[Federal Register Volume 76, Number 223 (Friday, November 18, 2011)]
[Rules and Regulations]
[Pages 71465-71467]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2011-29903]


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DEPARTMENT OF DEFENSE

Defense Acquisition Regulations System

48 CFR Part 216

RIN 0750-AG66


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

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

ACTION: Final rule.

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SUMMARY: DoD is adopting as final, with changes, an interim rule 
amending the Defense Federal Acquisition Regulation Supplement to 
implement the National Defense Authorization Act for Fiscal Year 2010 
regarding the notification requirements to Congress when awarding a 
single-award task- or delivery-order contract in excess of $103 
million.

DATES: Effective date: November 18, 2011.

FOR FURTHER INFORMATION CONTACT: Mr. Manuel Quinones, telephone (703) 
602-8383.

SUPPLEMENTARY INFORMATION: 

I. Background

    DoD published an interim rule at 75 FR 40716 on July 13, 2010, to 
implement section 814 of the National Defense Authorization Act (NDAA) 
for Fiscal Year (FY) 2010, (Pub. L. 111-84, enacted October 28, 2009). 
The public comment period closed on September 13, 2010. Three 
respondents submitted comments in response to the interim rule.

[[Page 71466]]

    The interim rule requires the head of the agency to notify the 
congressional defense committees within 30 days after any determination 
made under FAR 16.504(c)(ii)(D)(1), and to provide a copy of the 
determination and notification to the Deputy Director, Defense 
Procurement and Acquisition Policy. If the single-award task- or 
delivery-order contract award concerns intelligence or intelligence-
related activities of DoD, notification shall also be provided to the 
Select Committee on Intelligence of the Senate and Permanent Select 
Committee on Intelligence of the House of Representatives.

II. Discussion and Analysis of Public Comments

    A discussion of the comments received and the changes made to the 
final rule as a result of those comments are provided as follows:

A. Analysis of Public Comments

    Comment: Two respondents wrote that the interim rule's preamble was 
confusing and would lead to misinterpretations. One of the respondents 
stated that ``(t)here is a difference between a `single-source' and a 
`sole-source'.'' Further, the respondent stated that the ``Indefinite 
Quantity Contract itself is the subject of DFARS 216.505, not the 
resulting delivery or task orders issued under the contract.''
    Response: The respondent correctly states that there is a 
difference between single-source and sole-source, and the preamble of 
this final rule clarifies the intent of the rule by using the terms 
``single-award'' or ``single-source'' contracts, as used in the 
statute, in lieu of sole-source. In response to the other comment, 
individual task orders and delivery orders are the subject of DFARS 
216.505, Ordering; however, this rule addresses limitations on single-
award contracts, and DoD confirms that the rule text is correctly 
located at DFARS 216.504, Indefinite Quantity Contracts.
    Comment: A respondent requested that the preamble to the interim 
rule be amended to add ``contract'' or ``contracts'' where appropriate 
in order to better convey the intent of the existing and new 
regulations. The preamble for the interim rule appears to this 
respondent to change the reporting requirement from ``task or delivery 
order contracts'' to ``task or delivery orders.''
    Response: In response to the first comment, the title of this final 
rule has been amended to include ``Contracts'' in the title to more 
clearly convey the intent of the rule. Concerning the second comment, 
the agency-head determination and congressional notification are 
required, in accordance with 10 U.S.C. 2304a(d)(3), only for single-
source indefinite-delivery contracts estimated to exceed $100 million 
(now $103 million). DoD has reviewed and confirms that the interim rule 
changes at DFARS 216.504(c)(1)(ii)(D) correctly implemented the 
statutory requirements for single-source contracts, notwithstanding 
minor clarifications made in this final rule concerning reporting 
requirements.
    Comment: A respondent pointed out that there is a ``disconnect'' 
between the interim rule published in the Federal Register and the on-
line version of the DFARS. The on-line version includes, at the end of 
DFARS 216.504(c)(1)(ii)(d)(2), the sentence ``A copy of any 
determination made in accordance with FAR 16.504(c)(1)(ii)(D) shall be 
submitted to: Deputy Director, Defense Procurement (Contract Policy and 
International Contracting), OUSD (AT&L) DPAP (CPIC), 3060 Defense 
Pentagon, Washington, DC 20301-3060.'' The respondent notes that this 
appears to duplicate the same statement that is made earlier in the 
same paragraph.
    Response: In response to this comment, the rule text format, 
numbering, notification and reporting requirements are clarified in 
this final DFARS rule and in changes made to the DFARS Procedures 
Guidance and Information. Agency heads are required to provide a copy 
of each determination and congressional notification to the Office of 
the Under Secretary of Defense (Acquisition, Technology, and Logistics) 
Defense Procurement and Acquisition Policy (DPAP) Contract Policy and 
International Contracting (CPIC). This enables a single office to 
oversee and manage the DoD-wide use of single-award task- and delivery-
order contracts.
    Comment: A respondent submitted an editorial comment, asking that 
DoD add ``216.504, Indefinite-quantity contracts'' with a link to DFARS 
216, Table of Contents.
    Response: The ability to hyperlink is available in the HTML version 
of each DFARS subpart.

