30584 Federal Register / Vol. 83, No. 126 / Friday, June 29, 2018 / Rules and Regulations 

Community Health Center, IHS/ABQ 

Alamo Health Center and Kenaitze 

Indian Tribe) filed on May 15, 2018, 

Bristol Bay Area Health Corporation 

filed on April 2, 2018, and Council of 

Athabascan Tribal Government filed on 

April 9, 2018 are dismissed as moot. 

87. It is further ordered that, pursuant 

to 5 U.S.C. 801(a)(1)(A), the Commission 

shall send a copy of the Report and 

Order to Congress and to the 

Government Accountability Office 

pursuant to the Congressional Review 

Act. 

88. It is further ordered that the 

Commission’s Consumer and 

Governmental Affairs Bureau, Reference 

Information Center, shall send a copy of 

the Report and Order, including the 

Final Regulatory Flexibility Analysis, to 

the Chief Counsel for Advocacy of the 

Small Business Administration. 

Federal Communications Commission. 

Katura Jackson, 

Federal Register Liaison Officer, Office of the 

Secretary. 

List of Subjects in 47 CFR Part 54 

Communications common carriers, 

Health facilities, internet, 

Telecommunications. 

Final Rule 

For the reasons discussed in the 

preamble, the Federal Communications 

Commission amends 47 CFR part 54 as 

follows: 

PART 54—UNIVERSAL SERVICE 

■ 1. The authority citation for part 54 

continues to read as follows: 

Authority: 47 U.S.C. 151, 154(i), 155, 201, 

205, 214, 219, 220, 254, 303(r), 403, and 1302 

unless otherwise noted. 

■ 2. Amend § 54.675 by revising 

paragraph (a) to read as follows: 

§ 54.675 Cap. 

(a) Amount of the annual cap. The 

aggregate annual cap on federal 

universal service support for health care 

providers shall be $571 million per 

funding year, of which up to $150 

million per funding year will be 

available to support upfront payments 

and multi-year commitments under the 

Healthcare Connect Fund. 

(1) Inflation increase. In funding year 

2018 and the subsequent funding years, 

the $571 million cap on federal 

universal support in the Rural Health 

Care Program shall be automatically 

increased annually to take into account 

increases in the rate of inflation as 

calculated in paragraph (a)(2) of this 

section. 

(2) Increase calculation. To measure 

increases in the rate of inflation for the 

purposes of this paragraph (a), the 

Commission shall use the Gross 

Domestic Product Chain-type Price 

Index (GDP–CPI). To compute the 

annual increase as required by this 

paragraph (a), the percentage increase in 

the GDP–CPI from the previous year 

will be used. For instance, the annual 

increase in the GDP–CPI from 2017 to 

2018 would be used for the 2018 

funding year. The increase shall be 

rounded to the nearest 0.1 percent by 

rounding 0.05 percent and above to the 

next higher 0.1 percent and otherwise 

rounding to the next lower 0.1 percent. 

This percentage increase shall be added 

to the amount of the annual funding cap 

from the previous funding year. If the 

yearly average GDP–CPI decreases or 

stays the same, the annual funding cap 

shall remain the same as the previous 

year. 

(3) Public notice. When the 

calculation of the yearly average GDP– 

CPI is determined, the Wireline 

Competition Bureau shall publish a 

public notice in the Federal Register 

within 60 days announcing any increase 

of the annual funding cap based on the 

rate of inflation. 

(4) Amount of unused funds. All 

funds collected that are unused shall be 

carried forward into subsequent funding 

years for use in the Rural Health Care 

Program in accordance with the public 

interest and notwithstanding the annual 

cap. The Administrator shall report to 

the Commission, on a quarterly basis, 

funding that is unused from prior years 

of the Rural Health Care Program. 

