Defense Federal Acquisition Regulation Supplement: Payment Instructions (DFARS Case 2017-D036), 77053-77055 [2022-26691]
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Federal Register / Vol. 87, No. 241 / Friday, December 16, 2022 / Proposed Rules
List of Subjects in 47 CFR Part 8
SUPPLEMENTARY INFORMATION:
Cable television, Common carriers,
Communications common carriers,
Reporting and recordkeeping
requirements, Satellites,
Telecommunications, Telephone, Radio.
I. Background
DoD is proposing to amend the
DFARS to provide payment instructions
for certain contracts based on the type
of payment and item acquired. The
proposed rule would require separate
progress payment requests in order to
segregate foreign military sales (FMS)
and U.S. line items in progress payment
requests. In addition, the proposed rule
provides procedures for structuring
progress payment requests for contracts
with multiple production lots.
The proposed rule consists of
clarifications that require no additional
effort by large or small entities. The rule
provides contracting officers and
contractors clearer instruction on
information to include in payment
instructions and payment requests for
multiple lot purchases and combined
FMS/U.S. acquisitions.
Federal Communications Commission.
Marlene Dortch,
Secretary, Office of the Secretary.
[FR Doc. 2022–26853 Filed 12–15–22; 8:45 am]
BILLING CODE 6712–01–P
DEPARTMENT OF DEFENSE
Defense Acquisition Regulations
System
48 CFR Parts 204, 232, and 252
[Docket DARS–2022–0029]
RIN 0750–AJ46
Defense Federal Acquisition
Regulation Supplement: Payment
Instructions (DFARS Case 2017–D036)
Defense Acquisition Regulation
System, Department of Defense (DoD)
ACTION: Proposed rule.
AGENCY:
DoD is proposing to amend
the Defense Federal Acquisition
Regulation Supplement (DFARS) to
provide payment instructions for certain
contracts based on the type of item
acquired and the type of payment.
DATES: Comments on the proposed rule
should be submitted in writing to the
address shown below on or before
February 14, 2023, to be considered in
the formation of a final rule.
ADDRESSES: Submit comments in
response to DFARS Case 2017–D036 by
any of the following methods:
• Federal eRulemaking Portal:
https://www.regulations.gov. Search for
‘‘DFARS Case 2017–D036’’. Select
‘‘Comment Now’’ and follow the
instructions provided to submit a
comment. Please include ‘‘DFARS Case
2017–D036’’ on any attached document.
• Email: osd.dfars@mail.mil. Include
DFARS Case 2017–D036 in the subject
line of the message.
Comments received generally will be
posted without change to https://
www.regulation.gov, including any
personal information provided. To
confirm receipt of your comment(s),
please check https://
www.regulations.gov, approximately
two to three days after submission to
verify posting.
FOR FURTHER INFORMATION CONTACT: Mr.
David E. Johnson, telephone 202–913–
5764.
lotter on DSK11XQN23PROD with PROPOSALS1
SUMMARY:
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II. Discussion and Analysis
A review of Procurement Data
Standard validation results has shown
that contracting officers are not
consistently inserting required payment
instructions into contracts. Further, the
Defense Finance and Accounting
Service (DFAS) reported that the
payment instructions, if inserted, are
often not appropriate for the given
contract. Upon review, DoD found that
the appropriate accounting treatment for
payments can be determined by the type
of payment and item acquired. In
addition, DoD recognized the need to
establish procedures for structuring
progress payment requests for contracts
with multiple production lots.
DFARS 204.7109, Contract clauses,
and the clause at DFARS 252.204–7006,
Billing Instructions, are being amended
to change the applicability of contractor
cost vouchers to cost-reimbursable,
time-and-material, and labor-hour
contracts. The clause applicability was
revised to align with payment
instruction procedures provided in
DFARS Procedures, Guidance, and
Information 204.7108(b)(3). DFARS
252.204–7006, Billing Instructions,
clause title is also revised to ‘‘Billing
Instructions-Cost Vouchers’’.
The following revisions have been
made to simplify the contracting
officer’s instructions to the payment
office for progress payment funding
allocations: DFARS 232.502–4–70,
Additional clauses, and the new clause
at 252.232–70XX, Progress PaymentsMultiple Lots, provide the procedures
for submitting progress payments for
contracts with multiple production lots.
