[Federal Register Volume 81, Number 133 (Tuesday, July 12, 2016)]
[Proposed Rules]
[Pages 45118-45120]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2016-16346]
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DEPARTMENT OF THE TREASURY
48 CFR Parts 1032 and 1052
Department of the Treasury Acquisition Regulations; Incremental
Funding of Fixed-Price, Time-and-Material or Labor-Hour Contracts
During a Continuing Resolution
AGENCY: Department of the Treasury.
ACTION: Proposed rule.
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SUMMARY: This proposed rule would amend the Department of Treasury
Acquisition Regulation (DTAR) for the purposes of providing acquisition
policy for incremental funding of Fixed-Price, Time-and-Material or
Labor-Hour contracts during a continuing resolution.
DATES: Comment due date: September 12, 2016.
ADDRESSES: Treasury invites comments on the topics addressed in this
proposed rule. Comments may be submitted to Treasury by any of the
following methods: by submitting electronic comments through the
federal government e-rulemaking portal, www.regulations.gov, by email
to [email protected]; or by sending paper comments to
Department of the Treasury, Office of the Procurement Executive, Attn:
Thomas O'Linn, 1722 I Street NW., Mezzanine--M12C, Washington, DC
20006.
In general, Treasury will post all comments to www.regulations.gov
without change, including any business or personal information
provided, such as names, addresses, email addresses, or telephone
numbers. Treasury will also make such comments available for public
inspection and copying in Treasury's Library, Department of the
Treasury, 1500 Pennsylvania Avenue NW., Washington, DC 20220, on
official business days between the hours of 10:00 a.m. and 5:00 p.m.
Eastern Time. You can make an appointment to inspect comments by
telephoning (202) 622-0990. All comments, including attachments and
other supporting materials received are part of the public record and
subject to public disclosure. You should submit only information that
you wish to make publicly available.
FOR FURTHER INFORMATION CONTACT: Thomas O'Linn, Procurement Analyst,
Office of the Procurement Executive, at (202) 622-2092.
SUPPLEMENTARY INFORMATION:
Background
The DTAR, which supplements the Federal Acquisition Regulation
(FAR), is codified at 48 CFR Chapter 10.
The Anti-Deficiency Act, 31 U.S.C 1341 and the FAR section 32.702,
state that no officer or employee of the government may create or
authorize an obligation in excess of the funds available, or in advance
of appropriations unless otherwise authorized by law. A continuing
resolution (CR) provides funding for continuing projects or activities
that were conducted in the prior fiscal year for which appropriations,
funds, or other authority was previously made available.
Each CR is governed by its specific terms. However, amounts
available under a CR are frequently insufficient to fully fund contract
actions that may be required during its term. No existing contract
clause permits partial funding of a contract action awarded during a
CR. While other strategies are available to address the need to take
contract actions during a CR, these strategies--for example short-term
awards--are inefficient and may have other disadvantages.
This proposal would establish policies and procedures in order to
facilitate successful, timely, and economical execution of Treasury
contractual actions during a CR. Specifically, this proposed rule would
set forth procedures for using incremental funding for fixed-price,
time-and-material and labor-hour contracts during a period in which
funds are provided to Treasury Departmental Offices or Bureaus under a
CR. Heads of contracting activities may develop necessary supplemental
internal procedures as well as guidance to advise potential offerors,
offerors and contractors of these policies and procedures.
Regulatory Planning and Review
This rule is not a significant regulatory action as defined in
section
[[Page 45119]]
3(f) of Executive Order 12866. Therefore a regulatory assessment is not
required.
Regulatory Flexibility Act
The Regulatory Flexibility Act (5 U.S.C. chapter 6) generally
requires agencies to conduct an initial regulatory flexibility analysis
and a final regulatory flexibility analysis of any rule subject to
notice and comment rulemaking requirements, unless the agency certifies
that the rule will not have a significant economic impact on a
substantial number of small entities. It is hereby certified that this
proposed rule would not have a significant economic impact on a
substantial number of small entities. The rule is intended to make
changes to the DTAR that would allow for improvements in continuity
when Treasury funding is operating under a CR and should not have
significant economic impacts on small entities. Notwithstanding this
certification, the Department welcomes comments on the potential impact
on small entities.
List of Subjects in 48 CFR Parts 1032 and 1052
Government procurement.
Accordingly, the Department of the Treasury proposes to amend 48
CFR Chapter 10 as follows:
PART 1032--CONTRACT FINANCING
0
1. The authority citation for part 1032 continues to read as follows:
Authority: 41 U.S.C. 1707.
0
2. Add subpart 1032.7 to read as follows:
Subpart 1032.7--Contract Funding
Sec.
