Acquisition regulations: Contract administration and audit services,

[Federal Register: November 9, 1999 (Volume 64, Number 216)]

[Rules and Regulations]

[Page 61028-61030]

From the Federal Register Online via GPO Access [wais.access.gpo.gov]

[DOCID:fr09no99-8]

DEPARTMENT OF DEFENSE

48 CFR Parts 204, 209, 225, 242, and 247

[DFARS Cases 98-D003, 99-D004, and 99-D010]

Defense Federal Acquisition Regulation Supplement; Contract Administration and Audit Services

AGENCY: Department of Defense (DoD).

ACTION: Final rule.

SUMMARY: The Director of Defense Procurement has issued a final rule amending the Defense Federal Acquisition Regulation Supplement (DFARS) to update policy pertaining to DoD contract administration and audit services. The rule updates references to DoD publications, and reorganizes DFARS test for consistency with the organization of Federal Acquisition Regulation (FAR) text pertaining to contract administration.

EFFECTIVE DATE: November 9, 1999.

FOR FURTHER INFORMATION CONTACT: Mr. Rick Layser, Defense Acquisition Regulations Council, PDUSD (AT&L)DP(DAR), IMD 3D139, 3062 Defense Pentagon, Washington, DC 20301-3062. Telephone (703) 602-0293; telefax (703) 602-0350. Please cite DFARS Case 98-D003.

SUPPLEMENTARY INFORMATION:

1. Background

   This final rule amends the DFARS to update policy pertaining to DoD contract administration and audit services. The rule updates references in the DFARS text and reorganizes portions of DFARS Part 242 for consistency with the organization of FAR Part 42. The rule also adds text at DFARS 242.302(a)(13) to clarify that the Defense Contract Management Command is not responsible for making contract payments.

   This rule was not subject to Office of Management and Budget review under Executive Order 12866, dated September 30, 1993.

2. Regulatory Flexibility Act

   This final rule does not constitute a significant revision within the meaning of FAR 1.501 and Public Law 98-577 and publication for public comment is not required. However, DoD will consider comments from small entities concerning the affected DFARS subparts in accordance with 5 U.S.C. 610. Such comments should cite DFARS Case 98- D003.

3. Paperwork Reduction Act

   The Paperwork Reduction Act does not apply because the rule does not impose any information collection requirements that require the approval of the Office of Management and Budget under 44 U.S.C. 3501, et seq.

   List of Subjects in 48 CFR Parts 204, 209, 225, 242, and 247

   Government procurement. Michele P. Peterson, Executive Editor, Defense Acquisition Regulations Council.

   Therefore, 48 CFR parts 204, 209, 225, 242, and 247 are amended as follows:

   1. The authority citation for 48 CFR parts 204, 209, 225, 242, and 247 continues to read as follows:

      Authority: 41 U.S.C. 421 and 48 CFR Chapter 1.

      PART 204--ADMINISTRATIVE MATTERS

   2. Section 204.202 is amended by revising paragraph (1)(iv) to read as follows:

      204.202 Agency distribution requirements.

      (1) * * *

      (iv) One copy to the contract administration office (CAO) automatic data processing point, except when the DoDAAD code is the same as that of either the CAO or the payment office (see the Federal Directory of Contract Administration Services Components); and * * * * *

      204.7102 [Amended]

   3. Section 204.7102 is amended in paragraph (b)(1) by removing the abbreviation ``DoD'' and adding in its place the word ``Federal''; and in paragraph (b)(3) by removing the words ``Office of Defense Commercial Communications'' and adding in their place the words ``Defense Information Technology Contracting Organization''.

      PART 209--CONTRACTOR QUALIFICATIONS

      209.106-2 [Amended]

   4. Section 209.106-2 is amended in paragraph (1) in the first sentence by removing the reference and abbreviation ``DoD 4105.4, DoD'' and adding in their place the words ``the Federal''.

      PART 225--FOREIGN ACQUISITION

   5. Section 225.872-6 is amended by revising paragraphs (b) and (c)(1) to read as follows:

      225.872-6 Audit.

      * * * * *

      (b) To determine if such an annex is applicable to a particular qualifying country, contact the Deputy Director of Defense Procurement (Foreign Contracting), ((703) 697-9351/2/3, DSN 227-9351/2/3).

