2009-D017 Interim Rule

Federal Register / Vol. 75, No. 43 / Friday, March 5, 2010 / Rules and Regulations
FOR FURTHER INFORMATION CONTACT:

Ms.

Meredith Murphy, 703–602–1302.
SUPPLEMENTARY INFORMATION:
A. Background
This DFARS case is initiated to
partially implement section 812 of the
National Defense Authorization Act for
Fiscal Year 2010. Section 812 is entitled
‘‘Revision of Defense Supplement
Relating to Payment of Costs Prior to
Definitization.’’ Section 812 has been
partially implemented in DFARS Case
2008–D034, and this case implements
the balance of section 812, which makes
the limitations on payment of costs
prior to definitization of unpriced
change orders applicable to all
categories of undefinitized contractual
actions, ‘‘including undefinitized task
orders and delivery orders.’’ The
implementation is accomplished by
specifically including the category of
‘‘task orders and delivery orders’’ in the
definition of ‘‘contract action’’ at DFARS
217.7401.
This is not a significant regulatory
action and, therefore, was not subject to
review under section 6(b) of Executive
Order 12866, Regulatory Planning and
Review, dated September 30, 1993. This
rule is not a major rule under 5 U.S.C.
804.

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B. Regulatory Flexibility Act
DoD does not expect that this interim
rule will have a significant economic
impact on a substantial number of small
entities within the meaning of the
Regulatory Flexibility Act, 5 U.S.C. 601,
et seq., because the rule does not impose
any additional requirements on small
businesses. Therefore, an initial
Regulatory Flexibility Analysis has not
been performed. DoD invites comments
from small business concerns and other
interested parties on the expected
impact of this rule on small entities.
DoD will also consider comments
from small entities concerning the
existing regulations in subparts affected
by this rule in accordance with 5 U.S.C.
610. Interested parties must submit such
comments separately and should cite 5
U.S.C. 610 (DFARS Case 2009–D035) in
correspondence.
C. Paperwork Reduction Act
The Paperwork Reduction Act does
not apply because the interim rule does
not contain any information collection
requirements that require the approval
of the Office of Management and Budget
under 44 U.S.C., et seq.

(DoD) that urgent and compelling
circumstances exist to promulgate this
interim rule without prior opportunity
for public comments. This action is
necessary because section 812 of the
National Defense Authorization Act for
Fiscal Year 2010 became effective upon
enactment. The date of enactment was
October 28, 2009. However, pursuant to
41 U.S.C. 418b, DoD will consider
public comments received in response
to this interim rule in the formation of
the final rule.
List of Subjects in 48 CFR Part 217
Government procurement.
Ynette R. Shelkin,
Editor, Defense Acquisition Regulations
System.

Therefore, 48 CFR part 217 is
amended as follows:

■

PART 217—SPECIAL CONTRACTING
METHODS
1. The authority citation for 48 CFR
part 217 continues to read as follows:

■

Authority: 41 U.S.C. 421 and 48 CFR
Chapter 1.

2. Section 217.7401 is amended by
revising paragraph (a)(2) and adding
paragraph (a)(3) to read as follows:

■

217.7401

Definitions.

*

*
*
*
*
(a) * * *
(2) It includes task orders and
delivery orders.
(3) It does not include change orders,
administrative changes, funding
modifications, or any other contract
modifications that are within the scope
and under the terms of the contract, e.g.,
engineering change proposals, value
engineering change proposals, and over
and above work requests as described in
Subpart 217.77. For policy relating to
definitization of change orders, see
243.204–70.
*
*
*
*
*
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DEPARTMENT OF DEFENSE
Defense Acquisition Regulations
System
48 CFR Parts 237 and 252
RIN 0750–AG52

