[Federal Register Volume 62, Number 108 (Thursday, June 5, 1997)]
[Proposed Rules]
[Pages 30829-30831]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 97-14623]
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DEPARTMENT OF DEFENSE
48 CFR Parts 214 and 215
[DFARS Case 97-D011]
Defense Federal Acquisition Regulation Supplement; Distribution
of Contract Financing Payments
AGENCY: Department of Defense (DoD).
ACTION: Proposed rule with request for comments.
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SUMMARY: The Director of Defense Procurement is proposing to amend the
Defense Federal Acquisition Regulation Supplement (DFARS) to specify
that, when a contract contains multiple accounting classification
citations and a provision for contract financing payments, the contract
also shall include instructions adequate to permit the paying office to
distribute the contract financing payments in proportions that
reasonably reflect the performance of work under the contract.
DATES: Comments on the proposed rule should be submitted in writing to
the address shown below on or before August 4, 1997 to be considered in
the formulation of the final rule.
ADDRESSES: Interested parties should submit written comments to:
Defense Acquisition Regulations Council, Attn: Ms. Melissa Rider, PDUSD
(A&T) DP (DAR), IMD 3D139, 3062 Defense Pentagon, Washington, DC 20301-
3062. Telefax number (703) 602-0350. Please cite DFARS Case 97-D011 in
all correspondence related to this issue.
FOR FURTHER INFORMATION CONTACT:
[[Page 30830]]
Ms. Melissa Rider, (703) 602-0131.
SUPPLEMENTARY INFORMATION:
A. Background
This rule proposes amendments to DFARS Subpart 214.2, Solicitations
of Bids, and Subpart 215.4, Solicitation and Receipt of Proposals and
Quotations, to indicate that, when a contract contains multiple
accounting classification citations and includes a provision for
contract financing payments, the contracting officer shall provide
instructions adequate to permit the payment office to distribute the
contract financing payments in proportions that reasonably reflect the
performance of work on the contract. The contracting officer is
required to use one of four alternative approaches for developing the
payment instructions.
B. Regulatory Flexibility Act
The proposed rule is not expected to have a significant economic
impact on a substantial number of small entities within the meaning of
the Regulatory Flexibility Act, 5 U.S.C. 601, et seq., because the rule
primarily pertains to internal Government accounting procedures. An
initial regulatory flexibility analysis has therefore not been
performed. Comments are invited from small businesses and other
interested parties. Comments from small entities concerning the
affected DFARS subparts also will be considered in accordance with 5
U.S.C. 610. Such comments should be submitted separately and should
cite DFARS Case 97-D011 in correspondence.
C. Paperwork Reduction Act
The Paperwork Reduction Act does not apply, because this proposed
rule does not impose any information collection requirements that
require Office of Management and Budget approval under 44 U.S.C. 3501,
et seq.
List of Subjects in 48 CFR Parts 214 and 215
Government procurement.
Michele P. Peterson,
Executive Editor, Defense Acquisition Regulations Council.
Therefore, it is proposed that 48 CFR parts 214 and 215 be amended
as follows:
1. The authority citation for 48 CFR parts 214 and 215 continues to
read as follows:
Authority: 41 U.S.C. 421 and 48 CFR Chapter 1.
PART 214--SEALED BIDDING
2. Section 214.201-2 is added to read as follows:
214.201-2 Part I--The Schedule.
(g) Section G, Contract administration data. When a contract
contains multiple accounting classification citations and includes a
provision for contract financing payments (see FAR 32.902), the
contracting officer shall provide instructions based on one of the
following alternatives, adequate to permit the paying office to
distribute the contract financing payment in proportions that
reasonably reflect the performance of the work on the contract. Payment
instructions shall not be selected solely on the basis of
administrative convenience. The payment instructions may be updated as
necessary.
(i) Contract financing payments based on information supplied in
accordance with contract requirements. Payments will be made in a
manner consistent with information provided by the contractor as a
result of a contract requirement. For example, payment could be based
on:
(A) A payment distribution profile developed by the contracting
officer from a contract funds status report, or other form of cost
reporting, that identifies actual funds usage by contract line item (or
subline item) (CLIN/SLIN); or
(B) Information contractually required to be included on the
contractor's payment request, identifying the amount of payment to be
made for each CLIN/SLIN against which payment is requested.
