[Federal Register Volume 86, Number 165 (Monday, August 30, 2021)]
[Proposed Rules]
[Pages 48366-48368]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2021-18341]
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DEPARTMENT OF DEFENSE
Defense Acquisition Regulations System
48 CFR Part 204
[Docket DARS-2021-0017]
RIN 0750-AL48
Defense Federal Acquisition Regulation Supplement: Contract
Closeout Authority for DoD Services Contracts (DFARS Case 2021-D012)
AGENCY: Defense Acquisition Regulations System, Department of Defense
(DoD).
ACTION: Proposed rule.
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[[Page 48367]]
SUMMARY: DoD is proposing to amend the Defense Federal Acquisition
Regulation Supplement (DFARS) to implement a section of the National
Defense Authorization Act for Fiscal Year 2021.
DATES: Comments on the proposed rule should be submitted in writing to
the address shown below on or before October 29, 2021, to be considered
in the formation of the final rule.
ADDRESSES: Submit comments identified by DFARS Case 2021-D012, using
any of the following methods:
[cir] Federal eRulemaking Portal: https://www.regulations.gov.
Search for ``DFARS Case 2021-D012.'' Select ``Comment'' and follow the
instructions to submit a comment. Please include your name, company
name (if any), and ``DFARS Case 2021-D012'' on any attached document.
[cir] Email: [email protected]. Include DFARS Case 2021-D012 in
the subject line of the message.
Comments received generally will be posted without change to
https://www.regulations.gov, including any personal information
provided. To confirm receipt of your comment(s), please check https://www.regulations.gov, approximately two to three days after submission
to verify posting.
FOR FURTHER INFORMATION CONTACT: Ms. Kimberly R. Ziegler, telephone
571-372-6095.
SUPPLEMENTARY INFORMATION:
I. Background
This rule proposes to amend DFARS subpart 204.8 to implement
section 820 of the National Defense Authorization Act (NDAA) for Fiscal
Year (FY) 2021 (Pub. L. 116-283). Section 820 amends section 836(b) of
the NDAA for FY 2017 (Pub. L. 114-328), as modified by section 824 of
the NDAA for FY 2018 (Pub. L. 115-91). Section 836 authorizes DoD
contracting officers to close out certain physically complete contracts
or groups of contracts through modification of such contracts, without
completing the requirements of Federal Acquisition Regulation (FAR)
4.804-5(a)(3) through (15) based upon the age of the contract action.
DoD published a final rule at 84 FR 18153 on April 30, 2019, to
implement sections 836 of the NDAA for FY 2017 and 824 of the NDAA for
FY 2018. The final rule provided similar authorities for contracts
meeting certain criteria that were entered into on a date that was at
least 17 fiscal years prior to the current fiscal year.
II. Discussion and Analysis
Section 820 expands the application of the expedited contract
closeout authority of section 836 of the NDAA for FY 2017, implemented
at DFARS 204.804(3)(i)(A), to certain contracts or groups of contracts
that were awarded at least 7 or 10 fiscal years before the current
fiscal year and have completed performance or delivery at least four
years prior to the current fiscal year.
DFARS 204.804(3)(i)(A) currently provides a blanket application of
the 17 fiscal year standard, when certain requirements at
204.804(3)(i)(B) and (C) are met. Section 820 provides two new
standards, one of which provides a similar blanket application, but the
number of fiscal years is reduced from 17 to 7. The second standard of
at least 10 fiscal years only applies to contracts or groups of
contracts for military construction, as defined in 10 U.S.C. 2801, or
shipbuilding. Both new standards require physical completion (see FAR
4.804-4) at least four years prior to the current fiscal year.
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 proposed rule does not create any new solicitation provisions
or contract clauses. It does not impact any existing solicitation
provisions or contract clauses or their applicability to contracts
valued at or below the simplified acquisition threshold or for
commercial items, including COTS items.
IV. Expected Impact of the Rule
DFARS 204.804(3)(i) currently provides for the expedited closeout
of contracts or groups of contracts without completion of a
reconciliation audit or other corrective actions required by FAR 4.804-
5(a)(3) through (15) if certain criteria are met. If a contract was
entered into at least 17 years prior to the current fiscal year, is
physically complete, and has been determined not reconcilable, the
contracting officer may close the contract through a negotiated
settlement.
This rule reduces the age requirement from 17 years to 10 years for
military construction and shipbuilding and 7 years for all other
contract actions. The rule adds a new requirement that these contracts
must be physically complete at least four years prior to the current
fiscal year.
The expanded authority will apply to more recent contracts, subject
to the other criteria in DFARS 204.804(3)(i), to reduce the current
backlog and administration requirements for contracts eligible for
closeout.
