[Federal Register Volume 71, Number 62 (Friday, March 31, 2006)]
[Rules and Regulations]
[Pages 16241-16243]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 06-3085]
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DEPARTMENT OF ENERGY
48 CFR Parts 901 and 970
RIN 1991-AB64
Acquisition Regulation: Make-or-Buy Plans
AGENCY: Department of Energy.
ACTION: Final rule.
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SUMMARY: The Department of Energy (DOE) is amending the Department of
Energy Acquisition Regulation (DEAR) to revise its requirements for
contractor make-or-buy plans. The Department published a Notice of
Proposed Rulemaking on December 15, 2004, proposing to eliminate its
program requiring make or buy analyses and plans from its management
and operating (M&O) contractors.
DATES: Effective Date: May 1, 2006.
FOR FURTHER INFORMATION CONTACT: Richard Langston, U.S. Department of
Energy, MA-61, 1000 Independence Avenue, SW., Washington, DC 20585,
Telephone (202) 287-1339 or submit electronically to
[email protected].
SUPPLEMENTARY INFORMATION:
I. Background
II. Discussion of Public Comments
III. Section-by-Section Analysis
IV. Procedural Requirements
A. Review Under Executive Order 12866
B. Review Under Executive Order 12988
C. Review Under the Regulatory Flexibility Act
D. Review Under the Paperwork Reduction Act
E. Review Under the National Environmental Policy Act
F. Review Under Executive Order 13132
G. Review Under the Unfunded Mandates Reform Act of 1995
H. Review Under the Treasury and General Government
Appropriations Act, 1999
I. Review Under Executive Order 13211
J. Review Under the Treasury and General Government
Appropriations Act, 2001
K. Review Under the Small Business Regulatory Fairness Act of
1996
L. Approval by the Office of the Secretary of Energy
I. Background
DOE now has more than eight years of experience with the make-or-
buy policy it established in 1997. All M&O contractors have approved
make-or-buy plans in place. The Department has evaluated the operation
of the make-or-buy policy and the effect that policy has had in
achieving the Department's objectives. The make-or-buy program is not
delivering value to the Department commensurate with the costs of its
implementation.
The Department conducted a number of assessments since establishing
the current make-or-buy plan requirements and implemented a number of
actions intended to improve the manner in which DOE and its contractors
implemented the make-or-buy requirements. The conclusion drawn from the
most recent assessment is that there is little evidence that these
plans are producing the efficiencies and cost savings anticipated by
the Department. The Department has determined that the lack of
measurable progress and costs of complying and monitoring compliance
with the make-or-buy policy outweigh any potential benefits to the
Department.
There are multiple approaches to achieving cost efficiencies and
operational effectiveness under a contract, and the Department has made
great strides with its other contract reform initiatives. The make-or-
buy plan requirements have not increased efficiency and the Department
is amending the DEAR to eliminate the requirement that M&O contractors
prepare and maintain formal make-or-buy plans.
II. Discussion of Public Comments
Only one comment was received in response to our December 15, 2004
Notice of Proposed Rulemaking. The reviewer suggested that, rather than
eliminate the make-or-buy review analysis, the Department introduce a
5-part alternative make-or-buy system which would include consolidation
of identified products or services into a DOE-wide plan.
The Department has evaluated the suggested revisions to the make-
or-buy process. The make-or-buy process was ideally meant to be a
system for categorizing all M&O contract internal work activities as
``make'' or ``buy'' activities. ``Make'' activities are core
competencies critical to the mission success that are not available for
outsourcing. ``Buy'' activities are non-core work activities that
provide strategic support to core competencies that are available for
outsourcing. Contractors use their make-or-buy plans to evaluate
subcontracting opportunities and improve in-house performance. The
objective of the make-or-buy policy is to require M&O contractors to
operate the Department's laboratories, weapons production plants, and
other facilities in the most cost effective and efficient manner. The
suggested alternative does not appear to offer advantages in fulfilling
those needs. Accordingly, the Department is not pursuing the suggested
alternative.
III. Section-by-Section Analysis
The Department is amending the DEAR as follows.
1. Sections 901.105 is amended to delete the reference to the
Office of Management and Budget, OMB control number for make-or-buy
plans.
2. Sections 970.1504-4-1 through 970.1504-4-3 are eliminated.
3. Section 970.1504-5(b) is eliminated.
4. Section 970.5203-1 is amended to include outsourcing of
functions as a consideration of efficient and effective operations.
5. Section 970.5203-2 is amended to provide a requirement for
contractors to consider outsourcing as a mechanism to increase
improvement in the management of the contract.
6. Section 970.5215-2 is eliminated.
7. Section 970.5244-1 is amended to remove and reserve paragraph
(n).
