Defense Federal Acquisition Regulation Supplement: Contract Closeout Authority (DFARS Case 2018-D012), 18153-18155 [2019-08482]
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Federal Register / Vol. 84, No. 83 / Tuesday, April 30, 2019 / Rules and Regulations
Upon further review of the statute by
the HHS Office of the General Counsel,
HHS has determined that the better
reading of the HITECH Act is to apply
annual limits as represented in Table 2
below: $25,000 for no knowledge,
$100,000 for reasonable cause, $250,000
for corrected willful neglect, and
$1,500,000 for uncorrected willful
neglect. In light of this determination,
18153
and as a matter of enforcement
discretion, HHS is notifying the public
that all HIPAA enforcement actions will
be governed by the following interim
penalty tiers:
TABLE 2—PENALTY TIERS UNDER NOTIFICATION OF ENFORCEMENT DISCRETION
Culpability
Minimum penalty/
violation
Maximum penalty/
violation
$100
1,000
10,000
50,000
$50,000
50,000
50,000
50,000
No Knowledge ...........................................................................................................
Reasonable Cause ....................................................................................................
Willful Neglect—Corrected .........................................................................................
Willful Neglect—Not Corrected ..................................................................................
HHS will use this penalty tier
structure, as adjusted for inflation,2
until further notice. See, e.g., Heckler v.
Chaney, 470 U.S. 821, 831 (1985) (‘‘This
Court has recognized on several
occasions over many years that an
agency’s decision not to prosecute or
enforce, whether through civil or
criminal process, is a decision generally
committed to an agency’s absolute
discretion.’’).
HHS expects to engage in future
rulemaking to revise the penalty tiers in
the current regulation to better reflect
the text of the HITECH Act.
III. Collection of Information
Requirements
This notification of enforcement
discretion creates no legal obligations
and no legal rights. Because this
notification imposes no information
collection requirements, it need not be
reviewed by the Office of Management
and Budget under the Paperwork
Reduction Act of 1995 (44 U.S.C. 3501
et seq.).
Dated: April 23, 2019.
Roger T. Severino,
Director, Office for Civil Rights, Department
of Health and Human Services.
[FR Doc. 2019–08530 Filed 4–26–19; 4:15 pm]
DEPARTMENT OF DEFENSE
Defense Acquisition Regulations
System
48 CFR Part 204
[Docket DARS–2018–0029]
RIN 0750–AJ76
Defense Federal Acquisition
Regulation Supplement: Contract
Closeout Authority (DFARS Case
2018–D012)
Defense Acquisition
Regulations System, Department of
Defense (DoD).
ACTION: Final rule.
AGENCY:
DoD is issuing a final rule
amending the Defense Federal
Acquisition Regulation Supplement
(DFARS) to implement sections of the
National Defense Authorization Act for
Fiscal Year 2017 and 2018 to permit
expedited closeout of certain contracts
entered into on a date that is at least 17
fiscal years before the current fiscal
year.
SUMMARY:
DATES:
Effective April 30, 2019.
FOR FURTHER INFORMATION CONTACT:
Ms.
Kimberly Bass, telephone 571–372–
6174.
SUPPLEMENTARY INFORMATION:
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I. Background
2 HHS is required to annually adjust its CMPs for
inflation pursuant to the cost-of-living formula set
forth in the Federal Civil Penalties Inflation
Adjustment Act Improvements Act of 2015, enacted
as part of the Bipartisan Budget Act of 2015, Public
Law 114–74, section 701, 129 Stat. 599 (Nov. 2,
2015).
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DoD published a proposed rule in the
Federal Register at 83 FR 24897 on May
30, 2018, to implement section 836 of
the National Defense Authorization Act
(NDAA) for Fiscal Year (FY) 2017 (Pub.
L. 114–328), as modified by section 824
of the NDAA for FY 2018 (Pub. L. 115–
91), which authorizes the Secretary of
Defense to close out certain contracts or
groups of contracts through
modification of such contracts without
completing a reconciliation audit or
other corrective action. The authority
provided by sections 824 and 836
applies to contracts entered into on a
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Annual limit
$25,000
100,000
250,000
1,500,000
date that is at least 17 fiscal years before
the current fiscal year, that have no
further supplies or services due, and for
which a determination has been made
that the contract records are not
otherwise reconcilable, because—
• The contract or related payment
records have been destroyed or lost; or
• Although contracts records are
available, the time or effort required to
establish the exact amount owed to the
U.S. Government or amount owed to the
contractor is disproportionate to the
amount at issue.
