[Federal Register Volume 64, Number 10 (Friday, January 15, 1999)]
[Rules and Regulations]
[Pages 2595-2599]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 99-844]


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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: Final rule.

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SUMMARY: The Director of Defense Procurement has issued a final rule 
amending the Defense Federal Acquisition Regulation Supplement (DFARS) 
to update guidance on simplified acquisition procedures for consistency 
with the reorganization of simplified acquisition procedures in the 
Federal Acquisition Regulation (FAR).

EFFECTIVE DATE: January 15, 1999.

FOR FURTHER INFORMATION CONTACT: Ms. Susan L. Schneider, Defense 
Acquisition Regulations Council, PDUSD (A&T) DP (DAR), IMD 3D139, 3062 
Defense Pentagon, Washington, DC 20301-3062. Telephone (703) 602-0131; 
telefax (703) 602-0350. Please cite DFARS Case 97-D306.

SUPPLEMENTARY INFORMATION:

A. Background

    This final rule revises 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).
    A proposed DFARS rule was published on May 8, 1998 (63 FR 25438). 
Seven respondents submitted comments on the proposed rule. All comments 
were considered in developing the final rule. The guidance at 213.270 
of the proposed rule, pertaining to use of the Governmentwide 
commercial purchase card, has been excluded from the final rule, as the 
underlying policy memoranda have been canceled and superseded. The 
superseding policy memorandum, issued by the Principal Deputy Under 
Secretary of Defense for Acquisition and Technology on October 2, 1998, 
entitled ``Streamlined Payment Practices for Awards/Orders Valued at or 
below the Micro-Purchase Threshold,'' will be implemented in a future 
amendment to the DFARS.

B. Regulatory Flexibility Act

    The Department of Defense certifies that this final rule will not 
have a significant economic impact on a substantial number of small 
entities within the meaning of the Regulatory Flexibility Act, 5 U.S.C. 
601, et seq., because the rule primarily consists of conforming DFARS 
amendments and internal Government procedures to implement existing FAR 
guidance pertaining to purchase at or below the simplified acquisition 
threshold.

C. Paperwork Reduction Act

    The Paperwork Reduction Act does not apply because this final rule 
does not impose any 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 Parts 204, 208, 213, 216, 217, 219, 223, 
225, 237, 242, 246, 247, and 253

    Government procurement.
Michele P. 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 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:


Sec. 204.670-2  Reportable contracting actions.

* * * * *
    (c) Summarize on the monthly DD Form 1057, in accordance with the 
instructions in 253.204-71(a)(3), contracting actions that--
    (1) Support a contingency operation as defined in 10 U.S.C. 
101(a)(13) or a

[[Page 2596]]

humanitarian or peacekeeping operation as defined in 10 U.S.C. 2303(7); 
and
    (2) 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 adding 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 
ordering 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, solicit planned 
producers 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

Sec.
213.005  Federal Acquisition Streamlining Act of 1994 list of 
inapplicable laws.

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.

Subpart 213.70--Simplified Acquisition Procedures Under the 8(a) 
Program

213.7001  Policy.
213.7002  Procedures.
213.7003  Purchase orders.
213.7003-1  Obtaining contractor acceptance and modifying purchase 
orders.
213.7003-2  Contract clauses.

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

213.005  Federal Acquisition Streamlining Act of 1994 list of 
inapplicable laws.

    (a) The restriction on use of funds appropriated for fiscal year 
1998 in Section 8117 of the National Defense Appropriations Act for 
Fiscal Year 1998 (Pub. L. 105-56) is inapplicable to contracts at or 
below the simplified acquisition threshold (see 222.1304(b)).

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) Generally, use unilateral modifications (see FAR 43.103) 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
    (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 must satisfy the competition 
requirements of FAR Part 6 for any action not using simplified 
acquisition procedures.

[[Page 2597]]

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 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
    (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 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--
    (1) Purchase order or blanket purchase agreement;
    (2) Delivery order or task order;
    (3) Receiving and inspection report;
    (4) Property voucher;
    (5) Document for acceptance by the supplier; and
    (6) Public voucher, when used as--
    (i) A delivery order;
    (ii) The basis for payment of an invoice against blanket purchase 
agreements or basic ordering agreements when a firm-fixed-price has 
been established; or
    (iii) A purchase order for acquisitions using simplified 
acquisition procedures.
    (B) The DD Form 1155 is also authorized for use for--
    (1) Orders placed in accordance with FAR Subparts 8.4, 8.6, 8.7, 
and 16.5; and
    (2) Classified acquisition 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.

