21852 Federal Register / Vol. 76, No. 75 / Tuesday, April 19, 2011 / Proposed Rules 

remove references to obsolete forms and 

procedures and reflect the current 

process. No start-up costs are expected 

as only Internet access is required 

should small entities elect to comment 

on their past performance rating in 

CPARS. This rule will not duplicate, 

overlap, or conflict with any other 

known Federal rule. There are no 

known alternatives to this proposed 

rule. 

DoD invites comments from small 

businesses and other interested parties 

on the expected impact of this rule on 

small entities. 

DoD will also consider comments 

from small entities concerning the 

existing regulations in subparts affected 

by this rule in accordance with 5 U.S.C. 

610. Interested parties must submit such 

comments separately and should cite 5 

U.S.C. 610 (DFARS Case 2010–D024), in 

correspondence. 

IV. Paperwork Reduction Act 

The proposed rule does not impose 

additional information collection 

requirements that require the approval 

of the Office of Management and Budget 

under the Paperwork Reduction Act (44 

U.S.C. chapter 35.). 

List of Subjects in 48 CFR Part 236 

Government procurement. 

Mary Overstreet, 

Editor, Defense Acquisition Regulations 

System. 

Therefore, 48 CFR part 236 is 

proposed to be amended as follows: 

1. The authority citation for 48 CFR 

part 236 continues to read as follows: 

Authority: 41 U.S.C. 1303 and 48 CFR 

chapter 1. 

PART 236—CONSTRUCTION AND 

ARCHITECT-ENGINEER CONTRACTS 

236.201 [Removed] 

2. Section 236.201 is removed. 

3. Revise section 236.604 to read as 

follows: 

236.604 Performance evaluation. 

Prepare a separate performance 

evaluation after actual construction of 

the project. Ordinarily, the evaluating 

official should be the person most 

familiar with the A–E’s performance. 

[FR Doc. 2011–8962 Filed 4–18–11; 8:45 am] 

BILLING CODE 5001–08–P 

DEPARTMENT OF DEFENSE 

Defense Acquisition Regulations 

System 

48 CFR Part 245 

Defense Federal Acquisition 

Regulation Supplement; Responsibility 

and Liability for Government Property 

(DFARS Case 2010–D018) 

AGENCY: Defense Acquisition 

Regulations System, Department of 

Defense (DoD). 

ACTION: Proposed rule. 

SUMMARY: DoD is issuing a proposed 

rule to amend the Defense Federal 

Acquisition Regulation Supplement 

(DFARS) to extend the Government selfinsurance policy to Government 

property provided under negotiated 

fixed-price contracts that are awarded 

on a basis other than submission of 

certified cost or pricing data. 

DATES: Comments on the proposed rule 

should be submitted in writing to the 

address shown below on or before June 

20, 2011, to be considered in the 

formation of the final rule. 

ADDRESSES: You may submit comments, 

identified by DFARS Case 2010–D018, 

using any of the following methods: 

Æ Regulations.gov: http:// 

www.regulations.gov. 

Submit comments via the Federal 

eRulemaking portal by inputting 

‘‘DFARS Case 2010–D018’’ under the 

heading ‘‘Enter keyword or ID’’ and 

selecting ‘‘Search.’’ Select the link 

‘‘Submit a Comment’’ that corresponds 

with ‘‘DFARS Case 2010–D018.’’ Follow 

the instructions provided at the ‘‘Submit 

a Comment’’ screen. Please include your 

name, company name (if any), and 

‘‘DFARS Case 2010–D018’’ on your 

attached document. 

Æ E-mail: dfars@osd.mil. Include 

DFARS Case 2010–D018 in the subject 

line of the message. 

Æ FAX: 703–602–0350. 

Æ Mail: Defense Acquisition 

Regulations System, Attn: Mrs. Jennifer 

Abi-Najm, OUSD (AT&L) DPAP (DARS), 

Room 3B855, 3060 Defense Pentagon, 

Washington, DC 20301–3060. 

Comments received generally will be 

posted without change to http:// 

regulations.gov, including any personal 

information provided. To confirm 

receipt of your comment, please check 

http://www.regulations.gov 

approximately two to three days after 

submission to verify posting, except 

allow 30 days for posting of comments 

submitted by mail. 

FOR FURTHER INFORMATION CONTACT: Mrs. 

Jennifer Abi-Najm, 703–602–1013. 

SUPPLEMENTARY INFORMATION: 

I. Background 

This proposed rule will amend the 

DFARS to extend the Federal 

Acquisition Regulation (FAR) 

Government self-insurance policy for 

loss of Government property to 

negotiated fixed-price contracts 

awarded on a basis other than 

submission of certified cost or pricing 

data. FAR 45.104, Responsibility and 

liability for Government property, 

provides that contractors are not held 

liable for loss of Government property 

occurring under the following types of 

contracts: 

(1) Cost-reimbursement contracts. 

(2) Time-and-materials contracts. 

(3) Labor-hour contracts. 

(4) Fixed-price contracts awarded on 

the basis of submission of certified cost 

or pricing data. 

An exception to the FAR 45.104 

policy for Government assumption of 

risk of loss is for negotiated fixed-price 

contracts awarded on a basis other than 

submission of certified cost or pricing 

data. This rule proposes that DoD 

contractors not be held liable for loss of 

Government property under such 

contracts, and eliminates the use of 

Alternate I of the FAR clause at 52.245– 

1, Government Property. Use of 

Alternate I requires contractors to 

assume the risk and be responsible for 

loss of Government property. 

