Department of Defense: Acquisition Rulemaking Practices

What GAO Found

The Department of Defense's (DOD) acquisition rulemaking procedures are governed by 41 U.S.C. 1707, which generally requires DOD to issue a proposed rule for each rulemaking that provides not less than a 30-day public comment period. These requirements only apply to those rules which are related to the expenditure of appropriated funds and have a significant effect beyond the agency's internal operating procedures, or have a significant cost or administrative impact on contractors or offerors. However, the requirements may be waived if DOD determines that "urgent and compelling" circumstances make compliance with the requirements impracticable. In those instances, DOD issues a temporary interim rule that provides at least a 30-day public comment period. DOD may then issue a subsequent final rule after considering any comments received.

During fiscal years 2010 through 2014, DOD published 279 final and interim Defense Federal Acquisition Regulation Supplement (DFARS) rules in the Rules and Regulations sections of the Federal Register. Of the 279 final and interim DFARS rules, 139 were issued without prior notice and comment before they became effective. DOD determined that 90 of these DFARS rules were either non-substantive final rules or technical amendments. DOD determined that the remaining 49 rules had "urgent and compelling" circumstances and therefore issued the DFARS rules as interim rules.

GAO's review and analysis of the text of the 139 DFARS rules published without prior public comments identified two primary justifications cited by DOD for waiving the public comment requirement. For the 49 DFARS rules where DOD cited "urgent and compelling" circumstances, the most frequently cited justification was because acquisition requirements either needed to be addressed immediately or within a short-time frame to comply with a statute. Specifically, DOD cited specific language within a statute that required immediate implementation of a defense acquisition requirement as the "urgent and compelling" circumstance for 31 of these 49 DFARS rules. Another 49 of the 139 DFARS rules issued without prior public comment were not subject to public comments because DOD determined that the rules were non-substantive or non-significant. Specifically, DOD stated that 46 of the rules did not have significant effects beyond DOD's internal operating procedures. The remaining 41 DFARS rules issued without public comments were technical amendments for which DOD did not provide justifications in the published rules, but which it also deemed to be non-substantive or non-significant.

DOD officials identified multiple efforts to provide opportunity for public and industry participation during the rulemaking process, such as receiving communications via letters, emails, and telephone calls. Among other communication techniques identified by DOD officials were a web-based email account for the public and industry officials to ask questions, recommend changes, or comment on DFARS rules; Advanced Notices of Proposed Rulemaking used to receive early public input; identifying DOD points of contacts in Federal Register notices; and public meetings.

Why GAO Did This Study

House Report 113-446, accompanying H.R. 4435, Howard P. 'Buck' McKeon National Defense Authorization Act of 2015, mandated that GAO evaluate the Department of Defense (DOD) acquisition rulemaking practices.

GAO's objectives were (1) to describe DOD's current rulemaking procedures, including relevant provisions for notice and comment, for Defense Federal Acquisition Regulation Supplement (DFARS) rules; (2) to determine the frequency with which DOD issued final and interim rules without prior notice and comment during fiscal years 2010 through 2014; (3) to determine the most common justifications given by DOD when issuing final and interim DFARS rules without prior notice and comment; and (4) to identify methods cited by DOD for promoting constructive communication between DOD, the public, and the acquisition industry during rulemaking.

To address the objectives, GAO (1) reviewed relevant rulemaking requirements for issuance of DFARS rules as well as related guidance, (2) analyzed 279 final and interim DFARS rules published in the Federal Register to determine the frequency with which the rules had been issued without prior notice and comment and for common themes and patterns to determine the most common justifications for issuing rules without prior notice and comment, and (3) interviewed DOD officials about acquisition rulemaking practices and communications between agencies, the public, and industry officials.