To accomplish closeout of such
contracts, sections 824 and 836 further
authorize—
• A contract or groups of contracts
covered by these sections to be closed
out through a negotiated settlement with
the contractor; and
• The remaining contract balances to
be offset with balances within the
contract or on other contracts regardless
of the year or type of appropriation
obligated to fund each contract or
contract line item, and regardless of
whether the appropriation has closed.
When using this authority, the
closeout procedures require the
contracting officer to issue a
modification of the affected contract,
which must be signed by both the
contractor and the Government. When
closing out a group of contracts, the
contracting officer must issue a
modification of at least one of the
affected contracts that reflects the
negotiated settlement for the group of
contracts and this modification must be
signed by both the contractor and the
Government. The remaining contracts in
the group may be modified without
obtaining the contractor’s signature.
In accordance with section 836(d)(1)
of the NDAA for FY 2017, the Under
Secretary of Defense (Acquisition and
Sustainment) (USD(A&S)) is authorized
to waive any additional provision of law
or regulation in order to carry out the
closeout procedures as authorized in
section 836(a)–(c).
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Federal Register / Vol. 84, No. 83 / Tuesday, April 30, 2019 / Rules and Regulations
One respondent submitted public
comments in response to the proposed
rule.
II. Discussion and Analysis
DoD reviewed the public comments in
the development of the final rule. A
discussion of the comments and the
change made to the rule as a result of
those comments is provided, as follows:
A. Summary of Significant Changes
From the Proposed Rule in Response to
Public Comments
1. DFARS 204.804(3)(i)(C) is revised
to replace ‘‘individual’’ with
‘‘contracting official’’ to ensure the
required determination would be made
by a contracting official.
2. DFARS 204.804(3)(iv) is added to
implement the authority provided in
section 836 to waive provisions of
acquisition law or regulation in order to
close out contracts in accordance with
section 836.
B. Analysis of Public Comments
1. Use of the Term ‘‘Contracting
Official’’ Versus ‘‘Individual’’
Comment: The respondent
recommended a change to the proposed
rule text in DFARS 204.804(3)(i)(C) to
replace ‘‘individual’’ with ‘‘contracting
official’’ to ensure the required
determination would be made by a
contracting official.
Response: To ensure the contracting
officer retains the requisite authority to
execute expedited closeouts, the
proposed DFARS 204.804(3)(i)(C) text
will be revised to: ‘‘Has been
determined by a contracting official,
approved at least one level above the
contracting officer, to be not otherwise
reconcilable. . . .’’
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2. Establish a Measure To Define
Disproportionality
Comment: The respondent
recommended revisions to DFARS
204.804(3)(i)(C)(2) to establish a
measure to define ‘‘disproportionate’’
and to revise the text to reflect a
‘‘general rule’’ of 20 percent to
determine ‘‘disproportionately
excessive’’.
Response: The text at DFARS
204.804(3)(i)(C)(2) includes the term
‘‘disproportionate’’ to establish that
DoD’s estimate of time and effort are
determined to be greater than the
amount owed to a level of imbalance.
DoD has concerns that the use of a
general measure may become an
implied rule. It is not the intent of the
DoD to identify a threshold, but to leave
the determination of disproportion to
the contracting officer’s discretion.
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3. Include a Provision To Implement
Reporting Requirement
Comment: The respondent
recommended adding a provision to
create a template and implement a
reporting requirement.
Response: Creation of a solicitation
provision is not necessary to implement
the requirement for the Secretary of
Defense to notify the Congressional
defense committees within 10 days of
exercising the authority at section
836(d) to waive any provision of
acquisition law or regulation in order to
closeout contracts under the section 836
authority. Rather, a new paragraph
(3)(iv) is added at DFARS 204.804
regarding the authority, which has been
delegated to USD(A&S), to waive any
provision of acquisition law or
regulation to close out contracts as
authorized by section 836 and
implemented at DFARS 204.804(3)(i). A
reference to internal operating
procedures at DFARS Procedures,
Guidance, and Information
204.804(3)(iv) is also provided, which
direct departments and agencies to
forward requests to waive provisions of
acquisition law or regulation to the
Principal Director, Defense Pricing and
Contracting, who will forward the
request to USD(A&S), as appropriate.
