15812 Federal Register / Vol. 87, No. 53 / Friday, March 18, 2022 / Rules and Regulations 

(End of clause) 

[FR Doc. 2022–05531 Filed 3–17–22; 8:45 am] 

BILLING CODE 5001–06–P 

DEPARTMENT OF DEFENSE 

Defense Acquisition Regulations 

System 

48 CFR Part 204 

[Docket DARS–2021–0017] 

RIN 0750–AL48 

Defense Federal Acquisition 

Regulation Supplement: Contract 

Closeout Authority for DoD Services 

Contracts (DFARS Case 2021–D012) 

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 implement a section of the 

National Defense Authorization Act for 

Fiscal Year 2021. 

DATES: Effective March 18, 2022. 

FOR FURTHER INFORMATION CONTACT: Ms. 

Kimberly R. Ziegler, telephone 571– 

372–6095. 

SUPPLEMENTARY INFORMATION: 

I. Background 

DoD published a proposed rule in the 

Federal Register at 86 FR 48366 on 

August 30, 2021, to implement section 

820 of the National Defense 

Authorization Act (NDAA) for Fiscal 

Year (FY) 2021 (Pub. L. 116–283). 

Section 820 authorizes DoD contracting 

officers to close out certain physically 

complete contracts or groups of contacts 

through modification of such contracts, 

without completing the requirements of 

Federal Acquisition Regulation (FAR) 

4.804–5(a)(3) through (15) based upon 

the age of the contract action. 

Two respondents submitted public 

comments in response to the proposed 

rule. 

II. Discussion and Analysis 

DoD reviewed the public comments in 

the development of the final rule. A 

discussion of the comments and the 

changes made to the rule as a result of 

those comments is provided, as follows: 

A. Summary of Significant Changes 

From the Proposed Rule 

There are no changes from the 

proposed rule as a result of public 

comments. 

B. Analysis of Public Comments 

1. Support for the Rule 

Comment: The respondent supported 

the rule and requested DoD publish the 

final rule expeditiously. 

Response: DoD acknowledges the 

support. 

2. Expansion of the Statutory Criteria 

Comment: The respondent expressed 

concern that the rule, as well as the 

current DFARS text that implemented 

the statutory direction in the NDAA for 

FY 2017, reflects the language in section 

820 of the FY 2021 NDAA. The 

respondent asserts that the statutory 

language will not achieve the intent of 

Congress without further clarification. 

Response: This final rule implements 

the statutory authority provided in 

section 820 of the NDAA for FY 2021. 

There is nothing in the statute to 

indicate Congress had any intent other 

than the plain language meaning of that 

section as stated. DoD previously 

published a final rule at 84 FR 18153 on 

April 30, 2019, to implement section 

836 of the NDAA for FY 2017. 

3. Additional Guidance for the 

Workforce 

Comment: The respondent 

recommends DoD develop Procedures, 

Guidance, and Information (PGI) for the 

acquisition workforce that includes 

additional guidance on the application 

of the eligibility criteria and 

establishment of costs. 

Response: DoD has no indication that 

the acquisition workforce requires an 

update to the PGI on contract closeout. 

III. Applicability to Contracts at or 

Below the Simplified Acquisition 

Threshold (SAT) and for Commercial 

Products Including Commercially 

Available Off-the-Shelf (COTS) Items, 

and for Commercial Services 

This rule does not create any new 

solicitation provisions or contract 

clauses. It does not impact any existing 

solicitation provisions or contract 

clauses. 

IV. Expected Impact of the Rule 

DFARS 204.804(3)(i) currently 

provides for the expedited closeout of 

contracts or groups of contracts without 

completion of a reconciliation audit or 

other corrective actions required by FAR 

4.804–5(a)(3) through (15) if certain 

criteria are met. If a contract was 

entered into at least 17 years prior to the 

current fiscal year, is physically 

complete, and has been determined not 

reconcilable, the contracting officer may 

close the contract through a negotiated 

settlement. 

