E6-3992. Defense Federal Acquisition Regulation Supplement; Electronic Submission and Processing of Payment Requests (DFARS Case 2005-D009)

AGENCY:

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

ACTION:

Proposed rule with request for comments.

SUMMARY:

DoD is proposing to amend the Defense Federal Acquisition Regulation Supplement (DFARS) to update policy regarding requirements for DoD contractors to submit payment requests in electronic form. The proposed rule clarifies the situations under which DoD will grant exceptions to requirements for electronic submission of payment requests.

DATES:

Comments on the proposed rule should be submitted in writing to the address shown below on or before May 22, 2006 to be considered in the formation of the final rule.

ADDRESSES:

You may submit comments, identified by DFARS Case 2005-D009, using any of the following methods:

• Federal eRulemaking Portal: http://www.regulations.gov. Follow the instructions for submitting comments.
• E-mail: [e-mail]. Include DFARS Case 2005-D009 in the subject line of the message.
• Fax: [phone].
• Mail: Defense Acquisition Regulations System, Attn: Mr. Bill Sain, OUSD (AT&L) DPAP (DARS), IMD 3C132, 3062 Defense Pentagon, Washington, DC 20301-3062.
• Hand Delivery/Courier: Defense Acquisition Regulations System, Crystal Square 4, Suite 200A, 241 18th Street, Arlington, VA 22202-3402.

Comments received generally will be posted without change to http://www.regulations.gov, including any personal information provided.

FOR FURTHER INFORMATION CONTACT:

Mr. Bill Sain, [phone].

SUPPLEMENTARY INFORMATION:

A. Background

DFARS subpart 232.70 and the corresponding contract clause at DFARS 252.232-7003 contain requirements for electronic submission and processing of contract payment requests, in accordance with 10 U.S.C. 2227. The DFARS provides for certain exceptions to these requirements, to include one that applies if a contractor is unable to submit, or DoD is unable to receive, a payment request in electronic form. When this exception applies, the contractor must submit the payment request using a method mutually agreed to by the contractor, the contracting officer, the contract administration office, and the payment office. This DFARS text has caused differing interpretations as to what constitutes a contractor's inability to submit an electronic payment request, and whether the contracting officer, the contract administration office, and the payment office all must agree that the contractor is unable to submit an electronic payment request or if this decision is the sole authority of the contracting officer. Furthermore, the DFARS presently does not contain a requirement for the contract to specify the alternative method to be used when non-electronic submission is authorized.

To clarify requirements for submission of payment requests, DoD is proposing the following DFARS changes:

• Amendment of 232.7002(a) to replace the language that has caused confusion with an exception that applies when the administrative contracting officer determines, in writing, that electronic submission would be unduly burdensome to the contractor. The proposed language is consistent with the provisions of 10 U.S.C. 2227.
• Addition of a new paragraph at 232.7002(c) to require the contracting officer to specify, in Section G of the contract, the payment request method to be used when electronic submission is not required.
• Amendment of the clause at 252.232-7003 for consistency with the changes to 232.7002, and to add a reference to a DoD website that will contain a listing of the DoD activities and payment systems that are unable to receive payment requests in electronic form.

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 does not expect this rule 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 rule is designed to avoid any such impact by permitting alternative means of requesting payment when submission of electronic payment requests would be unduly burdensome to a contractor. Therefore, DoD has not performed an initial regulatory flexibility analysis. DoD invites comments from small businesses and other interested parties. DoD also will consider comments from small entities concerning the affected DFARS subparts in accordance with 5 U.S.C. 610. Such comments should be submitted separately and should cite DFARS Case 2005-D009.

C. Paperwork Reduction Act

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 232 and 252

• Government procurement

Michele P. Peterson

Editor, Defense Acquisition Regulations System.

Therefore, DoD proposes to amend 48 CFR parts 232 and 252 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 232.7002 is revised to read as follows:

232.7002

Policy.

(a) Contractors shall submit payment requests in electronic form, except for—

(1) Purchases paid for with a Governmentwide commercial purchase card;

(2) Awards made to foreign vendors for work performed outside the United States;

(3) Classified contracts or purchases when electronic submission and processing of payment requests could compromise the safeguarding of classified information or national security;

(4) Contracts awarded by deployed contracting officers in the course of military operations, including, but not limited to, contingency operations as defined in 10 U.S.C. 101(a)(13) or humanitarian or peacekeeping operations as defined in 10 U.S.C. 2302(8) or contracts awarded by contracting officers in the conduct of emergency operations, such as responses to natural disasters or national or civil emergencies;

(5) Purchases to support unusual or compelling needs of the type described in FAR 6.302-2;

(6) Cases in which DoD is unable to receive payment requests in electronic form; or

(7) Cases in which the administrative contracting officer has determined, in writing, that electronic submission would be unduly burdensome to the contractor.

(b) DoD officials receiving payment requests in electronic form shall process the payment requests in electronic form. Any supporting documentation necessary for payment, such as receiving reports, contracts, contract modifications, and required certifications, also shall be processed in electronic form. Scanned documents are acceptable forms for processing supporting documentation.

(c) When payment requests will not be submitted in electronic form, Section G of the contract shall specify the alternative payment request method or methods to be used (e.g., facsimile, conventional mail).

3. Section 232.7004 is revised to read as follows:

§ 232.7004

Contract clause.

Except as provided in 232.7002(a)(1) through (6), use the clause at 252.232-7003, Electronic Submission of Payment Requests, in solicitations and contracts.

PART 252—SOLICITATION PROVISIONS AND CONTRACT CLAUSES

4. Section 252.232-7003 is amended as follows:

a. By revising the clause date and paragraph (c);

b. By redesignating paragraph (d) as paragraph (e); and

c. By adding a new paragraph (d) to read as follows:

252.232-7003

Electronic Submission of Payment Requests.

* * * * *

Electronic Submission of Payment Requests (XXX 2006)

* * * * *

(c) The Contractor may submit a payment request in non-electronic form only when—

(1) The Administrative Contracting Officer has determined, in writing, that electronic submission would be unduly burdensome to the Contractor. In such cases, the Contractor shall include a copy of the Administrative Contracting Officer's determination with each request for payment; or

(2) DoD is unable to receive a payment request in electronic form. A listing of the DoD activities and payment systems that are unable to receive payment requests in electronic form is available at http://www.dod.mil/​dfas/​ecedi/​.

(d) The Contractor shall submit any non-electronic payment requests using the method or methods specified in Section G of the contract.

* * * * *