Part 235 - RESEARCH AND DEVELOPMENT CONTRACTING       235.001 Definitions.                                          235.006 Contracting methods and contract type.                                                         235.006-70 Manufacturing Technology Program.                                                            235.006-71 Competition.                                                                             235.008 Evaluation for award.                                          235.010 Scientific and technical reports.                                          235.015 RESERVED                                                         235.015-70 Special use allowances for research facilities acquired by educational institutions.                                                                             235.016 Broad agency announcement.                                          235.017 Federally Funded Research and Development Centers.                                                         235.017-1 Sponsoring agreements.                                                                             235.070 Indemnification against unusually hazardous risks.                                                         235.070-1 Indemnification under research and development contracts.                                                            235.070-2 Indemnification under contracts involving both research and development and other work.                                                            235.070-3 Contract clauses.                                                                             235.071 Export-controlled items.                                          235.072 Additional contract clauses.                                          Subpart 235.70 - Reserved    **Parent topic:** Defense Federal Acquisition Regulation235.001 Definitions.       “Research and development” means those efforts described by the Research, Development, Test, and Evaluation (RDT&E) budget activity definitions found in the DoD Financial Management Regulation (DoD 7000.14-R), Volume 2B, Chapter 5.235.006 Contracting methods and contract type.       (b)(i) For major defense acquisition programs as defined in 10 U.S.C. 4201—          (A)  Follow the procedures at                 234.004             ; and          (B) Notify the milestone decision authority of an intent not to exercise a fixed-price production option on a development contract for a major weapon system reasonably in advance of the expiration of the option exercise period.          (ii) For other than major defense acquisition programs—          (A)  Do not award a fixed-price type contract for a development program effort unless—          (*1*)  The level of program risk permits realistic pricing;          (*2*)  The use of a fixed-price type contract permits an equitable and sensible allocation of program risk between the Government and the contractor; and          (*3*) A written determination that the criteria of paragraphs (b)(ii)(A)( *1*) and ( *2*) of this section have been met is executed—          (*i*) By the USD(A&S) if the contract is over $25 million and is for: research and development for a non-major system; the development of a major system (as defined in FAR 2.101); or the development of a subsystem of a major system; or          (*ii*) By the contracting officer for any development not covered by paragraph (b)(ii)(A)( *3*)( *i*) of this section.          (B)  Obtain USD(A&S) approval of the Government’s prenegotiation position before negotiations begin, and obtain USD(A&S) approval of the negotiated agreement with the contractor before the agreement is executed, for any action that is—          (*1*)  An increase of more than $250 million in the price or ceiling price of a fixed-price type development contract, or a fixed-price type contract for the lead ship of a class;          (*2*)  A reduction in the amount of work under a fixed-price type development contract or a fixed-price type contract for the lead ship of a class, when the value of the work deleted is $100 million or more; or          (*3*)  A repricing of fixed-price type production options to a development contract, or a contract for the lead ship of a class, that increases the price or ceiling price by more than $250 million for equivalent quantities.    235.006-70 Manufacturing Technology Program.       In accordance with 10 U.S.C. 4841(d) and 4872, for acquisitions under the Manufacturing Technology Program—          (a)  Award all contracts using competitive procedures; and          (b)  Include in all solicitations an evaluation factor that addresses the extent to which offerors propose to share in the cost of the project (see FAR 15.304).235.006-71 Competition.       (a)(1) Use of a broad agency announcement with peer or scientific review for the award of science and technology proposals in accordance with 235.016 (a) fulfills the requirement for full and open competition (see 206.102 (d)(2)).          (2) Use of a commercial solutions opening with scientific, technological, or other subject-matter expert peer review for the award of innovative solutions or potential capabilities in accordance with subpart 212.70 fulfills the requirement for full and open competition (see 206.102-70).          (b) For a contract that is initially awarded from the competitive selection of a proposal resulting from a broad agency announcement, see 234.005-1 for the use of contract line items or contract options for the development and demonstration or initial production of technology developed under the contract or the delivery of initial or additional items.235.008 Evaluation for award.       