[Federal Register: March 3, 2008 (Volume 73, Number 42)]
[Rules and Regulations]               
[Page 11356-11359]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr03mr08-12]                         

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DEPARTMENT OF DEFENSE

Defense Acquisition Regulations System

48 CFR Parts 232 and 252 and Appendix F to Chapter 2

RIN 0750-AF63

 
Defense Federal Acquisition Regulation Supplement; Mandatory Use 
of Wide Area WorkFlow (DFARS Case 2006-D049)

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

ACTION: Final rule.

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SUMMARY: DoD has issued a final rule amending the Defense Federal 
Acquisition Regulation Supplement (DFARS) to require use of the Wide 
Area WorkFlow electronic system for submitting and processing payment 
requests and receiving reports under DoD contracts. Use of Wide Area 
WorkFlow facilitates timely and accurate payments to DoD contractors.

DATES: Effective Date: March 3, 2008.

FOR FURTHER INFORMATION CONTACT: Ms. Robin Schulze, Defense Acquisition 
Regulations System, OUSD (AT&L) DPAP (CPF), IMD 3D139, 3062 Defense 
Pentagon, Washington, DC 20301-3062. Telephone 703-602-0326; facsimile 
703-602-7887. Please cite DFARS Case 2006-D049.

SUPPLEMENTARY INFORMATION:

A. Background

    This final rule requires use of the Wide Area WorkFlow (WAWF) 
electronic system for submission and processing of payment requests and 
receiving reports under DoD contracts. WAWF, when fully implemented, 
will eliminate paper documents, eliminate redundant data entry, improve 
data accuracy, reduce the number of lost or misplaced documents, and 
result in more timely payments to contractors.
    DoD published a proposed rule at 72 FR 45405 on August 14, 2007. 
Sixteen respondents submitted comments on the proposed rule. A 
discussion of the comments is provided below:

1. Recommendation To Allow Third Party Payment System (TPPS) U.S. 
Bank--PowerTrack Transactions

    Comment: Eight respondents expressed concern that the rule would no 
longer support the use of TPPS, indicating that the rule fails to 
acknowledge the unique needs of suppliers who invoice on a transaction 
basis, such as those in the express and ground package delivery 
industry.
    DoD Response: The rule has been amended to permit the use of a DoD-
approved electronic third party payment system or other exempt vendor 
payment/invoicing system (such as PowerTrack, Transportation Financial 
Management System, and Cargo and Billing System) for payment of 
commercial transportation services.

2. Recommendation To Allow Continued Use of the Governmentwide 
Commercial Purchase Card

    Comment: One respondent questioned the functionality of WAWF to 
support Government purchase card (GPC) transactions.
    DoD Response: DFARS 232.7002(a)(1) exempts purchases paid for with 
a GPC. Therefore, the requirement to submit payment requests 
electronically through WAWF does not extend to GPC purchases.

3. Recommendation To Exclude Existing Foreign Military Sales Contracts

    Comment: One respondent expressed concern that the rule would 
require modification of existing foreign military sales contracts.
    DoD Response: In accordance with FAR 1.108(d), the rule is 
prospective in nature, becoming effective for solicitations issued on 
or after the effective date of the rule. It does not require 
modification of existing contracts.

4. Government Not Fully Compliant

    Comment: Three respondents expressed concern that WAWF has not been 
fully implemented within DoD.
    DoD Response: There are currently over 145,000 Government users of 
WAWF, with new users being added at the rate of 2,500 per month. All of 
the military departments are expanding their use of WAWF and have 
targets to complete deployment in fiscal year 2008. However, DoD 
recognizes there are instances where WAWF cannot be used, such as in a 
contingency environment. Paragraph (c)(2) of the clause at 252.232-7003 
provides an

[[Page 11357]]

exception to the use of WAWF for those DoD locations that are unable to 
receive a payment request or provide acceptance in electronic form.

5. Acceptance Issues

    a. Clarification that WAWF includes receiving reports.
    Comment: One respondent recommended clarifying that WAWF also 
includes receipt and acceptance, not just payment requests, since 
receiving reports are part of the payment process.
    DoD Response: The rule has been amended to clarify that the 
electronic submission of payment requests also includes the electronic 
submission of receiving report documentation necessary to support 
payment. Receiving reports are a key part of the payment process and 
have an important and close interrelationship with payment requests in 
WAWF.
    b. Blanket exception for installations unable to provide acceptance 
in WAWF.
    Comment: One respondent recommended a blanket exception for 
payments on installation support contracts where there presently is no 
centralized structure in place for acceptance of items or services in 
WAWF.
    DoD Response: Paragraph (c)(2) of the clause at 252.232-7003 
contains an exception to the use of WAWF for those DoD locations that 
are unable to provide acceptance in electronic form. However, DoD 
expects that use of this exception will be rare, since DoD is committed 
to full implementation of WAWF by the end of fiscal year 2008.

