81 FR 28730 - Defense Federal Acquisition Regulation Supplement: Multiyear Contract Requirements (DFARS Case 2015-D009)

DEPARTMENT OF DEFENSE
Defense Acquisition Regulations System

Federal Register Volume 81, Issue 90 (May 10, 2016)

Page Range		28730-28731
FR Document		2016-10823

DoD is issuing a final rule amending the Defense Federal Acquisition Regulation Supplement (DFARS) to implement a section of the National Defense Authorization Act for Fiscal Year 2015 and a section of the Department of Defense Appropriations Act, 2015, which address various requirements for multiyear contracts.

Federal Register, Volume 81 Issue 90 (Tuesday, May 10, 2016)

[Federal Register Volume 81, Number 90 (Tuesday, May 10, 2016)]
[Rules and Regulations]
[Pages 28730-28731]
From the Federal Register Online  [www.thefederalregister.org]
[FR Doc No: 2016-10823]


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DEPARTMENT OF DEFENSE

Defense Acquisition Regulations System

48 CFR Part 217

[Docket DARS-2015-0067]
RIN 0750-AI80


Defense Federal Acquisition Regulation Supplement: Multiyear 
Contract Requirements (DFARS Case 2015-D009)

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 implement a section of the 
National Defense Authorization Act for Fiscal Year 2015 and a section 
of the Department of Defense Appropriations Act, 2015, which address 
various requirements for multiyear contracts.

DATES: Effective May 10, 2016.

FOR FURTHER INFORMATION CONTACT: Mr. Christopher Stiller, telephone 
571-372-6176.

SUPPLEMENTARY INFORMATION: 

I. Background

    DoD published a proposed rule in the Federal Register at 80 FR 
81499 on December 30, 2015, to amend the DFARS to implement section 816 
of the National Defense Authorization Act for Fiscal Year 2015 (Pub. L. 
113-291) and section 8010 of the Department of Defense Appropriations 
Act, 2015 (Division C, Title VIII of Pub. L. 113-235), which address 
various requirements for multiyear contracts. There were no public 
comments submitted in response to the proposed rule. There are no 
changes from the proposed rule made in the final rule.

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

    This rule does not add any new provisions or clauses or impact any 
existing provisions or clauses.

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,

[[Page 28731]]

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 (FRFA) has been prepared 
consistent with the Regulatory Flexibility Act, 5 U.S.C. 601, et seq. 
The FRFA is summarized as follows:
    The purpose of this rule is to implement section 816 of the 
National Defense Authorization Act for Fiscal Year 2015 and section 
8010 of the Department of Defense Appropriations Act, 2015, which 
address various requirements for multiyear contracts. The rule will 
amend the Defense Federal Acquisition Regulation Supplement to require 
the head of agency to--
     Provide written notice to the congressional defense 
committees at least 30 days before termination of any multiyear 
contract; and
     For defense acquisition programs specifically authorized 
by law to be carried out using multiyear authority, ensure the 
Secretary of Defense certifies to Congress certain conditions for the 
multiyear contract have been met no later than 30 days before entry 
into the contract.
    No comments were received from the public regarding the initial 
regulatory flexibility analysis.
    The rule is not expected to impact small entities, because the rule 
applies to multiyear contract authorities for specific major defense 
acquisition programs for which small entities would not have the 
capacity or infrastructure to fulfill or sustain. Small entities may 
perform under multiyear contracts as subcontractors; however, the rule 
invokes requirements that apply at the prime contract level.
    This rule does not create any new reporting or recordkeeping 
requirements.
    There are no known significant alternatives to the rule. The impact 
of this rule on small business is not expected to be significant 
because it only affects DoD internal operating procedures.

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.

Jennifer Hawes,
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.


0
2. Revise section 217.170(b) to read as follows:


