Proposed Rule2023-27941
Defense Federal Acquisition Regulation Supplement: Data Requirements for Commercial Products for Major Weapon Systems (DFARS Case 2023-D010)
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Published
December 22, 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 James M. Inhofe National Defense Authorization Act for Fiscal Year 2023 that clarifies the data to be provided for certain procurements related to major weapon systems.
Full Text
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<title>Federal Register, Volume 88 Issue 245 (Friday, December 22, 2023)</title>
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[Federal Register Volume 88, Number 245 (Friday, December 22, 2023)]
[Proposed Rules]
[Pages 88554-88558]
From the Federal Register Online via the Government Publishing Office [<a href="http://www.gpo.gov">www.gpo.gov</a>]
[FR Doc No: 2023-27941]
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DEPARTMENT OF DEFENSE
Defense Acquisition Regulations System
48 CFR Parts 212, 215, 234, and 252
[Docket DARS-2023-0047]
RIN 0750-AL83
Defense Federal Acquisition Regulation Supplement: Data
Requirements for Commercial Products for Major Weapon Systems (DFARS
Case 2023-D010)
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 James M.
Inhofe National Defense Authorization Act for Fiscal Year 2023 that
clarifies the data to be provided for certain procurements related to
major weapon systems.
DATES: Comments on the proposed rule should be submitted in writing to
the address shown below on or before February 20, 2024, to be
considered in the formation of a final rule.
ADDRESSES: Submit comments identified by DFARS Case 2023-D010, 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 2023-D010. Select ``Comment'' and follow the
instructions to submit a comment. Please include ``DFARS Case 2023-
D010'' on any attached documents.
[cir] Email: <a href="/cdn-cgi/l/email-protection#c5aab6a1eba1a3a4b7b685a8a4aca9eba8aca9"><span class="__cf_email__" data-cfemail="5b34283f753f3d3a29281b363a323775363237">[email protected]</span></a>. Include DFARS Case 2023-D010 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 James M. Inhofe National Defense Authorization Act (NDAA) for
Fiscal Year (FY) 2023 (Pub. L. 117-263). Section 803 modifies 10 U.S.C.
3455 to
[[Page 88555]]
provide additional guidance regarding data requirements to support a
determination of commerciality and price reasonableness for certain
procurements associated with major weapon systems.
II. Discussion and Analysis
This rule proposes to modify DFARS 234.7002 to implement section
803 of the James M. Inhofe NDAA for FY 2023. Section 803 clarifies the
data an offeror is required to provide when a subsystem of major weapon
system or a component or spare part for a major weapon system or
subsystem is proposed as a commercial product. This proposed rule also
clarifies the data to be provided to the contracting officer to
determine price reasonableness for such actions. This proposed rule
affords the offeror the flexibility to either submit the data or
provide the contracting officer access to the data and to redact
certain customer information.
This proposed rule modifies the solicitation provision at DFARS
252.215-7010, Requirements for Certified Cost or Pricing Data and Data
Other Than Certified Cost or Pricing Data, to align with the revisions
made to DFARS 234.7002. This proposed rule also makes conforming
changes to DFARS parts 212 and 215 to add cross-references to DFARS
234.7002.
III. Applicability to Contracts at or Below the Simplified Acquisition
Threshold (SAT), for Commercial Products (Including Commercially
Available Off-the-Shelf (COTS) Items), and for Commercial Services
This proposed rule amends the provision at DFARS 252.215-7010,
Requirements for Certified Cost or Pricing Data and Data Other Than
Certified Cost or Pricing Data. However, this proposed rule does not
impose any new requirements on contracts at or below the SAT, for
commercial products including COTS items, or for commercial services.
The provision will continue to apply to acquisitions at or below the
SAT, to acquisitions of commercial products, excluding COTS items, and
to acquisitions of commercial services.
IV. Expected Impact of the Rule
DoD does not expect this proposed rule, when finalized, to have a
significant impact on offerors because it merely clarifies the data an
offeror is required to provide to the contracting officer when a
subsystem of a major weapon system or a component or spare part of a
major weapon system or subsystem is proposed as a commercial product.
