`[Federal Register Volume 89, Number 221 (Friday, November 15, 2024)]
[Rules and Regulations]
[Pages 90233-90237]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2024-26054]


-----------------------------------------------------------------------

DEPARTMENT OF DEFENSE

Defense Acquisition Regulations System

48 CFR Parts 203, 204, 205, 212, 215, and 225

[Docket DARS-2023-0043]
RIN 0750-AK33


Defense Federal Acquisition Regulation Supplement: 
Inapplicability of Additional Defense-Unique Laws and Certain Non-
Statutory DFARS Clauses to Commercial Item Contracts (DFARS Case 2018-
D074)

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 implement sections of the 
National Defense Authorization Acts for Fiscal Years 2018 and 2019 
regarding the applicability of certain solicitation provisions and 
contract clauses to contracts and subcontracts for commercial products, 
commercial services, and commercially available off-the-shelf items.

DATES: Effective November 25, 2024.

FOR FURTHER INFORMATION CONTACT: Ms. Jeanette Snyder, telephone 703-
508-7524.

SUPPLEMENTARY INFORMATION:

I. Background

    DoD published a proposed rule in the Federal Register at 88 FR 
80468 on November 17, 2023, to amend the DFARS to implement paragraphs 
(b) and (c) of section 849 of the National Defense Authorization Act 
(NDAA) for Fiscal Year (FY) 2018 (Pub. L. 115-91) and section 837 of 
the NDAA for FY 2019 (Pub. L. 115-232). Paragraph (b) of section 849 
requires that DoD review the DFARS and propose revisions to eliminate 
certain contract clause requirements applicable to Federal Acquisition 
Regulation (FAR) part 12 commercial product and commercial service 
acquisitions, except for regulations required by law or Executive 
order, unless the Secretary of Defense determines that there is a 
specific reason not to eliminate the regulation. Paragraph (c) of 
section 849 requires that DoD review the DFARS and propose revisions to 
eliminate certain contract clause requirements applicable to 
commercially available off-the-shelf (COTS) item subcontracts, except 
for regulations required by law or Executive order, unless the 
Secretary of Defense determines that there is a specific reason not to 
eliminate the regulation.
    Paragraph (a) of section 837 of the NDAA for FY 2019 revises 10 
U.S.C. 2375(b)(2), redesignated as 10 U.S.C. 3452(b)(2), by deleting 
the date ``January 1, 2015'' and adding the date ``October 13, 1994'' 
(the date of the Federal Acquisition Streamlining Act (FASA) of 1994). 
DoD published an extension to the comment period in the Federal 
Register on December 27, 2023, at 88 FR 89357. Two respondents 
submitted public comments in response to the proposed rule.

II. Discussion and Analysis

    DoD reviewed the public comments in the development of the final 
rule; however, no changes were made to the rule as a result of the 
comments received. A discussion of the comments is provided, as 
follows:

A. Summary of Significant Changes From the Proposed Rule

    DFARS 212.371 is amended to add the contract clauses at DFARS 
252.204-7012, Safeguarding Covered Defense Information and Cyber 
Incident Reporting, and 252.205-7000, Provision of Information to 
Cooperative Agreement Holders, to the list of solicitation provisions 
and contract clauses that are inapplicable to contracts for the 
acquisition of COTS items. These clauses are not applicable to 
contracts solely for the acquisition of COTS items. DFARS 212.301 is 
amended to restore, to the list of provisions and clauses that apply to 
commercial products and commercial services, the clause at DFARS 
252.203-7005, Representation Relating to Compensation of Former DoD 
Officials, that was removed from the list in the proposed rule. This 
change aligns this final rule with the final rule for DFARS Case 2010-
D020 published in the Federal Register on November 18, 2011 (76 FR 
71826).

B. Analysis of Public Comments

    Comment: One respondent recommended that DFARS clause 252.225-7029, 
Acquisition of Uniform Components for Afghan Military or Afghan 
National Police, be removed from the DFARS as it is obsolete, since the 
United States is no longer involved in Afghanistan and is no longer 
purchasing uniform components for the Afghan military or the Afghan 
National Police.
    Response: DoD acknowledges the respondent's concern relating to the 
applicability of DFARS clause 252.225-7029; however, the clause cannot 
be removed from the DFARS until the

[[Page 90234]]

underlying statutory requirement is repealed.
    Comment: One respondent indicated that the proposed rule did not 
sufficiently address the extent to which DoD reviewed, on a case-by-
case basis, the applicability of all regulations that require specific 
contract clauses for contracts using the procedures in part 12 of the 
FAR and for subcontracts for COTS items. The respondent requested that 
DoD publish a second proposed rule that explains and describes the 
case-by-case determinations that DoD made with respect to each of these 
regulations.
    Response: Section II of the preamble of the proposed rule provided 
a description of the analysis performed. In addition, the proposed rule 
for DFARS Case 2017-D010 (83 FR 30646) provided a description of the 
analysis performed of commercial product and commercial service 
applicability for DoD-unique statutes and associated contract clauses 
issued on or after January 1, 2015. In reviewing the remaining 
provisions and clauses, DoD considered procurement-related reasons 
including, but not limited to, the following: national security, common 
commercial practice, domestic preference, prohibited sources, trade 
agreements, protection of the Government, health and safety, and 
foreign military sales requirements.

