[Federal Register Volume 63, Number 89 (Friday, May 8, 1998)]
[Proposed Rules]
[Pages 25438-25442]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 98-12268]


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DEPARTMENT OF DEFENSE

48 CFR Parts 204, 208, 213, 216, 217, 219, 223, 225, 237, 242, 246, 
247, and 253

[DFARS Case 97-D306]


Defense Federal Acquisition Regulation Supplement; Simplified 
Acquisition Procedures

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 
Defense Federal Acquisition Regulation Supplement (DFARS) guidance on 
simplified acquisition procedures for consistency with the 
reorganization of simplified acquisition procedures in the Federal 
Acquisition Regulation (FAR), and for consistency with FAR amendments 
that implemented provisions of the Federal Acquisition Streamlining Act 
of 1994.

DATES: Comments on the proposed rule should be submitted in writing to 
the address shown below on or before July 7, 1998, to be considered in 
the formulation of the final rule.

ADDRESSES: Interested parties should submit written comments to: 
Defense Acquisition Regulations Council, Attn: Ms. Susan L. Schneider, 
PDUSD (A&T) DP (DAR), IMD 3D139, 3062 Defense Pentagon, Washington, DC 
20301-3062. Telefax number (703) 602-0350 Please cite DFARS Case 97-
D306 in all correspondence related to this issue.

FOR FURTHER INFORMATION CONTACT:
Susan Schneider, (703) 602-0131.

SUPPLEMENTARY INFORMATION: 

A. Background

    This proposed rule revised DFARS Part 213 to conform to the 
revision of FAR Part 13 that was published as Item IV of Federal 
Acquisition Circular 97-03 on December 9, 1997 (62 FR 64916). The rule 
also amends other parts of the DFARS for consistency with FAR 
amendments that implemented provisions of the Federal Acquisition 
Streamlining Act of 1994 (Public Law 103-355) pertaining to simplified 
acquisition procedures (e.g., replacement of the term ``small 
purchase'' with the term ``simplified acquisition''). The FAR 
amendments were published as Item III of Federal Acquisition Circular 
90-29 (60 FR 34741, July 3, 1995) and Item II of Federal Acquisition 
Circular 90-40 (61 FR 39189, July 26, 1996).

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 consists of conforming DFARS amendments and internal 
Government procedures to implement existing FAR guidance pertaining to 
purchases at or below the simplified acquisition threshold. 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-
D306 in correspondence.

C. Paperwork Reduction Act

    The Paperwork Reduction Act does not apply because the 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 204, 208, 213, 216, 217, 219, 223, 
225, 237, 242, 246, 247, and 253

    Government procurement.
Michele Peterson,
Executive Editor, Defense Acquisition Regulations Council.

    Therefore, 48 CFR Parts 204, 208, 213, 216, 217, 219, 223, 225, 
237, 242, 246, 247, and 253 are proposed to be amended as follows:
    1. The authority citation for 48 CFR Parts 204, 208, 213, 216, 217, 
219, 223, 225, 237, 242, 246, 247, and 253 continues to read as 
follows:

    Authority: 41 U.S.C. 421 and 48 CFR Chapter 1.

PART 204--ADMINISTRATIVE MATTERS

    2. Section 204.670-2 is amended by revising paragraph (c) to read 
as follows:


204.670-2   Reportable contracting actions.

* * * * *
    (c) Summarize on the monthly DD Form 1057, in accordance with the 
instruction in 253.204-71(a)(3), contracting actions that support a

[[Page 25439]]

contingency operation as defined in 10 U.S.C. 101(a)(13), or a 
humanitarian or peacekeeping operation as defined in 10 U.S.C. 2302(7), 
and that obligate or deobligate funds exceeding $25,000 but not 
exceeding $200,000.
* * * * *


204.804-1  [Amended]

    3. Section 204.804-1 is amended in paragraph (2) by removing the 
phrase ``small purchase'' and inserting in its place the phrase 
``simplified acquisition''.

PART 208--REQUIRED SOURCES OF SUPPLIES AND SERVICES

    4. Section 208.405-2 is revised to read as follows:


208.405-2  Order placement.

