[Federal Register Volume 70, Number 69 (Tuesday, April 12, 2005)]
[Proposed Rules]
[Pages 19043-19044]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 05-7090]


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DEPARTMENT OF DEFENSE

48 CFR Parts 242 and 252

[DFARS Case 2003-D023]


Defense Federal Acquisition Regulation Supplement; Contract 
Administration

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 update text pertaining to contract 
administration and audit services. 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 June 13, 2005, to be considered in 
the formation of the final rule.

ADDRESSES: You may submit comments, identified by DFARS Case 2003-D023, 
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 2003-D023 in the 
subject line of the message.
     Fax: (703) 602-0350.
     Mail: Defense Acquisition Regulations Council, Attn: Ms. 
Debbie Tronic, 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. Debbie Tronic, (703) 602-0289.

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/dpap/dfars/transf.htm.
    This proposed rule is a result of the DFARS Transformation 
initiative.
    The proposed changes--
     Delete text that is unnecessary or duplicative of FAR 
policy in the areas of visits to contractor facilities; conduct of 
postaward conferences; review and negotiation of contractor costs and 
billing rates; use of contractor past performance information; and 
contractor internal controls.
     Delete text on providing contract administration services 
to foreign governments and international organizations; coordination 
between corporate and individual administrative contracting officers; 
processing of contractor novation and change-of-name agreements; 
processing of voluntary refunds from contractors; and providing 
technical representatives at contractor facilities. This text will be 
relocated to the new DFARS companion resource, Procedures, Guidance, 
and Information (PGI), available at http://www.acq.osd.mil/dpap/dars/pgi.
     Update terminology at DFARS 242.202(a)(i)(D).
     Update the clause at DFARS 252.242-7004, Material 
Management and Accounting Systems, for consistency with the policy 
found at DFARS 242.7203(d)(5) regarding corrective action for a 
contractor's failure to make adequate progress in correcting system 
deficiencies.
    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 
makes no significant change to DoD contracting policy. 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 2003-D023.

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 Parts 242 and 252

    Government procurement.

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

    Therefore, DoD proposes to amend 48 CFR Parts 242 and 252 as 
follows:
    1. The authority citation for 48 CFR Parts 242 and 252 continues to 
read as follows:

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

[[Page 19044]]

PART 242--CONTRACT ADMINISTRATION AND AUDIT SERVICES

    2. Section 242.002 is amended by revising paragraph (S-70)(iii) to 
read as follows:


242.002  Interagency agreements.

* * * * *
    (S-70) * * *
    (iii) Other foreign governments (including Canadian government 
organizations other than SSC) and international organizations send 
their requests for contract administration services to the DoD Central 
Control Point (CCP) at the Headquarters, Defense Contract Management 
Agency, International and Federal Business Team. Contract 
administration offices provide services only upon request from the CCP. 
The CCP shall follow the procedures at PGI 242.002 (S-70)(iii).
    3. Section 242.202 is amended by revising paragraph (a)(i)(D) to 
read as follows:


242.202  Assignment of contract administration.

    (a)(i) * * *
    (D) Management and professional support services;
* * * * *

Subpart 242.4--[Removed]

    4. Subpart 242.4 is removed.
    5. Section 242.503-2 is revised to read as follows:


242.503-2  Postaward conference procedure.

    DD Form 1484, Post-Award Conference Record, may be used in 
conducting the conference and in preparing the conference report.


242.503-3, 242.570, and 242.704  [Removed]

    6. Sections 242.503-3, 242.570, and 242.704 are removed.
    7. Section 242.705-1 is revised to read as follows:


242.705-1  Contracting officer determination procedure.

    (a) Applicability and responsibility. (1) The corporate 
administrative contracting officer (CACO) and individual administrative 
contracting officers (ACOs) shall jointly decide how to conduct 
negotiations. Follow the procedures at PGI 242.705-1(a)(1) when 
negotiations are conducted on a coordinated basis.


242.705-2  [Amended]

    8. Section 242.705-2 is amended in paragraph (b)(2)(iii) by 
removing the last sentence.


242.705-3, 242.801, and 242.1202  [Removed]

    9. Sections 242.705-3, 242.801, and 242.1202 are removed.
    10. Section 242.1203 is revised to read as follows:


242.1203  Processing agreements.

    The responsible contracting officer shall process and execute 
novation and change-of-name agreements in accordance with the 
procedures at PGI 242.1203.

Subpart 242.15--[Removed]

    11. Subpart 242.15 is removed.
    12. Section 242.7100 is revised to read as follows:


242.7100  General.

    A voluntary refund is a payment or credit (adjustment under one or 
more contracts or subcontracts) to the Government from a contractor or 
subcontractor that is not required by any contractual or other legal 
obligation. Follow the procedures at PGI 242.7100 for voluntary 
refunds.


242.7101 and 242.7102  [Removed]

    13. Sections 242.7101 and 242.7102 are removed.
    14. Sections 242.7400 and 242.7401 are revised to read as follows:


242.7400  General.

    (a) Program managers may conclude that they need technical 
representation in contractor facilities to perform non-contract 
administration service (CAS) technical duties and to provide liaison, 
guidance, and assistance on systems and programs. In these cases, the 
program manager may assign technical representatives under the 
procedures in 242.7401.
    (b) A technical representative is a representative of a DoD 
program, project, or system office performing non-CAS technical duties 
at or near a contractor facility. A technical representative is not--
    (1) A representative of a contract administration or contract audit 
component; or
    (2) A contracting officer's representative (see 201.602).


242.7401  Procedures.

    When the program, project, or system manager determines that a 
technical representative is required, follow the procedures at PGI 
242.7401.


242.7500 and 242.7501  [Removed]

    15. Sections 242.7500 and 242.7501 are removed.


242.7502 and 242.7503  [Redesignated]

    16. Sections 242.7502 and 242.7503 are redesignated as sections 
242.7501 and 242.7502, respectively.

PART 252--SOLICITATION PROVISIONS AND CONTRACT CLAUSES


252.242-7000  [Removed and Reserved]

    17. Section 252.242-7000 is removed and reserved.
    18. Section 252.242-7004 is amended by revising the clause date and 
adding paragraph (d)(4) to read as follows:


252.242-7004  Material Management and Accounting System.

* * * * *

MATERIAL MANAGEMENT AND ACCOUNTING SYSTEM (XXX 2005)

* * * * *
    (d) * * *
    (4) If the contractor fails to make adequate progress, the ACO 
must take further action. The ACO may--
    (i) Elevate the issue to higher level management;
    (ii) Further reduce progress payments and/or disallow costs on 
vouchers;
    (iii) Notify the contractor of the inadequacy of the 
contractor's cost estimating system and/or cost accounting system; 
and
    (iv) Issue cautions to contracting activities regarding the 
award of future contracts.
* * * * *
[FR Doc. 05-7090 Filed 4-11-05; 8:45 am]
BILLING CODE 5001-08-P