In addition, DFARS 252.232–7002,
Progress Payments for Foreign Military
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77053
Sales Acquisitions, is revised to clarify
the requirement for submitting separate
progress payment requests for FMS and
U.S. contract line items.
III. Applicability to Contracts at or
Below the Simplified Acquisition
Threshold (SAT), for Commercial
Services, and for Commercial Products,
Including Commercially Available Offthe-Shelf (COTS) Items
The proposed rule clarifies payment
instructions for certain contracts based
on the type of item acquired and the
type of payment by amending DFARS
252.204–7006 and 252.232–7002, and
adding a new clause at 252.232–70XX.
DoD plans to apply all three clauses to
solicitations and contracts at or below
the SAT. This rule does not apply to
commercial services or commercial
products, including COTS items.
IV. Expected Impact of the Rule
Currently, payment instructions are
being entered manually into DoD’s
payment systems due to a lack of clarity
in the DFARS with regard to payment
instructions. This proposed rule
clarifies the payment instruction
language in the DFARS. The
clarifications in this proposed rule will
reduce data errors and inoperability
problems throughout DoD’s business
processes created by manual entry of
payment instructions in the payment
systems, as well as reducing the cost of
data entry.
V. Executive Order 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.
VI. Congressional Review Act
As required by the Congressional
Review Act (5 U.S.C. 801–808) before an
interim or final rule takes effect, DoD
will submit a copy of the interim or
final rule with the form, Submission of
Federal Rules Under the Congressional
Review Act, to the U.S. Senate, the U.S.
House of Representatives, and the
Comptroller General of the United
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Federal Register / Vol. 87, No. 241 / Friday, December 16, 2022 / Proposed Rules
lotter on DSK11XQN23PROD with PROPOSALS1
States. A major rule under the
Congressional Review Act cannot take
effect until 60 days after it is published
in the Federal Register. This rule is not
anticipated to be a major rule under 5
U.S.C. 804.
VII. 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. However, an initial regulatory
flexibility analysis has been performed
and is summarized as follows:
The purpose of this proposed rule is
to provide clarifications on payment
instructions for certain contracts based
on the type of item acquired and the
type of payment. DoD has found that the
payment instructions often are not
inserted when required and that
payment instructions, if inserted, are
often not appropriate for the contracts in
question. An analysis of the issue
showed that the appropriate accounting
treatment for payments can be derived
from the type of item acquired and the
type of payment. In addition, the
analysis highlighted the need to
establish procedures for structuring
progress payment requests for contracts
with multiple production lots. The
clarifications in this proposed rule will
promote consistency with generally
accepted accounting principles and
reduce data errors created by manual
entry of payment instructions in the
payment systems.
The objective of the proposed rule is
to clarify payment instructions. The
proposed rule includes clarifications to
procedures for billing instructions when
submitting cost vouchers and progress
payment requests. The proposed rule
clarifies instructions to contractors in
the clauses at DFARS 252.204–7006,
Billing Instructions, and 252.232–7002,
Progress Payments for Foreign Military
Sales Acquisitions. The proposed rule
also includes a new contract clause at
252.232–70XX, Progress Payments—
Multiple Lots. The legal basis for the
rule is 41 U.S.C. 1707.
The proposed rule will apply to all
small entities that will be awarded costreimbursement, time-and-material, or
labor-hour contracts. However, the
proposed rule requires negligible
additional effort by contractors,
including small entities, and it simply
clarifies the identification and use of
payment information elements in
payment requests. According to data
from the Federal Procurement Data
System for fiscal years 2017 through
2019, approximately 446,845 costreimbursement, time-and-material, and
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17:53 Dec 15, 2022
Jkt 259001
labor-hour contracts (60 percent of all
awards) are awarded to 29,022 small
businesses (60 percent of all awardees)
each year. This proposed rule also
applies to contracts that use multiple
accounting classifications or that
involve progress payments for multiple
production lots. DoD cannot accurately
quantify the number of contracts subject
to the multiple-lot progress payments
clause, but such contracts are likely few
in number.
The rule does not contain any new
reporting, recordkeeping, or other
compliance requirements for small
entities.
The rule does not duplicate, overlap,
or conflict with any other Federal rules.
There are no known, significant,
alternative approaches to the proposed
rule that would meet the objectives of
the rule.
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 2017–D036), in
correspondence.
List of Subjects in 48 CFR Parts 204,
232, and 252
Government procurement.
Jennifer D. Johnson,
Editor/Publisher, Defense Acquisition
Regulations System.
