Federal Register / Vol. 62, No. 69 / Thursday, April 10, 1997 / Rules and Regulations 17549

DEPARTMENT OF DEFENSE

Office of the Secretary

32 CFR Part 2

Pilot Program Policy

AGENCY: Department of Defense, Office

of the Deputy Under Secretary of

Defense (Acquisition Reform).

ACTION: Final rule.

SUMMARY: This rule establishes the

criteria for nominating an acquisition

program as a participant in the Defense

Acquisition Pilot Program, the

procedures for designation under the

pilot program, and the policies related

to requests for statutory and regulatory

relief to be granted under the pilot

program. This part implements the

provisions of Section 809 of the

National Defense Authorization Act for

Fiscal Year 1991, as amended by the

National Defense Authorization Act of

FY 1994.

EFFECTIVE DATE: April 10, 1997.

ADDRESSES: Office of the Deputy Under

Secretary of Defense (Acquisition

Reform), Room 2A330, 3620 Defense

Pentagon, Washington, DC 20301–3620.

FOR FURTHER INFORMATION CONTACT:

Mr. Richard K. Sylvester, telephone

(703) 697–6399.

SUPPLEMENTARY INFORMATION: On

December 2, 1993, the Department of

Defense published a proposed rule (58

FR 63542). Public comments were

received on the proposed rule and

reviewed and addressed. The comments

fell into two basic categories, the

majority which dealt with

administrative corrections and have

been incorporated, and the second

group, which are no longer germane as

a result of the designation of programs

as authorized by the Federal Acquisition

Streamlining Act of 1994 or from

inapplicability due to more recent

changes in statute. No substantive

changes have been made to the rule.

Publication in the Federal Register is

required by Section 809 of the National

Defense Authorization Act for Fiscal

Year 1991 (10 U.S.C. 2430 note), as

amended by the National Defense

Authorization Act of FY 1994. This rule

does not constitute ‘‘significant

regulatory action as defined by E.O.

12866. The rule does not: (1) Have an

annual effect on the economy of $100

million or more, or adversely affect in

a material way, the economy, a sector of

the economy, productivity, competition,

jobs; the environment, public health or

safety, or State, local, or tribal

governments or communities; (2) create

a serious inconsistency or otherwise

interfere with an action taken or

planned by another agency; (3)

materially alter the budgetary impact of

entitlements, grants user fees, loan

programs, or the rights and obligations

of recipients thereof; or (4) raise novel

legal or policy issues arising out of legal

mandates, the President’s priorities, or

the principles set forth in E.O. 12866.

This rule is not subject to the Regulatory

Flexibility Act (5 U.S.C. 601 et seq.).

Therefore, no Regulatory Flexibility

Analysis was prepared. This rule does

not impose any reporting or record

keeping requirements under the

Paperwork Reduction Act (44 U.S.C.

3501 et seq.).

List of Subjects in 32 CFR Part 2

Government procurement.

Accordingly, title 32, chapter I, is

amended by adding part 2, to read as

follows:

PART 2—PILOT PROGRAM POLICY

Sec.

2.1 Purpose.

2.2 Statutory relief for participating

programs.

2.3 Regulatory relief for participating

programs.

2.4 Designation of participating programs.

2.5 Criteria for designation of participating

programs.

Authority: 10 U.S.C. 2340 note.

§ 2.1 Purpose.

Section 809 of Public Law 101–510,

‘‘National Defense Authorization Act for

Fiscal Year 1991,’’ as amended by

section 811 of Public Law 102–484,

‘‘National Defense Authorization Act for

Fiscal Year 1993’’ and Public Law 103–

160, ‘‘National Defense Authorization

Act for Fiscal Year 1994,’’ authorizes the

Secretary of Defense to conduct the

Defense Acquisition Pilot Program. In

accordance with section 809 of Public

Law 101–510, the Secretary may

designate defense acquisition programs

for participation in the Defense

Acquisition Pilot Program.

(a) The purpose of the pilot programs

is to determine the potential for

increasing the efficiency and

effectiveness of the acquisition process.

