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Panoptic Enterprises' FEDERAL CONTRACTS DISPATCH

DATE: October 1, 2003

SUBJECT: Defense Federal Acquisition Regulation Supplement (DFARS); Indian Incentive Program

SOURCE: Federal Register, October 1, 2003, Vol. 68, No. 190, page 56561

AGENCIES: Department of Defense (DOD)

ACTION: Interim Rule

SYNOPSIS: DOD is amending DFARS Subpart 226.1, Indian Incentive Program, to implement Section 8021 of the Fiscal Year 2003 DOD Appropriations Act (Public Law 107-248). Section 8021 revises the criteria for application of the Indian Incentive Program to DOD contracts. In addition, this interim rule amends DFARS 252.226-7001, Utilization of Indian Organizations, Indian-Owned Economic Enterprises, and Native Hawaiian Small Business Concerns, to conform to the changes in DFARS Subpart 226.1, and to clarify that the clause, which permits incentive payments for use of Indian and Native Hawaiian subcontractors, may be used in all contract types.

EDITOR'S NOTE: For more on the proposed rule that is incorporated into this interim rule, see the November 22, 2002, FEDERAL CONTRACTS DISPATCH "Defense Federal Acquisition Regulation Supplement (DFARS); Indian Incentive Clause -- Contract Types."

DATES: The interim rule is effective October 1, 2003. Comments on the interim rule must be submitted on or before December 1, 2003.

ADDRESSES: Respondents may submit comments directly on the web site at http://emissary.acq.osd.mil/dar/dfars.nsf/pubcomm. As an alternative, respondents may e-mail comments to: dfars@acq.osd.mil. Also, respondents who cannot submit comments through the web site or by e-mail may submit comments to Defense Acquisition Regulations Council, Attn: Steven Cohen, OUSD(AT&L)DP(DAR), IMD 3C132, 3062 Defense Pentagon, Washington, DC 20301-3062, or by fax to 703-602-0350. Cite "DFARS Case 2002-D033" when making comments on this interim rule.

FOR FURTHER INFORMATION CONTACT: Angelena Moy, 703-602-1302.

SUPPLEMENTAL INFORMATION: The Indian Incentive Program provides for incentive payments to contractors, and subcontractors at any tier, that use Indian organizations and Indian-owned economic enterprises as subcontractors. DOD implementation of the Indian Incentive Program is in DFARS Subpart 226.1 and DFARS 252.226-7001.

Section 8021 of Public Law 107-248 revises the criteria for application of the Indian Incentive Program by (1) establishing a $500,000 threshold for contracts and subcontracts under which incentives may be paid; (2) by authorizing incentive payments for subcontracts awarded to Native Hawaiian small business concerns; and (3) by adding contracts and subcontracts for commercial items to the program. This interim rule amends DFARS 226.103, Procedures, and DFARS 252.226-7001 to implement Section 8021 (including changing the name of DFARS 252.226-7001 from "Utilization of Indian Organizations and Indian-Owned Economic Enterprises -- DOD Contracts" to indicate the inclusion of Native Hawaiians in the program).

In addition, on November 22, 2002, DOD published a proposed rule that would amend DFARS 252.226-7001 to clarify that the clause may be used in all contract types. Paragraph (e) addressed incentive payments under cost-type, cost-plus-incentive-fee, fixed-price incentive, and firm-fixed-price contracts, but the Indian Incentive program applies to all contract types, so the proposed rule would eliminate the references to those contract types to avoid any misconceptions regarding contract types that are not listed. Four comments were received and, as a result of those comments, the proposed rule is adopted as part of this interim rule along with the elimination of the 50-day waiting period for payments that was specified in paragraph (d) of the clause.

FOR FURTHER INFORMATION CONTACT: Panoptic Enterprises at 703-451-5953 or by e-mail to Panoptic@FedGovContracts.com.

Copyright 2003 by Panoptic Enterprises. All Rights Reserved.

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