4. Waiver Authority for Acquisition
Laws or Regulations Necessary for
Closeout of Contracts
Comment: The respondent had
concerns over the waiver authority for
acquisition laws or regulations
necessary for closeout of contracts
under section 836(a).
Response: Waiver of acquisition laws
and regulations necessary to close
contracts must be, under statute, within
the parameters of the congressionally
granted authority. In accordance with
section 836(d)(1) of the NDAA for FY
2017, the USD(A&S) is authorized to
waive any provision of law or regulation
in order to carry out the closeout
procedures as authorized in section
836(a)–(c).
5. DoD 7000.14–R, Financial
Management Regulation Update
Comment: The respondent
recommended updates to the DoD
7000.14–R, Financial Management
Regulation.
Response: This rule is implementing
in the DFARS sections 836 of the NDAA
for FY 2017, as modified by section 824
of the NDAA for FY 2018, to permit
close out of certain contracts or groups
of contracts. Updating the DoD 7000.14–
R is beyond the scope of this rule.
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6. Restate FAR 4.804–5(b) Requirements
for Contract Closeout Actions in DFARS
Comment: The respondent
recommended restating required
contract closeout actions specified in
FAR 4.804–5(b) in DFARS 204.804.
Response: The FAR requirements at
4.804–5(b) are applicable to DoD, as
stated in the FAR. Restating the FAR
text in the DFARS would be duplicative
and is unnecessary.
III. Applicability to Contracts at or
Below the Simplified Acquisition
Threshold and for Commercial Items,
Including Commercially Available Offthe-Shelf Items
This rule does not propose to create
any new provisions or clauses or impact
any existing provisions or clauses.
IV. 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.
V. Executive Order 13771
This rule is not subject to E.O. 13771,
because this rule is not a significant
regulatory action under E.O. 12866.
VI. Regulatory Flexibility Act
A final regulatory flexibility analysis
(FRFA) has been prepared consistent
with the Regulatory Flexibility Act, 5
U.S.C. 601, et seq. The FRFA is
summarized as follows:
This final rule is necessary to
implement section 836 of the National
Defense Authorization Act (NDAA) for
Fiscal Year (FY) 2017 (Pub. L. 114–328),
as modified by section 824 of the NDAA
for FY 2018 (Pub. L. 115–91). The
objective of this rule is to permit
expedited closeout of certain contracts
entered into on a date that is at least 17
fiscal years before the current fiscal
year.
There were no issues raised by the
public in response to the initial
regulatory flexibility analysis provided
in the proposed rule.
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Federal Register / Vol. 84, No. 83 / Tuesday, April 30, 2019 / Rules and Regulations
This rule will apply to small entities.
Using estimates from department and
agency subject matter experts,
approximately 11,300 contracts subject
to this rule need to be closed out by the
Government. Of these contracts, the
Government estimates that 50 percent,
or 5,650, of the awards were made to
small businesses.
This rule does not include any new
reporting, recordkeeping, or other
compliance requirements on any small
entities.
DoD has not identified any
alternatives that would meet the
requirements of the applicable statute.
VII. 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 204
Government procurement.
Jennifer Lee Hawes,
Regulatory Control Officer, Defense
Acquisition Regulations System.
Therefore, 48 CFR part 204 is
amended as follows:
PART 204—ADMINISTRATIVE
MATTERS
1. The authority citation for part 204
continues to read as follows:
■
Authority: 41 U.S.C. 1303 and 48 CFR
chapter 1.
2. Amend section 204.804 by—
a. In paragraph (1), removing
‘‘Contracting officers’’ and adding
‘‘Except as provided in paragraph (3) of
this section, contracting officers’’ in its
place;
■ b. In paragraph (2) removing ‘‘must’’
and adding ‘‘shall’’ in its place, and
■ c. Adding paragraph (3). The addition
reads as follows:
■
■
204.804
Closeout of contract files.