Therefore, 48 CFR parts 204, 232, and
252 are proposed to be amended as
follows:
■ 1. The authority citation for 48 CFR
parts 204, 232, and 252 continues to
read as follows:
Authority: 41 U.S.C. 1303 and 48 CFR
chapter 1.
PART 204—ADMINISTRATIVE AND
INFORMATION MATTERS
2. Amend section 204.7109 by
revising paragraph (b) to read as follows:
■
204.7109
Contract clauses.
*
*
*
*
*
(b) Use the clause at 252.204–7006,
Billing Instructions—Cost Vouchers, in
solicitations and contracts when a costreimbursement contract, a time-andmaterials contract, or a labor-hour
contract is contemplated.
PART 232—CONTRACT FINANCING
3. Amend section 232.502–4–70 by
adding paragraph (c).
The addition reads as follows:
■
VIII. Paperwork Reduction Act
232.502–4–70
The Paperwork Reduction Act (44
U.S.C. chapter 35) applies to this rule
regarding new DFARS clause 252.232–
70XX, Progress Payments—Multiple
Lots. However, these changes to the
DFARS do not impose additional
information collection requirements to
the paperwork burden previously
approved under Office of Management
and Budget (OMB) Control Number
9000–0010, titled Progress Payments, SF
1443.
The rule affects information collection
requirements in DFARS 252.232–7002,
Progress Payments for Foreign Military
Sales Acquisitions, currently approved
under OMB Control Number 0704–0321,
titled DFARS Part 232, Contract
Financing, and the Clause at 252.232–
7002, Progress Payments for Foreign
Military Sales Acquisition. The impact,
however, is negligible because the
changed reporting requirement is not
anticipated to increase the estimate of
total burden hours; rather the
requirement to submit separate payment
requests by rate is merely replaced by a
requirement to submit separate payment
requests for FMS and U.S. line items in
the contract.
*
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Additional clauses.
*
*
*
*
(c) Use the clause at 252.232–70XX,
Progress Payments—Multiple Lots, to
authorize separate progress payment
requests for multiple lots.
PART 252—SOLICITATION
PROVISIONS AND CONTRACT
CLAUSES
4. Amend section 252.204–7006—
a. By revising the section heading,
clause title, and clause date; and
■ b. In the clause introductory text,
removing ‘‘payment’’ and adding
‘‘payment using a cost voucher’’ in its
place.
The revisions read as follows:
■
■
252.204–7006
Vouchers.
*
*
*
Billing Instructions—Cost
*
*
Billing Instructions—Cost Vouchers (Date)
*
*
*
*
*
5. Revise section 252.232–7002 to
read as follows:
■
252.232–7002 Progress Payments for
Foreign Military Sales Acquisitions.
As prescribed in 232.502–4–70(a), use
the following clause:
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Federal Register / Vol. 87, No. 241 / Friday, December 16, 2022 / Proposed Rules
Progress Payments for Foreign Military Sales
Acquisitions (Date)
If this contract includes foreign military
sales (FMS) requirements, the Contractor
shall—
(a) Submit a separate progress payment
request for the FMS and U.S. line items in
the contract;
(b) Submit a supporting schedule showing
the amount of each request distributed to
each country’s requirements;
(c) Identify in each progress payment
request the contract requirements to which it
applies (i.e., FMS or U.S.);
(d) Calculate each request on the basis of
the prices, costs (including costs to
complete), subcontractor progress payments,
and progress payment liquidations of the
contract requirements to which it applies;
and
(e) Distribute costs among the countries in
a manner acceptable to the Administrative
Contracting Officer.
(End of clause)
(End of clause)
■ 6. Add section 252.232–70XX to read
as follows:
AGENCY:
252.232–70XX
Multiple Lots.
Progress Payments—
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As prescribed in 232.502–4–70(c), use
the following clause:
Progress Payments—Multiple Lots (Date)
(a) Definitions. As used in this clause—
Lot means one or more fixed price
deliverable line items or deliverable subline
items representing a single, severable group
where the sum of the costs for each group is
segregated and a single progress payment rate
is used.
Multiple lots means more than one lot on
a single contract where progress payment
proration is performed on a lot-wide, versus
contract-wide, basis.
