[Federal Register Volume 75, Number 209 (Friday, October 29, 2010)]
[Rules and Regulations]
[Pages 66680-66683]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2010-27302]
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DEPARTMENT OF DEFENSE
Defense Acquisition Regulations System
48 CFR Parts 237 and 252
RIN 0750-AG52
Defense Federal Acquisition Regulation Supplement (DFARS);
Continuation of Essential Contractor Services (DFARS Case 2009-D017)
AGENCY: Defense Acquisition Regulations System, Department of Defense
(DoD).
ACTION: Final rule.
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SUMMARY: DoD is adopting as final, with changes, the interim rule
amending the Defense Federal Acquisition Regulation Supplement (DFARS)
to add policy and a contract clause requiring that contractors
providing essential contractor services, as determined by the requiring
activity, shall be prepared to continue such services during periods of
crisis.
DATES: Effective date: October 29, 2010.
Applicability date: Contracting officers may, at their discretion,
include these changes in any existing contract with appropriate
consideration, in accordance with FAR 1.108(d)(3).
FOR FURTHER INFORMATION CONTACT: Mr. Julian E. Thrash, 703-602-0310.
SUPPLEMENTARY INFORMATION:
[[Page 66681]]
I. Background
DoD published an interim rule in the Federal Register at 75 FR
10191, on March 5, 2010, implementing the requirements of DoDI 3020.37,
Continuation of Essential DoD Contractor Services During Crises. DoD
Instruction (DoDI) 1100.22, Policy and Procedures for Determining
Workforce Mix, has since superseded DoDI 3020.37.
This rule is necessary to ensure that essential contractor services
are not interrupted. The current changing threat environment,
particularly under the additional challenges caused by such potential
crises as destructive weather, earthquakes, or pandemic disease, has
increased the need for continuity of operations capabilities and plans
that enable agencies to continue their essential functions during a
broad range of emergencies and crises.
DoD established this requirement for contractors to submit their
plans to ensure continuation of essential contractor services that
support mission-essential functions during a crisis situation. As a
general rule, the designation of services as essential contractor
services will not apply to an entire contract but will apply only to
those service function(s) that have been specifically identified as
essential contractor services by the functional commander or civilian
equivalent.
The public comment period for the DFARS interim rule closed May 4,
2010. Two respondents submitted comments to the interim rule. A
discussion of the comments and the changes made to the rule as a result
of those comments is provided below.
II. Analysis of Public Comments
A. Definitions
1. Definition of ``Functional Commander or Equivalent''
Comment. A respondent requested the term ``functional commander or
equivalent'' be defined. The respondent was concerned with how this
term would be interpreted in non-military offices that did not have a
``functional commander or equivalent.''
Response. The term ``functional commander or equivalent'' has been
revised. The term appropriate ``functional commander or civilian
equivalent'' clarifies the meaning of the phrase ``or equivalent.''
This revised identifier, ``civilian equivalent,'' was added to the
definitions of ``essential contractor services,'' and ``mission-
essential functions.'' Additionally, conforming changes to DFARS
237.7602(a), and 237.7602(b) were made for this revised term.
2. Definition of a `` Crisis''
Comment. A respondent requested a definition for a ``crisis'' be
added to the text.
Response. A crisis situation is dynamic, with the body of knowledge
growing hour-by-hour from the latest situational reports. As such, it
does not lend itself to a precise definition. The contractor will be
notified to activate plans for a crisis by the contracting officer, who
does so at the directions of the appropriate functional commander or
civilian equivalent.
B. The Contracting Officer's Role
Comment. A respondent was concerned that DFARS 237.7602, Policy,
did not clearly lay out the role of a contracting officer in the
process of requiring a contractor to submit a plan. The concern was
that direction to the contractor should come from the contracting
officer, not the requiring activity.
Response. DFARS 237.7602, Policy, has been revised at paragraphs
(a) and (b) to clarify that it is the role of the contracting officer,
not the requiring activity, to provide direction to the contractor.
C. Written Plan
1. Status of the Plan
Comment. A respondent expressed concern regarding DFARS
237.7602(b), whether the contractor should ``have a plan'' or ``submit
a plan.''
Response. DFARS 237.7602(b) has been revised to require contractors
to ``provide a written plan'' for Government-determined essential
contractor services.
