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:

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:

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:

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

Copyright 2003 by Panoptic Enterprises. All Rights Reserved.

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