25566 Federal Register / Vol. 76, No. 87 / Thursday, May 5, 2011 / Rules and Regulations 

possibly adding coverage in DFARS part 

242 relating to contract administration. 

Response: DoD has added a cross 

reference to FAR 37.104(d) at DFARS 

237.503. In this final rule, no changes 

are made to DFARS subpart 242. 

E. Editorial Recommendations 

Comment: A respondent proposed 

several clarifying edits. The respondent 

suggested moving some coverage from 

DFARS 237.503 to DFARS 237.104 and 

providing additional cross references. 

The respondent also proposed to revise 

the title of the form at PGI 237.503(c). 

Response: Some of these 

recommendations have been 

accommodated in the changes noted 

above and as follows: 

• New coverage at DFARS 237.104(d) 

has been added to point readers to the 

section entitled ‘‘Agency-head 

responsibilities’’ at DFARS 237.503 to 

ensure awareness of the certification 

requirement. 

• The title of the certification at PGI 

237.503(c) has been changed to 

‘‘Certification of Nonpersonal Services.’’ 

III. 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 rule 

has been designated a ‘‘significant 

regulatory action’’ although not 

economically significant, under section 

3(f) of Executive Order 12866. 

Accordingly, the rule has been reviewed 

by the Office of Management and 

Budget. This rule is not a major rule 

under 5 U.S.C. 804. 

IV. 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 change solely impacts 

internal Government operating 

procedures and will therefore not have 

a significant cost or administrative 

impact on contractors, subcontractors, 

or offerors. An initial regulatory 

flexibility analysis was not performed. 

No comments were received from small 

entities on this rule. 

V. Paperwork Reduction Act 

The final rule does not contain 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 Parts 211 and 

237 

Government procurement. 

Mary Overstreet, 

Editor, Defense Acquisition Regulations 

System. 

Therefore, the Defense Acquisition 

Regulations system confirms as final the 

interim rule published at 75 FR 54524 

on September 8, 2010, with the 

following changes: 

■ 1. The authority citation for 48 CFR 

parts 211 and 237 continues to read as 

follows: 

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

chapter 1. 

PART 211—DESCRIBING AGENCY 

NEEDS 

■ 2. Revise section 211.106 to read as 

follows: 

211.106 Purchase descriptions for service 

contracts. 

Agencies shall require that purchase 

descriptions for service contracts and 

resulting requirements documents, such 

as statements of work or performance 

work statements, include language to 

provide a clear distinction between 

Government employees and contractor 

employees. Agencies shall be guided by 

the characteristics and descriptive 

elements of personal-services contracts 

at FAR 37.104. Service contracts shall 

require contractor employees to identify 

themselves as contractor personnel by 

introducing themselves or being 

introduced as contractor personnel and 

displaying distinguishing badges or 

other visible identification for meetings 

with Government personnel. In 

addition, contracts shall require 

contractor personnel to appropriately 

identify themselves as contractor 

employees in telephone conversations 

and in formal and informal written 

correspondence. 

PART 237—SERVICE CONTRACTING 

■ 3. Amend section 237.104 by adding 

paragraph (d) as follows: 

237.104 Personal services contracts. 

* * * * * 

(d) See 237.503(c) for requirements for 

certification and approval of 

requirements for services to prevent 

contracts from being awarded or 

administered in a manner that 

constitutes an unauthorized personal 

services contract. 

* * * * * 

■ 4. Revise section 237.503 to read as 

follows: 

237.503 Agency-head responsibilities. 

(c) The agency head or designee shall 

employ procedures to ensure that 

requirements for service contracts are 

vetted and approved as a safeguard to 

prevent contracts from being awarded or 

administered in a manner that 

constitutes an unauthorized personal 

services contract. Contracting officers 

shall follow the procedures at PGI 

237.503, include substantially similar 

certifications in conjunction with 

service contract requirements, and place 

the certification in the contract file. The 

program manager or other official 

responsible for the requirement, at a 

level specified by the agency, should 

execute the certification. In addition, 

contracting officers and program 

managers should remain aware of the 

descriptive elements at FAR 37.104(d) 

to ensure that a service contract does 

not inadvertently become administered 

as a personal-services contract. 