    (1) When ordering from schedules, ordering offices--
    (i) May use DD Form 1155, Order for Supplies or Services, to place 
orders for--
    (A) Commercial items at or below the simplified acquisition 
threshold; and
    (B) Other than commercial items at any dollar value (see 213.307);
    (ii) Shall use SF 1449, Solicitation/Contract/Order for Commercial 
Items, to place orders for commercial items exceeding the simplified 
acquisition threshold (see FAR 12.204); and
    (iii) May use SF 1449 to place orders for other than commercial 
items at any dollar value.
    (2) Schedule orders may be placed orally if--
    (i) The Contractor agrees to furnish a delivery ticket for each 
shipment under the order (in the number of copies required by the 
orders office). The ticket must include the--
    (A) Contract number;
    (B) Order number under the contract;
    (C) Date of order;
    (D) Name and title of person placing the order;
    (E) Itemized listing of supplies or services furnished; and
    (F) Date of delivery or shipment; and
    (ii) Invoicing procedures are agreed upon. Optional methods of 
submitting invoices for payment are permitted, such as--
    (A) An individual invoice with a receipted copy of the delivery 
ticket;
    (B) A summarized monthly invoice covering all oral orders made 
during the month, with receipted copies of the delivery tickets (this 
option is preferred if there are many oral orders); or
    (C) A contracting officer statement that the Government has 
received the supplies.
    (3) For purchases where cash payment is an advantage, the use of 
imprest funds in accordance with 213.305 is authorized when--
    (i) The order does not exceed the threshold at FAR 13.305-3(a); and
    (ii) The contractor agrees to the procedure.
    (4) The Governmentwide commercial purchase card may be used to 
place schedule orders in accordance with agency procedures.
    5. Section 208.7204 is amended by revising paragraph (a) to read as 
follows:


208.7204  Procedures.

    (a) Except as otherwise provided in FAR or DFARS, planned producers 
shall be solicited for all acquisitions of their planned items, when 
the acquisition exceeds the simplified acquisition threshold.
* * * * *
    6. Section 208.7305 is amended by revising paragraph (a)(3) to read 
as follows:


208.7305  Contract clause.

    (a) * * *
    (3) For acquisitions at or below the simplified acquisition 
threshold.
* * * * *
    7. Part 213 is revised to read as follows:

PART 213--SIMPLIFIED ACQUISITION PROCEDURES

Subpart 213.2--Actions at or Below the Micro-Purchase Threshold

Sec.
213.270  Use of the Governmentwide commercial purchase card.

Subpart 213.3--Simplified Acquisition Methods

213.302  Purchase orders.
213.302-3  Obtaining contractor acceptance and modifying purchase 
orders.
213.302-5  Clauses.
213.303  Blanket purchase agreements (BPAs).
213.303-5  Purchases under BPAs.
213.305  Imprest funds and third party drafts.
213.305-1  General.
213.305-3  Conditions for use.
213.306  SF 44, Purchase Order--Invoice--Voucher.
213.307  Forms.

Subpart 213.4--Fast Payment Procedure

213.402  Conditions for use.

    Authority: 48 U.S.C. 421 and 48 CFR Chapter 1.

Subpart 213.2--Actions at or Below the Micro-Purchase Threshold


213.270  Use of the Governmentwide commercial purchase card.

    (a) Do not award a purchase order or other contract in an amount at 
or below the micro-purchase threshold for a commercial item unless a 
written determination is made by a member of the Senior Executive 
Service, a flag officer, or a general officer, that--
    (1)(i) The source or sources available for the supply or service do 
not accept the Governmentwide commercial purchase card (or other 
methods of purchase specified in paragraphs (c)(1) through (c)(3) of 
this section; and
    (ii) The contracting activity is seeking a source that accepts the 
Governmentwide commercial purchase card (or other methods of purchase 
specified in paragraphs (c)(1) through (c)(3) of this section); or
    (2) The nature of the supply or service necessitates use of a 
purchase order or other contract so that terms and conditions can be 
specified (e.g., purchase of safety critical parts that require 
Government source inspection).
    (b) To prevent mission delays, authority to make the written 
determination specified in paragraph (a) of this section may be 
delegated to the level of the senior local commander or director.
    (c) The written determination specified in paragraph (a) of this 
section is not required when--
    (1) Placing an order or call against an existing contract or 
agreement;
    (2) Using a purchase method, other than a purchase order, 
authorized by FAR part 13;
    (3) Awarding a purchase order or other contract that uses the 
Governmentwide commercial purchase card as the method of payment; or
    (4) Awarding a purchase order or other contract that will be 
performed entirely outside of any state, territory, or possession of 
the United States, the District of Columbia, and the Commonwealth of 
Puerto Rico.
    (d) The requirements of this section do not preclude the use of 
required sources of supply.

