43470 Federal Register / Vol. 77, No. 142 / Tuesday, July 24, 2012 / Rules and Regulations 

DEPARTMENT OF DEFENSE 

Defense Acquisition Regulations 

System 

48 CFR Part 252 

Defense Federal Acquisition 

Regulation Supplement; Technical 

Amendments 

AGENCY: Defense Acquisition 

Regulations System, Department of 

Defense (DoD). 

ACTION: Final rule. 

SUMMARY: DoD is making technical 

amendments to the Defense Federal 

Acquisition Regulation Supplement 

(DFARS) to provide needed editorial 

changes. 

DATES: Effective Date: July 24, 2012. 

FOR FURTHER INFORMATION CONTACT: Ms. 

Ynette Shelkin, Defense Acquisition 

Regulations System, 

OUSD(AT&L)DPAP(DARS), Room 

3B855, 3060 Defense Pentagon, 

Washington, DC 20301–3060. 

Telephone 571–372–6089; facsimile 

571–372–6094. 

SUPPLEMENTARY INFORMATION: This final 

rule amends the DFARS as follows: 

1. Adds paragraph (d)(1)(vii) to clause 

252.204–7007, Alternate A, Annual 

Representations and Certifications, 

which was inadvertently removed from 

the Code of Federal Regulations with 

the publication of DFARS Case 2011– 

D048 (77 FR 19128), and makes a 

conforming change to the clause date. 

2. Conforms statutory titles to the new 

Positive Law Codification of Title 41, 

United Sates Code, ‘‘Public Contracts,’’ 

in Alternates IV and V of clause 

252.225–7036, Buy American—Free 

Trade Agreements—Balance of 

Payments Program and makes 

conforming changes to the dates of the 

Alternates, which were inadvertently 

omitted from publication of the final 

rule under DFARS Case 2012–D003 (77 

FR 35879). 

List of Subjects in 48 CFR Part 252 

Government procurement. 

Ynette R. Shelkin, 

Editor, Defense Acquisition Regulations 

System. 

Therefore, 48 CFR part 252 is 

amended as follows: 

PART 252—SOLICITATION 

PROVISIONS AND CONTRACT 

CLAUSES 

■ 1. The authority citation for 48 CFR 

part 252 continues to read as follows: 

Authority: 41 U.S.C. 1303 and 48 CFR 

chapter 1. 

■ 2. Section 252.204–7007 is 

amended— 

■ a. By removing the clause date ‘‘(JUN 

2012)’’ and adding ‘‘(JUL 2012)’’ in its 

place; and 

■ b. By adding paragraph (d)(1)(vii) to 

read as follows: 

252.204–7007 Alternate A, Annual 

Representations and Certifications. 

* * * * * 

(d) * * * 

(1) * * * 

(vii) 252.247–7022, Representation of 

Extent of Transportation by Sea. Applies 

to all solicitations except those for 

direct purchase of ocean transportation 

services or those with an anticipated 

value at or below the simplified 

acquisition threshold. 

* * * * * 

252.225–7036 [Amended] 

■ 3. Section 252.225–7036 is amended 

in Alternates IV and V by removing the 

clause date ‘‘(MAY 2012)’’ and adding 

‘‘(JUN 2012)’’ in its place and in 

paragraph (c), by removing ‘‘Act’’. 

[FR Doc. 2012–17586 Filed 7–23–12; 8:45 am] 

BILLING CODE 5001–06–P 

DEPARTMENT OF DEFENSE 

Defense Acquisition Regulations 

System 

48 CFR Parts 215, 225, and 252 

RIN 0750–AH42 

Defense Federal Acquisition 

Regulation Supplement: Contracting 

With the Canadian Commercial 

Corporation (DFARS Case 2011–D049) 

AGENCY: Defense Acquisition 

Regulations System, Department of 

Defense (DoD). 

ACTION: Final rule. 

SUMMARY: DoD is issuing a final rule 

amending the Defense Federal 

Acquisition Regulation Supplement 

(DFARS) to clarify the requirements for 

the Canadian Commercial Corporation 

to submit data other than certified cost 

or pricing data. 

DATES: Effective date: July 24, 2012. 

FOR FURTHER INFORMATION CONTACT: Ms. 

Amy Williams, telephone 571–372– 

6106. 

SUPPLEMENTARY INFORMATION: 

I. Background 

DoD published a proposed rule in the 

Federal Register at 76 FR 61296 on 

October 4, 2011. DoD also issued a 

correction to a sentence in the 

Background Summary of the Federal 

Register notice on October 18, 2011, at 

76 FR 64297. One respondent submitted 

public comments in response to the 

proposed rule. 