1032.770 Incremental funding during a Continuing Resolution.
1032.770-1 Scope of section.
1032.770-2 Definition.
1032.770-3 General.
1032.770-4 Policy.
1032.770-5 Limitations.
1032.770-6 Procedures.
1032.770-7 Clause.
Subpart 1032.7--Contract Funding
1032.770 Incremental funding during a Continuing Resolution.
1032.770-1 Scope of section.
This section provides policy and procedure for using incremental
funding for fixed-price, time-and-material and labor-hour contracts
during a period in which funds are provided to Treasury Departmental
Offices or Bureaus, under a continuing resolution (CR). HCAs may
develop necessary supplemental internal procedures as well as guidance
to advise potential offerors, offerors and contractors of these
policies and procedures. Additionally, Bureaus who receive non-
appropriated funds may utilize and tailor these policies and procedures
to fit their needs.
1032.770-2 Definition.
``Continuing Resolution'' means an appropriation, in the form of a
joint resolution, that provides budget authority for federal agencies,
specific activities, or both to continue operation until the regular
appropriations are enacted. Typically, a continuing resolution is used
when legislative action on appropriations is not completed by the
beginning of a fiscal year.
1032.770-3 General.
The Anti-Deficiency Act, 31 U.S.C 1341 and FAR 32.702, states that
no officer or employee of the Government may create or authorize an
obligation in excess of the funds available, or in advance of
appropriations unless otherwise authorized by law. A CR provides
funding for continuing projects or activities that were conducted in
the prior fiscal year for which appropriations, funds, or other
authority was previously made available. Each CR is governed by the
specific terms in that specific CR (e.g. duration of the CR) and under
certain CRs, the funding amounts available for award of contract
actions are inadequate to fund the entire amounts needed for some
contract actions.
1032.770-4 Policy.
(a) A fixed-price, time-and-materials or labor-hour contract or
order for commercial or non-commercial supplies or severable or non-
severable services may be incrementally funded when--
(1) Funds are provided to a Treasury Departmental Office or Bureau
under a CR. This includes funds appropriated to a bureau, funds
appropriated to another entity that will be directly obligated on a
Treasury contract, and funds in a revolving fund or similar account
that will be reimbursed by a customer agency funded by a CR;
(2) Sufficient funds are not being allocated from the responsible
fiscal authority to fully fund the contract action that is otherwise
authorized to be issued;
(3) There is no statutory restriction that would preclude the
proposed use of funds;
(4) Funds are available and unexpired, as of the date the funds are
obligated;
(5) Assurance is provided by the responsible financial authority
that full funding is anticipated once an Appropriation Act is enacted;
and
(6) The clause prescribed by 1032.770-7 is incorporated into the
contract or order.
(b) Incremental funding may be limited to individual line item(s)
or a particular order(s).
1032.770-5 Limitations.
(a) This policy does not apply to contract actions that are not
covered by the CR.
(b) If this policy is applied to non-severable services or to
supplies, the contracting officer shall take into consideration the
business risk to the Government if funding does not become available to
fully fund the contract. If the contracting officer determines the use
of incremental funding for non-severable services or supplies is in the
best interest of the Government the contracting officer shall ensure
the contractor fully understands how the limitations of the
Government's liabilities under the contract might impact its ability to
perform within the prescribed contract schedule.
1032.770-6 Procedures.
(a) An incrementally funded fixed-price, time-and-materials or
labor-hour contract shall be fully funded once funds are available.
(b) The contracting officer shall ensure that sufficient funds are
allotted to the contract to cover the total amount payable to the
contractor in the event of termination of convenience by the
Government.
(c) Upon receipt of the contractor's notice under paragraph (c) of
the clause at 1052.232-90, Limitation of Government's Obligation, the
contracting officer shall promptly provide written notice to the
contractor that the Government is--
(i) Obligating additional funds for continued performance and
increasing the Government's limitation of obligation in a specified
amount;
(ii) Obligating the full amount of funds needed;
(iii) Terminating for convenience, as applicable, the affected line
items or contract; or
(iv) Considering whether to allot additional funds; and
(A) The contractor is entitled by the contract terms to stop work
when the Government's limitation of obligation is reached; and
(B) Any costs expended beyond the Government's limitation of
obligation are at the contractor's risk.
(d) Upon learning that the contract will receive no further funds
by the date provided in the notice under paragraph (c) of the clause at
1052.232-70, Limitation of Government's Obligation,
[[Page 45120]]
the contracting officer shall promptly give the contractor written
notice of the Government's decision and terminate the affected line
items or contract, as applicable, for the convenience of the
Government.
1032.770-7 Clause.
