DPN20190215

[Federal Register Volume 84, Number 32 (Friday, February 15, 2019)]

[Rules and Regulations]

[Pages 4360-4362]

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

[FR Doc No: 2019-02531]

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DEPARTMENT OF DEFENSE

Defense Acquisition Regulations System

48 CFR Chapter 2

[Docket DARS-2019-0003]

RIN 0750-AK46

Defense Federal Acquisition Regulation Supplement; Appendix A,

Armed Services Board of Contract Appeals, Part 1--Charter

AGENCY: Defense Acquisition Regulations System, Department of Defense

(DoD).

ACTION: Final rule.

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SUMMARY: DoD is issuing the updated Charter of the Armed Services Board

of Contract Appeals (ASBCA), dated April 9, 2018. The ASBCA is

chartered to serve as the authorized representative of the Secretary of

Defense and the Secretaries of the Army, Navy, and Air Force in

hearing, considering, and determining appeals by contractors from

decisions of contracting officers or their authorized representatives

or other authorities regarding claims on contracts under the Contract

Disputes Act of 1978 or other remedy-granting provisions.

DATES: Effective February 15, 2019.

FOR FURTHER INFORMATION CONTACT: Ms. Jennifer Hawes, Defense

Acquisition Regulations System, OUSD(A&S)DPAP(DARS), 3060 Defense

Pentagon, Room 3B941, Washington, DC 20301-3060, Telephone 571-372-

6115.

SUPPLEMENTARY INFORMATION:

I. Background

This publication of Appendix A of the Defense Federal Acquisition

Regulation

[[Page 4361]]

Supplement (DFARS) updates the Charter of the ASBCA from the most

recent prior version, dated May 14, 2007, to its latest version, dated

April 9, 2018. The updated Charter implements changes to ASBCA internal

administration to better support the Board's mission of hearing,

considering, and determining appeals by contractors from decisions of

contracting officers or their authorized representatives or other

authorities on disputed questions. In addition to minor administrative

changes and a rearranging of paragraphs to improve the logical flow of

the document and add clarity, the following substantive changes were

made to the Charter:

References to ``Under Secretary of Defense for

Acquisition, Technology and Logistics'' were changed to ``Under

Secretary of Defense responsible for acquisition.''

Former paragraph 4 (new paragraph 3) was shortened to

clearly state the Board Chairman's broad powers and responsibilities

and to remove detailed processes deemed not appropriate for this type

of document.

The requirement for the Board to forward quarterly reports

of the Board's proceedings to various Defense officials was removed.

The requirement for annual reports was retained.

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

by Statute

The statute that applies to the publication of the Federal

Acquisition Regulation (FAR) is the Office of Federal Procurement

Policy statute (codified at title 41 of the United States Code).

Specifically, 41 U.S.C. 1707(a)(1) 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 only

publishes the updated ASBCA charter and is therefore not required to be

published for public comment, because the rule does not have a

significant effect beyond the internal operating procedures of the

agency issuing the policy, regulation, procedure or form.

III. Executive Orders 12866 and 13563

Executive Order (E.O.) 12866, Regulatory Planning and Review; and

E.O. 13563, Improving Regulation and Regulatory Review, 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). This rule is

not a major rule as defined at 5 U.S.C. 804(2).

IV. Executive Order 13771

This rule is not an E.O. 13771 regulatory action, because this rule

concerns regulations related to agency organization, management, or

personnel.

III. Regulatory Flexibility Act

Because a notice of proposed rulemaking and an opportunity for

public comment are not required to be given for this rule under 41

U.S.C. 1707(a)(1) (see section II of this preamble), the analytical

requirements of the Regulatory Flexibility Act (5 U.S.C. 601 et seq.)

are not applicable. Accordingly, no regulatory flexibility analysis is

required and none has been prepared.

V. Paperwork Reduction Act

This rule does not impose any new information collection

requirements that require the approval of the Office of Management and

Budget under 44 U.S.C. 3501, et seq.

List of Subjects in 48 CFR Appendix A

Government procurement.

Jennifer Lee Hawes,

Regulatory Control Officer, Defense Acquisition Regulations System.

Therefore, DoD is amending 48 CFR appendix A to chapter 2 as

follows:

Appendix A to Chapter 2--Armed Services Board of Contract Appeals

0

1. The authority citation for 48 CFR appendix A to chapter 2 is revised

to read as follows:

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

0

2. Appendix A is amended by revising the introductory text and Part 1--

Charter to read as follows:

Appendix A to Chapter 2--Armed Services Board of Contract Appeals

* * * * *

Armed Services Board of Contract Appeals

Approved 1 May 1962

Revised 1 May 1969

Revised 1 September 1973

Revised 1 July 1979

Revised 14 May 2007

Revised 9 April 2018

Part 1--Charter

1. There is created the Armed Services Board of Contract Appeals

which is hereby designated as the authorized representative of the

Secretary of Defense, the Secretary of the Army, the Secretary of

the Navy and the Secretary of the Air Force, in hearing, considering

and determining appeals by contractors from decisions of contracting

officers or their authorized representatives or other authorities on

disputed questions. These appeals may be taken (a) pursuant to the

Contract Disputes Act of 1978 (41 U.S.C. Sections 7101-7109), (b)

pursuant to the provisions of contracts requiring the decision by

the Secretary of Defense or by a Secretary of a Military Department

or their duly authorized representative, or (c) pursuant to the

provisions of any directive whereby the Secretary of Defense or the

Secretary of a Military Department or their authorized

representative has granted a right of appeal not contained in the

contract on any matter consistent with the contract appeals

procedure. The Board may determine contract disputes for other

departments and agencies by agreement as permitted by law. The Board

shall operate under general policies established or approved by the

Under Secretary of Defense responsible for acquisition and may

perform other duties as directed not inconsistent with the Contract

Disputes Act of 1978. The Board shall decide the matters before it

independently.

2. Membership of the Board shall consist of attorneys at law who

have been qualified in the manner prescribed by the Contract

Disputes Act of 1978. Members of the Board are hereby designated

Administrative Judges. There shall be appointed from the Judges of

the Board a Chairman and two or more Vice Chairmen. Appointment of

the Chairman and Vice Chairmen and other Judges of the Board shall

be made by the Under Secretary of Defense responsible for

acquisition, the General Counsel of the Department of Defense, and

the Assistant Secretaries of the Military Departments responsible

for acquisition. The Chairman may designate a Judge of the Board to

serve as an Acting Chairman or Acting Vice Chairman.

3. The Chairman of the Board shall be responsible for

establishing appropriate divisions of the Board to provide for the

most effective and expeditious handling of appeals. The Chairman

shall have authority to establish procedures for the issuance of

Board decisions. The Chairman may refer an appeal of unusual

difficulty, significant precedential importance, or serious dispute

within the normal decision process for decision by a Senior Deciding

Group established by the Chairman which shall have the authority to

overturn prior Board precedent.

4. It shall be the duty and obligation of the Judges of the

Armed Services Board of Contract Appeals to decide appeals on the

[[Page 4362]]

record of the appeal to the best of their knowledge and ability in

accordance with applicable contract provisions and in accordance

with law and regulation pertinent thereto.

5. Any Judge of the Board or any examiner, designated by the

Chairman, shall be authorized to hold hearings, examine witnesses,

and receive evidence and argument. A Judge of the Board shall have

authority to administer oaths and issue subpoenas as specified in

the Contract Disputes Act of 1978. In cases of contumacy or refusal

to obey a subpoena, the Chairman may request orders of the court in

the manner prescribed in the Contract Disputes Act of 1978.

6. The Board shall have all powers necessary and incident to the

proper performance of its duties. The Board has the authority to

issue methods of procedure and rules and regulations for its conduct

and for the preparation and presentation of appeals and issuance of

opinions.

7. The Chairman shall be responsible for the internal

organization of the Board and for its administration. The Chairman

shall provide within approved ceilings for the staffing of the Board

with non-Judge personnel, including hearing examiners, as may be

required for the performance of the functions of the Board. The

Chairman shall appoint a Recorder of the Board. All personnel shall

be responsible to and shall function under the direction,

supervision and control of the Chairman.

8. The Board will be serviced by the Department of the Army for

administrative support as required for its operations.

Administrative support will include budgeting, funding, fiscal

control, manpower control and utilization, personnel administration,

security administration, supplies, and other administrative

services. The Departments of the Army, Navy, Air Force and the

Office of the Secretary of Defense will participate in financing the

Board's operations on an equal basis and to the extent determined by

the Under Secretary of Defense (Comptroller). The cost of processing

appeals for departments and agencies other than those in the

Department of Defense will be reimbursed.

9. Within 30 days following the close of a fiscal year, the

Chairman shall forward a report of the Board's transactions and

proceedings for the preceding fiscal year to the Under Secretary of

Defense responsible for acquisition, the General Counsel of the

Department of Defense, and the Assistant Secretaries of the Military

Departments responsible for acquisition.

10. The Board shall have a seal bearing the following

inscription: ``Armed Services Board of Contract Appeals.'' This seal

shall be affixed to all authentications of copies of records and to

such other instruments as the Board may determine.

11. This revised charter is effective April 9, 2018.

APPROVED:

(signed) Ellen M. Lord (9 April 2018),

Under Secretary of Defense (Acquisition & Sustainment).

(signed) William S. Castle,

Acting General Counsel of the Department of Defense.

(signed) Dr. Bruce D. Jette,

Assistant Secretary of the Army (Acquisition, Logistics &

Technology).

(signed) James F. Geurts,

Assistant Secretary of the Navy (Research, Development &

Acquisition).

(signed) Dr. Will Roper,

Assistant Secretary of the Air Force (Acquisition).

