[Federal Register Volume 76, Number 125 (Wednesday, June 29, 2011)]
[Rules and Regulations]
[Pages 38048-38050]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2011-16316]
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DEPARTMENT OF DEFENSE
Defense Acquisition Regulations System
48 CFR Parts 212 and 252
RIN 0750-AH27
Defense Federal Acquisition Regulation Supplement; Pilot Program
for Acquisition of Military-Purpose Nondevelopmental Items (DFARS Case
2011-D034)
AGENCY: Defense Acquisition Regulations System, Department of Defense
(DoD).
ACTION: Interim rule.
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SUMMARY: DoD is issuing an interim rule to amend the Defense Federal
Acquisition Regulation Supplement (DFARS) to implement section 866 of
the National Defense Authorization Act for Fiscal Year 2011. Section
866 authorized the Secretary of Defense to establish a pilot program to
assess the feasibility and advisability of acquiring military-purpose
nondevelopmental items in accordance with the streamlined procedures of
the pilot program.
DATES: Effective Date: June 29, 2011.
Comment date: Comments on the interim rule should be submitted in
writing to the address shown below on or before August 29, 2011, to be
considered in the formation of the final rule.
ADDRESSES: You may submit comments, identified by DFARS Case 2011-D034,
using any of the following methods:
[cir] Regulations.gov: http://www.regulations.gov. Submit comments
via the Federal eRulemaking portal by inputting ``DFARS Case 2011-
D034'' under the heading ``Enter keyword or ID'' and selecting
``Search.'' Select the link ``Submit a Comment'' that corresponds with
``DFARS Case 2011-D034.'' Follow the instructions provided at the
``Submit a Comment'' screen. Please include your name, company name (if
any), and ``DFARS Case 2011-D034'' on your attached document.
[cir] E-mail: [email protected]. Include DFARS Case 2011-D034 in the
subject line of the message.
[cir] Fax: 703-602-0350.
[cir] Mail: Defense Acquisition Regulations Council, Attn: Mr.
Manuel Quinones, OUSD(AT&L)DPAP(DAR), Room 3B855, 3060 Defense
Pentagon, Washington, DC 20301-3060.
Instructions: Please submit comments only and cite ``DFARS Case
2011-D034'' in all correspondence related to this case. All comments
received will be posted without change to http://www.regulations.gov,
including any personal information provided.
To confirm receipt of your comment(s), please check http://www.regulations.gov approximately two to three days after submission to
verify posting (except allow 30 days for posting of comments submitted
by mail).
FOR FURTHER INFORMATION CONTACT: Mr. Manuel Quinones, telephone 703-
602-8383.
SUPPLEMENTARY INFORMATION:
I. Background
Section 866 of the National Defense Authorization Act (NDAA) for
Fiscal Year (FY) 2011 (Pub. L. 111-383), enacted on January 7, 2011,
authorized the Secretary of Defense to carry out a pilot program to
assess the feasibility and advisability of acquiring military-purpose
nondevelopmental items in accordance with the streamlined procedures of
the pilot program. The authority for this pilot program expires on
January 6, 2016. Under this pilot program, DoD may enter into contracts
with nontraditional defense contractors for the purpose of--
--Enabling DoD to acquire items that otherwise might not have been
available to DoD;
--Assisting DoD in the rapid acquisition and fielding of
capabilities needed to meet urgent operational needs; and
--Protecting the interests of the United States in paying fair and
reasonable prices for the item or items acquired.
This pilot program is designed to test whether the streamlined
procedures, similar to those available for commercial items, can serve
as an effective incentive for nontraditional defense contractors to (1)
channel investment and innovation into areas that are useful to DoD and
(2) provide items developed exclusively at private expense to meet
validated military requirements.
[[Page 38049]]
II. Executive Orders 12866 and 13563
Executive Orders 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). Executive
Order 13563 emphasizes the importance of quantifying both costs and
benefits, of reducing costs, of harmonizing rules, and of promoting
flexibility. This is a significant regulatory action and, therefore,
was 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.
III. Regulatory Flexibility Act
DoD has prepared an initial regulatory flexibility analysis
consistent with 5 U.S.C. 604. A copy of the analysis may be obtained
from the point of contact specified herein. The analysis is summarized
as follows.
