DEPARTMENT OF DEFENSE

Statement of Regulatory Priorities

Background

The Department of Defense (DoD) is the largest Federal department consisting of three Military departments (Army, Navy, and Air Force), nine Unified Combatant Commands, 17 Defense Agencies, and ten DoD Field Activities. It has 1,304,807 military personnel and 866,923 civilians assigned as of June 30, 2015, and over 200 large and medium installations in the continental United States, U. S. territories, and foreign countries. The overall size, composition, and dispersion of DoD, coupled with an innovative regulatory program, presents a challenge to the management of the Defense regulatory efforts under Executive Order (E.O.) 12866 "Regulatory Planning and Review" of September 30, 1993.

Because of its diversified nature, DoD is affected by the regulations issued by regulatory agencies such as the Departments of Commerce, Energy, Health and Human Services, Housing and Urban Development, Labor, State, Transportation, and the Environmental Protection Agency. In order to develop the best possible regulations that embody the principles and objectives embedded in E.O. 12866, there must be coordination of proposed regulations among the regulatory agencies and the affected DoD components. Coordinating the proposed regulations in advance throughout an organization as large as DoD is a straightforward, yet formidable, undertaking.

DoD issues regulations that have an effect on the public and can be significant as defined in E.O. 12866. In addition, some of DoD's regulations may affect other agencies. DoD, as an integral part of its program, not only receives coordinating actions from other agencies, but coordinates with the agencies that are affected by its regulations as well.

Overall Priorities

The Department needs to function at a reasonable cost, while ensuring that it does not impose ineffective and unnecessarily burdensome regulations on the public. The rulemaking process should be responsive, efficient, cost-effective, and both fair and perceived as fair. This is being done in DoD while reacting to the contradictory pressures of providing more services with fewer resources. The Department of Defense, as a matter of overall priority for its regulatory program, fully incorporates the provisions of the President's priorities and objectives under E.O. 12866.

International Regulatory Cooperation

As the President noted in Executive Order 13609, "international regulatory cooperation, consistent with domestic law and prerogatives and U.S. trade policy, can be an important means of promoting" public health, welfare, safety, and our environment as well as economic growth, innovation, competitiveness, and job creation. Accordingly, in Executive Order 13609, the President requires each executive agency to include in its Regulatory Plan a summary of its international regulatory cooperation activities that are reasonably anticipated to lead to significant regulations.

The Department of Defense, along with the Departments of State and Commerce, engages with other countries in the Wassenaar Arrangement, Nuclear Suppliers Group, Australia Group, and Missile Technology Control Regime through which the international community develops a common list of items that should be subject to export controls. DoD has been a key participant in the Administration's Export Control Reform effort that resulted in a complete overhaul of the U.S. Munitions List and fundamental changes to the Commerce Control List. New controls have facilitated transfers of goods and technologies to allies and partners while helping prevent transfers to countries of national security and proliferation concern. DoD will continue to assess new and emerging technologies to ensure items that provide critical military and intelligence capabilities are properly controlled on international export control regime lists.

Retrospective Review of Existing Regulations

Pursuant to section 6 of Executive Order 13563 "Improving Regulation and Regulatory Review

(January 18, 2011), the following Regulatory Identification Numbers (RINs) have been identified as associated with retrospective review and analysis in the Department's final retrospective review of regulations plan. Several are of particular interest to small businesses. The entries on this list are completed actions, which do not appear in The Regulatory Plan. However, more information can be found about these completed rulemakings in past publications of the Unified Agenda on Reginfo.gov in the Completed Actions section for DoD. These rulemakings can also be found on Regulations.gov. We will continue to identify retrospective review regulations as they are published and report on the progress of the overall plan biannually. DoD's final agency plan and all updates to the plan can be found at: http://www.regulations.gov/#!docketDetail;D=DOD-2011-OS-0036

RIN

Rule Title (*expected to significantly reduce burdens on small businesses)

0703-AA90

Guidelines for Archaeological Investigation Permits and Other Research on Sunken Military Craft and Terrestrial Military Craft Under the Jurisdiction of the Department of the Navy

0703-AA92

Professional Conduct of Attorneys Practicing Under the Cognizance and Supervision of the Judge Advocate General

0710-AA66

Civil Monetary Penalty Inflation Adjustment Rule

0710-AA60

Nationwide Permit Program Regulations*

0750-AG47

Safeguarding Unclassified Controlled Technical Information (DFARS Case 2011-D039)

