22728 Federal Register / Vol. 75, No. 83 / Friday, April 30, 2010 / Proposed Rules 

require the approval of the Office of 

Management and Budget under 44 

U.S.C. 3501, et seq. 

List of Subjects in 48 CFR Parts 211 and 

252 

Government procurement. 

Ynette R. Shelkin, 

Editor, Defense Acquisition Regulations 

System. 

Therefore, DoD proposes to amend 48 

CFR parts 211 and 252 as follows: 

1. The authority citation for 48 CFR 

parts 211 and 252 continues to read as 

follows: 

Authority: 41 U.S.C. 421 and 48 CFR 

chapter 1. 

PART 211—DESCRIBING AGENCY 

NEEDS 

211.274–5 [Redesignated as 211.274–6] 

2. Redesignate section 211.274–5 as 

211.274–6. 

3. Add section 211.274–5 to read as 

follows: 

211.274–5 Policy for assignment of 

Government-assigned serial numbers. 

It is DoD policy that contractors apply 

Government-assigned serial numbers, 

such as tail numbers/hull numbers and 

equipment registration numbers in 

human-readable format, on major end 

items when required by law, regulation, 

or military operational necessity. The 

latest version of MIL–STD–130, Marking 

of U.S. Military Property, shall be used 

for the marking of human-readable 

information. 

4. In newly redesignated 211.274–6, 

add paragraph (c) to read as follows: 

211.274–6 Contract clauses. 

* * * * * 

(c) Use the clause at 252.211–70XX, 

Use of Government-Assigned Serial 

Numbers, in solicitations and contracts 

that— 

(1) Contain the clause at 252.211– 

7003, Item Identification and Valuation; 

and 

(2) Require the contractor to mark 

major end items under the terms and 

conditions of the contract. 

PART 252—SOLICITATION 

PROVISIONS AND CONTRACT 

CLAUSES 

252.211–7003 [Amended] 

5. Amend section 252.211–7003 by 

removing ‘‘211.274–5’’ from the 

introductory text and adding in its place 

‘‘211.274–6’’. 

252.211–7007 [Amended] 

5. Amend section 252.211–7007 by 

removing ‘‘211.274–5’’ from the 

introductory text and adding in its place 

‘‘211.274–6’’. 

6. Add section 252.211–70XX to read 

as follows: 

252.211–70XX Use of GovernmentAssigned Serial Numbers. 

As prescribed in 211.274–6(c), use the 

following clause: 

USE OF GOVERNMENT–ASSIGNED 

SERIAL NUMBERS (DATE) 

(a) Definitions. As used in this clause— 

Government-assigned serial number means 

a combination of letters or numerals in a 

fixed human-readable information format 

(text) conveying information about a major 

end item, which is provided to a Contractor 

by the requiring activity with accompanying 

technical data instructions for marking the 

Government-assigned serial number on major 

end items to be delivered to the Government. 

Major end item means a final combination 

of component parts and/or materials which is 

ready for its intended use and of such 

importance to operational readiness that 

review and control of inventory management 

functions (procurement, distribution, 

maintenance, disposal, and asset reporting) is 

required at all levels of life-cycle 

management. Major end items include 

aircraft; ships; boats; motorized wheeled, 

tracked, and towed vehicles for use on 

highway or rough terrain; weapon and 

missile end items; ammunition; and sets, 

assemblies, or end items having a major end 

item as a component. 

Unique item identifier (UII) means a set of 

data elements permanently marked on an 

item that is globally unique and 

unambiguous and never changes in order to 

provide traceability of the item throughout its 

total life cycle. The term includes a 

concatenated UII or a DoD-recognized unique 

identification equivalent. 

(b) The Contractor shall mark the 

Government-assigned serial numbers on 

those major end items as specified by line 

item in the Schedule, in accordance with the 

technical instructions for the placement and 

method of application identified in the terms 

and conditions of the contract. 

(c) The Contractor shall register the 

Government-assigned serial number along 

with the major end item’s UII at the time of 

delivery in accordance with the provisions of 

the clause at DFARS 252.211–7003(d). 

(d) The Contractor shall establish the UII 

for major end items for use throughout the 

life of the major end item. The Contractor 

may elect, but is not required, to use the 

Government-assigned serial number to 

construct the UII. 

