Defense Federal Acquisition Regulation Supplement; Types of Contracts, 39006-39008 [E6-10838]
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39006
Federal Register / Vol. 71, No. 132 / Tuesday, July 11, 2006 / Rules and Regulations
contractors or offerors, or a significant
effect beyond the internal operating
procedures of DoD. Therefore,
publication for public comment is not
required. However, DoD will consider
comments from small entities
concerning the affected DFARS subparts
in accordance with 5 U.S.C. 610. Such
comments should cite DFARS Case
2006–D003.
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 Parts 212,
225, and 252
Government procurement.
Michele P. Peterson,
Editor, Defense Acquisition Regulations
System.
Therefore, 48 CFR parts 212, 225, and
252 are amended as follows:
I 1. The authority citation for 48 CFR
parts 212, 225, and 252 continues to
read as follows:
I
Authority: 41 U.S.C. 421 and 48 CFR
Chapter 1.
PART 212—ACQUISITION OF
COMMERCIAL ITEMS
212.301
[Amended]
2. Section 212.301 is amended in
paragraph (f)(ii), in the second sentence,
by removing ‘‘(see 225.670–3)’’ and
adding in its place ‘‘(see 225.7603)’’.
I
PART 225—FOREIGN ACQUISITION
Subpart 225.6—[Removed]
I
3. Subpart 225.6 is removed.
225.1103
[Amended]
4. Section 225.1103 is amended as
follows:
I a. By removing paragraph (2); and
I b. By redesignating paragraphs (3) and
(4) as paragraphs (2) and (3)
respectively.
I 5. Subpart 225.76 is added to read as
follows:
I
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Subpart 225.76—Secondary Arab Boycott of
Israel
Sec.
225.7601 Restriction.
225.7602 Procedures.
225.7603 Exceptions.
225.7604 Waivers.
225.7605 Solicitation provision.
Restriction.
In accordance with 10 U.S.C. 2410i,
do not enter into a contract with a
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225.7602
Procedures.
DEPARTMENT OF DEFENSE
Defense Acquisition Regulations
System
For contracts awarded to the
Canadian Commercial Corporation
(CCC), the CCC will submit a
certification from its proposed
subcontractor with the other required
precontractual information (see
225.870).
48 CFR Part 216
225.7603
AGENCY:
Exceptions.
This restriction does not apply to—
(a) Purchases at or below the
simplified acquisition threshold;
(b) Contracts for consumable supplies,
provisions, or services for the support of
United States forces or of allied forces
in a foreign country; or
(c) Contracts pertaining to the use of
any equipment, technology, data, or
services for intelligence or classified
purposes, or to the acquisition or lease
thereof, in the interest of national
security.
225.7604
Waivers.
The Secretary of Defense may waive
this restriction on the basis of national
security interests. Forward waiver
requests to the Director, Defense
Procurement and Acquisition Policy,
ATTN: OUSD(AT&L)DPAP(PAIC), 3060
Defense Pentagon, Washington, DC
20301–3060.
225.7605
Solicitation provision.
Unless an exception applies or a
waiver has been granted in accordance
with 225.7604, use the provision at
252.225–7031, Secondary Arab Boycott
of Israel, in all solicitations.
PART 252—SOLICITATION
PROVISIONS AND CONTRACT
CLAUSES
252.225–7031
[Amended]
6. Section 252.225–7031 is amended
in the introductory text by removing
‘‘225.1103(2)’’ and adding in its place
‘‘225.7605’’.
I
252.225–7041
[Amended]
7. Section 252.225–7041 is amended
in the introductory text by removing
‘‘225.1103(3)’’ and adding in its place
‘‘225.1103(2)’’.
I
252.225–7042
[Amended]
8. Section 252.225–7042 is amended
in the introductory text by removing
‘‘225.1103(4)’’ and adding in its place
‘‘225.1103(3)’’.
I
Subpart 225.76—Secondary Arab
Boycott of Israel
225.7601
foreign entity unless it has certified that
it does not comply with the secondary
Arab boycott of Israel.
[FR Doc. E6–10850 Filed 7–10–06; 8:45 am]
BILLING CODE 5001–08–P
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[DFARS Case 2003–D078]
Defense Federal Acquisition
Regulation Supplement; Types of
Contracts
Defense Acquisition
Regulations System, Department of
Defense (DoD).
