[Federal Register: July 29, 2009 (Volume 74, Number 144)]
[Rules and Regulations]               
[Page 37649-37650]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]



Defense Acquisition Regulations System

48 CFR Parts 217 and 252

RIN 0750-AG29

Defense Federal Acquisition Regulation Supplement; Requirements 
Applicable to Undefinitized Contract Actions (DFARS Case 2008-D029)

AGENCY: Defense Acquisition Regulations System, Department of Defense 

ACTION: Final rule.


SUMMARY: DoD has issued a final rule amending the Defense Federal 
Acquisition Regulation Supplement (DFARS) to address requirements for 
DoD management and oversight of undefinitized contract actions, 
consistent with the provisions of Section 809 of the National Defense 
Authorization Act for Fiscal Year 2008.

DATES: Effective Date: July 29, 2009.

FOR FURTHER INFORMATION CONTACT: Ms. Cassandra Freeman, Defense 
Acquisition Regulations System, OUSD (AT&L) DPAP (DARS), IMD 3D139, 
3062 Defense Pentagon, Washington, DC 20301-3062. Telephone 703-602-
8383; facsimile 703-602-7887. Please cite DFARS Case 2008-D029.


A. Background

    Section 809 of the National Defense Authorization Act for Fiscal 
Year 2008 (Pub. L. 110-181) required DoD to issue guidance to ensure 
the implementation and enforcement of requirements applicable to 
undefinitized contract actions. On August 29, 2008, the Director, 
Defense Procurement and Acquisition Policy, issued a memorandum to DoD 
departments and agencies as required by Section 809 of Public Law 110-
181. This final rule amends the DFARS to address the requirements of 
the August 29, 2008 memorandum, specifically, requirements for DoD 
departments and agencies to submit semi-annual reports regarding 
undefinitized contract actions exceeding $5 million; for obligation of 
funds for the undefinitized period consistent with the contractor's 
proposal for that period; and for compliance with existing DFARS policy 
relating to profit computation for undefinitized contract actions.
    This rule was not subject to Office of Management and Budget review 
under Executive Order 12866, dated September 30, 1993.

[[Page 37650]]

B. Regulatory Flexibility Act

    This rule will not have a significant cost or administrative impact 
on contractors or offerors, or a significant effect beyond the internal 
operating procedures of DoD. Therefore, publication for public comment 
under 41 U.S.C. 418b 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 

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 217 and 252

    Government procurement.

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

Therefore, 48 CFR parts 217 and 252 are amended as follows:
1. The authority citation for 48 CFR Parts 217 and 252 continues to 
read as follows:

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


2. Section 217.7404-4 is amended by designating the existing text as 
paragraph (a) and adding paragraph (b) to read as follows:

217.7404-4  Limitations on obligations.

* * * * *
    (b) In determining the appropriate amount to obligate, the 
contracting officer shall assess the contractor's proposal for the 
undefinitized period and shall obligate funds only in an amount 
consistent with the contractor's requirements for the undefinitized 
3. Section 217.7404-6 is revised to read as follows:

217.7404-6  Allowable profit.

    When the final price of a UCA is negotiated after a substantial 
portion of the required performance has been completed, the head of the 
contracting activity shall ensure the profit allowed reflects--
    (a) Any reduced cost risk to the contractor for costs incurred 
during contract performance before negotiation of the final price;
    (b) The contractor's reduced cost risk for costs incurred during 
performance of the remainder of the contract; and
    (c) The requirements at 215.404-71-3(d)(2). The risk assessment 
shall be documented in the contract file.

217.7405  [Redesignated as 217.7406]

4. Section 217.7405 is redesignated as section 217.7406.
5. A new section 217.7405 is added to read as follows:

217.7405  Plans and reports.

    (a) To provide for enhanced management and oversight of UCAs, 
departments and agencies shall--
    (1) Prepare and maintain a Consolidated UCA Management Plan; and
    (2) Prepare semi-annual Consolidated UCA Management Reports 
addressing each UCA with an estimated value exceeding $5 million.
    (b) Consolidated UCA Management Reports and Consolidated UCA 
Management Plan updates shall be submitted to the Office of the 
Director, Defense Procurement and Acquisition Policy, by October 31 and 
April 30 of each year in accordance with the procedures at PGI 


252.217-7027   [Amended]

6. Section 252.217-7027 is amended in the introductory text by removing 
``217.7405'' and adding in its place ``217.7406''.

[FR Doc. E9-17947 Filed 7-28-09; 8:45 am]