[Federal Register Volume 89, Number 197 (Thursday, October 10, 2024)]
[Proposed Rules]
[Pages 82193-82196]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2024-23229]


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DEPARTMENT OF DEFENSE

Defense Acquisition Regulations System

48 CFR Parts 234, 242, and 252

[Docket DARS-2024-0031]
RIN 0750-AL47


Defense Federal Acquisition Regulation Supplement: Cost and 
Software Data Reporting for Major Weapons Systems (2021-D028)

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

ACTION: Proposed rule.

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SUMMARY: DoD is proposing to amend the Defense Federal Acquisition 
Regulation Supplement (DFARS) to implement statutory and other policy 
updates made to the cost and software data reporting requirements for 
major systems.

DATES: Comments on the proposed rule should be submitted in writing to 
the address shown below on or before December 9, 2024, to be considered 
in the formation of a final rule.

ADDRESSES: Submit comments identified by DFARS Case 2021-D028, using 
either of the following methods:
    [cir] Federal eRulemaking Portal: https://www.regulations.gov. 
Search for DFARS Case 2021-D028. Select ``Comment'' and follow the 
instructions to submit a comment. Please include ``DFARS Case 2021-
D028'' on any attached documents.
    [cir] Email: <a href="/cdn-cgi/l/email-protection#d5baa6b1fbb1b3b4a7a695b8b4bcb9fbb8bcb9"><span class="__cf_email__" data-cfemail="a2cdd1c68cc6c4c3d0d1e2cfc3cbce8ccfcbce">[email protected]</span></a>. Include DFARS Case 2021-D028 in 
the subject line of the message.
    Comments received generally will be posted without change to 
https://www.regulations.gov, including any personal information 
provided. To confirm receipt of your comment(s), please check https://www.regulations.gov, approximately two to three days after submission 
to verify posting.

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

SUPPLEMENTARY INFORMATION:

I. Background

    DoD is proposing to revise the DFARS to implement 10 U.S.C. 3227(b) 
and (c) and updates to the DFARS cost and software data reporting 
requirements made in the Department of Defense Instruction (DoDI) 
5000.73, Cost Analysis Guidance and Procedures, and Department of 
Defense Manual (DoDM) 5000.04, Cost and Software Data Reporting (CSDR). 
Paragraphs (b) and (c) of 10 U.S.C. 3227 require, unless waived, 
submission of cost data for contracts expected to exceed $20 million or 
$50 million for acquisition and sustainment programs expected to exceed 
$100 million. The data will facilitate cost estimation and comparison 
across acquisition programs. The changes to the DoDI and the DoDM 
implement DoDI 5000.02, Operation of the Adaptive Acquisition 
Framework, which restructured defense acquisition guidance to improve 
process effectiveness and implement the Adaptive Acquisition Framework.

II. Discussion and Analysis

    This rule proposes to modify DFARS subpart 234.71 to implement 10 
U.S.C. 3227(b) and (c) and the updates made to DoDI 5000.73 and DoDM 
5000.04 resulting from implementation of the Adaptive Acquisition 
Framework. This proposed rule amends DFARS subpart 234.71 to establish 
policy and procedures necessary to implement the updates to DoDI 
5000.73 and DoDM 5000.04.
    The rule also proposes to modify the DFARS to revise cost and 
software data reporting requirements for contracts above certain 
thresholds when awarded in support of acquisition or sustainment 
programs expected to exceed $100 million. This proposed rule modifies 
DFARS 242.503 to remove cost and software data reporting from postaward 
conference procedures, because the cost and software data reporting is 
a separate process.

[[Page 82194]]

    The solicitation provision at 252.234-7003, Notice of Cost and 
Software Data Reporting, is proposed for deletion. Revisions are 
proposed to the contract clause at 252.234-7004, Cost and Software Data 
Reporting.

III. 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 rule proposes to delete the solicitation provision and its 
Alternate I at DFARS 252.234-7003, Notice of Cost and Software Data 
Reporting, and proposes to rename and amend the clause and its 
Alternate I at DFARS 252.234-7004, Cost and Software Data Reporting. 
The basic clause at DFARS 252.234-7004 is prescribed at 234.7105(a) and 
the alternate I clause is prescribed at 234.7105(b). However, this 
proposed rule does not impose any new requirements on contracts at or 
below the SAT, for commercial products including COTS items, or for 
commercial services. The clause does not apply to acquisitions at or 
below the SAT, to acquisitions of commercial products (including COTS 
items), or to acquisitions of commercial services.