ACTION: Final rule.
SUMMARY: DoD has issued a final rule
amending the Defense Federal
Acquisition Regulation Supplement
(DFARS) to update text on the selection
and use of contract types. This rule is
a result of a transformation initiative
undertaken by DoD to dramatically
change the purpose and content of the
DFARS.
EFFECTIVE DATE: July 11, 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 2003–D078.
SUPPLEMENTARY INFORMATION:
A. Background
DFARS Transformation is a major
DoD initiative to dramatically change
the purpose and content of the DFARS.
The objective is to improve the
efficiency and effectiveness of the
acquisition process, while allowing the
acquisition workforce the flexibility to
innovate. The transformed DFARS will
contain only requirements of law, DoDwide policies, delegations of FAR
authorities, deviations from FAR
requirements, and policies/procedures
that have a significant effect beyond the
internal operating procedures of DoD or
a significant cost or administrative
impact on contractors or offerors.
Additional information on the DFARS
Transformation initiative is available at
https://www.acq.osd.mil/dpap/dars/
dfars/transformation/index.htm.
This final rule is a result of the
DFARS Transformation initiative. The
DFARS changes—
• Streamline text on the use of
economic price adjustment clauses;
• Increase, from 3 to 5 years, the
standard maximum ordering period
under basic ordering agreements;
• Delete obsolete text on the use of
cost-plus-fixed-fee contracts for
environmental restoration;
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Federal Register / Vol. 71, No. 132 / Tuesday, July 11, 2006 / Rules and Regulations
• Delete unnecessary text on design
stability and use of incentive provisions;
and
• Delete procedures for selecting
contract type and for use of special
economic price adjustment clauses,
incentive contracts, and basic ordering
agreements. Text on these subjects has
been relocated to the DFARS companion
resource, Procedures, Guidance, and
Information (PGI), available at https://
www.acq.osd.mil/dpap/dars/pgi.
DoD published a proposed rule at 70
FR 54694 on September 16, 2005. DoD
received no comments on the proposed
rule. Therefore, DoD has adopted the
proposed 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.
B. Regulatory Flexibility Act
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 rule updates and
streamlines DFARS text, but makes no
significant change to DoD contracting
policy.
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 216
Government procurement.
§ 216.203–4
Contract clauses.
216.405–2
(1) Generally, use the clauses at FAR
52.216–2, Economic Price Adjustment—
Standard Supplies, FAR 52.216–3,
Economic Price Adjustment—
Semistandard Supplies, and FAR
52.216–4, Economic Price Adjustment—
Labor and Material, only when—
(i) The total contract price exceeds the
simplified acquisition threshold; and
(ii) Delivery or performance will not
be completed within 6 months after
contract award.
(2) Follow the procedures at PGI
216.203–4 when using an economic
price adjustment clause based on cost
indexes of labor or material.
I 5. Section 216.306 is amended by
revising paragraph (c)(ii) to read as
follows:
216.306
Cost-plus-fixed-fee contracts.
(c) * * *
(ii) The prohibition in paragraph (c)(i)
of this section does not apply to
contracts specifically approved in
writing, setting forth the reasons
therefor, in accordance with the
following:
(A) The Secretaries of the military
departments are authorized to approve
such contracts that are for
environmental work only, provided the
environmental work is not classified as
construction, as defined by 10 U.S.C.
2801.
(B) The Secretary of Defense or
designee must approve such contracts
that are not for environmental work
only or are for environmental work
classified as construction.
I 6. Sections 216.402–2 through
216.403–2 are revised to read as follows:
216.402–2 Technical performance
incentives.
Michele P. Peterson,
Editor, Defense Acquisition Regulations
System.
See PGI 216.402–2 for guidance on
establishing performance incentives.
Therefore, 48 CFR part 216 is
amended as follows:
I
216.403
Fixed-price incentive contracts.
PART 216—TYPES OF CONTRACTS
216.403–2 Fixed-price incentive
(successive targets) contracts.