Subpart 213.3--Simplified Acquisition Methods


213.302  Purchase orders.


213.302-3  Obtaining contractor acceptance and modifying purchase 
orders.

    (1) Require written acceptance of purchase orders for classified 
acquisitions.
    (2) Normally, unilateral modifications (see FAR 43.103) will be 
used for--
    (i) No-cost amended shipping instructions if--
    (A) The amended shipping instructions modify a unilateral purchase 
order; and
    (B) The contractor agrees orally or in writing; and

[[Page 25440]]

    (ii) Any change made before work begins if--
    (A) The change is within the scope of the original order;
    (B) The contractor agrees;
    (C) The modification references the contractor's oral or written 
agreement; and
    (D) Block 13D of Standard Form 30, Amendment of Solicitation/
Modification of Contract, is annotated to reflect the authority for 
issuance of the modification.
    (3) A supplemental agreement converts a unilateral purchase order 
to a bilateral agreement. If not previously included in the purchase 
order, incorporate the clause at 252.243-7001, Pricing of Contract 
Modifications, in the Standard Form 30, and obtain the contractor's 
acceptance by signature on the Standard Form 30.


213.302-5  Clauses.

    Use the clause at 252.243-7001, Pricing of Contract Modifications, 
in all bilateral purchase orders.


213.303  Blanket purchase agreements (BPAs).


213.303-5  Purchases under BPAs.

    (b) Individual purchases for subsistence may be made at any dollar 
value; however, the contracting officer shall satisfy the competition 
requirements of FAR part 6 for any action not using simplified 
acquisition procedures.


213.305  Imprest funds and third party drafts.


213.305-1  General.

    (1) As a matter of policy, DoD does not support the use of cash 
payments from imprest funds. This policy is based, in part, on the 
mandatory electronic funds transfer requirements of the Debt Collection 
Improvement Act of 1996 (Pub. L. 104-134).
    (2) On a very limited basis, installation commanders and commanders 
of other activities with contracting authority may be granted authority 
to establish imprest funds and third party draft (accommodation check) 
accounts.
    (3) Third party draft accounts, when established in accordance with 
DoD 7000.14-R, DoD Financial Management Regulation, Volume 5, 
Disbursing Policy and Procedures--
    (i) Provide an alternative to cash and U.S. Treasury checks when 
the use of Government purchase or travel cards is not feasible;
    (ii) Eliminate the need for cash on hand for imprest fund 
transactions; and
    (iii) Give issuing activities the flexibility to issue low-volume 
and low-dollar value payment on site.


213.305-3  Conditions for use.

    (d)(i) Use of imprest funds--
    (A) Must comply with the conditions stated in--
    (1) DoD 7000.14-R, DoD Financial Management Regulation, Volume 5, 
Disbursing Policy and Procedures; and
    (2) The Treasury Financial Manual, Part 4, Chapter 3000, Section 
3020; and
    (B) Except as provided in paragraph (d)(ii) of this subsection, 
requires approval by the Director for Financial Commerce, Office of the 
Deputy Chief Financial Officer, Office of the Under Secretary of 
Defense (Comptroller).
    (ii) Imprest funds are authorized for use without further approval 
for--
    (A) Overseas transactions at or below the micro-purchase threshold 
in support or a contingency operation as defined in 10 U.S.C. 
101(a)(13) or a humanitarian or peacekeeping operation as defined in 10 
U.S.C. 2302(7); and
    (B) Classified transactions.


213.306  SF 44, Purchase Order-Invoice-Voucher.

    (a)(1) The micro-purchase limitation applies to all purchases, 
except that purchases not exceeding the simplified acquisition 
threshold may be made for--
    (A) Aviation fuel and oil;
    (B) Overseas transactions by contracting officers in support of a 
contingency operation as defined in 10 U.S.C. 101(a)(13) or a 
humanitarian or peacekeeping operation as defined in 10 U.S.C. 2302(7); 
and
    (C) Transactions in support of intelligence and other specialized 
activities addressed by part 2.7 of Executive Order 12333.


