83 FR 30584 - Defense Federal Acquisition Regulation Supplement: Undefinitized Contract Action Definitization (DFARS Case 2015-D024)

DEPARTMENT OF DEFENSE
Defense Acquisition Regulations System

Federal Register Volume 83, Issue 126 (June 29, 2018)

Page Range		30584-30587
FR Document		2018-14042
DoD is issuing a final rule amending the Defense Federal Acquisition Regulation Supplement (DFARS) to provide a more transparent means of documenting the impact of costs incurred during the undefinitized period of an undefinitized contract action on allowable profit.
Federal Register, Volume 83 Issue 126 (Friday, June 29, 2018)
[Federal Register Volume 83, Number 126 (Friday, June 29, 2018)]
[Rules and Regulations]
[Pages 30584-30587]
From the Federal Register Online  [www.thefederalregister.org]
[FR Doc No: 2018-14042]


=======================================================================
-----------------------------------------------------------------------

DEPARTMENT OF DEFENSE

Defense Acquisition Regulations System

48 CFR Parts 215, 217, and 243

[Docket DARS-2016-0026]
RIN 0750-AI99


Defense Federal Acquisition Regulation Supplement: Undefinitized 
Contract Action Definitization (DFARS Case 2015-D024)

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 provide a more transparent 
means of documenting the impact of costs incurred during the 
undefinitized period of an undefinitized contract action on allowable 
profit.

DATES: Effective June 29, 2018.

FOR FURTHER INFORMATION CONTACT: Mr. Mark Gomersall, telephone 571-372-
6176.

SUPPLEMENTARY INFORMATION: 

I. Background

    DoD published a proposed rule in the Federal Register at 81 FR 
73007 on October 21, 2016, to amend the DFARS to provide a more 
transparent means of documenting the impact of costs incurred during 
the undefinitized period of an undefinitized contract action (UCA), and 
to recognize when contractors demonstrate efficient management and 
internal cost control systems through the submittal of a timely, 
auditable proposal in furtherance of definitization of a UCA. In some 
cases, DoD contracting personnel have not documented their 
consideration of the reduced risk to the contractor of costs incurred 
during the undefinitized period of a UCA. While such costs generally 
present very little risk to the contractor, the contracting officer 
should consider the reasons for any delays in definitization in making 
their determination of the appropriate assigned value for contract type 
risk.

II. Discussion and Analysis

    Two respondents submitted public comments in response to the 
proposed rule. DoD reviewed the public comments in the development of 
this final rule. An analysis of the comments is provided as follows:

[[Page 30585]]

A. Summary of Significant Changes

    The following changes were made to the language published in the 
proposed rule:
    1. The term ``auditable proposal'' in 215.404-71-2 is revised as 
``qualifying proposal as defined in 217.7401(c)'' for consistency with 
10 U.S.C. 2326.
    2. The instructions for completing blocks 24a and 24b have been 
revised for clarity.
    3. The language at 215.404-71-3(d)(2)(ii) is revised for clarity.

