B.  Inclusion of Two Payment Clauses

Comment. The respondent states that it would be less confusing if the contract just contained either DFARS 252.232-7011, Payments in Support of Emergencies and Contingency Operations, or a FAR Prompt Payment clause. According to the respondent, if the environment became more stable or less stable, the contracting officer could bilaterally modify the contract to remove one clause and add the other. The respondent states that including both clauses and notifying the contractor which one applies by contract modification is an unusual, and unnecessary, way to administer a contract.

Response. DoD does not concur as the Government requires the maximum flexibility provided by DFARS subpart 232.9, Prompt Payment, in order to operate in such austere environments as Iraq and Afghanistan. This flexibility requires the ability to move from the appropriate FAR Prompt Payment clause when normal business conditions are possible, to the clause at DFARS 252.232-7011, Payments in Support of Emergencies and Contingency Operations, when an austere environment exists. The conditions described at 232.901, Applicability, provide guidelines for when austere operations are present. Contractors that operate in potential environments that may go back and forth from stable to unstable operations are given the opportunity to price such conditions into their proposals. The Government reserves the right to structure such contracts for this flexibility, and to convert the appropriate FAR or DFARS clause for the given situation, rather than depending upon a bilateral modification, to which the contractor might not agree, and which would require negotiation of consideration. As currently stated, the contracting officer can issue a unilateral contract modification notifying the contractor which clause is active.

This final rule provides DoD the needed flexibility in limited circumstances. The head of the contracting activity shall make subsequent determinations, after consultation with the cognizant comptroller, as the operational area evolves into a more stable business environment to enable the provisions of FAR 32.9 to apply.