DATE: January 18, 2001

SUBJECT: Department of Energy Acquisition Regulation (DEAR); Contractor Legal Management Requirements

SOURCE: Federal Register, January 18, 2001, Vol. 66, No. 12, page 4616

AGENCIES: Department of Energy (DOE)

ACTION: Final Rule

SYNOPSIS: DOE is amending the DEAR to conform to new DOE regulations that cover reimbursable legal costs incurred by its facility management and operations (M&O) contractors with contracts exceeding $100,000,000.

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

For more on the proposed rule, see the October 25, 2000, FEDERAL CONTRACTS DISPATCH "Department of Energy Acquisition Regulation (DEAR); Contractor Legal Management Requirements."

EFFECTIVE DATE: February 20, 2001.

FOR FURTHER INFORMATION CONTACT: Laura Fullerton, 202-586-3420 or e-mail: Laura.Fullerton@hq.doe.gov, or Anne Broker, 202-586-5060 or e-mail: Anne.Broker@hq.doe.gov.

SUPPLEMENTAL INFORMATION: The cost principles and contract clauses in DOE's contracts generally make legal costs, including the cost of litigation, allowable if reasonable and incurred in accordance with the applicable cost principles and contract clauses.

On October 25, 2000, DOE proposed creating a new Part 719, Contractor Legal Management Requirements, in Chapter 10 of the Code of Federal Regulations, Energy, which would consist of regulations intended to monitor and control legal costs and to provide guidance to aid contractors and DOE personnel in making determinations regarding the reasonableness of all outside legal costs, including the costs of litigation. Proposed 10 CFR Part 719 would cover all outside legal costs incurred by contractors with contracts exceeding $10,000,000 at facilities owned or leased by DOE.

Today, DOE is finalizing the proposed rule with certain changes. The threshold for applicability is increased from $10,000,000 to $100,000,000, and the regulations now also apply to legal counsel retained by DOE for litigation or other legal services where the legal costs over the life of the matter for which counsel has been retained are expected to exceed $100,000.

Also proposed on October 25, 2000, were amendments to DEAR Part 931, Cost Principles, and DEAR Part 970, DOE Management and Operating Contracts, to bring them into conformity with the proposed 10 CFR Part 719. The proposed DEAR amendments are also finalized with changes, many of which reflect the changes between the proposed and final 10 CFR Part 719. Other differences reflect the renumbering of sections in the rewrite of DEAR Part 970 (see the December 22, 2000, FEDERAL CONTRACTS DISPATCH "Department of Energy Acquisition Regulation (DEAR); Rewrite of Part 970, DOE Management and Operating Contracts").

The following are the other significant changes between the proposed and final DEAR amendments:

FOR FURTHER INFORMATION CONTACT: Panoptic Enterprises at 703-451-5953 or by e-mail to Panoptic@FedGovContracts.com.

Copyright 2001 by Panoptic Enterprises. All Rights Reserved.

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