Federal Register / Vol. 86, No. 129 / Friday, July 9, 2021 / Rules and Regulations 36229 

replacement in (c)(556)(i)(A)(1), Rule 

102, adopted on December 3, 2004. 

* * * * * 

(556) The following rule was 

submitted on September 16, 2020, by 

the Governor’s designee as an 

attachment to a letter dated September 

16, 2020. 

(i) Incorporation by reference. (A) 

South Coast Air Quality Management 

District. 

(1) Rule 102, ‘‘Definition of Terms,’’ 

adopted on January 10, 2020. 

(2) [Reserved] 

(B) [Reserved] 

(ii) [Reserved] 

(557) The following rule was 

submitted on September 21, 2020, by 

the Governor’s designee as an 

attachment to a letter dated September 

18, 2020. 

(i) Incorporation by reference. (A) El 

Dorado County Air Quality Management 

District. 

(1) Rule 215, ‘‘Architectural 

Coatings,’’ adopted on August 25, 2020. 

(2) [Reserved] 

(B) [Reserved] 

(ii) [Reserved] 

[FR Doc. 2021–14407 Filed 7–8–21; 8:45 am] 

BILLING CODE 6560–50–P 

DEPARTMENT OF HEALTH AND 

HUMAN SERVICES 

Centers for Medicare & Medicaid 

Services 

42 CFR Part 510 

[CMS–5529–F] 

RIN 0938–AU01 

Medicare Program: Comprehensive 

Care for Joint Replacement Model 

Three-Year Extension and Changes to 

Episode Definition and Pricing; 

Medicare and Medicaid Programs; 

Policies and Regulatory Revisions in 

Response to the COVID–19 Public 

Health Emergency 

Correction 

In rule document 2021–09097, 

appearing on pages 23496 through 

23576 in the issue of Monday, May 3, 

2021 make the following corrections. 

§ 510.400 [Amended] 

■ 1. On page 23574, in the second 

column, in paragraph (b)(4)(ii)(A), on 

the second line, ‘‘•80%’’ should read 

‘‘≥80%’’. 

■ 2. On the same page, in the same 

column, in the same paragraph, on the 

third line, ‘‘•300’’ should read ‘‘≥300’’. 

[FR Doc. C1–2021–09097 Filed 7–8–21; 8:45 am] 

BILLING CODE 0099–10–D 

DEPARTMENT OF DEFENSE 

Defense Acquisition Regulations 

System 

48 CFR Parts 204, 212, and 252 

[Docket DARS–2020–0007] 

RIN 0750–AK30 

Defense Federal Acquisition 

Regulation Supplement: Data 

Collection and Inventory for Services 

Contracts (DFARS Case 2018–D063) 

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 to 

implement a section of the United States 

Code that requires the collection of data 

on certain DoD service contracts. 

DATES: Effective July 9, 2021. 

FOR FURTHER INFORMATION CONTACT: Ms. 

Carrie Moore, telephone 571–372–6093. 

SUPPLEMENTARY INFORMATION: 

I. Background 

DoD published a proposed rule in the 

Federal Register at 85 FR 34569 on June 

5, 2020, to implement 10 U.S.C. 2330a, 

as amended by section 812 of the 

National Defense Authorization Act 

(NDAA) for Fiscal Year (FY) 2017 (Pub. 

L. 114–328), which requires DoD to 

establish a data collection system to 

provide certain management 

information with regard to an awarded 

contract or task order that is valued in 

excess of $3 million and is for the 

following service acquisition portfolio 

groups: Logistics management services, 

equipment-related services, knowledgebased services, or electronics and 

communications services. 

DoD published a prior proposed rule 

under DFARS Case 2012–D051 in the 

Federal Register at 79 FR 32522 on June 

5, 2014, to implement 10 U.S.C. 2330a 

(section 807 of the NDAA for FY 2008), 

which required DoD to establish a data 

collection system to provide certain data 

on the purchasing of services by DoD 

and to submit to Congress an annual 

inventory of services contracts awarded 

by or on behalf of DoD. The proposed 

rule for DFARS Case 2012–D051 

required contractors to enter the 

required data into a DoD-unique system, 

Enterprise Contractor Manpower 

Reporting Application (ECMRA). In 

response to public comments received 

in response to the proposed rule for 

DFARS Case 2012–D051, DoD made the 

following changes in the proposed rule 

for DFARS Case 2018–D063: 

• DoD has adopted the service 

contract reporting process used by other 

Federal agencies and no longer requires 

contractor reporting in ECMRA. This 

change enables DoD to use the Federal 

Procurement Data System (FPDS) to 

obtain a majority of the information 

required by 10 U.S.C. 2330a. FPDS does 

not provide data on the direct labor 

hours expended and dollar amounts 

invoiced for contracted services. 

Therefore, both the proposed and final 

rules require applicable contractors to 

enter the labor hours and dollar 

amounts in SAM, which is the process 

used by other Federal agencies, in 

accordance with Federal Acquisition 

Regulation (FAR) subpart 4.17. 

• To relieve burden and minimize 

impact for contractors and 

subcontractors, both the proposed and 

final rules require contractors to report 

the total number of hours worked (both 

contractor and subcontractor) under the 

contract for the entire fiscal year and 

does not require a breakdown of those 

hours by employee type or by 

subcontractor. The requirement to 

report subcontractor data is limited to 

first-tier subcontractors, consistent with 

the FAR requirement for service 

contract reporting. The proposed and 

final rules leave the process for 

collecting subcontractor data up to the 

discretion of each contractor; the rules 

do not prescribe a specific methodology 

that contractors must use to gather this 

data on applicable subcontracts, or 

prescribe a reporting requirement for 

subcontractors via the flow-down of the 

contract clause. 

• The estimated burdens for 

respondents and responses published in 

the proposed rule for DFARS Case 

2021–D051 have been updated to reflect 

the revised requirements of 10 U.S.C. 

2330a, as amended. 

The following is a summary of the 

public comments received in response 

to the proposed rule for DFARS Case 

2012–D051: 

A. Exemptions 

Comment: Several respondents 

recommended that the rule exempt 

certain areas including: Research and 

development projects; architect and 

engineering services; 

telecommunications and transmission 

and internet; and actions using criteria 

similar to the Service Contract Labor 

Standards exemptions in FAR 22.1003– 

4(d)(1). 

Response: The proposed rule for 

DFARS Case 2018–D063 implements 10 

U.S.C. 2330a, as amended by section 

812 of the NDAA for FY 2017, which 


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requires reporting for only four service 

acquisition portfolio groups: Logistics 

management services, equipment 

related services, knowledge-based 

services, and electronics and 

communications services. No further 

exemptions are available under the law. 

Comment: Several respondents 

recommended that contracted services 

that meet the definition of commercial 

items be exempt from ECMRA reporting. 