Specifically, this proposed rule clarifies the data an offeror is
required to provide to support the contracting officer's determination
of price reasonableness and commerciality. This proposed rule will also
allow an offeror to give the contracting officer access to the data, in
lieu of submitting it, and to redact certain customer information from
such data.
This proposed rule is expected to result in the timely submission
of data, which may decrease the time it takes for a contracting officer
to determine a product to be commercial, to determine price
reasonableness, and to award the contract.
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 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, as amended.
VI. Regulatory Flexibility Act
DoD does not expect this proposed rule, when finalized, 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 this rule merely clarifies the data to be provided for
certain procurements related to major weapon systems. 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
James M. Inhofe National Defense Authorization Act (NDAA) for Fiscal
Year (FY) 2023. Section 803 clarifies the data an offeror is required
to provide when a subsystem of a major weapon system or a component or
spare part for a major weapon system or subsystem is proposed as a
commercial product. Section 803 also clarifies the data to be provided
to the contracting officer to determine price reasonableness for such
actions. In addition, section 803 affords the offeror the flexibility
to either submit the data or provide the contracting officer access to
the data and to redact certain customer information.
The objective of this proposed rule is to implement section 803 of
the James M. Inhofe NDAA for FY 2023, which modifies 10 U.S.C. 3455.
The legal basis of the rule is section 803 of the James M. Inhofe NDAA
for FY 2023.
Based on data from the Federal Procurement Data System for fiscal
years 2021 through 2023, DoD awarded an average of approximately 50,260
commercial contracts related to major weapon systems to an average of
2,685 unique small entities per year. Therefore, this proposed rule is
expected to apply to approximately 2,685 small entities per fiscal
year.
This proposed rule does not impose any new reporting,
recordkeeping, or other compliance requirements for small entities. The
information being collected falls under the currently approved
information collection recordkeeping requirements under OMB control
number 0704-0574, Defense Federal Acquisition Regulation Supplement
(DFARS) Part 215; Only One Offer and Related Clauses in DFARS 252.
This 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 proposed rule on
small entities.
DoD will also consider comments from small entities concerning the
existing regulations in subparts affected by this proposed 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 2023-
D010), in correspondence.
VII. Paperwork Reduction Act
The Paperwork Reduction Act (44 U.S.C. chapter 35) applies to this
proposed rule. However, these changes to the DFARS do not impose
additional information collection requirements to the paperwork burden
previously approved by the Office of Management and Budget (OMB) under
OMB Control Number 0704-0574, entitled Defense Federal Acquisition
Regulation Supplement (DFARS) Part 215; Only One Offer and Related
Clauses in DFARS 252.
[[Page 88556]]
List of Subjects in 48 CFR Parts 212, 215, 234, and 252
Government procurement.
Jennifer D. Johnson,
Editor/Publisher, Defense Acquisition Regulations System.
Therefore, 48 CFR parts 212, 215, 234, and 252 are proposed to be
amended as follows:
0
1. The authority citation for parts 212, 215, 234, and 252 continues to
read as follows:
Authority: 41 U.S.C. 1303 and 48 CFR chapter 1.
PART 212--ACQUISITION OF COMMERCIAL PRODUCTS AND COMMERCIAL
SERVICES
0
2. Amend section 212.102 by revising paragraph (a)(iii)(A) to read as
follows:
212.102 Applicability.
(a) * * *
(iii) * * *
(A) Determine in writing that the acquisition meets the
``commercial product'' or ``commercial service'' definition in FAR
2.101. See 234.7002(b) and (c) for subsystems of major weapon systems
and components and spare parts of major weapon systems and subsystems;
* * * * *
0
3. Amend section 212.209 by revising paragraph (a)(1) to read as
follows:
212.209 Determination of price reasonableness.
(a) * * *
(1) In the case of major weapon systems, for subsystems of major
weapon systems and components and spare parts of major weapon systems
and subsystems acquired as commercial products in accordance with
subpart 234.70, shall use information submitted under 234.7002(e); and
* * * * *
PART 215--CONTRACTING BY NEGOTIATION
0
4. Amend section 215.403-1 by revising paragraph (c)(3)(A) to read as
follows:
215.403-1 Prohibition on obtaining certified cost or pricing data (10
U.S.C. chapter 271 and 41 U.S.C. chapter 35).
