Defense Federal Acquisition Regulation Supplement: Modification of DFARS Clause “Payment for Subline Items Not Separately Priced” (DFARS Case 2018-D050), 19691-19692 [2020-06726]

Download as PDF Federal Register / Vol. 85, No. 68 / Wednesday, April 8, 2020 / Rules and Regulations liquid net worth, connected by significant ownership interest to the Contractor. (E) Title to identified Contractor assets of adequate worth. (ii) Paragraph (f) of the clause at FAR 52.232–32 does not apply to the extent that the Contractor and the Contracting Officer agree on alternative forms of security. In the event the Contractor fails to provide adequate security, as required in this contract, no financing payment will be made under this contract. Upon receipt of adequate security, financing payments will be made, including all previous payments to which the Contractor is entitled, in accordance with the terms of the provisions for contract financing. If at any time the Contracting Officer determines that the security provided by the Contractor is insufficient, the Contractor shall promptly provide such additional security as the Contracting Officer determines necessary. In the event the Contractor fails to provide such additional security, the Contracting Officer may collect or liquidate such security that has been provided and suspend further payments to the Contractor; and the Contractor shall repay to the Government the amount of unliquidated financing payments as the Contracting Officer at his sole discretion deems repayable. ■ 12. Add section 252.232–7015 to read as follows: the Federal Acquisition Regulation (FAR) or performance-based payments in accordance with FAR subpart 32.10 will not be considered as a handicap or adverse factor in the award of the contract. (b) This solicitation includes a FAR and Defense Federal Acquisition Regulation Supplement (DFARS) clause for performance-based payments and a FAR clause for progress payments. The resultant contract will include either performancebased payments or progress payments, not both, except as may be authorized on separate orders subject to FAR 32.1003(c). (1) The performance-based payments clauses will be included in the contract if— (i) The Offeror has provided positive representation in response to DFARS 252.232–7015, Performance-Based Payments—Representation; (ii) The Offeror proposes a performancebased payment arrangement in accordance with FAR 52.232–28, Invitation to Propose Performance-Based Payments, including proposed events and timing, event completion criteria, event values, and expected expenditure profile; and (iii) The Offeror and the Government reach agreement on all aspects of the arrangement. (2) If performance-based payments clauses are not included in the resultant contract, the progress payments clause included in this solicitation will be included in any resultant contract, modified or altered if necessary in accordance with FAR 52.232–16 and its Alternate I. Even though the progress payments clause is included in the contract, the clause shall be inoperative during any time the contractor’s accounting system and controls are determined by the Government to be inadequate for segregation and accumulation of contract costs. 252.232–7015 Performance-Based Payments—Representation (End of provision) As prescribed in 232.1005–70(b), use the following provision: Performance-Based Payments— Representation (APR 2020) (End of provision) 13. Add section 252.232–7016 to read as follows: ■ lotter on DSKBCFDHB2PROD with RULES 252.232–7016 Notice of Progress Payments or Performance-Based Payments As prescribed in 232.1005–70(c), insert the following provision: Notice of Progress Payments or Performance-Based Payments (APR 2020) Jkt 250001 Defense Acquisition Regulations System 48 CFR Parts 204 and 252 [Docket DARS–2019–0049] RIN 0750–AK14 Defense Federal Acquisition Regulation Supplement: Modification of DFARS Clause ‘‘Payment for Subline Items Not Separately Priced’’ (DFARS Case 2018–D050) 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 modify the text of an existing DFARS clause to clarify its SUMMARY: (a) The need for customary progress payments in accordance with subpart 32.5 of 19:34 Apr 07, 2020 BILLING CODE 5001–06–P DEPARTMENT OF DEFENSE (a) In accordance with 10 U.S.C. 2307(b)(4)(A), the Contractor’s financial statements shall be in compliance with Generally Accepted Accounting Principles in order to receive performance-based payments. (b) The Offeror represents that its financial statements are [ ] are not [ ] in compliance with Generally Accepted Accounting Principles. VerDate Sep<11>2014 [FR Doc. 2020–06728 Filed 4–7–20; 8:45 am] PO 00000 Frm 00041 Fmt 4700 Sfmt 4700 19691 intent and conform its language to current DFARS terminology, pursuant to action taken by the Regulatory Reform Task Force. DATES: Effective April 8, 2020. FOR FURTHER INFORMATION CONTACT: Ms. Carrie Moore, telephone 571–372–6093. SUPPLEMENTARY INFORMATION: I. Background DoD published a proposed rule in the Federal Register at 84 FR 58362 on October 31, 2019, to modify DFARS clause 252.207–7002, Payment for Subline Items Not Separately Priced, to conform the text of the clause to the current contract line item structure terminology by replacing ‘‘contract line item’’ with ‘‘contract line or subline item’’ and add a prescription for the DFARS clause in the applicable section of DFARS 204.71. No public comments were received in response to the proposed rule. No changes are made in the final rule from the proposed rule. II. Applicability to Contracts at or Below the Simplified Acquisition Threshold and for Commercial Items, Including Commercially Available Offthe-Shelf Items This rule does not create any new provisions or clauses. The rule updates language used in the clause text to conform with current contract line item structure terminology. This rule does not change the applicability of the affected clause. III. Executive Orders 12866 and 13563 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. 