Pilot programs shall be conducted in

accordance with the standard

commercial, industrial practices. As

used in this policy, the term ‘‘standard

commercial, industrial practice’’ refers

to any acquisition management practice,

process, or procedure that is used by

commercial companies to produce and

sell goods and services in the

commercial marketplace. This

definition purposely implies a broad

range of potential activities to adopt

commercial practices, including

regulatory and statutory streamlining, to

eliminate unique Government

requirements and practices such as

government-unique contracting policies

and practices, government-unique

specifications and standards, and

reliance on cost determination rather

than price analysis.

(b) Standard commercial, industrial

practices include, but are not limited to:

(1) Innovative contracting policies

and practices;

(2) Performance and commercial

specifications and standards;

(3) Innovative budget policies;

(4) Establishing fair and reasonable

prices without cost data;

(5) Maintenance of long-term

relationships with quality suppliers;

(6) Acquisition of commercial and

non-developmental items (including

components); and

(7) Other best commercial practices.

§ 2.2 Statutory relief for participating

programs.

(a) Within the limitations prescribed,

the applicability of any provision of law

or any regulation prescribed to

implement a statutory requirement may

be waived for all programs participating

in the Defense Acquisition Pilot

Program, or separately for each

participating program, if that waiver or

limit is specifically authorized to be

waived or limited in a law authorizing

appropriations for a program designated

by statute as a participant in the Defense

Acquisition Pilot Program.

(b) Only those laws that prescribe

procedures for the procurement of

supplies or services; a preference or

requirement for acquisition from any

source or class of sources; any

requirement related to contractor

performance; any cost allowability, cost

accounting, or auditing requirements; or

any requirement for the management of,

testing to be performed under,

evaluation of, or reporting on a defense

acquisition program may be waived.

(c) The requirements in section 809 of

Public Law 101–510, as amended by

section 811 of Public Law 102–484, the

requirements in any law enacted on or

after the enactment of Public Law 101–

510 (except to the extent that a waiver

or limitation is specifically authorized

for such a defense acquisition program

by statute), and any provision of law

that ensures the financial integrity of the

conduct of a Federal Government

program or that relates to the authority

of the Inspector General of the

Department of Defense may not be

considered for waiver.
17550 Federal Register / Vol. 62, No. 69 / Thursday, April 10, 1997 / Rules and Regulations

1Copies of this Department of Defense

publication may be obtained from the Government

Printing Office, Superintendent of Documents,

Washington, DC 20402.

2See footnote 1 to § 2.3(a).

3Copies may be obtained, at cost, from the

National Technical Information Service, 5285 Port

Royal Road, Springfield, VA 22161.

4See footnote 3 to § 2.4(b).

5See footnote 3 to § 2.4(b).

§ 2.3 Regulatory relief for participating

programs.

(a) A program participating in the

Defense Acquisition Pilot Program will

not be subject to any regulation, policy,

directive, or administrative rule or

guideline relating to the acquisition

activities of the Department of Defense

other than the Federal Acquisition

Regulation (FAR) 1, the Defense FAR

Supplement (DFARS) 2, or those

regulatory requirements added by the

Under Secretary of Defense for

Acquisition and Technology, the Head

of the Component, or the DoD

Component Acquisition Executive.

(b) Provisions of the FAR and/or

DFARS that do not implement statutory

requirements may be waived by the

Under Secretary of Defense for

Acquisition and Technology using

appropriate administrative procedures.

Provisions of the FAR and DFARS that

implement statutory requirements may

be waived or limited in accordance with

the procedures for statutory relief

previously mentioned.

(c) Regulatory relief includes relief

from use of government-unique

specifications and standards. Since a

major objective of the Defense

Acquisition Pilot Program is to promote

standard, commercial industrial

practices, functional performance and

commercial specifications and

standards will be used to the maximum

extent practical. Federal or military

specifications and standards may be

used only when no practical alternative

exists that meet the user’s needs.

Defense acquisition officials (other than

the Program Manager or Commodity

Manager) may only require the use of

military specifications and standards

with advance approval from the Under

Secretary of Defense for Acquisition and

Technology, the Head of the DoD

Component, or the DoD Component

Acquisition Executive.

§ 2.4 Designation of participating

programs.

