[Federal Register Volume 70, Number 236 (Friday, December 9, 2005)]
[Rules and Regulations]
[Pages 73151-73152]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 05-23732]


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DEPARTMENT OF DEFENSE

48 CFR Parts 216 and 217

[DFARS Case 2003-D097/2004-D023]


Defense Federal Acquisition Regulation Supplement; Contract 
Period for Task and Delivery Order Contracts

AGENCY: Department of Defense (DoD).

ACTION: Final rule.

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SUMMARY: DoD has adopted as final, with changes, an interim rule 
amending the Defense Federal Acquisition Regulation Supplement (DFARS) 
to implement Section 843 of the National Defense Authorization Act for 
Fiscal Year 2004 and Section 813 of the National Defense Authorization 
Act for Fiscal Year 2005. Section 843 placed a 5-year limit on the 
period of task or delivery order contracts awarded under 10 U.S.C. 
2304a. Section 813 further amended 10 U.S.C. 2304a to permit a total 
period of up to 10 years, which may be exceeded if the head of the 
agency determines in writing that exceptional circumstances require a 
longer contract period.

EFFECTIVE DATE: December 9, 2005.

FOR FURTHER INFORMATION CONTACT: Ms. Robin Schulze, Defense Acquisition 
Regulations System, OUSD(AT&L)DPAP(DAR), IMD 3C132, 3062 Defense 
Pentagon, Washington, DC 20301-3062. Telephone (703) 602-0326; 
facsimile (703) 602-0350. Please cite DFARS Case 2003-D097.

SUPPLEMENTARY INFORMATION: 

A. Background

    This final rule implements Section 843 of the National Defense 
Authorization Act for Fiscal Year 2004 (Pub. L. 108-136) and Section 
813 of the National Defense Authorization Act for Fiscal Year 2005 
(Pub. L. 108-375). Section 843 amended the general authority for task 
and delivery order contracts at 10 U.S.C. 2304a to specify that a task 
or delivery order contact entered into under that section may cover a 
total period of not more than 5 years. Section 813 further amended 10 
U.S.C. 2304a to permit a total contract period of not more than 10 
years, unless the head of the agency determines in writing that 
exceptional circumstances require a longer contract period.
    DoD published an interim rule implementing Section 843 of Public 
Law 108-136 at 69 FR 13478 on March 23, 2004. As a result of public 
comments received on the interim rule, and to implement the provisions 
of Section 813 of Public Law 108-375, DoD published a second interim 
rule at 69 FR 74992 on December 15, 2004. Four sources submitted 
comments on the second interim rule. A discussion of the comments is 
provided below.
    1. Comment: Clarification of reporting requirement. One respondent 
recommended amendment of the rule to specify the frequency and ending 
date of the reporting requirement that applies to contracts with 
ordering periods exceeding 10 years.
    DoD Response: Concur. The final rule amends DFARS 217.204(e)(ii) to 
specify that DoD must submit a report to Congress, annually through 
fiscal year 2009, when an ordering period is extended beyond 10 years.
    2. Comment: Applicability to information technology contracts. One 
respondent recommended consolidation of the text addressing the types 
of contracts to which the rule does not apply. In addition, the 
respondent recommended deletion of text addressing the applicability of 
the rule to information technology contracts. The respondent did not 
believe it was necessary to call out a single type of contract with 
regard to the rule's applicability.
    DoD Response: Partially concur. The final rule revises DFARS 
217.204(e)(iii) to consolidate the text addressing the types of 
contracts to which the rule does not apply, and to remove the reference 
to information technology contracts. However, a parenthetical phrase 
emphasizing the applicability of the rule to information technology 
contracts has been added at 217.204(e)(i), since FAR 17.204(e) 
specifically exempts