Defense Federal Acquisition
Regulation Supplement (DFARS);
DFARS Case 2009–D017, Continuation
of Essential Contractor Services
AGENCY: Defense Acquisition
Regulations System, Department of
Defense (DoD).
ACTION: Interim rule with request for
comments.
SUMMARY: DoD is issuing an interim rule
amending the Defense Federal
Acquisition Regulation Supplement
(DFARS) to add policy and a contract
clause requiring that contractors
providing essential contractor services,
as determined by the requiring activity,
shall be prepared to continue such
services during periods of crisis.
DATES: Effective Date: March 5, 2010.
Comment Date: Comments on this
interim rule should be submitted in
writing to the address shown below on
or before May 4, 2010, to be considered
in the formation of the final rule.
ADDRESSES: You may submit comments,
identified by DFARS Case 2009–D017,
using any of the following methods:
Federal eRulemaking Portal: http://
www.regulations.gov. Follow the
instructions for submitting comments.
E-mail: dfars@osd.mil. Include
DFARS Case 2009–D017 in the subject
line of the message.
Fax: 703–602–0350.
Mail: Defense Acquisition Regulations
System, Attn: Mr. Julian E. Thrash,
OUSD(AT&L)DPAP(DARS), Room
3B855, 3060 Defense Pentagon,
Washington, DC 20301–3060.
Hand Delivery/Courier: Defense
Acquisition Regulations System, Crystal
Square 4, Suite 200A, 241 18th Street,
Arlington, VA 22202–3402.
Comments received generally will be
posted without change to http://
www.regulations.gov, including any
personal information provided.
FOR FURTHER INFORMATION CONTACT: Mr.
Julian E. Thrash, 703–602–0310.
SUPPLEMENTARY INFORMATION:

A. Background
This action is necessary to ensure that
essential contractor services are not
interrupted. The current changing threat
environment, particularly under the
additional challenges caused by such
crises as hurricanes, tornados,

D. Determination To Issue an Interim
Rule
A determination has been made under
the authority of the Secretary of Defense

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Federal Register / Vol. 75, No. 43 / Friday, March 5, 2010 / Rules and Regulations

earthquakes, blizzards, floods, or
pandemic influenza, has increased the
need for continuity of operations
capabilities and plans that enable
agencies to continue their essential
functions across a broad spectrum of
emergencies and crises. DoD has
established a new requirement for
contractors to submit their plans to
ensure continuation of essential
contractor services that support
mission-essential functions during a
crisis situation.
DoD Instruction (DoDI) 3020.37,
Continuation of Essential DoD
Contractor Services During Crises,
provides the basis for the definition of
‘‘essential contractor service,’’ which
means a service provided by a firm or
individual under contract to DoD to
support mission-essential functions,
such as support of vital systems,
including ships owned, leased, or
operated in support of military missions
or roles at sea; associated support
activities, including installation,
garrison, and base support services; and
similar services provided to foreign
military sales customers under the
Security Assistance Program. Services
are essential if the effectiveness of
defense systems or operations has the
potential to be seriously impaired by the
interruption of such services, as
determined by the appropriate
functional commander or equivalent. As
a general rule, the designation of
services as essential contractor services
will not apply to an entire contract but
will apply only to those service
functions that have been specifically
identified as essential contractor
services by the functional commander
or equivalent.
DoD is adding a new Subpart 237.76,
Continuation of Essential Contractor
Services, and the new clause at
252.237–7023, Continuation of Essential
Contractor Services. This clause is
required in solicitations and contracts
for services that are in support of
mission-essential functions. In
accordance with FAR 1.108(d)(3),
contracting officers may, at their
discretion, include these changes in any
existing contract with appropriate
consideration.
This regulatory action was subject to
review under Section 6(b) of Executive
Order 12866, Regulatory Planning and
Review, dated September 30, 1993. This
rule is not a major rule under 5 U.S.C.
804.
B. Regulatory Flexibility Act
DoD does not expect this interim rule
to have a significant economic impact
on a substantial number of small entities
within the meaning of the Regulatory

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Flexibility Act, 5 U.S.C. 601, et seq.,
because the rule allows equitable
adjustment for additional costs that are
incurred during a crisis situation.
Therefore, DoD has not performed an
initial regulatory flexibility analysis.
DoD invites comments from small
business concerns and other interested
parties on the expected impact of this
rule on small entities.
DoD will also consider comments
from small entities concerning the
existing regulations in subparts affected
by this rule in accordance with 5 U.S.C.
610. Interested parties must submit such
comments separately and should cite 5
U.S.C. 610 (DFARS Case 2009–D017) in
correspondence.
C. Paperwork Reduction Act
The Paperwork Reduction Act (44
U.S.C. Chapter 35) applies, because this
interim rule contains an information
collection requirement. DoD invites
comments on the following aspects of
the interim rule: (a) Whether the
collection of information is necessary
for the proper performance of the
functions of DoD, including whether the
information will have practical utility;
(b) the accuracy of the estimate of the
burden of the information collection; (c)
ways to enhance the quality, utility, and
clarity of the information to be
collected; and (d) ways to minimize the
burden of the information collection on
respondents, including the use of
automated collection techniques or
other forms of information technology.
The following is a summary of the
information collection requirement.
Title: Defense Federal Acquisition
Regulation Supplement (DFARS) 2009–
D017; Continuation of Essential
Contractor Services.
Type of Request: New collection.
Number of Respondents: 7,600.
Responses per Respondents: 1.25.
Annual Responses: 9,500.
Average Burden per Response: 2.
Total Annual Burden Hours: 19,000.
Needs and Uses: DoD needs this
information to ensure essential
contractor functions are performed for
continuity of operations.
Affected Public: Businesses or other
for-profit institutions.
Frequency: On occasion.
Respondent’s Obligation: Required to
obtain contract.
Written comments and
recommendations on the information
collection proposal should be sent to
Ms. Jasmeet Seehra at the Office of
Management and Budget, Desk Officer
for DoD, Room 10236, New Executive
Office Building, Washington, DC 20503,
with a copy to the Defense Acquisition
Regulations System, Attn: Mr. Julian