IV. Expected Impact of the Rule

    The proposed rule, if finalized, will impact the Government and 
large and small contractors. Contracting officers will be required to 
address CSDR requirements in acquisition plans and are now strongly 
encouraged to attend CSDR-readiness reviews for contracts meeting the 
updated thresholds.
    Currently, contractors are required to comply with CSDR 
requirements for major defense acquisition programs. This proposed 
rule, if finalized, will require approximately 304 unique contractors 
(including about 112 small entities) per year to comply with CSDR 
reporting requirements for approximately 6,208 contracts (including 
about 358 awarded to small entities) per year expected to exceed $20 
million and $50 million in support of acquisition and/or sustainment 
programs expected to exceed $100 million under certain acquisition 
pathways. Contractors will also be required to comply with CSDR 
requirements for any contract for a program that is expected to exceed 
$100 million, which the CSDR plan approval authority determines is high 
risk or of high technical interest.
    DoD expects to benefit by having access to cost and software data 
for acquisition and sustainment programs in the various acquisition 
pathways. This data will allow DoD to accomplish more accurate cost 
estimation and comparison across acquisition programs.

V. 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.

VI. Regulatory Flexibility Act

    DoD does not expect this proposed rule, when finalized, 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 this proposed rule only applies to contracts expected to 
exceed $20 million or $50 million for acquisition and sustainment 
programs expected to exceed $100 million. However, an initial 
regulatory flexibility analysis has been performed and is summarized as 
follows:
    This proposed rule is required to implement 10 U.S.C. 3227(b) and 
(c) and updates made to DoDI 5000.73, Cost Analysis Guidance and 
Procedures, and DoDM 5000.04, Cost and Software Data Reporting. Unless 
waived, 10 U.S.C. 3227(b) and (c) require submission of cost data for 
contracts expected to exceed $20 million or $50 million for acquisition 
and sustainment programs expected to exceed $100 million. The data will 
facilitate cost estimation and comparison across acquisition programs. 
The updates to the DoDI and DoDM implement DoDI 5000.02, Operation of 
the Adaptive Acquisition Framework, which restructured defense 
acquisition guidance to improve process effectiveness and implement the 
Adaptive Acquisition Framework.
    The objective of this proposed rule is to update the DFARS cost and 
software data reporting requirements to implement 10 U.S.C. 3227(b) and 
(c) and changes made to DoDI 5000.73, Cost Analysis Guidance and 
Procedures, and DoDM 5000.04, Cost and Software Data Reporting. The 
legal basis for this proposed rule is 41 U.S.C. 1303 and 10 U.S.C. 
3227(b) and (c).
    This proposed rule, when finalized, will require the clause at 
DFARS 252.234-7004, Cost and Software Data Reporting System, to be 
included in solicitations and contracts that are expected to exceed $50 
million and that meet the requirements for cost and software data 
reporting. The proposed rule, when finalized, will require alternate I 
of the clause to be included in solicitations and contracts that are 
expected to be greater than $20 million, but less than or equal to $50 
million, when required by the Cost and Software Data Reporting plan 
approval authority or when determined to be high-risk or of high-
technical interest by the cost and software data reporting plan 
approval authority. Therefore, DoD considered contracts with this 
clause that were awarded during the last three fiscal years. According 
to data from the Procurement Business Intelligence Service, in the last 
three fiscal years, DoD awarded such contracts to unique small entities 
as follows: 130 in FY 2021, 99 in FY 2022, and 109 in FY 2023, which 
averages out to 112 per fiscal year. Therefore, the number of small 
entities to which this proposed rule may apply is approximately 112.
    This proposed rule does not impose any new reporting, 
recordkeeping, or other compliance requirements for small entities.
    This proposed rule does not duplicate, overlap, or conflict with 
any other Federal rules.
    There are no known alternatives that would accomplish the stated 
objectives of the applicable statute.
    DoD invites comments from small business concerns and other 
interested parties on the expected impact of this proposed rule on 
small entities.
    DoD will also consider comments from small entities concerning the 
existing regulations in subparts affected by this proposed rule in 
accordance with 5 U.S.C. 610. Interested parties must submit such 
comments separately and should cite 5 U.S.C. 610 (DFARS Case 2021-
D028), in correspondence.

VII. Paperwork Reduction Act

    The Paperwork Reduction Act (44 U.S.C. chapter 35) applies to this 
proposed rule. However, these changes to the DFARS do not impose 
additional information collection requirements to the paperwork burden 
previously approved by the Office of Management and Budget (OMB) under 
OMB Control Number 0704-0671, entitled Cost and Software Data 
Reporting, and OMB Control Number 9000-0149, entitled

[[Page 82195]]

Subcontract Consent and Contractors' Purchasing System Review.

List of Subjects in 48 CFR Parts 234, 242, and 252

    Government procurement.

