Proposed Rule2023-01296
Defense Federal Acquisition Regulation Supplement: Defense Commercial Solutions Opening (DFARS Case 2022-D006)
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Published
January 31, 2023
Issuing agencies
Defense DepartmentDefense Acquisition Regulations System
Abstract
DoD is proposing to amend the Defense Federal Acquisition Regulation Supplement (DFARS) to implement a section of the National Defense Authorization Act for Fiscal Year 2022 that authorizes DoD to acquire innovative commercial products and commercial services using general solicitation competitive procedures, as well as a section of the National Defense Authorization Act for Fiscal Year 2023 that makes an amendment to that authority.
Full Text
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<title>Federal Register, Volume 88 Issue 20 (Tuesday, January 31, 2023)</title>
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[Federal Register Volume 88, Number 20 (Tuesday, January 31, 2023)]
[Proposed Rules]
[Pages 6605-6608]
From the Federal Register Online via the Government Publishing Office [<a href="http://www.gpo.gov">www.gpo.gov</a>]
[FR Doc No: 2023-01296]
Federal Register / Vol. 88 , No. 20 / Tuesday, January 31, 2023 /
Proposed Rules
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DEPARTMENT OF DEFENSE
Defense Acquisition Regulations System
48 CFR Parts 203, 204, 206, 212, 215, and 235
[Docket DARS-2023-0002]
RIN 0750-AL57
Defense Federal Acquisition Regulation Supplement: Defense
Commercial Solutions Opening (DFARS Case 2022-D006)
AGENCY: Defense Acquisition Regulations System, Department of Defense
(DoD).
ACTION: Proposed rule.
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SUMMARY: DoD is proposing to amend the Defense Federal Acquisition
Regulation Supplement (DFARS) to implement a section of the National
Defense Authorization Act for Fiscal Year 2022 that authorizes DoD to
acquire innovative commercial products and commercial services using
general solicitation competitive procedures, as well as a section of
the National Defense Authorization Act for Fiscal Year 2023 that makes
an amendment to that authority.
DATES: Comments on the proposed rule should be submitted in writing to
the address shown below on or before April 3, 2023, to be considered in
the formation of the final rule.
ADDRESSES: Submit comments identified by DFARS Case 2022-D006, using
either of the following methods:
[cir] Federal eRulemaking Portal: <a href="https://www.regulations.gov">https://www.regulations.gov</a>.
Search for ``DFARS Case 2022-D006.'' Select ``Comment'' and follow the
instructions to submit a comment. Please include ``DFARS Case 2022-
D006'' on any attached documents.
[cir] Email: <a href="/cdn-cgi/l/email-protection#aec1ddca80cac8cfdcddeec3cfc7c280c3c7c2"><span class="__cf_email__" data-cfemail="06697562286260677475466b676f6a286b6f6a">[email protected]</span></a>. Include DFARS Case 2022-D006 in
the subject line of the message.
Comments received generally will be posted without change to
<a href="https://www.regulations.gov">https://www.regulations.gov</a>, including any personal information
provided. To confirm receipt of your comment(s), please check <a href="https://www.regulations.gov">https://www.regulations.gov</a>, approximately two to three days after submission
to verify posting.
FOR FURTHER INFORMATION CONTACT: Ms. Jeanette Snyder, 703-508-7524.
SUPPLEMENTARY INFORMATION:
I. Background
DoD is proposing to revise the DFARS to implement section 803 of
the National Defense Authorization Act (NDAA) for Fiscal Year (FY) 2022
(Pub. L. 117-81) and section 814 of the NDAA for FY 2023 (Pub. L. 117-
263). Section 803 modifies 10 U.S.C. 2380c (redesignated as 10 U.S.C.
3458) to give DoD the authority to acquire innovative commercial
products and commercial services through a competitive selection of
proposals resulting from a general solicitation and the peer review of
such proposals. Section 803 of the NDAA for FY 2022 also repealed
section 879 of the NDAA for FY 2017, which authorized a pilot program
providing the same authority for a limited period of time. Section 814
amends 10 U.S.C. 3458 to replace ``fixed-price incentive fee
contracts'' with ``fixed-price incentive contracts''.