B. Analysis of Public Comments

1. Weighted Guidelines Revision
    Comment: One respondent did not see the need to change the current 
weighted guidelines form and structure to address unique requirements 
associated with establishing profit objectives for undefinitized 
contract actions, and therefore recommended no change to the current 
weighted guidelines application. The respondent asserted that the 
Government should comply with guidance provided by USD/AT&L, and the 
National Defense Authorization Act (NDAA) for Fiscal Year (FY) 2017, 
which stipulates that allowable profit should reflect the cost risk at 
the time that a contractor submits a qualifying proposal. The 
respondent stated that contractors should not be penalized for positive 
and efficient performance because they agreed to start work before 
final agreement on price, particularly when Government action or 
inaction is the cause of the delay. The respondent therefore asserted 
that profit should be based upon the risk at the time of the proposal 
and not at the time of negotiation.
    Response: The stated purpose of this rule is to provide a more 
transparent means of documenting the impact of costs incurred during 
the undefinitized period of a UCA, and to recognize when contractors 
demonstrate efficient management and internal cost control systems 
through the submittal of a timely, auditable proposal in furtherance of 
definitization of a UCA. Therefore, the weighted guidelines form is 
revised to provide a means of clearly demonstrating that the 
contracting officer has appropriately considered and documented the 
risk to the contractor during the undefinitized period, as well as the 
contractor's due diligence in submitting a timely, auditable proposal. 
DFARS case 2017-D022 has been opened to implement section 811, Modified 
Restrictions on Undefinitized Contractual Actions, of the NDAA for FY 
2017.
2. Costs Incurred Prior to Definitization
    Comment: One respondent stated that the requirements of DFARS 
215.404-71-3(d)(2), which direct contracting officers to assess the 
extent to which costs have been incurred prior to definitization of the 
UCA, are inconsistent with the tenets of the NDAA for FY 2017 and 
should also be deleted.
    Response: The requirements of DFARS 215.404-71-3(d)(2) are 
consistent with the requirements of section 811 of the NDAA for FY 
2017, which are being implemented under DFARS case 2017-D022.
3. Management/Cost Control Weighted Guidelines Factor Adjustment
    Comment: One respondent expressed concern that the 1 percent 
adjustment to the management/cost control factor is tied to the 
contractor's timely submission of an auditable proposal. The respondent 
stated that in many cases, industry submits timely, auditable proposals 
only to have the Government, usually after lengthy delay, deem them 
insufficient and request an updated proposal. This becomes an endless 
loop of auditing, requests for updated information (including actuals), 
more auditing, more requests for updated information, etc.
    Response: The adjustment to the management/cost control factor in 
the weighted guidelines is established to allow contracting officers to 
recognize when contractors demonstrate efficient management and 
internal cost control systems through the submittal of a timely, 
auditable proposal in furtherance of definitization of a UCA. It is 
incumbent on contractors to provide timely, auditable proposals in 
order to demonstrate their efficient management and internal cost 
control systems.
4. Timely UCA Definitization
    Comment: Both respondents expressed concern that the rule does not 
address the need for the Government to definitize UCAs in a timely 
manner.
    Response: To provide for enhanced management and oversight of UCAs, 
departments and agencies prepare and maintain semiannual Consolidated 
UCA Management Plans and UCA Management Reports to ensure contracting 
officers are actively and efficiently pursuing definitization of UCAs. 
Likewise, contractors are expected to submit timely, auditable 
proposals, including adequate supporting data in order to avoid 
unnecessary delays.

III. 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 amends the DFARS to provide a more transparent means of 
documenting the impact of costs incurred during the undefinitized 
period of an undefinitized contract action on allowable profit. The 
revisions do not add any new burdens or impact applicability of clauses 
and provisions at or below the simplified acquisition threshold, or to 
commercial items.

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.

V. Executive Order 13771

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

VI. Regulatory Flexibility Act

    This rule will not 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.
    The objective of the rule is to gain visibility into the 
contracting officer's rationale for the contract type risk values 
entered on the DD Form 1547, Record of Weighted Guidelines Application. 
The rule requires contracting officers to document in the price 
negotiation memorandum their rationale for assigning a specific 
contract type risk value. In addition, Item 24 on the DD Form 1547 is 
separated into Item 24a, Contract Type Risk (based on contractor 
incurred costs under a UCA) and Item 24b, Contract Type Risk (based on 
Government projected costs).
    This rule will not have a significant economic impact on a 
substantial number of small entities. This rule only

[[Page 30586]]

changes processes that are internal to the Government by providing a 
more transparent means of documenting the impact of costs incurred 
during the undefinitized period of a UCA when calculating negotiation 
profit objectives. This rule does not revise the current regulatory 
requirements at DFARS 215.404-71-3(d)(2), which direct contracting 
officers to assess the extent to which costs have been incurred prior 
to definitization of the contract action. However, to recognize when 
contractors demonstrate efficient management and cost control through 
the submittal of a timely, auditable proposal in furtherance of 
definitization of a UCA, and the proposal demonstrates effective cost 
control from the time of award to the present, the contracting officer 
may add 1 percentage point to the value determined for management/cost 
control up to the maximum of 7 percent.
    There is no change to reporting or recordkeeping as a result of 
this rule. 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 considers the approach described 
in the proposed rule to be the most practical and beneficial for both 
Government and industry.