With some exceptions, as provided at 

DFARS 225.870–1(c), the Canadian 

Commercial Corporation awards and 

administers DoD contracts with 

contractors located in Canada. DoD has 

waived the requirement for the 

Canadian Commercial Corporation and 

its subcontractors to submit certified 

cost or pricing data (see DFARS 

215.403–1(c)(4)(C)). However, the 

purpose of this rule is to clarify that the 

requirement to submit data other than 

certified cost or pricing data has not 

been waived. 

II. Discussion and Analysis 

A. Summary of Significant Changes in 

the Final Rule as a Result of Public 

Comments 

1. DFARS 215.408(5) has been revised 

to raise the threshold for costreimbursement contracts from the 

simplified acquisition threshold to 

$700,000. 

2. DFARS 215.408(5) has also raised 

the level to which the head of the 

contracting activity can delegate 

approval authority for using the 

provision at 252.215–7003 and the 

clause at 252.215–7004 in accordance 

with 215.408(5)(i)(B) and (ii)(B), 

respectively, from one level above the 

contracting officer to two levels above 

the contracting officer. 

3. DFARS 225.870–4(c)(5) and 

252.215–7003 now include the text at 

FAR 15.403–3(a)(4) to notify the 

contracting officer and the offerors that 

in order to be eligible for award, offerors 

must provide data necessary to 

determine that the price is fair and 

reasonable. 

4. The clause at 252.215–7004 has 

been revised to require data other than 

certified cost or pricing data for 

modifications only when they exceed 

the simplified acquisition threshold. 

The contracting officer may modify the 

clause to specify a higher threshold. 

B. Analysis of Public Comments 

1. Use of Domestic Policies, Procedures, 

and Practices 

Comment: The respondent cited the 

Defence Production Sharing Agreement 

of 1956 and the need to apply Canadian 

domestic policies, practices, and 

procedures when conducting price 

analysis on a Canadian supplier. 

Response: Data other than certified 

cost or pricing data can be released in 

line with Canadian laws and 


srobinson on DSK4SPTVN1PROD with RULES3
Federal Register / Vol. 77, No. 142 / Tuesday, July 24, 2012 / Rules and Regulations 43471 

government contracting practices, 

policies, and procedures. 

2. Information Necessary To Make a 

Determination of Fair and Reasonable 

Prices 

Comment: According to the 

respondent, under current defense 

procurement arrangements, Canada 

assumes the cost of investigating and 

verifying whether the prices on a 

procurement contract and its 

subsequent management are fair and 

reasonable. The respondent expressed 

concern over significant costs associated 

with investigation and verification of 

price reasonableness for companies and 

Government, so that duplication should 

be avoided. Nevertheless, the 

respondent acknowledged that DoD is 

ultimately responsible for making a final 

decision regarding the reasonableness of 

the prices it pays and that there may be 

some cases (such as sole source fixedprice contracts over $500 million and 

sole source cost-reimbursement 

contracts that exceed the simplified 

acquisition threshold) in which 

additional information may be needed. 

The respondent suggested modification 

to the DFARS rule to emphasize that the 

DoD contracting officer should not 

request more information than is 

necessary to determine that the price is 

fair and reasonable. 

Response: The principle that the 

contracting officer should not request 

more data than is necessary to 

determine that the price is fair and 

reasonable is stated in FAR 15.402(a)(3) 

and applies to all DoD requests for cost 

or pricing data. This DFARS rule 

reiterates at 225.870–4(c)(2), and in 

paragraph (b)(iii) of both the new 

provision at 252.215–7003 and the new 

clause at 252.215–7004, that the 

contracting officer shall only require 

submission of data other than certified 

cost or pricing data to the extent 

necessary to determine a fair and 

reasonable price. 

To avoid unnecessary duplication of 

effort, the provision and clause both 

provide that the Canadian Commercial 

Corporation shall provide to the 

contracting officer the analysis provided 

to the Canadian Commercial 

Corporation by Public Works and 

Government Services Canada 

(comparable to the analysis required at 

FAR 15.404–1) as well as profit rate or 

fee. 

3. Requests for Information Other Than 

Certified Cost or Pricing Data 

Comment: The respondent 

recommended that approval should be 

required for any request of information 

other than certified cost or pricing data. 

Response: The DFARS rule does not 

require authorization when requesting 

data for sole source acquisitions that 

are— 

• Cost-reimbursement, if the contract 

value is expected to exceed a dollar 

threshold of $700,000; or 

• Fixed-price, if the contract value is 

expected to exceed $500 million. 

