Defense Federal Acquisition Regulation Supplement; Streamlined Payment Practices

[Federal Register Volume 64, Number 138 (Tuesday, July 20, 1999)]
[Proposed Rules]
[Pages 38878-38880]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 99-18218]


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DEPARTMENT OF DEFENSE

48 CFR Parts 208, 212, 213, 214, 215, 232, and 252

[DFARS Case 98-D026]


Defense Federal Acquisition Regulation Supplement; Streamlined 
Payment Practices

AGENCY: Department of Defense (DoD).

ACTION: Proposed rule with request for comments.

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SUMMARY: The Director of Defense Procurement is proposing to amend the 
Defense Federal Acquisition Regulation Supplement (DFARS) to require 
use of the Governmentwide commercial purchase card as the method of 
purchase and/or method of payment for purchases valued at or below the 
micro-purchase threshold, unless an exception is authorized. Use of the 
purchase card streamlines purchasing and payment procedures and, 
therefore, increases operational efficiency.

DATES: Comments on the proposed rule should be submitted in writing to 
the address specified below on or before September 20, 1999, to be 
considered in the formation of the final rule.

ADDRESSES: Interested parties should submit written comments to: 
Defense Acquisition Regulations Council, Attn: Ms. Susan L. Schneider, 
PDUSD (A&T) DP (DAR), IMD 3D139, 3062 Defense Pentagon, Washington, DC 
20301-3062. Telefax (703) 602-0350. Please cite DFARS Case 98-D026.
    E-mail comments submitted over the Internet should be addressed to: 
dfars@acq.osd.mil.
    Please cite DFARS Case 98-D026 in all correspondence related to 
this proposed rule. E-mail correspondence should cite DFARS Case 98-
D026 in the subject line.


[[Page 38879]]


FOR FURTHER INFORMATION CONTACT: Ms. Susan L. Schneider, (703) 602-
0131. Please cite DFARS Case 98-D026.

SUPPLEMENTARY INFORMATION:

A. Background

    This rule proposes amendments to the DFARS to require use of the 
Governmentwide commercial purchase card as the method of purchase and/
or method of payment for DoD purchases valued at or below the micro-
purchase threshold of $2,500, unless an exception is authorized. The 
rule implements a policy memorandum issued by the Principal Deputy 
Under Secretary of Defense (Acquisition and Technology) on October 2, 
1998, Subject: Streamlined Payment Practices for Awards/Orders Valued 
at or below the Micro-Purchase Threshold; and a policy memorandum 
issued by the Under Secretary of Defense (Personnel and Readiness) on 
September 25, 1998, Subject: Use of Government-Wide Purchase Cards. The 
memoranda are available via the Internet at http://
purchasecard.sarda.army.mil.

B. Regulatory Flexibility Act

    The proposed rule is not expected 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 
Governmentwide commercial purchase card is similar in nature to 
commercial credit cards that are commonly used in the commercial 
marketplace. Therefore, an initial regulatory flexibility analysis has 
not been performed. Comments are invited from small businesses and 
other interested parties. Comments from small entities concerning the 
affected DFARS subparts also will be considered in accordance with 5 
U.S.C. 610. Such comments should be submitted separately and should 
cite DFARS Case 98-D026 in correspondence.

C. Paperwork Reduction Act

    The Paperwork Reduction Act does not apply because the proposed 
rule does not impose any information collection requirements that 
require the approval of the Office of Management and Budget under 44 
U.S.C. 3501, et seq.

List of Subjects in 48 CFR Parts 208, 212, 213, 214, 215, 232, and 
252

    Government procurement.
Michele P. Peterson,
Executive Director, Defense Acquisition Regulations Council.

    Therefore, 48 CFR Parts 208, 212, 213, 214, 215, 232, and 252 are 
proposed to be amended as follows:
    1. The authority citation for 48 CFR Parts 208, 212, 213, 214, 215, 
232, and 252 continues to read as follows:

    Authority: 41 U.S.C. 421 and 48 CFR chapter 1.

PART 208--REQUIRED SOURCES OF SUPPLIES AND SERVICES

    2. Section 208.405-2 is amended by revising paragraph (4) to read 
as follows:


208.405-2  Order placement.

* * * * *
    (4) If permitted under the schedule contract, use of the 
Governmentwide commercial purchase card--
    (i) Is mandatory for placement of orders valued at or below the 
micro-purchase threshold; and
    (ii) Is optional for placement of orders valued above the micro-
purchase threshold.

PART 212--ACQUISITION OF COMMERCIAL ITEMS

    3. Section 212.301 is amended by adding paragraph (f)(vi) to read 
as follows:


212.301  Solicitation provisions and contract clauses for the 
acquisition of commercial items.

    (f) * * *
    (vi) Use the clause at 252.232-7XXX, Mandatory Payment by 
Governmentwide Commercial Purchase Card, as prescribed in 232.1110.
    4. Section 212.303 is added to read as follows:


212.303  Contract format.

    Structure awards valued above the micro-purchase threshold (e.g., 
contract line items, delivery schedule, and invoice instructions) in a 
manner that will minimize the generation of invoices valued at or below 
the micro-purchase threshold.

PART 213--SIMPLIFIED ACQUISITION PROCEDURES

    5. Subpart 213.1 is added to read as follows:

Subpart 213.1--Procedures

Sec.
213.101  General.