II. Discussion and Analysis
This rule proposes to modify DFARS part 212 to add a new subpart
212.7X, Defense Commercial Solutions Opening, to implement section 803
of the NDAA for FY 2022, which permanently authorizes DoD to acquire
innovative commercial products and commercial services through the use
of general solicitation competitive procedures and the peer review of
such proposals in conjunction with a FAR part 12 contract. The proposed
new subpart 212.7X provides the scope, definitions, policy and
procedures, and limitations associated with the commercial solutions
opening. This proposed rule, at DFARS 212.7X02, Policy, authorizes
contracting officers to use a general solicitation (known as a
commercial solutions opening (CSO))--
<bullet> To obtain innovative solutions or potential capabilities
that fulfill requirements;
<bullet> To close capability gaps, or provide potential innovative
technological advancements; and
<bullet> When meaningful proposals with varying technical or
scientific approaches can be reasonably anticipated.
DFARS 212.7X02 instructs contracting officers to--
<bullet> Award any resulting CSO contracts on a fixed-price basis,
including fixed-price incentive contracts;
<bullet> Treat products and services acquired as commercial
products or commercial services; and
<bullet> Use the subpart 212.7X procedures in conjunction with FAR
part 35 and DFARS part 235 when acquiring research and development.
A CSO seeks innovative solutions, and DFARS 212.7X01 adds a
definition of ``innovative'' as follows: (1) any technology, process,
or method, including research and development, that is new as of the
date of submission of a proposal; or (2) any application that is new as
of the date of submission of a proposal of a technology, process, or
method existing as of such date.
This proposed rule also modifies DFARS 203, 204, 206, 215, 217, and
235 to add cross-references to CSOs.
III. Applicability to Contracts at or Below the Simplified Acquisition
Threshold and for Commercial Items, Including Commercially Available
Off-the-Shelf 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 simplified acquisition threshold, for commercial
products including commercially available off-the-shelf items, or for
commercial services.
IV. Expected Impact of the Rule
This proposed rule implements the permanent statutory authorization
for DoD to acquire innovative commercial products and commercial
services through a competitive selection of proposals resulting from a
general solicitation known as a CSO and the peer review of such
proposals in conjunction with a FAR part 12 contract. This rule is
expected to impact the Government and large and small entities by
simplifying solicitation, evaluation, and award procedures, which
should decrease acquisition cost and, thus, be less burdensome for all
parties. The use of a CSO in conjunction with a FAR part 12 contract is
also expected to benefit contractors and offerors as it will allow for
the use of existing commercial contracting procedures and operating
systems, which decreases burden on both large and small entities. As a
result, large and small entities may be more willing to enter into
contracts with DoD. Therefore, DoD expects to benefit by having greater
access to technologies not previously accessible.
V. 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
[[Page 6606]]
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.
VI. 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. This rule is not
anticipated to be a major rule under 5 U.S.C. 804.
VII. Regulatory Flexibility Act
DoD does not expect this proposed 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 only 11 contracts were awarded annually to small entities as a
result of a commercial solutions opening during the five-year period of
the pilot program from fiscal years 2018 to 2022. However, an initial
regulatory flexibility analysis has been performed and is summarized as
follows:
This proposed rule is necessary to implement section 803 of the
National Defense Authorization Act (NDAA) for Fiscal Year (FY) 2022
(Pub. L. 117-81) and section 814 of the NDAA for FY 2023 (Pub. L. 117-
263). Section 803 modifies 10 U.S.C. 2380c (redesignated as 10 U.S.C.
3458) to permanently authorize DoD to acquire innovative commercial
products and commercial services through a competitive selection of
proposals resulting from a general solicitation, known as a commercial
solutions opening (CSO), and the peer review of such proposals in
conjunction with a FAR part 12 contract. Section 814 amends 10 U.S.C.
3458 to replace ``fixed-price incentive fee contracts'' with ``fixed-
price incentive contracts''.
The objective of this proposed rule is to implement section 803 to
permanently authorize DoD to acquire innovative commercial products and
commercial services through a competitive selection of proposals
resulting from a CSO and the peer review of such proposals. This
proposed rule authorizes DoD to obtain innovative solutions or
potential capabilities to fulfill requirements, close capability gaps,
or provide potential technological advancements that are new as of the
date of submission of a proposal or that is a new application as of the
date of submission of a proposal of a technology, process, or method
existing as of such date. The use of a CSO with a FAR part 12
commercial contract is intended to bring new entrants into the DoD
marketplace. The legal basis for the rule is section 803 of the NDAA
for FY 2022.
