[Federal Register Volume 68, Number 162 (Thursday, August 21, 2003)]
[Rules and Regulations]
[Pages 50474-50475]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 03-21309]


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DEPARTMENT OF DEFENSE

48 CFR Part 217

[DFARS Case 2002-D041]


Defense Federal Acquisition Regulation Supplement; Multiyear 
Contracting Authority Revisions

AGENCY: Department of Defense (DoD).

ACTION: Interim rule with request for comments.

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SUMMARY: DoD has issued an interim rule amending the Defense Federal 
Acquisition Regulation Supplement (DFARS) to implement Section 820 of 
the National Defense Authorization Act for Fiscal Year 2003. Section 
820 restricts the use of multiyear contracts for supplies to only those 
for complete and usable end items, and restricts the use of advance 
procurement to only those long-lead items necessary in order to meet a 
planned delivery schedule for complete major end items.

DATES: Effective date: August 21, 2003.
    Comment date: Comments on the interim rule should be submitted to 
the address shown below on or before October 20, 2003, to be considered 
in the formation of the final rule.

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: [email protected]. Please 
cite DFARS Case 2002-D041 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

[[Page 50475]]

Council, Attn: Ms. Teresa Brooks, OUSD(AT&L)DPAP(DAR), IMD 3C132, 3062 
Defense Pentagon, Washington, DC 20301-3062; facsimile (703) 602-0350. 
Please cite DFARS Case 2002-D041.
    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. Teresa Brooks, (703) 602-0326.

SUPPLEMENTARY INFORMATION:

A. Background

    This interim rule amends DFARS Subpart 217.1 to implement Section 
820 of the National Defense Authorization Act for Fiscal Year 2003 
(Public Law 107-314). Section 820 amends the multiyear contracting 
authority at 10 U.S.C. 2306b(i) to specify that DoD may obligate funds 
for procurement of an end item under a multiyear contract only if the 
item is a complete and usable end item; and that DoD may obligate funds 
for advance procurement of property only for those long-lead items 
necessary to meet a planned delivery schedule for complete major end 
items that are programmed under the contract to be acquired with funds 
appropriated for a subsequent fiscal year (including an economic order 
quantity of such long-lead items when authorized by law).
    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 
primarily pertains to DoD planning and budget considerations with 
regard to multiyear contracts. Therefore, DoD has not performed an 
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 2002-D041.

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.

D. Determination to Issue an Interim Rule

    A determination has been made under the authority of the Secretary 
of Defense that urgent and compelling reasons exist to publish an 
interim rule prior to affording the public an opportunity to comment. 
This interim rule implements Section 820 of the National Defense 
Authorization Act for Fiscal Year 2003 (Public Law 107-314), which 
restricts the use of multiyear contracts for supplies to only those for 
complete and usable end items, and restricts the use of advance 
procurement to only those long-lead items necessary in order to meet a 
planned delivery schedule for complete major end items. Section 820 
became effective upon enactment on December 2, 2002. Comments received 
in response to this interim rule will be considered in the formation of 
the final rule.

List of Subjects in 48 CFR Part 217

    Government procurement.

Michele P. Peterson,
Executive Editor, Defense Acquisition Regulations Council.

0
Therefore, 48 CFR Part 217 is amended as follows:
0
1. The authority citation for 48 CFR Part 217 continues to read as 
follows:

    Authority: 41 U.S.C. 421 and 48 CFR Chapter 1.

PART 217--MULTIYEAR CONTRACTING

0
2. Section 217.172 is amended as follows:
0
a. By revising paragraph (a);
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b. In paragraph (b) by adding, before the period, the parenthetical 
``(10 U.S.C. 2306b(a)(6))''; and
0
c. In paragraph (d)(1), in the parenthetical, by removing ``10 U.S.C. 
2306b(l)(1)'' and adding in its place ``10 U.S.C. 
2306b(l)(1)(B)(i)(II)''. The revised text reads as follows:


217.172  Multiyear contracts for supplies.

    (a) This section applies to all multiyear contracts for supplies, 
including weapon systems and other multiyear acquisitions specifically 
authorized by law. For additional policies that apply only to multiyear 
contracts for weapon systems and other multiyear acquisitions 
specifically authorized by law, see 217.173.
* * * * *

0
3. Section 217.173 is amended as follows:
0
a. By revising the heading and paragraph (b) introductory text;
0
b. By redesignating paragraph (b)(5) as paragraph (b)(7); and
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c. By adding new paragraphs (b)(5) and (b)(6). The revised and added 
text reads as follows:


217.173  Multiyear contracts for weapon systems and other multiyear 
acquisitions specifically authorized by law.

* * * * *
    (b) The head of the agency must ensure that the following 
conditions are satisfied before awarding a multiyear contract under the 
authority described in paragraph (a) of this section or for other 
multiyear acquisitions specifically authorized by law:
* * * * *
    (5) The contract is for the procurement of a complete and usable 
end item (10 U.S.C. 2306b(i)(4)(A)).
    (6) Funds appropriated for any fiscal year for advance procurement 
are obligated only for the procurement of those long-lead items that 
are necessary in order to meet a planned delivery schedule for complete 
major end items that are programmed under the contract to be acquired 
with funds appropriated for a subsequent fiscal year (including an 
economic order quantity of such long-lead items when authorized by law 
(10 U.S.C. 2306b(i)(4)(B)).
* * * * *

0
4. Section 217.174 is amended by revising paragraphs (a)(1) and (a)(2) 
and by adding paragraph (c) to read as follows:


217.174  Multiyear contracts that employ economic order quantity 
procurement.

    (a) * * *
    (1) A multiyear contract providing for economic order quantity 
procurement in excess of $20 million in any one year (10 U.S.C. 
2306b(l)(1)(B)(i)(I)); or
    (2) A contract for advance procurement leading to a multiyear 
contract that employs economic order quantity procurement in excess of 
$20 million in any one year (10 U.S.C. 2306b(l)(1)(B)(ii); Section 
8008(a) of Public Law 105-56 and similar sections in subsequent DoD 
appropriations acts).
* * * * *
    (c) See 217.173(b)(6) for additional provisions regarding 
procurement of economic order quantities of long-lead items.

[FR Doc. 03-21309 Filed 8-20-03; 8:45 am]
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