See                 209.570              for limitations on the award of contracts to contractors acting as lead system integrators.235.010 Scientific and technical reports.       (b)  For DoD, the Defense Technical Information Center is responsible for collecting all scientific and technical reports.  For access to these reports, follow the procedures at PGI                 235.010             (b).235.015 RESERVED    235.015-70 Special use allowances for research facilities acquired by educational institutions.       (a)  *Definitions.*As used in this subsection—          (1)  “Research facility” means—          (i)  Real property, other than land; and          (ii)  Includes structures, alterations, and improvements, acquired for the purpose of conducting scientific research under contracts with departments and agencies of the DoD.          (2)  “Special use allowance” means a negotiated direct or indirect allowance—          (i)  For construction or acquisition of buildings, structures, and real property, other than land; and          (ii)  Where the allowance is computed at an annual rate exceeding the rate which normally would be allowed under FAR Subpart 31.3.          (b)  *Policy.*          (1)  Educational institutions are to furnish the facilities necessary to perform defense contracts.  FAR 31.3 governs how much the Government will reimburse the institution for the research programs.  However, in extraordinary situations, the Government may give special use allowances to an educational institution when the institution is unable to provide the capital for new laboratories or expanded facilities needed for defense contracts.          (2)  Decisions to provide a special use allowance must be made on a case-by-case basis, using the criteria in paragraph (c) of this subsection.          (c)  *Authorization for special use allowance.*The head of a contracting activity may approve special use allowances only when all of the following conditions are met—          (1)  The research facility is essential to the performance of DoD contracts;          (2)  Existing facilities, either Government or nongovernment, cannot meet program requirements practically or effectively;          (3)  The proposed agreement for special use allowances is a sound business arrangement;          (4)  The Government's furnishing of Government-owned facilities is undesirable or impractical; and          (5)  The proposed use of the research facility is to conduct essential Government research which requires the new or expanded facilities.          (d)  *Application of the special use allowance.*          (1)  In negotiating a special use allowance—          (i)  Compare the needs of DoD and of the institution for the research facility to determine the amount of the special use allowance;          (ii)  Consider rental costs for similar space in the area where the research facility is or will be located to establish the annual special use allowance;          (iii)  Do not include or allow—          (A)  The costs of land; or          (B)  Interest charges on capital;          (iv)  Do not include maintenance, utilities, or other operational costs;          (v)  The period of allowance generally will be—          (A)  At least ten years; or          (B)  A shorter period if the total amount to be allowed is less than the construction or acquisition cost for the research facility;          (vi)  Generally, provide for allocation of the special use allowance equitably among the Government contracts using the research facility;          (vii)  Special use allowances apply only in the years in which the Government has contracts in effect with the institution.  However, if in any given year there is a reduced level of Government research effort which results in the special use allowance being excessive compared to the Government research funding, a separate special use allowance may be negotiated for that year;          (viii)  Special use allowances may be adjusted for the period before construction is complete if the facility is partially occupied and used for Government research during that period.          (2)  A special use allowance may be based on either total or partial cost of construction or acquisition of the research facility.          (i)  When based on total cost neither the normal use allowance nor depreciation will apply—          (A)  During the special use allowance period; and          (B)  After the educational institution has recovered the total construction or acquisition cost from the Government or other users.          (ii)  When based on partial cost, normal use allowance and depreciation—          (A)  Apply to the balance of costs during the special use allowance period to the extent negotiated in the special use allowance agreement; and          (B)  Do not apply after the special use allowance period, except for normal use allowance applied to the balance.          (3)  During the special use allowance period, the research facility—          (i)  Shall be available for Government research use on a priority basis over nongovernment use; and          (ii)  Cannot be put to any significant use other than that which justified the special use allowance, unless the head of the contracting activity, who approved the special use allowance, consents.          (4)  The Government will pay only an allocable share of the special use allowance when the institution makes any substantial use of the research facility for parties other than the Government during the period when the special use allowance is in effect.          (5)  In no event shall the institution be paid more than the acquisition costs.235.016 Broad agency announcement.       (a)  *General*.  A broad agency announcement with peer or scientific review may be used for the award of science and technology proposals.  Science and technology proposals include proposals for the following:          (i)  Basic research (budget activity 6.1).          (ii)  Applied research (budget activity 6.2).          (iii)  Advanced technology development (budget activity 6.3).          (iv)  Advanced component development and prototypes (budget activity 6.4).235.017 Federally Funded Research and Development Centers.       (a)  *Policy.*          (2)  No DoD fiscal year 1992 or later funds may be obligated or expended to finance activities of a DoD Federally Funded Research and Development Center (FFRDC) if a member of its board of directors or trustees simultaneously serves on the board of directors or trustees of a profit-making company under contract to DoD, unless the FFRDC has a DoD-approved conflict of interest policy for its members (Section 8107 of Pub. L. 102-172 and similar sections in subsequent Defense appropriations acts).    235.017-1 Sponsoring agreements.       (c)(4)  DoD-sponsored FFRDCs that function primarily as research laboratories (C3I Laboratory operated by the Institute for Defense Analysis, Lincoln Laboratory operated by Massachusetts Institute of Technology, and Software Engineering Institute operated by Carnegie Mellon) may respond to solicitations and announcements for programs which promote research, development, demonstration, or transfer of technology (Section 217, Pub. L. 103-337).235.070 Indemnification against unusually hazardous risks.    235.070-1 Indemnification under research and development contracts.       (a) Under 10 U.S.C. 3861, and if authorized by the Secretary concerned, contracts for research and/or development may provide for indemnification of the contractor or subcontractors for—          (1)  Claims by third persons (including employees) for death, bodily injury, or loss of or damage to property; and          (2)  Loss of or damage to the contractor's property to the extent that the liability, loss, or damage—          (i)  Results from a risk that the contract defines as “unusually hazardous;”          (ii)  Arises from the direct performance of the contract; and          (iii)  Is not compensated by insurance or other means.          (b)  Clearly define the specific unusually hazardous risks to be indemnified.  Submit this definition for approval with the request for authorization to grant indemnification.  Include the approved definition in the contract.235.070-2 Indemnification under contracts involving both research and development and other work.       These contracts may provide for indemnification under the authority of both 10 U.S.C. 3861 and Pub. L. 85-804. Pub. L. 85-804 will apply only to work to which 10 U.S.C. 3861 does not apply. Actions under Pub. L. 85-804 must also comply with FAR 50.104-3.235.070-3 Contract clauses.       When the contractor is to be indemnified in accordance with                 235.070-1             , use either—          (a) The clause at 252.235-7000 , Indemnification Under 10 U.S.C. 3861—Fixed Price; or          (b) The clause at 252.235-7001 , Indemnification Under 10 U.S.C. 3861—Cost-Reimbursement, as appropriate.235.071 Export-controlled items.       For requirements regarding access to export-controlled items, see                 225.7901             .235.072 Additional contract clauses.       (a)  Use a clause substantially the same as the clause at                 252.235-7002             , Animal Welfare, in solicitations and contracts involving research, development, test, and evaluation or training that use live vertebrate animals.          (b)  Use the basic or the alternate of the clause at                 252.235-7003             , Frequency Authorization, in solicitations and contracts for developing, producing, constructing, testing, or operating a device requiring a frequency authorization.          (1)  Use the basic clause if agency procedures do not authorize the use of DD Form 1494, Application for Equipment Frequency Allocation, to obtain radio frequency authorization.          (2)  Use the alternate I clause if agency procedures authorize the use of DD Form 1494, Application for Equipment Frequency Allocation, to obtain frequency authorization.          (c)  Use the clause at                 252.235-7010             , Acknowledgment of Support and Disclaimer, in solicitations and contracts for research and development.          (d)  Use the clause at                 252.235-7011             , Final Scientific or Technical Report, in solicitations and contracts for research and development.          (e)  Use the clause at                 252.235-7004             , Protection of Human Subjects, in solicitations and contracts that include or may include research involving human subjects in accordance with 32 CFR Part 219, DoD Directive 3216.02, and 10 U.S.C. 980, including research that meets exemption criteria under 32 CFR 219.101(b).  The clause—          (1)  Applies to solicitations and contracts awarded by any DoD component, regardless of mission or funding Program Element Code; and          (2)  Does not apply to use of cadaver materials alone, which are not directly regulated by 32 CFR Part 219 or DoD Directive 3216.02, and which are governed by other DoD policies and applicable State and local laws.Subpart 235.70 - Reserved