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)

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, 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.

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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