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Panoptic Enterprises' FEDERAL CONTRACTS DISPATCH
DATE: February 21, 2003
SUBJECT: Defense Federal Acquisition Regulation Supplement (DFARS); Electronic Submission and Processing of Payment Requests
SOURCE: Federal Register, February 21, 2003, Vol. 68, No. 35, page 8450
AGENCIES: Department of Defense (DOD)
ACTION: Interim Rule
SYNOPSIS: DOD is adding DFARS Subpart 232.70, Electronic Submission and Processing of Payment Requests, to implement Section 1008 of the National Defense Authorization Act for Fiscal Year 2001 (Public Law 106-398), which requires contractors to submit, and DOD to process, payment requests in electronic form.
EDITOR'S NOTE: For more on the proposed rule, see the May 31, 2002, FEDERAL CONTRACTS DISPATCH "Defense Federal Acquisition Regulation Supplement (DFARS); Electronic Submission and Processing of Payment Requests."
Section 1008(a) required that contracts for which solicitations are issued after June 30, 2001, must require the contractor to submit electronically, and DOD to process electronically, any claim for payment under a DOD contract. However, Section 1008 permitted the Secretary of Defense to delay the implementation date to no later than October 1, 2002, if the Secretary found it was impracticable to implement the requirement until that later date.
On August 21, 2001, the Secretary of Defense published such a determination, and postponed the implementation data from June 30, 2001, to October 1, 2002, because DOD did not have the capability to receive all contractor claims for payment electronically by June 30, 2001, nor did it have the capability to process all claims and supporting documentation electronically. For more on the implementation delay, see the August 21, 2001, FEDERAL CONTRACTS DISPATCH "Department of Defense (DOD); Delay in Electronic Submission and Processing of Claims for Contract Payments."
Nevertheless, because DOD's automated payment systems were limited to certain types of payment requests, DOD was unable to meet the October 1, 2002, implementation date. However, DOD claims that its automated systems will be capable of processing nearly 100% percent of payment requests by March 1, 2003, so the interim rule is being issued at this time.
DATES: This interim rule is effective March 1, 2003. Comments on the interim rule must be submitted no later than April 22, 2003.
ADDRESSES: Respondents may submit comments directly on the web site at http://emissary.acq.osd.mil/dar/dfars.nsf/pubcomm. As an alternative, respondents may e-mail comments to: dfars@acq.osd.mil. Also, respondents who cannot submit comments through the web site or by e-mail may submit comments to Defense Acquisition Regulations Council, Attn: Sandra Haberlin, OUSD(AT&L)DP(DAR), IMD 3C132, 3062 Defense Pentagon, Washington, DC 20301-3062, or by fax to 703-602-0350. Cite "DFARS Case 2002-D001" when making comments on this interim rule.
FOR FURTHER INFORMATION CONTACT: Sandra Haberlin, 703-602-0289.
SUPPLEMENTAL INFORMATION: Section 1008 of Public Law 106-398 provides that:
- Contractors must submit electronically, and DOD must process electronically, requests for payment under DOD contracts;
- DOD must transmit any supporting documentation electronically within DOD; and
- The Secretary of Defense may exempt cases in any category if the Secretary determines that the requirement for using electronic means for submitting or transmitting payment requests is unduly burdensome.
On May 31, 2002, DOD published a proposed rule to implement Section 108 by adding a new DFARS Subpart 232.70 and related provision DFARS 252.232-7XXX, Electronic Submission of Payment Requests. The proposed DFARS Subpart 232.70 would consist of the following sections:
- DFARS 232.7000, Scope of Subpart.
- DFARS 232.7001, Definitions, which would direct interested parties to DFARS 252.232-7XXX for the definition of "electronic form and payment request."
- DFARS 232.7002, Policy, which would (1) require contractors to submit requests for contract financing and invoice payments in electronic form (except under six exceptions); and (2) require DOD officials receiving payment requests in electronic form to process the payment requests and supporting documentation in electronic form. The six exceptions would be: "(1) purchases paid for with a governmentwide commercial purchase card; (2) awards made to foreign vendors for work performed outside the United States; (3) classified contracts or purchases...when electronic submission and processing of payment requests could compromise the safeguarding of classified information or national security; (4) contracts awarded by deployed contracting officers in the course of military operations, including, but not limited to, contingency operations...or humanitarian or peacekeeping operations...or contracts awarded by contracting officers in the conduct of emergency operations, such as responses to natural disasters or national or civil emergencies; (5) purchases to support unusual or compelling needs of the type described in FAR 6.302-2 [Unusual and Compelling Urgency]; and (6) cases where the Secretary of Defense determines that the requirement for using electronic means for submitting or processing payment requests and supporting documentation is unduly burdensome."
- DFARS 232.7003, Procedures, would identify the following three electronic forms of payment request transmission as acceptable:
However, contracting officers would be permitted to authorize the contractor to use another electronic form, with the concurrence of the payment office and the contract administration office.
- DFARS 232.7004, Contract Clause, which would require the use of DFARS 252.232-7XXX in all solicitations and contracts except in the six exceptions identified in proposed DFARS 232.7002.
In addition, DFARS 252.232-7XXX would contain the definition of "electronic form" and "payment request," and reflect the procedures and requirements in DFARS Subpart 232.70.
Seventeen comments on the proposed rule were received. Based on those comments, DOD has made substantive changes to the rule, so it is publishing an interim rule with another request for comments.
The main differences between the proposed and interim rules are:
- The sixth exception to the electronic submittal requirement in DFARS 232.7002 (that is, the Secretary of Defense determines that using electronic means is unduly burdensome) is changed to "cases where (i) the contractor is unable to submit, or DOD is unable to receive, a payment request in electronic form; and (ii) the contracting officer, the payment office, and the contractor mutually agree to an alternative method." This revised exemption provides contracting officers the flexibility to work solutions to unique payment situations to ensure that contractors are paid on time for work they have performed.
- The definition of "electronic form" in paragraph (a)(2) of DFARS 252.232-7003, Electronic Submission of Payment Requests, is amended by adding the following new sentence: "Facsimile, e-mail, and scanned documents are not acceptable electronic forms."
- DFARS 252.246-7000, Material Inspection and Receiving Report, is revised to state that contractor submission of material inspection and receiving information using the WAWF-RA electronic form fulfills the requirement for a DD Form 250, Material Inspection and Receiving Report. Previously, a contractor could not use the WAWF-RA electronic form if the DD Form 250 had to be signed by an administrative contracting officer (ACO).
FOR FURTHER INFORMATION CONTACT: Panoptic Enterprises at 703-451-5953 or by e-mail to Panoptic@FedGovContracts.com.
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