Section 879 of the NDAA for FY 2017 (Pub. L. 114-328) authorized a
pilot program for the Defense CSO (the pilot), which was repealed by
section 803 of the NDAA for FY 2022. During the pilot, from FY 2018 to
FY 2022, DoD awarded a total of 89 contracts as a result of CSOs, with
56, or 63 percent, being awarded to small entities over the five-year
period. Approximately 11 contracts were awarded to small entities each
year. Data from the System for Award Management revealed there were
420,000 small entities registered as of January 2022. However, since
the use of a CSO with a FAR part 12 contract is intended to attract new
entrants into the market, this number may not fully capture the number
of small entities to which this rule may apply. Therefore, DoD cannot
provide a more precise estimate of the number of small entities to
which this rule may apply.
This proposed rule does not impose any new reporting,
recordkeeping, or other compliance requirements for small entities.
The proposed rule does not duplicate, overlap, or conflict with any
other Federal rules.
There are no known alternatives that would accomplish the stated
objectives of the applicable statute.
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 2022-D006), in
correspondence.
VIII. Paperwork Reduction Act
This proposed rule does not contain any new 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 203, 204, 206, 212, 215, and 235.
Government procurement.
Jennifer D. Johnson,
Editor/Publisher, Defense Acquisition Regulations System.
Therefore, 48 CFR parts 203, 204, 206, 212, 215, and 235 are
proposed to be amended as follows:
0
1. The authority citation for 48 CFR parts 203, 204, 206, 212, 215, and
235 continues to read as follows:
Authority: 41 U.S.C. 1303 and 48 CFR chapter 1.
PART 203--IMPROPER BUSINESS PRACTICES AND PERSONAL CONFLICTS OF
INTEREST
0
2. Add section 203.104-1 to subpart 203.1 to read as follows:
203.104-1 Definitions.
The definition of Federal agency procurement at FAR 3.104-1 also
includes commercial solutions openings.
PART 204--ADMINISTRATIVE AND INFORMATION MATTERS
0
3. Amend section 204.1603 by revising paragraph (a)(3)(A)(2) and adding
a sentence at the end of paragraph (a)(4) to read as follows:
204.1603 Procedures.
(a) * * *
(3) * * *
(A) * * *
(2) Use S to identify broad agency announcements and commercial
solutions openings.
* * * * *
(4) * * * Use C in position 10 to identify the solicitation as a
commercial solutions opening.
* * * * *
PART 206--COMPETITION REQUIREMENTS
0
4. Amend section 206.102 by adding paragraph (d)(4) to read as follows:
206.102 Use of competitive procedures.
(d) * * *
(4) Competitive selection of proposals based on a review by
scientific, technological, or other subject-matter expert peers
resulting from a commercial solutions opening as described in subpart
212.7X (10 U.S.C. 3458) is a competitive procedure.
[[Page 6607]]
PART 212--ACQUISITION OF COMMERCIAL PRODUCTS AND COMMERCIAL
SERVICES
0
5. Amend section 212.102 by adding paragraph (a)(i)(B)(3) to read as
follows:
212.102 Applicability.
(a) * * *
(i) * * *
(B) * * *
(3) 10 U.S.C. 3458--Supplies or services resulting from a
commercial solutions opening pursuant to subpart 212.7X.
* * * * *
0
6. Amend section 212.203 by adding paragraph (3) to read as follows:
212.203 Procedures for solicitation, evaluation, and award.
* * * * *
(3) See subpart 212.7X for acquisitions resulting from a commercial
solutions opening.
0
7. Add subpart 212.7X, consisting of sections 212.7X00 through
212.7X05, to read as follows:
SUBPART 212.7X--DEFENSE COMMERCIAL SOLUTIONS OPENING
Sec.
212.7X00 Scope of subpart.
212.7X01 Definition.
212.7X02 Policy.
212.7X03 Limitations.
212.7X04 Procedures.
212.7X05 Congressional notification.
SUBPART 212.7X--DEFENSE COMMERCIAL SOLUTIONS OPENING
212.7X00 Scope of subpart.
This subpart implements section 803 of the National Defense
Authorization Act for Fiscal Year 2022 (Pub. L. 117-81) (10 U.S.C.
3458) for the acquisition of innovative commercial products or
commercial services through the use of a general solicitation known as
a commercial solutions opening (CSO).
212.7X01 Definition.
As used in this subpart--
Innovative means--
(1) Any technology, process, or method, including research and
development, that is new as of the date of submission of a proposal; or
(2) Any application that is new as of the date of submission of a
proposal of a technology, process, or method existing as of such date.
212.7X02 Policy.