6. Recommendation for the Clause To Include Payment Instructions

    Comment: One respondent recommended that the contract clause 
contain actual payment instructions, including fill-ins for the 
information required by WAWF, such as required DoDAACs and supplemental 
e-mail addresses for the contracting officer's representative, the 
procuring contracting officer, or other contract administrators.
    DoD Response: The contracting office will include DoDAACs and 
supplemental e-mail addresses within the contract as necessary, with 
the exception of those for the Defense Contract Audit Agency (DCAA). 
The contractor should follow the instructions in WAWF to determine the 
appropriate DCAA office and DoDAAC.

7. Recommendation To Clarify Who Has Exception Authority (Procuring 
Contracting Officer (PCO) or Administrative Contracting Officer (ACO)) 
for Use of WAWF

    Comment: One respondent recommended clarification in the contract 
clause and its prescription to provide authority for the PCO to grant 
exceptions to the use of WAWF at the time of contract formation. The 
determination should be included in Section G of the contract, 
eliminating the requirement for a copy of the ACO's determination to be 
provided with each payment request.
    DoD Response: Prior to award, the PCO may authorize a contractor to 
use an electronic form other than WAWF, in accordance with DFARS 
232.7003(b), and the authorization will be annotated in Section G of 
the contract. After award, the ACO may authorize (in writing) the 
contractor to submit non-electronic payment requests and receiving 
reports when electronic submission would be unduly burdensome to the 
contractor (DFARS 252.232-7003(c)(3)). The requirement for the 
contractor to provide a copy of the ACO's written authorization with 
the payment request is intended to facilitate processing of the request 
and prevent inadvertent rejection of the paper document.

8. WAWF System Issues

    a. Credit invoices cannot process in WAWF.
    Comment: One respondent suggested that, because the current 
workload for negative invoices requires the submission of paper 
invoices, the rule should provide the authority to use alternative 
billing arrangements when WAWF is not suitable or available.
    DoD Response: The requirement to submit payment requests in 
electronic form does not extend to credit invoices/vouchers. WAWF was 
designed to comply with requirements for payments and will not be 
modified to accept credits. Any credits due to the Government on 
invoices with negative amounts should be coordinated with the Defense 
Finance and Accounting Service entitlement office.
    b. User difficulties.
    Comment: One respondent expressed concern that WAWF is not vendor-
friendly for input of documents. There are too many screens, fields, 
and steps; DoD activities do not always input the required purchase 
order and modification information; and invoices are not paid any 
faster than when using the mail system.
    DoD Response: Although WAWF input requires the use of multiple 
screens and fields, the information required for payment requests 
remains in compliance with FAR 32.905, Payment documentation and 
process. Purchase order and modification information used by WAWF is 
extracted from the Electronic Document Access (EDA) system to populate 
the WAWF data screens; the information is not input to WAWF. Therefore, 
errors in the data pulled from the EDA system are not a limitation of 
WAWF, but rather an EDA issue. Further, the decrease in processing time 
from submission to payment is realized in WAWF's immediate transmission 
of a document from action step to action step.
    c. Company-wide computer system revamp.
    Comment: One respondent stated that it was in the middle of a 
company-wide computer system revamp and any changes at this time would 
require a 12-month lead time.
    DoD Response: The rule is prospective in nature, becoming effective 
for solicitations issued on or after the effective date of the rule. 
Contractors will be expected to make the system changes necessary to 
comply with the provisions of new awards. However, the rule provides 
for the use of an alternate electronic form if authorized by the 
contracting officer.
    d. Electronic data interchange (EDI) American National Standards 
Institute (ANSI) X.12 Capability.
    Comment: One respondent requested a clear understanding of the EDI 
ANSI X.12 interfacing options with DoD.
    DoD Response: It is anticipated that WAWF will support EDI ANSI 
X.12 into the future. No changes are being contemplated.
    e. Grant and cooperative agreement processing capability.
    Comment: One respondent recommended inclusion of non-acquisition 
instruments (grants and cooperative agreements).
    DoD Response: While use of WAWF for these instruments will not be 
mandated, WAWF Version 3.12 (released October 21, 2007) accommodates 
the processing of grant payments and other transactions.
    f. WAWF downtime.
    Comment: One respondent expressed concern that WAWF is frequently 
not available.
    DoD Response: Statistics maintained by the WAWF Program Office show 
that WAWF availability has been at 99.955 percent for peak hours and 
100 percent for off-peak hours.
    g. Processing of 9000 series, contract data requirements list, and 
first article contract line items.