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

    Therefore, the Defense Acquisition Regulations System proposes to 
amend 48 CFR parts 234, 242, and 252 as follows:

0
1. The authority citation for 48 CFR parts 234, 242, and 252 continues 
to read as follows:

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

PART 234--MAJOR SYSTEM ACQUISITION

0
2. Revise section 234.7100 to read as follows:


234.7100   Scope of subpart.

    This subpart implements 10 U.S.C. 3227(b) and (c).
0
3. Revise section 234.7101 to read as follows:


234.7101   Applicability.

    (a) This subpart applies to contracts supporting any acquisition 
and/or sustainment program, if that program is expected to exceed $100 
million in one or more of the following acquisition pathways and to 
meet the following program criteria, when the contract is expected to 
exceed either of the following amounts:
    (1) $50 million.

                       Table 1 to Paragraph (a)(1)
------------------------------------------------------------------------
        Acquisition pathway                   Program criteria
------------------------------------------------------------------------
Major Capability Acquisition......  Acquisition Category (ACAT) I-II.
Software Pathway..................  Programs expected to exceed $100
                                     million in acquisition expenditures
                                     over any 5-year period.
Defense Business Systems..........  Business Category (BCAT) I-II
                                     expected to exceed $100 million in
                                     acquisition expenditures over any 5-
                                     year period.
Services..........................  Services Category (SCAT) I.
Middle Tier Acquisition...........  Programs expected to exceed $100
                                     million in acquisition expenditures
                                     over the Middle Tier Acquisition
                                     period.
------------------------------------------------------------------------

    (2) $20 million.

                       Table 2 to Paragraph (a)(2)
------------------------------------------------------------------------
        Acquisition pathway                   Program criteria
------------------------------------------------------------------------
Major Capability Acquisition......  If required by the Cost and Software
                                     Data Reporting plan approval
                                     authority.
Software Pathway..................
Defense Business Systems..........
Services..........................
Middle Tier Acquisition...........
Urgent Capability Acquisition.....
Other Acquisition Programs........
------------------------------------------------------------------------

    (b) This subpart also applies to contracts supporting any other 
program that is expected to exceed $100 million and is determined to be 
high-risk or of high-technical interest by the cost and software 
reporting (CSDR) plan approval authority.
0
4. Add sections 234.7102 through 234.7105 to read as follows:
* * * * *
Sec.
234.7102 Policy.
234.7103 Waiver.
234.7104 Procedures.
234.7105 Contract clause.
* * * * *


234.7102   Policy.

    The CSDR requirements are specified in DoD Instruction (DoDI) 
5000.73, Cost Analysis Guidance and Procedures, and are mandatory for 
acquisitions as specified in DoDI 5000.02, Operation of the Adaptive 
Acquisition Framework. Additional requirements for CSDR reporting are 
specified in DoD Manual (DoDM) 5000.04, Cost and Software Data 
Reporting.


234.7103   Waiver.

    (a) The CSDR requirements identified in this subpart may be waived 
only by the Office of the Secretary of Defense, Director of Cost 
Assessment and Program Evaluation (see 10 U.S.C. 3227(c)).
    (b) See PGI 234.7103 for contact information for the Cost 
Assessment and Program Evaluation office.


234.7104   Procedures.

    (a) If an indefinite-delivery contract is awarded, the contracting 
officer shall ensure the applicability of CSDR requirements is 
specified at the task order or delivery order level.
    (b) Prior to the issuance of a solicitation, the contracting 
officer shall obtain from the program manager, or other official 
responsible for the program, written documentation that preaward 
requirements of DoDM 5000.04 have been met or include a signed CSDR 
waiver in the contract file.
    (c) The contracting officer should attend the CSDR-readiness review 
for contracts that include the basic or alternate of the clause at 
252.234-7004, Cost and Software Data Reporting (see DoDM 5000.04).


234.7105   Contract clause.

    Use the basic or the alternate of the clause at 252.234-7004, Cost 
and Software Data Reporting, in solicitations and contracts for defense 
acquisition programs that are expected to exceed $100 million and meet 
the requirements for cost and software data reporting as follows:
    (a) Use the basic clause in solicitations and contracts that exceed 
$50 million and meet the criteria at 234.7101(a) and (a)(1).
    (b) Use the alternate clause in solicitations and contracts that 
exceed $20 million, but are less than or equal to $50 million, and that 
meet the criteria at 234.7101(a)(2) or (b).

[[Page 82196]]

PART 242--CONTRACT ADMINISTRATION AND AUDIT SERVICES

0
5. Revise section 242.503-2 to read as follows:


242.503-2   Postaward conference procedure.

    DD Form 1484, Post-Award Conference Record, may be used in 
conducting the conference and in preparing the conference report.

