DEPARTMENT OF DEFENSE 

Statement of Regulatory Priorities 

Background 

 The Department of Defense (DoD) is the largest Federal department, consisting of 3 Military 

departments (Army, Navy, and Air Force), 10 Unified Combatant Commands, 14 Defense 

Agencies, and 10 DoD Field Activities. It has 1,434,450 military personnel and 782,386 civilians 

assigned as of March 31, 2011, and over 200 large and medium installations in the continental 

United States, U. S. territories, and foreign countries. The overall size, composition, and 

dispersion of DoD, coupled with an innovative regulatory program, presents a challenge to the 

management of the Defense regulatory efforts under Executive Order (E.O.) 12866 "Regulatory 

Planning and Review" of September 30, 1993. 

 Because of its diversified nature, DoD is affected by the regulations issued by regulatory 

agencies such as the Departments of Energy, Health and Human Services, Housing and Urban 

Development, Labor, Transportation, and the Environmental Protection Agency. In order to 

develop the best possible regulations that embody the principles and objectives embedded in 

E.O. 12866, there must be coordination of proposed regulations among the regulatory agencies 

and the affected DoD components. Coordinating the proposed regulations in advance throughout 

an organization as large as DoD is straightforward, yet a formidable undertaking. 

 DoD is not a regulatory agency, but occasionally it issues regulations that have an effect on 

the public. These regulations, while small in number compared to the regulating agencies, can be 

significant as defined in E.O. 12866. In addition, some of DoD's regulations may affect the 

regulatory agencies. DoD, as an integral part of its program, not only receives coordinating 

actions from the regulating agencies, but coordinates with the agencies that are affected by its 

regulations as well. 

Overall Priorities 

 The Department needs to function at a reasonable cost, while ensuring that it does not impose 

ineffective and unnecessarily burdensome regulations on the public. The rulemaking process 

should be responsive, efficient, cost-effective, and both fair and perceived as fair. This is being 

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done in DoD while reacting to the contradictory pressures of providing more services with fewer 

resources. The Department of Defense, as a matter of overall priority for its regulatory program, 

fully incorporates the provisions of the President's priorities and objectives under Executive Order 

(E.O.) 12866. 

Retrospective Review of Existing Regulations 

Pursuant to section 6 of Executive Order 13563 "Improving Regulation and Regulatory 

Review (January 18, 2011), the following Regulatory Identifier Numbers (RINs) have been 

identified as associated with retrospective review and analysis in the Department’s final 

retrospective review of regulations plan. All are of particular interest to small businesses. Some of 

these entries on this list may be completed actions, which do not appear in The Regulatory Plan. 

 However, more information can be found about these completed rulemakings in past publications 

of the Unified Agenda on Reginfo.gov in the Completed Actions section for that agency. These 

rulemakings can also be found on Regulations.gov. The final agency plans can be found at:

http://www.regulations.gov/exchange/topic/eo-13563 

 0750-AH19 - Accelerated Payments to Small Business (DFARS Case 2011-D008) 

 0750-AH44 - Extension of DoD Mentor-Protégé Pilot Program (DFARS Case 2011-

D050) 

 0750-AH45 - Deletion of Text Implementing 10 U.S.C. 2323 (DFARS Case 2011-

D038)

Administration Priorities: 

1. Rulemakings that are expected to have high net benefits well in excess of costs. 

 The Department plans to— 

 Finalize the DFARS rule to permit offerors to propose an alternative line item structure to 

reflect the offeror’s business practices for selling and billing commercial items, and initial 

provisioning of spares for weapon systems. This rule should prevent misalignment of line 

item structure in receipt documents and invoices, which causes manual intervention and 

can delay payment; 

 Finalize the DFARS rule to conduct discussions prior to contract award for source 

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selections of $100 million or more. A DoD study showed a significant positive correlation 

between high-dollar source selections that were conducted without discussions and 

protests sustained. This rule should reduce the number of protests filed and their 

resultant costs to contractors and the Government; and 

 Finalize the DFARS rule to implement section 866 of the National Defense Authorization 

Act (NDAA) for Fiscal Year (FY) 2011 establishing a pilot program to acquire military 

purpose nondevelopmental items. This pilot program is designed to test whether the 

streamlined procedures, similar to those available for commercial items, can serve as an 

effective incentive for nontraditional defense contractors to (1) channel investment and 

innovation into areas that are useful to DoD and (2) provide items developed exclusively 

at private expense to meet validated military requirements. (2011-D034) 

