DATE: May 5, 2005

SUBJECT: Defense Federal Acquisition Regulation Supplement (DFARS); Authorization for Continued Contracts

SOURCE: Federal Register, May 5, 2005, Vol. 70, No. 86, page 23826

AGENCIES: Department of Defense (DOD)

ACTION: Proposed Rule

SYNOPSIS: This proposed rule would amend DFARS Subpart 204.70, Uniform Procurement Instrument Identification Numbers, to add policy permitting assignment of an additional identification number to an existing contract for administrative purposes.

EDITOR'S NOTE: 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 Federal Acquisition Regulation (FAR) authorities, deviations from 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), which is available at http://www.acq.osd.mil/dpap/dars/pgi/index.htm.

Additional information on the DFARS Transformation initiative is available at http://www.acq.osd.mil/dpap/dars/dfars/transformation/index.htm.

For more on the PGI, see the November 1, 2004, FEDERAL CONTRACTS DISPATCH "Defense Federal Acquisition Regulation Supplement (DFARS); Procedures, Guidance, and Information."

DATES: Comments on the proposed rule should be submitted on or before July 5, 2005.

ADDRESSES: Respondents may submit comments directly on the Federal eRulemaking Portal at http://www.regulations.gov; on the web site at http://emissary.acq.osd.mil/dar/dfars.nsf/pubcomm; by e-mail to: dfars@acq.osd.mil; by fax to 703-602-0350; by mail to Defense Acquisition Regulations Council, Attn: Robin Schulze, OUSD(AT&L)DP(DAR), IMD 3C132, 3062 Defense Pentagon, Washington, DC 20301-3062; or by courier/hand to Defense Acquisition Regulations Council, Crystal Square 4, Suite 200A, 241 18th Street, Arlington, VA 22202-3402. Cite "DFARS Case 2003-D052" when making comments on this proposed rule.

FOR FURTHER INFORMATION CONTACT: Robin Schulze, 703-602-0326.

SUPPLEMENTARY INFORMATION: This proposed rule would amend DFARS Subpart 204.70, specifically DFARS 204.7001, Policy, to permit DOD contracting activities to assign an additional identification number to an existing contract by issuing a separate “continued” contract when continued performance under the existing contract number is not practical for administrative reasons. The continued contract would incorporate all prices, terms, and conditions of the predecessor contract. The introduction of the proposed rule states, “Use of this procedure is expected to be limited, but will help to simplify administration, payment, and closeout of lengthy, complex contracts; and will help in situations where a contracting activity has exhausted its assigned series of identification numbers for orders placed against another activity's contract.”

DFARS 204.7001 would be amended to add paragraph (c), which would be an exception to the paragraph (b) requirement that the basic procurement instrument identification (PII) be retained unchanged for the life of the instrument. Paragraph (c) would permit the contracting officer to assign an additional PII number by “issuing a separate continued contract to permit continued contract performance” if “continued performance under a contract number is not possible or is not in the government’s best interest solely for administrative reasons (e.g., when the supplementary PII serial numbering system is exhausted or for lengthy major systems contracts with multiple options)...” It would go on state that a continued contract “(i) does not constitute a new procurement; (ii) incorporates all prices, terms, and conditions of the predecessor contract effective at the time of issuance of the continued contract; (iii) operates as a separate contract independent of the predecessor contract once issued; and (iv) shall not evade competition, expand the scope of work, or extend the period of performance beyond that of the predecessor contract.” Finally, it would require the contracting officer to follow the procedures at PGI 204.7001 when issuing a continued contract.

PGI 2004.7001 would require the contracting officer to obtain approval at a level above the contracting officer, provide notice to the contractor, and issue an administrative contract modification that would contain the following language:

This modification is issued for administrative purposes to facilitate continued contract performance due to [state the reason for assigning an additional PII number]. This modification is authorized in accordance with DFARS 204.7001(c).

Supplies and services already acquired under this contract number shall remain solely under this contract number for purposes of government inspection, acceptance, payment, and closeout. All future [delivery orders] [task orders] [options exercised] will be accomplished under continued contract XXXXXXX.

FOR FURTHER INFORMATION CONTACT: Panoptic Enterprises at 703-451-5953.

Copyright 2005 by Panoptic Enterprises. All Rights Reserved.

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