IV. Procedural Requirements
A. Review Under Executive Order 12866
This regulatory action has been determined not to be a significant
regulatory action under Executive Order 12866, Regulatory Planning and
Review, (58 FR 51735, October 4, 1993). Accordingly, this rule is not
subject to review under the Executive Order by the Office of
Information and Regulatory Affairs (OIRA) within the OMB.
B. Review Under Executive Order 12988
With respect to the review of existing regulations and the
promulgation of new regulations, section 3(a) of Executive Order 12988,
Civil Justice Reform, 61 FR 4729 (February 7, 1996), imposes on
Executive agencies the general duty to adhere to the following
requirements: (1) Eliminate drafting errors and ambiguity; (2) write
regulations to minimize litigation; and (3) provide a clear legal
standard for affected conduct rather than a general standard and
promote simplification and burden reduction. With regard to the review
required by section 3(a), section 3(b) of Executive Order 12988
specifically requires that Executive agencies make every reasonable
effort to ensure that the regulation: (1) Clearly specifies the
preemptive effect, if any; (2) clearly specifies any effect on existing
Federal law or regulation; (3) provides a clear legal standard for
affected conduct while promoting simplification and burden reduction;
(4) specifies the retroactive effect, if any; (5) adequately defines
key terms; and (6)
[[Page 16242]]
addresses other important issues affecting clarity and general
draftsmanship under any guidelines issued by the Attorney General.
Section 3(c) of Executive Order 12988 requires Executive agencies to
review regulations in light of applicable standards in section 3(a) and
section 3(b) to determine whether they are met or it is unreasonable to
meet one or more of them. DOE has completed the required review and
determined that, to the extent permitted by law, these regulations meet
the relevant standards of Executive Order 12988.
C. Review Under the Regulatory Flexibility Act
This rule has been reviewed under the Regulatory Flexibility Act, 5
U.S.C. 601 et seq., which requires preparation of an initial regulatory
flexibility analysis for any rule that must be proposed for public
comment and that is likely to have a significant economic impact on a
substantial number of small entities. The rule would not have a
significant economic impact on small entities because no small entities
are DOE M&O contractors and because the rule would eliminate the
existing burden of preparing make-or-buy analyses.
Accordingly, DOE certifies that this rule would not have a
significant economic impact on a substantial number of small entities,
and, therefore, no regulatory flexibility analysis has been prepared.
D. Review Under Paperwork Reduction Act
Information collection or recordkeeping requirements contained in
this rulemaking have been previously cleared under OMB paperwork
clearance package number 1910-5102. The existing burden will be removed
by this rulemaking.
E. Review Under the National Environmental Policy Act
DOE has concluded that promulgation of this rule falls into a class
of actions which would not individually or cumulatively have
significant impact on the human environment, as determined by DOE's
regulations (10 CFR part 1021, subpart D) implementing the National
Environmental Policy Act (NEPA) of 1969 (42 U.S.C. 4321 et seq.).
Specifically, this rule is categorically excluded from NEPA review
because the amendments to the DEAR are strictly procedural (categorical
exclusion A6). Therefore, this rule does not require an environmental
impact statement or environmental assessment pursuant to NEPA.
F. Review Under Executive Order 13132
Executive Order 13132 (64 FR 43255, August 4, 1999) imposes certain
requirements on agencies formulating and implementing policies or
regulations that preempt State law or that have federalism
implications. Agencies are required to examine the constitutional and
statutory authority supporting any action that would limit the
policymaking discretion of the States and carefully assess the
necessity for such actions. DOE has examined today's rule and has
determined that it does not preempt State law and does not have a
substantial direct effect on the States, on the relationship between
the National Government and the States, or on the distribution of power
and responsibilities among the various levels of government. No further
action is required by Executive Order 13132.
G. Review Under the Unfunded Mandates Reform Act of 1995
The Unfunded Mandates Reform Act of 1995 (Pub. L. 104-4) requires a
Federal agency to perform a detailed assessment of costs and benefits
of any rule imposing a Federal Mandate with costs to State, local or
tribal governments, or to the private sector, of $100 million or more
in any single year. This rulemaking does not impose a Federal mandate
on State, local or tribal governments or on the private sector.
H. Review Under the Treasury and General Government Appropriations Act,
1999
Section 654 of the Treasury and General Government Appropriations
Act, 1999 (Pub. L. 105-277), requires Federal agencies to issue a
Family Policymaking Assessment for any rule or policy that may affect
family well-being. This rule will have no impact on family well being.
