83 FR 24897 - Defense Federal Acquisition Regulation Supplement: Contract Closeout Authority (DFARS Case 2018-D012)

DEPARTMENT OF DEFENSE
Defense Acquisition Regulations System

Federal Register Volume 83, Issue 104 (May 30, 2018)

Page Range		24897-24898
FR Document		2018-11342

DoD is proposing to amend the Defense Federal Acquisition Regulation Supplement (DFARS) to implement sections of the National Defense Authorization Act for Fiscal Years 2017 and 2018 to permit expedited closeout of certain contracts entered into on a date that is at least 17 fiscal years before the current fiscal year.

Federal Register, Volume 83 Issue 104 (Wednesday, May 30, 2018)

[Federal Register Volume 83, Number 104 (Wednesday, May 30, 2018)]
[Proposed Rules]
[Pages 24897-24898]
From the Federal Register Online [www.thefederalregister.org]
[FR Doc No: 2018-11342]

Federal Register / Vol. 83 , No. 104 / Wednesday, May 30, 2018 /
Proposed Rules

[[Page 24897]]

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DEPARTMENT OF DEFENSE

Defense Acquisition Regulations System

48 CFR Part 204

[Docket DARS-2018-0029]
RIN 0750-AJ76

Defense Federal Acquisition Regulation Supplement: Contract
Closeout Authority (DFARS Case 2018-D012)

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) to implement sections of the National
Defense Authorization Act for Fiscal Years 2017 and 2018 to permit
expedited closeout of certain contracts entered into on a date that is
at least 17 fiscal years before the current fiscal year.

DATES: Comments on the proposed rule should be submitted in writing to
the address shown below on or before July 30, 2018, to be considered in
the formation of a final rule.

ADDRESSES: Submit comments identified by DFARS Case 2018-D012, using
any of the following methods:
[cir] Regulations.gov: http://www.regulations.gov. Submit comments
via the Federal eRulemaking portal by entering ``DFARS Case 2018-D012''
under the heading ``Enter keyword or ID'' and selecting ``Search.''
Select the link ``Submit a Comment'' that corresponds with ``DFARS Case
2018-D012.'' Follow the instructions provided at the ``Submit a
Comment'' screen. Please include your name, company name (if any), and
``DFARS Case 2018-D012'' on your attached document.
[cir] Email: osd.dfars@mail.mil. Include DFARS Case 2018-D012 in
the subject line of the message.
[cir] Fax: 571-372-6094.
[cir] Mail: Defense Acquisition Regulations System, Attn: Carrie
Moore, 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: Ms. Carrie Moore, telephone 571-372-
6093.

SUPPLEMENTARY INFORMATION:

I. Background

This rule proposes to revise the DFARS to implement section 836 of
the National Defense Authorization Act (NDAA) for Fiscal Year (FY) 2017
(Pub. L. 114-328), as modified by section 824 of the NDAA for FY 2018,
which authorizes the Secretary of Defense to close out certain
contracts or groups of contracts through modification of such contracts
without completing a reconciliation audit or other corrective action.
The authority provided by sections 824 and 836 applies to contracts
entered into on a date that is at least 17 fiscal years before the
current fiscal year, that have no further supplies or services due, and
for which a determination has been made that the contract records are
not otherwise reconcilable, because--
The contract or related payment records have been
destroyed or lost; or
Although contracts records are available, the time or
effort required to establish the exact amount owed to the U.S.
Government or amount owed to the contractor is disproportionate to the
amount at issue.
To accomplish closeout of such contracts, sections 824 and 836
further authorize the following:
A contract or groups of contracts covered by these
sections to be closed out through a negotiated settlement with the
contractor.
The remaining contract balances to be offset with balances
within the contract or on other contracts regardless of the year or
type of appropriation obligated to fund each contract or contract line
item, and regardless of whether the appropriation has closed.
When using this authority, the closeout procedures require the
contracting officer to issue a modification of the affected contract,
which must be signed by both the contractor and the Government. When
closing out a group of contracts, the contracting officer must issue a
modification for at least one of the affected contracts that reflects
the negotiated settlement for the group of contracts and this
modification must be signed by both the contractor and the Government.
The remaining contracts in the group may be modified without obtaining
the contractor's signature.

II. Discussion and Analysis

This rule proposes to amend DFARS 204.802 to incorporate the
expedited closeout authority and procedures provided by section 824 and
836 for contracts entered into on a date that is at least 17 fiscal
years before the current fiscal year, that have no further supplies or
services due under the contract, and where the appropriate
determination has been made by an individual at least one level above
the contracting officer.

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. Executive Order 13771

This rule is not an Executive Order (E.O.) 13771, Reducing
Regulation and Controlling Regulatory Costs, regulatory action, because
this rule is not significant under E.O. 12866.

