58138 Federal Register / Vol. 76, No. 182 / Tuesday, September 20, 2011 / Rules and Regulations 

PART 252—SOLICITATION 

PROVISIONS AND CONTRACT 

CLAUSES 

252.203–7000 [Amended] 

■ 11. Amend section 252.203–7000 by— 

■ (a) Removing the clause date of ‘‘(JAN 

2009)’’ and adding in its place ‘‘(SEP 

2011)’’; 

■ (b) In paragraph (a)(2)(i) introductory 

text, removing ‘‘403(16)’’ and adding in 

its place ‘‘131’’; and 

■ (c) In paragraph (c), removing 

‘‘423(e)(3)’’ and adding in its place 

‘‘2105(c)’’. 

252.212–7001 [Amended] 

■ 12. Amend section 252.212–7001 by— 

■ (a) Removing the clause date of ‘‘(AUG 

2011)’’ and adding in its place ‘‘(SEP 

2011)’’; and 

■ (b) In paragraph (b)(2) removing 

‘‘Section’’ and adding in its place 

‘‘section’’; 

■ (c) In paragraph (b)(2) removing the 

word ‘‘note’’. 

252.219–7003 [Amended] 

■ 13. Amend section 252.219–7003 by— 

■ (a) Removing the clause date of ‘‘(OCT 

2010)’’ and adding in its place ‘‘(SEP 

2011)’’; and 

■ (b) In paragraph (d), removing ‘‘46– 

48’’ and adding in its place ‘‘8502– 

8504’’. 

252.225–7001 [Amended] 

■ 14. Amend section 252.225–7001 by— 

■ (a) Removing the clause date of ‘‘(JAN 

2009)’’ and adding in its place ‘‘(SEP 

2011)’’; 

■ (b) In paragraph (b), removing 

‘‘Section 10a-d’’ and adding in its place 

‘‘chapter 83’’; and 

■ (c) In paragraph (b) removing ‘‘431’’ 

and adding in its place ‘‘1907’’. 

252.227–7037 [Amended] 

■ 15. Amend section 252.227–7037 by— 

■ (a) Removing the clause date ‘‘(SEP 

1999)’’ and adding in its place ‘‘(SEP 

2011)’’; and 

■ (b) In paragraph (e)(3), removing ‘‘601, 

et seq.’’ and adding in its place ‘‘7101’’. 

APPENDIX I TO CHAPTER 2— 

[Amended] 

■ 16. Amend section I–101.4 by 

removing ‘‘46’’ and adding in its place 

‘‘8502’’. 

[FR Doc. 2011–23951 Filed 9–19–11; 8:45 am] 

BILLING CODE ;P 

DEPARTMENT OF DEFENSE 

Defense Acquisition Regulations 

System 

48 CFR Parts 204, 212, and 252 

RIN 0750–AH02 

Defense Federal Acquisition 

Regulation Supplement (DFARS); 

Alternative Line Item Structure (DFARS 

Case 2010–D017) 

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 establish a standard 

procedure for offerors to propose an 

alternative line item structure that 

reflects the offeror’s business practices 

for selling and billing commercial items 

and initial provisioning spares for 

weapon systems 

DATES: Effective Date: September 20, 

2011. 

FOR FURTHER INFORMATION CONTACT: Mr. 

Julian E. Thrash, 703–602–0310. 

SUPPLEMENTARY INFORMATION: 

I. Background 

DoD published a proposed rule in the 

Federal Register at 76 FR 21847 on 

April 19, 2011, to add DFARS language 

that provides offerors the opportunity to 

propose an alternative line item 

structure in solicitations for commercial 

items and initial provisioning spares. 

This DFARS change will allow offerors 

to provide information about their 

products that may not have been known 

to the Government prior to issuance of 

the solicitation. No public comments 

were received regarding the proposed 

rule. 

DoD identified the need to propose an 

alternative line item structure during 

process reviews and working group 

sessions that assessed destinationacceptance procedures. The process 

reviews performed by DoD cross-service 

working groups, which were chartered 

by the Defense Finance and Accounting 

System, examined issues causing 

problems in the receipt and acceptance 

phase for contract deliverables and 

payments. 

This group determined that the level 

of detail in the requirements description 

and line item structure is not always 

sufficient for delivery, payment, and 

subsequent inventory management of 

the items delivered. For example, the 

contract line item may be for a desktop 

computer, but the actual items 

delivered, invoiced, and inventoried 

may reflect a separate monitor, 

keyboard, and central processing unit. 

