48276 Federal Register / Vol. 75, No. 153 / Tuesday, August 10, 2010 / Rules and Regulations 

Resubmission of a previously denied 

claim includes only those claims that 

were previously denied and refiled 

under the Act. 

(4) Any violation of paragraph (b) of 

this section shall result in a fine of not 

more than $5,000. 

* * * * * 

Dated: August 2, 2010. 

Eric H. Holder, Jr., 

Attorney General. 

[FR Doc. 2010–19633 Filed 8–9–10; 8:45 am] 

BILLING CODE 4410–12–P 

DEPARTMENT OF HOMELAND 

SECURITY 

Coast Guard 

33 CFR Part 117 

[Docket No. USCG–2010–0659] 

Drawbridge Operation Regulations; 

Pequonnock River, Bridgeport, CT, 

Maintenance 

AGENCY: Coast Guard, DHS. 

ACTION: Notice of temporary deviation 

from regulations. 

SUMMARY: The Commander, First Coast 

Guard District, has issued a temporary 

deviation from the regulation governing 

the operation of the Metro North (Peck) 

Bridge across the Pequonnock River, 

mile 0.3, at Bridgeport, Connecticut. 

The deviation allows the bridge to 

remain in the closed position to 

facilitate scheduled maintenance for 

three months. 

DATES: This deviation is effective from 

August 7, 2010 through November 7, 

2010. 

ADDRESSES: Documents mentioned in 

this preamble as being available in the 

docket are part of docket USCG–2010– 

0659 and are available online at 

www.regulations.gov, inserting USCG– 

2010–0659 in the ‘‘Keyword’’ and then 

clicking ‘‘Search.’’ They are also 

available for inspection or copying at 

the Docket Management Facility (M–30), 

U.S. Department of Transportation, 

West Building Ground Floor, Room 

W12–140, 1200 New Jersey Avenue, SE., 

Washington, DC 20590, between 9 a.m. 

and 5 p.m., Monday through Friday, 

except Federal holidays. 

FOR FURTHER INFORMATION CONTACT: If 

you have questions on this rule, call or 

e-mail Ms. Judy Leung-Yee, Project 

Officer, First Coast Guard District, 

telephone (212) 668–7165, e-mail 

judy.k.leung-yee@uscg.mil. If you have 

questions on viewing the docket, call 

Renee V. Wright, Program Manager, 

Docket Operations, telephone 202–366– 

9826. 

SUPPLEMENTARY INFORMATION: The Metro 

North (Peck) Bridge, across the 

Pequonnock River at mile 0.3, at 

Bridgeport, Connecticut, has a vertical 

clearance in the closed position of 26 

feet at mean high water and 32 feet at 

mean low water. The drawbridge 

operation regulations are listed at 33 

CFR 117.219(c). 

The owner of the bridge, Metro North 

Railroad, requested a temporary 

deviation from the regulations to 

facilitate scheduled bridge maintenance, 

mitre rail rehabilitation, at the bridge. 

Under this temporary deviation the 

Metro North (Peck) Bridge may remain 

in the closed position from August 7, 

2010 through November 7, 2010. Vessels 

that can pass under the bridge in the 

closed position may do so at all times. 

The Metro North (Peck) Bridge 

received no requests to open in both 

2008 and 2009. Waterway users were 

advised of the requested bridge closure 

and offered no objection. 

In accordance with 33 CFR 117.35(e), 

the bridge must return to its regular 

operating schedule immediately at the 

end of the designated time period. This 

deviation from the operating regulations 

is authorized under 33 CFR 117.35. 

Dated: July 30, 2010. 

Gary Kassof, 

Bridge Program Manager, First Coast Guard 

District. 

[FR Doc. 2010–19631 Filed 8–9–10; 8:45 am] 

BILLING CODE 9110–04–P 

DEPARTMENT OF DEFENSE 

Defense Acquisition Regulations 

System 

48 CFR Parts 215, 217, and 243 

[DFARS Case 2008–D034] 

RIN 0750–AG27 

Defense Federal Acquisition 

Regulation Supplement; Management 

of Unpriced Change Orders 

AGENCY: Defense Acquisition 

Regulations System, Department of 

Defense (DoD). 

ACTION: Final rule. 

SUMMARY: The Department of Defense 

(DoD) is adopting as final a proposed 

rule amending the DFARS to make 

requirements for DoD management and 

oversight of unpriced change orders 

consistent with those that apply to other 

undefinitized contract actions. This 

final rule adds new policy to address 

section 812 of the National Defense 

Authorization Act for Fiscal Year 2010. 

DATES: Effective Date: August 10, 2010. 

FOR FURTHER INFORMATION CONTACT: Ms. 

