[Federal Register: July 12, 2005 (Volume 70, Number 132)]
[Proposed Rules]               
[Page 39980-39981]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]

[[Page 39980]]



48 CFR Parts 225 and 249

[DFARS Case 2003-D046]

Defense Federal Acquisition Regulation Supplement; Contract 

AGENCY: Department of Defense (DoD).

ACTION: Proposed rule with request for comments.


SUMMARY: DoD is proposing to amend the Defense Federal Acquisition 
Regulation Supplement (DFARS) to update text pertaining to termination 
of contracts. This proposed rule is a result of a transformation 
initiative undertaken by DoD to dramatically change the purpose and 
content of the DFARS.

DATES: Comments on the proposed rule should be submitted in writing to 
the address shown below on or before September 12, 2005, to be 
considered in the formation of the final rule.

ADDRESSES: You may submit comments, identified by DFARS Case 2003-D046, 
using any of the following methods:
     Federal eRulemaking Portal: http://www.regulations.gov. 

Follow the instructions for submitting comments.
     Defense Acquisition Regulations Web Site: http://emissary.acq.osd.mil/dar/dfars.nsf/pubcomm.
 Follow the instructions for 

submitting comments.
     E-mail: dfars@osd.mil. Include DFARS Case 2003-D046 in the 
subject line of the message.
     Fax: (703) 602-0350.
     Mail: Defense Acquisition Regulations Council, Attn: Ms. 
Deborah Tronic, OUSD (AT&L) DPAP (DAR), IMD 3C132, 3062 Defense 
Pentagon, Washington, DC 20301-3062.
     Hand Delivery/Courier: Defense Acquisition Regulations 
Council, Crystal Square 4, Suite 200A, 241 18th Street, Arlington, VA 
    All comments received will be posted to http://emissary.acq.osd.mil/dar/dfars.nsf

FOR FURTHER INFORMATION CONTACT: Ms. Deborah Tronic, (703) 602-0289.


A. Background

    DFARS Transformation is a major DoD initiative to dramatically 
change the purpose and content of the DFARS. The objective is to 
improve the efficiency and effectiveness of the acquisition process, 
while allowing the acquisition workforce the flexibility to innovate. 
The transformed DFARS will contain only requirements of law, DoD-wide 
policies, delegations of FAR authorities, deviations from FAR 
requirements, and policies/procedures that have a significant effect 
beyond the internal operating procedures of DoD or a significant cost 
or administrative impact on contractors or offerors. Additional 
information on the DFARS Transformation initiative is available at 

    This proposed rule is a result of the DFARS Transformation 
initiative. The proposed DFARS changes--
     Relocate text on termination of Canadian Commercial 
Corporation contracts, from Part 225, Foreign Acquisition, to a more 
appropriate location in Part 249, Termination of Contracts;
     Delete unnecessary cross-references; and
     Delete text on preparation of contract termination status 
reports, completion of forms to document termination settlements, 
preparation of settlement negotiation memoranda, and congressional 
notification of significant contract terminations. This text will be 
relocated to the new DFARS companion resource, Procedures, Guidance, 
and Information (PGI), available at http://www.acq.osd.mil/dpap/dars/pgi

    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 does not expect this 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., because the rule 
makes no significant change to DoD contracting policy. Therefore, DoD 
has not performed an initial regulatory flexibility analysis. DoD 
invites comments from small businesses and other interested parties. 
DoD also will consider comments from small entities concerning the 
affected DFARS subparts in accordance with 5 U.S.C. 610. Such comments 
should be submitted separately and should cite DFARS Case 2003-D046.

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 225 and 249

    Government procurement.

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

    Therefore, DoD proposes to amend 48 CFR parts 225 and 249 as 
    1. The authority citation for 48 CFR parts 225 and 249 continues to 
read as follows:

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


    2. Section 225.870-6 is revised to read as follows:

225.870-6  Termination procedures.

    When contract termination is necessary, follow the procedures at 


    3. Sections 249.105-1 and 249.105-2 are revised to read as follows:

249.105-1  Termination status reports.

    Follow the procedures at PGI 249.105-1 for reporting status of 
termination actions.

249.105-2  Release of excess funds.

    See PGI 249.105-2 for guidance on recommending the release of 
excess funds.

249.106 through 249.108-4  [Removed]

    4. Sections 249.106 through 249.108-4 are removed.
    5. Sections 249.109-7 and 249.110 are revised to read as follows:

249.109-7  Settlement by determination.

    Follow the procedures at PGI 249.109-7 for settlement of a 
convenience termination by determination.

249.110  Settlement negotiation memorandum.

    Follow the procedures at PGI 249.110 for preparation of a 
settlement negotiation memorandum.
    6. Section 249.7000 is amended by revising paragraph (a)(3) and 
adding paragraphs (e) through (g) to read as follows:

249.7000  Terminated contracts with Canadian Commercial Corporation.

    (a) * * *
    (3) The Canadian Supply Manual, Chapter 11, Section 11.146, 
available at http://www.pwgsc.gc.ca/acquisitions/text/sm/sm-e.html.

* * * * *

[[Page 39981]]

    (e) The Canadian Commercial Corporation will continue administering 
contracts that the U.S. contracting officer terminates.
    (f) The Canadian Commercial Corporation will settle all Canadian 
subcontracts in accordance with the policies, practices, and procedures 
of the Canadian Government.
    (g) The U.S. agency administering the contract with the Canadian 
Commercial Corporation shall provide any services required by the 
Canadian Commercial Corporation, including disposal of inventory, for 
settlement of any subcontracts placed in the United States. Settlement 
of such U.S. subcontracts will be in accordance with this regulation.
    7. Section 249.7001 is revised to read as follows:

249.7001  Congressional notification on significant contract 

    Congressional notification is required for any termination 
involving a reduction in employment of 100 or more contractor 
employees. Proposed terminations must be cleared through department/
agency liaison offices before release of the termination notice, or any 
information on the proposed termination, to the contractor. Follow the 
procedures at PGI 249.7001 for congressional notification and release 
of information.

[FR Doc. 05-13306 Filed 7-11-05; 8:45 am]