[Federal Register Volume 75, Number 226 (Wednesday, November 24, 2010)]
[Rules and Regulations]
[Pages 71560-71562]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2010-29496]
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DEPARTMENT OF DEFENSE
Defense Acquisition Regulations System
48 CFR Parts 215, 234, 242, and 252
RIN 0750-AG46
Defense Federal Acquisition Regulation Supplement; Cost and
Software Data Reporting System (DFARS Case 2008-D027)
AGENCY: Defense Acquisition Regulations System, Department of Defense
(DoD).
ACTION: Final rule.
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SUMMARY: DoD is issuing a final rule to amend the Defense Federal
Acquisition Regulation Supplement (DFARS) to address DoD Cost and
Software Data Reporting system requirements for Major Defense
Acquisition Programs and Major Automated Information Systems.
DATES: Effective Date: November 24, 2010.
FOR FURTHER INFORMATION CONTACT: Ms. Mary Overstreet, Telephone 703-
602-0311.
SUPPLEMENTARY INFORMATION:
I. Background
The DoD cost and software data reporting (CSDR) system establishes
requirements for proposals and contract performance for major defense
acquisition programs (as defined in 10 U.S.C. 2430) and major automated
information systems (as defined in 10 U.S.C. 2445a).
During the proposal process, offerors are required to--
Describe the process to be used to satisfy the
requirements of the CSDR Manual (DoD 5000.04-M-1) and the Government-
approved CSDR plan; and
Submit certain cost information with the pricing proposal.
During contract performance, the contractor is required to--
Use a documented CSDR process for reporting;
Use the Government-approved contract CSDR plan as the
basis for reporting; and
Require subcontractors to comply with the cost and
software data reporting requirements.
DoD published a proposed rule at 75 FR 25165 on May 7, 2010. The
public comment period closed July 6, 2010. Two respondents submitted
comments that are grouped under four comment categories. Based on
public comments, changes were made to the proposed rule. Major changes
in the final rule are as follows:
Explaining that the two principal components of the CSDR
system are the contractor cost data reporting (CCDR) and the software
resources data reporting (SRDR) (DFARS 234.7100(a)).
Clarifying the solicitation and contract clause
prescriptions (DFARS 234.7101).
Including the approval authority for applying the CSDR
requirements at lower dollar thresholds (DFARS 234.7101(b)(2)).
Removing the requirement to submit DD Form 1921-2,
Progress Curve Report, with the offeror's pricing proposal (DFARS
252.234-7003(b)(6)).
Removing the reference to DD Form 1921-3, Contractor
Business Data Report (DFARS 242.503-2(b) and 252.234-7004, Cost and
Software Data Reporting System).
Restructuring the solicitation provision to clarify
proposal submission requirements (DFARS 252.234-7003).
Providing an Alternate I to the solicitation provision and
to the clause to accommodate CSDR requirements at lower dollar
thresholds (DFARS 252.234-7003 and 252.234-7004).
II. Discussion and Analysis
The following paragraphs address the four categories of comments
and DoD responses:
1. DD 1921-2, Progress Curve Report
Comment: A respondent noted that DD Form 1921-2 Progress Curve
Report, required to be submitted by offerors, in accordance with
paragraph (a)(3) of DFARS 252.234-70XX in the proposed rule, is
designed to collect unit/lot cost data and is, therefore, not
applicable to contracts that do not procure units or lots. The
respondent recommended revising the solicitation requirements.
Response: DoD agrees that the DD 1921-2 is not required to be
submitted with the contractor's pricing proposal and has revised DFARS
provision 252.234-7003 in the final rule accordingly.
2. The DD 1921-3, Contractor Business Data Report
a. Basis for Reporting
Comment: A respondent noted that paragraph (a)(3) of DFARS 252.234-
70YY in the proposed rule directs ``the Contractor (to) use DD Form
1921-3, Contractor Business Data Report, as the basis for reporting in
accordance with the required CSDR data item descriptions (DIDs).'' DD
Form 1921-3, Contractor Business Data Report, is not a basis for
reporting, but is a report to be prepared and submitted by the
contractor in accordance with DID DI-FNCL-81765A. The respondent
suggested removing the reference to DD Form 1921-3.