C. Other Changes

    A conforming change is made to the prescription at 205.470 for the 
clause at DFARS 252.205-7000. Language at 203.171-4(b) regarding 
applicability to commercial products and commercial services, which was 
proposed for deletion, has been restored in the prescription for the 
provision at DFARS 252.203-7005. DFARS 212.205, Offers, is removed to 
align with changes made at DFARS 215.371-4(a)(7). DFARS 212.371 is 
amended to change the date ``October 14, 1994'', to ``October 13, 
1994'' to align with 10 U.S.C. 3452. The prescription at DFARS 
225.1103(4) for the clause at 252.225-7007, Prohibition on Acquisition 
of Certain Items from Communist Chinese Military Companies, is amended 
to add the requirement to include the clause in solicitations and 
contracts using FAR part 12 procedures for the acquisition of 
commercial products and commercial services, to align with the 
determination made in the final rule for DFARS Case 2018-D020 published 
on December 21, 2018, at 83 FR 66066.

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 final rule does not create any new solicitation provisions or 
contract clauses. However, the final rule clarifies the applicability 
of the following provisions and clause by amending the list under 
paragraph (f) at DFARS 212.301, Solicitation provisions and contract 
clauses for the acquisition of commercial products and commercial 
services, to remove DFARS clause 252.203-7003, Agency Office of the 
Inspector General, and DFARS provision 252.215-7007, Notice of Intent 
to Resolicit. This rule also clarifies the applicability of certain 
provisions and clauses by amending the list at DFARS 212.370, 
Inapplicability of certain provisions and clauses to contracts and 
subcontracts for the acquisition of commercial products, commercial 
services, and COTS items, to add the following: (1) DFARS clause 
252.203-7003, Agency Office of the Inspector General; and (3) DFARS 
provision 252.215-7007, Notice of Intent to Resolicit. In addition, 
this rule makes similar clarifications at DFARS 212.371, 
Inapplicability of certain provisions and clauses to contracts for the 
acquisition of COTS items, to add the following: (1) DFARS clause 
252.205-7000, Provision of Information to Cooperative Agreement 
Holders; (2) DFARS provision 252.204-7008, Compliance with Safeguarding 
Covered Defense Information Controls; (3) DFARS clause 252.204-7012, 
Safeguarding Covered Defense Information and Cyber Incident Reporting; 
(4) DFARS provision 252.204-7019, Notice of NIST SP 800-171 DoD 
Assessment Requirements; (5) DFARS clause 252.204-7020, NIST SP 800-171 
DoD Assessment Requirements; and (6) DFARS clause 252.204-7021, 
Cybersecurity Maturity Model Certification Requirements.

IV. Expected Impact of the Proposed Rule

    This final rule could impact any large or small business that is 
awarded a commercial contract by DoD. This rule does not add any new 
solicitation provisions or contract clauses. Rather, there may be a 
reduction in burden on contractors by making one solicitation provision 
and one contract clause no longer applicable to solicitations and 
contracts for commercial products, commercial services, and COTS items, 
and by making two provisions and four clauses no longer applicable to 
solicitations and contracts for COTS items.

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. 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.

VII. 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 sections of the National 
Defense Authorization Act (NDAA) for Fiscal Year (FY) 2018 and the NDAA 
for FY 2019 regarding the applicability of certain solicitation 
provisions and contract clauses to contracts and subcontracts for 
commercial products, commercial services, and commercially available 
off-the-shelf (COTS) items.
    The objective of this rule is to implement paragraphs (b) and (c) 
of section 849 of the NDAA for FY 2018 (Pub. L. 115-91). Section 849 
paragraph (b) requires an amendment to the DFARS to eliminate certain 
contract clause requirements applicable to FAR part 12 commercial 
product and commercial service acquisitions, except for regulations 
required by law or Executive order, unless the Secretary of Defense 
determines that there is a

