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Federal Register / Vol. 86, No. 96 / Thursday, May 20, 2021 / Rules and Regulations
Comment: Some respondents request clarification on how the residual amount will be determined.
Response: Contracting officers are still required to complete all of the applicable closeout requirements at FAR
4.804 when executing the expedited contract closeout procedures under this rule. The closeout requirements at FAR
4.804 should result in a determination of any residual dollar amounts owed to either party at the end of the contract.
4. Integrity and Public Trust Comment: A respondent expresses concern that the proposed rule might negatively impact public trust because the waiver process may provide a mechanism for abuse by either contractors or the Government. Of specific concern is the potential for a contractor being permitted to provide less than the contract requires or, conversely, with the Government paying less than is legitimately owed under the contract price structure. The respondent expresses concern that public perception of the potential for abuse could outweigh the benefits of the intended cost efficiencies.
Response: FAR 4.8045 directs contracting officers to initiate contract closeout after receiving evidence of physical completion, as defined in FAR
4.8044.
5. Initial Regulatory Flexibility Analysis Comment: A respondent questions whether the impact on small business was accurately reflected in the initial regulatory flexibility analysis and asserts that the numbers were not comprehensive enough to estimate the impact on small business.
Response: See section VI of this preamble for revised and expanded analysis of the impact on small business.
III. Applicability to Contracts at or Below the Simplified Acquisition Threshold SAT and for Commercial Items, Including Commercially Available Off-the-Shelf COTS Items This rule creates a new clause at DFARS 252.2047022, Expediting Contract Closeout. The objective of the rule is to establish an expedited contract closeout agreement and instructions that will save administrative costs for both the contractor and the Government. DoD
plans to apply this clause to solicitations and contracts for acquisitions valued at or below the simplified acquisition threshold and to acquisitions of commercial items, including COTS items. These categories of acquisitions are those most likely to
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benefit from expedited contract closeout.
IV. Executive Order 12866 and 13563
Executive Orders E.O.s 12866 and 13563 direct agencies to assess all costs and benefits of available regulatory alternatives and, if regulation is necessary, to select regulatory approaches that maximize net benefits including potential economic, environmental, public health and safety effects, distributive impacts, and equity. E.O. 13563 emphasizes the importance of quantifying both costs and benefits, or reducing costs, or harmonizing rules, and of promoting flexibility. This is not a significant regulatory action and, therefore, was not subject to review under section 6b of E.O. 12866, Regulatory Planning and Review, dated September 30, 1993.
V. Congressional Review Act As required by the Congressional Review Act 5 U.S.C. 801808 before an interim or final rule takes effect, DoD
will submit a copy of the interim or final rule with the form, Submission of Federal Rules under the Congressional Review Act, to the U.S. Senate, the U.S.
House of Representatives, and the Comptroller General of the United States. A major rule under the Congressional Review Act cannot take effect until 60 days after it is published in the Federal Register. The Office of Information and Regulatory Affairs has determined that this rule is not a major rule as defined by 5 U.S.C. 804.
VI. Regulatory Flexibility Act A final regulatory flexibility analysis FRFA has been prepared consistent with the Regulatory Flexibility Act, 5
U.S.C. 601, et seq. The FRFA is summarized as follows:
This rule amends the Defense Federal Acquisition Regulation Supplement DFARS to permit expedited contract closeout through the waiver of entitlement by the contractor and the Government to any residual contract dollar amount of $1,000 or less at the time of contract closeout. The new DFARS clause will apply to solicitations and contracts, to include contracts valued at or below the simplified acquisition threshold and contracts for commercial items and commercially available off-the-shelf COTS items.
The objective of the rule is to avoid expending contractor and Government administrative resources in amounts greater than a residual contract dollar amount of $1,000 or less at the time of contract closeout.
One public comment questioned whether the impact on small business
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was accurately reflected in the initial regulatory flexibility analysis IRFA
and asserted that the numbers were not comprehensive enough to estimate the impact on small business. The IRFA
estimated the impact based only upon those contracts administered by the Defense Contract Management Agency;
however, the data did not identify the number of contracts awarded to small entities. Since the initial assessment, DoD-wide data was obtained and a more comprehensive FRFA has been conducted. There were no changes made to the rule as a result of this comment and the expanded analysis.
The rule will likely affect a large number of small entities that have been or will be awarded contracts, including those under FAR part 12 procedures for the acquisition of commercial items, including COTS items. Data was obtained from the Electronic Data Access module of the Procurement Integrated Enterprise Environment for physically complete contracts that are eligible for closeout and have a residual contract balance that is less than $1,000
but more than $0. These actions were then compared to the Federal Procurement Data System to estimate the number of those contracts awarded to small entities; however, the data did not identify the number of unique small entities.
As of the end of fiscal year 2020, the data indicates that there were an estimated 20,884 DoD contracts with total residual contract amounts valued at approximately $1,844,101 that meet the criteria for application of the rule.
Of those 20,884 contracts, it is estimated that 14,840 contracts with residual contract value of approximately $1,294,859 were awarded to small entities. The data further reflects that approximately 9,292 contracts had a remaining balance due to the contractor of $1,000 or less and 5,548 contracts indicated a credit due to the Government of $1,000 or less.
There are no known, significant, alternative approaches that would accomplish the objectives of the rule.
VII. Paperwork Reduction Act The rule does not contain any information collection requirements that require the approval of the Office of Management and Budget under the Paperwork Reduction Act 44 U.S.C.
chapter 35.

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