(b) When submitting progress payment
requests under the billing instructions in
Federal Acquisition Regulation (FAR) clause
52.232–16, Progress Payments, or Defense
Federal Acquisition Regulation Supplement
clause 252.232–7002, Progress Payments for
Foreign Military Sales Acquisitions, of this
contract, the Contractor shall—
(1) Submit separate progress payment
requests for each lot identified in the
contract;
(2) Identify the contract price for the lot as
the sum of all fixed-priced line items
identified to the lot, in accordance with FAR
32.501–3;
(3) Identify the lot on each progress
payment request to which the request
applies;
(4) Calculate each request on the basis of
the price, costs (including the cost to
complete), subcontractor progress payments,
and progress payment liquidations of the lot
to which it applies; and
(5) Distribute costs among lots in a manner
acceptable to the Administrative Contracting
Officer.
(c) Submit a separate progress payment
request for U.S. and FMS requirements in
accordance with the clause 252.232–7002,
Progress Payments for Foreign Military Sales
Acquisitions, of this contract.
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Jkt 259001
[FR Doc. 2022–26691 Filed 12–15–22; 8:45 am]
BILLING CODE 5001–06–P
DEPARTMENT OF DEFENSE
Defense Acquisition Regulations
System
48 CFR Part 252
[Docket DARS–2022–0030]
RIN 0750–AL67
Defense Federal Acquisition
Regulation Supplement: Update of
Challenge Period for Validation of
Asserted Restrictions on Technical
Data and Computer Software (DFARS
Case 2022–D016)
Defense Acquisition
Regulations System, Department of
Defense (DoD).
ACTION: Advance notice of proposed
rulemaking.
DoD is seeking information
that will assist in the development of a
revision to the Defense Federal
Acquisition Regulation Supplement
(DFARS) to implement a section of the
National Defense Authorization Act for
Fiscal Year 2012, which addresses the
validation of proprietary data
restrictions. In addition to the request
for written comments on this advance
notice of proposed rulemaking, DoD
will hold a public meeting to hear the
views of interested parties.
DATES: Comments on the advance notice
of proposed rulemaking should be
submitted in writing to the address
shown below on or before February 14,
2023, to be considered in the formation
of a proposed rule.
Public Meeting: A virtual public
meeting will be held on January 26,
2023, from 1:00 p.m. to 5:00 p.m.,
Eastern time. The public meeting will
end at the stated time, or when the
discussion ends, whichever comes first.
Registration: Registration to attend the
public meeting must be received no
later than close of business on January
19, 2023. Information on how to register
for the public meeting may be found
under the SUPPLEMENTARY INFORMATION
section of this notice.
ADDRESSES:
Public Meeting: A virtual public
meeting will be held using Zoom video
conferencing software.
Submission of Comments: Submit
comments identified by DFARS Case
2022–D016, using any of the following
methods:
Æ Federal eRulemaking Portal:
https://www.regulations.gov. Search for
SUMMARY:
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77055
‘‘DFARS Case 2022–D016.’’ Select
‘‘Comment’’ and follow the instructions
to submit a comment. Please include
‘‘DFARS Case 2022–D016’’ on any
attached documents.
Æ Email: osd.dfars@mail.mil. Include
DFARS Case 2022–D016 in the subject
line of the message.
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 https://
www.regulations.gov, approximately
two to three days after submission to
verify posting.
FOR FURTHER INFORMATION CONTACT:
David E. Johnson, telephone 202–913–
5764.
SUPPLEMENTARY INFORMATION:
I. Background
DoD is seeking information from
experts and interested parties in the
Government and the private sector that
will assist in the development of a
revision to the DFARS to implement
section 815(b) of the National Defense
Authorization Act (NDAA) for Fiscal
Year (FY) 2012 (Pub. L. 112–81). This
statute applies to DoD only; it does not
impact other Federal agencies. Section
815(b) amended 10 U.S.C. 2321
(redesignated as 10 U.S.C. 3782) by
increasing the validation period for
asserted restrictions from three years to
six years. Section 815(b) also amended
10 U.S.C. 2321 to provide an exception
to the prescribed time limit for
validation of asserted restrictions if the
technical data involved are the subject
of a fraudulently asserted use or release
restriction.
DoD previously published proposed
DFARS revisions to implement these
statutory revisions as part of DFARS
Case 2012–D022 on June 16, 2016, at 81
FR 39481. That case was suspended
during the pendency of the
Government-Industry Advisory Panel on
Technical Data Rights (the 813 Panel)
pursuant to section 813 of the NDAA for
FY 2016. As part of the resumption and
reorganization of the DFARS data rights
cases after the conclusion of the 813
Panel, this statutory subject matter has
been broken out in this separate case
due to the distinct subject matter and
limited nature of the statutory revisions.
