Defense Federal Acquisition Regulation Supplement; Incremental Funding of Fixed-Price Contracts, 18671-18673 [06-3457]
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Federal Register / Vol. 71, No. 70 / Wednesday, April 12, 2006 / Rules and Regulations
Subpart 222.13—Special Disabled
Veterans, Veterans of the Vietnam Era,
and Other Eligible Veterans
222.1305
Waivers.
(c) Follow the procedures at PGI
222.1305(c) for submission of waiver
requests.
222.1308
(DFARS) to implement a statutory
prohibition on foreign taxation under
contracts funded by U.S. assistance
programs. The rule addresses the
responsibilities of the contractor and the
contracting officer regarding the
prohibition.
DATES:
Complaint procedures.
The contracting officer shall—
(1) Forward each complaint received
as indicated in FAR 22.1308; and
(2) Notify the complainant of the
referral. The contractor in question shall
not be advised in any manner or for any
reason of the complainant’s name, the
nature of the complaint, or the fact that
the complaint was received.
Effective Date: April 12, 2006.
Ms.
Debra Overstreet, Defense Acquisition
Regulations System, OUSD (AT&L)
DPAP (DARS), IMD 3C132, 3062
Defense Pentagon, Washington, DC
20301–3062. Telephone (703) 602–0310;
facsimile (703) 602–0350. Please cite
DFARS Case 2004–D012.
FOR FURTHER INFORMATION CONTACT:
Defense Acquisition Regulations
System
48 CFR Parts 225, 229, and 252
B. Regulatory Flexibility Act
[DFARS Case 2004–D012]
DoD certifies that this final rule will
not 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 administrative notification
requirements of the rule are expected to
affect less than 10 contracts per year.
222.1406
Complaint procedures.
The contracting officer shall notify the
complainant of such referral. The
contractor in question shall not be
advised in any manner or for any reason
of the complainant’s name, the nature of
the complaint, or the fact that the
complaint was received.
222.7100 and 222.7200
[Removed]
17. Sections 222.7100 and 222.7200
are removed.
I
[FR Doc. 06–3456 Filed 4–11–06; 8:45 am]
BILLING CODE 5001–08–P
DEPARTMENT OF DEFENSE
Defense Federal Acquisition
Regulation Supplement; Prohibition of
Foreign Taxation on U.S. Assistance
Programs
Defense Acquisition
Regulations System, Department of
Defense (DoD).
ACTION: Final rule.
cprice-sewell on PROD1PC66 with RULES
AGENCY:
DoD has adopted as final,
without change, an interim rule
amending the Defense Federal
Acquisition Regulation Supplement
SUMMARY:
VerDate Aug<31>2005
15:11 Apr 11, 2006
Jkt 208001
Government procurement.
Michele P. Peterson,
Editor, Defense Acquisition Regulations
System.
Interim Rule Adopted as Final Without
Change
Accordingly, the interim rule
amending 48 CFR parts 225, 229, and
252, which was published at 70 FR
57191 on September 30, 2005, is
adopted as a final rule without change.
I
[FR Doc. 06–3453 Filed 4–11–06; 8:45 am]
BILLING CODE 5001–08–P
DEPARTMENT OF DEFENSE
DoD published an interim rule at 70
FR 57191 on September 30, 2005, to
implement Section 579 of Division E of
the Consolidated Appropriations Act,
2003 (Pub. L. 108–7); Section 506 of
Division D of the Consolidated
Appropriations Act, 2004 (Pub. L. 108–
199); and Section 506 of Division D of
the Consolidated Appropriations Act,
2005 (Pub. L. 108–447). These statutes
require that a bilateral agreement
providing for U.S. assistance to a foreign
country must specify that the U.S.
assistance shall be exempt from taxation
by the foreign government. Therefore,
the foreign government is prohibited
from imposing taxes on commodities
acquired under contracts funded by
such U.S. assistance. This DFARS rule
addresses the responsibilities of the
contractor and the contracting officer
regarding the prohibition.
DoD received no comments on the
interim rule. Therefore, DoD has
adopted the interim rule as a final rule
without change.
