Rule2024-11515
Defense Federal Acquisition Regulation Supplement: Data Requirements for Commercial Products for Major Weapon Systems (DFARS Case 2023-D010)
Primary source
Metadata and text below are from the Federal Register, a public-domain U.S. government work. Always verify the official published version before relying on it for any legal matter.
Published
May 30, 2024
Effective
May 30, 2024
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 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
<html>
<head>
<title>Federal Register, Volume 89 Issue 105 (Thursday, May 30, 2024)</title>
</head>
<body><pre>
[Federal Register Volume 89, Number 105 (Thursday, May 30, 2024)]
[Rules and Regulations]
[Pages 46805-46811]
From the Federal Register Online via the Government Publishing Office [<a href="http://www.gpo.gov">www.gpo.gov</a>]
[FR Doc No: 2024-11515]
=======================================================================
-----------------------------------------------------------------------
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: Final rule.
-----------------------------------------------------------------------
SUMMARY: DoD is issuing a final rule amending 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: Effective May 30, 2024.
FOR FURTHER INFORMATION CONTACT: Ms. Jeanette Snyder, telephone 703-
508-7524.
SUPPLEMENTARY INFORMATION:
I. Background
DoD published a proposed rule in the Federal Register at 88 FR
88554 on December 22, 2023, 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 provide
additional guidance regarding data requirements to support a
determination of commerciality and price reasonableness for certain
procurements associated with major weapon systems. Two 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
There are no significant changes from the proposed rule.
B. Analysis of Public Comments
1. Negative Impacts of the Rule
Comment: One respondent indicated that the requirement to provide
expanded data in support of commercial products added by section 803
presents a significant burden and risk to contractors. Many defense
industrial base suppliers are commercial companies that also offer
their products and services to DoD. For these suppliers, the statutory
obligation to comply with the expanded data requirements will force
commercial businesses to implement a compliance infrastructure to
segregate and archive business data. The additional cost associated
with this cannot be offset by raising product prices in a competitive
commercial marketplace and is of no value to commercial buyers. As
such, many of these suppliers may simply forgo the opportunity to enter
into contracts with DoD. In addition, the requirements for disclosure
increase the risk that highly sensitive commercial sales data will be
disclosed to competitors, which creates a significant business risk for
small and medium-sized suppliers.
Response: This rule implements the additional guidance provided in
section 803 of the NDAA for FY 2023 regarding data requirements to
support a determination of commerciality and a determination of price
reasonableness for certain procurements associated with major weapon
systems. For the commerciality determination, section 803, as
implemented in this rule, allows contractors to, for example, identify
the comparable commercial product it sells or that is sold in the
commercial market and provide the contracting officer a comparison
between the physical characteristics and functionality of such a
product and the subsystem, component, or spare part, if available. For
the price reasonableness determination, section 803, as implemented in
this rule, allows the offeror to provide or give the contracting
officer access to a representative sample of prices paid for the same
or similar commercial products under comparable terms and conditions
and, if not feasible, to provide the prices paid for the same or
similar commercial products sold under different terms and conditions.
In addition, offerors may redact customer information, which alleviates
any business risk. This information should be readily available to
commercial companies via their sales records, so companies should not
need to establish a compliance infrastructure to segregate and archive
business data. Therefore, this rule does not impose additional
administrative costs or recordkeeping burdens on commercial companies
that would cause them to no longer be willing to do business with DoD.
Comment: One respondent indicated that the significant compliance
burden and business risk levied by section 803 will give commercial
companies a choice of: (1) establishing and maintaining separate
production lines for commercial and defense products; or (2) exiting
the defense industrial base. Isolating defense production from
commercial production requires substantial upfront investment in
facilities and workforce and drives significant inefficiency in
production. Given recent instability in DoD's budget processes and
timing, expanding capacity in this way may be unfeasible for many
companies in today's defense industrial base. The cause and effect of
the changes made by section 803 will likely not only result in
protracted acquisition cycle times but also adversely affect the cost
of products sold to DoD and industry's ability to deliver timely
requirements in support of the warfighters. In addition, it is likely
to increase sole-source suppliers and compound DoD's current challenges
in accessing the most innovative technologies, products, and services,
which is not in the interest of the taxpayer, the warfighter, or the
industrial base.