(ii) Contract financing payments based on a unique payment
distribution profile. Payments will be based on a payment distribution
profile established by the contracting officer at contract award or as
revised during contract performance. The profile must indicate, for
each anticipated payment, a percentage apportionment by CLIN/SLIN,
based on anticipated contract performance. Payment distribution
profiles may be derived from information supplied by the contractor,
contract administration office, program office, or elsewhere. Payment
profiles may reflect a combination of the other alternatives described
herein; however, each CLIN/SLIN may use only one method (see 204.7103-1
and 204.7104-1).
(iii) Contract financing payments distributed on a proportionate
percentage basis. Payments will be distributed on a proportionate
percentage basis against all CLINs/SLINs when a best estimate of
contractor work performance supports an assumption that work will be
performed supports an assumption that work will be performed for all
CLINs/SLINs in a relatively proportionate manner.
(iv) Contracting financing payments using oldest funds first. This
payment method should be used only when other payment instruction
options are not practicable. When used, payments will be made from the
appropriate accounting classification citations in a sequence that
enables exhaustion of the oldest fiscal year financing appropriation,
before payments are made from more recent fiscal year appropriations.
This form of payment instruction most typically applies to requirements
that are funded by research, development, test and evaluation
appropriations for successive fiscal years.
3. Section 214.201-9 is added to read as follows:
214.201-9 Simplified contract format.
(b) Contract schedule.
(8) See 214.201-2(g) for contracts that contain multiple accounting
classification citations and include a provision for contract financing
payments.
PART 215--CONTRACTING BY NEGOTIATION
4. Section 215.406-2 is revised to read as follows:
215.406-2 Part I--Schedule.
(g) Section G, Contract administration data.
(i) When a contract contains both fixed-price and cost-
reimbursement line items or subline items, the contracting officer
shall provide, in Section B, Supplies or Services and Prices/Costs, an
identification of contract type specified for each contract line item
or subline item to facilitate appropriate payment.
(ii) When a contract contains multiple accounting classification
citations and includes a provision for contract financing payments (see
FAR 32.902), the contracting officer shall provide instructions based
on one of the following alternatives, adequate to permit the paying
office to distribute the contract financing payment in proportions that
reasonably reflect the performance of the work on the contract. Payment
instructions shall not be selected solely on the basis of
administrative convenience. The payment instructions may be updated as
necessary.
(A) Contract financing payments based on information supplied in
accordance with contract requirements. Payments will be made in a
manner consistent with information provided by the contractor as a
result of a contract
[[Page 30831]]
requirement. For example, payment could be based on:
(1) A payment distribution profile developed by the contracting
officer from a contract funds status report, or other form of cost
reporting, that identifies actual funds usage by contract line item (or
subline item) (CLIN/SLIN); or
(2) Information contractually required to be included on the
contractor's payment request, identifying the amount of payment to be
made for each CLIN/SLIN against which payment is requested.
(B) Contract financing payments based on a unique payment
distribution profile. Payments will be based on a payment distribution
profile established by the contracting officer at contract award or as
revised during contract performance. The profile must indicate, for
each anticipated payment, a percentage apportionment by CLIN/SLIN,
based on anticipated contract performance. Payment distribution
profiles may be derived from information supplied by the contractor,
contract administration office, program office, or elsewhere. Payment
profiles may reflect a combination of the other alternative described
herein; however, each CLIN/SLIN may use only one method (see 204.7103-1
and 204.7104-1).
(c) Contract financing payments distributed on a proportionate
percentage basis. Payments will be distributed on a proportionate
percentage basis against all CLIN/SLINs when a best estimate of
contractor work performance supports an assumption that work will be
performed for all CLIN/SLINs in a relatively proportionate manner.
(D) Contract financing payments using oldest funds first. This
payment method should be used only when other payment instruction
options are not practicable. When used, payments will be made from the
appropriate accounting classification citations in a sequence that
enables exhaustion of the oldest fiscal year financing appropriation,
before payments are made from more recent fiscal year appropriations.
This form of payment instruction most typically applies to requirements
that are funded by research, development, test and evaluation
appropriations for successive fiscal years.
[FR Doc. 97-14623 Filed 6-4-97; 8:45 am]
BILLING CODE 5000-04-M