58150 Federal Register / Vol. 76, No. 182 / Tuesday, September 20, 2011 / Rules and Regulations 

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 

A final regulatory flexibility analysis 

has been prepared consistent with the 

Regulatory Flexibility Act, 5 U.S.C. 601, 

et seq., and is summarized as follows: 

This is a final rule to revise the 

Defense Federal Acquisition Regulation 

Supplement (DFARS) at 213 to permit 

the use of U.S. Government fuel cards 

in lieu of an SF 44, Purchase OrderInvoice-Voucher, for fuel, oil, and 

refueling-related items for purchases not 

exceeding the simplified acquisition 

threshold. The objective of this rule is 

to amend DFARS 213.306(a)(1)(A) to (1) 

Permit the purchase of marine fuel 

using the Ships’ bunkers Easy 

Acquisition (SEA) Card® in lieu of the 

SF44, Purchase Order-Invoice-Voucher, 

up to the simplified acquisition 

threshold and (2) provide additional 

ground refueling-related services when 

using the AIR Card®. The legal basis is 

41 U.S.C. 1303 and 48 CFR chapter 1. 

Purchases of aviation fuel are on-thespot, over the counter transactions (‘‘gas 

and go’’), but generally exceed the 

micro-purchase threshold due to the 

price of aviation fuel and oil fuel tank 

capacities. Previously, the threshold for 

SF44/AIR Card® purchases of fuel and 

oil was set at the simplified acquisition 

threshold at DFARS 213.306(a)(1)(A)) 

under DFARS Case 2007–D017 (see final 

rule published at 72 FR 6484 on 

February 12, 2007). 

The military services and the U.S. 

Coast Guard have small vessels that 

fulfill valid mission needs in direct 

support of national security. Unlike 

larger vessels, small vessels’ movements 

and needs are often unpredictable. 

These small vessels must procure fuel 

away from their home stations, but 

because of their smaller size and unique 

mission requirements are unable to use 

the Defense Logistics Agency energy 

bunkers contracts available at major 

seaports. Due to port restrictions, 

bunkering merchants do not typically 

provide support to smaller vessels. 

Instead, these smaller vessels frequent 

non-contract merchants or ‘‘marina-type 

merchants’’ that otherwise serve civilian 

recreational watercraft and similar 

needs. 

No public comments were received in 

response to the initial regulatory 

flexibility analysis. 

Approximately 80% of ‘‘marina-type 

merchants’’ are considered small 

businesses. Marina-type merchants 

accepting the SEA Card® will pay a 

normal fee to the banking institution or 

processing center, similar to VISA 

charges these merchants incur from 

other credit card clients. In addition, 

merchants are expected to benefit from 

accelerated payments, since they will be 

paid by the banking institution in 

accordance with their merchant 

agreement. The rule facilitates open 

market purchases, benefits merchants by 

making it much easier for merchants to 

do business with the military and will 

not have a significant cost or 

administrative impact on contractors, 

subcontractors, or offerors. 

DoD does not expect this rule to 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 does not have a 

significant effect beyond DoD’s internal 

operating procedures, substituting the 

use of a fuel card (AIR Card® and SEA 

Card®) in lieu of the SF44, Purchase 

Order-Invoice-Voucher. 

IV. Paperwork Reduction Act 

This 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 Part 213 

Government procurement. 

Mary Overstreet, 

Editor, Defense Acquisition Regulations 

System. 

Therefore, 48 CFR part 213 is 

amended as follows: 

PART 213—SIMPLIFIED ACQUISITION 

PROCEDURES 

■ 1. The authority citation for 48 CFR 

part 213 continues to read as follows: 

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

chapter 1. 

■ 2. Section 213.306 is amended to 

revise paragraph (a)(1)(A) to read as 

follows: 

213.306 SF 44, Purchase Order-InvoiceVoucher. 

(a)(1) * * * 

(A) Fuel and oil. U.S. Government 

fuel cards may be used in lieu of an SF 

44 for fuel, oil, and authorized 

refueling-related items (see PGI 213.306 

for procedures on use of fuel cards); 

* * * * * 

[FR Doc. 2011–23944 Filed 9–19–11; 8:45 am] 

BILLING CODE 5001–08–P 

DEPARTMENT OF DEFENSE 

Defense Acquisition Regulations 

System 

48 CFR Part 215 

RIN 0750–AG82 

Defense Federal Acquisition 

Regulations Supplement; Discussions 

Prior to Contract Award (DFARS Case 

2010–D013) 

AGENCY: Defense Acquisition 

Regulations System, Department of 

Defense (DoD). 

