30366 Federal Register / Vol. 77, No. 99 / Tuesday, May 22, 2012 / Rules and Regulations 

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. 

IV. Regulatory Flexibility Act 

The Regulatory Flexibility Act does 

not apply to this rule because this final 

rule does not constitute a significant 

DFARS revision within the meaning of 

FAR 1.501–1 and 41 U.S.C. 1707 does 

not require publication for public 

comment. 

V. Paperwork Reduction Act 

This final 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 Part 225 

Government procurement. 

Ynette R. Shelkin, 

Editor, Defense Acquisition Regulations 

System. 

Therefore, 48 CFR part 225 is 

amended as follows: 

PART 225—FOREIGN ACQUISITION 

■ 1. The authority citation for 48 CFR 

part 225 continues to read as follows: 

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

chapter 1. 

225.770 [Amended] 

■ 2. Section 225.770 is amended in the 

first sentence to remove ‘‘Section 1211’’ 

and add ‘‘section 1211’’ in its place and 

add ‘‘and section 1243 of the National 

Defense Authorization Act for Fiscal 

Year 2012 (Pub. L. 112–81)’’ at the end 

of the sentence. 

■ 3. Section 225.770–5 is amended by 

revising paragraph (c) to read as follows: 

225.770–5 Waiver of prohibition. 

* * * * * 

(c)(1) The official granting a waiver 

shall submit a report to the 

congressional defense committees, with 

a copy to the Director of Defense 

Procurement and Acquisition Policy 

(see PGI 225.770–5), not less than 15 

days before issuing the waiver. 

(2) In the report, the official shall— 

(i) Identify the specific reasons for the 

waiver; and 

(ii) Include recommendations as to 

what actions may be taken to develop 

alternative sourcing capabilities in the 

future. 

[FR Doc. 2012–11561 Filed 5–21–12; 8:45 am] 

BILLING CODE 5001–06–P 

DEPARTMENT OF DEFENSE 

Defense Acquisition Regulations 

System 

48 CFR Part 204 

RIN 0750–AH71 

Defense Federal Acquisition 

Regulation Supplement: Contingency 

Contract Closeout (DFARS Case 2012– 

D014) 

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 require additional planning, 

monitoring, and executing activities for 

contract closeouts when the contracts 

are awarded for performance in 

contingency areas. 

DATES: Effective Date: May 22, 2012. 

FOR FURTHER INFORMATION CONTACT: 

Meredith Murphy, telephone 571–372– 

6098. 

SUPPLEMENTARY INFORMATION: 

I. Background 

DoD is amending the Defense Federal 

Acquisition Regulation Supplement 

(DFARS) to implement a 

recommendation made by the 

Government Accountability Office 

(GAO)report 11–891, ‘‘CONTINGENCY 

CONTRACTING: Improved Planning 

and Management Oversight Needed to 

Address Challenges with Closing 

Contracts,’’ dated August 23, 2011. The 

GAO recommended that DoD improve 

contract closeouts when the contracts 

are awarded for performance in 

contingency areas. The GAO 

recommended revising contract 

guidance to enhance advance planning 

for contingency contract closeouts. 

Additionally, the GAO advocated 

including a requirement that senior 

contracting officials monitor and assess 

the progress of contract closeout 

activities throughout the contingency 

operation. 

The DFARS is amended at 204.804 to 

implement key elements proposed by 

the GAO. The head of the contracting 

activity is required to assign the highest 

priority to contracts performed in a 

contingency area in order to reduce 

potential backlogs. Heads of contracting 

activities are responsible for supervising 

the progress of contingency contract 

closeout activities and taking 

appropriate steps if a backlog occurs. 

II. Publication of This Final Rule for 

Public Comment Is Not Required by 

Statute 

‘‘Publication of proposed 

regulations,’’ 41 U.S.C. 1707, is the 

statute which applies to the publication 

of the Federal Acquisition Regulation. 

Paragraph (a)(1) of the statute 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 this amendment does 

not relate to the expenditure of 

appropriated funds, and has neither a 

significant effect beyond the internal 

operating procedures of DoD, or a 

significant cost or administrative impact 

on contractors or offerors. These 

requirements affect only the internal 

operating procedures of the 

Government. 

III. 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. 

IV. Regulatory Flexibility Act 

The Regulatory Flexibility Act does 

not apply to this rule because this final 

rule does not constitute a significant 

DFARS revision within the meaning of 

FAR 1.501–1 and 41 U.S.C. 1707 does 

not require publication for public 

comment. 


srobinson on DSK4SPTVN1PROD with RULES2
Federal Register / Vol. 77, No. 99 / Tuesday, May 22, 2012 / Rules and Regulations 30367 

V. 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 Part 204 

Government procurement. 

Ynette R. Shelkin, 

Editor, Defense Acquisition Regulations 

System. 

