[Federal Register Volume 73, Number 186 (Wednesday, September 24, 2008)]
[Proposed Rules]
[Pages 55007-55010]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: E8-22419]


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DEPARTMENT OF DEFENSE

Defense Acquisition Regulations System

48 CFR Parts 204, 237, 239, 245, and 252

RIN 0750-AF92


Defense Federal Acquisition Regulation Supplement; Government 
Property (DFARS Case 2007-D020)

AGENCY: Defense Acquisition Regulations System, Department of Defense 
(DoD).

ACTION: Proposed rule with request for comments.

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SUMMARY: DoD is proposing to amend the Defense Federal Acquisition 
Regulation Supplement (DFARS) to update text addressing management of 
Government property in the possession of contractors. The DFARS changes 
are consistent with changes made to the Federal Acquisition Regulation 
(FAR).

DATES: Comments on the proposed rule should be submitted in writing to 
the address shown below on or before November 24, 2008, to be 
considered in the formation of the final rule.

ADDRESSES: You may submit comments, identified by DFARS Case 2007-D020, 
using any of the following methods:
    Federal eRulemaking Portal: http://www.regulations.gov. Follow the 
instructions for submitting comments.
    E-mail: <a href="/cdn-cgi/l/email-protection#355153544746755a46511b585c59"><span class="__cf_email__" data-cfemail="214547405352614e52450f4c484d">[email protected]</span></a>. Include DFARS Case 2007-D020 in the subject 
line of the message.
    Fax: 703-602-7887.
    Mail: Defense Acquisition Regulations System, Attn: Mr. Mark 
Gomersall, OUSD (AT&L) DPAP (DARS), IMD 3D139, 3062 Defense Pentagon, 
Washington, DC 20301-3062.
    Hand Delivery/Courier: Defense Acquisition Regulations System, 
Crystal Square 4, Suite 200A, 241 18th Street, Arlington, VA 22202-
3402.
    Comments received generally will be posted without change to http://www.regulations.gov, including any personal information provided.

FOR FURTHER INFORMATION CONTACT: Mr. Mark Gomersall, 703-602-0302.

SUPPLEMENTARY INFORMATION: 

A. Background

    This proposed rule updates and reorganizes DFARS Subparts 245.1, 
245.3, 245.4, and 245.5 for consistency with FAR changes addressing 
management of Government property in the possession of contractors, 
published at 72 FR 27364 on May 15, 2007. Minor related changes are 
made in Parts 204, 237, 239, and 252. The following table summarizes 
the proposed DFARS changes:

[[Page 55008]]



----------------------------------------------------------------------------------------------------------------
                Existing DFARS citation                                      Proposed change
----------------------------------------------------------------------------------------------------------------
204.7003...............................................  Remove ``facilities contracts'' from the list of
                                                          contract types, consistent with the removal of
                                                          references to facilities contracts from the FAR.
237.7003...............................................  Update the reference to the applicable FAR Government
                                                          Property clause.
239.7402...............................................  Update terminology and FAR references.
245.104................................................  Update and relocate to 245.105.
245.301................................................  (1) Update the definition of ``facilities project'' and
                                                          relocate to 245.101.
                                                         (2) Relocate the definition of ``mapping, charting, and
                                                          geodesy'' to 245.101 without change.
                                                         (3) Remove the definition of ``provide,'' since this
                                                          term is now defined in FAR 45.101.
                                                         (4) Remove the definitions of ``agency-peculiar
                                                          property,'' ``industrial plant equipment,'' and
                                                          ``other plant equipment,'' as they are no longer
                                                          considered necessary.
245.302-1(a)...........................................  Update and relocate to 245.102.
245.302-1(b) and DD Form 1419..........................  Remove. The specified equipment screening procedures
                                                          have become obsolete.
245.302-2 and 245.302-7................................  Remove. The separate procedures for facilities
                                                          contracts are no longer necessary.
245.303-2..............................................  Update and relocate to 245.102(3).
245.307-2..............................................  Remove. The corresponding FAR text has been removed.
245.310................................................  Update and relocate to 245.102(2).
245.310-70.............................................  Relocate to 245.107-70.
245.401................................................  Update and relocate to 245.301(1).
245.403................................................  Relocate to 245.302(2).
245.405................................................  Update and relocate to 245.302(1) and (3).
245.407................................................  Update and relocate to 245.301. The dollar threshold
                                                          for requiring descriptive information on items of
                                                          Government property for which a contractor requests
                                                          non-Government use is increased from $25,000 to
                                                          $100,000. The item unique identification (IUID) number
                                                          and the item condition are added to the types of
                                                          information to be provided.
Subpart 245.5 and DD Form 1342.........................  Remove as unnecessary.
Part 252...............................................  Update references and clause titles.
----------------------------------------------------------------------------------------------------------------