0750-AG62

Patents, Data, and Copyrights (DFARS Case 2010-D001)

0750-AH11

Only One Offer (DFARS Case 2011-D013)

0750-AH19

Accelerated Payments to Small Business (DFARS Case 2011-D008)

0750-AH54

Performance-Based Payments (DFARS Case 2011-D045)

0750-AH70

Defense Trade Cooperation Treaty With Australia and the United Kingdom (DFARS Case 2012-D034)

0750-AH86

Forward Pricing Rate Proposal Adequacy Checklist (DFARS Case 2012-D035)

0750-AH87

System for Award Management Name Changes, Phase 1 Implementation (DFARS Case 2012-D053)

0750-AH90

0750-AH94

0750-AH95

0750-AI02

0750-AI10

0750-AI19

0750-AI27

Clauses With Alternates-Transportation (DFARS Case 2012-D057)

Clauses with Alternates-Foreign Acquisition (DFARS Case 2013-D005)

Clauses with Alternates-Quality Assurance (DFARS Case 2013-D004)

Clauses with Alternates-Contract Financing (DFARS Case 2013-D014)

Clauses with Alternates-Research and Development Contracting (DFARS Case 2013-D026)

Clauses with Alternates-Taxes (DFARS Case 2013-D025)

Clauses with Alternates-Special Contracting Methods, Major System Acquisition, and Service Contracting (DFARS Case 2014-D004)

0750-AI03

Approval of Rental Waiver Requests (DFARS Case 2013-D006)

0750-AI07

Storage, Treatment, and Disposal of Toxic or Hazardous Materials-Statutory Update (DFARS Case 2013-D013)

0750-AI18

Photovoltaic Devices (DFARS Case 2014-D006)

0750-AI34

State Sponsors of Terrorism (DFARS Case 2014-D014)

0750-AI43

Inflation Adjustment of Acquisition-Related Thresholds

0790-AI42

Personnel Security Program

0790-AI54

Defense Support of Civilian Law Enforcement Agencies

0790-AI77

Provision of Early Intervention and Special Education Services to Eligible DoD Dependents

0790-AI86

Defense Logistics Agency Privacy Program

0790-AI87

Defense Logistics Agency Freedom of Information Act Program

0790-AI88

Shelter for the Homeless

0790-AJ03

DoD Privacy Program

0790-AJ06

Voluntary Education Programs

0790-AJ10

Enhancement of Protections on Consumer Credit for Members of the Armed Forces and Their Dependents

Pursuant to Executive Order 13563, DoD also removed 32 CFR part 513, "Indebtedness of Military Personnel," because the part is obsolete and the governing policy is now codified at 32 CFR part 112.

Administration Priorities:

1. Rulemakings that are expected to have high net benefits well in excess of costs.

The Department plans to finalize the following Defense Federal Acquisition Regulation Supplement (DFARS) rules:

  • Requirements Relating to Supply Chain Risk (DFARS case 2012-D050). This final rule implements section 806 of the National Defense Authorization Act (NDAA) for Fiscal Year (FY) 2011, as amended by section 806 of the NDAA for FY 2013. Section 806 requires contracting officers to evaluate an offerors supply chain risk when purchasing information technology related to national security systems. This rule enables agencies to exclude sources identified as having a supply chain risk from consideration for award of a covered contract, in order to minimize the potential risk for supplies and services purchased by DoD to maliciously degrade the integrity and operation of sensitive information technology systems. The cost impact will vary by solicitation or contract, depending on the level of potential harm to DoD systems that may be avoided by excluding a source with an unacceptable supply chain risk. However, DoD anticipates significant savings to taxpayers by reducing the risk of unsafe products entering the supply chain, which pose a serious threat to sensitive government information technology systems and put in jeopardy the safety of our military forces.

  • Network Penetration Reporting and Contracting for Cloud Services (DFARS case 2013-D018). This final rule implements section 941 of the NDAA for FY 2013 and section 1632 of the NDAA for FY 2015. Section 941 requires cleared defense contractors to report penetrations of networks and information systems and allows DoD personnel access to equipment and information to assess the impact of reported penetrations. Section 1632 requires that a contractor designated as operationally critical must report each time a cyber-incident occurs on that contractor's network or information systems. Ultimately, DoD anticipates significant savings to taxpayers as a result of this rule, by improving information security for DoD information that resides in or transits through contractor systems and a cloud environment. Recent high-profile breaches of Federal information show the need to ensure that information security protections are clearly, effectively, and consistently addressed in contracts. This rule will help protect covered defense information or other Government data from compromise and protect against the loss of operationally critical support capabilities, which could directly impact national security.

