Defense Federal Acquisition Regulation Supplement; Labor Reimbursement on DoD Non-Commercial Time-and-Materials and Labor-Hour Contracts (DFARS Case 2006-D030), 51189-51191 [E7-17423]
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Federal Register / Vol. 72, No. 172 / Thursday, September 6, 2007 / Rules and Regulations
(2) Assessments and corresponding
acquisition strategies developed under
this section shall—
(i) Be developed before issuance of a
solicitation for the weapon system or
subsystem;
(ii) Address the merits of including a
priced contract option for the future
delivery of technical data and computer
software, and associated license rights,
that were not acquired upon initial
contract award;
(iii) Address the potential for changes
in the sustainment plan over the life
cycle of the weapon system or
subsystem; and
(iv) Apply to weapon systems and
subsystems that are to be supported by
performance-based logistics
arrangements as well as to weapon
systems and subsystems that are to be
supported by other sustainment
approaches.
PART 227—PATENTS, DATA, AND
COPYRIGHTS
3. Section 227.7103–1 is amended by
adding paragraph (f) to read as follows:
I
227.7103–1
Policy.
*
*
*
*
*
(f) For acquisitions involving major
weapon systems or subsystems of major
weapon systems, the acquisition plan
shall address acquisition strategies that
provide for technical data and the
associated license rights in accordance
with 207.106(S–70).
I 4. Section 227.7203–1 is amended by
adding paragraph (e) to read as follows:
227.7203–1
Policy.
*
*
*
*
*
(e) For acquisitions involving major
weapon systems or subsystems of major
weapon systems, the acquisition plan
shall address acquisition strategies that
provide for computer software and
computer software documentation, and
the associated license rights, in
accordance with 207.106(S–70).
[FR Doc. E7–17422 Filed 9–5–07; 8:45 am]
pwalker on PROD1PC71 with RULES
BILLING CODE 5001–08–P
DEPARTMENT OF DEFENSE
Defense Acquisition Regulations
System
48 CFR Parts 212 and 234
RIN 0750–AF38
Defense Federal Acquisition
Regulation Supplement; Acquisition of
Major Weapon Systems as Commercial
Items (DFARS Case 2006–D012)
Defense Acquisition
Regulations System, Department of
Defense (DoD).
ACTION: Final rule.
AGENCY:
SUMMARY: DoD has adopted as final,
without change, an interim rule
amending the Defense Federal
Acquisition Regulation Supplement
(DFARS) to implement Section 803 of
the National Defense Authorization Act
for Fiscal Year 2006. Section 803 places
limitations on the acquisition of a major
weapon system as a commercial item.
EFFECTIVE DATE: September 6, 2007.
FOR FURTHER INFORMATION CONTACT: Ms.
Felisha Hitt, Defense Acquisition
Regulations System, OUSD (AT&L)
DPAP (DARS), IMD 3D139, 3062
Defense Pentagon, Washington, DC
20301–3062. Telephone (703) 602–0310;
facsimile (703) 602–7887. Please cite
DFARS Case 2006–D012.
SUPPLEMENTARY INFORMATION:
A. Background
DoD certifies that this final rule will
not have a significant economic impact
18:26 Sep 05, 2007
Jkt 211001
PO 00000
Frm 00031
Fmt 4700
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 relates to internal DoD
considerations regarding the acquisition
of major weapon systems.
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 and
234
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 212 and 234,
which was published at 71 FR 58537 on
October 4, 2006, is adopted as a final
rule without change.
I
[FR Doc. E7–17428 Filed 9–5–07; 8:45 am]
BILLING CODE 5001–08–P
DEPARTMENT OF DEFENSE
Defense Acquisition Regulations
System
48 CFR Parts 216 and 252
DoD published an interim rule at 71
FR 58537 on October 4, 2006, to
implement Section 803 of the National
Defense Authorization Act for Fiscal
Year 2006 (Pub. L. 109–163). Section
803 permits the treatment or acquisition
of a major weapon system as a
commercial item only if (1) The
Secretary of Defense determines that the
major weapon system meets the
definition of commercial item at 41
U.S.C. 403(12) and such treatment is
necessary to meet national security
objectives; and (2) the congressional
defense committees are notified at least
30 days before such treatment or
acquisition occurs.
