Rule2022-23276
Defense Federal Acquisition Regulation Supplement: Requiring Data Other Than Certified Cost or Pricing Data (DFARS Case 2020-D008)
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Published
October 28, 2022
Effective
October 28, 2022
Issuing agencies
Defense DepartmentDefense Acquisition Regulations System
Abstract
DoD is issuing a final rule amending the Defense Federal Acquisition Regulation Supplement (DFARS) to implement a section of the National Defense Authorization Act for Fiscal Year 2020 that provides additional requirements relating to the submission of data other than cost or pricing data.
Full Text
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<title>Federal Register, Volume 87 Issue 208 (Friday, October 28, 2022)</title>
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[Federal Register Volume 87, Number 208 (Friday, October 28, 2022)]
[Rules and Regulations]
[Pages 65502-65504]
From the Federal Register Online via the Government Publishing Office [<a href="http://www.gpo.gov">www.gpo.gov</a>]
[FR Doc No: 2022-23276]
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DEPARTMENT OF DEFENSE
Defense Acquisition Regulations System
48 CFR Parts 215 and 242
[Docket DARS-2021-0015]
RIN 0750-AK95
Defense Federal Acquisition Regulation Supplement: Requiring Data
Other Than Certified Cost or Pricing Data (DFARS Case 2020-D008)
AGENCY: Defense Acquisition Regulations System, Department of Defense
(DoD).
ACTION: Final rule.
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SUMMARY: DoD is issuing a final rule amending the Defense Federal
Acquisition Regulation Supplement (DFARS) to implement a section of the
National Defense Authorization Act for Fiscal Year 2020 that provides
additional requirements relating to the submission of data other than
cost or pricing data.
DATES: Effective October 28, 2022.
FOR FURTHER INFORMATION CONTACT: David E. Johnson, telephone 202-913-
5764.
SUPPLEMENTARY INFORMATION:
I. Background
DoD published a proposed rule in the Federal Register at 86 FR
48368 on August 30, 2021, to implement section 803 of the National
Defense Authorization Act (NDAA) for Fiscal Year (FY) 2020 (Pub. L.
116-92). Section 803 amends 10 U.S.C. 2306a(d) (redesignated as 10
U.S.C. 3705) to prohibit contracting officers from determining that the
price of a contract or subcontract is fair and reasonable based solely
on historical prices paid by the Government and to state that an
offeror is ineligible for award if the contracting officer is unable to
determine proposed prices are fair and reasonable by any other means,
when an offeror fails to make a good faith effort to comply with a
reasonable request to submit data other than certified cost or pricing
data, unless the head of the contracting activity (HCA) determines that
it is in the best interest of the Government to make the award to that
offeror. Five respondents submitted public comments in response to the
proposed rule.
II. Discussion and Analysis
DoD reviewed the public comments in the development of the final
rule. A discussion of the comments and the changes made to the rule as
a result of those comments is provided, as follows:
A. Summary of Significant Changes From the Proposed Rule
DoD revised DFARS 215.403-3(a)(1) to include the word
``subcontract'' to clarify that, in accordance with section 803 of the
NDAA for FY 2020, the rule applies to subcontractors. One respondent
suggested this revision.
DoD revised DFARS 215.403-3(a)(4) to include, in accordance with
section 803 of the NDAA for FY 2020, the requirement that offerors make
a good faith effort to comply with the Government's reasonable requests
to furnish data other than certified cost or pricing data. Two
respondents suggested this revision.
B. Analysis of Public Comments
1. Clarification of the Requirement Not To Base Price-Reasonableness
Solely on Historical Prices Paid by the Government
Comment: Three respondents expressed confusion with the requirement
not to base price reasonableness solely on historical prices paid by
the Government. Multiple respondents requested clarification on the
restriction of use of previously performed cost and price analysis.
Another respondent expressed concern with inclusion of the requirement
in multiple sections and recommended that the requirement should be
clearly connected to other relevant factors such as time elapsed since
prior purchase, and any differences in quantities purchased as part of
the price reasonableness determination.
Response: The rule does not prohibit contracting officers from
utilizing prior cost or price analyses, nor does it absolutely prohibit
contracting officers from utilizing historical prices paid by the
Government to determine prices fair and reasonable. Rather, the rule
prohibits contracting officers from determining the price of a contract
to be fair and reasonable based solely on historical prices paid by the
Government. Under this rule, historical prices paid by the Government
cannot properly comprise the only factor when determining prices fair
and reasonable, but rather may be used as one factor among several.
Inclusion of the requirement in DFARS 215.403-3 was intentional to
ensure the contracting officer is aware of the requirement in the event
that prior prices paid by the Government are the only information
available, and other than certified cost or pricing data will likely
have to be
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obtained. The respondents' recommendation to clearly connect the
requirement to other relevant factors was not incorporated as it
already exists in DFARS 215.404-1(b)(ii). Accordingly, no changes to
the rule are necessary as a result of these comments.
