[Federal Register Volume 66, Number 135 (Friday, July 13, 2001)]
[Rules and Regulations]
[Page 36711]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 01-17613]


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DEPARTMENT OF DEFENSE

Department of the Army

32 CFR Part 668


Report On Use of Employees of Non-Federal Entities To Provide 
Services to Department of the Army

AGENCY: Office of the Assistant Secretary of the Army (Manpower and 
Reserve Affairs), and Office of the Assistant Secretary of the Army 
(Acquisition, Logistics and Technology), Department of Army, DOD.

ACTION: Final rule.

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SUMMARY: This action removes the Department of the Army regulations on 
Contractor Manhour Reporting Requirement. The Director of Defense 
Procurement directed the Department of the Army to withdraw the 
regulations pending approval of, and further rulemaking on, the 
repetitive use provisions employed in covered Army contracts. In 
addition, the Office of Management and Budget concluded that the final 
rule made significant changes to the interim rule in apparent conflict 
with the Paperwork Reduction Act.

DATES: Effective July 13, 2001.

FOR FURTHER INFORMATION CONTACT: Mr. John R. Conklin, at john. 
conklin@saalt.army.mil, or Dr. John C. Anderson at 703-614-8247 or 
John.Anderson@hqda.army.mil.

SUPPLEMENTARY INFORMATION: 1. Applicability: No new contract actions 
containing the requirements cited in 32 CFR Part 668 may be awarded 
after the effective date of this rule. Contracting officers shall 
timely notify, in writing, all contractors whose existing contracts 
contain 32 CFR Part 668 requirements, that the requirement has been 
eliminated and that no further reporting is required under those 
contract actions. Any actual modification of such contracts to formally 
eliminate the requirement must take into account such issues as 
consideration and best interest of the Government on a case-by-case 
basis.
    2. Background: The Department of the Army, in the Federal Register 
(65 FR 13906) dated Wednesday, March 15, 2000, announced an interim 
rule to establish and implement basic contractor-reporting requirements 
to identify the number and value of direct, and associated indirect, 
labor work year equivalents for contracted services in support of the 
Army. This requirement was Army's implementation of statutory mandates 
and FY 2000 Congressional data requirements (10 U.S.C. 129a, 10 U.S.C. 
2461(g) and Section 343 of the FY 2000 DoD Authorization Act).
    Army contracting officers were directed to include the reporting 
requirements in all covered contracts involving services for Research 
and Development or Other Services and Construction. The interim rule 
was effective on the date of publication. A final rule, published at 65 
FR 81357-81362, December 26, 2000, codified regulations at 32 CFR Part 
668 that mandated the inclusion of a reporting requirement in certain 
contract actions as described in the rule.
    As a result of a number of legal and technical/procedural issues 
and significant complaints from industry about the scope and 
methodology of the Army final rule and the rulemaking process, the 
Director of Defense Procurement (DDP) in memorandums dated May 5, and 
June 5, 2001, directed the Army to cease using the standard contract 
requirements language (``repetitive use clause'') in covered contracts 
absent approval by the DDP and rulemaking in 40 CFR (covering 
acquisition regulations supplementing and implementing the Federal 
Acquisition Regulations System). The Office of Management and Budget 
concluded that the final rule made significant changes to the interim 
rule without changing the Paperwork Reduction Act estimates and 
assumptions, and without allowing for additional public comment 
thereon, in apparent conflict with the requirements of the Paperwork 
Reduction Act.
    Based on the foregoing, the Army hereby removes the resulting 
regulations from the Code of Federal Regulations (32 CFR Part 668).
    General: The Army's requirement for information on unit level 
contractor manpower equivalents, as stated in the December 26, 2000, 
final rule, remains. The Army needs this information for a host of 
reasons, including planning, programming and budgeting, and 
priortization and allocation of resources. From March 2000 to the 
present, the Army collected over $9.2 billion in contract data from 
approximately 1,200 contractors. Although this data has yet to be 
validated and analyzed in depth, initial indications are that the 
numbers of contract manpower equivalents reported by contractors were 
lower (for the associated values) than those estimated employing 
algorithms currently used by the Department of the Army and the 
Department of Defense for reporting to Congress.

List of Subjects in 32 CFR Part 668

    Government contracting, Reporting and recordkeeping requirements.

PART 668--[REMOVED AND RESERVED]

    Accordingly, for the reasons set out in the preamble, 32 CFR 
Chapter V, Subchapter L, Part 668, Contractor Manhour Reporting 
Requirement, is removed in its entirety.

Luz D. Ortiz,
Army Federal Register Liaison Officer.
[FR Doc. 01-17613 Filed 7-12-01; 8:45 am]
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