217.170  General.

* * * * *
    (b) The head of the agency must provide written notice to the 
congressional defense committees at least 30 days before termination of 
any multiyear contract (section 8010 of Division C, Title VIII, of the 
Consolidated and Further Continuing Appropriations Act, 2015 (Pub. L. 
113-235) and similar sections in subsequent DoD appropriations acts).
* * * * *
0
3. Amend section 217.172--
0
a. In paragraph (c), by removing ``10 U.S.C. 2306b(i)(3)'' and adding 
``10 U.S.C. 2306b(i)(1)'' in its place;
0
b. In paragraph (e)(1), by removing the word ``and'';
0
c. In paragraph (e)(2), by removing the period and adding a semicolon 
in its place;
0
d. By adding paragraphs (e)(3), (4), and (5);
0
e. In paragraph (h) introductory text, by removing ``under the 
authority described in paragraph (b) of this section:'' and adding 
``for a defense acquisition program that has been specifically 
authorized by law to be carried out using multiyear contract 
authority:'' in its place;
0
f. In paragraph (h)(2) introductory text, by removing ``March 1 of the 
year in which the Secretary requests legislative authority to enter'' 
and adding ``30 days before entry'' in its place and by removing ``10 
U.S.C. 2306b(i)(1)(A) through (G)'' and adding ``10 U.S.C. 
2306b(i)(3)'' in its place;
0
g. In paragraph (h)(2)(i)--
0
i. By removing ``FAR 17.105'' and adding ``FAR 17.105-1'' in its 
places;
0
ii. By adding a comma after ``(5)''; and
0
iii. By removing ``10 U.S.C. 2306b(i)(1)(A)'' and adding ``10 U.S.C. 
2306b(i)(3)(A)'' in its place;
0
h. In paragraph (h)(2)(ii), by removing ``10 U.S.C. 2306b(i)(1)(B)'' 
and adding ``10 U.S.C. 2306b(i)(3)(B)'' in its place;
0
i. In paragraph (h)(2)(iii), by removing ``10 U.S.C. 2306b(i)(1)(C)'' 
and adding ``10 U.S.C. 2306b(i)(3)(C)'' in its place;
0
j. In paragraph (h)(2)(iv), by removing ``10 U.S.C. 2306b(i)(1)(D)'' 
and adding ``10 U.S.C. 2306b(i)(3)(D)'' in its place;
0
k. In paragraph (h)(2)(v), by removing ``10 U.S.C. 2306b(i)(1)(E)'' and 
adding ``10 U.S.C. 2306b(i)(3)(E)'' in its place;
0
l. In paragraph (h)(2)(vi), by removing ``10 U.S.C. 2306b(i)(1)(F)'' 
and adding ``10 U.S.C. 2306b(i)(3)(F)'' in its place;
0
m. In paragraph (h)(2)(vii), by removing ``10 U.S.C. 2306b(i)(1)(G)'' 
and adding ``10 U.S.C. 2306b(i)(3)(G)'' in its place;
0
n. In paragraph (h)(3), by removing ``10 U.S.C. 2306b(i)(4)(A)'' and 
adding ``10 U.S.C. 2306b(i)(5)(A)'' in its place;
0
o. In paragraph (h)(4), by removing ``10 U.S.C. 2306b(i)(4)(B)'' and 
adding ``10 U.S.C. 2306b(i)(5)(B)'' in its place;
0
p. In paragraph (h)(5), by removing ``10 U.S.C. 2306b(i)(5)'' and 
adding ``10 U.S.C. 2306b(i)(6)'' in its place;
0
q. In paragraph (h)(6), by removing ``10 U.S.C. 2306b(i)(6)'' and 
adding ``10 U.S.C. 2306b(i)(7)'' in its place;
0
r. Removing paragraph (h)(7);
0
s. Redesignating paragraph (h)(8) as (h)(7); and
0
t. In newly redesignated paragraph (h)(7) introductory text, adding 
``(10 U.S.C. 2306b(i)(4))'' after ``law's specific savings 
requirement'' before the period.
    The additions read as follows:


217.172  Multiyear contracts for supplies.

* * * * *
    (e) * * *
    (3) Cancellation provisions in the contract do not include 
consideration of recurring manufacturing costs of the contractor 
associated with the production of unfunded units to be delivered under 
the contract;
    (4) The contract provides that payments to the contractor under the 
contract shall not be made in advance of incurred costs on funded 
units; and
    (5) The contract does not provide for a price adjustment based on a 
failure to award a follow-on contract (section 8010 of Division C, 
Title VIII, of the Consolidated and Further Continuing Appropriations 
Act, 2015 (Pub. L. 113-235) and similar sections in subsequent DoD 
appropriations acts).
* * * * *
[FR Doc. 2016-10823 Filed 5-9-16; 8:45 am]
BILLING CODE 5001-06-P

