[Federal Register Volume 66, Number 176 (Tuesday, September 11, 2001)]
[Rules and Regulations]
[Pages 47110-47112]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 01-22424]


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

DEPARTMENT OF DEFENSE

48 CFR Parts 226 and 252

[DFARS Case 2000-D024]


Defense Federal Acquisition Regulation Supplement; Utilization of 
Indian Organizations and Indian-Owned Economic Enterprises

AGENCY: Department of Defense (DoD).

ACTION: Interim rule with request for comments.

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

SUMMARY: DoD has issued an interim rule amending the Defense Federal 
Acquisition Regulation Supplement (DFARS) to implement Section 8022 of 
the DoD Appropriations Act for Fiscal Year 2001. Section 8022 provides 
for incentive payments to DoD contractors, and subcontractors at any 
tier, that use Indian organizations and Indian-owned economic 
enterprises as subcontractors.

DATES: Effective date: September 11, 2001.
    Comment date: Comments on the interim rule should be submitted to 
the address shown below on or before November 13, 2001, to be 
considered in the formation of the final rule.

ADDRESSES: Respondents may submit comments directly on the World Wide 
Web at http://emissary.acq.osd.mil/dar/dfars.nsf/pubcomm. As an 
alternative, respondents may e-mail comments to: dfars@acq.osd.mil. 
Please cite DFARS Case 2000-D024 in the subject line of e-mailed 
comments.
    Respondents that cannot submit comments using either of the above 
methods may submit comments to: Defense Acquisition Regulations 
Council, Attn: Ms. Angelena Moy, OUSD(AT&L)DP(DAR), IMD 3C132, 3062 
Defense Pentagon, Washington, DC 20301-3062; facsimile (703) 602-0350. 
Please cite DFARS Case 2000-024.
    At the end of the comment period, interested parties may view 
public comments on the World Wide Web at http://emissary.acq.osd.mil/dar/dfars.nsf.

[[Page 47111]]


FOR FURTHER INFORMATION CONTACT: Ms. Angelina Moy, (703) 602-1302.

SUPPLEMENTARY INFORMATION:

A. Background

    This interim rule implements Section 8022 of the DoD Appropriations 
Act for Fiscal Year 2001 (Public Law 106-259). Section 8022 provides 
funding for incentive payments to DoD contractors, and subcontractors 
at any tier, that use Indian organizations and Indian-owned economic 
enterprises as subcontractors.
    This rule revises DFARS 226.104 and adds a new clause at 252.226-
7001. The new clause is similar to the clause at FAR 52.226-1, 
Utilization of Indian Organizations and Indian-Owned Economic 
Enterprises, but contains the DoD requirement to provide for incentive 
payments to subcontracors at any tier.
    This rule was not subject to Office of Management and Budget review 
under Executive Order 12866, dated September 30, 1993.

B. Regulatory Flexibility Act

    DoD does not expect this 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., because DoD already 
has been implementing the Indian Incentive Program through use of the 
clause at FAR 52.226-1, Indian Organizations and Indian-Owned Economic 
Enterprises. The FAR clause permits incentive payments to large and 
small contractors that use Indian organizations or enterprises as 
subcontractors. The new DFARS clause will expand the incentive payments 
to subcontractors at any tier While this expansion is expected to 
benefit small businesses that award lower-tier subcontracts to Indian 
organizations or enterprises, the economic impact is not expected to be 
substantial. Therefore, DoD has not performed an initial regulatory 
flexibility analysis. DoD invites comments from small businesses and 
other interested parties. DoD also will consider comments from small 
entities concerning the affected DFARS subparts in accordance with 5 
U.S.C. 610. Such comments should be submitted separately and should 
cite DFARS Case 2000-D024.

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.

D. Determination To Issue an Interim Rule

    A determination has been made under the authority of the Secretary 
of Defense that urgent and compelling reasons exist to publish this 
interim rule prior to affording the public an opportunity to comment. 
This interim rule implements Section 8022 of the DoD Appropriations Act 
for Fiscal Year 2001 (Public Law 106-259). Section 8022 provides that a 
subcontractor at any tier shall be considered a contractor for the 
purposes of being allowed additional compensation under Section 504 of 
the Indian Financing Act of 1974 (25 U.S.C. 1544). Section 8022 became 
effective on August 9, 2000. DoD will consider comments received in 
response to this interim rule in the formation of the final rule.

List of Subjects in 48 CFR Parts 226 and 252

    Government procurement.

