80 FR 29981 - Defense Federal Acquisition Regulation Supplement: Multiyear Contracts-Statutory References and Cancellation Ceiling Threshold (DFARS Case 2014-D019)

DEPARTMENT OF DEFENSE
Defense Acquisition Regulations System

Federal Register Volume 80, Issue 100 (May 26, 2015)

Page Range		29981-29983
FR Document		2015-12340

DoD is issuing a final rule amending the Defense Federal Acquisition Regulation Supplement (DFARS) to update the cancellation ceiling threshold for multiyear contracts and to correct statutory references.

Federal Register, Volume 80 Issue 100 (Tuesday, May 26, 2015)

[Federal Register Volume 80, Number 100 (Tuesday, May 26, 2015)]
[Rules and Regulations]
[Pages 29981-29983]
From the Federal Register Online  [www.thefederalregister.org]
[FR Doc No: 2015-12340]


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DEPARTMENT OF DEFENSE

Defense Acquisition Regulations System

48 CFR Part 217

RIN 0750-AI37


Defense Federal Acquisition Regulation Supplement: Multiyear 
Contracts--Statutory References and Cancellation Ceiling Threshold 
(DFARS Case 2014-D019)

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 update the cancellation 
ceiling threshold for multiyear contracts and to correct statutory 
references.

DATES: Effective May 26, 2015.

FOR FURTHER INFORMATION CONTACT: Jennifer Hawes, telephone 571-372-
6115.

SUPPLEMENTARY INFORMATION: 

I. Background

    DoD published a proposed rule in the Federal Register at 79 FR 
65331 on September 19, 2014, to amend the DFARS regarding multiyear 
contracts to update the cancellation ceiling threshold at DFARS 
217.170(e)(1)(iv) for consistency with the Federal Acquisition 
Regulation and correct statutory references. The rule also corrects 
references to 10 U.S.C. 2306b, 10 U.S.C. 2306c, and section 8008a of 
Public Law 105-56 throughout DFARS subpart 217.1.
    No public comments were submitted in response to the proposed rule.

II. Discussion

    There are only minor editorial changes in the final rule from the 
proposed rule. Cross references contained within some paragraphs 
required revision since several paragraphs were redesignated and 
renumbered due to relocation of text or the addition of new text.

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

    A final regulatory flexibility analysis has been prepared 
consistent with the Regulatory Flexibility Act, 5 U.S.C. 601, et seq., 
and is summarized as follows:
    This rule amends the Defense Federal Acquisition Regulation 
Supplement (DFARS) regarding multiyear contracts to ensure consistency 
with the Federal Acquisition Regulation (FAR) and the underlying 
statutes. The objective of this rule is to increase the cancellation 
ceiling threshold at DFARS 217.170(e)(1)(iv) from $100 million to $125 
million to ensure consistency with the threshold at FAR 17.108(b).
    In addition, this rule corrects references to 10 U.S.C. 2306b, 10 
U.S.C. 2306c, and section 8008a of Pub. L. 105-56 throughout DFARS 
subpart 217.1 and makes the following clarifications:
     Requests for increased funding or reprogramming for 
procurement of a major system is relocated under DFARS 217.172(j) since 
it is in reference to a type of multiyear supply contract.
     A multiyear contract for supplies in excess of $500 
million must be specifically authorized by law in an Act other than an 
appropriations Act in accordance with 10 U.S.C. 2306b(i)(3).
     A multiyear procurement contract for any system (or 
component thereof) with a value greater than $500 million must be 
specifically authorized in an appropriations act in accordance with 10 
U.S.C. 2306b(l)(3).
    No comments were received from the public in response to initial 
regulatory flexibility analysis published in the proposed rule.

[[Page 29982]]

    Small businesses will not be affected by this rule. The rule will 
only impact procedures and authorities internal to the Government for 
multiyear contracts that require a cancellation ceiling up to $125 
million or multiyear contracts for supplies with a value in excess of 
$500 million.
    The rule imposes no reporting, recordkeeping, or other information 
collection requirements.

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 217

    Government procurement.

Amy G. Williams,
Editor, Defense Acquisition Regulations System.

    Therefore, 48 CFR part 217 is amended as follows:

PART 217--SPECIAL CONTRACTING METHODS

0
1. The authority citation for 48 CFR part 217 continues to read as 
follows:

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


217.103  [Amended]

0
2. Amend section 217.103, in the definition for ``Military 
installation,'' by removing ``(10 U.S.C. 2801(c)(2))'' and adding ``(10 
U.S.C. 2801(c)(4))'' in its place.

