DATE: September 17, 2004

SUBJECT: Defense Federal Acquisition Regulation Supplement (DFARS); Indian Incentive Program

SOURCE: Federal Register, September 17, 2004, Vol. 69, No. 180, page 55989

AGENCIES: Department of Defense (DOD)

ACTION: Final Rule

SYNOPSIS: DOD is adopting as final, with minor changes, the October 1, 2003, interim rule that amended DFARS Subpart 226.1, Indian Incentive Program, to implement Section 8021 of the Fiscal Year 2003 DOD Appropriations Act (Public Law 107-248), which revises the criteria for application of the Indian Incentive Program to DOD contracts. In addition, this interim rule amended DFARS 252.226-7001, Utilization of Indian Organizations, Indian-Owned Economic Enterprises, and Native Hawaiian Small Business Concerns, to conform to the changes in DFARS Subpart 226.1, and to clarify that the clause, which permits incentive payments for use of Indian and Native Hawaiian subcontractors, may be used in all contract types.

EDITOR'S NOTE: For more on the interim rule, see the October 1, 2003, FEDERAL CONTRACTS DISPATCH "Defense Federal Acquisition Regulation Supplement (DFARS); Indian Incentive Program."

EFFECTIVE DATE: September 17, 2004.

FOR FURTHER INFORMATION CONTACT: Donna Hairston-Benford, Defense Acquisition Regulations Council, OUSD (AT&L)DPAP(DAR),IMD 3C132, 3062 Defense Pentagon, Washington, DC 20301-3062; 703-602-0289; fax: 703-602-0350.

SUPPLEMENTAL INFORMATION: The Indian Incentive Program provides for incentive payments to contractors, and subcontractors at any tier, that use Indian organizations and Indian-owned economic enterprises as subcontractors. DOD implementation of the Indian Incentive Program is in DFARS Subpart 226.1 and DFARS 252.226-7001.

Section 8021 of Public Law 107-248 revises the criteria for application of the Indian Incentive Program by (1) establishing a $500,000 threshold for contracts and subcontracts under which incentives may be paid; (2) by authorizing incentive payments for subcontracts awarded to Native Hawaiian small business concerns; and (3) by adding contracts and subcontracts for commercial items to the program. On October 1, 2003, DOD published an interim rule which amended DFARS 226.103, Procedures, and DFARS 252.226-7001 to implement Section 8021 (including changing the name of DFARS 252.226-7001 from "Utilization of Indian Organizations and Indian-Owned Economic Enterprises -- DOD Contracts" to indicate the inclusion of Native Hawaiians in the program).

In addition, the interim rule included a change to DFARS 252.226-7001 to clarity that the clause may be used in all contract types. Paragraph (e) of the clause previously addressed incentive payments under cost-type, cost-plus-incentive-fee, fixed-price incentive, and firm-fixed-price contracts, but because the Indian Incentive program applies to all contract types, the interim rule eliminated the references to those contract types to avoid any misconceptions regarding contract types that are not listed.

Fourteen respondents submitted comments on the interim rule, and the interim rule is adopted as final with the following minor changes:

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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