Defense Federal Acquisition Regulation Supplement: Contractor Purchasing System Review Threshold (DFARS Case 2017-D038), 25228-25229 [2019-11304]

Download as PDF 25228 Federal Register / Vol. 84, No. 105 / Friday, May 31, 2019 / Proposed Rules Proposed rule. Subpart 232.9—Prompt Payment ACTION: 4. Revise section 232.903 to read as follows: SUMMARY: ■ 232.903 Responsibilities. In accordance with section 852 of the National Defense Authorization Act for Fiscal Year 2019 (Pub. L. 115–232), DoD shall assist small business concerns by providing payment as quickly as possible, to the fullest extent permitted by law, with a goal of 15 days after receipt of proper invoices and all required documentation, including acceptance, and before normal payment due dates established in the contract (see 232.906(a)). PART 252—SOLICITATION PROVISIONS AND CONTRACT CLAUSES 5. Add section 252.232–7XXX to read as follows: ■ 252.232–7XXX Accelerating Payments to Small Business Subcontractors— Prohibition on Fees and Consideration. As prescribed in 232.009–2, use the following clause: ACCELERATING PAYMENTS TO SMALL BUSINESS SUBCONTRACTORS— PROHIBITION ON FEES AND CONSIDERATION (DATE) (a) In accordance with section 852 of Public Law 115–232, the contractor shall not require any further consideration from or charge fees to the small business subcontractor when making accelerated payments to subcontractors under the clause at FAR 52.232–40, Providing Accelerated Payments to Small Business Subcontractors. (b) Include the substance of this clause, including this paragraph (b), in all subcontracts with small business concerns, including those for the acquisition of commercial items. (End of clause) [FR Doc. 2019–11309 Filed 5–30–19; 8:45 am] BILLING CODE 5001–06–P DoD is proposing to amend the Defense Federal Acquisition Regulation Supplement (DFARS) to establish a DoD contractor purchasing system review dollar threshold that provides a regulatory basis for allowing DoD personnel to support other essential priorities and missions of greater contractual risk, while reducing regulatory impact on contractors. DATES: Comments on the proposed rule should be submitted in writing to the address shown below on or before July 30, 2019, to be considered in the formation of a final rule. ADDRESSES: Submit comments identified by DFARS Case 2017–D038, using any of the following methods: Æ Federal eRulemaking Portal: http:// www.regulations.gov. Search for ‘‘DFARS Case 2017–D038.’’ Select ‘‘Comment Now’’ and follow the instructions to submit a comment. Please include your name, company name (if any), and ‘‘DFARS Case 2017– D038’’ on any attached document. Æ Email: osd.dfars@mail.mil. Include DFARS Case 2017–D038 in the subject line of the message. Æ Fax: 571–372–6094. Æ Mail: Defense Acquisition Regulations System, Attn: Kimberly Bass, OUSD(A&S)DPAP/DARS, Room 3B941, 3060 Defense Pentagon, Washington, DC 20301–3060. Instructions: Comments received generally will be posted without change to http://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: Kimberly Bass, telephone 571–372– 6174. SUPPLEMENTARY INFORMATION: DEPARTMENT OF DEFENSE I. Background Defense Acquisition Regulations System 48 CFR Part 244 khammond on DSKBBV9HB2PROD with PROPOSALS [Docket DARS–2019–0024] RIN 0750–AJ48 Defense Federal Acquisition Regulation Supplement: Contractor Purchasing System Review Threshold (DFARS Case 2017–D038) Defense Acquisition Regulations System, Department of Defense (DoD). AGENCY: VerDate Sep<11>2014 16:12 May 30, 2019 Jkt 247001 This proposed rule implements a recommendation from the Defense Contract Management Agency (DCMA) to raise the contractor purchasing system review (CPSR) threshold at Federal Acquisition Regulation 44.302(a) from $25 million to $50 million. Currently, FAR 44.302(a) requires the administrative contracting officer (ACO) to determine whether a contractor’s sales to the Government are expected to exceed $25 million during the next 12 months and, if so, perform a review to determine if a CPSR is needed. The ACO uses this dollar PO 00000 Frm 00026 Fmt 4702 Sfmt 4702 threshold in conjunction with the surveillance criteria cited at FAR 44.302(a), i.e., contractor past performance, and the volume, complexity, and dollar value of subcontracts. DCMA performs the preponderance of DoD CPSRs. Competitively awarded firm-fixed-price and competitively awarded fixed-price with economic price adjustment contracts and sales of commercial items pursuant to Part 12 are excluded from this requirement. FAR 44.302(a) specifically authorizes the head of the agency responsible for contract administration to raise or lower the $25 million CPSR threshold if it is considered to be in the Government’s best interest. The dollar threshold of $25 million cited at FAR 44.302(a) has been unchanged since 1996. In 2016, the DCMA CPSR Group conducted an analysis to determine if raising the CPSR threshold would be beneficial. Based on the Group’s findings, it was determined that adjusting the threshold upward to $50 million would appropriately account for inflation, reduce burden on small contractors, and allow a more efficient and effective use of CSPR resources to review larger contractors where more taxpayer dollars are at risk. II. Discussion and Analysis This rule proposes to amend DFARS 244.302, Requirements, to establish within the DFARS a DoD CPSR dollar threshold of $50 million. With this threshold in place, it is estimated that DCMA ACOs can reduce the number of contractor reviews by approximately 20 percent, while reducing by only 2% the value of contract dollars covered by CSPRs. Thus, the Government will be adequately protected by the $50 million threshold. 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 add any new provisions or clauses or impact any existing provisions or clauses. The rule merely increases the DoD dollar threshold for conducting CPSRs to $50 million. 