Federal Register / Vol. 69, No. 210 / Monday, November 1, 2004 / Rules and Regulations 63329

Executive Order 12866, dated 

September 30, 1993. 

B. Regulatory Flexibility Act 

This rule will not have a significant 

cost or administrative impact on 

contractors or offerors, or a significant 

effect beyond the internal operating 

procedures of DoD. Therefore, 

publication for public comment is not 

required. However, DoD will consider 

comments from small entities 

concerning the affected DFARS subparts 

in accordance with 5 U.S.C. 610. Such 

comments should cite DFARS Case 

2004–D005. 

C. Paperwork Reduction Act 

The Paperwork Reduction Act does 

not apply because the rule does not 

impose any information collection 

requirements that require the approval 

of the Office of Management and Budget 

under 44 U.S.C. 3501, et seq.

List of Subjects in 48 CFR Parts 208, 

210, 219, and 252

Government procurement.

Michele P. Peterson, 

Executive Editor, Defense Acquisition 

Regulations Council.

■ Therefore, 48 CFR parts 208, 210, 219, 

and 252 are amended as follows:

■ 1. The authority citation for 48 CFR 

parts 208, 210, 219, and 252 continues to 

read as follows:

Authority: 41 U.S.C. 421 and 48 CFR 

Chapter 1.

PART 208—REQUIRED SOURCES OF 

SUPPLIES AND SERVICES

Subpart 208.6—[Removed]

■ 2. Subpart 208.6 is removed.

PART 210—[REMOVED]

■ 3. Part 210 is removed.

PART 219—SMALL BUSINESS 

PROGRAMS

219.502–70 [Removed]

■ 4. Section 219.502–70 is removed.

219.508 [Removed]

■ 5. Section 219.508 is removed.

PART 252—SOLICITATION 

PROVISIONS AND CONTRACT 

CLAUSES

252.219–7005 and 252.219–7006 [Removed 

and Reserved]

■ 6. Sections 252.219–7005 and 

252.219–7006 are removed and reserved.

[FR Doc. 04–24283 Filed 10–29–04; 8:45 am] 

BILLING CODE 5001–08–P

DEPARTMENT OF DEFENSE

48 CFR Part 212

[DFARS Case 2003–D106] 

Defense Federal Acquisition 

Regulation Supplement; Transition of 

Weapons-Related Prototype Projects 

to Follow-On Contracts

AGENCY: Department of Defense (DoD).

ACTION: Interim rule with request for 

comments. 

SUMMARY: DoD has issued an interim 

rule amending the Defense Federal 

Acquisition Regulation Supplement 

(DFARS) to implement Section 847 of 

the National Defense Authorization Act 

for Fiscal Year 2004. Section 847 

authorizes DoD to carry out a pilot 

program that permits the use of 

streamlined contracting procedures for 

the production of items or processes 

begun as prototype projects under other 

transaction agreements.

DATES: Effective date: November 1, 

2004. 

Comment date: Comments on the 

interim rule should be submitted to the 

address shown below on or before 

January 3, 2005, to be considered in the 

formation of the final rule.

ADDRESSES: You may submit comments, 

identified by DFARS Case 2003–D106, 

using any of the following methods: 

• Federal eRulemaking Portal: http://

www.regulations.gov. Follow the 

instructions for submitting comments. 

• Defense Acquisition Regulations 

Web Site: http://emissary.acq.osd.mil/

dar/dfars.nsf/pubcomm. Follow the 

instructions for submitting comments. 

• E-mail: dfars@osd.mil. Include 

DFARS Case 2003–D106 in the subject 

line of the message. 

• Fax: (703) 602–0350. 

• Mail: Defense Acquisition 

Regulations Council, Attn: Ms. Amy 

Williams, OUSD(AT&L)DPAP(DAR), 

IMD 3C132, 3062 Defense Pentagon, 

Washington, DC 20301–3062. 

• Hand Delivery/Courier: Defense 

Acquisition Regulations Council, 

Crystal Square 4, Suite 200A, 241 18th 

Street, Arlington, VA 22202–3402. 

All comments received will be posted 

to http://emissary.acq.osd.mil/dar/

dfars.nsf.

FOR FURTHER INFORMATION CONTACT: Ms. 

Amy Williams, (703) 602–0328.