(End of Clause) 

[FR Doc. 2010–9889 Filed 4–29–10; 8:45 am] 

BILLING CODE 5001–08–P 

DEPARTMENT OF DEFENSE 

Defense Acquisition Regulations 

System 

48 CFR Parts 216 and 252 

Defense Federal Acquisition 

Regulation Supplement Award-Fee 

Contracts (DFARS Case 2006–D021) 

AGENCY: Defense Acquisition 

Regulations System, Department of 

Defense (DoD). 

ACTION: Proposed rule with request for 

comments. 

SUMMARY: DoD is proposing to amend 

the Defense Federal Acquisition 

Regulation Supplement (DFARS) to 

address award-fee contracts, including 

eliminating the use of provisional 

award-fee payments. 

DATES: Comments on the proposed rule 

should be submitted to the address 

shown below on or before June 29, 2010, 

to be considered in the formation of the 

final rule. 

ADDRESSES: You may submit comments, 

identified by DFARS Case 2006–D021, 

using any of the following methods: 

Æ Federal eRulemaking Portal: 

http://www.regulations.gov. Follow the 

instructions for submitting comments. 

Æ E-mail: dfars@osd.mil. Include 

DFARS Case 2006–D021 in the subject 

line of the message. 

Æ Fax: 703–602–0350. 

Æ Mail: Defense Acquisition 

Regulations System, Attn: Mr. Mark 

Gomersall, OUSD(AT&L)DPAP(DARS), 

3060 Defense Pentagon, Room 3B855, 

Washington, DC 20301–3060. 

Comments received generally will be 

posted without change to http:// 

www.regulations.gov, including any 

personal information provided. 

FOR FURTHER INFORMATION CONTACT: Mr. 

Mark Gomersall, 703–602–0302. 

SUPPLEMENTARY INFORMATION: 

A. Background 

This DFARS case proposes to revise 

guidance for award-fee evaluations and 

payments and to eliminate the use of 

provisional award-fee payments. One 

new clause is provided as part of this 

rule to detail the use of award fees. In 

addition, this rule incorporates DoD 

policy guidance on the use of objective 

criteria. 

This rule was not subject to Office of 

Management and Budget review under 

Executive Order 12866, dated 

September 30, 1993. 

B. Regulatory Flexibility Act 

DoD does not expect this rule to have 

a significant economic impact on a 


wwoods2 on DSK1DXX6B1PROD with PROPOSALS_PART 1
Federal Register / Vol. 75, No. 83 / Friday, April 30, 2010 / Proposed Rules 22729 

substantial number of small entities 

within the meaning of the Regulatory 

Flexibility Act, 5 U.S.C. 601, et seq. 

because most contracts awarded to 

small entities use simplified acquisition 

procedures or are awarded on a 

competitive fixed-price basis and do not 

utilize award-fee type incentives. 

Therefore, DoD has not performed an 

initial regulatory flexibility analysis. 

DoD invites comments from small 

business concerns 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 2006–D021) in 

correspondence. 

C. Paperwork Reduction Act 

The Paperwork Reduction Act does 

not apply because the rule does not 

impose any information collection 

requirements that require the approval 

of the Office of Management and Budget 

under 44 U.S.C. 3501, et seq. 

List of Subjects in 48 CFR Parts 216 and 

252 

Government procurement. 

Ynette R. Shelkin, 

Editor, Defense Acquisition Regulations 

System. 

Therefore, DoD proposes to amend 48 

CFR parts 216 and 252 as follows: 

1. The authority citation for 48 CFR 

parts 216 and 252 continues to read as 

follows: 

Authority: 41 U.S.C. 421 and 48 CFR 

chapter 1. 

PART 216—TYPES OF CONTRACTS 

2. Add sections 216.401 and 216.401– 

70 to read as follows: 

216.401 General. 

(e) Award-fee plans required in FAR 

16.401(e) must be incorporated into all 

award-fee type contracts. 

216.401–70 Objective criteria. 

(1) Contracting officers will use 

objective criteria to the maximum extent 

possible to measure contract 

performance. Objective criteria are 

associated with cost-plus-incentive-fee 

and fixed-price incentive contracts. 

(2) When objective criteria exist but 

the contracting officer determines that it 

is in the best interest of the Government 

also to incentivize subjective elements 

of performance, the most appropriate 

contract type is a multiple-incentive 

contract containing both objective 

incentives and subjective award-fee 

criteria (i.e., cost-plus-incentive-fee/ 

award-fee or fixed-price-incentive/ 

award-fee). 