(5) Application of unused funds. On 

an annual basis, in the second quarter 

of each calendar year, all funds that are 

collected and that are unused from prior 

years shall be available for use in the 

next full funding year of the Rural 

Health Care Program in accordance with 

the public interest and notwithstanding 

the annual cap as described in this 

paragraph (a). 

* * * * * 

[FR Doc. 2018–14073 Filed 6–28–18; 8:45 am] 

BILLING CODE 6712–01–P 

DEPARTMENT OF DEFENSE 

Defense Acquisition Regulations 

System 

48 CFR Parts 215, 217, and 243 

[Docket DARS–2016–0026] 

RIN 0750–AI99 

Defense Federal Acquisition 

Regulation Supplement: Undefinitized 

Contract Action Definitization (DFARS 

Case 2015–D024) 

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 provide a more transparent 

means of documenting the impact of 

costs incurred during the undefinitized 

period of an undefinitized contract 

action on allowable profit. 

DATES: Effective June 29, 2018. 

FOR FURTHER INFORMATION CONTACT: Mr. 

Mark Gomersall, telephone 571–372– 

6176. 

SUPPLEMENTARY INFORMATION: 

I. Background 

DoD published a proposed rule in the 

Federal Register at 81 FR 73007 on 

October 21, 2016, to amend the DFARS 

to provide a more transparent means of 

documenting the impact of costs 

incurred during the undefinitized 

period of an undefinitized contract 

action (UCA), and to recognize when 

contractors demonstrate efficient 

management and internal cost control 

systems through the submittal of a 

timely, auditable proposal in 

furtherance of definitization of a UCA. 

In some cases, DoD contracting 

personnel have not documented their 

consideration of the reduced risk to the 

contractor of costs incurred during the 

undefinitized period of a UCA. While 

such costs generally present very little 

risk to the contractor, the contracting 

officer should consider the reasons for 

any delays in definitization in making 

their determination of the appropriate 

assigned value for contract type risk. 

II. Discussion and Analysis 

Two respondents submitted public 

comments in response to the proposed 

rule. DoD reviewed the public 

comments in the development of this 

final rule. An analysis of the comments 

is provided as follows: 


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Federal Register / Vol. 83, No. 126 / Friday, June 29, 2018 / Rules and Regulations 30585 

A. Summary of Significant Changes 

The following changes were made to 

the language published in the proposed 

rule: 

1. The term ‘‘auditable proposal’’ in 

215.404–71–2 is revised as ‘‘qualifying 

proposal as defined in 217.7401(c)’’ for 

consistency with 10 U.S.C. 2326. 

2. The instructions for completing 

blocks 24a and 24b have been revised 

for clarity. 

3. The language at 215.404–71– 

3(d)(2)(ii) is revised for clarity. 

B. Analysis of Public Comments 

1. Weighted Guidelines Revision 

Comment: One respondent did not see 

the need to change the current weighted 

guidelines form and structure to address 

unique requirements associated with 

establishing profit objectives for 

undefinitized contract actions, and 

therefore recommended no change to 

the current weighted guidelines 

application. The respondent asserted 

that the Government should comply 

with guidance provided by USD/AT&L, 

and the National Defense Authorization 

Act (NDAA) for Fiscal Year (FY) 2017, 

which stipulates that allowable profit 

should reflect the cost risk at the time 

that a contractor submits a qualifying 

proposal. The respondent stated that 

contractors should not be penalized for 

positive and efficient performance 

because they agreed to start work before 

final agreement on price, particularly 

when Government action or inaction is 

the cause of the delay. The respondent 

therefore asserted that profit should be 

based upon the risk at the time of the 

proposal and not at the time of 

negotiation. 

Response: The stated purpose of this 

rule is to provide a more transparent 

means of documenting the impact of 

costs incurred during the undefinitized 

period of a UCA, and to recognize when 

contractors demonstrate efficient 

management and internal cost control 

systems through the submittal of a 

timely, auditable proposal in 

furtherance of definitization of a UCA. 