Meredith Murphy, Defense Acquisition 

Regulations System, OUSD (AT&L) 

DPAP/DARS, Room 3B855, 3060 

Defense Pentagon, Washington, DC 

20301–3060, Telephone 703–602–1302; 

facsimile 703–602–0350. Please cite 

DFARS Case 2008–D034. 

SUPPLEMENTARY INFORMATION: 

A. Background 

The proposed rule addressed DFARS 

subpart 217.74, which prescribes 

policies and procedures for the 

management and oversight of 

undefinitized contract actions (UCAs). 

In the current DFARS, unpriced change 

orders that are issued in accordance 

with FAR part 43 and DFARS part 243 

are excluded from the scope of subpart 

217.74. A rule was proposed because of 

the need for full accountability and 

enhanced oversight of unpriced 

contractual actions, including unpriced 

change orders. 

The proposed rule was published in 

the Federal Register at 74 FR 37669 on 

July 29, 2009. Two respondents 

submitted comments in response to the 

proposed rule. One respondent deemed 

this ‘‘a new rule that is very much 

needed,’’ while the other respondent 

requested that the proposed rule be 

withdrawn. To enhance transparency 

and accountability, DoD has determined 

to proceed with this rule. The comments 

submitted by the respondents are 

addressed in the following paragraphs. 

Comment: Make a separate limitation 

on obligations applicable to small 

businesses. 

One respondent addressed the 

percentage limitation on obligations 

prior to definitization, which the 

proposed rule, at DFARS 243.204–70– 

4(a), set at 50 percent. There is an 

exception in the proposed rule allowing 

an increase from 50 percent to 75 

percent when a contractor submits a 

qualifying proposal before 50 percent of 

the not-to-exceed price has been 

obligated by the Government. The 

respondent recommended that the latter 

percentage be increased from 75 percent 

to 95 percent for small, small 

disadvantaged, and HUBZone 

businesses. In support of its position, 

the respondent cited frequent instances 

where it believed that a particular 

agency had requested multiple audits as 

a delaying tactic to avoid definitization. 

When definitization is delayed, the 

contractor can perform up to half of the 

work that has been required unilaterally 

by the Government without being 


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Federal Register / Vol. 75, No. 153 / Tuesday, August 10, 2010 / Rules and Regulations 48277 

reimbursed. According to the 

respondent, this burden would impact 

small and small disadvantaged 

businesses disproportionately, because 

they do not have the internal cash flow 

generally available to large businesses. 

Response: This is an issue of faulty 

execution on the part of the agency 

cited, not a problem with the policy. 

Enabling an unpriced contract action to 

continue in an unpriced state up to 95 

percent of the not-to-exceed price, 

would only place contractors at greater 

risk and give contracting officers even 

less incentive to definitize the action in 

a timely manner. 

Comment: Limiting a contractor’s 

profit for reduced risk doesn’t consider 

that the contractor’s risk is increased 

while a contract obligation is 

undefinitized. 

The new section 243.204–70–6 

(Allowable profit) requires the 

Government to consider ‘‘(a) Any 

reduced cost risk to the contractor’’ 

when a substantial portion of the 

required performance has been 

completed before the contract action is 

definitized. Both respondents objected 

to the regulation’s assumption that a 

contractor’s cost risk declines in this 

situation. One respondent stated that it 

would be grossly unfair for DoD to 

retain the uniquely Government right to 

issue unilateral change orders and then 

penalize contractors by decrementing 

allowable profit on incurred costs. The 

other respondent claimed that the 

contractor experiences increased, not 

decreased, cost risk during the period 

that the change order remains 

undefinitized. 

Response: The respondents have not 

acknowledged that the Government also 

incurs increased cost risk during the 

period prior to definitization of the 

contract action. The intent of this 

coverage is to (1) increase transparency; 

(2) provide management oversight to 

prevent abuses in the definitization 

process; and (3) provide incentives for 

both the Government and contractors to 

definitize UCAs as quickly as 

reasonably possible. Therefore, this 

portion of the proposed rule will not be 

changed because doing so would reduce 

a big incentive to definitize an action in 

the minimum reasonable time. Further, 

the 50 percent and 75 percent 

limitations are established by statute (10 

U.S.C. 2326(b)(3)), and DoD does not 

have authority to modify them. 

Comment: Foreign military sales, 

special access programs, congressionally 

mandated long-lead procurement 

contracts, and purchases under the 

simplified acquisition threshold are 

exempted from the definition of 

undefinitized contract action (UCA). 

One respondent cites 10 U.S.C. 2326 

as exempting the above categories from 

the definition of UCA. Therefore, 

according to the respondent, DoD is 

prohibited from including these types of 

change orders in the UCA definition. 

