Source: https://regulations.justia.com/regulations/fedreg/2019/09/13/2019-19561.html
Timestamp: 2019-11-22 10:11:58
Document Index: 498357311

Matched Legal Cases: ['art 252', 'art 252', 'ART 252', 'art 252', 'art 252', 'art 252', 'art 252', 'ART 252', 'art 252', 'art 252']

Defense Federal Acquisition Regulation Supplement: Modification of DFARS Clause “Readjustment of Payments” (DFARS Case 2019-D017), 48501-48503 [2019-19561] :: Defense Acquisition Regulations System :: Department Of Defense :: Regulation Tracker :: Justia
Justia Regulation Tracker Department Of Defense Defense Acquisition Regulations System Defense Federal Acquisition Regulation Supplement: Modification of DFARS Clause “Readjustment of Payments” (DFARS Case 2019-D017), 48501-48503 [2019-19561]
Defense Federal Acquisition Regulation Supplement: Modification of DFARS Clause “Readjustment of Payments” (DFARS Case 2019-D017), 48501-48503 [2019-19561]
Download as PDF Federal Register / Vol. 84, No. 178 / Friday, September 13, 2019 / Rules and Regulations on the duty-free status of articles specified in paragraph (a)(2)(ii)(A) of the clause. Paragraph (a)(2)(ii)(A) used to be the location in the clause for the definition of ‘‘Caribbean Basin country end product,’’ but this paragraph number no longer exists. Instead, the clause has been renumbered and all of the definitions in the clause are include in alphabetical order under paragraph (a). This rule removes the reference to paragraph (a)(2)(ii)(A) in the clause and replaces it with a reference to the definition of ‘‘Caribbean Basin country end product’’ in paragraph (a). an amendment or modification thereof) must be published for public comment if it relates to the expenditure of appropriated funds, and has either a significant effect beyond the internal operating procedures of the agency issuing the policy, regulation, procedure, or form, or has a significant cost or administrative impact on contractors or offerors. This final rule is not required to be published for public comment, because DoD is not issuing a new regulation; rather, this rule is merely updating a reference in an existing clause. II. Discussion and Analysis The modification of this DFARS text implements a recommendation from the DoD Regulatory Reform Task Force. On February 24, 2017, the President signed Executive Order (E.O.) 13777, ‘‘Enforcing the Regulatory Reform Agenda,’’ which established a Federal policy ‘‘to alleviate unnecessary regulatory burdens’’ on the American people. In accordance with E.O. 13777, DoD established a Regulatory Reform Task Force to review and validate DoD regulations, including the DFARS. A public notice of the establishment of the DFARS Subgroup to the DoD Regulatory Reform Task Force, for the purpose of reviewing DFARS provisions and clauses, was published in the Federal Register at 82 FR 35741 on August 1, 2017, and requested public input. No public comments were received on this clause. The DoD Regulatory Reform Task Force reviewed the requirements of DFARS clause 252.225–7021 and recommended its modification to correct the reference. V. Executive Orders 12866 and 13563 khammond on DSKBBV9HB2PROD with RULES2 III. Applicability to Contracts at or Below the Simplified Acquisition Threshold and for Commercial Items, Including Commercially Available Offthe-Shelf Items This rule only updates a citation in an existing clause. The rule does not impose any new requirements on contracts at or below the simplified acquisition threshold or for commercial items, including commercially available off-the-shelf items. IV. Publication of This Final Rule for Public Comment Is Not Required by Statute The statute that applies to the publication of the Federal Acquisition Regulation is Office of Federal Procurement Policy statute (codified at title 41 of the United States Code). Specifically, 41 U.S.C. 1707(a)(1) requires that a procurement policy, regulation, procedure or form (including VerDate Sep<11>2014 18:37 Sep 12, 2019 Jkt 247001 E.O.s 12866 and E.O. 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. This rule is not a major rule under 5 U.S.C. 804. This rule is not subject to E.O. 13771, because this rule is not a significant regulatory action under E.O. 12866. VII. Regulatory Flexibility Act Because a notice of proposed rulemaking and an opportunity for public comment are not required to be given for this rule under 41 U.S.C. 1707(a)(1) (see section IV. of this preamble), the analytical requirements of the Regulatory Flexibility Act (5 U.S.C. 601 et seq.) are not applicable. Accordingly, no regulatory flexibility analysis is required, and none has been prepared. VIII. Paperwork Reduction Act The rule does not contain any information collection requirements that require the approval of the Office of Management and Budget under the Paperwork Reduction Act (44 U.S.C. chapter 35). Frm 00007 Fmt 4701 Sfmt 4700 List of Subjects in 48 CFR Part 252 Government procurement. Jennifer Lee Hawes, Regulatory Control Officer, Defense Acquisition Regulations System. Therefore, 48 CFR part 252 is amended as follows: PART 252—SOLICITATION PROVISIONS AND CONTRACT CLAUSES 1. The authority citation for 48 CFR part 252 continues to read as follows: ■ Authority: 41 U.S.C. 1303 and 48 CFR chapter 1. 