81_FR_42733 81 FR 42607 - Defense Federal Acquisition Regulation Supplement: Contract Financing (DFARS Case 2015-D026)

81 FR 42607 - Defense Federal Acquisition Regulation Supplement: Contract Financing (DFARS Case 2015-D026)

DEPARTMENT OF DEFENSE
Defense Acquisition Regulations System

Federal Register Volume 81, Issue 126 (June 30, 2016)

Page Range42607-42608
FR Document2016-15246

DoD is proposing to amend the Defense Federal Acquisition Regulation Supplement (DFARS) regarding the use of customary contact financing, other than loan guarantees and advance payments, on certain fixed-price contracts.

Federal Register, Volume 81 Issue 126 (Thursday, June 30, 2016) 
[Federal Register Volume 81, Number 126 (Thursday, June 30, 2016)]
[Proposed Rules]
[Pages 42607-42608]
From the Federal Register Online  [www.thefederalregister.org]
[FR Doc No: 2016-15246]


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DEPARTMENT OF DEFENSE

Defense Acquisition Regulations System

48 CFR Part 232

[Docket DARS-2016-0009]
RIN 0750-AI90


Defense Federal Acquisition Regulation Supplement: Contract 
Financing (DFARS Case 2015-D026)

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

ACTION: Proposed rule.

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SUMMARY: DoD is proposing to amend the Defense Federal Acquisition 
Regulation Supplement (DFARS) regarding the use of customary contact 
financing, other than loan guarantees and advance payments, on certain 
fixed-price contracts.

DATES: Comments on the proposed rule should be submitted in writing to 
the address shown below on or before August 29, 2016, to be considered 
in the formation of a final rule.

ADDRESSES: Submit comments identified by DFARS Case 2015-D026, using 
any of the following methods:
    [cir] Regulations.gov: http://www.regulations.gov. Submit comments 
via the Federal eRulemaking portal by entering ``DFARS Case 2015-D026'' 
under the heading ``Enter keyword or ID'' and selecting ``Search.'' 
Select the link ``Submit a Comment'' that corresponds with ``DFARS Case 
2015-D026.'' Follow the instructions provided at the ``Submit a 
Comment'' screen. Please include your name, company name (if any), and 
``DFARS Case 2015-D026'' on your attached document.
    [cir] Email: [email protected]. Include DFARS Case 2015-D026 in 
the subject line of the message.
    [cir] Fax: 571-372-6094.
    [cir] Mail: Defense Acquisition Regulations System, Attn: Mr. Mark 
Gomersall, OUSD (AT&L) DPAP/DARS, Room 3B941, 3060 Defense Pentagon, 
Washington, DC 20301-3060.
    Comments received generally will be posted without change to http://www.regulations.gov, including any personal information provided. To 
confirm receipt of your comment(s), please check www.regulations.gov, 
approximately two to three days after submission to verify posting 
(except allow 30 days for posting of comments submitted by mail).

FOR FURTHER INFORMATION CONTACT: Mr. Mark Gomersall, telephone 571-372-
6099.

SUPPLEMENTARY INFORMATION:

I. Background

    DoD is proposing to revise the DFARS regarding the use of customary 
contract financing, other than loan guarantees and advance payments 
identified in FAR part 32, on fixed-price contracts with a period of 
performance in excess of one year that meet the dollar thresholds 
established in FAR 32.104(d). DoD has determined that the use of such 
customary contract financing provides improved cash flow as an 
incentive for commercial companies to do business with DoD, is in DoD's 
best interest, and requires no further justification of its use.

[[Page 42608]]

II. Discussion and Analysis

    The proposed rule amends DFARS 232.104 to state that DoD has made 
the determination that the use of customary contract financing (see FAR 
32.113), other than loan guarantees and advance payments, is in DoD's 
best interest, and further justification of its use is unnecessary on 
fixed-price contracts that meet the dollar thresholds established in 
FAR 32.104(d), with a period of performance in excess of a year, and in 
solicitations expected to result in such contracts.