1. The authority citation for 48 CFR
part 216 continues to read as follows:
See PGI 216.403–2 for guidance on
the use of fixed-price incentive
(successive targets) contracts.
I
Authority: 41 U.S.C. 421 and 48 CFR
Chapter 1.
216.104
216.404
[Removed]
2. Section 216.104 is removed.
3. Section 216.104–70 is revised to
read as follows:
I
I
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§ 216.104–70
Research and development.
Follow the procedures at PGI
216.104–70 for selecting the appropriate
research and development contract type.
I 4. Section 216.203–4 is revised to read
as follows:
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[Removed]
7. Section 216.404 is removed.
I 8. Section 216.405–1 is revised to read
as follows:
I
216.405–1 Cost-plus-incentive-fee
contracts.
See PGI 216.405–1 for guidance on
the use of cost-plus-incentive-fee
contracts.
I 9. Section 216.405–2 is revised to read
as follows:
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39007
Cost-plus-award-fee contracts.
(b) Application. The cost-plus-awardfee (CPAF) contract may include
provisional award fee payments. A
provisional award fee payment is a
payment made within an evaluation
period prior to a final evaluation for that
period. The contracting officer may
include provisional award fee payments
in a CPAF contract on a case-by-case
basis, provided those payments—
(i) Are made no more frequently than
monthly;
(ii) Are limited to no more than—
(A) For the initial award fee
evaluation period, 50 percent of the
award fee available for that period; and
(B) For subsequent award fee
evaluation periods, 80 percent of the
evaluation score for the prior evaluation
period times the award fee available for
the current period, e.g., if the contractor
received 90 percent of the award fee
available for the prior evaluation period,
provisional payments for the current
period shall not exceed 72 percent (90
percent x 80 percent) of the award fee
available for the current period;
(iii) Are superseded by an interim or
final award fee evaluation for the
applicable evaluation period. If
provisional payments have exceeded the
payment determined by the evaluation
score for the applicable period, the
contracting officer shall collect the debt
in accordance with FAR 32.606; and
(iv) May be discontinued, or reduced
in such amounts deemed appropriate by
the contracting officer, when the
contracting officer determines that the
contractor will not achieve a level of
performance commensurate with the
provisional payment. The contracting
officer shall notify the contractor in
writing of any discontinuance or
reduction in provisional award fee
payments.
(c) Limitations.
(i) The CPAF contract shall not be
used—
(A) To avoid—
(1) Establishing cost-plus-fixed-fee
contracts when the criteria for cost-plusfixed-fee contracts apply; or
(2) Developing objective targets so a
cost-plus-incentive-fee contract can be
used; or
(B) For either engineering
development or operational system
development acquisitions that have
specifications suitable for simultaneous
research and development and
production, except a CPAF contract may
be used for individual engineering
development or operational system
development acquisitions ancillary to
the development of a major weapon
system or equipment, where—
(1) It is more advantageous; and
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Federal Register / Vol. 71, No. 132 / Tuesday, July 11, 2006 / Rules and Regulations
(2) The purpose of the acquisition is
clearly to determine or solve specific
problems associated with the major
weapon system or equipment.
(ii) Do not apply the weighted
guidelines method to CPAF contracts for
either the base (fixed) fee or the award
fee.
(iii) The base fee shall not exceed 3
percent of the estimated cost of the
contract exclusive of the fee.
(S–70) See PGI 216.405–2 for
guidance on the use of CPAF contracts.
I 10. Section 216.470 is revised to read
as follows:
216.470
Other applications of award fees.
See PGI 216.470 for guidance on other
applications of award fees.
I 11. Section 216.703 is revised to read
as follows:
216.703
Basic ordering agreements.
(c) Limitations. The period during
which orders may be placed against a
basic ordering agreement may not
exceed 5 years.
(d) Orders. Follow the procedures at
PGI 216.703(d) for issuing orders under
basic ordering agreements.
[FR Doc. E6–10838 Filed 7–10–06; 8:45 am]
BILLING CODE 5001–08–P
DEPARTMENT OF DEFENSE
Defense Acquisition Regulations
System
48 CFR Part 219
[DFARS Case 2006–D010]
Defense Federal Acquisition
Regulation Supplement; Extension of
Contract Goal for Small Disadvantaged
Businesses and Certain Institutions of
Higher Learning
Defense Acquisition
Regulations System, Department of
Defense (DoD).