DoD is issuing an interim rule to amend the DFARS to implement
section 866 of the National Defense Authorization Act for Fiscal Year
2011 (Pub. L. 111-383). Section 866 authorized the Secretary of Defense
to establish a pilot program to assess the feasibility and advisability
of acquiring military-purpose nondevelopmental items.
The objective of this rule is to establish a new DoD pilot program
at DFARS Subpart 212.71, entitled Pilot Program for Acquisition of
Military-Purpose Nondevelopmental Items. Under this pilot program, DoD
may enter into contracts with nontraditional defense contractors for
the purpose of (1) Enabling DoD to acquire items that otherwise might
not have been available to DoD; (2) assisting DoD in the rapid
acquisition and fielding of capabilities needed to meet urgent
operational needs; and (3) protecting the interests of the United
States in paying fair and reasonable prices for the item or items
acquired. It is anticipated that items similar to commercial all-
terrain vehicles or programmable robots, which can be modified for use
in a contingency environment, may result from use of this authority.
The legal basis is section 866 of the National Defense Authorization
Act for Fiscal Year 2011.
Since this is a new pilot program, data to support potential impact
to small entities is not yet available. Consistent with the overall
purpose of the program to attract nontraditional defense contractors,
DoD anticipates that this rule will have a positive economic impact to
small entities.
The interim rule affects contractors that are not currently
performing and have not performed, for at least the one-year period
preceding the solicitation of sources by DoD for the procurement or
transaction, any of the following for DoD--
--Any contract or subcontract that is subject to full coverage
under the cost accounting standards prescribed pursuant to section 26
of the Office of Federal Procurement Policy Act (41 U.S.C. 1502) and
the regulations implementing such section; or
--Any other contract in excess of the certified cost or pricing
data threshold under which the contractor is required to submit
certified cost or pricing data.
This interim rule does not impose any new reporting, recordkeeping
or other compliance requirements on contractors. There are no rules
that duplicate, overlap or conflict with this rule. There are no known
significant alternatives to the rule.
Accordingly, DoD does not expect this 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.
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 2011-D034) in
correspondence.
IV. Paperwork Reduction Act
The rule does not impose any information collection requirements
that require the approval of the Office of Management and Budget under
the Paperwork Reduction Act (44 U.S.C. chapter 35).
V. Determination To Issue an Interim Rule
A determination has been made under the authority of the Secretary
of Defense that urgent and compelling reasons exist to promulgate this
interim rule without prior opportunity for public comments. The rule
implements section 866 of the National Defense Authorization Act for
Fiscal Year 2011 (Pub. L. 111-383). Section 866 was effective upon
enactment on January 7, 2011. This action is necessary as DoD continues
to search for ways to acquire and deploy innovative technologies and
solutions to meet urgent operational needs. Without this interim rule,
DoD will be unable to test whether the streamlined procedures similar
to those available for commercial items can serve as an effective
incentive for non-traditional defense contractors to (1) channel
investment and innovation into areas that are useful to DOD and (2)
provide items developed exclusively at private expense to meet
validated military requirements.
List of Subjects in 48 CFR Parts 212 and 252
Government procurement.
Mary Overstreet,
Editor, Defense Acquisition Regulations System.
Therefore, 48 CFR parts 212 and 252 are amended as follows:
0
1. The authority citation for 48 CFR parts 212 and 252 continues to
read as follows:
Authority: 41 U.S.C. 1303 and 48 CFR chapter 1.
PART 212--ACQUISITION OF COMMERCIAL ITEMS
0
2. Amend part 212 by adding new subpart 212.71 to read as follows:
Subpart 212.71--Pilot Program for Acquisition of Military-Purpose
Nondevelopmental Items
212.7100 Scope.
212.7101 Definitions.
212.7102 Pilot program.
212.7103 Solicitation provision.
212.7100 Scope.
This subpart establishes the pilot program authorized by section
866 of the National Defense Authorization Act for Fiscal Year 2011
(Pub. L. 111-383).
212.7101 Definitions.
Military-purpose nondevelopmental item, nondevelopmental item, and
nontraditional defense contractor, as used in this subpart, are defined
in the provision at 252.212-7002.
212.7102 Pilot program.
212.7102-1 Contracts under the program.