VII. 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 Parts 215, 217, and 243

    Government procurement.

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

    Therefore, 48 CFR parts 215, 217, and 243 are amended as follows:

0
1. The authority citation for 48 CFR parts 215, 217, and 243 continues 
to read as follows:

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

PART 215--CONTRACTING BY NEGOTIATION

0
2. Amend section 215.404-71-2 by adding paragraph (e)(2)(iii) to read 
as follows:


215.404-71-2   Performance risk.

* * * * *
    (e) * * *
    (2) * * *
    (iii) If the contractor demonstrates efficient management and cost 
control through the submittal of a timely, qualifying proposal (as 
defined in 217.7401(c)) in furtherance of definitization of an 
undefinitized contract action, and the proposal demonstrates effective 
cost control from the time of award to the present, the contracting 
officer may add 1 percentage point to the value determined for 
management/cost control up to the maximum of 7 percent.
* * * * *

0
3. Amend section 215.404-71-3 by revising paragraphs (b) introductory 
text, (b)(1) through (3), and (d)(2) to read as follows:


215.404-71-3   Contract type risk and working capital adjustment.

* * * * *
    (b) Determination. The following extract from the DD 1547 is 
annotated to explain the process.

----------------------------------------------------------------------------------------------------------------
                                                                                                      Profit
           Item                    Contractor risk factors        Assigned value       Base          objective
----------------------------------------------------------------------------------------------------------------
24a.......................  Contract Type Risk (based on                     (1)          (2)(i)             (3)
                             incurred costs at the time of
                             qualifying proposal submission).
24b.......................  Contract Type Risk (based on                     (1)         (2)(ii)             (3)
                             Government estimated cost to
                             complete).
                                                                 -----------------------------------------------
24c.......................     Totals...........................  ..............             (3)             (3)
----------------------------------------------------------------------------------------------------------------


----------------------------------------------------------------------------------------------------------------
                                                                                                      Profit
       Item            Contractor risk factors    Costs financed   Length factor   Interest rate     objective
----------------------------------------------------------------------------------------------------------------
25................  Working Capital (4).........             (5)             (6)             (7)             (8)
----------------------------------------------------------------------------------------------------------------

    (1) Select a value from the list of contract types in paragraph (c) 
of this section using the evaluation criteria in paragraph (d) of this 
section. See paragraph (d)(2) of this section.
    (2)(i) Insert the amount of costs incurred as of the date the 
contractor submits a qualifying proposal, such as under an 
undefinitized contract action, (excluding facilities capital cost of 
money) into the Block 24a column titled Base.
    (ii) Insert the amount of Government estimated cost to complete 
(excluding facilities capital cost of money) into the Block 24b column 
titled Base.
    (3) Multiply (1) by (2)(i) and (2)(ii), respectively for Blocks 24a 
and 24b. Add Blocks 24a and 24b and insert the totals in Block 24c.
* * * * *
    (d) * * *
    (2) Mandatory. (i) The contracting officer shall assess the extent 
to which costs have been incurred prior to definitization of the 
contract action (also see 217.7404-6(a) and 243.204-70-6). When costs 
have been incurred prior to definitization, generally regard the 
contract type risk to be in the low end of the designated range. If a 
substantial portion of the costs have been incurred prior to 
definitization, the contracting officer may assign a value as low as 0 
percent, regardless of contract type.
    (ii) Contracting officers shall document in the price negotiation 
memorandum the reason for assigning a specific contract type risk 
value, to include the extent to which any reduced cost risk during the 
undefinitized period of performance was considered, in determining the 
negotiation objective.
* * * * *

PART 217--SPECIAL CONTRACTING METHODS


217.7404-6   [Amended]

0
4. Amend section 217.7404-6 by--
0
a. In paragraph (b), removing ``The contractor's reduced cost risk for 
costs incurred'' and adding in its place ``Any reduced cost risk to the 
contractor for costs expected to be incurred'' in its place; and
0
b. In paragraph (c), removing ``contract file'' and adding ``price 
negotiation memorandum'' in its place.