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 E:\FR\FM\31MYP1.SGM 31MYP1 Federal Register / Vol. 84, No. 105 / Friday, May 31, 2019 / Proposed Rules 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. khammond on DSKBBV9HB2PROD with PROPOSALS V. Executive Order 13771 This rule is not expected to be subject to E.O. 13771, because this rule is not a significant regulatory action under E.O. 12866. VI. Regulatory Flexibility Act DoD does not expect this proposed 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., based on a review of historical data concerning the purchasing system, business system program. 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 establish a DoD contractor purchasing system review (CPSR) dollar threshold. The objective of this rule is to create a new DFARS section at 244.302 to establish a CPSR dollar threshold of $50 million. The threshold will be used in conjunction with other surveillance criteria cited at Federal Acquisition Regulation (FAR) 44.302(a), to include contractor past performance and the volume, complexity, and dollar value of subcontracts. The proposed rule establishes a DoD dollar threshold of $50 million for a formal CPSR; in effect, raising the current surveillance threshold of $25 million cited at FAR 44.302(a) for DoD contractors. In 2014, there were there were 667 unique entities for which administrative contracting officers (ACO) had recorded approved CPSR decisions in the Contract Business Analysis Repository. A 20% reduction in the number of CPSRs is expected to result from increasing the CPSR threshold from $25 million to $50 million for a total reduction of approximately 133 firms no longer meeting the criteria for a CPSR review. Contractor purchasing systems are eligible for a comprehensive followon review every three years. Based on this three-year review cycle, approximately 45 fewer contractors would be reviewed each year (133 firms/3-year cycle = 44.3, rounded to 45 VerDate Sep<11>2014 16:12 May 30, 2019 Jkt 247001 fewer reviews conducted each year). Of the 45 entities, it is estimated that 35 of these contractors are large businesses and 10 are small entities. The $50 million dollar threshold should reduce the compliance burden for approximately 133 contractors, and permit a more prudent and efficient use of resources, prioritizing surveillance to the larger firms. For the approximately 133 contractors affected by this rule, there could be additional requirements for those firms to request consent to contract from the ACO, pursuant to FAR clause 52.244–2, Subcontracts. It is estimated that the annual number of consent to contract requests are approximately 12 per contractor. The rule does not duplicate, overlap, or conflict with any other Federal rules. There are no significant alternatives to the proposed rule that accomplish the stated objectives. 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 2017–D038), in correspondence. VII. Paperwork Reduction Act The Paperwork Reduction Act (44 U.S.C. Chapter 35) applies. The rule contains information collection requirements cleared by the Office of Management and Budget under OMB control number 9000–0149, entitled ‘‘Subcontract Consent and Contractor’s Purchasing System Review.’’ The current clearance for OMB control number 9000–0149 already accounts for the reduction in burden associated with raising the DoD threshold for conducting CPSRs. List of Subjects in 48 CFR Part 244 Government procurement. Jennifer Lee Hawes, Regulatory Control Officer, Defense Acquisition Regulations System. Therefore, 48 CFR part 244 is proposed to be amended as follows: PART 244—SUBCONTRACTING POLICIES AND PROCEDURES 1. The authority citation for 48 CFR part 244 continues to read as follows: ■ Authority: 41 U.S.C. 1303 ad 48 CFR chapter 1. PART 244—SUBCONTRACTING POLICIES AND PROCEDURES 2. Section 244.302 is added to read as follows: ■ PO 00000 Frm 00027 Fmt 4702 Sfmt 4702 244.302 25229 Requirements. (a) In lieu of the threshold at FAR 44.302(a), the ACO shall determine the need for a CPSR if a contractor’s sales to the Government are expected to exceed $50 million during the next 12 months. [FR Doc. 2019–11304 Filed 5–30–19; 8:45 am] BILLING CODE 5001–06–P DEPARTMENT OF TRANSPORTATION Federal Motor Carrier Safety Administration 49 CFR Chapter III, Subchapter B [Docket No. FMCSA–2018–0037] RIN 2126–AC17 Safe Integration of Automated Driving Systems-Equipped Commercial Motor Vehicles; Correction Federal Motor Carrier Safety Administration (FMCSA), DOT. ACTION: Advance notice of proposed rulemaking (ANPRM); correction. AGENCY: FMCSA is correcting an advanced notice of proposed rulemaking (NPRM) that published in the Federal Register on May 28, 2019. The document requests public comment about Federal Motor Carrier Safety Regulations (FMCSRs) that may need to be amended, revised, or eliminated to facilitate the safe introduction of automated driving systems (ADS) equipped commercial motor vehicles (CMVs) onto our Nation’s roadways. The ANPRM contained an erroneous date for closure of the comment period. DATES: The comments due date for the ANPRM published on May 28, 2019 (84 FR 24449), is corrected as of May 28, 2019. Comments on the ANPRM must be received on or before July 29, 2019. ADDRESSES: You may submit comments identified by Docket Number FMCSA– 2018–0037 using any of the following methods: • Federal eRulemaking Portal: http:// www.regulations.gov. Follow the online instructions for submitting comments. • Mail: Docket Management Facility, U.S. Department of Transportation, 1200 New Jersey Avenue SE, West Building, Ground Floor, Room W12–140, Washington, DC 20590–0001. • Hand Delivery or Courier: West Building, Ground Floor, Room W12– 140, 1200 New Jersey Avenue SE, Washington, DC, between 9 a.m. and 5 p.m. ET, Monday through Friday, except Federal holidays. • Fax: 202–493–2251. SUMMARY: E:\FR\FM\31MYP1.SGM 31MYP1