2. Rulemakings that promote Open Government and use disclosure as a regulatory tool. 

 The Department plans to— 

 Finalize the Federal Acquisition Regulation (FAR) to inform contractors of the statutory 

requirement of section 3010 of Public Law 111-212, to make Federal Awardee 

Performance and Integrity Information System information, excluding past performance 

reviews, available to the public; 

 Finalize the FAR rule that implements section 743 of Division C of the Fiscal Year 2010 

Consolidated Appropriations Act, which requires agencies to develop inventories of their 

service contacts, including number and work location of contractor employees; 

 Finalize the FAR rule to establish standard evaluation factors and rating scales for 

documenting contractor performance;

 Finalize the FAR rule that implements the Federal Funding Accountability and 

Transparency Act of 2006, which requires the Office of Management and Budget (OMB) 

to establish a free, public, website containing full disclosure of all Federal contract award 

information. This rule requires contractors to report executive compensation and first-tier 

subcontractor awards on unclassified contracts expected to be $25,000 or more, except 

contracts with individuals; 

 Finalize the FAR rule that implements section 811 of the NDAA for FY 2010, which 

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requires a written justification and approval prior to awarding a sole-source contract in an 

amount over $20 million under the 8(a) program; and 

 Finalize the DFARS rule to implement section 814 of the NDAA for FY 2010, which 

imposed additional reporting requirements for awards of single task and delivery-order 

contracts 

3. Rulemakings that streamline regulations and reduce unjustified burdens. 

 The Department plans to— 

 Finalize the DFARS rule to remove the requirement to use DD Forms 2626 and 2631 to 

report past performance information for construction and architect-engineer services and 

to instead provide the performance reports electronically; 

 Finalize the DFARS rule to amend the definition of “qualifying country end product” to 

make it comparable to the change in the definition of “domestic end product” by waiving 

the component test for qualifying country end products; 

 Finalize the DFARS rule to update appendix F, Material Inspection and Receiving Report, 

to incorporate procedures for using the electronic Wide Area WorkFlow (WAWF) 

Receiving Report, which is required for use in most contracts in lieu of the DD Form 250. 

WAWF is the electronic tool for documenting receipt and acceptance of supplies and 

services and for electronic invoicing; and 

 Finalize the rule for DFARS coverage of patents, data, and copyrights, which significantly 

reduces the amount of regulatory text and the number of required clauses. 

4. Efforts to minimize burdens on small businesses 

 Of interest to Small Businesses are regulations to— 

 Finalize the DFARS rule to accelerate payments to all DoD small business contractors. 

5. Rules to be modified, streamlined, expanded, or repealed to make the agency’s 

regulatory program more effective or less burdensome in achieving the regulatory 

objectives. 

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 DFARS Case 2011-D028—Removes component test for COTS items that are qualifying 

country end products. Require only determination of country of origin of the COTS item, 

not the components of the COTS item. 

 DFARS Case 2011-D013—Only One Offer. Motivate effective competition by driving 

behavior to allow sufficient time for submission of offers. 

 DFARS Case 2011-D008—Accelerate Small Business Payments. Accelerate payments 

to all small businesses, not just small disadvantaged businesses. 

 DFARS Case 2010-D018—Responsibility and Liability for Government Property. 

Includes fixed-price contracts that are awarded on the basis of adequate competition on 

the list of contract types whereby contractors are not held liable for loss of Government 

property. 

 DFARS Case 2010-D001—Patents, Data, and Copyrights. Rewrite of DFARS part 227, 

Patents, Data, and Copyrights. 

 DFARS Case 2009-D026—Multiyear Contracting. Comprehensive review of DFARS 

subpart 217.1 to simplify and clarify the coverage of multiyear acquisition. 

Specific DoD Priorities:

 For this regulatory plan, there are six specific DoD priorities, all of which reflect the established 

regulatory principles. In those areas where rulemaking or participation in the regulatory process is 

required, DoD has studied and developed policy and regulations that incorporate the provisions of 

the President's priorities and objectives under the Executive order. 

 DoD has focused its regulatory resources on the most serious environmental, health, and 

safety risks. Perhaps most significant is that each of the priorities described below promulgates 

regulations to offset the resource impacts of Federal decisions on the public or to improve the 

quality of public life, such as those regulations concerning acquisition, security, energy projects, 

education, and health affairs. 

1. Defense Procurement and Acquisition Policy 

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 The Department of Defense continuously reviews the DFARS and continues to lead 

Government efforts to— 

 Revise the DFARS to specify circumstances under which the U.S. Government needs to 

obtain data other than certified cost or pricing data from Canadian contractors via the 

Canadian Commercial Corporation. 

 Revise the DFARS to provide detailed guidance and instruction to DoD contracting 

officers for the use of DoD's performance-based payments analysis tool when contemplating 

the use of performance-based payments on new fixed-price type contracts. 