SUPPLEMENTARY INFORMATION: 

A. Background 

This interim rule adds a new DFARS 

subpart to implement Section 847 of the 

National Defense Authorization Act for 

Fiscal Year 2004 (Pub. L. 108–136). 

Section 847 authorizes DoD to carry out 

a pilot program for follow-on 

contracting for the production of items 

or processes begun as prototype projects 

under other transaction agreements. 

Contracts and subcontracts awarded 

under the program may be treated as 

those for the acquisition of commercial 

items; and items or processes acquired 

under the program may be treated as 

developed in part with Federal funds 

and in part at private expense for 

purposes of negotiating rights in 

technical data. 

This rule was not subject to Office of 

Management and Budget review under 

Executive Order 12866, dated 

September 30, 1993. 

B. Regulatory Flexibility Act 

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, et seq., 

because the rule applies only to 

production contracts for DoD weapons 

and weapon systems. Such contracts 

typically are not awarded to small 

business concerns. Therefore, DoD has 

not performed an initial regulatory 

flexibility analysis. DoD invites 

comments from small businesses and 

other interested parties. DoD also will 

consider comments from small entities 

concerning the affected DFARS subparts 

in accordance with 5 U.S.C. 610. Such 

comments should be submitted 

separately and should cite DFARS Case 

2003–D106. 

C. Paperwork Reduction Act 

The Paperwork Reduction Act does 

not apply because the rule does not 

impose any information collection 

requirements that require the approval 

of the Office of Management and Budget 

under 44 U.S.C. 3501, et seq.

D. 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 publish an interim rule prior to 

affording the public an opportunity to 

comment. This interim rule implements 

Section 847 of the National Defense 

Authorization Act for Fiscal Year 2004 

(Pub. L. 108–136). Section 847 

authorizes DoD to carry out a pilot 

program that permits the use of 

streamlined contracting procedures for 

the production of items or processes 

begun as prototype projects under other 

transaction agreements. The program is 

intended to ease the transition of 

nontraditional defense contractors from 

prototype transactions to standard 

63330 Federal Register / Vol. 69, No. 210 / Monday, November 1, 2004 / Rules and Regulations 

contracts. Section 847 became effective 

upon enactment on November 24, 2003, 

and expires on September 30, 2008. 

Comments received in response to this 

interim rule will be considered in the 

formation of the final rule.

List of Subjects in 48 CFR Part 212 

Government procurement.

Michele P. Peterson, 

Executive Editor, Defense Acquisition 

Regulations Council.

■ Therefore, 48 CFR part 212 is amended 

as follows:

■ 1. The authority citation for 48 CFR 

part 212 continues to read as follows:

Authority: 41 U.S.C. 421 and 48 CFR 

Chapter 1.

PART 212—ACQUISITION OF 

COMMERCIAL ITEMS

■ 2. Section 212.212 is added to read as 

follows:

212.212 Computer software. 

The DoD policy for acquiring 

commercial computer software is at 

227.7202.

■ 3. Subpart 212.70 is added to read as 

follows:

Subpart 212.70—Pilot Program for 

Transition to Follow-On Contracting 

After Use of Other Transaction 

Authority

Sec. 

212.7000 Scope. 

212.7001 Definitions. 

212.7002 Pilot program. 

212.7002–1 Contracts under the program. 

212.7002–2 Subcontracts under the 

program. 

212.7003 Rights in technical data and 

computer software.

212.7000 Scope. 

This subpart establishes the pilot 

program authorized by Section 847 of 

the National Defense Authorization Act 

for Fiscal Year 2004 (Pub. L. 108–136).

212.7001 Definitions. 

As used in this subpart—

Nontraditional defense contractor

means a business unit that—

(1) Has entered into an other 

transaction agreement with DoD; and 

(2) Has not, for a period of at least 1 

year prior to the date of the other 

transaction agreement, entered into or 

performed on—

(i) Any contract that is subject to full 

coverage under the cost accounting 

standards described in FAR Part 30; or 

(ii) Any other contract exceeding 

$500,000 to carry out prototype projects 

or to perform basic, applied, or 

advanced research projects for a Federal 

agency that is subject to the FAR. 