ACTION: Final rule. 

SUMMARY: DoD is amending the Defense 

Federal Acquisition Regulation 

Supplement (DFARS) to strongly 

encourage discussions prior to award for 

source selections of procurements 

estimated at $100 million or more. 

DATES: Effective Date: September 20, 

2011. 

FOR FURTHER INFORMATION CONTACT: Mr. 

Dustin Pitsch, telephone 703–602–0289. 

SUPPLEMENTARY INFORMATION: 

I. Background 

DoD published a proposed rule at 75 

FR 71647 on November 24, 2010, to 

implement the recommendation of the 

DoD Source Selection Joint Analysis 

Team (JAT) to strongly encourage the 

use of discussions in all competitive 

negotiated procurements over $100 

million. The period for public comment 

closed on January 24, 2011, and three 

respondents provided comments. 

The rule proposed to amend DFARS 

part 215 to strongly recommend, for 

acquisitions of more than $100 million, 

that contracting officers hold 

discussions rather than use the 

authority at FAR 52.215–1 to award on 

initial offers without discussions. 

II. Discussion and Analysis 

A. Proposed rule is excessive 

Comment: One respondent said that 

the proposed rule is ‘‘overkill.’’ 

Response: No change was made in the 

final rule in response to this comment. 

The JAT advises that data shows that 

the number of protests filed against the 

award of competitive negotiated 

contracts and orders over $100 million 

is substantially higher when discussions 

are not held. A preference for holding 


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Federal Register / Vol. 76, No. 182 / Tuesday, September 20, 2011 / Rules and Regulations 58151 

discussions is recognition of a best 

practice. 

B. Negative effects possible 

Comment: One respondent wrote that 

requiring discussions could have 

negative effects, such as added 

Government and industry cost due to 

the significant increase in the source 

selection schedule and reduced 

solicitation and proposal quality due to 

a mindset that problems can be fixed 

during discussions. 

Response: The JAT data demonstrates 

that procurement lead time is 

significantly extended when protests 

occurred. The second concern raised by 

the respondent, that proposals will be of 

lower quality, is unrealistic because the 

offeror that chooses to submit an 

inferior proposal always runs the risk of 

not making the competitive range and 

therefore not being considered for 

award. 

C. Change reference 

Comment: A respondent wanted to 

change the reference from 215.203–71 to 

215.306(d) because the latter deals with 

discussions, which are covered at FAR 

15.306(d). 

Response: DoD agrees with the 

recommendation. The statement about 

holding discussions for actions of $100 

million or more is relocated in the final 

rule to DFARS subpart 215.306(c) from 

215.2. 

D. Remove ‘‘competitive range’’ 

limitation 

Comment: A respondent proposed 

deleting the phrase ‘‘with offerors in the 

competitive range’’ at the end of the 

sentence ‘‘(F)or source selections when 

the procurement is $100 million or 

more, contracting officers should 

conduct discussions with offerors in the 

competitive range.’’ The respondent 

noted that FAR 15.306(c)(1) and (d), 

read together, require the conduct of 

discussions with all offerors in the 

competitive range in every case. 

Response: DoD agrees with 

respondent that the FAR already 

mandates discussions with all offerors 

whose proposals have been selected for 

the competitive range. The intent of this 

rule is to expand the situations in which 

discussions are held beyond those 

situations where they may be already 

mandated. The language in the 

proposed rule at DFARS 215.203–71 is 

relocated to 215.306(c)(1) in the final 

rule and revised to state ‘‘For source 

selections, when the procurement is 

$100 million or more, contracting 

officers should conduct discussions. 

Follow the procedures at FAR 15.306(c) 

and (d).’’ 

III. Executive Orders 12866 and 13563 

Executive Orders (E.O.s) 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). E.O. 13563 emphasizes the 

importance of quantifying both costs 

and benefits, of reducing costs, of 

harmonizing rules, and of promoting 

flexibility. This is a significant 

regulatory action and, therefore, was 

subject to review under Section 6(b) of 

E.O. 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 does not expect 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 

final rule does not add to or delete 

existing regulations on discussions for 

DoD procurements under $100 million, 

the majority of DoD procurements. For 

procurements of at least $100 million, 

any increase in discussions is 

anticipated to benefit all offerors, 

including small businesses, by 

providing them an opportunity to 

explain details of the offer and address 

their particular capabilities. 

