[Federal Register Volume 63, Number 173 (Tuesday, September 8, 1998)]
[Proposed Rules]
[Pages 47460-47461]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 98-23976]
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DEPARTMENT OF DEFENSE
48 CFR Parts 232 and 252
[DFARS Case 98-D400]
Defense Federal Acquisition Regulation Supplement; Flexible
Progress Payments
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 remove
references to the flexible progress payments method of contract
financing. The current DFARS coverage does not permit its use for
contracts awarded as a result of solicitations issued on or after
November 11, 1993.
DATES: Comments on the proposed rule should be submitted in writing to
the address specified below on or before November 9, 1998, to be
considered in the formulation of the final rule.
ADDRESSES: Interested parties should submit written comments on the
proposed rule to: Defense Acquisition Regulations Council, Attn: Ms.
Sandra G. Haberlin, PDUSD (A&T) DP (DAR), IMD 3D139, 3062 Defense
Pentagon, Washington, DC 20301-3062. Telefax number (703) 602-0350. E-
mail comments submitted over the Internet should be addressed to:
dfars@acq.osd.mil. Please cite DFARS Case 98-D400 in all correspondence
related to this issue. E-mail correspondence should cite DFARS Case 98-
D400 in the subject line.
FOR FURTHER INFORMATION CONTACT:
Ms. Sandra G. Haberlin, (703) 602-0131.
SUPPLEMENTARY INFORMATION:
A. Background
The Director of Defense Procurement established a special
interagency team to review existing policies and procedures related to
progress payments, to make them easier to understand and to minimize
the burdens imposed on contractors and contracting officers. Regulatory
requirements pertaining to progress payments that were not required by
statute, required to ensure adequately standardized government business
practices, or required to protect the public interest were considered
for revision or elimination.
An advance notice of proposed rulemaking (ANPR) was published in
the Federal Register on May 1, 1997 (62 FR 23740). The ANPR solicited
comments from industry and government personnel on how the Federal
Acquisition Regulation (FAR) could be revised to result in a simplified
and streamlined process of applying for and administering progress
payments.
After reviewing progress payment policies and public comments
received in response to the ANPR, the team identified potential changes
to the FAR and the DFARS. One of the changes for consideration was to
eliminate DFARS coverage for flexible progress payments. A second ANPR
was published in the Federal Register on March 5, 1998 (63 FR 11074),
that solicited comments on the potential changes identified in the
notice. The ANPR also announced a public meeting, that was subsequently
held on April 23, 1998.
After considering written comments received in response to the two
notices, and verbal comments provided during the public meeting, the
working group
[[Page 47461]]
submitted a report to the Defense Acquisition Regulations Council.
This proposed rule reflects the conclusion of the working group
that references to flexible progress payments as a method of contract
financing should be removed from the DFARS. This financing method is
administratively complex and burdensome, and may be replaced with the
less cumbersome financing method of performance-based payments in some
situations. In addition, as indicated in Table 32-1 at DFARS 232.502-1-
71, flexible progress payments currently are not permitted for use for
contracts awarded as a result of solicitations issued on or after
November 11, 1993.
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 most
contracts awarded to small entities have a dollar value less than the
simplified acquisition threshold, and, therefore, do not use the
flexible progress payments method of financing. In addition, flexible
progress payments currently are not permitted for use for contracts
awarded as a result of solicitations issued on or after November 11,
1993. An initial regulatory flexibility analysis has, therefore, 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 5 U.S.C. 601, et seq. (DFARS Case 98-D400), 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 Office of Management and Budget approval 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 proposed to be 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 is revised to read as follows:
Sec. 232.501 General.
Sec. 232.501-1 [Amended]
3. Section 232.501-1 is amended by removing paragraph (a)(iii).
Sec. 232.501-2 [Amended]
4. Section 232.501-2 is amended in the second sentence by revising
the parenthetical ``(232.171)'' to read ``(see 232.071)''.
Sec. 232.502-1-71 [Removed]
5. Section 232.502-1-71 is removed.
Sec. 232.502-4-70 [Amended]
6. Section 232.502-4-70 is amended by removing paragraph (b) and
redesignating paragraph (c) as paragraph (b).
PART 252--SOLICITATION PROVISIONS AND CONTRACT CLAUSES
Sec. 252.232-7003 [Removed and Reserved]
7. Section 252.232-7003 is removed and reserved.
8. Section 252.232-7004 is amended by revising the introductory
text to read as follows:
Sec. 252.232-70004 DoD progress payment rates.
As prescribed in 232.502-4-70(b), use the following clause:
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[FR Doc. 98-23976 Filed 9-4-98; 8:45 am]
BILLING CODE 5000-04-M