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*
*
*
*
*
(3)(i) In accordance with section 836
of the National Defense Authorization
Act for Fiscal Year 2017 (Pub. L. 114–
328) and section 824 of the National
Defense Authorization Act for Fiscal
Year 2018 (Pub. L. 115–91), contracting
officers may close out contracts or
groups of contracts through issuance of
one or more modifications to such
contracts without completing a
reconciliation audit or other corrective
action in accordance with FAR 4.804–
5(a)(3) through (15), as appropriate, if
each contract—
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(A) Was entered into on a date that is
at least 17 fiscal years before the current
fiscal year;
(B) Has no further supplies or services
due under the terms of the contract; and
(C) Has been determined by a
contracting official, at least one level
above the contracting officer, to be not
otherwise reconcilable, because—
(1) The contract or related payment
records have been destroyed or lost; or
(2) Although contract or related
payment records are available, the time
or effort required to establish the exact
amount owed to the U.S. Government or
amount owed to the contractor is
disproportionate to the amount at issue.
(ii) Any contract or group of contracts
meeting the requirements of paragraph
(3)(i) of this section may be closed out
through a negotiated settlement with the
contractor. Except as provided in
paragraph (3)(ii)(B) of this section, the
contract closeout process shall include
a bilateral modification of the affected
contract, including those contracts that
are closed out in accordance with a
negotiated settlement.
(A) For a contract or groups of
contracts, the contracting officer shall
prepare a negotiation settlement
memorandum that describes how the
requirements of paragraph (3)(i) of this
section have been met.
(B) For a group of contracts, a bilateral
modification of at least one contract
shall be made to reflect the negotiated
settlement for a group of contracts, and
unilateral modifications may be made,
as appropriate, to other contracts in the
group to reflect the negotiated
settlement.
(iii) For contract closeout actions
under paragraph (3) of this section,
remaining contract balances—
(A) May be offset with balances in
other contract line items within the
same contract, regardless of the year or
type of appropriation obligated to fund
each contract line item and regardless of
whether the appropriation obligated to
fund such contract line item has closed;
and
(B) May be offset with balances on
other contracts, regardless of the year or
type of appropriations obligated to fund
each contract and regardless of whether
such appropriations have closed.
(iv) USD(A&S) is authorized to waive
any provision of acquisition law or
regulation in order to carry out the
closeout procedures authorized in
paragraph (3)(i) of this section (see
procedures at PGI 204.804(3)(iv).
[FR Doc. 2019–08482 Filed 4–29–19; 8:45 am]
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18155
DEPARTMENT OF DEFENSE
Defense Acquisition Regulations
System
48 CFR Part 209
[Docket DARS–2019–0001]
Defense Federal Acquisition
Regulation Supplement: Technical
Amendments
Defense Acquisition
Regulations System, Department of
Defense (DoD).
ACTION: Final rule.
AGENCY:
DoD is making a technical
amendment to the Defense Federal
Acquisition Regulation Supplement
(DFARS) to update the list of debarring
and suspending officials.
DATES: Effective April 30, 2019.
FOR FURTHER INFORMATION CONTACT: Ms.
Jennifer L. Hawes, Defense Acquisition
Regulations System,
OUSD(A&S)DPC(DARS), Room 3B941,
3060 Defense Pentagon, Washington, DC
20301–3060. Telephone 571–372–6115;
facsimile 571–372–6094.
SUPPLEMENTARY INFORMATION: This final
rule amends DFARS 209.403 to add the
officials who have been delegated the
authority to serve as the debarring and
suspending officical for their respective
agencies. The Staff Judge Advocate has
been delegated authority to serve as the
debarring and suspending officical for
the United States Cyber Command. The
General Counsel has been delegated
authority to serve as the debarring and
suspending officical for the Defense
Health Agency.
SUMMARY:
List of Subjects in 48 CFR Part 209
Government procurement.
Jennifer Lee Hawes,
Regulatory Control Officer, Defense
Acquisition Regulations System.
