[Federal Register Volume 81, Number 90 (Tuesday, May 10, 2016)]

[Rules and Regulations]

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

[FR Doc No: 2016-10822]

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DEPARTMENT OF DEFENSE

Defense Acquisition Regulations System

48 CFR Parts 204, 209, 212, 227, 237, and 252

[Docket DARS-2014-0017]

RIN 0750-AH54

Defense Federal Acquisition Regulation Supplement: Disclosure to Litigation Support Contractors (DFARS Case 2012-D029)

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 a section of the National Defense Authorization Act for Fiscal Year 2012 that provides DoD the authority to allow its litigation support contractors access to ``sensitive information'' subject to certain restrictions.

DATES: Effective May 10, 2016.

FOR FURTHER INFORMATION CONTACT: Ms. Amy G. Williams, telephone 571-372-6106.

SUPPLEMENTARY INFORMATION:

I. Background

DoD published an interim rule in the Federal Register at 79 FR 11337 on February 28, 2014, to implement section 802 of the National Defense Authorization Act for Fiscal Year 2012 (Pub. L. 112-81), which provides DoD the express authority to allow its litigation support contractors access to ``sensitive information,'' provided that the litigation support contractor is subject to certain restrictions on using and disclosing such information. Two respondents submitted public comments in response to the interim rule.

II. Discussion and Analysis

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

A. Summary of Significant Changes From the Interim Rule

1. A new paragraph (b)(4) is added to the provision at DFARS 252.204-7013 and a new paragraph (b)(5) is added to the clause at DFARS 252.204-7014 to clarify that the offeror and the contractor, respectively, shall destroy or return to the Government, at the request of the contracting officer, all litigation information in its possession upon completion of the authorized litigation support activities.

2. A new paragraph (b)(2) is added to the clause at DFARS 252.204-7014 to clarify that the contractor shall not disclose litigation information to any entity outside the contractor's organization unless, prior to disclosure, the contracting officer has provided written consent.

B. Analysis of Public Comments

1. Inclusion of Third Party Information

Comment: One respondent commented that the interim rule went beyond the definition of ``sensitive information'' provided in 10 U.S.C. 129d because, as implemented, ``sensitive information'' is not limited to information owned by the Department of Defense. The respondent suggested that the absence of the language ``obtained from a person'' as used in Exemption 4 of the Freedom of Information Act (5 U.S.C. 552(b)(4)) indicates that 10 U.S.C. 129d was intended to apply only to information ``owned by the Department of Defense.'' The respondent stated that because the interim rule does not limit the scope of sensitive information to only information owned by DoD, the rule could expose the Government to liability or penalties for unauthorized disclosure of information under the Federal Tort Claims Act, or a taking of property under the U.S. Constitution, the Procurement Integrity Act, 41 U.S.C. 2101 et seq., and the Trade Secrets Act, 18 U.S.C. 1905. The respondent called for rescission of the interim rule until the definition of ``sensitive information'' was narrowed.

Response: The statutory language and legislative history do not indicate that 10 U.S.C. 129d is limited only to information owned by the Department of Defense (or the U.S. Government). Prior to, and notwithstanding, the enactment of the statute, DoD was authorized to disclose information that it owns. 10 U.S.C. 129d authorizes disclosure of ``sensitive information,'' without limitation related to the ownership or source of the information, for the sole purpose of providing litigation support to DoD. To narrow the definition as the respondent suggests would obviate the need for any statutory authorization. The new DFARS subpart 204.74 established by the interim rule implements the statutory authorization for litigation information, including sensitive information owned by or obtained from non-DoD sources. Disclosure of such information is thus authorized by law when done pursuant to DFARS subpart 204.74. No change is made in the final rule.

2. Safeguarding Unclassified Controlled Technical Information

Comment: One respondent questioned whether litigation support contractors, and their subcontractors, will be required to comply with the requirements at DFARS clause 252.204-7012, formerly entitled ``Safeguarding of Unclassified Controlled Technical Information.''

Response: The requirements of the clause at DFARS 252.204-7012, now entitled ``Safeguarding Covered Defense Information and Cyber Incident Reporting,'' will apply to contractors, and their subcontractors, as required by the clause.

3. Disposition of Litigation Information

Comment: One respondent suggested that the interim rule should be amended to include requirements for the information provided to a litigation support contractor to be destroyed or returned to DoD when no longer needed or at the end of contract performance.

Response: Paragraph (b)(4) is added to the provision at DFARS 252.204-7013 and paragraph (b)(5) is added to the clause at DFARS 252.204-7014 to clarify that the contractor shall destroy or return to the Government, at the request of the contracting officer, all litigation information in its possession upon completion of the authorized litigation support activities.

4. Use of Litigation Information

Comment: One respondent suggested limiting the authorized use of litigation information to the litigation support required by the individual contract, under which the litigation information was received.

Response: Litigation support contractors must be able to use the litigation information provided by the Government as needed. A contractor may provide litigation support under multiple contracts. In such instances, limiting the scope of authorized use to only the contract under which the litigation information was provided could require the Government to provide the same information multiple times. Having to exchange and handle multiple copies of the same information increases the risk of inadvertent disclosure and the cost of performance and administration. No change is made in the final rule.

5. Third Party Beneficiary Rights

Comment: One respondent stated that if ``sensitive information'' includes information owned by third parties, then the interim rule should be amended to require litigation support contractors to comply with Federal Acquisition Regulation (FAR) 9.505-4(b) and have a direct nondisclosure agreement between the owner of the sensitive information and the litigation support contractor. The respondent also stated that the third party beneficiary rights are illusory without notice to the owner of the sensitive information.

Response: A direct nondisclosure agreement or prior notice requirement could prejudice the Government by providing premature warning of possible litigation or of the Government's litigation strategies. Accordingly, DoD has determined that requiring a direct nondisclosure agreement pursuant to FAR 9.505-4(b) for litigation support contractors would not be in the Government's interest. 10 U.S.C. 129d does not require that DoD confer upon an owner of sensitive information any third party beneficiary rights; however, at paragraph (d) of the clause at 252.204-7014, DoD has chosen to provide third party beneficiary rights analogous to those afforded by paragraph (c) of the clause at DFARS 252.227-7025. No change is made in the final rule as a result of this comment.

6. Appropriateness of an Interim Rule

Comment: One respondent stated that issuing an interim rule was not appropriate because there was inadequate justification for the determination of urgent or compelling reasons for doing so. The respondent suggested that, without further justification, a proposed rule was more appropriate and urged rescission of the interim rule.

