DATE: August 10, 2004

SUBJECT: Defense Federal Acquisition Regulation Supplement (DFARS); Resolving Tax Problems

SOURCE: Federal Register, August 10, 2004, Vol. 69, No. 153, page 48445

AGENCIES: Department of Defense (DOD)

ACTION: Proposed Rule

SYNOPSIS: DOD is proposing to remove the text in DFARS 229.101, Resolving Tax Problems, pertaining to resolution of tax problems under DOD contracts. and relocate it to the DFARS companion document, the "Procedures, Guidance, and Information" (PGI).

DATES: Comments on the proposed rule must be submitted on or before October 12, 2004.

ADDRESSES: Respondents may submit comments directly on the web site at either http://www.regulations.gov OR 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: Euclides Barrera, OUSD(AT&L)DP(DAR), IMD 3C132, 3062 Defense Pentagon, Washington, DC 20301-3062; fax to either 703-602-7887 OR 703-602-0350; or hand-deliver/courier to: Defense Acquisition Regulations Council, Crystal Square 4, Suite 200A, 241 18th Street, Arlington, VA 22202-3402. Cite "DFARS Case 2003-D032" when making comments on this interim rule.

FOR FURTHER INFORMATION CONTACT: Euclides Barrera, 703-602-0296.

SUPPLEMENTARY INFORMATION: On February 11, 2003, DOD announced plans for conducting a "major transformation" of the DFARS (see the February 11, 2003, FEDERAL CONTRACTS DISPATCH "Defense Federal Acquisition Regulation Supplement (DFARS) Transformation"). The objective of the DFARS transformation is to improve the efficiency and effectiveness of the acquisition process while allowing the acquisition workforce the flexibility to innovate. The transformed DFARS will contain only requirements of law, DOD-wide policies, delegations of FAR authorities, deviations from Federal Acquisition Regulation (FAR) requirements, and policies and procedures that have a significant effect beyond the internal operating procedures of DOD or a significant cost or administrative impact on contractors or offerors. All mandatory and non-mandatory internal DOD procedures, non-mandatory guidance, and supplemental information will be contained in the DFARS companion document, the "Procedures, Guidance, and Information" (PGI) (for more on the PGI, see the February 23, 2004, FEDERAL CONTRACTS DISPATCH "Defense Federal Acquisition Regulation Supplement (DFARS); Procedures, Guidance, and Information").

This proposed rule would remove the text of DFARS 229.101(c), which addresses the resolution of issues regarding the applicability of taxes under DOD contracts, and DFARS 229.101(d), which addresses tax relief agreements between the United States and European governments, and replace them with the following:

      "(c) For guidance on directing a contractor to litigate the applicability of a particular tax, see PGI 229.101(c).
      "(d) For information on tax relief agreements between the United States and European foreign governments, see PGI 229.101(d)."

Current paragraph (a) of DFARS 229.101 would remain unchanged. It identifies agency-designated legal counsels.

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

Copyright 2004 by Panoptic Enterprises. All Rights Reserved.

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