81 FR 93841 - Defense Federal Acquisition Regulation Supplement: Contract Financing (DFARS Case 2015-D026)

DEPARTMENT OF DEFENSE
Defense Acquisition Regulations System

Federal Register Volume 81, Issue 246 (December 22, 2016)

Page Range		93841-93842
FR Document		2016-30596

DoD is issuing a final rule amending the Defense Federal Acquisition Regulation Supplement (DFARS) by providing that contracting officers are not required to further justify a decision to provide customary contract financing, other than loan guarantees and advance payments identified in FAR part 32, for certain fixed-price contracts.

Federal Register, Volume 81 Issue 246 (Thursday, December 22, 2016)

[Federal Register Volume 81, Number 246 (Thursday, December 22, 2016)]
[Rules and Regulations]
[Pages 93841-93842]
From the Federal Register Online  [www.thefederalregister.org]
[FR Doc No: 2016-30596]


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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: Final rule.

-----------------------------------------------------------------------

SUMMARY: DoD is issuing a final rule amending the Defense Federal 
Acquisition Regulation Supplement (DFARS) by providing that contracting 
officers are not required to further justify a decision to provide 
customary contract financing, other than loan guarantees and advance 
payments identified in FAR part 32, for certain fixed-price contracts.

DATES: Effective December 22, 2016.

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

SUPPLEMENTARY INFORMATION:

I. Background

    DoD published a proposed rule in the Federal Register at 81 FR 
42607 on June 30, 2016, 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 
the Department's best interest, and requires no further justification 
of its use.

II. Discussion and Analysis

    No public comments were submitted in response to the proposed rule. 
Therefore, there are no changes from the proposed rule made in the 
final rule.

III. Applicability to Contracts at or Below the Simplified Acquisition 
Threshold and for Commercial Items, Including Commercially Available 
Off-the-Shelf Items

    This final rule only provides DoD policy regarding providing 
contract financing for certain fixed-priced contracts. The rule does 
not add any new provisions or clauses or impact any existing provisions 
or clauses.

IV. 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.

[[Page 93842]]

V. 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:
    The objective of the 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 for fixed-price 
contracts with a period of performance in excess of one year that meet 
the dollar thresholds in FAR 32.104(d).
    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. This rule only 
changes processes that are internal to the Government and does not have 
any impact on small entities.
    There were no significant issues raised by the public in response 
to the initial regulatory flexibility analysis.
    There is no change to reporting or recordkeeping as a result of 
this rule.
    There are no known significant alternative approaches to the rule 
that would meet the requirements.

VI. 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 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. 2016-30596 Filed 12-21-16; 8:45 am]
BILLING CODE 5001-06-P

Federal Register / Vol. 81, No. 246 / Thursday, December 22, 2016 / Rules and Regulations 93841