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Thrash, OUSD(AT&L)DPAP(DARS),
Room 3B855, 3060 Defense Pentagon,
Washington, DC 20301–3060.
Comments can be received from 30 to 60
days after the date of this notice, but
comments to OMB will be most useful
if received by OMB within 30 days after
the date of this notice.
To request more information on this
information collection proposal or to
obtain a copy of the proposal and
associated collection instruments,
please write to the Defense Acquisition
Regulations System, Attn: Mr. Julian
Thrash.
D. Determination To Issue an Interim
Rule
A determination has been made under
the authority of the Secretary of Defense
(DoD) that urgent and compelling
reasons exist to promulgate this interim
rule without prior opportunity for
public comments. This action is
necessary to ensure that essential
contractor services are not interrupted
by crises such as those caused by
hurricanes, tornados, earthquakes,
blizzards, floods, or pandemic
influenza. DoD Instruction (DoDI)
3020.37, Continuation of Essential DoD
Contractor Services During Crises,
established the basis for implementing
policy, assigning responsibilities, and
prescribing procedures, to provide a
reasonable assurance for the
continuation of essential contractor
services (see http://www.dtic.mil/whs/
directives/corres/pdf/302037p.pdf). This
DoDI requires DoD components to rely
on the most effective mix of the total
force, cost and other factors considered,
including Active, Reserve, civilian,
host-nation, and contract resources
necessary to fulfill assigned peacetime
and wartime missions. DoD must take
action now to ensure essential
contractor services are ready to support
a total force response. The impact to
operations posed by not issuing an
interim rule presents an unacceptable
risk to DoD’s mission to provide a total
force response during crisis situations.
This interim rule clarifies the limited
use of the clause for only those essential
contractor services determined by the
functional commander, or equivalent, to
be necessary to prevent the impairment
of defense systems or operations.
Furthermore, this interim rule also
clarifies that an equitable adjustment
may be appropriate for an increase or
decrease in the cost incurred in
continuing the performance of essential
contractor services during a crisis
situation.

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Federal Register / Vol. 75, No. 43 / Friday, March 5, 2010 / Rules and Regulations
List of Subjects in 48 CFR Parts 237 and
252
Government procurement.
Ynette R. Shelkin,
Editor, Defense Acquisition Regulations
System.

Therefore, 48 CFR parts 237 and 252
are amended as follows:
■ 1. The authority citation for 48 CFR
parts 237 and 252 continues to read as
follows:
■

Authority: 41 U.S.C. 421 and 48 CFR
chapter 1

PART 237—SERVICE CONTRACTING
2. Subpart 237.76 is added to read as
follows:

■

SUBPART 237.76—CONTINUATION OF
ESSENTIAL CONTRACTOR SERVICES
Sec.
237.7600 Scope.
237.7601 Definitions.
237.7602 Policy.
237.7603 Contract clause.

SUBPART 237.76—CONTINUATION OF
ESSENTIAL CONTRACTOR SERVICES
237.7600

Scope.

This subpart prescribes procedures for
the acquisition of essential contractor
services, which support missionessential functions.

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237.7601

Definitions.

As used in this subpart—
Essential contractor service means a
service provided by a firm or individual
under contract to DoD to support
mission-essential functions, such as
support of vital systems, including ships
owned, leased, or operated in support of
military missions or roles at sea;
associated support activities, including
installation, garrison, and base support
services; and similar services provided
to foreign military sales customers
under the Security Assistance Program,
that are essential if the effectiveness of
defense systems or operations has the
potential to be seriously impaired by the
interruption of these services, as
determined by the appropriate
functional commander or equivalent.
Mission-essential functions means
those organizational activities that must
be performed under all circumstances to
achieve DoD component missions or
responsibilities, the failure of which
would significantly affect DoD’s ability
to provide vital services or exercise
authority, direction, and control.
237.7602

Policy.