2. Application of the Rule to Subcontracts and Flowdown Requirements
Comment: Four respondents questioned whether the requirement flowed
down to subcontracts. One respondent questioned whether or not the
contractor would need to develop a package for the contracting officer
to submit to the HCA for a determination that the purchase is in the
best interest of the Government, or if the determination that the
purchase is in the best interest of the Government could be made by an
official of the contractor. Another respondent inquired whether
contracting officers would be required to provide previous prices paid
to contractors, and if there would be a requirement that contractors be
prohibited from making a price reasonableness determination based
solely on historical prices paid by the contractor. Further, another
respondent questioned whether the contractors would be required to
track information about subcontractors providing cost data, similar to
the Contractor Performance Assessment Reporting System (CPARS).
Response: The rule does apply to subcontracts, and DoD concurs with
adding the word ``subcontract'' to 215.403-3(a)(4) to reflect the
statutory language at section 803 of the NDAA for FY 2020. The
contractor would not need to develop a package for the contracting
officer to submit to the HCA. The HCA would be making that decision
based upon the inputs from the Government team, whether it was at the
prime or subcontract level, and any inputs from the contractor would be
limited to providing supporting data to the contracting officer. The
Government would not be able to disclose price information unless the
contractors involved agreed to the release of the data. The contracting
officer would be responsible to assess and evaluate the analysis
performed by the prime on their subcontractors to ensure they
considered additional data aside from the previous prices paid.
Contractors will not be required to track information about
subcontractors providing cost data similar to CPARS. The contracting
officer would be responsible for tracking this information for prime
contractors and subcontractors.
3. Further Changes To Effect the Intent of the Rule
Comment: One respondent recommended augmenting DFARS 252.215-7010
with additional requirements intended to maximize cooperation from
offerors when contracting officers make data requests.
Response: The respondent's recommendation is outside the scope of
this rule.
4. Further Changes To Maximize Consistency
Comment: One respondent recommended amending DFARS 215.404-
1(b)(v)(C) to change the term ``customer,'' to ``type of customer.''
Response: DoD does not concur with this recommendation because it
is not required to implement the statute.
5. Inclusion of the Requirement for ``Good Faith'' Efforts To Comply
With a Reasonable Request To Furnish Data Other Than Certified Cost or
Pricing Data
Comment: Two respondents recommended revising the final rule at
DFARS 215.403-3(a)(4), to include, in accordance with section 803 of
the NDAA for FY 2020, the requirement that offerors make good faith
efforts when complying with the Government's reasonable requests to
furnish data other than certified cost or pricing data.
Response: DoD concurs with this recommendation and has revised
DFARS 215.403-3(a)(4) to include ``make a good faith effort to comply
with a reasonable request''.
III. Applicability to Contracts at or Below the Simplified Acquisition
Threshold (SAT) and for Commercial Services or Commercial Products,
Including Commercially Available Off-the-Shelf (COTS) Items
This rule does not create any new solicitation provisions or
contract clauses. It does not impact any existing solicitation
provisions or contract clauses or their applicability to contracts
valued at or below the SAT, for commercial services, or for commercial
products including COTS items.
IV. Executive Orders 12866 and 13563
Executive Orders (E.O.s) 12866 and 13563 direct agencies to assess
all costs and benefits of available regulatory alternatives and, if
regulation is necessary, to select regulatory approaches that maximize
net benefits (including potential economic, environmental, public
health and safety effects, distributive impacts, and equity). E.O.
13563 emphasizes the importance of quantifying both costs and benefits,
of reducing costs, of harmonizing rules, and of promoting flexibility.
This is not a significant regulatory action and, therefore, was not
subject to review under section 6(b) of E.O. 12866, Regulatory Planning
and Review, dated September 30, 1993.
V. Congressional Review Act
As required by the Congressional Review Act (5 U.S.C. 801-808)
before an interim or final rule takes effect, DoD will submit a copy of
the interim or final rule with the form, Submission of Federal Rules
under the Congressional Review Act, to the U.S. Senate, the U.S. House
of Representatives, and the Comptroller General of the United States. A
major rule under the Congressional Review Act cannot take effect until
60 days after it is published in the Federal Register. The Office of
Information and Regulatory Affairs has determined that this rule is not
a major rule as defined by 5 U.S.C. 804.
VI. Regulatory Flexibility Act
A final regulatory flexibility analysis has been prepared
consistent with the Regulatory Flexibility Act, 5 U.S.C. 601, et seq.,
and is summarized as follows:
The objective of this rule is to implement section 803 of the
National Defense Authorization Act for Fiscal Year 2020. Section 803
provides additional requirements for contracting officers and the head
of the contracting activity relating to obtaining data other than
certified cost or pricing data.