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.
B. Regulatory Flexibility Act
VerDate Aug<31>2005
51189
Sfmt 4700
RIN 0750–AF44
Defense Federal Acquisition
Regulation Supplement; Labor
Reimbursement on DoD NonCommercial Time-and-Materials and
Labor-Hour Contracts (DFARS Case
2006–D030)
Defense Acquisition
Regulations System, Department of
Defense (DoD).
ACTION: Final rule.
AGENCY:
SUMMARY: DoD has adopted as final,
without change, an interim rule
amending the Defense Federal
Acquisition Regulation Supplement
(DFARS) to provide policy for
reimbursing labor costs on
competitively awarded DoD noncommercial time-and-materials and
labor-hour contracts.
EFFECTIVE DATE: September 6, 2007.
FOR FURTHER INFORMATION CONTACT: Ms.
Robin Schulze, Defense Acquisition
Regulations System, OUSD (AT&L)
DPAP (CPF), IMD 3D139, 3062 Defense
Pentagon, Washington, DC 20301–3062.
E:\FR\FM\06SER1.SGM
06SER1
51190
Federal Register / Vol. 72, No. 172 / Thursday, September 6, 2007 / Rules and Regulations
Telephone (703) 602–0326; facsimile
(703) 602–7887. Please cite DFARS Case
2006–D030.
SUPPLEMENTARY INFORMATION:
pwalker on PROD1PC71 with RULES
A. Background
DoD published an interim rule at 71
FR 74469 on December 12, 2006, to
clarify payment procedures for noncommercial time-and-materials and
labor-hour contracts. Two sources
submitted comments on the interim
rule. A discussion of the comments is
provided below.
1. Comment: One source stated that
DoD should not require separate hourly
rates for each category of labor
performed by the contractor and each
subcontractor on every competitively
awarded non-commercial time-andmaterials and labor-hour contract, since
price competition will ensure the hourly
rates are fair and reasonable and will
eliminate potential abuses. The source
also stated that the rationale cited in the
interim rule for requiring separate
hourly rates failed to address the
benefits of adequate price competition
and was not relevant to the requirement
for separate rates. While not cited as
rationale for requiring separate rates, the
source stated that DoD may have
adopted the rule to ensure subcontract
labor meets the qualifications for the
labor categories specified in the
contract. If this is part of the rationale,
DoD already has the ability to
accomplish that objective through the
subcontract consent provisions of FAR
clause 52.244–2, which is mandatory for
all time-and-materials contracts that
exceed the simplified acquisition
threshold. Another source stated that
the rule eliminates the flexibility to
select the proper approach, considering
the advantages and disadvantages of the
pricing options for hourly rates.
DoD Response: The FAR provisions
authorize agencies to select, and make
mandatory, one of the three options for
pricing hourly rates. DoD believes it is
in the best interest of the Department to
select, and make mandatory, the FAR
option that requires separate fixed
hourly rates for each category of labor
performed by the contractor and each
subcontractor. DoD believes the
rationale cited in the interim rule
adequately supports the requirement for
separate rates. That rationale is not
based on the benefits of adequate price
competition, because those benefits are
not affected by the requirement for
separate hourly rates. The rationale is
also not based on a need to ensure the
subcontract labor meets the
qualifications for the labor categories
specified in the contract.
VerDate Aug<31>2005
18:26 Sep 05, 2007
Jkt 211001
2. Comment: One source stated that
the requirement for separate fixed
hourly rates for each category of labor
performed by the contractor and each
subcontractor will slow the acquisition
process by requiring lengthy contract
negotiations to establish separate hourly
rates and contract modifications to add
new subcontractors. In addition, the
requirement will hinder contract
performance, will tax DoD’s acquisition
workforce, and will likely prejudice
qualified small and small disadvantaged
businesses that only become known to
the prime contractor after contract
formation. Another source stated that
the requirement for separate fixed
hourly rates for each category of labor
performed by the contractor and each
subcontractor will negatively impact
contractor invoicing. Hours will have to
be billed separately for each
subcontractor and the prime for each
fund cite. As a result, contractor indirect
rates will increase to absorb the
additional administrative costs. In
addition, the administrative time and
expense required to modify the contract
to add new subcontractors will be
substantial.