■ c. In the Alternate I clause— ■ c. In the Alternate I clause— contract financing, other than loan
■ i. In the clause heading, removing the ■ i. In the clause heading, removing the guarantees and advance payments
date ‘‘(AUG 2016)’’ and adding ‘‘(DEC date ‘‘(AUG 2016)’’ and adding ‘‘(DEC identified in FAR part 32, for certain
2016)’’ in its place; and 2016)’’ in its place; and fixed-price contracts.
■ ii. In paragraph (a), the definition of ■ ii. In paragraph (a), the definition of DATES: Effective December 22, 2016.
‘‘Qualifying country’’, adding, in ‘‘Qualifying country’’, adding, in FOR FURTHER INFORMATION CONTACT: Mr.
alphabetical order, the country of alphabetical order, the country of Mark Gomersall, telephone 571–372–
‘‘Estonia’’. ‘‘Estonia’’; 6099.
■ d. In the Alternate II clause—
252.225–7002 [Amended] SUPPLEMENTARY INFORMATION:
■ i. In the clause heading, removing the
■ 5. Section 252.225–7002 is amended
date ‘‘(AUG 2016)’’ and adding ‘‘(DEC I. Background
by—
■ a. In the clause heading, removing the
2016)’’ in its place; and
■ ii. In paragraph (a), the definition of
DoD published a proposed rule in the
date ‘‘(AUG 2016)’’ and adding ‘‘(DEC Federal Register at 81 FR 42607 on June
2016)’’ in its place; and ‘‘Qualifying country’’, adding, in
alphabetical order, the country of 30, 2016, to revise the DFARS regarding
■ b. In paragraph (a), the definition of the use of customary contract financing,
‘‘Qualifying country’’, adding, in ‘‘Estonia’’;
■ e. In the Alternate III clause—
other than loan guarantees and advance
alphabetical order, the country of payments identified in FAR part 32, on
‘‘Estonia’’. ■ i. In the clause heading, removing the
date ‘‘(AUG 2016)’’ and adding ‘‘(DEC fixed-price contracts with a period of
252.225–7012 [Amended] 2016)’’ in its place; and performance in excess of one year that
■ 6. Section 252.225–7012 is amended ■ ii. In paragraph (a), the definition of
meet the dollar thresholds established
by— ‘‘Qualifying country’’, adding, in in FAR 32.104(d). DoD has determined
■ a. In the clause heading, removing the alphabetical order, the country of that the use of such customary contract
date ‘‘(JUL 2016)’’ and adding ‘‘(DEC ‘‘Estonia’’; financing provides improved cash flow
2016)’’ in its place; and ■ f. In the Alternate IV clause—
as an incentive for commercial
■ b. In paragraph (a), the definition of ■ i. In the clause heading, removing the
companies to do business with DoD, is
‘‘Qualifying country’’, adding, in date ‘‘(AUG 2016)’’ and adding ‘‘(DEC in the Department’s best interest, and
alphabetical order, the country of 2016)’’ in its place; and requires no further justification of its
‘‘Estonia’’. ■ ii. In paragraph (a), the definition of
use.

252.225–7017 [Amended]
‘‘Qualifying country’’, adding, in II. Discussion and Analysis
alphabetical order, the country of No public comments were submitted
■ 7. Section 252.225–7017 is amended
‘‘Estonia’’; and in response to the proposed rule.
by—
■ g. In the Alternate V clause—
■ a. In the clause heading, removing the Therefore, there are no changes from the
