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Proposed Rule

Defense Federal Acquisition Regulation Supplement; Contract Modifications

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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 contract modifications. 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 May 23, 2005, to be considered in the formation of the final rule.


You may submit comments, identified by DFARS Case 2003-D024, 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-D024 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 unnecessary text at DFARS 243.102, 243.105(a)(ii), 243.107, and 243.204-71.
  • Delete obsolete text at DFARS 243.105(a)(i).
  • Update text at DFARS 243.107-70 for consistency with the requirements of the clause at DFARS 252.249-7002, Notification of Anticipated Contract Termination or Reduction.
  • Clarify procedures at DFARS 243.204-70 for determining if a request for equitable contract adjustment meets the dollar threshold for requiring contractor certification.
  • Delete text at DFARS 243.170, 243.171, and 243.204 containing procedures for identification of foreign military sales requirements, for obligation or deobligation of contract funds, and for review and definitization of contract change orders. This text 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 makes no significant change to DoD contracting policy. 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 subparts in accordance with 5 U.S.C. 610. Such comments should be submitted separately and should cite DFARS Case 2003-D024.

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 243

  • 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 243 as follows:

1. The authority citation for 48 CFR part 243 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. Sections 243.102, 243.105, and 243.107 are removed.

3. Section 243.107-70 is amended by revising the second sentence to read as follows:

Notification of substantial impact on employment.

* * * The clause prescribed at 249.7003(c) requires that the contractor notify its employees, its subcontractors, and State and local officials when a contract modification will have a substantial impact on employment.

4. Sections 243.170 and 243.171 are revised to read as follows:

Identification of foreign military sale (FMS) requirements.

Follow the procedures at PGI 243.170 for identifying contract modifications that add FMS requirements.

Obligation or deobligation of funds.

Follow the procedures at PGI 243.171 when obligating or deobligating funds.

5. Section 243.204 is revised to read as follows:


Follow the procedures at PGI 243.204 for review and definitization of change orders.

6. Section 243.204-70 is amended by revising paragraph (b) to read as follows:

Certification of requests for equitable adjustment.
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(b) To determine if the dollar threshold for requiring certification is met, add together the absolute value of each cost increase and each cost decrease. See PGI 243.204-70(b) for an example.

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7. Section 243.204-71 is removed.

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[FR Doc. 05-5624 Filed 3-22-05; 8:45 am]