Therefore, 48 CFR parts 209 is
amended as follows:
■ 1. The authority citations for 48 CFR
part 209 continue to read as follows:
Authority: 41 U.S.C. 1303 and 48 CFR
chapter 1.
PART 209—CONTRACTOR
QUALIFICATIONS
2. In section 209.403, revise paragraph
(1) of the definition of ‘‘debarring and
suspending official’’ to read as follows:
■
209.403
Definitions.
Debarring and suspending official. (1)
For DoD, the designees are—
Army—Director, Soldier & Family Legal
Services
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]]>Agencies
[Federal Register Volume 84, Number 83 (Tuesday, April 30, 2019)]
[Rules and Regulations]
[Pages 18153-18155]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2019-08482]
=======================================================================
-----------------------------------------------------------------------
DEPARTMENT OF DEFENSE
Defense Acquisition Regulations System
48 CFR Part 204
[Docket DARS-2018-0029]
RIN 0750-AJ76
Defense Federal Acquisition Regulation Supplement: Contract
Closeout Authority (DFARS Case 2018-D012)
AGENCY: Defense Acquisition Regulations System, Department of Defense
(DoD).
ACTION: Final rule.
-----------------------------------------------------------------------
SUMMARY: DoD is issuing a final rule amending the Defense Federal
Acquisition Regulation Supplement (DFARS) to implement sections of the
National Defense Authorization Act for Fiscal Year 2017 and 2018 to
permit expedited closeout of certain contracts entered into on a date
that is at least 17 fiscal years before the current fiscal year.
DATES: Effective April 30, 2019.
FOR FURTHER INFORMATION CONTACT: Ms. Kimberly Bass, telephone 571-372-
6174.
SUPPLEMENTARY INFORMATION:
I. Background
DoD published a proposed rule in the Federal Register at 83 FR
24897 on May 30, 2018, to implement section 836 of the National Defense
Authorization Act (NDAA) for Fiscal Year (FY) 2017 (Pub. L. 114-328),
as modified by section 824 of the NDAA for FY 2018 (Pub. L. 115-91),
which authorizes the Secretary of Defense to close out certain
contracts or groups of contracts through modification of such contracts
without completing a reconciliation audit or other corrective action.
The authority provided by sections 824 and 836 applies to contracts
entered into on a date that is at least 17 fiscal years before the
current fiscal year, that have no further supplies or services due, and
for which a determination has been made that the contract records are
not otherwise reconcilable, because--
The contract or related payment records have been
destroyed or lost; or
Although contracts records are available, the time or
effort required to establish the exact amount owed to the U.S.
Government or amount owed to the contractor is disproportionate to the
amount at issue.
To accomplish closeout of such contracts, sections 824 and 836
further authorize--
A contract or groups of contracts covered by these
sections to be closed out through a negotiated settlement with the
contractor; and
The remaining contract balances to be offset with balances
within the contract or on other contracts regardless of the year or
type of appropriation obligated to fund each contract or contract line
item, and regardless of whether the appropriation has closed.
When using this authority, the closeout procedures require the
contracting officer to issue a modification of the affected contract,
which must be signed by both the contractor and the Government. When
closing out a group of contracts, the contracting officer must issue a
modification of at least one of the affected contracts that reflects
the negotiated settlement for the group of contracts and this
modification must be signed by both the contractor and the Government.
The remaining contracts in the group may be modified without obtaining
the contractor's signature.
In accordance with section 836(d)(1) of the NDAA for FY 2017, the
Under Secretary of Defense (Acquisition and Sustainment) (USD(A&S)) is
authorized to waive any additional provision of law or regulation in
order to carry out the closeout procedures as authorized in section
836(a)-(c).
[[Page 18154]]
One respondent submitted public comments in response to the
proposed rule.
II. Discussion and Analysis
DoD reviewed the public comments in the development of the final
rule. A discussion of the comments and the change made to the rule as a
result of those comments is provided, as follows:
A. Summary of Significant Changes From the Proposed Rule in Response to
Public Comments
1. DFARS 204.804(3)(i)(C) is revised to replace ``individual'' with
``contracting official'' to ensure the required determination would be
made by a contracting official.
2. DFARS 204.804(3)(iv) is added to implement the authority
provided in section 836 to waive provisions of acquisition law or
regulation in order to close out contracts in accordance with section
836.