[[Page 30587]]

PART 243--CONTRACT MODIFICATIONS


243.204-70-6   [Amended]

0
5. Amend section 243.204-70-6 by--
0
a. In paragraph (b), removing ``The contractor's reduced cost risk for 
costs incurred'' and adding ``Any reduced cost risk to the contractor 
for costs expected to be incurred'' in its place; and
0
b. In paragraph (c), removing ``contract action'' and adding ``unpriced 
change order'' in its place and removing ``contract file'' and adding 
``price negotiation memorandum'' in its place.

[FR Doc. 2018-14042 Filed 6-28-18; 8:45 am]
 BILLING CODE 5001-06-P
Federal Register / Vol. 83, No. 126 / Friday, June 29, 2018 / Rules and Regulations 30585

A. Summary of Significant Changes 2. Costs Incurred Prior to Definitization III. Applicability to Contracts at or
Below the Simplified Acquisition
The following changes were made to Comment: One respondent stated that Threshold (SAT) and for Commercial
the language published in the proposed the requirements of DFARS 215.404– Items, Including Commercially
rule: 71–3(d)(2), which direct contracting Available Off-the-shelf (COTS) Items
1. The term ‘‘auditable proposal’’ in officers to assess the extent to which
costs have been incurred prior to This rule amends the DFARS to
215.404–71–2 is revised as ‘‘qualifying provide a more transparent means of
proposal as defined in 217.7401(c)’’ for definitization of the UCA, are
inconsistent with the tenets of the documenting the impact of costs
consistency with 10 U.S.C. 2326. incurred during the undefinitized
NDAA for FY 2017 and should also be
2. The instructions for completing period of an undefinitized contract
deleted.
blocks 24a and 24b have been revised action on allowable profit. The revisions
for clarity. Response: The requirements of
do not add any new burdens or impact
DFARS 215.404–71–3(d)(2) are
3. The language at 215.404–71– applicability of clauses and provisions
consistent with the requirements of
3(d)(2)(ii) is revised for clarity. at or below the simplified acquisition
section 811 of the NDAA for FY 2017, threshold, or to commercial items.
B. Analysis of Public Comments which are being implemented under
DFARS case 2017–D022. IV. Executive Orders 12866 and 13563
1. Weighted Guidelines Revision
3. Management/Cost Control Weighted Executive Orders (E.O.s) 12866 and
Comment: One respondent did not see Guidelines Factor Adjustment 13563 direct agencies to assess all costs
the need to change the current weighted and benefits of available regulatory
guidelines form and structure to address Comment: One respondent expressed alternatives and, if regulation is
unique requirements associated with concern that the 1 percent adjustment to necessary, to select regulatory
establishing profit objectives for the management/cost control factor is approaches that maximize net benefits
undefinitized contract actions, and tied to the contractor’s timely (including potential economic,
therefore recommended no change to submission of an auditable proposal. environmental, public health and safety
the current weighted guidelines The respondent stated that in many effects, distributive impacts, and
application. The respondent asserted cases, industry submits timely, equity). E.O. 13563 emphasizes the
that the Government should comply auditable proposals only to have the importance of quantifying both costs
with guidance provided by USD/AT&L, Government, usually after lengthy and benefits, of reducing costs, of