Response: An exception for services 

that meet the definition of a commercial 

item would exclude significant sums 

expended by DoD on commercial 

service acquisitions intended to be 

covered by the law. The intent of the 

statute is to enhance DoD’s ability to 

manage the total force, inclusive of 

military, civilian, and contractor 

personnel. Specifically, section 2330a 

requires the military departments and 

defense agencies to ensure that the 

inventory of contracts for services 

required by the statute is used to inform 

strategic workforce planning decisions 

under 10 U.S.C. 129a, develop budget 

justification materials for services in 

accordance with 10 U.S.C. 235, and 

ensure services contracts are not for the 

performance of inherently governmental 

functions. Therefore, services meeting 

the definition of a commercial item are 

not exempt from the reporting 

requirement. 

Comment: Several respondents 

recommended that firm fixed-price 

service contracts be exempt from the 

ECMRA reporting requirement, because 

these contracts acquire services in their 

entirety, not as individuals (full-time 

equivalents). 

Response: In accordance with 

paragraph (b) of 10 U.S.C. 2330a, the 

data required to be collected under the 

statute includes service contracts and 

orders that contain firm fixed-prices for 

the specific tasks to be performed. 

Therefore, firm fixed-price contracts for 

the applicable services are not exempt 

under the proposed rule for DFARS 

Case 2018–D063. 

Comment: One respondent 

recommended that the rule exempt DoD 

intelligence community agency 

contracts, because the existing 

exemption for ‘‘classified services’’ is 

not sufficient to cover the exempt 

contracts entered into by DoD 

intelligence community agencies. 

Response: The statute does not 

provide for exemptions to the reporting 

requirement; therefore, the proposed 

rule for DFARS Case 2012–D051 does 

not provide for exemptions, in order to 

comply with the law. 

Comment: One respondent 

recommended that, due to the difficulty 

in tracking labor for service contracts 

where contractor employees may spend 

only small fractions of their time 

servicing the Government contract (such 

as refuse collection and software as a 

service), the rule should be changed to 

exempt such contracts by using the 

criteria similar to the Service Contract 

Labor Standards exemptions (see FAR 

22.1003–4(d)(1)). 

Response: Title 10 U.S.C. 2330a, as 

amended by section 812 of the NDAA 

for FY 2017, now limits data collection 

to four service acquisition portfolio 

groups: Logistics management services, 

equipment related services, knowledgebased services, and electronics and 

communications services. Under the 

proposed rule for DFARS Case 2018– 

D063, only service contracts with a total 

estimated value exceeding $3 million 

that are for services in one of the four 

portfolio groups must be reported in 

SAM. 

Comment: One respondent questioned 

whether Congress intended DoD to 

report contracts for services that are 

integrally related to supplies, or 

contracts where the services are a 

relatively small dollar value in relation 

to the supplies. 

Response: Title 10 U.S.C. 2330a 

requires the collection of data on ‘‘each 

purchase of services by a military 

department or Defense Agency’’ that 

meets a certain dollar threshold and is 

for certain services. The proposed rule 

for DFARS Case 2018–D063 clarifies 

that the requirement applies to contracts 

or orders that have a total estimated 

value, including options, exceeding $3 

million and are for services in one of the 

four service acquisition portfolio 

groups. 

B. Expansion of Reporting Requirement 

Comment: Two respondents suggested 

that the ECMRA reporting requirement 

be extended to contracts for services 

valued at or below the simplified 

acquisition threshold (SAT). Doing so 

would be consistent with the 

congressional intent in 10 U.S.C. 2330a 

for DoD to provide a total inventory of 

contracted services. 

Response: Title 10 U.S.C. 2330a(a), as 

amended by section 812 of the NDAA 

for FY 2017, now only requires the 

collection of data on service contracts, 

under certain portfolio groups, that 

exceed $3 million. The proposed rule 

for DFARS Case 2018–D063 implements 

the statutory threshold. Applying the 

rule to service contracts below $3 

million is not necessary to implement 

the statute and would impose an 

unnecessary burden on the public and 

DoD. 

Comment: One respondent suggested 

that the final rule clarify that services 

provided ancillary to a lease or rental 

contract (such as auto repair and 

maintenance services incidental to a 

vehicle lease) are subject to ECMRA 

reporting requirement. The respondent 

also recommended that the final rule 

clarify that the ECMRA reporting 

requirements apply to contracts for 

destruction, demolition, and removal. 

Response: Title 10 U.S.C. 2330a(a), as 

amended by section 812 of the NDAA 

for FY 2017, specifies that the service 

acquisition portfolio group for 

equipment related services is included 

in the required reporting group. It is 

expected that contracts for equipmentrelated services with a total estimated 

value, including options, exceeding $3 

million will be reported in SAM. 

C. Duplicative of Existing Systems 

Comment: Two respondents indicated 

that the rule is duplicative of the 

existing FAR rule on service contract 

reporting that applies to civilian 

agencies (see FAR subpart 4.17). 

Respondents stated that there should 

not be two parallel systems, one for 

civilian agencies and another for 

defense agencies, because this situation 

causes confusion and compliance 

problems within industry. 

Response: FAR subpart 4.17 does not 

apply to DoD. The proposed rule for 

DFARS Case 2018–D063 enables DoD to 

fulfill its obligation under 10 U.S.C. 

2330a. Since publication of the 

proposed rule under DFARS Case 2012– 

D051, DoD has adopted the use of FPDS 

to collect a majority of the required data, 

in an effort to standardize the reporting 

process for contractors across the 

Federal Government. 

Comment: Several respondents 

suggested that the ECMRA system is 

duplicative of other Government 

systems, such as FPDS, which can also 

be used to estimate the data provided in 

the annual inventory of contracts for 

services. 

Response: DoD has adopted the 

service contract reporting process used 

by other Federal agencies and no longer 

requires contractor reporting in ECMRA. 

This rule will enable DoD to use FPDS 

to obtain a majority of the information 

required by 10 U.S.C. 2330a. FPDS does 

not provide data on the direct labor 

hours expended and dollar amounts 

invoiced for contracted services. 

Therefore, the proposed rule for DFARS 

Case 2018–D063 requires applicable 

contractors to enter the labor hours and 

dollar amounts in SAM, which is the 

process used by other Federal agencies, 

in accordance with FAR subpart 4.17. 

Comment: Two respondents suggested 

that the separate instances of ECMRA 

(Army, Navy, Air Force, and other DoD 


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agencies) be combined into one DoDwide ECMRA system. 

Response: The use of ECMRA is no 

longer necessary. The proposed rule for 

DFARS Case 2018–D063 requires 

contractors to enter information in 

SAM. 

Comment: Two respondents suggested 

that the rule is duplicative of existing 

DoD reporting requirements, such as: (1) 

The Army’s contractor manpower 

reporting requirement; and (2) the 

Secretary of Defense Memorandum 

entitled ‘‘Enterprise-wide Contractor 

Manpower Reporting Application,’’ 

dated November 2012, that requires all 

new contracts for services to include a 

contract line item for contractor 

manpower reporting and a requirement 

in the performance work statement for 

contractor manpower reporting. 

Response: This rule will replace, not 

duplicate, the existing Army contract 

manpower reporting requirement and 

the requirements in the November 2012 

Memorandum from the Under Secretary 

of Defense for Acquisition, Technology, 

and Logistics and the Acting Principal 

Deputy Under Secretary of Defense for 

Personnel and Readiness. 