Response: DoD published the basis for its determination that urgent and compelling reasons existed to authorize the use of an interim rule. After consideration of the respondent's comment, DoD determined that rescission of the interim rule was not warranted.

7. Release of Information to Litigation Support Subcontractors

Comment: One respondent stated that while litigation support contractors are required to flow down the clause at DFARS 252.204-7014 to subcontractors, it is not clear whether litigation support contractors and any subcontractors would be subject to DFARS clause 252.204-7000, Disclosure of Information.

Response: This rule does not affect the applicability of the clause DFARS at 252.204-7000. In accordance with its prescription at DFARS 204.404-70(a), the clause applies to all solicitations and contracts when the contractor will have access to or generate unclassified information that may be sensitive and inappropriate for release to the public. That clause will flow down to subcontracts, in accordance with paragraph (c) of the clause. There is no conflict between the DFARS 252.204-7000 clause and the DFARS 252.204-7014 clause, at the prime or subcontract level. The clause at DFARS 252.204-7000 prohibits the release of information outside the contractor's organization without permission from the contracting officer, while the DFARS 252.204-7014 clause requires the litigation support contractor to protect against any unauthorized releases of information, and does not authorize the contractor to make any releases outside the contractor's organization. However, to minimize any potential confusion, paragraph (b)(2) is added to the DFARS 252.204-7014 clause to state more clearly that it does not authorize the contractor to release litigation information outside the contractor's organization without permission of the contracting officer. Contracting officers, in conjunction with the Government litigation team, maintain control over the flow of information to litigation support contractors and outside parties.

8. Prescription Conflict

Comment: One respondent pointed out that the prescription in the interim rule at DFARS 204.7403(c) would have precluded DFARS 252.204-7015 from ever being included in a contract.

Response: This error was corrected in a technical amendment to the DFARS published in the Federal Register at 79 FR 13568 on March 11, 2014.

C. Other Changes

A summary of revisions made to the rule to make necessary conforming changes, clarifications, and editorial changes follows:

1. Definitions

a. The definition of ``litigation information'' is revised to clarify that information contained in publicly available solicitations will not be protected from disclosure as litigation information, because the information has already been released to the public. A corresponding policy statement is also added at DFARS 204.7402(c).

b. A policy statement is added at DFARS 204.7402(d) to state that contracting officers, when sharing sensitive information with a litigation support contractor, shall ensure that all other applicable requirements for handling and safeguarding the relevant types of sensitive information re included in the contract (e.g., FAR subparts 4.4 and 24.1; DFARS subparts 204.4 and 224.1).

c. The definition of ``litigation support contractor'' is revised to clarify that, in addition to experts and technical consultants, the term also includes the contractor's subcontractors and suppliers. The text ``the Department of Defense'' is also removed, since the clause is only used in DoD contracts.

d. DFARS subpart 204.74, the provision at 252.204-7013, and the clauses at 252.204-7014 and 252.204-7015 are revised to include the full text of all relevant definitions, rather than cross-referencing the definitions that were provided in full-text only in the contract clause at DFARS 252.204-7014. Further, the definition of ``sensitive information'' is clarified by removing the term ``confidential information'' and replacing it with ``controlled unclassified information'' in subpart 204.74, the provision, and the clauses.

2. Conforming Changes

a. A conforming change has been made to DFARS 209.505-4(b)(i) in order to differentiate between the requirements that pertain to litigation support contractors from the requirements for other contractors, consistent with the changes in this rule.

b. DFARS 209.505-4(b)(ii) is added to clarify the policies and procedures (set forth in 204.74 and associated provisions and clauses) governing access to proprietary information for litigation support activities as an element of the coverage for organizational and consultant conflicts of interest.

3. Technical Clarifications

a. At paragraph (c)(2) of the provision at DFARS 252.204-7013 and at paragraph (d)(2) of the clause at DFARS 252.204-7014, the reference to ``data or software'' is changed to ``litigation information'' and the reference to ``the unauthorized duplication, release or disclosure'' is changed to ``any such unauthorized use or disclosure,'' to more accurately refer to all of the unauthorized activities described at paragraph (c)(1) of the provision and paragraph (d)(1) of the clause.

b. The term ``Solicitation'' is removed from the title of the provision at DFARS 252.204-7013, as it is not necessary because the title already refers to ``Offerors.''

c. Paragraph (b) of the clause at DFARS 252.204-7014 is revised to state that the contractor ``shall'' instead of ``agrees and acknowledges'' to ensure the contractor complies with the limitations set forth in paragraph (b) during contract performance.

d. The title of the clause at DFARS 252.204-7015 is revised to ``Notice of Authorized Disclosure of Information for Litigation Support'' to more accurately depict the intent of the clause.

III. Applicability to Contracts at or Below the Simplified Acquisition Threshold and for Commercial Items, Including Commercially Available Off-the-Shelf Items

The prescriptions for use of the provision and clauses of this rule, which implement section 802 of the National Defense Authorization Act (NDAA) for Fiscal Year (FY) 2012 (Pub. L. 112-81) include use in contracts and subcontracts valued at or below the simplified acquisition threshold (SAT) and contracts and subcontracts for the acquisition of commercial items, including commercially available off-the-shelf (COTS) items.

A. Applicability to Contracts at or Below the SAT

41 U.S.C. 1905 governs the applicability of laws to contracts or subcontracts in amounts not greater than the SAT. It is intended to limit the applicability of laws to such contracts or subcontracts. 41 U.S.C. 1905 provides that if a provision of law contains criminal or civil penalties, or if the FAR Council makes a written determination that it is not in the best interest of the Federal Government to exempt contracts or subcontracts at or below the SAT, the law will apply to them. The Director, Defense Procurement and Acquisition Policy (DPAP), is the appropriate authority to make comparable determinations for regulations to be published in the DFARS, which is part of the FAR system of regulations.

DoD has determined that it is in the best interest of the Federal Government to apply the rule to contracts and subcontracts in amounts not greater than the SAT. Section 802 of the NDAA for FY 2012 was enacted to ensure DoD ligation support contractors protect sensitive information from any unauthorized disclosure and are prohibited from using such information for any purpose other than providinglitigation support services to DoD. Based on data available in the Federal Procurement Data System (FPDS) for FY 2015, 421 of the 453 total DoD awards for professional attorney services or associated legal services were valued at less than the SAT. An exception for contracts valued at or under the SAT would exclude a large portion (93 percent) of the contracts intended to be covered by section 802, thereby undermining the overarching public policy purpose of the law and adversely affecting the Government's ability to successfully engage in legal proceedings.