The resultant misalignment of 

transaction detail (i.e., contract line 

item, invoiced unit, delivery and 

inventory unit) is the cause of failures 

in the electronic processes of the DoD’s 

business enterprise requiring manual 

intervention with potential delays in 

contractor payment. 

To address this recurring problem, 

this rule establishes and standardizes a 

process to enable offerors to propose 

changes in their offer to the 

solicitation’s line item structure. 

Establishing such a process is a first step 

towards managing variation in these 

transactions by eliminating or reducing 

manual intervention. 

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, 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. 

III. 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 does not impose any 

additional requirements on small 

businesses. Further, this change does 

not add to, or delete from existing 

requirements or authorities for entities 

to include alternative line item 

structures in their offers. This rule is 

formalizing a process to facilitate 

offerors’ ability to request changes to the 

line item structure. 

IV. 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). 


sroberts on DSK5SPTVN1PROD with RULES
Federal Register / Vol. 76, No. 182 / Tuesday, September 20, 2011 / Rules and Regulations 58139 

List of Subjects in 48 CFR Parts 204, 

212, and 252 

Government procurement. 

Mary Overstreet, 

Editor, Defense Acquisition Regulations 

System. 

Therefore, 48 CFR parts 204, 212, and 

252 are amended as follows: 

■ 1. The authority citation for 48 CFR 

parts 204, 212, and 252 continues to 

read as follows: 

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

chapter 1. 

PART 204—ADMINISTRATIVE 

MATTERS 

■ 2. Amend section 204.7103 by adding 

a new paragraph (g) to read as follows: 

204.7103–1 Criteria for establishing. 

* * * * * 

(g) Certain commercial items and 

initial provisioning spares for weapons 

systems are requested and subsequently 

solicited using units of measure such as 

kit, set, or lot. However, there are times 

when individual items within that kit, 

set, or lot are not grouped and delivered 

in a single shipment. This creates 

potential contract administration issues 

with inspection, acceptance, and 

payment. In such cases, solicitations 

should be structured to allow offerors to 

provide information about products that 

may not have been known to the 

Government prior to solicitation and 

propose an alternate line item structure 

as long as the alternate is consistent 

with the requirements of 204.71, which 

provides explicit guidance on the use of 

contract line items and subline items, 

and with PGI 204.71. 

■ 3. Revise section 204.7109 to read as 

follows: 

204.7109 Solicitation provision and 

contract clause. 

(a) Use the clause at 252.204–7006, 

Billing Instructions, in solicitations and 

contracts if Section G includes— 

(1) Any of the standard payment 

instructions at PGI 204.7108(d)(1) 

through (6); or 

(2) Other payment instructions, in 

accordance with PGI 204.7108(d)(12), 

that require contractor identification of 

the contract line item(s) on the payment 

request. 

(b) Use the provision at 252.204–7011, 

Alternative Line Item Structure, in 

solicitations for commercial items and 

initial provisioning spares. 

PART 212—ACQUISITION OF 

COMMERCIAL ITEMS 

■ 4. Amend section 212.301 by revising 

paragraph (f)(iv) to read as follows: 

212.301 Solicitation provisions and 

contract clauses for the acquisition of 

commercial items. 

(f) * * * 

(iv) Use the provisions and clauses 

prescribed elsewhere in DFARS as 

follows: 

(A) Use the provision at 252.204– 

7011, Alternative Line Item Structure, as 

prescribed in 204.7109(b). 

(B) Use the provision at 252.209– 

7001, Disclosure of Ownership or 

Control by the Government of a 

Terrorist Country, as prescribed in 

209.104–70(a). 

(C) Use the clause at 252.211–7003, 

Item Identification and Valuation, as 

prescribed in 211.274–4. 

(D) Use the clause at 252.211–7006, 

Radio Frequency Identification, as 

prescribed in 211.275–3. 

(E) Use the provision at 252.225– 

7010, Commercial Derivative Military 

Article—Specialty Metals Compliance 

Certificate, as prescribed in 225.7003– 

5(b). 

(F) Use the clause at 252.225–7040, 

Contractor Personnel Authorized to 

Accompany U.S. Armed Forces 

Deployed Outside the United States, as 

prescribed in 225.7402–4. 

(G) Use the clause at 252.225–7043, 

Antiterrorism/Force Protection Policy 

for Defense Contractors Outside the 

United States, in solicitations and 

contracts that include the clause at 

252.225–7040. 

(H) Use the clause at 252.232–7009, 

Mandatory Payment by 

Governmentwide Commercial Purchase 

Card, as prescribed in 232.1110. 

