contract may eventually cause such businesses to exceed the small business size standard associated with the applicable NAICS code, and to encourage these businesses to develop the competencies typically desired of other than small businesses.

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, 219, and 252

Government procurement.

Amy G. Williams,

Editor, Defense Acquisition Regulations System.

Therefore, 48 CFR parts 212, 219, and 252 are amended as follows:

1. The authority citation for 48 CFR parts 212 and 252 continues 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 by adding a new paragraph (f)(vi)(C) to read as follows:

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

(f) * * *

(vi) * * *

(C) Use the provision at 252.219-7000, Advancing Small Business Growth, as prescribed in 219.309(1), to comply with 10 U.S.C. 2419.

* * * * *

PART 219--SMALL BUSINESS PROGRAMS

3. The authority citation for 48 CFR part 219 is revised to read as follows:

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

4. Amend section 219.303 by revising the section heading to read as follows:

219.303 Determining North American Industry Classification System codes and size standards.

* * * * *

5. Add section 219.309 to subpart 219.3 to read as follows:

219.309 Solicitation provisions and contract clauses.

(1) Use the provision at 252.219-7000, Advancing Small Business Growth, in solicitations, including solicitations using FAR part 12 procedures for acquisition of commercial items, when the estimated annual value of the contract is expected to exceed--

(i) The small business size standard, if expressed in dollars, for the North American Industry Classification System (NAICS) code assigned by the contracting officer; or

(ii) $70 million, if the small business size standard is expressed as number of employees for the NAICS code assigned by the contracting officer.

PART 252--SOLICITATION PROVISIONS AND CONTRACT CLAUSES

6. Add section 252.219-7000 to read as follows:

252.219-7000 Advancing Small Business Growth.

As prescribed in 219.309(1), use the following provision:

Advancing Small Business Growth (May 2015)

(a) This provision implements 10 U.S.C. 2419.

(b) The Offeror acknowledges by submission of its offer that by acceptance of the contract resulting from this solicitation, the Offeror may exceed the applicable small business size standard of the North American Industry Classification System (NAICS) code assigned to the contract and would no longer qualify as a small business concern for that NAICS code. (Small business size standards matched to industry NAICS codes are published by the Small Business Administration and are available at http://www.sba.gov/content/table-small-business-size-standards.) The Offeror is therefore encouraged to develop the capabilities and characteristics typically desired in contractors that are competitive as other-than-small contractors in this industry.

(c) For procurement technical assistance, the Offeror may contact the nearest Procurement Technical Assistance Center (PTAC). PTAC locations are available at www.dla.mil/SmallBusiness/Pages/ptac.aspx.

(End of provision)

[FR Doc. 2015-12338 Filed 5-22-15; 8:45 am]

BILLING CODE 5001-06-P

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[Federal Register Volume 80, Number 100 (Tuesday, May 26, 2015)]

[Rules and Regulations]

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

[FR Doc No: 2015-12339]

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DEPARTMENT OF DEFENSE

Defense Acquisition Regulations System

48 CFR Parts 212, 213, and 252

RIN 0750-AI40

Defense Federal Acquisition Regulation Supplement: Past Performance Information Retrieval System--Statistical Reporting (PPIRS-SR) (DFARS Case 2014-D015)

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 require contracting officers to consider information in the Statistical Reporting module of the Past Performance Information Retrieval System when evaluating past performance of offerors under competitive solicitations for supplies using simplified acquisition procedures.

DATES: Effective May 26, 2015.

FOR FURTHER INFORMATION CONTACT: Ms. Jennifer Hawes, telephone 571-372-6115.

SUPPLEMENTARY INFORMATION:

I. Background

DoD published a proposed rule in the Federal Register at 80 FR 4848 on January 29, 2015, to revise the DFARS to add a new provision at DFARS 252.213-7000, Notice to Prospective Suppliers on the Use of Past Performance Information Retrieval System--Statistical Reporting in Past Performance Evaluations, for use in competitive solicitations for supplies using FAR part 13 simplified acquisition procedures, including those for acquisitions valued at less than or equal to $1 million under FAR 13.5. One respondent submitted a public comment in response to the proposed rule.

II. Discussion and Analysis

DoD reviewed the public comment in the development of the final rule. A discussion of the comment and the changes made to the rule is provided below:

A. Analysis of Public Comment

Comment: A respondent commented that streamlining a formal and systematic process will improve the opportunities for small businesses and reduce bias in the award of Government contracts.

Response: No changes were made a result of this comment.

B. Other Changes

The final rule includes a clarification in the prescription at DFARS 213.106-2-70 that the provision is applicable for use in competitive solicitations using FAR part 12 procedures for the acquisition of commercial items. A minor editorial change is also made at 212.301(f)(v) to address the reference to the DFARS provision 252.213-7000, Notice to Prospective Suppliers on Use of Past Performance Information Retrieval System--Statistical Reporting in Past Performance Evaluations, in the same manner as the other content of this section.

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 amends the Defense Federal Acquisition Regulation Supplement (DFARS) to require contracting officers to consider information available in Past Performance Information Retrieval System-Statistical Reporting (PPIRS-SR) when evaluating the past performance of offerors under competitive solicitations for supplies using FAR part 13 simplified acquisition procedures (including acquisitions under the authority of FAR subpart 13.5 valued at less than or equal to $1 million).