2. Materially Altered Plans
Comment. A respondent expressed concern that a contracting officer
needs to have the most current version of the contractor's plan. The
concern centered on the determination of whether a change would
``materially alter'' the plan.
Response. DFARS 252.237-7023(c)(2) has been revised to require the
contractor to provide all plan updates to the contracting officer for
approval.
3. Use of a Plan
Comment. A respondent expressed a number of concerns about the
evaluation of a contractor's written plan, and whether or not the plan
should be evaluated prior to contract award.
Response. In response to this concern, a provision has been created
at DFARS 252.237-7024, Notice of Continuation of Essential Contractor
Services, to require the submission of the plan as part of the
offeror's proposal. The associate provision prescription is added at
237.7603. The contractor's continuity of essential services plan shall
be considered and evaluated as part of the technical evaluation of
offers. The functional managers of the services should be consulted to
determine the sufficiency of these plans. The contractor's Mission-
Essential Contractor Services Plan, in the resultant contract, will
remain active in accordance with the clause at DFARS 252.237-7023,
Continuation of Essential Contractor Services.
D. Equitable Adjustment
Comment. A respondent stated that, if costs increase due to the
continuation of services during an event that would create an excusable
delay, contractors should be entitled to an equitable adjustment to the
terms of the contract. Furthermore, they were concerned that inclusion
of the clause in a contract could be construed as waiving the
contractor's right to an equitable adjustment to contract terms other
than schedule terms when providing its best efforts to maintain
continuity of operations during a crisis.
Response. DFARS 252.237-7023(f), Changes, provides the basis for
determining an equitable adjustment. In the interim rule, this
paragraph allowed for an equitable adjustment to contract price. In the
final rule, this paragraph has been revised to include that, in
addition to an adjustment in price, an equitable adjustment may be to
``delivery schedule, or both.''
E. Causes Beyond the Control of the Contractor
Comment. Two respondents requested the clause at DFARS 252.237-
7023(c) be clarified with regard to causes beyond the control of the
contractor.
Response. As a result of the necessity to ensure performance of a
mission-essential function, a new paragraph has been added at DFARS
252.237-7023(d)(1). This paragraph clarifies that, in those specific
instances where a contractor function is considered mission essential,
it is important for contract performance to continue notwithstanding
any other clause of the contract; and that the contractor shall be
responsible to perform those services identified as essential
contractor services during crisis situations (as directed by the
contracting officer), in accordance with its Mission-Essential
Contractor Services Plan. If in the course of contract performance, a
contractor feels it must apply for an equitable adjustment, it may
follow the
[[Page 66682]]
process required in DFARS 252.237-7023(f), Changes.
F. Other Changes
The definitions have been moved from 237.7601 to the
clause 252.237-7023(a).
DFARS 252.237-7023 has been renamed ``Continuation of
Essential Contractor Services'' instead of ``Continuation of Mission-
Essential Functions'' in order to use more precise terminology.
Redesignated DFARS 252.237-7023(e) adds ``military''
personnel to the list of options the Government reserves the right to
utilize in crisis situations. Additionally, reference to the Office of
Federal Procurement Policy letter dated May 2007, and FAR and DFARS
parts 18 and 218 were determined unnecessary and have been deleted from
that paragraph.
III. Executive Order 12866
This regulatory action was subject to review under Section 6(b) of
Executive Order 12866, Regulatory Planning and Review, dated September
30, 1993. This rule is not a major rule under 5 U.S.C. 804.
IV. Regulatory Flexibility Act
DoD certifies that this rule will not have a significant economic
impact upon a substantial number of small entities because it allows
for an equitable adjustment for additional costs that are incurred
during a crisis situation.
The interim rule published at 75 FR 10191, on March 5, 2010,
invited comments from small businesses and other interested parties. No
comments were received from small entities on the affected DFARS
subpart with regard to small businesses.
V. Paperwork Reduction Act
This final rule contains an information collection requirement. The
Office of Management and Budget (OMB) has approved the information
collection requirement for use through December 31, 2010, under OMB
Control Number 0704-0465, in accordance with the emergency processing
procedures of 5 CFR 1320.13.
The following is a summary of the information collection
requirement.
Title: Defense Federal Acquisition Regulation Supplement (DFARS)
2009-D017; Continuation of Essential Contractor Services.
