83 FR 54679 - Defense Federal Acquisition Regulation Supplement: Repeal of DFARS Provision “Bonds or Other Security” (DFARS Case 2018-D036)

DEPARTMENT OF DEFENSE
Defense Acquisition Regulations System

Federal Register Volume 83, Issue 211 (October 31, 2018)

Page Range		54679-54680
FR Document		2018-23679

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

Federal Register, Volume 83 Issue 211 (Wednesday, October 31, 2018)

[Federal Register Volume 83, Number 211 (Wednesday, October 31, 2018)]
[Rules and Regulations]
[Pages 54679-54680]
From the Federal Register Online  [www.thefederalregister.org]
[FR Doc No: 2018-23679]


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DEPARTMENT OF DEFENSE

Defense Acquisition Regulations System

48 CFR Parts 228 and 252

[Docket DARS-2018-0049]
RIN 0750-AJ98


Defense Federal Acquisition Regulation Supplement: Repeal of 
DFARS Provision ``Bonds or Other Security'' (DFARS Case 2018-D036)

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 remove a provision that is 
no longer necessary.

DATES: Effective October 31, 2018.

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

SUPPLEMENTARY INFORMATION:

I. Background

    DoD is amending the DFARS to remove DFARS provision 252.228-7004, 
Bonds or Other Security, and the associated clause prescription at 
DFARS 228.170. The Miller Act (40 U.S.C. 3131 to 3134) requires 
contractors on certain construction contracts to post bonds that 
guarantee performance of the contract and payment to subcontractors and 
suppliers. Several Federal Acquisition Regulation (FAR) clauses are 
available to implement these requirements on construction contracts. 
While the guarantees of the Miller Act do not apply to contracts for 
demolition, dismantling, or removal of improvements, FAR 37.302 permits 
the contracting officer to require a performance bond or other 
security, in accordance with FAR 28.103, on such contracts when it is 
necessary to ensure completion of the work or protect property or 
payment of suppliers.
    For DoD, when performance bonds or other securities are necessary 
for contracts that involve dismantling, demolition, or removal of 
improvements, this DFARS provision is included in the solicitation. The 
provision requires offerors to furnish a bid guarantee with their 
offer; advises that, upon notice of award, the successful offeror shall 
provide the Government with the performance bond and any payment due 
within a set timeframe; and, identifies the acceptable sureties that 
can be used to support the bond.
    In reviewing existing FAR provisions and clauses, it was determined 
that FAR clause 52.228-16, Performance and Payment Bonds--Other than 
Construction, and FAR provision 52.228-1, Bid Guarantee, provide the 
information contained in the DFARS provision and can be included in 
solicitations and contracts that involve dismantling, demolition, or 
removal of improvements. The FAR clause ensures completion of the work; 
protects property associated with the contract effort; requires the 
offeror to furnish a performance bond within a set amount of time after 
receiving a notice of award; and, specifies that bonds must be 
supported by specific sureties. The FAR provision requires offerors to 
provide a bid guarantee prior to the opening of bids; includes the form 
and amount of the guarantee to be provided; advises that a resultant 
contract may be terminated for failure to provide an executed bond 
after contract award; and, states that the bid guarantee will be used 
to offset cost in the event of a termination for default. Since the FAR 
provision and clause can be used to provide the same information 
included in DFARS provision, this DFARS provision is no longer 
necessary and can be removed.
    The removal of this DFARS provision 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 provision. The DoD Task Force reviewed the 
requirements of DFARS provision 252.228-7004, Bonds and Other Security, 
and determined that the DFARS coverage 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 obsolete DFARS provision 252.228-7004, Bonds 
or Other Security. 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. 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 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.

[[Page 54680]]

IV. 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, Office of Information and 
Regulatory Affairs, 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).

V. Executive Order 13771

    This rule is not an E.O. 13771 regulatory action, because this rule 
is not significant under E.O. 12866.

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 III. 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 the Office of Management and Budget under 
the Paperwork Reduction Act (44 U.S.C. chapter 35).

List of Subjects in 48 CFR Parts 228 and 252

    Government procurement.

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

    Therefore, 48 CFR parts 228 and 252 are amended as follows:

0
1. The authority citation for 48 CFR parts 228 and 252 continues to 
read as follows:

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

PART 228--BONDS AND INSURANCE


228.170   [Removed]

0
2. Remove section 228.170.