II. Public Meeting
DoD is interested in continuing a
dialogue with experts and interested
parties in the Government and the
private sector regarding amending the
DFARS to implement section 815(b) of
the NDAA for FY 2012.
E:\FR\FM\16DEP1.SGM
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]]>Agencies
[Federal Register Volume 87, Number 241 (Friday, December 16, 2022)]
[Proposed Rules]
[Pages 77053-77055]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2022-26691]
=======================================================================
-----------------------------------------------------------------------
DEPARTMENT OF DEFENSE
Defense Acquisition Regulations System
48 CFR Parts 204, 232, and 252
[Docket DARS-2022-0029]
RIN 0750-AJ46
Defense Federal Acquisition Regulation Supplement: Payment
Instructions (DFARS Case 2017-D036)
AGENCY: Defense Acquisition Regulation System, Department of Defense
(DoD)
ACTION: Proposed rule.
-----------------------------------------------------------------------
SUMMARY: DoD is proposing to amend the Defense Federal Acquisition
Regulation Supplement (DFARS) to provide payment instructions for
certain contracts based on the type of item acquired and the type of
payment.
DATES: Comments on the proposed rule should be submitted in writing to
the address shown below on or before February 14, 2023, to be
considered in the formation of a final rule.
ADDRESSES: Submit comments in response to DFARS Case 2017-D036 by any
of the following methods:
Federal eRulemaking Portal: https://www.regulations.gov.
Search for ``DFARS Case 2017-D036''. Select ``Comment Now'' and follow
the instructions provided to submit a comment. Please include ``DFARS
Case 2017-D036'' on any attached document.
Email: [email protected]. Include DFARS Case 2017-D036 in
the subject line of the message.
Comments received generally will be posted without change to
https://www.regulation.gov, including any personal information
provided. To confirm receipt of your comment(s), please check https://www.regulations.gov, approximately two to three days after submission
to verify posting.
FOR FURTHER INFORMATION CONTACT: Mr. David E. Johnson, telephone 202-
913-5764.
SUPPLEMENTARY INFORMATION:
I. Background
DoD is proposing to amend the DFARS to provide payment instructions
for certain contracts based on the type of payment and item acquired.
The proposed rule would require separate progress payment requests in
order to segregate foreign military sales (FMS) and U.S. line items in
progress payment requests. In addition, the proposed rule provides
procedures for structuring progress payment requests for contracts with
multiple production lots.
The proposed rule consists of clarifications that require no
additional effort by large or small entities. The rule provides
contracting officers and contractors clearer instruction on information
to include in payment instructions and payment requests for multiple
lot purchases and combined FMS/U.S. acquisitions.
II. Discussion and Analysis
A review of Procurement Data Standard validation results has shown
that contracting officers are not consistently inserting required
payment instructions into contracts. Further, the Defense Finance and
Accounting Service (DFAS) reported that the payment instructions, if
inserted, are often not appropriate for the given contract. Upon
review, DoD found that the appropriate accounting treatment for
payments can be determined by the type of payment and item acquired. In
addition, DoD recognized the need to establish procedures for
structuring progress payment requests for contracts with multiple
production lots.
DFARS 204.7109, Contract clauses, and the clause at DFARS 252.204-
7006, Billing Instructions, are being amended to change the
applicability of contractor cost vouchers to cost-reimbursable, time-
and-material, and labor-hour contracts. The clause applicability was
revised to align with payment instruction procedures provided in DFARS
Procedures, Guidance, and Information 204.7108(b)(3). DFARS 252.204-
7006, Billing Instructions, clause title is also revised to ``Billing
Instructions-Cost Vouchers''.
The following revisions have been made to simplify the contracting
officer's instructions to the payment office for progress payment
funding allocations: DFARS 232.502-4-70, Additional clauses, and the
new clause at 252.232-70XX, Progress Payments-Multiple Lots, provide
the procedures for submitting progress payments for contracts with
multiple production lots. In addition, DFARS 252.232-7002, Progress
Payments for Foreign Military Sales Acquisitions, is revised to clarify
the requirement for submitting separate progress payment requests for
FMS and U.S. contract line items.