B. Applicability to Contracts for the Acquisition of Commercial Items, Including COTS Items

41 U.S.C. 1906 governs the applicability of laws to contracts for the acquisition of commercial items, and is intended to limit the applicability of laws to contracts for the acquisition of commercial items. 41 U.S.C. 1906 provides that if a provision of law contains criminal or civil penalties, or if the FAR Council makes a written determination that it is not in the best interest of the Federal Government to exempt commercial item contracts, the provision of law will apply to contracts for the acquisition of commercial items. Likewise, 41 U.S.C. 1907 governs the applicability of laws to COTS items, with the Administrator for Federal Procurement Policy the decision authority to determine that it is in the best interest of the Government to apply a provision of law to acquisitions of COTS items in the FAR. The Director, DPAP, is the appropriate authority to make comparable determinations for regulations to be published in the DFARS, which is part of the FAR system of regulations.

Given that the requirements of section 802 of the NDAA for FY 2008 were enacted to protect sensitive information provided to DoD litigation support contractors from unauthorized use and disclosure, DoD has determined that it is in the best interest of the Federal Government to apply the rule to contracts for the acquisition of commercial items, as defined at FAR 2.101. Based on data available in FPDS for FY 2015, 352 of the 453 total DoD awards for legal support services were classified as commercial contracts. An exception for contracts for the acquisition of commercial items, would exclude 78 percent of the contracts intended to be covered by the law, thereby undermining the overarching public policy purpose of the law.

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 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.

V. Regulatory Flexibility Act

DoD does not expect this final 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. However, a final regulatory flexibility analysis has been prepared and is summarized as follows:

This rule amends the Defense Federal Acquisition Regulation Supplement (DFARS) to implement statutory authority (10 U.S.C. 129d) for DoD to allow its litigation support contractors to have access to ``sensitive information,'' provided that the litigation support contractor is subject to certain restrictions on using and disclosing such information.

The objective of the rule is to expressly authorize DoD to provide its ligation support contractors with access to certain types of non-public information, provided that the ligation support contractors are required to protect that information from any unauthorized disclosure, and are prohibited from using that for any purpose other than providing litigation support services to DoD.

No significant issues were raised by the public comments in response to the initial regulatory flexibility analysis published with the interim rule.

According to data available in the Federal Procurement Data System for fiscal year 2015, DoD awarded 453 total contracts for legal support services to 212 unique vendors. Of those awards, 340 awards or 75 percent were made to 162 small businesses.

The rule imposes no reporting, recordkeeping, or other information collection requirements; rather, the rule subjects litigation support contractors to certain restrictions on using and disclosing litigation support information. DoD organizations using litigation support contractors are generally already using very restrictive nondisclosure agreements to govern any sensitive information that may be provided to, or developed or discovered by, the litigation support contractors in providing litigation support services for DoD. These DoD organizations will likely review their current practices and make any necessary modifications to ensure that there are no inconsistencies with the new requirements. As such, DoD does not expect the rule to have a significant economic impact on the small businesses affected by this rule.

There are no known significant alternatives to the rule. The impact of this rule on small business is not expected to be significant.

VI. Paperwork Reduction Act

The rule contains no new 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 204, 209, 212, 227, 237, and 252

Government procurement.

Jennifer L. Hawes,

Editor, Defense Acquisition Regulations System.

Therefore, the interim rule amending 48 CFR parts 204, 212, 227, 237, and 252 which was published at 79 FR 11338 on February 28, 2014, is adopted as a final rule with the following changes:

1. The authority citation for 48 CFR parts 204, 209, 212, and 252 continues to read as follows:

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

PART 204--ADMINISTRATIVE MATTERS

2. Section 204.7401 is revised to read as follows:

204.7401 Definitions.

As used in this subpart--

Computer software means computer programs, source code, source code listings, object code listings, design details, algorithms, processes, flow charts, formulae, and related material that would enable the software to be reproduced, recreated, or recompiled. Computer software does not include computer data bases or computer software documentation.

Litigation information means any information, including sensitive information, that is furnished to the contractor by or on behalf of the Government, or that is generated or obtained by the contractor in the performance of litigation support under a contract. The term does not include information that is lawfully, publicly available without restriction, including information contained in a publicly available solicitation.

Litigation support means administrative, technical, or professional services provided in support of the Government during or in anticipation of litigation.

Litigation support contractor means a contractor (including its experts, technical consultants, subcontractors, and suppliers) providing litigation support under a contract that contains the clause at 252.204-7014, Limitations on the Use or Disclosure of Information by Litigation Support Contractors.

Sensitive information means controlled unclassified information of a commercial, financial, proprietary, or privileged nature. The term includes technical data and computer software, but does not include information that is lawfully, publicly available without restriction.

Technical data means recorded information, regardless of the form or method of the recording, of a scientific or technical nature (including computer software documentation). The term does not include computer software or data incidental to contract administration, such as financial and/or management information.

3. Section 204.7402 is amended by adding paragraphs (c) and (d) to read as follows:

204.7402 Policy.

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(c) Information that is publicly available without restriction, including publicly available solicitations for litigation support services, will not be protected from disclosure as litigation information.

(d) When sharing sensitive information with a litigation support contractor, contracting officers shall ensure that all other applicable requirements for handling and safeguarding the relevant types of sensitive information are included in the contract (e.g., FAR subparts 4.4 and 24.1; DFARS subparts 204.4 and 224.1).

4. Section 204.7403 is revised to read as follows:

204.7403 Solicitation provision and contract clauses.

(a) Use the provision at 252.204-7013, Limitations on the Use or Disclosure of Information by Litigation Support Offerors, in all solicitations for contracts that involve litigation support services, including solicitations using FAR part 12 procedures for the acquisition of commercial items.

(b) Use the clause at 252.204-7014, Limitations on the Use or

Disclosure of Information by Litigation Support Contractors, in all solicitations and contracts that involve litigation support services, including solicitations and contracts using FAR part 12 procedures for the acquisition of commercial items.

(c) Use the clause at 252.204-7015, Notice of Authorized Disclosure of Information for Litigation Support, in all solicitations and contracts, including solicitations and contracts using FAR part 12 procedures for the acquisition of commercial items.