213.307  Forms.

    (a) If SF Form 1449 is not used, use DD Form 1155 in accordance 
with paragraph (b)(i) of this section.
    (b)(i) Use DD Form 1155, Order for Supplies or Services, for 
purchases made using simplified acquisition procedures.
    (A) The DD Form 1155 serves as a--
    (i) Purchase order or blanket purchase agreement;
    (ii) Delivery order or task order;
    (iii) Receiving and inspection report;
    (iv) Property voucher;
    (v) Document for acceptance by the supplier; and
    (vi) Public voucher, when used as--
    (A) A delivery order;
    (B) The basis for payment of an invoice against blanket purchase 
agreements or basic ordering agreements when a firm-fixed-price has 
been established; or
    (C) A purchase order for acquisitions using simplified acquisition 
procedures.
    (B) The DD Form 1155 is also authorized for use for--
    (i) Orders placed in accordance with FAR Subparts 8.4, 8.6, 8.7, 
and 16.5; and
    (ii) Classified acquisitions when the purchase is made within the 
United States, its possessions, and Puerto Rico. Attach the DD Form 
254, Contract Security Classification Specification, to the purchase 
order.
    (ii) Do not use Optional Form 347, Order for Supplies or Services, 
or Optional Form 348, Order for Supplies or Services Schedule-
Continuation.
    (iii) Use Standard Form 30, Amendment of Solicitation/Modification 
of Contract to--
    (A) Modify a purchase order; or
    (B) Cancel a unilateral purchase order.

Subpart 213.4--Fast Payment Procedure


213.402  Conditions for use.

    (a) Individual orders may exceed the simplified acquisition 
threshold for--
    (i) Brand-name commissary resale subsistence; and
    (ii) Medical supplies for direct shipment overseas.

PART 216--TYPES OF CONTRACTS

    8. Section 216.203-4 is amended in the introductory text of 
paragraph (a) by adding a comma after the word ``Supplies''; and by 
revising paragraphs (a)(i) and (b)(i) to read as follows:


216.203-4  Contract clauses.

    (a) * * *
    (i) The total contract price exceeds the simplified acquisition 
threshold; and
* * * * *
    (b) * * *
    (i) The total contract price exceeds the simplified acquisition 
threshold; and
* * * * *

PART 217--SPECIAL CONTRACTING METHODS

    9. Section 217.7302 is amended by revising paragraph (b) to read as 
follows:


217.7302  Procedures.

* * * * *
    (b) The requirement in paragraph (a) of this section does not apply 
to contracts--
    (1) For commercial items; or
    (2) Valued at or below the simplified acquisition threshold.
    10. Section 217.7504 is amended by revising paragraph (a)(2) to 
read as follows:


217.7504  Limitations on price increases.

* * * * *

[[Page 25441]]

    (a) * * *
    (2) Departments and agencies may specify an alternate percentage or 
percentages for contracts at or below the simplified acquisition 
threshold.
* * * * *

PART 219--SMALL BUSINESS PROGRAMS

    11. Section 219.201 is amended by revising paragraph (c)(9)(A) to 
read as follows:


Sec. 219.201  General policy.

* * * * *
    (c) * * *
    (9) * * *
    (A) Reviewing and making recommendations for all acquisitions over 
$10,000, except small business reservations;
* * * * *
    12. Section 219.7001 is amended in paragraph (b) by revising the 
introductory text and paragraph (b)(1) to read as follows:


Sec. 219.7001  Applicability.

* * * * *
    (b) Do not use the evaluation preference in acquisitions that--
    (1) Use simplified acquisition procedures;
* * * * *

PART 223--ENVIRONMENT, CONSERVATION, OCCUPATIONAL SAFETY, AND DRUG-
FREE WORKPLACE

    13. Section 223.570-4 is amended by revising paragraph (b) to read 
as follows:


Sec. 223.570-4  Contract clause.

* * * * *
    (b) Do not use the clause in solicitations and contracts--
    (1) For commercial items;
    (2) When performance or partial performance will be outside the 
United States, its territories, and possessions, unless the contracting 
officer determines such inclusion to be in the best interest of the 
Government; or
    (3) When the value of the acquisition is at or below the simplified 
acquisition threshold.

PART 225--FOREIGN ACQUISITION

    14. Section 225.105 is amended by revising paragraph (5)(ii)(B) to 
read as follows:


Sec. 225.105  Evaluating offers.

* * * * *
    (5) * * *
    (ii) * * *
    (B) ``Domestically produced or manufactured products'' under small 
business set-asides or small business reservations; and
* * * * *
    15. Section 225.770-3 is amended by revising paragraph (a) to read 
as follows:


Sec. 225.770-3  Exceptions.

* * * * *
    (a) Purchases at or below the simplified threshold;
* * * * *

PART 237--SERVICE CONTRACTING


Sec. 237.7302  [Amended]

    16. Section 237.7302 is amended in the third sentence by removing 
the reference ``13.105'' and inserting in its place the reference 
``13.003(b)(1)''.