III. Applicability to Contracts at or Below the Simplified Acquisition
Threshold (SAT), for Commercial Services, and for Commercial Products,
Including Commercially Available Off-the-Shelf (COTS) Items
The proposed rule clarifies payment instructions for certain
contracts based on the type of item acquired and the type of payment by
amending DFARS 252.204-7006 and 252.232-7002, and adding a new clause
at 252.232-70XX. DoD plans to apply all three clauses to solicitations
and contracts at or below the SAT. This rule does not apply to
commercial services or commercial products, including COTS items.
IV. Expected Impact of the Rule
Currently, payment instructions are being entered manually into
DoD's payment systems due to a lack of clarity in the DFARS with regard
to payment instructions. This proposed rule clarifies the payment
instruction language in the DFARS. The clarifications in this proposed
rule will reduce data errors and inoperability problems throughout
DoD's business processes created by manual entry of payment
instructions in the payment systems, as well as reducing the cost of
data entry.
V. Executive Order 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.
VI. Congressional Review Act
As required by the Congressional Review Act (5 U.S.C. 801-808)
before an interim or final rule takes effect, DoD will submit a copy of
the interim or final rule with the form, Submission of Federal Rules
Under the Congressional Review Act, to the U.S. Senate, the U.S. House
of Representatives, and the Comptroller General of the United
[[Page 77054]]
States. A major rule under the Congressional Review Act cannot take
effect until 60 days after it is published in the Federal Register.
This rule is not anticipated to be a major rule under 5 U.S.C. 804.
VII. 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.
However, an initial regulatory flexibility analysis has been performed
and is summarized as follows:
The purpose of this proposed rule is to provide clarifications on
payment instructions for certain contracts based on the type of item
acquired and the type of payment. DoD has found that the payment
instructions often are not inserted when required and that payment
instructions, if inserted, are often not appropriate for the contracts
in question. An analysis of the issue showed that the appropriate
accounting treatment for payments can be derived from the type of item
acquired and the type of payment. In addition, the analysis highlighted
the need to establish procedures for structuring progress payment
requests for contracts with multiple production lots. The
clarifications in this proposed rule will promote consistency with
generally accepted accounting principles and reduce data errors created
by manual entry of payment instructions in the payment systems.
The objective of the proposed rule is to clarify payment
instructions. The proposed rule includes clarifications to procedures
for billing instructions when submitting cost vouchers and progress
payment requests. The proposed rule clarifies instructions to
contractors in the clauses at DFARS 252.204-7006, Billing Instructions,
and 252.232-7002, Progress Payments for Foreign Military Sales
Acquisitions. The proposed rule also includes a new contract clause at
252.232-70XX, Progress Payments--Multiple Lots. The legal basis for the
rule is 41 U.S.C. 1707.
The proposed rule will apply to all small entities that will be
awarded cost-reimbursement, time-and-material, or labor-hour contracts.
However, the proposed rule requires negligible additional effort by
contractors, including small entities, and it simply clarifies the
identification and use of payment information elements in payment
requests. According to data from the Federal Procurement Data System
for fiscal years 2017 through 2019, approximately 446,845 cost-
reimbursement, time-and-material, and labor-hour contracts (60 percent
of all awards) are awarded to 29,022 small businesses (60 percent of
all awardees) each year. This proposed rule also applies to contracts
that use multiple accounting classifications or that involve progress
payments for multiple production lots. DoD cannot accurately quantify
the number of contracts subject to the multiple-lot progress payments
clause, but such contracts are likely few in number.
The rule does not contain any new reporting, recordkeeping, or
other compliance requirements for small entities.
The rule does not duplicate, overlap, or conflict with any other
Federal rules.
There are no known, significant, alternative approaches to the
proposed rule that would meet the objectives of the rule.
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 2017-D036), in
correspondence.
VIII. Paperwork Reduction Act
The Paperwork Reduction Act (44 U.S.C. chapter 35) applies to this
rule regarding new DFARS clause 252.232-70XX, Progress Payments--
Multiple Lots. However, these changes to the DFARS do not impose
additional information collection requirements to the paperwork burden
previously approved under Office of Management and Budget (OMB) Control
Number 9000-0010, titled Progress Payments, SF 1443.
