80 FR 29980 - Defense Federal Acquisition Regulation Supplement: Approval Threshold for Time-and-Materials and Labor-Hour Contracts (DFARS Case 2014-D020)
DEPARTMENT OF DEFENSE
Defense Acquisition Regulations System Federal Register Volume 80, Issue 100 (May 26, 2015)
Defense Acquisition Regulations System
Federal Register Volume 80, Issue 100 (May 26, 2015)
| Page Range | 29980-29981 | |
| FR Document | 2015-12341 |
[Federal Register Volume 80, Number 100 (Tuesday, May 26, 2015)] [Rules and Regulations] [Pages 29980-29981] From the Federal Register Online [www.thefederalregister.org] [FR Doc No: 2015-12341] ======================================================================= ----------------------------------------------------------------------- DEPARTMENT OF DEFENSE Defense Acquisition Regulations System 48 CFR Part 216 RIN 0750-AI56 Defense Federal Acquisition Regulation Supplement: Approval Threshold for Time-and-Materials and Labor-Hour Contracts (DFARS Case 2014-D020) AGENCY: Defense Acquisition Regulations System, Department of Defense (DoD). ACTION: Final rule. ----------------------------------------------------------------------- SUMMARY: DoD is issuing a final rule amending the Defense Federal Acquisition Regulation Supplement (DFARS) to establish the level of approval required for a determination and findings for time-and- materials and labor-hour contracts, or portions of contracts, exceeding $1 million. DATES: Effective May 26, 2015. FOR FURTHER INFORMATION CONTACT: Ms. Jennifer Johnson, telephone 571- 372-6176. SUPPLEMENTARY INFORMATION: I. Background DoD is issuing a final rule amending the DFARS to establish the level of approval required for a determination and findings (D&F) for time-and-materials and labor-hour contracts, or portions of contracts, exceeding $1 million. The D&F must address why cost-plus-fixed-fee and other contract types are not appropriate. The approval requirements in this rule do not apply to contracts that support contingency or peacekeeping operations, or that provide humanitarian assistance, disaster relief, or recovery from conventional, nuclear, biological, chemical, or radiological attack. II. Publication of This Final Rule for Public Comment Is Not Required by Statute ``Publication of proposed regulations'', 41 U.S.C. 1707, is the statute which applies to the publication of the Federal Acquisition Regulation. Paragraph (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 pertains to requirements for internal documentation within DoD, specifically, determination and findings for use of the time-and- materials and labor-hour contract types. These requirements affect only the internal operating procedures of the Government. This final rule is not required to be published for public comment, because it has no effect beyond the internal operating procedures of DoD, and has no cost or administrative impact on contractors or offerors. III. 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. This rule is not a major rule under 5 U.S.C. 804. IV. 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. V. 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 Part 216 Government procurement. Amy G. Williams, Editor, Defense Acquisition Regulations System. Therefore, 48 CFR part 216 is amended as follows: PART 216--TYPES OF CONTRACTS 0 1. The authority citation for 48 CFR part 216 continues to read as follows: Authority: 41 U.S.C. 1303 and 48 CFR chapter 1. 0 2. Section 216.601 is amended by revising paragraph (d) to read as follows: 216.601 Time-and-materials contracts. (d) Limitations. (i)(A) Approval of determination and findings for time-and- materials or labor-hour contracts. (1) Base period plus any option periods is three years or less. (i) For contracts (including indefinite-delivery contracts) and orders in which [[Page 29981]] the portion of the requirement performed on a time-and-materials or labor-hour basis exceeds $1 million, the approval authority for the determination and findings shall be the senior contracting official within the contracting activity. This authority may not be delegated. (ii) For contracts (including indefinite-delivery contracts) and orders in which the portion of the requirement performed on a time-and- materials or labor-hour basis is less than or equal to $1 million, the determination and findings shall be approved one level above the contracting officer. (2) Base period plus any option periods exceeds three years. The authority of the head of the contracting activity to approve the determination and findings may not be delegated. (3) Exception. The approval requirements in paragraphs (d)(i)(A)(1) and (2) of this section do not apply to contracts that-- (i) Support contingency or peacekeeping operations; or (ii) Provide humanitarian assistance, disaster relief, or recovery from conventional, nuclear, biological, chemical, or radiological attack. (B) Content of determination and findings. The determination and findings shall contain sufficient facts and rationale to justify that no other contract type is suitable. At a minimum, the determination and findings shall-- (1) Include a description of the market research conducted; (2) Establish that it is not possible at the time of placing the contract or order to accurately estimate the extent or duration of the work or to anticipate costs with any reasonable degree of certainty; (3) Address why a cost-plus-fixed-fee term or other cost- reimbursement, incentive, or fixed-price contract or order is not appropriate; for contracts (including indefinite-delivery contracts) and orders for noncommercial items awarded to contractors with adequate accounting systems, a cost-plus-fixed-fee term contract type shall be preferred over a time-and-materials or labor-hour contract type; (4) Establish that the requirement has been structured to minimize the use of time-and-materials and labor-hour requirements (e.g., limiting the value or length of the time-and-materials or labor-hour portion of the contract or order; establishing fixed prices for portions of the requirement); and (5) Describe the actions planned to minimize the use of time-and- materials and labor-hour contracts on future acquisitions for the same requirements. (C) Indefinite-delivery contracts. For indefinite-delivery contracts, the contracting officer shall structure contracts that authorize time-and-materials orders or labor-hour orders to also authorize orders on a cost-reimbursement, incentive, or fixed-price basis, to the maximum extent practicable. * * * * * [FR Doc. 2015-12341 Filed 5-22-15; 8:45 am] BILLING CODE 5001-06-P
![29980 Federal Register / Vol. 80, No. 100 / Tuesday, May 26, 2015 / Rules and Regulations
