[Federal Register Volume 89, Number 187 (Thursday, September 26, 2024)]
[Rules and Regulations]
[Pages 79000-79001]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2024-21094]



[[Page 79000]]

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DEPARTMENT OF DEFENSE

Defense Acquisition Regulations System

48 CFR Part 206

[Docket DARS-2024-0014]
RIN 0750-AL65


Defense Federal Acquisition Regulation Supplement: Modification 
of Prize Authority for Advanced Technology Achievements (DFARS Case 
2022-D014)

AGENCY: Defense Acquisition Regulations System, Department of Defense 
(DoD).

ACTION: Final rule.

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SUMMARY: DoD is issuing a final rule amending the Defense Federal 
Acquisition Regulation Supplement (DFARS) to implement a section of the 
National Defense Authorization Act for Fiscal Year 2022 that provides 
procedures and approval and reporting requirements for contracts 
awarded as prizes for advanced technology achievements.

DATES: Effective October 1, 2024.

FOR FURTHER INFORMATION CONTACT: Mr. Jon Snyder, telephone 703-945-
5341.

SUPPLEMENTARY INFORMATION:

I. Background

    DoD published a proposed rule in the Federal Register at 89 FR 
31680 on April 25, 2024, to implement section 822 of the National 
Defense Authorization Act (NDAA) for Fiscal Year (FY) 2022 (Pub. L. 
117-81), which amends 10 U.S.C. 4025. Section 822 provides the 
authority to carry out advanced technology prize programs to award 
contracts to recognize outstanding achievements in basic, advanced, and 
applied research; technology development; and prototype development. 
Section 822 specifies the award of a contract as a prize is a 
competitive procedure if the solicitation is widely advertised. Section 
822 also requires approval of such awards that exceed $10,000 and 
congressional reporting for contracts that exceed $10 million. There 
were no public comments submitted in response to the proposed rule. 
There are no changes made to the final rule.

II. Applicability to Contracts At or Below the Simplified Acquisition 
Threshold (SAT), for Commercial Products (Including Commercially 
Available Off-the-Shelf (COTS) Items), and for Commercial Services

    This final rule does not create any new solicitation provisions or 
contract clauses. It does not impact any existing solicitation 
provisions or contract clauses or their applicability to contracts 
valued at or below the simplified acquisition threshold, for commercial 
products including COTS items, or for commercial services.

III. Expected Impact of the Rule

    Prior to the enactment of the NDAA for FY 2022, 10 U.S.C. 4025 
(formerly 10 U.S.C. 2374a) did not provide for the award of contracts 
as prizes for outstanding achievements in basic, advanced, and applied 
research; technology development; and prototype development. This final 
rule implements the authority to award contracts as prizes under 
certain conditions.
    This final rule may increase participation in prize competitions 
and decrease the lead time to deliver to the warfighter achievements in 
basic, advanced, and applied research; technology development; and 
prototype development. This final rule may help to expand the defense 
industrial base by providing a way for entities that are new to DoD 
procurement to obtain DoD contracts. It may also streamline the 
competitive process, which could reduce Government administrative costs 
associated with competitive negotiated acquisitions. For this reason, 
the difference in the cost of managing a contract instead of another 
type of prize is expected to be negligible.
    Data provided from the Office of the Under Secretary of Defense for 
Research and Engineering indicates there were a total of 809 cash 
prizes awarded from FY 2021 to FY 2023, or approximately 270 per year, 
worth a total of about $3.5 million annually. DoD estimates 20 percent 
of these 270 historical cash prize awards, or 54 cash prize awards 
worth a total of approximately $700,000, would be converted to 
contracts. Therefore, DoD estimates that approximately 54 entities per 
year would be awarded contracts or a combination of contracts, other 
agreements (e.g., grants, cooperative agreements, other transaction 
agreements), and cash prizes as a result of the changes in this final 
rule.

IV. 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 
subject to review under section 6(b) of E.O. 12866, Regulatory Planning 
and Review, as amended.

V. Congressional Review Act

    As required by the Congressional Review Act (5 U.S.C. 801-808) 
before an interim or final rule takes effect, DoD will submit a copy of 
the interim or final rule with the form, Submission of Federal Rules 
under the Congressional Review Act, to the U.S. Senate, the U.S. House 
of Representatives, and the Comptroller General of the United States. A 
major rule under the Congressional Review Act cannot take effect until 
60 days after it is published in the Federal Register. The Office of 
Information and Regulatory Affairs has determined that this rule is not 
a major rule as defined by 5 U.S.C. 804.

VI. Regulatory Flexibility Act

    A final regulatory flexibility analysis has been prepared 
consistent with the Regulatory Flexibility Act, 5 U.S.C. 601, et seq. 
and is summarized as follows:
    This rule is necessary to implement section 822 of the National 
Defense Authorization Act (NDAA) for Fiscal Year (FY) 2022 (Pub. L. 
117-81), which amends 10 U.S.C. 4025, Prizes for advanced technology 
achievements. Section 822 provides advanced technology prize programs 
authority to award contracts to recognize outstanding achievements in 
basic, advanced, and applied research; technology development; and 
prototype development. Section 822 also provides that the award of a 
contract as a prize is a competitive procedure if the prize program 
solicitation is widely advertised. Section 822 also requires approval 
of such awards exceeding $10,000 and congressional reporting for 
contracts exceeding $10 million. The objective of this final rule is to 
implement section 822 of the NDAA for FY 2022.
    There were no significant issues raised by the public in response 
to the initial regulatory flexibility analysis.
    Data provided from the Office of the Under Secretary of Defense for 
Research and Engineering indicates there were a

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total of 809 cash prizes awarded from FY 2021 to FY 2023, or 
approximately 270 per year, worth a total of about $3.5 million 
annually. During this three-year period, DoD awarded a total of 636 
cash prizes to small entities, which is an average of 212 per year. DoD 
estimates 20 percent of these 212 historical cash prize awards, or 42 
cash prize awards worth a total of approximately $545,000, would be 
converted to contracts. Therefore, DoD estimates that approximately 42 
small entities per year would be awarded contracts or a combination of 
contracts, other agreements (e.g., grants, cooperative agreements, 
other transaction agreements), and cash prizes as a result of the 
changes in this final rule. Therefore, DoD does not anticipate that 
this final rule will have a significant impact on small entities.
    The rule does not impose any new reporting, recordkeeping, or other 
compliance requirements for small entities.
    There are no known alternatives that would accomplish the stated 
objectives of the applicable statute.

VII. Paperwork Reduction Act

    This final rule does not contain 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).

List of Subjects in 48 CFR Part 206

    Government procurement.

Jennifer D. Johnson,
Editor/Publisher, Defense Acquisition Regulations System.

    Therefore, the Defense Acquisition Regulations System amends 48 CFR 
part 206 as follows:

PART 206--COMPETITION REQUIREMENTS

0
1. The authority citation for 48 CFR part 206 continues to read as 
follows:

    Authority:  41 U.S.C. 1303 and 48 CFR chapter 1.


0
2. Amend section 206.102-70 by--
0
a. Designating the text as paragraph (a); and
0
b. Adding paragraph (b).
    The addition reads as follows:


206.102-70  Other competitive procedures.

    (a) * * *
    (b) The award of a contract as a prize resulting from a competitive 
selection of prize recipients for advanced technology achievements is a 
competitive procedure (10 U.S.C. 4025(f)), when the solicitation is 
widely advertised, including through the Governmentwide point of entry 
(see FAR part 5). See PGI 206.102-70 for approval requirements.

[FR Doc. 2024-21094 Filed 9-25-24; 8:45 am]
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