28730 Federal Register / Vol. 81, No. 90 / Tuesday, May 10, 2016 / Rules and Regulations

3B941, 3060 Defense Pentagon, PART 215—CONTRACTING BY DEPARTMENT OF DEFENSE
Washington, DC 20301–3060. NEGOTIATION
Telephone 571–372–6115; facsimile Defense Acquisition Regulations
571–372–6094. ■ 3. Revise section 215.300 to read as System
SUPPLEMENTARY INFORMATION: This final follows:
48 CFR Part 217
rule amends the DFARS as follows— 215.300 Scope of subpart. [Docket DARS–2015–0067]
1. Corrects cross references at DFARS
212.301(f)(xvi), Acquisition of Contracting officers shall follow the RIN 0750–AI80
Information Technology, in paragraphs principles and procedures in Director,
(A) and (B); Defense Procurement and Acquisition Defense Federal Acquisition
Policy memorandum dated April 1, Regulation Supplement: Multiyear
2. Directs contracting officers to 2016, entitled ‘‘Department of Defense Contract Requirements (DFARS Case
additional DFARS Procedures, 2015–D009)
Source Selection Procedures,’’ when
Guidance, and Information (PGI) by
conducting negotiated, competitive AGENCY: Defense Acquisition
adding a cross reference at DFARS
acquisitions utilizing FAR part 15 Regulations System, Department of
215.300 and updates the date of the
procedures. See PGI 215.300. Defense (DoD).
Director, Defense Procurement and
Acquisition Policy memorandum 215.408 [AMENDED] ACTION: Final rule.
entitled ‘‘Department of Defense Source
Selection Procedures’’; ■ 4. Amend section 215.408, in SUMMARY: DoD is issuing a final rule
paragraph (3)(ii)(A)(1)(i), by removing amending the Defense Federal
3. Corrects a threshold at DFARS Acquisition Regulation Supplement
215.408(3)(ii)(A)(1)(i) to reflect $750,000 ‘‘$700,000’’ and adding ‘‘$750,000’’ in
its place. (DFARS) to implement a section of the
in lieu of $700,000 that was National Defense Authorization Act for
inadvertently omitted in the inflation Fiscal Year 2015 and a section of the
adjustment DFARS Case 2014–D025 PART 216—TYPES OF CONTRACTS
Department of Defense Appropriations
published in the Federal Register at 80 Act, 2015, which address various
FR 36903; ■ 5. Add section 216.104 to read as
follows: requirements for multiyear contracts.
4. Adds DFARS section 216.104 to DATES: Effective May 10, 2016.
provide guidance concerning selection 216.104 Factors in selecting contract type. FOR FURTHER INFORMATION CONTACT: Mr.
and negotiation of the most appropriate Christopher Stiller, telephone 571–372–
Contracting officers shall follow the
contract type and also directs 6176.
contracting officers to additional PGI principles and procedures in Director,
Defense Procurement and Acquisition SUPPLEMENTARY INFORMATION:
coverage.
Policy memorandum dated April 1, I. Background
5. Redesignates paragraphs within 2016, entitled ‘‘Guidance on Using
DFARS 225.7003–2 to add a new Incentive and Other Contract Types,’’ DoD published a proposed rule in the
paragraph (b) to provide an internet link Federal Register at 80 FR 81499 on
when selecting and negotiating the most
for more information on specialty December 30, 2015, to amend the
appropriate contract type for a given
metals restrictions and reporting of DFARS to implement section 816 of the
procurement. See PGI 216.104.
noncompliances. National Defense Authorization Act for
PART 225—FOREIGN ACQUISITION Fiscal Year 2015 (Pub. L. 113–291) and
List of Subjects in 48 CFR 212, 215, 216,
section 8010 of the Department of
and 225
Defense Appropriations Act, 2015
■ 6. Amend section 225.7003–2 by—
Government procurement. (Division C, Title VIII of Pub. L. 113–
■ a. Redesignating paragraphs (a) and 235), which address various
Jennifer L. Hawes, (b) as (1) and (2), respectively; requirements for multiyear contracts.
Editor, Defense Acquisition Regulations ■ b. Designating the introductory text as There were no public comments
System. paragraph (a); submitted in response to the proposed
rule. There are no changes from the
Therefore, 48 CFR parts 212, 215, 216, ■ c. In the newly redesignated
proposed rule made in the final rule.
and 225 are amended as follows: paragraph (1), redesignating paragraphs
(1) through (6) as paragraphs (i) through II. Applicability to Contracts at or
■ 1. The authority citation for 48 CFR Below the Simplified Acquisition
(vi), respectively; and
parts 212, 215, 216, and 225 continues Threshold (SAT) and for Commercial
to read as follows: ■ d. Adding paragraph (b).
Items, Including Commercially
Authority: 41 U.S.C. 1303 and 48 CFR The addition reads as follows: Available Off-the-Shelf (COTS) Items
chapter 1. This rule does not add any new
225.7003–2 Restrictions.
* * * * * provisions or clauses or impact any
PART 212—ACQUISITION OF
existing provisions or clauses.
COMMERCIAL ITEMS (b) For more information on specialty
metals restrictions and reporting of III. Executive Orders 12866 and 13563
212.301 [AMENDED]
noncompliances, see http:// Executive Orders (E.O.s) 12866 and
ehiers on DSK5VPTVN1PROD with RULES