(I) Use the clause at 252.232–7010, 

Levies on Contract Payments, as 

prescribed in 232.7102. 

(J) Use the clause at 252.232–7011, 

Payments in Support of Emergencies 

and Contingency Operations, as 

prescribed in 232.908. 

(K) Use the clause at 252.246–7003, 

Notification of Potential Safety Issues, 

as prescribed in 246.371. 

(L) Use the provision at 252.247– 

7026, Evaluation Preference for Use of 

Domestic Shipyards—Applicable to 

Acquisition of Carriage by Vessel for 

DoD Cargo in the Coastwise or 

Noncontiguous Trade, as prescribed in 

247.574(e).] 

(M) Use the clause at 252.247–7027, 

Riding Gang Member Requirements, as 

prescribed in 247.574(f). 

* * * * * 

PART 252—SOLICITATION 

PROVISIONS AND CONTRACT 

CLAUSES 

■ 5. Add section 252.204–7011 to read 

as follows: 

252.204–7011 Alternative Line Item 

Structure. 

As prescribed in 204.7109(b), insert 

the following provision: 

ALTERNATIVE LINE-ITEM STRUCTURE 

(SEP 2011) 

(a) Line items are the basic structural 

elements in a solicitation or contract that 

provide for the organization of contract 

requirements to facilitate pricing, delivery, 

inspection, acceptance and payment. Line 

items are organized into contract line items, 

subline items, and exhibit line items. 

Separate line items should be established to 

account for separate pricing, identification 

(see section 211.274 of the Defense Federal 

Acquisition Regulation Supplement), 

deliveries, or funding. The Government 

recognizes that the line item structure in this 

solicitation may not conform to every 

offeror’s practices. Failure to correct these 

issues can result in difficulties in accounting 

for deliveries and processing payments. 

Therefore, offerors are invited to propose an 

alternative line item structure for items on 

which bids, proposals, or quotes are 

requested in this solicitation to ensure that 

the resulting contract structure is 

economically and administratively 

advantageous to the Government and the 

Contractor. 

(b) If an alternative line item structure is 

proposed, the structure must be consistent 

with subpart 204.71 of the Defense Federal 

Acquisition Regulation Supplement and PGI 

204.71. A sample solicitation line-item 

structure and a corresponding offer of a 

proposed alternative line-item structure 

follow. 

Solicitation: 

Item No. Supplies/Service Quantity Unit Unit 

price Amount 

0001 ......................................... Computer, Desktop with CPU, Monitor, Keyboard and Mouse 20 EA ...........

Alternative line-item structure offer where 

monitors are shipped separately: 


sroberts on DSK5SPTVN1PROD with RULES
58140 Federal Register / Vol. 76, No. 182 / Tuesday, September 20, 2011 / Rules and Regulations 

Item No. Supplies/Service Quantity Unit Unit 

Price Amount 

0001 ......................................... Computer, Desktop with CPU, Keyboard and Mouse ............... 20 EA ...........

0002 ......................................... Monitor ....................................................................................... 20 EA ...........

(End of provision) 

[FR Doc. 2011–23953 Filed 9–19–11; 8:45 am] 

BILLING CODE 5001–08–P 

DEPARTMENT OF DEFENSE 

Defense Acquisition Regulations 

System 

48 CFR Parts 204 and 252 

RIN 0750–AG39 

Defense Federal Acquisition 

Regulation Supplement; Annual 

Representations and Certifications 

(DFARS Case 2009–D011) 

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 conform it to higher-level 

changes in the Code of Federal 

Regulation relating to annual 

representations and certifications. 

DATES: Effective date: September 20, 

2011. 

FOR FURTHER INFORMATION CONTACT: 

Mr. Julian Thrash, 703–602–0310. 

SUPPLEMENTARY INFORMATION: 

I. Background 

DFARS 204.1202 prescribes use of 

DFARS provision 252.204–7007, 

Alternate A, Annual Representations 

and Certifications, in contracts that also 

incorporate Federal Acquisition 

Regulation (FAR) provision 52.204–8, 

Annual Representations and 

Certifications. FAR 52.204–8 was 

changed to add a new paragraph (c), 

which lists the applicable 

representations and certifications in the 

Online Representations and 

Certifications Application (ORCA). This 

FAR change necessitated a similar 

modification of DFARS 252.204–7007. 