[FR Doc. 2011–10878 Filed 5–4–11; 8:45 am] 

BILLING CODE 5001–08–P 

DEPARTMENT OF DEFENSE 

Defense Acquisition Regulations 

System 

48 CFR Parts 216 and 252 

RIN 0750–AH20 

Defense Federal Acquisition 

Regulation Supplement (DFARS); 

Electronic Ordering Procedures 

(DFARS Case 2009–D037) 

AGENCY: Defense Acquisition 

Regulations System, Department of 

Defense (DoD). 

ACTION: Final rule. 

SUMMARY: DoD is issuing a final rule to 

amend the Defense Federal Acquisition 

Regulation Supplement (DFARS) to 

address electronic business procedures 

for placing orders. This final rule adds 

a new DFARS clause to clarify this 

process. 

DATES: Effective date: May 5, 2011. 

FOR FURTHER INFORMATION CONTACT: Mr. 

Julian Thrash, Telephone 703–602– 

0310. 

SUPPLEMENTARY INFORMATION: 


jlentini on DSKJ8SOYB1PROD with RULES
Federal Register / Vol. 76, No. 87 / Thursday, May 5, 2011 / Rules and Regulations 25567 

I. Background 

DoD published a proposed rule in the 

Federal Register at 75 FR 60690, on 

October 1, 2010. This case establishes a 

standard method for the issuance of 

orders via electronic means. DoD 

currently has the capability to distribute 

orders electronically on a routine basis 

and can post to a Web site that any 

contractor can access. In order to make 

this possible, the DFARS needs to 

provide language that will make those 

procedures a routine part of contract 

order distribution. This will enable DoD 

to further the goals of the E-Government 

Act of 2002 (Pub. L. 107–347). 

The public comment period closed 

November 30, 2010. Five respondents 

submitted comments to the proposed 

rule, which are addressed below. 

II. Discussion and Analysis 

A. Effective Way To Do Business 

Comment: One respondent opined 

that requiring vendors and the 

Government to communicate 

exclusively via electronic means will be 

the most effective way for the 

Government to do business in the 

future. 

Response: Concur this could be the 

most effective way to communicate, 

however, e-mail and facsimile will 

continue to be permitted as a means of 

communication. 

B. Elements of an Order 

Comment: One respondent expressed 

concern that many elements of an order 

are not universal, and are not 

automatically posted to the Electronic 

Document Access (EDA) system from 

the contract writing systems (i.e., 

attachments and appendices). The 

respondent opined that ordering 

officials would thus be forced to either 

use e-mail to get some elements of the 

order to the contractor or, alternatively, 

to manually replace the automatically 

uploaded documents in EDA with 

manually compiled complete 

documents. The respondent suggested 

that neither approach would be 

efficient. 

Response: As a matter of policy, DoD 

already requires posting of the contract 

or order, including its attachments, to 

EDA. This rule merely leverages that 

existing requirement to codify rules for 

electronic issuance of orders. Use of 

e-mail will not be necessary. 

C. Use of E-Mail 

Comment: A respondent questioned 

whether it is wise to take e-mail totally 

off the table, when FAR 52.216–18, 

Ordering, currently permits ordering 

officials to specify e-mail as an 

‘‘electronic commerce method’’ so long 

as it is authorized in the schedule. The 

respondent recommended that the 

DFARS clause should explicitly permit 

the use of e-mail as a recognized 

electronic commerce method. The 

respondent recommended, in the 

alternative, that the Government permit 

the use of e-mail on a ‘‘by-exception 

basis’’ or at the discretion of the 

contracting officer. 

Response: DoD considered the use of 

e-mail as a primary method of 

distribution, but rejected its use because 

of the lack of an audit trail. DoD was 

also concerned that the delivery and 

receipt of e-mail is subject to 

interruption without notice due to 

firewall and spam filter configurations. 

D. Changes to 252.216–70XX(c)(1), 

Ordering 

Comment: A respondent suggested 

that the term ‘‘notice’’ in 252.216– 

70XX(c)(1), Ordering, should be 

defined. Another respondent stated the 

final rule should be clearer about who 

in the company will be receiving the 

awards to reduce the possibility for 

miscommunication. Another respondent 

stated that electronic commerce is a 

term specifically identified in Federal 

Acquisition Regulation (FAR) Part 2, 

and is broader than just the EDA, which 

is not defined in the FAR or DFARS. 

