Subpart 202.1 - DEFINITIONS

Parent topic: Part 202 - DEFINITIONS OF WORDS AND TERMS

202.101 Definitions.

“Authorized aftermarket manufacturer” means an organization that fabricates an electronic part

under a contract with, or with the express written authority of, the original component manufacturer

based on the original component manufacturer’s designs, formulas, and/or specifications.

“Compromise” means disclosure of information to unauthorized persons, or a violation of the

security policy of a system, in which unauthorized intentional or unintentional disclosure,

modification, destruction, or loss of an object, or the copying of information to unauthorized media

may have occurred.

“Congressional defense committees” means—

(1) In accordance with 10 U.S.C. 101(a)(16), except as otherwise specified in paragraph (2) of this

definition or as otherwise specified by statute for particular applications—

(i) The Committee on Armed Services of the Senate;

(ii) The Subcommittee on Defense of the Committee on Appropriations of the Senate;

(iii) The Committee on Armed Services of the House of Representatives; and

(iv) The Subcommittee on Defense of the Committee on Appropriations of the House of

Representatives.

(2) For use in subpart 217.1, see the definition at 217.103 .

“Contract administration office” also means a contract management office of the Defense Contract

Management Agency.

“Contract manufacturer” means a company that produces goods under contract for another

company under the label or brand name of that company.

“Contracting activity” for DoD also means elements designated by the director of a defense agency

which has been delegated contracting authority through its agency charter. DoD contracting

activities are listed at PGI 202.101 .

“Contracting officer's representative” means an individual designated and authorized in writing by

the contracting officer to perform specific technical or administrative functions.

“Contractor-approved supplier” means a supplier that does not have a contractual agreement with

the original component manufacturer for a transaction, but has been identified as trustworthy by a

contractor or subcontractor.

“Counterfeit electronic part” means an unlawful or unauthorized reproduction, substitution, or

alteration that has been knowingly mismarked, misidentified, or otherwise misrepresented to be an

authentic, unmodified electronic part from the original manufacturer, or a source with the express
written authority of the original manufacturer or current design activity, including an authorized

aftermarket manufacturer. Unlawful or unauthorized substitution includes used electronic parts

represented as new, or the false identification of grade, serial number, lot number, date code, or

performance characteristics.

“Cyber incident” means actions taken through the use of computer networks that result in a

compromise or an actual or potentially adverse effect on an information system and/or the

information residing therein.

“Departments and agencies,” as used in DFARS, means the military departments and the defense

agencies. The military departments are the Departments of the Army, Navy, and Air Force (the

Marine Corps is a part of the Department of the Navy, and the Space Force is a part of the Air

Force). The defense agencies are the Defense Advanced Research Projects Agency, the Defense

Commissary Agency, the Defense Contract Management Agency, the Defense Counterintelligence

and Security Agency, the Defense Finance and Accounting Service, the Defense Health Agency, the

Defense Information Systems Agency, the Defense Intelligence Agency, the Defense Logistics

Agency, the Defense Threat Reduction Agency, the Missile Defense Agency, the National GeospatialIntelligence Agency, the National Security Agency, the United States Cyber Command, the United

States Special Operations Command, the United States Transportation Command, and the

Washington Headquarters Service.

“Department of Defense (DoD),” as used in DFARS, means the Department of Defense, the military

departments, and the defense agencies.

“Electronic part” means an integrated circuit, a discrete electronic component (including, but not

limited to, a transistor, capacitor, resistor, or diode), or a circuit assembly (section 818(f)(2) of Pub.

L. 112-81).

“Executive agency” means for DoD, the Department of Defense, the Department of the Army, the

Department of the Navy, and the Department of the Air Force.

“Head of the agency” means, for DoD, the Secretary of Defense, the Secretary of the Army, the

Secretary of the Navy, and the Secretary of the Air Force. Subject to the direction of the Secretary

of Defense, the Under Secretary of Defense (Acquisition and Sustainment), and the Principal

Director, Defense Pricing and Contracting (DPC), the directors of the defense agencies have been

delegated authority to act as head of the agency for their respective agencies (i.e., to perform

functions under the FAR or DFARS reserved to a head of agency or agency head), except for such

actions that by terms of statute, or any delegation, must be exercised within the Office of the

Secretary of Defense. (For emergency acquisition flexibilities, see 218.270 .)

“Major defense acquisition program” is defined in 10 U.S.C. 4201.

“Milestone decision authority,” with respect to a major defense acquisition program, , or major

system, means the official within the Department of Defense designated with the overall

responsibility and authority for acquisition decisions for the program or system, including authority

to approve entry of the program or system into the next phase of the acquisition process (10 U.S.C.