V. Ordering Clauses ACTION: Final rule. administrative impact on contractors or
16. Accordingly, it is ordered that, offerors.
SUMMARY: DoD is issuing a final rule
pursuant to sections 1, 4(i)–4(j), 5, 251, III. Executive Orders 12866 and 13563
amending the Defense Federal
and 303(r) of the Communications Act Executive Orders (E.O.s) 12866 and
Acquisition Regulation Supplement
of 1934, as amended, 47 U.S.C. 151, 13563 direct agencies to assess all costs
(DFARS) to establish the level of
154(i)–(j), 155, 251, 303(r), this Order and benefits of available regulatory
approval required for a determination
approving the North American alternatives and, if regulation is
and findings for time-and-materials and
Numbering Council’s recommendation necessary, to select regulatory
labor-hour contracts, or portions of
to revise the ‘‘Cancel Flows’’ in the approaches that maximize net benefits
contracts, exceeding $1 million.
Local Number Portability Provisioning (including potential economic,
Flows, WC Docket No. 07–244, CC DATES: Effective May 26, 2015.
environmental, public health and safety
Docket Nos. 95–116 and 99–200, is FOR FURTHER INFORMATION CONTACT: Ms. effects, distributive impacts, and
adopted. Jennifer Johnson, telephone 571–372– equity). E.O. 13563 emphasizes the
17. It is further ordered that, pursuant 6176. importance of quantifying both costs
to sections 1, 4(i)–4(j), 5, 251, and 303(r) and benefits, of reducing costs, of
of the Communications Act of 1934, as SUPPLEMENTARY INFORMATION:
harmonizing rules, and of promoting
amended, 47 U.S.C. 151, 154(i)–(j), 155, I. Background flexibility. This is not a significant
251, 303(r), this Order approving the regulatory action and, therefore, was not
North American Numbering Council’s DoD is issuing a final rule amending
subject to review under section 6(b) of
recommendation to revise the the DFARS to establish the level of
E.O. 12866, Regulatory Planning and
‘‘Disconnect Process for Ported approval required for a determination
Review, dated September 30, 1993. This
Telephone Numbers’’ in the Local and findings (D&F) for time-and- rule is not a major rule under 5 U.S.C.
Number Portability Provisioning Flows, materials and labor-hour contracts, or 804.
WC Docket No. 07–244, CC Docket Nos. portions of contracts, exceeding $1
95–116 and 99–200, is adopted. million. The D&F must address why IV. Regulatory Flexibility Act
18. It is further ordered that, pursuant cost-plus-fixed-fee and other contract The Regulatory Flexibility Act does
to sections 1, 4(i)–4(j), 5, 251, and 303(r) types are not appropriate. The approval not apply to this rule because this final
of the Communications Act of 1934, as requirements in this rule do not apply rule does not constitute a significant
amended, 47 U.S.C. 151, 154(i)–(j), 155, to contracts that support contingency or DFARS revision within the meaning of
251, 303(r), this Order approving the peacekeeping operations, or that FAR 1.501–1, and 41 U.S.C. 1707 does
North American Numbering Council’s provide humanitarian assistance, not require publication for public
recommendation to accept Best Practice disaster relief, or recovery from comment.
65 and the corresponding revisions to conventional, nuclear, biological,
chemical, or radiological attack. V. Paperwork Reduction Act
the Local Number Portability
Provisioning flows, and denying the The rule does not contain any
II. Publication of This Final Rule for
North American Numbering Council’s information collection requirements that
Public Comment Is Not Required by
recommendation to accept Best Practice require the approval of the Office of
Statute Management and Budget under the
30, WC Docket No. 07–244, CC Docket
Nos. 95–116 and 99–200, is adopted. ‘‘Publication of proposed Paperwork Reduction Act (44 U.S.C.
