[Federal Register Volume 75, Number 133 (Tuesday, July 13, 2010)]
[Rules and Regulations]
[Pages 40716-40717]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2010-16901]


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DEPARTMENT OF DEFENSE

Defense Acquisition Regulations System

48 CFR Part 216


Defense Federal Acquisition Regulation Supplement; Notification 
Requirements for Awards of Single-Source Task or Delivery Orders (DFARS 
Case 2009-D036)

AGENCY: Defense Acquisition Regulations System, Department of Defense 
(DoD).

ACTION: Interim rule with request for comments.

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SUMMARY: DoD is issuing an interim rule amending the Defense Federal 
Acquisition Regulation Supplement (DFARS) to implement section 814 of 
the National Defense Authorization Act for Fiscal Year 2010.

DATES: Effective date: July 13, 2010.
    Comment date: Comments on the interim rule should be submitted in 
writing to the address shown below on or before September 13, 2010, to 
be considered in the formation of the final rule.

ADDRESSES: Submit comments identified by DFARS Case 2009-D036, using 
any of the following methods:
    [cir] Federal eRulemaking Portal: http://www.regulations.gov. 
Follow the instructions for submitting comments.
    [cir] E-mail: [email protected]. Include DFARS Case 2009-D036 in the 
subject line of the message.
    [cir] Fax: 703-602-0350.
    [cir] Mail: Defense Acquisition Regulations System, Attn: Ms. 
Meredith Murphy, OUSD (AT&L) DPAP/DARS, Room 3B855, 3060 Defense 
Pentagon, Washington, DC 20301-3060.
    Comments received generally will be posted without change to http://www.regulations.gov, including any personal information provided.

FOR FURTHER INFORMATION CONTACT: Meredith Murphy, Defense Acquisition 
Regulations System, OUSD (AT&L) DPAP (DARS), Room 3B855, 3060 Defense 
Pentagon, Washington, DC 20301-3060. Telephone 703-602-1302; facsimile 
703-602-0350.

SUPPLEMENTARY INFORMATION:

A. Background

    This DFARS rule implements section 814 of the National Defense 
Authorization Act for Fiscal Year 2010 (Pub. L. 111-84), enacted 
October 28, 2009. Section 814 is entitled ``Amendment to Notification 
Requirements for Awards of Single-Source Task or Delivery Orders.'' 10 
U.S.C. 2304a(d)(3)(A) prohibits the award of a sole-source task or 
delivery order that is estimated to exceed $100 million (including all 
options) unless the head of the agency determines in writing that--
    (1) The task or delivery orders expected under the contract are so 
integrally related that only a single source can reasonably perform the 
work;
    (2) The contract provides only for firm-fixed-price task orders or 
delivery orders for products for which unit prices are established in 
the contract or services for which prices are established in the 
contract for the specific tasks to be performed;
    (3) Only one source is qualified and capable of performing the work 
at a reasonable price to the government; or
    (4) Because of exceptional circumstances, it is necessary in the 
public interest to award the contract to a single source.
    Section 814 requires agency heads to notify the congressional 
defense committees within 30 days after making any determination for 
the reasons in (1) through (4) previously cited. In addition, if the 
task or delivery order concerns intelligence activities of the 
Department of Defense, the agency head also is required to provide 
notification within 30 days of the determination to the Permanent 
Select Committee on Intelligence of the House of Representatives if the 
order relates to tactical intelligence and intelligence-related 
activities, and to the Select Committee on Intelligence of the Senate 
and the Permanent Select Committee on Intelligence of the House of 
Representatives if the order relates to intelligence and intelligence-
related activities other than those activities previously mentioned.
    Given the need for consistency of content and format in the 
information provided to the Congress and the necessity for meeting the 
30-day deadline for reporting the determinations to the Congress, 
agency heads are being asked to provide the determinations, not 
directly to the congressional committees, but to the Office of the 
Under Secretary of Defense (Acquisition, Technology, and Logistics) 
Defense Procurement and Acquisition Policy, Contract Policy and 
International Contracting. This will also enable a single office to 
oversee and manage the DoD picture for single-source task and delivery 
orders. The new reporting requirement is located at DFARS 
216.504(c)(1)(ii)(D)(2).
    This is not a significant regulatory action and, therefore, was not 
subject to review under section 6(b) of Executive Order 12866, 
Regulatory Planning and Review, dated September 30, 1993. This rule is 
not a major rule under 5 U.S.C. 604.