V. 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.
VI. Congressional Review Act
As required by the Congressional Review Act (5 U.S.C. 801-808)
before an interim or final rule takes effect, DoD will submit a copy of
the interim or final rule with the form, Submission of Federal Rules
Under the Congressional Review Act, to the U.S. Senate, the U.S. House
of Representatives, and the Comptroller General of the United States. A
major rule under the Congressional Review Act cannot take effect until
60 days after it is published in the Federal Register. This rule is not
anticipated to be a major rule under 5 U.S.C. 804.
VII. Regulatory Flexibility Act.
DoD does not expect this 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 this rule
implements requirements primarily for the Government. However, an
initial regulatory flexibility analysis has been performed and is
summarized as follows:
This rule proposes to amend the Defense Federal Acquisition
Regulation Supplement (DFARS) to implement section 820 of the National
Defense Authorization Act (NDAA) for Fiscal Year (FY) 2021 (Pub. L.
116-283). Section 820 expands the application of the expedited contract
closeout authority of section 836 of the NDAA for FY 2017, implemented
at DFARS 204.804(3)(i)(A), to certain contracts or groups of contracts
that were awarded at least 7 to 10 FYs before the current FY and have
completed performance or delivery at least four years prior to the
current FY. The new 10-year standard
[[Page 48368]]
will apply to contracts or groups of contracts for military
construction, as defined in 10 U.S.C. 2801, or shipbuilding, while the
7-year standard will apply to all other contracts.
The objective of the rule is to implement the requirements of
section 820, which expands the application of the expedited contract
closeout authority of section 836 of the NDAA for FY 2017 to more
recent, physically complete contracts. The legal basis of the rule is
section 820 of the NDAA for FY 2021.
This rule will likely affect small entities that have been or will
be awarded DoD contracts, including those under FAR part 12 procedures
for the acquisition of commercial items, including commercially
available off-the-shelf items. Data was obtained from the Electronic
Data Access module of the Procurement Integrated Enterprise Environment
for contracts that were physically completed at least four years ago
and are eligible for closeout between the new standard of 7 or 10 years
and the previous standard of at least 17 fiscal years after award. The
data were then compared to the Federal Procurement Data System (FPDS)
to estimate the number of contracts awarded to small entities.
Contracts subject to the previous standard of 17 years are included in
this estimate.
As of April 2021, the FPDS data indicate that approximately 29,200
contracts, eligible for expedited closeout under the 7-year standard,
were awarded to an estimated 4,490 unique small entities. An additional
estimated 1,775 contracts, subject to the 10-year standard, were
awarded to approximately 576 small entities. As a result, DoD estimates
that approximately 5,066 small entities will have the opportunity to
benefit from the expanded expedited contract authorities provided in
this rule.
The rule does not impose any new reporting, recordkeeping, or
compliance requirements.
The rule does not duplicate, overlap, or conflict with any other
Federal rules.
There are no practical alternatives that will accomplish the
objectives of the statute.
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 the 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 2021-D012), in
correspondence.
VIII. Paperwork Reduction Act
This rule does not contain any information collection requirements
that require the approval of the Office of Management and Budget (OMB)
under the Paperwork Reduction Act (44 U.S.C. chapter 35).
List of Subjects in 48 CFR Part 204
Government procurement.
Jennifer D. Johnson,
Editor/Publisher, Defense Acquisition Regulations System.
Therefore, 48 CFR part 204 is proposed to be amended as follows:
PART 204--ADMINISTRATIVE AND INFORMATION MATTERS
0
1. The authority citation for 48 CFR part 204 continues to read as
follows:
Authority: 41 U.S.C. 1303 and 48 CFR chapter 1.
0
2. Amend section 204.804 by revising paragraph (3)(i) to read as
follows:
Sec. 204.804 Closeout of contract files.
* * * * *
(3)(i) In accordance with section 836 of the National Defense
Authorization Act for Fiscal Year 2017 (Pub. L. 114-328), section 824
of the National Defense Authorization Act for Fiscal Year 2018 (Pub. L.
115-91), and section 820 of the National Defense Authorization Act for
Fiscal Year 2021 (Pub. L. 116-283), contracting officers may close out
contracts or groups of contracts through issuance of one or more
modifications to such contracts without completing a reconciliation
audit or other corrective action in accordance with FAR 4.804-5(a)(3)
through (15), as appropriate, if each contract--
(A)(1) For military construction (as defined at 10 U.S.C. 2801) or
shipbuilding, was awarded at least 10 fiscal years before the current
fiscal year; or
(2) For all other contracts, was awarded at least 7 fiscal years
before the current fiscal year;
(B) The performance or delivery was completed at least 4 years
prior to the current fiscal year; and
(C) Has been determined by a contracting official, at least one
level above the contracting officer, to be not otherwise reconcilable,
because--
(1) The contract or related payment records have been destroyed or
lost; or
(2) Although contract or related payment records are available, the
time or effort required to establish the exact amount owed to the U.S.
Government or amount owed to the contractor is disproportionate to the
amount at issue.
* * * * *
[FR Doc. 2021-18341 Filed 8-27-21; 8:45 am]
BILLING CODE 5001-06-P