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

    DoD does not expect this 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. However, an initial 
regulatory flexibility analysis has been performed and is summarized as 
follows:
    DoD is proposing to amend the Defense Federal Acquisition 
Regulation Supplement (DFARS) to state that DoD has made the 
determination that the use of customary contract financing (see Federal 
Acquisition Regulation (FAR) 32.113), other than loan guarantees and 
advance payments, is in DoD's best interest, and further justification 
of its use is unnecessary on fixed-price contracts that meet the dollar 
thresholds established in FAR 32.104(d), with a period of performance 
in excess of a year, and in solicitations expected to result in such 
contracts.
    The objective of the proposed rule is to clarify that the use of 
certain customary contract financing does not require further 
justification, as it has been determined to be in DoD's best interest, 
and the use of the specified contract financing is an incentive for 
commercial companies to do business with DoD.
    This rule will apply to DoD contractors, including small entities, 
where a fixed-price contract with a period of performance in excess of 
one year and meeting the thresholds in FAR 32.104(d) is contemplated.
    There is no change to reporting or recordkeeping as a result of 
this rule. This rule changes processes that are internal to the 
Government and does not have any impact on small entities for reporting 
or recordkeeping.
    The rule does not duplicate, overlap, or conflict with any other 
Federal rules. There are no known significant alternative approaches to 
the rule that would meet the requirements.
    DoD invites comments from small business concerns and other 
interested parties on the expected impact of this rule on small 
entities.
    DoD will also consider comments from small entities concerning the 
existing regulations in subparts affected by this rule in accordance 
with 5 U.S.C. 610. Interested parties must submit such comments 
separately and should cite 5 U.S.C. 610 (DFARS Case 2015-D026), in 
correspondence.

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 232

    Government procurement.

Jennifer L. Hawes,
Editor, Defense Acquisition Regulations System.

    Therefore, 48 CFR part 232 is proposed to be amended as follows:

PART 232--CONTRACT FINANCING

0
1. The authority citation for part 232 continues to read as follows:

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

0
2. Add section 232.104 to subpart 232.1 to read as follows:


232.104  Providing contract financing.

    For fixed-price contracts with a period of performance in excess of 
a year that meet the dollar thresholds established in FAR 32.104(d), 
and for solicitations expected to result in such contracts, in lieu of 
the requirement at FAR 32.104(d)(1)(ii) for the contractor to 
demonstrate actual financial need or the unavailability of private 
financing, DoD has determined that--
    (1) The use of customary contract financing (see FAR 32.113), other 
than loan guarantees and advance payments, is in DoD's best interest; 
and
    (2) Further justification of its use in individual acquisitions is 
unnecessary.