Comment: Two respondents suggested 

that the rule exceeds the scope of 

congressional intent, because DoD is 

already using its internal records and 

systems to achieve the statutory 

objective of the inventory of contracts 

for services. 

Response: The rule does not exceed 

the scope of congressional intent, 

because existing systems and reports do 

not fully capture all of the data required 

by 10 U.S.C. 2330a. 

D. Flow Down to Subcontracts 

Comment: Two respondents suggested 

that the requirement for subcontract 

reporting be changed. One respondent 

suggested that the prime contractor be 

required only to flow down the clause 

to subcontractors and relieved of the 

responsibility of reporting for 

subcontractors. The other respondent 

suggested that subcontractor data not be 

reported at all, as this is inconsistent 

with commercial practice. 

Response: The proposed rule for 

DFARS Case 2018–D063 does not 

contain a requirement to flow down a 

clause. Instead, the proposed rule 

requires contractors to include its 

subcontractor labor hours in the total 

number of labor hours the contractor 

reports annually to SAM. The proposed 

rule leaves the process for collecting 

subcontractor data up to the discretion 

of each contractor. 

E. Need for Additional Resources 

Comment: One respondent suggested 

that more resources be provided to the 

Office of the Under Secretary of Defense 

for Personnel and Readiness workforce 

that administers and coordinates the 

inventory of contracts for services. 

Response: This suggestion is beyond 

the scope of the rule. 

F. ECMRA Process 

Comment: One respondent noted that 

the ECMRA interface for the Fourth 

Estate (other DoD agencies and field 

activities) is not yet fully operational, in 

contrast to what is stated in the 

proposed rule. For example, there is no 

operational help desk support for 

Fourth Estate activities. The respondent 

suggests that the final rule should be 

delayed until ECMRA is consolidated 

into a common portal for all DoD 

agencies, or until the ECMRA instance 

for Fourth Estate activities is fully 

resourced. 

Response: The use of ECMRA is no 

longer necessary. The proposed rule for 

DFARS Case 2018–D063 requires 

contractors to enter information in 

SAM. 

Comment: One respondent questioned 

how the Government validates data 

provided by contractors in ECMRA. The 

respondent suggested that ECMRA be 

linked to Wide Area WorkFlow and that 

the contracting officer or the contracting 

officer’s representative be allowed to 

inspect payroll data in order to validate 

contractor data entered into ECMRA. 

Response: Agencies are responsible 

for ensuring the contractor submits 

information in SAM that is reasonable 

and consistent with available contract 

information. Agencies may use any 

contract data available, as appropriate 

and necessary, to meet this 

responsibility. 

Comment: One respondent suggested 

that the rule be clearer about how the 

ECMRA will protect nonpublic data, 

such as direct labor hours and cost data. 

Response: The use of ECMRA is no 

longer necessary. 

Comment: One respondent requested 

clarification on the procedures to follow 

when the services under one contract 

support two or more DoD services or 

agencies. 

Response: The proposed rule for 

DFARS Case 2018–D063 requires 

contractors to enter information in 

SAM, which is a single system able to 

collect all requisite data under this rule. 

Comment: One respondent suggested 

that ECMRA should have a built-in 

capability for an overall point of contact 

at each agency level who can gather and 

manage the ECMRA information and 

that data be gathered at a centralized 

location. 

Response: The use of ECMRA is no 

longer necessary. The proposed rule for 

DFARS Case 2018–D063 requires 

contractors to enter information in 

SAM, which is a Governmentwide 

system. 

Comment: One respondent noted that 

it is unduly restrictive to allow only one 

contractor user per contract to view the 

data for that contract in ECMRA. 

Response: The use of ECMRA is no 

longer necessary. The proposed rule for 

DFARS case 2018–D063 requires 

contractors to enter information in 

SAM. 

Comment: One respondent suggested 

that the rule should clarify the 

contractor’s responsibilities in the event 

that the Government-populated 

information in ECMRA is incorrect. 

Response: The use of ECMRA is no 

longer necessary. The proposed rule for 

DFARS Case 2018–D063 requires 

contractors to enter information in 

SAM. Contractors may contact the SAM 

Helpdesk or the contracting officer in 

the event that data needs to be updated 

in SAM. 

Comment: One respondent suggested 

that the requiring activity, and not the 

contracting officer, be responsible for 

verifying the contractor’s ECMRA 

compliance is documented. 

Response: In accordance with FAR 

1.602–2, the contracting officer is 

responsible for ensuring compliance 

with the terms of the contract. 

Comment: A respondent suggested 

that a DD Form 1423, Contract Data 

Requirements List, be included as a 

requirement in the rule. 

Response: The proposed DFARS 

clauses convey the requirement for 

contractor reporting to SAM; therefore, 

a DD Form 1423 is not necessary. 

G. Proposed Clause Changes 

Comment: One respondent requested 

clarification regarding the prescription 

for the clause at DFARS 252.237–70XX 

with regard to indefinite-delivery, 

indefinite-quantity contracts. The 

respondent asked whether the clause 

must be included only if the expected 

dollar value of the individual task or 

delivery orders will exceed the SAT or 

if the total dollar value of all the task or 

delivery orders issued under the 

contract will exceed the SAT. 

Response: The rule requires 

information reporting on each task order 

that meets the criteria and threshold for 

service contract reporting. The proposed 

rule for DFARS Case 2018–D063 does 

not require reporting at the contract 

level for indefinite-delivery contracts. 

The rule proposes a basic clause that 


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applies to solicitations, contracts (other 

than indefinite-delivery contracts), and 

task orders awarded under non-DoD 

indefinite-delivery contracts; and an 

alternate clause that applies to DoD 

issued solicitations and contracts for 

indefinite-delivery type contracts. The 

basic clause and the alternate clause 

implement the reporting requirement for 

contracts and/or task orders that have a 

total estimated value, including options, 

exceeding $3 million and are for 

services in the four specified service 

acquisition portfolio groups. The basic 

clause advises contractors to report on 

the effort performed under the contract 

or the task order awarded under a nonDoD contract. The alternate clause 

advises the contractor to report on the 

effort performed under each task order 

awarded under a DoD indefinitedelivery contract that meets the criteria 

and threshold for service contract 

reporting. 

Comment: One respondent suggested 

that the rule include a link to the 

product service code (PSC) manual 

available at www.acquisition.gov, to aid 

contracting personnel in determining 

the types of services to which the 

proposed rule applies or does not apply. 

Response: The applicable PSCs will 

be identified in the DFARS Procedures, 

Guidance, and Information upon 

publication of the final rule. 

Comment: One respondent suggested 

that the rule require the contracting 

officer to prepare a determination 

designating specifically the services to 

which the ECMRA reporting 

requirement would apply. 

Response: It is not necessary for the 

contracting officer to prepare such a 

determination or provide further 

clarification to the contractor. The 

proposed rule for DFARS Case 2018– 

D063 only applies the requirement to 

report in SAM, via the DFARS clause, 

to those contracts and orders that meet 

the thresholds and criteria for service 

contract reporting, as expressed in 10 

U.S.C. 2330a. 