* * * * *

[FR Doc. 2019-02531 Filed 2-14-19; 8:45 am]

BILLING CODE 5001-06-P

DEPARTMENT OF DEFENSE

Defense Acquisition Regulations System

48 CFR Parts 204, 212, and 252

[Docket DARS-2018-0038]

RIN 0750-AJ45

Defense Federal Acquisition Regulation Supplement: Antiterrorism

Training Requirements for Contractors (DFARS Case 2017-D034)

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 the requirement

for contractors to complete Level I antiterrorism awareness training.

DATES: Effective February 15, 2019.

FOR FURTHER INFORMATION CONTACT: Ms. Barbara J. Trujillo, telephone

571-372-6102.

SUPPLEMENTARY INFORMATION:

I. Background

DoD published a proposed rule in the Federal Register at 83 FR

42820 on August 24, 2018, to revise the DFARS to implement the

antiterrorism training requirements for contractors provided in DoD

Instruction (DoDI) O-2000.16, Volume 1, DoD Antiterrorism (AT) Program

Implementation: DoD AT Standards (available at http://www.esd.whs.mil/Directives/issuances/dodi/). The rule will ensure contractors, who as a

condition of contract performance require routine physical access to a

Federally-controlled facility or military installation, are aware of

the requirement for contractor personnel to complete Level I DoD

antiterrorism awareness training. Routine physical access is considered

more than intermittent access, such as when a contractor employee is

required to obtain a Common Access Card. The training is required

within 30 days of requiring access and annually thereafter and must be

completed either through DoD-sponsored and certified computer or web-

based distance learning instruction, or under the instruction of a

qualified Level I antiterrorism awareness instructor.

There were no public comments submitted in response to the proposed

rule. There are no changes made to the final rule with regard to public

comments; however, there are some minor editorial revisions

incorporated. The definition of ``military installation'' at DFARS

204.7201, Definitions, and the clause at 252.204-7004, DoD

Antiterrorism Awareness Training for Contractors, is updated to reflect

more precisely the statutory definition at 10 U.S.C. 2801(c)(4) to

address activities in a foreign country. Additionally, the clause is

updated to reflect the current secured weblink of https://jko.jten.mil/

for information and guidance pertaining to the DoD antiterrorism

awareness training. These minor editorial updates are administrative

and have no effect on the public.

II. Applicability to Contracts at or Below the Simplified Acquisition

Threshold and for Commercial Items, Including Commercially Available

Off-the-Shelf Items

This rule creates a new DFARS clause 252.204-7004, Antiterrorism

Awareness Training for Contractors, to advise DoD contractors of the

requirement for its employees (and those of its subcontractors, if

applicable) to complete Level I antiterrorism awareness training within

30 days of requiring access and annually thereafter, if, as a condition

of contract performance require routine physical access to a Federally-

controlled facility or a military installation. DoD plans to apply this

clause to solicitations and contracts below the simplified acquisition

threshold and to the procurement of commercial items, including

commercially available off-the-shelf items (as defined in Federal

Acquisition Regulation 2.101). This is necessary in order to reach as

wide an audience as possible to ensure contractor personnel who are

required to have routine physical access to a Federally-controlled

facility or military installation are aware of this training

requirement.

III. Executive Orders 12866 and 13563

Executive Orders (E.O.s) 12866 and 13563 direct agencies to assess

all costs and benefits of available regulatory

[[Page 4363]]

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. Executive Order 13771

This final rule is not an E.O. 13771 regulatory action, because

this rule is not significant under E.O. 12866.

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 is necessary to implement the requirements of DoD

Instruction O-2000.16, Volume 1, DoD Antiterrorism (AT) Program

Implementation: DoD AT Standards, to ensure that contractors complete

Level I antiterrorism awareness training. The objective of this final

rule is to ensure contractor personnel who, as a condition of contract

performance, require routine physical access to a Federally-controlled

facility or military installation are aware of terrorism threats and

the proper responses to threat actions. In recent years, there have

been terrorist events directed at Federally-controlled facilities and

military installation and all personnel that routinely access those

facilities need to be aware of the threat.

There were no issues raised by the public in response to the

initial regulatory flexibility analysis provided in the proposed rule.

It is expected that contracts that contain the clause at Federal

Acquisition Regulation (FAR) 52.204-9, Personal Identity Verification

of Contractor Personnel, are contracts that would require contractor

personnel to have routine physical access to Federally-controlled

facilities or military installations. According to data available in

the Electronic Data Access system, in fiscal year 2017, DoD awarded

137,106 contracts containing the clause at FAR 52.204-9 to 15,814

businesses, of which 10,837 (68.5 percent) were to small businesses.

Common Access Cards (CAC) are issued to contractors who require routine

physical access to a Federally-controlled facility or military

installation. There are currently 507,665 contractors that hold CAC

cards.

The rule does not impose any reporting or recordkeeping

requirements.

There are no known alternative approaches that would accomplish the

stated objectives. The impact is not expected to be significant,

because current contractor employees who hold a CAC have already

completed the requisite training and the cost of training new

contractor personnel is at the expense of the Department. The time

allotted for the training is approximately two hours per year. The

training will provide safety awareness and precautionary measures that

will benefit contractor personnel requiring routine physical access to

a Federally-controlled facilities or military installations. This

awareness not only benefits the contractor personnel, but also DoD

civilians, military, and its assets.

VI. Paperwork Reduction Act

The rule does not contain any information collection requirements

that require the approval of the Office of Management and Budget under

the Paperwork Reduction Act (44 U.S.C. chapter 35).

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

Government procurement.

Jennifer Lee Hawes,

Regulatory Control Officer, Defense Acquisition Regulations System.

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

0

1. The authority citation for 48 CFR parts 204, 212, and 252 continues

to read as follows:

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

PART 204--ADMINISTRATIVE MATTERS

0

2. Add subpart 204.72, consisting of 204.7200 through 204.7203, to read

as follows:

SUBPART 204.72--ANTITERRORISM AWARENESS TRAINING

Sec.

204.7200 Scope of subpart.

204.7201 Definition.

204.7202 Policy.

204.7203 Contract clause.

Subpart 204.72--Antiterrorism Awareness Training

204.7200 Scope of subpart.

This subpart provides policy and guidance related to antiterrorism

awareness training for contractor personnel who require routine

physical access to a Federally-controlled facility or military

installation.

204.7201 Definition.

As used in this subpart--

Military installation means a base, camp, post, station, yard,

center, or other activity under the jurisdiction of the Secretary of a

military department or, in the case of an activity in a foreign

country, under the operational control of the Secretary of a military

department or the Secretary of Defense (see 10 U.S.C. 2801(c)(4)).

204.7202 Policy.

It is DoD policy that--

(a) Contractor personnel who, as a condition of contract

performance, require routine physical access to a Federally-controlled

facility or military installation are required to complete Level I

antiterrorism awareness training within 30 days of requiring access and

annually thereafter; and

(b) In accordance with Department of Defense Instruction O-2000.16,

Volume 1, DoD Antiterrorism (AT) Program Implementation: DoD AT

Standards, Level I antiterrorism awareness training may be completed--

(1) Through a DoD-sponsored and certified computer or web-based

distance learning instruction for Level I antiterrorism awareness; or

(2) Under the instruction of a qualified Level I antiterrorism

awareness instructor.

204.7203 Contract clause.

Include the clause at 252.204-7004, DoD Antiterrorism Awareness

Training for Contractors, in solicitations and contracts, including

solicitations and contracts using FAR part 12 procedures for the

acquisition of commercial items, when contractor personnel require

routine physical access to a Federally-controlled facility or military

installation.

PART 212--ACQUISITION OF COMMERCIAL ITEMS

0

3. Amend section 212.301 by--

0

a. Redesignating paragraphs (f)(ii)(A) through (F) as paragraphs

(f)(ii)(B) through (G), respectively; and

0

b. Adding new paragraph (f)(ii)(A).

The addition reads as follows:

[[Page 4364]]

212.301 Solicitation provisions and contract clauses for the

acquisition of commercial items.

* * * * *

(f) * * *

(ii) * * *

(A) Use the clause at 252.204-7004, Antiterrorism Awareness

Training for Contractors, as prescribed in 204.7203.

* * * * *

PART 252--SOLICITATION PROVISIONS AND CONTRACT CLAUSES

0

4. Add section 252.204-7004 to read as follows:

252.204-7004 Antiterrorism Awareness Training for Contractors.

As prescribed in 204.7203, use the following clause:

Level I Antiterrorism Awareness Training for Contractors (FEB 2019)

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

Military installation means a base, camp, post, station, yard,

center, or other activity under the jurisdiction of the Secretary of

a military department or, in the case of an activity in a foreign

country, under the operational control of the Secretary of a

military department or the Secretary of Defense (see 10 U.S.C.

2801(c)(4)).

(b) Training. Contractor personnel who require routine physical

access to a Federally-controlled facility or military installation

shall complete Level I antiterrorism awareness training within 30

days of requiring access and annually thereafter. In accordance with

Department of Defense Instruction O-2000.16 Volume 1, DoD

Antiterrorism (AT) Program Implementation: DoD AT Standards, Level I

antiterrorism awareness training shall be completed--

(1) Through a DoD-sponsored and certified computer or web-based

distance learning instruction for Level I antiterrorism awareness;

or

(2) Under the instruction of a Level I antiterrorism awareness

instructor.

(c) Additional information. Information and guidance pertaining

to DoD antiterrorism awareness training is available at https://jko.jten.mil/ or as otherwise identified in the performance work

statement.

(d) Subcontracts. The Contractor shall include the substance of

this clause, including this paragraph (d), in subcontracts,

including subcontracts for commercial items, when subcontractor

performance requires routine physical access to a Federally-

controlled facility or military installation.

