2011-10094. Defense Federal Acquisition Regulation Supplement; Accelerate Small Business Payments (DFARS Case 2011-D008)

AGENCY:

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

ACTION:

Interim rule with request for comments.

SUMMARY:

DoD is issuing an interim rule amending the Defense Federal Acquisition Regulation Supplement (DFARS) to accelerate payments to all small business concerns.

DATES:

The interim rule is effective April 27, 2011. Comments on the interim rule should be submitted in writing to the address shown below on or before June 27, 2011, to be considered in the formation of the final rule.

ADDRESSES:

Submit comments, identified by DFARS Case 2011-D008, using any of the following methods:

○ Regulations.gov: http://www.regulations.gov.

Submit comments via the Federal eRulemaking portal by inputting “DFARS Case 2011-D008” under the heading “Enter keyword or ID” and selecting “Search.” Select the link “Submit a Comment” that corresponds with “DFARS Case 2011-D008.” Follow the instructions provided at the “Submit a Comment” screen. Please include your name, company name (if any), and “DFARS Case 2011-D008” on your attached document.

○ E-mail: [e-mail]. Include DFARS Case 2011-D008 in the subject line of the message.

○ Fax: [phone].

○ Mail: Defense Acquisition Regulations System, Attn: Ms. Lee Renna, OUSD (AT&L) DPAP/DARS, Room 3B855, 3060 Defense Pentagon, Washington, DC 20301-3060.

Comments received generally will be posted without change to http://www.regulations.gov,, including any personal information provided. To confirm receipt of your comment(s), please check http://www.regulations.gov approximately two to three days after submission to verify posting (except allow 30 days for posting of comments submitted by mail). Follow the instructions for submitting comments.

FOR FURTHER INFORMATION CONTACT:

Ms. Lee Renna, 703-602-0764.

SUPPLEMENTARY INFORMATION:

I. Background

DoD is amending the DFARS to accelerate payments for all small business concerns. Currently, DoD assists small disadvantaged business concerns by paying them as quickly as possible after invoices are received and before the normal payment due dates established in the contract. This interim rule removes the term “disadvantaged” from the language at DFARS 232.903 and DFARS 232.906(a)(ii), thereby extending this payment policy uniformly to all small business concerns.

II. Executive Order 12866 and Executive Order 13563

Executive Orders 12866 and 13563 direct agencies to assess all costs and benefits of available regulatory alternatives and, if regulation is necessary, to select regulatory approaches that maximize net benefits (including potential economic, environmental, public health and safety effects, distributive impacts, and equity). Executive Order 13563 emphasizes the importance of quantifying both costs and benefits, of reducing costs, of harmonizing rules, and of promoting flexibility. This is not a significant regulatory action and, therefore, was not subject to review under Section 6(b) of Executive Order 12866, Regulatory Planning and Review, dated September 30, 1993. This rule is not a major rule under 5 U.S.C. 804.

III. Regulatory Flexibility Act

DoD expects this rule to have a significant positive economic impact on all small entities within the meaning of the Regulatory Flexibility Act, 5 U.S.C. 601, et seq., because it extends accelerated payments to all small business concerns. An initial regulatory flexibility analysis has been completed and is summarized as follows:

This interim rule revises DFARS 232.903 and 232.906(a)(ii) to allow accelerated payments to all small business concerns. This rule allows DoD to exercise greater flexibility offered by 5 CFR 1315.5 and FAR 32.903 which permit the use of accelerated payment procedures for small business concerns.

Analysis of the Federal Procurement Data System indicates that approximately 60,000 small businesses had active contracts in Fiscal Year 2010. It is reasonable to assume a similar number of small businesses will be positively affected by the use of accelerated payment procedures.

There are no information collection requirements associated with this rule. This rule does not duplicate, overlap, or conflict with any other Federal rules.

The desired outcome is best achieved by the implementation of the rule as stated herein and there are no other alternatives available to achieve the desired outcome. This rule is expected to have a positive impact on small entities.

DoD invites comments from small business concerns and other interested parties on the expected impact of this rule on small entities.

DoD will also consider comments from small entities concerning the existing regulations in subparts affected by this rule in accordance with 5 U.S.C. 610. Interested parties must submit such comments separately and should cite 5 U.S.C. 610 (DFARS Case 2011-D008) in correspondence.

IV. Paperwork Reduction Act

This final rule does not contain any information collection requirements that require the approval of the Office of Management and Budget under the Paperwork Burden Act (44 U.S.C. chapter 35).

V. Determination to Issue an Interim Rule

A determination has been made under the authority of the Secretary of Defense (DoD) that urgent and compelling circumstances exist to promulgate this interim rule without prior opportunity for public comments pursuant to 41 U.S.C. 1707 and FAR 1.501-3(b). This action is necessary to ensure DoD implements cash flow improvements for small business firms as quickly as possible. Accelerating payments is a way to boost the financial health of small businesses. At present, the authority to accelerate payments at DFARS 232.903 and 232.906 is limited to small disadvantaged business. Implementation of the interim rule will expand that authority to the entire community of DoD's small business suppliers. However, DoD will consider public comments received in response to this interim rule in the formation of the final rule.

List of Subjects in 48 CFR Part 232

• Government procurement

Mary Overstreet,

Editor, Defense Acquisition Regulations System.

Therefore, 48 CFR part 232 is amended as follows:

PART 232—CONTRACT FINANCING

1. The authority citation for 48 CFR part 232 continues to read as follows:

Authority: 41 U.S.C. 1303 and 48 CFR chapter 1.

2. Revise section 232.903 to read as follows:

232.903

Responsibilities.

DoD policy is to assist small business concerns by paying them as quickly as possible after invoices and all proper documentation, including acceptance, are received and before normal payment due dates established in the contract (see 232.906(a)).

232.906

(Amended)

3. Amend section 232.906(a)(ii) by removing the word “disadvantaged”.