        DEPARTMENT OF COMMERCE
        National Oceanic and Atmospheric Administration
        50 CFR Part 679
        [Docket No. 080612764-8801-01]
        RIN 0648-AW94
        Fisheries of the Exclusive Economic Zone Off Alaska; Groundfish Fisheries of the Bering Sea and Aleutian Islands Management Area and Gulf of Alaska, Seabird Avoidance Requirements Revisions for International Pacific Halibut Commission Regulatory Area 4E

          AGENCY:
          National Marine Fisheries Service (NMFS), National Oceanic and Atmospheric Administration (NOAA), Commerce.

          ACTION:
          Proposed rule; request for comments.

          SUMMARY:
          NMFS issues a proposed rule that would revise the seabird avoidance requirements for the hook-and-line groundfish and halibut fisheries in International Pacific Halibut Commission Area 4E. The proposed rule would eliminate seabird avoidance requirements for hook-and-line vessels less than or equal to 55 ft (16.8 m) length overall in portions of Area 4E in the eastern Bering Sea. This action is necessary to revise seabird avoidance measures based on the latest scientific information and to reduce unnecessary regulatory burdens and associated costs.

          DATES:
          Written comments must be received by February 17, 2009.

          ADDRESSES:
          Send comments to Sue Salveson, Assistant Regional Administrator, Sustainable Fisheries Division, Alaska Region, NMFS, Attn: Ellen Sebastian. You may submit comments, identified by 0648-AW94, by any one of the following methods:

          • Electronic Submissions: Submit all electronic public comments via the Federal eRulemaking Portal website at http://www.regulations.gov.
          • Mail: P. O. Box 21668, Juneau, AK 99802.
          • Fax: (907) 586-7557.
          • Hand delivery to the Federal Building: 709 West 9th Street, Room 420A, Juneau, AK.

          All comments received are a part of the public record and will generally be posted to http://www.regulations.gov without change. All Personal Identifying Information (e.g., name, address) voluntarily submitted by the commenter may be publicly accessible. Do not submit Confidential Business Information or otherwise sensitive or protected information.
          NMFS will accept anonymous comments (enter N/A in the required fields, if you wish to remain anonymous). Attachments to electronic comments will be accepted in Microsoft Word, Excel, WordPerfect, or Adobe portable document file (pdf) formats only.

          Copies of the map of the seabird avoidance measures in Area 4E, and the Environmental Assessment/Regulatory Impact Review/Initial Regulatory Flexibility Analysis (EA/RIR/IRFA) for this action may be obtained from the Alaska Region NMFS address above or from the Alaska Region NMFS website at http://www.alaskafisheries.noaa.gov.

          FOR FURTHER INFORMATION CONTACT:
          Melanie Brown, 907-586-7228.

        SUPPLEMENTARY INFORMATION:

        The groundfish fisheries in the exclusive economic zone (EEZ) off Alaska are managed under the Fishery Management Plan for Groundfish of the Bering Sea and Aleutian Islands Management Area and the Fishery Management Plan for Groundfish of the Gulf of Alaska (FMPs). The North Pacific Fishery Management Council (Council) prepared the FMPs under the authority of the Magnuson-Stevens Fishery Conservation and Management Act (Magnuson-Stevens Act), 16 U.S.C. 1801, et seq. Regulations implementing the FMPs appear at 50 CFR part 679. General regulations governing U.S. fisheries also appear at 50 CFR part 600.
        Management of the Pacific halibut fisheries in and off Alaska is governed by an international agreement between Canada and the United States. This agreement, entitled the “Convention Between the United States of America and Canada for the Preservation of the Halibut Fishery of the Northern Pacific Ocean and Bering Sea” (Convention), was signed at Ottawa, Canada, on March 2, 1953, and was amended by the “Protocol Amending the Convention,” signed at Washington, D.C., March 29, 1979. The Convention is implemented in the United States by the Northern Pacific Halibut Act of 1982 (Halibut Act). The directed commercial Pacific halibut fishery in Alaska is managed under an individual fishing quota (IFQ) program, as is the fixed gear sablefish fishery. The IFQ Program is a limited access management system. This program is codified at 50 CFR part 679.
        Background
        The purpose of this proposed action is to revise the seabird avoidance measures currently implemented for the hook-and-line groundfish and halibut fisheries based on the best available information regarding seabird occurrence and potential fishing vessel interactions. Seabird avoidance measures reduce the incidental mortality of seabirds in the hook-and-line fisheries off Alaska. Since 1997, NMFS has implemented and revised seabird avoidance measures to mitigate interactions between the federal hook-and-line fisheries and seabirds (62 FR 23176, April 29, 1997; 63 FR 11161, March 6, 1998; 69 FR 1930, January 13, 2004; and 72 FR 71601, December 18, 2007).