(End of clause)

[FR Doc. 2019-02525 Filed 2-14-19; 8:45 am]

BILLING CODE 5001-06-P

DEPARTMENT OF DEFENSE

Defense Acquisition Regulations System

48 CFR Parts 206, 215, 234, and 235

[Docket DARS-2018-0053]

RIN 0750-AJ83

Defense Federal Acquisition Regulation Supplement: Amendments

Related to General Solicitations (DFARS Case 2018-D021)

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 sections of the

National Defense Authorization Act for Fiscal Year 2018, which expand

the definition of ``competitive procedures'' in 10 U.S.C. 2302 and

extend the term and increase the dollar value under the contract

authority for advanced development of initial or additional prototype

units.

DATES: Effective February 15, 2019.

FOR FURTHER INFORMATION CONTACT: Ms. Heather Kitchens, telephone 571-

372-6104.

SUPPLEMENTARY INFORMATION:

I. Background

DoD published a proposed rule in the Federal Register at 83 FR

54698 on October 31, 2018, to implement sections 221 and 861 of the

National Defense Authorization Act (NDAA) for Fiscal Year (FY) 2018

(Pub. L. 115-91).

Section 221 amends 10 U.S.C. 2302(2)(B) to allow for an expanded

application of other competitive procedures by replacing the words

``basic research'' with ``science and technology''. ``Competitive

procedures'' were defined in 10 U.S.C. 2302(2)(B) to include ``the

competitive selection for award of basic research proposals resulting

from a general solicitation, and the peer review or scientific review

(as appropriate) of such proposals.'' Changing the words ``basic

research'' to ``science and technology'' expands the meaning of other

competitive procedures to apply to ``advanced technology development''

and ``advanced component development and prototypes'' research

proposals, in addition to ``basic research'' and ``applied research''

proposals. One of the solicitation methods for research and development

proposals, a broad agency announcement (BAA), is defined in the Federal

Acquisition Regulation (FAR) as ``a general announcement of an agency's

research interest including criteria for selecting proposals and

soliciting the participation of all offerors capable of satisfying the

Government's needs.'' Section 221 permits the use of BAAs for

competitive selection of science and technology proposals by

authorizing the use of the competitive procedures at 10 U.S.C.

2302(2)(B) that result from a general solicitation and peer or

scientific review of such proposals--a key element of the BAA process.

Section 861 amends 10 U.S.C. 2302e to allow for an extended term

limit and increased dollar threshold under the contract authority for

advanced development of initial or additional prototype units awarded

from a competitive selection, as specified in 10 U.S.C. 2302(2)(B). The

statutory term limit extends from 12 months to 2 years and the dollar

threshold increases from $20 million to $100 million in fiscal year

2017 constant dollars (10 U.S.C. 2302e). Section 861 also amends 10

U.S.C. 2302e to repeal the obsolete authority implemented by section

819 of the NDAA for FY 2010 (Pub. L. 111-84), thereby eliminating the

expiration date of the authority.

One respondent submitted a public comment on the proposed rule.

II. Discussion and Analysis

DoD reviewed the public comment in the development of the final

rule. A discussion of the comment received and any changes made to the

rule is provided as follows:

A. Summary of Significant Changes

DoD did not make any changes to the proposed rule as a result of

the public comment.

B. Analysis of Public Comment

Comment: The respondent recommended the proposed rule update

213.106-1(b) to address documentation requirements related to

competition for actions not exceeding the simplified acquisition

threshold (SAT).

Response: Since there is no DFARS 213.106-1(b) section, DoD

reviewed FAR 13.106-1(b), Soliciting Competition, which allows

contracting officers to solicit from a single source, for purchases not

exceeding the SAT, if the contracting officer determines that

circumstances deem only one source reasonably available. This rule

relates to soliciting proposals using other competitive procedures

(such as a broad agency announcement) and is not related to

solicitations of a single source for purchases not exceeding the SAT;

[[Page 4365]]

therefore, DoD determined that the public comment is outside the scope

of this rule.

C. Other Changes

One minor editorial change is made to the final rule. DoD compared

the proposed rule to the current version of the DFARS text and noted

the need to correct a typo at DFARS 215.371-4(a) by changing the word

``sections'' to ``section''.

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 Order (E.O.s) 12866, Regulatory Planning and Review; and

E.O. 13563, Improving Regulation and Regulatory Review, 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 is not a

major rule under 5 U.S.C. 804.

V. Executive Order 13771

This final rule is not an E.O. 13771 regulatory action, because

this rule is not significant under E.O. 12866.

VI. Regulatory Flexibility Act

A final regulatory flexibility analysis has been prepared and is

summarized as follows:

This rule proposes to amend the DFARS to implement sections 221 and

861 of the National Defense Authorization Act (NDAA) for Fiscal Year

(FY) 2018.

Section 221 expands the definition of ``competitive procedures'' at

10 U.S.C. 2302(2)(B) by removing the term ``basic research'' and adding

``science and technology'' in its place. Section 861 implements a

statutory modification to 10 U.S.C. 2302e to extend the term limit and

dollar threshold for the contract authority for advanced development of

initial or additional prototype units from 12 months to 2 years and

from $20 million to $100 million in fiscal year 2017 constant dollars

(10 U.S.C. 2302e), respectively. The modification also repeals the

obsolete authority of section 819 of the NDAA for FY 2010 (Pub. L. 111-

84), thereby eliminating the expiration date of September 30, 2019, for

the contract authority for advanced development of initial or

additional prototype units.

The objective of this rule is to implement sections 221 and 861 to

establish broad agency announcements as a competitive procedure that

may be used to select science and technology proposals and to expand

the term limit and dollar threshold for the contract authority for

advanced development of initial or additional prototype units. This

rule impacts internal Government procedures by expanding the meaning of

other competitive procedures to include the competitive selection of

science and technology proposals and expands the contract authority for

advanced development of initial or additional prototype units.

There were no public comments concerning the initial regulatory

flexibility analysis.

In FY 2017, DoD awarded 1,853 contracts for research and

development, excluding Small Business Innovation Research (SBIR) and

Small Technology Transfer Research (STTR) program requirements.

Approximately 53% of those new contract actions were awarded to 1,005

of unique small business and nontraditional DoD entities. There were

2,858 new contract awards for SBIR and STTR program requirements for

DoD. Approximately 66% of those new contract actions were awarded to

1,891 of unique small business and nontraditional DoD entities.

This final rule does not include any new reporting or recordkeeping

requirements for small entities.

There are no known significant alternative approaches to the final

rule that would meet the requirements of the applicable statute.

VI. Paperwork Reduction Act

This final rule does not contain any information collection

requirements that require the approval of the Office of Management and

Budget under the Paperwork Reduction Act (44 U.S.C. chapter 35).

List of Subjects in 48 CFR Parts 206, 215, 234, and 235

Government procurement.

Jennifer Lee Hawes,

Regulatory Control Officer, Defense Acquisition Regulations System.

Therefore, 48 CFR parts 206, 215, 234, and 235 are amended as

follows:

0

1. The authority citation for 48 CFR parts 206, 215, 234, and 235

continues to read as follows:

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

PART 206--COMPETITION REQUIREMENTS

0

2. Subpart 206.1, consisting of 206.102, is added to read as follows:

Subpart 206.1--Full and Open Competition

206.102 Use of competitive procedures.

(d) Other competitive procedures.

(2) In lieu of FAR 6.102(d)(2), competitive selection of science

and technology proposals resulting from a broad agency announcement

with peer or scientific review, as described in 235.016(a) (10 U.S.C.

2302(2)(B)).

PART 215--CONTRACTING BY NEGOTIATION

0

3. Section 215.371-4 is amended by revising paragraph (a)(4) to read as

follows:

215.371-4 Exceptions.

(a) * * *

(4) Acquisitions of science and technology, as specified in

235.016(a); or

* * * * *

PART 234--MAJOR SYSTEM ACQUISITION

0

4. Section 234.005-1 is amended by--

0

a. Removing paragraph (2);

0

b. Redesignating paragraph (1) and (1)(i) through (iii) as introductory

text and paragraphs (1), (2), and (3), respectively;

0

c. In the newly redesignated introductory text, removing ``general

solicitation'' and adding ``broad agency announcement'' in its place;

0

d. In the newly redesignated paragraph (2) removing ``12 months'' and

adding ``2 years'' in its place; and

0

e. Revising the newly redesignated paragraph (3) to read as follows:

234.005-1 Competition.

* * * * *

(3) The dollar value of the work to be performed pursuant to the

contract line

[[Page 4366]]

item or contract option shall not exceed $100 million in fiscal year

2017 constant dollars. (10 U.S.C. 2302e)

PART 235--RESEARCH AND DEVELOPMENT CONTRACTING

0

5. Section 235.006-71 is amended by--

0

a. Redesignating the introductory text as paragraph (b); and

0

b. Adding paragraph (a).

The addition reads as follows:

235.006--71 Competition.

(a) Use of a broad agency announcement with peer or scientific

review for the award of science and technology proposals in accordance

with 235.016(a) fulfills the requirement for full and open competition

(see 206.102(d)(2)).

* * * * *

0

6. Section 235.016 is added to read as follows:

235.016 Broad agency announcement.

(a) General. A broad agency announcement with peer or scientific

review may be used for the award of science and technology proposals.

Science and technology proposals include proposals for the following:

(i) Basic research (budget activity 6.1).

(ii) Applied research (budget activity 6.2).

(iii) Advanced technology development (budget activity 6.3).

(iv) Advanced component development and prototypes (budget activity

6.4).

