III.  Regulatory Flexibility Act

DoD does not expect this interim rule 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 the statute impacts only private security contractors performing outside the United States. However, an initial regulatory flexibility analysis has been performed and is summarized as follows:

DoD is issuing an interim rule amending the Defense Federal Acquisition Regulation Supplement (DFARS) to implement section 862 of the National Defense Authorization Act (NDAA) for Fiscal Year (FY) 2008, as amended by section 853 of the NDAA for FY 2009 and sections 831 and 832 of the NDAA for FY 2011. The statutory provisions add requirements and limitations for contractors performing private security functions outside the United States in areas of contingency operations, complex contingency operations, or other military operations or exercises that are designated by the combatant commanders. The specific requirements are included in Department of Defense Instruction 3020.50, entitled "Private Security Contractors Operating in Contingency Operations, Combat Operations, or Other Significant Military Operations." These requirements are that contractors performing in areas such as Iraq and Afghanistan ensure that contractor personnel performing private security functions comply with the DoDI, including (1) accounting for Government-acquired and contractor-furnished property and (2) reporting incidents in which a weapon is discharged, personnel are attacked or killed or property is destroyed, or active, lethal countermeasures are employed.

In FY 2010, DoD awarded 1,839 contracts for performance in Iraq and Afghanistan. Of this total, 361, or 20 percent, were awarded to small businesses. Firms performing private security functions in these areas were already required to report the occurrence of incidences such as those listed in the clause at DFARS 252.225-7039, Contractors Performing Private Security Functions, but there was no consistency in the manner of reporting or the individual to whom the report was to be made. This DFARS interim rule and DoDI 3020.50 provide this consistency and clarity and, in that sense, serve to relieve any burden on small businesses.

The interim rule contains information collection requirements that require the approval of the Office of Management and Budget under the Paperwork Burden Act (44 U.S.C. chapter 35). There is an approved information collection, OMB control number 0704-0460, Synchronized Predeployment and Operational Tracker (SPOT) System, in the amount of approximately 150,000 hours. DoD has determined that the currently approved burden hours are sufficient to cover these requirements.

The rule does not duplicate, overlap, or conflict with any other Federal rules. There are no alternatives that accomplish the stated objectives of the applicable statutes.

DoD invites comments from small business concerns and other interested parties on the expected impact of this rule on small entities.

DoD will also consider comments from small entities concerning the existing regulations in subparts affected by this rule in accordance with 5 U.S.C. 610. Interested parties must submit such comments separately and should cite 5 U.S.C. 610 (DFARS Case 2011-D023) in correspondence.