[[Page 73152]]

information technology contracts from the regulatory time limits being 
supplemented by this rule.
    3. Comment: Period of performance for certain performance-based 
contracts. One respondent stated that some performance-based contracts 
require periods of performance of 15 to 20 years to obtain the desired 
end results and questioned how to award these contracts given the 
limits imposed by the rule.
    DoD Response: The rule permits agencies to authorize longer 
performance periods when deemed necessary for exceptional 
circumstances.
    4. Comment: Administrative error. One respondent requested 
clarification of the DoD Response to Comment 1 in the preamble to the 
interim rule published at 69 FR 74992 on December 15, 2004. The text 
contained an erroneous reference to DFARS 217.204(e)(iii) regarding the 
limit on period of performance for task and delivery orders.
    DoD Response: Concur that the reference was in error. The correct 
reference is DFARS 217.204(e)(iv).
    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 a final regulatory flexibility analysis consistent 
with 5 U.S.C. 604. The analysis is summarized below. A copy of the 
analysis may be obtained from the point of contact specified herein.
    This rule finalizes an interim DFARS rule published on December 15, 
2004. The rule implements Section 843 of the National Defense 
Authorization Act for Fiscal Year 2004 (Pub. L. 108-136) and Section 
813 of the National Defense Authorization Act for Fiscal Year 2005 
(Pub. L. 108-375). Section 843 of Public Law 108-136 limited the period 
of a task or delivery order contract awarded under 10 U.S.C. 2304a to 
not more than 5 years. Section 813 of Public Law 108-375 revised the 
limitation to not more than 10 years, unless the head of the agency 
determines in writing that exceptional circumstances require a longer 
contract period. DoD received no comments on the initial regulatory 
flexibility analysis. As a result of comments received on the interim 
rule, the final rule clarifies the types of contracts that are subject 
to the rule and clarifies that the Congressional reporting requirement, 
applicable to contracts with ordering periods exceeding 10 years, 
expires at the end of fiscal year 2009. The rule applies to DoD task or 
delivery order contracts awarded under the authority of 10 U.S.C. 
2304a. It may affect businesses interested in receiving such contracts. 
The impact on small entities is unknown at this time.

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 216 and 217

    Government procurement.

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

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Accordingly, the interim rule amending 48 CFR parts 216 and 217, which 
was published at 69 FR 13478 on March 23, 2004, and which was amended 
by the interim rule published at 69 FR 74992 on December 15, 2004, is 
adopted as a final rule with the following changes:
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1. The authority citation for 48 CFR parts 216 and 217 continues to 
read as follows:

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

PART 217--SPECIAL CONTRACTING METHODS

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2. Section 217.204 is revised to read as follows:


217.204  Contracts.

    (e)(i) Notwithstanding FAR 17.204(e), the ordering period of a task 
order or delivery order contract (including a contract for information 
technology) awarded by DoD pursuant to 10 U.S.C. 2304a--
    (A) May be for any period up to 5 years;
    (B) May be subsequently extended for one or more successive periods 
in accordance with an option provided in the contract or a modification 
of the contract; and
    (C) Shall not exceed 10 years unless the head of the agency 
determines in writing that exceptional circumstances require a longer 
ordering period.
    (ii) DoD must submit a report to Congress, annually through fiscal 
year 2009, when an ordering period is extended beyond 10 years in 
accordance with paragraph (e)(i)(C) of this section. Follow the 
procedures at PGI 217.204(e) for reporting requirements.
    (iii) Paragraph (e)(i) of this section does not apply to the 
following:
    (A) Contracts, including task or delivery order contracts, awarded 
under other statutory authority.
    (B) Advisory and assistance service task order contracts 
(authorized by 10 U.S.C. 2304b that are limited by statute to 5 years, 
with the authority to extend an additional 6 months (see FAR 
16.505(c)).
    (C) Definite-quantity contracts.
    (D) GSA schedule contracts.
    (E) Multi-agency contracts awarded by agencies other than NASA, 
DoD, or the Coast Guard.
    (iv) Obtain approval from the senior procurement executive before 
issuing an order against a task or delivery order contract subject to 
paragraph (e)(i) of this section, if performance under the order is 
expected to extend more than 1 year beyond the 10-year limit or 
extended limit described in paragraph (e)(i)(C) of this section (see 
FAR 37.106 for funding and term of service contracts).
[FR Doc. 05-23732 Filed 12-8-05; 8:45 am]
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