H. Definition Clarification 

Comment: One respondent noted that 

many terms, including ‘‘direct labor 

hours’’ and ‘‘cost data,’’ are not defined 

in the proposed rule. 

Response: This proposed rule only 

uses the term ‘‘direct labor hours,’’ 

which is defined in FAR 2.101. 

Comment: Two respondents 

recommended that the term ‘‘services’’ 

be better defined for the purposes of 

informing both the Government and 

contractor when the proposed rule for 

DFARS Case 2012–D051 applies and 

when the contractor is responsible for 

entering data into ECMRA. 

Response: The proposed rule for 

DFARS Case 2018–D063 only applies 

the requirement to report in SAM, via 

the DFARS clause, to those contracts 

and orders that meet or are expected to 

meet the thresholds and criteria for 

service contract reporting, as expressed 

in 10 U.S.C. 2330a. When awarded a 

contract, or task order placed under a 

non-DoD contract, this rule proposes a 

basic clause to notify contractors of the 

requirement to report in SAM on the 

effort performed under the award. When 

awarded an indefinite-delivery contract 

under which orders will be placed that 

may meet the thresholds and criteria for 

service contract reporting, this rule 

proposes an alternate clause to notify 

contractors of the requirement to report 

in SAM on the effort performed for a 

task order issued under the contract that 

meets the service contract reporting 

thresholds and criteria. 

I. Major Rule 

Comment: One respondent suggested 

that the Government reconsider whether 

this is a major rule. Title 5 U.S.C. 804 

defines a major rule as one which the 

Office of Management and Budget 

(OMB) determines will cause a major 

increase in costs or prices for individual 

industries, or have a significant adverse 

effect on competition, employment, 

investment, productivity, or innovation. 

This rule imposes new reporting 

requirements, particularly for 

commercial item contractors that 

provide professional services and 

supplies. These contractors would not 

have been previously subject to the type 

of manpower reporting required by this 

rule. For small businesses, the need to 

build compliant procedures and 

automated systems could be a barrier to 

participating in the federal market. This 

is particularly the case when the 

cumulative effect of multiple and 

duplicative data reporting requirements 

is considered. The ultimate result over 

time will be a decrease in competition 

and innovation in the Federal market. 

Response: This rule is not a major rule 

in that it does not have a significant 

impact on competition, employment, 

investment, productivity, innovation, or 

on the ability of U.S. enterprises to 

compete with foreign enterprises. 

Similar reporting requirements for 

civilian agencies have appeared in FAR 

subpart 4.17 since 2014, so many 

contractors already have experience 

with this type of reporting requirement. 

The scope of this rule has been 

decreased, because 10 U.S.C. 2330a, as 

amended by section 812 of the NDAA 

for FY 2017, limits data collection to 

four service acquisition portfolios and 

applies only to contracts and task orders 

exceeding $3 million in total estimated 

value, including options. 

J. Initial Regulatory Flexibility Analysis 

Comment: Two respondents stated 

that the proposed reporting system did 

not have a goal of minimizing the 

burden to small business and that the 

constant flow of new regulations to 

businesses have little regard for the 

benefit to the Government or burden on 

businesses. 

Response: The burden applied to 

small businesses is the minimum 

consistent with applicable laws, 

Executive orders, regulations, and 

prudent business practices. The 

information collection requirement has 

been narrowly tailored to maximize the 

use of existing records already 

maintained by contractors and by the 

Government. To further minimize the 

impact, DoD is adopting the existing 

system and process used by the rest of 

the Government to obtain the requisite 

information from contractors, which 

maintains a familiar and consistent 

reporting requirement for contractors; 

and the information is collected 

electronically, help-desk support and 

user guides are available for SAM, and 

reporting requirements will be limited 

to a small number of data elements to 

facilitate ease of reporting and reduce 

contractor burden. In addition, the 

NDAA for FY 2017 raised the threshold 

for reporting to $3 million from the SAT 

and limited the data reporting to four 

service acquisition portfolio groups. 

K. Paperwork Reduction Act 

1. Government Systems Already in 

Place 

Comment: Two respondents stated 

that the Government has systems in 

place for collecting the required data 

and the rule would require duplicative 

contractor reporting that is not 

necessary for compliance. Two 

respondents noted that there will be two 

rules, one for DoD and the other nonDoD, which could potentially apply 

under a single contract vehicle and that 

determining which set of rules apply 

will be burdensome. 

Response: The rule will not require 

duplicative reporting by contractors. 

The DoD and non-DoD reporting 

requirements are based on separate 

statutes. Further, the information 

collection requirement associated with 

this DFARS Case 2018–D063, once 

cleared by OMB, will supersede the 

reporting requirements approved under 

OMB Control Number 0704–0491, 

entitled ‘‘DoD Inventory of Contracts for 

Services Compliance.’’ Contracts 

awarded by DoD, or on behalf of DoD, 


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will contain the proposed DFARS 

clauses. 

2. Paperwork Reduction Act Constraints 

Comment: One respondent stated that 

the rule conflicts with Paperwork 

Reduction Act constraints on 

rulemaking, namely that the rule must: 

(1) Be necessary for the proper 

performance of the agency; (2) not be 

duplicative of information otherwise 

reasonably accessible to the agency; and 

(3) reduce, to the extent practicable and 

appropriate, the burden on persons who 

shall provide information to or for the 

agency. 

Response: The rule complies with the 

Paperwork Reduction Act. The 

information collection is necessary in 

order for DoD to meet the requirement 

of 10 U.S.C. 2330a, as amended, to 

collect certain service contract data and 

report annually to Congress. The rule is 

not duplicative of information otherwise 

reasonably accessible to DoD. DoD 

systems do not currently collect all of 

the data elements required by the 

statute. 

The information collection 

requirement has been narrowly tailored 

to minimize the impact of reporting and 

maximize the use of existing records 

already maintained by contractors and 

by the Government. To minimize the 

impact, the information will be 

collected electronically, help-desk 

support will be provided to users, and 

reporting requirements will be limited 

to a small number of data elements. 

3. Burden Estimates 

Comment: Two respondents 

commented that the rule underestimates 

the number of contractors that will be 

impacted. One respondent indicated 

that the total estimated number of 

respondents of 13,269, including 7,962 

for small businesses, seems low, since 

the GSA Schedules alone have 20,000 

contractors and 80% of the contractors 

are small businesses. One respondent 

stated that the estimate for the total 

number of annual responses of 

approximately 54,000 appears low. In 

addition, several respondents 

commented that the estimate of an 

average of 1.4 hours per response is too 

low, citing reasons such as: (1) The 

billions of dollars in services for which 

DoD contracts for annually and the 

corresponding volume of data required 

to be entered, (2) the limitation of the 

ECMRA bulk upload capability, or (3) 

the impact on response time resulting 

from the flow down of the reporting 

requirement to subcontractors. One 

respondent stated that the burden is 

disproportionally high for small 

businesses that are less likely to have 

the necessary internal infrastructure. 

Response: The estimated burdens for 

respondents and responses published in 

the previously proposed rule have been 

updated to reflect the revised 

requirements of 10 U.S.C. 2330a, as 

amended. 