Response: The Congress recently took 

a different position on this issue. It is a 

matter of statutory construction that 

later-enacted laws take precedence over 

prior-enacted laws. This rule of 

statutory construction is particularly 

relevant here. In this case, section 812 

of the National Defense Authorization 

Act for Fiscal Year 2010 (Pub. L. 111– 

84), enacted October 28, 2009, requires 

DoD to extend the limitations on cost 

reimbursement and profit/fee to all 

categories of undefinitized contract 

actions. 

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. 

B. 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 change is to internal 

Government operating procedures. The 

rule makes requirements for DoD 

management and oversight of unpriced 

change orders consistent with those that 

apply to other undefinitized contract 

actions. 

C. Paperwork Reduction Act 

The Paperwork Reduction Act does 

not apply because the final 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 215, 

217, and 243 

Government procurement. 

Ynette R. Shelkin, 

Editor, 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. 421 and 48 CFR 

chapter 1. 

PART 215—CONTRACTING BY 

NEGOTIATION 

215.404–71–3 [Amended] 

■ 2. Amend section 215.404–71–3 in the 

first sentence of paragraph (d)(2), by 

revising the parenthetical to read ‘‘(also 

see 217.7404–6(a) and 243.204–70–6)’’. 

PART 217—SPECIAL CONTRACTING 

METHODS 

■ 3. Amend section 217.7401 in 

paragraph (d) by adding a third sentence 

to read as follows: 

217.7401 Definitions. 

* * * * * 

(d) * * * For policy relating to 

definitization of change orders, see 

243.204–70. 

■ 4. Revise section 217.7402 to read as 

follows: 

217.7402 Exceptions. 

(a) The following undefinitized 

contract actions (UCAs) are not subject 

to this subpart. However, the 

contracting officer shall apply the policy 

and procedures to them to the 

maximum extent practicable (also see 

paragraph (b) of this section): 

(1) UCAs for foreign military sales; 

(2) Purchases at or below the 

simplified acquisition threshold; 

(3) Special access programs; 

(4) Congressionally mandated longlead procurement contracts. 

(b) If the contracting officer 

determines that it is impracticable to 

adhere to the policy and procedures of 

this subpart for a particular contract 

action that falls within one of the 

categories in paragraph (a)(1), (3), or (4) 

of this section, the contracting officer 

shall provide prior notice, through 

agency channels, to the Deputy Director, 

Defense Procurement and Acquisition 

Policy (Contract Policy and 

International Contracting), 3060 Defense 

Pentagon, Washington, DC 20301–3060. 

■ 5. Amend section 217.7405 by adding 

paragraph (c) to read as follows: 

217.7405 Plans and reports. 

* * * * * 

(c) Consolidated UCA Management 

Reports shall include information about 

all change orders that are not forward 

priced (i.e., unpriced) and have an 

estimated value exceeding $5 million. 

■ 6. Revise section 217.7406 to read as 

follows: 

217.7406 Contract clauses. 

(a) Use the clause at FAR 52.216–24, 

Limitation of Government Liability, in— 

(1) All UCAs; 

(2) Solicitations associated with 

UCAs; 


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48278 Federal Register / Vol. 75, No. 153 / Tuesday, August 10, 2010 / Rules and Regulations 

(3) Basic ordering agreements; 

(4) Indefinite-delivery contracts; 

(5) Any other type of contract 

providing for the use of UCAs; and 

(6) Unpriced change orders with an 

estimated value exceeding $5 million. 

(b)(1) Use the clause at 252.217–7027, 

Contract Definitization, in— 

(i) All UCAs; 

(ii) Solicitations associated with 

UCAs; 

(iii) Basic ordering agreements; 

(iv) Indefinite-delivery contracts; 

(v) Any other type of contract 

providing for the use of UCAs; and 

(vi) Unpriced change orders with an 

estimated value exceeding $5 million. 

(2) Insert the applicable information 

in paragraphs (a), (b), and (d) of the 

clause. 

(3) If, at the time of entering into the 

UCA or unpriced change order, the 

contracting officer knows that the 

definitive contract action will meet the 

criteria of FAR 15.403–1, 15.403–2, or 

15.403–3 for not requiring submission of 

cost or pricing data, the words ‘‘and cost 

or pricing data’’ may be deleted from 

paragraph (a) of the clause. 

PART 243—CONTRACT 

MODIFICATIONS 

■ 7. Revise section 243.204 to read as 

follows: 

243.204 Administration. 

Follow the procedures at PGI 243.204 

for administration of change orders. 

243.204–70 [Redesignated as 243.204–71] 

■ 8. Redesignate section 243.204–70 as 

section 243.204–71. 

■ 9. Add a new section 243.204–70 to 

read as follows: 

243.204–70 Definitization of change 

orders. 

243.204–70–1 Scope. 

(a) This subsection applies to 

unpriced change orders with an 

estimated value exceeding $5 million. 