Response: Section 803 of the NDAA for FY 2023 provides additional
guidance regarding data requirements to support a determination of
commerciality and a determination of price reasonableness for certain
[[Page 46806]]
procurements associated with major weapon systems. The additional
guidance provides clarity to offerors and contracting officers
regarding what is required for such determinations to simplify and
expedite procurements. This information should be readily available to
commercial companies via their product information and sales records,
so commercial companies should not need to establish separate
production lines or exit the DoD market. This rule should not result in
an increase in sole-source suppliers, nor should it affect DoD's
ability to access innovative technologies, products, and services.
Comment: One respondent indicated that section 803 struck sections
of law (10 U.S.C. 3455(d)(1)(B)(i-iv)) that provide for an incremental
approach to seeking data to determine reasonableness of price for
commercial products. In determining price reasonableness, this long-
standing framework required contracting officers to start with the
least expensive and most reliable, relevant data (e.g., price data) and
move down the spectrum to data that is most expensive and time-
consuming to collect and analyze (e.g., cost data). This incremental
approach was intended to keep acquisitions efficient, prices low, and
decisions unbiased. In striking this incremental approach, section 803
sets conditions for contracting officers to start the process with an
immediate demand for cost data, likely leading to increased acquisition
cycle times, as well as increased tensions during contract
negotiations, not only between DoD and the contractor but also between
the contractor and their suppliers.
Response: Section 803, as implemented in this rule at DFARS
234.7002(e)(1) and (2), continues to require contracting officers to
first request price data. DFARS 234.7002(e)(3) directs contracting
officers to only request additional information from the offeror if the
price data is insufficient to determine price reasonableness and
approval to do so has been obtained. As such, this rule maintains the
long-standing framework for contracting officers to first request price
data from offerors and, therefore, should not affect acquisition cycle
time or contract negotiations.
Comment: One respondent indicated that implementation of section
803 will likely compound DoD's current challenges in leveraging multi-
use technologies, stimulating expansion of domestic production and
investment in advanced manufacturing technologies, and potentially
accelerate growing fragility of suppliers, particularly small
businesses. As noted in the National Defense Industrial Strategy, DoD-
unique requirements make DoD an unattractive customer, particularly for
small businesses and nontraditional defense contractors, thus impeding
competition and increasing the likelihood of sole-source situations.
The respondent indicated that the compliance cost and the risk of
exposure of business-sensitive data jeopardizes the ability of small
businesses, in particular, to remain viable in the commercial
marketplace. This may leave them no choice but to exit the defense
market, which will increase the fragility of the defense industrial
base. The loss of these suppliers will also lead to time-consuming and
expensive processes to requalify new vendors if they can be found.
Aerospace prime contractors would be uniquely impacted by such
departures, as many suppliers are subject to specific airworthiness
standards and Federal Aviation Administration qualifications. As such,
the increased burden, compliance cost and risk of exposure imposed by
the implementation of section 803 may result in the need to identify
and qualify new suppliers, which may increase costs on current
programs, drive delays in the delivery of critical capability to the
warfighter, and impede DoD's efforts to meet increased contracting
small business goals.
Response: Section 803 of the NDAA for FY 2023 provides additional
guidance that clarifies to offerors and contracting officers as to what
is required to be submitted to simplify and expedite procurements. This
information should be readily available to small businesses via their
sales data; therefore, it should not impose an additional burden to the
extent that businesses would exit the defense market or that prime
contractors would need to locate new qualified subcontractors. In
addition, any business risk is alleviated, as the rule also allows
offerors to redact sensitive customer information. This rule should not
affect DoD's ability to leverage multi-use technologies, stimulate the
expansion of domestic production and investment in advanced
manufacturing technologies, or meet its small business goals.