        NMFS compiled seabird sightings data from the following sources: from 1988-2004 records from seabird observers on the U.S. Fish and Wildlife Service's (FWS) research vessel M/V TIGLAX; from incidental sightings by biologists, fishermen, seamen, fisheries observers, and birdwatchers provided to the FWS; from the International Pacific Halibut Commission (IPHC); from the Alaska Natural Heritage Program; from historical sightings documented in published literature; from satellite tagging data; and from the North Pacific Pelagic Seabird Database. The EA/RIR/IRFA for this action describes this information (see ADDRESSES). This information showed that seabird species of concern are not likely to occur in portions of Area 4E where fishing vessels using hook-and-line gear may operate; and therefore, it is not likely that interactions between the fishing vessels and these seabird species of concern would occur in those portions of Area 4E. Thus, the Council recommended revisions to the seabird avoidance measures in a portion of Area 4E. These revisions would eliminate seabird avoidance measures in the portion of Area 4E where seabird species of concern are not likely to occur. The revisions would apply to vessels greater than 26 ft (7.9 m) to less than or equal to 55 ft (16.8 m) length overall (LOA) fishing in the EEZ. Vessels less than or equal to 26 ft (7.9 m) LOA are not required to use seabird avoidance measures. Vessels greater than 55 ft (16.8 m) LOA would continue to be required to use seabird avoidance measures in all of Area 4E. Vessels this size and larger are more likely to interact with other seabirds because of the greater amount of offal discharge and greater number of hooks fished compared to smaller vessels. Vessels greater than 55 ft (16.8 m) LOA are capable of efficiently deploying seabird avoidance gear, as further discussed in the Classification section.
        Species of concern of pelagic seabirds (particularly the Endangered Species Act (ESA)-listed short-tailed albatross) are rarely observed in most of Area 4E; and therefore, are not likely to interact with hook-and-line fisheries in most of this area (Figure 1). Pelagic seabird species of concern that may interact with hook-and-line vessels have been observed and documented in the southern portion of Area 4E west of Bristol Bay. The seabird avoidance measures would continue to be required in this area for all hook-and-line vessels greater than 26 feet (7.9 m) LOA.
        BILLING CODE 3510-22-S

          EP16ja09.015

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        Eliminating unnecessary seabird avoidance measures is intended to remove associated economic burdens on affected vessels. These revisions are the result of adaptive management using the best available information to focus regulatory requirements where they are needed. Research results and the environmental and economic considerations of the proposed action are summarized in the EA/RIR/IRFA for this action (see ADDRESSES).
        Proposed Regulatory Amendments
        In June 2008, the Council unanimously recommended revisions to the seabird avoidance measures in a portion of Area 4E. These measures would apply to operators of vessels fishing for Pacific halibut in the IFQ and Community Development Quota (CDQ) management programs in waters from 0 nm to 200 nm; for IFQ sablefish in waters from 0 nm to 200 nm; and for groundfish with hook-and-line gear in the EEZ.
        The proposed rule to implement the Council's recommendations would reorganize and revise § 679.24(e)(3) and Table 20 to part 679 to clarify existing regulatory text and to eliminate unnecessary seabird avoidance gear requirements for all hook-and-line vessels less than or equal to 55 ft (16.8 m) LOA fishing in Area 4E, except in the southern portion of Area 4E as shown in Figure 1. Hook-and-line vessels fishing in the portion of Area 4E south of 60 degrees N latitude and west of 160 degrees W longitude would continue to be required to use seabird avoidance measures. The best available scientific information regarding seabird observations in the Area 4E indicates that ESA-listed seabirds and other seabird species of concern are not likely to occur in Area 4E, except for the southern portion where seabird avoidance measures would continue to be required. Therefore, the proposed rule would eliminate seabird avoidance measures where interactions with seabird species of concern is not likely to occur and ensure that such measures are used in waters where interactions with seabird species of concern are likely to occur.
        Table 19 to part 679 also would be revised to correct cross references. Under the descriptions for the seabird avoidance gear and other methods, the reference to § 679.24(e)(5) would be corrected to read § 679.24(e)(4).
        Classification
        Pursuant to section 304(b)(1)(A) of the Magnuson-Stevens Act, the NMFS Assistant Administrator has determined that this proposed rule is consistent with the FMPs, other provisions of the Magnuson-Stevens Act, the Halibut Act, and other applicable law, subject to further consideration after public comment.
        This proposed rule has been determined to be not significant for the purposes of Executive Order 12866.

