83 FR 49180 - Defense Federal Acquisition Regulation Supplement: Repeal of DFARS Clause “Award Fee” (DFARS Case 2018-D037)

DEPARTMENT OF DEFENSE
Defense Acquisition Regulations System

Federal Register Volume 83, Issue 189 (September 28, 2018)

Page Range		49180-49181
FR Document		2018-20973

DoD is issuing a final rule amending the Defense Federal Acquisition Regulation Supplement (DFARS) to remove a clause that is no longer necessary.

Federal Register, Volume 83 Issue 189 (Friday, September 28, 2018)

[Federal Register Volume 83, Number 189 (Friday, September 28, 2018)]
[Rules and Regulations]
[Pages 49180-49181]
From the Federal Register Online  [www.thefederalregister.org]
[FR Doc No: 2018-20973]


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DEPARTMENT OF DEFENSE

Defense Acquisition Regulations System

48 CFR Parts 216 and 252

[Docket DARS-2018-0044]
RIN 0750-AJ99


Defense Federal Acquisition Regulation Supplement: Repeal of 
DFARS Clause ``Award Fee'' (DFARS Case 2018-D037)

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) to remove a clause that is no 
longer necessary.

DATES: Effective September 28, 2018.

FOR FURTHER INFORMATION CONTACT: Ms. Carrie Moore, telephone 571-372-
6093.

SUPPLEMENTARY INFORMATION:

I. Background

    DoD is amending the DFARS to remove the DFARS clause 252.216-7005, 
Award Fee, and the associated clause prescription at DFARS 
216.406(e)(2). The DFARS clause advises contractors that: They may earn 
an award fee from zero dollars to the maximum amount stated in the 
award fee plan; an award fee will not be paid for any evaluation period 
in which the Government rates the contractor's overall cost, schedule, 
and technical performance below satisfactory; and, the contracting 
officer may unilaterally revise the award fee plan prior to the 
beginning of a rating period in order to redirect the contractor's 
emphasis on performance.
    Federal Acquisition Regulation (FAR) 16.401 prescribes the award 
fee pool percentages that are available to the contractor and required 
for use by the Government in an award fee plan. Like the DFARS clause, 
these percentages permit the contractor to earn between 0% and 100% of 
the award fee pool. Also like the DFARS clause, the FAR requires all 
award fee plans to prohibit contractors from earning any award fee when 
the contractor's overall cost, schedule, and technical performance is 
below satisfactory. While the FAR does not address the unilateral 
ability to of the contracting officer to make revisions to the award 
fee plan, as discussed in the DFARS clause, the FAR does require award 
fee plans to contain reasonable and attainable targets that motivate 
contractors and discourage inefficiency or waste. Finally, DFARS 
216.401 requires the award fee plan to be incorporated into the 
contract. This action provides contractors with an award fee plan that 
conveys all of the FAR information and requirements for award fee 
plans. As such, this DFARS clause is unnecessary and can be removed.
    The removal of this DFARS clause supports a recommendation from the 
DoD Regulatory Reform Task Force. On February 24, 2017, the President 
signed Executive Order (E.O.) 13777, ``Enforcing the Regulatory Reform 
Agenda,'' which established a Federal policy ``to alleviate unnecessary 
regulatory burdens'' on the American people. In accordance with E.O. 
13777, DoD established a Regulatory Reform Task Force to review and 
validate DoD regulations, including the DFARS. A public notice of the 
establishment of the DFARS Subgroup to the DoD Regulatory Reform Task 
Force, for the purpose of reviewing DFARS provisions and clauses, was 
published in the Federal Register at 82 FR 35741 on August 1, 2017, and 
requested public input. No public comments were received on this 
clause. Subsequently, the DoD Task Force reviewed the requirements of 
DFARS clause 252.216-7005, Award Fee, and determined that the DFARS 
clause was unnecessary and recommended removal.

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

    This rule only removes DFARS clause 252.216-7005, Award Fee, which 
is obsolete. Therefore, the rule does not impose any new requirements 
on contracts at or below the simplified acquisition threshold and for 
commercial items, including commercially available off-the-shelf items.

III. Executive Orders 12866 and 13563

    E.O. 12866, Regulatory Planning and Review; and E.O. 13563, 
Improving Regulation and Regulatory Review, 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. 
The Office of Management and Budget (OMB), Office of Information and 
Regulatory Affairs (OIRA), has determined that this is not a 
significant regulatory action as defined under section 3(f) of E.O. 
12866 and, therefore, was not subject to review under section 6(b). 
This rule is not a major rule as defined at 5 U.S.C. 804(2).

