DoD Issues Interim Rule for Contractors Performing Private Security Functions

August 19, 2011

DoD is issuing an interim rule amending the Defense Federal Acquisition Regulation Supplement (DFARS) to implement sections of the National Defense Authorization Act (NDAA) for Fiscal Year (FY) 2008, which establish minimum processes and requirements for the selection, accountability, training, equipping, and conduct of personnel performing private security functions. Effective Date: August 19, 2011. Federal Register Volume 76, Number 161 (Friday, August 19, 2011).

The NDAA for FY 2008 (Pub. L. 110-181, enacted October 28, 2008), section 862, entitled ''Contractors Performing Private Security Functions in Areas of Combat Operations or Other Significant Military Operations,'' was amended by section 853 of the NDAA for FY 2009 (Pub. L. 110-417, enacted October 14, 2008) and sections 831 and 832 of the NDAA for FY 2011 (Pub. L. 111-383, enacted January 7, 2011). An interim final rule was published in the Federal Register on July 17, 2009, to meet the mandate of section 862 of the FY 2008 NDAA to provide policy and guidance regulating the actions of DoD and other Governmental private security contractors. A clause to cover the interagency requirements will be covered by a separate and subsequent FAR rule currently under development.

This interim rule is focused solely on providing implementing contractual language and a contract clause mandated by statute and applicable to DoD contracts only. While section 862 of the 2008 NDAA required standardization of rules for private security contractors among Government agencies, DOD's underlying instruction, the Department of Defense Instruction (DoDI) 3020.50, entitled ''Private Security Contractors Operating in Areas of Contingency Operations, Combat Operations, or Other Significant Operations'' at http://www.dtic.mil/whs/directives/corres/pdf was written to cover both DoD private security contractors (in all contingency operations) and interagency private security contractors (in combat operations). This interim rule implements the legislation by establishing (1) regulations addressing the selection, training, equipping, and conduct of personnel performing private security functions in areas of contingency operations, complex contingency operations, or other military operations or exercises that are designated by the combatant commander, (2) a contract clause, and (3) remedies.

Section 833 of the NDAA for FY 2011 is entitled ''Standards and Certification for Private Security Contractors.'' This provision mandates the establishment of third-party certification processes for determining whether private security contractors adhere to standards for operational and business practices. The required industry standard is currently under development and will be incorporated in the DFARS once the standard is published.

The regulations implementing the referenced statutory provisions are in DFARS subpart 225.3, entitled ''Contracts Performed Outside the United States.'' DFARS 225.302-3, Definitions, provides the definition of ''private security functions'' from section 862, as amended, and the definition of ''complex contingency operations'' from JP-102 (DoD Dictionary). This coverage does not apply to the performance of private security functions within the United States or outside the United States in areas that are not (a) contingency operations, (b) complex contingency operations, or (c) other military operations designated by the combatant commander. Importantly, DFARS 225.302 applies to the performance of private security functions in the applicable areas, without regard to whether the DoD contractor is a private security contractor. For example, a contractor delivering construction materials in an area of contingency operations might subcontract with a private security contractor to protect its supplies and employees during delivery. Although the supplier of the construction materials is not a private security contractor, the requirements of DFARS 252.225-7039, Contractors Performing Private Security Functions, are applicable. As a further example, the same contractor, if delivering construction materials to a base in Germany is not governed, at this time, by the requirements and limitations of DFARS 252.225.7039 because Germany is not an area of contingency operations, complex contingency operations, or other significant military operations or exercises that are designated by the combatant commander. This is further clarified at DFARS 225.302-4, Policy. This subsection implements the relevant policy document, DoDI 3020.50, and assigns contractor responsibilities for the selection, accountability,
training, equipping, and conduct of personnel performing private security functions under contracts in the covered areas. It also assigns responsibilities and establishes procedures for incident reporting, use of and accountability for equipment, and rules for the use of force.

The statutes also include specific remedies for violations of the responsibilities and procedures in the law, DoDI 3020.50, and DFARS 225.302-4. Without impinging on the Government's usual contractual remedies (e.g., termination for default), the Government may, at its discretion, direct the contractor to remove or replace any personnel who fail to comply with, or violate, applicable requirements of the clause at 252.225-7039, Contractors Performing Private Security Functions. Such corrective actions must be taken at the contractor's own expense and without prejudice to any other contractual rights. The statute prescribes additional remedies as follows:
1. Contracting officers must include a contractor's failure to comply in appropriate past-performance databases.
2. If the contract is an award-fee contract, the contracting officer must include performance failure in the assessment of award fees for the relevant period (as well as authorizing the treatment of such failures as a basis for reducing or denying award fees for the relevant period or recovering all or part of award fees previously paid for such period).
3. If the contractor fails to comply with the Government's direction to remove or replace personnel, and such failure to comply is severe, prolonged, or repeated, the statute specifies the authority of the contracting officer to terminate the contract for default.

Comments on the interim rule should be submitted in writing to the address shown below on or before October 18, 2011, to be considered in the formation of the final rule.
Regulations.gov: http://www.regulations.gov. Submit comments via the Federal eRulemaking portal by inputting ''DFARS Case 2011-D023'' under the heading ''Enter keyword or ID'' and selecting ''Search.'' Select the link ''Submit a Comment'' that corresponds with ''DFARS Case 2011-D023.'' Follow the instructions provided at the ''Submit a Comment'' screen. Please include your name, company name (if any), and ''DFARS Case 2011-D023'' on your attached document.
E-mail: dfars@osd.mil. Include DFARS Case 2011-D023 in the subject line of the message.
Fax: 703-602-0350.
Mail: Defense Acquisition Regulations System, Attn: Meredith Murphy, OUSD (AT&L) DPAP/DARS, Room 3B855, 3060 Defense Pentagon, Washington, DC 20301-3060.

FOR FURTHER INFORMATION CONTACT: Meredith Murphy, Defense Acquisition Regulations System, OUSD (AT&L) DPAP/DARS, Room 3B855, 3060 Defense Pentagon, Washington, DC 20301-3060. Telephone 703-602-1302; facsimile 703-602-0350. 






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