[Federal Register Volume 81, Number 90 (Tuesday, May 10, 2016)]
[Rules and Regulations]
[Pages 28730-28731]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2016-10823]


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DEPARTMENT OF DEFENSE

Defense Acquisition Regulations System

48 CFR Part 217

[Docket DARS-2015-0067]
RIN 0750-AI80


Defense Federal Acquisition Regulation Supplement: Multiyear 
Contract Requirements (DFARS Case 2015-D009)

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

ACTION: Final rule.

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SUMMARY: DoD is issuing a final rule amending the Defense Federal 
Acquisition Regulation Supplement (DFARS) to implement a section of the 
National Defense Authorization Act for Fiscal Year 2015 and a section 
of the Department of Defense Appropriations Act, 2015, which address 
various requirements for multiyear contracts.

DATES: Effective May 10, 2016.

FOR FURTHER INFORMATION CONTACT: Mr. Christopher Stiller, telephone 
571-372-6176.

SUPPLEMENTARY INFORMATION: 

I. Background

    DoD published a proposed rule in the Federal Register at 80 FR 
81499 on December 30, 2015, to amend the DFARS to implement section 816 
of the National Defense Authorization Act for Fiscal Year 2015 (Pub. L. 
113-291) and section 8010 of the Department of Defense Appropriations 
Act, 2015 (Division C, Title VIII of Pub. L. 113-235), which address 
various requirements for multiyear contracts. There were no public 
comments submitted in response to the proposed rule. There are no 
changes from the proposed rule made in the final rule.

II. Applicability to Contracts at or Below the Simplified Acquisition 
Threshold (SAT) and for Commercial Items, Including Commercially 
Available Off-the-Shelf (COTS) Items

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

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,

[[Page 28731]]

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

    A final regulatory flexibility analysis (FRFA) has been prepared 
consistent with the Regulatory Flexibility Act, 5 U.S.C. 601, et seq. 
The FRFA is summarized as follows:
    The purpose of this rule is to implement section 816 of the 
National Defense Authorization Act for Fiscal Year 2015 and section 
8010 of the Department of Defense Appropriations Act, 2015, which 
address various requirements for multiyear contracts. The rule will 
amend the Defense Federal Acquisition Regulation Supplement to require 
the head of agency to--
     Provide written notice to the congressional defense 
committees at least 30 days before termination of any multiyear 
contract; and
     For defense acquisition programs specifically authorized 
by law to be carried out using multiyear authority, ensure the 
Secretary of Defense certifies to Congress certain conditions for the 
multiyear contract have been met no later than 30 days before entry 
into the contract.
    No comments were received from the public regarding the initial 
regulatory flexibility analysis.
    The rule is not expected to impact small entities, because the rule 
applies to multiyear contract authorities for specific major defense 
acquisition programs for which small entities would not have the 
capacity or infrastructure to fulfill or sustain. Small entities may 
perform under multiyear contracts as subcontractors; however, the rule 
invokes requirements that apply at the prime contract level.
    This rule does not create any new reporting or recordkeeping 
requirements.
    There are no known significant alternatives to the rule. The impact 
of this rule on small business is not expected to be significant 
because it only affects DoD internal operating procedures.

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).

List of Subjects in 48 CFR Part 217

    Government procurement.

Jennifer Hawes,
Editor, Defense Acquisition Regulations System.

    Therefore, 48 CFR part 217 is amended as follows:

PART 217--SPECIAL CONTRACTING METHODS

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1. The authority citation for 48 CFR part 217 continues to read as 
follows:

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


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2. Revise section 217.170(b) to read as follows:


217.170  General.

* * * * *
    (b) The head of the agency must provide written notice to the 
congressional defense committees at least 30 days before termination of 
any multiyear contract (section 8010 of Division C, Title VIII, of the 
Consolidated and Further Continuing Appropriations Act, 2015 (Pub. L. 
113-235) and similar sections in subsequent DoD appropriations acts).
* * * * *
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3. Amend section 217.172--
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a. In paragraph (c), by removing ``10 U.S.C. 2306b(i)(3)'' and adding 
``10 U.S.C. 2306b(i)(1)'' in its place;
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b. In paragraph (e)(1), by removing the word ``and'';
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c. In paragraph (e)(2), by removing the period and adding a semicolon 
in its place;
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d. By adding paragraphs (e)(3), (4), and (5);
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e. In paragraph (h) introductory text, by removing ``under the 
authority described in paragraph (b) of this section:'' and adding 
``for a defense acquisition program that has been specifically 
authorized by law to be carried out using multiyear contract 
authority:'' in its place;
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f. In paragraph (h)(2) introductory text, by removing ``March 1 of the 
year in which the Secretary requests legislative authority to enter'' 
and adding ``30 days before entry'' in its place and by removing ``10 
U.S.C. 2306b(i)(1)(A) through (G)'' and adding ``10 U.S.C. 
2306b(i)(3)'' in its place;
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g. In paragraph (h)(2)(i)--
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i. By removing ``FAR 17.105'' and adding ``FAR 17.105-1'' in its 
places;
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ii. By adding a comma after ``(5)''; and
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iii. By removing ``10 U.S.C. 2306b(i)(1)(A)'' and adding ``10 U.S.C. 
2306b(i)(3)(A)'' in its place;
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h. In paragraph (h)(2)(ii), by removing ``10 U.S.C. 2306b(i)(1)(B)'' 
and adding ``10 U.S.C. 2306b(i)(3)(B)'' in its place;
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i. In paragraph (h)(2)(iii), by removing ``10 U.S.C. 2306b(i)(1)(C)'' 
and adding ``10 U.S.C. 2306b(i)(3)(C)'' in its place;
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j. In paragraph (h)(2)(iv), by removing ``10 U.S.C. 2306b(i)(1)(D)'' 
and adding ``10 U.S.C. 2306b(i)(3)(D)'' in its place;
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k. In paragraph (h)(2)(v), by removing ``10 U.S.C. 2306b(i)(1)(E)'' and 
adding ``10 U.S.C. 2306b(i)(3)(E)'' in its place;
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l. In paragraph (h)(2)(vi), by removing ``10 U.S.C. 2306b(i)(1)(F)'' 
and adding ``10 U.S.C. 2306b(i)(3)(F)'' in its place;
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m. In paragraph (h)(2)(vii), by removing ``10 U.S.C. 2306b(i)(1)(G)'' 
and adding ``10 U.S.C. 2306b(i)(3)(G)'' in its place;
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n. In paragraph (h)(3), by removing ``10 U.S.C. 2306b(i)(4)(A)'' and 
adding ``10 U.S.C. 2306b(i)(5)(A)'' in its place;
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o. In paragraph (h)(4), by removing ``10 U.S.C. 2306b(i)(4)(B)'' and 
adding ``10 U.S.C. 2306b(i)(5)(B)'' in its place;
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p. In paragraph (h)(5), by removing ``10 U.S.C. 2306b(i)(5)'' and 
adding ``10 U.S.C. 2306b(i)(6)'' in its place;
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q. In paragraph (h)(6), by removing ``10 U.S.C. 2306b(i)(6)'' and 
adding ``10 U.S.C. 2306b(i)(7)'' in its place;
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r. Removing paragraph (h)(7);
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s. Redesignating paragraph (h)(8) as (h)(7); and
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t. In newly redesignated paragraph (h)(7) introductory text, adding 
``(10 U.S.C. 2306b(i)(4))'' after ``law's specific savings 
requirement'' before the period.
    The additions read as follows:


217.172  Multiyear contracts for supplies.

* * * * *
    (e) * * *
    (3) Cancellation provisions in the contract do not include 
consideration of recurring manufacturing costs of the contractor 
associated with the production of unfunded units to be delivered under 
the contract;
    (4) The contract provides that payments to the contractor under the 
contract shall not be made in advance of incurred costs on funded 
units; and
    (5) The contract does not provide for a price adjustment based on a 
failure to award a follow-on contract (section 8010 of Division C, 
Title VIII, of the Consolidated and Further Continuing Appropriations 
Act, 2015 (Pub. L. 113-235) and similar sections in subsequent DoD 
appropriations acts).
* * * * *
[FR Doc. 2016-10823 Filed 5-9-16; 8:45 am]
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