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. V. Regulatory Flexibility Act A final regulatory flexibility analysis (FRFA) has been prepared consistent with the Regulatory Flexibility Act, 5 E:\FR\FM\08APR1.SGM 08APR1 19692 Federal Register / Vol. 85, No. 68 / Wednesday, April 8, 2020 / Rules and Regulations U.S.C. 601, et seq. The FRFA is summarized as follows: The Department of Defense is amending the Defense Federal Acquisition Regulation Supplement (DFARS) to modify the text of DFARS clause 252.204–7002, Payment for Subline Items Not Separately Priced, to simplify and conform the clause text to current Government contract line item structure terminology. The objective of this rule is to clarify the intent of the clause for contractors, when submitting invoices under contracts that contain items that are not separately priced. The modification of this DFARS clause supports a recommendation from the DoD Regulatory Reform Task Force. No public comments were received in response to the initial regulatory flexibility analysis. Based on an average of data for fiscal year 2016 through 2018 from the Federal Procurement Data System and Electronic Document Access, DoD awards approximately 12,435 contracts annually that includes the DFARS clause 252.204–7002. Of the 12,435 awards, approximately 4,924 contracts (40%) are awarded to 1,564 unique small business entities. Based on the available data and the objective of the rule, DoD does not anticipate that this proposed rule will significantly impact small business entities. This rule does not include any new reporting, recordkeeping, or other compliance requirements for small businesses. This 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 stated objectives. VI. Paperwork Reduction Act 2. Amend section 204.7104–1: a. In paragraph (b)(3)(iii), by removing ‘‘subsection’’ and adding ‘‘section’’ in its place; and ■ b. By revising paragraph (b)(3)(iv). The revision reads as follows: ■ ■ 204.7104–1 Criteria for establishing. * * * * * (b) * * * (3) * * * (iv) When the price for items not separately priced is included in the price of another contract line or subline item, it may be necessary to withhold payment on the priced contract line or subline item until the included line or subline items that are not separately priced have been delivered. See the clause at 252.204–7002, Payment for Contract Line or Subline Items Not Separately Priced. ■ 3. Revise section 204.7109 to read as follows: 204.7109 Contract clauses. (a) Use the clause at 252.204–7002, Payment for Contract Line or Subline Items Not Separately Priced, in solicitations and contracts when the price for items not separately priced is included in the price of another contract line or subline item. (b) Use the clause at 252.204–7006, Billing Instructions, in solicitations and contracts if Section G includes— (1) Any of the standard payment instructions at PGI 204.7108(b)(2); or (2) Other payment instructions, in accordance with PGI 204.7108(d)(12), that require contractor identification of the contract line item(s) on the payment request. 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). PART 252—SOLICITATION PROVISIONS AND CONTRACT CLAUSES List of Subjects in 48 CFR Parts 204 and 252 252.204–7002 Payment for Contract Line or Subline Items Not Separately Priced. Jennifer Lee Hawes, Regulatory Control Officer, Defense Acquisition Regulations System. Payment for Contract Line or Subline Items Not Separately Priced (APR 2020) Therefore, 48 CFR parts 204 and 252 are amended as follows: 1. The authority citation for 48 CFR parts 204 and 252 continues to read as follows: ■ Authority: 41 U.S.C. 1303 and 48 CFR chapter 1. VerDate Sep<11>2014 19:34 Apr 07, 2020 Jkt 250001 4. Revise section 252.204–7002 to read as follows: ■ As prescribed in 204.7109(a), use the following clause: Government procurement. lotter on DSKBCFDHB2PROD with RULES PART 204—ADMINISTRATIVE AND INFORMATION MATTERS (a) If the schedule in this contract contains any contract line or subline items identified as not separately priced (NSP), it means that the unit price for the NSP line or subline item is included in the unit price of another, related line or subline item. (b) The Contractor shall not invoice the Government for an item that includes in its price an NSP item until— PO 00000 Frm 00042 Fmt 4700 Sfmt 4700 (1) The Contractor has also delivered the NSP item included in the price of the item being invoiced; and (2) The Government has accepted the NSP item. (c) This clause does not apply to technical data. (End of clause) 252.204–7006 [Amended] 5. Amend section 252.204–7006 introductory text by removing ‘‘204.7109’’ and adding ‘‘204.7109(b)’’ in its place. ■ [FR Doc. 2020–06726 Filed 4–7–20; 8:45 am] BILLING CODE 5001–06–P DEPARTMENT OF DEFENSE Defense Acquisition Regulations System 48 CFR Parts 212, 232, and 252 [Docket DARS–2019–0025] RIN 0750–AK25 Defense Federal Acquisition Regulation Supplement: Prompt Payments of Small Business Contractors (DFARS Case 2018–D068) 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 a section of the National Defense Authorization Act for Fiscal Year 2019 that provides for accelerated payments to small business contractors and subcontractors. DATES: Effective April 8, 2020. FOR FURTHER INFORMATION CONTACT: Ms. Jennifer D. Johnson, telephone 571– 372–6100. SUPPLEMENTARY INFORMATION: SUMMARY: I. Background DoD published a proposed rule in the Federal Register at 84 FR 25225 on May 31, 2019, to implement section 852 of the National Defense Authorization Act (NDAA) for Fiscal Year (FY) 2019 (Pub. L. 115–232). Section 852 provides for accelerated payments to DoD contractors that are small businesses and to small business subcontractors by accelerating payments to their prime contractors. Thirteen respondents 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 E:\FR\FM\08APR1.SGM 08APR1