Therefore, the weighted guidelines form 

is revised to provide a means of clearly 

demonstrating that the contracting 

officer has appropriately considered and 

documented the risk to the contractor 

during the undefinitized period, as well 

as the contractor’s due diligence in 

submitting a timely, auditable proposal. 

DFARS case 2017–D022 has been 

opened to implement section 811, 

Modified Restrictions on Undefinitized 

Contractual Actions, of the NDAA for 

FY 2017. 

2. Costs Incurred Prior to Definitization 

Comment: One respondent stated that 

the requirements of DFARS 215.404– 

71–3(d)(2), which direct contracting 

officers to assess the extent to which 

costs have been incurred prior to 

definitization of the UCA, are 

inconsistent with the tenets of the 

NDAA for FY 2017 and should also be 

deleted. 

Response: The requirements of 

DFARS 215.404–71–3(d)(2) are 

consistent with the requirements of 

section 811 of the NDAA for FY 2017, 

which are being implemented under 

DFARS case 2017–D022. 

3. Management/Cost Control Weighted 

Guidelines Factor Adjustment 

Comment: One respondent expressed 

concern that the 1 percent adjustment to 

the management/cost control factor is 

tied to the contractor’s timely 

submission of an auditable proposal. 

The respondent stated that in many 

cases, industry submits timely, 

auditable proposals only to have the 

Government, usually after lengthy 

delay, deem them insufficient and 

request an updated proposal. This 

becomes an endless loop of auditing, 

requests for updated information 

(including actuals), more auditing, more 

requests for updated information, etc. 

Response: The adjustment to the 

management/cost control factor in the 

weighted guidelines is established to 

allow contracting officers to recognize 

when contractors demonstrate efficient 

management and internal cost control 

systems through the submittal of a 

timely, auditable proposal in 

furtherance of definitization of a UCA. 

It is incumbent on contractors to 

provide timely, auditable proposals in 

order to demonstrate their efficient 

management and internal cost control 

systems. 

4. Timely UCA Definitization 

Comment: Both respondents 

expressed concern that the rule does not 

address the need for the Government to 

definitize UCAs in a timely manner. 

Response: To provide for enhanced 

management and oversight of UCAs, 

departments and agencies prepare and 

maintain semiannual Consolidated UCA 

Management Plans and UCA 

Management Reports to ensure 

contracting officers are actively and 

efficiently pursuing definitization of 

UCAs. Likewise, contractors are 

expected to submit timely, auditable 

proposals, including adequate 

supporting data in order to avoid 

unnecessary delays. 

III. Applicability to Contracts at or 

Below the Simplified Acquisition 

Threshold (SAT) and for Commercial 

Items, Including Commercially 

Available Off-the-shelf (COTS) Items 

This rule amends the DFARS to 

provide a more transparent means of 

documenting the impact of costs 

incurred during the undefinitized 

period of an undefinitized contract 

action on allowable profit. The revisions 

do not add any new burdens or impact 

applicability of clauses and provisions 

at or below the simplified acquisition 

threshold, or to commercial items. 

IV. 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, was 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. 

V. Executive Order 13771 

This rule is not an E.O. 13771, 

Reducing and Controlling Regulatory 

Costs, regulatory action, because this 

rule is not significant under E.O. 12866. 

VI. Regulatory Flexibility Act 

This 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. 

The objective of the rule is to gain 

visibility into the contracting officer’s 

rationale for the contract type risk 

values entered on the DD Form 1547, 

Record of Weighted Guidelines 

Application. The rule requires 

contracting officers to document in the 

price negotiation memorandum their 

rationale for assigning a specific 

contract type risk value. In addition, 

Item 24 on the DD Form 1547 is 

separated into Item 24a, Contract Type 

Risk (based on contractor incurred costs 

under a UCA) and Item 24b, Contract 

Type Risk (based on Government 

projected costs). 