B. Other Changes

    The final rule at DFARS 216.504(c)(1)(ii)(D)(i) is revised to 
clarify that the authority to make any determination authorized by FAR 
16.504(c)(1)(ii)(D)(1) shall not be delegated below the level of the 
senior procurement executive. Previously, this limitation on the 
delegation of approval authority only applied to determinations made 
because it was necessary in the public interest to award the contract 
to a single source due to exceptional circumstances, and these 
determinations had to be reported to Congress. Since the statue and the 
resultant interim rule expand the reporting requirement to require that 
any determination made under FAR 16.504(c)(1)(ii)(D)(1) be reported to 
Congress, the limitation on delegation of approval authority is revised 
to be commensurate with the expanded reporting requirement.

III. Executive Orders 12866 and 13563

    Executive Orders (E.O.s) 12866 and 13563 direct agencies to assess 
all costs and benefits of available regulatory alternatives and, if 
regulation is necessary, to select regulatory approaches that maximize 
net benefits (including potential economic, environmental, public 
health and safety effects, distributive impacts, and equity). E.O. 
13563 emphasizes the importance of quantifying both costs and benefits, 
of reducing costs, of harmonizing rules, and of promoting flexibility. 
This is not a significant regulatory action and, therefore, was not 
subject to review under section 6(b) of E.O. 12866, Regulatory Planning 
and Review, dated September 30, 1993. This rule is not a major rule 
under 5 U.S.C. 804.

IV. 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 change solely impacts internal Government operating 
procedures and will therefore not have a significant cost or 
administrative impact on contractors, subcontractors, or offerors. The 
notification requirements are within DoD and between DoD agencies and 
the Congress. An initial regulatory flexibility analysis was not 
performed. No comments were received from small entities on this rule.

V. Paperwork Reduction Act

    The rule does not contain any information collection requirements 
that require the approval of the Office of Management and Budget under 
the Paperwork Reduction Act (44 U.S.C. chapter 35).

[[Page 71467]]

List of Subjects in 48 CFR Part 216

    Government procurement.

Mary Overstreet,
Editor, Defense Acquisition Regulations System.

    Therefore, the Defense Acquisition Regulations System confirms as 
final the interim rule published at 75 FR 40716 on July 13, 2010, with 
the following changes:

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. 1303 and 48 CFR chapter 1.


0
2. Revise section 216.504 to read as follows:


216.504   Indefinite-quantity contracts.

    (c)(1)(ii)(D) Limitation on single-award contracts.
    (i) The authority to make the determination authorized in FAR 
16.504(c)(1)(ii)(D)(1) shall not be delegated below the level of the 
senior procurement executive.
    (ii) The head of the agency must notify the congressional defense 
committees within 30 days after making any determination under FAR 
16.504(c)(1)(ii)(D)(1). 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 
Permanent Select Committee on Intelligence of the House of 
Representatives. (See sample notification at PGI 
216.504(c)(1)(ii)(D)(iv).)
    (iii) A copy of each determination made in accordance with FAR 
16.504(c)(1)(ii)(D) and each congressional notice shall be submitted in 
accordance with PGI 216.504(c)(1)(ii)(D)(iii).

[FR Doc. 2011-29903 Filed 11-17-11; 8:45 am]
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