252.225–7021 [Amended] 2. Amend section 252.225–7021 by— a. In the clause heading, removing the date ‘‘(AUG 2019)’’ and adding ‘‘(SEP 2019)’’ in its place; ■ b. In paragraph (e) introductory text, removing ‘‘paragraph (a)(2)(ii)(A)’’ and adding ‘‘the definition of ‘‘Caribbean Basin country end product’’ within paragraph (a)’’ in its place. ■ c. In the Alternate II clause— ■ i. In the clause heading, removing the date ‘‘(AUG 2019)’’ and adding ‘‘(SEP 2019)’’ in its place; ■ ii. In paragraph (f) introductory text, removing ‘‘paragraph (a)(2)(ii)(A)’’ and adding ‘‘the definition of ‘‘Caribbean Basin country end product’’ within paragraph (a)’’ in its place. ■ ■ [FR Doc. 2019–19560 Filed 9–12–19; 8:45 am] BILLING CODE 5001–06–P VI. Executive Order 13771 PO 00000 48501 DEPARTMENT OF DEFENSE Defense Acquisition Regulations System 48 CFR Part 252 [Docket DARS–2019–0046] RIN 0750–AK54 Defense Federal Acquisition Regulation Supplement: Modification of DFARS Clause ‘‘Readjustment of Payments’’ (DFARS Case 2019–D017) Defense Acquisition Regulations System, Department of Defense (DoD). ACTION: Final rule. AGENCY: DoD is issuing a final rule amending the Defense Federal Acquisition Regulation Supplement (DFARS) to update an existing DFARS clause to clearly identify the Government official to be contacted when applying the terms of the clause, pursuant to action taken by the Regulatory Reform Task Force. SUMMARY: E:\FR\FM\13SER2.SGM 13SER2 48502 Federal Register / Vol. 84, No. 178 / Friday, September 13, 2019 / Rules and Regulations Effective September 13, 2019. Ms. Carrie Moore, telephone 571–372–6093. SUPPLEMENTARY INFORMATION: DATES: FOR FURTHER INFORMATION CONTACT: I. Background DoD is amending the DFARS to update the Government point of contact in DFARS clause 252.227–7002, Readjustment of Payments. DFARS clause 252.227–7002 is included in all contracts that contain patent release and settlement agreements, license agreements, and/or assignments, executed by the Government, under which the Government acquires rights, and provide for payment of a running royalty. The clause addresses royalty terms, conditions, and payments, and requires the contractor to notify ‘‘the Secretary’’ upon granting more favorable royalty terms to the Government under another agreement. Contractors do not notify the Secretary of Defense, Army, Navy, or Air Force when complying with this clause, and DFARS conventions no longer use ‘‘the Secretary’’ as a way to identify the Department responsible for issuing the contract or oversight of subsequent contract performance. Instead, contractors notify the contracting officer when such a notification is necessary under the clause. The contracting officer is the appropriate point of contact, as they are the individual responsible for ensuring performance of all necessary actions for effective contracting, ensuring compliance with the terms of the contract, and safeguarding the interests of the United States in its contractual relationships. This rule updates the clause to identify the contracting officer, not the Secretary, as the individual to be notified under the clause. As a result, this rule intends to clarify and simplify the notification required of contractors by the clause and avoid any miscommunication or misunderstanding between the Government and contractor when complying with the clause. khammond on DSKBBV9HB2PROD with RULES2 II. Discussion and Analysis The modification of this DFARS text implements a recommendation from the DoD Regulatory Reform Task Force. On February 24, 2017, the President signed Executive Order (E.O.) 13777, ‘‘Enforcing the Regulatory Reform Agenda,’’ which established a Federal policy ‘‘to alleviate unnecessary regulatory burdens’’ on the American people. In accordance with E.O. 13777, DoD established a Regulatory Reform Task Force to review and validate DoD VerDate Sep<11>2014 18:37 Sep 12, 2019 Jkt 247001 regulations, including the DFARS. A public notice of the establishment of the DFARS Subgroup to the DoD Regulatory Reform Task Force, for the