* * * * *
(c) * * *
(3) * * *
(A) Follow the procedures at PGI 215.403-1(c)(3) for pricing
commercial products or commercial services, except see 234.7002(e) for
pricing commercial subsystems of major weapon systems and components
and spare parts of major weapon systems and subsystems.
* * * * *
215.403-3 [Amended]
0
5. Amend section 215.403-3 in paragraph (c) by removing ``234.7002(d)''
and adding ``234.7002(e)'' in its place.
PART 234--MAJOR SYSTEM ACQUISITION
0
6. Amend section 234.7002--
0
a. By revising paragraph (b)(2);
0
b. By adding paragraph (b)(3);
0
c. By revising paragraphs (c)(1)(ii) and (c)(2);
0
d. By redesignating paragraph (d) as paragraph (e);
0
e. By adding a new paragraph (d); and
0
f. By revising newly redesignated paragraphs (e) introductory text, and
(e)(1) through (3);
0
g. In newly redesignated paragraph (e)(4), by removing ``paragraph
(d)(3)'' and ``paragraphs (d)(1) and (2)'' and adding ``paragraph
(e)(1)'' in their places; and
0
h. In newly redesignated paragraph (e)(5), by removing ``paragraphs
(d)(1) and (2)'' and ``PGI 234.7002(d)(5)'' and adding ``paragraph
(e)(1)'' and ``PGI 234.7002(e)(5)'' in their places, respectively.
The revisions and additions read as follows:
234.7002 Policy.
* * * * *
(b) * * *
(2) The contracting officer determines in writing that the
subsystem is a commercial product in accordance with 212.102(a)(iii).
For a subsystem of a major weapon system proposed as a commercial
product that has not previously been determined to be a commercial
product (see 212.102(a)(ii)), follow the procedures in paragraph (d) of
this section.
(3) This paragraph (b) shall apply only to subsystems of major
weapon systems that are acquired by DoD through a--
(i) Prime contract;
(ii) Modification to a prime contract; or
(iii) Subcontract under a prime contract for the acquisition of a
subsystem proposed as a commercial product that has not previously been
determined to be a commercial product (see 212.102(a)(ii)).
(c) * * *
(1) * * *
(ii) The contracting officer determines in writing that the
component or spare part is a commercial product in accordance with
212.102(a)(iii). For a component or spare part proposed as a commercial
product that has not previously been determined to be a commercial
product (see 212.102(a)(ii)), follow the procedures in paragraph (d) of
this section.
(2) This paragraph (c) shall apply only to components and spare
parts that are acquired by DoD through a--
(i) Prime contract;
(ii) Modification to a prime contract; or
(iii) Subcontract under a prime contract for the acquisition of a
component or spare part proposed as a commercial product that has not
previously been determined to be a commercial product (see
212.102(a)(ii)).
(d) Commerciality determination. To the extent necessary to make a
commercial product determination in accordance with 212.102(a)(iii)
that relies on paragraph (1), (2), (3), (4), or (5) of the ``commercial
product'' definition at FAR 2.101 for a subsystem, component, or spare
part as described in paragraphs (b) and (c) of this section, the
contracting officer shall require the offeror to--
(1) Identify the comparable commercial product the offeror sells to
the general public or nongovernmental entities for other than
governmental purposes;
(2) Provide a comparison between the physical characteristics and
functionality of the comparable commercial product and the subsystem,
component, or spare part, including--
(i) For products under paragraph (3)(i) of the ``commercial
product'' definition at FAR 2.101, a description of the modification
and documentation to support that the modification is customarily
available in the marketplace; or
(ii) For products under paragraph (3)(ii) of the ``commercial
product'' definition at FAR 2.101, a detailed description of the
modification and detailed technical data to demonstrate that the
modification is minor (e.g., information on production processes and
material differences); and
(3) Provide the national stock number (NSN) for the comparable
commercial product, if one is assigned, and the NSN for the subsystem,
component, or spare part, if one is assigned; or
(4) If the offeror does not sell a comparable commercial product to
the general public or nongovernmental entities for other than
governmental purposes--
(i) Notify the contracting officer in writing that it does not sell
such a comparable product; and
(ii) Provide the contracting officer a comparison of the physical
[[Page 88557]]
characteristics and functionality of the comparable commercial product
and the subsystem, component, or spare part, if available.
