[Federal Register: December 15, 2004 (Volume 69, Number 240)]
[Rules and Regulations]
[Page 74992-74994]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr15de04-16]
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DEPARTMENT OF DEFENSE
48 CFR Part 217
[DFARS Case 2003-D097/2004-D023]
Defense Federal Acquisition Regulation Supplement; Contract
Period for Task and Delivery Order Contracts
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 843 of
the National Defense Authorization Act for Fiscal Year 2004 and Section
813 of the National Defense Authorization Act for Fiscal Year 2005.
Section 843 placed a 5-year limit on the period of task or delivery
order contracts awarded under 10 U.S.C. 2304a. Section 813 further
amended 10 U.S.C. 2304a to permit a total period of up to 10 years,
which may be exceeded if the head of the agency determines in writing
that exceptional circumstances require a longer contract period. The
DFARS rule clarifies that the 10-year limit applies to the ordering
period, establishes a limit on the length of orders, and includes other
key information regarding applicability.
DATES: Effective date: December 15, 2004.
Comment date: Comments on the interim rule should be submitted to
the address shown below on or before February 14, 2005, to be
considered in the formation of the final rule.
ADDRESSES: You may submit comments, identified by DFARS Case 2003-D097,
using any of the following methods:
Federal eRulemaking Portal: http://www.regulations.gov.
Follow the instructions for submitting comments.
Defense Acquisition Regulations Web Site: http://emissary.acq.osd.mil/dar/dfars.nsf/pubcomm.
Follow the instructions for
submitting comments.
E-mail: dfars@osd.mil. Include DFARS Case 2003-D097 in the
subject line of the message.
[[Page 74993]]
Fax: (703) 602-0350.
Mail: Defense Acquisition Regulations Council, Attn: Ms.
Robin Schulze, OUSD(AT&L)DPAP(DAR), IMD 3C132, 3062 Defense Pentagon,
Washington, DC 20301-3062.
Hand Delivery/Courier: Defense Acquisition Regulations
Council, Crystal Square 4, Suite 200A, 241 18th Street, Arlington, VA
22202-3402.
All comments received will be posted to http://emissary.acq.osd.mil/dar/dfars.nsf
.
FOR FURTHER INFORMATION CONTACT: Robin Schulze, (703) 602-0326.
SUPPLEMENTARY INFORMATION:
A. Background
This interim rule implements Section 843 of the National Defense
Authorization Act for Fiscal Year 2004 (Pub. L. 108-136) and Section
813 of the National Defense Authorization Act for Fiscal Year 2005
(Pub. L. 108-375). Section 843 amended the general authority for task
and delivery order contracts at 10 U.S.C. 2304a to specify that a task
or delivery order contract entered into under that section may cover a
total period of not more than 5 years. Section 813 further amended 10
U.S.C. 2304a to permit a total ordering period of not more than 10
years, unless the head of the agency determines in writing that
exceptional circumstances necessitate a longer ordering period.
DoD published an interim rule implementing Section 843 of Public
Law 108-136 at 69 FR 13478 on March 23, 2004. Twenty-three respondents
submitted comments on the interim rule. A discussion of the comments is
provided below. This second interim rule implements Section 813 of
Public Law 108-375 and incorporates changes made as a result of public
comments received on the interim rule published on March 23, 2004.
Differences between the first and second interim rules are addressed in
the discussion of comments 1, 2, 3, and 7 below.
1. Comment: Ordering period vice period of performance. Twelve
respondents expressed concern that the rule did not specify whether the
5-year limit applies to the ordering period or the period of
performance. Respondents pointed out that if performance is limited to
5 years, the end result is that this type of contract may only be able
to have a base year and 2 or 3 option years to ensure that all work is
completed by the end of the fifth year.
DoD Response: The second interim rule incorporates the 10-year
limit allowed by Section 813 and clarifies that the limit applies to
the ordering period. In making this clarification, DoD determined that
it was important to establish a reasonable limit on the period of
performance for task or delivery orders issued during the ordering
period and established such a limit in the rule at 217.204(e)(iii).
