[Federal Register Volume 75, Number 205 (Monday, October 25, 2010)]
[Rules and Regulations]
[Pages 65439-65441]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2010-26718]


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DEPARTMENT OF DEFENSE

Defense Acquisition Regulations System

48 CFR Parts 219 and 252

[DFARS Case 2009-D002]


Defense Federal Acquisition Regulation Supplement; Electronic 
Subcontracting Reporting System

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

ACTION: Interim rule with request for comments.

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SUMMARY: This interim rule amends the Defense Acquisition Regulation 
Supplement (DFARS) to conform to the Federal Acquisition Regulation 
(FAR) by providing Department of Defense (DoD)-specific policy and 
procedures related to the Electronic Subcontracting Reporting System 
(eSRS). The FAR has been revised to reflect use of the eSRS, rather 
than Standard Form 294--Subcontract Report for Individual Contracts, 
and Standard Form 295--Summary Subcontract Report, for submission of 
small business subcontract reports.

DATES: Effective date: October 25, 2010.
    Comment date: Comments on the interim rule should be submitted in 
writing to the address shown below on or before December 27, 2010, to 
be considered in the formation of the final rule.

ADDRESSES: You may submit comments, identified by DFARS Case 2009-D002, 
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-D002 in the 
subject line of the message.
    [cir] Fax: 703-602-0350.
    [cir] Mail: Defense Acquisition Regulations System, Attn: Ms. 
Cassandra R. Freeman, OUSD (AT&L) DPAP (DARS), 3060 Defense Pentagon, 
Room 3B855, Washington, DC 20301-3060.
    All comments received will be posted to http://www.regulations.gov.

FOR FURTHER INFORMATION CONTACT: Ms. Cassandra R. Freeman, Defense 
Acquisition Regulations System, OUSD (AT&L) DPAP (DARS), 3060 Defense 
Pentagon, Room 3B855, Washington, DC 20301-3060, Telephone 703-602-
8383; facsimile(703)602-0350. Please cite DFARS Case 2009-D002.

SUPPLEMENTARY INFORMATION: 

A. Background

    This DFARS case is the companion case to FAR Case 2005-040 
Electronic Subcontracting Reporting System. This DFARS interim rule 
amends sections 219.708 and 252.219 to provide DoD-specific procedures 
and policies related to DoD's implementation of eSRS.

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 small 
businesses are not required to have subcontracting plans and, 
therefore, are not required to use eSRS to submit reports on their 
progress in achieving the goals in those plans.
    Therefore, DoD has not performed an initial regulatory flexibility 
analysis. 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-D002 in 
correspondence.

C. Paperwork Reduction Act

    This interim rule does not impose any new information collection 
requirements that require the approval of the Office of Management and 
Budget under 44 U.S.C. 3501, et seq. This rule provides DoD 
instructions on how to submit reports that are already required by the 
FAR and are covered under Office of Management and Budget Clearance 
Numbers 9000-0006 and 9000-0007.

D. Determination To Issue an Interim Rule

    A determination has been made under the authority of the Secretary 
of Defense that urgent and compelling reasons exist to publish an 
interim rule prior to affording the public an opportunity to comment. 
The FAR already requires the use of eSRS for submission of 
subcontracting reports. This interim rule provides to DoD contractors 
the DoD-specific policies and procedures that they must follow in order 
to be able to submit subcontract reports using eSRS, as required by the 
FAR.

[[Page 65440]]

List of Subjects in 48 CFR Parts 219 and 252

    Government procurement.

Clare M. Zebrowski,
Editor, Defense Acquisition Regulations System.

0
Therefore, 48 CFR parts 219 and 252 are amended as follows:
0
1. The authority citation for 48 CFR parts 219 and 252 continues to 
read as follows:

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

PART 219--SMALL BUSINESS PROGRAMS

0
2. Section 219.708 is amended by revising paragraph (b)(1) to read as 
follows:


