[Federal Register Volume 81, Number 126 (Thursday, June 30, 2016)]
[Proposed Rules]
[Pages 42607-42608]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2016-15246]
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DEPARTMENT OF DEFENSE
Defense Acquisition Regulations System
48 CFR Part 232
[Docket DARS-2016-0009]
RIN 0750-AI90
Defense Federal Acquisition Regulation Supplement: Contract
Financing (DFARS Case 2015-D026)
AGENCY: Defense Acquisition Regulations System, Department of Defense
(DoD).
ACTION: Proposed rule.
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SUMMARY: DoD is proposing to amend the Defense Federal Acquisition
Regulation Supplement (DFARS) regarding the use of customary contact
financing, other than loan guarantees and advance payments, on certain
fixed-price contracts.
DATES: Comments on the proposed rule should be submitted in writing to
the address shown below on or before August 29, 2016, to be considered
in the formation of a final rule.
ADDRESSES: Submit comments identified by DFARS Case 2015-D026, using
any of the following methods:
[cir] Regulations.gov: http://www.regulations.gov. Submit comments
via the Federal eRulemaking portal by entering ``DFARS Case 2015-D026''
under the heading ``Enter keyword or ID'' and selecting ``Search.''
Select the link ``Submit a Comment'' that corresponds with ``DFARS Case
2015-D026.'' Follow the instructions provided at the ``Submit a
Comment'' screen. Please include your name, company name (if any), and
``DFARS Case 2015-D026'' on your attached document.
[cir] Email: [email protected]. Include DFARS Case 2015-D026 in
the subject line of the message.
[cir] Fax: 571-372-6094.
[cir] Mail: Defense Acquisition Regulations System, Attn: Mr. Mark
Gomersall, OUSD (AT&L) DPAP/DARS, Room 3B941, 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 www.regulations.gov,
approximately two to three days after submission to verify posting
(except allow 30 days for posting of comments submitted by mail).
FOR FURTHER INFORMATION CONTACT: Mr. Mark Gomersall, telephone 571-372-
6099.
SUPPLEMENTARY INFORMATION:
I. Background
DoD is proposing to revise the DFARS regarding the use of customary
contract financing, other than loan guarantees and advance payments
identified in FAR part 32, on fixed-price contracts with a period of
performance in excess of one year that meet the dollar thresholds
established in FAR 32.104(d). DoD has determined that the use of such
customary contract financing provides improved cash flow as an
incentive for commercial companies to do business with DoD, is in DoD's
best interest, and requires no further justification of its use.
[[Page 42608]]
II. Discussion and Analysis
The proposed rule amends DFARS 232.104 to state that DoD has made
the determination that the use of customary contract financing (see FAR
32.113), other than loan guarantees and advance payments, is in DoD's
best interest, and further justification of its use is unnecessary on
fixed-price contracts that meet the dollar thresholds established in
FAR 32.104(d), with a period of performance in excess of a year, and in
solicitations expected to result in such contracts.
III. Executive Orders 12866 and 13563
Executive Orders (E.O.s) 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). E.O.
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 E.O. 12866, Regulatory Planning
and Review, dated September 30, 1993. This rule is not a major rule
under 5 U.S.C. 804.
IV. 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. However, an initial
regulatory flexibility analysis has been performed and is summarized as
follows:
DoD is proposing to amend the Defense Federal Acquisition
Regulation Supplement (DFARS) to state that DoD has made the
determination that the use of customary contract financing (see Federal
Acquisition Regulation (FAR) 32.113), other than loan guarantees and
advance payments, is in DoD's best interest, and further justification
of its use is unnecessary on fixed-price contracts that meet the dollar
thresholds established in FAR 32.104(d), with a period of performance
in excess of a year, and in solicitations expected to result in such
contracts.
The objective of the proposed rule is to clarify that the use of
certain customary contract financing does not require further
justification, as it has been determined to be in DoD's best interest,
and the use of the specified contract financing is an incentive for
commercial companies to do business with DoD.
This rule will apply to DoD contractors, including small entities,
where a fixed-price contract with a period of performance in excess of
one year and meeting the thresholds in FAR 32.104(d) is contemplated.
There is no change to reporting or recordkeeping as a result of
this rule. This rule changes processes that are internal to the
Government and does not have any impact on small entities for reporting
or recordkeeping.
The rule does not duplicate, overlap, or conflict with any other
Federal rules. There are no known significant alternative approaches to
the rule that would meet the requirements.
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 2015-D026), in
correspondence.
V. Paperwork Reduction Act
The rule does not contain any information collection requirements
that require the approval of the Office of Management and Budget under
the Paperwork Reduction Act (44 U.S.C. chapter 35).
List of Subjects in 48 CFR Part 232
Government procurement.
Jennifer L. Hawes,
Editor, Defense Acquisition Regulations System.
Therefore, 48 CFR part 232 is proposed to be amended as follows:
PART 232--CONTRACT FINANCING
0
1. The authority citation for part 232 continues to read as follows:
Authority: 41 U.S.C. 1303 and 48 CFR chapter 1.
0
2. Add section 232.104 to subpart 232.1 to read as follows:
232.104 Providing contract financing.
For fixed-price contracts with a period of performance in excess of
a year that meet the dollar thresholds established in FAR 32.104(d),
and for solicitations expected to result in such contracts, in lieu of
the requirement at FAR 32.104(d)(1)(ii) for the contractor to
demonstrate actual financial need or the unavailability of private
financing, DoD has determined that--
(1) The use of customary contract financing (see FAR 32.113), other
than loan guarantees and advance payments, is in DoD's best interest;
and
(2) Further justification of its use in individual acquisitions is
unnecessary.
[FR Doc. 2016-15246 Filed 6-29-16; 8:45 am]
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