This rule was not subject to Office of
Management and Budget review under
Executive Order 12866, dated
September 30, 1993.
(a)(1) Use of the clause at FAR
52.222–35, Equal Opportunity for
Special Disabled Veterans, Veterans of
the Vietnam Era, and Other Eligible
Veterans, with its paragraph (c), Listing
Openings, also satisfies the requirement
of 10 U.S.C. 2410k.
I 16. Section 222.1406 is revised to read
as follows:
List of Subjects in 48 CFR Parts 225,
229, and 252
SUPPLEMENTARY INFORMATION:
A. Background
222.1310 Solicitation provision and
contract clauses.
18671
C. Paperwork Reduction Act
The information collection
requirements of the rule do not reach
the threshold for requiring Office of
Management and Budget approval
under 44 U.S.C. 3501, et seq.
PO 00000
Frm 00083
Fmt 4700
Sfmt 4700
Defense Acquisition Regulations
System
48 CFR Parts 232 and 252
[DFARS Case 1990–037]
Defense Federal Acquisition
Regulation Supplement; Incremental
Funding of Fixed-Price Contracts
Defense Acquisition
Regulations System, Department of
Defense (DoD).
ACTION: Final rule.
AGENCY:
SUMMARY: DoD has adopted as final,
with changes, an interim rule amending
the Defense Federal Acquisition
Regulation Supplement (DFARS) to
address the use of incrementally funded
fixed-price contracts. The rule contains
a contract clause for use in those
situations where incremental funding of
fixed-price contracts is permitted.
DATES: Effective Date: April 12, 2006.
FOR FURTHER INFORMATION CONTACT: Mr.
Bill Sain, Defense Acquisition
Regulations System,
OUSD(AT&L)DPAP(DARS), IMD 3C132,
3062 Defense Pentagon, Washington, DC
20301–3062. Telephone (703) 602–2022;
facsimile (703) 602–0350. Please cite
DFARS Case 1990–037.
SUPPLEMENTARY INFORMATION:
A. Background
This rule revises and finalizes the
interim rule published at 58 FR 46091
on September 1, 1993, regarding
incremental funding of fixed-price
contracts. Prior to the issuance of the
interim rule, incrementally funded
fixed-price contracts had been used in
limited situations throughout DoD for a
number of years. This technique
permitted DoD to award fixed-price
contracts in specific circumstances
E:\FR\FM\12APR1.SGM
12APR1
cprice-sewell on PROD1PC66 with RULES
18672
Federal Register / Vol. 71, No. 70 / Wednesday, April 12, 2006 / Rules and Regulations
where full funding was not available
and incremental funding was statutorily
permitted. Use of this technique
precluded the need to use a cost-type
contract when the nature of the
requirement was more suitable for a
fixed-price contract. To implement this
technique, a number of nonstandard
clauses had been developed for use
within the military departments and
defense agencies. In recognition of the
need for a standard clause for such
contracts, DoD issued an interim rule to
specify those situations where
incremental funding of fixed-price
contracts is permitted. Six sources
submitted comments on the interim
rule. The following is a discussion of
the comments and the issues relating to
the development of the final rule.
1. Language permitting use of
incremental funding. The interim rule
permitted the use of incremental
funding only when the contract was
funded with research and development
appropriations or when Congress had
otherwise authorized incremental
funding. The interim rule further
required that, for either base services or
hazardous/toxic waste remediation
contracts for which incremental funding
had been authorized by Congress, the
head of the contracting activity must
approve the use of incremental funding.
A number of respondents expressed
concern regarding this language.
DoD has revised the rule to
specifically address contracts for
severable services. As provided for in
DFARS 232.703–3, contracts crossing
fiscal years, the contracting officer may
enter into a contract, exercise an option,
or place an order under a contract for
severable services for a period that
begins in one fiscal year and ends in the
next fiscal year if the period of the
contract awarded, option exercised, or
order placed does not exceed one year
(10 U.S.C. 2410a). The public comments
indicated that this provision may cause
confusion with regard to the use of
incremental funding for severable
services. Therefore, the final rule
contains a new paragraph 232.703–1(i)
to specifically address incremental
funding for severable services.