PART 209--CONTRACTOR QUALIFICATIONS

5. Amend section 209.505-4 by--

a. Redesignating paragraph (b) as paragraph (b)(i);

b. In newly resdesignated paragraph (b)(i), removing ``For contractors'' and adding ``For contractors, other than litigation support contractors,'' in its place; and

c. Adding new paragraph (b)(ii).

The addition reads as follows:

209.505-4 Obtaining access to proprietary information.

(b) * * *

(ii) For litigation support contractors accessing litigation information, including that originating from third parties, use and nondisclosure requirements are addressed through the use of the provision at 252.204-7013 and the clause at 252.204-7014, as prescribed at 204.7404(a) and 204.7404(b), respectively. Pursuant to that provision and clause, litigation support contractors are not required to enter into nondisclosure agreements directly with any third party asserting restrictions on any litigation information.

PART 212--SOLICITATION PROVISIONS AND CONTRACT CLAUSES FOR THE ACQUISITION OF COMMERCIAL ITEMS

212.301 [Amended]

6. Amend section 212.301 by--

a. In paragraph (f)(ii)(E), removing the term ``Solicitation''; and

b. In paragraph (f)(ii)(G), removing ``Disclosure of Information to Litigation Support Contractors'' and adding ``Notice of Authorized Disclosure of Information for Litigation Support'' in its place.

PART 252--SOLICITATION PROVISIONS AND CONTRACT CLAUSES

7. Amend section 252.204-7013 by--

a. Revising the section heading.

b. In the clause heading, removing ``Support Solicitation Offerors'' and adding ``Support Offerors'' in its place;

c. Removing the clause date ``(FEB 2014)'' and adding ``(MAY 2016)'' in its place;

d. Revising paragraph (a).

e. In the paragraph (b) introductory text, adding ``that'' after ``acknowledges'';

f. In paragraph (b)(1), removing ``That all'' and adding ``All'' in its place;

g. In paragraph (b)(2), removing ``That the'' and adding ``The'' in its place;

h. In paragraph (b)(3), removing ``That'' and adding ``The'' in its place and removing ``contracts.'' and adding ``contracts; and'' in its place;

i. Adding paragraph (b)(4); and

j. In paragraph (c)(2), removing ``such data or software, for the unauthorized duplication, release, or disclosure'' and adding ``such litigation information, for any such unauthorized use or disclosure'' in its place.

The revisions and addition read as follows:

252.204-7013 Limitations on the Use or Disclosure of Information by Litigation Support Offerors.

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

Computer software means computer programs, source code, source code listings, object code listings, design details, algorithms, processes, flow charts, formulae, and related material that would enable the software to be reproduced, recreated, or recompiled. Computer software does not include computer data bases or computer software documentation.

Litigation information means any information, including sensitive information, that is furnished to the contractor by or on behalf of the Government, or that is generated or obtained by the contractor in the performance of litigation support under a contract. The term does not include information that is lawfully, publicly available without restriction, including information contained in a publicly available solicitation.

Litigation support means administrative, technical, or professional services provided in support of the Government during or in anticipation of litigation.

Sensitive information means controlled unclassified information of a commercial, financial, proprietary, or privileged nature. The term includes technical data and computer software, but does not include information that is lawfully, publicly available without restriction.

Technical data means recorded information, regardless of the form or method of the recording, of a scientific or technical nature (including computer software documentation). The term does not include computer software or data incidental to contract administration, such as financial and/or management information.

(b) * * *

(4) Upon completion of the authorized litigation support activities, the Offeror will destroy or return to the Government at the request of the Contracting Officer all litigation information in its possession.

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8. Amend section 252.204-7014 by--

a. In the clause heading, removing the clause date ``(FEB 2014)'' and adding ``(MAY 2016)'' in its place;

b. In paragraph (a), revising the introductory text and the definitions of ``Litigation information'', ``Litigation support contractor'', and ``Sensitive information'';

c. Revising paragraph (b);

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

e. Adding a new paragraph (c);

f. In newly redesignated paragraph (d)(2), removing ``such data or software, for the unauthorized duplication, release, or disclosure'' and adding ``such litigation information, for any such unauthorized use or disclosure'' in its place; and

g. In newly redesignated paragraph (f), removing ``this paragraph (e)'' and add ``this paragraph (f)'' in its place.

The revisions and addition read as follows:

252.204-7014 Limitations on the Use or Disclosure of Information by Litigation Support Contractors.

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

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Litigation information means any information, including sensitive information, that is furnished to the contractor by or on behalf of the Government, or that is generated or obtained by the contractor in the performance of litigation support under a contract. The term does not include information that is lawfully, publicly available without restriction, including information contained in a publicly available solicitation.

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Litigation support contractor means a contractor (including its experts, technical consultants, subcontractors, and suppliers) providing litigation support under a contract that contains this clause.

Sensitive information means controlled unclassified information of a commercial, financial, proprietary, or privileged nature. The term includes technical data and computer software, but does not include information that is lawfully, publicly available without restriction.

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(b) Limitations on use or disclosure of litigation information. Notwithstanding any other provision of this contract, the Contractor shall--

(1) Access and use litigation information only for the purpose of providing litigation support under this contract;

(2) Not disclose litigation information to any entity outside the Contractor's organization unless, prior to such disclosure the Contracting Officer has provided written consent to such disclosure;

(3) Take all precautions necessary to prevent unauthorized disclosure of litigation information;

(4) Not use litigation information to compete against a third party for Government or nongovernment contracts; and

(5) Upon completion of the authorized litigation support activities, destroy or return to the Government at the request of the Contracting Officer all litigation information in its possession.

(c) Violation of paragraph (b)(1),(b)(2), (b)(3), (b)(4), or (b)(5) of this clause is a basis for the Government to terminate this contract.

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9. Amend section 252.204-7015 by--

a. Revising the section heading, introductory text, the clause heading, and paragraph (a); and

b. In the paragraph (b) heading, removing ``Authorized disclosure'' and adding ``Notice of authorized disclosures'' in its place.

The revision read as follows:

252.204-7015 Notice of Authorized Disclosure of Information for Litigation Support.

As prescribed in 204.7403(c), use the following clause:

Notice of Authorized Disclosure of Information for Litigation Support (May 2016)

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

Computer software means computer programs, source code, source code listings, object code listings, design details, algorithms, processes, flow charts, formulae, and related material that would enable the software to be reproduced, recreated, or recompiled. Computer software does not include computer data bases or computer software documentation.