        An IRFA was prepared as required by section 603 of the Regulatory Flexibility Act (RFA). The IRFA describes the economic impact this proposed rule, if adopted, would have on small entities. A description of the action, why it is being considered, and the legal basis for this action are contained at the beginning of this section in the preamble and in the SUMMARY section of the preamble. A summary of the analysis follows. A copy of this analysis is available from NMFS (see ADDRESSES).
        The vessels that fish for groundfish or halibut with hook-and-line gear in the waters off Alaska would be directly regulated by the proposed action. The seabird avoidance measures presently in place, and the alternatives and options considered, apply directly to the operator of a vessel deploying hook-and-line gear in the waters off Alaska. These regulations apply to the operation of a vessel and not directly to the halibut or sablefish IFQ-holder unless the holder is also the owner/operator of a vessel. Multiple IFQs may be used on a single vessel. Thus, the IRFA analysis of large and small entities is conducted at the vessel level and not the IFQ level. This analysis is complicated by the fact that the halibut fishery is managed somewhat separately from the Federal groundfish fisheries, resulting in multiple data sources being synthesized for the analysis. Thus, data from multiple sources and years have been used to estimate the numbers of large and small entities.
        Approximately 70 vessels ranging between 26 ft (7.9 m) and 55 ft (16.8 m) LOA, participated in the CDQ Pacific halibut fishery in Area 4E. The 70 vessels that fished in the CDQ halibut fishery in Area 4E are mostly small vessels, 66 are less than 33 ft (10.1 m) LOA. These small vessels fish in the salmon and herring fisheries in the Bristol Bay and Togiak Bay areas of Alaska. None of the 70 vessels harvest groundfish in other Federal fisheries; thus, comprehensive annual revenue data are not available for these vessels in the way that they are for vessels that participate in Federal groundfish fisheries. However, given the small size of these vessels and the small scale of the fisheries they participate in, it is not expected that any of these vessels would earn more than $4 million in annual revenue. Thus, these 70 vessels are believed to be small entities, as defined by Small Business Administration criteria.
        Comprehensive annual revenue data, from all sources, are available for the 92 vessels that participated in the Federal hook-and-line groundfish fisheries in the Bering Sea and Aleutian Islands management area in 2006. In 2006, 52 hook and line catcher vessels (CVs) and 6 hook-and-line catcher processors (CPs) reported that they caught and processed less than $4 million in gross ex-vessel or gross first wholesale product value. Thus, these 58 vessels are considered small entities.
        In total, this analysis has identified 128 vessels that are believed to be directly regulated small entities. A review of American Fisheries Act (AFA) permit data revealed that none of the 128 vessels with gross revenue less than $4 million in 2006 are AFA-permitted vessels. Because AFA affiliations are relatively stable across years, none of these vessels are large because of AFA affiliations.
        The IRFA indicates that this proposed action is not likely to impose significant costs on directly regulated small entities. The action reduces the regulatory burden on hook-and-line vessels 55 ft (16.8 m) LOA or less by eliminating all seabird avoidance requirements for these vessels operating in portions of Area 4E. The reduced regulatory burden under the proposed action would tend to reduce the costs for the directly regulated vessels. Vessel operational cost of production data are not presently collected, making it impossible to quantify the net effect on operational costs that might occur under each alternative and option.
        Since the initial adoption of seabird avoidance regulations, research has been conducted to more precisely identify the geographical distribution and range of seabirds of concern, and on the efficacy of required seabird avoidance devices. Recent research has shown the likely locations of interaction between seabirds of concern and fishing vessels in Area 4E and has provided the information necessary to identify waters where seabird avoidance measures may not be necessary. The proposed action, which is intended to reduce the economic burden placed on small entities operating in these fisheries, is a direct result of this research.