The contracting officer shall insert the clause at 1052.232-70,
Limitation of Government's Obligation, in
(a) Solicitations and resultant contracts when incremental funding
of fixed-price, time-and-material or labor-hour contract via a CR is
anticipated; or
(b) Contracts or orders when incremental funding of a fixed-price,
time-and-material or labor-hour contract is authorized and the Treasury
Departmental Office or Bureau is operating under a CR (see 1032.770-4);
and
(c) The CO shall insert the information required in paragraph (a)
and (c) of the clause.
PART 1052--SOLICITATION PROVISIONS AND CONTRACT CLAUSES
0
3. The authority citation for part 1032 continues to read as follows:
Authority: 41 U.S.C. 1707.
0
4. Add 1052.232-70 to subpart 1052.2 to read as follows:
1052.232-70 Limitation of Government's Obligation.
As prescribed in 1032.770-7, insert the following clause.
Contracting officers are authorized, in appropriate cases, to revise
paragraph (a) of this clause to specify the work required under the
contract, in lieu of using contract line item numbers as well as revise
paragraph (c) of this paragraph to specify a different notification
period and percentage. The 30-day period may be varied from 45, 60 to
90 days, and the 75 percent from 75 to 85 percent:
LIMITATION OF GOVERNMENT'S OBLIGATION (TBD 2016)
(a) Funding is not currently available to fully fund this
contract due to the Government operating under a continuing
resolution (CR). The item(s) listed in the table below are being
incrementally funded as described below. The funding allotted to
these item(s) is presently available for payment and allotted to
this contract. This table will be updated by a modification to the
contract when additional funds are made available, if any, to this
contract.
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Funds required
CLIN total Funds allotted for complete
Contract line item number (CLIN) price to the CLIN funding of the
CLIN
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$ $ $
$ $ $
$ $ $
$ $ $
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Totals.................................... $ $ $
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(b) For the incrementally funded item(s) identified in paragraph
(a) of this clause, the Contractor agrees to perform up to the point
at which the total amount payable by the government, including any
invoice payments to which the contractor is entitled and
reimbursement of authorized termination costs in the event of
termination of those item(s) for the Government's convenience, does
not exceed the total amount currently obligated to those item(s).
The Contractor is not authorized to continue work on these item(s)
beyond that point. The Government will not be obligated in any event
to reimburse the contractor in excess of the amount allotted to the
line items of the contract regardless of anything to the contrary in
any other clause, including but not limited to the clause entitled
``Termination for Convenience of the Government'' or paragraph (1)
entitled ``Termination for the Government's Convenience'' of the
clause at FAR 52.212-4, ``Commercial Terms and Conditions--
Commercial Items.''
(c) Notwithstanding paragraph (h) of this clause, the Contractor
shall notify the Contracting Officer in writing at least thirty days
prior to the date when, in the Contractor's best judgment, the work
will reach the point at which the total amount payable by the
Government, including any cost for termination for convenience, will
approximate 85 percent of the total amount then allotted to the
contract for performance of the item(s) identified in paragraph (a)
of this clause. The notification shall state the estimated date when
that point will be reached and an estimate of additional funding, if
any, needed to continue performance. The notification shall also
advise the Contracting Officer of the estimated amount of additional
funds required for the timely performance of the item(s) funded
pursuant to this contract. If after such notification additional
funds are not allotted by the date identified in the Contractor's
notification, or by an agreed upon substitute date, the Contracting
Officer will terminate any item(s) for which additional funds have
not been allotted, pursuant to the terms of this contract
authorizing termination for the convenience of the Government.
Failure to make the notification required by this paragraph, whether
for reasons within or beyond the contractor's control, will not
increase the maximum amount payable to the contractor under
paragraphs (a) and (b) of this clause.
(d) The Government may at any time prior to termination allot
additional funds for the performance of the item(s) identified in
paragraph (a) of this clause.
(e) The termination provisions of paragraphs (a) through (h) of
this clause do not limit the rights of the Government under the
clause entitled ``Default'' or ``Termination for Cause.'' The
provisions of this clause are limited to the work and allotment of
funds for the item(s) set forth in paragraph (a) of this clause.
This clause no longer applies once the contract is fully funded.
(f) Nothing in this clause affects the right of the Government
to terminate this contract pursuant to the Government's termination
for convenience terms set forth in this contract.
(g) Nothing in this clause shall be construed as authorization
of voluntary services whose acceptance is otherwise prohibited under
31 U.S.C. 1342.
(h) The parties contemplate that the Government will allot funds
to this contract from time to time as the need arises and as funds
become available. There is no fixed schedule for providing
additional funds.
(End of clause)
Dated: June 23, 2016.
Iris B. Cooper,
Senior Procurement Executive, Office of the Procurement Executive.
[FR Doc. 2016-16346 Filed 7-11-16; 8:45 am]
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