DoD published a proposed rule in the 

Federal Register at 75 FR 71646, on 

November 24, 2010, to update DFARS 

204.1202 and 252.204–7007. The public 

comment period closed January 24, 

2011. Two respondents submitted 

comments on the proposed rule. A 

discussion of the comments is provided 

below. 

II. Discussion and Analysis 

A. Applicability 

Comment: A respondent 

recommended DFARS 252.212–7000, 

Offeror Representations and 

Certifications—Commercial Items, be 

retained in the list of representations 

and certification at 204.1202(2) that are 

not to be included in the solicitation 

when using the provision DFARS 

252.204–7007, because that provision is 

to be used in non-commercial 

solicitations only. Another respondent 

recommended that DFARS 204.1202(2) 

include provisions that are applicable to 

solicitations, rather than those not 

applicable, similar to FAR 52.204–8. 

Response: The first respondent is 

correct that DFARS provision 252.212– 

7000 is for commercial solicitations 

only and will not be included in 

solicitations that include DFARS 

252.204–7007, because that provision is 

used when FAR 52.204–8 is included, 

and that FAR provision is not used in 

solicitations issued under FAR part 12 

for acquisition of commercial items. 

However, inclusion of DFARS 252.212– 

7000 on the list at DFARS 204.1202(2) 

is not appropriate, because the list at 

DFARS 204.1202(2) should include only 

provisions that are listed in 252.204– 

7007, Alternate A, Annual 

Representations and Certifications. 

Therefore, the final rule does not retain 

252.212–7000 on the list at 204.1202(2). 

Further, DFARS 204.1202(2) 

introductory text was amended to 

clarify that the listed provisions will not 

be included separately in the 

solicitation, because the appropriate 

representations and certifications will 

be covered by inclusion of DFARS 

252.204–7007 in the solicitation. 

Comment: A respondent 

recommended the representations at 

DFARS 252.216–7003 and DFARS 

252.239–7011 be retained in the list of 

representations and certifications at 

DFARS 252.204–7007 because the 

Contractor is asked to make a 

representation about itself. 

Response: DFARS 252.216–7003 will 

be retained in the list. DFARS 252.239– 

7011, however, will not be included 

because the clause requires contractors 

to make certain representations during 

contract performance concerning 

reimbursement of special construction 

and equipment costs. According to 

DFARS 239.7408–1(a), ‘‘special 

construction normally involves a 

common carrier giving a special service 

or facility related to the performance of 

the basic telecommunications service 

requirements.’’ Since these are costs that 

occur during contract performance, the 

contractor would not be able to make a 

proper representation prior to award. 

B. Clarification 

Comment: A respondent 

recommended modifying the second 

sentence of DFARS 252.204.7007(e) by 

removing ‘‘as indicated in (d) and (e) of 

this provision’’ and adding ‘‘as well as 

those in (d) above’’ after ‘‘posted 

electronically.’’ 

Response: When using the alternate at 

DFARS 252.204–7007, paragraphs (d) 

and (e) replace paragraph (d) of FAR 

52.204–8. DFARS 252.204–7007(e) 

provides that by submission of an offer, 

the offeror verifies that the FAR 52.204– 

8(c) representations and certifications 

and the DFARS 252.204–7007(d) 

representations and certifications are up 

to date in ORCA. Accordingly, the 

language in paragraph (e) was changed 

to include the statement ‘‘as indicated 

in FAR 52.204–8(c) and paragraph (d) of 

this provision.’’ 

Comment: A respondent commented 

that the second to last line of 252.204– 

7007(e) should say ‘‘provision number’’ 

instead of ‘‘clause number.’’ 

Response: The term ‘‘clause number’’ 

was changed to ‘‘provision number’’ in 

the second to last line of 252.204– 

7007(e) and in the first block of the table 

provided. 

C. Additional Changes 

DFARS 252.209–7001, Disclosure of 

Ownership or Control by the 

Government of a Terrorist Country, 

which was inadvertently omitted from 

the listing of provisions, has been added 

to 204.1202(2)(i) and 252.204– 

7007(d)(1)(i). The Alternates for 

252.225–7020, Trade Agreements 

Certificate, and 252.225–7035, Buy 

American Act-Free Trade AgreementsBalance of Payments Program 

Certificate, were added to 252.204– 

7007(d)(2)(iii), and (vi), respectively. 

Additionally, to further clarify 

applicability of the various provisions, 

252.204–7007(d) was reformatted into 

two sections to separately list the 

DFARS provisions that the contracting 

officer may individually select if one of 

the provisions applies for a particular 


sroberts on DSK5SPTVN1PROD with RULES