Agencies

[Federal Register Volume 84, Number 105 (Friday, May 31, 2019)]
[Proposed Rules]
[Pages 25228-25229]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2019-11304]


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DEPARTMENT OF DEFENSE

Defense Acquisition Regulations System

48 CFR Part 244

[Docket DARS-2019-0024]
RIN 0750-AJ48


Defense Federal Acquisition Regulation Supplement: Contractor 
Purchasing System Review Threshold (DFARS Case 2017-D038)

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

ACTION: Proposed rule.

-----------------------------------------------------------------------

SUMMARY: DoD is proposing to amend the Defense Federal Acquisition 
Regulation Supplement (DFARS) to establish a DoD contractor purchasing 
system review dollar threshold that provides a regulatory basis for 
allowing DoD personnel to support other essential priorities and 
missions of greater contractual risk, while reducing regulatory impact 
on contractors.

DATES: Comments on the proposed rule should be submitted in writing to 
the address shown below on or before July 30, 2019, to be considered in 
the formation of a final rule.

ADDRESSES: Submit comments identified by DFARS Case 2017-D038, using 
any of the following methods:
    [cir] Federal eRulemaking Portal: http://www.regulations.gov. 
Search for ``DFARS Case 2017-D038.'' Select ``Comment Now'' and follow 
the instructions to submit a comment. Please include your name, company 
name (if any), and ``DFARS Case 2017-D038'' on any attached document.
    [cir] Email: [email protected]. Include DFARS Case 2017-D038 in 
the subject line of the message.
    [cir] Fax: 571-372-6094.
    [cir] Mail: Defense Acquisition Regulations System, Attn: Kimberly 
Bass, OUSD(A&S)DPAP/DARS, Room 3B941, 3060 Defense Pentagon, 
Washington, DC 20301-3060.
    Instructions: Comments received generally will be posted without 
change to http://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: Kimberly Bass, telephone 571-372-6174.

SUPPLEMENTARY INFORMATION:

I. Background

    This proposed rule implements a recommendation from the Defense 
Contract Management Agency (DCMA) to raise the contractor purchasing 
system review (CPSR) threshold at Federal Acquisition Regulation 
44.302(a) from $25 million to $50 million. Currently, FAR 44.302(a) 
requires the administrative contracting officer (ACO) to determine 
whether a contractor's sales to the Government are expected to exceed 
$25 million during the next 12 months and, if so, perform a review to 
determine if a CPSR is needed. The ACO uses this dollar threshold in 
conjunction with the surveillance criteria cited at FAR 44.302(a), 
i.e., contractor past performance, and the volume, complexity, and 
dollar value of subcontracts. DCMA performs the preponderance of DoD 
CPSRs. Competitively awarded firm-fixed-price and competitively awarded 
fixed-price with economic price adjustment contracts and sales of 
commercial items pursuant to Part 12 are excluded from this 
requirement.
    FAR 44.302(a) specifically authorizes the head of the agency 
responsible for contract administration to raise or lower the $25 
million CPSR threshold if it is considered to be in the Government's 
best interest. The dollar threshold of $25 million cited at FAR 
44.302(a) has been unchanged since 1996. In 2016, the DCMA CPSR Group 
conducted an analysis to determine if raising the CPSR threshold would 
be beneficial. Based on the Group's findings, it was determined that 
adjusting the threshold upward to $50 million would appropriately 
account for inflation, reduce burden on small contractors, and allow a 
more efficient and effective use of CSPR resources to review larger 
contractors where more taxpayer dollars are at risk.

