[Federal Register Volume 85, Number 68 (Wednesday, April 8, 2020)]
[Proposed Rules]
[Pages 19719-19720]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2020-06724]


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DEPARTMENT OF DEFENSE

Defense Acquisition Regulations System

48 CFR Parts 204, 232, and 252

[Docket DARS-2019-0047]
RIN 0750-AJ52


Defense Federal Acquisition Regulation Supplement: Expediting 
Contract Closeout (DFARS Case 2017-D042)

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

ACTION: Proposed rule.

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SUMMARY: DoD is proposing to amend the Defense Federal Acquisition 
Regulation Supplement to provide for expedited contract closeout 
through a waiver by the contractor and the Government of entitlement to 
any residual dollar amounts that are due to either party at the time of 
final contract closeout. The changes are necessary to establish an 
expedited contract closeout agreement that will save administrative 
costs for both the contractor and the Government.

DATES: Comments on the proposed rule should be submitted in writing 
using one of the methods shown in ADDRESSES on or before June 8, 2020, 
to be considered in the formation of a final rule.

ADDRESSES: Submit comments in response to DFARS CASE 2017-D042 by any 
of the following methods:
     Regulations.gov: http://www.regulations.gov. Submit 
comments via Federal Rulemaking portal by entering ``DFARS Case 2017-
D042'' under the heading ``Enter keyword of ID'' and selecting 
``Search.'' Select the link ``Submit a Comment'' that corresponds with 
``DFARS Case 2017-D042.'' Follow the instructions provided at the 
``Submit a Comment'' screen. Please include your name, company name (if 
any), and ``DFARS Case 2017-D042'' on your attached document.
     Email: [email protected]. Include DFARS Case 2017-D042 in 
the subject line of the message.
     Fax: 571-372-6094.
     Mail: Defense Acquisition Regulations System, Attn: Ms. 
Kimberly Bass, 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.regulation.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. Kimberly Bass, telephone 571-372-
6174.

SUPPLEMENTARY INFORMATION: 

I. Background

    DoD is proposing to add a new DFARS contract clause that allows for 
an expedited contract closeout agreement between the contractor and the 
Government that will save administrative costs for both the contractor 
and the Government. The clause will be used when the contracting 
officer intends to expedite the contract closeout process by having the 
contractor and the Government waive entitlement to any residual dollar 
amounts up to $1,000 at the time of final contract closeout. The 
objective of the rule is to reduce the amount of time and money 
expended on reconciling small dollar residual dollar amounts in order 
to close out contracts.

II. Discussion and Analysis

    The proposed DFARS clause 252.204-70XX, Expediting Contract 
Closeout, provides an agreement by the Government and contractor to 
waive any entitlement that otherwise might accrue to either party in 
any amount of $1,000 or less at the time of final contract closeout. 
The new clause will be prescribed at DFARS 204.804-70 for use in 
solicitations and contracts, including those under FAR part 12 
procedures for acquisition of commercial items, when the contracting 
officer intends to expedite contract closeout through such a waiver.

III. Applicability to Contracts at or Below the Simplified Acquisition 
Threshold and for Commercial Items, Including Commercially Available 
Off-the-Shelf Items

    This rule proposes to create a new clause DFARS 252.204-70XX, 
Expediting Contract Closeout. DoD plans to apply this clause to 
solicitations and contracts for the acquisition of commercial items, 
including commercially available off-the-shelf items, and to 
acquisitions valued at or below the simplified

[[Page 19720]]

acquisition threshold. These categories of acquisitions are those most 
likely to benefit from expedited contract closeout.

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, 
or reducing costs, or 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 expected to be subject to E.O. 13771, because this 
rule is not a significant regulatory action.

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. An 
initial regulatory flexibility analysis (IRFA) has been performed and 
is summarized as follows:
    The Department of Defense (DoD) proposes amending the Defense 
Federal Acquisition Regulation Supplement (DFARS) to add a new contract 
clause 252.204-70XX, Expediting Contract Closeout, to expedite contract 
closeout on contracts with a residual dollar amount of $1,000 or less 
at the time of final closeout.
    The objective of the proposed clause is to facilitate expedited 
contract closeout and avoid excessive administrative costs for both the 
contractor and the Government to reconcile relatively small residual 
dollar amounts in order to close out a contract.
    The proposed rule will apply to small entities that have been or 
will be awarded contracts, including those under FAR part 12 procedures 
for the acquisition of commercial items. DoD is unable to estimate the 
total number of small entities that have DoD contracts with a residual 
amount of $1,000 or less; however, the Defense Contract Management 
Agency (DCMA) was able to provide information on contracts administered 
by DCMA. According to data available in Mechanization of Contract 
Administration Services/Shared Data Warehouse as of June 2019, there 
were 11,831 flexibly-priced contracts with residual dollar amounts of 
$1,000 or less, of which 3,507 contracts were awarded to small 
entities. The average residual amount on these contracts was $70.
    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).
    The 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 requirements of the proposed 
rule.
    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 2017-D042), in 
correspondence.

VIII. 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 204, 212, and 252

    Government procurement.

Jennifer Lee Hawes,
Regulatory Control Officer, Defense Acquisition Regulations System.

    Therefore, 48 CFR parts 204, 212, and 252 are proposed to be 
amended as follows:

0
1. The authority citation for 48 CFR parts 204, 212, and 252 continues 
to read as follows:

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

PART 204--ADMINISTRATIVE AND INFORMATION MATTERS

0
2. Add section 204.804-70 to read as follows:


204.804-70   Contract clause.

    Use the clause at 252.204-70XX, Expediting Contract Closeout, in 
solicitations and contracts, including solicitations and contracts 
using FAR part 12 procedures for the acquisition of commercial items, 
when the contracting officer intends to expedite contract closeout 
through the waiver of entitlement to any residual dollar amounts by the 
contractor and the Government at the time of final contract closeout.

PART 212--ACQUISITION OF COMMERCIAL ITEMS

0
3. Amend section 212.301 by adding paragraph (f)(ii)(K) to read as 
follows:


212.301   Solicitation provisions and contract clauses for the 
acquisition of commercial items.

    (f) * * *
    (ii) * * *
    (K) Use the clause at 252.204-70XX, Expediting Contract Closeout, 
as prescribed in 204.804-70.
* * * * *

PART 252--SOLICITATION PROVISIONS AND CONTRACT CLAUSES

0
4. Add section 252.204-70XX to read as follows:


252.204-70XX   Expediting contract closeout.

    As prescribed in 204.804-70, use the following clause:

Expediting Contract Closeout (DATE)

    (a) Both the Government and the Contractor agree to waive any 
entitlement that otherwise might accrue to either party in any 
residual dollar amount of $1,000 or less at the time of final 
contract closeout.
    (b) A residual dollar amount includes all money owed to either 
party at the end of the contract and as a result of the contract, 
excluding amounts connected in any way with taxation or a violation 
of law or regulation.
    (c) For purposes of determining residual dollar amounts, offsets 
(for example across multiple contracts or orders) may be considered 
to the extent permitted by law.
(End of clause)
[FR Doc. 2020-06724 Filed 4-7-20; 8:45 am]
 BILLING CODE 5001-06-P