[Federal Register Volume 67, Number 50 (Thursday, March 14, 2002)]
[Proposed Rules]
[Pages 11455-11456]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 02-5954]



48 CFR Part 252

[DFARS Case 2000-D029]

Defense Federal Acquisition Regulation Supplement; Restriction on 
Contingent Fees for Foreign Military Sales--Commercial Items

AGENCY: Department of Defense (DoD).

ACTION: Proposed rule with request for comments.


SUMMARY: DoD is proposing to amend the Defense Federal Acquisition 
Regulation Supplement (DFARS) to remove a clause from the list of 
clauses included in contracts for commercial items to implement 
provisions of law or Executive orders. The clause proposed for removal 
pertains to restrictions on contingent fees for foreign military sales.

DATES: Comments on the proposed rule should be submitted in writing to 
the address shown below on or before May 13, 2002, 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: [email protected]. 
Please cite DFARS Case 2000-D029 in the subject line of e-mailed 
    Respondents that cannot submit comments using either of the above 
methods may submit comments to: Defense Acquisition Regulations 
Council, Attn: Ms. Amy Williams, OUSD(AT&L)DP(DAR), IMD 3C132, 3062 
Defense Pentagon, Washington, DC 20301-3062; facsimile (703) 602-0350. 
Please cite DFARS Case 2000-D029.
    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.

FOR FURTHER INFORMATION CONTACT: Ms. Amy Williams, (703) 602-0328.


A. Background

    The clause at DFARS 252.212-7001, Contract Terms and Conditions 
Required to Implement Statutes or Executive Orders Applicable to 
Defense Acquisitions of Commercial Items, includes a list of clauses 
that may be included in a contract for commercial items to implement 
provisions of law or Executive orders. Included on the list is the 
clause at DFARS 252.225-7027, Restriction on Contingent Fees for 
Foreign Military Sales, which cites 22 U.S.C. 2779 as its statutory 
basis. However, the clause at DFARS 252.225-7027 does not implement 22 
U.S.C. 2779, which requires in subsection (c) that no fee may be 
included in the amount paid under a contract unless the amount is 
reasonable, allocable, and not made to a person who has used improper 
influence. The clause at DFARS 252.225-7027 implements DoD policy only, 
requiring that, in order for the costs of certain contingent fees to be 
allowable, the Government must identify the fees and the foreign 
military sales customer must approve payment of the fees in writing 
before contract award. This requirement has little effect in commercial 
contracts where the price the Government pays is generally a fixed 
price, not based on cost analysis.
    This rule was not subject to Office of Management and Budget review 
under Executive Order 12866, dated September 30, 1993.

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 most 
firms that pay or receive contingent fees for foreign military sales 
are not small business concerns. 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 subpart in 
accordance with 5 U.S.C. 610. Such comments should be submitted 
separately and should cite DFARS Case 2000-D029.

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.

[[Page 11456]]

List of Subjects in 48 CFR Part 252

    Government procurement.

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

    Therefore, DoD proposes to amend 48 CFR part 252 as follows:
    1. The authority citation for 48 CFR part 252 continues to read as 

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


252.212-7001  [Amended]

    2. Section 252.212-7001 is amended as follows:
    a. By revising the clause date to read ``(XXX 2002)'', and
    b. In paragraph (b), by removing the entry ``____ 252.225-7027 
Restriction on Contingent Fees for Foreign Military Sales (MAR 1998) 
(22 U.S.C. 2779).''.
[FR Doc. 02-5954 Filed 3-13-02; 8:45 am]