[FR Doc. 2019-02527 Filed 2-14-19; 8:45 am]

BILLING CODE 5001-06-P

DEPARTMENT OF DEFENSE

Defense Acquisition Regulations System

48 CFR Part 211

[Docket DARS-2018-0021]

RIN 0750-AJ23

Defense Federal Acquisition Regulation Supplement: Use of

Commercial or Non-Government Standards (DFARS Case 2017-D014)

AGENCY: Defense Acquisition Regulations System, Department of Defense

(DoD).

ACTION: Final rule.

-----------------------------------------------------------------------

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 2017 by encouraging

offerors to propose commercial or non-Government standards and

industry-wide practices that meet the intent of military or Government-

unique specifications and standards.

DATES: Effective February 15, 2019.

FOR FURTHER INFORMATION CONTACT: Ms. Kimberly Bass, telephone 571-372-

6174.

SUPPLEMENTARY INFORMATION:

I. Background

DoD published a proposed rule in the Federal Register at 83 FR

30644 on June 29, 2018, to implement section 875(c) of the National

Defense Authorization Act (NDAA) for Fiscal Year (FY) 2017 (Pub. L.

114-328), which requires DoD to revise the DFARS to encourage

contractors to propose commercial or non-Government standards and

industry-wide practices that meet the intent of military or Government-

unique specifications and standards. Four respondents submitted

comments on 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 any changes made to the

rule are provided as follows:

A. Summary of Significant Changes

There were no changes from the proposed rule made in the final rule

as a result of the public comments.

B. Analysis of Public Comments

1. Support for the Rule

Comment: Two respondents provided support for the proposed rule.

Response: DoD acknowledges the support for the rule.

2. Section 875 Implementation

Comment: Several respondents shared concerns with DoD's

implementation of section 875 of the NDAA for FY 2017, regarding how

standards would be added to the Acquisition Streamlining and

Standardization Information System (ASSIST) database in order to

implement the statutory requirements. The respondents also recommended

revisions to the rule to allow contractors to propose equally effective

standards and supporting data for reliance upon standards that meet the

intent of the Government's requirements and to require the Government

to determine that a commercial or non-Government requirement does not

meet a military specification or standard.

Response: Maintenance of the ASSIST database is beyond the scope of

this rule. Questions regarding standards and the ASSIST database should

be directed to the Defense Standardization Program Office. Contact

information is available at https://www.dsp.dla.mil/Contact-Us1/.

Removing the prohibition at DFARS 211.107(b) on DoD using Federal

Acquisition Regulation (FAR) 52.211-7, Alternatives to Government-

Unique Standards, allows offerors to propose standards as alternatives,

as intended. The language in the rule meets the intent of the statute

at section 875(c) of the NDAA for FY 2017.

3. ASSIST Database Instructions

Comment: One respondent supported the use of the ASSIST database as

a repository of voluntary consensus standards adopted by DoD and

recommended additional instructions and clarification on how non-

Government standards are selected for inclusion in the database.

Response: Maintenance or modification of the ASSIST database is

beyond the scope of this rule. Questions regarding standards and the

ASSIST database should be directed to the Defense Standardization

Program Office. Contact information is available at https://www.dsp.dla.mil/Contact-Us1/.

4. Applicability

Comment: Three respondents were concerned by the limitation on

applicability of section 875 of the NDAA for FY 2017 requirements to

contracts over the simplified acquisition threshold (SAT) and

noncommercial contracts.

Response: Section III of this final rule preamble clarifies that

the rule does not exclude solicitations for contracts valued at or

below the SAT. No change to the text of the rule is required, since the

proposed rule did not include a limitation to contracts valued above

the SAT in the clause prescription. This rule, however, is not

applicable to commercial contracts, including COTS, since Government-

or military-unique specifications and standards should not be used in

commercial contracts.

5. Use of FAR Provision 52.211-7

Comment: One respondent was concerned that the existing

solicitation provision at FAR 52.211-7, Alternatives to Government-

Unique Standards, uses a different standard in determining whether the

standard proposed by the contractor is acceptable. The respondent was

also concerned the rule required burden of proof from the contractor to

demonstrate the contractor's proposed standard meets the Government's

requirement.

[[Page 4367]]

Response: Although the statute uses the phrase ``encourage

contractors to propose commercial or non-Government standards and

industry-wide practices that meet the intent of the military

specifications and standards,'' DoD retains the responsibility to

ensure the requirements are met. Although offerors are encouraged to

propose alternative standards, they must be subject to DoD's review and

approval. DoD standards ensure that essential mission requirements are

met. It is the offeror's responsibility to demonstrate that its

proposed alternative standards meet the essential DoD mission

requirements.

6. Revise DFARS Clause 252.211-7005

Comment: One respondent recommended revising DFARS clause 252.211-

7005, Substitutions for Military or Federal Specifications and

Standards, to meet the intent of the requirements in section 875.

Response: The rule revises the prescription to require the use of

the provision at FAR 52.211-7 when Government-unique specifications and

standards are included in DoD solicitations; use of this provision was

previously optional. This approach meets the intent of section 875

requirements.

7. Revise DFARS 211.201

Comment: One respondent recommended revising DFARS 211.201 to add

the new requirements established in section 875, which require military

specifications to be used in acquisitions only to define an exact

design solution when there is no acceptable commercial or non-

Government standard, or when the use of a commercial or non-Government

standard is not cost effective.

Response: DoD has determined it is unnecessary to revise DFARS

211.201, since the rule removes the prohibition at DFARS 211.107(b).

This rule requires DoD to use FAR provision 52.211-7 to permit offerors

to propose commercial or non-Government standards and industry-wide

practices.

C. Other Changes

A reference to section 875(c) of the NDAA for FY 2017 is added at

211.107(b) and a minor editorial change is made to DFARS 211.201 to

revise the name of the database from ``DLA ASSIST database'' to

``ASSIST database''.

III. Applicability to Contracts at or Below the Simplified Acquisition

Threshold and Contracts for Commercial Items, Including Commercially

Available Off-the-Shelf Items

The purpose of this rule is to implement section 875(c) of the NDAA

for FY 2017, which requires DoD to revise the DFARS to encourage

offerors to propose commercial or non-Government standards and

industry-wide practices that meet the intent of military or Government-

unique specifications and standards. The rule does not add any new

provisions or clauses; however, to comply with section 875(c), the rule

requires DoD contracting officers to use the provision at FAR 52.211-7

in DoD solicitations that include military or Government-unique

specifications and standards.

A. Applicability to Contracts at or Below the Simplified Acquisition

Threshold

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 Principal Director, Defense Pricing and Contracting (DPC), 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.

In accordance with 41 U.S.C. 1905, the Principal Director, DPC, has

determined that it would not be in the best interest of the Federal

Government to exempt acquisitions not greater than the SAT from the

requirements of section 875(c) of the NDAA for FY 2017. This rule

prescribes the use of the provision at FAR 52.211-7 in DoD

solicitations that include military or Government-unique specifications

and standards, which include those for acquisitions valued at or below

the SAT. It is possible that contracts valued at or below this

threshold (currently $250,000), could contain military or Government-

unique specifications or standards; therefore, it is necessary and

appropriate to include this provision in such contracts in order to

give potential offerors an opportunity to propose alternatives to such

specifications and standards. Providing such opportunities to offerors

may increase competition and ultimately drive down costs associated

with compliance with military or Government-unique specifications and

standards.

B. Applicability to Contracts and Subcontracts for the Procurement of

Commercial Items, Including Commercially Available Off-the-Shelf Items

10 U.S.C. 2375 governs the applicability of Defense-unique statutes

to contracts and subcontracts for procurement of commercial items,

including commercially available off-the-shelf (COTS) items. It is

intended to limit the applicability of these laws to such contracts or

subcontracts. 10 U.S.C. 2375(b)(2) provides that if a provision of law

contains criminal or civil penalties, or if the Under Secretary of

Defense for Acquisition and Sustainment makes a written determination

that it is not in the best interest of the Department of Defense to

exempt contracts for the procurement of commercial items, then the

provision of law will apply to contracts for the procurement of

commercial items. 10 U.S.C. 2375(c)(2) and (d)(2) make similar

provisions for subcontracts under contracts for the procurement of

commercial items, and for the procurement of commercially available

off-the-shelf (COTS) items.

Determinations in accordance with 10 U.S.C. 2375 have not been

made. This rule does not prescribe the provision at FAR 52.211-7 for

use in solicitations issued using FAR part 12 procedures for the

acquisition of commercial items, including COTS, since such contracts

should not include military or Government-unique specifications or

standards.

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.

[[Page 4368]]

V. Executive Orders 13771

This final rule is an E.O. 13771 regulatory action, because this

rule is not significant under E.O. 12866.

VI. 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 implements section 875(c) of the National Defense

Authorization Act (NDAA) for Fiscal Year (FY) 2017 (Pub. L. 114-328).

The objective of this rule is to require the use of FAR 52.211-7,

Alternatives to Government-Unique Standards, in DoD solicitations that

include military or Government-unique specifications and standards.

This will encourage and permit offerors to propose alternatives to

Government-unique standards by using an existing FAR provision. The

legal basis for this rule is section 875(c) of the NDAA for FY 2017.

There were no significant issues raised by the public in response

to the initial regulatory flexibility analysis.

Based on Federal Procurement Data System data for Product Service

Code 5342 (hardware, weapon systems), this rule could potentially apply

to approximately 710 unique entities, of which 565 are small

businesses. This is based on the number of DoD contract awards in FY

2017. However, of that total, and given the DoD policy of discouraging

the use of military specifications and standards in solicitations, this

rule would likely impact no more than 40 offerors or potential

contractors (the approximate number of DoD contractors involved in

major weapons systems). Accordingly, DoD estimates that this rule will

have limited impact. Given the fact that some small number of DoD

solicitations may include a military or Government-unique specification

or standard generally limited to those involving a major weapons

system, this rule provides a means for offerors to propose alternatives

on a given solicitation.

