[Federal Register Volume 69, Number 110 (Tuesday, June 8, 2004)]
[Proposed Rules]
[Pages 31939-31941]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 04-12934]


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DEPARTMENT OF DEFENSE

48 CFR Parts 225 and 252

[DFARS Case 2004-D001]


Defense Federal Acquisition Regulation Supplement; Reporting 
Contract Performance Outside the United States

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 clarify requirements for reporting of

[[Page 31940]]

contract performance outside the United States. This proposed rule is a 
result of a transformation initiative undertaken by DoD to dramatically 
change the purpose and content of the DFARS.

DATES: Comments on the proposed rule should be submitted in writing to 
the address shown below on or before August 9, 2004, to be considered 
in the formation of the final rule.

ADDRESSES: You may submit comments, identified by DFARS Case 2004-D001, 
using any of the following methods:
     Federal eRulemaking Portal: http://www.regulations.gov. 
Follow the instructions for submitting comments.
     Defense Acquisition Regulations Web site: http://emissary.acq.osd.mil/dar/dfars.nsf/pubcomm. Follow the instructions for 
submitting comments.
     E-mail: [email protected]. Include DFARS Case 2004-D001 in the 
subject line of the message.
     Fax: (703) 602-0350.
     Mail: Defense Acquisition Regulations Council, Attn: Ms. 
Amy Williams, OUSD (AT&L) DPAP (DAR), IMD 3C132, 3062 Defense Pentagon, 
Washington, DC 20301-3062.
     Hand Delivery/Courier: Defense Acquisition Regulations 
Council, Crystal Square 4, Suite 200A, 241 18th Street, Arlington, VA 
22202-3402.
    All comments received will be posted to http://emissary.acq.osd.mil/dar/dfars.nsf.

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

SUPPLEMENTARY INFORMATION:

A. Background

    DFARS Transformation is a major DoD initiative to dramatically 
change the purpose and content of the DFARS. The objective is to 
improve the efficiency and effectiveness of the acquisition process, 
while allowing the acquisition workforce the flexibility to innovate. 
The transformed DFARS will contain only requirements of law, DoD-wide 
policies, delegations of FAR authorities, deviations from FAR 
requirements, and policies/procedures that have a significant effect 
beyond the internal operating procedures of DoD or a significant cost 
or administrative impact on contractors or offerors. Additional 
information on the DFARS Transformation initiative is available at 
http://www.acq.osd.mil/dp/dars/transf.htm.
    This proposed rule is a result of the DFARS Transformation 
initiative. The proposed changes clarify requirements for reporting of 
contract performance outside the United States; and establish two 
separate contract clauses to eliminate confusion between two reporting 
requirements presently contained in one clause.
    DFARS Subpart 225.72, Reporting Contract Performance Outside the 
United States, implements: (1) DoD policy for contractor reporting of 
performance outside the United States under contracts exceeding 
$500,000; and (2) requirements of 10 U.S.C. 2410g for offerors and 
contractors to notify DoD of any intention to perform a DoD contract 
outside the United States and Canada, when the contract exceeds $10 
million and could be performed inside the United States or Canada.
    This proposed rule revises DFARS Subpart 225.72, and the 
corresponding solicitation provision and contract clauses, to clarify 
the two separate reporting requirements. In addition, the proposed rule 
removes text from DFARS 225.7202 related to contracting officer 
distribution of reports. This text will be relocated to the new DFARS 
companion resource, Procedures, Guidance, and Information (PGI). A 
proposed rule describing the purpose and structure of PGI was published 
at 69 FR 8145 on February 23, 2004.
    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 rule 
clarifies existing reporting requirements, with no substantive change 
to those requirements. 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 2004-D001.

C. Paperwork Reduction Act

    The proposed rule does not contain any new information collection 
requirements that require the approval of the Office of Management and 
Budget (OMB) under 44 U.S.C. 3501, et seq. The existing information 
collection requirements in DFARS Subpart 225.72 have been approved by 
OMB under Control Number 0704-0229.

List of Subjects in 48 CFR Parts 225 and 252

    Government procurement.

Michele P. Peterson,
 Executive Editor, Defense Acquisition Regulations Council.
    Therefore, DoD proposes to amend 48 CFR Parts 225 and 252 as 
follows:
    1. The authority citation for 48 CFR Parts 225 and 252 continues to 
read as follows:

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

PART 225--FOREIGN ACQUISITION

    2. Section 225.7200 is revised to read as follows:


225.7200  Scope of subpart.

    This subpart addresses--
    (a) The requirements of 10 U.S.C. 2410g for offerors and 
contractors to notify DoD of any intention to perform a DoD contract 
outside the United States and Canada when the contract could be 
performed inside the United States or Canada; and
    (b) DoD requirements for contractor reporting of the volume, type, 
and nature of contract performance outside the United States.
    3. Sections 225.7202 and 225.7203 are revised to read as follows:


Sec.  225.7202  Contracting officer distribution of reports.

    Follow the procedures at PGI 225.7202 for distribution of reports 
submitted with offers in accordance with the provision at 252.225-7003, 
Report of Intended Performance Outside the United States and Canada--
Submission with Offer.


Sec.  225.7203  Solicitation provision and contract clause.