(b) Unpriced change orders for foreign 

military sales and special access 

programs are not subject to this 

subsection, but the contracting officer 

shall apply the policy and procedures to 

them to the maximum extent 

practicable. If the contracting officer 

determines that it is impracticable to 

adhere to the policy and procedures of 

this subsection for an unpriced change 

order for a foreign military sale or a 

special access program, the contracting 

officer shall provide prior notice, 

through agency channels, to the Deputy 

Director, Defense Procurement and 

Acquisition Policy (Contract Policy and 

International Contracting), 3060 Defense 

Pentagon, Washington, DC 20301–3060. 

243.204–70–2 Price ceiling. 

Unpriced change orders shall include 

a not-to-exceed price. 

243.204–70–3 Definitization schedule. 

(a) Unpriced change orders shall 

contain definitization schedules that 

provide for definitization by the earlier 

of— 

(1) The date that is 180 days after 

issuance of the change order (this date 

may be extended but may not exceed 

the date that is 180 days after the 

contractor submits a qualifying 

proposal); or 

(2) The date on which the amount of 

funds obligated under the change order 

is equal to more than 50 percent of the 

not-to-exceed price. 

(b) Submission of a qualifying 

proposal in accordance with the 

definitization schedule is a material 

element of the contract. If the contractor 

does not submit a timely qualifying 

proposal, the contacting officer may 

suspend or reduce progress payments 

under FAR 32.503–6, or take other 

appropriate action. 

243.204–70–4 Limitations on obligations. 

(a) The Government shall not obligate 

more than 50 percent of the not-toexceed price before definitization. 

However, if a contractor submits a 

qualifying proposal before 50 percent of 

the not-to-exceed price has been 

obligated by the Government, the 

limitation on obligations before 

definitization may be increased to no 

more than 75 percent (see 232.102–70 

for coverage on provisional delivery 

payments). 

(b) Obligations should be consistent 

with the contractor’s requirements for 

the undefinitized period. 

243.204–70–5 Exceptions. 

(a) The limitations in 243.204–70–2, 

243.204–70–3, and 243.204–70–4 do not 

apply to unpriced change orders for the 

purchase of initial spares. 

(b) The limitations in 243.204–70–4(a) 

do not apply to unpriced change orders 

for ship construction and ship repair. 

(c) The head of the agency may waive 

the limitations in 243.204–70–2, 

243.204–70–3, and 243.204–70–4 for 

unpriced change orders if the head of 

the agency determines that the waiver is 

necessary to support— 

(1) A contingency operation; or 

(2) A humanitarian or peacekeeping 

operation. 

243.204–70–6 Allowable profit. 

When the final price of an unpriced 

change order is negotiated after a 

substantial portion of the required 

performance has been completed, the 

head of the contracting activity shall 

ensure the profit allowed reflects— 

(a) Any reduced cost risk to the 

contractor for costs incurred during 

contract performance before negotiation 

of the final price; 

(b) The contractor’s reduced cost risk 

for costs incurred during performance of 

the remainder of the contract; and 

(c) The extent to which costs have 

been incurred prior to definitization of 

the contract action (see 215.404–71– 

3(d)(2)). The risk assessment shall be 

documented in the contract file. 

243.204–70–7 Plans and reports. 

To provide for enhanced management 

and oversight of unpriced change 

orders, departments and agencies 

shall— 

(a) Include in the Consolidated 

Undefinitized Contract Action (UCA) 

Management Plan required by 217.7405, 

the actions planned and taken to ensure 

that unpriced change orders are 

definitized in accordance with this 

subsection; and 

(b) Include in the Consolidated UCA 

Management Report required by 

217.7405, each unpriced change order 

with an estimated value exceeding $5 

million. 

■ 10. Add section 243.205–72 to read as 

follows: 

243.205–72 Unpriced change orders. 

See the clause prescriptions at 

217.7406 for all unpriced change orders 

with an estimated value exceeding $5 

million. 

[FR Doc. 2010–19674 Filed 8–9–10; 8:45 am] 

BILLING CODE 5001–08–P 

DEPARTMENT OF DEFENSE 

Defense Acquisition Regulations 

System 

48 CFR Parts 215, 231, and 252 

[DFARS Case 2006–D057] 

Defense Federal Acquisition 

Regulation Supplement; Excessive 

Pass-Through Charges 

AGENCY: Defense Acquisition 

Regulations System, Department of 

Defense (DoD). 

ACTION: Final rule. 

SUMMARY: DoD is issuing a final rule to 

delete the DFARS language 

implementing section 852 of the 

National Defense Authorization Act for 

Fiscal Year 2007 that ensures that passthrough charges on contracts or 

subcontracts that are entered into for or 

on behalf of DoD are not excessive in 


wwoods2 on DSK1DXX6B1PROD with RULES_PART 1