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Panoptic Enterprises' FEDERAL CONTRACTS DISPATCH

DATE: December 15, 2004

SUBJECT: Defense Federal Acquisition Regulation Supplement (DFARS); Contract Period for Task and Delivery Order Contracts

SOURCE: Federal Register, December 15, 2004, Vol. 69, No. 240, page 74992

AGENCIES: Department of Defense (DOD)

ACTION: Interim Rule

SYNOPSIS: This interim rule amends DFARS 217.204, Contracts, to implement 813 of the National Defense Authorization Act for Fiscal Year 2005 (Public Law 108-375), which amends the general authority for task and delivery order contracts at 10 U.S.C. 2304a to permit task and delivery order contracts to cover a total period of up to 10 years, which may be exceeded if the head of the agency determines in writing that exceptional circumstances require a longer contract period.

EDITOR'S NOTE: For more on the acquisition-related provisions of the National Defense Authorization Act for Fiscal Year 2005, see the October 29, 2004, FEDERAL CONTRACTS DISPATCH "Enactment of the National Defense Authorization Act for Fiscal Year 2005."

DATES: The interim rule is effective December 15, 2004. Comments on the interim rule should be submitted on of before February 14, 2005.

ADDRESSES: Respondents may submit comments directly on the Federal eRulemaking Portal at http://www.regulations.gov, or the Defense Acquisition Regulations website 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 sites or by e-mail may submit comments to Defense Acquisition Regulations Council, Attn: Robin Schulze, OUSD(AT&L)DPAP(DAR), IMD 3C132, 3062 Defense Pentagon, Washington, DC 20301-3062; may hand- or courier-deliver to Defense Acquisition Regulations Council, Crystal Square 4, Suite 200A, 241 18th Street, Arlington, VA 22202-3402; or fax to 703-602-0350. Cite "DFARS Case 2003-D097" when making comments on this interim rule.

FOR FURTHER INFORMATION CONTACT: Robin Schulze, 703-602-0326.

SUPPLEMENTAL INFORMATION: Section 843 of the National Defense Authorization Act for Fiscal Year 2004 (Public Law 108-136) specified that task or delivery order contacts awarded under the authority of 10 U.S.C. 2304a (which applies to DOD, the National Aeronautics and Space Administration, and the Coast Guard) may cover a total period of not more than five years, and that the total period includes all options or modifications (see the November 25, 2003, FEDERAL CONTRACTS DISPATCH "Enactment of the National Defense Authorization Act for Fiscal Year 2004").

On March 23, 2004, DOD published an interim rule implementing Section 843 of Public Law 108-136 (see the March 23, 2004, FEDERAL CONTRACTS DISPATCH "Defense Federal Acquisition Regulation Supplement (DFARS); Contract Period for Task and Delivery Order Contracts"). The interim rule added DFARS 217.204, Contracts, and its paragraph (e) stated, "Notwithstanding FAR 17.204(e), the period of a task order or delivery order contract, including all options or modifications, awarded by DOD pursuant to 10 U.S.C. 2304a shall not exceed 5 years." (EDITOR'S NOTE: Paragraph (e) of FAR 17.204, Contracts, states, "...the total of the basic and option periods shall not exceed 5 years in the case of services, and the total of the basic and option quantities shall not exceed the requirement for 5 years in the case of supplies. These limitations do not apply to information technology contracts....")

Subsequent to the publication of the interim rule, Public Law 108-375 was enacted. Section 813 of Public Law 108-375 further amended 10 U.S.C. 2304a revised the contract period for task and delivery order contracts (including options) to "any period up to five years and may extend the contract period for one or more successive periods pursuant to an option provided in the contract or a modification of the contract. The total contract period as extended may not exceed 10 years unless such head of an agency determines in writing that exceptional circumstances necessitate a longer contract period."

This second interim rule implements the provisions of Section 813 and several comments submitted in response to the March 23, 2004, interim rule. It amends DFARS 217.204(e) to state:

"(e)(i) Notwithstanding FAR 17.204(e), the ordering period of a task order or delivery order contract awarded by DOD pursuant to 10 U.S.C. 2304a (A) may be for any period up to 5 years; (B) may be subsequently extended for one or more successive periods in accordance with an option provided in the contract or a modification of the contract; and (C) shall not exceed 10 years unless the head of the agency determines in writing that exceptional circumstances require a longer ordering period.
      "(ii) DOD must submit a report to Congress when an ordering period is extended beyond 10 years in accordance with paragraph (e)(i)(C) of this section. Follow the procedures at PGI [Procedures, Guidance, and Information] 217.204(e) for reporting requirements." (EDITOR'S NOTE: For more on the PGI, see the November 1, 2004, FEDERAL CONTRACTS DISPATCH "Defense Federal Acquisition Regulation Supplement (DFARS); Procedures, Guidance, and Information."
      "(iii) Paragraph (e)(i) of this section (A) also applies to information technology task or delivery order contracts; (B) does not apply to contracts, including task or delivery order contracts, awarded under other statutory authority; and (C) does not apply to the following: (1) advisory and assistance service task order contracts (authorized by 10 U.S.C. 2304b that are limited by statute to 5 years, with the authority to extend an additional 6 months (see FAR 16.505(c) [Ordering]); (2) definite-quantity contracts; (3) GSA schedule contracts; [and] (4) multi-agency contracts awarded by agencies other than NASA, DOD, or the Coast Guard.
      "(iv) Obtain approval from the senior procurement executive before issuing an order against a task or delivery order contract subject to paragraph (e)(i) of this section, if performance under the order is expected to extend more than 1 year beyond the 10-year limit or extended limit described in paragraph (e)(i)(C) of this section (see FAR 37.106 [Funding and Term of Service Contracting] for funding and term of service contracts)."

The following are the changes made to the second interim rule in response to comments submitted on the first interim rule:

FOR FURTHER INFORMATION CONTACT: Panoptic Enterprises at 703-451-5953.

Copyright 2004 by Panoptic Enterprises. All Rights Reserved.

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