[[Page 11358]]

    Comment: One respondent stated that WAWF does not accept 9000 
series, contract data requirements list, and first article contract 
line items, and should not be mandated until all items may be processed 
electronically.
    DoD Response: WAWF Version 3.12, released October 21, 2007, 
accommodates the processing of 9000 series, contract data requirements 
list, and first article contract line items.
    This rule was not subject to Office of Management and Budget review 
under Executive Order 12866, dated September 30, 1993.

B. Regulatory Flexibility Act

    DoD has prepared a final regulatory flexibility analysis consistent 
with 5 U.S.C. 604. A copy of the analysis may be obtained from the 
point of contact specified herein. The analysis is summarized as 
follows:
    The objective of the rule is to fully automate the payment process, 
including receiving reports, to significantly improve the timeliness of 
payments and to reduce DoD's interest charges for late payments. The 
rule continues DoD's implementation of the electronic invoicing 
requirements of 10 U.S.C. 2227, as added by Section 1008 of the 
National Defense Authorization Act for Fiscal Year 2001 (Pub. L. 106-
398).
    The DFARS presently identifies three accepted electronic forms of 
transmitting payment requests under DoD contracts: (1) American 
National Standards Institute (ANSI) X.12 Electronic Data Interchange 
(EDI); (2) Web Invoicing System (WInS); and (3) WAWF. ANSI X.12 EDI and 
WInS cannot process all DoD payment request types, nor can they process 
receiving reports. In addition, EDI and WInS information cannot be made 
available to all interested Government offices and organizations. WAWF 
is the only DoD system that can process all payment request types as 
well as receiving reports. WAWF keeps historical files that are readily 
available for both contractor and Government use. The use of WAWF 
already has contributed significantly to improving the timeliness of 
payments and to DoD's goal of reducing interest charges for late 
payments.
    The rule will still allow a contractor to submit a payment request 
through an electronic means other than WAWF, or in a non-electronic 
format, if authorized by the contracting officer. In addition, the rule 
will allow contractors to submit ANSI X.12 EDI transactions through 
WAWF.
    Approximately 1,000 small entities will be required to switch from 
WInS to the WAWF system, used by over 20,000 small entities. Both 
systems involve submission of invoices through the World Wide Web. 
Approximately 1 hour is needed to learn the WAWF system. No reporting, 
recordkeeping, or compliance records will be required from small 
entities. All such records will be generated by DoD as a by-product of 
the use of the required system.

C. 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 232 and 252

    Government procurement.

Michele P. Peterson,
Editor, Defense Acquisition Regulations System.


0
Therefore, 48 CFR parts 232 and 252 and Appendix F to chapter 2 are 
amended as follows:
0
1. The authority citation for 48 CFR parts 232 and 252 and Appendix F 
to subchapter I continues to read as follows:

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

PART 232--CONTRACT FINANCING

0
2. The heading of subpart 232.70 is revised to read as follows:

Subpart 232.70--Electronic Submission and Processing of Payment 
Requests and Receiving Reports

0
3. Section 232.7002 is amended by revising paragraph (a) introductory 
text, paragraph (a)(6), the last sentence of paragraph (b), paragraph 
(c) introductory text, and the first sentence of paragraph (c)(1) to 
read as follows:


232.7002  Policy.

    (a) Contractors shall submit payment requests and receiving reports 
in electronic form, except for--
* * * * *
    (6) Cases in which DoD is unable to receive payment requests or 
provide acceptance in electronic form; or
* * * * *
    (b) * * * Scanned documents are acceptable for processing 
supporting documentation other than receiving reports and other forms 
of acceptance.
    (c) When payment requests and receiving reports will not be 
submitted in electronic form--
    (1) Payment requests and receiving reports shall be submitted by 
facsimile or conventional mail. * * *
* * * * *
    4. Sections 232.7003 and 232.7004 are revised to read as follows:


232.7003  Procedures.

    (a) The accepted electronic form for submission of payment requests 
and receiving reports is Wide Area WorkFlow (see Web site--https://
wawf.eb.mil/).
    (b) If the payment office and the contract administration office 
concur, the contracting officer may authorize a contractor to submit a 
payment request and receiving report using an electronic form other 
than Wide Area WorkFlow. However, with this authorization, the 
contractor and the contracting officer shall agree to a plan, which 
shall include a timeline, specifying when the contractor will transfer 
to Wide Area WorkFlow.
    (c) For payment of commercial transportation services provided 
under a Government rate tender or a contract for transportation 
services, the use of a DoD-approved electronic third party payment 
system or other exempted vendor payment/invoicing system (e.g., 
PowerTrack, Transportation Financial Management System, and Cargo and 
Billing System) is permitted.