        An IRFA must describe any significant alternatives to the proposed rule that accomplish the stated objectives of the proposed action, consistent with applicable statutes, and that would minimize any significant economic impact of the proposed rule on small entities. Including status quo, this proposed action has four alternatives and two options.
        Alternative 1 is the status quo, which would require the continued use of seabird avoidance measures for all hook-and-line vessels fishing for groundfish or halibut in the federal waters of Area 4E. This alternative would not provide economic relief; and therefore, does not meet the objectives of this action.
        Alternative 2 would exempt hook-and-line vessels 26 ft (7.9 m) to 32 ft (9.8 m) LOA from seabird avoidance measures while fishing for groundfish or halibut in Area 4E. This alternative would provide economic relief to only vessels in this size class, partially meeting the objectives of the action for the hook-and-line fleet.
        Alternative 3 (preferred) would exempt hook-and-line vessels 26 ft (7.9 m) to 55 ft (16.8 m) LOA from seabird avoidance measures while fishing for groundfish or halibut in Area 4E. This alternative would provide more economic relief to the hook-and-line fleet than Alternatives 1 and 2.
        Alternative 4 would exempt all hook-and-line vessels from seabird avoidance measures while fishing for groundfish or halibut in Area 4E. This alternative would provide the most economic relief to the hook-and-line fleet compared to the other alternatives, but the economic relief in comparison to Alternative 3 is not likely a large difference. Very few vessels over 55 ft (16.8 m) LOA participate in the hook-and-line fishery in Area 4E, and the larger vessels have the capability to use seabird avoidance gear based on larger deck space, adequate superstructure, and available crew.
        Two options were also considered for this action. Option 1 (preferred) would require full compliance with the seabird avoidance measures inside the shaded portion of Area 4E, as shown in Figure 1, while option 2 would require only the use of a buoy bag in the shaded area. Option 1 would require more costs to deploy seabird avoidance gear that meets the streamer standards than option 2, which required a buoy bag with no standards and no supporting superstructure for streamer lines. Because the buoy bag is not likely as effective as the streamer lines, option 1 is more protective of short-tailed albatross and other seabirds that may occur in the shaded area shown in Figure 1.
        The preferred action is Alternative 3 with option 1, which provides more economic relief than Alternatives 1 or 2 with option 1. Alternative 3 and option 1 were selected because most of the vessels participating in the hook-and-line fishery in Area 4E are less than 55 ft (16.8 m) LOA. The use of seabird avoidance gear on these vessels can be difficult because of limited deck space for the gear or the lack of superstructure to support the streamer lines. Smaller vessels also are likely to have fewer crew members available to handle the gear. Only Alternative 4 has smaller economic impacts on the directly regulated small entities than Alternative 3. Because very few large vessels participate in the Area 4E fishery, Alternative 4 is not likely to provide much more economic relief than Alternative 3. Alternative 4 was not chosen because larger vessels are more likely to have adequate deck space, superstructure, and crew available to allow for safe and effective use of seabird avoidance gear. Because of the presence of short-tailed albatross in the shaded area of Figure 1, the Council recommended option 1 for vessels fishing in this area to ensure the continued protection of short-tailed albatross from potential incidental takes by any hook-and-line vessel. Option 1 has a marginally greater potential adverse economic impact on directly regulated small entities than does option 2, but option 1 more fully achieves the objectives of the proposed action and is necessary for the protection of short-tailed albatross and other seabirds that may occur in the shaded area of Figure 1, making it more compliant with other applicable law (e.g., ESA).
        No Federal rules duplicate, overlap, or conflict with the proposed action.
        An informal consultation with the FWS under the Endangered Species Act was concluded for this proposed action on September 15, 2008. As a result of the informal consultation, NMFS determined that fishing activities under this rule are not likely to adversely affect endangered or threatened species or their designated critical habitat. The FWS concurred with this determination.