 Revise the DFARS to implement a DoD Better Buying Power initiative by providing a 

proposal-adequacy checklist in a provision to ensure offerors take responsibility for providing 

thorough, accurate, and complete proposals. 

 Revise the DFARS to address standards and structures for the safeguarding of 

unclassified DoD information. 

 Revise the DFARS to implement the DoD Better Buying Power initiative to address 

acquisitions using competitive procedures in which only one offer is received. With some 

exceptions, the contracting officer must resolicit for an additional period of at least 30 days, if 

the solicitation allowed fewer than 30 days for receipt of proposals and only one offer is 

received. If a period of at least 30 days was allowed for receipt of proposals, the contracting 

officer must determine prices to be fair and reasonable through price or cost analysis or enter 

negotiations with the offeror. 

 Revise the DFARS to implement a DoD Better Buying Power initiative by requiring 

contractors to submit annual technical descriptions for their independent research and 

development projects. 

 Revise the DFARS to establish means for cleared contractors, who have unclassified 

U.S. Government information resident on or transiting through contractor information 

systems, to share cyber threat information. 

 Revise the FAR to implement section 841 of the National Defense Authorization Act for 

FY 2009, which required a review of the FAR coverage on organizational conflicts of interest 

(OCIs). 

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 Finalize the DFARS rule to clarify DoD policy regarding the definition and administration 

of contractor business systems to improve the effectiveness of DCMA/DCAA oversight of 

contractor business systems; 

 Finalize the DFARS rule to implement a DoD Better Buying Power initiative to increase 

the use of fixed-price incentive (firm target) contracts; 

2. Logistics and Materiel Readiness, Department of Defense 

 The Department of Defense published or plans to publish rules on contractors supporting the 

military in contingency operations: 

 Final Rule: Private Security Contractors (PSCs) Operating in Contingency Operations, 

Combat Operations or Other Significant Military Operations. In order to meet the mandate of 

section 862 of the 2008 National Defense Authorization Act (NDAA) (as amended by section 

813 (b) of the 2010 NDAA and section 832 of the 2011 NDAA), this rule establishes policy, 

assigns responsibilities, and provides procedures for the regulation of the selection, 

accountability, training, equipping, and conduct of personnel performing private security 

functions under a covered contract during contingency operations, combat operations, or 

other significant military operations. It also assigns responsibilities and establishes 

procedures for incident reporting, use of and accountability for equipment, rules for the use of 

force, and a process for administrative action or the removal, as appropriate, of PSCs and 

PSC personnel. DoD published an interim final rule on July 17, 2009 (74 FR 34690 to 34694), 

with an effective date of July 17, 2009. The comment period ended August 31, 2009. DoD, in 

coordination with the Department of State and the United States Agency for International 

Development, prepared a final rule, which included the responses to the public comments, 

and incorporated changes to the interim final rule, where appropriate. The final rule also 

incorporated the legislative changes required by section 813 (b) of the 2010 NDAA and 

section 832 of the 2011 NDAA. The final rule was published August 11, 2011 (76 FR 49650), 

with an effective date of September 12, 2011. 

 Interim Final Rule: Operational Contract Support. This rule will incorporate the latest 

changes and lessons learned into policy and procedures for operational contract support 

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(OCS), including OCS program management, contract support integration, and the 

integration of DoD contractor personnel into contingency operations outside the United 

States. DoD anticipates publishing the interim final rule in the first or second quarter of FY 

2012. 

3. Installations and Environment, Department of Defense 

The Department of Defense will publish a rule regarding the process for evaluating the impact 

of certain types of structures on military operations and readiness: 

 Interim Final Rule: This rule implements policy, assigns responsibilities, and prescribes 

procedures for the establishment and operation of a process for evaluation of proposed 

projects submitted to the Secretary of Transportation under section 44718 of title 49, United 

States Code. The evaluation process is established for the purpose of identifying any adverse 

impact of proposed projects on military operations and readiness, minimizing or mitigating 

such adverse impacts, and determining if any such projects pose an unacceptable risk to the 

national security of the United States. The rule also includes procedures for the operation of 

a central DoD siting clearinghouse to facilitate both informal and formal reviews of proposed 

projects. This rule was required by section 358 of Public Law 111-383. DoD anticipates 

publishing an interim final rule in fourth quarter of FY 2011. 

