[Federal Register Volume 70, Number 77 (Friday, April 22, 2005)]
[Rules and Regulations]
[Pages 20838-20840]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 05-7979]


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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: Final rule.

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SUMMARY: DoD has issued a final rule amending the Defense Federal 
Acquisition Regulation Supplement (DFARS) to clarify requirements for 
reporting of contract performance outside the United States. This rule 
is a result of a transformation initiative undertaken by DoD to 
dramatically change the purpose and content of the DFARS.

DATES: Effective Date: April 22, 2005.

FOR FURTHER INFORMATION CONTACT: Ms. Amy Williams, Defense Acquisition 
Regulations Council, OUSD(AT&L)DPAP(DAR), IMD 3C132, 3062 Defense 
Pentagon, Washington, DC 20301-3062. Telephone (703) 602-0328; 
facsimile (703) 602-0350. Please cite DFARS Case 2004-D001.

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.
    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 final rule revises DFARS Subpart 225.72, and the corresponding 
solicitation provision and contract clause, to clarify the two separate 
reporting requirements. In addition, the rule removes DFARS text 
(previously at 225.7202) related to contracting officer distribution of 
reports. This text has been relocated to the new DFARS companion 
resource, Procedures, Guidance, and Information (PGI), available at 
http://www.acq.osd.mil/dpap/dars/pgi.
    DoD published a proposed rule at 69 FR 31939 on June 8, 2004. DoD 
received comments from one industry association. The comments are 
summarized as follows:
    1. Comment: The quarterly reporting requirement, which is not based 
on a statutory requirement, should be eliminated.
    DoD Response: Do not concur. The quarterly report provides 
information that DoD uses in the assessment of bilateral defense trade 
with allied countries. The information is also of significant interest 
to Congress.
    2. Comment: The reporting requirements should apply only to 
subcontracts that are awarded directly as a result of the award of the 
prime contract.
    DoD Response: Do not concur. The purpose of the reporting 
requirements is to determine the portion of total contract dollars 
spent on performance outside the United States, regardless of whether 
the dollars are spent as a result of a preexisting contractual 
arrangement or as a result of a subcontract awarded directly under the 
prime contract.
    3. Comment: The clause titles and text should be revised to clarify 
the nature and timing of the reporting requirements.
    DoD Response: The final rule incorporates most of the recommended 
clarifying changes. In particular, the final rule--

[[Page 20839]]

     Revises the titles of the clauses at (252) 225-7004 and 
(252) 225-7006 to make a distinction between requirements for reporting 
of intended and actual contract performance;
     Revises paragraph (b) of the clause at (252) 225-7004 to 
require reporting ``as soon as practical after the information is 
known,'' rather than ``as soon as the information is known.''
     Revises paragraph (b), and adds a new paragraph (e)(3), in 
the clause at (252) 225-7006 to further clarify reporting requirements 
for contractors and subcontractors.
    4. Comment: Contracting officers should be authorized to substitute 
the new clauses for prior versions of the clauses that are in existing 
contracts, to simplify administration and improve compliance with 
clause requirements.
    DoD Response: In accordance with FAR 1.108, the new clauses apply 
to solicitations issued on or after the effective date of this DFARS 
rule. Contracting officers may, at their discretion, include the 
clauses in any existing contract with appropriate consideration.
    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 certifies that this final rule will not 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 requirements for reporting contract 
performance outside the United States, with no substantive change to 
those requirements.

C. Paperwork Reduction Act

    The 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 for use through March 31, 2007.

List of Subjects in 48 CFR Parts 225 and 252

    Government procurement.

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

0
Therefore, 48 CFR Parts 225 and 252 are amended as follows:
0
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

0
2. Subpart 225.72 is revised to read as follows:

Subpart 225.72--Reporting Contract Performance Outside the United 
States

Sec.
225.7201 Policy.
225.7202 Exception.
225.7203 Contracting officer distribution of reports.
225.7204 Solicitation provision and contract clauses.


225.7201  Policy.

    (a) 10 U.S.C. 2410g requires 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.
    (b) DoD requires contractors to report the volume, type, and nature 
of contract performance outside the United States.


225.7202  Exception.

    This subpart does not apply to contracts for commercial items, 
construction, ores, natural gas, utilities, petroleum products and 
crudes, timber (logs), or subsistence.


225.7203  Contracting officer distribution of reports.

    Follow the procedures at PGI 225.7203 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.


225.7204  Solicitation provision and contract clauses.

    Except for acquisitions described in 225.7202--
    (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, Report of Intended Performance 
Outside the United States and Canada--Submission after Award, in 
solicitations and contracts with a value exceeding $10 million; and
    (c) Use the clause at 252.225-7006, Quarterly Reporting of Actual 
Contract Performance Outside the United States, in solicitations and 
contracts with a value exceeding $500,000.

PART 252--SOLICITATION PROVISIONS AND CONTRACT CLAUSES

0
3. Sections 252.225-7003 and 252.225-7004 are revised to read as 
follows:


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

    As prescribed in 225.7204(a), use the following provision:

Report of Intended Performance Outside the United States and Canada--
Submission With Offer (Apr 2005)

    (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://www.dtic.mil/whs/directives/infomgt/forms/formsprogram.htm.

(End of provision)


252.225-7004  Report of Intended Performance Outside the United States 
and Canada--Submission after Award.

    As prescribed in 225.7204(b), use the following clause:

Report of Intended Performance Outside the United States and Canada--
Submission After Award (Apr 2005)

    (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 practical after 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;

[[Page 20840]]

    (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://www.dtic.mil/whs/directives/infomgt/forms/formsprogram.htm.

(End of clause)

0
4. Section 252.225-7006 is added to read as follows:


252.225-7006  Quarterly Reporting of Actual Contract Performance 
Outside the United States.

    As prescribed in 225.7204(c), use the following clause:

Quarterly Reporting of Actual Contract Performance Outside the United 
States (Apr 2005)

    (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 of the contract; and
    (2) The Contractor specified the foreign place of performance in 
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://www.dtic.mil/whs/directives/infomgt/forms/formsprogram.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;
    (2) Shall provide the number of this contract to its 
subcontractors required to submit reports under this clause; and
    (3) Shall require the subcontractor, with respect to performance 
of its subcontract, to comply with the requirements directed to the 
Contractor in paragraphs (a) through (d) of this clause.

(End of clause)

[FR Doc. 05-7979 Filed 4-21-05; 8:45 am]
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