Litigation support means administrative, technical, or professional services provided in support of the Government during or in anticipation of litigation.

Litigation support contractor means a contractor (including its experts, technical consultants, subcontractors, and suppliers) providing litigation support under a contract that contains the clause at 252.204-7014, Limitations on the Use or Disclosure of Information by Litigation Support Contractors.

Sensitive information means controlled unclassified information of a commercial, financial, proprietary, or privileged nature. The term includes technical data and computer software, but does not include information that is lawfully, publicly available without restriction.

Technical data means recorded information, regardless of the form or method of the recording, of a scientific or technical nature (including computer software documentation). The term does not include computer software or data incidental to contract administration, such as financial and/or management information.

* * * * *

[FR Doc. 2016-10822 Filed 5-9-16; 8:45 am]

BILLING CODE 5001-06-P

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[Federal Register Volume 81, Number 90 (Tuesday, May 10, 2016)]

[Rules and Regulations]

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

[FR Doc No: 2016-10830]

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DEPARTMENT OF DEFENSE

Defense Acquisition Regulations System

48 CFR Parts 212, 215, 216, and 225

Defense Federal Acquisition Regulation Supplement; Technical Amendments

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

ACTION: Final rule.

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SUMMARY: DoD is making technical amendments to the Defense Federal Acquisition Regulation Supplement (DFARS) to provide needed editorial changes.

DATES: Effective May 10, 2016.

FOR FURTHER INFORMATION CONTACT: Ms. Jennifer L. Hawes, Defense Acquisition Regulations System, OUSD(AT&L)DPAP(DARS), Room 3B941, 3060 Defense Pentagon, Washington, DC 20301-3060. Telephone 571-372-6115; facsimile 571-372-6094.

SUPPLEMENTARY INFORMATION: This final rule amends the DFARS as follows--

1. Corrects cross references at DFARS 212.301(f)(xvi), Acquisition of Information Technology, in paragraphs (A) and (B);

2. Directs contracting officers to additional DFARS Procedures, Guidance, and Information (PGI) by adding a cross reference at DFARS 215.300 and updates the date of the Director, Defense Procurement and Acquisition Policy memorandum entitled ``Department of Defense Source Selection Procedures'';

3. Corrects a threshold at DFARS 215.408(3)(ii)(A)(1)(i) to reflect $750,000 in lieu of $700,000 that was inadvertently omitted in the inflation adjustment DFARS Case 2014-D025 published in the Federal Register at 80 FR 36903;

4. Adds DFARS section 216.104 to provide guidance concerning selection and negotiation of the most appropriate contract type and also directs contracting officers to additional PGI coverage.

5. Redesignates paragraphs within DFARS 225.7003-2 to add a new paragraph (b) to provide an internet link for more information on specialty metals restrictions and reporting of noncompliances.

List of Subjects in 48 CFR 212, 215, 216, and 225

Government procurement.

Jennifer L. Hawes,

Editor, Defense Acquisition Regulations System.

Therefore, 48 CFR parts 212, 215, 216, and 225 are amended as follows:

1. The authority citation for 48 CFR parts 212, 215, 216, and 225 continues to read as follows:

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

PART 212--ACQUISITION OF COMMERCIAL ITEMS

212.301 [AMENDED]

2. Amend section 212.301, in paragraphs (f)(xvi)(A) and (B), by removing ``239.7603(a)'' and ``239.7603(b)'' and adding ``239.7604(a)'' and ``239.7604(b)'' in each place, respectively.

PART 215--CONTRACTING BY NEGOTIATION

3. Revise section 215.300 to read as follows:

215.300 Scope of subpart.

Contracting officers shall follow the principles and procedures in Director, Defense Procurement and Acquisition Policy memorandum dated April 1, 2016, entitled ``Department of Defense Source Selection Procedures,'' when conducting negotiated, competitive acquisitions utilizing FAR part 15 procedures. See PGI 215.300.

215.408 [AMENDED]

4. Amend section 215.408, in paragraph (3)(ii)(A)(1)(i), by removing ``$700,000'' and adding ``$750,000'' in its place.

PART 216--TYPES OF CONTRACTS

5. Add section 216.104 to read as follows:

216.104 Factors in selecting contract type.

Contracting officers shall follow the principles and procedures in Director, Defense Procurement and Acquisition Policy memorandum dated April 1, 2016, entitled ``Guidance on Using Incentive and Other Contract Types,'' when selecting and negotiating the most appropriate contract type for a given procurement. See PGI 216.104.

PART 225--FOREIGN ACQUISITION

6. Amend section 225.7003-2 by--

a. Redesignating paragraphs (a) and (b) as (1) and (2), respectively;

b. Designating the introductory text as paragraph (a);

c. In the newly redesignated paragraph (1), redesignating paragraphs (1) through (6) as paragraphs (i) through (vi), respectively; and

d. Adding paragraph (b).

The addition reads as follows:

225.7003-2 Restrictions.

* * * * *

(b) For more information on specialty metals restrictions and reporting of noncompliances, see http://www.acq.osd.mil/dpap/cpic/ic/restrictions_on_specialty_metals_10_usc_2533b.html.

[FR Doc. 2016-10830 Filed 5-9-16; 8:45 am]

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[Federal Register Volume 81, Number 90 (Tuesday, May 10, 2016)]

[Rules and Regulations]

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

[FR Doc No: 2016-10823]

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DEPARTMENT OF DEFENSE

Defense Acquisition Regulations System

48 CFR Part 217

[Docket DARS-2015-0067]

RIN 0750-AI80

Defense Federal Acquisition Regulation Supplement: Multiyear Contract Requirements (DFARS Case 2015-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 implement a section of the National Defense Authorization Act for Fiscal Year 2015 and a section of the Department of Defense Appropriations Act, 2015, which address various requirements for multiyear contracts.

DATES: Effective May 10, 2016.

FOR FURTHER INFORMATION CONTACT: Mr. Christopher Stiller, telephone 571-372-6176.

SUPPLEMENTARY INFORMATION:

I. Background

DoD published a proposed rule in the Federal Register at 80 FR 81499 on December 30, 2015, to amend the DFARS to implement section 816 of the National Defense Authorization Act for Fiscal Year 2015 (Pub. L. 113-291) and section 8010 of the Department of Defense Appropriations Act, 2015 (Division C, Title VIII of Pub. L. 113-235), which address various requirements for multiyear contracts. There were no public comments submitted in response to the proposed rule. There are no changes from the proposed rule made in the final rule.