19. It is further ordered that this Order regulations’’, 41 U.S.C. 1707, is the chapter 35).
shall become effective 30 days after statute which applies to the publication List of Subjects in 48 CFR Part 216
publication in the Federal Register. of the Federal Acquisition Regulation.
Paragraph (a)(1) of the statute requires Government procurement.
Federal Communications Commission.
that a procurement policy, regulation, Amy G. Williams,
Sanford S. Williams, procedure or form (including an Editor, Defense Acquisition Regulations
Assistant Chief, Competition Policy Division, amendment or modification thereof) System.
Wireline Competition Bureau. must be published for public comment
[FR Doc. 2015–12633 Filed 5–22–15; 8:45 am] Therefore, 48 CFR part 216 is
if it relates to the expenditure of amended as follows:
BILLING CODE 6712–01–P appropriated funds, and has either a
significant effect beyond the internal PART 216—TYPES OF CONTRACTS
operating procedures of the agency
DEPARTMENT OF DEFENSE issuing the policy, regulation, procedure ■ 1. The authority citation for 48 CFR
or form, or has a significant cost or part 216 continues to read as follows:
Defense Acquisition Regulations administrative impact on contractors or Authority: 41 U.S.C. 1303 and 48 CFR
System offerors. This final rule is not required chapter 1.
to be published for public comment
48 CFR Part 216 ■ 2. Section 216.601 is amended by
because it pertains to requirements for
revising paragraph (d) to read as
internal documentation within DoD,
RIN 0750–AI56 follows:
specifically, determination and findings
Defense Federal Acquisition for use of the time-and-materials and 216.601 Time-and-materials contracts.
labor-hour contract types. These
wreier-aviles on DSK5TPTVN1PROD with RULES
Regulation Supplement: Approval (d) Limitations.
Threshold for Time-and-Materials and requirements affect only the internal (i)(A) Approval of determination and
Labor-Hour Contracts (DFARS Case operating procedures of the findings for time-and-materials or labor-
2014–D020) Government. This final rule is not hour contracts.
required to be published for public (1) Base period plus any option
AGENCY: Defense Acquisition comment, because it has no effect periods is three years or less.
Regulations System, Department of beyond the internal operating (i) For contracts (including indefinite-
Defense (DoD). procedures of DoD, and has no cost or delivery contracts) and orders in which
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![Federal Register / Vol. 80, No. 100 / Tuesday, May 26, 2015 / Rules and Regulations 29981
the portion of the requirement (C) Indefinite-delivery contracts. For paragraphs were redesignated and
performed on a time-and-materials or indefinite-delivery contracts, the renumbered due to relocation of text or
labor-hour basis exceeds $1 million, the contracting officer shall structure the addition of new text.
approval authority for the determination contracts that authorize time-and-
III. Executive Orders 12866 and 13563
and findings shall be the senior materials orders or labor-hour orders to
contracting official within the also authorize orders on a cost- Executive Orders (E.O.s) 12866 and
contracting activity. This authority may reimbursement, incentive, or fixed-price 13563 direct agencies to assess all costs
not be delegated. basis, to the maximum extent and benefits of available regulatory
(ii) For contracts (including practicable. alternatives and, if regulation is
indefinite-delivery contracts) and orders * * * * * necessary, to select regulatory
in which the portion of the requirement approaches that maximize net benefits
[FR Doc. 2015–12341 Filed 5–22–15; 8:45 am]
performed on a time-and-materials or (including potential economic,
BILLING CODE 5001–06–P
labor-hour basis is less than or equal to environmental, public health and safety
$1 million, the determination and effects, distributive impacts, and
findings shall be approved one level DEPARTMENT OF DEFENSE equity). E.O. 13563 emphasizes the
above the contracting officer. importance of quantifying both costs
(2) Base period plus any option Defense Acquisition Regulations and benefits, of reducing costs, of
periods exceeds three years. The System harmonizing rules, and of promoting
authority of the head of the contracting flexibility. This is not a significant
activity to approve the determination 48 CFR Part 217 regulatory action and, therefore, was not
and findings may not be delegated. subject to review under section 6(b) of
RIN 0750–AI37 E.O. 12866, Regulatory Planning and
(3) Exception. The approval
requirements in paragraphs (d)(i)(A)(1) Defense Federal Acquisition Review, dated September 30, 1993. This
and (2) of this section do not apply to Regulation Supplement: Multiyear rule is not a major rule under 5 U.S.C.
contracts that— Contracts—Statutory References and 804.