This rule contains reporting and recordkeeping requirements for

those entities that, in response to a DoD solicitation containing

military or Government-unique standards, wish to propose voluntary

consensus standards that meet the Government's requirements as

alternatives to the Government-unique standards. The professional skill

sets required are those of mid-level administrative personnel.

There are no known significant alternative approaches to the rule

that would meet the requirements of the statute. DoD considers the

approach described in the rule to be the most practical and beneficial

for both Government and industry.

VII. Paperwork Reduction Act

The Paperwork Reduction Act (44 U.S.C. chapter 35) applies. The

rule contains information collection requirements. OMB has cleared this

information collection requirement under OMB control number 9000-0153,

titled, OMB Circular A-119; FAR Sections Affected: 52.211-7 and 53.105.

List of Subjects in 48 CFR Part 211

Government procurement.

Jennifer Lee Hawes,

Regulatory Control Officer, Defense Acquisition Regulations System.

Therefore, 48 CFR part 211 is amended as follows:

PART 211--DESCRIBING AGENCY NEEDS

0

1. The authority citation for part 211 continues to read as follows:

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

0

2. Revise section 211.107 to read as follows:

211.107 Solicitation provision.

(b) To comply with section 875(c) of the National Defense

Authorization Act for Fiscal Year 2017 (Pub. L. 114-328), use the

provision at FAR 52.211-7, Alternatives to Government-Unique Standards,

in DoD solicitations that include military or Government-unique

specifications and standards.

0

3. Revise section 211.201 to read as follows:

211.201 Identification and availability of specifications.

Follow the procedures at PGI 211.201 for obtaining specifications,

standards, and data item descriptions from the ASSIST database,

including DoD adoption notices on voluntary consensus standards.

[FR Doc. 2019-02524 Filed 2-14-19; 8:45 am]

BILLING CODE 5000-06-P

DEPARTMENT OF DEFENSE

Defense Acquisition Regulations System

48 CFR Parts 212, 215, 239, and 252

[Docket DARS-2019-0002]

RIN 0750-AK26

Defense Federal Acquisition Regulation Supplement: Extension of

Supply Chain Risk Management Authority (DFARS Case 2018-D072)

AGENCY: Defense Acquisition Regulations System, Department of Defense

(DoD).

ACTION: Final rule.

-----------------------------------------------------------------------

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 2019.

DATES: Effective February 15, 2019.

FOR FURTHER INFORMATION CONTACT: Ms. Kimberly R. Ziegler, telephone

571-372-6095.

SUPPLEMENTARY INFORMATION:

I. Background

DoD is amending the DFARS to implement section 881 of the National

Defense Authorization Act (NDAA) for Fiscal Year (FY) 2019 (Pub. L.

115-232). Section 881 codifies the authority for information relating

to supply chain risk at 10 U.S.C. 2339a and repeals the sunset date at

sections 806(g) of the NDAA for FY 2011 (Pub. L. 111-383), as modified

by section 806(a) of the NDAA for FY 2013 (Pub. L. 112-239), making the

authority permanent.

DoD published a final rule (DFARS Case 2012-D050) in the Federal

Register at 80 FR 67243 on October 30, 2015, to implement section 806

of the NDAA for FY 2011, as amended by section 806 of the NDAA for FY

2013 (Pub. L. 112-239). The objective of the rule was to minimize the

potential risk for supplies and services purchased by DoD to

maliciously degrade the integrity and operation of sensitive

information technology systems. The rule implemented the use of supply

chain risk as an evaluation factor in information technology

procurements for services or supplies as a covered system, as a part of

a covered system, or in support of a covered system. DFARS provision

252.239-7017, Notice of Supply Chain Risk, and DFARS clause 252.239-

7018, Supply Chain Risk, were added to inform contractors of the

requirement to mitigate supply chain risk in the provision of supplies

and

[[Page 4369]]

services to the Government and other statutory authorities afforded to

the Government under section 806.

Section 881 of the NDAA for FY 2019 codified this authority at 10

U.S.C. 2339a and removed the September 30, 2018, sunset date. This

final rule removes the sunset date at DFARS 239.7300(b) and changes

numerous statutory citations from section 806 of Public Law 111-383 to

10 U.S.C. 2339a. This rule makes no change to the authority for

information relating to supply chain risk currently implemented in the

DFARS, other than removing the sunset date, updating the statutory

citations, and the following minor editorial changes:

Corrects the reference to 44 U.S.C. 3552(b) in the

definition of ``covered system.''

Replaces the description of a national security system

with the defined term ``covered system'' in the definition of ``supply

chain risk.''

Changes ``Under Secretary of Defense for Acquisition,

Technology, and Logistics'' to ``Under Secretary of Defense for

Acquisition and Sustainment.''

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

by Statute

The statute that applies to the publication of the Federal

Acquisition Regulation (FAR) is 41 U.S.C. 1707 entitled ``Publication

of Proposed Regulations.'' 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 this rule merely removes the sunset date of the existing

regulation, making it permanent, and replaces the obsolete statutory

citations with the new 10 U.S.C. 2339a reference.

III. Applicability to Contracts at or Below the Simplified Acquisition

Threshold and for Commercial Items, Including Commercially Available

Off-the-Shelf Items

This rule only removes the sunset date from DFARS 239.7300(b) and

updates the statutory citations to 10 U.S.C. 2339a, wherever necessary.

The rule continues to prescribe the associated clauses to contracts at

or below the simplified acquisition threshold and for commercial items,

including commercially available off-the-shelf items.

IV. Executive Orders 12866 and 13563

Executive Orders (E.O.) 12866 and E.O. 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. Executive Order 13771

This final rule is not an E.O. 13771 regulatory action, because

this rule is not a significant under E.O. 12866.

VI. Regulatory Flexibility Act

Because a notice of proposed rulemaking and an opportunity for

public comment are not required to be given for this rule under 41

U.S.C. 1707(a)(1) (see section II. of this preamble), the analytical

requirement of the Regulatory Flexibility Act (5 U.S.C. 601 et seq.)

are not applicable. Accordingly, no regulatory flexibility analysis is

required, and none has been prepared.

VII. 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, 215, 239, and 252

Government procurement.

Jennifer Lee Hawes,

Regulatory Control Officer, Defense Acquisition Regulations System.

Therefore, 48 CFR 212, 215, 239, and 252 are amended as follows:

0

1. The authority citation for parts 212, 215, 239, and 252 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]

0

2. Amend section 212.301, in paragraphs 212.301(f)(xv)(C) and (D), by

removing ``section 806 of Public Law 111-383'' and adding ``10 U.S.C.

2339a'' in its place in both places.

PART 215--CONTRACTING BY NEGOTIATION

215.503 [Amended]

0

3. Amend section 215.503 by removing ``section 806 of the National

Defense Authorization Act for Fiscal Year 2011, as amended by section

806 of the National Defense Authorization Act for Fiscal Year 2013''

and adding ``10 U.S.C. 2339a'' in its place.

215.506 [Amended]

0

4. Amend 215.506, in paragraph (e) by removing ``section 806 of the

National Defense Authorization Act for Fiscal Year 2011, as amended by

section 806 of the National Defense Authorization Act for Fiscal Year

2013'' and adding ``10 U.S.C. 2339a'' in its place.

PART 239--ACQUISITION OF INFORMATION TECHNOLOGY

0

5. Revise section 239.7300 to read as follows:

239.7300 Scope of subpart.

This subpart implements 10 U.S.C. 2339a and elements of DoD

Instruction 5200.44, Protection of Mission Critical Functions to

Achieve Trusted Systems and Networks (TSN), at https://www.esd.whs.mil/Portals/54/Documents/DD/issuances/dodi/520044p.pdf?ver=2018-11-08-075800-903.

239.7301 [Amended]

0

6. Amend section 239.7301 by--

0

a. In the definition of ``Covered item of supply'' removing ``(see

section 806(e)(6) of Pub. L. 111-383)'' and adding ``(see 10 U.S.C.

2339a)'' in its place;

0

b. In the introductory text of the definition of ``Covered system''

removing ``44 U.S.C. 3542(b)(see section 806(e)(5) of Pub. L. 111-

383)'' and adding ``44 U.S.C. 3552(b) (see 10 U.S.C. 2339a)'' in its

place; and

0

c. In the definition of ``Supply chain risk'' removing ``national

security system (as that term is defined at 44 U.S.C. 3542(b))'' and

``such system'' and adding ``covered system'' and ``such system (see 10

U.S.C. 2339a)'' in its place, respectively.

[[Page 4370]]

239.7302 [Amended]

0

7. Amend section 239.7302, introductory text, by removing ``national

security systems, as that term is defined at 44 U.S.C. 3542(b),'' and

adding ``covered systems (see 10 U.S.C. 2339a)'' in its place.

239.7303 [Amended]

0

8. Amend section 239.7303 by--

0

a. In paragraph (b)(1), removing ``Acquisition, Technology, and

Logistics'' and adding ``Acquisition and Sustainment'' in its place;

and

0

b. In paragraph (b)(2), removing ``senior'' and adding ``service'' in

its place.

239.7304 [Amended]

0

9. Amend section 239.7304, in paragraphs (a), (b) introductory text,

and (c)(2)(ii) by removing ``Acquisition, Technology, and Logistics''

and adding ``Acquisition and Sustainment'' in their place.

