[Federal Register Volume 83, Number 126 (Friday, June 29, 2018)]
[Proposed Rules]
[Pages 30659-30661]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2018-14040]


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DEPARTMENT OF DEFENSE

Defense Acquisition Regulations System

48 CFR Parts 217 and 252

[Docket DARS-2018-0036]
RIN 0750-AJ87


Defense Federal Acquisition Regulation Supplement: Modification 
of DFARS Clause ``Surge Option'' (DFARS Case 2018-D025)

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

ACTION: Proposed rule.

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SUMMARY: DoD is proposing to amend the Defense Federal Acquisition 
Regulation Supplement (DFARS) to revise a clause to reflect current 
terminology and industry practices, pursuant to action taken by the 
Regulatory Reform Task Force.

DATES: Comments on the proposed rule should be submitted in writing to 
the address shown below on or before August 28, 2018, to be considered 
in the formation of a final rule.

ADDRESSES: Submit comments identified by DFARS Case 2018-D025, using 
any of the following methods:
     Regulations.gov: http://www.regulations.gov. Submit 
comments via the Federal eRulemaking portal by entering ``DFARS Case 
2018-D025'' under the heading ``Enter keyword or ID'' and selecting 
``Search.'' Select the link ``Submit a Comment'' that corresponds with 
``DFARS Case 2018-D025.'' Follow the instructions provided at the 
``Submit a Comment'' screen. Please include your name, company name (if 
any), and ``DFARS Case 2018-D025'' on your attached document.
     Email: [email protected]. Include DFARS Case 2018-D025 in 
the subject line of the message.
     Fax: 571-372-6094.
     Mail: Defense Acquisition Regulations System, Attn: Carrie 
Moore, OUSD (A&S) 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 2 to 3 days after submission to verify posting (except 
allow 30 days for posting of comments submitted by mail).

FOR FURTHER INFORMATION CONTACT: Ms. Carrie Moore, telephone 571-372-
6093.

[[Page 30660]]


SUPPLEMENTARY INFORMATION:

I. Background

    This rule proposes to revise the DFARS by modifying DFARS clause 
252.217-7001, Surge Option, to replace the term ``Production Surge Plan 
(DI-MGMT-80969)'' with ``Capabilities Analysis Plan (CAP)'' and add 
text to permit the option increase of supplies or services called for 
under the clause to be expressed as a specific number. The associated 
clause prescription at DFARS 217.208-70(b) is proposed to be amended to 
reflect that the option increase of supplies or services may also be 
expressed as a specific number.
    This clause is incorporated into contracts that support industrial 
planning for selected essential military items in the event of a 
national emergency. Currently, the clause advises contractors that the 
Government has the option to increase the supplies or services 
delivered under the contract up to a specified percentage or accelerate 
the rate of delivery. It also instructs contractors to follow the 
Production Surge Plan (DI MGMT 80969) included in the contract or, if 
no plan is in the contract, to provide a delivery schedule to the 
Government within 30 days of contract award. A review of the clause 
text indicates that it should be modified to reflect current practices 
in the marketplace.

II. Discussion and Analysis

    Paragraphs (b)(1) and (2) of DFARS clause 252.217-7001 include a 
reference to a Production Surge Plan (DI MGMT 80969). DoD subject 
matter experts advise that Production Surge Plan (DI MGMT 80969) is no 
longer an up-to-date reference and that Capabilities Analysis Plan 
(CAP) is the current terminology used in industrial planning efforts. 
This rule will update the clause paragraphs to reflect the current 
industry terminology.
    Paragraph (a) of the DFARS clause provides contractors with a 
maximum quantity of supplies or services by which the Government may 
increase the contract in order to support a surge need. This quantity 
is expressed as a percentage of the supplies or services currently 
being provided for under the contract. Supply chains supporting surge 
needs more commonly express increases of supplies or services as a 
specific number of additional supplies or services to be provided under 
the contract, as opposed to an additional percentage of the supplies or 
services already being provided under the contract. In order to reflect 
current supply chain practices, this rule proposes to permit the 
contracting officer to express DoD's surge need as a specific quantity 
of supplies or services needed, or utilize the existing method of 
expressing the surge need as a percentage of contracted supplies or 
services.
    The proposed revision to this DFARS clause supports a 
recommendation from the DoD Regulatory Reform Task Force. On February 
24, 2017, the President signed Executive Order (E.O.) 13777, 
``Enforcing the Regulatory Reform Agenda,'' which established a Federal 
policy ``to alleviate unnecessary regulatory burdens'' on the American 
people. In accordance with E.O. 13777, DoD established a Regulatory 
Reform Task Force to review and validate DoD regulations, including the 
DFARS. A public notice of the establishment of the DFARS Subgroup to 
the DoD Regulatory Reform Task Force, for the purpose of reviewing 
DFARS provisions and clauses, was published in the Federal Register at 
82 FR 35741 on August 1, 2017, and requested public input. No public 
comments were received on this clause. Subsequently, the DoD Task Force 
reviewed the requirements of DFARS 252.217-7001, Surge Option, and 
determined that the DFARS coverage should be revised to align with 
industry practice.