(e) Relevant information to determine price reasonableness. For
products relying on paragraph (3)(ii) of the commercial product
definition at FAR 2.101, see FAR 15.403-1(c)(3)(iii)(C). See 212.209(a)
for requirements of 10 U.S.C. 3453 with regard to market research.
(1) Unless an exception at FAR 15.403-1(b)(1) or (2) applies--
(i) To the extent necessary to make a determination of price
reasonableness, the contracting officer shall require the offeror to
submit or provide to the contracting officer access to a representative
sample, as determined by the contracting officer, of prices paid for
the same or similar commercial products under comparable terms and
conditions by both Government and commercial customers and the terms
and conditions of such sales.
(ii) If the contracting officer determines that the offeror cannot
provide or give access to sufficient information described in this
paragraph (e)(1) to determine the reasonableness of price, the
contracting officer shall require the offeror to submit or provide the
contracting officer access to a representative sample, as determined by
the contracting officer, of the prices paid for the same or similar
commercial products sold under different terms and conditions and the
terms and conditions of such sales.
(2) The contracting officer shall allow the offeror to redact only
information provided pursuant to paragraph (e)(1) of this section that
identifies the customer, if the offeror certifies in writing for each
sale that the customer is a--
(i) Government customer (e.g., Federal, State, local, or foreign
government);
(ii) Commercial customer purchasing the product for governmental
purposes; or
(iii) Commercial customer purchasing the product for a commercial,
mixed, or unknown purpose.
(3) If the contracting officer determines--
(i) That the information submitted pursuant to paragraph (e)(1) of
this section is not sufficient to determine the reasonableness of price
because the comparable commercial product(s) provided by the offeror
are not a valid basis for a price analysis; or
(ii) That the proposed price is not reasonable after evaluating
sales data, then the contracting officer shall obtain approval from an
official one level above the contracting officer, without power of
delegation, to require the offeror to submit other relevant information
regarding the basis for price or cost, including information on labor
costs, material costs, and overhead rates.
* * * * *
PART 252--SOLICITATION PROVISIONS AND CONTRACT CLAUSES
0
7. Amend section 252.215-7010--
0
a. By removing the provision date ``JAN 2023'' and adding ``DATE'' in
its place;
0
b. In paragraph (a) in the definition of ``Sufficient non-Government
sales'' by removing ``by FAR'' and adding ``by Federal Acquisition
Regulation (FAR)'' in its place;
0
c. By redesignating paragraphs (b)(1)(ii)(B) through (E) as
(b)(1)(ii)(C) through (F);
0
d. By adding a new paragraph (b)(1)(ii)(B);
0
e. In paragraph (d)(1) by removing ``DFARS 215.402(a)(i) and 215.404-
1(b)'' and adding ``Defense Federal Acquisition Regulation Supplement
(DFARS) 215.402(a)(i), 215.404-1(b), and 234.7002(e)'' in its place;
0
f. By redesignating paragraphs (d)(3) and (4) as (d)(4) and (5);
0
g. By adding a new paragraph (d)(3);
0
h. In newly redesignated paragraph (d)(4) by removing ``FAR 15.403-3''
and adding ``FAR 15.403-3 or DFARS 234.7002(e)'' in its place;
0
i. In Alternate I--
0
i. By revising the provision title and date;
0
ii. In paragraph (a) in the definition of ``Sufficient non-Government
sales'' by removing ``by FAR'' and adding ``by Federal Acquisition
Regulation (FAR)'';
0
iii. By redesignating paragraphs (b)(1)(ii)(B) through (E) as
(b)(1)(ii)(C) through (F);
0
iv. By adding a new paragraph (b)(1)(ii)(B);
0
v. In paragraph (d)(1) by removing ``DFARS 215.402(a)(i) and 215.404-
1(b)'' and adding ``Defense Federal Acquisition Regulation Supplement
(DFARS) 215.402(a)(i), 215.404-1(b), and 234.7002(e)'' in its place;
0
vi. By redesignating paragraphs (d)(3) and (4) as (d)(4) and (5);
0
vii. By adding a new paragraph (d)(3); and
0
viii. In newly redesignated paragraph (d)(4) by removing ``FAR 15.403-
3'' and adding ``FAR 15.403-3 or DFARS 234.7002(e)'' in its place.