Comment: One respondent indicated that 10 U.S.C. 3455, unlike the
Truth in Negotiations Act (10 U.S.C. chapter 271), does not provide a
waiver and the only exception for data submission is for commercially
available off-the-shelf (COTS) items. Accordingly, some suppliers may
only be willing to provide COTS-based solutions to remain clear of the
requirements imposed by section 803. This will result in the loss of
benefit of modern manufacturing capability to perform in-line
modifications of commercial aircraft to meet DoD needs. Instead of a
commercial derivative military aircraft being assembled on a commercial
production line, the alternative is a complete COTS aircraft being
disassembled, modified, and reassembled. This will result in a
significant increase in cost to DoD and a significant delay in delivery
of capability to the warfighter.
Response: FAR 15.403-1(b)(1) and (2) provide exceptions to the
requirement to provide data to support a determination of price
reasonableness as specified in this rule at DFARS 234.7002(e)(1).
Section 803 allows the offeror to provide, or give the contracting
officer access to, a representative sample of prices paid for the same
or similar commercial products under comparable terms and conditions
and, if not feasible, to provide, or give the contracting officer
access to, the prices paid for the same or similar commercial products
sold under different terms and conditions. Since this rule allows
offerors to give contracting officers access to this information, it
should actually reduce any contractor burden. This information should
be readily available to offerors via their sales records; therefore, it
should not impose an additional burden to the extent that contractors
would be willing to only provide COTS items to DoD. Since this rule
clarifies the data offerors are to provide to the contracting officer
to determine price reasonableness, the rule may expedite contract
negotiations, decrease acquisition cycle time, and expedite delivery of
capability to the warfighter.
2. Clarifications
Comment: One respondent indicated the proposed rule DFARS text
referencing ``subsystems of major weapon systems and components and
spare parts of major weapon systems and subsystems'' is awkward and
confusing. It appears that the language is referring to ``subsystems of
major weapon systems'' and ``components and spare parts of major weapon
systems and of subsystems of major weapon systems.''
Response: The text at DFARS 212.102(a)(iii)(A), 212.209(a)(1), and
215.403-1(c)(3)(A) has been amended to incorporate the recommended
change.
Comment: One respondent indicated that the proposed rule text at
DFARS 234.7002(d)(4)(ii) makes no sense. If the offeror does not sell a
comparable commercial product, then how can the
[[Page 46807]]
offeror provide a comparison of the comparable commercial product. The
comparison should be between the product being offered and the most
comparable commercial product in the commercial marketplace.
Response: The text at DFARS 234.7002(d)(4)(ii) has been amended to
require the offeror to provide the contracting officer a comparison
between the physical characteristics and functionality of the most
comparable commercial product in the commercial market and the
subsystem, component, or spare part, if available.
Comment: One respondent indicated the proposed rule text at DFARS
234.7002(e)(3) is incomplete. The ``if/then'' statement is missing the
``then'' portion. The respondent asked why the DAR Council had removed
the rest of the language in paragraph (3), which states ``. . . the
contracting officer shall request the offeror to submit other relevant
information, including uncertified cost data. However, no uncertified
cost data may be required in any case in which there are sufficient
non-Government sales of the same item to establish reasonableness of
price.''
Response: The text at DFARS 234.7002(e)(3)(i) and (ii) has been
moved to 234.7002(e)(3) to include the ``if/then'' statement in one
paragraph for clarity. Regarding the deletion of the language in
paragraph (e)(3), the proposed rule text at DFARS 234.7002(e)(1)
clarifies the data to be submitted by offerors and, as such, replaces
the existing text at DFARS 234.7002(e)(3) that was removed in the
proposed rule.
C. Other Changes
The text at DFARS 234.7002(d)(4) is amended to add the following to
the end of the phrase for clarity: ``then the offeror is required to''.
Paragraph (b)(1)(ii) of the basic and alternate I of the provision at
DFARS 252.215-7010 is amended to clarify that the information to be
provided by the offeror pursuant to this paragraph is also for purposes
of determining commerciality. Paragraph (d)(3) of the basic and
alternate I of the provision at DFARS 252.215-7010 is also amended to
add a cross reference to DFARS 234.7002(e) for clarity. In addition,
minor editorial changes are made in the basic and alternate I of the
provision.
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 final 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 not apply to acquisitions at or below
the SAT and will continue to apply 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 final rule to have a significant impact on
the Government or 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 of a subsystem of a major weapon system is
proposed as a commercial product. Specifically, this rule clarifies the
data an offeror is required to provide to support the contracting
officer's determination of price reasonableness and commerciality. This
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 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 a 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. 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.