2. Head of the contracting activity
(HCA) approval. The interim rule
required the HCA to approve interim
funding for base services and
hazardous/toxic waste remediation
contracts. DoD believes that the
language in the final rule precludes the
need for HCA approval. In those cases
where incremental funding has been
authorized by Congress, the contracting
officer should have the flexibility to use
such funding without requiring the
administrative burden of obtaining HCA
VerDate Aug<31>2005
15:11 Apr 11, 2006
Jkt 208001
approval. This is consistent with the
DoD policy of empowering contracting
personnel to the maximum extent
practicable. The final rule is sufficient
for the contracting officer to apply the
requirements without further approval,
as the rule specifies exactly which
contracts are eligible for incremental
funding. The final rule also emphasizes
the preference for full funding by
requiring that incrementally funded
fixed-price contracts be fully funded as
soon as funds are available. Therefore,
the final rule eliminates the requirement
for HCA approval for base services or
hazardous/toxic waste remediation
contracts.
3. Work without funding. One
respondent asserted that the clause at
DFARS 252.232–7007 encourages
contractors to work without funding.
The respondent stated that the clause is
intended as a vehicle for contracting
officers to circumvent the AntiDeficiency Act.
Under the requirements of DFARS
252.232–7007, the contractor agrees to
perform up to the point at which the
total amount payable by the
Government, including reimbursement
in the event of termination for
convenience, approximates the total
amount allotted to the contract; the
contractor is not obligated to continue
work on those items beyond that point,
and the Government is not obligated to
reimburse the contractor in excess of the
amount allotted to the contract. The
clause notifies the contractor that
continuing work is at the sole risk of the
contractor. Thus, the clause is not, nor
is it intended to be, a vehicle for
violating the Anti-Deficiency Act.
Nevertheless, DoD agrees that it would
be helpful to revise the language
regarding continued contract
performance to emphasize that the
contractor is not authorized to continue
work. Therefore, the final rule changes
the phrase ‘‘The Contractor will not be
obligated to continue work’’ to ‘‘The
Contractor is not authorized to continue
work’’. In addition, the final rule
redesignates paragraph (i) of the clause
as paragraph (j) and adds a new
paragraph (i) to read ‘‘Nothing in this
clause shall be construed as
authorization of voluntary services
whose acceptance is otherwise
prohibited under 31 U.S.C. 1342.’’
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
PO 00000
Frm 00084
Fmt 4700
Sfmt 4700
be obtained from the point of contact
specified herein. The analysis is
summarized as follows:
This rule amends the DFARS to allow
incrementally funded fixed-price
contracts in certain limited, and clearly
defined, situations. The objective of the
rule is to encourage the full funding of
contracts, while recognizing that there
are specific situations where full
funding is not possible, and allowing
incremental funding to be used in those
situations. DoD received no public
comments on the initial regulatory
flexibility analysis. As a result of
comments received on the interim rule,
the final rule contains changes that
clarify the applicability of the rule and
the requirements of the contract clause.
The rule applies to all entities with
incrementally funded fixed-priced DoD
contracts. DoD believes that the rule has
little or no economic impact on such
entities, since the rule places little cost
risk on the contractor. This is especially
true of the final rule, which includes
revisions that clarify that a contractor is
not authorized to continue performance
of a contract beyond the amount
incrementally funded. The final rule
maintains the clear preference for fully
funded fixed-priced contracts; and
requires the use of a standard clause in
clearly defined and limited
circumstances permitting DoD to award,
and the contractor to begin work under,
a contract prior to the availability of full
funding. The rule requires that full
funding be placed on the contract as
soon as funds are available; clearly
states that the contractor is not
authorized to perform work beyond the
available funds allotted to the contract;
and provides specific protections to the
contractor until full funding is made
available. The rule requires the
contractor to notify the contracting
officer at least 90 days prior to the date
when, in the contractor’s best judgment,
the work under the contract will reach
the point at which the total amount
payable by the Government, including
any cost for termination for
convenience, will approximate 85
percent of the total amount allotted to
the contract. In addition, the contractor
must provide information regarding
additional funding needed to continue
performance. This information is the
minimum needed for the Government to
determine the appropriate course of
action. The required information should
be readily available to the contractor as
part of its normal business practices.