II. Executive Order 12866 and 

Executive Order 13563 

Executive Orders 12866 and 13563 

direct agencies to assess all costs and 

benefits of available regulatory 

alternatives and, if regulation is 

necessary, to select regulatory 

approaches that maximize net benefits 

(including potential economic, 

environmental, public health and safety 

effects, distributive impacts, and 

equity). Executive Order 13563 

emphasizes the importance of 

quantifying both costs and benefits, of 

reducing costs, of harmonizing rules, 

and of promoting flexibility. This is not 

a significant regulatory action and, 

therefore, was not subject to review 

under Section 6(b) of Executive Order 

12866, Regulatory Planning and Review, 

dated September 30, 1993. This rule is 

not a major rule under 5 U.S.C. 804. 

III. Regulatory Flexibility Act 

DoD has prepared an initial regulatory 

flexibility analysis consistent with 

5 U.S.C. 603. A copy of the analysis may 

be obtained from the point of contact 

specified herein. The analysis is 

summarized as follows: 


jdjones on DSK8KYBLC1PROD with PROPOSALS-1
Federal Register / Vol. 76, No. 75 / Tuesday, April 19, 2011 / Proposed Rules 21853 

The objective of this rule is to add 

negotiated fixed-priced contracts, 

awarded on a basis other than 

submission of certified cost or pricing 

data, to the list of contracts for which 

the Government is self-insuring and 

assumes risk of loss for Government 

property provided under such contracts. 

The basic premise of this case, that the 

Government should be self-insuring 

under contracts that provide 

Government property, is supported by 

the Government Accountability Office 

(GAO) policy contained in GAO 

publication, GAO–04–261SP 

Appropriations Law, and its decisions. 

The Government generally selfinsures against contractor loss of 

Government property acquired or 

provided under most negotiated 

Government contracts. An exception to 

this policy at FAR 45.104 is for 

negotiated fixed-price contracts 

awarded on a basis other than 

submission of certified cost or pricing 

data. For those contracts, the contractor 

is liable for loss of Government property 

(except for reasonable fair wear and 

tear) invoked by use of FAR clause 

52.245–1, Government Property, with its 

Alternate I. 

DoD has approximately 3,000 

contractors with contracts that authorize 

furnishing some form of Government 

contract property. The majority of 

property (over 80 percent in terms of 

original acquisition value) is 

accountable to large businesses, with 

the remainder accountable to small 

entities. 

Any impact of this rule on small 

entities is expected to be beneficial. 

Large businesses with substantial cash 

reserves may be in a financial position 

that enables those firms to select a high 

insurance deductible in order to garner 

lower premiums by electing to become 

self-insuring for potential property loss 

up to the level of the deductible. Small 

entities may not have the financial 

capacity or capability to select a high 

insurance deductible in order to be selfinsuring up to the higher thresholds. 

The effect of small entities not being 

able to select higher deductible 

thresholds may be to incur higher 

insurance premiums, which might 

negatively impact their ability to 

compete. The Government assuming the 

liability for loss of Government property 

under negotiated fixed-price contracts 

awarded on a basis other than 

submission of certified cost or pricing 

data should provide some relief for the 

small entities concerning costs to 

acquire insurance against risk of loss. 

DoD invites comments from small 

businesses and other interested parties 

on the expected impact of this rule on 

small entities. 

DoD will also consider comments 

from small entities concerning the 

existing regulations in subparts affected 

by this rule in accordance with 

5 U.S.C. 610. Interested parties must 

submit such comments separately and 

should cite 5 U.S.C. 610 (DFARS Case 

2010–D018), in correspondence. 

IV. Paperwork Reduction Act 

This rule does not impose any 

information collection requirements that 

require the approval of the Office of 

Management and Budget under the 

Paperwork Reduction Act (44 U.S.C. 

chapter 35). 

List of Subjects in 48 CFR Part 245 

Government procurement. 

Ynette R. Shelkin, 

Editor, Defense Acquisition Regulations 

System. 

Therefore, 48 CFR part 245 is 

proposed to be amended as follows: 

PART 245–GOVERNMENT PROPERTY 

1. The authority citation for 48 CFR 

part 245 continues to read as follows: 

Authority: 41 U.S.C. 1303 and 48 CFR 

chapter 1. 

2. Section 245.104 is added to subpart 

245.1 to read as follows: 

245.104 Responsibility and liability for 

Government property. 

(a) In addition to the contract types 

listed at FAR 45.104, contractors are not 

held liable for loss of Government 

property under negotiated fixed-price 

contracts awarded on a basis other than 

submission of certified cost or pricing 

data. 

3. Section 245.107 is revised to read 

as follows: 

245.107 Contract clauses. 

(1) Use the clause at 252.245–7000, 

Government-Furnished Mapping, 

Charting, and Geodesy Property, in 

solicitations and contracts when 

mapping, charting, and geodesy 

property is to be furnished. 

(2) Use the clause at 252.245–7001, 

Tagging, Labeling, and Marking of 

Government-Furnished Property, in 

solicitations and contracts that contain 

the clause at FAR 52.245–1, 

Government Property. 

(3) Use the clause at 252.245–7002, 

Reporting Loss of Government Property, 

in solicitations and contracts that 

contain the clause at FAR 52.245–1, 

Government Property. 

(4) For negotiated fixed-price 

contracts awarded on a basis other than 

submission of certified cost or pricing 

data for which Government property is 

provided, use the clause at FAR 52.245– 

1, Government Property, without its 

Alternate I. 

[FR Doc. 2011–8958 Filed 4–18–11; 8:45 am] 

BILLING CODE 5001–08–P 


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