A final regulatory flexibility analysis 

was performed and is summarized as 

follows. This rule was initiated at the 

request of the Director, Defense 

Procurement and Acquisition Policy, to 

implement a recommendation of the 

Department of Defense (DoD) Source 

Selection Joint Analysis Team (JAT). 

The JAT, which was tasked to revise the 

DoD Source Selection Procedures, 

determined that there is a significant 

positive correlation between high-dollar 

source selections conducted without 

discussions and the number of protests 

sustained. In order to improve the 

quality of high-dollar, complex source 

selections, and reduce turbulence and 

inefficiency resulting from sustained 

protests, the policy is changed to 

strongly encourage discussions prior to 

the award of source selections estimated 

at $100 million or more. 

DoD research has indicated that 

meaningful discussions with industry 

prior to contract award on high-dollar, 

complex requirements improves both 

industry’s understanding of solicitation 

requirements and the Government’s 

understanding of industry issues. By 

identifying and discussing these issues 

prior to submission of final proposals, 

the Government is often able to issue 

clarifying language. The modified 

requirements documentation allows 

industry to tailor proposals and better 

describe the offeror’s intended 

approach, increases the probability that 

the offeror’s proposal satisfies the 

Government requirements, and often 

results in better contract performance. 

Asking contracting officers to conduct 

discussions with industry provides a 

reasonable approach to recognizing and 

addressing valid industry concerns and 

a constructive alternative to protests 

resulting from industry frustration over 

misunderstood requirements. The legal 

basis is 41 U.S.C. 1303 and 48 CFR 

chapter 1. 

Data were reviewed for the most 

recent year available, Fiscal Year 2009. 

While there is no data source available 

that tabulates the number of offers 

received from small businesses, DoD 

determined that 620 new contracts and 

252 new task orders or delivery orders 

of $100 million or more were awarded 

to small businesses during Fiscal Year 

2009. Therefore, DoD estimates that at 

least 872 small businesses could benefit 

from this policy change. 

There is no reporting, recordkeeping, 

or other compliance requirement 

associated with the proposed rule. 

Therefore, there is no impact, positive 

or negative, on small businesses in this 

area. Thus, there are no additional 

professional skills necessary on the part 

of small businesses in this area. There 

are no direct costs to small business 

firms to comply with this rule. 

Conversely, small businesses that might 

have previously filed a protest against 

an award when discussions were not 

held may now be able to avoid the costs 

associated with protesting. 

The rule does not duplicate, overlap, 

or conflict with any other Federal rules. 

There are no practical alternatives 

that will accomplish the objectives of 

the proposed rule. When a solicitation 

includes the provision at FAR 52.215– 

1, Instructions to Offerors—Competitive 

Acquisitions, paragraph (f)(4) of the 

clause states that the ‘‘Government 

intends to evaluate proposals and award 

a contract without discussions.’’ If, 

however, the solicitation includes FAR 

52.215–1 with its Alternate I, then the 

revised paragraph (f)(4) states that the 

‘‘Government intends to evaluate 

proposals and award a contract after 

conducting discussions with offerors 

whose proposals have been determined 

to be within the competitive range.’’ Use 

of the clause without Alternate I will 

not accomplish the stated objectives; 


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58152 Federal Register / Vol. 76, No. 182 / Tuesday, September 20, 2011 / Rules and Regulations 

only the clause with its Alternate I will 

accomplish the purpose of this case. 

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 Part 215 

Government procurement. 

Mary Overstreet, 

Editor, Defense Acquisition Regulations 

System. 

Therefore, 48 CFR part 215 is 

amended as follows: 

PART 215—CONTRACTING BY 

NEGOTIATION 

■ 1. The authority citation for 48 CFR 

part 215 continues to read as follows: 

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

chapter 1. 

■ 2. Section 215.209 is added as follows: 

215.209 Solicitation provisions and 

contract clauses. 

(a) For source selections when the 

procurement is $100 million or more, 

contracting officers should use the 

provision at FAR 52.215–1, Instructions 

to Offerors—Competitive Acquisition, 

with its Alternate I. 

■ 3. Section 215.306 is added as follows: 

215.306 Exchanges with offerors after 

receipt of proposals. 

(c) Competitive range. 

(1) For acquisitions with an estimated 

value of $100 million or more, 

contracting officers should conduct 

discussions. Follow the procedures at 

FAR 15.306(c) and (d). 