The policy in the final rule is designed
to minimize any economic impact on
small entities. There are no practical
E:\FR\FM\12APR1.SGM
12APR1
Federal Register / Vol. 71, No. 70 / Wednesday, April 12, 2006 / Rules and Regulations
alternatives to the rule. The rule is
consistent with statutory requirements.
C. Paperwork Reduction Act
PART 252—SOLICITATION
PROVISIONS AND CONTRACT
CLAUSES
4. Section 252.232–7007 is amended
as follows:
I a. By revising the clause date;
I b. In paragraph (b), by revising the
second sentence;
I c. By revising paragraph (i); and
I d. By adding paragraph (j) to read as
follows:
The information collection
requirements of the clause at DFARS
252.232–7007, Limitation of
Government’s Obligation, have been
approved by the Office of Management
and Budget under Clearance Number
0704–0359 for use through December
31, 2007.
I
List of Subjects in 48 CFR Parts 232 and
252
252.232–7007
Obligation.
*
Government procurement.
Authority: 41 U.S.C. 421 and 48 CFR
Chapter 1.
PART 232—CONTRACT FINANCING
2. Section 232.001 is added to read as
follows:
I
Definitions.
Incremental funding means the partial
funding of a contract or an exercised
option, with additional funds
anticipated to be provided at a later
time.
I 3. Section 232.703–1 is revised to read
as follows:
cprice-sewell on PROD1PC66 with RULES
*
*
*
Accordingly, the interim rule
amending 48 CFR Parts 232 and 252,
which was published at 58 FR 46091 on
September 1, 1993, is adopted as a final
rule with the following changes:
I 1. The authority citation for 48 CFR
parts 232 and 252 continues to read as
follows:
I
232.703–1
*
LIMITATION OF GOVERNMENT’S
OBLIGATION (APR 2006)
Michele P. Peterson,
Editor, Defense Acquisition Regulations
System.
232.001
*
Limitation of Government’s
*
*
*
*
(b) * * * The Contractor is not
authorized to continue work on those
item(s) beyond that point. * * *
*
*
*
*
*
(i) Nothing in this clause shall be
construed as authorization of voluntary
services whose acceptance is otherwise
prohibited under 31 U.S.C. 1342.
(j) The parties contemplate that the
Government will allot funds to this
contract in accordance with the
following schedule:
On execution of contract $ll
(month) (day), (year) $ll
(month) (day), (year) $ll
(month) (day), (year) $ll
*
*
*
*
*
[FR Doc. 06–3457 Filed 4–11–06; 8:45 am]
BILLING CODE 5001–08–P
DEPARTMENT OF TRANSPORTATION
National Highway Traffic Safety
Administration
General.
(1) A fixed-price contract may be
incrementally funded only if—
(i) The contract (excluding any
options) or any exercised option—
(A) Is for severable services;
(B) Does not exceed one year in
length; and
(C) Is incrementally funded using
funds available (unexpired) as of the
date the funds are obligated; or
(ii) The contract uses funds available
from multiple (two or more) fiscal years
and—
(A) The contract is funded with
research and development
appropriations; or
(B) Congress has otherwise authorized
incremental funding.
(2) An incrementally funded fixedprice contract shall be fully funded as
soon as funds are available.
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15:11 Apr 11, 2006
Jkt 208001
49 CFR Parts 571
[Docket No. NHTSA 2006–24455]
RIN 2127–AJ78
Federal Motor Vehicle Safety
Standards; Power-Operated Window,
Partition, and Roof Panel Systems
National Highway Traffic
Safety Administration (NHTSA), DOT.
ACTION: Final rule; response to petitions
for reconsideration.