The respondent acknowledged that 

for such contracts additional requests 

for data other than certified cost or 

pricing data may be warranted. To 

require higher level approval of each 

such request would impose an 

unnecessary administrative burden. 

Higher level approval is required for any 

request for data other than certified cost 

or pricing data in solicitations and 

contracts other than those sole source 

acquisitions specified in the rule. 

4. Level of Authorization for Requests 

for Additional Information 

Comment: The respondent 

recommended requiring the approval by 

the head of the contracting activity, or 

a delegate no lower than the Senior 

Executive Service level, before a 

contracting officer proceeds with any 

request for data other than certified cost 

or pricing data to the Canadian 

Commercial Corporation. 

Response: In response to this 

comment, DoD revised the final rule to 

restrict delegation of approval authority 

by the head of the contracting activity 

to a level no lower than two levels 

above the DoD contracting officer. 

5. Application to Competitive 

Acquisitions in Which Two or More 

Offers Are Received 

Comment: The respondent stated that 

substantive investigation and cost 

verification of cost reasonableness is 

normally not required if a solicitation 

for goods or services is considered 

competitive. Therefore, the respondent 

recommended that requests for data 

other then certified cost or pricing data 

not be allowed on competitive 

acquisitions in which more than one 

offer is received. The respondent 

acknowledged that if only one offer is 

received, the acquisition may be treated 

the same as a sole source procurement, 

rather than a competitive procurement. 

Response: FAR 15.403–3 states that 

when adequate price competition exists, 

generally no additional data are 

necessary to determine the 

reasonableness of price. FAR 15.404–1 

provides that comparison of proposed 

prices received in response to the 

solicitation normally establishes a fair 

and reasonable price. However, the FAR 

does not preclude the unusual 

circumstance in which additional data 

might be required (although preferably 

from a source other than the offeror). In 

such circumstances, the contracting 

officer may request the data with the 

higher level approval as specified in the 

final rule. 

6. Modifications 

Comment: The respondent 

recommended a minimum threshold to 

limit the requests for data other than 

certified cost or pricing data to 

significant contract modifications. 

Response: DoD has modified the final 

rule to provide a threshold at least equal 

to the simplified acquisition threshold. 

The prescription advises that the 

request for data other than certified cost 

or pricing data should be used (1) for 

modifications that equal or exceed the 

simplified acquisition threshold; or (2) 

when questions of cost or price realism 

arise. The contracting officer can modify 

the clause to specify a higher threshold, 

based on the value and type of 

acquisition. 

7. Compliance With Canadian law 

Comment: According to the 

respondent, any release of data by the 

Canadian Commercial Corporation must 

comply with Canadian law, regulations, 

and obligations, especially the Access to 

Information Act and the Privacy Act, as 

well as non-disclosure agreements with 

parties in a contractual relationship 

with the Government. 

Response: Award of a contract to a 

Canadian contractor via the Canadian 

Commercial Corporation is subject to 

the terms and conditions of the DFARS 

clause and to FAR 15.403–3(a)(4), which 

specifies that an offeror who does not 

comply with a requirement to submit 

data that the contracting officer has 

deemed necessary to determine price 

reasonableness or cost realism is 

ineligible for award unless the head of 

the contracting activity determines that 

it is in the best interest of the 

Government to make the award to that 

offeror. 

III. Executive Orders 12866 and 13563 

Executive Orders (E.O.s) 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). E.O. 13563 emphasizes the 

importance of quantifying both costs 

and benefits, of reducing costs, of 

harmonizing rules, and of promoting 

flexibility. This is not a significant 

regulatory action and, therefore, was not 


srobinson on DSK4SPTVN1PROD with RULES3
43472 Federal Register / Vol. 77, No. 142 / Tuesday, July 24, 2012 / Rules and Regulations 

subject to review under section 6(b) of 

E.O. 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 certifies that this final rule will 

not 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 it only impacts Canadian 

business concerns. No domestic small 

business entities will be impacted by 

this rule. For the definition of ‘‘small 

business’’, the Regulatory Flexibility Act 

refers to the Small Business Act, which 

in turn allows the U.S. Small Business 

Administration (SBA) Administrator to 

specify detailed definitions or standards 

(5 U.S.C. 601(3) and 15 U.S.C. 632(a)). 