As a result, this final rule amends the 

DFARS to require contractors to 

annually report certain data on 

applicable contracts in order to meet the 

data requirements of the statute and 

DoD’s total workforce management 

efforts. Three respondents submitted 

public comments in response to this 

second 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 

No significant changes were made to 

the rule as a result of public comments. 

Minor changes were made to clarify the 

intent of the rule in regard to the 

requirement to report subcontract data. 

Public comments requested clarification 

on whether the rule required contractors 

to report direct labor hours and costs for 

all subcontracts that support the 

contract or just those subcontracts 

awarded to directly perform services 

under the contract, otherwise referred to 

as ‘‘first-tier subcontracts’’ under the 

similar service contract inventory 

reporting requirements at Federal 

Acquisition Regulation (FAR) 4.17. The 

intent of the rule is to require 

contractors to report the direct labor 

hours only for subcontracts the 

contractor directly awarded for the 

purpose of acquiring services for 

performance of the prime contract, 

similar to the subcontract reporting 

requirement at FAR 4.17. As a result, 

the term ‘‘first-tier’’ was added as a 

modifier to the definition of 

‘‘subcontract’’ and a definition of ‘‘firsttier subcontract’’ was added to section 

204.1701 and DFARS clause 252.204– 

7023, Reporting Requirements for 

Contracted Services, and its alternate I. 

B. Analysis of Public Comments 

A discussion of the comments is 

provided as follows: 

a. General Support 

Comment: Two respondents 

expressed general support for the rule. 

Response: DoD acknowledges support 

for the rule. 

b. Exemptions to Rule 

Comment: Two respondents 

recommended that commercial service 

contracts be exempt from the rule, as 

companies providing commercial 

services may not have a system to track 

labor hours by contract and/or by 

subcontractor and may need to 

implement a new system to comply 

with the rule. Alternately, a respondent 

recommended that specific contracts or 

certain types of commercial contracts be 

exempt from the reporting requirements 

for the rule. 

Response: The statute requires DoD to 

collect data on specific service 

purchases in excess of $3 million, 

regardless of contract type, and does not 

provide for exemptions to the reporting 

requirement. As a result, the rule 

applies to all contracts that meet the 

criteria at 10 U.S.C. 2330a(a) and does 

not provide for exemptions. 

c. Usefulness of Data 

Comment: A respondent advised that 

the rule weakens the utility of service 

contract inventories by limiting them to 

staff augmentation contracts and 

contracts closely associated with 

inherently governmental functions, and 

preventing the adoption of the 

Enterprise-wide Contractor Manpower 

Reporting Application (ECMRA). 

Response: The rule implements the 

statute and supports DoD total 

workforce management efforts by 

requiring reporting on contracts valued 

in excess of $3 million for logistics 

management services, equipmentrelated services, knowledge-based 

services, or electronics and 

communications services. The rule does 

not further limit the reporting 

requirement to only those contracts that 

are also staff augmentation contracts or 

contracts for services closely associated 

with inherently governmental functions. 

The rule also incorporates the policy 

of Secretary of Defense Memorandum, 

Revised Department of Defense 

Contractor Manpower Reporting 

Initiative, dated October 16, 2019, 

jointly signed by the Under Secretary of 

Defense (USD) for Acquisition and 

Sustainment and Acting USD for 

Personnel and Readiness. The memo 

requires reporting of manpower data 

relating to the performance of services 

be done in the System for Award 

Management (SAM), instead of ECMRA, 

in order to be consistent with the 

existing service contract reporting 

requirements of the FAR. 

Comment: A respondent expressed 

concern that the rule only requires 

reporting on the aggregate labor hours 

performed under the contract annually 


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and, because of this, DoD will not have 

the detailed information it needs to 

determine whether contractors are 

performing inherently governmental 

functions. 

Response: The rule requires the 

collection of data that supplements 

information already available to DoD. 

The rule assists in the evaluation of 

DoD’s workforce mix and the extent to 

which the Department’s needs are being 

met through contracted support. It is not 

necessary to distinguish between the 

contractor and subcontractor labor 

hours performed under a contract in 

order to meet the requirements of the 

statute or support DoD’s total workforce 

management efforts. 

Comment: A respondent expressed 

concern that the rule’s collection of 

labor data cannot be meaningfully used 

by officials, as the annual reporting 

cycle will not produce the timely, 

relevant data needed to inform decision 

making. 

Response: The rule implements the 

reporting cycle required by 10 U.S.C. 

2330a. The statute requires DoD, by the 

end of the third quarter of each fiscal 

year, to prepare an annual inventory of 

the activities performed during the 

preceding fiscal year pursuant to staff 

augmentation contracts and contracts 

closely associated with inherently 

governmental functions. To support this 

requirement, the rule requires 

contractors to input contract data for the 

preceding fiscal year in SAM no later 

than October 31 of each fiscal year. The 

rule’s October 31 deadline facilitates 

DoD’s compilation and submission of 

the annual inventory and summary 

before the third quarter of each fiscal 

year, as required by 10 U.S.C. 2330a. 

d. Difficulties Reporting Direct Labor 

Hour Data 

Comment: Two respondents advised 

that the reporting requirement of the 

rule may be difficult to meet, because 

many commercial services are offered at 

a fixed price and are not broken down 

into direct labor hours, and 

subcontractors may consider the data 

sensitive or proprietary and be hesitant 

to provide it to contractors. A 

respondent advised that, as a result of 

these issues, the rule may create cost 

and competition implications for the 

supply chain because contractors may 

have to create and price contractual 

requirements to obtain the information 

from their subcontractors, and the 

number of available vendors may be 

restricted if they choose not to provide 

the data required by the rule. 

As an alternative solution, two 

respondents recommended that the rule 

limit the collection of data to the list 

explicitly identified at 10 U.S.C. 

2330a(b). Respondents suggested that 

DoD could apply the methodology used 

to determine military or civilian fulltime equivalents to the data at 10 U.S.C. 

2330a(b) in order to fulfill the inventory 

summary required by 10 U.S.C. 

2330a(c). 

Response: The statute requires that 

‘‘the number of contractor employees, 

expressed as full-time equivalents for 

direct labor, using direct labor hours 

and associated cost data collected from 

contractors’’ be provided for each 

contract included in the annual 

inventory. This information is not 

included in the list of data at 10 U.S.C. 

2330a(b). 

While the Federal Procurement Data 

System provides DoD with a majority of 

the requisite data, DoD cannot meet all 

of the statutory data requirements of the 

inventory summary, or support the 

needs of DoD’s total workforce 

management efforts, using only the data 

listed at 10 U.S.C. 2330a(b). Therefore, 

this rule requires contractors to provide 

direct labor hour and cost data to 

implement the statute and support DoD 

workforce planning and analysis. 

To relieve burden and minimize 

impact for contractors and 

subcontractors, the rule requires 

contractors to report the total number of 

hours (both contractor and 

subcontractor) worked under the 

contract for the entire fiscal year and 

does not require a breakdown of those 

hours by employee type or by 

subcontractor. 

e. Reporting of Subcontractor Data 

Comment: A respondent 

recommended that the requirement to 

report subcontractor data be limited to 

first-tier subcontractors, which is 

consistent with the current FAR 

requirements for civilian agencies. 