    This rule was not subject to Office of Management and Budget review 
under Executive Order 12866, dated September 30, 1993.

B. Regulatory Flexibility Act

    DoD does not expect this proposed rule to have a significant 
economic impact on a substantial number of small entities within the 
meaning of the Regulatory Flexibility Act, 5 U.S.C. 601, et seq., 
because the proposed rule makes no significant change to DoD policy 
regarding the management of Government property in the possession of 
contractors. Therefore, DoD has not performed an initial regulatory 
flexibility analysis. DoD invites comments from small businesses and 
other interested parties. DoD also will consider comments from small 
entities concerning the affected DFARS subparts in accordance with 5 
U.S.C. 610. Such comments should be submitted separately and should 
cite DFARS Case 2007-D020.

C. Paperwork Reduction Act

    The information collection requirements of DFARS Part 245 have been 
approved by the Office of Management and Budget under Control Number 
0704-0246.

List of Subjects in 48 CFR Parts 204, 237, 239, 245, and 252

    Government procurement.

Michele P. Peterson,
Editor, Defense Acquisition Regulations System.

    Therefore, DoD proposes to amend 48 CFR parts 204, 237, 239, 245, 
and 252 as follows:
    1. The authority citation for 48 CFR parts 204, 237, 239, 245, and 
252 continues to read as follows:

    Authority: 41 U.S.C. 421 and 48 CFR Chapter 1.

PART 204--ADMINISTRATIVE MATTERS

    2. Section 204.7003 is amended by revising paragraph (a)(3)(v) to 
read as follows:


204.7003  Basic PII number.

    (a) * * *
    (3) * * *
    (v) Reserved-E
* * * * *

PART 237--SERVICE CONTRACTING

    3. Section 237.7003 is amended by revising paragraph (c) to read as 
follows:


237.7003  Solicitation provisions and contract clauses.

* * * * *
    (c) Use the clause at FAR 52.245-1, Government Property, with its 
Alternate I, in solicitations and contracts that include port of entry 
requirements.

PART 239--ACQUISITION OF INFORMATION TECHNOLOGY

    4. Section 239.7402 is amended by revising paragraphs (b)(3) and 
(4) to read as follows:


239.7402  Policy.

* * * * *
    (b) * * *
    (3) Except as provided in paragraph (b)(4) of this section, 
contractors and subcontractors shall normally provide all required 
property, to include telecommunications security equipment or related 
devices, in accordance with FAR 45.102. In some cases, such as for 
communications security (COMSEC) equipment designated as controlled 
cryptographic item (CCI), contractors or subcontractors must also meet 
ownership eligibility conditions.
    (4) When the contractor or subcontractor does not meet ownership 
eligibility conditions, the head of the agency may authorize provision 
of the necessary property as Government-furnished property or 
acquisition as contractor-acquired property, as long as conditions of 
FAR 45.102(b) are met.
* * * * *

PART 245--GOVERNMENT PROPERTY

    5. Subparts 245.1 and 245.3 are revised to read as follows:
Subpart 245.1--General
Sec.
245.101 Definitions.
245.102 Policy.

[[Page 55009]]

245.105 Contractor's property management system compliance.
245.107-70 Contract clause.

Subpart 245.1--General


245.101  Definitions.

    As used in this part--
    Facilities project means a Government project to provide, 
modernize, or replace real property for use by a contractor in 
performing a Government contract or subcontract.
    Mapping, charting, and geodesy (MC&G) property is defined in the 
clause at 252.245-7000, Government-Furnished Mapping, Charting, and 
Geodesy Property.


