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Proposed Rule

Defense Federal Acquisition Regulation Supplement; Acquisition of Utility Services

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Information about this document as published in the Federal Register.

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Department of Defense (DoD).


Proposed rule with request for comments.


DoD is proposing to amend the Defense Federal Acquisition Regulation Supplement (DFARS) to update text pertaining to the acquisition of utility services. This proposed rule is a result of a transformation initiative undertaken by DoD to dramatically change the purpose and content of the DFARS.


Comments on the proposed rule should be submitted in writing to the address shown below on or before April 25, 2005, to be considered in the formation of the final rule.


You may submit comments, identified by DFARS Case 2003-D069, using any of the following methods:

  • Federal eRulemaking Portal: Follow the instructions for submitting comments.
  • Defense Acquisition Regulations Web Site:​dar/​dfars.nsf/​pubcomm. Follow the instructions for submitting comments.
  • E-mail: Include DFARS Case 2003-D069 in the subject line of the message.
  • Fax: (703) 602-0350.
  • Mail: Defense Acquisition Regulations Council, Attn: Ms. Michele Peterson, OUSD(AT&L)DPAP(DAR), IMD 3C132, 3062 Defense Pentagon, Washington, DC 20301-3062.
  • Hand Delivery/Courier: Defense Acquisition Regulations Council, Crystal Square 4, Suite 200A, 241 18th Street, Arlington, VA 22202-3402.

All comments received will be posted to​dar/​dfars.nsf.

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Ms. Michele Peterson, (703) 602-0311.

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A. Background

DFARS Transformation is a major DoD initiative to dramatically change the purpose and content of the DFARS. The objective 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 FAR requirements, and policies/procedures that have a significant effect beyond the internal operating procedures of DoD or a significant cost or administrative impact on contractors or offerors. Additional information on the DFARS Transformation initiative is available at​dpap/​dfars/​transf.htm.

This proposed rule is a result of the DFARS Transformation initiative. The proposed changes—

  • Delete text on use of competitive procedures and delegated authority to acquire utility services at DFARS 241.202 and 241.203, as these issues are adequately addressed in the Federal Acquisition Regulation;
  • Delete obsolete text on preaward contract reviews at DFARS 241.270; and
  • Delete procedures and corresponding definitions related to connection charges and award of separate contracts for utility services at DFARS 241.101, 241.202, and 241.205. Text on this subject will be relocated to the new DFARS companion resource, Procedures, Guidance, and Information (PGI), available at​dpap/​dars/​pgi.

This rule was not subject to Office of Management and Budget review under Executive Order 12866, dated September 30, 1993.

B. Regulatory Flexibility Act

DoD does not expect this rule to 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 deletes DFARS text that is obsolete or duplicative of FAR policy or that addresses DoD procedural matters. Therefore, DoD has not performed an initial regulatory flexibility analysis. DoD invites comments from small businesses and other interested parties. DoD also will consider comments from small entities concerning the affected DFARS subpart in accordance with 5 U.S.C. 610. Such comments should be submitted separately and should cite DFARS Case 2003-D069. Start Printed Page 8567

C. Paperwork Reduction Act

The Paperwork Reduction Act does not apply because the rule does not impose any information collection requirements that require the approval of the Office of Management and Budget under 44 U.S.C. 3501, et seq.

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List of Subjects in 48 CFR Part 241

  • Government procurement
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Michele P. Peterson,

Editor, Defense Acquisition Regulations System.

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Therefore, DoD proposes to amend 48 CFR part 241 as follows:

1. The authority citation for 48 CFR part 241 continues to read as follows:

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

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2. Section 241.101 is amended by removing the definitions of “Definite term contract”, “Dual service area”, and “Indefinite term contract”, and by revising the definition of “Service power procurement officer” to read as follows:

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Service power procurement officer means for the—

(1) Army, the Chief of Engineers;

(2) Navy, the Commander, Naval Facilities Engineering Command;

(3) Air Force, the head of a contracting activity; and

(4) Defense Logistics Agency, the head of a contracting activity.

3. Section 241.103 is revised to read as follows:

Statutory and delegated authority.

(1) The contracting officer may enter into a utility service contract related to the conveyance of a utility system for a period not to exceed 50 years (10 U.S.C. 2688(c)(3)).

(2) See PGI 241.103 for statutory authorities and maximum contract periods for utility and energy contracts.

4. Section 241.202 is revised to read as follows:


(1) Connection and service charges. The Government may pay a connection charge when required to cover the cost of the necessary connecting facilities. A connection charge based on the estimated labor cost of installing and removing the facility shall not include salvage cost. A lump-sum connection charge shall be no more than the agreed cost of the connecting facilities less net salvage. The order of precedence for contractual treatment of connection and service charges is—

(i) No connection charge.

(ii) Termination liability. Use when an obligation is necessary to secure the required services. The obligation must be not more than the agreed connection charge, less any net salvage material costs. Use of a termination liability instead of a connection charge requires the approval of the service power procurement officer or designee.

(iii) Connection charge, refundable. Use a refundable connection charge when the supplier refuses to provide the facilities based on lack of capital or published rules which prohibit providing up-front funding. The contract should provide for refund of the connection charge within five years unless a longer period or omission of the refund requirement is authorized by the service power procurement officer or designee.

(iv) Connection and service charges, nonrefundable. The Government may pay certain nonrefundable, nonrecurring charges including service initiation charges, a contribution in aid of construction, membership fees, and charges required by the supplier's rules and regulations to be paid by the customer. If possible, consider sharing with other than Government users the use of (and costs for) facilities when large nonrefundable charges are required.

(2) Construction and labor requirements. Follow the procedures at PGI 241.202(2) for construction and labor requirements associated with connection and service charges.


5. Section 241.203 is removed.

6. Section 241.205 is revised to read as follows:

Separate contracts.

Follow the procedures at PGI 241.205 when acquiring utility services by separate contract.


7. Section 241.270 is removed.

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[FR Doc. 05-3198 Filed 2-18-05; 8:45 am]