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)

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, 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.

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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]
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