[Federal Register Volume 88, Number 40 (Wednesday, March 1, 2023)]
[Rules and Regulations]
[Pages 12862-12864]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2023-04028]


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DEPARTMENT OF DEFENSE

Defense Acquisition Regulations System

48 CFR Parts 212, 232, and 252

[Docket DARS-2023-0004]
RIN 0750-AL27


Defense Federal Acquisition Regulation Supplement: Prompt Payment 
of Contractors (DFARS Case 2021-D008)

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 remove a clause and the 
associated prescription that are no longer necessary.

DATES: Effective March 16, 2023.

FOR FURTHER INFORMATION CONTACT: David E. Johnson, telephone 202-913-
5764.

SUPPLEMENTARY INFORMATION: 

I. Background

    This rule implements section 815 of the National Defense 
Authorization Act (NDAA) for Fiscal Year (FY) 2021 (Pub. L. 116-283), 
which strengthened the requirement that DoD establish a goal to pay 
small business contractors within 15 days of receipt of an invoice. In 
particular, section 815(1) of the NDAA for FY 2021 amended 10 U.S.C. 
2307(a)(2)(A) (now located in 10 U.S.C. 3801) by striking the language 
``if a specific payment date is not established by contract.'' Section 
815(2) of the NDAA for FY 2021 amended 10 U.S.C. 2307(a)(2)(B) by 
striking the language ``if the prime contractor agrees'' and replacing 
it with the language ``if the prime contractor agrees or proposes.'' 
Section 814 of the NDAA for FY 2022 (Pub. L. 117-81) rescinded section 
815(2) of the NDAA for FY 2021.
    In related Federal Acquisition Regulation (FAR) Case 2020-007, DoD, 
GSA, and NASA published a proposed rule at 86 FR 53923 on September 29, 
2021, to implement a policy that provides for accelerated payments to 
contractors that are small businesses and to small business 
subcontractors by accelerating payments to their prime contractors. 
This change to the FAR implements section 873 of the NDAA for FY 2020 
(Pub. L. 116-92). Section 873 requires agencies to establish an 
accelerated payment date for small business prime contractors, to the 
fullest

[[Page 12863]]

extent permitted by law, with a goal of 15 days after receipt of a 
proper invoice, if a specific payment date is not established by 
contract. Section 873 also requires that, to the fullest extent 
permitted by law, the head of an agency establish an accelerated 
payment date for prime contractors that subcontract with small 
businesses, with a goal of 15 days after receipt of a proper invoice, 
if--
    (1) A specific payment date is not established by contract; and
    (2) The contractor agrees to make accelerated payments to the 
subcontractor without any further consideration from, or fees charged 
to, the subcontractor.
    FAR Case 2020-007 implements portions of 10 U.S.C. 2307 (now 
located in 10 U.S.C. 3801-3808) stating requirements regarding 
accelerated payments applicable only to DoD. The FAR case implements 
section 815(1) of the NDAA for FY 2021 by excluding from DoD contracts 
the condition reflected in the language ``a specific payment date is 
not established by contract.'' Therefore, separate implementation of 
section 815(1) in the DFARS is not required.
    DFARS Case 2021-D008 now rescinds portions of the DFARS that FAR 
Case 2020-007 renders moot. In particular, DFARS clause 252.232-7017, 
Accelerating Payments to Small Business Subcontractors--Prohibition on 
Fees and Consideration, prohibits the contractor requiring any further 
consideration from or charging fees to the small business subcontractor 
in exchange for making accelerated payments. DFARS 232.009-2 prescribes 
inclusion of the clause at DFARS 252.232-7017 in solicitations and 
contracts, including those using FAR part 12 procedures for the 
acquisition of commercial products and commercial services, that 
include the clause at FAR 52.232-40, Providing Accelerated Payments to 
Small Business Subcontractors. FAR Case 2020-007 amends FAR clause 
52.232-40 to include the same information as DFARS clause 252. 232-
7017, so the DFARS clause is duplicative and no longer necessary. 
Therefore, it can be removed from the DFARS along with the prescription 
at 232.009-2.

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

    The statute that applies to the publication of the 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 merely removes an 
obsolete clause and the associated prescription from the DFARS.

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

    This rule only removes obsolete DFARS clause 252.232-7017, 
Accelerating Payments to Small Business Subcontractors--Prohibition on 
Fees and Consideration, and the associated prescription. This rule does 
not create any new solicitation provisions or contract clauses that 
apply to contracts at or below the simplified acquisition threshold, 
for commercial products, including commercially available off-the-shelf 
items, or for commercial services.

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 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 under 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 212, 232, and 252

    Government procurement.

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

    Therefore, 48 CFR parts 212, 232, and 252 are amended as follows:

0
1. The authority citation for 48 CFR parts 212, 232, and 252 continues 
to read as follows:

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

PART 212--ACQUISITION OF COMMERCIAL PRODUCTS AND COMMERCIAL 
SERVICES


212.301  [Amended]

0
2. Amend section 212.301 by removing paragraph (f)(xiv)(G).

PART 232--CONTRACT FINANCING

0
3. Revise sections 232.009 and 232.009-1 to read as follows:


232.009  Providing accelerated payments to small business contractors 
and to prime contractors that subcontract with a small business 
concern.


232.009-1  General.

    10 U.S.C. 3801(b) requires DoD to provide accelerated payments to 
small business contractors and subcontractors, to the fullest extent 
permitted by law, with a goal of 15 days.


232.009-2  [Removed]

0
4. Remove section 232.009-2.

[[Page 12864]]

PART 252--SOLICITATION PROVISIONS AND CONTRACT CLAUSES


252.232-7017  [Removed and Reserved]

0
5. Remove and reserve section 252.232-7017.

[FR Doc. 2023-04028 Filed 2-28-23; 8:45 am]
BILLING CODE 5001-06-P