B. Regulatory Flexibility Act

    DoD does not expect that this interim rule will 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 does not impose any additional requirements on small 
businesses and is concerned with internal Government operating 
procedures. Section 814 of the FY 2010 NDAA builds upon the existing 
requirements for justification of sole-source awards of task or 
delivery order contracts that are estimated to exceed $100 million 
(including all options). The dollar threshold and the circumstances 
justifying a sole-source award are not changed by section 814. The new 
statute, however, requires agency heads to notify the congressional 
defense committees within 30 days after

[[Page 40717]]

making any determination regarding the making of sole-source awards. 
This is a change to internal operating procedures of the Government 
with no impact on contractors or offerors. Therefore, an initial 
regulatory flexibility analysis has not been performed. However, DoD 
invites comments from small business concerns and other interested 
parties on the expected impact of this rule on small entities.
    DoD will also consider comments from small entities concerning the 
existing regulations in subparts affected by this rule in accordance 
with 5 U.S.C. 610. Interested parties must submit such comments 
separately and should cite 5 U.S.C. 610 (DFARS Case 2009-D036) in 
correspondence.

C. Paperwork Reduction Act

    The Paperwork Reduction Act does not apply because the interim rule 
does not contain any information collection requirements that require 
the approval of the Office of Management and Budget under 44 U.S.C., et 
seq.

D. Determination To Issue an Interim Rule

    A determination has been made under the authority of the Secretary 
of Defense (DoD) that urgent and compelling circumstances exist to 
promulgate this interim rule without prior opportunity for public 
comments pursuant to 41 U.S.C. 418b and FAR 1.501-3(b). This interim 
rule implements section 814 of the National Defense Authorization Act 
for FY 2010, which prohibits the award of a sole-source task or 
delivery order that is estimated to exceed $100 million (including all 
options) unless the head of the agency determines that one of four 
exceptions applies, and notifies appropriate congressional defense 
committees (and intelligence activities, if the order concerns 
intelligence activities) within 30 days of the determination. An 
interim rule is necessary because the statute became effective upon 
enactment on October 28, 2009, and it is imperative that DoD 
contracting officers be aware of additional congressional notification 
requirements as soon as possible in order to enable them to comply with 
the law. DoD will consider public comments received in response to this 
interim rule in the formation of the final rule.

List of Subjects in 48 CFR Part 216

    Government procurement.

Ynette R. Shelkin,
Editor, Defense Acquisition Regulations System.

0
Therefore, 48 CFR part 216 is amended as follows:

PART 216--TYPES OF CONTRACTS

0
1. The authority citation for 48 CFR part 216 continues to read as 
follows:

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


0
2. Section 216.504 is revised to read as follows:


216.504   Indefinite-quantity contracts.

    (c)(1)(ii)(D) Limitation on single-award contracts.
* * * * *
    (2) The head of the agency must notify the congressional defense 
committees within 30 days after any determination under this section 
and provide a copy of the determination and notification to the Deputy 
Director, Defense Procurement and Acquisition Policy (Contract Policy 
and International Contracting), OUSD (AT&L) DPAP/CPIC, 3060 Defense 
Pentagon, Washington, DC 20301-3060. If the award concerns intelligence 
or intelligence-related activities of DoD, notification shall also be 
provided to the Select Committee on Intelligence of the Senate and the 
Permanent Select Committee on Intelligence of the House of 
Representatives. (See sample notification at PGI 
216.504(c)(1)(ii)(D)(2).)

[FR Doc. 2010-16901 Filed 7-12-10; 8:45 am]
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