PART 252--SOLICITATION PROVISIONS AND CONTRACT CLAUSES

252.239-7017 [Amended]

0

10. Amend section 252.239-7017 by--

0

a. In the clause heading, removing the date ``(NOV 2013)'' and adding

``(FEB 2019)'' in its place;

0

b. In paragraph (a), removing ``national security system (as that term

is defined at 44 U.S.C. 3542(b))'' and ``such system'' and adding

``covered system'' and ``such system (see 10 U.S.C. 2339a)'' in its

place, respectively;

0

c. In paragraph (b) removing ``section 806 of Public Law 383'' and

adding ``10 U.S.C. 2339a'' in its place; and

0

d. In paragraph (c) removing ``section 806 of Public Law 383'' and

adding ``10 U.S.C. 2339a'' in its place.

252.239-7018 [Amended]

0

11. Amend section 252.239-7018 by--

0

a. In the clause heading, removing the date ``(OCT 2015)'' and adding

``(FEB 2019)'' in its place;

0

b. In paragraph (a), in the definition of ``Supply chain risk''

removing ``national security system (as that term is defined at 44

U.S.C. 3542(b))'' and ``such system'' and adding ``covered system'' and

``such system (see 10 U.S.C. 2339a)'' in its place, respectively; and

0

c. In paragraphs (c) and (d), removing ``section 806 of Public Law 111-

383'' and adding ``10 U.S.C. 2339a'' in its place in both places.

[FR Doc. 2019-02529 Filed 2-14-19; 8:45 am]

BILLING CODE 5001-06-P

DEPARTMENT OF DEFENSE

Defense Acquisition Regulations System

48 CFR Parts 212, 247, and 252

[Docket DARS-2018-0040]

RIN 0750-AJ94

Defense Federal Acquisition Regulation Supplement: Modification

of DFARS Clause ``Transportation of Supplies by Sea'' (DFARS Case 2018-

D028)

AGENCY: Defense Acquisition Regulations System, Department of Defense

(DoD).

ACTION: Final rule.

-----------------------------------------------------------------------

SUMMARY: DoD is issuing a final rule amending the Defense Federal

Acquisition Regulation Supplement (DFARS) to modify the text of an

existing DFARS clause to include the text of another DFARS clause, in

order to streamline the instructions to contractors subject to both of

these clauses.

DATES: Effective February 15, 2019.

FOR FURTHER INFORMATION CONTACT: Ms. Carrie Moore, telephone 571-372-

6093.

SUPPLEMENTARY INFORMATION:

I. Background

DoD published a proposed rule in the Federal Register at 83 FR

42846 on August 24, 2018, to modify DFARS clause 252.247-7023,

Transportation of Supplies by Sea, to include the instructions

currently specified in DFARS clause 252.247-7024, Notification of

Supplies by Sea, and then remove DFARS clause 252.247-7024 from the

DFARS. No public comments were received in response to the proposed

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 does not create any new provisions or clauses or impose

any new requirements. The rule merely consolidates existing

instructions regarding notifications of transportation of supplies by

sea into a single DFARS clause, 252.247-7023, which will continue to

apply to contracts for commercial and commercially available Off-the-

shelf items, as well as contracts at or below the simplified

acquisition threshold.

III. Executive Orders 12866 and 13563

Executive Order (E.O.) 12866, Regulatory Planning and Review; and

E.O. 13563, Improving Regulation and Regulatory Review, 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. The Office of Management and Budget, Office of Information

and Regulatory Affairs, has determined that this is not a significant

regulatory action as defined under section 3(f) of E.O. 12866 and,

therefore, was not subject to review under section 6(b). This rule is

not a major rule as defined at 5 U.S.C. 804(2).

IV. Executive Order 13771

This final rule is not an E.O. 13771 regulatory action, because

this rule is not significant under E.O. 12866.

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:

DoD is amending DFARS clause 252.247-7023, Transportation of

Supplies by Sea, to include the instructions currently specified in

DFARS clause 252.247-7024, Notification of Supplies by Sea, and then

removing DFARS clause 252.247-7024 from the DFARS. The objective of

this rule is to streamline the instructions to contractors pertaining

to the transportation of supplies by sea. The combination of these

DFARS clauses supports a recommendation from the DoD Regulatory Reform

Task Force.

No public comments were received in response to the initial

regulatory flexibility analysis.

Based on fiscal year 2016 data from the Federal Procurement Data

System, the Government issued approximately 83,000 contract actions

that included DFARS clause 252.247-7023. Of the 83,000 contract

actions, approximately 39,000 awards were made to 15,000 unique small

businesses entities.

This rule does not include any new reporting, recordkeeping, or

other compliance requirements for small businesses.

There are no known significant alternative approaches to the rule

that would meet the proposed objectives.

[[Page 4371]]

VI. Paperwork Reduction Act

The Paperwork Reduction Act (44 U.S.C. chapter 35) does apply;

however, these changes to the DFARS do not impose additional

information collection requirements to the paperwork burden previously

approved under OMB Control Number 0704-0245, titled: Defense Federal

Acquisition Regulation Supplement (DFARS) Part 247, Transportation and

Related Clauses.

List of Subjects in 48 CFR Parts 212, 247, and 252

Government procurement.

Jennifer Lee Hawes,

Regulatory Control Officer, Defense Acquisition Regulations System.

Therefore, 48 CFR parts 212, 247, and 252 are amended as follows:

0

1. The authority citation for 48 CFR parts 212, 247, and 252 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]

0

2. Amend section 212.301 by:

0

a. Removing paragraph (f)(xix)(D);

0

b. Redesignating paragraphs (f)(xix)(E) through (H) as paragraphs

(f)(xix)(D) through (G), respectively;

0

c. In the newly redesignated paragraph (f)(xix)(D), removing

``247.574(d)'' and adding ``247.574(c)'' in its place;

0

d. In the newly redesignated paragraph (f)(xix)(E), removing

``247.574(e)'' and adding ``247.574(d)'' in its place;

0

e. In the newly redesignated paragraph (f)(xix)(F), removing

``247.574(f)'' and adding ``247.574(e)'' in its place; and

0

f. In the newly redesignated paragraph (f)(xix)(G), removing ``U.S''

and adding ``U.S.'' in its place.

PART 247--TRANSPORTATION

247.574 [Amended]

0

3. Amend section 247.574 by:

0

a. Removing paragraph (c); and

0

b. Redesignating paragraphs (d) through (f) as paragraphs (c) through

(e), respectively.

PART 252--SOLICITATION PROVISIONS AND CONTRACT CLAUSES

0

4. Amend section 252.247-7023 by:

0

a. In the clause heading, removing the date ``(APR 2014)'' and adding

``(FEB 2019)'' in its place;

0

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

0

c. Adding a new paragraph (h); and

0

d. In the newly redesignated paragraphs (i)(1) and (2), removing

``paragraph (h)'' and adding ``paragraph (i)'' in both places;

0

e. In Alternate I:

0

i. In the clause heading, removing the date of ``(APR 2014)'' and

adding ``(FEB 2019)'' in its place;

0

ii. Redesignating paragraph (h) as paragraph (i);

0

iii. In the newly redesignated paragraphs (i)(1) and (2), removing

``paragraph (h)'' and adding ``paragraph (i)'' in both places; and

0

iv. Adding a new paragraph (h).

0

f. In Alternate II--

0

i. In the clause heading, removing the date of ``(APR 2014)'' and

adding ``(FEB 2019)'' in its place;

0

ii. Redesignating paragraph (h) as paragraph (i);

0

iii. In the newly redesignated paragraphs (i)(1) and (2), removing

``paragraph (h)'' and adding ``paragraph (i)'' in both places; and

0

iv. Adding a new paragraph (h).

The additions read as follows:

252.247-7023 Transportation of Supplies by Sea.

* * * * *

(h) If the Contractor has indicated by the response to the

solicitation provision, Representation of Extent of Transportation by

Sea, that it did not anticipate transporting by sea any supplies;

however, after the award of this contract, the Contractor learns that

supplies will be transported by sea, the Contractor--

(1) Shall notify the Contracting Officer of that fact; and

(2) Hereby agrees to comply with all the terms and conditions of

this clause.

* * * * *

Alternate I. * * *

* * * * *

(h) If the Contractor has indicated by the response to the

solicitation provision, Representation of Extent of Transportation by

Sea, that it did not anticipate transporting by sea any supplies;

however, after the award of this contract, the Contractor learns that

supplies will be transported by sea, the Contractor--

(1) Shall notify the Contracting Officer of that fact; and

(2) Hereby agrees to comply with all the terms and conditions of

this clause.

* * * * *

Alternate II. * * *

* * * * *

(h) If the Contractor has indicated by the response to the

solicitation provision, Representation of Extent of Transportation by

Sea, that it did not anticipate transporting by sea any supplies, but

the contractor learns after the award of the contract that supplies

will be transported by sea, the Contractor shall notify the Contracting

Officer of that fact.

* * * * *

252.247-7024 [Removed and Reserved]

0

4. Remove and reserve section 252.247-7024.

252.247-7025 [Amended]

0

5. Amend section 252.247-7025, in the introductory text, by removing

``247.574(d)'' and adding ``247.574(c)'' in its place.

252.247-7026 [Amended]

0

6. Amend section 252.247-7026, in the introductory text, by removing

``247.574(e)'' and adding ``247.574(d)'' in its place.

252.247-7027 [Amended]

0

7. Amend section 252.247-7027, in the introductory text, by removing

``247.574(f)'' and adding ``247.574(e)'' in its place.

[FR Doc. 2019-02528 Filed 2-14-19; 8:45 am]

DEPARTMENT OF DEFENSE

Defense Acquisition Regulations System

48 CFR Part 236

[Docket DARS-2018-0039]

RIN 0750-AJ75

Defense Federal Acquisition Regulation Supplement: Exemption From

Design-Build Selection Procedures (DFARS Case 2018-D011)

AGENCY: Defense Acquisition Regulations System, Department of Defense

(DoD).