(a) Contractors providing services
designated as essential contractor
services by a requiring activity shall be
prepared to continue providing such

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services, in accordance with the terms
and conditions of their contracts, during
periods of crisis. As a general rule, the
designation of services as essential
contractor services will not apply to an
entire contract but will apply only to
those service functions that have been
specifically identified as essential
contractor services by the functional
commander or equivalent.
(b) Contractors who provide
Government-determined essential
contractor services shall have a written
plan to ensure the continuation of these
services in crisis situations. Contracting
officers shall consult with a functional
manager to assess the sufficiency of the
contractor-provided written plan.
Contractors will activate such plans
only during periods of crisis, as directed
by the appropriate functional
commander or equivalent.
(c) The contracting officer shall follow
the procedures at PGI 207.105(b)(20)(C)
in preparing an acquisition plan.
237.7603

Contract clause.

Use the clause at 252.237–7023,
Continuation of Essential Contractor
Services, in solicitations and contracts
for services that are in support of
mission-essential functions.
PART 252—SOLICITATION
PROVISIONS AND CONTRACT
CLAUSES
2. Section 252.237–7023 is added to
read as follows:

■

252.237–7023, Continuation of Essential
Contractor Services.

As prescribed in 237.7603, use the
following clause:
Continuation of Mission Essential Functions
(Date)
(a) The Government has identified all or a
portion of the services performed under this
contract as essential contractor services in
support of mission-essential functions. The
contractor-provided services that have been
determined to be essential contractor services
in support of mission-essential functions are
listed in attachment _,
Mission-Essential Contractor Services,
dated ____.
(b) The Contractor shall provide a written
plan for continuing the performance of
essential contractor services identified in
paragraph (a) of this section during a crisis.
(1) The Contractor shall identify in the
plan the provisions made for the acquisition
of essential personnel and resources, if
necessary, for continuity of operations for up
to 30 days or until normal operations can be
resumed;
(2) The plan must, at a minimum,
address—
(i) Challenges associated with maintaining
essential contractor services during an
extended event, such as a pandemic that
occurs in repeated waves;

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(ii) The time lapse associated with the
initiation of the acquisition of essential
personnel and resources and their actual
availability on site;
(iii) The components, processes, and
requirements for the identification, training,
and preparedness of personnel who are
capable of relocating to alternate facilities or
performing work from home;
(iv) Any established alert and notification
procedures for mobilizing identified
‘‘essential contractor service’’ personnel; and
(v) The approach for communicating
expectations to contractor employees
regarding their roles and responsibilities
during a crisis.
(3) The Contractor shall maintain and
update its plan as necessary and adhere to its
requirements throughout the contract term.
The Contractor shall not materially alter the
plan without the Contracting Officer’s
consent.
(4) As directed by the Contracting Officer,
the Contractor shall participate in training
events, exercises, and drills associated with
Government efforts to test the effectiveness of
continuity of operations procedures and
practices.
(c) In the event the Contractor anticipates
not being able to perform any of the essential
contractor services identified in paragraph (a)
of this section during a crisis situation, the
Contractor shall notify the Contracting
Officer or other designated representative as
expeditiously as possible and use its best
efforts to cooperate with the Government in
the Government’s efforts to maintain the
continuity of operations.
(d) The Government reserves the right in
such crisis situations to use Federal
employees of other agencies or contract
support from other contractors or to enter
into new contracts for essential contractor
services. Any new contracting efforts would
be conducted in accordance with OFPP
letter, ‘‘Emergency Acquisitions’’ May 2007
and FAR and DFARS subparts 18 and 218,
respectively, or any other subsequent
emergency guidance issued.
(e) Changes. The Contractor shall segregate
and separately identify all costs incurred in
continuing performance of essential services
in a crisis situation. The Contractor shall
notify the Contracting Officer of an increase
or decrease in costs within ninety days after
continued performance has been directed by
the Contracting Officer, or within any
additional period that the Contracting Officer
approves in writing, but not later than the
date of final payment under the contract. The
Contractor’s notice shall include the
Contractor’s proposal for an equitable
adjustment and any data supporting the
increase or decrease in the form prescribed
by the Contracting Officer. The parties shall
negotiate an equitable price adjustment to the
contract price as soon as is practicable after
receipt of the Contractor’s proposal.
The Contractor shall include the substance
of this clause, including this paragraph (f), in
subcontracts for the essential services.
(End of Clause)
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