          List of Subjects in 50 CFR Part 679
          Alaska, Fisheries, Recordkeeping and reporting requirements.

          Dated: January 12, 2009.
          Samuel D. Rauch III,
          Deputy Assistant Administrator for Regulatory Programs, National Marine Fisheries Service.

        For reasons set out in the preamble, NMFS proposes to amend 50 CFR part 679 as follows:

          PART 679—FISHERIES OF THE EXCLUSIVE ECONOMIC ZONE OFF ALASKA

        1. The authority citation for part 679 is revised to read as follows:

          Authority:
          16 U.S.C. 773 et seq.; 1801 et seq.; 3631 et seq.; Pub. L. 108 447.
          2. In § 679.24, redesignate paragraphs (e)(3)(i) and (e)(3)(ii) as paragraphs (e)(3)(ii) and (e)(3)(iii), respectively; add new paragraph (e)(3)(i); and revise paragraph (e)(3) introductory text to read as follows:

          § 679.24
          Gear limitations.

          (e) * * *
          (3) Seabird avoidance gear requirements. (See also Table 20 to this part.)
          (i) The operator of a vessel identified in paragraph (e)(1) of this section must comply with paragraph (e)(3)(ii) or (e)(3)(iii) of this section while fishing with hook-and-line gear for groundfish, IFQ halibut, CDQ halibut, or IFQ sablefish in Federal waters (EEZ) and for IFQ halibut, CDQ halibut, or IFQ sablefish in the State of Alaska waters, excluding fishing in
          (A) NMFS Reporting Area 649 (Prince William Sound);
          (B) State waters of Cook Inlet;
          (C) NMFS Reporting Area 659 (Eastern GOA Regulatory Area; Southeast Inside District), but including waters in the areas south of a straight line at 56°17.25 N. lat. between Point Harris and Port Armstrong in Chatham Strait, State statistical areas 325431 and 325401, and west of a straight line at 136°21.17 E. long. from Point Wimbledon extending south through the Inian Islands to Point Lavinia; and
          (D) Area 4E with a vessel less than or equal to 55 ft (16.8 m) LOA, but including fishing in waters south of 60°00.00 N. lat. and west of 160°00.00 W. long.

        3. Tables 19 and 20 to part 679 are revised to read as follows:

          Table 19 to Part 679--Seabird Avoidance Gear Codes

            VESSEL LOGBOOK
            CODE
            SEABIRD AVOIDANCE GEAR OR METHOD.

            1

              Paired Streamer Lines: Used during deployment of hook-and-line gear to prevent birds from taking hooks. Two streamer lines used, one on each side of the main groundline. Each streamer line consists of three components: a length of line, streamers attached along a portion of the length and one or more float devices at the terminal end. See performance and material standards at § 679.24(e)(4)(iii).

            2

              Single Streamer Line: Used during deployment of hook-and-line gear to prevent birds from taking hooks. The streamer line consists of three components: a length of line, streamers attached along a portion of the length and one or more float devices at the terminal end. See performance and material standards at § 679.24(e)(4)(ii).

            3

              Single Streamer Line, used with Snap Gear: Used during the deployment of snap gear to prevent birds from taking hooks. The streamer line consists of three components: a length of line, streamers attached along a portion of the length and one or more float devices at the terminal end. See performance and material standards at § 679.24(e)(4)(iv).

            4

              Buoy Bag Line: Used during the deployment of hook-and-line gear to prevent birds from taking hooks. A buoy bag line consists of two components: a length of line (without streamers attached) and one or more float devices at the terminal end. See performance and material standards at § 679.24(e)(4)(i).

            Other Device used in conjunction with Single Streamer Line or Buoy Bag Line

            5

              Add weights to groundline: Applying weights to the groundline for the purpose of sinking the hook-and-line gear more quickly and preventing seabirds from accessing the baited hooks.