III. 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 propose to create any new provisions or clauses. 
The proposed changes to DFARS clause 252.217-7001, Surge Option, are 
minimal and reflect only updates required to mirror current industry 
terminology and practice for support that may be required for 
industrial planning for selected essential military items in the event 
of a national emergency. The rule applies to contracts below the SAT, 
however, the rule does not apply to commercial items and COTS items.

IV. Executive Orders 12866 and 13563

    Executive Order (E.O.) 12866, Regulatory Planning and Review; and 
E.O. 13563, Improving Regulation and Regulatory Review, 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. The Office of Management and Budget, Office of Information 
and Regulatory Affairs (OIRA), has determined that this is not a 
significant regulatory action as defined under section 3(f) of E.O. 
12866 and, therefore, was not subject to review under section 6(b). 
This rule is not a major rule as defined at 5 U.S.C. 804(2).

V. Executive Order 13771

    This rule is not an E.O. 13771, Reducing Regulation and Controlling 
Regulatory Costs, regulatory action, because this rule is not 
significant under E.O. 12866.

VI. Regulatory Flexibility Act

    DoD does not expect this proposed 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 the rule is only updating a term used in the clause and 
However, an initial regulatory flexibility analysis has been performed 
and is summarized as follows:
    The Department of Defense is proposing to amend the Defense Federal 
Acquisition Regulation Supplement (DFARS) to revise a clause to reflect 
current terminology and industry practices, pursuant to action taken by 
the Regulatory Reform Task Force.
    The objective of this proposed rule is to improve the flexibility 
offered to contractors when submitting pricing by giving the option to 
quote prices by percentage or quantity increases and update the 
terminology used from ``Production Surge Plan'' to ``Capability 
Analysis Plan'' (CAP). The modification of this DFARS text supports a 
recommendation from the DoD Regulatory Reform Task Force.
    This rule is not expected 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. Based on fiscal year 
2017 data from the Federal Procurement Data System, the Government 
issued approximately 78 contract actions that cited mobilization as the 
reason for other than full and open competition for the surge option. 
Of the 78 total contract actions, approximately 33 awards were made to 
24 unique small businesses entities.
    This proposed rule does not include any new reporting, 
recordkeeping, or other compliance requirements for small businesses. 
This rule does not duplicate, overlap, or conflict with any other 
Federal rules. There are no known significant alternative approaches to 
the

[[Page 30661]]

proposed rule that would meet the proposed objectives.

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 217 and 252

    Government procurement.

Amy G. Williams,
Deputy, Defense Acquisition Regulations System.

    Therefore, 48 CFR parts 217 and 252 are proposed to be amended as 
follows:

0
1. The authority citation for parts 217 and 252 continues to read as 
follows:

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

PART 217--SPECIAL CONTRACTING METHODS


217.208-70   [Amended]

0
2. In section 217.208-70, amend paragraph (b)(1), by removing 
``percentage'' and adding ``percentage or quantity'' in its place.

PART 252--SOLICITATION PROVISIONS AND CONTRACT CLAUSES

0
3. Amend section 252.217-7001 by--
0
a. Removing the clause date of ``(AUG 1992)'' and adding ``(DATE)'' in 
its place;
0
b. Revising paragraph (a)(1);
0
c. In paragraph (b)(1), removing ``Production Surge Plan (DI-MGMT)'' 
and adding ``(Capabilities Analysis Plan (CAP)'' in its place; and
0
d. In paragraph (b)(2), removing ``Production Surge Plan'' and adding 
``CAP'' in its place.
    The revision reads as follows:


252.217-7001   Surge Option.

* * * * *
    (a) * * *
    (1) Increase the quantity of supplies or services called for under 
this contract by no more than __ percent or __ [insert quantity and 
description of services or supplies to be increased]; and/or
* * * * *

[FR Doc. 2018-14040 Filed 6-28-18; 8:45 am]
 BILLING CODE 5001-06-P