219.708  Contract clauses.

    (b)(1)(A) Use the clause at 252.219-7003, Small Business 
Subcontracting Plan (DoD Contracts)--
    (1) In solicitations and contracts that contain the clause at FAR 
52.219-9, Small Business Subcontracting Plan.
    (2) With its Alternate I in contracts that use Alternate III of 
52.219-9, Small Business Subcontracting Plan.
    (B) In contracts with contractors that have comprehensive 
subcontracting plans approved under the test program described in 
219.702, use the clause at 252.219-7004, Small Business Subcontracting 
Plan (Test Program), instead of the clauses at 252.219-7003, Small 
Business Subcontracting Plan (DoD Contracts), and FAR 52.219-9, Small 
Business Subcontracting Plan. Include --
    (1) FAR clause 52.219-9, Small Business Subcontracting Plan and 
252.219-7003 in the contract for purposes of the contractor flowing 
these clauses down to subcontractors, except
    (2) When the contract will not be reported in FPDS (see FAR 4.606 
(c)(5)), include FAR clause 52.219-9, Small Business Subcontracting 
Plan with its Alternate III and 252.219-7003 Small Business 
Subcontracting Plan (DoD Contracts) with its Alternate I in the 
contract for purposes of the contractor flowing these clauses down to 
subcontractors.
* * * * *

PART 252--SOLICITATION PROVISIONS AND CONTRACT CLAUSES

0
3. Section 252.212-7001 is amended by revising the clause date to read 
``(OCT 2010)'' in the clause title and paragraphs (b)(3) and (b)(4).


0
4. Section 252.219-7003 is revised to read as follows:


252.219-7003  Small business subcontracting plan (DoD contracts).

    As prescribed in 219.708(b)(1)(A)(1), use the following clause:

SMALL BUSINESS SUBCONTRACTING PLAN (DoD CONTRACTS) (OCT 2010)

    This clause supplements the Federal Acquisition Regulation 
52.219-9, Small Business Subcontracting Plan, clause of this 
contract.
    (a) Definitions. As used in this clause--
    Historically black colleges and universities means institutions 
determined by the Secretary of Education to meet the requirements of 
34 CFR Section 608.2. The term also means any nonprofit research 
institution that was an integral part of such a college or 
university before November 14, 1986.
    Minority institutions means institutions meeting the 
requirements of Section 1046(3) of the Higher Education Act of 1965 
(20 U.S.C. 1135d-5(3)). The term also includes Hispanic-serving 
institutions as defined in Section 316(b)(1) of such Act (20 U.S.C. 
1059c(b)(1)).
    Summary Subcontract Report (SSR) Coordinator means the 
individual at the department or agency level who is registered in 
eSRS and is responsible for acknowledging receipt or rejecting SSRs 
in eSRS for the department or agency.
    (b) Except for company or division-wide commercial items 
subcontracting plans, the term ``small disadvantaged business,'' 
when used in the FAR 52.219-9 clause, includes historically black 
colleges and universities and minority institutions, in addition to 
small disadvantaged business concerns.
    (c) Work under the contract or its subcontracts shall be 
credited toward meeting the small disadvantaged business concern 
goal required by paragraph (d) of the FAR 52.219-9 clause when:
    (1) It is performed on Indian lands or in joint venture with an 
Indian Tribe or a Tribally-owned corporation, and
    (2) It meets the requirements of 10 U.S.C. 2323a.
    (d) Subcontracts awarded to workshops approved by the Committee 
for Purchase from People Who are Blind or Severely Disabled (41 
U.S.C. 46-48), may be counted toward the Contractor's small business 
subcontracting goal.
    (e) A mentor firm, under the Pilot Mentor-Protege Program 
established under Section 831 of Public Law 101-510, as amended, may 
count toward its small disadvantaged business goal, subcontracts 
awarded--
    (1) Protege firms which are qualified organizations employing 
the severely handicapped; and
    (2) Former protege firms that meet the criteria in Section 
831(g)(4) of Public Law 101-510.
    (f) The master plan is approval by the Contractor's cognizant 
contract administration activity.
    (g) In those subcontracting plans which specifically identify 
small businesses, the Contractor shall notify the Administrative 
Contracting Officer of any substitutions of firms that are not small 
business firms, for the small business firms specifically identified 
in the subcontracting plan. Notifications shall be in writing and 
shall occur within a reasonable period of time after award of the 
subcontract. Contractor-specified formats shall be acceptable.
    (h)(1) For DoD, the Contractor shall submit reports in eSRS as 
follows:
    (i) The Individual Subcontract Report (ISR) shall be submitted 
to the contracting officer at the procuring contracting office, even 
when contract administration has been delegated to the Defense 
Contract Management Agency.
    (ii) An SSR for other than a commercial subcontracting plan, or 
construction and related maintenance repair contracts, shall be 
submitted in eSRS to the department or agency within DoD that 
administers the majority of the Contractor's individual 
subcontracting plans. An example would be Defense Finance and 
Accounting Service or Missile Defense Agency.
    (2) For DoD, the authority to acknowledge receipt or reject 
reports in eSRS is as follows:
    (i) The authority to acknowledge receipt or reject the ISR 
resides with the contracting officer who receives it, as described 
in paragraph (h)(1)(i) of this clause.
    (ii) Except as provided in (h)(2)(iii), the authority to 
acknowledge receipt or reject SSRs in eSRS resides with the SSR 
Coordinator at the department or agency that administers the 
majority of the Contractor's individual subcontracting plans.
    (iii) The authority to acknowledge receipt or reject SSRs for 
construction and related maintenance and repair contracts resides 
with the SSR Coordinator for each department or agency.
    (iv) The authority to acknowledge receipt or reject the Year-End 
Supplementary Report for Small Disadvantaged Businesses resides with 
the SSR Coordinator who acknowledges receipt or rejects the SSR.
    (v) If the Contractor submits the Small Disadvantaged Business 
Participation report using eSRS, the authority to acknowledge 
receipt or reject this report in eSRS resides with the contracting 
officer who acknowledges receipt or rejects the ISR.