(3) See PGI 216.401–70 for guidance 

on the use of award-fee contracts. 

3. Revise section 216.405–2 to read as 

follows: 

216.405–2 Cost-plus-award-fee contracts. 

(1) Award-fee pool. The award-fee 

pool is the total available award fee for 

each evaluation period for the life of the 

contract. The contracting officer must 

perform an analysis of appropriate fee 

distribution to ensure at least 40% of 

the award fee is held for the final 

evaluation so that the award fee is 

appropriately distributed over all 

evaluation periods to incentivize the 

contractor throughout performance of 

the contract. 

(2) Award-fee evaluation and 

payments. Award-fee payments other 

than payments resulting from the 

evaluation at the end of an award-fee 

period are prohibited. (This prohibition 

does not apply to base-fee payments.) 

The fee-determining official’s rating for 

award-fee evaluations will be provided 

to the contractor within 45 calendar 

days of the end of the period being 

evaluated. The final award-fee payment 

will be consistent with the contracting 

officer’s final evaluation of the 

contractor’s overall performance against 

the cost, schedule, and performance 

outcomes specified in the award-fee 

plan. 

(3) Limitations. 

(i) The CPAF contract shall not be 

used— 

(A) To avoid— 

(1) Establishing cost-plus-fixed-fee 

contracts when the criteria for cost-plusfixed-fee contracts apply; or 

(2) Developing objective targets so a 

cost-plus-incentive-fee contract can be 

used; or 

(B) For either engineering 

development or operational system 

development acquisitions that have 

specifications suitable for simultaneous 

research and development and 

production, except a CPAF contract may 

be used for individual engineering 

development or operational system 

development acquisitions ancillary to 

the development of a major weapon 

system or equipment, where— 

(1) It is more advantageous; and 

(2) The purpose of the acquisition is 

clearly to determine or solve specific 

problems associated with the major 

weapon system or equipment. 

(ii) Do not apply the weighted 

guidelines method to CPAF contracts for 

either the base (fixed) fee or the award 

fee. 

(iii) The base fee shall not exceed 

three percent of the estimated cost of the 

contract exclusive of the fee. 

(4) See PGI 216.405–2 for guidance on 

the use of cost-plus-award-fee contracts. 

4. Add section 216.406 to read as 

follows: 

216.406 Contract clauses. 

(e) Use the clause at 252.216–70XX, 

Award Fee, in solicitations and 

contracts when an award-fee contract is 

contemplated. 

PART 252—SOLICITATION 

PROVISIONS AND CONTRACT 

CLAUSES 

5. Add section 252.216–70XX to read 

as follows: 

252.216–70XX Award fee. 

As prescribed in 216.406(e), insert the 

following clause: 

AWARD FEE (DATE) 

The Contractor may earn award fee from a 

minimum of zero dollars to the maximum 

amount stated in the award-fee plan in this 

contract. In no event will award fee be paid 

to the Contractor for any evaluation period in 

which the Government rates the Contractor’s 

overall cost, schedule, and technical 

performance below satisfactory. The 

Government may unilaterally revise the 

award-fee plan prior to the beginning of any 

rating period in order to redirect Contractor 

emphasis. 

(End of clause) 

[FR Doc. 2010–9881 Filed 4–29–10; 8:45 am] 

BILLING CODE 5001–08–P 

DEPARTMENT OF DEFENSE 

Defense Acquisition Regulations 

System 

48 CFR Parts 245 and 252 

RIN 0750–AG64 

Defense Federal Acquisition 

Regulation Supplement; Reporting of 

Government Property Lost, Stolen, 

Damaged, or Destroyed (DFARS Case 

2008–D049) 

AGENCY: Defense Acquisition 

Regulations System, Department of 

Defense (DoD). 

ACTION: Proposed rule with request for 

comments. 

SUMMARY: DoD proposes to amend the 

Defense Federal Acquisition Regulation 

Supplement (DFARS) to require 

contractors to report loss, theft, damage, 

and destruction (LTDD) of Government 

property to the DCMA ‘‘eTools’’ 

application. 


wwoods2 on DSK1DXX6B1PROD with PROPOSALS_PART 1