B. Analysis of Public Comments
1. Use of the Term ``Contracting Official'' Versus ``Individual''
Comment: The respondent recommended a change to the proposed rule
text in DFARS 204.804(3)(i)(C) to replace ``individual'' with
``contracting official'' to ensure the required determination would be
made by a contracting official.
Response: To ensure the contracting officer retains the requisite
authority to execute expedited closeouts, the proposed DFARS
204.804(3)(i)(C) text will be revised to: ``Has been determined by a
contracting official, approved at least one level above the contracting
officer, to be not otherwise reconcilable. . . .''
2. Establish a Measure To Define Disproportionality
Comment: The respondent recommended revisions to DFARS
204.804(3)(i)(C)(2) to establish a measure to define
``disproportionate'' and to revise the text to reflect a ``general
rule'' of 20 percent to determine ``disproportionately excessive''.
Response: The text at DFARS 204.804(3)(i)(C)(2) includes the term
``disproportionate'' to establish that DoD's estimate of time and
effort are determined to be greater than the amount owed to a level of
imbalance. DoD has concerns that the use of a general measure may
become an implied rule. It is not the intent of the DoD to identify a
threshold, but to leave the determination of disproportion to the
contracting officer's discretion.
3. Include a Provision To Implement Reporting Requirement
Comment: The respondent recommended adding a provision to create a
template and implement a reporting requirement.
Response: Creation of a solicitation provision is not necessary to
implement the requirement for the Secretary of Defense to notify the
Congressional defense committees within 10 days of exercising the
authority at section 836(d) to waive any provision of acquisition law
or regulation in order to closeout contracts under the section 836
authority. Rather, a new paragraph (3)(iv) is added at DFARS 204.804
regarding the authority, which has been delegated to USD(A&S), to waive
any provision of acquisition law or regulation to close out contracts
as authorized by section 836 and implemented at DFARS 204.804(3)(i). A
reference to internal operating procedures at DFARS Procedures,
Guidance, and Information 204.804(3)(iv) is also provided, which direct
departments and agencies to forward requests to waive provisions of
acquisition law or regulation to the Principal Director, Defense
Pricing and Contracting, who will forward the request to USD(A&S), as
appropriate.
4. Waiver Authority for Acquisition Laws or Regulations Necessary for
Closeout of Contracts
Comment: The respondent had concerns over the waiver authority for
acquisition laws or regulations necessary for closeout of contracts
under section 836(a).
Response: Waiver of acquisition laws and regulations necessary to
close contracts must be, under statute, within the parameters of the
congressionally granted authority. In accordance with section 836(d)(1)
of the NDAA for FY 2017, the USD(A&S) is authorized to waive any
provision of law or regulation in order to carry out the closeout
procedures as authorized in section 836(a)-(c).
5. DoD 7000.14-R, Financial Management Regulation Update
Comment: The respondent recommended updates to the DoD 7000.14-R,
Financial Management Regulation.
Response: This rule is implementing in the DFARS sections 836 of
the NDAA for FY 2017, as modified by section 824 of the NDAA for FY
2018, to permit close out of certain contracts or groups of contracts.
Updating the DoD 7000.14-R is beyond the scope of this rule.
6. Restate FAR 4.804-5(b) Requirements for Contract Closeout Actions in
DFARS
Comment: The respondent recommended restating required contract
closeout actions specified in FAR 4.804-5(b) in DFARS 204.804.
Response: The FAR requirements at 4.804-5(b) are applicable to DoD,
as stated in the FAR. Restating the FAR text in the DFARS would be
duplicative and is unnecessary.
III. Applicability to Contracts at or Below the Simplified Acquisition
Threshold and for Commercial Items, Including Commercially Available
Off-the-Shelf Items
This rule does not propose to create any new provisions or clauses
or impact any existing provisions or clauses.
IV. 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.
V. Executive Order 13771
This rule is not subject to E.O. 13771, because this rule is not a
significant regulatory action under E.O. 12866.
VI. Regulatory Flexibility Act
A final regulatory flexibility analysis (FRFA) has been prepared
consistent with the Regulatory Flexibility Act, 5 U.S.C. 601, et seq.
