[Federal Register Volume 84, Number 211 (Thursday, October 31, 2019)]
[Proposed Rules]
[Pages 58364-58366]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2019-23803]
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DEPARTMENT OF DEFENSE
Defense Acquisition Regulations System
48 CFR Parts 232 and 252
[Docket DARS-2019-0059]
RIN 0750-AK50
Defense Federal Acquisition Regulation Supplement: Modification
of DFARS Clause, ``Advanced Payment Pool'' (DFARS Case 2019-D013)
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 modify the text of an existing DFARS
clause to include the text of another DFARS clause on the same subject
in an effort to streamline contract terms and conditions for
contractors.
DATES: Comments on the proposed rule should be submitted in writing to
the address shown below on or before December 30, 2019, to be
considered in the formation of a final rule.
ADDRESSES: Submit comments identified by DFARS Case 2019-D013, using
any of the following methods:
[cir] Federal eRulemaking Portal: http://www.regulations.gov.
Search for ``DFARS Case 2019-D013.'' Select ``Comment Now'' and follow
the instructions to submit a comment. Please include ``DFARS Case 2019-
D013'' on any attached documents.
[cir] Email: [email protected]. Include DFARS Case 2019-D013 in
the subject line of the message.
[cir] Fax: 571-372-6094.
[cir] Mail: Defense Acquisition Regulations System, Attn: Carrie
Moore, OUSD(A&S)DPC/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: Ms. Carrie Moore, telephone 571-372-
6093.
SUPPLEMENTARY INFORMATION:
I. Background
This rule proposes to modify the clause at DFARS 252.232-7000,
Advance Payment Pool, to incorporate the information currently included
in DFARS clause 252.232-7001, Disposition of Payments, and make minor
changes to simplify the clause text. Combining these clauses will
result in 252.232-7001 being removed from the DFARS.
II. Discussion and Analysis
When applying for advance payments under a contract in accordance
with Federal Acquisition Regulation (FAR) 32.408, contractors must
provide the name and address of the financial institution, also
referred to as the ``disbursing office,'' at which the contractor will
establish a special account to serve as the depository for the advance
payments. FAR 32.406(b) requires the Government to use either a letter
of credit or a direct Treasury check to make advance payments to a
contractor, unless a waiver is obtained from the Treasury Department.
A letter of credit is issued by the Government when the contract
and the contractor meet certain criteria. The letter of credit enables
the contractor to withdraw Government funds from the special account to
cover the contractor's own disbursements of cash for contract
performance. If the contract and/or contractor cannot meet the
criteria, a letter of credit is not issued, and the contractor must
submit a properly certified invoice or voucher to the Government for
approval. Upon approval of the invoice or voucher, a dual Treasury
check is issued to the disbursing office for dissemination to the
contractor's special account.
Prior to contract award and in accordance with FAR 32.4, the
Government executes a determination supported by a written findings,
authorization for the use of advance payment, and an agreement
identifying the terms and conditions for advance payment under the
contract. FAR clause 52.232-12, Advanced Payments, is included in all
solicitations and contracts under which the Government will provide
advance payments. The FAR clause advises contractors that advance
payment will be made via a letter of credit or submission of a properly
certified and approved invoice.
[[Page 58365]]
DFARS clause 252.232-7000 is included in all contracts that will be
subject to an advance payment pool agreement with a nonprofit
organization or educational institution. The DFARS clause supplements
the FAR clause by notifying contractors that advance payments will also
be made in accordance with the findings, determinations, and
authorization for advance payment and the terms and conditions of the
advance payment pool agreement.
DFARS clause 252.232-7001, Disposition of Payments, is also
included in contracts that will be subject to an advanced payment pool
agreement with a nonprofit organization or educational institution, but
only when advance payments will not be made by the disbursing office
(i.e., when a letter of credit has not been issued under the contract
and the contractor must submit an invoice of voucher in accordance with
the FAR clause). The DFARS clause supplements the FAR clause by
clarifying for contractors that advance payments will be made via a
dual Treasury check forwarded to the disbursing office for distribution
to the contractor.
This rule proposes to combine both DFARS clauses, by adding text to
DFARS clause 252.232-7000 to clarify for contractors when a dual
Treasury check will be used to make payment under the contract. This
information was previously included in DFARS clause 252.232-7001 and
the associated prescription. By combining these clauses, DFARS clause
252.232-7001 may be removed from the DFARS.