This rule will not have a significant 

economic impact on a substantial 

number of small entities. This rule only 


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30586 Federal Register / Vol. 83, No. 126 / Friday, June 29, 2018 / Rules and Regulations 

changes processes that are internal to 

the Government by providing a more 

transparent means of documenting the 

impact of costs incurred during the 

undefinitized period of a UCA when 

calculating negotiation profit objectives. 

This rule does not revise the current 

regulatory requirements at DFARS 

215.404–71–3(d)(2), which direct 

contracting officers to assess the extent 

to which costs have been incurred prior 

to definitization of the contract action. 

However, to recognize when contractors 

demonstrate efficient management and 

cost control through the submittal of a 

timely, auditable proposal in 

furtherance of definitization of a UCA, 

and the proposal demonstrates effective 

cost control from the time of award to 

the present, the contracting officer may 

add 1 percentage point to the value 

determined for management/cost 

control up to the maximum of 7 percent. 

There is no change to reporting or 

recordkeeping as a result of this rule. 

The rule does not duplicate, overlap, or 

conflict with any other Federal rules. 

There are no known significant 

alternative approaches to the rule that 

would meet the requirements. DoD 

considers the approach described in the 

proposed rule to be the most practical 

and beneficial for both Government and 

industry. 

VII. Paperwork Reduction Act 

The 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 215, 

217, and 243 

Government procurement. 

Amy G. Williams, 

Deputy, Defense Acquisition Regulations 

System. 

Therefore, 48 CFR parts 215, 217, and 

243 are amended as follows: 

■ 1. The authority citation for 48 CFR 

parts 215, 217, and 243 continues to 

read as follows: 

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

chapter 1. 

PART 215—CONTRACTING BY 

NEGOTIATION 

■ 2. Amend section 215.404–71–2 by 

adding paragraph (e)(2)(iii) to read as 

follows: 

215.404–71–2 Performance risk. 

* * * * * 

(e) * * * 

(2) * * * 

(iii) If the contractor demonstrates 

efficient management and cost control 

through the submittal of a timely, 

qualifying proposal (as defined in 

217.7401(c)) in furtherance of 

definitization of an undefinitized 

contract action, and the proposal 

demonstrates effective cost control from 

the time of award to the present, the 

contracting officer may add 1 percentage 

point to the value determined for 

management/cost control up to the 

maximum of 7 percent. 

* * * * * 

■ 3. Amend section 215.404–71–3 by 

revising paragraphs (b) introductory 

text, (b)(1) through (3), and (d)(2) to read 

as follows: 

215.404–71–3 Contract type risk and 

working capital adjustment. 

* * * * * 

(b) Determination. The following 

extract from the DD 1547 is annotated 

to explain the process. 

Item Contractor risk factors Assigned 

value Base Profit objective 

24a ....... Contract Type Risk (based on incurred costs at the time of qualifying proposal 

submission).

(1) (2)(i) (3) 

24b ....... Contract Type Risk (based on Government estimated cost to complete) ................ (1) (2)(ii) (3) 

24c ....... Totals .................................................................................................................. ........................ (3) (3) 

Item Contractor risk factors Costs 

financed 

Length 

factor 

Interest 

rate 

Profit 

objective 

25 ......... Working Capital (4) ........................................................................ (5) (6) (7) (8) 

(1) Select a value from the list of 

contract types in paragraph (c) of this 

section using the evaluation criteria in 

paragraph (d) of this section. See 

paragraph (d)(2) of this section. 

(2)(i) Insert the amount of costs 

incurred as of the date the contractor 

submits a qualifying proposal, such as 

under an undefinitized contract action, 

(excluding facilities capital cost of 

money) into the Block 24a column titled 

Base. 

(ii) Insert the amount of Government 

estimated cost to complete (excluding 

facilities capital cost of money) into the 

Block 24b column titled Base. 

