2009-D017 Final Rule

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I. Background

DEPARTMENT OF DEFENSE

IV. Paperwork Reduction Act

DFARS 209.405–1 limits placement of
orders against contracts with contractors
that have been debarred, suspended, or
proposed for debarment. On December
11, 2003, the final rule published under
FAR Case 2002–010 (68 FR 69250)
incorporated these restrictions into the
FAR. The DFARS text, therefore,
became redundant and is deleted by this
final rule.

Defense Acquisitions Regulations
System

This final rule affects the certification
and information collection requirements
in the provisions at DFARS 252.225–
7020 and 252.225–7035, currently
approved under Office of Management
and Budget Control Number 0704–0229.
However, there is no impact on the
estimated burden hours. The dollar
threshold changes are in line with
inflation and maintain the status quo.

II. Executive Order 12866
This is not a significant regulatory
action and, therefore, was not subject to
Office of Management and Budget
review under section 6(b) of Executive
Order 12866, dated September 30, 1993.
This rule is not a major rule under 5
U.S.C. 804.
III. Regulatory Flexibility Act
The Regulatory Flexibility Act does
not apply to this rule. This final rule
does not constitute a significant DFARS
revision within the meaning of 41
U.S.C. 418b and FAR 1.501, and
publication for public comment is not
required. However, DoD will consider
comments from small entities
concerning the affected DFARS parts in
accordance with 5 U.S.C. 610. Interested
parties must submit such comments
separately and should cite 5 U.S.C. 601,
et seq., in correspondence.
IV. Paperwork Reduction Act
This rule does not impose any new
information collection requirements that
require the approval of the Office of
Management and Budget under 44
U.S.C. 3501, et seq.
List of Subjects in 48 CFR Part 209
Government procurement.
Ynette R. Shelkin,
Editor, Defense Acquisition Regulations
System.

Therefore, 48 CFR part 209 is
amended as follows:

■

PART 209—CONTRACTOR
QUALIFICATIONS
1. The authority citation for 48 CFR
part 209 continues to read as follows:

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

■

[Removed]

2. Remove section 209.405–1.

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RIN 0750–AG59

Defense Federal Acquisition
Regulation Supplement; Trade
Agreements—New Thresholds (DFARS
2009–D040)

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List of Subjects in 48 CFR Part 225
Government procurement.

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

AGENCY:

ACTION:

Ynette R. Shelkin,
Editor, Defense Acquisition Regulations
System.

Final rule.

DoD is adopting as final,
without change, the interim rule that
amended the Defense Federal
Acquisition Regulation Supplement
(DFARS) to incorporate increased
thresholds for application of the World
Trade Organization Government
Procurement Agreement and the Free
Trade Agreements, as determined by the
United States Trade Representative.

SUMMARY:

DATES:

Effective Date: October 29, 2010.

FOR FURTHER INFORMATION CONTACT:

Ms.

Amy Williams, 703–602–0328.

Interim Rule Adopted as Final Without
Change
Accordingly, the interim rule
amending 48 CFR part 225 published at
75 FR 32637 on June 8, 2010, is adopted
as final without change.

■

[FR Doc. 2010–27303 Filed 10–28–10; 8:45 am]
BILLING CODE 5001–08–P

DEPARTMENT OF DEFENSE
Defense Acquisition Regulations
System

SUPPLEMENTARY INFORMATION:

48 CFR Parts 237 and 252

I. Background
DoD published an interim rule in the
Federal Register on June 8, 2010 (75 FR
32637) to amend the clause
prescriptions at DFARS 225.1101 and
225.7503 to reflect increased thresholds
for application of the trade agreements.
The comment period closed on August
9, 2010. DoD received no comments on
the interim rule. DoD has therefore
adopted the interim rule as a final rule
without change.
II. Executive Order 12866

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 this rule does not impose
economic burdens on contractors. The
purpose and effect of this rule is to
adjust the dollar threshold changes to
keep pace with inflation and thus
maintain the status quo.