Agencies

[Federal Register Volume 85, Number 68 (Wednesday, April 8, 2020)]
[Rules and Regulations]
[Pages 19691-19692]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2020-06726]


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DEPARTMENT OF DEFENSE

Defense Acquisition Regulations System

48 CFR Parts 204 and 252

[Docket DARS-2019-0049]
RIN 0750-AK14


Defense Federal Acquisition Regulation Supplement: Modification 
of DFARS Clause ``Payment for Subline Items Not Separately Priced'' 
(DFARS Case 2018-D050)

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 modify the text of an 
existing DFARS clause to clarify its intent and conform its language to 
current DFARS terminology, pursuant to action taken by the Regulatory 
Reform Task Force.

DATES: Effective April 8, 2020.

FOR FURTHER INFORMATION CONTACT: Ms. Carrie Moore, telephone 571-372-
6093.

SUPPLEMENTARY INFORMATION: 

I. Background

    DoD published a proposed rule in the Federal Register at 84 FR 
58362 on October 31, 2019, to modify DFARS clause 252.207-7002, Payment 
for Subline Items Not Separately Priced, to conform the text of the 
clause to the current contract line item structure terminology by 
replacing ``contract line item'' with ``contract line or subline item'' 
and add a prescription for the DFARS clause in the applicable section 
of DFARS 204.71. No public comments were received in response to the 
proposed rule. No changes are made in the final rule from the proposed 
rule.

II. 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 create any new provisions or clauses. The rule 
updates language used in the clause text to conform with current 
contract line item structure terminology. This rule does not change the 
applicability of the affected clause.