The SBA regulations at 13 CFR 121.105 

discuss who is a small business: ‘‘(a)(1) 

Except for small agricultural 

cooperatives, a business concern eligible 

for assistance from SBA as a small 

business is a business entity organized 

for profit, with a place of business 

located in the United States, and which 

operates primarily within the United 

States or which makes a significant 

contribution to the U.S. economy 

through payment of taxes or use of 

American products, materials or labor.’’ 

V. Paperwork Reduction Act 

The rule contains 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); 

however, these changes to the DFARS 

do not impose additional information 

collection requirements to the 

paperwork burden previously approved 

under OMB Control Number 9000–0013, 

Cost or Pricing Data Requirements and 

Information Other Than Cost or Pricing 

Data. 

List of Subjects in 48 CFR Parts 215, 

225, and 252 

Government procurement. 

Ynette R. Shelkin, 

Editor, Defense Acquisition Regulations 

System. 

Therefore, 48 CFR parts 215, 225, and 

252 are amended as follows: 

■ 1. The authority citation for 48 CFR 

parts 215, 225, and 252 continues to 

read as follows: 

Authority: 41 U.S.C. 1303 and 48 CFR 

chapter 1. 

PART 215—CONTRACTING BY 

NEGOTIATION 

■ 2. Amend section 215.403–1 by 

revising the heading and paragraph 

(c)(4)(C) to read as follows: 

215.403–1 Prohibition on obtaining 

certified cost or pricing data (10 U.S.C. 

2306a and 41 U.S.C. chapter 35). 

* * * * * 

(c) * * * 

(4) * * * 

(C) DoD has waived the requirement 

for submission of certified cost or 

pricing data for the Canadian 

Commercial Corporation and its 

subcontractors (but see 215.408(5) and 

225.870–4(c)). 

* * * * * 

■ 3. Amend section 215.408 by adding 

paragraph (5) to read as follows: 

215.408 Solicitation provisions and 

contract clauses. 

* * * * * 

(5) When contracting with the 

Canadian Commercial Corporation— 

(i) Use the provision at 252.215–7003, 

Requirement for Data Other Than 

Certified Cost or Pricing Data— 

(A) In solicitations for sole source 

acquisitions that are— 

(1) Cost-reimbursement, if the 

contract value is expected to exceed 

$700,000; or 

(2) Fixed-price, if the contract value is 

expected to exceed $500 million; or 

(B) In other solicitations, if the head 

of the contracting activity, or designee 

no lower than two levels above the 

contracting officer, determines that data 

other than certified cost or pricing data 

is needed in order to determine that the 

price is fair and reasonable (see FAR 

15.403–3(a)); and 

(ii)(A) Use the clause at 252.215– 

7004, Requirement for Data Other Than 

Certified Cost or Pricing Data— 

Modifications—Canadian Commercial 

Corporation— 

(1) In solicitations and contracts for 

sole source acquisitions that are— 

(i) Cost-reimbursement, if the contract 

value is expected to exceed $700,000; or 

(ii) Fixed-price, if the contract value is 

expected to exceed $500 million; or 

(2) In other solicitations and 

contracts, if the head of the contracting 

activity, or designee no lower than two 

levels above the contracting officer, 

determines that it is reasonably certain 

that data other than certified cost or 

pricing data will be needed in order to 

determine that the price of 

modifications is fair and reasonable (see 

FAR 15.403–3(a)). 

(B) The contracting officer may 

specify a higher threshold in paragraph 

(b) of the clause. 

PART 225—FOREIGN ACQUISITION 

225.802–70 [Amended] 

■ 4. Amend section 225.802–70 in the 

second sentence by removing ‘‘Subpart’’ 

and adding ’’subpart’’ in its place. 

225.870–1 [Amended] 

■ 5. Amend section 225.870–1, 

paragraph (a), by removing ‘‘Canadian 

Government’’ each time it appears and 

adding ‘‘Canadian government’’ in its 

place. 

■ 6. Amend section 225.870–4 by 

redesignating paragraph (c) as paragraph 

(d) and adding new paragraph (c) to 

read as follows: 

225.870–4 Contracting procedures. 

* * * * * 

(c) Requirement for data other than 

certified cost or pricing data. (1) DoD 

has waived the requirement for 

submission of certified cost or pricing 

data for the Canadian Commercial 

Corporation and its subcontractors (see 

215.403–1(c)(4)(C)). 

(2) The Canadian Commercial 

Corporation is not exempt from the 

requirement to submit data other than 

certified cost or pricing data, as defined 

in FAR 2.101. In accordance with FAR 

15.403–3(a)(1)(ii), the contracting officer 

shall require submission of data other 

than certified cost or pricing data from 

the offeror, to the extent necessary to 

determine a fair and reasonable price. 