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Defense Federal Acquisition
Regulation Supplement (DFARS);
Continuation of Essential Contractor
Services (DFARS Case 2009–D017)
Defense Acquisition
Regulations System, Department of
Defense (DoD).
ACTION: Final rule.
AGENCY:

DoD is adopting as final, with
changes, the 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: October 29, 2010.
Applicability date: Contracting
officers may, at their discretion, include
these changes in any existing contract
with appropriate consideration, in
accordance with FAR 1.108(d)(3).
FOR FURTHER INFORMATION CONTACT: Mr.
Julian E. Thrash, 703–602–0310.
SUPPLEMENTARY INFORMATION:
SUMMARY:

This rule was not subject to Office of
Management and Budget review under
Executive Order 12866, Regulatory
Planning and Review, dated September
30, 1993. This rule is not a major rule
under 5 U.S.C. 804.
III. Regulatory Flexibility Act

■

209.405–1

48 CFR Part 225

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Federal Register / Vol. 75, No. 209 / Friday, October 29, 2010 / Rules and Regulations
I. Background
DoD published an interim rule in the
Federal Register at 75 FR 10191, on
March 5, 2010, implementing the
requirements of DoDI 3020.37,
Continuation of Essential DoD
Contractor Services During Crises. DoD
Instruction (DoDI) 1100.22, Policy and
Procedures for Determining Workforce
Mix, has since superseded DoDI
3020.37.
This rule is necessary to ensure that
essential contractor services are not
interrupted. The current changing threat
environment, particularly under the
additional challenges caused by such
potential crises as destructive weather,
earthquakes, or pandemic disease, has
increased the need for continuity of
operations capabilities and plans that
enable agencies to continue their
essential functions during a broad range
of emergencies and crises.
DoD established this requirement for
contractors to submit their plans to
ensure continuation of essential
contractor services that support
mission-essential functions during a
crisis situation. 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 function(s) that have been
specifically identified as essential
contractor services by the functional
commander or civilian equivalent.
The public comment period for the
DFARS interim rule closed May 4, 2010.
Two respondents submitted comments
to the interim rule. A discussion of the
comments and the changes made to the
rule as a result of those comments is
provided below.
II. Analysis of Public Comments

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1. Definition of ‘‘Functional Commander
or Equivalent’’
Comment. A respondent requested the
term ‘‘functional commander or
equivalent’’ be defined. The respondent
was concerned with how this term
would be interpreted in non-military
offices that did not have a ‘‘functional
commander or equivalent.’’
Response. The term ‘‘functional
commander or equivalent’’ has been
revised. The term appropriate
‘‘functional commander or civilian
equivalent’’ clarifies the meaning of the
phrase ‘‘or equivalent.’’ This revised
identifier, ‘‘civilian equivalent,’’ was
added to the definitions of ‘‘essential
contractor services,’’ and ‘‘missionessential functions.’’ Additionally,
conforming changes to DFARS
237.7602(a), and 237.7602(b) were made
for this revised term.

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Comment. A respondent requested a
definition for a ‘‘crisis’’ be added to the
text.
Response. A crisis situation is
dynamic, with the body of knowledge
growing hour-by-hour from the latest
situational reports. As such, it does not
lend itself to a precise definition. The
contractor will be notified to activate
plans for a crisis by the contracting
officer, who does so at the directions of
the appropriate functional commander
or civilian equivalent.
B. The Contracting Officer’s Role
Comment. A respondent was
concerned that DFARS 237.7602, Policy,
did not clearly lay out the role of a
contracting officer in the process of
requiring a contractor to submit a plan.
The concern was that direction to the
contractor should come from the
contracting officer, not the requiring
activity.
Response. DFARS 237.7602, Policy,
has been revised at paragraphs (a) and
(b) to clarify that it is the role of the
contracting officer, not the requiring
activity, to provide direction to the
contractor.
C. Written Plan
1. Status of the Plan
Comment. A respondent expressed
concern regarding DFARS 237.7602(b),
whether the contractor should ‘‘have a
plan’’ or ‘‘submit a plan.’’
Response. DFARS 237.7602(b) has
been revised to require contractors to
‘‘provide a written plan’’ for
Government-determined essential
contractor services.
2. Materially Altered Plans