DoD Response: The FAR authorizes
separate fixed hourly rates for each
category of labor performed by the
contractor and each subcontractor to
recognize there may be circumstances
when separate rates are required to
adequately protect the Government. As
stated in the preamble to the interim
rule, DoD believes it is in the best
interest of the Department to require
separate fixed hourly rates for each
category of labor performed by the
contractor and each subcontractor.
When making that determination, DoD
considered the potential administrative
burden and costs that may result from
the rule. In addition, the rule is not
intended to prejudice small and small
disadvantaged businesses. If additional
subcontractors, including small and
small disadvantaged businesses, are
needed to perform on the contract after
the initial contract award, the contract
can be modified to add the hourly rates
for the new subcontractors.
3. Comment: One source stated that
the requirement for separate fixed
hourly rates for each category of labor
performed by the contractor and each
subcontractor makes it difficult to
evaluate competing offers during source
selection. Offerors will propose separate
hourly rates for the prime contractor
and each subcontractor by labor
category. Offerors will then apply those
rates to the projected mix of labor
(prime and/or subcontract) to determine
the overall estimated price for each
labor category. The Government will
PO 00000
Frm 00032
Fmt 4700
Sfmt 4700
then use the average labor rate for the
labor categories to evaluate competing
offers. However, after contract award,
the prime contractor can change the mix
of labor performed by the prime and
subcontractors for each labor category.
As a result, the actual rates that will be
paid for a labor category may be
significantly different than the
estimated rates used to evaluate the
offer during source selection. The
source also stated that the rule does not
provide guidance on how to ensure the
benefits of competition are maintained
and whether cost or pricing data is
required when new subcontractors are
proposed. With blended fixed hourly
rates, competition establishes the
reasonableness of the fixed hourly rates,
and those rates are used for payment
regardless of whether the prime or any
subcontractors perform the work. With
the required separate fixed hourly rates
for each category of labor performed by
the contractor and each subcontractor,
the benefits of competition may be lost,
since the rates on the contract apply
only to the labor identified during the
proposal stage.
DoD Response: DoD acknowledges
that certain pricing challenges will arise
from the use of separate fixed hourly
rates for each category of labor
performed by the contractor and each
subcontractor. DoD notes the pricing
challenges do not originate with this
rule. The FAR provisions also authorize
the use of separate hourly rates for labor
performed by the contractor and each
subcontractor. While the DFARS rule
requires reimbursement using a
different rate for the prime versus the
subcontractor, a similar difference
existed prior to the rule. Under the prior
FAR provisions, offerors could project a
mix of labor (prime and subcontractor).
After contract award, the prime could
change the actual mix of labor,
potentially resulting in significantly
different costs than the estimated costs
that were used to evaluate the offer
during source selection. While there are
pricing challenges associated with timeand-materials contracts, those
challenges were not created by this rule.
4. Comment: One source stated that
the rule could lead to the Government
directing subcontract orders to reduce
contract costs when subcontractors’
fixed hourly rates are lower than the
prime contractor’s fixed hourly rates. If
the Government directs subcontract
orders, the prime contractor will lose its
ability and responsibility to manage its
resources and the Government may
forfeit certain contract remedies.
DoD Response: In promulgating
regulations, the assumption is that
contracting personnel will follow the
E:\FR\FM\06SER1.SGM
06SER1
Federal Register / Vol. 72, No. 172 / Thursday, September 6, 2007 / Rules and Regulations
regulations. Nothing in the rule
encourages contracting officers to
wrongly direct subcontract orders.
5. Comment: One source stated that
some of the subcontractors under the
prime contract may compete with the
prime for other prime contracts. The
prime contractor may gain a competitive
advantage over these other contractors
on future competitions, since the prime
will have insight into the composition
of their rates.
DoD Response: Nothing in the rule
provides prime contractors insight into
the composition of their subcontract
rates. The prime contractor will bill for
subcontract labor using its negotiated
fixed hourly rates for the subcontractor.
