[Federal Register Volume 81, Number 90 (Tuesday, May 10, 2016)]
[Rules and Regulations]
[Pages 28733-28735]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2016-10824]
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DEPARTMENT OF DEFENSE
Defense Acquisition Regulations System
48 CFR Part 241
[Docket DARS-2015-0050]
RIN 0750-AI74
Defense Federal Acquisition Regulation Supplement: Contract Term
Limit for Energy Savings Contracts (DFARS Case 2015-D018)
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 clarify the contract term
for energy savings contracts awarded under 10 U.S.C. 2913.
DATES: Effective May 10, 2016.
FOR FURTHER INFORMATION CONTACT: Ms. Amy Williams, telephone 571-372-
6106.
SUPPLEMENTARY INFORMATION:
I. Background
DoD published a proposed rule in the Federal Register at 80 FR
72675 on November 20, 2015, to clarify the contract term for contracts
awarded under the statutory authority of 10 U.S.C. 2913. Ten
respondents submitted public comments in response to the proposed rule.
[[Page 28734]]
II. Discussion and Analysis
DoD reviewed the public comments in the development of the final
rule. A discussion of the comments received and the changes made to the
rule as a result of those comments follows:
A. Summary of Significant Changes From the Proposed Rule
The final rule has been revised at DFARS 241.103(2) to provide that
the contracting officer may enter into an energy savings contract under
10 U.S.C. 2913 for a period not to exceed 25 years. This change to
``energy savings contract'' from ``shared energy savings contract''
brings the term limit for all activities authorized by section 2913
under the final rule.
B. Analysis of Public Comments
1. General Support for the Rule
Comment: Several respondents expressed support for the changes in
the proposed rule, indicating that the term limit of 25 years would
promote the use of shared energy savings contracts, have a positive
benefit on small businesses, facilitate greater partnerships between
utilities and DoD customers, and increase competition. One respondent
indicated that the term limit of 25 years would lead to several
benefits including deeper retrofits, elimination of cream skimming,
effectively leveraging private sector funding, and accomplishing the
President's Performance Contracting Challenge goals.
Response: Noted.
2. Clarification of the Contract Period
Comment: One respondent requested clarification of the date that
the contract period commences. The respondent stated that the rule
would most effectively accomplish its goal of accommodating project
financing needs if the contract period were tied to the payment term,
and suggested that the rule be revised to state the following: ``The
contracting officer may enter into a shared energy savings contract
under 10 U.S.C. 2913 for a `payment term' not to exceed 25 years.''
Response: Payment term is interpreted as the performance period of
the contract, which is not to exceed 25 years. The contract period will
include the entire performance period, including construction, if any.
3. Inclusion of Water-Related Projects
Comment: One respondent expressed concern that the rule's failure
to address water-related projects authorized by 10 U.S.C. 2866 would
result in ambiguity and confusion with regard to the term limit for
such contracts. The respondent suggested that the rule be revised to
state the following: ``The contracting officer may enter into a
contract under 10 U.S.C. 2913 or 10 U.S.C. 2866 for a period not to
exceed 25 years.''
Response: The recommendation is beyond the scope of the case.
4. Application of 10 U.S.C. 2913 to Agreements With Gas or Electric
Utilities
Comment: One respondent stated that 10 U.S.C. 2913 applies not only
to shared energy savings contracts, but also to agreements with gas or
electric companies, and recommended removing the reference to shared
energy savings contracts.
Response: The final rule has been revised at 241.103(2) to provide
that the contracting officer may enter into an energy savings contract
under 10 U.S.C. 2913 for a period not to exceed 25 years.
III. Applicability to Contracts at or Below the Simplified Acquisition
Threshold and for Commercial Items, Including Commercially Available
Off-the-Shelf Items
This rule 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
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:
This final rule amends the Defense Federal Acquisition Regulation
Supplement (DFARS) to clarify the contract term for contracts awarded
under the statutory authority of 10 U.S.C. 2913. Section 2913 requires
DoD to develop a simplified method of contracting for shared energy
savings contract services that will accelerate the use of such
contracts. DoD is authorized by section 2913 to contract with utility
service providers to implement energy conservation measures on military
bases. Section 2913 does not indicate a term limit for contracts or
activities executed under this authority, and this has created
ambiguity and inconsistency throughout DoD on the term limit that is
imposed on contracts awarded under the authority. Additionally, the
ambiguity has resulted in a hesitation to enter shared energy savings
contracts, contrary to the intent of section 2913.
No comments were received from the public regarding the initial
regulatory flexibility analysis.
The rule is not anticipated to have a significant economic impact
on small business entities. The number of contract awards made under
the authority of 10 U.S.C. 2913 is not currently tracked by DoD's
business systems. However, it is estimated that approximately 25 shared
energy savings projects are initiated across DoD each year, with
approximately 17 being awarded annually. It is believed that most
awards are made to large utility providers, with generally 25% or more
of the renovation and operations and maintenance work executed under
the awards being subcontracted to local small business by the utility
provider.
This rule does not create any new reporting or recordkeeping
requirements.
There are no known significant alternatives to the rule.
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 Part 241
Government procurement.
Jennifer L. Hawes,
Editor, Defense Acquisition Regulations System.
Therefore, 48 CFR part 241 is amended as follows:
PART 241--ACQUISITION OF UTILITY SERVICES
0
1. The authority citation for part 241 continues to read as follows:
Authority: 41 U.S.C. 1303 and 48 CFR chapter 1.
0
2. Amend section 241.103 by--
0
a. Redesignating paragraphs (2) and (3) as paragraphs (3) and (4); and
0
b. Adding a new paragraph (2).
[[Page 28735]]
The addition reads as follows:
241.103 Statutory and delegated authority.
* * * * *
(2) The contracting officer may enter into an energy savings
contract under 10 U.S.C. 2913 for a period not to exceed 25 years.
* * * * *
[FR Doc. 2016-10824 Filed 5-9-16; 8:45 am]
BILLING CODE 5001-06-P