      (c) * * *

      [[Page 61029]]

      (1) Except for the United Kingdom (UK), send the request to the administrative contracting officer at the cognizant activity listed in Section 2B of the Federal Directory of Contract Administration Services Components. Send the request for audit from the UK directly to their Ministry of Defence. * * * * *

      225.872-7 [Amended]

   6. Section 225.872-7 is amended by removing the reference ``OPNAV Instruction 5540.8L'' and adding in its place the reference ``SECNAV Instruction 5510.1H''; and by removing the reference ``AFR 205-4'' and adding in its place the reference ``AFI 31-601''.

      PART 242--CONTRACT ADMINISTRATION AND AUDIT SERVICES

   7. The heading of Part 242 is revised to read as set forth above.

   8. Section 242.002 is added (immediately before subpart 242.1) to read as follows:

      242.002 Interagency agreements.

      (b)(i) DoD requires reimbursement, at a rate set by the Under Secretary of Defense (Comptroller/Chief Financial Officer), from non- DoD organizations, except for--

      (A) Quality assurance, contract administration, and audit services provided under a no-charge reciprocal agreement;

      (B) Services performed under subcontracts awarded by the Small Business Administration under FAR subpart 19.8; and

      (C) Quality assurance and pricing services performed for the Supply and Services Canada.

      (ii) Departments and agencies may request an exception from the reimbursement policy in paragraph (b)(i) of this section from the Under Secretary of Defense (Comptroller/Chief Financial Officer). A request must show that an exception is in the best interest of the Government.

      (iii) Departments and agencies must pay for services performed by non-DoD activities, foreign governments, or international organizations, unless otherwise provided by reciprocal agreements.

      (S-70)(i) Foreign governments and international organizations may request contract administration services on their direct purchases from U.S. producers. Direct purchase is the purchase of defense supplies in the United States through commercial channels for use by the foreign government or international organization.

      (ii) Supply and Services Canada (SSC) is permitted to submit its requests for contract administration services directly to the cognizant contract administration office.

      (iii) Other foreign governments (including Canadian government organizations other than SSC) and international organizations send their requests for contract administration services to the DoD Central Control Point (CCP) at the Defense Contract Management Command (DCMC), New York, NY. Contract administration offices provide services only upon request from the CCP. The CCP shall--

      (A) Determine whether the request is from a friendly foreign government or an international agency in which the United States is a participant;

      (B) Determine whether the services are consistent with the DoD mutual security program policies (the Assistant Secretary of Defense (International Security Affairs) is the source of information for questions as to the eligibility of foreign governments to receive services);

      (C) Ensure that the reimbursement arrangements are consistent with paragraph (b) of this section;

      (D) Coordinate with appropriate contract administration offices to determine whether DoD can provide the services;

      (E) Notify the requestor that the request is accepted, or provide reasons why it cannot be accepted;

      (F) Distribute the acquisition documents and related materials to contract administration offices; and

      (G) Receive statements of costs incurred by contract administration offices for reimbursable services and forward them for billing to the Security Assistance Accounting Center.

      Subpart 242.1--[Removed]

   9. Subpart 242.1 is removed.

   10. Subpart 242.2 is revised to read as follows:

       Subpart 242.2--Contract Administration Services

       Sec.

       242.200-70 Scope of subpart. 242.202 Assignment of contract administration.

       242.200-70 Scope of subpart.

       This subpart does not address the contract administration role of a contracting officer's representative (see 201.602).

       242.202 Assignment of contract administration.

       (a)(i) DoD activities shall not retain any contract for administration that requires performance of any contract administration function at or near contractor facilities, except contracts for--

       (A) The National Security Agency;

       (B) Research and development with universities;

       (C) Flight training;

       (D) Consultant support services;

       (E) Mapping, charting, and geodesy services;

       (F) Base, post, camp, and station purchases;

       (G) Operation or maintenance of, or installation of equipment at, radar or communication network sites;

       (H) Communications services;

       (I) Installation, operation, and maintenance of space-track sensors and relays;

       (J) Dependents Medicare program contracts;

       (K) Stevedoring contracts;

       (L) Construction and maintenance of military and civil public works, including harbors, docks, port facilities, military housing, development of recreational facilities, water resources, flood control, and public utilities;

       (M) Architect-engineer services;

       (N) Airlift and sealift services (Air Mobility Command and Military Sealift Command may perform contract administration services at contractor locations involved solely in performance of airlift or sealift contracts);

       (O) Subsistence supplies;

       (P) Ballistic missile sites (contract administration offices may perform supporting administration of these contracts at missile activation sites during the installation, test, and checkout of the missiles and associated equipment); and

       (Q) Operation and maintenance of, or installation of equipment at, military test ranges, facilities, and installations.