This final rule reduces the age 

requirement from 17 years to 10 years 

for military construction and 

shipbuilding and 7 years for all other 

contract actions. The rule adds a new 

requirement that these contracts must be 

physically complete at least 4 years 

prior to the current fiscal year. 

The expanded authority will apply to 

more recent contracts, subject to the 

other criteria in DFARS 204.804(3)(i), to 

reduce the current backlog and 

administration requirements for 

contracts eligible for closeout. 

V. 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. 

VI. Congressional Review Act 

As required by the Congressional 

Review Act (5 U.S.C. 801–808) before an 

interim or final rule takes effect, DoD 

will submit a copy of the interim or 

final rule with the form, Submission of 

Federal Rules Under the Congressional 

Review Act, to the U.S. Senate, the U.S. 

House of Representatives, and the 

Comptroller General of the United 

States. A major rule under the 

Congressional Review Act cannot take 

effect until 60 days after it is published 

in the Federal Register. The Office of 

Information and Regulatory Affairs has 

determined that this rule is not a major 

rule as defined by 5 U.S.C. 804. 

VII. Regulatory Flexibility Act 

DoD does not expect this rule to 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 this rule implements 

requirements primarily for the 

Government. However, a final 

regulatory flexibility analysis (FRFA) 

has been prepared consistent with the 

Regulatory Flexibility Act, 5 U.S.C. 601, 

et seq. The FRFA is summarized as 

follows: 

This rule amends the Defense Federal 

Acquisition Regulation Supplement 


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Federal Register / Vol. 87, No. 53 / Friday, March 18, 2022 / Rules and Regulations 15813 

(DFARS) to implement section 820 of 

the National Defense Authorization Act 

(NDAA) for Fiscal Year (FY) 2021 (Pub. 

L. 116–283). Section 820 expands the 

application of the expedited contract 

closeout authority of section 836 of the 

NDAA for FY 2017, implemented at 

DFARS 204.804(3)(i)(A), to certain 

contracts or groups of contracts that 

were awarded at least 7 to 10 FYs before 

the current FY and have completed 

performance or delivery at least 4 years 

prior to the current FY. The new 10-year 

standard will apply to contracts or 

groups of contracts for military 

construction, as defined in 10 U.S.C. 

2801, or shipbuilding, while the 7-year 

standard will apply to all other 

contracts. 

The objective of the rule is to 

implement the requirements of section 

820, which expands the application of 

the expedited contract closeout 

authority of section 836 of the NDAA for 

FY 2017 to more recent, physically 

complete contracts. The legal basis of 

the rule is section 820 of the NDAA for 

FY 2021. 

There were no significant issues 

raised by the public in response to the 

initial regulatory flexibility analysis. 

This rule will likely affect small 

entities that have been or will be 

awarded DoD contracts, including those 

under FAR part 12 procedures for the 

acquisition of commercial products, 

including commercially available offthe-shelf items, and commercial 

services. Data was obtained from the 

Electronic Data Access module of the 

Procurement Integrated Enterprise 

Environment for contracts that were 

physically completed at least 4 years 

ago and are eligible for closeout between 

the new standard of 7 or 10 years and 

the previous standard of at least 17 

fiscal years after award. These numbers 

were then compared to the Federal 

Procurement Data System (FPDS) to 

estimate the number of contracts 

awarded to small entities. Contracts 

subject to the previous standard of 17 

years are included in this estimate. 

As of April 2021, the FPDS data 

indicate that approximately 29,200 

contracts, eligible for expedited closeout 

under the 7-year standard, were 

awarded to an estimated 4,490 unique 

small entities. An additional estimated 

1,775 contracts, subject to the 10-year 

standard, were awarded to 

approximately 576 small entities. As a 

result, DoD estimates that 

approximately 5,066 small entities will 

have the opportunity to benefit from the 

expanded expedited contract authorities 

provided in this rule. 

The rule does not impose any new 

reporting, recordkeeping, or compliance 

requirements. 

There are no practical alternatives 

that will accomplish the objectives of 

the statute. 