PART 252--SOLICITATION PROVISIONS AND CONTRACT CLAUSES


252.234-7003   [Removed and Reserved]

0
6. Remove and reserve section 252.234-7003.
0
7. Revise section 252.234-7004 to read as follows:


252.234-7004   Cost and Software Data Reporting.

    As prescribed in 234.7105(a), use the following basic clause:

Cost and Software Data Reporting--Basic (DATE)

    (a) Definition. As used in this clause--
    Undefinitized contract action means any contract action for 
which the contract terms, specifications, or price are not agreed 
upon before performance is begun under the action. Examples are 
letter contracts, orders under basic ordering agreements, and 
provisioned item orders, for which the price has not been agreed 
upon before performance has begun.
    (b) Requirements. In the performance of this contract, the 
Contractor shall--
    (1) Use cost and software data reporting (CSDR) processes and 
procedures that accomplish the requirements contained in the 
contract CSDR Plan (DD Form 2794) and applicable data item 
description(s);
    (2) Establish, implement, and maintain processes and procedures 
that provide for the consistent collection and generation of 
reliable actual cost data required by the contract CSDR Plan (DD 
Form 2794) and applicable data item description(s); and
    (3)(i) Within 60 days of contract award or the definitization of 
an undefinitized contract action, complete a CSDR-readiness review 
with the Cost Assessment and Program Evaluation, Deputy Director for 
Cost Assessment and the cost estimating component of the relevant 
military department or defense agency in order to review CSDR 
requirements.
    (ii) During the CSDR-readiness review, the Contractor shall--
    (A) Describe the processes and procedures the Contractor will 
use to--
    (1) Provide for the consistent collection and generation of 
reliable CSDR data; and
    (2) Deliver timely CSDR data deliverables required by the 
contract CSDR Plan (DD Form 2794) and applicable data item 
description(s);
    (B) Identify any subcontractor whose contract is expected to 
exceed $50 million; and
    (C) Identify any potential revisions to CSDR requirements that 
may better align data reporting to the Contractor's procedures.
    (c) Notification. For subcontracts expected to exceed $50 
million, if the Contractor changes subcontractors or awards new 
subcontracts, the Contractor shall notify the Contracting Officer 
within 10 days of award.
    (d) Subcontracts. The Contractor shall include this clause in 
subcontracts at any tier that are expected to exceed $50 million.
(End of clause)
    Alternate I. As prescribed in 234.7105(b), use the following 
clause, which uses different paragraphs (b)(3)(ii)(B), (c), and (d) 
than the basic clause:

Cost and Software Data Reporting--Alternate I (DATE)

    (a) Definition. As used in this clause--
    Undefinitized contract action means any contract action for 
which the contract terms, specifications, or price are not agreed 
upon before performance is begun under the action. Examples are 
letter contracts, orders under basic ordering agreements, and 
provisioned item orders, for which the price has not been agreed 
upon before performance has begun.
    (b) Requirements. In the performance of this contract, the 
Contractor shall--
    (1) Use cost and software data reporting (CSDR) processes and 
procedures that accomplish the requirements contained in the 
contract CSDR Plan (DD Form 2794) and applicable data item 
description(s);
    (2) Establish, implement, and maintain processes and procedures 
that provide for the consistent collection and generation of 
reliable actual cost data required by the contract CSDR Plan (DD 
Form 2794) and applicable data item description(s); and
    (3)(i) Within 60 days of contract award or the definitization of 
an undefinitized contract action, complete a CSDR-readiness review 
with the Cost Assessment and Program Evaluation, Deputy Director for 
Cost Assessment and the cost estimating component of the relevant 
military department or defense agency in order to review CSDR 
requirements.
    (ii) During the CSDR-readiness review, the Contractor shall--
    (A) Describe the processes and procedures the Contractor will 
use to--
    (1) Provide for the consistent collection and generation of 
reliable CSDR data; and
    (2) Deliver timely CSDR data deliverables required by the 
contract CSDR Plan (DD Form 2794) and applicable data item 
description(s);
    (B) Identify any subcontractor whose contract is expected to 
exceed $20 million; and
    (C) Identify any potential revisions to CSDR requirements that 
may better align data reporting to the Contractor's procedures.
    (c) Notification. For subcontracts expected to exceed $20 
million, if the Contractor changes subcontractors or awards new 
subcontracts, the Contractor shall notify the Contracting Officer 
within 10 days of award.
    (d) Subcontracts. The Contractor shall include this clause in 
subcontracts at any tier that are expected to exceed $20 million.
(End of clause)
[FR Doc. 2024-23229 Filed 10-9-24; 8:45 am]
BILLING CODE 6001-FR-P


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