PART 252--SOLICITATION PROVISIONS AND CONTRACT CLAUSES


252.228-7004  [Removed and Reserved]

0
3. Remove and reserve section 252.228-7004.

[FR Doc. 2018-23679 Filed 10-30-18; 8:45 am]
 BILLING CODE 5001-06p-P

Federal Register / Vol. 83, No. 211 / Wednesday, October 31, 2018 / Rules and Regulations 54679

I–102 Participant eligibility. associated clause prescription at DFARS The removal of this DFARS provision
* * * * * 228.170. The Miller Act (40 U.S.C. 3131 supports a recommendation from the
(e) A mentor firm may not enter into an to 3134) requires contractors on certain DoD Regulatory Reform Task Force. On
agreement with a protégé firm if SBA has construction contracts to post bonds February 24, 2017, the President signed
made a determination of affiliation. If SBA that guarantee performance of the Executive Order (E.O.) 13777,
has not made such a determination and if the contract and payment to subcontractors ‘‘Enforcing the Regulatory Reform
DoD Office of Small Business Programs and suppliers. Several Federal Agenda,’’ which established a Federal
(OSBP) has reason to believe, based on SBA’s
regulations regarding affiliation, that the
Acquisition Regulation (FAR) clauses policy ‘‘to alleviate unnecessary
mentor firm is affiliated with the protégé are available to implement these regulatory burdens’’ on the American
firm, then DoD OSBP will request a requirements on construction contracts. people. In accordance with E.O. 13777,
determination regarding affiliation from SBA. While the guarantees of the Miller Act DoD established a Regulatory Reform
* * * * * do not apply to contracts for demolition, Task Force to review and validate DoD
dismantling, or removal of regulations, including the DFARS. A
I–106 Development of mentor-protégé improvements, FAR 37.302 permits the public notice of the establishment of the
agreements. contracting officer to require a DFARS Subgroup to the DoD Regulatory
* * * * * performance bond or other security, in Reform Task Force, for the purpose of
(d) * * * accordance with FAR 28.103, on such reviewing DFARS provisions and
(6) * * * contracts when it is necessary to ensure clauses, was published in the Federal
(v) Women’s business centers described in
section 29 of the Small Business Act (15
completion of the work or protect Register at 82 FR 35741 on August 1,
U.S.C. 656). property or payment of suppliers. 2017, and requested public input. No
For DoD, when performance bonds or public comments were received on this
* * * * *
other securities are necessary for provision. The DoD Task Force
I–107 Elements of a mentor-protégé contracts that involve dismantling, reviewed the requirements of DFARS
agreement. demolition, or removal of provision 252.228–7004, Bonds and
* * * * * improvements, this DFARS provision is Other Security, and determined that the
(h) The assistance the mentor will provide included in the solicitation. The DFARS coverage was unnecessary and
to the protégé firm in understanding Federal provision requires offerors to furnish a recommended removal.
contract regulations, including the FAR and bid guarantee with their offer; advises
DFARS, after award of a subcontract under II. Applicability to Contracts at or
the Program, if applicable;
that, upon notice of award, the Below the Simplified Acquisition
successful offeror shall provide the Threshold and for Commercial Items,
* * * * * Government with the performance bond
[FR Doc. 2018–23673 Filed 10–30–18; 8:45 am] Including Commercially Available Off-
and any payment due within a set the-Shelf Items
BILLING CODE 5001–06p–P
timeframe; and, identifies the acceptable
sureties that can be used to support the This rule only removes obsolete
DEPARTMENT OF DEFENSE bond. DFARS provision 252.228–7004, Bonds
In reviewing existing FAR provisions or Other Security. Therefore, the rule
Defense Acquisition Regulations and clauses, it was determined that FAR does not impose any new requirements
System clause 52.228–16, Performance and on contracts at or below the simplified
Payment Bonds—Other than acquisition threshold and for
48 CFR Parts 228 and 252 Construction, and FAR provision commercial items, including
52.228–1, Bid Guarantee, provide the commercially available off-the-shelf
[Docket DARS–2018–0049] information contained in the DFARS items.
RIN 0750–AJ98 provision and can be included in III. Publication of This Final Rule for
solicitations and contracts that involve Public Comment Is Not Required by
Defense Federal Acquisition dismantling, demolition, or removal of Statute
Regulation Supplement: Repeal of improvements. The FAR clause ensures
DFARS Provision ‘‘Bonds or Other completion of the work; protects The statute that applies to the
Security’’ (DFARS Case 2018–D036) property associated with the contract publication of the FAR is Office of
effort; requires the offeror to furnish a Federal Procurement Policy statute
AGENCY: Defense Acquisition performance bond within a set amount (codified at title 41 of the United States
Regulations System, Department of of time after receiving a notice of award; Code). Specifically, 41 U.S.C. 1707(a)(1)
Defense (DoD). and, specifies that bonds must be requires that a procurement policy,
ACTION: Final rule. supported by specific sureties. The FAR regulation, procedure, or form
provision requires offerors to provide a (including an amendment or
SUMMARY: DoD is issuing a final rule
bid guarantee prior to the opening of modification thereof) must be published
amending the Defense Federal
bids; includes the form and amount of for public comment if it relates to the
Acquisition Regulation Supplement
the guarantee to be provided; advises expenditure of appropriated funds, and
(DFARS) to remove a provision that is
that a resultant contract may be has either a significant effect beyond the
no longer necessary.
terminated for failure to provide an internal operating procedures of the
DATES: Effective October 31, 2018. executed bond after contract award; agency issuing the policy, regulation,
FOR FURTHER INFORMATION CONTACT: Ms. and, states that the bid guarantee will be procedure, or form, or has a significant
Carrie Moore, telephone 571–372–6093. used to offset cost in the event of a cost or administrative impact on
amozie on DSK3GDR082PROD with RULES