232.7004  Contract clause.

    Except as provided in 232.7002(a), use the clause at 252.232-7003, 
Electronic Submission of Payment Requests and Receiving Reports, in 
solicitations and contracts.

PART 252--SOLICITATION PROVISIONS AND CONTRACT CLAUSES

0
5. Section 252.212-7001 is amended by revising paragraph (b)(17) to 
read as follows:


252.212-7001  Contract Terms and Conditions Required To Implement 
Statutes or Executive Orders Applicable to Defense Acquisitions of 
Commercial Items.

* * * * *
    (b) * * *
    (17) ----252.232-7003, Electronic Submission of Payment Requests 
and Receiving Reports (MAR 2008) (10 U.S.C. 2227).

0
6. Section 252.232-7003 is amended by revising the section heading, the 
clause title and date, and paragraphs (a)(2), (b), and (c) to read as 
follows:


252.232-7003  Electronic Submission of Payment Requests and Receiving 
Reports.

* * * * *

[[Page 11359]]

ELECTRONIC SUBMISSION OF PAYMENT REQUESTS AND RECEIVING REPORTS (MAR 
2008)

    (a) * * *
    (2) Electronic form means any automated system that transmits 
information electronically from the initiating system to all 
affected systems. Facsimile, e-mail, and scanned documents are not 
acceptable electronic forms for submission of payment requests. 
However, scanned documents are acceptable when they are part of a 
submission of a payment request made using Wide Area WorkFlow (WAWF) 
or another electronic form authorized by the Contracting Officer.
* * * * *
    (b) Except as provided in paragraph (c) of this clause, the 
Contractor shall submit payment requests and receiving reports using 
WAWF, in one of the following electronic formats that WAWF accepts: 
Electronic Data Interchange, Secure File Transfer Protocol, or World 
Wide Web input. Information regarding WAWF is available on the 
Internet at https://wawf.eb.mil/.
    (c) The Contractor may submit a payment request and receiving 
report using other than WAWF only when--
    (1) The Contracting Officer authorizes use of another electronic 
form. With such an authorization, the Contractor and the Contracting 
Officer shall agree to a plan, which shall include a timeline, 
specifying when the Contractor will transfer to WAWF;
    (2) DoD is unable to receive a payment request or provide 
acceptance in electronic form;
    (3) The Contracting Officer administering the contract for 
payment has determined, in writing, that electronic submission would 
be unduly burdensome to the Contractor. In such cases, the 
Contractor shall include a copy of the Contracting Officer's 
determination with each request for payment; or
    (4) DoD makes payment for commercial transportation services 
provided under a Government rate tender or a contract for 
transportation services using a DoD-approved electronic third party 
payment system or other exempted vendor payment/invoicing system 
(e.g., PowerTrack, Transportation Financial Management System, and 
Cargo and Billing System).
* * * * *

0
7. Section 252.246-7000 is amended by revising the clause date and 
paragraph (b) to read as follows:


252.246-7000  Material Inspection and Receiving Report.

* * * * *

MATERIAL INSPECTION AND RECEIVING REPORT (MAR 2008)

* * * * *
    (b) Contractor submission of the material inspection and 
receiving information required by Appendix F of the Defense FAR 
Supplement by using the Wide Area WorkFlow (WAWF) electronic form 
(see paragraph (b) of the clause at 252.232-7003) fulfills the 
requirement for a material inspection and receiving report (DD Form 
250). Two copies of the receiving report (paper copies of either the 
DD Form 250 or the WAWF report) shall be distributed with the 
shipment, in accordance with Appendix F, Part 4, F-401, Table 1, of 
the Defense FAR Supplement.

Appendix F--Material Inspection and Receiving Report

0
8. Appendix F to chapter 2 is amended in Part 3, Section F-306, by 
revising paragraph (a) to read as follows:

F-306 Invoice instructions.

    (a) Contractors shall submit payment requests and receiving 
reports in electronic form, unless an exception in 232.7002 applies. 
Contractor submission of the material inspection and receiving 
information required by this appendix by using the Wide Area 
WorkFlow electronic form (see paragraph (b) of the clause at 
252.232-7003) fulfills the requirement for an MIRR.
* * * * *

0
9. Appendix F to chapter 2 is amended in Part 4, Section F-401, by 
revising paragraph (a) to read as follows:

F-401 Distribution.

    (a) The contractor is responsible for distributing the DD Form 
250, including mailing and payment of postage. Use of the Wide Area 
WorkFlow electronic form satisfies the distribution requirements of 
this section, except for the copies required to accompany shipment.
* * * * *
[FR Doc. E8-3947 Filed 2-29-08; 8:45 am]

BILLING CODE 5001-08-P