0
3. Amend section 217.170 by--
0
a. Removing paragraph (b);
0
b. Redesignating paragraphs (c), (d), and (e) as paragraphs (b), (c), 
and (d), respectively;
0
c. Revising newly redesignated paragraphs (d)(1)(ii), (iii), and (iv);
0
d. In newly redesignated paragraph (d)(2), removing ``(e)(1)(i)'' and 
adding ``(d)(1)(i)'' in its place;
0
e. In newly redesignated paragraph (d)(3), removing ``(e)(2)'' and 
adding ``(d)(2)'' in its place;
0
f. In newly redesignated paragraph (d)(4), removing ``(e)(1)'' and 
adding ``(d)(1)'' in its place;
0
g. In newly redesignated paragraph (d)(5) introductory text, removing 
``$100 million'' and adding ``$125 million'' in its place; and
0
h. In newly redesignated paragraph (d)(5)(i) introductory text, 
removing ``(e)(1)'' and adding ``(d)(1)'' in its place.
    The revisions read as follows:


217.170  General.

* * * * *
    (d)(1) * * *
    (ii) Employ economic order quantity procurement in excess of $20 
million in any one year of the contract (see 10 U.S.C. 
2306b(l)(1)(B)(i)(I) and section 8008(a) of Pub. L. 105-56 and similar 
sections in subsequent DoD appropriations acts);
    (iii) Involve a contract for advance procurement leading to a 
multiyear contract that employs economic order quantity procurement in 
excess of $20 million in any one year (see 10 U.S.C. 2306b(l)(1)(B)(ii) 
and section 8008(a) of Pub. L. 105-56 and similar sections in 
subsequent DoD appropriations acts); or
    (iv) Include a cancellation ceiling in excess of $125 million (see 
10 U.S.C. 2306c(d)(4) and 10 U.S.C. 2306b(g)(1)).
* * * * *


217.171  [Amended]

0
4. Amend section 217.171 by--
0
a. In paragraph (a) introductory text, removing ``(10 U.S.C. 2306c)'' 
and adding ``(10 U.S.C. 2306c(a))'' in its place;
0
b. In paragraph (a)(5)(iii), adding ``(10 U.S.C. 2306c(b))'' at the end 
of the sentence, before the period;
0
c. In paragraph (b)(3), adding ``(10 U.S.C. 2306c(c))'' at the end of 
the sentence, before the period.
0
d. In paragraph (c)(3), adding ``(10 U.S.C. 2306c(a))'' at the end of 
the sentence, before the period; and
0
e. In paragraph (d), removing ``(10 U.S.C. 2306(c))'' and adding ``(10 
U.S.C. 2306c(d)(2))'' in its place.

0
5. Amend section 217.172 by--
0
a. Revising paragraph (c);
0
b. Redesignating paragraphs (d) through (h) as paragraphs (e) through 
(i), respectively;
0
c. Adding a new paragraph (d);
0
d. In newly redesignated paragraph (f)(1), adding a parenthesis to 
close the parenthetical phrase ``(when entered into or extended)'' and 
removing ``(10 U.S.C. 2306b(1)(5))'' and adding ``(10 U.S.C. 
2306b(l)(5))'' in its place;
0
e. In newly redesignated paragraph (f)(2)--
0
i. Removing ``(g)(2)(i)'' and adding ``(h)(2)(i)'' in its place;
0
ii. Removing ``(g)(2)'' and adding ``(h)(2)'' in its place; and
0
iii. Removing the parenthetical reference ``(10 U.S.C. 
2306b(a)(1)(7))'';
0
f. In newly redesignated paragraph (g)(1), adding the parenthetical 
reference ``(10 U.S.C. 2306b(h)(1))'' before the semicolon;
0
g. In newly redesignated paragraph (g)(2)--
0
i. Removing ``217.172(g)(3) and (4)'' and adding ``paragraphs (h)(3) 
and (4) of this section'' in its place; and
0
ii. Adding the parenthetical reference ``(10 U.S.C. 2306b(h)(2))'' at 
the end of the first sentence, before the period;
0
h. In newly redesignated paragraph (h)(2) introductory text--
0
i. Removing ``(g)(2)(i)'' and adding ``(h)(2)(i)'' in its place; and
0
ii. Removing the word ``are'';
0
i. In newly redesignated paragraph (h)(2)(ii), removing ``(g)(2)(i)'' 
and adding ``(h)(2)(i)'' in its place;
0
j. In newly redesignated paragraph (h)(2)(vii)--
0
i. Adding the parenthetical reference ``(10 U.S.C. 2306b(i)(1)(G))'' at 
the end of the first sentence before the period, and removing the 
parenthetical reference ``(10 U.S.C. 2306b(i)(1)(G))'' from the end of 
the second sentence; and
0
ii. Removing ``USD(C)(P/B)'' and adding ``OUSD(C)(P/B)'' in its place;
0
k. In newly redesignated paragraph (h)(2)(viii) introductory text, 
removing ``USD(C)(P/B)'' and adding ``OUSD(C)(P/B)'' in its place;
0
l. In newly redesignated paragraph (h)(5), removing ``(g)(2)'' and 
adding ``(h)(2)'' in its place;
0
m. In newly redesignated paragraph (h)(6)--
0
i. Removing ``(g)(2)'' and adding ``(h)(2)'' in its place; and
0
ii. Removing ``(g)(5)'' and adding ``(h)(5)'' in its place;
0
n. In newly redesignated paragraph (h)(8) introductory text, removing 
the parenthetical reference ``(10 U.S.C. 2306b(i)(2))''; and
0
o. Adding a new paragraph (j).
    The revisions and additions read as follows:


217.172  Multiyear contracts for supplies.

* * * * *
    (c) Multiyear contracts in amounts exceeding $500 million must be 
specifically authorized by law in an act other than an appropriations 
act (10 U.S.C. 2306b(i)(3)).
    (d) The head of the agency may not initiate a multiyear procurement 
contract for any system (or component thereof) if the value of the 
multiyear contract would exceed $500 million unless authority for the 
contract is specifically provided in an appropriations act (10 U.S.C. 
2306b(l)(3)).
* * * * *
    (j) Any requests for increased funding or reprogramming for 
procurement of a major system under a multiyear contract shall be 
accompanied by an explanation of how the request for increased funding 
affects the determinations made by the

[[Page 29983]]

Secretary of Defense under 217.172(h)(2) (10 U.S.C. 2306b(m)).

[FR Doc. 2015-12340 Filed 5-22-15; 8:45 am]
 BILLING CODE 5001-06-P

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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Federal Register / Vol. 80, No. 100 / Tuesday, May 26, 2015 / Rules and Regulations 29983

Secretary of Defense under rule. No changes have been made from information under Government
217.172(h)(2) (10 U.S.C. 2306b(m)). the proposed rule. contracts. Preparation of these records
[FR Doc. 2015–12340 Filed 5–22–15; 8:45 am] requires clerical and analytical skills to
III. Executive Orders 12866 and 13563
BILLING CODE 5001–06–P
create the documents and input them
Executive Orders (E.O.s) 12866 and into the electronic WAWF system.
13563 direct agencies to assess all costs There is no significant economic
DEPARTMENT OF DEFENSE and benefits of available regulatory impact on small entities.
alternatives and, if regulation is
necessary, to select regulatory V. Paperwork Reduction Act
Defense Acquisition Regulations
System approaches that maximize net benefits The rule contains information
(including potential economic, collection requirements that require the
48 CFR Chapter 2 environmental, public health and safety approval of the Office of Management
effects, distributive impacts, and and Budget under the Paperwork
RIN 0750–AI46 equity). E.O. 13563 emphasizes the Reduction Act (44 U.S.C chapter 35).
importance of quantifying both costs However, these changes to the DFARS
Defense Federal Acquisition and benefits, of reducing costs, of do not impose additional information
Regulation Supplement: Appendix F— harmonizing rules, and of promoting collection requirements to the
Energy Receiving Reports (DFARS flexibility. This is not a significant paperwork burden previously approved
Case 2014–D024) regulatory action and, therefore, was not under OMB Control Number 0704–0248,
subject to review under section 6(b) of entitled Material Inspection and
AGENCY: Defense Acquisition E.O. 12866, Regulatory Planning and Receiving Report.
Regulations System, Department of Review, dated September 30, 1993. This
Defense (DoD). List of Subjects in 48 CFR Appendix F
rule is not a major rule under 5 U.S.C.
ACTION: Final rule.
to Chapter 2
804.
Government procurement.
SUMMARY: DoD is issuing a final rule IV. Regulatory Flexibility Act
amending the Defense Federal Amy G. Williams,
A final regulatory flexibility analysis
Acquisition Regulation Supplement has been prepared consistent with the Editor, Defense Acquisition Regulations
(DFARS) to identify the Wide Area System.
Regulatory Flexibility Act, 5 U.S.C. 601,
WorkFlow Energy Receiving Report as et seq., and is summarized as follows: Therefore, 48 CFR chapter 2,
the electronic equivalent of the DD This rule amends the Defense Federal subchapter I, is amended in appendix F
Form 250, Material Inspection and Acquisition Regulation Supplement as follows:
Receiving Report, for overland (DFARS) Appendix F to identify the CHAPTER 2—DEFENSE ACQUISITION
shipments and the DD Form 250–1, Wide Area WorkFlow (WAWF) Energy REGULATIONS SYSTEM, DEPARTMENT OF