The FRFA is summarized as follows:
This final rule is necessary to implement section 836 of the
National Defense Authorization Act (NDAA) for Fiscal Year (FY) 2017
(Pub. L. 114-328), as modified by section 824 of the NDAA for FY 2018
(Pub. L. 115-91). The objective of this rule is to permit expedited
closeout of certain contracts entered into on a date that is at least
17 fiscal years before the current fiscal year.
There were no issues raised by the public in response to the
initial regulatory flexibility analysis provided in the proposed rule.
[[Page 18155]]
This rule will apply to small entities. Using estimates from
department and agency subject matter experts, approximately 11,300
contracts subject to this rule need to be closed out by the Government.
Of these contracts, the Government estimates that 50 percent, or 5,650,
of the awards were made to small businesses.
This rule does not include any new reporting, recordkeeping, or
other compliance requirements on any small entities.
DoD has not identified any alternatives that would meet the
requirements of the applicable statute.
VII. 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 204
Government procurement.
Jennifer Lee Hawes,
Regulatory Control Officer, Defense Acquisition Regulations System.
Therefore, 48 CFR part 204 is amended as follows:
PART 204--ADMINISTRATIVE MATTERS
0
1. The authority citation for part 204 continues to read as follows:
Authority: 41 U.S.C. 1303 and 48 CFR chapter 1.
0
2. Amend section 204.804 by--
0
a. In paragraph (1), removing ``Contracting officers'' and adding
``Except as provided in paragraph (3) of this section, contracting
officers'' in its place;
0
b. In paragraph (2) removing ``must'' and adding ``shall'' in its
place, and
0
c. Adding paragraph (3). The addition reads as follows:
204.804 Closeout of contract files.
* * * * *
(3)(i) In accordance with section 836 of the National Defense
Authorization Act for Fiscal Year 2017 (Pub. L. 114-328) and section
824 of the National Defense Authorization Act for Fiscal Year 2018
(Pub. L. 115-91), contracting officers may close out contracts or
groups of contracts through issuance of one or more modifications to
such contracts without completing a reconciliation audit or other
corrective action in accordance with FAR 4.804-5(a)(3) through (15), as
appropriate, if each contract--
(A) Was entered into on a date that is at least 17 fiscal years
before the current fiscal year;
(B) Has no further supplies or services due under the terms of the
contract; and
(C) Has been determined by a contracting official, at least one
level above the contracting officer, to be not otherwise reconcilable,
because--
(1) The contract or related payment records have been destroyed or
lost; or
(2) Although contract or related payment records are available, the
time or effort required to establish the exact amount owed to the U.S.
Government or amount owed to the contractor is disproportionate to the
amount at issue.
(ii) Any contract or group of contracts meeting the requirements of
paragraph (3)(i) of this section may be closed out through a negotiated
settlement with the contractor. Except as provided in paragraph
(3)(ii)(B) of this section, the contract closeout process shall include
a bilateral modification of the affected contract, including those
contracts that are closed out in accordance with a negotiated
settlement.
(A) For a contract or groups of contracts, the contracting officer
shall prepare a negotiation settlement memorandum that describes how
the requirements of paragraph (3)(i) of this section have been met.
(B) For a group of contracts, a bilateral modification of at least
one contract shall be made to reflect the negotiated settlement for a
group of contracts, and unilateral modifications may be made, as
appropriate, to other contracts in the group to reflect the negotiated
settlement.
(iii) For contract closeout actions under paragraph (3) of this
section, remaining contract balances--
(A) May be offset with balances in other contract line items within
the same contract, regardless of the year or type of appropriation
obligated to fund each contract line item and regardless of whether the
appropriation obligated to fund such contract line item has closed; and
(B) May be offset with balances on other contracts, regardless of
the year or type of appropriations obligated to fund each contract and
regardless of whether such appropriations have closed.
(iv) USD(A&S) is authorized to waive any provision of acquisition
law or regulation in order to carry out the closeout procedures
authorized in paragraph (3)(i) of this section (see procedures at PGI
204.804(3)(iv).
[FR Doc. 2019-08482 Filed 4-29-19; 8:45 am]
BILLING CODE 5001-06-P
