[Federal Register: August 8, 2006 (Volume 71, Number 152)]
[Rules and Regulations]               
[Page 44928-44929]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]



Defense Acquisition Regulations System

48 CFR Part 242

[DFARS Case 2003-D051]

Defense Federal Acquisition Regulation Supplement; Contract 
Administration Functions

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 addressing 
functions performed by DoD contract administration offices. 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: August 8, 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-D051.


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 revises the list of contract administration functions at DFARS 
242.302 to--
    [cir] Clarify responsibilities for payment administration and for 
verification of contractor compliance with earned value management 
system requirements;
    [cir] Delete obsolete text on mobilization production planning 
surveys; and
    [cir] Delete procedures for designation of contract payment 
offices. Text on this subject has been relocated to the DFARS companion 
resource, Procedures, Guidance, and Information (PGI), available at 

    DoD published a proposed rule at 70 FR 67955 on November 9, 2005. 
One respondent submitted comments on the proposed rule. The respondent 
stated that (1) there is a lack of clear regulatory authority for 
acceptance other than FAR 46.502, which assigns acceptance 
responsibility to contracting officers; (2) acceptance is not one of 
the contract administration functions at FAR 42.302; and (3) FAR 
46.502, where it refers to delegation of responsibility for acceptance 
to a contract administration office, errs in its reference to FAR 
42.202(g), since refusal of a contract administration delegation is 
exclusive of actions inferred in performing acceptance when an 
administration office is assigned. The respondent recommended that, 
since acceptance actions can be performed on behalf of a contracting 
officer when a contract is not assigned for administration (e.g., 
destination acceptance) by an activity other than a contract 
administration office, DFARS 242.302 should provide coverage of 
acceptance responsibility when a contracting officer intends that a 
contract administration office perform acceptance.
    DoD does not agree that DFARS 242.302 should be amended to provide 
coverage of acceptance responsibility when a contracting officer 
intends that a contract administration office perform acceptance. FAR 
42.302 lists the functions that are normally delegated to a contract 
administration office. Even though acceptance is not specifically 
mentioned, it is covered under FAR 42.302(a)(38), which provides for 
ensuring contractor compliance with contractual quality assurance 
requirements and references FAR Part 46. In particular, FAR 46.502 
provides for delegation of responsibility for acceptance to a contract 
administration office. However, DoD recognizes that there are times 
when a contract administration office has been assigned responsibility 
for ensuring contractor compliance with contract quality assurance 
requirements, but where actual product acceptance is performed by an 
activity other than the contract administration office (i.e., 
destination acceptance). DoD has established a separate DFARS Case, 
2005-D024, to address this situation.
    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 addresses internal DoD responsibilities for 
performance of contract administration functions.

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 242

    Government procurement.

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

Therefore, 48 CFR part 242 is amended as follows:


1. The authority citation for 48 CFR Part 242 continues to read as 

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

2. Section 242.302 is revised to read as follows:

242.302  Contract administration functions.

    (a)(4) Also, review and evaluate--
    (A) Contractor estimating systems (see FAR 15.407-5); and
    (B) Contractor material management and accounting systems under 
subpart 242.72.

[[Page 44929]]

    (7) See 242.7502 for ACO responsibilities with regard to receipt of 
an audit report identifying significant accounting system or related 
internal control deficiencies.
    (9) For additional contract administration functions related to 
IR&D/B&P projects performed by major contractors, see 242.771-3(a).
    (12) Also perform all payment administration in accordance with any 
applicable payment clauses.
    (13)(A) Do not delegate the responsibility to make payments to the 
Defense Contract Management Agency (DCMA).
    (B) Follow the procedures at PGI 242.302(a)(13)(B) for designation 
of payment offices.
    (39) See 223.370 for contract administration responsibilities on 
contracts for ammunition and explosives.
    (67) Also support program offices and buying activities in 
precontractual efforts leading to a solicitation or award.
    (S-70) Serve as the single point of contact for all Single Process 
Initiative (SPI) Management Council activities. The ACO shall negotiate 
and execute facilitywide class modifications and agreements for SPI 
processes, when authorized by the affected components.
    (S-71) DCMA has responsibility for reviewing earned value 
management system (EVMS) plans and for verifying initial and continuing 
contractor compliance with DoD EVMS criteria. The contracting officer 
shall not retain this function.
    (b)(S-70) Issue, negotiate, and execute orders under basic ordering 
agreements for overhaul, maintenance, and repair.

[FR Doc. E6-12778 Filed 8-7-06; 8:45 am]