[Federal Register Volume 68, Number 162 (Thursday, August 21, 2003)]
[Proposed Rules]
[Pages 50495-50496]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 03-21312]


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DEPARTMENT OF DEFENSE

48 CFR Part 242

[DFARS Case 2002-D015]


Defense Federal Acquisition Regulation Supplement; Production 
Surveillance and Reporting

AGENCY: Department of Defense (DoD).

ACTION: Proposed rule with request for comments.

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SUMMARY: DoD is proposing to amend the Defense Federal Acquisition 
Regulation Supplement (DFARS) to eliminate requirements for contract 
administration offices to perform production surveillance on 
contractors that have only Criticality Designator C (low-urgency) 
contracts. This change will permit contract administration offices to 
devote more resources to critical and high-risk contracts.

DATES: DoD will consider all comments received by October 20, 2003.

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@osd.mil. Please 
cite DFARS Case 2002-D015 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: Mr. Steven Cohen, OUSD(AT&L)DPAP(DAR), IMD 3C132, 3062 
Defense Pentagon, Washington, DC 20301-3062; facsimile (703) 602-0350. 
Please cite DFARS Case 2002-D015.
    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: Mr. Steven Cohen, (703) 602-0293.

SUPPLEMENTARY INFORMATION:

A. Background

    DFARS 242.1104 presently requires the cognizant contract 
administration office to conduct a periodic risk assessment of each 
contractor to determine the degree of production surveillance needed 
for contracts awarded to that contractor, and to develop a production 
surveillance plan based on the risk level determined during the risk 
assessment. This proposed rule revises DFARS 242.1104 to eliminate 
requirements for production surveillance on contractors that have only 
Criticality Designator C (low-urgency) contracts, and for monitoring of 
progress on any Criticality Designator C contract, unless production 
surveillance or contract monitoring is specifically requested by the 
contracting officer. This change will enable contract administration 
offices to use production surveillance resources in a more effective 
manner.
    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 the DFARS 
changes in this rule primarily affect the allocation of Government 
resources to production surveillance functions. 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 2002-D015.

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 Part 242

    Government procurement.

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

    Therefore, DoD proposes to amend 48 CFR part 242 as follows:
    1. The authority citation for 48 CFR part 242 continues to read as 
follows:

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

PART 242--CONTRACT ADMINISTRATION AND AUDIT SERVICES

    2. Section 242.1104 is revised to read as follows:


242.1104  Surveillance requirements.

    (a) The cognizant contract administration office (CAO)--
    (i) Shall perform production surveillance on all contractors that 
have Criticality Designator A or B contracts;
    (ii) Shall not perform production surveillance on contractors that 
have only Criticality Designator C contracts, unless specifically 
requested by the contracting officer; and
    (iii) When production surveillance is required, shall--
    (A) Conduct a periodic risk assessment of the contractor to 
determine the degree of production surveillance needed for all 
contracts awarded to that contractor. The risk assessment shall 
consider information provided by the contractor and the contracting 
officer;

[[Page 50496]]

    (B) Develop a production surveillance plan based on the risk level 
determined during a risk assessment;
    (C) Modify the production surveillance plan to incorporate any 
special surveillance requirements for individual contracts, including 
any requirements identified by the contracting officer; and
    (D) Monitor contract progress and identify potential contract 
delinquencies in accordance with the production surveillance plan. 
Contracts with Criticality Designator C are exempt from this 
requirement unless specifically requested by the contracting officer.

[FR Doc. 03-21312 Filed 8-20-03; 8:45 am]
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