Tanker/Barge Material Inspection And Receiving Report as the electronic DEFENSE
Receiving Report, for waterborne equivalent of the DD Form 250, Material
shipments. ■ 1. The authority citation for appendix
Inspection and Receiving Report, for
F to chapter 2 continues to read as
DATES: Effective May 26, 2015. overland shipments and the DD Form
follows:
250–1, Tanker/Barge Material
FOR FURTHER INFORMATION CONTACT: Authority: 41 U.S.C. 1303 and 48 CFR
Inspection and Receiving Report, for
Jennifer Johnson, telephone 571–372– chapter 1.
waterborne shipments.
6176. DFARS 232.7002, Policy, requires ■ 2. Amend appendix F to chapter 2 by:
SUPPLEMENTARY INFORMATION: contractors to submit payment and ■ a. In section F–101, revising
receiving reports in electronic form, and paragraph (a) and the first sentence of
I. Background paragraph (b);
the accepted electronic form is WAWF.
DoD published a proposed rule in the DFARS 232.7003, Procedures, identifies ■ b. In section F–103, revising
Federal Register at 79 FR 73539 on WAWF as the accepted electronic form. paragraph (d) introductory text;
December 11, 2014, to amend Appendix In addition, the clause at DFARS ■ c. In section F–104, revising
F of the DFARS to identify the Wide 252.232–7003, Electronic Submission of paragraph (b) introductory text;
Area WorkFlow (WAWF) Energy Payment Requests and Receiving ■ d. Revising the part 3 heading; and
Receiving Report as the electronic Reports, requires payment requests and ■ e. In section F–301, revising
equivalent of the paper DD Form 250 for receiving reports using WAWF in nearly paragraph (b)(13).
overland shipments and the DD Form all cases. The revisions read as follows:
250–1 for waterborne shipments. No comments were received from the Appendix F to Chapter 2—Material
DFARS 232.7002, Policy, requires public regarding the initial regulatory Inspection and Inspection and
contractors to submit payment and flexibility analysis. Receiving Report
receiving reports in electronic form, and DoD does not expect this rule to have
the accepted electronic form identified a significant economic impact on a * * * * *
in DFARS 232.7003, Procedures, is substantial number of small entities Part 1—Introduction
WAWF. In addition, the clause at within the meaning of the Regulatory
F–101 General.
DFARS 252.232–7003, Electronic Flexibility Act, 5 U.S.C. 601, et seq. The
(a) This appendix contains procedures and
wreier-aviles on DSK5TPTVN1PROD with RULES

Submission of Payment Requests and rule affects all DoD contractors who are
Receiving Reports, requires payment not exempt from using WAWF. Exempt instructions for the use, preparation, and
distribution of the Wide Area WorkFlow
requests and receiving reports using classes of contracts are those that are (WAWF) Receiving Report, the WAWF
WAWF in nearly all cases. listed under the seven categories of Energy RR, and commercial shipping/
contracts at DFARS 232.7002, Policy. packing lists used to document Government
II. Discussion and Analysis The projected recordkeeping is contract quality assurance. The WAWF RR is
There were no public comments limited to that required to properly the electronic equivalent of the DD Form 250,
submitted in response to the proposed record shipping and receiving Material Inspection and Receiving Report

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Document Created: 2018-02-21 10:31:37
Document Modified: 2018-02-21 10:31:37

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		Jennifer Hawes, telephone 571-372- 6115.
FR Citation		80 FR 29981
RIN Number		0750-AI37

80 FR 29981 - Defense Federal Acquisition Regulation Supplement: Multiyear Contracts-Statutory References and Cancellation Ceiling Threshold (DFARS Case 2014-D019)

DEPARTMENT OF DEFENSEDefense Acquisition Regulations System

Federal Register Volume 80, Issue 100 (May 26, 2015)

DEPARTMENT OF DEFENSE
Defense Acquisition Regulations System