A. Definitions

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2. Definition of a ‘‘ Crisis’’

Comment. A respondent expressed
concern that a contracting officer needs
to have the most current version of the
contractor’s plan. The concern centered
on the determination of whether a
change would ‘‘materially alter’’ the
plan.
Response. DFARS 252.237–7023(c)(2)
has been revised to require the
contractor to provide all plan updates to
the contracting officer for approval.
3. Use of a Plan
Comment. A respondent expressed a
number of concerns about the
evaluation of a contractor’s written plan,
and whether or not the plan should be
evaluated prior to contract award.
Response. In response to this concern,
a provision has been created at DFARS
252.237–7024, Notice of Continuation of
Essential Contractor Services, to require
the submission of the plan as part of the

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offeror’s proposal. The associate
provision prescription is added at
237.7603. The contractor’s continuity of
essential services plan shall be
considered and evaluated as part of the
technical evaluation of offers. The
functional managers of the services
should be consulted to determine the
sufficiency of these plans. The
contractor’s Mission-Essential
Contractor Services Plan, in the
resultant contract, will remain active in
accordance with the clause at DFARS
252.237–7023, Continuation of Essential
Contractor Services.
D. Equitable Adjustment
Comment. A respondent stated that, if
costs increase due to the continuation of
services during an event that would
create an excusable delay, contractors
should be entitled to an equitable
adjustment to the terms of the contract.
Furthermore, they were concerned that
inclusion of the clause in a contract
could be construed as waiving the
contractor’s right to an equitable
adjustment to contract terms other than
schedule terms when providing its best
efforts to maintain continuity of
operations during a crisis.
Response. DFARS 252.237–7023(f),
Changes, provides the basis for
determining an equitable adjustment. In
the interim rule, this paragraph allowed
for an equitable adjustment to contract
price. In the final rule, this paragraph
has been revised to include that, in
addition to an adjustment in price, an
equitable adjustment may be to
‘‘delivery schedule, or both.’’
E. Causes Beyond the Control of the
Contractor
Comment. Two respondents requested
the clause at DFARS 252.237–7023(c) be
clarified with regard to causes beyond
the control of the contractor.
Response. As a result of the necessity
to ensure performance of a missionessential function, a new paragraph has
been added at DFARS 252.237–
7023(d)(1). This paragraph clarifies that,
in those specific instances where a
contractor function is considered
mission essential, it is important for
contract performance to continue
notwithstanding any other clause of the
contract; and that the contractor shall be
responsible to perform those services
identified as essential contractor
services during crisis situations (as
directed by the contracting officer), in
accordance with its Mission-Essential
Contractor Services Plan. If in the
course of contract performance, a
contractor feels it must apply for an
equitable adjustment, it may follow the

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process required in DFARS 252.237–
7023(f), Changes.
F. Other Changes
• The definitions have been moved
from 237.7601 to the clause 252.237–
7023(a).
• DFARS 252.237–7023 has been
renamed ‘‘Continuation of Essential
Contractor Services’’ instead of
‘‘Continuation of Mission-Essential
Functions’’ in order to use more precise
terminology.
• Redesignated DFARS 252.237–
7023(e) adds ‘‘military’’ personnel to the
list of options the Government reserves
the right to utilize in crisis situations.
Additionally, reference to the Office of
Federal Procurement Policy letter dated
May 2007, and FAR and DFARS parts
18 and 218 were determined
unnecessary and have been deleted from
that paragraph.
III. Executive Order 12866
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.
IV. Regulatory Flexibility Act
DoD certifies that this rule will not
have a significant economic impact
upon a substantial number of small
entities because it allows for an
equitable adjustment for additional
costs that are incurred during a crisis
situation.
The interim rule published at 75 FR
10191, on March 5, 2010, invited
comments from small businesses and
other interested parties. No comments
were received from small entities on the
affected DFARS subpart with regard to
small businesses.