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 DFARS rule contains a substitute
paragraph for use with the solicitation
provision at FAR 52.216–29. The FAR
provision contains three options for
establishing fixed hourly rates on
competitively awarded non-commercial
time-and-materials and labor-hour
contracts. The DFARS rule requires use
of the FAR option that provides for the
establishment of separate fixed hourly
rates for each category of labor
performed by the contractor and each
subcontractor. The objective of the rule
is to use the FAR option for establishing
labor rates that is the most suitable for
DoD contracts. The rule will apply to all
entities interested in receiving DoD
competitively awarded non-commercial
time-and-materials and labor-hour
contracts. The impact on small entities
is unknown at this time.
C. Paperwork Reduction Act
pwalker on PROD1PC71 with RULES
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.
VerDate Aug<31>2005
18:26 Sep 05, 2007
Jkt 211001
List of Subjects in 48 CFR Parts 216 and
252
Government procurement.
Michele P. Peterson,
Editor, Defense Acquisition Regulations
System.
PART 216—[AMENDED]
Interim Rule Adopted as Final Without
Change
Accordingly, the interim rule
amending 48 CFR parts 216 and 252,
which was published at 71 FR 74469 on
December 12, 2006, is adopted as a final
rule without change.
I
[FR Doc. E7–17423 Filed 9–5–07; 8:45 am]
BILLING CODE 5001–08–P
DEPARTMENT OF DEFENSE
Defense Acquisition Regulations
System
48 CFR Part 236
RIN 0750–AF41
Defense Federal Acquisition
Regulation Supplement;
Congressional Notification of
Architect—Engineer Services/Military
Family Housing Contracts (DFARS
Case 2006–D015)
Defense Acquisition
Regulations System, Department of
Defense (DoD).
ACTION: Final rule.
AGENCY:
SUMMARY: DoD has adopted as final,
without change, an interim rule
amending the Defense Federal
Acquisition Regulation Supplement
(DFARS) to implement Section
1031(a)(37) of the National Defense
Authorization Act for Fiscal Year 2004.
Section 1031(a)(37) amended the
requirements for submission of a
notification to Congress before the
award of a contract for architectural and
engineering services or construction
design in connection with military
construction, military family housing, or
restoration or replacement of damaged
or destroyed facilities.
EFFECTIVE DATE: September 6, 2007.
FOR FURTHER INFORMATION CONTACT: Ms.
Felisha Hitt, Defense Acquisition
Regulations System, OUSD (AT&L)
DPAP (DARS), IMD 3D139, 3062
Defense Pentagon, Washington, DC
20301–3062. Telephone (703) 602–0310;
facsimile (703) 602–7887. Please cite
DFARS Case 2006–D015.
SUPPLEMENTARY INFORMATION:
PO 00000
Frm 00033
Fmt 4700
Sfmt 4700
51191
A. Background
DoD published an interim rule at 71
FR 58540 on October 4, 2006, to
implement Section 1031(a)(37) of the
National Defense Authorization Act for
Fiscal Year 2004 (Pub. L. 108–136).
Section 1031(a)(37) amended the
requirements at 10 U.S.C. 2807, for
submission of a notification to Congress
before the award of a contract for
architectural and engineering services or
construction design in connection with
military construction, military family
housing, or restoration or replacement
of damaged or destroyed facilities. The
amendments increased the contract
dollar threshold for submission from
$500,000 to $1,000,000; and reduced the
time period for submission, from 21 to
14 days before obligation of funds, when
the notification is provided in electronic
medium.
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.
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 relates to reporting
requirements that are internal to the
Government.
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 236
Government procurement.
Michele P. Peterson,
Editor, Defense Acquisition Regulations
System.
PART 236—[AMENDED]
Interim Rule Adopted as Final Without
Change
Accordingly, the interim rule
amending 48 CFR Part 236, which was
published at 71 FR 58540 on October 4,
2006, is adopted as a final rule without
change.
[FR Doc. E7–17427 Filed 9–5–07; 8:45 am]
BILLING CODE 5001–08–P
E:\FR\FM\06SER1.SGM
06SER1
]]>Agencies
[Federal Register Volume 72, Number 172 (Thursday, September 6, 2007)]
[Rules and Regulations]
[Pages 51189-51191]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: E7-17423]
-----------------------------------------------------------------------
DEPARTMENT OF DEFENSE
Defense Acquisition Regulations System
48 CFR Parts 216 and 252
RIN 0750-AF44
Defense Federal Acquisition Regulation Supplement; Labor
Reimbursement on DoD Non-Commercial Time-and-Materials and Labor-Hour
Contracts (DFARS Case 2006-D030)
AGENCY: Defense Acquisition Regulations System, Department of Defense
(DoD).