2. Comment: Six-month extension for services. Two respondents
raised concerns as to whether the 5-year limit imposed by Section 843
was inclusive of any 6-month extension permitted by the clause at FAR
52.217-8, Option to Extend Services. Another respondent identified the
exception at FAR 16.505(c)(2)(ii) for contracted advisory and
assistance services that permits such contracts to exceed 5 years by 6
months in certain circumstances. This respondent suggested that the
DFARS rule supplement FAR 16.505(c)(2) to clarify whether contracts for
advisory and assistance services can be longer than 5 years.
DoD Response: For contracts issued pursuant to 10 U.S.C. 2304a, the
ordering period is restricted to a maximum of 10 years unless the head
of the agency determines in writing that exceptional circumstances
require a longer ordering period. However, the performance period of an
order may extend no more than 1 year beyond the 10-year limit or
extended limit unless approved by the senior procurement executive. The
authority at FAR 16.505(c)(2)(ii), for advisory and assistance
services, derives from 10 U.S.C. 2304b and is unaffected by Section 843
or 813, which limit only task or delivery order contracts awarded
pursuant to 10 U.S.C. 2304a. The second interim rule clarifies that
contracts for advisory and assistance services are governed by the
requirements of 10 U.S.C. 2304b and FAR 16.505(c).
3. Comment: Exception for Information Technology. One respondent
suggested that the 5-year limit imposed by Section 843 should not apply
to information technology contracts and that the rule should be
clarified to identify this exception. The respondent identified the
Clinger-Cohen Act (Pub. L. 104-106) as the authority for the exception
for information technology.
DoD Response: The Clinger-Cohen Act does not provide an exception
for information technology. The limits in Sections 843 and 813 apply to
all task and delivery order contracts awarded under 10 U.S.C. 2304a,
including those for information technology. The second interim rule
clarifies this point at 217.204(e)(ii).
4. Comment: Applicability to contracts awarded before the interim
rule. One respondent requested that the rule address the applicability
of Section 843 to contracts awarded after the enactment of Section 843,
but before the issuance of the interim rule. Another respondent assumed
that the 5-year limit precluded agencies from placing orders under
contracts awarded prior to the enactment of Section 843. Another
respondent expressed concern that some of the military departments
unilaterally implemented the 5-year limit for existing indefinite-
delivery indefinite-quantity contracts or chose to implement the limit
for new solicitations issued prior to the effective date of the rule.
Two respondents recommended that the background information for the
rule state that the 5-year limit is applicable only to contracts that
result from solicitations issued on or after March 23, 2004.
DoD Response: Generally, statutes take effect on the date of
enactment unless they expressly state a different effective date (e.g.,
``upon implementation in regulations, or 180 days, whichever comes
first''). Consistent with FAR 1.108(d), as a matter of policy, the
DFARS implementation of the Section 843 limitation was effective for
solicitations issued on or after March 23, 2004, the date of
publication of the first interim rule. The DFARS implementation of the
Section 813 limitation is effective on the date of publication of this
second interim rule. In accordance with FAR 1.108(d)(2), contracting
officers may amend solicitations issued before the effective date of
this second interim rule to incorporate the longer ordering period.
5. Comment: Applicability to existing contracts. One respondent
raised questions about the applicability of the 5-year limit to new
solicitations issued for new delivery orders to be awarded against
existing contracts. Specifically, whether the 5-year limit (1) would
apply to the entire contract, including previously awarded delivery
orders; (2) would apply to merely the single delivery order and any
additional delivery orders solicited after the interim rule; or (3)
would not apply. Another respondent questioned whether an existing
contract that has a 7-year ordering period but has reached a quantity
or dollar ceiling in 5 years could be modified, with a justification
and approval, to increase the ceiling. The same respondent questioned
whether an existing contract could be modified to extend the ordering
period beyond 5 years.
DoD Response: Neither Section 843 nor 813 has retroactive effect.
Under Section 813, a contracting officer may exercise existing options
and may modify existing contracts to add new
[[Page 74994]]
options or otherwise extend the ordering period up to 10 years, or
longer if authorized by the head of the agency. Additionally, an
existing contract may be modified to extend the existing ordering
period, provided the justification for the new work is documented in a
justification and approval in accordance with FAR 6.304.
