[Federal Register Volume 74, Number 144 (Wednesday, July 29, 2009)]
[Rules and Regulations]
[Pages 37645-37648]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: E9-17954]


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DEPARTMENT OF DEFENSE

Defense Acquisition Regulations System

48 CFR Parts 204, 236, 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: Final rule.

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SUMMARY: DoD has issued a final rule amending 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: Effective Date: July 29, 2009.

FOR FURTHER INFORMATION CONTACT: Mr. Mark Gomersall, Defense 
Acquisition Regulations System, OUSD (AT&L) DPAP (DARS), IMD 3D139, 
3062 Defense Pentagon, Washington, DC 20301-3062. Telephone 703-602-
0302; facsimile 703-602-7887. Please cite DFARS Case 2007-D020.

SUPPLEMENTARY INFORMATION:

A. Background

    This final 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. Related changes are made in 
Parts 204, 236, 237, 239, and 252. The following table summarizes the 
DFARS changes in this rule:

------------------------------------------------------------------------
          DFARS citation                  Changes made by this rule
------------------------------------------------------------------------
204.7003..........................  Removed ``facilities contracts''
                                     from the list of contract types,
                                     consistent with the removal of
                                     references to facilities contracts
                                     from the FAR.
237.7003..........................  Updated the reference to the
                                     applicable FAR Government Property
                                     clause.
239.7402..........................  Updated and clarified the text in
                                     paragraphs (b)(3) and (4).
245.104...........................  Updated and relocated the text to
                                     245.105.
245.301...........................  (1) Updated the definition of
                                     ``facilities project'' and
                                     relocated it to 237.7501.
                                    (2) Relocated the definition of
                                     ``mapping, charting, and geodesy''
                                     to 245.101 without change.
                                    (3) Removed the definition of
                                     ``provide,'' since this term is now
                                     defined in FAR 45.101.
                                    (4) Removed the definitions of
                                     ``agency-peculiar property,''
                                     ``industrial plant equipment,'' and
                                     ``other plant equipment,'' as they
                                     are no longer considered necessary.
245.302-1(a)......................  Revised to eliminate text addressing
                                     responsibilities for approval of
                                     facilities projects, as these
                                     responsibilities are addressed DoD
                                     Directive 4275.5. The remaining
                                     text is relocated to 237.7502, with
                                     cross-references added at 236.275
                                     and 245.102(3).
245.302-1(b) and DD Form 1419.....  Removed. The specified equipment
                                     screening procedures have become
                                     obsolete.
245.302-2 and 245.302-7...........  Removed. The separate procedures for
                                     facilities contracts are no longer
                                     necessary.
245.303-2.........................  Updated and relocated to 245.102(2).
245.307-2.........................  Removed. The corresponding FAR text
                                     has been removed.

[[Page 37646]]

 
245.310...........................  Updated and relocated to 245.102(1).
245.310-70........................  Relocated to 245.107-70.
245.401...........................  Removed as unnecessary.
245.403...........................  Relocated to 245.302(2).
245.405...........................  Updated and relocated to 245.302(1)
                                     and (3).
245.407...........................  Removed as unnecessary.
Subpart 245.5.....................  Removed as unnecessary.
Part 252..........................  Updated references and clause
                                     titles.
------------------------------------------------------------------------

    DoD published a proposed rule at 73 FR 55007 on September 24, 2008, 
to address the DFARS changes. Three sources submitted comments on the 
proposed rule. A discussion of the comments is provided below.
    1. Comment: One respondent recommended retaining the definition of 
``agency peculiar property''.
    DoD Response: The term ``agency peculiar property'' is no longer 
used in DFARS Part 245. Therefore, the definition has been excluded 
from the final rule.
    2. Comment: One respondent recommended that the term ``facilities'' 
be defined and included within DFARS Part 245.
    DoD Response: The term ``facilities'' is defined in DoD Directive 
4275.5, Acquisition and Management of Industrial Resources. The rule 
contains a reference to Directive 4275.5 in Subpart 237.75.
    3. Comment: One respondent suggested the addition of text at 
245.105 to specify that the administrative contracting officer will 
perform property administration in the absence of an assigned property 
administrator.
    DoD Response: DoD considers the additional text unnecessary, since 
the performance of contract property administration is already a 
contracting officer function listed in FAR 42.302(26). However, for 
clarity, the term ``property administrator'' has been revised to 
``assigned property administrator'' at 245.105.
    4. Comment: One respondent stated that the proposed text at 
245.301(2) elevates the level of approval required for certain non-
Government use of Government-owned equipment beyond that specified in 
the FAR, since FAR 45.301 assigns this responsibility to the head of 
the contracting activity whereas the proposed DFARS rule requires 
assistant Secretary or agency head approval.
    DoD Response: This text has been excluded from the final rule. FAR 
45.301 adequately addresses use and rental policy.
    5. Comment: One respondent suggested the phrase ``only if'' be 
replaced with the term ``provided'' at DFARS 245.302(1)(i), with regard 
to the conditions placed on contracting officer approval of contractor 
use of Government property on work for foreign governments or 
international organizations.
    DoD Response: The text at DFARS 245.302(1)(i) has been revised to 
replace the term ``only if'' with the term ``provided.'' Additionally, 
to preserve contracting officer flexibility, the word ``shall'' has 
been replaced with the word ``may'' in that same paragraph.
    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 certifies that this final rule will not 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 rule makes no significant change to DoD policy regarding 
the management of Government property in the possession of contractors.

