[Federal Register Volume 64, Number 216 (Tuesday, November 9, 1999)]
[Rules and Regulations]
[Pages 61028-61030]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 99-29036]


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DEPARTMENT OF DEFENSE

48 CFR Parts 204, 209, 225, 242, and 247

[DFARS Cases 98-D003, 99-D004, and 99-D010]


Defense Federal Acquisition Regulation Supplement; Contract 
Administration and Audit Services

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 policy pertaining to DoD contract administration and audit 
services. The rule updates references to DoD publications, and 
reorganizes DFARS test for consistency with the organization of Federal 
Acquisition Regulation (FAR) text pertaining to contract 
administration.

EFFECTIVE DATE: November 9, 1999.

FOR FURTHER INFORMATION CONTACT: Mr. Rick Layser, Defense Acquisition 
Regulations Council, PDUSD (AT&L)DP(DAR), IMD 3D139, 3062 Defense 
Pentagon, Washington, DC 20301-3062. Telephone (703) 602-0293; telefax 
(703) 602-0350. Please cite DFARS Case 98-D003.

SUPPLEMENTARY INFORMATION:

A. Background

    This final rule amends the DFARS to update policy pertaining to DoD 
contract administration and audit services. The rule updates references 
in the DFARS text and reorganizes portions of DFARS Part 242 for 
consistency with the organization of FAR Part 42. The rule also adds 
text at DFARS 242.302(a)(13) to clarify that the Defense Contract 
Management Command is not responsible for making contract payments.
    This rule was not subject to Office of Management and Budget review 
under Executive Order 12866, dated September 30, 1993.

B. Regulatory Flexibility Act

    This final rule does not constitute a significant revision within 
the meaning of FAR 1.501 and Public Law 98-577 and publication for 
public comment is not required. However, DoD will consider comments 
from small entities concerning the affected DFARS subparts in 
accordance with 5 U.S.C. 610. Such comments should cite DFARS Case 98-
D003.

C. Paperwork Reduction Act

    The Paperwork Reduction Act does not apply because the 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, 209, 225, 242, and 247

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

    Therefore, 48 CFR parts 204, 209, 225, 242, and 247 are amended as 
follows:
    1. The authority citation for 48 CFR parts 204, 209, 225, 242, and 
247 continues to read as follows:

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

PART 204--ADMINISTRATIVE MATTERS

    2. Section 204.202 is amended by revising paragraph (1)(iv) to read 
as follows:


204.202  Agency distribution requirements.

    (1) * * *
    (iv) One copy to the contract administration office (CAO) automatic 
data processing point, except when the DoDAAD code is the same as that 
of either the CAO or the payment office (see the Federal Directory of 
Contract Administration Services Components); and
* * * * *


204.7102  [Amended]

    3. Section 204.7102 is amended in paragraph (b)(1) by removing the 
abbreviation ``DoD'' and adding in its place the word ``Federal''; and 
in paragraph (b)(3) by removing the words ``Office of Defense 
Commercial Communications'' and adding in their place the words 
``Defense Information Technology Contracting Organization''.

PART 209--CONTRACTOR QUALIFICATIONS


209.106-2  [Amended]

    4. Section 209.106-2 is amended in paragraph (1) in the first 
sentence by removing the reference and abbreviation ``DoD 4105.4, DoD'' 
and adding in their place the words ``the Federal''.

PART 225--FOREIGN ACQUISITION

    5. Section 225.872-6 is amended by revising paragraphs (b) and 
(c)(1) to read as follows:


225.872-6  Audit.

* * * * *
    (b) To determine if such an annex is applicable to a particular 
qualifying country, contact the Deputy Director of Defense Procurement 
(Foreign Contracting), ((703) 697-9351/2/3, DSN 227-9351/2/3).
    (c) * * *

[[Page 61029]]

    (1) Except for the United Kingdom (UK), send the request to the 
administrative contracting officer at the cognizant activity listed in 
Section 2B of the Federal Directory of Contract Administration Services 
Components. Send the request for audit from the UK directly to their 
Ministry of Defence.
* * * * *


225.872-7  [Amended]

    6. Section 225.872-7 is amended by removing the reference ``OPNAV 
Instruction 5540.8L'' and adding in its place the reference ``SECNAV 
Instruction 5510.1H''; and by removing the reference ``AFR 205-4'' and 
adding in its place the reference ``AFI 31-601''.