PART 242--CONTRACT ADMINISTRATION


Sec. 242.203  [Amended]

    17. Section 242.203 is amended in paragraph (a)(i)(P) by adding, 
after the semicolon, the word ``and''; in paragraph (a)(i)(Q) by 
removing ``; and'' and inserting a period in its place; and by removing 
paragraph (a)(i)(R).

PART 246--QUALITY ASSURANCE

    18. Section 246.370 is amended by revising paragraph (b)(1) to read 
as follows:


Sec. 246.370  Material inspection and receiving report.

* * * * *
    (b) * * *
    (1) Contracts awarded using simplified acquisition procedures;
* * * * *

PART 247--TRANSPORTATION

    19. Section 247.271-3 is amended by revising paragraphs (b)(1) and 
(b)(2)(iv)(B) to read as follows:


Sec. 247.271-3  Procedures.

* * * * *
    (b) * * *
    (1) Excess requirements are those services that exceed contractor 
capabilities available under contracts. Use simplified acquisition 
procedures to satisfy excess requirements.
    (2) * * *
    (iv) * * *
    (B) Using simplified acquisition procedures.
* * * * *
    20. Section 247.573 is amended by revising paragraphs (a)(2) and 
(b)(2) to read as follows:


Sec. 247.573  Solicitation provision and contract clauses.

    (a) * * *
    (2) Those with an anticipated value at or below the simplified 
acquisition threshold.
    (b) * * *
    (2) Those with an anticipated value at or below the simplified 
acquisition threshold.
* * * * *

PART 253--FORMS


Sec. 253.204-70  [Amended]

    21. Section 253.204-70 is amended in the introductory text of 
paragraph (b)(13)(i)(E) and in the first sentence of paragraph 
(b)(13)(i)(G) by removing the reference ``13.202(c)(3)'' and inserting 
in its place the reference ``13.303-2(c)(3)''; and in paragraph 
(d)(5)(iv)(A)(2) by removing the reference ``13.105'' and inserting in 
its place the reference ``13.003(b)(1)''.
    22. Section 253.204-71 is amended by revising paragraph (a)(3) 
introductory text and paragraphs (g)(2)(ii)(C) and (i)(1) to read as 
follows:


Sec. 253.204-71  DD Form 1057, Monthly Contracting Summary of Actions, 
$25,000 or Less.

    (a) * * *
    (3) report actions of $25,000 or less in support of a contingency 
operation as defined in 10 U.S.C. 101(a)(13), or a humanitarian or 
peacekeeping operation as defined in 10 U.S.C. 2302(7), in accordance 
with the instructions in paragraphs (c) through (j) of this subsection. 
Report actions exceeding $25,000 but not exceeding $200,000 in support 
of a contingency operation as defined in 10 U.S.C. 101(a)(13), or a 
humanitarian or peacekeeping operation as defined in 10 U.S.C. 2302(7), 
on the monthly DD Form 1057 as follows:
* * * * *
    (g) * * *
    (2) * * *
    (ii) * * *
    (C) Block E2c, SB Set-Aside Using Simplified Acquisition 
Procedures. Enter actions pursuant to FAR 13.003(b)(1) when award is to 
an SDB, but a preference was not applied.
* * * * *
    (i) * * *
    (1) Enter the total number and dollar value of actions in support 
of a contingency operation as defined in 10 U.S.C. 101(a)(13) or a 
humanitarian or peacekeeping operation as defined in 10 U.S.C. 2302(7). 
The numbers entered here are a breakout of the numbers already entered 
in Sections B and C.
* * * * *
    23. Section 253.213 is amended by revising the section heading; by 
redesignating paragraph (e) as paragraph (f); and in newly designated 
paragraph

[[Page 25442]]

(f) by revising the introductory text and paragraph (f)(i) to read as 
follows:


253.213  Simplified acquisition procedures (SF's 18, 30, 44, 1165, 
1449, and OF's 336, 347, and 348).

    (f) DoD uses the DD Form 1155, Order for Supplies or Services, 
instead of OF 347; and Optional Form 336, Continuation Sheet, instead 
of OF 348.
    (i) Use the DD Form 1155 as prescribed in 213.307(b)(i) and in 
accordance with the instructions at 253.213-70.
* * * * *
[FR Doc. 98-12268 Filed 5-7-98; 8:45 am]
BILLING CODE 5000-04-M