and the National Defense Authorization delay, deem them insufficient and harmonizing rules, and of promoting
Act (NDAA) for Fiscal Year (FY) 2017, request an updated proposal. This flexibility. This is not a significant
which stipulates that allowable profit becomes an endless loop of auditing, regulatory action and, therefore, was not
should reflect the cost risk at the time requests for updated information subject to review under section 6(b) of
that a contractor submits a qualifying (including actuals), more auditing, more E.O. 12866, Regulatory Planning and
proposal. The respondent stated that requests for updated information, etc. Review, dated September 30, 1993. This
contractors should not be penalized for Response: The adjustment to the rule is not a major rule under 5 U.S.C.
positive and efficient performance management/cost control factor in the 804.
because they agreed to start work before weighted guidelines is established to V. Executive Order 13771
final agreement on price, particularly allow contracting officers to recognize
when Government action or inaction is when contractors demonstrate efficient This rule is not an E.O. 13771,
the cause of the delay. The respondent management and internal cost control Reducing and Controlling Regulatory
therefore asserted that profit should be systems through the submittal of a Costs, regulatory action, because this
based upon the risk at the time of the timely, auditable proposal in rule is not significant under E.O. 12866.
proposal and not at the time of furtherance of definitization of a UCA. VI. Regulatory Flexibility Act
negotiation. It is incumbent on contractors to This rule will not have a significant
Response: The stated purpose of this provide timely, auditable proposals in economic impact on a substantial
rule is to provide a more transparent order to demonstrate their efficient number of small entities within the
means of documenting the impact of management and internal cost control meaning of the Regulatory Flexibility
costs incurred during the undefinitized systems. Act, 5 U.S.C. 601 et seq.
period of a UCA, and to recognize when 4. Timely UCA Definitization The objective of the rule is to gain
contractors demonstrate efficient visibility into the contracting officer’s
management and internal cost control Comment: Both respondents rationale for the contract type risk
systems through the submittal of a expressed concern that the rule does not values entered on the DD Form 1547,
timely, auditable proposal in address the need for the Government to Record of Weighted Guidelines
furtherance of definitization of a UCA. definitize UCAs in a timely manner. Application. The rule requires
Therefore, the weighted guidelines form Response: To provide for enhanced contracting officers to document in the
is revised to provide a means of clearly management and oversight of UCAs, price negotiation memorandum their
demonstrating that the contracting departments and agencies prepare and rationale for assigning a specific
officer has appropriately considered and maintain semiannual Consolidated UCA contract type risk value. In addition,
documented the risk to the contractor Management Plans and UCA Item 24 on the DD Form 1547 is
during the undefinitized period, as well Management Reports to ensure separated into Item 24a, Contract Type
sradovich on DSK3GMQ082PROD with RULES