Type of Request: New collection.
Number of Respondents: 7,600.
Responses per Respondents: 1.25.
Annual Responses: 9,500.
Average Burden per Response: 2.
Total Annual Burden Hours: 19,000.
Needs and Uses: DoD needs this information to ensure essential
contractor services are performed for continuity of operations.
Affected Public: Businesses or other for-profit institutions.
Frequency: On occasion.
Respondent's Obligation: Required to obtain contract.
The interim rule, published at 75 FR 10191, on March 5, 2010,
invited comments on the following aspects of the interim rule: (a)
Whether the collection of information is necessary for the proper
performance of the functions of DoD, including whether the information
will have practical utility; (b) the accuracy of the estimate of the
burden of the information collection; (c) ways to enhance the quality,
utility, and clarity of the information to be collected; and (d) ways
to minimize the burden of the information collection on respondents,
including the use of automated collection techniques or other forms of
information technology. No comments were received regarding this
information collection requirement.
To request more information on this information collection or to
obtain a copy of the information collection requirement and associated
collection instruments, please write to the Defense Acquisition
Regulations System (DARS), Attn: Mr. Julian Thrash,
OUSD(AT&L)DPAP(DARS), Room 3B855, 3060 Defense Pentagon, Washington, DC
20301-3060.
List of Subjects in 48 CFR Parts 237 and 252
Government procurement.
Clare M. Zebrowski,
Editor, Defense Acquisition Regulations System.
0
Therefore, the Defense Acquisition Regulations System confirms as final
the interim rule published at 75 FR 10191, March 5, 2010, with the
following changes:
0
1. The authority citation for 48 CFR parts 237 and 252 continues to
read as follows:
Authority: 41 U.S.C. 421 and 48 CFR chapter 1.
PART 237--SERVICE CONTRACTING
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2. Subpart 237.76 is revised to read as follows:
Subpart 237.76--Continuation of Essential Contractor Services
Sec.
237.7600 Scope.
237.7601 Definitions.
237.7602 Policy.
237.7603 Solicitation provision and contract clause.
Subpart 237.76--Continuation of Essential Contractor Services
237.7600 Scope.
This subpart prescribes procedures for the acquisition of essential
contractor services which support mission-essential functions.
237.7601 Definitions.
As used in this subpart, essential contractor service and mission-
essential functions are defined in the clause at 252.237-7023,
Continuation of Essential Contractor Services.
237.7602 Policy.
(a) Contractors providing services designated as essential
contractor services shall be prepared to continue providing such
services, in accordance with the terms and conditions of their
contracts, during periods of crisis. As a general rule, the designation
of services as essential contractor services will not apply to an
entire contract but will apply only to those service functions that
have been specifically identified as essential contractor services by
the functional commander or civilian equivalent.
(b) Contractors who provide Government-determined essential
contractor services shall provide a written plan to be incorporated in
the contract, to ensure the continuation of these services in crisis
situations. Contracting officers shall consult with a functional
manager to assess the sufficiency of the contractor-provided written
plan. Contractors will activate such plans only during periods of
crisis, as authorized by the contracting officer, who does so at the
direction of the appropriate functional commander or civilian
equivalent.
(c) The contracting officer shall follow the procedures at PGI
207.105U(b)(20)(C) in preparing an acquisition plan.
237.7603 Solicitation provision and contract clause.
(a) Use the clause at 252.237-7023, Continuation of Essential
Contractor Services in all solicitations and contracts for services
that are in support of mission-essential functions.
(b) Use the provision at 252.237-7024, Notice of Continuation of
Essential Contractor Services in all solicitations for services that
include the clause 252.237-7023.
PART 252--SOLICITATION PROVISIONS AND CONTRACT CLAUSES
0
3. Section 252.237-7023 is revised to read as follows:
[[Page 66683]]
252.237-7023 Continuation of Essential Contractor Services.
As prescribed in 237.7603(a), use the following clause:
CONTINUATION OF ESSENTIAL CONTRACTOR SERVICES (OCT 2010)
(a) Definitions. As used in this clause-
(1) Essential contractor service means a service provided by a
firm or individual under contract to DoD to support mission-
essential functions, such as support of vital systems, including
ships owned, leased, or operated in support of military missions or
roles at sea; associated support activities, including installation,
garrison, and base support services; and similar services provided
to foreign military sales customers under the Security Assistance
Program. Services are essential if the effectiveness of defense
systems or operations has the potential to be seriously impaired by
the interruption of these services, as determined by the appropriate
functional commander or civilian equivalent.