VII. 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:
This rule is necessary to implement section 803 of the James M.
Inhofe National Defense Authorization Act (NDAA) for Fiscal Year (FY)
2023. The objective of this rule is to implement section 803, which
modifies 10 U.S.C. 3455 to clarify the data an offeror is required to
provide to the contracting officer to support a commerciality
determination and a price reasonableness determination when a subsystem
of a major weapon system or a component or spare part of a major weapon
system or of a subsystem of a major weapon system is proposed as a
commercial product.
No significant issues were raised by the public comments in
response to the initial regulatory flexibility analysis.
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 rule is expected
to apply to approximately 2,685 small entities per fiscal year.
This 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
requirements under Office of Management and Budget (OMB) Control Number
0704-0574, Defense Federal Acquisition Regulation Supplement (DFARS)
Part 215; Only One Offer and Related Clauses in DFARS 252.
[[Page 46808]]
There are no known alternatives that would accomplish the stated
objectives of the applicable statute.
VIII. Paperwork Reduction Act
The Paperwork Reduction Act (44 U.S.C. chapter 35) applies to this
final rule. However, these changes to the DFARS do not impose
additional information collection requirements to the paperwork burden
previously approved by OMB under OMB Control Number 0704-0574, Defense
Federal Acquisition Regulation Supplement (DFARS) Part 215; Only One
Offer and Related Clauses in DFARS 252.
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, 235, and 252 are 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 of
subsystems of major weapon systems;
* * * * *
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 of subsystems of major weapon systems 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 of subsystems of major
weapon systems.
* * * * *
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 by--
0
a. Revising paragraph (b)(2);
0
b. Adding paragraph (b)(3);
0
c. Revising paragraphs (c)(1)(ii), (c)(2) and (d); and
0
e. Adding a paragraph (e); and
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
provision at 252.215-7010, Requirements for Certified Cost or Pricing
Data and Data Other Than Certified Cost or Pricing Data, requires 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
[[Page 46809]]
purposes, then the offeror is required to--
(i) Notify the contracting officer in writing that it does not sell
such a comparable product; and
(ii) Provide the contracting officer a comparison between the
physical characteristics and functionality of the most comparable
commercial product in the commercial market 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 to or provide 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; or
(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 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 provided by the offeror is not a valid
basis for price analysis or 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, and 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.
(4) An offeror shall not be required to submit information
described in paragraph (e)(1) of this section with regard to a
commercially available off-the-shelf item. An offeror may be required
to submit such information with regard to any other item that was
developed exclusively at private expense only after the head of the
contracting activity determines in writing that the information
submitted pursuant to paragraph (e)(1) of this section is not
sufficient to determine the reasonableness of price.
(5) An offeror may submit information or analysis relating to the
value of a commercial product to aid in the determination of the
reasonableness of the price of such commercial product. A contracting
officer may consider such information or analysis in addition to the
information submitted pursuant to paragraph (e)(1) of this section. For
additional guidance see PGI 234.7002(e)(5).
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 ``MAY 2024''
in its place;
0
b. In paragraph (a) by revising the definition of ``Sufficient non-
Government sales'';
0
c. By revising and republishing paragraphs (b) and (d);
0
d. In Alternate I--
0
i. By revising the provision title and date;
0
ii. In paragraph (a) by revising the definition of ``Sufficient non-
Government sales''; and
0
iii. By revising and republishing paragraphs (b) and (d).
The additions, revisions and republications read as follows:
252.215-7010 Requirements for Certified Cost or Pricing Data and Data
Other Than Certified Cost or Pricing Data.
* * * * *
(a) * * *
Sufficient non-Government sales means relevant sales data that
reflects market pricing and contains enough information to make
adjustments covered by Federal Acquisition Regulation (FAR) 15.404-
1(b)(2)(ii)(B).
* * * * *
(b) Exceptions from certified cost or pricing data. (1) In lieu of
submitting certified cost or pricing data, the Offeror may submit a
written request for exception by submitting the information described
in paragraphs (b)(1)(i) and (ii) of this provision. The Contracting
Officer may require additional supporting information, but only to the
extent necessary to determine whether an exception should be granted
and whether the price is fair and reasonable.