4. Military Community and Family Policy, Department of Defense 

The Department of Defense plans to publish a final rule to implement policy, assign 

responsibilities, and prescribe procedures for the operation of voluntary education programs 

within DoD: 

 Final Rule: Voluntary Education Programs. In this rule, the Department of Defense (DoD) 

implements policy, assigns responsibilities, and prescribes procedures for the operation of 

voluntary education programs within DoD. Several of the subject areas in this rule include: 

Procedures for Service members participating in education programs; guidelines for 

establishing, maintaining, and operating voluntary education programs including, but not 

limited to, instructor-led courses offered on-installation and off-installation, as well as via 

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distance learning; procedures for obtaining on-base voluntary education programs and 

services; minimum criteria for selecting institutions to deliver higher education programs and 

services on military installations; the establishment of a DoD Voluntary Education Partnership 

Memorandum of Understanding (MOU) between DoD and educational institutions receiving 

tuition assistance payments; and procedures for other education programs for Service 

members and their adult family members. The new requirement for a signed MOU with DoD 

from participating educational institutions will be effective January 1, 2012. The Department 

published a proposed rule on August 6, 2010 (75 FR 47504 to 47514). The comment period 

ended October 10, 2010, which contained a total of 110 comments. Several comments from 

the general public were accepted, including suggestions to clarify terms such as “one single 

tuition rate” and a “needs assessment.” DoD anticipates publishing the final rule during the 

first quarter of FY 2012. 

5. Health Affairs, Department of Defense 

 The Department of Defense is able to meet its dual mission of wartime readiness and 

peacetime health care by operating an extensive network of medical treatment facilities. This 

network includes DoD’s own military treatment facilities supplemented by civilian health care 

providers, facilities, and services under contract to DoD through the TRICARE program. 

TRICARE is a major health care program designed to improve the management and integration 

of DoD’s health care delivery system. The program’s goal is to increase access to health care 

services, improve health care quality, and control health care costs. 

 The TRICARE Management Activity has published or plans to publish the following rules: 

 Final rule on TRICARE: Reimbursement of Sole Community Hospitals and Adjustment to 

Reimbursement of Critical Access Hospitals. The rule implements the statutory provision in 

10 United States Code 1079(j)(2) that TRICARE payment methods for institutional care shall 

be determined to the extent practicable in accordance with the same reimbursement rules as 

those that apply to payments to providers of services of the same type under Medicare. This 

rule implements a reimbursement methodology similar to that furnished to Medicare 

beneficiaries for services provided by sole community hospitals. It is projected that 

implementation of this rule will result in a health care savings of $31 million per year with 

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proposed phase-in period and an estimated initial start-up cost of $200,000. Any on-going 

administrative costs would be minimal and there are no applicable risks to the public. The 

proposed rule was published July 5, 2011 (76 FR 39043). The comment period ended on 

September 6, 2011. DoD anticipates publishing a final rule in the second quarter of FY 2012. 

 Final rule on TRICARE: TRICARE Young Adult. The purpose of this interim final rule is to 

establish the TRICARE Young Adult program implementing ssection 702 of the Ike Skelton 

NDAA for FY 2011 (Pub. L. 111-383) to provide medical coverage to unmarried children 

under the age of 26 who no longer meet the age requirements for TRICARE eligibility (age 

21, or 23 if enrolled in a full-time course of study at an institution of higher learning approved 

by the Secretary of Defense) and who are not eligible for medical coverage from an eligible 

employer-sponsored plan (as defined in section 5000A(f)(2) of the Internal Revenue Code of 

1986). If qualified, they can purchase TRICARE Standard/Extra or TRICARE Prime benefits 

coverage. The particular TRICARE plan available depends on the military sponsor's eligibility 

and the availability of the TRICARE plan in the dependent's geographic location. It is 

projected that implementation of this rule will result in an estimated initial start-up cost of 

$3,000,000. Premiums are designed to cover the anticipated health care costs, as well as 

ongoing administrative costs. The interim final rule was published April 27, 2011 (76 FR 

23479), with an immediate effective date. The comment period ended June 27, 2011. DoD 

anticipates publishing a final rule in the first quarter of FY 2012. 

6. Personnel and Readiness, Department of Defense 

The Department of Defense will publish a rule regarding Service Academies: 

 Final Rule: Service Academies. This rule establishes policy, assigns responsibilities, and 

prescribes procedures for Department of Defense oversight of the Service Academies. 

Administrative costs are negligible and benefits are clear, concise rules that enable the 

Secretary of Defense to insure that the Service Academies are efficiently operated and meet 

the needs of the armed forces. The proposed rule was published October 18, 2007 (72 FR 

59053), and included policy that has since changed. The final rule, particularly the 

explanation of separation policy, will reflect recent changes in the Don't Ask, Don't Tell policy. 

DoD anticipates publishing the final rule in the second quarter of FY 2012. 

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