58694 Federal Register / Vol. 79, No. 189 / Tuesday, September 30, 2014 / Rules and Regulations 

SUPPLEMENTARY INFORMATION: 

I. Background 

DoD published an interim rule at 79 

FR 4631 on January 29, 2014, to 

implement section 811 of the National 

Defense Authorization Act (NDAA) for 

Fiscal Year (FY) 2013 (Pub. L. 112–239), 

which was enacted January 2, 2013. 

Two comments were submitted on the 

interim rule. 

Section 811(a) instructs DoD to 

modify the acquisition regulations to 

prohibit DoD from entering into costtype contracts for the production of 

major defense acquisition programs 

(MDAPs) for contracts entered into on or 

after October 1, 2014, with one 

exception in section 811(b). Under 

section 811(b), the Under Secretary of 

Defense for Acquisition, Technology, 

and Logistics may submit to the 

congressional defense committees: (1) A 

written certification that the particular 

cost-type contract is needed to provide 

a required capability in a timely, costeffective manner; and (2) An 

explanation of the steps taken to ensure 

that the use of cost-type pricing is 

limited to only those line items or 

portions of the contract where such 

pricing is needed to achieve the purpose 

of the exception. In implementing 

section 811 of the NDAA for FY 2013, 

DoD further defined the prohibition on 

entering into cost-type contracts to 

explicitly state the prohibition also 

applies to entering into costreimbursement line items for the 

production of MDAPs. 

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: 

Comment: The respondent stated that 

the term ‘‘cost-type reimbursement 

contract’’ at DFARS 234.004(2)(i)(C) was 

ambiguous and recommended that the 

term ‘‘cost-reimbursement contract’’ be 

used instead to maintain consistency 

with other references within the 

acquisition regulations. 

Response: The text at DFARS 

234.004(2)(i)(C) has been revised to 

replace the term ‘‘cost-type 

reimbursement contract’’ with ‘‘costreimbursement type contract.’’ 

Comment: The respondent stated that 

the reference to DFARS 201.101 within 

Section II, Discussion and Analysis, of 

the Federal Register Notice published 

for the proposed rule should be DFARS 

202.101. 

Response: The respondent is correct. 

However, the comment did not 

necessitate changes to the interim rule 

as the rule itself cited DFARS 202.101 

accurately. 

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 amends the DFARS to 

implement section 811 of the NDAA for 

FY 2013, which prohibits the DoD from 

entering into cost-type contracts for the 

production of major defense acquisition 

programs (MDAPs) unless the Under 

Secretary of Defense for Acquisition, 

Technology, and Logistics submits an 

exception to the congressional defense 

committees. In implementing section 

811 of the NDAA for FY 2013, DoD 

further defined the prohibition on 

entering into cost-type contracts to 

explicitly state the prohibition also 

applies to entering into costreimbursement line items for the 

production of MDAPs. 

Small entities do not have or are 

exempt from having the complex, 

expensive business and management 

systems required to manage the 

complex, higher risk, and expensive 

major defense acquisition programs 

(MDAPs). Small entities do play a 

significant role in performing as 

subcontractors and component 

manufacturers for MDAPs, but this rule 

does not apply to subcontractors and 

component manufacturers. 

No comments were received from the 

public in response to the initial 

regulatory flexibility analysis. 

This rule does not impose new 

recordkeeping or reporting requirements 

and does not duplicate, overlap, or 

conflict with any other Federal rules. 

There are no known significant 

alternative approaches to the rule that 

would meet the requirements of the 

statute. 

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 Parts 202, 

207, 209, 216, and 234 

Government procurement. 

Manuel Quinones, 

Editor, Defense Acquisition Regulations 

System. 

Therefore, DoD adopts as final the 

interim rule published at 79 FR 4631 on 

January 29, 2014, with the following 

changes: 

PART 234—MAJOR SYSTEM 

ACQUISITION 

■ 1. The authority citation for part 234 

continues to read as follows: 

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

Chapter 1. 

234.004 [Amended] 

■ 2. Section 234.004(2)(i)(C) 

introductory text is amended by 

removing ‘‘cost-type reimbursement 

contact’’ and adding ‘‘costreimbursement type contract’’ in its 

place. 

[FR Doc. 2014–22858 Filed 9–29–14; 8:45 am] 

BILLING CODE 5001–06–P 

DEPARTMENT OF DEFENSE 

Defense Acquisition Regulations 

System 

48 CFR Parts 212, 225, 232, and 252 

RIN 0750–AI14 

Defense Federal Acquisition 

Regulation Supplement; Payment in 

Local Currency (Afghanistan) (DFARS 

Case 2013–D029) 

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 incorporate into the DFARS 

policies and procedures concerning 

payment for contracts for performance 

in Afghanistan. 

DATES: Effective September 30, 2014. 


tkelley on DSK3SPTVN1PROD with RULES
Federal Register / Vol. 79, No. 189 / Tuesday, September 30, 2014 / Rules and Regulations 58695 

FOR FURTHER INFORMATION CONTACT: Ms. 