as the contractor’s due diligence in contracting officers are actively and Risk (based on contractor incurred costs
submitting a timely, auditable proposal. efficiently pursuing definitization of under a UCA) and Item 24b, Contract
DFARS case 2017–D022 has been UCAs. Likewise, contractors are Type Risk (based on Government
opened to implement section 811, expected to submit timely, auditable projected costs).
Modified Restrictions on Undefinitized proposals, including adequate This rule will not have a significant
Contractual Actions, of the NDAA for supporting data in order to avoid economic impact on a substantial
FY 2017. unnecessary delays. number of small entities. This rule only

VerDate Sep<11>2014 16:30 Jun 28, 2018 Jkt 244001 PO 00000 Frm 00061 Fmt 4700 Sfmt 4700 E:\FR\FM\29JNR1.SGM 29JNR1
30586 Federal Register / Vol. 83, No. 126 / Friday, June 29, 2018 / Rules and Regulations

changes processes that are internal to and beneficial for both Government and 215.404–71–2 Performance risk.
the Government by providing a more industry. * * * * *
transparent means of documenting the
VII. Paperwork Reduction Act (e) * * *
impact of costs incurred during the
undefinitized period of a UCA when The rule does not contain any (2) * * *
calculating negotiation profit objectives. information collection requirements that (iii) If the contractor demonstrates
This rule does not revise the current require the approval of the Office of efficient management and cost control
regulatory requirements at DFARS Management and Budget under the through the submittal of a timely,
215.404–71–3(d)(2), which direct Paperwork Reduction Act (44 U.S.C. qualifying proposal (as defined in
contracting officers to assess the extent chapter 35). 217.7401(c)) in furtherance of
to which costs have been incurred prior definitization of an undefinitized
List of Subjects in 48 CFR Parts 215,
to definitization of the contract action. contract action, and the proposal
217, and 243
However, to recognize when contractors
Government procurement. demonstrates effective cost control from
demonstrate efficient management and
the time of award to the present, the
cost control through the submittal of a Amy G. Williams,
timely, auditable proposal in contracting officer may add 1 percentage
Deputy, Defense Acquisition Regulations point to the value determined for
furtherance of definitization of a UCA, System.
and the proposal demonstrates effective management/cost control up to the
cost control from the time of award to Therefore, 48 CFR parts 215, 217, and maximum of 7 percent.
the present, the contracting officer may 243 are amended as follows: * * * * *
add 1 percentage point to the value ■ 1. The authority citation for 48 CFR
■ 3. Amend section 215.404–71–3 by
determined for management/cost parts 215, 217, and 243 continues to
revising paragraphs (b) introductory
control up to the maximum of 7 percent. read as follows:
There is no change to reporting or text, (b)(1) through (3), and (d)(2) to read
Authority: 41 U.S.C. 1303 and 48 CFR as follows:
recordkeeping as a result of this rule. chapter 1.
The rule does not duplicate, overlap, or 215.404–71–3 Contract type risk and
conflict with any other Federal rules. PART 215—CONTRACTING BY working capital adjustment.
There are no known significant NEGOTIATION
alternative approaches to the rule that * * * * *
would meet the requirements. DoD ■ 2. Amend section 215.404–71–2 by (b) Determination. The following
considers the approach described in the adding paragraph (e)(2)(iii) to read as extract from the DD 1547 is annotated
proposed rule to be the most practical follows: to explain the process.

Assigned Profit
Item Contractor risk factors Base
value objective

24a ....... Contract Type Risk (based on incurred costs at the time of qualifying proposal (1) (2)(i) (3)
submission).
24b ....... Contract Type Risk (based on Government estimated cost to complete) ................ (1) (2)(ii) (3)

24c ....... Totals .................................................................................................................. ........................ (3) (3)

Costs Length Interest Profit
Item Contractor risk factors financed factor rate objective

25 ......... Working Capital (4) ........................................................................ (5) (6) (7) (8)

(1) Select a value from the list of (d) * * * of performance was considered, in
contract types in paragraph (c) of this (2) Mandatory. (i) The contracting determining the negotiation objective.
section using the evaluation criteria in officer shall assess the extent to which * * * * *
paragraph (d) of this section. See costs have been incurred prior to
paragraph (d)(2) of this section. definitization of the contract action (also PART 217—SPECIAL CONTRACTING
(2)(i) Insert the amount of costs METHODS
see 217.7404–6(a) and 243.204–70–6).
incurred as of the date the contractor
When costs have been incurred prior to 217.7404–6 [Amended]
submits a qualifying proposal, such as
definitization, generally regard the
under an undefinitized contract action,
(excluding facilities capital cost of contract type risk to be in the low end ■ 4. Amend section 217.7404–6 by—
money) into the Block 24a column titled of the designated range. If a substantial ■ a. In paragraph (b), removing ‘‘The
Base. portion of the costs have been incurred contractor’s reduced cost risk for costs
(ii) Insert the amount of Government prior to definitization, the contracting incurred’’ and adding in its place ‘‘Any
estimated cost to complete (excluding officer may assign a value as low as 0 reduced cost risk to the contractor for
percent, regardless of contract type.
sradovich on DSK3GMQ082PROD with RULES

facilities capital cost of money) into the costs expected to be incurred’’ in its
Block 24b column titled Base. (ii) Contracting officers shall place; and
(3) Multiply (1) by (2)(i) and (2)(ii), document in the price negotiation ■ b. In paragraph (c), removing
respectively for Blocks 24a and 24b. memorandum the reason for assigning a ‘‘contract file’’ and adding ‘‘price
Add Blocks 24a and 24b and insert the specific contract type risk value, to negotiation memorandum’’ in its place.
totals in Block 24c. include the extent to which any reduced
* * * * * cost risk during the undefinitized period