(2) Mission-essential functions means those organizational
activities that must be performed under all circumstances to achieve
DoD component missions or responsibilities, as determined by the
appropriate functional commander or civilian equivalent. Failure to
perform or sustain these functions would significantly affect DoD's
ability to provide vital services or exercise authority, direction,
and control.
(b) The Government has identified all or a portion of the
contractor services performed under this contract as essential
contractor services in support of mission-essential functions. These
services are listed in attachment --, Mission-Essential Contractor
Services, dated --------.
(c)(1) The Mission-Essential Contractor Services Plan submitted
by the Contractor, is incorporated in this contract.
(2) The Contractor shall maintain and update its plan as
necessary. The Contractor shall provide all plan updates to the
Contracting Officer for approval.
(3) As directed by the Contracting Officer, the Contractor shall
participate in training events, exercises, and drills associated
with Government efforts to test the effectiveness of continuity of
operations procedures and practices.
(d)(1) Notwithstanding any other clause of this contract, the
Contractor shall be responsible to perform those services identified
as essential contractor services during crisis situations (as
directed by the Contracting Officer), in accordance with its
Mission-Essential Contractor Services Plan.
(2) In the event the Contractor anticipates not being able to
perform any of the essential contractor services identified in
accordance with paragraph (b) of this clause during a crisis
situation, the Contractor shall notify the Contracting Officer or
other designated representative as expeditiously as possible and use
its best efforts to cooperate with the Government in the
Government's efforts to maintain the continuity of operations.
(e) The Government reserves the right in such crisis situations
to use Federal employees, military personnel, or contract support
from other contractors, or to enter into new contracts for essential
contractor services.
(f) Changes. The Contractor shall segregate and separately
identify all costs incurred in continuing performance of essential
services in a crisis situation. The Contractor shall notify the
Contracting Officer of an increase or decrease in costs within
ninety days after continued performance has been directed by the
Contracting Officer, or within any additional period that the
Contracting Officer approves in writing, but not later than the date
of final payment under the contract. The Contractor's notice shall
include the Contractor's proposal for an equitable adjustment and
any data supporting the increase or decrease in the form prescribed
by the Contracting Officer. The parties shall negotiate an equitable
price adjustment to the contract price, delivery schedule, or both
as soon as is practicable after receipt of the Contractor's
proposal.
(g) The Contractor shall include the substance of this clause,
including this paragraph (g), in subcontracts for the essential
services.
(End of clause)
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4. Section 252.237-7024 is added to read as follows:
252.237-7024 Notice of Continuation of Essential Contractor Services.
As prescribed in 237.7603(b), use the following provision:
NOTICE OF CONTINUATION OF ESSENTIAL CONTRACTOR SERVICES [OCT 2010]
(a) Definitions. Essential contractor service and mission-
essential functions have the meanings given in the clause at
252.237-7023, Continuation of Essential Contractor Services, in this
solicitation.
(b) The offeror shall provide with its offer a written plan
describing how it will continue to perform the essential contractor
services listed in attachment --, Mission Essential Contractor
Services, dated --------, during periods of crisis. The offeror
shall--
(1) Identify provisions made for the acquisition of essential
personnel and resources, if necessary, for continuity of operations
for up to 30 days or until normal operations can be resumed;
(2) Address in the plan, at a minimum--
(i) Challenges associated with maintaining essential contractor
services during an extended event, such as a pandemic that occurs in
repeated waves;
(ii) The time lapse associated with the initiation of the
acquisition of essential personnel and resources and their actual
availability on site;
(iii) The components, processes, and requirements for the
identification, training, and preparedness of personnel who are
capable of relocating to alternate facilities or performing work
from home;
(iv) Any established alert and notification procedures for
mobilizing identified ``essential contractor service'' personnel;
and
(v) The approach for communicating expectations to contractor
employees regarding their roles and responsibilities during a
crisis.
(End of provision)
[FR Doc. 2010-27302 Filed 10-28-10; 8:45 am]
BILLING CODE 5001-08-P