Jennifer Hawes, telephone 571–372– 

6115. 

SUPPLEMENTARY INFORMATION: 

I. Background 

DoD published a proposed rule in the 

Federal Register at 79 FR 4647 on 

January 29, 2014, to amend the DFARS 

to provide policy and procedures at 

DFARS 212.301 and 232.72 on the use 

of a new solicitation provision at 

252.232–7014, Notification of Payment 

in Local Currency (Afghanistan). This 

provision provides notification that the 

payment currency to be used for 

contracts for performance in 

Afghanistan shall be dependent on the 

nationality of the vendor. Two 

respondents submitted public 

comments in response to the proposed 

rule. 

II. Discussion and Analysis 

DoD reviewed the public comments in 

development of the final rule. One 

minor change is made to the final rule 

as a result of one of the comments. A 

discussion of the comments is provided 

below. 

Comment: The respondent stated that 

if the U.S. Government solicited the use 

of security forces in Afghanistan, any 

resulting contract would be required to 

be awarded to the Afghan Public 

Protection Force (APPF) and use APPF 

procurement terms. 

Response: This comment is outside 

the scope of this final rule. The rule 

only addresses contracts awarded to 

vendors and not state-owned Afghani 

governmental entities for the provision 

of security services. 

Comment: The respondent noted that 

section 212.301(f)(lii) referred to 

252.232–70XX as a clause rather than a 

provision. 

Response: The final rule correctly 

refers to 252.232–7014 as a provision. 

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 

A final regulatory flexibility analysis 

has been prepared consistent with the 

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

et seq., and is summarized as follows: 

This final rule amends the DFARS by 

incorporating policies and procedures at 

DFARS 212.301 and 232.72 on the use 

of a new DFARS solicitation provision 

252.232–7014, Notification of Payment 

in Local Currency (Afghanistan). This 

rule implements the payment currency 

procedures contained in the U.S. 

Central Command’s Fragmentary Orders 

09–1567 and 10–143. The provision 

provides notification that the payment 

currency to be used for contracts for 

performance in Afghanistan shall be 

dependent on the nationality of the 

vendor. Additionally, DFARS 225.7703– 

1 provides direction to contracting 

officers to follow the procedures at 

DFARS Procedures, Guidance, and 

Information 225.7703–1(c) when issuing 

solicitations and contracts for 

performance in Afghanistan. 

No comments were received from the 

public in response to the initial 

regulatory flexibility analysis. DoD does 

not expect this rule to have an economic 

impact on a substantial number of small 

entities because this rule merely 

provides requirements for payments to 

host nation vendors for performance in 

Afghanistan. 

This rule does not add any new 

information collection, reporting, or 

recordkeeping requirements. No 

alternatives were identified that will 

accomplish the objectives of the rule. 

V. Paperwork Reduction Act 

The rule does not contain 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 Parts 212, 

225, 232, and 252 

Government procurement. 

Manuel Quinones, 

Editor, Defense Acquisition Regulations 

System. 

Therefore, 48 CFR parts 212, 225, 232, 

and 252 are amended as follows: 

■ 1. The authority citation for parts 212, 

225, 232, and 252 continues to read as 

follows: 

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

Chapter 1. 

PART 212—ACQUISITION OF 

COMMERCIAL ITEMS 

■ 2. Amend section 212.301 by 

redesignating paragraphs (f)(lviii) 

through (lxxiii) as (f)(lix) through (lxxiv) 

and adding a new paragraph (f)(lviii) to 

read as follows: 

212.301 Solicitation provisions and 

contract clauses for the acquisition of 

commercial items. 

(f) * * * 

(lviii) Use the provision at 252.232– 

7014, Notification of Payment in Local 

Currency (Afghanistan), as prescribed in 

232.7202. 

* * * * * 

PART 225—FOREIGN ACQUISITIONS 

■ 3. Amend section 225.7703–1 by 

adding paragraph (c) to read as follows: 

225.7703–1 Acquisition procedures. 

* * * * * 

(c) When issuing solicitations and 

contracts for performance in 

Afghanistan, follow the procedures at 

PGI 225.7703–1(c). 

PART 232—CONTRACT FINANCING 

■ 4. Add subpart 232.72 to read as 

follows: 

Subpart 232.72—Payment in Local Currency 

(Afghanistan) 

Sec. 

232.7200 Scope of subpart. 

232.7201 Policy and procedures. 

232.7202 Solicitation provision. 

SUBPART 232.72—PAYMENT IN 

LOCAL CURRENCY (AFGHANISTAN) 

232.7200 Scope of subpart. 

This subpart prescribes policies and 

procedures concerning the payment of 

contracts for performance in 

Afghanistan. 