■ i. In the clause heading, removing the
date ‘‘(SEP 2016)’’ and adding ‘‘(DEC proposed rule made in the final rule.
2016)’’ in its place; and date ‘‘(AUG 2016)’’ and adding ‘‘(DEC
■ b. In paragraph (a), the definition of
2016)’’ in its place; and III. Applicability to Contracts at or
‘‘Qualifying country’’, adding, in ■ ii. In paragraph (a), the definition of Below the Simplified Acquisition
alphabetical order, the country of ‘‘Qualifying country’’, adding, in Threshold and for Commercial Items,
‘‘Estonia’’. alphabetical order, the country of Including Commercially Available Off-
‘‘Estonia’’. the-Shelf Items
252.225–7021 [Amended] [FR Doc. 2016–30598 Filed 12–21–16; 8:45 am] This final rule only provides DoD
■ 8. Section 252.225–7021 is amended BILLING CODE 5001–06–P policy regarding providing contract
by— financing for certain fixed-priced
■ a. In the clause heading, removing the contracts. The rule does not add any
date ‘‘(SEP 2016)’’ and adding ‘‘(DEC DEPARTMENT OF DEFENSE new provisions or clauses or impact any
2016)’’ in its place; existing provisions or clauses.
■ b. In paragraph (a), the definition of Defense Acquisition Regulations
‘‘Qualifying country’’, adding, in System IV. Executive Orders 12866 and 13563
alphabetical order, the country of Executive Orders (E.O.s) 12866 and
‘‘Estonia’’; and 48 CFR Part 232 13563 direct agencies to assess all costs
■ c. In the Alternate II clause—
[Docket DARS–2016–0009] and benefits of available regulatory
■ i. In the clause heading, removing the
alternatives and, if regulation is
date of ‘‘(SEP 2016)’’ and adding ‘‘(DEC RIN 0750–AI90 necessary, to select regulatory
2016)’’ in its place; and
approaches that maximize net benefits
■ ii. In paragraph (a), the definition of Defense Federal Acquisition
(including potential economic,
‘‘Qualifying country’’, adding, in Regulation Supplement: Contract
environmental, public health and safety
alphabetical order, the country of Financing (DFARS Case 2015–D026)
effects, distributive impacts, and
‘‘Estonia’’.
AGENCY: Defense Acquisition equity). E.O. 13563 emphasizes the
252.225–7036 [Amended] Regulations System, Department of importance of quantifying both costs
■ 9. Section 252.225–7036 is amended Defense (DoD). and benefits, of reducing costs, of
by— ACTION: Final rule. harmonizing rules, and of promoting
■ a. In the clause heading, removing the flexibility. This is not a significant
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date ‘‘(AUG 2016)’’ and adding ‘‘(DEC SUMMARY: DoD is issuing a final rule regulatory action and, therefore, was not
2016)’’ in its place; amending the Defense Federal subject to review under section 6(b) of
■ b. In paragraph (a), the definition of Acquisition Regulation Supplement E.O. 12866, Regulatory Planning and
‘‘Qualifying country’’, adding, in (DFARS) by providing that contracting Review, dated September 30, 1993. This
alphabetical order, the country of officers are not required to further rule is not a major rule under 5 U.S.C.
‘‘Estonia’’; justify a decision to provide customary 804.