The respondent further stated that 

limiting the Government’s electronic 

communication options to the EDA only 

will prevent ordering officials from 

using other means of electronic 

commerce in the event EDA is not 

accessible (e.g., system is down or 

contingency contracting where EDA 

may not be available), and that use of 

the broader term ‘‘electronic commerce’’ 

would allow for the flexibility to adopt 

the use of new methods of electronic 

communication as they arise. 

Response: Contract load notification 

lists can be set up in EDA for a specific 

contract or delivery order. Each contract 

or delivery order requires its own 

notification list. Notification lists may 

be created for contracts that do not yet 

exist in EDA. When a contract loads into 

EDA, the notification process activates 

and EDA e-mails the notification to the 

addresses on the lists. Notification 

e-mail messages are sent once per day. 

Therefore, it is not necessary to define 

what constitutes a notice. 

DoD has chosen EDA as its primary 

means of establishing an official shared 

copy of the contract. This case leverages 

that decision. This case is not intended 

to prohibit the use of other electronic 

commerce tools to transmit data about 

the contract, but only to address EDA as 

the location of the document. 

E. Encryption 

Comment: A respondent suggested 

that DoD should allow for an alternate 

means of electronic communication that 

provides for secure transmission of files 

(such as deliverables, reports, financial, 

and Privacy Act data) back to the issuer. 

The respondent further stated that email is a very simple, widespread, and 

known technology, and that many 

regulations require strong encryption 

when sending sensitive (controlled 

unclassified information, personally 

identifiable information, etc.) data over 

the internet. The respondent 

recommended that DoD should be 

encrypting files before transmitting 

them, and that including (in the clause) 

the option to use e-mail would set the 

stage for enhanced, electronic 

communications between DoD and its 

many small contractors, via the 

Internet’s ubiquitous direct 

communication tool. 

Response: EDA shares data using 

secure hypertext transfer protocol 

(https), which encrypts all data in 

transit, and is universally used by both 

industry and Government to protect 

sensitive data. EDA fulfills DoD’s 

requirement for the secure transmission 

of data. 

F. Registration in EDA 

Comment: A respondent asked 

whether contractor registration in EDA 

will eventually become mandatory like 

Central Contractor Registration (CCR) 

(i.e., a pre-condition for receiving a 

contract). The respondent went on to 

suggest that DoD would have a difficult 

time getting industry (and particularly 

small businesses) to use EDA without a 

mandatory registration requirement. 

Response: An implicit condition of 

this ordering clause is that vendors who 

wish to receive notice of electronic 

orders must create an account in EDA. 

In order to create an account, the vendor 

must know the Commercial and 

Government Entity (CAGE) or the Data 

Universal Numbering System (DUNS) 

number for the business unit, and 

specify it in their EDA registration. The 

electronic business point of contact for 

that CAGE/DUNS as identified in CCR 

must authorize, via e-mail, the applicant 

for the EDA vendor user account as 

someone who may access documents for 

that CAGE/DUNS. 

G. Access to EDA 

Comment: A respondent noted that 

there is a general lag between the time 

when an order is released in the 

contract writing system, and the time 

when it is available in EDA, and that 

this is a practical downside of not 


jlentini on DSKJ8SOYB1PROD with RULES
25568 Federal Register / Vol. 76, No. 87 / Thursday, May 5, 2011 / Rules and Regulations 

permitting the use of e-mail to issue 

orders. Two respondents expressed 

concern that there may be occasions 

when contractors cannot readily gain 

access to EDA or that there may be 

contractors who object to registering in 

the EDA system. 

Response: Historical data shows that, 

on average, actions are posted to EDA 

within one to two days. This average 

compares very favorably with the 

averages associated with mailing or any 

other distribution process. There are 

two EDA sites, one at http:// 

eda.ogden.disa.mil/, and the other at 

http://eda.cols.disa.mil/, to ensure 

connectivity. These two sites allow for 

an overall 99.1% average system 

availability. EDA is a very reliable 

means of conducting DoD’s business, 

and the issue of EDA nonavailability is 

not considered significant. 

H. Exceptions 

Comment: A respondent 

recommended striking facsimile and 

mail as acceptable methods of issuing 

orders in order to more firmly promote 

the use of electronic business. 

Response: The objective of the case is 

not to eliminate paper methods but to 

establish a regular process for electronic 

methods. 

