06-2644. Defense Federal Acquisition Regulation Supplement; Approval of Service Contracts and Task and Delivery Orders

AGENCY:

Defense Acquisition Regulations System, Department of Defense (DoD).

ACTION:

Final rule.

SUMMARY:

DoD has adopted as final, with changes, an interim rule amending the Defense Federal Acquisition Regulation Supplement (DFARS) to implement Section 801(b) of the National Defense Authorization Act for Fiscal Year 2002 and Section 854 of the National Defense Authorization Act for Fiscal Year 2005. Section 801(b) requires DoD to establish and implement a management structure for the procurement of services. Section 854 requires DoD agencies to comply with certain review and approval requirements before using a non-DoD contract to procure supplies or services in amounts exceeding the simplified acquisition threshold.

DATES:

Effective March 21, 2006.

FOR FURTHER INFORMATION CONTACT:

Ms. Robin Schulze, Defense Acquisition Regulations System, OUSD (AT&L) DPAP (DARS), IMD 3C132, 3062 Defense Pentagon, Washington, DC 20301-3062. Telephone [phone]; facsimile [phone]. Please cite DFARS Case 2002-D024.

SUPPLEMENTARY INFORMATION:

A. Background

DoD published an interim rule at 68 FR 56563 on October 1, 2003, to implement Section 801(b) of the National Defense Authorization Act for Fiscal Year 2002 (Pub. L. 107-107). The rule established requirements for DoD to obtain certain approvals before acquiring services through use of a DoD contract or task order that is not performance based, or through any contract or task order that is awarded by an agency other than DoD.

Section 854 of the National Defense Authorization Act for Fiscal Year 2005 (Pub. L. 108-375) placed additional restrictions on the use of contracts awarded by an agency other than DoD in amounts exceeding the simplified acquisition threshold. DoD published a second interim rule at 70 FR 29640 on May 24, 2005, containing changes resulting from public comments received on the interim rule published on October 1, 2003; changes implementing Section 854 of Public Law 108-375; and changes implementing the requirements of a DoD policy memorandum dated October 29, 2004, on the proper use of non-DoD contracts for the acquisition of supplies and services.

One industry association submitted comments on the interim rule published on May 24, 2005. The association supported the rule, but provided additional comments containing suggestions for improvement. A discussion of the comments is provided below.

1. Comment: DoD should extend the requirements of the rule to task and delivery orders placed by DoD under another defense agency's contract.

DoD Response: The rule is intended to resolve specific systemic problems regarding the use of non-DoD contracts, i.e., orders placed under non-DoD contracts were not consistent with DoD-unique statutory and regulatory requirements. DoD is not aware of any similar problems for direct or assisted buys under DoD contracts. DoD believes that the existing controls and procedures are adequate to ensure that orders placed by DoD under DoD contracts are consistent with DoD-unique statutory and regulatory requirements.

2. Comment: The rule would be stronger if the requirement at DFARS 207.105(b)(4), to document in the acquisition plan the method to be used to ensure that orders under non-DoD contracts are consistent with DoD-unique statutory and regulatory requirements, also said “including the review and approval requirements of Subpart 217.78.”

DoD Response: DFARS Subpart 217.78 requires agencies to establish and maintain procedures for reviewing and approving orders under non-DoD contracts. It does not contain the specific review and approval requirements, which vary by department and agency. This DFARS rule requires contracting officers to address the method of ensuring that statutory and regulatory requirements will be met, which should be consistent with the agency procedures established in accordance with Subpart 217.78.

3. Comment: DoD should promptly create accompanying Procedures, Guidance, and Information (PGI) coverage, particularly for the data collection elements required by DFARS 217.7802(e).

DoD Response: DoD has established corresponding PGI coverage at http://www.acq.osd.mil/​dpap/​dars/​pgi/​index.htm (PGI 217.7802(e)) to address requirements for reporting of data on the use of assisted acquisition. In addition, DoD has amended the DFARS rule at 208.404(a)(i), 216.505(1), 217.7802(e), and 237.170-2(b) to add references to these reporting requirements.

4. Comment: The supplementary information accompanying the final rule should address the memorandum issued by the Director of Defense Procurement and Acquisition Policy on June 17, 2005, entitled “Proper Use of Non-DoD Contracts,” and the supplemental memoranda issued by the military departments and defense agencies.

DoD Response: The new PGI coverage contains a link to the Defense Procurement and Acquisition Policy Web site on Proper Use of Non-DoD Contract Vehicles at http://www.acq.osd.mil/​dpap/​specificpolicy/​index.htm. This Web site contains links to the referenced memoranda and other relevant information.

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 contains internal DoD approval requirements, intended to ensure that acquisitions of supplies and services are accomplished in accordance with existing statutes and regulations.

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 207, 208, 216, 217, and 237

• Government procurement

Michele P. Peterson,

Editor, Defense Acquisition Regulations System.

Accordingly, the interim rule amending 48 CFR part 237, which was published at 68 FR 56563 on October 1, 2003, and the interim rule amending 48 CFR parts 207, 208, 216, 217, and 237, which was published at 70 FR 29640 on May 24, 2005, are adopted as a final rule with the following changes:

1. The authority citation for 48 CFR parts 207, 208, 216, 217, and 237 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 208.404 is amended by revising the section heading and paragraph (a)(i) to read as follows:

208.404

Use of Federal Supply Schedules.

(a)(i) Departments and agencies shall comply with the review, approval, and reporting requirements established in accordance with subpart 217.78 when placing orders for supplies or services in amounts exceeding the simplified acquisition threshold.

* * * * *

PART 216—TYPES OF CONTRACTS

3. Section 216.505 is amended by revising paragraph (1) to read as follows:

216.505

Ordering.

(1) Departments and agencies shall comply with the review, approval, and reporting requirements established in accordance with Subpart 217.78 when placing orders under non-DoD contracts in amounts exceeding the simplified acquisition threshold.

* * * * *

PART 217—SPECIAL CONTRACTING METHODS

4. Section 217.7802 is amended by revising paragraph (e) to read as follows:

217.7802

Policy.

* * * * *

(e) Collecting and reporting data on the use of assisted acquisition for analysis. Follow the reporting requirements at PGI 217.7802.

PART 237—SERVICE CONTRACTING

5. Section 237.170-2 is amended by revising paragraph (b) to read as follows:

237.170-2

Approval requirements.

* * * * *

(b) Acquisition of services through use of a contract or task order issued by a non-DoD agency. Comply with the review, approval, and reporting requirements established in accordance with Subpart 217.78 when acquiring services through use of a contract or task order issued by a non-DoD agency.