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###### Department of Defense

###### Defense Acquisition Regulations System

          - 48 CFR Parts 211 and 237
          - RIN 0750-AG72

# AGENCY:

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

# ACTION:

Interim rule with request for comments.

# SUMMARY:

DoD is issuing an interim rule amending the Defense Federal Acquisition Regulation Supplement (DFARS) to enable further implementation of section 831 of the Duncan Hunter National Defense Authorization Act for Fiscal Year 2009 to require DoD to develop guidance related to personal services contracts.

# DATES:

*Effective Date:*                         September 8, 2010.                    

*Comment Date:*                         Comments on the interim rule should be submitted in writing to the address shown below on or before November 8, 2010, to be considered in the formation of the final rule.                    

# ADDRESSES:

Submit comments identified by DFARS Case 2009-D028, using any of the following methods:

                        ○                         *Federal eRulemaking Portal: http://www.regulations.gov*. Follow the instructions for submitting comments.                    

                        ○                         *E-mail: dfars@osd.mil*. Include DFARS Case 2009-D028 in the subject line of the message.                    

                        ○                         *Fax:*                         703-602-0350.                    

                        ○                         *Mail:*                         Defense Acquisition Regulations System, Attn: Meredith Murphy, OUSD(AT&L)DPAP/DARS, Room 3B855, 3060 Defense Pentagon, Washington, DC 20301-3060.                    

                        Comments received generally will be posted without change to                         *http://www.regulations.gov,*                         including any personal information provided.                    

                        To confirm receipt of your comment(s), please check                         *http://www.regulations.gov*                         approximately two to three days after submission to verify posting (except allow 30 days for posting of comments submitted by mail).                    

      ( print page 54525)    

# FOR FURTHER INFORMATION CONTACT:

Meredith Murphy, Defense Acquisition Regulations System, OUSD (AT&L) DPAP/DARS, Room 3B855, 3060 Defense Pentagon, Washington, DC 20301-3060. Telephone 703-602-1302; facsimile 703-602-0350.

# SUPPLEMENTARY INFORMATION:

## A. Background

Section 831 of the Duncan Hunter National Defense Authorization Act for Fiscal Year 2009 (Pub. L. 110-417), Development of Guidance on Personal Services Contracts, required DoD to mitigate the risks associated with personal services by developing guidance enabling contracting officers to better distinguish between personal services and non-personal services. Recommendations by the Office of the DoD Inspector General have highlighted the need for additional clarity in this area.

DFARS parts 211 and 237 are being amended to (1) require that statements of work or performance work statements clearly distinguish between Government employees and contractor employees and (2) ensure that procedures are adopted to prevent contracts from being awarded or administered as unauthorized personal services contracts. These Government procedures include an internal requirement that a program manager, or equivalent, certification that the service contract requirement does not include an unauthorized personal services arrangement be included in the contract file.

                    DoD reviewed guidance in use throughout the Department, including several checklists currently used. This interim rule adopts best practices and implements a requirement for the program manager, or equivalent, to complete and submit a certification to the contracting officer with a services contract requirement. A new DFARS section 211.106, Purchase descriptions for service contracts, is added to require that purchase descriptions for service contracts clearly distinguish between Government employees and contractor employees. In addition, a new section 237.503, Agency-head responsibilities, is added to require DoD agencies to adopt procedures that (1) ensure service contract requirements are vetted and approved in a manner that will prevent them from being awarded or administered as unauthorized personal services contracts, and (2) require a program manager, or equivalent, certification to be completed and provided to the contracting officer as part of the service contract procurement request, for inclusion in the contract file, that the service contract requirement does not include an unauthorized personal services arrangement, either in the way the work statement is written or in the manner in which the resulting contract will be managed and overseen. The certification requirement is designed to ensure that the prohibitions against personal services contracting in law (                    *e.g.,*10 U.S.C. 129b, 5 U.S.C. 3109, or 10 U.S.C. 1091) are not violated.                

This is a significant regulatory action, and therefore, was subject to review under section 6(b) of Executive Order 12866, Regulatory Planning and Review, dated September 30, 1993. This rule is not a major rule under 5 U.S.C. 604.

## C. Regulatory Flexibility Act

                    DoD does not expect this interim 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 section 831 affects only internal government operations and procedures. The interim rule does not impose any additional requirements on small businesses. Therefore, an initial regulatory flexibility analysis has not been performed. DoD invites comments from small business concerns and other interested parties on the expected impact of this rule on small entities.                

DoD will also consider comments from small entities concerning the existing regulations in subparts affected by this rule in accordance with 5 U.S.C. 610. Interested parties must submit such comments separately and should cite 5 U.S.C. 610 (DFARS Case 2009-D028) in correspondence.

## D. Paperwork Reduction Act

                    The Paperwork Reduction Act does not apply because the rule does not impose information collection requirements that require the approval of the Office of Management and Budget under 44 U.S.C. 3501,                     *et seq.*

## E. Determination to Issue an Interim Rule

A determination has been made under the authority of the Secretary of Defense that urgent and compelling reasons exist to publish an interim rule without prior opportunity for public comment pursuant to U.S.C. 418b and FAR 1.501-3(b). This action is necessary because the statute became effective upon enactment on October 14, 2008, and it is imperative that DoD program managers and contracting officers be provided with the means to distinguish between personal and non-personal services. However, DoD will consider public comments received in response to this interim rule in the formation of the final rule.

# List of Subjects in 48 CFR Parts 211 and 237

      - Government procurement

Ynette R. Shelkin,

Editor, Defense Acquisition Regulations System.

Therefore, 48 CFR parts 211 and 237 are amended as follows:

1. The authority citation for 48 CFR parts 211 and 237 continues to read as follows:

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

# PART 211—DESCRIBING AGENCY NEEDS

2. Section 211.106 is added to read as follows: 

211.106 

Agencies shall require that purchase descriptions for service contracts and resulting requirements documents, such as statements of work or performance work statements, include language to provide a clear distinction between Government employees and contractor employees. Service contracts shall require contractor employees to identify themselves as contractor personnel by introducing themselves or being introduced as contractor personnel and by displaying distinguishing badges or other visible identification for meetings with Government personnel. In addition, contracts shall require contractor personnel to appropriately identify themselves as contractor employees in telephone conversations and in formal and informal written correspondence.

# PART 237—SERVICE CONTRACTING

3. Subpart 237.5 is added to read as follows: 

# Subpart 237.5—Management Oversight of Service Contracts

237.503 

                                (c) The agency head or designee shall employ procedures to ensure that requirements for service contracts are vetted and approved as a safeguard to prevent contracts from being awarded or administered in a manner that constitutes an unauthorized personal services contract. Contracting officers shall follow the procedures at PGI 237.503, include substantially similar certifications in conjunction with service contract requirements, and place the certification in the contract file. The                                       ( print page 54526)                                    program manager or other official responsible for the requirement, at a level specified by the agency, should execute the certification.                            

[FR Doc. 2010-22226 Filed 9-7-10; 8:45 am]

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