Therefore, 48 CFR part 204 is 

amended to read as follows: 

PART 204—ADMINISTRATIVE 

MATTERS 

■ 1. The authority citation for 48 CFR 

part 204 continues to read as follows: 

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

chapter 1. 

■ 2. Section 204.804 is revised to read 

as follows: 

204.804 Closeout of contract files. 

(1) Contracting officers shall close out 

contracts in accordance with the 

procedures at PGI 204.804. The closeout 

date for file purposes shall be 

determined and documented by the 

procuring contracting officer. 

(2) The head of the contracting 

activity shall assign the highest priority 

to closeout of contracts awarded for 

performance in a contingency area. 

Heads of contracting activities must 

monitor and assess on a regular basis 

the progress of contingency contract 

closeout activities and take appropriate 

steps if a backlog occurs. For guidance 

on the planning and execution of 

closing out such contracts, see PGI 

207.105(b)(20)(C)(8) and PGI 

225.7404(e). 

[FR Doc. 2012–11562 Filed 5–21–12; 8:45 am] 

BILLING CODE 5001–06–P 

DEPARTMENT OF DEFENSE 

Defense Acquisition Regulations 

System 

48 CFR Parts 204 and 243 

RIN 0750–AH56 

Defense Federal Acquisition 

Regulation Supplement: Order of 

Application for Modifications (DFARS 

Case 2012–D002) 

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 an order for 

application of contract modifications to 

resolve any potential conflicts that may 

arise from multiple modifications with 

the same effective date. 

DATES: Effective Date: May 22, 2012. 

FOR FURTHER INFORMATION CONTACT: Dr. 

Laura Welsh, telephone 571–372–6091. 

SUPPLEMENTARY INFORMATION: 

I. Background 

DoD published a proposed rule in the 

Federal Register at 77 FR 2679 on 

January 19, 2012, to establish an order 

for application of contract 

modifications. DFARS subpart 204.70, 

Uniform Procurement Instrument 

Identification Numbers, prescribes 

numbering procedures for contract 

modifications and the Federal 

Acquisition Regulation (FAR) part 43.1, 

General, prescribes rules for 

determining the effective date of 

contract modifications. There are no 

rules to describe in what order to apply 

modifications to determine the actual 

content of a resulting modified contract. 

In order to determine the sequence of 

modifications to a contract or order, a 

method for determining the order of 

application for modifications is needed 

to resolve any conflict arising from 

multiple modifications with the same 

effective date. Therefore, this final rule 

adds DFARS text at 204.7007, Order of 

Application for Modifications, to 

resolve any potential conflict in these 

circumstances. One respondent 

submitted a public comment in 

response to the proposed rule. 

II. Discussion and Analysis of the 

Public Comment 

DoD considered the public comment 

in the development of the final rule, 

which is discussed as follows. 

Comment: A respondent suggested 

that a cross-reference to the proposed 

DFARS 204.7007 language be placed 

within DFARS part 243, Contract 

Modifications, as the rule addresses 

contract modifications. 

Response: In response to the 

respondent’s comment, a cross-reference 

to DFARS 204.7007 is added at DFARS 

243.172. No other changes were made to 

the proposed rule. 

III. 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. 

IV. Regulatory Flexibility Act 

DoD has prepared a final regulatory 

flexibility analysis (FRFA) consistent 

with the Regulatory Flexibility Act, 5 

U.S.C. 601, et seq. The FRFA is 

summarized as follows: 

This rule finalizes a proposed 

amendment to the Defense Federal 

Acquisition Regulation Supplement 

(DFARS) which was published on 

January 19, 2012. DFARS subpart 

204.70, Uniform Procurement 

Instrument Identification Numbers, 

prescribes numbering procedures for 

contract modifications, and Federal 

Acquisition Regulation (FAR) subpart 

43.1, General, prescribes guidelines for 

determining the effective date. There are 

no rules to describe in what order to 

apply modifications to determine the 

actual content of a resulting modified 

contract. 

The objective of the rule is to provide 

a set of rules to the contracting officer 

to resolve any potential conflicts from 

multiple modifications with the same 

effective date. 

There were no public comments in 

response to the initial regulatory 

flexibility analysis. 

DoD received no comments by the 

Chief Counsel for Advocacy of the Small 

Business Administration in response to 

the proposed rule. 

The changes required to the DFARS 

by this case only affect the internal 

operating processes of DoD by 

establishing an order of application for 

contract modifications. These changes 

are not expected to have an economic 

impact on contractors. 

This rule does not impose any new 

reporting or recordkeeping 

requirements. 

The alternative to this rule is to 

continue relying on DFARS subpart 

204.70, which prescribes numbering 

procedures for contract modifications, 

and FAR subpart 43.1, which provides 

guidelines for determining the effective 

date. However, the cited text does not 

provide a clear structured path to ensure 

no ambiguity arises when determining 

in what order to apply modifications. 


srobinson on DSK4SPTVN1PROD with RULES2