Response: DoD agrees and deleted the requirement for DD Form 1921-
3, Contractor Business Data Report, from clause 252.234-7004 in the
final rule.
b. Exempt Below $50 Million
Comment: One respondent asked if a subcontractor is exempt from
reporting if it incurs less than $50 million on a program, or if the
reporting requirements apply to all levels of subcontractors regardless
of level of participation in the program.
Response: DoD revised the solicitation provision and contract
clause to clarify applicability to subcontracts.
c. Specific Guidance Is Necessary
Comment: One respondent had numerous questions concerning the
completion of DD Form 1921-3.
Response: Questions relating to DD Form 1921-3 preparation guidance
are outside the scope of this rule and should be referred directly to
the
[[Page 71561]]
Defense Cost and Resource Center. References to DD Form 1921-3 have
been removed from this final rule.
3. Solicitation Provision and Contract Clause Prescriptions
Comment: A respondent noted that ``Paragraphs (a) and (b) of
234.7101, Solicitation provision and contract clause, appear to be
intended to distinguish between solicitation instructions and contract
requirements, as well as Contractor Cost Data Reporting (CCDR)
thresholds (> $50M) versus Software Resources Data Reporting (SRDR)
thresholds (> $20M).'' Accordingly, the respondent suggested revising
the paragraphs to clarify the distinctions.
Response: DoD agrees and has revised the cited paragraphs
accordingly.
4. Contractor Cost and Data Reporting Application
Comment: One respondent asked whether cost allocations are going to
be considered valid contract costs and if this supersedes FAR 31.201.
The respondent also asked what allowance is provided for contractors
with accounting software that does not accommodate the additional data
fields necessary to map the offeror's accounting system to the CCDR
data item descriptions.
Response: DoD notes that the 5000 series regulations express a
strong preference for actual cost data. However, the use of cost
allocations is not prohibited; clause 252.234-7003 asks for actual cost
data to be used ``to the maximum extent possible'' (emphasis added). On
the second point, DoD notes that the required mapping does not
necessitate unique software applications. DoD expects its contractors
to use standard and readily available electronic software applications
such as electronic spreadsheets (e.g., MS-Excel[supreg]) or word
processing formats (e.g., MS-Word[supreg]).
III. Executive Order 12866
This is not a significant regulatory action and, therefore, was not
subject to review under section 6(b) of Executive Order 12866,
Regulatory Planning and Review, dated September 30, 1993. This rule is
not a major rule under 5 U.S.C. 804.
IV. Regulatory Flexibility Act
DoD has prepared a final regulatory flexibility analysis consistent
with 5 U.S.C. 604. A copy of the analysis may be obtained from the
individual specified herein. The analysis is summarized as follows:
The objective of the rule is to set forth cost and software data
reporting (CSDR) system reporting requirements that are essential for
DoD to estimate the cost of current and future weapon systems. The data
are also very useful in performing contract price analysis, comparing
prices of similar systems, and for capturing contractor-provided cost
estimates in standard formats to facilitate comparison across several
contractors.
The rule will apply to DoD major defense acquisition program (MDAP)
and major automated information system (MAIS) contractors. Due to the
magnitude of these major programs, most small businesses are not MDAP
or MAIS contractors. DoD solicited comments from small entities and
other interested parties (proposed rule at 75 FR 25165). No comments
were received from small entities on the impact of this rule and none
of the comments was in response to the initial regulatory flexibility
analysis. Therefore, there is no change to the rule in this regard.
This final rule sets forth existing DoD CSDR requirements for
weapon system programs for proposal submission and contract
performance.
During the proposal process, in response to solicitations, offerors
are required to--
Describe the standard CSDR process to be used to satisfy
the requirements of the CSDR Manual, DoD 5000.04-M-1, and the
Government approved CSDR plan, DD Form 2794, and the related Resource
Distribution Table (RDT);
Provide comments on the adequacy of the CSDR contract
plan, and the related RDT contained in the solicitation; and,
Submit with their pricing proposal: DD Form 1921, Cost
Data Summary Report, and DD Form 1921-1, Functional Cost-Hour Report.
