34292 Federal Register / Vol. 74, No. 134 / Wednesday, July 15, 2009 / Proposed Rules 

DEPARTMENT OF DEFENSE 

Defense Acquisition Regulations 

System 

48 CFR Part 216 

RIN 0750–AF81 

Defense Federal Acquisition 

Regulation Supplement; Letter 

Contract Definitization Schedule 

(DFARS Case 2007–D011) 

AGENCY: Defense Acquisition 

Regulations System, Department of 

Defense (DoD). 

ACTION: Proposed rule with request for 

comments. 

SUMMARY: DoD is proposing to amend 

the Defense Federal Acquisition 

Regulation Supplement (DFARS) to 

clarify requirements regarding 

definitization of letter contracts. The 

rule specifies that DoD letter contracts 

will be definitized using the DFARS 

procedures applicable to all other 

undefinitized contract actions. 

DATES: Comments on the proposed rule 

should be submitted in writing to the 

address shown below on or before 

September 14, 2009, to be considered in 

the formation of the final rule. 

ADDRESSES: You may submit comments, 

identified by DFARS Case 2007–D011, 

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 2007–D011 in the subject 

line of the message. 

Fax: 703–602–7887. 

Mail: Defense Acquisition Regulations 

System, Attn: Ms. Cassandra Freeman, 

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: Ms. 

Cassandra Freeman, 703–602–8383. 

SUPPLEMENTARY INFORMATION: 

A. Background 

Section 16.603 of the Federal 

Acquisition Regulation (FAR) permits 

the use of a letter contract as a 

preliminary, undefinitized contractual 

instrument, when negotiating a 

definitive contract is not possible in 

sufficient time to meet the 

Government’s requirements. FAR 

16.603–2(c)(3) requires the 

definitization of a letter contract within 

180 days after the date of the letter 

contract, or before completion of 40 

percent of the work to be performed, 

whichever occurs first. In extreme cases 

and according to agency procedures, the 

contracting officer may authorize an 

additional period. 

DFARS Subpart 217.74 contains 

requirements applicable to all DoD 

undefinitized contract actions, 

consistent with 10 U.S.C. 2326. DFARS 

217.7404–3(a) requires definitization of 

such actions by 180 days after issuance 

of the action (this date may be extended 

but may not exceed 180 days after the 

contractor submits a qualifying 

proposal), or the date on which the 

amount of funds obligated exceeds 50 

percent of the not-to-exceed price, 

whichever is earlier. If the contractor 

submits a qualifying proposal before 50 

percent of the not-to-exceed price has 

been obligated by the Government, the 

limitation on obligations before 

definitization may be increased to no 

more than 75 percent. 

In view of the differences between the 

FAR and DFARS definitization 

requirements, confusion has arisen in 

this area. This proposed rule clarifies 

that the definitization requirements at 

DFARS 217.7404–3(a) apply to DoD 

letter contracts instead of the 

requirements at FAR 16.603–2(c)(3). 

This approach provides consistency in 

the manner in which DoD manages its 

undefinitized contract actions, and is in 

line with the specific provisions of 10 

U.S.C. 2326 relating to DoD use of 

undefinitized contract actions. 

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 is a 

clarification of existing requirements 

pertaining to undefinitized contract 

actions. 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 subpart 

in accordance with 5 U.S.C. 610. Such 

comments should be submitted 

separately and should cite DFARS Case 

2007–D011. 

C. Paperwork Reduction Act 

The Paperwork Reduction Act does 

not apply, because the proposed rule 

does not contain any information 

collection requirements that require the 

approval of the Office of Management 

and Budget under 44 U.S.C. 3501, et 

seq. 

List of Subjects in 48 CFR Part 216 

Government procurement. 

Michele P. Peterson, 

Editor, Defense Acquisition Regulations 

System. 

Therefore, DoD proposes to amend 48 

CFR Part 216 as follows: 

PART 216—TYPES OF CONTRACTS 

1. The authority citation for 48 CFR 

Part 216 continues to read as follows: 

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

Chapter 1. 

2. Section 216.603–2 is added to read 

as follows: 

216.603–2 Application. 

(c)(3) In accordance with 10 U.S.C. 

2326, establish definitization schedules 

for letter contracts following the 

requirements at 217.7404–3(a) instead of 

the requirements at FAR 16.603–2(c)(3). 

[FR Doc. E9–16665 Filed 7–14–09; 8:45 am] 

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