[Federal Register Volume 70, Number 55 (Wednesday, March 23, 2005)]
[Rules and Regulations]
[Pages 14572-14573]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 05-5629]


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DEPARTMENT OF DEFENSE

48 CFR Part 207

[DFARS Case 2004-D021]


Defense Federal Acquisition Regulation Supplement; Contractor 
Performance of Acquisition Functions Closely Associated With Inherently 
Governmental Functions

AGENCY: Department of Defense (DoD).

ACTION: Interim rule with request for comments.

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SUMMARY: DoD has issued an interim rule amending the Defense Federal 
Acquisition Regulation Supplement (DFARS) to implement Section 804 of 
the National Defense Authorization Act for Fiscal Year 2005. Section 
804 places limitations on the award of contracts for the performance of 
acquisition functions closely associated with inherently governmental 
functions.

DATES: Effective date: March 23, 2005.
    Comment date: Comments on the interim rule should be submitted to 
the address shown below on or before May 23, 2005 to be considered in 
the formation of the final rule.

ADDRESSES: You may submit comments, identified by DFARS Case 2004-D021, 
using any of the following methods:
     Federal eRulemaking Portal: http://www.regulations.gov. 
Follow the instructions for submitting comments. o 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-D021 in the 
subject line of the message.
     Fax: (703) 602-0350.
     Mail: Defense Acquisition Regulations Council, Attn: Ms. 
Robin Schulze, 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.

[[Page 14573]]

    All comments received will be posted to http://emissary.acq.osd.mil/dar/dfars.nsf.

FOR FURTHER INFORMATION CONTACT: Ms. Robin Schulze, (703) 602-0326.

SUPPLEMENTARY INFORMATION:

A. Background

    This interim rule adds DFARS Subpart 207.5 to implement Section 804 
of the National Defense Authorization Act for Fiscal Year 2005 (Public 
Law 108-375). Section 804 adds 10 U.S.C. 2383, which places limitations 
on the award of contracts for performance of the acquisition functions 
closely associated with inherently governmental functions that are 
listed in section 7.503(d) of the Federal Acquisition Regulation.
    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 has prepared an initial regulatory flexibility analysis 
consistent with 5 U.S.C. 603. The analysis is summarized as follows: 
The objective of the rule is to ensure proper management and oversight 
of contracts for functions that generally are not considered to be 
inherently governmental, but may approach being in that category 
because of the nature of the function, the manner in which the 
contractor performs the contract, or the manner in which the Government 
administers contractor performance. The impact of the rule on small 
entities is unknown at this time. DoD agencies will implement the 
requirements of the rule in making decisions whether to enter into, and 
in the administration of, contracts for performance of the acquisition 
functions closely associated with inherently governmental functions 
that are listed in section 7.503(d) of the Federal Acquisition 
Regulation. 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 
2004-D021.

C. Paperwork Reduction Act

    The Paperwork Reduction Act does not apply, because the rule does 
not contain 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 an 
interim rule prior to affording the public an opportunity to comment. 
This interim rule implements Section 804 of the National Defense 
Authorization Act for Fiscal Year 2005 (Public Law 108-375). Section 
804 provides that DoD may enter into contracts for the performance of 
acquisition functions closely associated with inherently governmental 
functions only if: (1) Appropriate DoD personnel cannot reasonably be 
made available to perform the functions; (2) appropriate DoD personnel 
will supervise contractor performance and will perform all associated 
inherently governmental functions; and (3) DoD addresses any potential 
organizational conflict of interest of the contractor in the 
performance of the contract. Section 804 became effective upon 
enactment on October 28, 2004. Comments received in response to this 
interim rule will be considered in the formation of the final rule.

List of Subjects in 48 CFR Part 207

    Government procurement.

Michele P. Peterson,
Editor, Defense Acquisition Regulations System.

0
Therefore, 48 CFR Part 207 is amended as follows:
0
1. The authority citation for 48 CFR Part 207 continues to read as 
follows:

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

PART 207--ACQUISITION PLANNING

0
2. Subpart 207.5 is added to read as follows:

Subpart 207.5--Inherently Governmental Functions

Sec.
207.500 Scope of subpart.
207.503 Policy.


207.500  Scope of subpart.

    This subpart also implements 10 U.S.C. 2383.


207.503  Policy.

    (S-70) Contracts for acquisition functions.
    (1) In accordance with 10 U.S.C. 2383, the head of an agency may 
enter into a contract for performance of the acquisition functions 
closely associated with inherently governmental functions that are 
listed at FAR 7.503(d) only if--
    (i) The contracting officer determines that appropriate military or 
civilian DoD personnel--
    (A) Cannot reasonably be made available to perform the functions;
    (B) Will supervise contractor performance of the contract; and
    (C) Will perform all inherently governmental functions associated 
with the functions to be performed under the contract; and
    (ii) The contracting officer ensures that the agency addresses any 
potential organizational conflict of interest of the contractor in the 
performance of the functions under the contract (see FAR Subpart 9.5).
    (2) See related information at PGI 207.503(S-70).

[FR Doc. 05-5629 Filed 3-22-05; 8:45 am]
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