213.101  General.

    Structure awards valued above the micro-purchase threshold (e.g., 
contract line items, delivery schedule, and invoice instructions) in a 
manner that will minimize the generation of invoices valued at or below 
the micro-purchase threshold.
    6. Subpart 213.2 is added to read as follows:

Subpart 213.2--Actions at or Below the Micro-Purchase Threshold

Sec.
213.270  Use of the Governmentwide commercial purchase card.


213.270  Use of the Governmentwide commercial purchase card.

    Use the Governmentwide commercial purchase card as the method of 
purchase and/or method of payment for purchases valued at or below the 
micro-purchase threshold. This policy applies to all types of contract 
actions authorized by the FAR unless--
    (1) The Deputy Secretary of Defense has approved an exception for 
an electronic commerce/electronic data interchange system or 
operational requirement that results in a more cost-effective payment 
process;
    (2)(i) A general or flag officer or a member of the Senior 
Executive Service (SES) makes a written determination that--
    (A) The source or sources available for the supply or service do 
not accept the purchase card; and
    (B) The contracting office is seeking a source that accepts the 
purchase card.
    (ii) To prevent mission delays, if an activity does not have a 
resident general or flag officer or SES member, delegation of this 
authority to the level of the senior local commander or director is 
permitted; or
    (3) The purchase or payment meets one or more of the following 
criteria:
    (i) The place of performance is entirely outside of any State, 
territory, or possession of the United States, the District of 
Columbia, and the Commonwealth of Puerto Rico;
    (ii) The purchase is a Standard Form 44 purchase for aviation fuel 
or oil;
    (iii) The purchase is an overseas transaction by a contracting 
officer in support of a contingency operation as defined in 10 U.S.C. 
101(a)(13) or a humanitarian or peacekeeping operation as defined in 10 
U.S.C. 2302(7);
    (iv) The purchase is a transaction in support of intelligence or 
other specialized activities addressed by Part 2.7 of Executive Order 
12333;
    (v) The purchase is for training exercises in preparation for 
overseas contingency, humanitarian, or peacekeeping operations;
    (vi) The payment is made with an accommodation check;
    (vii) The payment is for a transportation bill;
    (viii) The purchase is under a Federal Supply Schedule contract 
that does not permit use of the Governmentwide commercial purchase 
card;
    (ix) The purchase is for medical services and--

[[Page 38880]]

    (A) It involves a controlled substance or narcotic;
    (B) It requires the submission of a Health Care Summary Record to 
document the nature of the care purchased;
    (C) The ultimate price of the medical care is subject to an 
independent determination that changes the price paid based on 
application of a mandatory CHAMPUS Maximum Allowable Charge 
determination that reduces the Government liability below billed 
charges;
    (D) The Government already has entered into a contract to pay for 
the services without the use of a purchase card;
    (E) The purchaser is a beneficiary seeking medical care; or
    (F) The cardholder determines that use of the purchase card is not 
appropriate or cost-effective. The Medical Prime Vendor Program and the 
DoD Medical Electronic Catalog Program are two examples where use of 
the purchase card may not be cost-effective.

PART 214--SEALED BIDDING

    7. Section 214.201-1 is added to read as follows:


214.201-1  Uniform contract format.

    Structure awards valued above the micro-purchase threshold (e.g., 
contract line items, delivery schedule, and invoice instructions) in a 
manner that will minimize the generation of invoices valued at or below 
the micro-purchase threshold.

PART 215--CONTRACTING BY NEGOTIATION

    8. Section 215.204-1 is added to read as follows:


215.204-1  Uniform contract format.

    Structure awards valued above the micro-purchase threshold (e.g., 
contract line items, delivery schedule, and invoice instructions) in a 
manner that will minimize the generation of invoices valued at or below 
the micro-purchase threshold.

PART 232--CONTRACT FINANCING

    9. Subpart 232.11 is added to read as follows:

Subpart 232.11--Electronic Funds Transfer

Sec.
232.1108  Payment by Governmentwide commercial purchase card.
232.1110  Solicitation provisions and contract clauses.


232.1108  Payment by Governmentwide commercial purchase card.

    The Governmentwide commercial purchase card is the mandatory EFT 
payment method for purchases valued at or below the micro-purchase 
threshold, except as provided in 213.270.


232.1110  Solicitation provisions and contract clauses.

    Use the clause at 252.232-7XXX, Mandatory Payment by Governmentwide 
Commercial Purchase Card, in solicitations, contracts, and agreements 
when--
    (1) Placement of orders or calls valued at or below the micro-
purchase threshold is anticipated; and
    (2) Payment by Governmentwide commercial purchase card is required 
for orders or calls valued at or below the micro-purchase threshold 
under the contract or agreement.

PART 252--SOLICITATION PROVISIONS AND CONTRACT CLAUSES

    10. Section 252.232-7XXX is added to read as follows:


252.232-7XXX  Mandatory Payment by Governmentwide Commercial Purchase 
Card.

    As prescribed in 232.1110, use the following clause:

MANDATORY PAYMENT BY GOVERNMENTWIDE COMMERCIAL PURCHASE CARD (XXX 1999)

    The Contractor agrees to accept the Governmentwide commercial 
purchase card as the method of payment for orders or calls valued at 
or below $2,500 under this contract or agreement.

(End of clause)
[FR Doc. 99-18218 Filed 7-19-99; 8:45 am]
BILLING CODE 5000-04-M