PART 242--CONTRACT ADMINISTRATION AND AUDIT SERVICES

    7. The heading of Part 242 is revised to read as set forth above.
    8. Section 242.002 is added (immediately before subpart 242.1) to 
read as follows:


242.002  Interagency agreements.

    (b)(i) DoD requires reimbursement, at a rate set by the Under 
Secretary of Defense (Comptroller/Chief Financial Officer), from non-
DoD organizations, except for--
    (A) Quality assurance, contract administration, and audit services 
provided under a no-charge reciprocal agreement;
    (B) Services performed under subcontracts awarded by the Small 
Business Administration under FAR subpart 19.8; and
    (C) Quality assurance and pricing services performed for the Supply 
and Services Canada.
    (ii) Departments and agencies may request an exception from the 
reimbursement policy in paragraph (b)(i) of this section from the Under 
Secretary of Defense (Comptroller/Chief Financial Officer). A request 
must show that an exception is in the best interest of the Government.
    (iii) Departments and agencies must pay for services performed by 
non-DoD activities, foreign governments, or international 
organizations, unless otherwise provided by reciprocal agreements.
    (S-70)(i) Foreign governments and international organizations may 
request contract administration services on their direct purchases from 
U.S. producers. Direct purchase is the purchase of defense supplies in 
the United States through commercial channels for use by the foreign 
government or international organization.
    (ii) Supply and Services Canada (SSC) is permitted to submit its 
requests for contract administration services directly to the cognizant 
contract administration office.
    (iii) Other foreign governments (including Canadian government 
organizations other than SSC) and international organizations send 
their requests for contract administration services to the DoD Central 
Control Point (CCP) at the Defense Contract Management Command (DCMC), 
New York, NY. Contract administration offices provide services only 
upon request from the CCP. The CCP shall--
    (A) Determine whether the request is from a friendly foreign 
government or an international agency in which the United States is a 
participant;
    (B) Determine whether the services are consistent with the DoD 
mutual security program policies (the Assistant Secretary of Defense 
(International Security Affairs) is the source of information for 
questions as to the eligibility of foreign governments to receive 
services);
    (C) Ensure that the reimbursement arrangements are consistent with 
paragraph (b) of this section;
    (D) Coordinate with appropriate contract administration offices to 
determine whether DoD can provide the services;
    (E) Notify the requestor that the request is accepted, or provide 
reasons why it cannot be accepted;
    (F) Distribute the acquisition documents and related materials to 
contract administration offices; and
    (G) Receive statements of costs incurred by contract administration 
offices for reimbursable services and forward them for billing to the 
Security Assistance Accounting Center.

Subpart 242.1--[Removed]

    9. Subpart 242.1 is removed.
    10. Subpart 242.2 is revised to read as follows:

Subpart 242.2--Contract Administration Services

Sec.

242.200-70  Scope of subpart.
242.202  Assignment of contract administration.


242.200-70  Scope of subpart.

    This subpart does not address the contract administration role of a 
contracting officer's representative (see 201.602).


242.202  Assignment of contract administration.

    (a)(i) DoD activities shall not retain any contract for 
administration that requires performance of any contract administration 
function at or near contractor facilities, except contracts for--
    (A) The National Security Agency;
    (B) Research and development with universities;
    (C) Flight training;
    (D) Consultant support services;
    (E) Mapping, charting, and geodesy services;
    (F) Base, post, camp, and station purchases;
    (G) Operation or maintenance of, or installation of equipment at, 
radar or communication network sites;
    (H) Communications services;
    (I) Installation, operation, and maintenance of space-track sensors 
and relays;
    (J) Dependents Medicare program contracts;
    (K) Stevedoring contracts;
    (L) Construction and maintenance of military and civil public 
works, including harbors, docks, port facilities, military housing, 
development of recreational facilities, water resources, flood control, 
and public utilities;
    (M) Architect-engineer services;
    (N) Airlift and sealift services (Air Mobility Command and Military 
Sealift Command may perform contract administration services at 
contractor locations involved solely in performance of airlift or 
sealift contracts);
    (O) Subsistence supplies;
    (P) Ballistic missile sites (contract administration offices may 
perform supporting administration of these contracts at missile 
activation sites during the installation, test, and checkout of the 
missiles and associated equipment); and
    (Q) Operation and maintenance of, or installation of equipment at, 
military test ranges, facilities, and installations.
    (ii) Contract administration functions for base, post, camp, and 
station contracts on a military installation are normally the 
responsibility of the installation or tenant commander. However, the 
Defense Contract Management Command (DCMC) shall, upon request of the 
military department, and subject to prior agreement, perform contract 
administration services on a military installation.
    (iii) DCMC shall provide preaward survey assistance for post, camp, 
and station work performed on a military installation. The contracting 
office and the DCMC preaward survey monitor should jointly determine 
the scope of the survey and individual responsibilities.
    (iv) To avoid duplication, contracting offices shall not locate 
their personnel at contractor facilities, except--