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, 236, 237, 239, 245, and 252

    Government procurement.

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

0
Therefore, 48 CFR parts 204, 236, 237, 239, 245, and 252 are amended as 
follows:
0
1. The authority citation for 48 CFR Parts 204, 236, 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

0
2. Section 204.7003 is amended as follows:
0
a. In paragraph (a)(3)(iii) by removing ``facilities contracts,''; and
0
b. By revising paragraph (a)(3)(v) to read as follows:


204.7003  Basic PII number.

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

PART 236--CONSTRUCTION AND ARCHITECT-ENGINEER CONTRACTS

0
3. Section 236.275 is added to read as follows:


236.275   Construction of industrial resources.

    See Subpart 237.75 for policy relating to facilities projects.

PART 237--SERVICE CONTRACTING

0
4. 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.

0
5. Subpart 237.75 is added to read as follows:
Subpart 237.75--Acquisition and Management of Industrial Resources
Sec.
237.7501 Definition.
237.7502 Policy.

Subpart 237.75--Acquisition and Management of Industrial Resources


237.7501   Definition.

    Facilities project, as used in this subpart, means a Government 
project to provide, modernize, or replace real property for use by a 
contractor in performing a Government contract or subcontract.


237.7502   Policy.

    (a) Comply with DoD Directive 4275.5, Acquisition and Management of 
Industrial Resources, in processing requests for facilities projects.

[[Page 37647]]

    (b) Departments and agencies shall submit reports of facilities 
projects to the House and Senate Armed Services Committees--
    (1) At least 30 days before starting facilities projects involving 
real property (10 U.S.C. 2662); and
    (2) 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.

PART 239--ACQUISITION OF INFORMATION TECHNOLOGY

0
6. 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) 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

0
7. Subparts 245.1 and 245.3 are revised to read as follows:
Subpart 245.1--General
Sec.
245.101 Definitions.
245.102 Policy.
245.105 Contractor's property management system compliance.
245.107-70 Contract clause.

Subpart 245.1--General


245.101   Definitions.

    Mapping, charting, and geodesy property, as used in this subpart, 
is defined in the clause at 252.245-7000, Government-Furnished Mapping, 
Charting, and Geodesy Property.


245.102   Policy.

    (1) 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.
    (2) 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.
    (3) Acquisition and management of industrial resources. See Subpart 
237.75 for policy relating to facilities projects.


245.105   Contractor's property management system compliance.

    The assigned 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


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 may grant approval, provided--
    (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 foreign governments or international organizations.
    (B) When a particular foreign government or international 
organization has funded the acquisition of 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.

[[Page 37648]]

Subparts 245.4 and 245.5 [Removed]

0
8. Subparts 245.4 and 245.5 are removed.

PART 252--SOLICITATION PROVISIONS AND CONTRACT CLAUSES


252.217-7005   [Amended]

0
9. Section 252.217-7005 is amended as follows:
0
a. By revising the clause date to read ``(JUL 2009)''; and
0
b. In paragraph (e)(7) by removing ``(Fixed-Price Contracts)''.


252.217-7010   [Amended]

0
10. Section 252.217-7010 is amended as follows:
0
a. By revising the clause date to read ``(JUL 2009)''; and
0
b. In paragraph (c)(3) by removing ``(Fixed Price Contracts)''.


252.242-7004   [Amended]

0
11. Section 252.242-7004 is amended as follows:
0
a. By revising the clause date to read ``(JUL 2009)''; and
0
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]

0
12. Section 252.245-7000 is amended in the introductory text by 
removing ``245.310-70'' and adding in its place ``245.107-70''.

[FR Doc. E9-17954 Filed 7-28-09; 8:45 am]
BILLING CODE 5001-08-P