  • Detection and Avoidance of Counterfeit Electronic Parts-Further Implementation (DFARS case 2014-D005). This final rule further implements section 818 of the NDAA for FY 2012, as modified by section 817 of the NDAA for FY 2015. Section 818, as modified by section 817, addresses required sources of electronic parts for defense contractors and subcontractors. This rule requires DoD and its contractors and subcontractors, except in limited circumstances, to acquire electronic parts from trusted suppliers. The rule also requires DoD contractors and subcontractors that are not the original component manufacturer, to notify the Government if it is not possible to obtain an electronic part from a trusted supplier and to be responsible for the inspection, test, and authentication of such parts in accordance with existing industry standards. Such validation of new parts and new suppliers are steps that a prudent contractor would take notwithstanding this rule. The benefits associated with avoiding the acquisition of counterfeit electronic parts, which could directly impact national security, far outweigh the minimal cost impact associated with the notification requirement imposed by this rule.

    2. Rulemakings of particular interest to small businesses.

    The Department plans to propose the following DFARS rule-

  • Temporary Extension of Test Program for Comprehensive Small Business Subcontracting Plans (DFARS case 2015-D013). This proposed rule implements section 821 of the NDAA for FY 2015 regarding the Test Program for Comprehensive Small Business Subcontracting Plans. The Test Program was established under section 834 of the NDAAs for FYs 1990 and 1992 to determine whether the negotiation and administration of comprehensive small business subcontracting plans would result in an increase of opportunities provided for small business concerns under DoD contracts. A comprehensive subcontracting plan (CSP) can be negotiated on a corporate, division, or sector level, rather than contract by contract. This rule proposes to amend the DFARS to: (1) extend the Test Program through December 31, 2017; (2) require contracting officers to consider an offerors failure to make a good faith effort to comply with its CSP in past performance evaluations; and (3) inform program participants that a CSP will not be negotiated with a contractor that did not meet the small business goals negotiated in its prior CSP. This rule is of particular interest to small businesses because it holds prime contractors that are participating in the program accountable for the small business goals established in their CSP, resulting in increased business opportunities for small business subcontractors.

    3. Rulemakings that streamline regulations, reduce unjustified burdens, and minimize burdens on small businesses.

    The Department plans to finalize the following DFARS rule-

  • Warranty Tracking of Serialized Items (DFARS case 2014-D026). This final rule requires the use of the electronic contract attachments to record and track warranty data and source of repair information for serialized items in the Product Data Reporting and Evaluation Program (PDREP) system. While contracting officers are encouraged to use the electronic attachments, currently, it is not mandatory in the DFARS. As a result, offerors may propose warranty terms in paper form, which are later manually input into the PDREP system when a contract is awarded. On the other hand, the electronic contract attachments are designed to easily upload to the PDREP system, which reduces: (1) the potential burden of manually entering warranty terms in multiple places, and (2) inaccuracies in the data reported. By making use of these attachments mandatory, the rule provides DoD the ability to more effectively track warranty data and source of repair information for serialized items in a single repository of warranty terms.

    4. Rules to be modified, streamlined, expanded, or repealed to make the agency's regulatory program more effective or less burdensome in achieving the regulatory objectives.

    The Department plans to finalize the following DFARS rule-

  • Clauses with Alternates-Small Business Programs (DFARS case 2015-D017). This final rule amends those contract clauses associated with small business programs that are prescribed for use with an "alternate." A contracting officer selects a basic clause for inclusion in a contract based on the clause prescription contained in the DFARS. Some clause prescriptions require the use of "alternate" text within a basic clause depending on the circumstances of the acquisition. In lieu of listing the basic clause and any alternate text separately, this rule proposes to include in the regulation the full text of both the basic clause with the alternate clause. This new convention will facilitate selection of clauses with alternates using automated contract writing systems and ensure paragraphs from the basic clause that should be superseded by alternate text are not inadvertently included in the solicitation or contract. As a result, the terms of a solicitation and contract are clearly communicated to offerors and contractors who consider such terms during proposal development and contract performance.