(3) The contracting officer shall use 

the provision at 252.215–7003, 

Requirement for Data Other Than 

Certified Cost or Pricing Data— 

Canadian Commercial Corporation, and 

the clause at 252.215–7004, 

Requirement for Data Other Than 

Certified Cost or Pricing Data— 

Modifications—Canadian Commercial 

Corporation, as prescribed at 

215.408(5)(i) and (ii), respectively. 

(4) Except for contracts described in 

225.870–1(c)(1) through (4), Canadian 

suppliers will provide required data 

other than certified cost or pricing data 

exclusively through the Canadian 

Commercial Corporation. 

(5) As specified in FAR 15.403– 

3(a)(4), an offeror who does not comply 

with a requirement to submit data that 

the contracting officer has deemed 

necessary to determine price 

reasonableness or cost realism is 

ineligible for award, unless the head of 

the contracting activity determines that 

it is in the best interest of the 

Government to make the award to that 

offeror, based on consideration of the 

following: 

(i) The effort made to obtain the data. 

(ii) The need for the item or service. 


srobinson on DSK4SPTVN1PROD with RULES3
Federal Register / Vol. 77, No. 142 / Tuesday, July 24, 2012 / Rules and Regulations 43473 

(iii) Increased cost or significant harm 

to the Government if award is not made. 

* * * * * 

PART 252—SOLICITATION 

PROVISIONS AND CONTRACT 

CLAUSES 

■ 7. Add sections 252.215–7003 and 

252.215–7004 to read as follows: 

252.215–7003 Requirement for 

Submission of Data Other Than Certified 

Cost or Pricing Data—Canadian 

Commercial Corporation. 

As prescribed at 215.408(5)(i), use the 

following provision: 

REQUIREMENT FOR SUBMISSION OF 

DATA OTHER THAN CERTIFIED COST OR 

PRICING DATA—CANADIAN 

COMMERCIAL CORPORATION (JUL 2012) 

(a) Submission of certified cost or pricing 

data is not required. 

(b) Canadian Commercial Corporation shall 

obtain and provide the following: 

(i) Profit rate or fee (as applicable). 

(ii) Analysis provided by Public Works and 

Government Services Canada to the Canadian 

Commercial Corporation to determine a fair 

and reasonable price (comparable to the 

analysis required at FAR 15.404–1). 

(iii) Data other than certified cost or pricing 

data necessary to permit a determination by 

the U.S. Contracting Officer that the 

proposed price is fair and reasonable [U.S. 

Contracting Officer to insert description of 

the data required in accordance with FAR 

15.403–3(a)(1)]. 

(c) As specified in FAR 15.403–3(a)(4), an 

offeror who does not comply with a 

requirement to submit data that the U.S. 

Contracting Officer has deemed necessary to 

determine price reasonableness or cost 

realism is ineligible for award unless the 

head of the contracting activity determines 

that it is in the best interest of the 

Government to make the award to that 

offeror. 

(End of provision) 

252.215–7004 Requirement for 

Submission of Data Other Than Certified 

Cost or Pricing Data—Modifications– 

Canadian Commercial Corporation. 

As prescribed at 215.408(5)(ii), use 

the following clause: 

REQUIREMENT FOR SUBMISSION OF 

DATA OTHER THAN CERTIFIED COST OR 

PRICING DATA—MODIFICATIONS— 

CANADIAN COMMERCIAL CORPORATION 

(JUL 2012) 

(a) Submission of certified cost or pricing 

data is not required. 

(b) Canadian Commercial Corporation shall 

obtain and provide the following for 

modifications that exceed the simplified 

acquisition threshold [or higher dollar value 

specified by the U.S. Contracting Officer in 

the solicitation]. 

(i) Profit rate or fee (as applicable). 

(ii) Analysis provided by Public Works and 

Government Services Canada to the Canadian 

Commercial Corporation to determine a fair 

and reasonable price (comparable to the 

analysis required at FAR 15.404–1). 

(iii) Data other than certified cost or pricing 

data necessary to permit a determination by 

the U.S. Contracting Officer that the 

proposed price is fair and reasonable [U.S. 

Contracting Officer to insert description of 

the data required in accordance with FAR 

15.403–3(a)(1)]. 

(End of clause) 

[FR Doc. 2012–17588 Filed 7–23–12; 8:45 am] 

BILLING CODE 5001–06–P 


srobinson on DSK4SPTVN1PROD with RULES3