Subpart 213.70--Simplified Acquisition Procedures Under the 8(a) 
Program


213.7001  Policy.

    For sole source acquisitions under the 8(a) Program, contracting 
officers may use the procedures established in the Memorandum of 
Understanding cited in 219.800.


213.7002  Procedures.

    For acquisitions that are otherwise appropriate to be conducted 
using procedures set forth in this part, and also eligible for the 8(a) 
Program, contracting officers may use--
    (a)(1) For sole source purchase orders not exceeding the simplified 
acquisition threshold, the procedures in 219.804-2(2); or
    (2) For other types of acquisitions, the procedures in Subpart 
219.8, excluding the procedures in 219.804-2(2); or
    (b) The procedures for award to the Small Business Administration 
in FAR Subpart 19.8.


213.7003  Purchase orders.


213.7003-1  Obtaining contractor acceptance and modifying purchase 
orders.

    The contracting officer need not obtain a contractor's written 
acceptance of a purchase order or modification of a purchase order for 
an acquisition under the 8(a) Program pursuant to 219.804-2(2).


213.7003-2  Contract clauses.

    Use the clauses prescribed in 219.811-3 (1) and (3) for purchase 
orders under the 8(a) Program pursuant to the Memorandum of 
Understanding cited in 219.800.

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  Procedure.

* * * * *
    (b) The requirement in paragraph (a) of this section does not apply 
to contracts that are--
    (1) For commercial items; or
    (2) Valued at or below the simplified acquisition threshold.

[[Page 2598]]

    10. Section 217.7504 is amended by revising paragraph (a)(2) to 
read as follows:


217.7504  Limitations on price increases.

* * * * *
    (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 redesignating paragraphs (c) and 
(d) as paragraphs (d) and (e), respectively; and by revising newly 
designated paragraph (d)(9)(A) to read as follows:


219.201  General policy.

* * * * *
    (d) * * *
    (9) * * *
    (A) Reviewing and making recommendations for all acquisitions over 
$10,000, except those restricted for exclusive small business 
participation;
* * * * *

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

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


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

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


225.105  Evaluating offers.

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


225.770-3  Exceptions.

* * * * *
    (a) Purchase at or below the simplified acquisition threshold;
* * * * *

PART 237--SERVICE CONTRACTING


237.7302  [Amended]

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

PART 242--CONTRACT ADMINISTRATION


242.203  [Amended]

    16. 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 adding a period in its place; and by removing 
paragraph (a)(i)(R).

PART 246--QUALITY ASSURANCE

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


246.370  Material inspection and receiving report.

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

PART 247--TRANSPORTATION

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


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.
* * * * *
    19. Section 247.573 is amended by revising paragraphs (a), (b), and 
(c) to read as follows:


247.573  Solicitation provision and contract clauses.

    (a) Use the provision at 252.247-7022, Representation of Extent of 
Transportation by Sea, in all solicitations except--
    (1) Those for direct purchase of ocean transportation services; or
    (2) Those with an anticipated value at or below the simplified 
acquisition threshold.
    (b) Use the clause at 252.247-7023, Transportation of Supplies by 
Sea, in all solicitations and resultant contracts, except--
    (1) Those for direct purchase of ocean transportation services; or
    (2) Those with an anticipated value at or below the simplified 
acquisition threshold.
    (c) Use the clause at 252.247-7024, Notification of Transportation 
of Supplies by Sea, in all contracts for which the offeror made a 
negative response to the inquiry in the provision at 252.247-7022, 
Representation of Extent of Transportation by Sea.
* * * * *

PART 253--FORMS


253.204-70  [Amended]

    20. Section 253.204-70 is amended in paragraph (d)(5)(iv)(A) (2) by 
removing the reference ``13.105'' and adding in its place the reference 
``13.003(b)(1)''.
    21. 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:


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

[[Page 2599]]

here are a breakout of the numbers already entered in Sections B and C.
* * * * *
    22. Section 253.213 is amended by revising the section heading; by 
redesignating paragraph (e) as paragraph (f); and in newly designated 
paragraph (f) by revising the introductory text of (f) 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 OF 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. 99-844 Filed 1-14-99; 8:45 am]
BILLING CODE 5000-04-M