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V. Paperwork Reduction Act
This final rule contains an
information collection requirement. The
Office of Management and Budget
(OMB) has approved the information
collection requirement for use through
December 31, 2010, under OMB Control
Number 0704–0465, in accordance with
the emergency processing procedures of
5 CFR 1320.13.
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.

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Total Annual Burden Hours: 19,000.
Needs and Uses: DoD needs this
information to ensure essential
contractor services are performed for
continuity of operations.
Affected Public: Businesses or other
for-profit institutions.
Frequency: On occasion.
Respondent’s Obligation: Required to
obtain contract.
The interim rule, published at 75 FR
10191, on March 5, 2010, invited
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.
No comments were received regarding
this information collection requirement.
To request more information on this
information collection or to obtain a
copy of the information collection
requirement and associated collection
instruments, please write to the Defense
Acquisition Regulations System (DARS),
Attn: Mr. Julian Thrash,
OUSD(AT&L)DPAP(DARS), Room
3B855, 3060 Defense Pentagon,
Washington, DC 20301–3060.
List of Subjects in 48 CFR Parts 237 and
252
Government procurement.
Clare M. Zebrowski,
Editor, Defense Acquisition Regulations
System.

Therefore, the Defense Acquisition
Regulations System confirms as final the
interim rule published at 75 FR 10191,
March 5, 2010, with the following
changes:
■ 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 revised to read as
follows:

■

Subpart 237.76—Continuation of Essential
Contractor Services
Sec.
237.7600 Scope.
237.7601 Definitions.
237.7602 Policy.
237.7603 Solicitation provision and
contract clause.

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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.
237.7601

Definitions.

As used in this subpart, essential
contractor service and mission-essential
functions are defined in the clause at
252.237–7023, Continuation of Essential
Contractor Services.
237.7602

Policy.

(a) Contractors providing services
designated as essential contractor
services shall be prepared to continue
providing such 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 civilian
equivalent.
(b) Contractors who provide
Government-determined essential
contractor services shall provide a
written plan to be incorporated in the
contract, 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 authorized by the contracting officer,
who does so at the direction of the
appropriate functional commander or
civilian equivalent.
(c) The contracting officer shall follow
the procedures at PGI
207.105U(b)(20)(C) in preparing an
acquisition plan.
237.7603 Solicitation provision and
contract clause.

(a) Use the clause at 252.237–7023,
Continuation of Essential Contractor
Services in all solicitations and
contracts for services that are in support
of mission-essential functions.
(b) Use the provision at 252.237–7024,
Notice of Continuation of Essential
Contractor Services in all solicitations
for services that include the clause
252.237–7023.
PART 252—SOLICITATION
PROVISIONS AND CONTRACT
CLAUSES
3. Section 252.237–7023 is revised to
read as follows:

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252.237–7023 Continuation of Essential
Contractor Services.

As prescribed in 237.7603(a), use the
following clause:

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CONTINUATION OF ESSENTIAL
CONTRACTOR SERVICES (OCT 2010)
(a) Definitions. As used in this clause–
(1) Essential contractor service means a
service provided by a firm or individual
under contract to DoD to support missionessential 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 these services, as determined
by the appropriate functional commander or
civilian equivalent.
(2) Mission-essential functions means those
organizational activities that must be
performed under all circumstances to achieve
DoD component missions or responsibilities,
as determined by the appropriate functional
commander or civilian equivalent. Failure to
perform or sustain these functions would
significantly affect DoD’s ability to provide
vital services or exercise authority, direction,
and control.
(b) The Government has identified all or a
portion of the contractor services performed
under this contract as essential contractor
services in support of mission-essential
functions. These services are listed in
attachment l, Mission-Essential Contractor
Services, dated llll.
(c)(1) The Mission-Essential Contractor
Services Plan submitted by the Contractor, is
incorporated in this contract.
(2) The Contractor shall maintain and
update its plan as necessary. The Contractor
shall provide all plan updates to the
Contracting Officer for approval.
(3) 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.
(d)(1) Notwithstanding any other clause of
this contract, the Contractor shall be
responsible to perform those services
identified as essential contractor services
during crisis situations (as directed by the
Contracting Officer), in accordance with its
Mission-Essential Contractor Services Plan.
(2) In the event the Contractor anticipates
not being able to perform any of the essential
contractor services identified in accordance
with paragraph (b) of this clause 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.
(e) The Government reserves the right in
such crisis situations to use Federal
employees, military personnel, or contract