II. Applicability to Contracts at or Below the Simplified Acquisition Threshold (SAT) and for Commercial Items, Including Commercially Available Off-the-Shelf (COTS) Items

This rule does not add any new provisions or clauses or impact any existing provisions or clauses.

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 (FRFA) has been prepared consistent with the Regulatory Flexibility Act, 5 U.S.C. 601, et seq. The FRFA is summarized as follows:

The purpose of this rule is to implement section 816 of the National Defense Authorization Act for Fiscal Year 2015 and section 8010 of the Department of Defense Appropriations Act, 2015, which address various requirements for multiyear contracts. The rule will amend the Defense Federal Acquisition Regulation Supplement to require the head of agency to--

Provide written notice to the congressional defense committees at least 30 days before termination of any multiyear contract; and

For defense acquisition programs specifically authorized by law to be carried out using multiyear authority, ensure the Secretary of Defense certifies to Congress certain conditions for the multiyear contract have been met no later than 30 days before entry into the contract.

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

The rule is not expected to impact small entities, because the rule applies to multiyear contract authorities for specific major defense acquisition programs for which small entities would not have the capacity or infrastructure to fulfill or sustain. Small entities may perform under multiyear contracts as subcontractors; however, the rule invokes requirements that apply at the prime contract level.

This rule does not create any new reporting or recordkeeping requirements.

There are no known significant alternatives to the rule. The impact of this rule on small business is not expected to be significant because it only affects DoD internal operating procedures.

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.

Jennifer Hawes,

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.

2. Revise section 217.170(b) to read as follows:

217.170 General.

* * * * *

(b) The head of the agency must provide written notice to the congressional defense committees at least 30 days before termination of any multiyear contract (section 8010 of Division C, Title VIII, of the Consolidated and Further Continuing Appropriations Act, 2015 (Pub. L. 113-235) and similar sections in subsequent DoD appropriations acts).

* * * * *

3. Amend section 217.172--

a. In paragraph (c), by removing ``10 U.S.C. 2306b(i)(3)'' and adding ``10 U.S.C. 2306b(i)(1)'' in its place;

b. In paragraph (e)(1), by removing the word ``and'';

c. In paragraph (e)(2), by removing the period and adding a semicolon in its place;

d. By adding paragraphs (e)(3), (4), and (5);

e. In paragraph (h) introductory text, by removing ``under the authority described in paragraph (b) of this section:'' and adding ``for a defense acquisition program that has been specifically authorized by law to be carried out using multiyear contract authority:'' in its place;

f. In paragraph (h)(2) introductory text, by removing ``March 1 of the year in which the Secretary requests legislative authority to enter'' and adding ``30 days before entry'' in its place and by removing ``10 U.S.C. 2306b(i)(1)(A) through (G)'' and adding ``10 U.S.C. 2306b(i)(3)'' in its place;

g. In paragraph (h)(2)(i)--

i. By removing ``FAR 17.105'' and adding ``FAR 17.105-1'' in its places;

ii. By adding a comma after ``(5)''; and

iii. By removing ``10 U.S.C. 2306b(i)(1)(A)'' and adding ``10 U.S.C. 2306b(i)(3)(A)'' in its place;

h. In paragraph (h)(2)(ii), by removing ``10 U.S.C. 2306b(i)(1)(B)'' and adding ``10 U.S.C. 2306b(i)(3)(B)'' in its place;

i. In paragraph (h)(2)(iii), by removing ``10 U.S.C. 2306b(i)(1)(C)'' and adding ``10 U.S.C. 2306b(i)(3)(C)'' in its place;

j. In paragraph (h)(2)(iv), by removing ``10 U.S.C. 2306b(i)(1)(D)'' and adding ``10 U.S.C. 2306b(i)(3)(D)'' in its place;

k. In paragraph (h)(2)(v), by removing ``10 U.S.C. 2306b(i)(1)(E)'' and adding ``10 U.S.C. 2306b(i)(3)(E)'' in its place;

l. In paragraph (h)(2)(vi), by removing ``10 U.S.C. 2306b(i)(1)(F)'' and adding ``10 U.S.C. 2306b(i)(3)(F)'' in its place;

m. In paragraph (h)(2)(vii), by removing ``10 U.S.C. 2306b(i)(1)(G)'' and adding ``10 U.S.C. 2306b(i)(3)(G)'' in its place;

n. In paragraph (h)(3), by removing ``10 U.S.C. 2306b(i)(4)(A)'' and adding ``10 U.S.C. 2306b(i)(5)(A)'' in its place;

o. In paragraph (h)(4), by removing ``10 U.S.C. 2306b(i)(4)(B)'' and adding ``10 U.S.C. 2306b(i)(5)(B)'' in its place;

p. In paragraph (h)(5), by removing ``10 U.S.C. 2306b(i)(5)'' and adding ``10 U.S.C. 2306b(i)(6)'' in its place;

q. In paragraph (h)(6), by removing ``10 U.S.C. 2306b(i)(6)'' and adding ``10 U.S.C. 2306b(i)(7)'' in its place;

r. Removing paragraph (h)(7);

s. Redesignating paragraph (h)(8) as (h)(7); and

t. In newly redesignated paragraph (h)(7) introductory text, adding ``(10 U.S.C. 2306b(i)(4))'' after ``law's specific savings requirement'' before the period.

The additions read as follows:

217.172 Multiyear contracts for supplies.

* * * * *

(e) * * *

(3) Cancellation provisions in the contract do not include consideration of recurring manufacturing costs of the contractor associated with the production of unfunded units to be delivered under the contract;

(4) The contract provides that payments to the contractor under the contract shall not be made in advance of incurred costs on funded units; and

(5) The contract does not provide for a price adjustment based on a failure to award a follow-on contract (section 8010 of Division C, Title VIII, of the Consolidated and Further Continuing Appropriations Act, 2015 (Pub. L. 113-235) and similar sections in subsequent DoD appropriations acts).

* * * * *

[FR Doc. 2016-10823 Filed 5-9-16; 8:45 am]

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[Federal Register Volume 81, Number 90 (Tuesday, May 10, 2016)]

[Rules and Regulations]

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

[FR Doc No: 2016-10826]

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DEPARTMENT OF DEFENSE

Defense Acquisition Regulations System

48 CFR Parts 225 and 252

[Docket DARS-2015-0052]

RIN 0750-AI76

Defense Federal Acquisition Regulation Supplement: Duty-Free Entry Threshold (DFARS 2015-D036)

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 threshold for duty-free entry on foreign supplies that are not from qualifying countries.