[FR Doc. 2016-15246 Filed 6-29-16; 8:45 am]
BILLING CODE 5001-06-P

Federal Register / Vol. 81, No. 126 / Thursday, June 30, 2016 / Proposed Rules 42607 required under this section with other may not choose to comply with the SUMMARY: DoD is proposing to amend reporting requirements, such as the title alternative emission limits in paragraph the Defense Federal Acquisition V monitoring report required by 40 CFR (k)(4) of this section and shall comply Regulation Supplement (DFARS) 70.6(a)(3)(iii)(A), but at no point shall with the emission limits in paragraph regarding the use of customary contact the duration of a semiannual period (k)(3)(i) of this section. financing, other than loan guarantees exceed six months. (14) Equipment operation. (i) At all and advance payments, on certain fixed- (i) The owner/operator shall submit a times, including periods of startup, price contracts. report that lists the monthly rolling 12- shutdown, and malfunction, the owner DATES: Comments on the proposed rule month emission rates for NOX. or operator shall, to the extent should be submitted in writing to the (ii) The owner/operator shall submit practicable, maintain and operate the address shown below on or before excess emissions reports for NOX limits. unit including associated air pollution August 29, 2016, to be considered in the Excess emissions means emissions that control equipment in a manner formation of a final rule. exceed the emissions limits specified in consistent with good air pollution ADDRESSES: Submit comments paragraph (k)(3) of this section. The control practices for minimizing identified by DFARS Case 2015–D026, reports shall include the magnitude, emissions. Pollution control equipment using any of the following methods: date(s), and duration of each period of shall be designed and capable of Æ Regulations.gov: http:// excess emissions, specific identification operating properly to minimize www.regulations.gov. Submit comments of each period of excess emissions that emissions during all expected operating via the Federal eRulemaking portal by occurs during startups, shutdowns, and conditions. Determination of whether entering ‘‘DFARS Case 2015–D026’’ malfunctions of the unit, the nature and acceptable operating and maintenance under the heading ‘‘Enter keyword or cause of any malfunction (if known), procedures are being used will be based ID’’ and selecting ‘‘Search.’’ Select the and the corrective action taken or on information available to the Regional link ‘‘Submit a Comment’’ that preventative measures adopted. Administrator which may include, but corresponds with ‘‘DFARS Case 2015– (iii) The owner/operator shall submit is not limited to, monitoring results, D026.’’ Follow the instructions provided CEMS performance reports, to include review of operating and maintenance at the ‘‘Submit a Comment’’ screen. dates and duration of each period procedures, and inspection of the unit. (ii) After completion of installation of Please include your name, company during which the CEMS was inoperative ammonia injection on a unit, the owner name (if any), and ‘‘DFARS Case 2015– (except for zero and span adjustments or operator shall inject sufficient D026’’ on your attached document. and calibration checks), reason(s) why Æ Email: osd.dfars@mail.mil. Include the CEMS was inoperative and steps ammonia to achieve compliance with NOX emission limits set forth in DFARS Case 2015–D026 in the subject taken to prevent recurrence, and any line of the message. CEMS repairs or adjustments. paragraph (k)(3) of this section for that Æ Fax: 571–372–6094. (iv) The owner/operator shall also unit while preventing excessive Æ Mail: Defense Acquisition submit results of any CEMS ammonia emissions. Regulations System, Attn: Mr. Mark performance tests specified by 40 CFR (15) Enforcement. Notwithstanding Gomersall, OUSD (AT&L) DPAP/DARS, part 60, Appendix F, Procedure 1 any other provision in this Room 3B941, 3060 Defense Pentagon, (Relative Accuracy Test Audits, Relative implementation plan, any credible evidence or information relevant as to Washington, DC 20301–3060. Accuracy Audits, and Cylinder Gas Comments received generally will be Audits). whether the unit would have been in posted without change to http:// (v) When no excess emissions have compliance with applicable www.regulations.gov, including any occurred or the CEMS has not been requirements if the appropriate personal information provided. To inoperative, repaired, or adjusted during performance or compliance test had confirm receipt of your comment(s), the reporting period, the owner/operator been performed, can be used to establish please check www.regulations.gov, shall state such information in the whether or not the owner or operator has violated or is in violation of any approximately two to three days after reports required by paragraph (k)(9)(ii) submission to verify posting (except of this section. standard or applicable emission limit in the plan. allow 30 days for posting of comments (13) Notifications. (i) The owner/ submitted by mail). operator shall submit notification of [FR Doc. 2016–15305 Filed 6–29–16; 8:45 am] FOR FURTHER INFORMATION CONTACT: Mr. commencement of construction of any BILLING CODE 6560–50–P equipment which is being constructed Mark Gomersall, telephone 571–372– to comply with the NOX emission limits 6099. in paragraph (k)(3) of this section. DEPARTMENT OF DEFENSE SUPPLEMENTARY INFORMATION: (ii) The owner/operator shall submit I. Background semiannual progress reports on Defense Acquisition Regulations construction of any such equipment. System DoD is proposing to revise the DFARS (iii) The owner/operator shall submit regarding the use of customary contract notification of initial startup of any such 48 CFR Part 232 financing, other than loan guarantees equipment. and advance payments identified in (iv) By June 30, 2018, the owner/ [Docket DARS–2016–0009] FAR part 32, on fixed-price contracts operator of the Clarkdale Plant shall RIN 0750–AI90 with a period of performance in excess notify EPA Region 9 by letter whether of one year that meet the dollar sradovich on DSK3GDR082PROD with PROPOSALS it will comply with the emission limits Defense Federal Acquisition thresholds established in FAR in paragraph (k)(3)(i) of this section or Regulation Supplement: Contract 32.104(d). DoD has determined that the whether it will comply with the Financing (DFARS Case 2015–D026) use of such customary contract emission limits in paragraph (k)(4) of AGENCY: Defense Acquisition financing provides improved cash flow this section. In the event that the owner/ Regulations System, Department of as an incentive for commercial operator does not submit timely and Defense (DoD). companies to do business with DoD, is proper notification by June 30, 2018, the in DoD’s best interest, and requires no ACTION: Proposed rule. owner/operator of the Clarkdale Plant further justification of its use. VerDate Sep<11>2014 18:10 Jun 29, 2016 Jkt 238001 PO 00000 Frm 00039 Fmt 4702 Sfmt 4702 E:\FR\FM\30JNP1.SGM 30JNP1