232.7201 Policy and procedures. 

Payment currency used for contracts 

performed in Afghanistan shall be 

dependent on the nationality of the 

vendor pursuant to the authority of 

USCENTCOM Fragmentary Orders 

(FRAGOs) 09–1567 and 10–143. If the 

contract is awarded to a host nation 

vendor (Afghan), the contractor will be 

paid in Afghani (local currency) via 

electronic funds transfer to a local 

(Afghan) banking institution. Contracts 

shall not be awarded to host nation 

vendors who do not bank locally. If 

awarded to other than a host nation 

vendor, the contract will be awarded in 

U.S. dollars. 


tkelley on DSK3SPTVN1PROD with RULES
58696 Federal Register / Vol. 79, No. 189 / Tuesday, September 30, 2014 / Rules and Regulations 

232.7202 Solicitation provision. 

Use the provision at 252.232–7014, 

Notification of Payment in Local 

Currency (Afghanistan), in all 

solicitations, including solicitations 

using FAR part 12 procedures for the 

acquisition of commercial items, for 

performance in Afghanistan. 

PART 252—SOLICITATION 

PROVISIONS AND CONTRACT 

CLAUSES 

■ 5. Add section 252.232–7014 to read 

as follows: 

252.232–7014 Notification of Payment in 

Local Currency (Afghanistan). 

As prescribed in 232.7202, use the 

following provision: 

NOTIFICATION OF PAYMENT IN 

LOCAL CURRENCY (AFGHANISTAN) 

(SEP 2014) 

(a) The contract resulting from this 

solicitation will be paid in Afghani (local 

currency) if the contract is awarded to a host 

nation vendor (Afghan), pursuant to the 

authority of USCENTCOM Fragmentary 

Order (FRAGO) 09–1567 and FRAGO 10– 

143. Contract payment will be made in 

Afghani (local currency) via electronic funds 

transfer (EFT) to a local (Afghan) banking 

institution, unless an exception in paragraph 

(c) applies. Contracts shall not be awarded to 

host nation vendors who do not bank locally. 

If award is made to other than a host nation 

vendor, the contract will be awarded in U.S. 

dollars. 

(b) Vendors shall submit quotations and 

offers in U.S. dollars. If the contract is 

awarded to an Afghan vendor, the quotation 

or offer will be converted to Afghani using 

a Government budget rate of [Insert current 

budget rate here.] Afghani per U.S. dollar. 

(c) By exception, the following forms of 

payment are acceptable, in the following 

order of priority, when the local finance 

office determines that EFT using ITS.gov is 

not available: 

(1) EFT using Limited Depository Account 

(LDA). 

(2) Check from the local finance office 

LDA. 

(3) Local currency cash payments in 

Afghani (must be approved in writing by the 

local finance office and contracting office 

prior to contract award). Payments in cash 

are restricted to contracts when— 

(i) The vendor provides proof via a letter 

from the host nation banking institution that 

it is not EFT capable; and 

(ii) The local finance office validates that 

the vendor’s banking institution is not EFT 

capable. Cash payments will be made in 

Afghani. 

(End of provision) 

[FR Doc. 2014–22861 Filed 9–29–14; 8:45 am] 

BILLING CODE 5001–06–P 

DEPARTMENT OF DEFENSE 

Defense Acquisition Regulations 

System 

48 CFR Part 217 

RIN 0750–AI35 

Defense Federal Acquisition 

Regulation Supplement: Contract 

Period for Task and Delivery Order 

Contracts—Deletion of Congressional 

Reporting Requirement (DFARS Case 

2014–D018) 

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 delete an obsolete 

congressional reporting requirement. 

DATES: Effective September 30, 2014. 

FOR FURTHER INFORMATION CONTACT: Ms. 

Janetta Brewer, telephone 571–372– 

6104. 

SUPPLEMENTARY INFORMATION: 

I. Background 

On December 9, 2005, the DFARS was 

amended to implement section 813 of 

the National Defense Authorization Act 

for Fiscal Year 2005 (Pub. L. 108–375), 

which required the Secretary of Defense 

to submit to Congress a report setting 

forth when an ordering period of a task 

or delivery order contract awarded 

pursuant to section 2304(a) of title 10, 

United States Code, was extended 

beyond ten years. The reporting 

requirement applied to fiscal years 2005 

through 2009. 

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 it deletes an obsolete 

congressional reporting requirement 

imposed on DoD. 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. 

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 217 

Government procurement. 

Manuel Quinones, 

Editor, Defense Acquisition Regulations 

System. 

Therefore, 48 CFR part 217 is 

amended as follows: 

PART 217—SPECIAL CONTRACTING 

METHODS 

■ 1. The authority citation for 48 CFR 

part 217 continues to read as follows: 

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

chapter 1. 

217.204 [Amended] 

■ 2. Amend section 217.204 by 

removing paragraph (e)(ii) and 

redesignating paragraphs (e)(iii) and (iv) 

as paragraphs (e)(ii) and (iii), 

respectively. 

[FR Doc. 2014–22862 Filed 9–29–14; 8:45 am] 

BILLING CODE 5001–06–P 


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