ACTION: Final rule.

-----------------------------------------------------------------------

SUMMARY: DoD is issuing a final rule to amend the Defense Federal

Acquisition Regulation Supplement (DFARS) to implement a section of the

National Defense Authorization Act for Fiscal Year 2018 that provides

an exemption from design-build selection procedures for contracts that

exceed $4 million.

DATES: Effective February 15, 2019.

FOR FURTHER INFORMATION CONTACT: Ms. Heather Kitchens, telephone 571-

372-6104.

SUPPLEMENTARY INFORMATION:

[[Page 4372]]

I. Background

DoD published a proposed rule in the Federal Register at 83 FR

42850 on August 24, 2018, to implement section 823 of the National

Defense Authorization Act (NDAA) for Fiscal Year (FY) 2018. Section 823

modifies 10 U.S.C. 2305a to provide an exemption from the phase two

design-build maximum number of offerors that may be selected to submit

competitive proposals for contracts exceeding $4 million. The exemption

provides that if the contract value exceeds $4 million and the

solicitation is issued pursuant to an indefinite-delivery indefinite-

quantity (IDIQ) contract for design-build construction, the maximum

number of offerors to be selected may exceed five.

In addition, for other than IDIQ contracts, the rule provides

authority to exceed the five offeror maximum when the contracting

officer's decision is approved by the head of the contracting activity,

delegable to a level no lower than the senior contracting official

within the contracting activity, when the solicitation is for a

contract that exceeds $4 million. When a solicitation is for a contract

that does not exceed $4 million, the rule provides that the number of

offerors is at the contracting officer's discretion.

Three 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 any changes made to the

rule are provided as follows:

A. Summary of Significant Changes

There were no changes from the proposed rule made in the final rule

as a result of the comments received. The comments did not recommend

changes to the proposed rule; rather, the respondents expressed

concerns over the underlying intent of the statute.

B. Analysis of Public Comments

1. Administrative and Cost Burden

Comment: Several respondents stated that the statutory requirement

will create a significant administrative and cost burden on the

Government and/or industry. One respondent suggested that the exemption

will require DoD officials to review an unnecessarily high number of

full proposals undermining the purpose of both IDIQ contracts and

design-build.

Response: The rule does not require contracting officers to

consider more than five offerors; instead, the rule provides

contracting officers the option to allow for more than five offerors to

submit competitive proposals in solicitations for contracts for design-

build construction that exceed $4 million.

2. Impact on Competition

Comment: Several respondents stated that the statutory requirement

will drive away highly qualified design-build firms and/or possibly

favor lower qualified firms. One respondent stated that increasing the

number of offerors will reduce participation from highly qualified

firms who incur much of the cost in these competitions. The same

respondent noted that increasing the number of offerors may favor lower

qualified offerors based on artificially low bids.

Response: DoD does not agree that the statutory requirement, and

the resulting implementing rule, will drive away highly qualified

design-build firms and/or possibly favor lower qualified firms. The

competitive selection criteria will not change based on this rule.

Conversely, the rule could be viewed as providing expanded opportunity

for qualified firms to compete.

3. Learning Curve

Comment: One respondent stated that the statutory requirement will

create a learning curve for new firms, which will result in longer

project times.

Response: DoD does not agree that expanding the competitive pool

will necessarily result in longer project times. While a learning curve

might be expected for any new firm or new requirement, this does not

drive the decision of whether or not to restrict competition.

4. Industry Best Practices/Innovation

Comment: Two respondents stated that the statutory requirement

moves away from industry best practices. One respondent stated that the

statutory requirement diminishes the opportunities for innovation that

design-build offers.

Response: While the rule may be viewed by the respondents as moving

away from industry best practices, this rule is necessary to meet the

requirements of the statute. Opening up the competitive pool may result

in opportunities for increased innovation.

5. Accountability

Comment: One respondent stated that the statutory requirement will

create a larger competitive pool which will diminish accountability.

Response: Opening up the competitive pool should not have any

effect upon or diminish accountability.

C. Other Changes

One minor editorial change is made to the rule numbering to

correctly designate the added DFARS rule text as ``236.303-1(a)(4)'' in

lieu of ``236.303-1(4)''.

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 create any new provisions or clauses or impact

any existing provisions or clauses.

IV. Executive Orders 12866 and 13563

Executive Order (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 is not a major rule under 5

U.S.C. 804.

V. Executive Order 13771

This final rule is not an E.O. 13771 regulatory action, because

this rule is not significant under E.O. 12866.

VI. Regulatory Flexibility Act

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 section 823 of the National Defense

Authorization Act (NDAA) for Fiscal Year (FY) 2018, which modifies 10

U.S.C. 2305a(d) regarding the maximum number of offerors that may be

selected to submit competitive proposals under solicitations for two-

phase design-build. Specifically, the selection procedures are modified

by providing an exemption from the maximum number of five offerors when

the contract value in a solicitation exceeds $4 million and the

solicitation is issued pursuant to an indefinite-delivery indefinite-

quantity (IDIQ) contract for design-build construction. The rule

provides the

[[Page 4373]]

authority to exceed the five offeror maximum when the contracting

officer's decision is approved by the head of the contracting activity,

delegable to a level no lower than the senior contracting official

within the contracting activity, when the solicitation is for a

contract that exceeds $4 million. The rule also provides that the

number of offerors is at the contracting officer's discretion when the

solicitation is for a contract that does not exceed $4 million.

There were no significant issues raised by the public comments in

response to the initial regulatory flexibility analysis.

Based on FY 2017 data from the Federal Procurement Data System, DoD

issued approximately 499 new awards for construction exceeding $4

million to 396 unique businesses, to include IDIQ contracts, purchase

orders, and orders under basic ordering agreements. Of the 499 new

awards for construction, approximately 305 awards (approximately 61

percent) were made to 252 unique small entities (approximately 64

percent). This estimate is based on the assumption that contracts for

design-build are coded as ``construction'' in FPDS, in which case a

smaller number of small entities are actually impacted by the

opportunity to exceed to the five offeror maximum for contracts valued

in excess of $4 million. For contracts valued at or below $4 million,

the FAR already provides an opportunity for contracting officers to

determine that a greater number of offerors is in the Government's

interest and is consistent with the purposes and objectives of the two-

phase design-build selection procedures. No significant impact is

expected to result from authorizing contracting officers to exceed the

maximum number at their own discretion.

This final rule does not include any new reporting or recordkeeping

requirements for small entities.

There are no known significant alternative approaches to the final

rule that would meet the requirements of the applicable statute.

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 236

Government procurement.

Jennifer Lee Hawes,

Regulatory Control Officer, Defense Acquisition Regulations System.

Therefore, 48 CFR part 236 is amended as follows:

PART 236--CONSTRUCTION AND ARCHITECT-ENGINEER CONTRACTS

0

1. The authority citation for part 236 continues to read as follows:

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

0

2. Add subpart 236.3, consisting of 236.303-1, to read as follows:

SUBPART 236.3--TWO-PHASE DESIGN-BUILD SELECTION PROCEDURES

236.303-1 Phase One.

(a)(4) In lieu of the limitations on the maximum number of offerors

that may be selected to submit phase-two proposals at FAR 36.303-

1(a)(4), for DoD--

(i) If the contract value exceeds $4 million, the maximum number of

offerors specified in the solicitation that are to be selected to

submit phase-two proposals shall not exceed five, unless--

(A) The solicitation is issued for an indefinite-delivery

indefinite-quantity contract for design-build construction; or

(B) The head of the contracting activity, delegable to a level no

lower than the senior contracting official within the contracting

activity, approves the contracting officer's decision with respect to

an individual solicitation, that a maximum number greater than five is

in the best interest of the Government and is consistent with the

purposes and objectives of the two-phase selection procedures. The

decision shall be documented in the contract file (10 U.S.C 2305a(d)).

(ii) If the contract value is at or below $4 million, the maximum

number of offerors specified in the solicitation that are to be

selected to submit phase-two proposals is at the discretion of the

contracting officer.

[FR Doc. 2019-02526 Filed 2-14-19; 8:45 am]

DEPARTMENT OF DEFENSE

Defense Acquisition Regulations System

48 CFR Parts 215 and 217

[Docket DARS-2019-0004]

RIN 0750-AJ72

Defense Federal Acquisition Regulation Supplement: Undefinitized

Contract Actions (DFARS Case 2018-D008)

AGENCY: Defense Acquisition Regulations System, Department of Defense

(DoD).

ACTION: Proposed rule.

-----------------------------------------------------------------------

SUMMARY: DoD is proposing to amend the Defense Federal Acquisition

Regulation Supplement (DFARS) to implement a section of the National

Defense Authorization Act for Fiscal Year 2017 and a section of the

National Defense Authorization Act for Fiscal Year 2018 to revise

requirements for definitizing undefinitized contract actions.

DATES: Comments on the proposed rule should be submitted in writing to

the address shown below on or before April 16, 2019, to be considered

in the formation of a final rule.

ADDRESSES: Submit comments identified by DFARS Case 2018-D008, using

any of the following methods:

[cir] Federal eRulemaking Portal: http://www.regulations.gov.

Search for ``DFARS Case 2018-D008.'' Select ``Comment Now'' and follow

the instructions provided to submit a comment. Please include ``DFARS

Case 2018-D008'' on any attached documents.

[[Page 4430]]

[cir] Email: osd.dfars@mail.mil. Include DFARS Case 2018-D008 in

the subject line of the message.

[cir] Fax: 571-372-6094.