DoD received no public comments in response to the initial
regulatory flexibility analysis.
This rule does not directly impose requirements on small entities.
The section 803 requirement making certain offerors ineligible for
award is already in the Federal Acquisition Regulation. This rule
impacts (1) the contracting officer's need for data other than
historical prices paid by the Government, unless there is adequate
price competition; and (2) the criteria for the head of the contracting
activity's determination to make an award. In some cases, the
contracting officer's need for data other than historical prices paid
by the Government may result in a request for additional data from an
offeror. Based on data from the Federal Procurement Data System for FY
2018 through FY 2020, DoD estimates that 1,672 small entities may
receive a request for additional data.
This rule entails no new reporting, recordkeeping, or other
compliance requirements on small entities. There are no known
alternative approaches to
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the rule that would meet the stated objectives of the statute.
VII. Paperwork Reduction Act
This rule does not contain any 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 215 and 242
Government procurement.
Jennifer D. Johnson,
Editor/Publisher, Defense Acquisition Regulations System.
Therefore, 48 CFR parts 215 and 242 are amended as follows:
0
1. The authority citation for parts 215 and 242 continues to read as
follows:
Authority: 41 U.S.C. 1303 and 48 CFR chapter 1.
PART 215--CONTRACTING BY NEGOTIATION
0
2. Amend section 215.403-3 by adding paragraph (a) to read as follows:
215.403-3 Requiring data other than certified cost or pricing data.
* * * * *
(a) In accordance with 10 U.S.C. 2306a(d)--
(1) Contracting officers shall not determine the price of a
contract or subcontract to be fair and reasonable based solely on
historical prices paid by the Government (see PGI 215.403-3(4)); and
(4) In lieu of the factors for consideration listed in FAR 15.403-
3(a)(4), a determination by the head of the contracting activity (see
PGI 215.403-3(7)) that it is in the best interest of the Government to
make the award to an offeror that does not make a good faith effort to
comply with a reasonable request to submit data other than certified
cost or pricing data shall be based on consideration of pertinent
factors, including the following:
(i) The effort to obtain the data.
(ii) Availability of other sources of supply of the item or
service.
(iii) The urgency or criticality of the Government's need for the
item or service.
(iv) Reasonableness of the price of the contract, subcontract, or
modification of the contract or subcontract based on information
available to the contracting officer.
(v) Rationale or justification made by the offeror for not
providing the requested data.
(vi) Risk to the Government if award is not made.
* * * * *
0
3. Amend section 215.404-1 by revising paragraph (b)(ii) and paragraph
(b)(v) introductory text to read as follows:
215.404-1 Proposal analysis techniques.
* * * * *
(b) * * *
(ii) If the contracting officer determines that the information
obtained through market research is insufficient to determine the
reasonableness of price, the contracting officer shall consider
information submitted by the offeror of recent purchase prices paid by
the Government and commercial customers for the same or similar
commercial items under comparable terms and conditions in establishing
price reasonableness on a subsequent purchase if the contracting
officer is satisfied that the prices previously paid remain a valid
reference for comparison. Price reasonableness shall not be based
solely on historical prices paid by the Government (see 215.403-
3(a)(1)). The contracting officer shall consider the totality of other
relevant factors such as the time elapsed since the prior purchase and
any differences in the quantities purchased (10 U.S.C. 2306a(b)(5)).
* * * * *
(v) When evaluating pricing data, the contracting officer shall
consider materially differing terms and conditions, quantities, and
market and economic factors (see PGI 215.404-1(b)(v)). For similar
items, the contracting officer shall also consider material differences
between the similar item and the item being procured (see FAR 15.404-
1(b)(2)(ii)(B)). Material differences are those that could reasonably
be expected to influence the contracting officer's determination of
price reasonableness. The contracting officer shall consider the
following factors when evaluating the relevance of the information
available:
* * * * *
PART 242--CONTRACT ADMINISTRATION AND AUDIT SERVICES
0
4. Revise section 242.1502 to read as follows:
242.1502 Policy.
(g) Past performance evaluations in the Contractor Performance
Assessment Reporting System--
(i) Shall include an assessment of the contractor's performance
against, and efforts to achieve, the goals identified in its
comprehensive small business subcontracting plan when the contract
contains the clause at 252.219-7004, Small Business Subcontracting Plan
(Test Program); and
(ii) Shall, unless exempted by the head of the contracting
activity, include a notation on contractors that have denied multiple
requests for submission of data other than certified cost or pricing
data over the preceding 3-year period, but nevertheless received an
award (10 U.S.C. 2306a(d)(2)(B)(ii)).
[FR Doc. 2022-23276 Filed 10-27-22; 8:45 am]
BILLING CODE 5001-06-P
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</html>Indexed from Federal Register on October 28, 2022.
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