[Federal Register Volume 81, Number 58 (Friday, March 25, 2016)]
[Proposed Rules]
[Pages 17050-17051]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2016-06725]



  Federal Register / Vol. 81 , No. 58 / Friday, March 25, 2016 / 
Proposed Rules  

[[Page 17050]]


-----------------------------------------------------------------------

DEPARTMENT OF DEFENSE

Defense Acquisition Regulations System

48 CFR Parts 216 and 236

[Docket DARS-2016-0006]
RIN 0750-AI87


Defense Federal Acquisition Regulation Supplement: Prohibition on 
Use of Any Cost-Plus System of Contracting for Military Construction 
and Military Family Housing Projects (DFARS Case 2015-D040)

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

ACTION: Proposed rule.

-----------------------------------------------------------------------

SUMMARY: DoD is proposing to amend the Defense Federal Acquisition 
Regulation Supplement (DFARS) to implement a section of the National 
Defense Authorization Act for Fiscal Year 2012 that amended title 10 of 
the United States Code by prohibiting any form of cost-plus contracting 
for military construction projects or military family housing projects.

DATES: Comments on the proposed rule should be submitted in writing on 
or before May 24, 2016, to be considered in the formation of a final 
rule.

ADDRESSES: Submit comments identified by DFARS Case 2015-D040, using 
any of the following methods:
    [cir] Regulations.gov: http://www.regulations.gov. Submit comments 
via the Federal eRulemaking portal by entering ``DFARS Case 2015-D040'' 
under the heading ``Enter keyword or ID'' and selecting ``Search.'' 
Select the link ``Submit a Comment'' that corresponds with ``DFARS Case 
2015-D040.'' Follow the instructions provided at the ``Submit a 
Comment'' screen. Please include your name, company name (if any), and 
``DFARS Case 2015-D040'' on your attached document.
    [cir] Email: [email protected]. Include DFARS Case 2015-D040 in 
the subject line of the message.
    [cir] Fax: 571-372-6094.
    [cir] Mail: Defense Acquisition Regulations System, Attn: Mr. 
Christopher Stiller, OUSD(AT&L)DPAP/DARS, Room 3B941, 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: Mr. Christopher Stiller, telephone 
571-372-6176.

SUPPLEMENTARY INFORMATION:

I. Background

    DoD is proposing to revise the DFARS to implement section 2801 of 
the National Defense Authorization Act for Fiscal Year 2012 (Pub. L. 
112-81). Section 2801 entitled ``Prohibition on Use of Any Cost-Plus 
System of Contracting for Military Construction and Military Family 
Housing Projects'' amends section 2306 of title 10, United States Code 
(U.S.C.), by prohibiting any form of cost-plus contracting for military 
construction projects or military family housing projects.

II. Discussion and Analysis

    The rule proposes to amend DFARS 216.301-3, Limitations, to 
prohibit the use of any form of cost-plus contract type for contracts 
in connection with a military construction project or military family 
housing project. The placement of the text aligns with general 
limitations provided at FAR 16.301-3 on cost-reimbursement contracts. 
Because 10 U.S.C. 2306(c) prohibits several distinct kinds of cost-plus 
type contracts, the prohibition does not align with any specific cost-
plus type as implemented at FAR 16.301-3.
    The prohibition at 10 U.S.C. 2306(c) is broader in scope than the 
prohibition currently implemented at DFARS 216.306; therefore, the 
language at DFARS 216.306 is revised to add a cross reference to the 
proposed revision at DFARS 216.301-3. The proposed rule adds a new 
section at DFARS 236.215 to align with FAR 36.215 and provide a cross 
reference to DFARS 216.301-3. Finally, a cross reference is also added 
at DFARS 236.271 to 216.301-3.

III. Applicability to Contracts at or Below the Simplified Acquisition 
Threshold and for Commercial Items, Including Commercially Available 
Off-the-Shelf Items

    This case does not add any new provisions or clauses or impact any 
existing provisions or clauses.

IV. 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.

V. 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. However, an initial 
regulatory flexibility analysis has been performed and is summarized as 
follows.
    DoD is proposing to amend the Defense Federal Acquisition 
Regulation Supplement (DFARS) to implement section 2801 of the National 
Defense Authorization Act for Fiscal Year 2012, which amends 10 U.S.C. 
2306, to prohibit any form of cost-plus contracting for military 
construction projects or military family housing projects.
    There is an existing prohibition at DFARS 216.306 on using certain 
cost-plus-fixed-fee contracts funded by a military construction 
appropriations acts. This proposed rule expands this prohibition to all 
cost-plus contract types in connection with a military construction 
project or military family housing project.
    There is minimal impact anticipated on small entities as a result 
of the proposed rule. Based on data available in the Federal 
Procurement Data System, there were only 19 cost-reimbursement type 
construction acquisitions awarded in fiscal year 2015, two of which 
were awarded to small businesses. There is already a general 
prohibition at DFARS 216.306 on certain cost-plus-fixed-fee contracts 
funded by a military construction appropriations act. The proposed rule 
expands this prohibition to all cost-plus contract types in connection 
with a military construction project or a military family housing 
project.
    There are no new projected reporting, recordkeeping, and other 
compliance requirements of the rule.
    The rule does not duplicate, overlap, or conflict with any other 
Federal rules. There are no known significant alternatives to this 
rule.
    DoD invites comments from small business concerns and other 
interested parties on the expected impact of this rule on small 
entities.

[[Page 17051]]

    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 2015-D040), in 
correspondence.

VI. 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).

List of Subjects in 48 CFR Parts 216 and 236

    Government procurement.

Jennifer L. Hawes,
Editor, Defense Acquisition Regulations System.

    Therefore, 48 CFR parts 216 and 236 are proposed to be amended as 
follows:

0
1. The authority citation for 48 CFR parts 216 and 236 continues to 
read as follows:

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

0
2. Add section 216.301-3 to read as follows:

PART 216--TYPES OF CONTRACTS


216.301-3  Limitations.

    Contracts in connection with a military construction project or a 
military family housing project shall not use any form of a cost-plus 
contract type (10 U.S.C. 2306(c)). This applies notwithstanding a 
declaration of war or the declaration by the President of a national 
emergency under section 201 of the National Emergencies Act (50 U.S.C. 
1621) that includes the use of the armed forces.
0
3. Amend section 216.306 by adding introductory text to paragraph (c) 
to read as follows:


216.306  Cost-plus-fixed-fee contracts.

    (c) Limitations. For contracts in connection with a military 
construction project or military family housing project, see the 
prohibition at 216.301-3.
* * * * *

PART 236--CONSTRUCTION AND ARCHITECT-ENGINEER CONTRACTS

0
4. Add section 236.215 to read as follows:


236.215  Special procedures for cost-reimbursement contracts for 
construction.

    See 216.301-3 for the prohibition on the use of any form of a cost-
plus contract in connection with a military construction project or a 
military family housing project.
0
5. Revise section 236.271 to read as follows:


236.271  Cost-plus-fixed-fee contracts.

    Annual military construction appropriations acts restrict the use 
of cost-plus-fixed-fee contracts (see 216.306(c)). See also 216.301-3 
regarding the prohibition against the use of any form of a cost-plus 
contract in connection with a military construction project or military 
family housing project.
[FR Doc. 2016-06725 Filed 3-24-16; 8:45 am]
 BILLING CODE 5001-06-P