       (ii) Contract administration functions for base, post, camp, and station contracts on a military installation are normally the responsibility of the installation or tenant commander. However, the Defense Contract Management Command (DCMC) shall, upon request of the military department, and subject to prior agreement, perform contract administration services on a military installation.

       (iii) DCMC shall provide preaward survey assistance for post, camp, and station work performed on a military installation. The contracting office and the DCMC preaward survey monitor should jointly determine the scope of the survey and individual responsibilities.

       (iv) To avoid duplication, contracting offices shall not locate their personnel at contractor facilities, except--

       [[Page 61030]]

       (A) In support of contracts retained for administration in accordance with paragraph (a)(i) of this section; or

       (B) As permitted under subpart 242.74.

       (e)(1)(A) In special circumstances, a contract administration office may request support from a component not listed in the Federal Directory of Contract Administration Services Components (available via the Internet at http://www.dcmc.hq.dla.mil/casbook/casbook.htm). An example is a situation where the contractor's work site is on a military base and a base organization is asked to provide support. Before formally sending the request, coordinate with the office concerned to ensure that resources are available for, and capable of, providing the support.

       (B) When requesting support on a subcontract that includes foreign contract military sale (FMS) requirements, the contract administration office shall--

       (1) Mark ``FMS Requirement'' on the face of the documents; and

       (2) For each FMS case involved, provide the FMS case identifier, associated item quantities, DoD prime contract number, and prime contract line/subline item number.

   11. Section 242.302 is amended by removing paragraph (a)(8); and by adding, after paragraph (a)(9), paragraph (a)(13) to read as follows:

       242.302 Contract administration functions.

       (a) * * *

       (13)(A) Do not delegate the responsibility to make payments to the Defense Contract Management Command (DCMC).

       (B) For contracts assigned to DCMC for contract administration, designate as the payment office--

       (1) The cognizant Defense Finance and Accounting Service (DFAS) payment office as specified in the Federal Directory of Contract Administration Services Components (available via the Internet at http://www.dcmc.hq.dla.mil/casbook/casbook.htm), for contracts funded with DoD funds;

       (2) The department or agency payment office, if authorized by defense financial management regulations or if the contract is funded with non-DoD funds; or

       (3) Multiple payment offices under paragraphs (a)(13)(B) (1) and (2) of this section, if the contract is funded with both DoD and non- DoD funds.

       (C) For contracts not assigned to DCMC, select a payment office or offices under department/agency procedures. DoD personnel may use the DFAS Reference Tool, available via the Internet at http:// referencetool.dfas.mil, to identify cognizant DFAS payment offices. * * * * *

       242.705-1 [Amended]

   12. Section 242.705-1 is amended in paragraph (a)(1) in the first sentence by removing the parenthetical ``(ACO)'' and adding in its place the parenthetical ``(ACOs)''; and by removing paragraph (b).

       242.705-2 [Amended]

   13. Section 242.705-2 is amended by removing paragraph (b)(2)(ii); and by redesignating paragraph (b)(2)(iv) as paragraph (b)(2)(iii).

       242.7400 [Amended]

   14. Section 242.7400 is amended in paragraph (a) in the second sentence, in the parenthetical, by removing the reference ``242.203(a)(i) and (v)'' and adding in its place the reference ``242.202(a)''.

       Part 247--Transportation

       247.305-10 [Amended]

   15. Section 247.305-10 is amended in paragraph (b)(iv) introductory text by removing the reference and abbreviation ``DoD 4105.4, DoD'' and adding in their place the words ``the Federal''.

   16. Section 247.370 is amended by revising paragraph (b)(1) to read as follows:

       247.370 Use of Standard Form 30 for consignment instructions.

       * * * * *

       (b) * * *

       (1) For contracts assigned for any contract administration function listed in FAR subpart 42.3 to any office listed in the Federal Directory of Contract Administration Services Components, within five working days; * * * * *

       [FR Doc. 99-29036Filed11-8-99; 8:45 am]

       BILLING CODE 5000-04-M