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support from other contractors, or to enter
into new contracts for essential contractor
services.
(f) 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, delivery schedule, or both as
soon as is practicable after receipt of the
Contractor’s proposal.
(g) The Contractor shall include the
substance of this clause, including this
paragraph (g), in subcontracts for the
essential services.

(End of clause)
■ 4. Section 252.237–7024 is added to
read as follows:
252.237–7024 Notice of Continuation of
Essential Contractor Services.

As prescribed in 237.7603(b), use the
following provision:
NOTICE OF CONTINUATION OF
ESSENTIAL CONTRACTOR SERVICES
[OCT 2010]
(a) Definitions. Essential contractor service
and mission-essential functions have the
meanings given in the clause at 252.237–
7023, Continuation of Essential Contractor
Services, in this solicitation.
(b) The offeror shall provide with its offer
a written plan describing how it will
continue to perform the essential contractor
services listed in attachment l, Mission
Essential Contractor Services, dated llll,
during periods of crisis. The offeror shall—
(1) Identify 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) Address in the plan, at a minimum—
(i) Challenges associated with maintaining
essential contractor services during an
extended event, such as a pandemic that
occurs in repeated waves;
(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

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regarding their roles and responsibilities
during a crisis.

(End of provision)
[FR Doc. 2010–27302 Filed 10–28–10; 8:45 am]
BILLING CODE 5001–08–P

DEPARTMENT OF DEFENSE
Defense Acquisition Regulations
System
48 CFR Parts 246 and 252
RIN 0750–AG73

Defense Federal Acquisition
Regulation Supplement; Safety of
Facilities, Infrastructure, and
Equipment for Military Operations
(DFARS Case 2009–D029)
Defense Acquisition
Regulations System, Department of
Defense (DoD).
ACTION: Interim rule with request for
comments.
AGENCY:

DoD is issuing an interim rule
amending the Defense Federal
Acquisition Regulation Supplement
(DFARS) to implement section 807 of
the National Defense Authorization Act
of 2010. Section 807 requires that
facilities, infrastructure, and equipment
that are intended for use by military or
civilian personnel of the Department of
Defense (DoD), in current or future
military operations, should be inspected
for safety and habitability prior to use,
and that such facilities should be
brought into compliance with generally
accepted standards for the safety and
health of personnel to the maximum
extent practicable consistent with the
requirements of military operations and
the best interests of DoD to minimize
the safety and health risk posed to such
personnel.
DATES: Effective date: October 29, 2010.
Comment date: Comments on the
interim rule should be submitted in
writing to the address shown below on
or before December 28, 2010, to be
considered in the formation of the final
rule.
ADDRESSES: Submit comments,
identified by DFARS Case 2008–D029,
using any of the following methods:
Regulations.gov: http://
www.regulations.gov.
Submit comments via the Federal
eRulemaking portal by inputting
‘‘DFARS Case 2009–D029’’ under the
heading ‘‘Enter keyword or ID’’ and
selecting ‘‘Search.’’ Select the link
‘‘Submit a Comment’’ that corresponds
with ‘‘DFARS Case 2009–D029.’’ Follow
the instructions provided at the ‘‘Submit
SUMMARY:

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