II. Discussion and Analysis

    This rule proposes to amend DFARS 244.302, Requirements, to 
establish within the DFARS a DoD CPSR dollar threshold of $50 million. 
With this threshold in place, it is estimated that DCMA ACOs can reduce 
the number of contractor reviews by approximately 20 percent, while 
reducing by only 2% the value of contract dollars covered by CSPRs. 
Thus, the Government will be adequately protected by the $50 million 
threshold.

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 add any new provisions or clauses or impact any 
existing provisions or clauses. The rule merely increases the DoD 
dollar threshold for conducting CPSRs to $50 million.

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

[[Page 25229]]

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 expected to be subject to E.O. 13771, because this 
rule is not a significant regulatory action under E.O. 12866.

VI. Regulatory Flexibility Act

    DoD does not expect this proposed 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., based 
on a review of historical data concerning the purchasing system, 
business system program. 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 establish a DoD contractor purchasing 
system review (CPSR) dollar threshold.
    The objective of this rule is to create a new DFARS section at 
244.302 to establish a CPSR dollar threshold of $50 million. The 
threshold will be used in conjunction with other surveillance criteria 
cited at Federal Acquisition Regulation (FAR) 44.302(a), to include 
contractor past performance and the volume, complexity, and dollar 
value of subcontracts. The proposed rule establishes a DoD dollar 
threshold of $50 million for a formal CPSR; in effect, raising the 
current surveillance threshold of $25 million cited at FAR 44.302(a) 
for DoD contractors.
    In 2014, there were there were 667 unique entities for which 
administrative contracting officers (ACO) had recorded approved CPSR 
decisions in the Contract Business Analysis Repository. A 20% reduction 
in the number of CPSRs is expected to result from increasing the CPSR 
threshold from $25 million to $50 million for a total reduction of 
approximately 133 firms no longer meeting the criteria for a CPSR 
review. Contractor purchasing systems are eligible for a comprehensive 
follow-on review every three years. Based on this three-year review 
cycle, approximately 45 fewer contractors would be reviewed each year 
(133 firms/3-year cycle = 44.3, rounded to 45 fewer reviews conducted 
each year). Of the 45 entities, it is estimated that 35 of these 
contractors are large businesses and 10 are small entities.
    The $50 million dollar threshold should reduce the compliance 
burden for approximately 133 contractors, and permit a more prudent and 
efficient use of resources, prioritizing surveillance to the larger 
firms.
    For the approximately 133 contractors affected by this rule, there 
could be additional requirements for those firms to request consent to 
contract from the ACO, pursuant to FAR clause 52.244-2, Subcontracts. 
It is estimated that the annual number of consent to contract requests 
are approximately 12 per contractor.
    The rule does not duplicate, overlap, or conflict with any other 
Federal rules. There are no significant alternatives to the proposed 
rule that accomplish the stated objectives.
    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 2017-D038), in 
correspondence.

VII. Paperwork Reduction Act

    The Paperwork Reduction Act (44 U.S.C. Chapter 35) applies. The 
rule contains information collection requirements cleared by the Office 
of Management and Budget under OMB control number 9000-0149, entitled 
``Subcontract Consent and Contractor's Purchasing System Review.'' The 
current clearance for OMB control number 9000-0149 already accounts for 
the reduction in burden associated with raising the DoD threshold for 
conducting CPSRs.

List of Subjects in 48 CFR Part 244

    Government procurement.

Jennifer Lee Hawes,
Regulatory Control Officer, Defense Acquisition Regulations System.

    Therefore, 48 CFR part 244 is proposed to be amended as follows:

PART 244--SUBCONTRACTING POLICIES AND PROCEDURES

0
1. The authority citation for 48 CFR part 244 continues to read as 
follows:

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

PART 244--SUBCONTRACTING POLICIES AND PROCEDURES

0
2. Section 244.302 is added to read as follows:


244.302  Requirements.

    (a) In lieu of the threshold at FAR 44.302(a), the ACO shall 
determine the need for a CPSR if a contractor's sales to the Government 
are expected to exceed $50 million during the next 12 months.

[FR Doc. 2019-11304 Filed 5-30-19; 8:45 am]
BILLING CODE 5001-06-P