■ 2. Amend section 212.301, in www.acq.osd.mil/dpap/cpic/ic/ 13563 direct agencies to assess all costs
paragraphs (f)(xvi)(A) and (B), by restrictions_on_specialty_metals_10_ and benefits of available regulatory
removing ‘‘239.7603(a)’’ and usc_2533b.html. alternatives and, if regulation is
‘‘239.7603(b)’’ and adding ‘‘239.7604(a)’’ [FR Doc. 2016–10830 Filed 5–9–16; 8:45 am] necessary, to select regulatory
and ‘‘239.7604(b)’’ in each place, BILLING CODE 5001–06–P
approaches that maximize net benefits
respectively. (including potential economic,

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Federal Register / Vol. 81, No. 90 / Tuesday, May 10, 2016 / Rules and Regulations 28731

environmental, public health and safety V. Paperwork Reduction Act ■ i. By removing ‘‘FAR 17.105’’ and
effects, distributive impacts, and The rule does not contain any adding ‘‘FAR 17.105–1’’ in its places;
equity). E.O. 13563 emphasizes the ■ ii. By adding a comma after ‘‘(5)’’; and
information collection requirements that
importance of quantifying both costs ■ iii. By removing ‘‘10 U.S.C.
require the approval of the Office of 2306b(i)(1)(A)’’ and adding ‘‘10 U.S.C.
and benefits, of reducing costs, of Management and Budget under the
harmonizing rules, and of promoting 2306b(i)(3)(A)’’ in its place;
Paperwork Reduction Act (44 U.S.C. ■ h. In paragraph (h)(2)(ii), by removing
flexibility. This is not a significant chapter 35).
regulatory action and, therefore, was not ‘‘10 U.S.C. 2306b(i)(1)(B)’’ and adding
subject to review under section 6(b) of List of Subjects in 48 CFR Part 217 ‘‘10 U.S.C. 2306b(i)(3)(B)’’ in its place;
■ i. In paragraph (h)(2)(iii), by removing
E.O. 12866, Regulatory Planning and Government procurement.
Review, dated September 30, 1993. This ‘‘10 U.S.C. 2306b(i)(1)(C)’’ and adding
rule is not a major rule under 5 U.S.C. Jennifer Hawes, ‘‘10 U.S.C. 2306b(i)(3)(C)’’ in its place;
Editor, Defense Acquisition Regulations ■ j. In paragraph (h)(2)(iv), by removing
804.
System. ‘‘10 U.S.C. 2306b(i)(1)(D)’’ and adding
IV. Regulatory Flexibility Act ‘‘10 U.S.C. 2306b(i)(3)(D)’’ in its place;
Therefore, 48 CFR part 217 is ■ k. In paragraph (h)(2)(v), by removing
A final regulatory flexibility analysis amended as follows: ‘‘10 U.S.C. 2306b(i)(1)(E)’’ and adding
(FRFA) has been prepared consistent ‘‘10 U.S.C. 2306b(i)(3)(E)’’ in its place;
with the Regulatory Flexibility Act, 5 PART 217—SPECIAL CONTRACTING ■ l. In paragraph (h)(2)(vi), by removing
U.S.C. 601, et seq. The FRFA is METHODS ‘‘10 U.S.C. 2306b(i)(1)(F)’’ and adding
summarized as follows: ‘‘10 U.S.C. 2306b(i)(3)(F)’’ in its place;
■ 1. The authority citation for 48 CFR
The purpose of this rule is to ■ m. In paragraph (h)(2)(vii), by
part 217 continues to read as follows:
implement section 816 of the National removing ‘‘10 U.S.C. 2306b(i)(1)(G)’’ and
Authority: 41 U.S.C. 1303 and 48 CFR adding ‘‘10 U.S.C. 2306b(i)(3)(G)’’ in its
Defense Authorization Act for Fiscal chapter 1.
Year 2015 and section 8010 of the place;
Department of Defense Appropriations ■ 2. Revise section 217.170(b) to read as ■ n. In paragraph (h)(3), by removing
Act, 2015, which address various follows: ‘‘10 U.S.C. 2306b(i)(4)(A)’’ and adding
requirements for multiyear contracts. ‘‘10 U.S.C. 2306b(i)(5)(A)’’ in its place;
217.170 General. ■ o. In paragraph (h)(4), by removing
The rule will amend the Defense
Federal Acquisition Regulation * * * * * ‘‘10 U.S.C. 2306b(i)(4)(B)’’ and adding
Supplement to require the head of (b) The head of the agency must ‘‘10 U.S.C. 2306b(i)(5)(B)’’ in its place;
provide written notice to the ■ p. In paragraph (h)(5), by removing
agency to—
congressional defense committees at ‘‘10 U.S.C. 2306b(i)(5)’’ and adding ‘‘10
• Provide written notice to the least 30 days before termination of any U.S.C. 2306b(i)(6)’’ in its place;
congressional defense committees at multiyear contract (section 8010 of ■ q. In paragraph (h)(6), by removing
least 30 days before termination of any Division C, Title VIII, of the ‘‘10 U.S.C. 2306b(i)(6)’’ and adding ‘‘10
multiyear contract; and Consolidated and Further Continuing U.S.C. 2306b(i)(7)’’ in its place;
• For defense acquisition programs Appropriations Act, 2015 (Pub. L. 113– ■ r. Removing paragraph (h)(7);
specifically authorized by law to be 235) and similar sections in subsequent ■ s. Redesignating paragraph (h)(8) as
carried out using multiyear authority, DoD appropriations acts). (h)(7); and
■ t. In newly redesignated paragraph
ensure the Secretary of Defense certifies * * * * *
to Congress certain conditions for the (h)(7) introductory text, adding ‘‘(10
■ 3. Amend section 217.172—
multiyear contract have been met no U.S.C. 2306b(i)(4))’’ after ‘‘law’s specific
■ a. In paragraph (c), by removing ‘‘10
later than 30 days before entry into the savings requirement’’ before the period.
U.S.C. 2306b(i)(3)’’ and adding ‘‘10 The additions read as follows:
contract. U.S.C. 2306b(i)(1)’’ in its place;
No comments were received from the ■ b. In paragraph (e)(1), by removing the 217.172 Multiyear contracts for supplies.
public regarding the initial regulatory word ‘‘and’’; * * * * *
flexibility analysis. ■ c. In paragraph (e)(2), by removing the (e) * * *
The rule is not expected to impact period and adding a semicolon in its (3) Cancellation provisions in the
small entities, because the rule applies place; contract do not include consideration of
to multiyear contract authorities for ■ d. By adding paragraphs (e)(3), (4), recurring manufacturing costs of the
specific major defense acquisition and (5); contractor associated with the
programs for which small entities would ■ e. In paragraph (h) introductory text, production of unfunded units to be
not have the capacity or infrastructure by removing ‘‘under the authority delivered under the contract;
described in paragraph (b) of this (4) The contract provides that
to fulfill or sustain. Small entities may
section:’’ and adding ‘‘for a defense payments to the contractor under the
perform under multiyear contracts as
acquisition program that has been contract shall not be made in advance
subcontractors; however, the rule
specifically authorized by law to be of incurred costs on funded units; and
invokes requirements that apply at the (5) The contract does not provide for
prime contract level. carried out using multiyear contract
authority:’’ in its place; a price adjustment based on a failure to
This rule does not create any new ■ f. In paragraph (h)(2) introductory award a follow-on contract (section
reporting or recordkeeping text, by removing ‘‘March 1 of the year 8010 of Division C, Title VIII, of the
requirements. in which the Secretary requests Consolidated and Further Continuing
ehiers on DSK5VPTVN1PROD with RULES