(3) Multiply (1) by (2)(i) and (2)(ii), 

respectively for Blocks 24a and 24b. 

Add Blocks 24a and 24b and insert the 

totals in Block 24c. 

* * * * * 

(d) * * * 

(2) Mandatory. (i) The contracting 

officer shall assess the extent to which 

costs have been incurred prior to 

definitization of the contract action (also 

see 217.7404–6(a) and 243.204–70–6). 

When costs have been incurred prior to 

definitization, generally regard the 

contract type risk to be in the low end 

of the designated range. If a substantial 

portion of the costs have been incurred 

prior to definitization, the contracting 

officer may assign a value as low as 0 

percent, regardless of contract type. 

(ii) Contracting officers shall 

document in the price negotiation 

memorandum the reason for assigning a 

specific contract type risk value, to 

include the extent to which any reduced 

cost risk during the undefinitized period 

of performance was considered, in 

determining the negotiation objective. 

* * * * * 

PART 217—SPECIAL CONTRACTING 

METHODS 

217.7404–6 [Amended] 

■ 4. Amend section 217.7404–6 by— 

■ a. In paragraph (b), removing ‘‘The 

contractor’s reduced cost risk for costs 

incurred’’ and adding in its place ‘‘Any 

reduced cost risk to the contractor for 

costs expected to be incurred’’ in its 

place; and 

■ b. In paragraph (c), removing 

‘‘contract file’’ and adding ‘‘price 

negotiation memorandum’’ in its place. 


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Federal Register / Vol. 83, No. 126 / Friday, June 29, 2018 / Rules and Regulations 30587 

PART 243—CONTRACT 

MODIFICATIONS 

243.204–70–6 [Amended] 

■ 5. Amend section 243.204–70–6 by— 

■ a. In paragraph (b), removing ‘‘The 

contractor’s reduced cost risk for costs 

incurred’’ and adding ‘‘Any reduced 

cost risk to the contractor for costs 

expected to be incurred’’ in its place; 

and 

■ b. In paragraph (c), removing 

‘‘contract action’’ and adding ‘‘unpriced 

change order’’ in its place and removing 

‘‘contract file’’ and adding ‘‘price 

negotiation memorandum’’ in its place. 

[FR Doc. 2018–14042 Filed 6–28–18; 8:45 am] 

BILLING CODE 5001–06–P 

DEPARTMENT OF DEFENSE 

Defense Acquisition Regulations 

System 

48 CFR Parts 216, 247, and 252 

[Docket DARS–2018–0031] 

RIN 0750–AJ91 

Defense Federal Acquisition 

Regulation Supplement: Repeal of 

DFARS Clause ‘‘Requirements’’ 

(DFARS Case 2018–D030) 

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 remove a clause that is 

duplicative of an existing Federal 

Acquisition Regulation (FAR) clause. 

DATES: Effective June 29, 2018. 

FOR FURTHER INFORMATION CONTACT: Ms. 

Carrie Moore, telephone 571–372–6093. 

SUPPLEMENTARY INFORMATION: 

I. Background 

DoD is amending the DFARS to 

remove the DFARS clause 252.216– 

7010, Requirements, the Alternate 

clause, the associated clause 

prescription at DFARS 216.506, and a 

cross-reference to the clause at DFARS 

247.271–3(p). 

The DFARS clause is included in 

contracts for preparation of personal 

property for movement or storage, or for 

intra-city or intra-area movement; 

advises contractors that a requirements 

contract has been issued and how 

quantities work under the contract; that 

the delivery of items or performance of 

work is subject to the issuance of orders; 

and, that the Government shall order all 

requirements covered by the contract 

from the contractor, unless certain 

circumstances apply. 

FAR clause, 52.216–21, Requirements, 

advises contractors of the same 

information in the DFARS clause, and 

also provides a date after which the 

contractor is not required to make any 

deliveries under the contract. The 

DFARS clause is no longer necessary, 

because the FAR clause applies to the 

situations in which the DFARS clause is 

prescribed for use and covers the 

information contained in the DFARS 

clause. As such, this DFARS clause is 

now redundant and can be removed. 