This rule does not change any existing processes or add any new
requirements for either DoD or the public. Both DFARS clauses
supplement the FAR clause and clarify the terms and conditions that
apply when advance payment pool agreements are authorized under the
contract. As such, these DFARS clauses can be combined to streamline
and consolidate the information provided to contractors regarding
advanced payment pool agreements.
The modification of this DFARS text 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 these clauses. Subsequently, the DoD Task Force
reviewed the requirements of DFARS clauses 252.232-7000 and 252.232-
7001 and determined that the clauses could be combined.
III. Applicability to Contracts at or Below the Simplified Acquisition
Threshold and for Commercial Items, Including Commercially Available
Off-the-Shelf Items
This proposed rule does not create any new provisions or clauses.
The rule combines two clauses on the same topic into a single clause
and makes minor modifications to simplify clause text. This rule does
not change the applicability of the affected clauses, which are not
included in solicitations and contracts that are valued at or below the
simplified acquisition threshold or for commercial items, including
commercially available off-the-shelf items.
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. Executive Order 13771
This rule is not subject to E.O. 13771, because this rule is not a
significant regulatory action 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 not creating any new requirements or changing any
existing requirements for contractors. However, an initial regulatory
flexibility analysis has been performed and is summarized as follows:
DoD is proposing to modify the DFARS clause 252.232-7000, Advance
Payment Pool, to incorporate the information currently included in
DFARS clause 252.232-7001, Disposition of Payments, and make minor
changes to simplify the clause text. Combining these clauses will
result in 252.232-7001 being removed from the DFARS. This rule is
pursuant to action taken by the DoD Regulatory Reform Task Force.
The objective of this proposed rule is to streamline and
consolidate the information provided to contractors regarding advanced
payment pool agreements.
DoD does not collect data on the number of contracts awarded to
small business entities that involve advanced payment pool agreements
with a nonprofit organization or educational institution; therefore,
DoD is unable to estimate the number of small entities that will be
impacted by this rule. However, DoD does not expect small businesses
entities to be significantly impacted by this rule, because the rule
does not change any existing processes or impose any additional
burdens. Instead, the rule streamlines and clarifies the information
currently provided under the two clauses.
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
proposed rule that would meet the proposed objectives.
DoD invites comments from small business concerns and other
interested parties on the expected impact of this rule on small
entities. 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 2019-D013)
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).
[[Page 58366]]
List of Subjects in 48 CFR Parts 232 and 252
Government procurement.
Jennifer Lee Hawes,
Regulatory Control Officer, Defense Acquisition Regulations System.
Therefore, 48 CFR parts 232 and 252 are proposed to be amended as
follows:
0
1. The authority citation for 48 CFR parts 232 and 252 continues to
read as follows:
Authority: 41 U.S.C. 1303 and 48 CFR chapter 1.
PART 232--CONTRACT FINANCING
0
2. Amend section 232.412-70 by--
0
a. Removing paragraph (b);
0
b. Redesignating paragraph (c) as (b); and
0
c. In the newly redesignated paragraph (b), removing ``(See subpart
219.71)'' and adding ``(see subpart 219.71)'' in its place.
PART 252--SOLICITATION PROVISIONS AND CONTRACT CLAUSES
0
3. Amend section 252.232-7000 by--
0
a. Removing the clause date of ``(DEC 1991)'' and adding ``(DATE)'' in
its place;
0
b. In paragraph (b), removing ``(insert the name of the contractor)''
and adding ``[insert the name of the Contractor]'' in its place;
0
c. Adding paragraph (c).
The addition reads as follows:
252.232-7000 Advance payment pool.
* * * * *
(c) When a letter of credit has not been issued to the Contractor
in conjunction with the contract, payment will be by a dual payee
Treasury check made payable to the Contractor or the disbursing office
in the Advance Payment Pool Agreement and will be forwarded to that
disbursing office for appropriate disposition.
* * * * *
252.232-700 [Removed and Reserved]
0
4. Remove and reserve section 252.232-7001.
252.232-7005 [Amended]
0
5. Amend section 252.232-7005 in the introductory text by removing
``232.412-70(c)'' and adding ``232.412-70(b)'' in its place.
[FR Doc. 2019-23803 Filed 10-30-19; 8:45 am]
BILLING CODE 5001-06-P