42608 Federal Register / Vol. 81, No. 126 / Thursday, June 30, 2016 / Proposed Rules II. Discussion and Analysis commercial companies to do business (1) The use of customary contract The proposed rule amends DFARS with DoD. financing (see FAR 32.113), other than 232.104 to state that DoD has made the This rule will apply to DoD loan guarantees and advance payments, determination that the use of customary contractors, including small entities, is in DoD’s best interest; and contract financing (see FAR 32.113), where a fixed-price contract with a (2) Further justification of its use in other than loan guarantees and advance period of performance in excess of one individual acquisitions is unnecessary. payments, is in DoD’s best interest, and year and meeting the thresholds in FAR [FR Doc. 2016–15246 Filed 6–29–16; 8:45 am] further justification of its use is 32.104(d) is contemplated. BILLING CODE 5001–06–P There is no change to reporting or unnecessary on fixed-price contracts recordkeeping as a result of this rule. that meet the dollar thresholds This rule changes processes that are DEPARTMENT OF DEFENSE established in FAR 32.104(d), with a internal to the Government and does not period of performance in excess of a have any impact on small entities for Defense Acquisition Regulations year, and in solicitations expected to reporting or recordkeeping. System result in such contracts. The rule does not duplicate, overlap, III. Executive Orders 12866 and 13563 or conflict with any other Federal rules. 48 CFR Part 252 Executive Orders (E.O.s) 12866 and There are no known significant [Docket DARS–2016–0020] 13563 direct agencies to assess all costs alternative approaches to the rule that would meet the requirements. RIN 0750–AI96 and benefits of available regulatory DoD invites comments from small alternatives and, if regulation is Defense Federal Acquisition business concerns and other interested necessary, to select regulatory Regulation Supplement: parties on the expected impact of this approaches that maximize net benefits Administrative Cost To Issue and rule on small entities. (including potential economic, Administer a Contract (DFARS Case DoD will also consider comments environmental, public health and safety 2016–D020) from small entities concerning the effects, distributive impacts, and existing regulations in subparts affected AGENCY: Defense Acquisition equity). E.O. 13563 emphasizes the by this rule in accordance with 5 U.S.C. Regulations System, Department of importance of quantifying both costs 610. Interested parties must submit such Defense (DoD). and benefits, of reducing costs, of comments separately and should cite 5 harmonizing rules, and of promoting ACTION: Proposed rule. U.S.C. 610 (DFARS Case 2015–D026), in flexibility. This is not a significant correspondence. SUMMARY: DoD is proposing to amend regulatory action and, therefore, was not subject to review under section 6(b) of V. Paperwork Reduction Act the Defense Federal Acquisition E.O. 12866, Regulatory Planning and Regulation Supplement (DFARS) to The rule does not contain any revise the estimated administrative cost Review, dated September 30, 1993. This information collection requirements that rule is not a major rule under 5 U.S.C. to award and administer a contract, for require the approval of the Office of the purpose of evaluating bids for 804. Management and Budget under the multiple awards. IV. Regulatory Flexibility Act Paperwork Reduction Act (44 U.S.C. DATES: Comments on the proposed rule chapter 35). DoD does not