IV. 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.

V. Publication of This Final Rule for Public Comment Is Not Required by 
Statute

    The statute that applies to the publication of the FAR is Office of 
Federal Procurement Policy statute (codified at title 41 of the United 
States Code). Specifically, 41 U.S.C. 1707(a)(1) requires that a 
procurement policy, regulation, procedure or form (including an 
amendment or modification thereof) must be published for public comment 
if it relates to the expenditure of

[[Page 49181]]

appropriated funds, and has either a significant effect beyond the 
internal operating procedures of the agency issuing the policy, 
regulation, procedure, or form, or has a significant cost or 
administrative impact on contractors or offerors. This final rule is 
not required to be published for public comment, because DoD is not 
issuing a new regulation; rather, this rule merely removes an obsolete 
requirement from the DFARS.

VI. Regulatory Flexibility Act

    Because a notice of proposed rulemaking and an opportunity for 
public comment are not required to be given for this rule under 41 
U.S.C. 1707(a)(1) (see section V. of this preamble), the analytical 
requirements of the Regulatory Flexibility Act (5 U.S.C. 601 et seq.) 
are not applicable. Accordingly, no regulatory flexibility analysis is 
required and none has been prepared.

VII. Paperwork Reduction Act

    The rule does not contain any information collection requirements 
that require the approval of OMB under the Paperwork Reduction Act (44 
U.S.C. chapter 35).

List of Subjects in 48 CFR Parts 216 and 252

    Government procurement.

Jennifer Lee Hawes,
Regulatory Control Officer, Defense Acquisition Regulations System.

    Therefore, 48 CFR parts 216 and 252 are amended as follows:

0
1. The authority citation for 48 CFR parts 216 and 252 continues to 
read as follows:

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

PART 216--TYPES OF CONTRACTS


216.406   [Amended]

0
2. Amend section 216.406 by--
0
a. Removing paragraph (e)(2); and
0
b. Redesignating paragraph (e)(1) as paragraph (e).

PART 252--SOLICITATION PROVISIONS AND CONTRACT CLAUSES


252.216-7004  [Amended]

0
3. Amend section 252.216-7004, in the introductory text, by removing 
``216.406'' and adding ``216.406(e)'' in its place.


252.216-7005  [Removed and Reserved]

0
3. Remove and reserve section 252.216-7005.

[FR Doc. 2018-20973 Filed 9-27-18; 8:45 am]
 BILLING CODE 5001-06-P

Federal Register / Vol. 83, No. 189 / Friday, September 28, 2018 / Rules and Regulations 49181