The contracting officer may enter into contracts with
nontraditional defense contractors for the acquisition of military-
purpose nondevelopmental items. See PGI 212.7102 for file documentation
requirements. Each contract entered into under the pilot program
shall--
(a) Be awarded using competitive procedures;
[[Page 38050]]
(b) Be a firm-fixed-price contract, or a fixed-price contract with
an economic price adjustment clause;
(c) Be in an amount not in excess of $50 million;
(d) Provide--
(1) For the delivery of an initial lot of production quantities of
completed items not later than nine months after the date of the award
of such contract; and
(2) That failure to make delivery as provided for under paragraph
(d)(1) may result in termination for cause; and
(e) Be--
(1) Exempt from the requirement to submit certified cost or pricing
data;
(2) Exempt from the cost accounting standards under section 26 of
the Office of Procurement Policy Act (41 U.S.C. 1502); and
(3) Subject to the requirement to provide data other than certified
cost or pricing data for the purpose of price reasonableness
determinations.
212.7102-2 Reporting requirements.
Departments and agencies shall prepare a consolidated annual report
to provide information about contracts awarded under this pilot
authority. The report shall be submitted to the Office of the Deputy
Director, Defense Procurement and Acquisition Policy (Contract Policy
and International Contracting), by October 31 each year in accordance
with the procedures at PGI 212.7102. See PGI 212.7102 for annual
reporting format.
212.7102-3 Sunset of the pilot authority.
(a) The authority to carry out the pilot program described in this
subpart expires on January 6, 2016.
(b) The expiration under paragraph (a) of this section of the
authority to carry out the pilot program will not affect the validity
of any contract awarded under the pilot program before the expiration
of the pilot program under that paragraph.
212.7103 Solicitation provision.
Use the provision at 252.212-7002, Pilot Program for Acquisition of
Military-Purpose Nondevelopmental Items, in all solicitations that meet
the applicability criteria of 212.7102-1 for this pilot program.
PART 252--SOLICITATION PROVISIONS AND CONTRACT CLAUSES
0
3. Amend part 252 by adding new section 252.212-7002 to read as
follows:
252.212-7002 Pilot Program for Acquisition of Military-Purpose
Nondevelopmental Items.
As prescribed in 212.7103, use the following provision:
PILOT PROGRAM FOR ACQUISITION OF MILITARY-PURPOSE NONDEVELOPMENTAL
ITEMS (JUN 2011)
(a) Definitions. As used in this provision--
Military-purpose nondevelopmental item means a nondevelopmental
item that meets a validated military requirement, as determined in
writing by the responsible program manager, and has been developed
exclusively at private expense. An item shall not be considered to
be developed at private expense if development of the item was paid
for in whole or in part through--
(1) Independent research and development costs or bid and
proposal costs, per the definition in FAR 31.205-18, that have been
reimbursed directly or indirectly by a Federal agency or have been
submitted to a Federal agency for reimbursement; or
(2) Foreign government funding.
``Nondevelopmental item'' is defined in FAR 2.101 and for the
purpose of this subpart also includes previously developed items of
supply that require modifications other than those customarily
available in the commercial marketplace if such modifications are
consistent with the requirement of DFARS 212.7102-2(d)(1).
Nontraditional defense contractor means an entity that is not
currently performing and has not performed, for at least the one-
year period preceding the solicitation of sources by the Department
of Defense for the procurement or transaction, any of the following
for the Department of Defense--
(1) Any contract or subcontract that is subject to full coverage
under the cost accounting standards prescribed pursuant to Section
26 of the Office of Federal Procurement Policy Act (41 U.S.C.
section 1502) and the regulations implementing such section; or
(2) Any other contract in excess of the certified cost or
pricing data threshold under which the contractor is required to
submit certified cost or pricing data.
(b) Notice. This is a procurement action under section 866 of
the National Defense Authorization Act for Fiscal Year 2011, Pilot
Program for Acquisition of Military-Purpose Nondevelopmental Items,
and is subject to the limitations outlined in DFARS 212.7102.
(c) Representation. By submission of its offer, the offeror
represents that it is a nontraditional defense contractor.
(End of provision)
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[FR Doc. 2011-16316 Filed 6-28-11; 8:45 am]
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