[FR Doc. 2011–23949 Filed 9–19–11; 8:45 am] 

BILLING CODE 5001–08–P 

DEPARTMENT OF DEFENSE 

Defense Acquisition Regulations 

System 

48 CFR Parts 217 and 241 

RIN 0750–AG89 

Defense Federal Acquisition 

Regulation Supplement; Multiyear 

Contracting (DFARS Case 2009–D026) 

AGENCY: Defense Acquisition 

Regulations System, Department of 

Defense (DoD). 

ACTION: Final rule. 

SUMMARY: DoD is issuing a final rule 

amending the Defense Federal 

Acquisition Regulation Supplement 

(DFARS) to update and clarify the 

requirements for multiyear contracting. 

DATES: Effective date: September 20, 

2011. 

FOR FURTHER INFORMATION CONTACT: Mr. 

Manuel Quinones, telephone (703) 602– 

8383. 

SUPPLEMENTARY INFORMATION: 

I. Background 

This DFARS case was initiated by 

DoD to perform a comprehensive review 

of DFARS subpart 217.1, Multiyear 

Contracting. On March 2, 2011, the DoD 

published a proposed rule to update and 

clarify the requirements relating to 

multiyear contracting. This final rule 

reorganizes and updates existing 

coverage for multiyear acquisitions. 

A minor editorial change was made to 

the final rule at DFARS 217.170 to 

remove the redundant introductory 

sentence that had been proposed at 

217.170(a) and to revert to the original 

paragraph numbering of this section. At 

DFARS 217.172(f)(1), the references to 

217.172(g)(4) and (5) were corrected to 

refer to 217.172(g)(3) and (4). Coverage 

at 217.175 was renumbered to 217.174 

to follow in sequence, and this required 

a reference citation change at 241.103. 

No changes to existing DoD policy, 

including implementation of any 

statutorily mandated acquisition-related 

thresholds, are being made in this rule. 

II. Executive Orders 12866 and 13563 

Executive Orders (E.O.s) 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). E.O. 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, is not 

subject to review under section 6(b) of 

E.O. 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 certifies that this rule will not 

have a significant economic impact 

upon a substantial number of small 

entities within the meaning of the 

Regulatory Flexibility Act, 5 U.S.C. 601, 

et seq., because the rule does not change 

the existing requirements of subpart 

217.1. Furthermore, these requirements 

are primarily internal procedures for 

DoD. No comments were received from 

small entities concerning the existing 

regulations in subparts affected by this 

rule in accordance with 5 U.S.C. 610. 

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 Parts 217 and 

241: 

Government procurement. 

Mary Overstreet 

Editor, Defense Acquisition Regulations 

System. 

Therefore, 48 CFR parts 217 and 241 

are amended as follows: 

■ 1. The authority citation for 48 CFR 

parts 217 and 241 continues to read as 

follows: 

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

chapter 1. 

PART 217—SPECIAL CONTRACTING 

METHODS 

■ 2. Section 217.170 is amended by— 

■ a. Amending paragraph (a), by 

removing ‘‘Section’’ and adding in its 

place ‘‘section’’ and removing ‘‘Public 

Law 105–56’’ and adding in its place 

‘‘Pub. L. 105–56,’’; 

■ b. Amending paragraph (b), by 

removing ‘‘217.172(f)(2)’’ and adding in 

its place ‘‘217.172(g)(2)’’; 

■ c. Amending paragraph (c) by 

removing ‘‘Section’’ and adding in its 

place ‘‘section’’ and removing ‘‘Public 

Law 105–56’’ and adding in its place 

‘‘Pub. L. 105–56,’’; 

■ d. Amending paragraph (c) by 

removing in the listing of references ‘‘;’’ 

in two places and adding in its place 

‘‘,’’; and 

■ e. Revising paragraph (e) to read as 

follows: 

217.170 General. 

* * * * * 

(e)(1) DoD must provide notification 

to the congressional defense committees 

at least 30 days before entering into a 

multiyear contract for certain 

procurements, including those expected 

to— 

(i) Employ an unfunded contingent 

liability in excess of $20 million (see 10 

U.S.C. 2306b(l)(1)(B)(i)(II), 10 U.S.C. 

2306c(d)(1), and section 8008(a) of 

Pub. L. 105–56 and similar sections in 

subsequent DoD appropriations acts); 


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