purpose of reviewing DFARS provisions and clauses, was published in the Federal Register at 82 FR 35741 on August 1, 2017, and requested public input. One public comment was received on this clause. Comment: The respondent advised that the clause is never used and should be deleted from the DFARS. The respondent recommended that, instead of the clause, a policy statement permitting DoD to enter into settlement agreements where patent and copyright infringement is alleged by a third party owner of a patent or copyright would suffice. Response: DFARS clause 252.227– 7002 serves as an agreement, through incorporation in the contract, between DoD and the contractor that, by execution of the contract, DoD is entitled to apply the more favorable royalty terms of future license agreements between the contractor and DoD to the contract that includes the clause. The clause also requires the contractor to notify DoD if the contractor grants more favorable terms to the DoD, and identifies how royalty payments will be handled in the event of a patent claim or appeal. The clause applies to the requirements and content of the individual contract. As such, the clause is necessary, when applicable, in the contract to represent the agreement to such terms by both parties, as they relate to the specific contract. A general statement of policy does not fulfill the intent of this clause. Additionally, the clause is available for use, when applicable and necessary. This clause is beneficial to DoD by facilitating a standard and uniform incorporation of more common terms and conditions associated with patent and license agreements and assignments into applicable contracts, without having to draft the language of these more common terms and conditions with each contract. This approach also ensures the same language is incorporated into each contract, which helps DoD avoid miscommunications or misunderstanding and maintain consistency in negotiating such terms and conditions DoD-wide. The DoD Task Force reviewed the requirements of DFARS clause 252.227– 7002 and determined that the DFARS clause should only be modified to update the point of contact for notifications. PO 00000 Frm 00008 Fmt 4701 Sfmt 4700 III. Applicability to Contracts at or Below the Simplified Acquisition Threshold and for Commercial Items, Including Commercially Available Offthe-Shelf Items This proposed rule does not create any new provisions or clauses. The rule clarifies the point of contact for an existing clause. This rule does not change the applicability of the affected clause, which applies to those valued at or below the SAT, if applicable, but not to commercial or COTS items. IV. Publication of This Final Rule for Public Comment Is Not Required by Statute The statute that applies to the publication of the Federal Acquisition Regulation is Office of Federal Procurement Policy statute (codified at title 41 of the United States Code). Specifically, 41 U.S.C. 1707(a)(1) requires that a procurement policy, regulation, procedure or form (including an amendment or modification thereof) must be published for public comment if it relates to the expenditure of appropriated funds, and has either a significant effect beyond the internal operating procedures of the agency issuing the policy, regulation, procedure, or form, or has a significant cost or administrative impact on contractors or offerors. This final rule is not required to be published for public comment, because DoD is not issuing a new regulation; rather, this rule merely updates the Government point of contact. V. Executive Orders 12866 and 13563 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. This rule is not a major rule under 5 U.S.C. 804. VI. Executive Order 13771 This rule is not subject to E.O. 13771, because this rule is not a significant regulatory action under E.O. 12866. E:\FR\FM\13SER2.SGM 13SER2 Federal Register / Vol. 84, No. 178 / Friday, September 13, 2019 / Rules and Regulations VII. Regulatory Flexibility Act Because a notice of proposed rulemaking and an opportunity for public comment are not required to be given for this rule under 41 U.S.C. 1707(a)(1) (see section IV. of this preamble), the analytical requirements of the Regulatory Flexibility Act (5 U.S.C. 601 et seq.) are not applicable. Accordingly, no regulatory flexibility analysis is required, and none has been prepared. VIII. Paperwork Reduction Act The rule does not contain any information collection requirements that require the approval of the Office of Management and Budget under the Paperwork Reduction Act (44 U.S.C. chapter 35). List of Subjects in 48 CFR Part 252 Government procurement. Jennifer Lee Hawes, Regulatory Control Officer, Defense Acquisition Regulations System. Therefore, 48 CFR part 252 is amended as follows: PART 252—SOLICITATION PROVISIONS AND CONTRACT CLAUSES 1. The authority citation for part 252 continues to read as follows: ■ Authority: 41 U.S.C. 1303 and 48 CFR chapter 1. 