VerDate Sep<11>2014 16:30 Jun 28, 2018 Jkt 244001 PO 00000 Frm 00062 Fmt 4700 Sfmt 4700 E:\FR\FM\29JNR1.SGM 29JNR1
Federal Register / Vol. 83, No. 126 / Friday, June 29, 2018 / Rules and Regulations 30587

PART 243—CONTRACT requirements covered by the contract is necessary, to select regulatory
MODIFICATIONS from the contractor, unless certain approaches that maximize net benefits
circumstances apply. (including potential economic,
243.204–70–6 [Amended] FAR clause, 52.216–21, Requirements, environmental, public health and safety
■ 5. Amend section 243.204–70–6 by— advises contractors of the same effects, distributive impacts, and
■ a. In paragraph (b), removing ‘‘The information in the DFARS clause, and equity). E.O. 13563 emphasizes the
contractor’s reduced cost risk for costs also provides a date after which the importance of quantifying both costs
incurred’’ and adding ‘‘Any reduced contractor is not required to make any and benefits, of reducing costs, of
cost risk to the contractor for costs deliveries under the contract. The harmonizing rules, and of promoting
expected to be incurred’’ in its place; DFARS clause is no longer necessary, flexibility. The Office of Management
and because the FAR clause applies to the and Budget, Office of Information and
■ b. In paragraph (c), removing situations in which the DFARS clause is Regulatory Affairs (OIRA), has
‘‘contract action’’ and adding ‘‘unpriced prescribed for use and covers the determined that this is not a significant
change order’’ in its place and removing information contained in the DFARS regulatory action as defined under
‘‘contract file’’ and adding ‘‘price clause. As such, this DFARS clause is section 3(f) of E.O. 12866 and, therefore,
negotiation memorandum’’ in its place. now redundant and can be removed. was not subject to review under section
The removal of this DFARS clause 6(b). This rule is not a major rule as
[FR Doc. 2018–14042 Filed 6–28–18; 8:45 am]
supports a recommendation from the defined at 5 U.S.C. 804(2).
BILLING CODE 5001–06–P
DoD Regulatory Reform Task Force. On
February 24, 2017, the President signed IV. Executive Order 13771
DEPARTMENT OF DEFENSE Executive Order (E.O.) 13777, This rule is not an E.O. 13771,
‘‘Enforcing the Regulatory Reform Reducing Regulation and Controlling
Defense Acquisition Regulations Agenda,’’ which established a Federal Regulatory Costs, regulatory action,
System policy ‘‘to alleviate unnecessary because this rule is not significant under
regulatory burdens’’ on the American E.O. 12866.
48 CFR Parts 216, 247, and 252 people. In accordance with E.O. 13777,
DoD established a Regulatory Reform V. Publication of This Final Rule for
[Docket DARS–2018–0031] Task Force to review and validate DoD Public Comment Is Not Required by
regulations, including the DFARS. A Statute
RIN 0750–AJ91
public notification of the establishment The statute that applies to the
Defense Federal Acquisition of the DFARS Subgroup to the DoD publication of the Federal Acquisition
Regulation Supplement: Repeal of Regulatory Reform Task Force, for the Regulation (FAR) is the Office of Federal
DFARS Clause ‘‘Requirements’’ purpose of reviewing DFARS provisions Procurement Policy statute (codified at
(DFARS Case 2018–D030) and clauses, was published in the title 41 of the United States Code).
Federal Register at 82 FR 35741 on Specifically, 41 U.S.C 1707(a)(1)
AGENCY: Defense Acquisition
August 1, 2017, and requested public requires that a procurement policy,
Regulations System, Department of
input. No public comments were regulation, procedure or form (including
Defense (DoD).
received on this provision. an amendment or modification thereof)
ACTION: Final rule. Subsequently, the DoD Task Force must be published for public comment
SUMMARY: DoD is issuing a final rule reviewed the requirements of DFARS if it relates to the expenditure of
amending the Defense Federal clause 252.216–7010, Requirements, appropriated funds, and has either a
Acquisition Regulation Supplement and determined that the DFARS significant effect beyond the internal
(DFARS) to remove a clause that is coverage was redundant and operating procedures of the agency
duplicative of an existing Federal recommended removal. issuing the policy, regulation,
Acquisition Regulation (FAR) clause. procedure, or form, or has a significant
II. Applicability to Contracts at or
cost or administrative impact on
DATES: Effective June 29, 2018. Below the Simplified Acquisition
contractors or offerors. This final rule is
FOR FURTHER INFORMATION CONTACT: Ms. Threshold and for Commercial Items,
not required to be published for public
Carrie Moore, telephone 571–372–6093. Including Commercially Available Off-
comment, because DoD is not issuing a
SUPPLEMENTARY INFORMATION: the-Shelf Items
new regulation; rather, this rule merely
This rule does not add any new removes an obsolete clause from the
I. Background
solicitation provisions or contract DFARS.
DoD is amending the DFARS to clauses. This rule only removes obsolete
remove the DFARS clause 252.216– DFARS provision 252.216–7010, VI. Regulatory Flexibility Act
7010, Requirements, the Alternate Requirements. Therefore, the rule does Because a notice of proposed
clause, the associated clause not impose any new requirements on rulemaking and an opportunity for
prescription at DFARS 216.506, and a contracts at or below the simplified public comment are not required to be
cross-reference to the clause at DFARS acquisition threshold and for given for this rule under 41 U.S.C.
247.271–3(p). commercial items, including 1707(a)(1) (see section V. of this
The DFARS clause is included in commercially available off-the-shelf preamble), the analytical requirements
contracts for preparation of personal items. of the Regulatory Flexibility Act (5
property for movement or storage, or for U.S.C. 601 et seq.) are not applicable.
sradovich on DSK3GMQ082PROD with RULES