III. Executive Orders 12866 and 13563

    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. 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.

V. Regulatory Flexibility Act

    A final regulatory flexibility analysis (FRFA) has been prepared 
consistent with the Regulatory Flexibility Act, 5

[[Page 19692]]

U.S.C. 601, et seq. The FRFA is summarized as follows:
    The Department of Defense is amending the Defense Federal 
Acquisition Regulation Supplement (DFARS) to modify the text of DFARS 
clause 252.204-7002, Payment for Subline Items Not Separately Priced, 
to simplify and conform the clause text to current Government contract 
line item structure terminology.
    The objective of this rule is to clarify the intent of the clause 
for contractors, when submitting invoices under contracts that contain 
items that are not separately priced. The modification of this DFARS 
clause supports a recommendation from the DoD Regulatory Reform Task 
Force. No public comments were received in response to the initial 
regulatory flexibility analysis.
    Based on an average of data for fiscal year 2016 through 2018 from 
the Federal Procurement Data System and Electronic Document Access, DoD 
awards approximately 12,435 contracts annually that includes the DFARS 
clause 252.204-7002. Of the 12,435 awards, approximately 4,924 
contracts (40%) are awarded to 1,564 unique small business entities. 
Based on the available data and the objective of the rule, DoD does not 
anticipate that this proposed rule will significantly impact small 
business entities. This rule does not include any new reporting, 
recordkeeping, or other compliance requirements for small businesses. 
This 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 stated objectives.

VI. 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 Parts 204 and 252

    Government procurement.

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

    Therefore, 48 CFR parts 204 and 252 are amended as follows:

0
1. The authority citation for 48 CFR parts 204 and 252 continues to 
read as follows:

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

PART 204--ADMINISTRATIVE AND INFORMATION MATTERS

0
2. Amend section 204.7104-1:
0
a. In paragraph (b)(3)(iii), by removing ``subsection'' and adding 
``section'' in its place; and
0
b. By revising paragraph (b)(3)(iv).
    The revision reads as follows:


204.7104-1   Criteria for establishing.

* * * * *
    (b) * * *
    (3) * * *
    (iv) When the price for items not separately priced is included in 
the price of another contract line or subline item, it may be necessary 
to withhold payment on the priced contract line or subline item until 
the included line or subline items that are not separately priced have 
been delivered. See the clause at 252.204-7002, Payment for Contract 
Line or Subline Items Not Separately Priced.

0
3. Revise section 204.7109 to read as follows:


204.7109   Contract clauses.

    (a) Use the clause at 252.204-7002, Payment for Contract Line or 
Subline Items Not Separately Priced, in solicitations and contracts 
when the price for items not separately priced is included in the price 
of another contract line or subline item.
    (b) Use the clause at 252.204-7006, Billing Instructions, in 
solicitations and contracts if Section G includes--
    (1) Any of the standard payment instructions at PGI 204.7108(b)(2); 
or
    (2) Other payment instructions, in accordance with PGI 
204.7108(d)(12), that require contractor identification of the contract 
line item(s) on the payment request.

PART 252--SOLICITATION PROVISIONS AND CONTRACT CLAUSES

0
4. Revise section 252.204-7002 to read as follows:


252.204-7002   Payment for Contract Line or Subline Items Not 
Separately Priced.

    As prescribed in 204.7109(a), use the following clause:

Payment for Contract Line or Subline Items Not Separately Priced (APR 
2020)

    (a) If the schedule in this contract contains any contract line 
or subline items identified as not separately priced (NSP), it means 
that the unit price for the NSP line or subline item is included in 
the unit price of another, related line or subline item.
    (b) The Contractor shall not invoice the Government for an item 
that includes in its price an NSP item until--
    (1) The Contractor has also delivered the NSP item included in 
the price of the item being invoiced; and
    (2) The Government has accepted the NSP item.
    (c) This clause does not apply to technical data.
(End of clause)


252.204-7006   [Amended]

0
5. Amend section 252.204-7006 introductory text by removing 
``204.7109'' and adding ``204.7109(b)'' in its place.

[FR Doc. 2020-06726 Filed 4-7-20; 8:45 am]
 BILLING CODE 5001-06-P