[Federal Register Volume 87, Number 208 (Friday, October 28, 2022)]
[Rules and Regulations]
[Pages 65512-65513]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2022-23283]


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DEPARTMENT OF DEFENSE

Defense Acquisition Regulations System

48 CFR Parts 216 and 235

[Docket DARS-2022-0023]
RIN 0750-AL58


Defense Federal Acquisition Regulation Supplement: Repeal of 
Preference for Fixed-Price Contracts (DFARS Case 2022-D007)

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

ACTION: Final rule.

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SUMMARY: DoD is issuing a final rule amending the Defense Federal 
Acquisition Regulation Supplement (DFARS) to implement a section of the 
National Defense Authorization Act for Fiscal Year 2022.

DATES: Effective October 28, 2022.

FOR FURTHER INFORMATION CONTACT: Ms. Kimberly R. Ziegler, telephone 
703-901-3176.

SUPPLEMENTARY INFORMATION:

I. Background

    DoD is issuing a final rule amending the DFARS to implement section 
817 of the National Defense Authorization Act (NDAA) for Fiscal Year 
(FY) 2022 (Pub. L. 117-81), which repeals section 829 of the NDAA for 
FY 2017 (Pub. L. 114-328). This rule removes text that was added to the 
DFARS associated with the implementation of section 829.
    DoD published a final rule in the Federal Register at 84 FR 65304 
on November 27, 2019, to implement section 829. Section 829 required 
contracting officers to first consider fixed-price contracts, including 
fixed-price incentive contracts, when determining contract type and to 
obtain approval from the head of the contracting activity for certain 
cost-reimbursement contracts.
    This final rule removes references, policies, and limitations 
related to section 829 at DFARS sections 216.102(1), 216.301-3(2), 
216.401(d), and 235.006(b)(i). Conforming changes are made to revise 
two cross-references at 235.006(b)(ii). At DFARS 216.102(3) an obsolete 
reference to DFARS 225.7301-1 is removed, since the requirement at 
225.7301-1 was repealed by section 888 of the NDAA for FY 2021 (Pub. L. 
116-283); see the final rule for DFARS Case 2021-D019 published in the 
Federal Register at 86 FR 48339 on August 30, 2021.

II. Publication of This Final Rule for Public Comment Is Not Required 
by Statute

    The statute that applies to the publication of the Federal 
Acquisition Regulation (FAR) is 41 U.S.C. 1707, Publication of Proposed 
Regulations. Subsection (a)(1) of the statute requires that a 
procurement policy, regulation, procedure, or form (including an 
amendment or modification thereof) must be published for public comment 
if it relates to the expenditure of appropriated funds and has either a 
significant effect beyond the internal operating procedures of the 
agency issuing the policy, regulation, procedure, or form, or has a 
significant cost or administrative impact on contractors or offerors. 
This final rule is not required to be published for public comment, 
because this rule is updating internal DoD operating procedures.

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

    This 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 at 
or below the simplified acquisition threshold, for commercial services, 
or for commercial products including COTS 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.

V. 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

[[Page 65513]]

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. The Office of Information and 
Regulatory Affairs has determined that this rule is not a major rule as 
defined by 5 U.S.C. 804.

VI. Regulatory Flexibility Act

    The Regulatory Flexibility Act does not apply to this rule because 
this final rule does not constitute a significant DFARS revision within 
the meaning of FAR 1.501-1, and 41 U.S.C. 1707 does not require 
publication for public comment.

VII. Paperwork Reduction Act

    This 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 216 and 235

    Government procurement.

Jennifer D. Johnson,
Editor/Publisher, Defense Acquisition Regulations System.

    Therefore, 48 CFR parts 216 and 235 are amended as follows:

0
1. The authority citation for 48 CFR parts 216 and 235 continues to 
read as follows:

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

PART 216--TYPES OF CONTRACTS

0
2. Revise section 216.102 to read as follows:


216.102   Policies.

    In accordance with section 811 of the National Defense 
Authorization Act for Fiscal Year 2013 (Pub. L. 112-239), use of any 
cost-reimbursement line item for the acquisition of production of major 
defense acquisition programs is prohibited, unless the exception at 
234.004(2)(ii) applies.

0
3. Revise section 216.301-3 to read as follows:


216.301-3  Limitations.

    For contracts in connection with a military construction project or 
a military family housing project, contracting officers shall not use 
cost-plus-fixed-fee, cost-plus-award-fee, or cost-plus-incentive-fee 
contract types (10 U.S.C. 2306(c)). This applies notwithstanding a 
declaration of war or the declaration by the President of a national 
emergency under section 201 of the National Emergencies Act (50 U.S.C. 
1621) that includes the use of the Armed Forces.

0
4. Amend section 216.401 by revising paragraph (d) to read as follows:


216.401   General.

* * * * *
    (d) The determination and findings justifying that the use of an 
incentive- or award-fee contract is in the best interest of the 
Government, may be signed by the head of contracting activity or a 
designee--
    (i) No lower than one level below the head of the contracting 
activity for award-fee contracts; or
    (ii) One level above the contracting officer for incentive-fee 
contracts.
* * * * *

PART 235--RESEARCH AND DEVELOPMENT CONTRACTING


235.006  [Amended]

0
5. Amend section 235.006 by--
0
a. Removing paragraph (b)(i);
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b. Redesignating paragraphs (b)(ii) and (iii) as paragraphs (b)(i) and 
(ii), respectively;
0
c. In the newly redesignated paragraph (b)(ii)(A)(3), removing 
``(b)(iii)(A)(1) and (2)'' and adding ``(b)(ii)(A)(1) and (2)'' in its 
place; and
0
d. In the newly redesignated paragraph (b)(ii)(A)(3)(ii), removing 
``(b)(iii)(A)(3)(i)'' and adding ``(b)(ii)(A)(3)(i)'' in its place.

[FR Doc. 2022-23283 Filed 10-27-22; 8:45 am]
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