245.102  Policy.

    (1) Facilities projects.
    (i) Comply with DoD Directive 4275.5, Acquisition and Management of 
Industrial Resources, in processing requests for facilities projects. 
Submit the request for approval to--
    (A) The Secretary of the military department concerned, or the 
director of the defense agency concerned, if the project--
    (1) Is a research and development funded effort not exceeding $3 
million per fiscal year;
    (2) Is funded from procurement appropriations, is approved on a 
location basis, and does not exceed $5 million for all property efforts 
during one fiscal year; or
    (3) Is in support of a major system or subsystem (including 
ammunition-related projects) and the total investment will not exceed 
$25 million during the projected acquisition or maintenance effort; or
    (B) The Deputy Under Secretary of Defense (Industrial Affairs and 
Installations) if the project exceeds the limitations in paragraph 
(1)(i)(A) of this section.
    (ii) Departments and agencies shall submit reports of facilities 
projects to the House and Senate Armed Services Committees--
    (A) At least 30 days before starting facilities projects involving 
real property (10 U.S.C. 2662); and
    (B) In advance of starting construction for a facilities project 
regardless of cost. Use DD Form 1391, FY----Military Construction 
Project Data, to notify congressional committees of projects that are 
not included in the annual budget.
    (2) Mapping, charting, and geodesy property. All Government-
furnished mapping, charting, and geodesy (MC&G) property is under the 
control of the Director, National Geospatial Intelligence Agency.
    (i) MC&G property shall not be duplicated, copied, or otherwise 
reproduced for purposes other than those necessary for contract 
performance.
    (ii) Upon completion of contract performance, the contracting 
officer shall--
    (A) Contact the Director, National Geospatial Intelligence Agency, 
4600 Sangamore Road, Bethesda, MD 20816-5003, for disposition 
instructions;
    (B) Direct the contractor to destroy or return all Government-
furnished MC&G property not consumed during contract performance; and
    (C) Specify the destination and means of shipment for property to 
be returned to the Government.
    (3) Government supply sources. When a contractor will be 
responsible for preparing requisitioning documentation to acquire 
Government-furnished property from Government supply sources, include 
in the contract the requirement to prepare the documentation in 
accordance with DoD 4000.25-1-M, Military Standard Requisitioning and 
Issue Procedures (MILSTRIP). Copies are available from the address 
cited at PGI 251.102.


245.105  Contractor's property management system compliance.

    The property administrator shall perform property administration in 
accordance with department or agency procedures.


245.107-70  Contract clause.

    Use the clause at 252.245-7000, Government-Furnished Mapping, 
Charting, and Geodesy Property, in solicitations and contracts when 
mapping, charting, and geodesy property is to be furnished.
Subpart 245.3--Authorizing the Use and Rental of Government Property
Sec.
245.301 Use and rental.
245.302 Contracts with foreign governments or international 
organizations.
Subpart 245.3--Authorizing the Use and Rental of Government Property


245.301  Use and rental.

    (1) Government use, as used in this subpart, includes use on 
contracts for foreign military sales. Also see 245.302.
    (2) Authorizing non-Government use.
    (i) Non-Government use of Government-owned equipment exceeding 25 
percent of the total use for Government and commercial work requires 
prior approval of the--
    (A) Assistant Secretary of the Army (AL&T);
    (B) Assistant Secretary of the Navy (RD&A);
    (C) Assistant Secretary of the Air Force (Acquisition); or
    (D) Director, Defense Logistics Agency.
    (ii) The authority in paragraph (2)(i) of this section may be 
delegated to the head of a contracting activity. Any redelegation 
requires the approval of the Deputy Under Secretary of Defense 
(Industrial Affairs and Installations).
    (iii) To determine the percentage of non-Government use--
    (A) Compute the percentage of non-Government use on time available 
for use. Use the contractor's normal work schedule as represented by 
the scheduled production shift hours;
    (B) Use a base time period that is neither less than three months 
nor more than one year; and
    (C) Use may be averaged at a single plant for all items costing 
less than $25,000.
    (iv) Contractors should submit requests for non-Government use of 
Government-owned equipment to the contract administration office at 
least six weeks before the projected use. The request shall include--
    (A) The total number of items of Government equipment requested for 
use and the acquisition cost of each item; and
    (B) For each item of Government equipment with an acquisition cost 
of $100,000 or more, an itemized list including nomenclature, item 
unique identification (IUID) number if known, condition, year of 
manufacture, and acquisition cost.
    (v) Approving officials shall retain for periodic review, 
documentation of the circumstances justifying non-Government use of 
Government property.