The additions and revision read as follows:
252.215-7010 Requirements for Certified Cost or Pricing Data and Data
Other Than Certified Cost or Pricing Data.
* * * * *
(b) * * *
(1) * * *
(ii) * * *
(B) For subsystems of a major weapon system and components and
spare parts of a major weapon system or subsystem of a major weapon
system that have not previously been determined to be commercial--
(1) The comparable commercial product the Offeror sells to the
general public or nongovernmental entities;
(2) A comparison between the physical characteristics and
functionality of the comparable commercial product and the subsystem,
component, or spare part, including--
(i) For products under paragraph 3(i) of the ``commercial product''
definition at FAR 2.101, a description of the modification and
documentation to support that the modification is customarily available
in the marketplace; or
(ii) For products under paragraph (3)(ii) of the ``commercial
product'' definition at FAR 2.101, a detailed description of the
modification and detailed technical data to demonstrate that the
modification is minor (e.g., information on production processes and
material differences); and
(3) The national stock number (NSN) for the comparable commercial
product, if one is assigned, and the NSN for the subsystem, component,
or spare part, if one is assigned; or
(4) If the Offeror does not sell a comparable commercial product to
the general public or nongovernmental entities for purposes other than
government purposes, the Offeror shall--
(i) Notify the Contracting Officer in writing that it does not sell
such a comparable product; and
(ii) Provide the Contracting Officer with a comparison of the
physical characteristics and functionality of the most comparable
commercial product in the commercial market.
* * * * *
(d) * * *
(3) If the Offeror redacts data that identifies the customer, then
the Offeror shall include, for each sale, the following signed
statement with the data submitted:
``By submission of this data, the Offeror [Offeror insert
company name] certifies that the customer was [Offeror insert one or
more of the following as applicable: a government customer; a
commercial customer purchasing the same or similar product for
governmental purposes (e.g., Federal, state, local, or foreign
government); or a commercial customer purchasing the same or similar
product for a commercial, mixed, or unknown purpose].''
* * * * *
[[Page 88558]]
Alternate I. * * *
Requirements for Certified Cost or Pricing Data and Data Other Than
Certified Cost or Pricing Data--Alternate I (Date)
* * * * *
(b) * * *
(1) * * *
(ii) * * *
(B) For subsystems of a major weapon system and components and
spare parts of a major weapon system or subsystem of a major weapon
system that have not previously been determined to be commercial--
(1) The comparable commercial product the Offeror sells to the
general public or nongovernmental entities;
(2) A comparison between the physical characteristics and
functionality of the comparable commercial product and the subsystem,
component, or spare part, including--
(i) For products under paragraph 3(i) of the ``commercial product''
definition at FAR 2.101, a description of the modification and
documentation to support that the modification is customarily available
in the marketplace; or
(ii) For products under paragraph (3)(ii) of the ``commercial
product'' definition at FAR 2.101, a detailed description of the
modification and detailed technical data to demonstrate that the
modification is minor (e.g., information on production processes and
material differences); and
(3) The national stock number (NSN) for the comparable commercial
product, if one is assigned, and the NSN for the subsystem, component,
or spare part; or
(4) If the Offeror does not sell a comparable commercial product to
the general public or nongovernmental entities for purposes other than
government purposes, the Offeror shall--
(i) Notify the Contracting Officer in writing that it does not sell
such a comparable product; and
(ii) Provide the Contracting Officer with a comparison of the
physical characteristics and functionality of the most comparable
commercial product in the commercial market.
* * * * *
(d) * * *
(3) If the Offeror redacts data that identifies the customer, then
the Offeror shall include, for each sale, the following signed
statement with the data submitted:
``By submission of this data, the Offeror [Offeror insert
company name] certifies that the customer was [Offeror insert one or
more of the following as applicable: a government customer (e.g.,
Federal, state, local, or foreign government); a commercial customer
purchasing the same or similar product for governmental purposes; or
a commercial customer purchasing the same or similar product for a
commercial, mixed, or unknown purpose].''
* * * * *
[FR Doc. 2023-27941 Filed 12-21-23; 8:45 am]
BILLING CODE 6001-FR-P
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