ACTION: Final rule.
-----------------------------------------------------------------------
SUMMARY: DoD has adopted as final, without change, an interim rule
amending the Defense Federal Acquisition Regulation Supplement (DFARS)
to provide policy for reimbursing labor costs on competitively awarded
DoD non-commercial time-and-materials and labor-hour contracts.
EFFECTIVE DATE: September 6, 2007.
FOR FURTHER INFORMATION CONTACT: Ms. Robin Schulze, Defense Acquisition
Regulations System, OUSD (AT&L) DPAP (CPF), IMD 3D139, 3062 Defense
Pentagon, Washington, DC 20301-3062.
[[Page 51190]]
Telephone (703) 602-0326; facsimile (703) 602-7887. Please cite DFARS
Case 2006-D030.
SUPPLEMENTARY INFORMATION:
A. Background
DoD published an interim rule at 71 FR 74469 on December 12, 2006,
to clarify payment procedures for non-commercial time-and-materials and
labor-hour contracts. Two sources submitted comments on the interim
rule. A discussion of the comments is provided below.
1. Comment: One source stated that DoD should not require separate
hourly rates for each category of labor performed by the contractor and
each subcontractor on every competitively awarded non-commercial time-
and-materials and labor-hour contract, since price competition will
ensure the hourly rates are fair and reasonable and will eliminate
potential abuses. The source also stated that the rationale cited in
the interim rule for requiring separate hourly rates failed to address
the benefits of adequate price competition and was not relevant to the
requirement for separate rates. While not cited as rationale for
requiring separate rates, the source stated that DoD may have adopted
the rule to ensure subcontract labor meets the qualifications for the
labor categories specified in the contract. If this is part of the
rationale, DoD already has the ability to accomplish that objective
through the subcontract consent provisions of FAR clause 52.244-2,
which is mandatory for all time-and-materials contracts that exceed the
simplified acquisition threshold. Another source stated that the rule
eliminates the flexibility to select the proper approach, considering
the advantages and disadvantages of the pricing options for hourly
rates.
DoD Response: The FAR provisions authorize agencies to select, and
make mandatory, one of the three options for pricing hourly rates. DoD
believes it is in the best interest of the Department to select, and
make mandatory, the FAR option that requires separate fixed hourly
rates for each category of labor performed by the contractor and each
subcontractor. DoD believes the rationale cited in the interim rule
adequately supports the requirement for separate rates. That rationale
is not based on the benefits of adequate price competition, because
those benefits are not affected by the requirement for separate hourly
rates. The rationale is also not based on a need to ensure the
subcontract labor meets the qualifications for the labor categories
specified in the contract.
2. Comment: One source stated that the requirement for separate
fixed hourly rates for each category of labor performed by the
contractor and each subcontractor will slow the acquisition process by
requiring lengthy contract negotiations to establish separate hourly
rates and contract modifications to add new subcontractors. In
addition, the requirement will hinder contract performance, will tax
DoD's acquisition workforce, and will likely prejudice qualified small
and small disadvantaged businesses that only become known to the prime
contractor after contract formation. Another source stated that the
requirement for separate fixed hourly rates for each category of labor
performed by the contractor and each subcontractor will negatively
impact contractor invoicing. Hours will have to be billed separately
for each subcontractor and the prime for each fund cite. As a result,
contractor indirect rates will increase to absorb the additional
administrative costs. In addition, the administrative time and expense
required to modify the contract to add new subcontractors will be
substantial.
DoD Response: The FAR authorizes separate fixed hourly rates for
each category of labor performed by the contractor and each
subcontractor to recognize there may be circumstances when separate
rates are required to adequately protect the Government. As stated in
the preamble to the interim rule, DoD believes it is in the best
interest of the Department to require separate fixed hourly rates for
each category of labor performed by the contractor and each
subcontractor. When making that determination, DoD considered the
potential administrative burden and costs that may result from the
rule. In addition, the rule is not intended to prejudice small and
small disadvantaged businesses. If additional subcontractors, including
small and small disadvantaged businesses, are needed to perform on the
contract after the initial contract award, the contract can be modified
to add the hourly rates for the new subcontractors.