The rule affects information collection requirements in DFARS
252.232-7002, Progress Payments for Foreign Military Sales
Acquisitions, currently approved under OMB Control Number 0704-0321,
titled DFARS Part 232, Contract Financing, and the Clause at 252.232-
7002, Progress Payments for Foreign Military Sales Acquisition. The
impact, however, is negligible because the changed reporting
requirement is not anticipated to increase the estimate of total burden
hours; rather the requirement to submit separate payment requests by
rate is merely replaced by a requirement to submit separate payment
requests for FMS and U.S. line items in the contract.
List of Subjects in 48 CFR Parts 204, 232, and 252
Government procurement.
Jennifer D. Johnson,
Editor/Publisher, Defense Acquisition Regulations System.
Therefore, 48 CFR parts 204, 232, and 252 are proposed to be
amended as follows:
0
1. The authority citation for 48 CFR parts 204, 232, 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 204.7109 by revising paragraph (b) to read as follows:
204.7109 Contract clauses.
* * * * *
(b) Use the clause at 252.204-7006, Billing Instructions--Cost
Vouchers, in solicitations and contracts when a cost-reimbursement
contract, a time-and-materials contract, or a labor-hour contract is
contemplated.
PART 232--CONTRACT FINANCING
0
3. Amend section 232.502-4-70 by adding paragraph (c).
The addition reads as follows:
232.502-4-70 Additional clauses.
* * * * *
(c) Use the clause at 252.232-70XX, Progress Payments--Multiple
Lots, to authorize separate progress payment requests for multiple
lots.
PART 252--SOLICITATION PROVISIONS AND CONTRACT CLAUSES
0
4. Amend section 252.204-7006--
0
a. By revising the section heading, clause title, and clause date; and
0
b. In the clause introductory text, removing ``payment'' and adding
``payment using a cost voucher'' in its place.
The revisions read as follows:
252.204-7006 Billing Instructions--Cost Vouchers.
* * * * *
Billing Instructions--Cost Vouchers (Date)
* * * * *
0
5. Revise section 252.232-7002 to read as follows:
252.232-7002 Progress Payments for Foreign Military Sales
Acquisitions.
As prescribed in 232.502-4-70(a), use the following clause:
[[Page 77055]]
Progress Payments for Foreign Military Sales Acquisitions (Date)
If this contract includes foreign military sales (FMS)
requirements, the Contractor shall--
(a) Submit a separate progress payment request for the FMS and
U.S. line items in the contract;
(b) Submit a supporting schedule showing the amount of each
request distributed to each country's requirements;
(c) Identify in each progress payment request the contract
requirements to which it applies (i.e., FMS or U.S.);
(d) Calculate each request on the basis of the prices, costs
(including costs to complete), subcontractor progress payments, and
progress payment liquidations of the contract requirements to which
it applies; and
(e) Distribute costs among the countries in a manner acceptable
to the Administrative Contracting Officer.
(End of clause)
0
6. Add section 252.232-70XX to read as follows:
252.232-70XX Progress Payments--Multiple Lots.
As prescribed in 232.502-4-70(c), use the following clause:
Progress Payments--Multiple Lots (Date)
(a) Definitions. As used in this clause--
Lot means one or more fixed price deliverable line items or
deliverable subline items representing a single, severable group
where the sum of the costs for each group is segregated and a single
progress payment rate is used.
Multiple lots means more than one lot on a single contract where
progress payment proration is performed on a lot-wide, versus
contract-wide, basis.
(b) When submitting progress payment requests under the billing
instructions in Federal Acquisition Regulation (FAR) clause 52.232-
16, Progress Payments, or Defense Federal Acquisition Regulation
Supplement clause 252.232-7002, Progress Payments for Foreign
Military Sales Acquisitions, of this contract, the Contractor
shall--
(1) Submit separate progress payment requests for each lot
identified in the contract;
(2) Identify the contract price for the lot as the sum of all
fixed-priced line items identified to the lot, in accordance with
FAR 32.501-3;
(3) Identify the lot on each progress payment request to which
the request applies;
(4) Calculate each request on the basis of the price, costs
(including the cost to complete), subcontractor progress payments,
and progress payment liquidations of the lot to which it applies;
and
(5) Distribute costs among lots in a manner acceptable to the
Administrative Contracting Officer.
(c) Submit a separate progress payment request for U.S. and FMS
requirements in accordance with the clause 252.232-7002, Progress
Payments for Foreign Military Sales Acquisitions, of this contract.
(End of clause)
[FR Doc. 2022-26691 Filed 12-15-22; 8:45 am]
BILLING CODE 5001-06-P