appropriated funds, and has either a 252.216–7005 [Removed and Reserved] February 24, 2017, the President signed
significant effect beyond the internal ■ 3. Remove and reserve section Executive Order (E.O.) 13777,
operating procedures of the agency 252.216–7005. ‘‘Enforcing the Regulatory Reform
issuing the policy, regulation, Agenda,’’ which established a Federal
[FR Doc. 2018–20973 Filed 9–27–18; 8:45 am]
procedure, or form, or has a significant policy ‘‘to alleviate unnecessary
BILLING CODE 5001–06–P
cost or administrative impact on regulatory burdens’’ on the American
contractors or offerors. This final rule is people. In accordance with E.O. 13777,
not required to be published for public DEPARTMENT OF DEFENSE DoD established a Regulatory Reform
comment, because DoD is not issuing a Task Force to review and validate DoD
new regulation; rather, this rule merely Defense Acquisition Regulations regulations, including the DFARS. A
removes an obsolete requirement from System public notice of the establishment of the
the DFARS. DFARS Subgroup to the DoD Regulatory
VI. Regulatory Flexibility Act 48 CFR Parts 247 and 252 Reform Task Force, for the purpose of
[Docket DARS–2018–0046]
reviewing DFARS provisions and
Because a notice of proposed clauses, was published in the Federal
rulemaking and an opportunity for RIN 0750–AK01 Register at 82 FR 35741 on August 1,
public comment are not required to be 2017, and requested public input. No
given for this rule under 41 U.S.C. Defense Federal Acquisition public comments were received on this
1707(a)(1) (see section V. of this Regulation Supplement: Repeal of clause. Subsequently, the DoD Task
preamble), the analytical requirements DFARS Clause ‘‘Indefinite Quantities— Force reviewed the requirements of
of the Regulatory Flexibility Act (5 Fixed Charges’’ (DFARS Case 2018– DFARS clause 252.247–7004, Indefinite
U.S.C. 601 et seq.) are not applicable. D039)
Quantities—Fixed Charges, and
Accordingly, no regulatory flexibility determined that the DFARS clause was
AGENCY: Defense Acquisition
analysis is required and none has been unnecessary and recommended
Regulations System, Department of
prepared. removal.
Defense (DoD).
VII. Paperwork Reduction Act ACTION: Final rule. II. Applicability to Contracts at or
The rule does not contain any SUMMARY: DoD is issuing a final rule Below the Simplified Acquisition
information collection requirements that amending the Defense Federal Threshold and for Commercial Items,
require the approval of OMB under the Acquisition Regulation Supplement Including Commercially Available Off-
Paperwork Reduction Act (44 U.S.C. (DFARS) to remove a clause that is no the-Shelf Items
chapter 35). longer necessary. This rule only removes DFARS clause
List of Subjects in 48 CFR Parts 216 and DATES: Effective September 28, 2018. 252.247–7004, Indefinite Quantities—
252 FOR FURTHER INFORMATION CONTACT: Ms. Fixed Charges, which is obsolete.
Carrie Moore, telephone 571–372–6093. Therefore, the rule does not impose any
Government procurement. SUPPLEMENTARY INFORMATION: new requirements on contracts at or
Jennifer Lee Hawes, below the simplified acquisition
I. Background
Regulatory Control Officer, Defense threshold or for commercial items,
Acquisition Regulations System. DoD is amending the DFARS to including commercially available off-
remove the DFARS clause 252.247– the-shelf items.
Therefore, 48 CFR parts 216 and 252 7004, Indefinite Quantities—Fixed
are amended as follows: Charges, and the associated clause III. Executive Orders 12866 and 13563
prescription at DFARS 247.270–4(d).
■ 1. The authority citation for 48 CFR E.O. 12866, Regulatory Planning and
When applicable, the DFARS clause is
parts 216 and 252 continues to read as Review; and E.O. 13563, Improving
used in indefinite-delivery, indefinite-
follows: Regulation and Regulatory Review,
quantity contracts for stevedoring
Authority: 41 U.S.C. 1303 and 48 CFR services to notify the contractor that the direct agencies to assess all costs and
chapter 1. Government is obligated to pay the benefits of available regulatory
contractor the fixed monthly amount alternatives and, if regulation is
PART 216—TYPES OF CONTRACTS established in the contract. necessary, to select regulatory
This notification is not necessary, approaches that maximize net benefits
216.406 [Amended] (including potential economic,
since line items are established in all
■ 2. Amend section 216.406 by— contracts to describe the items being environmental, public health and safety
purchased, as well as the pricing, effects, distributive impacts, and
■ a. Removing paragraph (e)(2); and equity). E.O. 13563 emphasizes the
funding, and delivery information for
■ b. Redesignating paragraph (e)(1) as each item. The award of the contract is importance of quantifying both costs
paragraph (e). the Government’s agreement to pay the and benefits, of reducing costs, of
contractor for the line items, in harmonizing rules, and of promoting
PART 252—SOLICITATION accordance with the contract; therefore, flexibility. The Office of Management
PROVISIONS AND CONTRACT this DFARS clause provides no and Budget (OMB), Office of
CLAUSES Information and Regulatory Affairs
amozie on DSK3GDR082PROD with RULES2

additional benefit for the contractor or
252.216–7004 [Amended] the Government. As such, this DFARS (OIRA), has determined that this is not
clause is unnecessary and can be a significant regulatory action as defined
■ 3. Amend section 252.216–7004, in removed. under section 3(f) of E.O. 12866 and,
the introductory text, by removing The removal of this DFARS text therefore, was not subject to review
‘‘216.406’’ and adding ‘‘216.406(e)’’ in supports a recommendation from the under section 6(b). This rule is not a
its place. DoD Regulatory Reform Task Force. On major rule as defined at 5 U.S.C. 804(2).

VerDate Sep<11>2014 19:35 Sep 27, 2018 Jkt 244001 PO 00000 Frm 00005 Fmt 4701 Sfmt 4700 E:\FR\FM\28SER2.SGM 28SER2

Document Created: 2018-09-28 01:23:23
Document Modified: 2018-09-28 01:23:23

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		Rules and Regulations
Action		Final rule.
Dates		Effective September 28, 2018.
Contact		Ms. Carrie Moore, telephone 571-372- 6093.
FR Citation		83 FR 49180
RIN Number		0750-AJ99
CFR Citation		48 CFR 216 48 CFR 252

83 FR 49180 - Defense Federal Acquisition Regulation Supplement: Repeal of DFARS Clause “Award Fee” (DFARS Case 2018-D037)

DEPARTMENT OF DEFENSEDefense Acquisition Regulations System

Federal Register Volume 83, Issue 189 (September 28, 2018)

DEPARTMENT OF DEFENSE
Defense Acquisition Regulations System