DATES: Effective May 10, 2016.

FOR FURTHER INFORMATION CONTACT: Mr. Christopher Stiller, telephone 571-372-6176.

SUPPLEMENTARY INFORMATION:

I. Background

DoD published a proposed rule in the Federal Register at 80 FR 72672 on November 20, 2015, to revise DFARS 225.901(3), and the clause 252.225-7013, Duty-Free Entry, by updating the $200 threshold that was established on April 30, 2003, to $300. There were no public comments submitted in response to the proposed rule. There are no changes from the proposed rule made in the final rule.

II. Applicability to Contracts at or Below the Simplified Acquisition Threshold and for Commercial Items, Including Commercially Available Off-the-Shelf Items

This rule merely updates the threshold for duty-free entry on foreign supplies that are not qualifying country suppliers or eligible products under a trade agreement. The clause at DFARS 252.225-7013, Duty-Free Entry, which is prescribed for use in lieu of Federal Acquisition Regulation clause 52.225-8, may be used in acquisitions at or below the simplified acquisition threshold when the savings from waiving the duty is anticipated to be more than the administrative cost of waiving the duty. The clause is not prescribed for use in contracts for commercial items, including commercially available off-the-shelf items.

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 (FRFA) has been prepared consistent with the Regulatory Flexibility Act, 5 U.S.C. 601, et seq. The FRFA is summarized as follows:

The objective of this rule is to amend Defense Federal Acquisition Supplement (DFARS) subpart 225.9 and the clause at 252.225-7013, Duty-Free Entry, to update the threshold for duty-free entry on foreign supplies that are not from the qualifying countries.

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

DoD does not expect this rule to have a significant economic impact on a substantial number of small entities because this rule only makes an upward inflationary adjustment of an administrative threshold, from $200 to $300, at DFARS 225.901(3) and the clause at DFARS 252.225-7013. The information requested in DFARS clause 252.225-7013 supplements the information requested in the Federal Acquisition Regulation clause at 52.225-10 and is required only if the contractor is requesting duty-free entry.

Current data indicates, on average, approximately 31,500 duty-free entry certificates on foreign supplies for DoD per year. DoD does not expect a change in the estimated duty-free entry processes because the change is consistent with the rate of inflation; therefore, small entities will not be materially affected by this rule.

This rule does not impose any additional reporting, recordkeeping, and 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 affects the information collection requirements in the clause at DFARS 252.225-7013, currently approved under OMB Control Number 0704-0229, entitled ``Defense Federal Acquisition Regulation Supplement Part 225, Foreign Acquisition, and related clauses,'' in accordance with the Paperwork Reduction Act (44.U.S.C. chapter 35). The impact, however, is negligible, because this rule only makes an upward adjustment of the duty-free entry threshold from the $200 to $300, consistent with the rate of inflation.

List of Subjects in 48 CFR Parts 225 and 252

Government procurement.

Jennifer L. Hawes,

Editor, Defense Acquisition Regulations System.

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

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

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

PART 225--FOREIGN ACQUISITION

225.901 [Amended]

2. In section 225.901, amend paragraph (3) by removing ``$200'' and adding ``$300'' in its place.

PART 252--SOLICITATION PROVISIONS AND CONTRACT CLAUSES

252.225-7013 [Amended]

3. Amend section 252.225-7013 by--

a. Removing the clause date ``(NOV 2014)'' and adding ``(MAY 2016)'' in its place; and

b. Amending paragraph (b)(3) by removing ``$200'' and adding ``$300'' in its place.

[FR Doc. 2016-10826 Filed 5-9-16; 8:45 am]

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[Federal Register Volume 81, Number 90 (Tuesday, May 10, 2016)]

[Rules and Regulations]

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

[FR Doc No: 2016-10825]

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DEPARTMENT OF DEFENSE

Defense Acquisition Regulations System

48 CFR Part 239

[Docket DARS-2015-0046]

RIN 0750-AI72

Defense Federal Acquisition Regulation Supplement: Long-Haul Telecommunications (DFARS Case 2015-D023)

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 a definition of ``long-haul telecommunications.''

DATES: Effective May 10, 2016.

FOR FURTHER INFORMATION CONTACT: Mr. Christopher Stiller, telephone 571-372-6176.

SUPPLEMENTARY INFORMATION:

I. Background

DoD published a proposed rule in the Federal Register at 80 FR 72674 on November 20, 2015, to revise DFARS subpart 239.74 to add ``long-haul telecommunications'' to the telecommunications services definitions and identify Defense Information Systems Agency as the procurer of long-haul telecommunications services for DoD, as mentioned in DoD Directive 5105.19, Defense Information Systems Agency. There were no public comments submitted in response to the proposed rule.

There are no changes from the proposed rule made in the final rule.

II. Applicability to Contracts at or Below the Simplified Acquisition Threshold and for Commercial Items, Including Commercially Available Off-the-Shelf Items

This case does not add any new provisions or clauses or impact any existing provisions or clauses.

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 (FRFA) has been prepared consistent with the Regulatory Flexibility Act, 5 U.S.C. 601, et seq. The FRFA is summarized as follows:

The purpose of this final rule is to amend the Defense Federal Acquisition Regulation Supplement (DFARS) to add a definition of ``long-haul telecommunications'' and provide a pointer to DFARS Procedures, Guidance, and Information for procedures internal to DoD.

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

The requirements under this rule will apply to long-haul telecommunications (Product Service Code D304) requirements as defined in the DoD Directive 5105.19, Defense Information Systems Agency. According to data available in the Federal Procurement Data System-Next Generation (FPDS-NG) for fiscal year 2014 through July 31, 2015, DoD awarded 13,596 new long-haul telecommunications contracts. Approximately 3 percent (451) of the total were awarded to small entities (comprised of 222 unique small entities).

This rule does not create any new reporting or recordkeeping requirements.

There are no known significant alternatives to the rule. The impact of this rule on small entities is not expected to be significant because it only affects DoD internal operating procedures.

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 239

Government procurement.

Jennifer L. Hawes,

Editor, Defense Acquisition Regulations System.

Therefore, 48 CFR part 239 is amended as follows:

PART 239--ACQUISITION OF INFORMATION TECHNOLOGY

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

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

2. Amend section 239.7401 by--

a. Removing the alphabetical paragraph designation from each definition; and

b. Adding, in alphabetical order, a new definition for ``Long-haul telecommunications''.