(i) Exception for prices set by law or regulation--Identification
of the law or regulation establishing the prices offered. If the prices
are controlled under law by periodic rulings, reviews, or similar
actions of a governmental body, attach a copy of the controlling
document, unless it was previously submitted to the contracting office.
(ii) Commercial product or commercial service exception. For a
commercial product or commercial service exception, the Offeror shall
submit, at a minimum, information that is adequate for determining
commerciality and evaluating the reasonableness of the price for this
acquisition, including prices at which the same product or service or
similar products or services have been sold in the commercial market.
Such information shall include--
(A) For products or services previously determined to be
commercial, the contract number and military department, defense
agency, or other DoD component that rendered such determination, and if
available, a Government point of contact;
(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''
[[Page 46810]]
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.
(C) For items priced based on a catalog--
(1) A copy of or identification of the Offeror's current catalog
showing the price for that item; and
(2) If the catalog pricing provided with this proposal is not
consistent with all relevant sales data, a detailed description of
differences or inconsistencies between or among the relevant sales
data, the proposed price, and the catalog price (including any related
discounts, refunds, rebates, offsets, or other adjustments);
(D) For items priced based on market pricing, a description of the
nature of the commercial market, the methodology used to establish a
market price, and all relevant sales data. The description shall be
adequate to permit the DoD to verify the accuracy of the description;
(E) For items included on an active Federal Supply Service Multiple
Award Schedule contract, proof that an exception has been granted for
the schedule item; or
(F) For items provided by nontraditional defense contractors, a
statement that the entity is not currently performing and has not
performed, for at least the 1-year period preceding the solicitation of
sources by DoD for the procurement or transaction, any contract or
subcontract for DoD that is subject to full coverage under the cost
accounting standards prescribed pursuant to 41 U.S.C. 1502 and the
regulations implementing such section.
* * * * *
(d) Requirements for data other than certified cost or pricing
data. (1) Data other than certified cost or pricing data submitted in
accordance with this provision shall include the minimum information
necessary to permit a determination that the proposed price is fair and
reasonable, to include the requirements in Defense Federal Acquisition
Regulation Supplement (DFARS) 215.402(a)(i), 215.404-1(b), and
234.7002(e).
(2) In cases in which uncertified cost data is required, the
information shall be provided in the form in which it is regularly
maintained by the Offeror or prospective subcontractor in its business
operations.
(3) If the Offeror redacts data that identifies the customer (see
DFARS 234.7002(e)(2)), 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].''
(4) Within 10 days of a written request from the Contracting
Officer for additional information to permit an adequate evaluation of
the proposed price in accordance with FAR 15.403-3 or DFARS
234.7002(e), the Offeror shall provide either the requested
information, or a written explanation for the inability to fully
comply.
(5) Subcontract price evaluation. (i) Offerors shall obtain from
subcontractors the minimum information necessary to support a
determination of price reasonableness, as described in FAR part 15 and
DFARS part 215.
(ii) No cost data may be required from a prospective subcontractor
in any case in which there are sufficient non-Government sales of the
same item to establish reasonableness of price.
(iii) If the Offeror relies on relevant sales data for similar
items to determine the price is reasonable, the Offeror shall obtain
only that technical information necessary--
(A) To support the conclusion that items are technically similar;
and
(B) To explain any technical differences that account for variances
between the proposed prices and the sales data presented.
* * * * *
Alternate I. * * *
Requirements for Certified Cost or Pricing Data and Data Other Than
Certified Cost or Pricing Data--Alternate I (MAY 2024)
(a) * * *
Sufficient non-Government sales means relevant sales data that
reflects market pricing and contains enough information to make
adjustments covered by Federal Acquisition Regulation (FAR) 15.404-
1(b)(2)(ii)(B).
* * * * *
(b) Exceptions from certified cost or pricing data. (1) In lieu of
submitting certified cost or pricing data, the Offeror may submit a
written request for exception by submitting the information described
in paragraphs (b)(1)(i) and (ii) of this provision. The Contracting
Officer may require additional supporting information, but only to the
extent necessary to determine whether an exception should be granted
and whether the price is fair and reasonable.