ACTION: Final rule.
AGENCY:
Regulations System, OUSD (AT&L)
DPAP (DARS), IMD 3C132, 3062
Defense Pentagon, Washington, DC
20301–3062. Telephone (703) 602–0289;
facsimile (703) 602–0350. Please cite
DFARS Case 2006-D010.
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[FR Doc. E6–10853 Filed 7–10–06; 8:45 am]
BILLING CODE 5001–08–P
A. Background
DEPARTMENT OF DEFENSE
10 U.S.C. 2323 establishes a goal for
DoD to award five percent of contract
and subcontract dollars to small
disadvantaged businesses, historically
black colleges and universities, and
minority institutions. Section 842 of the
National Defense Authorization Act for
Fiscal Year 2006 (Pub. L. 109–163)
extended the period for applicability of
the goal through fiscal year 2009. This
final rule amends DFARS 219.800 to
reflect the extension.
This rule was not subject to Office of
Management and Budget review under
Executive Order 12866, dated
September 30, 1993.
Defense Acquisition Regulations
System
B. Regulatory Flexibility Act
This rule will not have a significant
cost or administrative impact on
contractors or offerors, or a significant
effect beyond the internal operating
procedures of DoD. Therefore,
publication for public comment is not
required. However, DoD will consider
comments from small entities
concerning the affected DFARS subpart
in accordance with 5 U.S.C. 610. Such
comments should cite DFARS Case
2006–D010.
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.
Government procurement.
SUMMARY:
VerDate Aug<31>2005
[Amended]
2. Section 219.000 is amended in the
introductory text by removing ‘‘2006’’
and adding in its place ‘‘2009’’.
I
SUPPLEMENTARY INFORMATION:
List of Subjects in 48 CFR Part 219
DoD has issued a final rule
amending the Defense Federal
Acquisition Regulation Supplement
(DFARS) to implement Section 842 of
the National Defense Authorization Act
for Fiscal Year 2006. Section 842
extends, through fiscal year 2009, DoD’s
goal to award five percent of contract
and subcontract dollars to small
disadvantaged businesses, historically
black colleges and universities, and
minority institutions.
DATES: Effective Date: July 11, 2006.
FOR FURTHER INFORMATION CONTACT: Ms.
Deborah Tronic, Defense Acquisition
219.000
48 CFR Parts 225 and 252
Defense Federal Acquisition
Regulation Supplement; Technical
Amendments
Defense Acquisition
Regulations System, Department of
Defense (DoD).
ACTION: Final rule.
AGENCY:
SUMMARY: DoD is making technical
amendments to the Defense Federal
Acquisition Regulation Supplement
(DFARS) to add a reference to guidance
documents, update an Internet address,
and add paragraph designations in a
contract clause.
DATES: Effective Date: July 11, 2006.
FOR FURTHER INFORMATION CONTACT: Ms.
Michele Peterson, Defense Acquisition
Regulations System, OUSD (AT&L)
DPAP (DARS), IMD 3C132, 3062
Defense Pentagon, Washington, DC
20301–3062. Telephone (703) 602–0311;
facsimile (703) 602–0350.
SUPPLEMENTARY INFORMATION: This final
rule amends DFARS text as follows:
• Section 225.7002–1. Adds a
reference to guidance found in the
DFARS companion resource,
Procedures, Guidance, and Information
(PGI).
• Section 225.7401. Updates an
Internet address.
• Section 252.212–7001. Adds
paragraph designations to the DFARS
clauses listed within this contract
clause. No substantive change is made
to the content of the clause.
Michele P. Peterson,
Editor, Defense Acquisition Regulations
System.
List of Subjects in 48 CFR Parts 225 and
252
I
Therefore, 48 CFR part 219 is
amended as follows:
Michele P. Peterson,
Editor, Defense Acquisition Regulations
System.
PART 219–SMALL BUSINESS
PROGRAMS
I
Government procurement.
1. The authority citation for 48 CFR
part 219 continues to read as follows:
Therefore, 48 CFR parts 225 and 252
are amended as follows:
I 1. The authority citation for 48 CFR
parts 225 and 252 continues to read as
follows:
Authority: 41 U.S.C. 421 and 48 CFR
Chapter 1.