I. Review Under Executive Order 13211
Executive Order 13211, Actions Concerning Regulations That
Significantly Affect Energy Supply, Distribution, or Use, (66 FR 28355,
May 22, 2001) requires Federal agencies to prepare and submit to the
OIRA, Office of Management and Budget, a Statement of Energy Effects
for any significant energy action. A ``significant energy action'' is
defined as any action by an agency that promulgates or is expected to
lead to promulgation of a final rule, and that: (1) Is a significant
regulatory action under Executive Order 12866, or any successor order;
and (2) is likely to have a significant adverse effect on the supply,
distribution, or use of energy, or (3) is designated by the
Administrator of OIRA as a significant energy action. For any
significant energy action, the agency must give a detailed statement of
any adverse effects on energy supply, distribution, or use should the
proposal be implemented, and of reasonable alternatives to the action
and their expected benefits on energy supply, distribution, and use.
Today's rule is not a significant energy action. Accordingly, DOE
has not prepared a Statement of Energy Effects.
J. Review Under the Treasury and General Government Appropriations Act,
2001
The Treasury and General Government Appropriations Act, 2001, 44
U.S.C. 3516, note, provides for agencies to review most disseminations
of information to the public under implementing guidelines established
by each agency pursuant to general guidelines issued by OMB. OMB's
guidelines were published at 67 FR 8452 (February 22, 2002), and DOE's
guidelines were published at 67 FR 62446 (October 7, 2002). DOE has
reviewed today's rule under the OMB and DOE guidelines and has
concluded that it is consistent with applicable policies in those
guidelines.
K. Review Under the Small Business Regulatory Enforcement Fairness Act
of 1996
As required by 5 U.S.C. 801, DOE will report to Congress
promulgation of this rule prior to its effective date. The report will
state that it has been determined that the rule is not a ``major rule''
as defined by 5 U.S.C. 804(3).
L. Approval by the Office of the Secretary of Energy
The Office of the Secretary of Energy has approved issuance of this
final rule.
List of Subjects in 48 CFR Parts 901 and 970
Government procurement.
Issued in Washington, DC, on March 23, 2006.
Edward R. Simpson,
Director, Office of Procurement and Assistance Management, Office of
Management, Department of Energy.
Robert C. Braden, Jr.,
Director, Office of Acquisition and Supply Management, National Nuclear
Security Administration.
0
For the reasons set out in the preamble, the Department of Energy is
amending chapter 9 of title 48 of the Code of Federal Regulations as
set forth below:
[[Page 16243]]
PART 901--FEDERAL ACQUISITION REGULATIONS SYSTEM
0
1. The authority citation for part 901 is revised to read as follows:
Authority: 42 U.S.C. 2201; 2282a; 2282b; 2282c; 42 U.S.C. 7101,
et seq.; 41 U.S.C. 418b; 50 U.S.C. 2401, et seq.
0
2. Section 901.105 is amended by revising the second sentence to read
as follows:
901.105 OMB control numbers.
* * * The OMB control number for the collection of information
under 48 CFR chapter 9 is 1910-4100 except for Reporting and
Recordkeeping Requirements for Safety Management (see 48 CFR 970.5223-
1) which is 1910-5103.
PART 970--DOE MANAGEMENT AND OPERATING CONTRACTS
0
3. The authority citation for part 970 continues to read as follows:
Authority: 42 U.S.C. 2201; 2282a; 2282b; 2282c; 42 U.S.C. 7101,
et seq.; 41 U.S.C. 418b; 50 U.S.C. 2401, et seq.
970.1504-4-1-970.1504-4-3 [Removed and Reserved]
0
4. Sections 970.1504-4-1 through 970.1504-4-3 are removed and reserved.
970.1504-5 [Amended]
0
5. Section 970.1504-5 is amended by removing paragraph (b), and
redesignating paragraphs (c), (d) and (e) as paragraphs (b), (c) and
(d) respectively.
970.5203-1 [Amended]
0
6. Section 970.5203-1 is amended by revising the clause date to read
``May 2006'' and by adding in paragraph (a)(1), second sentence, the
words ``including consideration of outsourcing of functions'' after the
word ``promoted''.
970.5203-2 [Amended]
0
7. Section 970.5203-2, is amended by revising the clause date to read
``May 2006'' and by adding in paragraph (a), last sentence, the words
``outsourcing decisions,'' after the words ``changes in
organization,''.
970.5215-2 [Removed and Reserved]
0
8. Section 970.5215-2, Make-or-Buy plan, is removed and reserved.
970.5244-1 [Amended]
0
9. Section 970.5244-1 is amended by revising the clause date to read
``May 2006'' and by removing and reserving paragraph (n).
[FR Doc. 06-3085 Filed 3-30-06; 8:45 am]
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