The removal of this DFARS clause 

supports a recommendation from the 

DoD Regulatory Reform Task Force. On 

February 24, 2017, the President signed 

Executive Order (E.O.) 13777, 

‘‘Enforcing the Regulatory Reform 

Agenda,’’ which established a Federal 

policy ‘‘to alleviate unnecessary 

regulatory burdens’’ on the American 

people. In accordance with E.O. 13777, 

DoD established a Regulatory Reform 

Task Force to review and validate DoD 

regulations, including the DFARS. A 

public notification of the establishment 

of the DFARS Subgroup to the DoD 

Regulatory Reform Task Force, for the 

purpose of reviewing DFARS provisions 

and clauses, was published in the 

Federal Register at 82 FR 35741 on 

August 1, 2017, and requested public 

input. No public comments were 

received on this provision. 

Subsequently, the DoD Task Force 

reviewed the requirements of DFARS 

clause 252.216–7010, Requirements, 

and determined that the DFARS 

coverage was redundant and 

recommended removal. 

II. Applicability to Contracts at or 

Below the Simplified Acquisition 

Threshold and for Commercial Items, 

Including Commercially Available Offthe-Shelf Items 

This rule does not add any new 

solicitation provisions or contract 

clauses. This rule only removes obsolete 

DFARS provision 252.216–7010, 

Requirements. Therefore, the rule does 

not impose any new requirements on 

contracts at or below the simplified 

acquisition threshold and for 

commercial items, including 

commercially available off-the-shelf 

items. 

III. Executive Orders 12866 and 13563 

Executive Order (E.O.) 12866, 

Regulatory Planning and Review; and 

E.O. 13563, Improving Regulation and 

Regulatory Review, 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. The Office of Management 

and Budget, Office of Information and 

Regulatory Affairs (OIRA), has 

determined that this is not a significant 

regulatory action as defined under 

section 3(f) of E.O. 12866 and, therefore, 

was not subject to review under section 

6(b). This rule is not a major rule as 

defined at 5 U.S.C. 804(2). 

IV. Executive Order 13771 

This rule is not an E.O. 13771, 

Reducing Regulation and Controlling 

Regulatory Costs, regulatory action, 

because this rule is not significant under 

E.O. 12866. 

V. Publication of This Final Rule for 

Public Comment Is Not Required by 

Statute 

The statute that applies to the 

publication of the Federal Acquisition 

Regulation (FAR) is the Office of Federal 

Procurement Policy statute (codified at 

title 41 of the United States Code). 

Specifically, 41 U.S.C 1707(a)(1) 

requires that a procurement policy, 

regulation, procedure or form (including 

an amendment or modification thereof) 

must be published for public comment 

if it relates to the expenditure of 

appropriated funds, and has either a 

significant effect beyond the internal 

operating procedures of the agency 

issuing the policy, regulation, 

procedure, or form, or has a significant 

cost or administrative impact on 

contractors or offerors. This final rule is 

not required to be published for public 

comment, because DoD is not issuing a 

new regulation; rather, this rule merely 

removes an obsolete clause from the 

DFARS. 

VI. Regulatory Flexibility Act 

Because a notice of proposed 

rulemaking and an opportunity for 

public comment are not required to be 

given for this rule under 41 U.S.C. 

1707(a)(1) (see section V. of this 

preamble), the analytical requirements 

of the Regulatory Flexibility Act (5 

U.S.C. 601 et seq.) are not applicable. 

Accordingly, no regulatory flexibility 

analysis is required and none has been 

prepared. 

VII. Paperwork Reduction Act 

The rule does not contain any 

information collection requirements that 


sradovich on DSK3GMQ082PROD with RULES