[Federal Register: November 22, 2002 (Volume 67, Number 226)]
[Proposed Rules]
[Page 70388-70389]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr22no02-29]
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DEPARTMENT OF DEFENSE
48 CFR Part 216
[DFARS Case 2001-D013]
Defense Federal Acquisition Regulation Supplement; Provisional
Award Fee Payments
AGENCY: Department of Defense (DoD).
ACTION: Proposed rule with request for comments.
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SUMMARY: DoD is proposing to amend the Defense Federal Acquisition
Regulation Supplement (DFARS) to address the use of provisional award
fee payments under cost-plus-award-fee contracts. The rule provides for
successfully performing contractors to receive a portion of award fees
within an evaluation period, prior to an interim or final evaluation
for that period.
DATES: DoD will consider all comments received by January 21, 2003.
ADDRESSES: Respondents may submit comments directly on the World Wide
Web at http://emissary.acq.osd.mil/dar/dfars.nsf/pubcomm. As an
alternative, respondents may e-mail comments to: dfars@acq.osd.mil.
Please cite DFARS Case 2001-D013 in the subject line of e-mailed
comments.
Respondents that cannot submit comments using either of the above
methods may submit comments to: Defense Acquisition Regulations
Council, Attn: Ms. Sandra Haberlin, OUSD(AT&L)DPAP(DAR), IMD 3C132,
3062 Defense Pentagon, Washington, DC 20301-3062; facsimile (703) 602-
0350. Please cite DFARS Case 2001-D013.
At the end of the comment period, interested parties may view
public comments on the World Wide Web at http://emissary.acq.osd.mil/
dar/dfars.nsf.
FOR FURTHER INFORMATION CONTACT: Ms. Sandra Haberlin, (703) 602-0289.
SUPPLEMENTARY INFORMATION:
A. Background
Cost-reimbursement contracts containing award fees typically
provide for an award fee payment no more frequently than every 6
months. This practice may place an undue financial burden on an
otherwise successfully performing contractor. Therefore, the proposed
rule provides for the payment of provisional award fees within an
evaluation period, prior to an interim or final evaluation for that
period. The provisional payments are based on (1) successful
evaluations for prior evaluation periods, and (2) the fee determining
official's expectation that payment of provisional fee amounts will not
reduce the overall effectiveness of the award fee incentive.
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
applies only to cost-plus-award-fee contracts. Most contracts awarded
to small entities use simplified acquisition procedures or are awarded
on a competitive, fixed-price basis. Therefore, DoD has not performed
an
[[Page 70389]]
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 subpart in
accordance with 5 U.S.C. 610. Such comments should be submitted
separately and should cite DFARS Case 2001-D013.
C. Paperwork Reduction Act
The Paperwork Reduction Act does not apply because the 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 Part 216
Government procurement.
Michele P. Peterson,
Executive Editor, Defense Acquisition Regulations Council.
Therefore, DoD proposes to amend 48 CFR Part 216 as follows:
1. The authority citation for 48 CFR Part 216 continues to read as
follows:
Authority: 41 U.S.C. 421 and 48 CFR Chapter 1.
PART 216--TYPES OF CONTRACTS
2. Section 216.405-2 is amended by adding paragraph (b)(3) to read as
follows:
216.405-2 Cost-plus-award-fee contracts.
* * * * *
(b) * * *
(3) The CPAF contract may include provisional award fee payments. A
provisional award fee payment is a payment made within an evaluation
period prior to an interim or final evaluation for that period. The
contracting officer may include provisional award fee payments in a
CPAF contract on a case-by-case basis, provided those payments'
(A) Are made no more frequently than monthly;
(B) Are limited to no more than--
(1) For the initial award fee evaluation period, 50 percent of the
award fee available for that period; and
(2) For subsequent award fee evaluation periods, 80 percent of the
evaluation score for the prior evaluation period times the award fee
available for the current period, e.g., if the contractor received 90
percent of the award fee available for the prior evaluation period,
provisional payments for the current period shall not exceed 72 percent
(90 percent x 80 percent) of the award fee available for the current
period;
(C) Are superceded by an interim or final award fee evaluation for
the applicable evaluation period. If provisional payments have exceeded
the payment determined by the evaluation score for the applicable
period, the contractor shall either credit the next payment voucher for
the amount of the overpayment or refund the difference to the
Government, as directed by the contracting officer; and
(D) May be discontinued, or reduced in such amounts deemed
appropriate by the contracting officer, when the contracting officer
determines that the contractor will not achieve a level of performance
commensurate with the provisional payment. The contracting officer
shall notify the contractor in writing of any discontinuance or
reduction in provisional award fee payments.
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[FR Doc. 02-29466 Filed 11-21-02; 8:45 am]
BILLING CODE 5001-08-P