    Except for acquisitions described in 225.7201--
    (a) Use the provision at 252.225-7003, Report of Intended 
Performance Outside the United States and Canada--Submission with 
Offer, in solicitations with a value exceeding $10 million;
    (b) Use the clause at 252.225-7004, Immediate Reporting of Intended 
Contract Performance Outside the United States and Canada, in 
solicitations and contracts with a value exceeding $10 million; and
    (c) Use the clause at 252.225-7XXX, Quarterly Reporting of Contract 
Performance Outside the United States, in solicitations and contracts 
with a value exceeding $500,000.

[[Page 31941]]

PART 252--SOLICITATION PROVISIONS AND CONTRACT CLAUSES

    4. Sections 252.225-7003 and 252.225-7004 are revised to read as 
follows:


Sec.  252.225-7003  Report of Intended Performance Outside the United 
States and Canada--Submission with Offer.

    As prescribed in 225.7203(a), use the following provision:

Report of Intended Performance Outside the United States and Canada--
Submission With Offer (XXX 2004)

    (a) The offeror shall submit, with its offer, a report of 
intended performance outside the United States and Canada if--
    (1) The offer exceeds $10 million in value; and
    (2) The offeror is aware that the offeror or a first-tier 
subcontractor intends to perform any part of the contract outside 
the United States and Canada that--
    (i) Exceeds $500,000 in value; and
    (ii) Could be performed inside the United States or Canada.
    (b) Information to be reported includes that for--
    (1) Subcontracts;
    (2) Purchases; and
    (3) Intracompany transfers when transfers originate in a foreign 
location.
    (c) The offeror shall submit the report using--
    (1) DD Form 2139, Report of Contract Performance Outside the 
United States; or
    (2) A computer-generated report that contains all information 
required by DD Form 2139.
    (d) The offeror may obtain a copy of DD Form 2139 from the 
Contracting Officer or via the Internet at http://web1.whs.osd.mil/icdhome/forms.htm htm.
    (End of provision)


252.225-7004  Immediate Reporting of Intended Contract Performance 
Outside the United States and Canada.

    As prescribed in 225.7203(b), use the following clause:

Immediate Reporting of Intended Contract Performance Outside the United 
States and Canada (XXX 2004)

    (a) Reporting requirement. The Contractor shall submit a report 
in accordance with this clause, if the Contractor or a first-tier 
subcontractor will perform any part of this contract outside the 
United States and Canada that--
    (1) Exceeds $500,000 in value; and
    (2) Could be performed inside the United States or Canada.
    (b) Submission of reports. The Contractor--
    (1) Shall submit a report as soon as the information is known;
    (2) To the maximum extent practicable, shall submit a report 
regarding a first-tier subcontractor at least 30 days before award 
of the subcontract;
    (3) Need not resubmit information submitted with its offer, 
unless the information changes;
    (4) Shall submit all reports to the Contracting Officer; and
    (5) Shall submit a copy of each report to: Deputy Director of 
Defense Procurement and Acquisition Policy (Program Acquisition and 
International Contracting), OUSD(AT&L)DPAP(PAIC), Washington, DC 
20301-3060.
    (c) Report format. The Contractor--
    (1) Shall submit reports using--
    (i) DD Form 2139, Report of Contract Performance Outside the 
United States; or
    (ii) A computer-generated report that contains all information 
required by DD Form 2139; and
    (2) May obtain copies of DD Form 2139 from the Contracting 
Officer or via the Internet at http://web1.whs.osd.mil/icdhome/forms.htm.
    (End of clause)

    5. Section 252.225-7XXX is added to read as follows:


252.225-7XXX  Quarterly Reporting of Contract Performance Outside the 
United States.

    As prescribed in 225.7203(c), use the following clause:

Quarterly Reporting of Contract Performance Outside the United States 
(XXX 2004)

    (a) Reporting requirement. Except as provided in paragraph (b) 
of this clause, within 10 days after the end of each quarter of the 
Government's fiscal year, the Contractor shall report any 
subcontract, purchase, or intracompany transfer that--
    (1) Will be or has been performed outside the United States;
    (2) Exceeds the simplified acquisition threshold in Part 2 of 
the Federal Acquisition Regulation; and
    (3) Has not been identified in a report for a previous quarter.
    (b) Exception. Reporting under this clause is not required if--
    (1) A foreign place of performance is the principal place of 
performance; and
    (2) The Contractor specified the foreign place of performance in 
the Place of Performance provision of its offer.
    (c) Submission of reports. The Contractor shall submit the 
reports required by this clause to: Deputy Director of Defense 
Procurement and Acquisition Policy (Program Acquisition and 
International Contracting), OUSD(AT&L)DPAP(PAIC), Washington, DC 
20301-3060.
    (d) Report format. The Contractor--
    (1) Shall submit reports using--
    (i) DD Form 2139, Report of Contract Performance Outside the 
United States; or
    (ii) A computer-generated report that contains all information 
required by DD Form 2139; and
    (2) May obtain copies of DD Form 2139 from the Contracting 
Officer or via the Internet at http://web1.whs.osd.mil/icdhome/forms.htm.
    (e) Subcontracts. The Contractor--
    (1) Shall include the substance of this clause in all first-tier 
subcontracts exceeding $500,000, except those for commercial items, 
construction, ores, natural gases, utilities, petroleum products and 
crudes, timber (logs), or subsistence; and
    (2) Shall provide the number of this contract to its 
subcontractors required to submit reports under this clause.

(End of clause)
[FR Doc. 04-12934 Filed 6-7-04; 8:45 am]
BILLING CODE 5001-08-P