Authority: 41 U.S.C. 421 and 48 CFR
Chapter 1.
I
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]]>Agencies
[Federal Register Volume 71, Number 132 (Tuesday, July 11, 2006)]
[Rules and Regulations]
[Pages 39006-39008]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: E6-10838]
-----------------------------------------------------------------------
DEPARTMENT OF DEFENSE
Defense Acquisition Regulations System
48 CFR Part 216
[DFARS Case 2003-D078]
Defense Federal Acquisition Regulation Supplement; Types of
Contracts
AGENCY: Defense Acquisition Regulations System, Department of Defense
(DoD).
ACTION: Final rule.
-----------------------------------------------------------------------
SUMMARY: DoD has issued a final rule amending the Defense Federal
Acquisition Regulation Supplement (DFARS) to update text on the
selection and use of contract types. This rule is a result of a
transformation initiative undertaken by DoD to dramatically change the
purpose and content of the DFARS.
EFFECTIVE DATE: July 11, 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 2003-D078.
SUPPLEMENTARY INFORMATION:
A. Background
DFARS Transformation is a major DoD initiative to dramatically
change the purpose and content of the DFARS. The objective is to
improve the efficiency and effectiveness of the acquisition process,
while allowing the acquisition workforce the flexibility to innovate.
The transformed DFARS will contain only requirements of law, DoD-wide
policies, delegations of FAR authorities, deviations from FAR
requirements, and policies/procedures that have a significant effect
beyond the internal operating procedures of DoD or a significant cost
or administrative impact on contractors or offerors. Additional
information on the DFARS Transformation initiative is available at
https://www.acq.osd.mil/dpap/dars/dfars/transformation/index.htm.
This final rule is a result of the DFARS Transformation initiative.
The DFARS changes--
Streamline text on the use of economic price adjustment
clauses;
Increase, from 3 to 5 years, the standard maximum ordering
period under basic ordering agreements;
Delete obsolete text on the use of cost-plus-fixed-fee
contracts for environmental restoration;
[[Page 39007]]
Delete unnecessary text on design stability and use of
incentive provisions; and
Delete procedures for selecting contract type and for use
of special economic price adjustment clauses, incentive contracts, and
basic ordering agreements. Text on these subjects has been relocated to
the DFARS companion resource, Procedures, Guidance, and Information
(PGI), available at https://www.acq.osd.mil/dpap/ dars/pgi.
DoD published a proposed rule at 70 FR 54694 on September 16, 2005.
DoD received no comments on the proposed rule. Therefore, DoD has
adopted the proposed 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.
B. Regulatory Flexibility Act
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 rule updates and streamlines DFARS text, but makes no
significant change to DoD contracting policy.
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 216
Government procurement.
Michele P. Peterson,
Editor, Defense Acquisition Regulations System.
0
Therefore, 48 CFR part 216 is amended as follows:
PART 216--TYPES OF CONTRACTS
0
1. The authority citation for 48 CFR part 216 continues to read as
follows:
Authority: 41 U.S.C. 421 and 48 CFR Chapter 1.
216.104 [Removed]
0
2. Section 216.104 is removed.
0
3. Section 216.104-70 is revised to read as follows:
Sec. 216.104-70 Research and development.
Follow the procedures at PGI 216.104-70 for selecting the
appropriate research and development contract type.
0
4. Section 216.203-4 is revised to read as follows:
Sec. 216.203-4 Contract clauses.
(1) Generally, use the clauses at FAR 52.216-2, Economic Price
Adjustment--Standard Supplies, FAR 52.216-3, Economic Price
Adjustment--Semistandard Supplies, and FAR 52.216-4, Economic Price
Adjustment--Labor and Material, only when--
(i) The total contract price exceeds the simplified acquisition
threshold; and
(ii) Delivery or performance will not be completed within 6 months
after contract award.
(2) Follow the procedures at PGI 216.203-4 when using an economic
price adjustment clause based on cost indexes of labor or material.