SUPPLEMENTARY INFORMATION: termination for default. Since the FAR contractors or offerors. This final rule is
provision and clause can be used to not required to be published for public
I. Background provide the same information included comment, because DoD is not issuing a
DoD is amending the DFARS to in DFARS provision, this DFARS new regulation; rather, this rule merely
remove DFARS provision 252.228–7004, provision is no longer necessary and can removes an obsolete requirement from
Bonds or Other Security, and the be removed. the DFARS.

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54680 Federal Register / Vol. 83, No. 211 / Wednesday, October 31, 2018 / Rules and Regulations

IV. Executive Orders 12866 and 13563 PART 228—BONDS AND INSURANCE with the services upon receipt of the
written notification. A description of the
E.O. 12866, Regulatory Planning and 228.170 [Removed] scope of the supervision and inspection
Review, and E.O. 13563, Improving ■ 2. Remove section 228.170. services is included as an appendix to
Regulation and Regulatory Review, the contract.
direct agencies to assess all costs and PART 252—SOLICITATION The need for architect-engineers to
benefits of available regulatory PROVISIONS AND CONTRACT perform supervision and inspection
alternatives and, if regulation is CLAUSES services during construction is
necessary, to select regulatory uncommon. When it is necessary, an
approaches that maximize net benefits 252.228–7004 [Removed and Reserved] option that accurately describes the
(including potential economic, ■ 3. Remove and reserve section scope of services can be included in the
environmental, public health and safety 252.228–7004. contract, pursuant to Federal
effects, distributive impacts, and [FR Doc. 2018–23679 Filed 10–30–18; 8:45 am] Acquisition Regulation subpart 17.2,
equity). E.O. 13563 emphasizes the BILLING CODE 5001–06p–P
Options. Contracting activities can
importance of quantifying both costs better address these services, to the
and benefits, of reducing costs, of extent they are needed and the
harmonizing rules, and of promoting DEPARTMENT OF DEFENSE procedures applicable to the
flexibility. The Office of Management requirement, within the scope of a
and Budget, Office of Information and Defense Acquisition Regulations contract. As such, this DFARS clause is
Regulatory Affairs, has determined that System unnecessary and can be removed.
this is not a significant regulatory action The removal of this DFARS clause
as defined under section 3(f) of E.O. 48 CFR Parts 236 and 252 supports a recommendation from the
12866 and, therefore, was not subject to DoD Regulatory Reform Task Force. On
[Docket DARS–2018–0050]
review under section 6(b). This rule is February 24, 2017, the President signed
not a major rule as defined at 5 U.S.C. RIN 0750–AK03 Executive Order (E.O.) 13777,
804(2). ‘‘Enforcing the Regulatory Reform
Defense Federal Acquisition Agenda,’’ which established a Federal
V. Executive Order 13771 Regulation Supplement: Repeal of policy ‘‘to alleviate unnecessary
This rule is not an E.O. 13771 DFARS Clause ‘‘Option for Supervision regulatory burdens’’ on the American
regulatory action, because this rule is and Inspection Services’’ (DFARS Case people. In accordance with E.O. 13777,
not significant under E.O. 12866. 2018–D041) DoD established a Regulatory Reform
AGENCY: Defense Acquisition Task Force to review and validate DoD
VI. Regulatory Flexibility Act regulations, including the DFARS. A
Regulations System, Department of
Because a notice of proposed Defense (DoD). public notice of the establishment of the
rulemaking and an opportunity for DFARS Subgroup to the DoD Regulatory
ACTION: Final rule.
