[Federal Register: January 23, 2006 (Volume 71, Number 14)]
[Rules and Regulations]               
[Page 3416-3417]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]



48 CFR Part 241

[DFARS Case 2003-D069]

Defense Acquisition Regulations System; Defense Federal 
Acquisition Regulation Supplement; Acquisition of Utility Services

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 update text pertaining to 
the acquisition of utility services. This rule is a result of a 
transformation initiative undertaken by DoD to dramatically change the 
purpose and content of the DFARS.

EFFECTIVE DATE: January 23, 2006.

FOR FURTHER INFORMATION CONTACT: Ms. Robin Schulze, Defense Acquisition 
Regulations System, OUSD (AT&L) DPAP (DARS), IMD 3C132, 3062 Defense 
Pentagon, Washington, DC 20301-3062. Telephone (703) 602-0326; 
facsimile (703) 602-0350. Please cite DFARS Case 2003-D069.

[[Page 3417]]


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--
     Deletes text on use of competitive procedures and 
delegated authority to acquire utility services at DFARS 241.202 and 
241.203, as these issues are adequately addressed in the Federal 
Acquisition Regulation;
     Deletes obsolete text on preaward contract reviews at 
DFARS 241.270; and
     Deletes procedures and corresponding definitions related 
to connection charges and award of separate contracts for utility 
services at DFARS 241.101, 241.202, and 241.205. Text on these subjects 
has been relocated to the new DFARS companion resource, Procedures, 
Guidance, and Information (PGI), available at http://www.acq.osd.mil/dpap/dars/pgi

    DoD published a proposed rule at 70 FR 8566 on February 22, 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 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 Part 241

    Government procurement.

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

Therefore, 48 CFR part 241 is amended as follows:


1. The authority citation for 48 CFR part 241 continues to read as 

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

2. Section 241.101 is amended by removing the definitions of ``Definite 
term contract'', ``Dual service area'', and ``Indefinite term 
contract'', and by revising the definition of ``Service power 
procurement officer'' to read as follows:

241.101  Definitions.

* * * * *
    Service power procurement officer means for the--
    (1) Army, the Chief of Engineers;
    (2) Navy, the Commander, Naval Facilities Engineering Command;
    (3) Air Force, the head of a contracting activity; and
    (4) Defense Logistics Agency, the head of a contracting activity.

3. Section 241.103 is revised to read as follows:

241.103  Statutory and delegated authority.

    (1) The contracting officer may enter into a utility service 
contract related to the conveyance of a utility system for a period not 
to exceed 50 years (10 U.S.C. 2688(c)(3)).
    (2) See PGI 241.103 for statutory authorities and maximum contract 
periods for utility and energy contracts.

4. Section 241.202 is revised to read as follows:

241.202  Procedures.

    (1) Connection and service charges. The Government may pay a 
connection charge when required to cover the cost of the necessary 
connecting facilities. A connection charge based on the estimated labor 
cost of installing and removing the facility shall not include salvage 
cost. A lump-sum connection charge shall be no more than the agreed 
cost of the connecting facilities less net salvage. The order of 
precedence for contractual treatment of connection and service charges 
    (i) No connection charge.
    (ii) Termination liability. Use when an obligation is necessary to 
secure the required services. The obligation must be not more than the 
agreed connection charge, less any net salvage material costs. Use of a 
termination liability instead of a connection charge requires the 
approval of the service power procurement officer or designee.
    (iii) Connection charge, refundable. Use a refundable connection 
charge when the supplier refuses to provide the facilities based on 
lack of capital or published rules which prohibit providing up-front 
funding. The contract should provide for refund of the connection 
charge within five years unless a longer period or omission of the 
refund requirement is authorized by the service power procurement 
officer or designee.
    (iv) Connection and service charges, nonrefundable. The Government 
may pay certain nonrefundable, nonrecurring charges including service 
initiation charges, a contribution in aid of construction, membership 
fees, and charges required by the supplier's rules and regulations to 
be paid by the customer. If possible, consider sharing with other than 
Government users the use of (and costs for) facilities when large 
nonrefundable charges are required.
    (2) Construction and labor requirements. Follow the procedures at 
PGI 241.202(2) for construction and labor requirements associated with 
connection and service charges.

241.203  [Removed]

5. Section 241.203 is removed.

6. Section 241.205 is revised to read as follows:

241.205  Separate contracts.

    Follow the procedures at PGI 241.205 when acquiring utility 
services by separate contract.

241.270  [Removed]

7. Section 241.270 is removed.

[FR Doc. 06-565 Filed 1-20-06; 8:45 am]