[Federal Register: May 12, 2006 (Volume 71, Number 92)]
[Rules and Regulations]               
[Page 27646-27648]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]



Defense Acquisition Regulations System

48 CFR Part 246

[DFARS Case 2003-D027]

Defense Federal Acquisition Regulation Supplement; Quality 

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 
Government contract quality assurance requirements. This rule is a 
result of a transformation initiative undertaken by DoD to dramatically 
change the purpose and content of the DFARS.

DATES:  Effective Date: May 12, 2006.

Acquisition Regulations System, OUSD (AT&L) DPAP (DARS), IMD 3C132, 
3062 Defense Pentagon, Washington, DC 20301-3062. Telephone (703) 602-
0289; facsimile (703) 602-0350. Please cite DFARS Case 2003-D027.


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 
http://www.acq.osd.mil/dpap/dars/dfars/ transformation/index.htm.

    This final rule is a result of the DFARS Transformation initiative. 
The DFARS changes--
     Update and clarify requirements for Government contract 
quality assurance and use of warranties;
     Delete unnecessary definitions and unnecessary text on 
technical requirements matters, responsibilities of contract 
administration offices, and material inspection and receiving reports; 
     Delete text on preparation of quality assurance 
instructions, use of quality inspection approval stamps, and 
information on types of quality evaluation data. 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 29710 on May 24, 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 policy regarding contract quality assurance 

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 246

    Government procurement.

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

Therefore, 48 CFR Part 246 is amended follows:


1. The authority citation for 48 CFR Part 246 continues to read as 

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

246.101  [Removed]

2. Section 246.101 is removed.

3. Section 246.102 is amended by revising paragraph (1) to read as 

246.102  Policy.

* * * * *
    (1) Develop and manage a systematic, cost-effective Government 
contract quality assurance program to ensure that contract performance 
conforms to

[[Page 27647]]

specified requirements. Apply Government quality assurance to all 
contracts for services and products designed, developed, purchased, 
produced, stored, distributed, operated, maintained, or disposed of by 
* * * * *

4. Section 246.103 is revised to read as follows:

246.103  Contracting office responsibilities.

    (1) The contracting office must coordinate with the quality 
assurance activity before changing any quality requirement.
    (2) The activity responsible for technical requirements may prepare 
instructions covering the type and extent of Government inspections for 
acquisitions that are complex, have critical applications, or have 
unusual requirements. Follow the procedures at PGI 246.103(2) for 
preparation of instructions.

246.104 and 246.203  [Removed]

5. Sections 246.104 and 246.203 are removed.

6. Section 246.406 is amended by revising paragraph (2) to read as 

246.406  Foreign governments.

* * * * *
    (2) International military sales (non-NATO). Departments and 
agencies shall--
    (i) Perform quality assurance services on international military 
sales contracts or in accordance with existing agreements;
    (ii) Inform host or U.S. Government personnel and contractors on 
the use of quality assurance publications; and
    (iii) Delegate quality assurance to the host government when 
satisfactory services are available.
* * * * *

7. Section 246.408-71 is amended by revising paragraph (c) to read as 

246.408-71  Aircraft.

* * * * *
    (c) The CAO shall ensure that the contractor possesses any required 
FAA certificates prior to acceptance.

246.408-72  [Removed]

8. Section 246.408-72 is removed.

9. Sections 246.470-1 and 246.470-2 are revised to read as follows:

246.470-1  Assessment of additional costs.

    (a) Under the clause at FAR 52.246-2, Inspection of Supplies--
Fixed-Price, after considering the factors in paragraph (c) of this 
subsection, the quality assurance representative (QAR) may believe that 
the assessment of additional costs is warranted. If so, the 
representative shall recommend that the contracting officer take the 
necessary action and provide a recommendation as to the amount of 
additional costs. Costs are based on the applicable Federal agency, 
foreign military sale, or public rate in effect at the time of the 
delay, reinspection, or retest.
    (b) If the contracting officer agrees with the QAR, the contracting 
officer shall--
    (1) Notify the contractor, in writing, of the determination to 
exercise the Government's right under the clause at FAR 52.246-2, 
Inspection of Supplies--Fixed-Price; and
    (2) Demand payment of the costs in accordance with the collection 
procedures contained in FAR Subpart 32.6.
    (c) In making a determination to assess additional costs, the 
contracting officer shall consider--
    (1) The frequency of delays, reinspection, or retest under both 
current and prior contracts;
    (2) The cause of such delay, reinspection, or retest; and
    (3) The expense of recovering the additional costs.

246.470-2  Quality evaluation data.

    The contract administration office shall establish a system for the 
collection, evaluation, and use of the types of quality evaluation data 
specified in PGI 246.470-2.

246.470-3 through 246.470-5  [Removed]

10. Sections 246.470-3 through 246.470-5 are removed.

11. Section 246.472 is revised to read as follows:

246.472  Inspection stamping.

    (a) DoD quality inspection approval marking designs (stamps) may be 
used for both prime contracts and subcontracts. Follow the procedures 
at PGI 246.472(a) for use of DoD inspection stamps.
    (b) Policies and procedures regarding the use of National 
Aeronautics and Space Administration (NASA) quality status stamps are 
contained in NASA publications. When requested by NASA centers, the DoD 
inspector shall use NASA quality status stamps in accordance with 
current NASA requirements.

12. Section 246.601 is added to read as follows:

246.601  General.

    See Appendix F, Material Inspection and Receiving Report, for 
procedures and instructions for the use, preparation, and distribution 
    (1) The Material Inspection and Receiving Report (DD Form 250 
series); and
    (2) Supplier's commercial shipping/packing lists used to evidence 
Government contract quality assurance.

246.670 and 246.671  [Removed]

13. Sections 246.670 and 246.671 are removed.

246.702 and 246.703  [Removed]

14. Sections 246.702 and 246.703 are removed.

15. Sections 246.704 through 246.706 are revised to read as follows:

246.704  Authority for use of warranties.

    (1) The chief of the contracting office must approve use of a 
warranty, except in acquisitions for--
    (i) Commercial items (see FAR 46.709);
    (ii) Technical data, unless the warranty provides for extended 
liability (see 246.708);
    (iii) Supplies and services in fixed-price type contracts 
containing quality assurance provisions that reference higher-level 
contract quality requirements (see 246.202-4); or
    (iv) Supplies and services in construction contracts when using the 
warranties that are contained in Federal, military, or construction 
guide specifications.
    (2) The chief of the contracting office shall approve the use of a 
warranty only when the benefits are expected to outweigh the cost.

246.705  Limitations.

    (a) In addition to the exceptions provided in FAR 46.705(a), 
warranties in the clause at 252.246-7001, Warranty of Data, may be used 
in cost-reimbursement contracts.

246.706  Warranty terms and conditions.

    (b)(5) Markings. For non-commercial items, use MIL-STD-129, Marking 
for Shipments and Storage, and MIL-STD-130, Identification Marking of 
U.S. Military Property, when marking warranty items.

16. Section 246.710 is amended by revising paragraph (1) to read as 

[[Page 27648]]

246.710  Contract clauses.

    (1) Use a clause substantially the same as the clause at 252.246-
7001, Warranty of Data, in solicitations and contracts that include the 
clause at 252.227-7013, Rights in Technical Data and Computer Software, 
when there is a need for greater protection or period of liability than 
provided by the inspection and warranty clauses prescribed in FAR Part 
* * * * *
[FR Doc. 06-4468 Filed 5-11-06; 8:45 am]