This rule will help fill the gap between the higher DoD threshold for the collection and evaluation of past performance information and the thresholds at FAR 15.304(c)(3)(i). PPIRS-SR collects quantifiable delivery and quality data from existing systems and uses that data to classify each supplier's performance by Federal supply class and product service code. Contracting officers will use this objective data to help make better-informed best value award decisions for supply contracts valued at less than or equal to $1 million.

No comments were received from the public regarding the initial regulatory flexibility analysis.

This rule will apply to small businesses submitting offers on competitive solicitations for supplies issued using simplified acquisition procedures valued at less than $1 million. According to a report generated in the Federal Procurement Data System, in fiscal year 2013, DoD made 15,258 new competitive awards for commercial supplies valued at less than or equal to $1 million to 4,018 unique small businesses.

The rule creates no new reporting, recordkeeping, or other compliance requirements. There are no known significant alternatives to the rule. The impact of this rule on small business is not expected to be significant.

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 212, 213, and 252

Government procurement.

Amy G. Williams,

Editor, Defense Acquisition Regulations System.

Therefore, 48 CFR parts 212, 213, and 252 are amended as follows:

1. The authority citation for 48 CFR parts 212, 213, and 252 continues to read as follows:

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

PART 212--ACQUISITION OF COMMERCIAL ITEMS

2. In section 212.301, redesignate paragraphs (f)(v) through (xviii) as paragraphs (f)(vi) through (xix), respectively, and add a new paragraph (f)(v) to read as follows:

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

(f) * * *

(v) Part 213--Simplified Acquisition Procedures. Use the provision at 252.213-7000, Notice to Prospective Suppliers on Use of Past Performance Information Retrieval System--Statistical Reporting in Past Performance Evaluations, as prescribed in 213.106-2-70.

* * * * *

PART 213--SIMPLIFED ACQUISITION PROCEDURES

3. Add sections 213.106-2 and 213.106-2-70 to subpart 213.1 to read as follows:

213.106-2 Evaluation of quotations or offers.

(b)(i) For competitive solicitations for supplies using FAR part 13 simplified acquisition procedures, including acquisitions valued at less than or equal to $1 million under the authority at FAR subpart 13.5, the contracting officer shall--

(A) Consider data available in the statistical reporting module of the Past Performance Information Retrieval System (PPIRS-SR) regarding the supplier's past performance history for the Federal supply class (FSC) and product or service code (PSC) of the supplies being purchased. Procedures for the use of PPIRS-SR in the evaluation of quotations or offers are provided in the PPIRS-SR User's Manual available under the references section of the PPIRS Web site at www.ppirs.gov;

(B) Ensure the basis for award includes an evaluation of each supplier's past performance history in PPIRS-SR for the FSC and PSC of the supplies being purchased; and

(C) In the case of a supplier without a record of relevant past performance history in PPIRS-SR for the FSC or PSC of the supplies being purchased, the supplier may not be evaluated favorably or unfavorably for its past performance history.

213.106-2-70 Solicitation provision.

Use the provision at 252.213-7000, Notice to Prospective Suppliers on the Use of Past Performance Information Retrieval System--Statistical Reporting in Past Performance Evaluations, in competitive solicitations for supplies when using FAR part 13 simplified acquisition procedures, including competitive solicitations using FAR part 12 procedures for the acquisition of commercial items and acquisitions valued at less than or equal to $1 million under the authority at FAR subpart 13.5.

PART 252--SOLICITATION PROVISIONS AND CONTRACT CLAUSES

4. Add new section 252.213-7000 to read as follows:

252.213-7000 Notice to Prospective Suppliers on Use of Past Performance Information Retrieval System--Statistical Reporting in Past Performance Evaluations.

As prescribed in 213.106-2-70, use the following provision:

Notice to Prospective Suppliers on Use of Past Peformance Information Retrieval System--Statistical Reporting in Past Performance Evaluations (May 2015)

(a) The Past Performance Information Retrieval System--Statistical Reporting (PPIRS-SR) application (http://www.ppirs.gov/) will be used in the evaluation of suppliers' past performance in accordance with DFARS 213.106-2(b)(i).

(b) PPIRS-SR collects quality and delivery data on previously awarded contracts and orders from existing Department of Defense reporting systems to classify each supplier's performance history by Federal supply class (FSC) and product or service code (PSC). The PPIRS-SR application provides the contracting officer quantifiable past performance information regarding a supplier's quality and delivery performance for the FSC and PSC of the supplies being purchased.

(c) The quality and delivery classifications identified for a supplier in PPIRS-SR will be used by the contracting officer to evaluate a supplier's past performance in conjunction with the supplier's references (if requested) and other provisions of this solicitation under the past performance evaluation factor. The Government reserves the right to award to the supplier whose quotation or offer represents the best value to the Government.

(d) PPIRS-SR classifications are generated monthly for each contractor and can be reviewed by following the access instructions in the PPIRS-SR User's Manual found at https://www.ppirs.gov/ppirsfiles/pdf/PPIRS-SR_UserMan.pdf. Contractors are granted access to PPIRS-SR for their own classifications only. Suppliers are encouraged to review their own classifications, the PPIRS-SR reporting procedures and classification methodology detailed in the PPIRS-SR User's Manual, and PPIRS-SR Evaluation Criteria available from the references at http://www.ppirs.gov/ppirsfiles/reference.htm. The method to challenge a rating generated by PPIRS-SR is provided in the User's Manual.

(End of provision)

[FR Doc. 2015-12339 Filed 5-22-15; 8:45 am]

BILLING CODE 5001-06-P