V. Regulatory Flexibility Act

DoD does not expect this proposed 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 the scope of rule is limited to contracts awarded at least 17
years before a current fiscal year that still require final closeout by
the Government. However, an initial regulatory flexibility analysis has
been performed and is summarized as follows:
The Department of Defense is proposing to amend the Defense Federal
Acquisition Regulation Supplement (DFARS) to implement section 836 of
the National Defense Authorization Act (NDAA) for Fiscal Year (FY) 2017
(Pub. L. 114-328), as modified by section 824 of the NDAA for FY 2018,
to permit expedited closeout of certain contracts entered into on a
date that is at least 17 fiscal years before the current fiscal year.
The objective of this proposed rule is to implement section 836 of
the NDAA for FY 2017, as modified by section 824 of the NDAA for FY
2018.

[[Page 24898]]

Using estimates from Department and Agency subject matter experts,
approximately 11,300 contracts subject to this rule need to be closed
out by the Government. Of these contracts, the Government estimates
that 50 percent, or 5,650, of the awards were made to small businesses.
This proposed rule does not include any new reporting,
recordkeeping, or other compliance requirements for small businesses.
This rule does not duplicate, overlap, or conflict with any other
Federal rules.
There are no known significant alternative approaches to the
proposed rule that would meet the requirements of the applicable
statute.
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 2018-
D012), in correspondence.

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 204

Government procurement.

Amy G. Williams,
Deputy, Defense Acquisition Regulations System.

Therefore, 48 CFR part 204 is proposed to be amended as follows:

PART 204--ADMINISTRATIVE MATTERS

0
1. The authority citation for part 204 continues to read as follows:

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

0
2. Amend section 204.804 by--
0
a. In paragraph (1), removing ``Contracting officers'' and adding
``Except as provided in paragraph (3) of this section, contracting
officers'' in its place; and
0
b. Adding paragraph (3).
The addition reads as follows:

204.804 Closeout of contract files.

* * * * *
(3)(i) In accordance with section 836 of the National Defense
Authorization Act for Fiscal Year 2017 (Pub. L. 114-328) and section
824 of the National Defense Authorization Act for Fiscal Year 2018
(Pub. L. 115-91), contracting officers may close out contracts or
groups of contracts through issuance of one or more modifications to
such contracts without completing a reconciliation audit or other
corrective action in accordance with FAR 4.804-5(a)(3) through (15), as
appropriate, if each contract--
(A) Was entered into on a date that is at least 17 fiscal years
before the current fiscal year;
(B) Has no further supplies or services due under the terms of the
contract; and
(C) Has been determined by an individual, at least one level above
the contracting officer, to be not otherwise reconcilable, because--
(1) The contract or related payment records have been destroyed or
lost; or
(2) Although contract or related payment records are available, the
time or effort required to establish the exact amount owed to the U.S.
Government or amount owed to the contractor is disproportionate to the
amount at issue.
(ii) Any contract or group of contracts meeting the requirements of
paragraph (3)(i) of this section may be closed out through a negotiated
settlement with the contractor. Except as provided in paragraph
(3)(ii)(B), the contract closeout process shall include a bilateral
modification of the affected contract, including those contracts that
are closed out in accordance with a negotiated settlement.
(A) For a contract or groups of contracts, the contracting officer
shall prepare a negotiation settlement memorandum that describes how
the requirements of paragraph (3)(i) have been met.
(B) For a group of contracts, a bilateral modification of at least
one contract shall be made to reflect the negotiated settlement for a
group of contracts, and unilateral modifications may be made, as
appropriate, to other contracts in the group to reflect the negotiated
settlement.
(iii) For contract closeout actions under paragraph (3) of this
section, remaining contract balances--
(A) May be offset with balances in other contract line items within
the same contract, regardless of the year or type of appropriation
obligated to fund each contract line item and regardless of whether the
appropriation obligated to fund such contract line item has closed; and
(B) May be offset with balances on other contracts, regardless of
the year or type of appropriations obligated to fund each contract and
regardless of whether such appropriations have closed.
* * * * *
[FR Doc. 2018-11342 Filed 5-29-18; 8:45 am]
BILLING CODE 5001-06-P

Document Created: 2018-05-30 01:02:23
Document Modified: 2018-05-30 01:02:23

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		Proposed Rules
Action		Proposed rule.
Dates		Comments on the proposed rule should be submitted in writing to
Contact		Ms. Carrie Moore, telephone 571-372- 6093.
FR Citation		83 FR 24897
RIN Number		0750-AJ76

83 FR 24897 - Defense Federal Acquisition Regulation Supplement: Contract Closeout Authority (DFARS Case 2018-D012)

DEPARTMENT OF DEFENSEDefense Acquisition Regulations System

Federal Register Volume 83, Issue 104 (May 30, 2018)

DEPARTMENT OF DEFENSE
Defense Acquisition Regulations System