            6

              Additional Buoy Bag Line or Single Streamer Line: Using a second buoy bag line or streamer line for the purpose of enhancing the effectiveness of these deterrent devices at preventing seabirds from accessing baited hooks.

            7

              Strategic Offal Discharge: Discharging fish, fish parts (i.e., offal) or spent bait for the purpose of distracting seabirds away from the main groundline while setting gear.

            Additional Device Used

            8

              Night Fishing: Setting hook-and-line gear during dark (night time hours).

              Line Shooter: A hydraulic device designed to deploy hook-and-line gear at a speed slightly faster than the vessel's speed during setting.

              Lining Tube: A device used to deploy hook-and-line gear through an underwater-setting device.

              Other (Describe)

            9
            No Deterrent Used Due to Weather. [See weather exceptions at § 679.24(e)(4)(i), (e)(4)(ii)(B), (e)(4)(iii)(B), (e)(4)(iv)(B), and (e)(4)(v).]

            0
            No Deterrent Used.

          Table 20 to Part 679—Seabird Avoidance Gear Requirements for Vessels, based on Area, Gear, and Vessel Type
          (See § 679.24(e) for complete seabird avoidance program requirements; see § 679.24(e)(1) for applicable fisheries.)

              If you operate a vessel deploying hook-and-line gear, other than snap gear, in waters specified at § 679.24(e)(3), and your vessel is...

              then you must use this seabird avoidance gear in conjunction with requirements at § 679.24(e)...

            >26 ft to 55 ft LOA and without masts, poles, or rigging
            minimum of one buoy bag line

            >26 ft to 55 ft LOA and with masts, poles, or rigging
            minimum of a single streamer line of a standard specified at § 679.24(e)(4)(ii)

            >55 ft LOA
            minimum of paired streamer lines of a standard specified at § 679.24(e)(4)(iii)

              If you operate a vessel deploying hook-and-line gear and use snap gear in waters specified at § 679.24(e)(3), and your vessel is...

              then you must use this seabird avoidance gear in conjunction with requirements at § 679.24(e)...

            >26 ft to 55 ft LOA and without masts, poles, or rigging
            minimum of one buoy bag line

            >26 ft to 55 ft and with masts, poles, or rigging
            minimum of a single streamer line of a standard specified at § 679.24(e)(4)(iv)

            >55 ft LOA
            minimum of a single streamer line of a standard specified at § 679.24(e)(4)(iv)

              If you operate any of the following hook-and-line vessels...

              then...

            < 32 ft in the State waters of IPHC Area 4E
            you are exempt from seabird avoidance measures.

            in NMFS Reporting Area 649 (Prince William Sound)

            in State waters of Cook Inlet

            in NMFS Reporting Area 659 (Eastern GOA Regulatory Area, Southeast Inside District), but not including waters in the areas south of a straight line at 56°17.25 N. lat. between Point Harris and Port Armstrong in Chatham Strait, State statistical areas 325431 and 325401, and west of a straight line at 136°21.17 E. long. from Point Wimbledon extending south through the Inian Islands to Point Lavinia

            ≤ 55 ft in IPHC Area 4E but not including waters south of 60°00.00 N. lat. and west of 160°00.00 W. long.

      [FR Doc. E9-974 Filed 1-15-09; 8:45 am]
      BILLING CODE 3510-22-S


        DEPARTMENT OF DEFENSE
        48 CFR Parts 232 and 252
        [DFARS Case 2001-D012]
        Defense Federal Acquisition Regulation Supplement; Customary Progress Payment Rate for Large Business Concerns

          AGENCY:
          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 increase the customary uniform progress payment rate for large business concerns from 75 percent to 80 percent. The progress payment rate change will be applicable only to contract awards made on or after October 1, 2001, with final implementation contingent upon the approval of a DoD budget and outlay ceiling for Fiscal Year (FY) 2002 sufficient to accommodate the outlay impact of this proposed change. The Budget of the United States Government, FY 2002, submitted by the President, accommodates the outlay impact. Contracts awarded before October 1, 2001, will not be modified to include the 80 percent rate.

          DATES:
          Comments on the proposed rule should be submitted to the address shown below on or before September 24, 2001 to be considered in the formation of the final rule.

