Defense Federal Acquisition Regulation Supplement: Contract Financing (DFARS Case 2015-D026), 42607-42608 [2016-15246]

Agencies

• Defense Acquisition Regulations System
• DEPARTMENT OF DEFENSE

[Federal Register Volume 81, Number 126 (Thursday, June 30, 2016)]
[Proposed Rules]
[Pages 42607-42608]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2016-15246]


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DEPARTMENT OF DEFENSE

Defense Acquisition Regulations System

48 CFR Part 232

[Docket DARS-2016-0009]
RIN 0750-AI90


Defense Federal Acquisition Regulation Supplement: Contract 
Financing (DFARS Case 2015-D026)

AGENCY: Defense Acquisition Regulations System, Department of Defense 
(DoD).

ACTION: Proposed rule.

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SUMMARY: DoD is proposing to amend the Defense Federal Acquisition 
Regulation Supplement (DFARS) regarding the use of customary contact 
financing, other than loan guarantees and advance payments, on certain 
fixed-price contracts.

DATES: Comments on the proposed rule should be submitted in writing to 
the address shown below on or before August 29, 2016, to be considered 
in the formation of a final rule.

ADDRESSES: Submit comments identified by DFARS Case 2015-D026, using 
any of the following methods:
    [cir] Regulations.gov: https://www.regulations.gov. Submit comments 
via the Federal eRulemaking portal by entering ``DFARS Case 2015-D026'' 
under the heading ``Enter keyword or ID'' and selecting ``Search.'' 
Select the link ``Submit a Comment'' that corresponds with ``DFARS Case 
2015-D026.'' Follow the instructions provided at the ``Submit a 
Comment'' screen. Please include your name, company name (if any), and 
``DFARS Case 2015-D026'' on your attached document.
    [cir] Email: osd.dfars@mail.mil. Include DFARS Case 2015-D026 in 
the subject line of the message.
    [cir] Fax: 571-372-6094.
    [cir] Mail: Defense Acquisition Regulations System, Attn: Mr. Mark 
Gomersall, OUSD (AT&L) DPAP/DARS, Room 3B941, 3060 Defense Pentagon, 
Washington, DC 20301-3060.
    Comments received generally will be posted without change to https://www.regulations.gov, including any personal information provided. To 
confirm receipt of your comment(s), please check www.regulations.gov, 
approximately two to three days after submission to verify posting 
(except allow 30 days for posting of comments submitted by mail).

FOR FURTHER INFORMATION CONTACT: Mr. Mark Gomersall, telephone 571-372-
6099.

SUPPLEMENTARY INFORMATION:

I. Background

    DoD is proposing to revise the DFARS regarding the use of customary 
contract financing, other than loan guarantees and advance payments 
identified in FAR part 32, on fixed-price contracts with a period of 
performance in excess of one year that meet the dollar thresholds 
established in FAR 32.104(d). DoD has determined that the use of such 
customary contract financing provides improved cash flow as an 
incentive for commercial companies to do business with DoD, is in DoD's 
best interest, and requires no further justification of its use.

[[Page 42608]]

II. Discussion and Analysis

    The proposed rule amends DFARS 232.104 to state that DoD has made 
the determination that the use of customary contract financing (see FAR 
32.113), other than loan guarantees and advance payments, is in DoD's 
best interest, and further justification of its use is unnecessary on 
fixed-price contracts that meet the dollar thresholds established in 
FAR 32.104(d), with a period of performance in excess of a year, and in 
solicitations expected to result in such contracts.

III. Executive Orders 12866 and 13563

    Executive Orders (E.O.s) 12866 and 13563 direct agencies to assess 
all costs and benefits of available regulatory alternatives and, if 
regulation is necessary, to select regulatory approaches that maximize 
net benefits (including potential economic, environmental, public 
health and safety effects, distributive impacts, and equity). E.O. 
13563 emphasizes the importance of quantifying both costs and benefits, 
of reducing costs, of harmonizing rules, and of promoting flexibility. 
This is not a significant regulatory action and, therefore, was not 
subject to review under section 6(b) of E.O. 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 does not expect this rule to 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. However, an initial 
regulatory flexibility analysis has been performed and is summarized as 
follows:
    DoD is proposing to amend the Defense Federal Acquisition 
Regulation Supplement (DFARS) to state that DoD has made the 
determination that the use of customary contract financing (see Federal 
Acquisition Regulation (FAR) 32.113), other than loan guarantees and 
advance payments, is in DoD's best interest, and further justification 
of its use is unnecessary on fixed-price contracts that meet the dollar 
thresholds established in FAR 32.104(d), with a period of performance 
in excess of a year, and in solicitations expected to result in such 
contracts.
    The objective of the proposed rule is to clarify that the use of 
certain customary contract financing does not require further 
justification, as it has been determined to be in DoD's best interest, 
and the use of the specified contract financing is an incentive for 
commercial companies to do business with DoD.
    This rule will apply to DoD contractors, including small entities, 
where a fixed-price contract with a period of performance in excess of 
one year and meeting the thresholds in FAR 32.104(d) is contemplated.
    There is no change to reporting or recordkeeping as a result of 
this rule. This rule changes processes that are internal to the 
Government and does not have any impact on small entities for reporting 
or recordkeeping.
    The rule does not duplicate, overlap, or conflict with any other 
Federal rules. There are no known significant alternative approaches to 
the rule that would meet the requirements.
    DoD invites comments from small business concerns and other 
interested parties on the expected impact of this rule on small 
entities.
    DoD will also consider comments from small entities concerning the 
existing regulations in subparts affected by this rule in accordance 
with 5 U.S.C. 610. Interested parties must submit such comments 
separately and should cite 5 U.S.C. 610 (DFARS Case 2015-D026), in 
correspondence.

V. Paperwork Reduction Act

    The rule does not contain any information collection requirements 
that require the approval of the Office of Management and Budget under 
the Paperwork Reduction Act (44 U.S.C. chapter 35).

List of Subjects in 48 CFR Part 232

    Government procurement.

Jennifer L. Hawes,
Editor, Defense Acquisition Regulations System.

    Therefore, 48 CFR part 232 is proposed to be amended as follows:

PART 232--CONTRACT FINANCING

0
1. The authority citation for part 232 continues to read as follows:

    Authority: 41 U.S.C. 1303 and 48 CFR chapter 1.

0
2. Add section 232.104 to subpart 232.1 to read as follows:


232.104  Providing contract financing.

    For fixed-price contracts with a period of performance in excess of 
a year that meet the dollar thresholds established in FAR 32.104(d), 
and for solicitations expected to result in such contracts, in lieu of 
the requirement at FAR 32.104(d)(1)(ii) for the contractor to 
demonstrate actual financial need or the unavailability of private 
financing, DoD has determined that--
    (1) The use of customary contract financing (see FAR 32.113), other 
than loan guarantees and advance payments, is in DoD's best interest; 
and
    (2) Further justification of its use in individual acquisitions is 
unnecessary.

[FR Doc. 2016-15246 Filed 6-29-16; 8:45 am]
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