AGENCY:
SUMMARY: This document responds to
two petitions for reconsideration of our
September 2004 final rule amending the
Federal motor vehicle safety standard
for power-operated windows, partitions,
and roof panel systems. The
amendments required that switches for
these windows and other items in new
motor vehicles be resistant to accidental
PO 00000
Frm 00085
Fmt 4700
Sfmt 4700
18673
actuation that causes those items to
begin to close. The purpose of the
amendments was to reduce the number
of injuries and fatalities to people,
especially children, that occur when
they unintentionally close the poweroperated items on themselves by
accidentally leaning against or kneeling
or standing on the switch or when other
occupants accidentally actuate the
switch in that manner.
The petitions for reconsideration
requested that the agency adopt
additional amendments. The petitions
are granted in part and denied in part.
In responding to the petitions’ request to
require ‘‘pull-up-to-close’’ power
window switches, we are
simultaneously implementing a
congressional mandate to require such
switches. In addition, through this
document, we are amending the
standard to make a number of technical
amendments.
DATES: Effective Date: The amendments
made in this final rule are effective June
12, 2006.
Compliance Date: The requirements
of the September 2004 final rule, as
amended by today’s rule, become
mandatory for all vehicles subject to the
standard that are manufactured for sale
in the U.S. on or after October 1, 2008.
Voluntary compliance is permitted
before that date.
Petitions for Reconsideration: If you
wish to submit a petition for
reconsideration for this rule, your
petition must be received by May 30,
2006.
Petitions for reconsideration
should refer to the docket number above
and be submitted to: Administrator,
Room 5220, National Highway Traffic
Safety Administration, 400 Seventh
Street, SW., Washington, DC 20590.
See the SUPPLEMENTARY INFORMATION
portion of this document (Section VIII;
Rulemaking Analyses and Notices) for
DOT’s Privacy Act Statement regarding
documents submitted to the agency’s
dockets.
ADDRESSES:
For
non-legal issues, you may call Mr.
Michael Pyne, Office of Crash
Avoidance Standards (Telephone: 202–
366–2720) (Fax: 202–366–4329).
For legal issues, you may call Mr. Eric
Stas, Office of Chief Counsel
(Telephone: 202–366–2992) (Fax: 202–
366–3820).
You may send mail to these officials
at National Highway Traffic Safety
Administration, 400 Seventh Street,
SW., Washington, DC 20590.
SUPPLEMENTARY INFORMATION:
FOR FURTHER INFORMATION CONTACT:
E:\FR\FM\12APR1.SGM
12APR1
]]>Agencies
[Federal Register Volume 71, Number 70 (Wednesday, April 12, 2006)]
[Rules and Regulations]
[Pages 18671-18673]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 06-3457]
-----------------------------------------------------------------------
DEPARTMENT OF DEFENSE
Defense Acquisition Regulations System
48 CFR Parts 232 and 252
[DFARS Case 1990-037]
Defense Federal Acquisition Regulation Supplement; Incremental
Funding of Fixed-Price Contracts
AGENCY: Defense Acquisition Regulations System, Department of Defense
(DoD).
ACTION: Final rule.
-----------------------------------------------------------------------
SUMMARY: DoD has adopted as final, with changes, an interim rule
amending the Defense Federal Acquisition Regulation Supplement (DFARS)
to address the use of incrementally funded fixed-price contracts. The
rule contains a contract clause for use in those situations where
incremental funding of fixed-price contracts is permitted.
DATES: Effective Date: April 12, 2006.
FOR FURTHER INFORMATION CONTACT: Mr. Bill Sain, Defense Acquisition
Regulations System, OUSD(AT&L)DPAP(DARS), IMD 3C132, 3062 Defense
Pentagon, Washington, DC 20301-3062. Telephone (703) 602-2022;
facsimile (703) 602-0350. Please cite DFARS Case 1990-037.