The addition reads as follows:

239.7401 Definitions.

* * * * *

Long-haul telecommunications means all general and special purpose long-distance telecommunications facilities and services (including commercial satellite services, terminal equipment and local circuitry supporting the long-haul service) to or from the post, camp, base, or station switch and/or main distribution frame (except for trunk lines to the first-serving commercial central office for local communications services).

* * * * *

3. Amend section 239.7402 by adding paragraph (d) to read as follows:

239.7402 Policy.

* * * * *

(d) Long-haul telecommunications services. When there is a requirement for procurement of long-haul telecommunications services, follow PGI 239.7402(d).

[FR Doc. 2016-10825 Filed 5-9-16; 8:45 am]

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[Federal Register Volume 81, Number 90 (Tuesday, May 10, 2016)]

[Rules and Regulations]

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

[FR Doc No: 2016-10824]

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DEPARTMENT OF DEFENSE

Defense Acquisition Regulations System

48 CFR Part 241

[Docket DARS-2015-0050]

RIN 0750-AI74

Defense Federal Acquisition Regulation Supplement: Contract Term Limit for Energy Savings Contracts (DFARS Case 2015-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 clarify the contract term for energy savings contracts awarded under 10 U.S.C. 2913.

DATES: Effective May 10, 2016.

FOR FURTHER INFORMATION CONTACT: Ms. Amy Williams, telephone 571-372-6106.

SUPPLEMENTARY INFORMATION:

I. Background

DoD published a proposed rule in the Federal Register at 80 FR 72675 on November 20, 2015, to clarify the contract term for contracts awarded under the statutory authority of 10 U.S.C. 2913. Ten respondents submitted public comments in response to the proposed rule.

II. Discussion and Analysis

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

A. Summary of Significant Changes From the Proposed Rule

The final rule has been revised at DFARS 241.103(2) to provide that the contracting officer may enter into an energy savings contract under 10 U.S.C. 2913 for a period not to exceed 25 years. This change to ``energy savings contract'' from ``shared energy savings contract'' brings the term limit for all activities authorized by section 2913 under the final rule.

B. Analysis of Public Comments

1. General Support for the Rule

Comment: Several respondents expressed support for the changes in the proposed rule, indicating that the term limit of 25 years would promote the use of shared energy savings contracts, have a positive benefit on small businesses, facilitate greater partnerships between utilities and DoD customers, and increase competition. One respondent indicated that the term limit of 25 years would lead to several benefits including deeper retrofits, elimination of cream skimming, effectively leveraging private sector funding, and accomplishing the President's Performance Contracting Challenge goals.

Response: Noted.

2. Clarification of the Contract Period

Comment: One respondent requested clarification of the date that the contract period commences. The respondent stated that the rule would most effectively accomplish its goal of accommodating project financing needs if the contract period were tied to the payment term, and suggested that the rule be revised to state the following: ``The contracting officer may enter into a shared energy savings contract under 10 U.S.C. 2913 for a `payment term' not to exceed 25 years.''

Response: Payment term is interpreted as the performance period of the contract, which is not to exceed 25 years. The contract period will include the entire performance period, including construction, if any.

3. Inclusion of Water-Related Projects

Comment: One respondent expressed concern that the rule's failure to address water-related projects authorized by 10 U.S.C. 2866 would result in ambiguity and confusion with regard to the term limit for such contracts. The respondent suggested that the rule be revised to state the following: ``The contracting officer may enter into a contract under 10 U.S.C. 2913 or 10 U.S.C. 2866 for a period not to exceed 25 years.''

Response: The recommendation is beyond the scope of the case.

4. Application of 10 U.S.C. 2913 to Agreements With Gas or Electric Utilities

Comment: One respondent stated that 10 U.S.C. 2913 applies not only to shared energy savings contracts, but also to agreements with gas or electric companies, and recommended removing the reference to shared energy savings contracts.

Response: The final rule has been revised at 241.103(2) to provide that the contracting officer may enter into an energy savings contract under 10 U.S.C. 2913 for a period not to exceed 25 years.

III. Applicability to Contracts at or Below the Simplified Acquisition Threshold and for Commercial Items, Including Commercially Available Off-the-Shelf Items

This rule does not add any new provisions or clauses or impact any existing provisions or clauses.

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 (FRFA) has been prepared consistent with the Regulatory Flexibility Act, 5 U.S.C. 601, et seq. The FRFA is summarized as follows:

This final rule amends the Defense Federal Acquisition Regulation Supplement (DFARS) to clarify the contract term for contracts awarded under the statutory authority of 10 U.S.C. 2913. Section 2913 requires DoD to develop a simplified method of contracting for shared energy savings contract services that will accelerate the use of such contracts. DoD is authorized by section 2913 to contract with utility service providers to implement energy conservation measures on military bases. Section 2913 does not indicate a term limit for contracts or activities executed under this authority, and this has created ambiguity and inconsistency throughout DoD on the term limit that is imposed on contracts awarded under the authority. Additionally, the ambiguity has resulted in a hesitation to enter shared energy savings contracts, contrary to the intent of section 2913.

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

The rule is not anticipated to have a significant economic impact on small business entities. The number of contract awards made under the authority of 10 U.S.C. 2913 is not currently tracked by DoD's business systems. However, it is estimated that approximately 25 shared energy savings projects are initiated across DoD each year, with approximately 17 being awarded annually. It is believed that most awards are made to large utility providers, with generally 25% or more of the renovation and operations and maintenance work executed under the awards being subcontracted to local small business by the utility provider.

This rule does not create any new reporting or recordkeeping requirements.

There are no known significant alternatives to the rule.

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 Part 241

Government procurement.

Jennifer L. Hawes,

Editor, Defense Acquisition Regulations System.

Therefore, 48 CFR part 241 is amended as follows:

PART 241--ACQUISITION OF UTILITY SERVICES

1. The authority citation for part 241 continues to read as follows:

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

2. Amend section 241.103 by--

a. Redesignating paragraphs (2) and (3) as paragraphs (3) and (4); and

b. Adding a new paragraph (2).

The addition reads as follows:

241.103 Statutory and delegated authority.

* * * * *

(2) The contracting officer may enter into an energy savings contract under 10 U.S.C. 2913 for a period not to exceed 25 years.

* * * * *

[FR Doc. 2016-10824 Filed 5-9-16; 8:45 am]

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