[cir] Mail: Defense Acquisition Regulations System, Attn: Ms. Amy

Williams, OUSD(A&S)DPC/DARS, Room 3B941, 3060 Defense Pentagon,

Washington, DC 20301-3060.

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

confirm receipt of your comment(s), please check www.regulations.gov,

approximately two to three days after submission to verify posting

(except allow 30 days for posting of comments submitted by mail).

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

6106.

SUPPLEMENTARY INFORMATION:

I. Background

DoD is proposing to revise the DFARS to implement section 811 of

the National Defense Authorization Act (NDAA) for Fiscal Year (FY) 2017

(Pub. L. 114-328) and section 815 of the NDAA for FY 2018 (Pub. L. 115-

91). Section 811 modifies restrictions on undefinitized contractual

actions (UCA) regarding risk based profit, time for definitization, and

foreign military sales. Section 815 establishes limitations on

unilateral definitizations of UCAs over $50 million.

II. Discussion and Analysis

This rule proposes to make the following amendments to DFARS:

If a UCA is definitized after the end of the 180-day

period beginning on the date the contractor submits a qualifying

proposal, the head of the agency shall ensure profit reflects the cost

risk of the contractor as such risk existed on the date the contractor

submitted the qualifying proposal.

The definitization of a UCA may not be extended by more

than 90 days beyond the maximum 180-day definitization schedule

negotiated in the UCA without a written determination by the Secretary

of the military department concerned, the head of the defense agency

concerned, the commander of the combatant command concerned, or the

Under Secretary of Defense for Acquisition and Sustainment, that it is

in the best interests of the military department, the defense agency,

the combatant command, or the Department of Defense, respectively, to

continue the action.

Contracting officers of the Department of Defense may not

enter into a UCA for a foreign military sale unless the contract action

provides for definitization within 180 days and the contracting officer

obtains approval from the head of the contracting activity. The head of

the agency may waive this requirement if necessary to support a

contingency or humanitarian or peacekeeping operation.

Contracting officers may not unilaterally definitize a UCA

with a value greater than $50 million until--

[cir] The end of the 180-day period beginning on the date on which

the contractor submits a qualifying proposal to definitize the

contractual terms, specifications, and price; or the date on which the

amount of funds expended under the contractual action is equal to more

than 50 percent of the negotiated overall not-to-exceed price for the

contractual action;

[cir] The service acquisition executive for the military department

that awarded the contract or the Under Secretary of Defense for

Acquisition and Sustainment if the contract was awarded by a defense

agency or other component of the Department of Defense, approves the

definitization in writing;

[cir] The contracting officer provides a copy of the written

approval to the contractor; and

[cir] A period of 30 calendar days has elapsed after the written

approval is provided to the contractor.

The definition of ``qualifying proposal'' is being amended

to align with the statutory definition at 10 U.S.C. 2306, which is a

proposal that contains sufficient information to enable DoD to conduct

a ``meaningful audit'' instead of a ``complete and meaningful audit.''

III. Applicability to Contracts at or Below the Simplified Acquisition

Threshold and Contracts for Commercial Items, Including Commercially

Available Off-the-Shelf Items

This rule does not propose to create 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. Executive Orders 13771

This rule is not expected to be an E.O. 13771 regulatory action,

because this rule is not significant under E.O. 12866.

VI. Regulatory Flexibility Act

DoD does not expect this proposed 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, an initial regulatory flexibility analysis has been performed

and is summarized as follows:

DoD is proposing to amend the Defense Federal Acquisition

Regulation Supplement (DFARS) to modify requirements on undefinitized

contractual actions (UCAs) regarding calculations of risk-based profit

objectives, timing for definitizations, foreign military sales, and

limitations on unilateral definitizations of UCAs over $50 million, in

accordance with recently enacted statutory requirements.

The objective is to implement section 811 of the National Defense

Authorization Act (NDAA) for Fiscal Year (FY) 2017 (Pub. L. 114-328)

and section 815 of the NDAA for FY 2018 (Pub. L. 115-91).

With regard to potential profit impacts, DoD estimates that this

rule will impact approximately 470 contracts per year, primarily

awarded to other than small entities, where definitization is extended

beyond 180 days after receipt of a qualifying proposal.

The proposed rule does not include additional reporting or record

keeping requirements.

The rule does not duplicate, overlap, or conflict with any other

Federal rules. There are no known significant alternative approaches to

the rule that would meet the requirements.

DoD invites comments from small business concerns and other

interested parties on the expected impact of this rule on small

entities.

DoD will also consider comments from small entities concerning the

existing regulations in subparts affected by this rule in accordance

with 5 U.S.C. 610. Interested parties must submit such comments

separately and should cite 5 U.S.C. 610 (DFARS Case 2018-D008), in

correspondence.

[[Page 4431]]

VII. 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 215 and 217

Government procurement.

Jennifer Lee Hawes,

Regulatory Control Officer, Defense Acquisition Regulations System.

Therefore, 48 CFR parts 215 and 217 are proposed to be amended as

follows:

0

1. The authority citation for 48 CFR parts 215 and 217 continues to

read as follows:

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

PART 215--CONTRACTING BY NEGOTIATION

0

2. In section 215.404-71-3, revise paragraph (d)(2)(i) to read as

follows:

215.404-71-3 Contract type risk and working capital adjustment.

* * * * *

(d) * * *

(2) * * *

(i) The contracting officer shall assess the extent to which costs

have been incurred prior to definitization of the contract action (also

see 217.7404-6(a) and 243.204-70-6). When costs have been incurred

prior to definitization, generally regard the contract type risk to be

in the low end of the designated range. If a substantial portion of the

costs have been incurred prior to definitization, the contracting

officer may assign a value as low as 0 percent, regardless of contract

type. However, if a contractor submits a qualifying proposal to

definitize an undefinitized contract action and the contracting officer

for such action definitizes the contract after the end of the 180-day

period beginning on the date on which the contractor submitted the

qualifying proposal (as defined in 217.7401(c)), the profit allowed on

the contract shall accurately reflect the cost risk of the contractor

as such risk existed on the date the contractor submitted the

qualifying proposal.

* * * * *

PART 217--SPECIAL CONTRACTING METHODS

217.7401 [Amended]

0

3. In section 217.7401, amend paragraph (c) introductory text by

removing ``complete and''.

217.7402 [Amended]

0

4. Amend section 217.7402 by--

0

a. Removing paragraph (a)(1);

0

b. Redesignating paragraphs (a)(2) through (4) as paragraphs (a)(1)

through (3); and

0

c. In the newly redesignated paragraphs (a)(1) and (2), remove the

semicolons and replace them with periods.

0

5. Revise section 217.7404 to read as follows:

217.7404 Limitations.

See PGI 217.7404 for additional guidance on obtaining approval to

authorize use of an undefinitized contact action, documentation

requirements, and other limitations on their use.

(a) Foreign military sales contracts. (1) A contracting officer may

not enter into a UCA for a foreign military sale unless--

(i) The contract action provides for agreement upon contractual

terms, specifications, and price by the end of the 180-day period

beginning on the date on which the contractor submits a qualifying

proposal; and

(ii) The contracting officer obtains approval from the head of the

contracting activity to enter into a UCA in accordance with 217.7404-1.

(2) The head of an agency may waive the requirements of paragraph

(a)(1) of this section, if a waiver is necessary in order to support

any of the following operations:

(i) A contingency operation.

(ii) A humanitarian or peacekeeping operation.

(b) Unilateral definitization by a contracting officer. Any UCA

with a value greater than $50 million may not be unilaterally

definitized until--

(1) The earlier of--

(i) The end of the 180-day period, beginning on the date on which

the contractor submits a qualifying proposal to definitize the

contractual terms, specifications, and price; or

(ii) The date on which the amount of funds expended under the

contractual action is equal to more than 50 percent of the negotiated

overall not-to-exceed price for the contractual action;

(2) The service acquisition executive for the military department

that awarded the contract or the Under Secretary of Defense for

Acquisition and Sustainment if the contract was awarded by a defense

agency or other component of the Department of Defense, approves the

definitization in writing;

(3) The contracting officer provides a copy of the written approval

to the contractor; and

(4) A period of 30 calendar days has elapsed after the written

approval is provided to the contractor.

0

6. Amend section 217.7404-3 by revising paragraph (a)(1) to read as

follows:

217.7404-3 Definitization schedule.

(a) * * *

(1) The date that is 180 days after the contractor submits a

qualifying proposal. This date may not be extended beyond an additional

90 days without a written determination by the Secretary of the

military department concerned, the head of the defense agency

concerned, the commander of the combatant command concerned, or the

Under Secretary of Defense for Acquisition and Sustainment that it is

in the best interests of the military department, the defense agency,

the combatant command, or the Department of Defense, respectively, to

continue the action; or

* * * * *

217.7404-5 [Amended]

0

7. Amend section 217.7404-5, in paragraph (b) introductory text, by

removing ``217.7404-2'' and adding ``217.7404(a), 217.7404-2'' in its

place.

0

8. Amend section 217.7404-6 by revising paragraph (a) to read as

follows:

217.7404-6 Allowable profit.

* * * * *

(a) Any reduced cost risk to the contractor for costs incurred

during contract performance before negotiation of the final price.

However, if a contractor submits a qualifying proposal to definitize a

UCA and the contracting officer for such action definitizes the

contract after the end of the 180-day period beginning on the date on

which the contractor submitted the qualifying proposal, the profit

allowed on the contract shall accurately reflect the cost risk of the

contractor as such risk existed on the date the contractor submitted

the qualifying proposal;

* * * * *

[FR Doc. 2019-02530 Filed 2-14-19; 8:45 am]

BILLING CODE 5001-06-P