01-24390. Defense Federal Acquisition Regulation Supplement; Customary Progress Payment Rate for Large Business Concerns

AGENCY:

Department of Defense (DoD).

ACTION:

Final rule.

SUMMARY:

DoD is amending the Defense Federal Acquisition Regulation Supplement (DFARS) to increase the customary uniform progress payment rate for large business concerns from 75 percent to 80 percent. The progress payment rate change is applicable only to contract awards made on or after October 1, 2001. Contracts awarded before October 1, 2001, will not be modified to include the 80 percent rate.

EFFECTIVE DATE:

October 1, 2001.

FOR FURTHER INFORMATION CONTACT:

Ms. Sandra Haberlin, Defense Acquisition Regulations Council, OUSD (AT&L) DP (DAR), IMD 3C132, 3062 Defense Pentagon, Washington, DC 20301-3062. Telephone [phone]; facsimile [phone]. Please cite DFARS Case 2001-D012.

SUPPLEMENTARY INFORMATION:

A. Background

This final DFARS rule conforms the DoD customary uniform progress payment rate for large business concerns with the progress payment rate for large business concerns currently being used by other Executive agencies under Federal Acquisition Regulation 32.501-1(a).

This final rule is unchanged from the proposed rule that was published at 66 FR 44589 on August 24, 2001. DoD received two comments in response to the proposed rule. Both comments were in favor of the rule.

This rule was not subject to Office of Management and Budget review under Executive Order 12866, dated September 30, 1993.

B. Regulatory Flexibility Act

DoD certifies that this final 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., because the rule makes no change to the progress payment rates for small business and small disadvantaged business concerns.

C. Paperwork Reduction Act

The Paperwork Reduction Act does not apply because the 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 232 and 252

• Government procurement

Michele P. Peterson,

Executive Editor, Defense Acquisition Regulations Council.

Therefore, 48 CFR parts 232 and 252 are amended as follows:

1. The authority citation for 48 CFR parts 232 and 252 continues to read as follows:

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

PART 232—CONTRACT FINANCING

2. Section 232.501-1 is revised to read as follows:

232.501-1

Customary progress payment rates.

(a) The customary progress payment rates for DoD contracts, including contracts that contain foreign military sales (FMS) requirements, are 80 percent for large business concerns, 90 percent for small business concerns, and 95 percent for small disadvantaged business concerns.

3. Section 232.502-4-70 is amended by revising paragraph (b) to read as follows:

232.502-4-70

Additional clauses.

* * * * *

(b) Use the clause at 252.232-7004, DoD Progress Payment Rates, instead of Alternate I of the clause at FAR 52.232-16, if the contractor is a small business or small disadvantaged business concern.

PART 252—SOLICITATION PROVISIONS AND CONTRACT CLAUSES

4. Section 252.232-7004 is revised to read as follows:

252.232-7004

DoD Progress Payment Rates.

As prescribed in 232.502-4-70(b), use the following clause:

DOD Progress Payment Rates (Oct. 2001)

(a) If the contractor is a small business concern, the Progress Payments clause of this contract is modified to change each mention of the progress payment rate and liquidation rate (excepting paragraph (k), Limitations on Undefinitized Contract Actions) to 90 percent.

(b) If the contractor is a small disadvantaged business concern, the Progress Payments clause of this contract is modified to change each mention of the progress payment rate and liquidation rate (excepting paragraph (k), Limitations on Undefinitized Contract Actions) to 95 percent.

(End of clause)