0
5. Section 216.306 is amended by revising paragraph (c)(ii) to read as
follows:
216.306 Cost-plus-fixed-fee contracts.
(c) * * *
(ii) The prohibition in paragraph (c)(i) of this section does not
apply to contracts specifically approved in writing, setting forth the
reasons therefor, in accordance with the following:
(A) The Secretaries of the military departments are authorized to
approve such contracts that are for environmental work only, provided
the environmental work is not classified as construction, as defined by
10 U.S.C. 2801.
(B) The Secretary of Defense or designee must approve such
contracts that are not for environmental work only or are for
environmental work classified as construction.
0
6. Sections 216.402-2 through 216.403-2 are revised to read as follows:
216.402-2 Technical performance incentives.
See PGI 216.402-2 for guidance on establishing performance
incentives.
216.403 Fixed-price incentive contracts.
216.403-2 Fixed-price incentive (successive targets) contracts.
See PGI 216.403-2 for guidance on the use of fixed-price incentive
(successive targets) contracts.
216.404 [Removed]
0
7. Section 216.404 is removed.
0
8. Section 216.405-1 is revised to read as follows:
216.405-1 Cost-plus-incentive-fee contracts.
See PGI 216.405-1 for guidance on the use of cost-plus-incentive-
fee contracts.
0
9. Section 216.405-2 is revised to read as follows:
216.405-2 Cost-plus-award-fee contracts.
(b) Application. The cost-plus-award-fee (CPAF) contract may
include provisional award fee payments. A provisional award fee payment
is a payment made within an evaluation period prior to a final
evaluation for that period. The contracting officer may include
provisional award fee payments in a CPAF contract on a case-by-case
basis, provided those payments--
(i) Are made no more frequently than monthly;
(ii) Are limited to no more than--
(A) For the initial award fee evaluation period, 50 percent of the
award fee available for that period; and
(B) For subsequent award fee evaluation periods, 80 percent of the
evaluation score for the prior evaluation period times the award fee
available for the current period, e.g., if the contractor received 90
percent of the award fee available for the prior evaluation period,
provisional payments for the current period shall not exceed 72 percent
(90 percent x 80 percent) of the award fee available for the current
period;
(iii) Are superseded by an interim or final award fee evaluation
for the applicable evaluation period. If provisional payments have
exceeded the payment determined by the evaluation score for the
applicable period, the contracting officer shall collect the debt in
accordance with FAR 32.606; and
(iv) May be discontinued, or reduced in such amounts deemed
appropriate by the contracting officer, when the contracting officer
determines that the contractor will not achieve a level of performance
commensurate with the provisional payment. The contracting officer
shall notify the contractor in writing of any discontinuance or
reduction in provisional award fee payments.
(c) Limitations.
(i) The CPAF contract shall not be used--
(A) To avoid--
(1) Establishing cost-plus-fixed-fee contracts when the criteria
for cost-plus-fixed-fee contracts apply; or
(2) Developing objective targets so a cost-plus-incentive-fee
contract can be used; or
(B) For either engineering development or operational system
development acquisitions that have specifications suitable for
simultaneous research and development and production, except a CPAF
contract may be used for individual engineering development or
operational system development acquisitions ancillary to the
development of a major weapon system or equipment, where--
(1) It is more advantageous; and
[[Page 39008]]
(2) The purpose of the acquisition is clearly to determine or solve
specific problems associated with the major weapon system or equipment.
(ii) Do not apply the weighted guidelines method to CPAF contracts
for either the base (fixed) fee or the award fee.
(iii) The base fee shall not exceed 3 percent of the estimated cost
of the contract exclusive of the fee.
(S-70) See PGI 216.405-2 for guidance on the use of CPAF contracts.
0
10. Section 216.470 is revised to read as follows:
216.470 Other applications of award fees.
See PGI 216.470 for guidance on other applications of award fees.
0
11. Section 216.703 is revised to read as follows:
216.703 Basic ordering agreements.
(c) Limitations. The period during which orders may be placed
against a basic ordering agreement may not exceed 5 years.
(d) Orders. Follow the procedures at PGI 216.703(d) for issuing
orders under basic ordering agreements.
[FR Doc. E6-10838 Filed 7-10-06; 8:45 am]
BILLING CODE 5001-08-P