252.227–7002 [Amended] 2. Amend section 252.227–7002 by— a. Removing the clause date of ‘‘(OCT 1966)’’ and adding ‘‘(SEP 2019)’’ in its place; and ■ b. In paragraph (a), removing ‘‘the Secretary’’ and adding ‘‘the Contracting Officer’’ in its place. ■ ■ [FR Doc. 2019–19561 Filed 9–12–19; 8:45 am] BILLING CODE 5001–06–P DEPARTMENT OF DEFENSE Defense Acquisition Regulations System 48 CFR Part 252 [Docket DARS–2019–0045] khammond on DSKBBV9HB2PROD with RULES2 RIN 0750–AK55 Defense Federal Acquisition Regulation Supplement: Modification of DFARS Clause ‘‘Reporting and Payment of Royalties’’ (DFARS Case 2019–D018) Defense Acquisition Regulations System, Department of Defense (DoD). AGENCY: VerDate Sep<11>2014 18:37 Sep 12, 2019 Jkt 247001 ACTION: Final rule. DoD is issuing a final rule amending the Defense Federal Acquisition Regulation Supplement (DFARS) to update an existing DFARS clause to clarify instructions to contracting officers when completing the clause, pursuant to action taken by the Regulatory Reform Task Force. DATES: Effective September 13, 2019. FOR FURTHER INFORMATION CONTACT: Ms. Carrie Moore, telephone 571–372–6093. SUPPLEMENTARY INFORMATION: SUMMARY: I. Background DoD is amending the DFARS to update the fill-in instructions for contracting officers contained in the clause at DFARS 252.227–7009, Reporting and Payment of Royalties. DFARS clause 252.227–7009 is available for use in all contracts that contain patent release and settlement agreements, license agreements, and/or assignments, executed by the Government, under which the Government acquires rights, and provide for payment of a running royalty. The clause addresses the terms and conditions for DoD reporting of annual royalties accrued under the contract and the contractor’s resultant submission of a royalty payment request. When applicable, DFARS 227.7009– 4(d)(1) requires contracting officers to specify the name of the designated office within the applicable department or agency that is responsible for managing and reporting the extent of use of the licensed subject matter for the entire department or agency. The annual report generated by the designated office is provided to the contractor, in accordance with the clause. Depending on department or agency procedures, this report may be provided directly to the contractor by the designated office or to the contracting officer for further distribution. Upon award of a contract that incorporates the DFARS clause, the contracting officer must fill in the clause with the name of the office or individual that will provide the annual report directly to the contractor. The clause includes parenthetical instructions to contracting officers on the information required in the clause. Currently, these instructions reference the ‘‘procuring office’’ as the entity to be named in the clause, but this guidance is no longer accurate. This rule updates the parenthetical guidance to direct contracting officers to insert the name of the designated office or contracting officer, in accordance PO 00000 Frm 00009 Fmt 4701 Sfmt 4700 48503 with agency procedures. As a result, this rule intends to clarify for contractors the source of the report provided under the clause and avoid any miscommunication or misunderstanding between the Government and contractor when complying with the clause. II. Discussion and Analysis The modification of this DFARS text implements a recommendation from the DoD Regulatory Reform Task Force. On February 24, 2017, the President signed Executive Order (E.O.) 13777, ‘‘Enforcing the Regulatory Reform Agenda,’’ which established a Federal policy ‘‘to alleviate unnecessary regulatory burdens’’ on the American people. In accordance with E.O. 13777, DoD established a Regulatory Reform Task Force to review and validate DoD regulations, including the DFARS. A public notice of the establishment of the DFARS Subgroup to the DoD Regulatory Reform Task Force, for the purpose of reviewing DFARS provisions and clauses, was published in the Federal Register at 82 FR 35741 on August 1, 2017, and requested public input. One public comment was received on this clause. Comment: The respondent advised that the clause is never used and should be deleted from the DFARS. Instead, the respondent advised that a policy statement that permits DoD to enter into settlement agreements where