Response: Concur. To reduce burden 

on and maintain consistency for 

contractors, DoD intends for the 

reporting requirements and procedures 

of this rule to be as similar as possible 

to the existing service contract reporting 

requirements of the FAR. The intent of 

the rule is for contractors to report the 

total number of direct labor hours 

expended in performing the contracted 

services during the preceding fiscal 

year. The total number of hours reported 

to SAM should represent a combined 

total of the number of direct labor hours 

the contractor itself expended 

performing the contracted services, and 

the total number of direct labor hours 

any of the contractor’s subcontractors 

expended performing the contracted 

services. To clarify this intent, the rule 

is amended to replace the term 

‘‘subcontract’’ with ‘‘first-tier 

subcontract,’’ based on the definition at 

FAR 4.1701. 

Comment: A respondent 

recommended the rule be revised to 

specifically authorize contractors to rely 

on the direct labor hour data received 

from subcontractors when reporting 

total labor hours annually in SAM. 

Response: The rule simply requires 

the reporting of the direct labor hours 

expended on the contracted service for 

the preceding fiscal year. The rule does 

not prescribe or suggest a specific 

methodology that contractors must use 

to gather this data on its applicable 

subcontracts, or prescribe a reporting 

requirement for subcontractors via the 

flow-down of the contract clause. 

Therefore, an amendment to the rule to 

authorize a specific methodology for 

gathering the data is not necessary. 

III. Applicability to Contracts at or 

Below the Simplified Acquisition 

Threshold and for Commercial Items, 

Including Commercially Available Offthe-Shelf Items 

This rule does not apply the 

requirements of 10 U.S.C. 2330a, as 

amended by section 812 of the NDAA 

for FY 2017, to contracts at or below the 

simplified acquisition threshold (SAT) 

or for commercially available off-theshelf items (COTS) items, but does 

apply the rule to contracts for the 

acquisition of commercial items. 

A. Background 

Section 812 of the NDAA for FY 2017 

is silent on applicability to contracts 

and subcontracts in amounts no greater 

than the SAT or for the acquisition of 

commercial items. 10 U.S.C. 2330a(a), as 

amended by section 812 of the NDAA 

for FY 2017, only requires the collection 

of data on service contracts, under 

certain portfolio groups, that exceed $3 

million, which effectively precludes 

application to acquisitions under the 

SAT. Also, the statute does not provide 

for civil or criminal penalties. 

Therefore, the statute does not apply to 

contracts or subcontracts in amounts not 

greater than the SAT or to the 

acquisition of commercial items unless 

the Principal Director, Defense Pricing 

and Contracting, makes a written 

determination as provided in 41 U.S.C. 

1905 and 10 U.S.C. 2375. 

B. Applicability To Contracts for the 

Acquisition of Commercial Items, 

Excluding COTS Items 

10 U.S.C. 2375 exempts contracts and 

subcontracts for the acquisition of 

commercial items, including COTS 

items, from provisions of law enacted 

after October 13, 1994, that, as 


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Federal Register / Vol. 86, No. 129 / Friday, July 9, 2021 / Rules and Regulations 36235 

determined by the Under Secretary of 

Defense for Acquisition and 

Sustainment (USD(A&S)), set forth 

policies, procedures, requirements, or 

restrictions for the acquisition of 

property or services unless— 

• The provision of law— 

Æ Provides for criminal or civil 

penalties; 

Æ Requires that certain articles be 

bought from American sources pursuant 

to 10 U.S.C. 2533a or that strategic 

materials critical to national security be 

bought from American sources pursuant 

to 10 U.S.C. 2533b; 

Æ Specifically refers to 10 U.S.C. 2375 

and states that it shall apply to contracts 

and subcontracts for the acquisition of 

commercial items (including COTS 

items); or 

Æ USD(A&S) determines in writing 

that it would not be in the best interest 

of the Government to exempt contracts 

or subcontracts for the acquisition of 

commercial items from the applicability 

of the provision. 

This authority has been delegated to 

the Principal Director, Defense Pricing 

and Contracting. 

Consistent with 10 U.S.C. 2375, DoD 

has determined that it is in the best 

interest of the United States to apply the 

requirements of 10 U.S.C. 2330a to the 

acquisition of commercials items, 

excluding COTS items. The intent of the 

statute is to enhance DoD’s ability to 

manage the total force, inclusive of 

military, civilian, and contractor 

personnel. Specifically, section 2330a, 

as amended, requires the military 

departments and defense agencies to 

ensure that the inventory of contracts 

for services required by the statute is 

used to inform strategic workforce 

planning decisions under 10 U.S.C. 

129a and develop budget justification 

materials for services in accordance 

with 10 U.S.C. 235. An exception for 

services that meet the definition of a 

commercial item would exclude 

significant sums expended by DoD on 

contracted services intended to be 

covered by the law, thereby 

undermining the overarching public 

policy purpose of the law. Therefore, 

this rule will apply to the acquisition of 

commercial items, excluding COTS 

items. 

IV. 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. 

V. 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(2). 

VI. Regulatory Flexibility Act 

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: 

The objective of this rule is to 

implement 10 U.S.C. 2330a, as modified 

by section 812 of the National Defense 

Authorization Act (NDAA) for Fiscal 

Year (FY) 2017 (Pub. L. 114–328), which 

requires DoD to establish a data 

collection system that provides 

management information on each 

purchase of services by a military 

department or defense agency in excess 

of $3 million for the following service 

acquisition portfolio groups: Logistics 

management services; equipmentrelated services; knowledge-based 

services; and electronics and 

communications services. 

As a result, DoD is amending the 

Defense Federal Acquisition Regulation 

Supplement (DFARS) to require 

contractors to annually report certain 

data on applicable contracts in order to 

meet the data requirements of the 

statute and DoD’s total workforce 

management efforts. No public 

comments were received in response to 

the initial regulatory flexibility analysis. 

Based on data from the Federal 

Procurement Data System for FY 2016 

through 2018, DoD awards annually an 

average of 4,386 service contracts and 

orders to 1,934 unique entities that have 

an estimated value greater than $3 

million and are within the four portfolio 

groups outlined in the rule. Of the 4,386 

contracts and orders awarded annually, 

approximately 2,059 (47 percent) are 

made to 1,227 (63 percent) unique small 

entities. 

This rule requires all contractors that 

are awarded a contract or order in 

excess of $3 million for services in any 

of the four service acquisition portfolio 

groups to report contract data in the 

System for Award Management (SAM). 

The contractor is required to report the 

total amount invoiced for services 

performed during the preceding fiscal 

year and the number of direct labor 

hours, including first-tier subcontractor 

hours, expended on services performed 

during the preceding fiscal year. The 

Government estimates that a 

journeyman level contractor employee 

with basic knowledge of the contract 

would be required to enter the data. The 

contractor employee may also need to 

gather additional billing information 

from the organization in order to 

complete the data input in SAM. 