(i) Support contingency or Cancellation Ceiling Threshold IV. Regulatory Flexibility Act
peacekeeping operations; or (DFARS Case 2014–D019)
(ii) Provide humanitarian assistance, A final regulatory flexibility analysis
disaster relief, or recovery from AGENCY: Defense Acquisition has been prepared consistent with the
conventional, nuclear, biological, Regulations System, Department of Regulatory Flexibility Act, 5 U.S.C. 601,
chemical, or radiological attack. Defense (DoD). et seq., and is summarized as follows:
(B) Content of determination and ACTION: Final rule. This rule amends the Defense Federal
findings. The determination and Acquisition Regulation Supplement
findings shall contain sufficient facts SUMMARY: DoD is issuing a final rule (DFARS) regarding multiyear contracts
and rationale to justify that no other amending the Defense Federal to ensure consistency with the Federal
contract type is suitable. At a minimum, Acquisition Regulation Supplement Acquisition Regulation (FAR) and the
the determination and findings shall— (DFARS) to update the cancellation underlying statutes. The objective of
(1) Include a description of the market ceiling threshold for multiyear contracts this rule is to increase the cancellation
research conducted; and to correct statutory references. ceiling threshold at DFARS
(2) Establish that it is not possible at DATES: Effective May 26, 2015. 217.170(e)(1)(iv) from $100 million to
the time of placing the contract or order FOR FURTHER INFORMATION CONTACT: $125 million to ensure consistency with
to accurately estimate the extent or Jennifer Hawes, telephone 571–372– the threshold at FAR 17.108(b).
duration of the work or to anticipate 6115. In addition, this rule corrects
costs with any reasonable degree of references to 10 U.S.C. 2306b, 10 U.S.C.
SUPPLEMENTARY INFORMATION:
certainty; 2306c, and section 8008a of Pub. L.
(3) Address why a cost-plus-fixed-fee I. Background 105–56 throughout DFARS subpart
term or other cost-reimbursement, DoD published a proposed rule in the 217.1 and makes the following
incentive, or fixed-price contract or Federal Register at 79 FR 65331 on clarifications:
order is not appropriate; for contracts September 19, 2014, to amend the • Requests for increased funding or
(including indefinite-delivery contracts) DFARS regarding multiyear contracts to reprogramming for procurement of a
and orders for noncommercial items update the cancellation ceiling major system is relocated under DFARS
awarded to contractors with adequate threshold at DFARS 217.170(e)(1)(iv) for 217.172(j) since it is in reference to a
accounting systems, a cost-plus-fixed- consistency with the Federal type of multiyear supply contract.
fee term contract type shall be preferred Acquisition Regulation and correct • A multiyear contract for supplies in
over a time-and-materials or labor-hour statutory references. The rule also excess of $500 million must be
contract type; corrects references to 10 U.S.C. 2306b, specifically authorized by law in an Act
(4) Establish that the requirement has 10 U.S.C. 2306c, and section 8008a of other than an appropriations Act in
been structured to minimize the use of Public Law 105–56 throughout DFARS accordance with 10 U.S.C. 2306b(i)(3).
time-and-materials and labor-hour subpart 217.1. • A multiyear procurement contract
requirements (e.g., limiting the value or No public comments were submitted for any system (or component thereof)
length of the time-and-materials or with a value greater than $500 million
wreier-aviles on DSK5TPTVN1PROD with RULES
in response to the proposed rule.
labor-hour portion of the contract or must be specifically authorized in an
order; establishing fixed prices for II. Discussion appropriations act in accordance with
portions of the requirement); and There are only minor editorial 10 U.S.C. 2306b(l)(3).
(5) Describe the actions planned to changes in the final rule from the No comments were received from the
minimize the use of time-and-materials proposed rule. Cross references public in response to initial regulatory
and labor-hour contracts on future contained within some paragraphs flexibility analysis published in the
acquisitions for the same requirements. required revision since several proposed rule.
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Document Created: 2018-02-21 10:31:04
Document Modified: 2018-02-21 10:31:04
| Category | Regulatory Information | |
| Collection | Federal Register | |
| sudoc Class | AE 2.7: GS 4.107: AE 2.106: | |
| Publisher | Office of the Federal Register, National Archives and Records Administration | |
| Section | Rules and Regulations | |
| Action | Final rule. | |
| Dates | Effective May 26, 2015. | |
| Contact | Ms. Jennifer Johnson, telephone 571- 372-6176. | |
| FR Citation | 80 FR 29980 | |
| RIN Number | 0750-AI56 |
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