public comment are not required to be Reform Task Force, for the purpose of
given for this rule under 41 U.S.C. SUMMARY: DoD is issuing a final rule reviewing DFARS provisions and
1707(a)(1) (see section III. of this amending the Defense Federal clauses, was published in the Federal
preamble), the analytical requirements Acquisition Regulation Supplement Register at 82 FR 35741 on August 1,
of the Regulatory Flexibility Act (5 (DFARS) to remove a clause that is no 2017, and requested public input. No
U.S.C. 601 et seq.) are not applicable. longer necessary. public comments were received on this
Accordingly, no regulatory flexibility DATES: Effective October 31, 2018.
clause. Subsequently, the DoD Task
analysis is required, and none has been Force reviewed the requirements of
FOR FURTHER INFORMATION CONTACT: Ms.
prepared. DFARS clause 252.236–7009, Option for
Carrie Moore, telephone 571–372–6093. Supervision and Inspection Services,
VII. Paperwork Reduction Act SUPPLEMENTARY INFORMATION: and determined that the DFARS
I. Background coverage was unnecessary and
The rule does not contain any recommended removal.
information collection requirements that DoD is amending the DFARS to
require the approval of the Office of remove the DFARS clause 252.236– II. Applicability to Contracts at or
Management and Budget under the 7009, Option for Supervision and Below the Simplified Acquisition
Paperwork Reduction Act (44 U.S.C. Inspection Services, remove the Threshold and for Commercial Items,
chapter 35). associated clause prescription at DFARS Including Commercially Available Off-
236.609–70(a)(1), and revise a cross the-Shelf Items
List of Subjects in 48 CFR Parts 228 and
reference in the introductory text to This rule only removes obsolete
252
DFARS clause 252.236–7011. DFARS DFARS clause 252.236–7009, Option for
Government procurement. clause 252.236–7009 is used in fixed- Supervision and Inspection Services.
price solicitations and contracts for Therefore, the rule does not impose any
Jennifer Lee Hawes, architect-engineering services when the new requirements on contracts at or
Regulatory Control Officer, Defense architect may also be required to below the simplified acquisition
Acquisition Regulations System. provide supervision and inspection threshold and for commercial items,
Therefore, 48 CFR parts 228 and 252 services during construction. The clause including commercially available off-
advises contractors that the Government the-shelf items.
amozie on DSK3GDR082PROD with RULES

are amended as follows:
may, at its option, direct the contractor
■ 1. The authority citation for 48 CFR to perform supervision and inspection III. Publication of This Final Rule for
parts 228 and 252 continues to read as services for the construction contract. If Public Comment Is Not Required by
follows: the need for such services arises, the Statute
Authority: 41 U.S.C. 1303 and 48 CFR Government will notify the contractor in The statute that applies to the
chapter 1. writing and the contractor shall proceed publication of the FAR is Office of

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Document Created: 2018-10-31 00:32:50
Document Modified: 2018-10-31 00:32:50

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 October 31, 2018.
Contact		Ms. Carrie Moore, telephone 571-372- 6093.
FR Citation		83 FR 54679
RIN Number		0750-AJ98
CFR Citation		48 CFR 228 48 CFR 252

83 FR 54679 - Defense Federal Acquisition Regulation Supplement: Repeal of DFARS Provision “Bonds or Other Security” (DFARS Case 2018-D036)

DEPARTMENT OF DEFENSEDefense Acquisition Regulations System

Federal Register Volume 83, Issue 211 (October 31, 2018)

DEPARTMENT OF DEFENSE
Defense Acquisition Regulations System