SUPPLEMENTARY INFORMATION:
A. Background
This rule revises and finalizes the interim rule published at 58 FR
46091 on September 1, 1993, regarding incremental funding of fixed-
price contracts. Prior to the issuance of the interim rule,
incrementally funded fixed-price contracts had been used in limited
situations throughout DoD for a number of years. This technique
permitted DoD to award fixed-price contracts in specific circumstances
[[Page 18672]]
where full funding was not available and incremental funding was
statutorily permitted. Use of this technique precluded the need to use
a cost-type contract when the nature of the requirement was more
suitable for a fixed-price contract. To implement this technique, a
number of nonstandard clauses had been developed for use within the
military departments and defense agencies. In recognition of the need
for a standard clause for such contracts, DoD issued an interim rule to
specify those situations where incremental funding of fixed-price
contracts is permitted. Six sources submitted comments on the interim
rule. The following is a discussion of the comments and the issues
relating to the development of the final rule.
1. Language permitting use of incremental funding. The interim rule
permitted the use of incremental funding only when the contract was
funded with research and development appropriations or when Congress
had otherwise authorized incremental funding. The interim rule further
required that, for either base services or hazardous/toxic waste
remediation contracts for which incremental funding had been authorized
by Congress, the head of the contracting activity must approve the use
of incremental funding. A number of respondents expressed concern
regarding this language.
DoD has revised the rule to specifically address contracts for
severable services. As provided for in DFARS 232.703-3, contracts
crossing fiscal years, the contracting officer may enter into a
contract, exercise an option, or place an order under a contract for
severable services for a period that begins in one fiscal year and ends
in the next fiscal year if the period of the contract awarded, option
exercised, or order placed does not exceed one year (10 U.S.C. 2410a).
The public comments indicated that this provision may cause confusion
with regard to the use of incremental funding for severable services.
Therefore, the final rule contains a new paragraph 232.703-1(i) to
specifically address incremental funding for severable services.
2. Head of the contracting activity (HCA) approval. The interim
rule required the HCA to approve interim funding for base services and
hazardous/toxic waste remediation contracts. DoD believes that the
language in the final rule precludes the need for HCA approval. In
those cases where incremental funding has been authorized by Congress,
the contracting officer should have the flexibility to use such funding
without requiring the administrative burden of obtaining HCA approval.
This is consistent with the DoD policy of empowering contracting
personnel to the maximum extent practicable. The final rule is
sufficient for the contracting officer to apply the requirements
without further approval, as the rule specifies exactly which contracts
are eligible for incremental funding. The final rule also emphasizes
the preference for full funding by requiring that incrementally funded
fixed-price contracts be fully funded as soon as funds are available.
Therefore, the final rule eliminates the requirement for HCA approval
for base services or hazardous/toxic waste remediation contracts.
3. Work without funding. One respondent asserted that the clause at
DFARS 252.232-7007 encourages contractors to work without funding. The
respondent stated that the clause is intended as a vehicle for
contracting officers to circumvent the Anti-Deficiency Act.
Under the requirements of DFARS 252.232-7007, the contractor agrees
to perform up to the point at which the total amount payable by the
Government, including reimbursement in the event of termination for
convenience, approximates the total amount allotted to the contract;
the contractor is not obligated to continue work on those items beyond
that point, and the Government is not obligated to reimburse the
contractor in excess of the amount allotted to the contract. The clause
notifies the contractor that continuing work is at the sole risk of the
contractor. Thus, the clause is not, nor is it intended to be, a
vehicle for violating the Anti-Deficiency Act. Nevertheless, DoD agrees
that it would be helpful to revise the language regarding continued
contract performance to emphasize that the contractor is not authorized
to continue work. Therefore, the final rule changes the phrase ``The
Contractor will not be obligated to continue work'' to ``The Contractor
is not authorized to continue work''. In addition, the final rule
redesignates paragraph (i) of the clause as paragraph (j) and adds a
new paragraph (i) to read ``Nothing in this clause shall be construed
as authorization of voluntary services whose acceptance is otherwise
prohibited under 31 U.S.C. 1342.''
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:
This rule amends the DFARS to allow incrementally funded fixed-
price contracts in certain limited, and clearly defined, situations.