4211).

“Non-Government sales” means sales of the supplies or services to non-Governmental entities for

purposes other than governmental purposes.

“Nontraditional defense contractor” means an entity that is not currently performing and has not

performed 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, for at least the 1-year period preceding the solicitation of sources by DoD for the

procurement (10 U.S.C. 3014).

“Obsolete electronic part” means an electronic part that is no longer available from the original

manufacturer or an authorized aftermarket manufacturer.

“Offset” means a benefit or obligation agreed to by a contractor and a foreign government or

international organization as an inducement or condition to purchase supplies or services pursuant

to a foreign military sale (FMS). There are two types of offsets: direct offsets and indirect offsets.

(1) A direct offset involves benefits or obligations, including supplies or services that are directly

related to the item(s) being purchased and are integral to the deliverable of the FMS contract. For

example, as a condition of a foreign military sale, the contractor may require or agree to permit the

customer to produce in its country certain components or subsystems of the item being sold.

Generally, direct offsets must be performed within a specified period, because they are integral to

the deliverable of the FMS contract.

(2) An indirect offset involves benefits or obligations, including supplies or services that are not

directly related to the specific item(s) being purchased and are not integral to the deliverable of the

FMS contract. For example, as a condition of a foreign military sale, the contractor may agree to

purchase certain manufactured products, agricultural commodities, raw materials, or services, or

make an equity investment or grant of equipment required by the FMS customer, or may agree to

build a school, road or other facility. Indirect offsets would also include projects that are related to

the FMS contract but not purchased under said contract (e.g., a project to develop or advance a

capability, technology transfer, or know-how in a foreign company). Indirect offsets may be

accomplished without a clearly defined period of performance.

“Offset costs” means the costs to the contractor of providing any direct or indirect offsets required

(explicitly or implicitly) as a condition of a foreign military sale.

“Original component manufacturer” means an organization that designs and/or engineers a part and

is entitled to any intellectual property rights to that part.

“Original equipment manufacturer” means a company that manufactures products that it has

designed from purchased components and sells those products under the company's brand name.

“Original manufacturer” means the original component manufacturer, the original equipment

manufacturer, or the contract manufacturer.

“Procedures, Guidance, and Information (PGI)” means a companion resource to the DFARS that—

(1) Contains mandatory internal DoD procedures. The DFARS will direct compliance with mandatory

procedures using imperative language such as “Follow the procedures at...” or similar directive

language;

(2) Contains non-mandatory internal DoD procedures and guidance and supplemental information to

be used at the discretion of the contracting officer. The DFARS will point to non-mandatory

procedures, guidance, and information using permissive language such as “The contracting officer

may use...” or “Additional information is available at...” or other similar language;

(3) Is numbered similarly to the DFARS, except that each PGI numerical designation is preceded by

the letters “PGI”; and
(4) Is available electronically at https://www.acq.osd.mil/dpap/dars/dfarspgi/current/index.html.

“Senior procurement executive” means, for DoD—

(1) Department of Defense (including the defense agencies)—Under Secretary of Defense

(Acquisition and Sustainment);

(2) Department of the Army—Assistant Secretary of the Army (Acquisition, Logistics and

Technology);

(3)Department of the Navy—Assistant Secretary of the Navy (Research,Development and

Acquisition);

(4)Department of the Air Force—Assistant Secretary of the Air Force (Acquisition); and

(5)The directors of the defense agencies have been delegated authority to act as senior procurement

executive for their respective agencies, except for such actions that by terms of statute, or any

delegation, must be exercised by the Under Secretary of Defense (Acquisition and Sustainment).

“Sufficient non-Government sales” means relevant sales data that reflects market pricing and

contains enough information to make adjustments covered by FAR 15.404-1(b)(2)(ii)(B).

“Suspect counterfeit electronic part” means an electronic part for which credible evidence

(including, but not limited to, visual inspection or testing) provides reasonable doubt that the

electronic part is authentic.

“Tiered evaluation of offers,” also known as “cascading evaluation of offers,” means a procedure

used in negotiated acquisitions, when market research is inconclusive for justifying limiting

competition to small business concerns, whereby the contracting officer—

(1) Solicits and receives offers from both small and other than small business concerns;

(2) Establishes a tiered or cascading order of precedence for evaluating offers that is specified in the

solicitation; and

(3) If no award can be made at the first tier, evaluates offers at the next lower tier, until award can

be made.

“Uncertified cost data” means the subset of “data other than certified cost or pricing data” (see FAR

2.101) that relates to cost.