VIII. Paperwork Reduction Act 

This rule does not contain any 

information collection requirements that 

require the approval of the Office of 

Management and Budget (OMB) under 

the Paperwork Reduction Act (44 U.S.C. 

chapter 35). 

List of Subjects in 48 CFR Part 204 

Government procurement. 

Jennifer D. Johnson, 

Editor/Publisher, Defense Acquisition 

Regulations System. 

Therefore, 48 CFR part 204 is 

amended as follows: 

PART 204—ADMINISTRATIVE AND 

INFORMATION MATTERS 

■ 1. The authority citation for 48 CFR 

part 204 continues to read as follows: 

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

chapter 1. 

■ 2. Amend section 204.804 by revising 

paragraph (3)(i) to read as follows: 

204.804 Closeout of contract files. 

* * * * * 

(3)(i) In accordance with section 836 

of the National Defense Authorization 

Act for Fiscal Year 2017 (Pub. L. 114– 

328), section 824 of the National 

Defense Authorization Act for Fiscal 

Year 2018 (Pub. L. 115–91), and section 

820 of the National Defense 

Authorization Act for Fiscal Year 2021 

(Pub. L. 116–283), contracting officers 

may close out contracts or groups of 

contracts through issuance of one or 

more modifications to such contracts 

without completing a reconciliation 

audit or other corrective action in 

accordance with FAR 4.804–5(a)(3) 

through (15), as appropriate, if each 

contract— 

(A)(1) For military construction (as 

defined at 10 U.S.C. 2801) or 

shipbuilding, was awarded at least 10 

fiscal years before the current fiscal 

year; or 

(2) For all other contracts, was 

awarded at least 7 fiscal years before the 

current fiscal year; 

(B) The performance or delivery was 

completed at least 4 years prior to the 

current fiscal year; and 

(C) Has been determined by a 

contracting official, at least one level 

above the contracting officer, to be not 

otherwise reconcilable, because— 

(1) The contract or related payment 

records have been destroyed or lost; or 

(2) Although contract or related 

payment records are available, the time 

or effort required to establish the exact 

amount owed to the U.S. Government or 

amount owed to the contractor is 

disproportionate to the amount at issue. 

* * * * * 

[FR Doc. 2022–05532 Filed 3–17–22; 8:45 am] 

BILLING CODE 5001–06–P 

DEPARTMENT OF DEFENSE 

48 CFR Parts 215 and 252 

[Docket DARS–2022–0005] 

RIN 0750–AL31 

Defense Federal Acquisition 

Regulation Supplement: Evaluation 

Factor for Employing or 

Subcontracting With Members of the 

Selected Reserve (DFARS Case 2021– 

D013) 

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 implement a section of the 

National Defense Authorization Act for 

Fiscal Year 2021. 

DATES: Effective March 18, 2022. 

FOR FURTHER INFORMATION CONTACT: Ms. 

Kimberly R. Ziegler, Telephone 571– 

372–6095. 

SUPPLEMENTARY INFORMATION: 

I. Background 

DoD is amending the DFARS to 

implement section 821 of the National 

Defense Authorization Act (NDAA) for 

Fiscal Year (FY) 2021 (Pub. L. 116–283) 

that removes the burden of proof at 10 

U.S.C. 2305 note when using an 

evaluation factor for employing or 

subcontracting with members of the 

Selected Reserve. Accordingly, this rule 

removes DFARS solicitation provision 

252.215–7005, Evaluation Factor for 

Employing or Subcontracting with 

Members of the Selected Reserve, and 

makes conforming changes to the 

associated provision and clause 

prescriptions at DFARS 215.370–3. 

DFARS provision 252.215–7005 is 

included in solicitations that contain an 

evaluation factor that considers whether 

an offeror intends to perform the 

contract using employees or individual 

subcontractors who are members of the 

Selected Reserve. If an offeror intends to 

use such employees or subcontractors, 

the provision requires the offeror to 

submit certain documentation as proof 


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