[Federal Register: November 9, 2005 (Volume 70, Number 216)]
[Rules and Regulations]               
[Page 67919-67921]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]



48 CFR Parts 242 and 252

[DFARS Case 2003-D023]

Defense Federal Acquisition Regulation Supplement; Contract 

AGENCY: Department of Defense (DoD).

ACTION: Final rule.


SUMMARY: DoD has issued a final rule amending the Defense Federal 
Acquisition Regulation Supplement (DFARS) to update text pertaining to 
contract administration and audit services. This rule is a result of a 
transformation initiative undertaken by

[[Page 67920]]

DoD to dramatically change the purpose and content of the DFARS.

EFFECTIVE DATE: November 9, 2005.

Acquisition Regulations System, OUSD(AT&L)DPAP(DAR), IMD 3C132, 3062 
Defense Pentagon, Washington, DC 20301-3062. Telephone (703) 602-0289; 
facsimile (703) 602-0350. Please cite DFARS Case 2003-D023.


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 final rule is a result of the DFARS Transformation initiative. 
The rule:
    [cir] Deletes text that is unnecessary or duplicative of FAR policy 
in the areas of visits to contractor facilities; conduct of postaward 
conferences; review and negotiation of contractor costs and billing 
rates; use of contractor past performance information; and contractor 
internal controls.
    [cir] Deletes text on providing contract administration services to 
foreign governments and international organizations; coordination 
between corporate and individual administrative contracting officers; 
processing of contractor novation and change-of-name agreements; 
processing of voluntary refunds from contractors; and providing 
technical representatives at contractor facilities. This text has been 
relocated to the new DFARS companion resource, Procedures, Guidance, 
and Information (PGI), available at http://www.acq.osd.mil/dpap/dars/pgi

    [cir] Updates terminology at DFARS 242.202(a)(i)(D).
    [cir] Updates the clause at DFARS 252.242-7004, Material Management 
and Accounting Systems, for consistency with the policy found at DFARS 
242.7203(d)(5) regarding corrective action for a contractor's failure 
to make adequate progress in correcting system deficiencies.
    DoD published a proposed rule at 70 FR 19043 on April 12, 2005. DoD 
received no comments on the proposed rule. Therefore, DoD has adopted 
the proposed rule as a final rule without change.
    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 certifies that this final rule will not 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 updates, clarifies, and streamlines DFARS text, but 
makes no significant change to DoD contracting policy.

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 242 and 252

    Government procurement.

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

Therefore, 48 CFR parts 242 and 252 are amended as follows:
1. The authority citation for 48 CFR parts 242 and 252 continues to 
read as follows:

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


2. Section 242.002 is amended by revising paragraph (S-70)(iii) to read 
as follows:

242.002  Interagency agreements.

* * * * *
    (S-70) * * *
    (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 Headquarters, Defense Contract Management 
Agency, International and Federal Business Team. Contract 
administration offices provide services only upon request from the CCP. 
The CCP shall follow the procedures at PGI 242.002(S-70)(iii).

3. Section 242.202 is amended by revising paragraph (a)(i)(D) to read 
as follows:

242.202  Assignment of contract administration.

    (a)(i) * * *
    (D) Management and professional support services;
* * * * *

Subpart 242.4--[Removed]

4. Subpart 242.4 is removed.

5. Section 242.503-2 is revised to read as follows:

242.503-2  Post-award conference procedure.

    DD Form 1484, Post-Award Conference Record, may be used in 
conducting the conference and in preparing the conference report.

242.503-3, 242.570, and 242.704  [Removed]

6. Sections 242.503-3, 242.570, and 242.704 are removed.
7. Section 242.705-1 is revised to read as follows:

242.705-1  Contracting officer determination procedure.

    (a) Applicability and responsibility. (1) The corporate 
administrative contracting officer and individual administrative 
contracting officers shall jointly decide how to conduct negotiations. 
Follow the procedures at PGI 242.705-1(a)(1) when negotiations are 
conducted on a coordinated basis.

242.705-2  [Amended]

8. Section 242.705-2 is amended in paragraph (b)(2)(iii) by removing 
the last sentence.

242.705-3, 242.801, and 242.1202  [Removed]

9. Sections 242.705-3, 242.801, and 242.1202 are removed.

10. Section 242.1203 is revised to read as follows:

242.1203  Processing agreements.

    The responsible contracting officer shall process and execute 
novation and change-of-name agreements in accordance with the 
procedures at PGI 242.1203.

Subpart 242.15--[Removed]

11. Subpart 242.15 is removed.

12. Section 242.7100 is revised to read as follows:

242.7100  General.

    A voluntary refund is a payment or credit (adjustment under one or 

[[Page 67921]]

contracts or subcontracts) to the Government from a contractor or 
subcontractor that is not required by any contractual or other legal 
obligation. Follow the procedures at PGI 242.7100 for voluntary 

242.7101 and 242.7102  [Removed]

13. Sections 242.7101 and 242.7102 are removed.

14. Sections 242.7400 and 242.7401 are revised to read as follows:

242.7400  General.

    (a) Program managers may conclude that they need technical 
representation in contractor facilities to perform non-contract 
administration service (CAS) technical duties and to provide liaison, 
guidance, and assistance on systems and programs. In these cases, the 
program manager may assign technical representatives under the 
procedures in 242.7401.
    (b) A technical representative is a representative of a DoD 
program, project, or system office performing non-CAS technical duties 
at or near a contractor facility. A technical representative is not--
    (1) A representative of a contract administration or contract audit 
component; or
    (2) A contracting officer's representative (see 201.602).

242.7401  Procedures.

    When the program, project, or system manager determines that a 
technical representative is required, follow the procedures at PGI 

242.7500 and 242.7501  [Removed]

15. Sections 242.7500 and 242.7501 are removed.

242.7502 and 242.7503  [Redesignated]

16. Sections 242.7502 and 242.7503 are redesignated as sections 
242.7501 and 242.7502, respectively.


252.242-7000  [Removed and Reserved]

17. Section 252.242-7000 is removed and reserved.

18. Section 252.242-7004 is amended by revising the clause date and 
adding paragraph (d)(4) to read as follows:

252.242-7004  Material Management and Accounting System.

* * * * *


* * * * *
    (d) * * *
    (4) If the contractor fails to make adequate progress, the ACO must 
take further action. The ACO may--
    (i) Elevate the issue to higher level management;
    (ii) Further reduce progress payments and/or disallow costs on 
    (iii) Notify the contractor of the inadequacy of the contractor's 
cost estimating system and/or cost accounting system; and
    (iv) Issue cautions to contracting activities regarding the award 
of future contracts.
* * * * *
[FR Doc. 05-22103 Filed 11-8-05; 8:45 am]