[Federal Register Volume 71, Number 92 (Friday, May 12, 2006)]
[Rules and Regulations]
[Pages 27640-27641]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 06-4465]


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DEPARTMENT OF DEFENSE

Defense Acquisition Regulations System

48 CFR Part 204

[DFARS Case 2003-D052]


Defense Federal Acquisition Regulation Supplement; Authorization 
for Continued Contracts

AGENCY: Defense Acquisition Regulations System, 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 add policy permitting the 
assignment of an additional identification number to an existing 
contract for administrative purposes. 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: May 12, 2006.

FOR FURTHER INFORMATION CONTACT: Ms. Deborah Tronic, Defense 
Acquisition Regulations System, OUSD (AT&L) DPAP (DARS), IMD 3C132, 
3062 Defense Pentagon, Washington, DC 20301-3062. Telephone (703) 602-
0289; facsimile (703) 602-0350. Please cite DFARS Case 2003-D052.

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/dars/dfars/transformation/index.htm.
    This final rule is a result of the DFARS Transformation initiative. 
The rule permits DoD contracting activities to assign an additional 
identification number to an existing contract by issuing a separate 
``continued'' contract, when continued performance under the existing 
contract number is not practical for administrative reasons. The 
continued contract will incorporate all prices, terms, and conditions 
of the predecessor contract. Use of this procedure is expected to be 
limited, but will help to simplify administration, payment, and 
closeout of lengthy, complex contracts; and will help in situations 
where a contracting activity has exhausted its assigned series of 
identification numbers for orders placed against another activity's 
contract.
    DoD published a proposed rule at 70 FR 23826 on May 5, 2005. One 
DoD contracting activity submitted comments requesting clarification of 
administrative matters pertaining to the Government's execution of this 
new procedure. A new section has been added to the DFARS companion 
resource, Procedures, Guidance, and Information (PGI), at PGI 204.7001 
(http://www.acq.osd.mil/dpap/dars/pgi), to provide supplemental 
guidance to contracting officers regarding use of this procedure.
    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 addresses an administrative procedure that is 
performed by the Government. A continued contract does not constitute a 
new procurement and will incorporate all prices, terms, and conditions 
of the predecessor contract.

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 Part 204

    Government procurement.

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

0
Therefore, 48 CFR Part 204 is amended as follows:

PART 204--ADMINISTRATIVE MATTERS

0
1. The authority citation for 48 CFR Part 204 continues to read as 
follows:

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


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2. Section 204.7001 is revised to read as follows:

204.7001 Policy.

    (a) Use the uniform procurement instrument identification (PII) 
numbering system prescribed by this subpart for the solicitation/
contract instruments described in 204.7003 and 204.7004.
    (b) Retain the basic PII number unchanged for the life of the 
instrument unless the conditions in paragraph (c) of this section 
exist.
    (c)(1) If continued performance under a contract number is not 
possible or is not in the Government's best interest solely for 
administrative reasons (e.g., when the supplementary PII serial 
numbering system is exhausted or for lengthy major systems contracts 
with multiple options), the contracting officer may assign an 
additional PII number by issuing a separate continued contract to 
permit continued contract performance.
    (2) A continued contract--
    (i) Does not constitute a new procurement;
    (ii) Incorporates all prices, terms, and conditions of the 
predecessor contract effective at the time of issuance of the continued 
contract;
    (iii) Operates as a separate contract independent of the 
predecessor contract once issued; and
    (iv) Shall not evade competition, expand the scope of work, or 
extend the period of performance beyond that of the predecessor 
contract.
    (3) When issuing a continued contract, the contracting officer 
shall--
    (i) Issue an administrative modification to the predecessor 
contract to clearly state that--
    (A) Any future awards provided for under the terms of the 
predecessor contract (e.g., issuance of orders or exercise of options) 
will be accomplished under the continued contract; and
    (B) Supplies and services already acquired under the predecessor 
contract

[[Page 27641]]

shall remain solely under that contract for purposes of Government 
inspection, acceptance, payment, and closeout; and
    (ii) Follow the procedures at PGI 204.7001(c).

[FR Doc. 06-4465 Filed 5-11-06; 8:45 am]
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