DoD has considered the public 

comments, and has decided to make no 

major changes to the text that was 

proposed in the Federal Register at 75 

FR 60690, on October 1, 2010. However, 

there is one small change made at 

216.506(a), where the name ‘‘Ordering’’ 

was added to the clause prescription as 

the title for FAR 52.216–18. This final 

rule makes the following DFARS 

changes: 

• Adds DFARS 216.506(a) to require 

a new clause 252.216–7006, Ordering, 

in lieu of the clause at 52.216–18, 

Ordering, in solicitations, and contracts 

when a definite-quantity contract, a 

requirements contract, or an indefinitequantity contract is contemplated; and 

• Add a new clause at DFARS 

252.216–7006, Ordering. 

III. 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. 

IV. Regulatory Flexibility Act 

DoD has prepared a final regulatory 

flexibility analysis consistent with 5 

U.S.C. 604 and is summarized below. A 

copy of the analysis may be obtained 

from the point of contact specified 

herein. 

The objective of this rule is to 

establish a standard method for 

distributing orders via electronic means. 

DoD currently has the capability to 

distribute orders electronically on a 

routine basis, and posts those orders to 

a Web site that any contractor can 

access. 

This DFARS change will provide 

standard contract language that will 

make those order distribution 

procedures a routine part of contract 

order placement. This rule will enable 

DoD to further the goals of the 

E-Government Act of 2002. 

For Fiscal Year 2009, DoD made 

awards to 6,097 small business unique 

Data Universal Numbering System 

(DUNS) numbers using the clause at 

FAR 52.216–18, Ordering. The benefit of 

this rule to small business is that it will 

make electronic distribution procedures 

a routine part of order issuance. This 

change will ultimately help improve the 

management, and promotion of 

electronic Government services and 

processes, and will establish a 

framework to improve public access to 

Government information, and services. 

This rule was published as a proposed 

rule in the Federal Register at 75 FR 

60690, on October 1, 2010. No 

comments were received from small 

entities on the affected DFARS subpart 

with regard to small businesses. We 

anticipate that there will be limited, if 

any, additional costs imposed on small 

businesses. 

V. 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 Parts 216 and 

252 

Government procurement. 

Mary Overstreet, 

Editor, Defense Acquisition Regulations 

System. 

Therefore, 48 CFR parts 216 and 252 

are amended as follows: 

■ 1. The authority citation for 48 CFR 

parts 216 and 252 continues to read as 

follows: 

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

chapter 1. 

PART 216—TYPES OF CONTRACTS 

■ 2. Amend section 216.506 by adding 

paragraph (a) to read as set forth below. 

216.506 Solicitation provisions and 

contract clauses. 

(a) Insert the clause at 252.216–7006, 

Ordering, in lieu of the clause at 

52.216–18, Ordering, in solicitations 

and contracts when a definite-quantity 

contract, a requirements contract, or an 

indefinite-quantity contract is 

contemplated. 

* * * * * 

PART 252—SOLICITATION 

PROVISIONS AND CONTRACT 

CLAUSES 

■ 3. Add section 252.216–7006 to read 

as follows: 

252.216–7006 Ordering. 

As prescribed in 216.506(a), use the 

following clause: 

ORDERING (MAY 2011) 

(a) Any supplies and services to be 

furnished under this contract shall be 

ordered by issuance of delivery orders or task 

orders by the individuals or activities 

designated in the contract schedule. Such 

orders may be issued from 

llllllllll through 

llllllllllll [insert dates]. 

(b) All delivery orders or task orders are 

subject to the terms and conditions of this 

contract. In the event of conflict between a 

delivery order or task order and this contract, 

the contract shall control. 

(c)(1) If issued electronically, the order is 

considered ‘‘issued’’ when a copy has been 

posted to the Electronic Document Access 

system, and notice has been sent to the 

Contractor. 

(2) If mailed or transmitted by facsimile, a 

delivery order or task order is considered 

‘‘issued’’ when the Government deposits the 

order in the mail or transmits by facsimile. 

Mailing includes transmittal by U.S. mail or 

private delivery services. 

(3) Orders may be issued orally only if 

authorized in the schedule. 

(End of Clause) 

[FR Doc. 2011–10967 Filed 5–4–11; 8:45 am] 

BILLING CODE 5001–08–P 


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