patent and copyright infringement is alleged by a third party owner of a patent or copyright would suffice, in lieu of the clause. Response: DFARS clause 252.227– 7009 serves as an agreement, through incorporation in the contract, between DoD and the contractor that, by execution of the contract, DoD and the contractor agree to the terms, conditions, and timeframes imposed for the reporting and payment of royalties, as they apply to the requirements and content of the specific contract. A general statement of policy does not fulfill the intent of this clause. Additionally, the clause is available for use when applicable and necessary. As such, this clause is beneficial to DoD by facilitating a standard and uniform incorporation of more common terms and conditions associated with patent and license agreements and assignments into applicable contracts, without having to draft the language of these more common terms and conditions with each contract. This approach also ensures the same language is incorporated into each contract, which helps DoD avoid miscommunications or misunderstanding and maintain E:\FR\FM\13SER2.SGM 13SER2
[Pages 48501-48503]
[FR Doc No: 2019-19561]
[Docket DARS-2019-0046]
RIN 0750-AK54
of DFARS Clause ``Readjustment of Payments'' (DFARS Case 2019-D017)
clause to clearly identify the Government official to be contacted when
applying the terms of the clause, pursuant to action taken by the
DoD is amending the DFARS to update the Government point of contact
in DFARS clause 252.227-7002, Readjustment of Payments. DFARS clause
252.227-7002 is included in all contracts that contain patent release
and settlement agreements, license agreements, and/or assignments,
executed by the Government, under which the Government acquires rights,
and provide for payment of a running royalty. The clause addresses
royalty terms, conditions, and payments, and requires the contractor to
notify ``the Secretary'' upon granting more favorable royalty terms to
the Government under another agreement.
Contractors do not notify the Secretary of Defense, Army, Navy, or
Air Force when complying with this clause, and DFARS conventions no
longer use ``the Secretary'' as a way to identify the Department
responsible for issuing the contract or oversight of subsequent
contract performance. Instead, contractors notify the contracting
officer when such a notification is necessary under the clause. The
contracting officer is the appropriate point of contact, as they are
the individual responsible for ensuring performance of all necessary
actions for effective contracting, ensuring compliance with the terms
of the contract, and safeguarding the interests of the United States in
its contractual relationships.
This rule updates the clause to identify the contracting officer,
not the Secretary, as the individual to be notified under the clause.
As a result, this rule intends to clarify and simplify the notification
required of contractors by the clause and avoid any miscommunication or
misunderstanding between the Government and contractor when complying
Response: DFARS clause 252.227-7002 serves as an agreement, through
execution of the contract, DoD is entitled to apply the more favorable
royalty terms of future license agreements between the contractor and
DoD to the contract that includes the clause. The clause also requires
the contractor to notify DoD if the contractor grants more favorable
terms to the DoD, and identifies how royalty payments will be handled
in the event of a patent claim or appeal. The clause applies to the
applicable and necessary. This clause is beneficial to DoD by
facilitating a standard and uniform incorporation of more common terms
and conditions associated with patent and license agreements and
assignments into applicable contracts, without having to draft the
language of these more common terms and conditions with each contract.
This approach also ensures the same language is incorporated into each
contract, which helps DoD avoid miscommunications or misunderstanding
and maintain consistency in negotiating such terms and conditions DoD-
252.227-7002 and determined that the DFARS clause should only be
modified to update the point of contact for notifications.
The rule clarifies the point of contact for an existing clause. This
rule does not change the applicability of the affected clause, which
applies to those valued at or below the SAT, if applicable, but not to
commercial or COTS items.
252.227-7002  [Amended]
2. Amend section 252.227-7002 by--
a. Removing the clause date of ``(OCT 1966)'' and adding ``(SEP 2019)''
b. In paragraph (a), removing ``the Secretary'' and adding ``the