Defense Federal Acquisition Regulation Supplement; Multiyear Contract Authority for Electricity From Renewable Energy Sources (DFARS Case 2008-D006)

Summary:

DoD is adopting as final, without change, the interim ruleamending the Defense Federal Acquisition Regulation Supplement (DFARS) to implement section 828 of the National Defense Authorization Act for Fiscal Year 2008.

Table of Contents

For further information contact:

Ms. Amy G. Williams, 703-602-0328.

Supplementary information:

I. Background

DoD published an interim rule at 75 FR 34942 on June 21, 2010, to amend DFARS parts 217 and 241 to authorize the Department of Defense to enter into a contract for a period not to exceed 10 years for the purchase of electricity from sources of renewable energy, as that term is defined in section 203(b)(2) of the Energy Policy Act of 2005 (42 U.S.C. 15852(b)(2)). Section 828 of the National Defense Authorization Act (NDAA) for Fiscal Year (FY) 2008 (Pub. L. 110-181) authorizes DoD to enter into a contract for a period in excess of five years only if the head of the contracting activity determined, on the basis of a business case analysis prepared by DoD, that—

(1) The proposed purchase of electricity under such contract is cost effective; and

(2) It would not be possible to purchase electricity from the source in an economical manner without the use of a contract for a period in excess of five years.

II. Executive Order 12866

This rule is not a significant regulatory action and, therefore, was not 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.

III. Executive Order 13563

In accordance with Executive Order 13563, Improving Regulation and Regulatory Review, dated January 18, 2011, DoD has determined that this rule is not excessively burdensome to the public, and is consistent with DoD's intent to purchase electricity from sources of renewable energy in the most cost-effective manner.

IV. Regulatory Flexibility Act

This final rule is not expected to 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 there are a very limited number of small businesses engaged in the sale of energy-related services, to include the sale of renewable energy. The market for renewable fuels is highly volatile and is less predictable than other fuel markets. Renewable-energy and alternative-fuel projects are capital-intensive investments and involve the construction of production facilities, which limits small-entity participation.

Although no significant economic impact on small business is anticipated, DoD has prepared a final regulatory flexibility analysis consistent with 5 U.S.C. 604. A copy of the analysis is summarized below and may be obtained from the point of contact specified herein. The analysis is summarized as follows:

The objective of this rule is to implement section 828 of the NDAA for FY 2008. Section 828 authorized the Department of Defense (DoD) to enter into a contract for a period not to exceed 10 years for the purchase of electricity from sources of renewable energy, as that term is defined in section 203(b)(2)of the Energy Policy Act of 2005 (42 U.S.C. 15852(b)(2)). This final rule establishes the conditions under which the head of the contracting activity may enter into a contract for the purchase of renewable energy not to exceed 10 years. Section 828 allows DoD to award a contract for a period in excess of five years: (1) Only after a determination of the cost effectiveness of the proposed purchase has been made based upon a business case analysis, and (2) if it would not be possible to purchase electricity from the source in an economical manner without the use of a contract for a period in excess of five years.

This final rule will apply to DoD contractors engaged in the sale of energy-related services to include the sale of renewable energy.

This rule does not duplicate, overlap, or conflict with any other Federal rules. DoD considers the approach described in the interim rule published at 75 FR 34942 on June 21, 2010, to be the most practical and beneficial for both Government and industry.

DoD invited comments from small business concerns and other interested parties on the expected impact of this rule on small entities. No comments were received.

V. Paperwork Reduction Act

This rule does not impose additional 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).

List of subjects in 48 cfr parts 217 and 241

Government procurement.

Ynette R. Shelkin,

Editor, Defense Acquisition Regulations System.

Interim Rule Adopted as Final Without Change

Accordingly, the interim rule amending 48 CFR parts 217 and 241, which was published at 75 FR 34942 on June 21, 2010, is adopted as a final rule without change.

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