3. Comment: One source stated that the requirement for separate
fixed hourly rates for each category of labor performed by the
contractor and each subcontractor makes it difficult to evaluate
competing offers during source selection. Offerors will propose
separate hourly rates for the prime contractor and each subcontractor
by labor category. Offerors will then apply those rates to the
projected mix of labor (prime and/or subcontract) to determine the
overall estimated price for each labor category. The Government will
then use the average labor rate for the labor categories to evaluate
competing offers. However, after contract award, the prime contractor
can change the mix of labor performed by the prime and subcontractors
for each labor category. As a result, the actual rates that will be
paid for a labor category may be significantly different than the
estimated rates used to evaluate the offer during source selection. The
source also stated that the rule does not provide guidance on how to
ensure the benefits of competition are maintained and whether cost or
pricing data is required when new subcontractors are proposed. With
blended fixed hourly rates, competition establishes the reasonableness
of the fixed hourly rates, and those rates are used for payment
regardless of whether the prime or any subcontractors perform the work.
With the required separate fixed hourly rates for each category of
labor performed by the contractor and each subcontractor, the benefits
of competition may be lost, since the rates on the contract apply only
to the labor identified during the proposal stage.
DoD Response: DoD acknowledges that certain pricing challenges will
arise from the use of separate fixed hourly rates for each category of
labor performed by the contractor and each subcontractor. DoD notes the
pricing challenges do not originate with this rule. The FAR provisions
also authorize the use of separate hourly rates for labor performed by
the contractor and each subcontractor. While the DFARS rule requires
reimbursement using a different rate for the prime versus the
subcontractor, a similar difference existed prior to the rule. Under
the prior FAR provisions, offerors could project a mix of labor (prime
and subcontractor). After contract award, the prime could change the
actual mix of labor, potentially resulting in significantly different
costs than the estimated costs that were used to evaluate the offer
during source selection. While there are pricing challenges associated
with time-and-materials contracts, those challenges were not created by
this rule.
4. Comment: One source stated that the rule could lead to the
Government directing subcontract orders to reduce contract costs when
subcontractors' fixed hourly rates are lower than the prime
contractor's fixed hourly rates. If the Government directs subcontract
orders, the prime contractor will lose its ability and responsibility
to manage its resources and the Government may forfeit certain contract
remedies.
DoD Response: In promulgating regulations, the assumption is that
contracting personnel will follow the
[[Page 51191]]
regulations. Nothing in the rule encourages contracting officers to
wrongly direct subcontract orders.
5. Comment: One source stated that some of the subcontractors under
the prime contract may compete with the prime for other prime
contracts. The prime contractor may gain a competitive advantage over
these other contractors on future competitions, since the prime will
have insight into the composition of their rates.
DoD Response: Nothing in the rule provides prime contractors
insight into the composition of their subcontract rates. The prime
contractor will bill for subcontract labor using its negotiated fixed
hourly rates for the subcontractor.
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 DFARS rule contains a substitute paragraph for use with the
solicitation provision at FAR 52.216-29. The FAR provision contains
three options for establishing fixed hourly rates on competitively
awarded non-commercial time-and-materials and labor-hour contracts. The
DFARS rule requires use of the FAR option that provides for the
establishment of separate fixed hourly rates for each category of labor
performed by the contractor and each subcontractor. The objective of
the rule is to use the FAR option for establishing labor rates that is
the most suitable for DoD contracts. The rule will apply to all
entities interested in receiving DoD competitively awarded non-
commercial time-and-materials and labor-hour contracts. The impact on
small entities is unknown at this time.
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 216 and 252
Government procurement.
Michele P. Peterson,
Editor, Defense Acquisition Regulations System.
PART 216--[AMENDED]
Interim Rule Adopted as Final Without Change
0
Accordingly, the interim rule amending 48 CFR parts 216 and 252, which
was published at 71 FR 74469 on December 12, 2006, is adopted as a
final rule without change.
[FR Doc. E7-17423 Filed 9-5-07; 8:45 am]
BILLING CODE 5001-08-P
