[Federal Register Volume 78, Number 211 (Thursday, October 31, 2013)]
[Rules and Regulations]
[Pages 65218-65219]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2013-25727]


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DEPARTMENT OF DEFENSE

Defense Acquisition Regulations System

48 CFR Part 237

RIN 0750-AI05


Defense Federal Acquisition Regulation Supplement: Private Sector 
Notification Requirements of In-Sourcing Actions DFARS Case 2012-D036

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

ACTION: Interim rule.

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SUMMARY: DoD is issuing an interim rule amending the Defense Federal 
Acquisition Regulation Supplement (DFARS) to implement a section of the 
National Defense Authorization Act regarding private sector 
notification of in-sourcing actions.

DATES: Effective date: October 31, 2013.
    Comment date: Comments on the interim rule should be submitted in 
writing to the address shown below on or before December 30, 2013, to 
be considered in the formation of a final rule.''

ADDRESSES: Submit comments identified by DFARS Case 2012-D036 using any 
of the following methods:
    [cir] Regulations.gov: http://www.regulations.gov. Submit comments 
via the Federal eRulemaking portal by entering ``DFARS Case 2012-D036'' 
under the heading ``Enter keyword or ID'' and selecting ``Search.'' 
Select the link ``Submit a Comment'' that corresponds with ``DFARS Case 
2012-D036.'' Follow the instructions provided at the ``Submit a 
Comment'' screen. Please include your name, company name (if any), and 
``DFARS Case 2012-D036 on your attached document.
    [cir] Email: [email protected]. Include DFARS Case 2012-D036 in the 
subject line of the message.
    [cir] Fax: 571-372-6094.
    [cir] Mail: Defense Acquisition Regulations System, Attn: Annette 
Gray, 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. To 
confirm receipt of your comment(s), please check www.regulations.gov, 
approximately two to three days after submission to verify posting 
(except allow 30 days for posting of comments submitted by mail).

FOR FURTHER INFORMATION CONTACT: Annette Gray, Defense Acquisition 
Regulations System, OUSD(AT&L)DPAP/DARS, Room 3B855, 3060 Defense 
Pentagon, Washington, DC 20301-3060. Telephone 571-372-6093; facsimile 
571-372-6101.

SUPPLEMENTARY INFORMATION:

I. Background

    This interim rule revises DFARS 237.102-79 to implement section 938 
of the National Defense Authorization Act (NDAA) for Fiscal Year (FY) 
2012 regarding private sector notification of in-sourcing actions.

II. Discussion and Analysis

    Section 938 of the NDAA requires the Secretary of Defense to 
establish procedures for the timely notification of any contractor who 
performs a function that the Secretary plans to convert (in-source) to 
performance by DoD civilian employees. A written notification will be 
provided to affected incumbent contractors within 20 business days of 
the contracting officer's receipt of a decision by the cognizant 
component in-sourcing program official to in-source services. The 
notification will summarize why the services are being insourced and 
must be coordinated with the component's in-sourcing program official. 
A copy of the notification will be provided to the congressional 
defense committees.

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

[[Page 65219]]

rule is not a major rule under 5 U.S.C. 804.

IV. Regulatory Flexibility Act

    DoD does not expect this interim 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 it impacts only those incumbent contractors for which an in-
sourcing determination has been made. The DFARS change relates solely 
to a notification requirement of a decision, made outside of 
acquisition regulatory channels, to convert a contracted function to 
performance by DoD civilian employees. The impact of this interim rule 
will be to heighten the awareness of impacted firms. An initial 
regulatory flexibility analysis has been performed and is summarized as 
follows:
    This action implements section 938 of the National Defense 
Authorization Act (NDAA) for Fiscal Year 2012 regarding private sector 
notification of in-sourcing actions. Section 938 of the NDAA requires 
the Secretary of Defense to establish procedures for the timely 
notification of any contractor that performs a function that the 
Secretary plans to convert (in-source) to performance by DoD civilian 
employees and to also provide the congressional defense committees a 
copy of any such notification.
    The interim rule will apply to all small business concerns that 
have contracts with DoD agencies that are being in-sourced. The most 
recent data from the DoD Office of Small Business Programs for fiscal 
years 2009 thru 2012 shows an average of 59,362 small business concerns 
have contracts with DoD. The degree of potential impact of this rule to 
those concerns, however, is unknown since there is no way to gauge in 
advance the extent of any future in-sourcing decisions.
    There are no projected reporting, recordkeeping, and other 
compliance requirements associated with this rule. The rule does not 
duplicate, overlap, or conflict with any other Federal rules. DoD has 
not identified any alternatives that would fulfill the requirements of 
the statute and reduce impact on small businesses. Any impact of the 
rule is expected to be beneficial to small businesses, by giving them 
timely notification of planned in-sourcing actions.
    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 2012-D036), 
in correspondence.

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).

VI. Determination To Issue an Interim Rule

    A determination has been made under the authority of the Secretary 
of Defense, pursuant to 41 U.S.C. 1707(d), that urgent and compelling 
reasons exist to promulgate this rule on an interim basis without prior 
opportunity for public comment. This action is necessary to implement 
section 938 of the National Defense Authorization Act (NDAA) for Fiscal 
Year 2012, which requires DoD to provide notification to the private 
sector of in-sourcing action determinations. Section 938 requires the 
Secretary of Defense to establish procedures for the timely 
notification of any incumbent contractor who performs a function that 
the Secretary plans to convert (in-source) to performance by DoD 
civilian employees. The notification must also be provided to the 
congressional defense committees. In-sourcing decisions may have a 
significant economic effect on firms that have contracts with DoD. 
Firms that are not notified on a timely basis of an in-sourcing 
determination that impacts them have less time to prepare for lost 
revenue and to make staffing adjustments. The rule, in addition to 
ensuring that there will be timely notification to affected 
contractors, should help facilitate a more seamless transition in 
services when implementing in-sourcing requirements. Nonetheless, 
pursuant to 41 U.S.C. 1707 and FAR 1.501-3(b), 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 237

    Government procurement.

Manuel Quinones,
Editor, Defense Acquisition Regulations System.

    Therefore, 48 CFR part 237 are amended as follows:

PART 237--SERVICE CONTRACTING

0
1. The authority citation for 48 CFR part 237 continues to read as 
follows:

    Authority:  41 U.S.C. 1303 and 48 CFR chapter 1.


0
2. Section 237.102-79 is revised to read as follows:


237.102-79  Private sector notification requirements in support of in-
sourcing actions.

    In accordance with 10 U.S.C. 2463, contracting officers shall 
provide written notification to affected incumbent contractors of 
Government in-sourcing determinations. Notification shall be provided 
within 20 business days of the contracting officer's receipt of a 
decision from the cognizant component in-sourcing program official. The 
notification will summarize the requiring official's final 
determination as to why the service is being in-sourced and shall be 
coordinated with the component's in-sourcing program official. No 
formal hiring or contract-related actions may be initiated prior to 
such notification, except for preliminary internal actions associated 
with hiring or contract modification. The memorandum on private sector 
notification requirements in support of in-sourcing actions is 
available at PGI 237.1, under the Supplemental Information tab.

[FR Doc. 2013-25727 Filed 10-30-13; 8:45 am]
BILLING CODE 5001-06-P