The objective of the rule is to encourage the full funding of
contracts, while recognizing that there are specific situations where
full funding is not possible, and allowing incremental funding to be
used in those situations. DoD received no public comments on the
initial regulatory flexibility analysis. As a result of comments
received on the interim rule, the final rule contains changes that
clarify the applicability of the rule and the requirements of the
contract clause. The rule applies to all entities with incrementally
funded fixed-priced DoD contracts. DoD believes that the rule has
little or no economic impact on such entities, since the rule places
little cost risk on the contractor. This is especially true of the
final rule, which includes revisions that clarify that a contractor is
not authorized to continue performance of a contract beyond the amount
incrementally funded. The final rule maintains the clear preference for
fully funded fixed-priced contracts; and requires the use of a standard
clause in clearly defined and limited circumstances permitting DoD to
award, and the contractor to begin work under, a contract prior to the
availability of full funding. The rule requires that full funding be
placed on the contract as soon as funds are available; clearly states
that the contractor is not authorized to perform work beyond the
available funds allotted to the contract; and provides specific
protections to the contractor until full funding is made available. The
rule requires the contractor to notify the contracting officer at least
90 days prior to the date when, in the contractor's best judgment, the
work under the contract will reach the point at which the total amount
payable by the Government, including any cost for termination for
convenience, will approximate 85 percent of the total amount allotted
to the contract. In addition, the contractor must provide information
regarding additional funding needed to continue performance. This
information is the minimum needed for the Government to determine the
appropriate course of action. The required information should be
readily available to the contractor as part of its normal business
practices. The policy in the final rule is designed to minimize any
economic impact on small entities. There are no practical
[[Page 18673]]
alternatives to the rule. The rule is consistent with statutory
requirements.
C. Paperwork Reduction Act
The information collection requirements of the clause at DFARS
252.232-7007, Limitation of Government's Obligation, have been approved
by the Office of Management and Budget under Clearance Number 0704-0359
for use through December 31, 2007.
List of Subjects in 48 CFR Parts 232 and 252
Government procurement.
Michele P. Peterson,
Editor, Defense Acquisition Regulations System.
0
Accordingly, the interim rule amending 48 CFR Parts 232 and 252, which
was published at 58 FR 46091 on September 1, 1993, is adopted as a
final rule with the following changes:
0
1. The authority citation for 48 CFR parts 232 and 252 continues to
read as follows:
Authority: 41 U.S.C. 421 and 48 CFR Chapter 1.
PART 232--CONTRACT FINANCING
0
2. Section 232.001 is added to read as follows:
232.001 Definitions.
Incremental funding means the partial funding of a contract or an
exercised option, with additional funds anticipated to be provided at a
later time.
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3. Section 232.703-1 is revised to read as follows:
232.703-1 General.
(1) A fixed-price contract may be incrementally funded only if--
(i) The contract (excluding any options) or any exercised option--
(A) Is for severable services;
(B) Does not exceed one year in length; and
(C) Is incrementally funded using funds available (unexpired) as of
the date the funds are obligated; or
(ii) The contract uses funds available from multiple (two or more)
fiscal years and--
(A) The contract is funded with research and development
appropriations; or
(B) Congress has otherwise authorized incremental funding.
(2) An incrementally funded fixed-price contract shall be fully
funded as soon as funds are available.
PART 252--SOLICITATION PROVISIONS AND CONTRACT CLAUSES
0
4. Section 252.232-7007 is amended as follows:
0
a. By revising the clause date;
0
b. In paragraph (b), by revising the second sentence;
0
c. By revising paragraph (i); and
0
d. By adding paragraph (j) to read as follows:
252.232-7007 Limitation of Government's Obligation.
* * * * *
LIMITATION OF GOVERNMENT'S OBLIGATION (APR 2006)
* * * * *
(b) * * * The Contractor is not authorized to continue work on
those item(s) beyond that point. * * *
* * * * *
(i) Nothing in this clause shall be construed as authorization of
voluntary services whose acceptance is otherwise prohibited under 31
U.S.C. 1342.
(j) The parties contemplate that the Government will allot funds to
this contract in accordance with the following schedule:
On execution of contract $----
(month) (day), (year) $----
(month) (day), (year) $----
(month) (day), (year) $----
* * * * *
[FR Doc. 06-3457 Filed 4-11-06; 8:45 am]
BILLING CODE 5001-08-P