expect this rule to have should be submitted in writing to the a significant economic impact on a List of Subjects in 48 CFR Part 232 address shown below on or before substantial number of small entities Government procurement. August 29, 2016, to be considered in the within the meaning of the Regulatory formation of a final rule. Flexibility Act, 5 U.S.C. 601, et seq. Jennifer L. Hawes, ADDRESSES: Submit comments However, an initial regulatory flexibility Editor, Defense Acquisition Regulations identified by DFARS Case 2016–D020, analysis has been performed and is System. using any of the following methods: summarized as follows: Therefore, 48 CFR part 232 is Æ Regulations.gov: http:// DoD is proposing to amend the proposed to be amended as follows: www.regulations.gov. Submit comments Defense Federal Acquisition Regulation via the Federal eRulemaking portal by Supplement (DFARS) to state that DoD PART 232—CONTRACT FINANCING entering ‘‘DFARS Case 2016–D020’’ has made the determination that the use under the heading ‘‘Enter keyword or of customary contract financing (see ■ 1. The authority citation for part 232 ID’’ and selecting ‘‘Search.’’ Select the Federal Acquisition Regulation (FAR) continues to read as follows: link ‘‘Submit a Comment’’ that 32.113), other than loan guarantees and Authority: 41 U.S.C. 1303 and 48 CFR corresponds with ‘‘DFARS Case 2016– advance payments, is in DoD’s best chapter 1. D020.’’ Follow the instructions provided interest, and further justification of its ■ 2. Add section 232.104 to subpart at the ‘‘Submit a Comment’’ screen. use is unnecessary on fixed-price 232.1 to read as follows: Please include your name, company contracts that meet the dollar thresholds name (if any), and ‘‘DFARS Case 2016– established in FAR 32.104(d), with a 232.104 Providing contract financing. D020’’ on your attached document. period of performance in excess of a For fixed-price contracts with a Æ Email: osd.dfars@mail.mil. Include year, and in solicitations expected to period of performance in excess of a DFARS Case 2016–D020 in the subject sradovich on DSK3GDR082PROD with PROPOSALS result in such contracts. year that meet the dollar thresholds line of the message. The objective of the proposed rule is established in FAR 32.104(d), and for Æ Fax: 571–372–6094. to clarify that the use of certain solicitations expected to result in such Æ Mail: Defense Acquisition customary contract financing does not contracts, in lieu of the requirement at Regulations System, Attn: Mr. require further justification, as it has FAR 32.104(d)(1)(ii) for the contractor to Christopher Stiller, OUSD (AT&L) been determined to be in DoD’s best demonstrate actual financial need or the DPAP/DARS, Room 3B941, 3060 interest, and the use of the specified unavailability of private financing, DoD Defense Pentagon, Washington, DC contract financing is an incentive for has determined that— 20301–3060. VerDate Sep<11>2014 18:10 Jun 29, 2016 Jkt 238001 PO 00000 Frm 00040 Fmt 4702 Sfmt 4702 E:\FR\FM\30JNP1.SGM 30JNP1


Document Created: 2018-02-08 07:45:09
Document Modified: 2018-02-08 07:45:09
CategoryRegulatory Information
CollectionFederal Register
sudoc ClassAE 2.7:
GS 4.107:
AE 2.106:
PublisherOffice of the Federal Register, National Archives and Records Administration
SectionProposed Rules
ActionProposed rule.
DatesComments on the proposed rule should be submitted in writing to
ContactMr. Mark Gomersall, telephone 571-372- 6099.
FR Citation81 FR 42607 
RIN Number0750-AI90
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