[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