(a) Pilot programs may be nominated

by a DoD Component Head or

Component Acquisition Executive for

participation in the Defense Acquisition

Pilot Program. The Under Secretary of

Defense for Acquisition and Technology

shall determine which specific

programs will participate in the pilot

program and will transmit to the

Congressional defense committees a

written notification of each defense

acquisition program proposed for

participation in the pilot program.

Programs proposed for participation

must be specifically designated as

participants in the Defense Acquisition

Pilot Program in a law authorizing

appropriations for such programs and

provisions of law to be waived must be

specifically authorized for waiver.

(b) Once included in the Defense

Acquisition Pilot Program, decision and

approval authority for the participating

program shall be delegated to the lowest

level allowed in the acquisition

regulations consistent with the total cost

of the program (e.g., under DoD

Directive 5000.1, 3 an acquisition

program that is a major defense

acquisition program would be delegated

to the appropriate Component

Acquisition Executive as an acquisition

category IC program)

(c) At the time of nomination

approval, the Under Secretary of

Defense for Acquisition and Technology

will establish measures to judge the

success of a specific program, and will

also establish a means of reporting

progress towards the measures.

§ 2.5 Criteria for designation of

participating programs.

(a) Candidate programs must have an

approved requirement, full program

funding assured prior to designation,

and low risk. Nomination of a candidate

program to participate in the Defense

Acquisition Pilot Program should occur

as early in the program’s life-cycle as

possible. Developmental programs will

only be considered on an exception

basis.

(b) Programs in which commercial or

non-developmental items can satisfy the

military requirement are preferred as

candidate programs. A nominated

program will address which standard

commercial, industrial practices will be

used in the pilot program and how those

practices will be applied.

(c) Nomination of candidate programs

must be accompanied by a list of

waivers being requested to Statutes,

FAR, DFARS, DoD Directives 4 and

Instructions,5 and where applicable,

DoD Component regulations. Waivers

being requested must be accompanied

by rationale and justification for the

waiver. The justification must include:

(1) The provision of law proposed to

be waived or limited.

(2) The effects of the provision of law

on the acquisition, including specific

examples.

(3) The actions taken to ensure that

the waiver or limitation will not reduce

the efficiency, integrity, and

effectiveness of the acquisition process

used for the defense acquisition

program; and

(4) A discussion of the efficiencies or

savings, if any, that will result from the

waiver or limitation.

(d) No nominated program shall be

accepted until the Under Secretary of

Defense has determined that the

candidate program is properly planned.

Dated: April 4, 1997.

L.M. Bynum,

Alternate OSD Federal Register Liaison

Officer, Department of Defense.

[FR Doc. 97–9202 Filed 4–9–97; 8:45 am]

BILLING CODE 5000–04–M

DEPARTMENT OF DEFENSE

Department of the Army

Corps of Engineers

33 CFR Part 334

Danger Zones and Restricted Areas

AGENCY: Army Corps of Engineers, DoD.

ACTION: Final rule.

SUMMARY: The Corps is amending many

of the danger zone and restricted area

regulations to clarify that persons, as

well as vessels or other listed watercraft,

are subject to the restrictions placed on

the use of and entry into the areas

established by the danger zone and

restricted area regulations. This

clarification does not affect the size,

location or further restrict the public’s

use of the areas. The danger zones and

restricted areas continue to be essential

to the safety and security of Government

facilities, vessels and personnel and

protect the public from the hazards

associated with the operations at the

Government facilities. We are also

making several minor editorial changes

to remove obsolete materials and reflect

a change in the name of a Naval

Command referenced in a restricted area

regulation.

EFFECTIVE DATE: May 12, 1997.

FOR FURTHER INFORMATION CONTACT:

Mr. Ralph Eppard, Regulatory Branch,

CECW–OR at (202) 761–1783.

SUPPLEMENTARY INFORMATION: Pursuant

to its authorities in Section 7 of the

Rivers and Harbors Act of 1917 (40 Stat.

266; 33 U.S.C. 1) and Chapter XIX of the

Army Appropriations Act of 1919 (40

Stat. 892; 33 U.S.C. 3), the Corps is

amending danger zone and restricted

area regulations in 33 CFR part 334, by

inserting the word ‘‘person’’, or similar