[[Page 61030]]

    (A) In support of contracts retained for administration in 
accordance with paragraph (a)(i) of this section; or
    (B) As permitted under subpart 242.74.
    (e)(1)(A) In special circumstances, a contract administration 
office may request support from a component not listed in the Federal 
Directory of Contract Administration Services Components (available via 
the Internet at http://www.dcmc.hq.dla.mil/casbook/casbook.htm). An 
example is a situation where the contractor's work site is on a 
military base and a base organization is asked to provide support. 
Before formally sending the request, coordinate with the office 
concerned to ensure that resources are available for, and capable of, 
providing the support.
    (B) When requesting support on a subcontract that includes foreign 
contract military sale (FMS) requirements, the contract administration 
office shall--
    (1) Mark ``FMS Requirement'' on the face of the documents; and
    (2) For each FMS case involved, provide the FMS case identifier, 
associated item quantities, DoD prime contract number, and prime 
contract line/subline item number.
    11. Section 242.302 is amended by removing paragraph (a)(8); and by 
adding, after paragraph (a)(9), paragraph (a)(13) to read as follows:


242.302  Contract administration functions.

    (a) * * *
    (13)(A) Do not delegate the responsibility to make payments to the 
Defense Contract Management Command (DCMC).
    (B) For contracts assigned to DCMC for contract administration, 
designate as the payment office--
    (1) The cognizant Defense Finance and Accounting Service (DFAS) 
payment office as specified in the Federal Directory of Contract 
Administration Services Components (available via the Internet at 
http://www.dcmc.hq.dla.mil/casbook/casbook.htm), for contracts funded 
with DoD funds;
    (2) The department or agency payment office, if authorized by 
defense financial management regulations or if the contract is funded 
with non-DoD funds; or
    (3) Multiple payment offices under paragraphs (a)(13)(B) (1) and 
(2) of this section, if the contract is funded with both DoD and non-
DoD funds.
    (C) For contracts not assigned to DCMC, select a payment office or 
offices under department/agency procedures. DoD personnel may use the 
DFAS Reference Tool, available via the Internet at http://
referencetool.dfas.mil, to identify cognizant DFAS payment offices.
 * * * * *


242.705-1  [Amended]

    12. Section 242.705-1 is amended in paragraph (a)(1) in the first 
sentence by removing the parenthetical ``(ACO)'' and adding in its 
place the parenthetical ``(ACOs)''; and by removing paragraph (b).


242.705-2  [Amended]

    13. Section 242.705-2 is amended by removing paragraph (b)(2)(ii); 
and by redesignating paragraph (b)(2)(iv) as paragraph (b)(2)(iii).


242.7400  [Amended]

    14. Section 242.7400 is amended in paragraph (a) in the second 
sentence, in the parenthetical, by removing the reference 
``242.203(a)(i) and (v)'' and adding in its place the reference 
``242.202(a)''.

Part 247--Transportation


247.305-10  [Amended]

    15. Section 247.305-10 is amended in paragraph (b)(iv) introductory 
text by removing the reference and abbreviation ``DoD 4105.4, DoD'' and 
adding in their place the words ``the Federal''.
    16. Section 247.370 is amended by revising paragraph (b)(1) to read 
as follows:


247.370  Use of Standard Form 30 for consignment instructions.

* * * * *
    (b) * * *
    (1) For contracts assigned for any contract administration function 
listed in FAR subpart 42.3 to any office listed in the Federal 
Directory of Contract Administration Services Components, within five 
working days;
* * * * *
[FR Doc. 99-29036 Filed 11-8-99; 8:45 am]
BILLING CODE 5000-04-M