While this rule does not impose a 

significant economic impact on small 

entities, DoD has taken steps to 

minimize the impact of the rule on both 

small and large entities. Specifically, 

DoD now requires reporting under the 

rule to be done in SAM, instead of the 

Enterprise-wide Contractor Manpower 

Reporting Application (ECMRA). This 

change permits contractors to report 

fewer data elements under the rule and 

implements a data collection system 

that is familiar to contractors under the 

existing service contract reporting 

requirements of the Federal Acquisition 

Regulation. 

VII. Paperwork Reduction Act 

This rule contains information 

collection requirements that have been 

approved by the Office of Management 

and Budget under the Paperwork 

Reduction Act (44 U.S.C. chapter 35). 

This information collection requirement 

has been assigned OMB Control Number 

0704–0519, entitled ‘‘Defense Federal 

Acquisition Supplement (DFARS); 

Subpart 204.17, Service Contracts 

Inventory, and Associated Clause.’’ 

List of Subjects in 48 CFR Parts 204, 

212, and 252 

Government procurement. 

Jennifer D. Johnson, 

Regulatory Control Officer, Defense 

Acquisition Regulations System. 

Therefore, 48 CFR parts 204, 212, and 

252 are amended as follows: 

■ 1. The authority citation for parts 204, 

212, and 252 continues to read as 

follows: 

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

chapter 1. 


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36236 Federal Register / Vol. 86, No. 129 / Friday, July 9, 2021 / Rules and Regulations 

PART 204—ADMINISTRATION AND 

INFORMATION MATTERS 

■ 2. Add subpart 204.17, consisting of 

204.1700, 204.1701, 204.1703, and 

204.1705, to read as follows: 

SUBPART 204.17—SERVICE CONTRACTS 

INVENTORY 

Sec. 

204.1700 Scope of subpart. 

204.1701 Definitions. 

204.1703 Reporting Requirements. 

204.1705 Contract clauses. 

SUBPART 204.17—SERVICE 

CONTRACTS INVENTORY 

204.1700 Scope of subpart. 

This subpart prescribes the 

requirement to report certain contracted 

services in accordance with 10 U.S.C. 

2330a. 

204.1701 Definitions. 

As used in this subpart— 

First-tier subcontract means a 

subcontract awarded directly by the 

contractor for the purpose of acquiring 

services for performance of a prime 

contract. It does not include the 

contractor’s supplier agreements with 

vendors, such as long-term 

arrangements for materials or supplies 

or services that benefit multiple 

contracts and/or the costs of which are 

normally applied to a contractor’s 

general and administrative expenses or 

indirect costs. 

204.1703 Reporting requirements. 

(a) Thresholds. Service contractor 

reporting of information is required in 

the System for Award Management 

(SAM) when a contract or order— 

(i) Has a total estimated value, 

including options, that exceeds $3 

million; and 

(ii) Is for services in the following 

service acquisition portfolio groups (see 

PGI 204.1703 for a list of applicable 

product and service codes): 

(A) Logistics management services. 

(B) Equipment-related services. 

(C) Knowledge-based services. 

(D) Electronics and communications 

services. 

(b) Agency reporting responsibilities. 

In the event the agency believes that 

revisions to the contractor-reported 

information are warranted, the agency 

shall notify the contractor. 

(S–70) Contractor reporting. (1) The 

basic and the alternate of the clause at 

252.204–7023, Reporting Requirements 

for Contracted Services, require 

contractors to report annually, by 

October 31, on the services performed 

under the contract or order, including 

any first-tier subcontracts, during the 

preceding Government fiscal year. 

(2) For indefinite-delivery contracts, 

basic ordering agreements, and blanket 

purchase agreements— 

(i) Contractor reporting is required for 

each order issued under the contract or 

agreement that meets the requirements 

of paragraph (a) of this section; and 

(ii) Service contract reporting is not 

required for the basic contract or 

agreement. 

204.1705 Contract clauses. 

(a)(i) Use the basic or the alternate of 

the clause 252.204–7023, Reporting 

Requirements for Contracted Services, 

in solicitations, contracts, agreements, 

and orders, including solicitations and 

contracts using FAR part 12 procedures 

for the acquisition of commercial items, 

that— 

(A) Have a total estimated value, 

including options, that exceeds $3 

million; and 

(B) Are for services in the following 

service acquisition portfolio groups: 

(1) Logistics management services. 

(2) Equipment-related services. 

(3) Knowledge-based services. 

(4) Electronics and communications 

services. 

(ii) Use the basic clause in 

solicitations and contracts, except 

solicitations and resultant awards of 

indefinite-delivery contracts, and orders 

placed under non-DoD contracts that 

meet the criteria in paragraph (a)(i) of 

this section. 

(iii) Use the alternate I clause in 

solicitations and resultant awards of 

indefinite-delivery contracts, basic 

ordering agreements, and blanket 

purchase agreements, when one or more 

of the orders under the contract or 

agreement are expected to meet the 

criteria in paragraph (a)(i) of this 

section. 

PART 212—ACQUISITION OF 

COMMERCIAL ITEMS 

■ 3. Amend section 212.301 by adding 

paragraph (f)(ii)(N) to read as follows: 

* * * * * 

212.301 Solicitation provisions and 

contract clauses for the acquisition of 

commercial items. 

* * * * * 

(f) * * * 

(ii) * * * 

(N) Use the clause at 252.204–7023, 

Reporting Requirements for Contracted 

Services, to comply with 10 U.S.C. 

2330a. 

(1) Use the basic clause as prescribed 

in 204.1705(a)(i) and (ii). 

(2) Use the alternate I clause as 

prescribed in 204.1705(a)(i) and (iii). 

* * * * * 

Part 252—Solicitation Provisions and 

Contract Clauses 

■ 4. Add section 252.204–7023 to read 

as follows: 

252.204–7023 Reporting Requirements for 

Contracted Services. 

Basic. As prescribed in 204.1705(a)(i) 

and (ii), use the following clause: 

Reporting Requirements for Contracted 

Services—Basic (Jul 2021) 

(a) Definition. As used in this clause— 

First-tier subcontract means a subcontract 

awarded directly by the contractor for the 

purpose of acquiring services for 

performance of a prime contract. It does not 

include the contractor’s supplier agreements 

with vendors, such as long-term 

arrangements for materials or supplies or 

services that benefit multiple contracts and/ 

or the costs of which are normally applied to 

a contractor’s general and administrative 

expenses or indirect costs. 

(b) The Contractor shall report annually, by 

October 31, at https://www.sam.gov, on the 

services performed under this contract or 

order, including any first-tier subcontracts, 

during the preceding Government fiscal year 

(October 1–September 30). 

(c) The Contractor shall report the 

following information for the contract or 

order: 

(1) The total dollar amount invoiced for 

services performed during the preceding 

Government fiscal year under the contract or 

order. 

(2) The number of Contractor direct labor 

hours, to include first-tier subcontractor 

direct labor hours, as applicable, expended 

on the services performed under the contract 

or order during the previous Government 

fiscal year. 

(d) The Government will review the 

Contractor’s reported information for 

reasonableness and consistency with 

available contract information. In the event 

the Government believes that revisions to the 

Contractor’s reported information are 

warranted, the Government will notify the 

Contractor. Upon notification, the Contractor 

shall revise the reported information or 

provide the Government with a supporting 

rationale for the information. 

