[Federal Register Volume 71, Number 54 (Tuesday, March 21, 2006)]
[Rules and Regulations]
[Pages 14100-14101]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 06-2643]
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DEPARTMENT OF DEFENSE
Defense Acquisition Regulations System
48 CFR Part 207
[DFARS Case 2004-D021]
Defense Federal Acquisition Regulation Supplement; Contractor
Performance of Acquisition Functions Closely Associated With Inherently
Governmental Functions
AGENCY: Defense Acquisition Regulations System, Department of Defense
(DoD).
ACTION: Final rule.
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SUMMARY: DoD has adopted as final, with changes, an interim rule
amending the Defense Federal Acquisition Regulation Supplement (DFARS)
to implement Section 804 of the National Defense Authorization Act for
Fiscal Year 2005. Section 804 places limitations on the award of
contracts for the performance of acquisition functions closely
associated with inherently governmental functions.
DATES: Effective March 21, 2006.
FOR FURTHER INFORMATION CONTACT: Ms. Robin Schulze, Defense Acquisition
Regulations System, OUSD (AT&L) DPAP (DARS), IMD 3C132, 3062 Defense
Pentagon, Washington, DC 20301-3062. Telephone (703) 602-0326,
facsimile (703) 602-0350. Please cite DFARS Case 2004-D021.
SUPPLEMENTARY INFORMATION:
A. Background
DoD published an interim rule at 70 FR 14572 on March 23, 2005, to
implement Section 804 of the National Defense Authorization Act for
Fiscal Year 2005. Section 804 places limitations on the award of
contracts for the performance of acquisition functions closely
associated with inherently governmental functions.
Three sources submitted comments on the interim rule. A discussion
of the comments is provided below.
1. Comment: One respondent recommended revision of the text at
207.503(S-70)(1) to replace the phrase ``functions closely associated
with inherently governmental functions that are listed at FAR
7.503(d)'' with the phrase ``services and actions that are listed at
FAR 7.503(d).'' Since 10 U.S.C. 2383(b)(3) states that the phrase
``functions closely associated with inherently governmental functions''
means those functions described in FAR 7.503(d), use of the FAR
reference would meet the letter of the law and would avoid introducing
a new phrase in the DFARS.
DoD Response: DoD believes that use of the phrase ``functions
closely associated with inherently governmental functions,'' along with
the reference to FAR 7.503(d), more clearly describes the requirements
of the rule. Therefore, DoD has made no change to the rule as a result
of this comment.
2. Comment: One respondent recommended amending the text at
207.503(S-70)(1)(i)(B) to remove the word ``supervise'' and replace it
with the phrase ``provide oversight to'' to prevent a conflict with
Office of Federal Procurement Policy (OFPP) Policy Letter 92-1,
Inherently Governmental Functions. The respondent stated that OFPP
Policy Letter 92-1 cautions against exercising ``such control over
contractor activities to convert the contract * * * to a personal
services contract,'' and that use of the word ``supervise,'' could be
understood by Federal officials that they are to interact with
contractor employees in the same way they supervise Federal employees.
DoD Response: It should be noted that OMB Circular No. A-76 dated
May 29, 2003, supersedes OFPP Policy Letter 92-1. However, DoD agrees
that the term ``supervise'' could be subject to differing
interpretations and could lead to an inappropriate contract
relationship. Therefore, DoD has amended the rule to replace the term
``supervise'' with the term ``oversee.''
3. Comment: One respondent stated that, given the importance of
this issue, DoD should provide further guidance concerning the
circumstances under which contracting officers may make a determination
under 207.503(S-70)(1)(i)(A), that appropriate DoD personnel cannot
reasonably be made available to perform the functions.
DoD Response: DoD does not believe that additional guidance is
necessary. The availability decision must be made on a case-by-case
basis, and DoD contracting officers should retain the flexibility to
make informed decisions to meet mission needs.
4. Comment: One respondent expressed support for the rule, since
the rule places some controls on the award of contracts for the
performance of jobs closely associated with the Federal Government's
purchases of goods and services. The respondent believes that the
Government should protect
[[Page 14101]]
inherently governmental functions, and recommended that DoD require
contracting officers to provide written justifications of decisions
made under this DFARS rule and that those justifications be made
publicly available on the World Wide Web.
DoD Response: In accordance with FAR Subpart 4.8, the Government
contract file should document the basis for an acquisition and the
relevant decisions made by the contracting officer. DoD does not
believe it is necessary to post the determinations made in accordance
with this rule on the World Wide Web.
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 a final regulatory flexibility analysis consistent
with 5 U.S.C. 604. A copy of the analysis may be obtained from the
point of contact specified herein. The analysis is summarized as
follows:
The objective of the rule is to ensure proper management and
oversight of contracts for functions that generally are not considered
to be inherently governmental, but may approach being in that category
because of the nature of the function, the manner in which the
contractor performs the contract, or the manner in which the Government
administers contractor performance. The impact of the rule on small
entities is unknown at this time. DoD agencies will implement the
requirements of the rule in making decisions whether to enter into, and
in the administration of, contracts for performance of the acquisition
functions closely associated with inherently governmental functions
that are listed in section 7.503(d) of the Federal Acquisition
Regulation. DoD received no comments on the initial regulatory
flexibility analysis. As a result of comments received on the interim
rule, the final rule contains a minor change to clarify that Government
personnel ``oversee'' but do not ``supervise'' contractor personnel.
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 207
Government procurement.
Michele P. Peterson,
Editor, Defense Acquisition Regulations System.
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Accordingly, the interim rule amending 48 CFR part 207, which was
published at 70 FR 14572 on March 23, 2005, is adopted as a final rule
with the following change:
PART 207--ACQUISITION PLANNING
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1. The authority citation for 48 CFR part 207 continues to read as
follows:
Authority: 41 U.S.C. 421 and 48 CFR Chapter 1.
207.503 [Amended]
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2. Section 207.503 is amended in paragraph (S-70)(1)(i)(B) by removing
``supervise'' and adding in its place ``oversee''.
[FR Doc. 06-2643 Filed 3-20-06; 8:45 am]
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