    5. Rulemakings that have a significant international impact.

    The Department plans to propose the following DFARS rule-

  • Contractors Performing Private Security Functions (DFARS case 2015-D021). During contingency operations, humanitarian or peace operations, or other military operations or exercises, DoD employs private security contractors (PSCs) to guard personnel, facilities, designated sites, or property of Federal agencies, the contractor or subcontractor, or a third party. Requirements for DoD contractors performing private security functions outside the United States are currently contained in the Federal Acquisition Regulation, and supplemented by the DFARS. This rule proposes to streamline the regulation by consolidating all terms and conditions for DoD PSCs in a single DFARS clause, which can be updated by DoD in a more efficient and timely manner. This rule will also provide an alternative to the high-level quality assurance standard required by the DFARS for PSCs. Contract quality requirements fall into four general categories, depending on the extent of quality assurance needed by the Government for the acquisition involved. In the case of PSC's, the high-level quality standard, "Management System for Quality of Private Security Company Operations - Requirements with Guidance, ANSI/ASIS PSC.1-2012" is mandatory. The alternative proposed by this rule for PSCs (ISO 18788: Management System Private Security Operations - Requirements with Guidance) is substantially the same as ANSI/ASIS PSC.1-2012 and is more widely accepted on an international basis.
  • Specific DoD Priorities:

    For this regulatory plan, there are five specific DoD priorities, all of which reflect the established regulatory principles. DoD has focused its regulatory resources on the most serious health and safety risks. Perhaps most significant is that each of the priorities described below promulgates regulations to offset the resource impacts of Federal decisions on the public or to improve the quality of public life, such as those regulations concerning acquisition, health affairs, transition assistance, and cyber security.

    1. Acquisition, Technology, and Logistics/Defense Procurement and Acquisition

    Policy (DPAP), Department of Defense

    DPAP continuously reviews the DFARS and continues to lead Government efforts to-

  • Improve the presentation, clarity, and streamlining of the regulation by: (1) implementing the new convention to construct clauses with alternates in a manner whereby the alternate clauses are included in full-text; (2) removing guidance that does not have a significant effect beyond the internal operating procedure of the Department or impose a significant cost or administrative impact on contractors or offerors, which is more appropriately addressed in the DFARS Procedures, Guidance, and Information; and (3) removing obsolete reporting or other requirements imposed on contractors. Such improvements ensure that the regulation contracting officers, contractors, and offerors have a clear understanding of the rules for doing business with the Department of Defense.

  • Obtain early engagement with industry on procurement topics of high public interest by: (1) utilizing the DPAP Defense Acquisition Regulation System website to obtain early public feedback on newly enacted legislation that impacts the Department's acquisition regulations, prior to initiating rulemaking to draft the implementing rules; and (2) holding public meetings to solicit industry feedback on proposed rulemakings.

  • Employ methods to facilitate and improve efficiency of the contracting process such as: (1) requiring the use of electronic forms; and (2) establishing that electronic contract documents contained in Electronic Data Access system are official contract documents. Use of electronic means to accomplish the contracting process: (1) reduces the burden on both industry and the Department associated with manual and duplicative data entry, and (2) removes limitations on access to information.

    2. Health Affairs, Department of Defense

    The Department of Defense is able to meet its dual mission of wartime readiness and peacetime health care for those entitled to DoD medical care and benefits by operating an extensive network of military medical treatment facilities supplemented by services furnished by civilian health care providers and facilities through the TRICARE program as administered under DoD contracts. TRICARE is a major health care program designed to improve the management and integration of DoD's health care delivery system.

    The Department of Defense's Military Health System (MHS) continues to meet the challenge of providing the world's finest combat medicine and aeromedical evacuation, while supporting peacetime health care for those entitled to DoD medical care and benefits at home and abroad. The MHS brings together the worldwide health care resources of the Uniformed Services (often referred to as "direct care," usually within military treatment facilities) and supplements this capability with services furnished by network and non-network civilian health care professionals, institutions, pharmacies, and suppliers, through the TRICARE program as administered under DoD contracts, to provide access to high quality health care services while maintaining the capability to support military operations. The TRICARE program serves 9.5 million Active Duty Service Members, National Guard and Reserve members, retirees, their families, survivors, and certain former spouses worldwide. TRICARE continues to offer an increasingly integrated and comprehensive health care plan, refining and enhancing both benefits and programs in a manner consistent with the law, industry standard of care, and best practices, to meet the changing needs of its beneficiaries. The program's goal is to increase access to health care services, improve health care quality, and control health care costs.