(End of clause) 

Alternate I. As prescribed in 204.1705 

(a)(i) and (iii), use the following clause, 

which substitutes ‘‘contract or 

agreement for each order’’ in lieu of 

‘‘contract or order’’ in paragraph (b) and 

‘‘order’’ in lieu of ‘‘contract or order’’ in 

paragraphs (c) and (c)(1) and (2), and 

identifies the dollar threshold and 

service acquisition portfolio groups for 

which orders under the contract or 

agreement require service contract 

reporting. 

Reporting Requirements for Contracted 

Services—Alternate I (Jul 2021) 

(a) Definition. As used in this clause— 


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Federal Register / Vol. 86, No. 129 / Friday, July 9, 2021 / Rules and Regulations 36237 

First-tier subcontract means a subcontract 

awarded directly by the contractor for the 

purpose of acquiring services for 

performance of a prime contract. It does not 

include the contractor’s supplier agreements 

with vendors, such as long-term 

arrangements for materials or supplies or 

services that benefit multiple contracts and/ 

or the costs of which are normally applied to 

a contractor’s general and administrative 

expenses or indirect costs. 

(b) The contractor shall report annually, by 

October 31, at https://www.sam.gov, on 

services performed during the preceding 

Government fiscal year (October 1– 

September 30) under this contract or 

agreement for each order, including any firsttier subcontract, which exceeds $3 million 

for services in the following service 

acquisition portfolio groups: 

(1) Logistics management services. 

(2) Equipment-related services. 

(3) Knowledge-based services. 

(4) Electronics and communications 

services. 

(c) The Contractor shall report the 

following information for the order: 

(1) The total dollar amount invoiced for 

services performed during the preceding 

Government fiscal year under the order. 

(2) The number of Contractor direct labor 

hours, to include first-tier subcontractor 

direct labor hours, as applicable, expended 

on the services performed under the order 

during the previous Government fiscal year. 

(d) The Government will review the 

Contractor’s reported information for 

reasonableness and consistency with 

available contract information. In the event 

the Government believes that revisions to the 

Contractor’s reported information are 

warranted, the Government will notify the 

Contractor. Upon notification, the Contractor 

shall revise the reported information or 

provide the Government with a supporting 

rationale for the information. 

(End of clause) 

[FR Doc. 2021–14429 Filed 7–8–21; 8:45 am] 

BILLING CODE 5001–06–P 

DEPARTMENT OF COMMERCE 

National Oceanic and Atmospheric 

Administration 

50 CFR Part 660 

[Docket No: 210702–0144; RTID 0648– 

XW035] 

Fisheries Off West Coast States; 

Coastal Pelagic Species Fisheries; 

Annual Specifications; 2021–2022 

Annual Specifications and 

Management Measures for Pacific 

Sardine 

AGENCY: National Marine Fisheries 

Service (NMFS), National Oceanic and 

Atmospheric Administration (NOAA), 

Commerce. 

ACTION: Final rule. 

SUMMARY: NMFS is implementing 

annual harvest specifications and 

management measures for the northern 

subpopulation of Pacific sardine 

(hereafter, Pacific sardine), for the 

fishing year, which runs from July 1, 

2021, through June 30, 2022. This final 

rule will prohibit most directed 

commercial fishing for Pacific sardine 

off the coasts of Washington, Oregon, 

and California. Pacific sardine harvest 

will be allowed only in the live bait 

fishery, minor directed fisheries, as 

incidental catch in other fisheries, or as 

authorized under exempted fishing 

permits. The incidental harvest of 

Pacific sardine will be limited to 20 

percent by weight of all fish per trip 

when caught with other stocks managed 

under the Coastal Pelagic Species 

Fishery Management Plan, or up to 2 

metric tons per trip when caught with 

non-Coastal Pelagic Species stocks. The 

annual catch limit for the 2021–2022 

Pacific sardine fishing year is 3,329 

metric tons. This final rule is intended 

to conserve and manage the Pacific 

sardine stock off the U.S. West Coast. 

DATES: Effective July 6, 2021. 

FOR FURTHER INFORMATION CONTACT: 

Taylor Debevec, West Coast Region, 

NMFS, (562) 619–2052, 

Taylor.Debevec@noaa.gov. 

SUPPLEMENTARY INFORMATION: NMFS 

manages the Pacific sardine fishery in 

the U.S. exclusive economic zone (EEZ) 

off the Pacific coast (California, Oregon, 

and Washington) in accordance with the 

Coastal Pelagic Species (CPS) Fishery 

Management Plan (FMP). The FMP and 

its implementing regulations require 

NMFS to set annual catch levels for the 

Pacific sardine fishery based on the 

annual specification framework and 

control rules in the FMP. These control 

rules include the harvest guideline (HG) 

control rule, which, in conjunction with 

the overfishing limit (OFL) and 

acceptable biological catch (ABC) rules 

in the FMP, are used to manage harvest 

levels for Pacific sardine, in accordance 

with the Magnuson-Stevens Fishery 

Conservation and Management Act 

(MSA), 16 U.S.C. 1801 et seq. 

This final rule implements the annual 

catch levels, reference points, and 

management measures for the 2021– 

2022 fishing year. The final rule adopts, 

without changes, the catch levels and 

restrictions that NMFS proposed in the 

rule published on May 26, 2021. The 

proposed rule for this action included 

additional background on the 

specifications and details of how the 

Pacific Fishery Management Council 

(Council) derived its recommended 

specifications for Pacific sardine. Those 

details are not repeated here. For 

additional information on this action, 

please refer to the proposed rule (86 FR 

28325). 

This rule implements an OFL of 5,525 

metric tons (mt) and an ABC/annual 

catch limit (ACL) of 3,329 mt, based on 

CPS FMP control rules and a biomass 

estimate of Pacific sardine of 28,276 mt. 

This biomass estimate is from the 2020 

benchmark stock assessment and was 

recommended for use this year by the 

Council’s Scientific and Statistical 

Committee after identifying significant 

uncertainties in the 2021 catch-only 

projection. Because the estimated 

biomass is less than the value of the 

CUTOFF parameter in the CPS FMP 

(150,000 mt), the harvest guideline is set 

to 0 mt, meaning there is no primary 

directed fishery for Pacific sardine. This 

is the seventh consecutive year the 

primary directed fishery has been 

closed. Because the estimated biomass 

is below the minimum stock size 

threshold (50,000 mt) the FMP requires 

that incidental catch of Pacific sardine 

in other CPS fisheries be limited to an 

incidental allowance of no more than 20 

percent by weight. Although these 

management measures, triggered by the 

FMP, are expected to keep catch far 

below the ACL as they have done in 

recent history, this rule also implements 

an annual catch target (ACT) of 3,000 mt 

and implements management measures 

to ensure harvest opportunity 

throughout the year. 

A summary of the 2021–2022 fishing 

year specifications can be found in 

Table 1, and management measures in 

the list below. 


jbell on DSKJLSW7X2PROD with RULES