80 FR 36719 - Defense Federal Acquisition Regulation Supplement: Allowability of Legal Costs for Whistleblower Proceedings (DFARS Case 2013-D022)

DEPARTMENT OF DEFENSE
Defense Acquisition Regulations System

Federal Register Volume 80, Issue 123 (June 26, 2015)

DoD has adopted as final, without change, an interim rule that amended the Defense Federal Acquisition Regulation Supplement (DFARS) to implement a section of the National Defense Authorization Act for Fiscal Year 2013 that addresses the allowability of legal costs incurred by a contractor related to whistleblower proceedings.

[Federal Register Volume 80, Number 123 (Friday, June 26, 2015)]
[Rules and Regulations]
[Page 36719]
From the Federal Register Online  [www.thefederalregister.org]
[FR Doc No: 2015-15665]


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DEPARTMENT OF DEFENSE

Defense Acquisition Regulations System

48 CFR Parts 216 and 252

RIN 0750-AI04


Defense Federal Acquisition Regulation Supplement: Allowability 
of Legal Costs for Whistleblower Proceedings (DFARS Case 2013-D022)

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

ACTION: Final rule.

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SUMMARY: DoD has adopted as final, without change, an interim rule that 
amended the Defense Federal Acquisition Regulation Supplement (DFARS) 
to implement a section of the National Defense Authorization Act for 
Fiscal Year 2013 that addresses the allowability of legal costs 
incurred by a contractor related to whistleblower proceedings.

DATES: Effective June 26, 2015.

FOR FURTHER INFORMATION CONTACT: Ms. Amy Williams, telephone 571-372-
6106.

SUPPLEMENTARY INFORMATION:

I. Background

    DoD published an interim rule in the Federal Register on September 
30, 2013 (78 FR 59859). This interim rule revised DFARS subparts 216.3 
and added a new clause at 252.216-7009 to implement paragraphs (g) and 
(i) of section 827 of the National Defense Authorization Act for Fiscal 
Year 2013 (Pub. L. 112-239).

II. Discussion and Analysis

    No public comments were received in response to the interim rule. 
The interim rule is converted to a final rule without change.

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 a significant regulatory action and, therefore, was 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

    DoD does not expect this final rule to have a significant economic 
impact on a substantial number of small entities within the meaning of 
the Regulatory Flexibility Act, 5 U.S.C. 601, et seq., because most 
contracts awarded to small entities are awarded on a competitive fixed-
price basis, and do not require application of the cost principles 
contained in this rule. However, a final regulatory flexibility 
analysis has been performed and is summarized as follows:
    The reason for the action is to implement section 827(g) of the 
National Defense Authorization Act for Fiscal Year (FY) 2013 (Pub. L. 
113-239). Section 827(g) expands the cost principle at 10 U.S.C. 
2324(k) to apply the cost principle on allowability of costs related to 
legal and other proceedings to costs incurred by contractors in 
proceedings commenced by a contractor employee submitting a complaint 
under 10 U.S.C. 2409 (whistleblowing), and include as specifically 
unallowable, legal costs of a proceeding that results in an order to 
take corrective action under 10 U.S.C. 2409.
    The objective of the rule is to enhance whistleblower protections 
for contractor employees. The legal basis for the rule is 10 U.S.C. 
2324(k).
    There were no public comments in response to the initial regulatory 
flexibility analysis.
    Most contracts awarded on a fixed-price competitive basis do not 
require application of the cost principles. Most contracts valued at or 
below the simplified acquisition threshold are awarded on a fixed-price 
competitive basis. Requiring submission of certified cost or pricing 
data for acquisitions that do not exceed the simplified acquisition 
threshold is prohibited (FAR 15.403-4(a)(2)). According to Federal 
Procurement Data System data for FY 2012, there were 48,115 new DoD 
contract awards over the simplified acquisition threshold in FY 2012. 
Of those contracts, only 6,760 awards were to small businesses on other 
than a competitive fixed-price basis. Estimating 3 awards per small 
business, that could involve about 2,600 small businesses. However, 
this rule would only affect a contractor if a contractor employee 
commenced a proceeding by submitting a complaint under 10 U.S.C. 2409, 
and if that proceeding resulted in any of the circumstances listed at 
FAR 31.205-47(b). DoD does not have data on the percentage of contracts 
that involve submission of a whistleblower complaint and result in any 
of the circumstances listed at FAR 31.205-47(b).
    There are no projected reporting, recordkeeping, and other 
compliance requirements of the rule.
    DoD was unable to identify any alternatives to the rule that would 
reduce the impact on small entities and still meet the requirements of 
the statute.

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 Parts 216 and 252

    Government procurement.


0
Accordingly, the interim rule amending 48 CFR parts 216 and 252, which 
was published at 78 FR 59859 on September 30, 2013, is adopted as a 
final rule without change.

Amy G. Williams,
Editor, Defense Acquisition Regulations System.
[FR Doc. 2015-15665 Filed 6-25-15; 8:45 am]
 BILLING CODE 5001-06-P