(End of clause)

ALTERNATE I (OCT 2010)

    As prescribed in 219.708(b)(1)(A)(2), substitute the following 
paragraph (h)(1)(i) for paragraph (h)(1)(i) in the basic clause:

    (h)(1)(i) The Standard Form 294 Subcontracting Report for 
Individual Contracts shall be submitted in accordance with the 
instructions on that form; paragraph (h)(2)(i) is inapplicable.


0
5. Section 252.219-7004 is added to read as follows:


252.219-7004  Small business subcontracting plan (test program).

    As prescribed in 219.708(b)(1)(B), use the following clause:

[[Page 65441]]

SMALL BUSINESS SUBCONTRACTING PLAN (TEST PROGRAM) (OCT 2010)

    (a) Definition.
    Electronic Subcontracting Reporting System (eSRS) means the 
Governmentwide, electronic, Web-based system for small business 
subcontracting program reporting. The eSRS is located at http://www.esrs.gov.
    (b) The Offeror's comprehensive small business subcontracting 
plan and its successors, which are authorized by and approved under 
the test program of Section 834 of Pub. L. 101-189, as amended, 
shall be included in and made a part of the resultant contract. Upon 
expulsion from the test program or expiration of the test program, 
the Contractor shall negotiate an individual subcontracting plan for 
all future contracts that meet the requirements of Section 211 of 
Public Law 95-507.
    (c) The Contractor shall--
    (1) Ensure that subcontractors with subcontracting plans agree 
to submit an Individual Subcontract Report (ISR) and/or Summary 
Subcontract Report (SSR) using the Electronic Subcontracting 
Reporting System (eSRS);
    (2) Provide its contract number, its DUNS number, and the e-mail 
address of the Contractor's official responsible for acknowledging 
or rejecting the ISR to all first-tier subcontractors, who will be 
required to submit ISRs, so they can enter this information into the 
eSRS when submitting their reports;
    (3) Require that each subcontractor with a subcontracting plan 
provide the prime contract number, its own DUNS number, and the e-
mail address of the subcontractor's official responsible for 
acknowledging or rejecting the ISRs to its subcontractors with 
subcontracting plans who will be required to submit ISRs; and
    (4) Acknowledge receipt or reject all ISRs submitted by its 
subcontractors using eSRS.
    (d) The Contractor shall submit SSRs using eSRS at http://www.esrs.gov. The reports shall provide information on subcontract 
awards to small business concerns, veteran-owned small business 
concerns, service-disabled veteran-owned small business concerns, 
HUBZone small business concerns, small disadvantaged business 
concerns, women-owned small business concerns, and Historically 
Black Colleges and Universities and Minority Institutions. Purchases 
from a corporation, company, or subdivision that is an affiliate of 
the prime Contractor or subcontractor are not included in these 
reports. Subcontract award data reported by prime contractors and 
subcontractors shall be limited to awards made to their immediate 
next-tier subcontractors. Credit cannot be taken for awards made to 
lower tier subcontractors unless the Contractor or subcontractor has 
been designated to receive a small business or small disadvantaged 
business credit from an ANC or Indian Tribe. Only subcontracts 
involving performance in the U.S. or its outlying areas should be 
included in these reports.
    (1) This report may be submitted on a corporate, company or 
subdivision (e.g., plant or division operating as a separate profit 
center) basis, as negotiated in the comprehensive subcontracting 
plan with the Defense Contract Management Agency.
    (2) This report encompasses all subcontracting under prime 
contracts and subcontracts with the Department of Defense, 
regardless of the dollar value of the subcontracts, and is based on 
the negotiated comprehensive subcontracting plan.
    (3) The Contractor shall submit the report semi-annually for the 
six months ending March 31 and the twelve months ending September 
30. Reports are due 30 days after the close of each reporting 
period.
    (4) The authority to receipt or reject the SSR resides with the 
Comprehensive Subcontracting Program Division, the Defense Contract 
Management Agency Small Business Center.
    (e) All reports submitted at the close of each fiscal year shall 
include a Year-End Supplementary Report for Small Disadvantaged 
Businesses. The report shall include subcontract awards, in whole 
dollars, to small disadvantaged business concerns by North American 
Industry Classification System (NAICS) Industry Subsector. If the 
data are not available when the year-end SSR is submitted, the prime 
Contractor and/or subcontractor shall submit the Year-End 
Supplementary Report for Small Disadvantaged Businesses within 90 
days of submitting the year-end SSR. The authority to acknowledge 
receipt or reject the Year End Report resides with the Comprehensive 
Subcontracting Program Division, the Defense Contract Management 
Agency Small Business Center.
    (f) The failure of the Contractor or subcontractor to comply in 
good faith with the clause of this contract entitled ``Utilization 
of Small Business Concerns,'' or an approved plan required by this 
clause, shall be a material breach of the contract.
    (g) The Contractor shall include, in contracts that offer 
subcontracting possibilities, are expected to exceed $550,000 
($1,000,000 for construction of any public facility), and are 
required to include the clause at 52.219-8, Utilization of Small 
Business Concerns--
    (1) FAR 52.219-9, Small Business Subcontracting Plan, and 
252.219-7003, Small Business Subcontracting Plan (DoD Contracts), 
when the Contracting Officer has included these clauses in the 
contract for purposes of flowdown to subcontractors;
    (2) 52.219-9 Small Business Subcontracting Plan with its 
Alternate III and 252.219-7003, Small Business Subcontracting Plan 
(DoD Contracts), with its Alternate I, when the Contracting Officer 
has included these clauses in the contract for flowdown to 
subcontractors to allow for submission of SF 294s in lieu of ISRs; 
or
    (3) 252.219-7004, Small Business Subcontracting Plan (Test 
Program), in subcontracts with subcontractors that participate in 
the test program described in DFARS 219.702.


