DATE: April 21, 2000

FROM: Barry McVay, CPCM

SUBJECT: Department of Energy Acquisition Regulation (DEAR); Financial Management Clauses for Management and Operating (M&O) Contracts

SOURCE: Federal Register, April 21, 2000, Vol. 65, No. 78, page 21371

AGENCIES: Department of Energy (DOE)

ACTION: Final Rule

SYNOPSIS: DOE is amending DEAR Part 970, DOE Management and Operating (M&O) Contracts, to designate certain DEAR M&O contract clauses and Federal Acquisition Regulation (FAR) clauses as Standard Financial Management Clauses to be included in M&O contracts unless the Chief Financial Officer concurs in a deviation. Also, this final rule revises several existing financial management clauses and adds four financial management related clauses.

EDITOR'S NOTE: The DEAR is available on the Internet at http://www.pr.doe.gov/dear.html.

DOE has proposed to rewrite DEAR Part 970 to streamline its policies, procedures, provisions, and clauses. For more on this effort, see the March 13, 2000, FEDERAL CONTRACTS DISPATCH "Department of Energy (DOE); Rewrite of DEAR Part 970, DOE Management and Operating (M&O) Contracts."

EFFECTIVE DATE: May 22, 2000. The introduction to the rules states, "The contracting officer must apply the changes this rule makes to solicitations issued on or after the effective date of this rule and may apply the changes to existing solicitations. Because this rule's changes are already incorporated in the majority of the Department's management and operating contracts, the contracting officer should incorporate the changes into existing contracts as soon as practicable, but in no case later than one year from the effective date of this rule."

FOR FURTHER INFORMATION CONTACT: Michael L. Righi, Office of Policy (MA-51), Department of Energy, 1000 Independence Avenue, SW, Washington, DC 20585, 202-586-8175, fax: 202-586-0545, e-mail: michael.l.righi@pr.doe.gov.

SUPPLEMENTAL INFORMATION: On November 18, 1998, DOE published a notice of proposed rulemaking (NPRM) that would revise DEAR Part 970 to implement provisions of the Chief Financial Officers Act of 1990 (Public Law 101-576), which requires each agency to improve its systems of accounting, financial management, and internal controls. The proposed rule would apply the requirements of the act to DOE's financial relationship with its M&O contractors. DOE received 11 comments from three commenters, and none of the comments were accepted. Therefore, this rule finalizes the notice of proposed rulemaking without change.

However, President Clinton signed the National Nuclear Security Administration (NNSA) Act (Public Law 106-65) into law after publication of the notice of proposed rulemaking. The NNSA Act reorganized DOE by drawing together various national security-related components of DOE and placing them under an the new DOE Undersecretary for Nuclear Security. Since the NNSA Act provides that existing procurement regulations, including DEAR Part 970, remain in effect, the authority citation for DEAR Part 970 is revised to include the citation for the NNSA.

The following are the main changes being made to the DEAR by this final rule:

FOR FURTHER INFORMATION CONTACT: Barry McVay at 703-451-5953 or by e-mail to BarryMcVay@FedGovContracts.com.

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