    The Defense Health Agency plans to publish the following rule-

  • Proposed Rule: TRICARE Mental Health and Substance Abuse. This rule proposes revisions to the TRICARE regulation to reduce administrative barriers to access to mental health benefit coverage and to improve access to substance use disorder (SUD) treatment for TRICARE beneficiaries, consistent with earlier Department of Defense and Institute of Medicine recommendations, current standards of practice in mental health and addition medicine, and governing laws. This proposed rule has four main objectives: (1) to eliminate of quantitative and qualitative treatment limitations on SUD and mental health benefit coverage and align beneficiary cost-sharing for mental health and SUD benefits with those applicable to medical/surgical benefits; (2) to expand covered mental health and SUD treatment under TRICARE, to include coverage of intensive outpatient programs and treatment of opioid dependence; (3) to streamline the requirements for institutional providers to become TRICARE authorized providers; and (4) to develop TRICARE reimbursement methodologies for newly recognized mental health and SUD intensive outpatient programs and opioid treatment programs. DoD anticipates publishing the proposed rule in the second quarter of FY 2016.

    3. Personnel and Readiness, Department of Defense

    The Department of Defense plans to publish rules regarding transition assistance for military personnel and sexual assault prevention-

  • Interim Final Rule: Transition Assistance for Military Personnel (TAP). This rule establishes policy, assigns responsibilities, and prescribes procedures for administration of the DoD Transition Assistance Program (TAP). The goal of TAP is to prepare all eligible members of the Military Services for a transition to civilian life, including preparing them to meet Career Readiness Standards (CRS). The TAP provides information and training to ensure Service members leaving Active Duty and eligible Reserve Component Service members being released from active duty are prepared for their next step in life whether pursuing additional education, finding a job in the public or private sector, starting their own business or other form of self-employment, or returning to school or an existing job. Service members receive training to meet CRS through the Transition GPS (Goals, Plans, Success) curricula, including a core curricula and individual tracks focused on Accessing Higher Education, Career Technical Training, and Entrepreneurship. All Service members who are separating, retiring, or being released from a period of 180 days or more of continuous Active Duty must complete all mandatory requirements of the Veterans Opportunity to Work (VOW) Act, which includes pre-separation counseling to develop an Individual Transition Plan (ITP) and identify their career planning needs; attend the Department of Veterans Affairs (VA) Benefits Briefings I and II to understand what VA benefits the Service member earned, how to apply for them, and leverage them for a positive economic outcome; and attend the Department of Labor Employment Workshop (DOLEW), which focuses on the mechanics of resume writing, networking, job search skills, interview skills, and labor market research. DoD anticipates publishing the interim final rule in the first quarter of FY 2016.

  • Interim Final Rule; Amendment: Sexual Assault Prevention and Response (SAPR) Program. The purpose of this rule is to implement DoD policy and assign responsibilities for the SAPR Program on prevention, response, and oversight of sexual assault. The goal is for DoD to establish a culture free of sexual assault through an environment of prevention, education and training, response capability, victim support, reporting procedures, and appropriate accountability that enhances the safety and well-being of all persons. DoD anticipates publishing the interim final rule in the second quarter of FY 2016.

  • Interim Final Rule; Amendment: Sexual Assault Prevention and Response (SAPR) Program Procedures. This rule establishes policy, assigns responsibilities, and provides guidance and procedures for the SAPR Program. It establishes processes and procedures for the Sexual Assault Forensic Examination Kit, the multidisciplinary Case Management Group, and guidance on how to handle sexual assault, SAPR minimum program standards, SAPR training requirements, and SAPR requirements for the DoD Annual Report on Sexual Assault in the Military. The DoD goal is a culture free of sexual assault through an environment of prevention, education and training, response capability, victim support, reporting procedures, and appropriate accountability that enhances the safety and well-being of all persons. DoD anticipates publishing the interim final rule in the second quarter of FY 2016.

    4. Chief Information Officer, Department of Defense

    The Department of Defense plans to publish the final rule for the Defense Industrial Base (DIB) Cybersecurity (CS) Activities that implements statutory requirements for mandatory cyber incident reporting while maintaining the voluntary cyber threat information sharing program.

  • Interim Final Rule: Defense Industrial Base (DIB) Cyber Security (CS) Activities. DoD revised its DoD-DIB Cybersecurity (CS) Activities regulation to mandate reporting of cyber incidents that result in an actual or potentially adverse effect on a covered contractor information system or covered defense information residing therein, or on a contractor's ability to provide operationally critical support, and modify eligibility criteria to permit greater participation in the voluntary DoD-Defense Industrial Base (DIB) Cybersecurity (CS) information sharing program. DoD anticipates publishing the final rule in the fourth quarter of FY 2016.