245.302  Contracts with foreign governments or international 
organizations.

    (1) General.
    (i) Approval. A contractor may use Government property on work for 
foreign governments and international organizations only when approved 
in writing by the contracting officer having cognizance of the 
property. The contracting officer shall grant approval only if--
    (A) The use will not interfere with foreseeable requirements of the 
United States;
    (B) The work is undertaken as a DoD foreign military sale; or
    (C) For a direct commercial sale, the foreign country or 
international organization would be authorized to contract with the 
department concerned under the Arms Export Control Act.
    (ii) Use charges.
    (A) The Use and Charges clause is applicable on direct commercial 
sales to

[[Page 55010]]

foreign governments or international organizations.
    (B) When a particular foreign government or international 
organization has funded the acquisition of specific production and 
research property, do not assess the foreign government or 
international organization rental charges or nonrecurring recoupments 
for the use of such property.
    (2) Special tooling and special test equipment.
    (i) DoD normally recovers a fair share of nonrecurring costs of 
special tooling and special test equipment by including these costs in 
its calculation of the nonrecurring cost recoupment charge when major 
defense equipment is sold by foreign military sales or direct 
commercial sales to foreign governments or international organizations. 
``Major defense equipment'' is defined in DoD Directive 2140.2, 
Recoupment of Nonrecurring Costs on Sales of U.S. Items, as any item of 
significant military equipment on the United States Munitions List 
having a nonrecurring research, development, test, and evaluation cost 
of more than $50 million or a total production cost of more than $200 
million.
    (ii) When the cost thresholds in paragraph (2)(i) of this section 
are not met, the contracting officer shall assess rental charges for 
use of special tooling and special test equipment pursuant to the Use 
and Charges clause if administratively practicable.
    (3) Waivers.
    (i) Rental charges for use of U.S. production and research property 
on commercial sales transactions to the Government of Canada are waived 
for all commercial contracts. This waiver is based on an understanding 
wherein the Government of Canada has agreed to waive its rental 
charges.
    (ii) Requests for waiver or reduction of charges for the use of 
Government property on work for foreign governments or international 
organizations shall be submitted to the contracting officer, who shall 
refer the matter through contracting channels. In response to these 
requests, approvals may be granted only by the Director, Defense 
Security Cooperation Agency, for particular sales that are consistent 
with paragraph (1)(i)(C) of this section.

Subparts 245.4 and 245.5 [Removed]

    6. Subparts 245.4 and 245.5 are removed.

PART 252--SOLICITATION PROVISIONS AND CONTRACT CLAUSES


252.217-7005   [Amended]

    7. Section 252.217-7005 is amended as follows:
    a. By revising the clause date to read ``(XXX 2008)''; and
    b. In paragraph (e)(7) by removing ``(Fixed-Price Contracts)''.


252.217-7010  [Amended]

    8. Section 252.217-7010 is amended as follows:
    a. By revising the clause date to read ``(XXX 2008)''; and
    b. In paragraph (c)(3) by removing ``(Fixed Price Contracts)''.


252.242-7004  [Amended]

    9. Section 252.242-7004 is amended as follows:
    a. By revising the clause date to read ``(XXX 2008)''; and
    b. In paragraph (e)(9) introductory text, in the first sentence, by 
removing ``Regardless of the provisions of FAR 45.505-3(f)(1)(ii), 
have'' and adding in its place ``Have''.


252.245-7000  [Amended]

    10. Section 252.245-7000 is amended as follows:
    a. By revising the clause date to read ``(XXX 2008)''; and
    b. In the introductory text by removing ``245.310-70'' and adding 
in its place ``245.107-70''.

[FR Doc. E8-22419 Filed 9-23-08; 8:45 am]
BILLING CODE 5001-08-P


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