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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
 AGENCY: Defense Acquisition Regulations System, Department of Defense (DoD).
 ACTION: Proposed rule.
 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: ○ 
                        *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. ○ 
                        *Email: osd.dfars@mail.mil.*
                         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.
                    ( print 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 
                    ( print 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: 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
 2.Revise section 234.7100 to read as follows: 234.7100
  This subpart implements 10 U.S.C. 3227(b) and (c).
 3.Revise section 234.7101 to read as follows: 234.7101
  (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 criteriaMajor 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 criteriaMajor Capability Acquisition
If required by the Cost and Software Data Reporting plan approval authority.Software PathwayDefense Business SystemsServicesMiddle Tier AcquisitionUrgent Capability AcquisitionOther 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.
 4.Add sections 234.7102 through 234.7105 to read as follows: 
 234.7102
                    Policy.
                    234.7103
                    Waiver.
                    234.7104
                    Procedures.
                    234.7105
                    Contract clause.
 
 234.7102
  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
  (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
  (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
  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).
 PART 242—CONTRACT ADMINISTRATION AND AUDIT SERVICES
 5.Revise section 242.503-2 to read as follows: 242.503-2
  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
 6.Remove and reserve section 252.234-7003. 7.Revise section 252.234-7004 to read as follows: 252.234-7004
  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