intra-city or intra-area movement; III. Executive Orders 12866 and 13563
Accordingly, no regulatory flexibility
advises contractors that a requirements Executive Order (E.O.) 12866, analysis is required and none has been
contract has been issued and how Regulatory Planning and Review; and prepared.
quantities work under the contract; that E.O. 13563, Improving Regulation and
the delivery of items or performance of Regulatory Review, direct agencies to VII. Paperwork Reduction Act
work is subject to the issuance of orders; assess all costs and benefits of available The rule does not contain any
and, that the Government shall order all regulatory alternatives and, if regulation information collection requirements that

VerDate Sep<11>2014 16:30 Jun 28, 2018 Jkt 244001 PO 00000 Frm 00063 Fmt 4700 Sfmt 4700 E:\FR\FM\29JNR1.SGM 29JNR1
Document Created: 2018-06-29 01:13:31
Document Modified: 2018-06-29 01:13:31
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 June 29, 2018.
Contact		Mr. Mark Gomersall, telephone 571-372- 6176.
FR Citation		83 FR 30584
RIN Number		0750-AI99
CFR Citation		48 CFR 215 48 CFR 217 48 CFR 243
83 FR 30584 - Defense Federal Acquisition Regulation Supplement: Undefinitized Contract Action Definitization (DFARS Case 2015-D024)

DEPARTMENT OF DEFENSEDefense Acquisition Regulations System

Federal Register Volume 83, Issue 126 (June 29, 2018)

DEPARTMENT OF DEFENSE
Defense Acquisition Regulations System