There are no known significant legislative authority to enter’’ and Appropriations Act, 2015 (Pub. L. 113–
alternatives to the rule. The impact of adding ‘‘30 days before entry’’ in its 235) and similar sections in subsequent
this rule on small business is not place and by removing ‘‘10 U.S.C. DoD appropriations acts).
expected to be significant because it 2306b(i)(1)(A) through (G)’’ and adding * * * * *
only affects DoD internal operating ‘‘10 U.S.C. 2306b(i)(3)’’ in its place; [FR Doc. 2016–10823 Filed 5–9–16; 8:45 am]
procedures. ■ g. In paragraph (h)(2)(i)— BILLING CODE 5001–06–P

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Document Created: 2016-05-10 05:19:37
Document Modified: 2016-05-10 05:19:37

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 10, 2016.
Contact		Mr. Christopher Stiller, telephone 571-372-6176.
FR Citation		81 FR 28730
RIN Number		0750-AI80

81 FR 28730 - Defense Federal Acquisition Regulation Supplement: Multiyear Contract Requirements (DFARS Case 2015-D009)

DEPARTMENT OF DEFENSEDefense Acquisition Regulations System

Federal Register Volume 81, Issue 90 (May 10, 2016)

DEPARTMENT OF DEFENSE
Defense Acquisition Regulations System