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

    Therefore, 48 CFR Parts 226 and 252 are amended as follows:
    1. The authority citation for 48 CFR Parts 226 and 252 continues to 
read as follows:

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

PART 226--OTHER SOCIOECONOMIC PROGRAMS

    2. Section 225.104 introductory text is revised to read as follows:


226.104  Contract clause.

    Use the clause at 252.226-7001, Utilization of Indian Organizations 
and Indian-Owned Economic Enterprises-DoD Contracts, in solicitations 
and contracts that--
* * * * *

PART 252--SOLICITATION PROVISIONS AND CONTRACT CLAUSES

    3. Section 252.226-7001 is added to read as follows:


252.226-7001  Utilization of Indian Organizations and Indian-Owned 
Economic Enterprises-DoD Contracts.

    As prescribed in 226.104, use the following clause:

Utilization of Indian Organizations and Indian-Owned Economic 
Enterprises-DoD Contracts (Sep 2001)

    (a) Definitions. As used in this clause--
    ``Indian'' means any person who is a member of any Indian tribe, 
band, group, pueblo, or community that is recognized by the Federal 
Government as eligible for services from the Bureau of Indian 
Affairs (BIA) in accordance with 25 U.S.C. 1452(c) and any 
``Native'' as defined in the Alaska Native Claims Settlement Act (43 
U.S.C. 1601).
    ``Indian organization'' means the governing body of any Indian 
tribe or entity established or recognized by the governing body of 
an Indian tribe for the purposes of 25 U.S.C. Chapter 17.
    ``Indian-owned economic enterprise'' means any Indian-owned (as 
determined by the Secretary of the Interior) commercial, industrial, 
or business activity established or organized for the purpose of 
profit, provided that Indian ownership constitutes not less than 51 
percent of the enterprise.
    ``Indian tribe'' means any Indian tribe, band, group, pueblo, or 
community, including native villages and native groups (including 
corporations organized by Kenai, Juneau, Sitka, and Kodiak) as 
defined in the Alaska Native Claims Settlement Act, that is 
recognized by the Federal Government as eligible for services from 
BIA in accordance with 25 U.S.C. 1452 (c).
    ``Interested party'' means a contractor or an actual or 
prospective offeror whose direct economic interest would be affected 
by the award of a subcontract or by the failure to award a 
subcontract.
    (b) The Contract shall use its best efforts to give Indian 
organizations and Indian-owned economic enterprises the maximum 
practicable opportunity to participate in the subcontracts it 
awards, to the fullest extent consistent with efficient performance 
of the contract.
    (c) The Contracting Officer and the Contractor, acting in good 
faith, may rely on the representation of an Indian organization or 
Indian-owned economic enterprise as to its eligibility, unless and 
interested party challenges its status or the Contracting Officer 
has independent reason to question that status.
    (d) In the event of a challenge to the representation of a 
subcontractor, the Contracting Officer will refer the matter to the 
U.S. Department of the Interior, Bureau of Indian Affairs, Attn: 
Chief, Division of Contracting and Grants Administration, 1849 C 
Street NW, MS-2626-MIB, Washington, DC 20240-4000. The BIA will 
determine the eligibility and will notify the Contracting Officer. 
No incentive payment will be made--
    (1) Within 59 working days of subcontract award;
    (2) While a challenge is pending; or
    (3) If a subcontractor is determined to be an ineligible 
participant.
    (e)(1) The Contractor, on its own behalf or on behalf of a 
subcontractor at any tier, may request an adjustment under the 
Indian Incentive Program to the following:
    (i) The estimated cost of cost-type contract.
    (ii) The target cost of a cost-plus-incentive-fee contract.
    (iii) The target cost and ceiling price of a fixed-price 
incentive contract.
    (iv) The price of a firm-fixed-price contract.
    (2) The amount of the adjustment that may be made to the 
contract is 5 percent of the

[[Page 47112]]

estimated cost, target cost, or firm-fixed price included in the 
subcontract initially awarded to the Indian organization or Indian-
owned economic enterprise.
    (3) The Contractor has the burden of proving the amount claimed 
and must assert its request for an adjustment prior to completion of 
contract performance.
    (4) The Contracting Officer, subject to the terms and conditions 
of the contract and the availability of funds, will authorize an 
incentive payment of 5 percent of the amount paid to the 
subcontractor.
    (5) If the Contractor requests and receives an adjustment on 
behalf of a subcontractor, the Contractor is obligated to pay the 
subcontractor the adjustment.
    (f) The Contractor shall insert the substance of this clause, 
including this paragraph (f), in all subcontracts that--
    (1) Are for other than commercial items; and
    (2) Are expected to exceed the simplified acquisition threshold 
in Part 2 of the Federal Acquisition Regulation.

(End of clause)

[FR Doc. 01-22424 Filed 9-10-01; 8:45 am]
BILLING CODE 5000-04-M