During contract performance, the contractor will be required to--
Utilize a documented CSDR process that satisfies the
guidelines contained in the DoD 5000.04-M-1, CSDR Manual;
Use management procedures that provide for generation of
timely and reliable information for the two principal components of the
CSDR system: Contractor cost data reports and software resources data
reports;
Use the Government-approved contract CSDR plan, DD Form
2794, with the related RDT; and
Require subcontractors, or subcontracted effort if
subcontractors have not been selected, to comply with the CSDR
requirements.
This final rule is not expected 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., as most MDAP and
MAIS contractors are large businesses. For reporting, contractors are
expected to use standard and readily available electronic software
applications such as electronic spreadsheets (e.g., MS-Excel[supreg])
or word processing formats (e.g., MS-Word[supreg]) to show the
necessary mapping from their accounting systems into the standard CCDR
formats.
V. Paperwork Reduction Act
The information collection requirements associated with this rule
were approved by the Office of Management and Budget under Clearance
Number 0704-0188, Acquisition Management Systems and Data Requirements
Control List. The revisions in the final rule will not change the
burden hours approved under Clearance Number 0704-0188.
List of Subjects in 48 CFR Parts 215, 234, 242, and 252
Government procurement.
Ynette R. Shelkin,
Editor, Defense Acquisition Regulations System.
0
Therefore, 48 CFR parts 215, 234, 242, and 252 are amended as follows:
0
1. The authority citation for 48 CFR parts 215, 234, 242, and 252
continues to read as follows:
Authority: 41 U.S.C. 421 and 48 CFR chapter 1.
PART 215--CONTRACTING BY NEGOTIATION
215.403-5 [Removed]
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2. Remove section 215.403-5.
PART 234--MAJOR SYSTEM ACQUISITION
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3. Subpart 234.71 is added to read as follows:
Subpart 234.71--Cost and Software Data Reporting
Sec.
234.7100 Policy.
234.7101 Solicitation provision and contract clause.
Subpart 234.71--Cost and Software Data Reporting
234.7100 Policy.
(a) The cost and software data reporting (CSDR) requirement is
mandatory for major defense acquisition programs (as defined in 10
U.S.C. 2430), and major automated information system programs (as
defined in 10 U.S.C. 2445a) as specified in DoDI
[[Page 71562]]
5000.02, Operation of the Defense Acquisition System and the DoD
5000.04-M-1, CSDR Manual. The CSDR system is applied in accordance with
the reporting requirements established in DoDI 5000.02. The two
principal components of the CSDR system are contractor cost data
reporting and software resources data reporting.
(b) Prior to contract award, contracting officers shall consult
with the Defense Cost and Resource Center to determine that the offeror
selected for award has proposed a standard CSDR system, as described in
the offeror's proposal in response to the provision at 252.234-7003,
that is in compliance with DoDI 5000.02, Operation of the Defense
Acquisition System, and the DoD 5000.04-M-1, CSDR Manual.
(c) Contact information for the Defense Cost and Resource Center
and the Deputy Director, Cost Assessment, is located at PGI 234.7100.
234.7101 Solicitation provision and contract clause.
(a)(1) Use the provision at 252.234-7003, Notice of Cost and
Software Data Reporting System, in all solicitations that include the
clause at 252.234-7004, Cost and Software Data Reporting.
(2) Use the provision with its Alternate I when the clause at
252.234-7004, Cost and Software Data Reporting, is used with its
Alternate I.
(b)(1) Use the clause at 252.234-7004, Cost and Software Data
Reporting System, in all solicitations and contracts for major defense
acquisition programs and major automated information system programs
that exceed $50 million.
(2) Use the clause with its Alternate I in solicitations and
contracts for major defense acquisition programs and major automated
information system programs with a value equal to or greater than $20
million but less than or equal to $50 million, when so directed by the
program manager with the approval of the OSD Deputy Director, Cost
Assessment.
PART 242--CONTRACT ADMINISTRATION AND AUDIT SERVICES
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4. Designate the current text of section 242.503-2 as paragraph (a) and
add new paragraph (b) to read as follows:
242.503-2 Postaward conference procedure.
