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Defense Federal Acquisition Regulation Supplement; Contract Administration Functions

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Defense Acquisition Regulations System, Department of Defense (DoD).


Final rule.


DoD has issued a final rule amending the Defense Federal Acquisition Regulation Supplement (DFARS) to update text addressing functions performed by DoD contract administration offices. This rule is a result of a transformation initiative undertaken by DoD to dramatically change the purpose and content of the DFARS.


Effective Date: August 8, 2006.

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Ms. Deborah Tronic, Defense Acquisition Regulations System, OUSD (AT&L) DPAP (DARS), IMD 3C132, 3062 Defense Pentagon, Washington, DC 20301-3062. Telephone (703) 602-0289; facsimile (703) 602-0350. Please cite DFARS Case 2003-D051.

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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/​dars/​dfars/​transformation/​index.htm.

This final rule is a result of the DFARS Transformation initiative. The rule revises the list of contract administration functions at DFARS 242.302 to—

○ Clarify responsibilities for payment administration and for verification of contractor compliance with earned value management system requirements;

○ Delete obsolete text on mobilization production planning surveys; and

○ Delete procedures for designation of contract payment offices. Text on this subject has been relocated to the DFARS companion resource, Procedures, Guidance, and Information (PGI), available at​dpap/​dars/​pgi.

DoD published a proposed rule at 70 FR 67955 on November 9, 2005. One respondent submitted comments on the proposed rule. The respondent stated that (1) there is a lack of clear regulatory authority for acceptance other than FAR 46.502, which assigns acceptance responsibility to contracting officers; (2) acceptance is not one of the contract administration functions at FAR 42.302; and (3) FAR 46.502, where it refers to delegation of responsibility for acceptance to a contract administration office, errs in its reference to FAR 42.202(g), since refusal of a contract administration delegation is exclusive of actions inferred in performing acceptance when an administration office is assigned. The respondent recommended that, since acceptance actions can be performed on behalf of a contracting officer when a contract is not assigned for administration (e.g., destination acceptance) by an activity other than a contract administration office, DFARS 242.302 should provide coverage of acceptance responsibility when a contracting officer intends that a contract administration office perform acceptance.

DoD does not agree that DFARS 242.302 should be amended to provide coverage of acceptance responsibility when a contracting officer intends that a contract administration office perform acceptance. FAR 42.302 lists the functions that are normally delegated to a contract administration office. Even though acceptance is not specifically mentioned, it is covered under FAR 42.302(a)(38), which provides for ensuring contractor compliance with contractual quality assurance requirements and references FAR Part 46. In particular, FAR 46.502 provides for delegation of responsibility for acceptance to a contract administration office. However, DoD recognizes that there are times when a contract administration office has been assigned responsibility for ensuring contractor compliance with contract quality assurance requirements, but where actual product acceptance is performed by an activity other than the contract administration office (i.e., destination acceptance). DoD has established a separate DFARS Case, 2005-D024, to address this situation.

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 certifies that this final rule will not 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 addresses internal DoD responsibilities for performance of contract administration functions.

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 242

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Michele P. Peterson,

Editor, Defense Acquisition Regulations System.

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1. The authority citation for

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

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2. Section 242.302 is revised to read as follows:

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Contract administration functions.

(a)(4) Also, review and evaluate—

(A) Contractor estimating systems (see FAR 15.407-5); and

(B) Contractor material management and accounting systems under subpart 242.72. Start Printed Page 44929

(7) See 242.7502 for ACO responsibilities with regard to receipt of an audit report identifying significant accounting system or related internal control deficiencies.

(9) For additional contract administration functions related to IR&D/B&P projects performed by major contractors, see 242.771-3(a).

(12) Also perform all payment administration in accordance with any applicable payment clauses.

(13)(A) Do not delegate the responsibility to make payments to the Defense Contract Management Agency (DCMA).

(B) Follow the procedures at PGI 242.302(a)(13)(B) for designation of payment offices.

(39) See 223.370 for contract administration responsibilities on contracts for ammunition and explosives.

(67) Also support program offices and buying activities in precontractual efforts leading to a solicitation or award.

(S-70) Serve as the single point of contact for all Single Process Initiative (SPI) Management Council activities. The ACO shall negotiate and execute facilitywide class modifications and agreements for SPI processes, when authorized by the affected components.

(S-71) DCMA has responsibility for reviewing earned value management system (EVMS) plans and for verifying initial and continuing contractor compliance with DoD EVMS criteria. The contracting officer shall not retain this function.

(b)(S-70) Issue, negotiate, and execute orders under basic ordering agreements for overhaul, maintenance, and repair.

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[FR Doc. E6-12778 Filed 8-7-06; 8:45 am]