(End of clause)


0
6. In appendix I to chapter 2, Section I-105 is amended by revising 
paragraph (b)(7) to read as follows:

Appendix I--Policy and Procedures for the DoD Pilot Mentor-Protege 
Program

* * * * *

I-105 Mentor approval process.

    (b) * * *
    (7) The total dollar amount and percentage of subcontracts that 
the company awarded to all SDB, women-owned small business, HUBZone 
small business, and service-disabled veteran-owned small business 
firms under DoD contracts and other Federal agency contracts during 
the 2 preceding fiscal years. (Show DoD subcontract awards 
separately.) If the company presently is required to submit a 
Summary Subcontract Report (SSR) or previously submitted the 
Standard Form (SF) 295, the request must include copies of the final 
reports for the 2 preceding fiscal years.

0
7. In appendix I to chapter 2, section I-112.1 is amended by revising 
the section heading and paragraph (a) to read as follows:

I-112.1 Reporting requirements applicable to Individual Subcontract 
Reports (ISR), Summary Subcontract Reports (SSR) and SF 294s.

    (a) Amounts credited toward applicable subcontracting goal(s) 
for unreimbursed costs under the Program must be separately 
identified on the appropriate ISR, SSR or SF 294 reports from the 
amounts credited toward the goal(s) resulting from the award of 
actual subcontracts to protege firms. The combination of the two 
must equal the mentor firm's overall accomplishment toward the 
applicable goal(s).
* * * * *

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8. In appendix I to chapter 2, section I-112.2 is amended by revising 
paragraph (c)(3) to read as follows:

I-112.2 Program specific Reporting requirements.

* * * * *
    (c) * * *
    (3) Dollars credited, if any, toward applicable subcontracting 
goals as a result of developmental assistance provided to the 
protege and a copy of the ISR or SF 294 and/or SSR for each contract 
where developmental assistance was credited.
* * * * *
[FR Doc. 2010-26718 Filed 10-22-10; 8:45 am]
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