Other transaction means a transaction 

that—

(1) Is other than a contract, grant, or 

cooperative agreement; 

(2) Is not subject to the FAR or its 

supplements; and 

(3) Is entered into in accordance with 

32 CFR part 3.

212.7002 Pilot program.

212.7002–1 Contracts under the program. 

(a) The contracting officer may use 

FAR part 12 procedures to award a 

contract for an item or process that does 

not meet the definition of ‘‘commercial 

item,’’ if the contract—

(1) Is awarded to a nontraditional 

defense contractor; 

(2) Is a follow-on contract for the 

production of an item or process begun 

as a prototype project under an other 

transaction agreement; 

(3) Does not exceed $50,000,000; 

(4) Is awarded on or before September 

30, 2008; and 

(5) Is either—

(i) A firm-fixed-price contract; or 

(ii) A fixed-price contract with 

economic price adjustment. 

(b) See 212.7003 for special 

procedures pertaining to rights in 

technical data and computer software.

212.7002–2 Subcontracts under the 

program. 

Except as provided in 212.7003, a 

subcontract for an item or process that 

does not meet the definition of 

‘‘commercial item’’ may be treated as a 

subcontract for a commercial item, if the 

subcontract—

(a) Is under a contract awarded in 

accordance with 212.7002–1; 

(b) Is awarded to a nontraditional 

defense contractor; and 

(c) Is either—

(1) A firm-fixed-price subcontract; or 

(2) A fixed-price subcontract with 

economic price adjustment.

212.7003 Rights in technical data and 

computer software. 

For purposes of determining rights in 

technical data under 227.7102 and 

rights in computer software under 

227.7202, items or processes acquired 

under a contract or subcontract awarded 

in accordance with 212.7002 may be 

treated as developed in part with 

Federal funds and in part at private 

expense (i.e., mixed funding). When this 

occurs—

(a) For technical data, use the clauses 

at 252.227–7013, Rights in Technical 

Data—Noncommercial Items, and 

252.227–7037, Validation of Restrictive 

Markings on Technical Data; 

(b) For computer software, use the 

clauses at 252.227–7014, Rights in 

Noncommercial Computer Software and 

Noncommercial Computer Software 

Documentation, and 252.227–7019, 

Validation of Asserted Restrictions—

Computer Software; 

(c) Require the contractor to include 

the clauses prescribed by paragraphs (a) 

and (b) of this section in subcontracts 

awarded in accordance with 212.7002–

2; and 

(d) Negotiate for the appropriate 

technical data and computer software 

deliverables and special license rights in 

those deliverables, in view of the 

parties’ relative contributions to the 

development of the items or processes.

[FR Doc. 04–24284 Filed 10–29–04; 8:45 am] 

BILLING CODE 5001–08–P

DEPARTMENT OF DEFENSE

48 CFR Part 212 

[DFARS Case 2003–D018] 

Defense Federal Acquisition 

Regulation Supplement; Laws 

Inapplicable to Commercial 

Subcontracts

AGENCY: Department of Defense (DoD).

ACTION: Final rule.

SUMMARY: DoD has issued a final rule 

amending the Defense Federal 

Acquisition Regulation Supplement 

(DFARS) to remove the Trade 

Agreements Act and the Buy American 

Act from the list of laws inapplicable to 

subcontracts for commercial items. This 

rule is a result of a transformation 

initiative undertaken by DoD to 

dramatically change the purpose and 

content of the DFARS.

DATES: Effective November 1, 2004.

FOR FURTHER INFORMATION CONTACT: Ms. 

Amy Williams, Defense Acquisition 

Regulations Council, OUSD (AT&L) 

DPAP (DAR), IMD 3C132, 3062 Defense 

Pentagon, Washington, DC 20301–3062. 

Telephone (703) 602–0328; facsimile 

(703) 602–0350. Please cite DFARS Case 

2003–D018.

SUPPLEMENTARY INFORMATION: 

A. Background 

DFARS Transformation is a major 

DoD initiative to dramatically change 

the purpose and content of the DFARS. 

The objective is to improve the 

efficiency and effectiveness of the 

acquisition process, while allowing the 

acquisition workforce the flexibility to 

innovate. The transformed DFARS will 

contain only requirements of law, DoDwide policies, delegations of FAR 

authorities, deviations from FAR 

requirements, and policies/procedures