* * * * *
(b) For contracts that include the clause at 252.234-7004, Cost and
Software Data Reporting, postaward conferences shall include a
discussion of the contractor's standard cost and software data
reporting (CSDR) process that satisfies the guidelines contained in the
DoD 5000.04-M-1, CSDR Manual, and the requirements in the Government-
approved CSDR plan for the contract, DD Form 2794, and related Resource
Distribution Table.
PART 252--SOLICITATION PROVISIONS AND CONTRACT CLAUSES
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5. Add section 252.234-7003 to read as follows:
252.234-7003 Notice of Cost and Software Data Reporting System. (NOV
2010)
As prescribed in 234-7101(a)(1), use the following provision:
NOTICE OF COST AND SOFTWARE DATA REPORTING SYSTEM (NOV 2010)
(a) This solicitation includes--
(1) The Government-approved cost and software data reporting
(CSDR) plan for the contract, DD Form 2794; and
(2) The related Resource Distribution Table.
(b) As part of its proposal, the offeror shall--
(1) Describe the process to be used to satisfy the requirements
of the DoD 5000.04-M-1, CSDR Manual, and the Government-approved
CSDR plan for the proposed contract;
(2) Demonstrate how contractor cost and data reporting (CCDR)
will be based, to the maximum extent possible, upon actual cost
transactions and not cost allocations;
(3) Demonstrate how the data from its accounting system will be
mapped into the standard reporting categories required in the CCDR
data item descriptions;
(4) Describe how recurring and nonrecurring costs will be
segregated;
(5) Provide comments on the adequacy of the CSDR contract plan
and related Resource Distribution Table; and
(6) Submit the DD Form 1921, Cost Data Summary Report, and DD
Form 1921-1, Functional Cost-Hour Report, with its pricing proposal.
(c) CSDR reporting will be required for subcontractors at any
tier with a subcontract that exceeds $50 million. The offeror shall
identify, by providing comments on the Resource Distribution Table,
the subcontractors, or, if the subcontractors have not been
selected, the subcontracted effort in this category.
(End of provision)
Alternate I (NOV 2010). As prescribed in 234.7101(a)(2), substitute
the following paragraph (c) for paragraph (c) of the basic provision:
(c) CSDR reporting will be required for subcontractors for
selected subcontracts identified in the CSDR contract plan as
requiring such reporting. The offeror shall identify, by providing
comments on the Resource Distribution Table, the subcontractors, or,
if the subcontractors have not been selected, the subcontracted
effort.
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6. Add section 252.234-7004 to read as follows:
252.234-7004 Cost and Software Data Reporting System. (NOV 2010)
As prescribed in 234.7101(b)(1), use the following clause:
COST AND SOFTWARE DATA REPORTING SYSTEM (NOV 2010)
(a) In the performance of this contract, the Contractor shall
use--
(1) A documented standard cost and software data reporting
(CSDR) process that satisfies the guidelines contained in the DoD
5000.04-M-1, CSDR Manual;
(2) Management procedures that provide for generation of timely
and reliable information for the contractor cost data reports
(CCDRs) and software resources data reports (SRDRs) required by the
CCDR and SRDR data items of this contract; and
(3) The Government-approved CSDR plan for this contract, DD Form
2794, and the related Resource Distribution Table as the basis for
reporting in accordance with the required CSDR data item
descriptions.
(b) The Contractor shall require CSDR reporting from
subcontractors at any tier with a subcontract that exceeds $50
million. If, for subcontracts that exceed $50 million, the
Contractor changes subcontractors or makes new subcontract awards,
the Contractor shall notify the Government.
(End of clause)
Alternate I (NOV 2010). As prescribed in 234.7101(b)(2), substitute
the following paragraph (b) for paragraph (b) of the basic clause:
(b) The Contractor shall require CSDR reporting from selected
subcontractors identified in the CSDR contract plan as requiring
such reporting. If the Contractor changes subcontractors or makes
new awards for selected subcontract effort, the Contractor shall
notify the Government.
[FR Doc. 2010-29496 Filed 11-23-10; 8:45 am]
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