(a) Contracting officers may only use a CSO--
(1) To obtain innovative solutions or potential capabilities that
fulfill requirements;
(2) To close capability gaps, or provide potential innovative
technological advancements; and
(3) When meaningful proposals with varying technical or scientific
approaches can be reasonably anticipated.
(b) Notwithstanding the limitations at FAR 12.207(a) and (e),
contracts awarded pursuant to a CSO shall be fixed-price, including
fixed-price incentive contracts. When using a fixed-price incentive
type contract, see FAR 12.214 and 16.204 for additional requirements.
(c) Contracting officers shall treat products and services acquired
using a CSO as commercial products or commercial services.
(d) When using a CSO to acquire research and development,
contracting officers shall use the procedures of this subpart in
conjunction with FAR part 35 and part 235. A CSO is not subject to the
limitations at 235.016 and may be used to fulfill requirements for
research and development, ranging from advanced component development
through operational systems development.
212.7X03 Limitations.
Contracting officers shall follow the procedures at PGI 212.7X03 to
obtain senior procurement executive approval to award a contract in
excess of $100 million resulting from a CSO.
212.7X04 Procedures.
This section prescribes procedures for the use of a CSO.
(a) The CSO shall--
(1) Describe the agency's interest for an individual program
requirement or for broadly defined areas of interest covering the full
range of the agency's requirements;
(2) Specify the technical data required that may be necessary to
meet DoD's minimum requirements (see 227.7102 and 227.7202);
(3) Describe the evaluation factors for selecting proposals to
include--
(i) Technical and importance to agency programs as the primary
evaluation factors;
(ii) Price to the extent appropriate, but at a minimum to determine
that the price is fair and reasonable; and
(iii) Relative importance of the factors, and the method of
evaluation;
(4) Specify the period of time during which proposals submitted in
response to the CSO will be accepted; and
(5) Contain instructions for the preparation and submission of
proposals.
(b) The contracting officer shall publicize the CSO through the
Governmentwide point of entry and, if authorized pursuant to FAR
subpart 5.5, may also publish a notice regarding the CSO in noted
scientific, technical, or engineering periodicals. The contracting
officer shall publish the notice at least annually.
(c) Proposals received in response to the CSO shall be evaluated in
accordance with evaluation factors specified therein through a
scientific, technological, or other subject-matter expert peer review
process. Written evaluation reports on individual proposals are
required, but proposals need not be evaluated against each other since
they are not submitted in response to a common performance work
statement or statement of work.
(d) Synopsis of proposed contract actions under FAR subpart 5.2 of
individual contract actions based upon proposals received in response
to the CSO is not required. The notice published pursuant to paragraph
(b) of this section fulfills the synopsis requirement.
(e) When a small business concern would otherwise be selected for
award but is considered not responsible, follow the SBA Certificate of
Competency procedure (see FAR subpart 19.6).
(f) The contracting officer shall document the decision that the
requirements of this subpart have been met and include the
documentation in the contract file.
212.7X05 Congressional notification.
See PGI 212.7X05 for congressional notification requirements for
contracts valued at more than $100 million that are awarded pursuant to
a CSO.
PART 215--CONTRACTING BY NEGOTIATION
0
8. Amend section 215.371-4 by adding paragraph (a)(6) to read as
follows:
215.371-4 Exceptions.
(a) * * *
(6) Acquisitions under a commercial solutions opening pursuant to
subpart 212.7X.
* * * * *
0
9. Add subpart 215.6, consisting of sections 215.602 and 215.604, to
read as follows:
SUBPART 215.6--UNSOLICITED PROPOSALS
215.602 Policy.
The policy at FAR 15.602 applies to commercial solutions openings.
[[Page 6608]]
215.604 Agency points of contact.
(a)(3) The guidance at FAR 15.604(a)(3) applies to commercial
solutions openings.
PART 235--RESEARCH AND DEVELOPMENT CONTRACTING
0
10. Amend section 235.006-71 by revising paragraph (a) to read as
follows:
235.006-71 Competition.
(a)(1) Use of a broad agency announcement with peer or scientific
review for the award of science and technology proposals in accordance
with 235.016(a) fulfills the requirement for full and open competition
(see 206.102(d)(2)).
(2) Use of a commercial solutions opening with scientific,
technological, or other subject-matter expert peer review for the award
of innovative solutions or potential capabilities in accordance with
subpart 212.7X fulfills the requirement for full and open competition
(see 206.102(d)(4)).
* * * * *
[FR Doc. 2023-01296 Filed 1-30-23; 8:45 am]
BILLING CODE 5001-06-P
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