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93842 Federal Register / Vol. 81, No. 246 / Thursday, December 22, 2016 / Rules and Regulations

V. Regulatory Flexibility Act (1) The use of customary contract Regulatory Flexibility Analysis (IRFA),
A final regulatory flexibility analysis financing (see FAR 32.113), other than other supporting documents used by the
has been prepared consistent with the loan guarantees and advance payments, Mid-Atlantic Fishery Management
Regulatory Flexibility Act, 5 U.S.C. 601, is in DoD’s best interest; and Council and its committees, and the
et seq., and is summarized as follows: (2) Further justification of its use in original environmental assessment for
individual acquisitions is unnecessary. the 2016–2018 summer flounder, scup,
The objective of the rule is to clarify
[FR Doc. 2016–30596 Filed 12–21–16; 8:45 am] and black sea bass specifications are
that the use of certain customary
available from Dr. Christopher Moore,
contract financing does not require BILLING CODE 5001–06–P
Executive Director, Mid-Atlantic
further justification, as it has been
Fishery Management Council, Suite 201,
determined to be in DoD’s best interest
800 North State Street, Dover, DE 19901.
for fixed-price contracts with a period of DEPARTMENT OF COMMERCE
The specifications document is also
performance in excess of one year that
National Oceanic and Atmospheric accessible via the Internet at http://
meet the dollar thresholds in FAR
Administration www.greateratlantic.fisheries.noaa.gov.
32.104(d).
The Final Regulatory Flexibility
DoD does not expect this final rule to
50 CFR Part 648 Analysis (FRFA) consists of the IRFA,
have a significant economic impact on
public comments and responses
a substantial number of small entities [Docket No. 161017970–6999–02] contained in this final rule, and the
within the meaning of the Regulatory
summary of impacts and alternatives
Flexibility Act, 5 U.S.C. 601, et seq. This RIN 0648–XE976
contained in this final rule. Copies of
rule only changes processes that are
Fisheries of the Northeastern United the small entity compliance guide are
internal to the Government and does not
States; Summer Flounder, Scup, and available from John K. Bullard, Regional
have any impact on small entities.
Black Sea Bass Fisheries; 2017–2018 Administrator, Greater Atlantic Region,
There were no significant issues
Summer Flounder Specifications and National Marine Fisheries Service, 55
raised by the public in response to the
Announcement of 2017 Summer Great Republic Drive, Gloucester, MA
initial regulatory flexibility analysis.
Flounder and Black Sea Bass 01930–2298.
There is no change to reporting or
Commercial Accountability Measures FOR FURTHER INFORMATION CONTACT:
recordkeeping as a result of this rule.
There are no known significant Emily Gilbert, Fishery Policy Analyst,
AGENCY: National Marine Fisheries (978) 281–9244.
alternative approaches to the rule that Service (NMFS), National Oceanic and
would meet the requirements. SUPPLEMENTARY INFORMATION:
Atmospheric Administration (NOAA),
VI. Paperwork Reduction Act Commerce. Background
ACTION: Final rule. The Mid-Atlantic Fishery
The rule does not contain any
information collection requirements that Management Council and the Atlantic
SUMMARY: In this rule, NMFS issues States Marine Fisheries Commission
require the approval of the Office of revised final 2017 and 2018
Management and Budget under the cooperatively manage the summer
specifications for the summer flounder flounder, scup, and black sea bass
Paperwork Reduction Act (44 U.S.C. fishery, which include commercial and
chapter 35). fisheries. The Summer Flounder, Scup,
recreational catch limits and prohibit and Black Sea Bass Fishery Management
List of Subjects in 48 CFR Part 232 federally permitted commercial fishing Plan (FMP) and its implementing
vessels from landing summer flounder regulations outline the Council’s
Government procurement. in Delaware in 2017 due to continued process for establishing specifications.
Jennifer L. Hawes, quota repayment from previous years’ Specifications in these fisheries include
Editor, Defense Acquisition Regulations overages. NMFS also announces a black various catch and landing subdivisions,
System. sea bass commercial accountability such as the commercial and recreational
measure that revises the 2017 annual sector annual catch limits (ACLs),
Therefore, 48 CFR part 232 is
catch target and commercial quota to annual catch targets (ACTs), and sector-
amended as follows:
account for a catch overage in 2015. specific landing limits (i.e., the
PART 232—CONTRACT FINANCING These actions are necessary to comply commercial fishery quota and
with regulations implementing the recreational harvest limit). Annual
■ 1. The authority citation for part 232 Summer Flounder, Scup, and Black Sea specifications may be established for
continues to read as follows: Bass Fishery Management Plan, and to three-year periods, and, in interim
ensure compliance with the Magnuson- years, specifications are reviewed by the
Authority: 41 U.S.C. 1303 and 48 CFR
chapter 1. Stevens Fishery Conservation and Council to ensure previously
Management Act. The intent of this established multi-year specifications
■ 2. Add section 232.104 to subpart action is to establish harvest levels and
232.1 to read as follows: remain appropriate. The FMP and its
other management measures based on implementing regulations also outline
232.104 Providing contract financing. updated scientific information to ensure the Council’s process for establishing
For fixed-price contracts with a that summer flounder are not overfished specifications. Requirements of the
period of performance in excess of a or subject to overfishing in 2017 and Magnuson-Stevens Fishery
year that meet the dollar thresholds 2018, and to enact the catch limit Conservation and Management Act
established in FAR 32.104(d), and for adjustments that are required by the (Magnuson-Stevens Act), including the
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solicitations expected to result in such fishery management plan. 10 national standards, also apply to
contracts, in lieu of the requirement at DATES: Effective January 1, 2017, specifications.
FAR 32.104(d)(1)(ii) for the contractor to through December 31, 2018. The most recent specifications for
demonstrate actual financial need or the ADDRESSES: Copies of the specifications summer flounder, scup, and black sea
unavailability of private financing, DoD document, consisting of a supplemental bass fisheries were established in a
has determined that— environmental assessment (SEA), Initial December 28, 2015, final rule (80 FR

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Document Created: 2016-12-21 23:52:39
Document Modified: 2016-12-21 23:52:39

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 December 22, 2016.
Contact		Mr. Mark Gomersall, telephone 571-372- 6099.
FR Citation		81 FR 93841
RIN Number		0750-AI90

81 FR 93841 - Defense Federal Acquisition Regulation Supplement: Contract Financing (DFARS Case 2015-D026)

DEPARTMENT OF DEFENSEDefense Acquisition Regulations System

Federal Register Volume 81, Issue 246 (December 22, 2016)

DEPARTMENT OF DEFENSE
Defense Acquisition Regulations System