          ADDRESSES:

          Respondents may submit comments directly on the World Wide Web at http://emissary.acq.osd.mil/dar/dfars.nsf/pubcomm. As an alternative, respondents may e-mail comments to: dfars@acq.osd.mil. Please cite DFARS Case 2001-D012 in the subject line of e-mailed comments.

          Respondents that cannot submit comments using either of the above methods may submit comments to: Defense Acquisition Regulations Council, Attn: Ms. Sandra Haberlin, OUSD (AT&L) DP (DAR), IMD 3C132, 3062 Defense Pentagon, Washington, DC 20301-3062; facsimile (703) 602-0350. Please cite DFARS Case 2001-D012.

          At the end of the comment period, interested parties may view public comments on the World Wide Web at http://emissary.acq.osd.mil/dar/dfars.nsf.

          FOR FURTHER INFORMATION CONTACT:
          Ms. Sandra Haberlin, (703) 602-0289.

        SUPPLEMENTARY INFORMATION:
        A. Background
        Pursuant to Section 8155 of the FY 1994 Defense Appropriations Act (Public Law 103-139), DoD reduced the customary progress payment rate for large business concerns from 85 percent to 75 percent, effective for solicitations issued on or after November 11, 1993. The rates for small business and small disadvantaged business concerns (90 percent and 95 percent, respectively) were not changed.
        Despite changes to short term borrowing rates in subsequent years that have supported an increase in the progress payment rate for large business concerns, DoD has been unable to accommodate a rate increase within available funding outlays until FY 2002. This proposed DFARS change will conform the DoD customary uniform progress payment rate for large business concerns with the progress payment rate for large business concerns currently being used by other Executive agencies under FAR 32.501-1(a). The DoD rate will be applicable only to new contract awards made on or after October 1, 2001. Contracts awarded before October 1, 2001, will not be modified to include the 80 percent rate.
        This rule was not subject to Office of Management and Budget review under Executive Order 12866, dated September 30, 1993.
        B. Regulatory Flexibility Act
        The proposed rule is not expected 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 progress payment rates for small and small disadvantaged business concerns are unchanged. 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 2001-D012.
        C. Paperwork Reduction Act
        The Paperwork Reduction Act does not apply because the rule does not impose 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 Parts 232 and 252
          Government procurement.

          Michele P. Peterson,
          Executive Editor, Defense Acquisition Regulations Council.

        Therefore, DoD proposes to amend 48 CFR Parts 232 and 252 as follows:
        1. The authority citation for 48 CFR Parts 232 and 252 continues to read as follows:

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

          PART 232—CONTRACT FINANCING
          2. Section 232.501-1 is revised to read as follows:

            232.501-1
            Customary progress payment rates.
            (a) The customary progress payment rates for DoD contracts, including contracts that contain foreign military sales (FMS) requirements, are 80 percent for large business concerns, 90 percent for small business concerns, and 95 percent for small disadvantaged business concerns.
            3. Section 232.502-4-70 is amended by revising paragraph (b) to read as follows:

            232.502-4-70
            Additional clauses.

            (b) Use the clause at 252.232-7004, DoD Progress Payment Rates, instead of Alternate I of the clause at FAR 52.232-16, if the contractor is a small business or small disadvantaged business concern.

          PART 252—SOLICITATION PROVISIONS AND CONTRACT CLAUSES
          4. Section 252.232-7004 is revised to read as follows:

            252.232-7004
            DoD Progress Payment Rates.
            As prescribed in 232.502-4-70(b), use the following clause:

              DoD Progress Payment Rates (XXX 2001)

              (a) If the contractor is a small business concern, the Progress Payments clause of this contract is modified to change each mention of the progress payment rate and liquidation  rate (excepting paragraph (k), Limitations on Undefinitized Contract Actions) to 90 percent.

              (b) If the contractor is a small disadvantaged business concern, the Progress Payments clause of this contract is modified to change each mention of the progress payment rate and liquidation rate (excepting paragraph (k), Limitations on Undefinitized Contract Actions) to 95 percent.

              (End of clause)

      [FR Doc. 01-21466  Filed 8-23-01; 8:45 am]
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