(i) Exception for price set by law or regulation--Identification of
the law or regulation establishing the price offered. If the price is
controlled under law by periodic rulings, reviews, or similar actions
of a governmental body, attach a copy of the controlling document,
unless it was previously submitted to the contracting office.
(ii) Commercial product or commercial service exception. For a
commercial product or commercial service exception, the Offeror shall
submit, at a minimum, information that is adequate for determining
commerciality and evaluating the reasonableness of the price for this
acquisition, including prices at which the same product or service or
similar products or services have been sold in the commercial market.
Such information shall include--
(A) For products or services previously determined to be
commercial, the contract number and military department, defense
agency, or other DoD component that rendered such determination, and if
available, a Government point of contact;
(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--
[[Page 46811]]
(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.
(C) For items priced based on a catalog--
(1) A copy of or identification of the Offeror's current catalog
showing the price for that item; and
(2) If the catalog pricing provided with this proposal is not
consistent with all relevant sales data, a detailed description of
differences or inconsistencies between or among the relevant sales
data, the proposed price, and the catalog price (including any related
discounts, refunds, rebates, offsets, or other adjustments);
(D) For items priced based on market pricing, a description of the
nature of the commercial market, the methodology used to establish a
market price, and all relevant sales data. The description shall be
adequate to permit the DoD to verify the accuracy of the description;
(E) For items included on an active Federal Supply Service Multiple
Award Schedule contract, proof that an exception has been granted for
the schedule item; or
(F) For items provided by nontraditional defense contractors, a
statement that the entity is not currently performing and has not
performed, for at least the 1-year period preceding the solicitation of
sources by the DoD for the procurement or transaction, any contract or
subcontract for the DoD that is subject to full coverage under the cost
accounting standards prescribed pursuant to 41 U.S.C. 1502 and the
regulations implementing such section.
(2) The Offeror grants the Contracting Officer or an authorized
representative the right to examine, at any time before award, books,
records, documents, or other directly pertinent records to verify any
request for an exception under this provision, and to determine the
reasonableness of price.
* * * * *
(d) Requirements for data other than certified cost or pricing
data. (1) Data other than certified cost or pricing data submitted in
accordance with this provision shall include all data necessary to
permit a determination that the proposed price is fair and reasonable,
to include the requirements in Defense Federal Acquisition Regulation
Supplement (DFARS) 215.402(a)(i), 215.404-1(b), and 237.7002(e).
(2) In cases in which uncertified cost data is required, the
information shall be provided in the form in which it is regularly
maintained by the Offeror or prospective subcontractor in its business
operations.
(3) If the Offeror redacts data that identifies the customer (see
DFARS 234.7002(e)(2)), 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].''
(4) The Offeror shall provide information described as follows:
[Insert description of the data and the format that are required,
including access to records necessary to permit an adequate evaluation
of the proposed price in accordance with FAR 15.403-3 or DFARS
234.7002(e).]
(5) Within 10 days of a written request from the Contracting
Officer for additional information to support proposal analysis, the
Offeror shall provide either the requested information, or a written
explanation for the inability to fully comply.
(6) Subcontract price evaluation. (i) Offerors shall obtain from
subcontractors the information necessary to support a determination of
price reasonableness, as described in FAR part 15 and DFARS part 215.
(ii) No cost information may be required from a prospective
subcontractor in any case in which there are sufficient non-Government
sales of the same item to establish reasonableness of price.
(iii) If the Offeror relies on relevant sales data for similar
items to determine the price is reasonable, the Offeror shall obtain
only that technical information necessary--
(A) To support the conclusion that items are technically similar;
and
(B) To explain any technical differences that account for variances
between the proposed prices and the sales data presented.
* * * * *
[FR Doc. 2024-11515 Filed 5-29-24; 8:45 am]
BILLING CODE 6001-FR-P
</pre></body>
</html>Indexed from Federal Register on May 30, 2024.
This is legal information, not legal advice. Laws vary by jurisdiction and change frequently. Always verify current law with official sources and consult a licensed attorney in your jurisdiction for advice on your specific situation.