[Federal Register Volume 88, Number 55 (Wednesday, March 22, 2023)]
[Rules and Regulations]
[Pages 17354-17355]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2023-05674]


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DEPARTMENT OF DEFENSE

Defense Acquisition Regulations System

48 CFR Part 242

[Docket DARS-2023-0007]
RIN 0750-AL69


Defense Federal Acquisition Regulation Supplement: Contract 
Administration Office Functions Relating to Direct Costs (DFARS Case 
2022-D021)

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 clarify when a contract 
administration office has authority to negotiate and settle direct 
costs questioned in incurred cost audits.

DATES: Effective March 22, 2023.

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

SUPPLEMENTARY INFORMATION: 

I. Background

    DoD is issuing a final rule to amend the DFARS by adding to section 
242.302(b) an additional contract administrative function delegable 
from a procuring contracting office to a contract administration 
office. DFARS 242.302(b) specifies functions performed by the contract 
administration office ``only when and to the extent specifically 
authorized'' by the procuring contracting office, as stated in Federal 
Acquisition Regulation (FAR) 42.302. Any administrative functions 
unspecified under FAR 42.302 or DFARS 242.302, and not otherwise 
delegated, remain the responsibility of the procuring contracting 
office. This

[[Page 17355]]

rule explicitly allows delegation of authority from the procuring 
contracting office to the Government contract administration office to 
negotiate and settle direct costs questioned in incurred cost audits.

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 it merely involves assignment 
among DoD agencies of an existing contract administrative function. 
This rule does not have a significant cost or administrative impact on 
contractors or offerors, and it does not have a significant effect 
beyond DoD's internal 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 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 prescriptions for their use.

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 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 Part 242

    Government procurement.

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

    Therefore, 48 CFR part 242 is amended as follows:

PART 242--CONTRACT ADMINISTRATION AND AUDIT SERVICES

0
1. The authority citation for 48 CFR part 242 continues to read as 
follows:

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


0
2. Amend section 242.302 by adding paragraph (b)(S-71) to read as 
follows:


242.302   Contract administration functions.

* * * * *
    (b) * * *
    (S-71)(A) Except for classified contracts, negotiate or settle 
questioned direct costs in an incurred cost audit. The procuring 
contracting officer may delegate this authority to the contract 
administration office (CAO) only upon prior coordination and agreement 
with the CAO. Upon such delegation, the procuring contracting officer 
shall provide the CAO access within 30 days to all supporting 
documentation in their possession related to the questioned direct 
costs in an incurred cost audit.
    (B) After settlement of the questioned direct costs, the CAO shall 
provide the procuring contracting office the results of the settlement. 
The procuring contracting office shall make any adjustments resulting 
from the settlement on affected contracts and report such adjustments 
to the CAO.

[FR Doc. 2023-05674 Filed 3-21-23; 8:45 am]
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