6. Comment: Options on Orders and Within Scope Changes. One
respondent requested that the rule address the use of option periods
attached to task and delivery orders. The respondent suggested that
every order should be permitted to contain up to four option periods.
Another respondent suggested that within-scope changes could extend the
ordering period beyond 5 years and requested that the rule clarify
whether the 5-year limit applies to within-scope changes.
DoD Response: Options and modifications may be issued to extend the
total ordering period for a contract or an individual order; however,
the total ordering period may not exceed 10 years unless authorized by
the head of the agency.
7. Comment: Disappointed with Implementation. Two respondents
expressed disappointment that DoD rushed to implement Section 843 and
that the interim rule provided only the barest coverage. The
respondents recommended that the final rule expand the coverage to
include key elements from the question and answer document made
available on the Defense Procurement and Acquisition Policy Web site.
DoD Response: DoD has a responsibility to promptly implement laws
enacted by Congress. It was also necessary to issue an interim rule to
ensure consistent implementation within DoD. The second interim rule
has been expanded to include key elements regarding applicability from
the question and answer document and changes required by the enactment
of Section 813.
8. Comment: Program Impacts. Four respondents identified programs
or missions that will be impacted by the 5-year limit.
DoD Response: DoD agrees that the 5-year limit may have had an
adverse impact on the ability of agencies to accomplish their missions.
The second interim rule minimizes the impact to the extent permitted by
Section 813.
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 has prepared an initial regulatory flexibility analysis
consistent with 5 U.S.C. 604. The analysis is summarized as follows:
This interim rule applies to all new DoD solicitations for supplies or
services that will result in a task or delivery order contract awarded
under the authority of 10 U.S.C. 2304a. It may affect businesses
interested in submitting offers for such contracts. The impact on small
entities is unknown at this time. 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 2003-D097.
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 813 of the National Defense
Authorization Act for Fiscal Year 2005 (Pub. L. 108-375). Section 813
provides that the total period of a task or delivery order contract
awarded under 10 U.S.C. 2304a may not exceed 10 years, unless the head
of the agency determines in writing that exceptional circumstances
require a longer contract period. Section 813 became effective upon
enactment on October 28, 2004. 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--SPECIAL CONTRACTING METHODS
0
2. Section 217.204 is revised to read as follows:
217.204 Contracts.
(e)(i) Notwithstanding FAR 17.204(e), the ordering period of a task
order or delivery order contract awarded by DoD pursuant to 10 U.S.C.
2304a--
(A) May be for any period up to 5 years;
(B) May be subsequently extended for one or more successive periods
in accordance with an option provided in the contract or a modification
of the contract; and
(C) Shall not exceed 10 years unless the head of the agency
determines in writing that exceptional circumstances require a longer
ordering period.
(ii) DoD must submit a report to Congress when an ordering period
is extended beyond 10 years in accordance with paragraph (e)(i)(C) of
this section. Follow the procedures at PGI 217.204(e) for reporting
requirements.
(iii) Paragraph (e)(i) of this section--
(A) Also applies to information technology task or delivery order
contracts;
(B) Does not apply to contracts, including task or delivery order
contracts, awarded under other statutory authority; and
(C) Does not apply to the following:
(1) Advisory and assistance service task order contracts
(authorized by 10 U.S.C. 2304b that are limited by statute to 5 years,
with the authority to extend an additional 6 months (see FAR
16.505(c)).
(2) Definite-quantity contracts.
(3) GSA schedule contracts.
(4) Multi-agency contracts awarded by agencies other than NASA,
DoD, or the Coast Guard.
(iv) Obtain approval from the senior procurement executive before
issuing an order against a task or delivery order contract subject to
paragraph (e)(i) of this section, if performance under the order is
expected to extend more than 1 year beyond the 10-year limit or
extended limit described in paragraph (e)(i)(C) of this section (see
FAR 37.106 for funding and term of service contracts).
[FR Doc. 04-27346 Filed 12-14-04; 8:45 am]
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