[[Page 90235]]

specific reason not to eliminate the regulation. Section 849 paragraph 
(c) requires an amendment to the DFARS to eliminate certain contract 
clause requirements applicable to COTS item subcontracts, except for 
regulations required by law or Executive order, unless the Secretary of 
Defense determines that there is a specific reason not to eliminate the 
regulation.
    This rule also includes revisions to implement paragraph (a) of 
section 837 of the NDAA for FY 2019 (Pub. L. 115-232). Section 837 
paragraph (a) revises 10 U.S.C. 2375(b)(2), redesignated as 10 U.S.C. 
3452(b)(2), by deleting the date ``January 1, 2015'' and adding the 
date ``October 13, 1994.'' This rule implements the change at 10 U.S.C. 
3452(b)(2) by amending the DFARS to eliminate solicitation provisions 
and contract clauses enacted after October 13, 1994, not including the 
provisions or clauses referred to in 10 U.S.C. 3452(e)(1), (e)(2), and 
(e)(3), from commercial product and commercial service solicitations 
and contracts, respectively, unless the Under Secretary of Defense for 
Acquisition and Sustainment makes a written determination that it would 
not be in the best interest of the Department of Defense to exclude 
them.
    No significant issues were raised by the public comments in 
response to the initial regulatory flexibility analysis.
    According to data from the Federal Procurement Data System for FY 
2021 through FY 2023, DoD awarded approximately 31,022 contracts for 
commercial products, commercial services, or COTS items to an average 
of 13,335 unique small entities per year. Therefore, DoD estimates that 
the number of small entities to which this rule will apply is 13,335.
    This rule does not include any new reporting, recordkeeping, or 
other compliance requirements for small entities.
    There are no known alternatives that would accomplish the stated 
objectives of the statutes.

VIII. 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 Parts 203, 204, 205, 212, 215, and 225

    Government procurement.

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

    Therefore, the Defense Acquisition Regulations System amends 48 CFR 
parts 203, 204, 205, 212, 215, and 225 as follows:

0
1. The authority citation for parts 203, 204, 205, 212, 215, and 225 
continues to read as follows:

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

PART 203--IMPROPER BUSINESS PRACTICES AND PERSONAL CONFLICTS OF 
INTEREST

0
2. Amend section 203.1004 by revising paragraph (a) to read as follows:


203.1004   Contract clauses.

    (a) Use the clause at 252.203-7003, Agency Office of the Inspector 
General, in solicitations and contracts that include the FAR clause 
52.203-13, Contractor Code of Business Ethics and Conduct.
* * * * *

PART 204--ADMINISTRATIVE AND INFORMATION MATTERS

0
3. Amend section 204.7403 by revising paragraph (b) to read as follows:


204.7403   Contract clauses.

* * * * *
    (b) Use the clause at 252.204-7015, Notice of Authorized Disclosure 
of Information for Litigation Support, in solicitations and contracts 
that involve litigation support services, including solicitations and 
contracts using FAR part 12 procedures for the acquisition of 
commercial products and commercial services.

PART 205--PUBLICIZING CONTRACT ACTIONS

0
4. Revise section 205.470 to read as follows:


205.470   Contract clause.

    Use the clause at 252.205-7000, Provision of Information to 
Cooperative Agreement Holders, in solicitations and contracts, 
including solicitations and contracts using FAR part 12 procedures for 
the acquisition of commercial products and commercial services, except 
for solicitations and contracts solely for the acquisition of 
commercially available off-the-shelf items, that are expected to exceed 
$1.5 million. This clause implements 10 U.S.C. 4957.

PART 212--ACQUISITION OF COMMERCIAL PRODUCTS AND COMMERCIAL 
SERVICES


212.205   [Removed]

0
5. Remove section 212.205.

0
6. Amend section 212.301--
0
a. In paragraph (f)(i)(B) by removing ``section 847 of Pub. L. 110-
181'' and adding ``section 847 of the National Defense Authorization 
Act for Fiscal Year 2008 (Pub. L. 110-181)'' in its place;
0
b. By removing paragraph (f)(i)(D);
0
c. By redesignating paragraph (f)(i)(E) as (f)(i)(D);
0
d. By revising paragraphs (f)(ii)(B) through (D);
0
e. By removing paragraph (f)(vi)(C);
0
f. By redesignating paragraphs (f)(vi)(D), (E), and (F) as paragraphs 
(f)(vi)(C), (D) and (E), respectively;
0
g. By revising paragraph (f)(viii)(D);
0
h. By revising paragraphs (f)(x)(J) through (L), (U), and (Y);
0
i. In paragraph (f)(xi)(A) by removing ``Pub. L.'' and adding ``Public 
Law'' in its place;
0
j. By revising paragraph (f)(xi)(B);
0
k. In paragraph (f)(xii)(C) by removing ``227.7102-4(c)'' and adding 
``227.7102-4(c), to comply with 10 U.S.C. 3781-3786'' in its place;
0
l. In paragraph (f)(xiv)(D) by removing ``232.7102'' and adding 
``232.7102, to comply with 26 U.S.C. 6331(h)'' in its place; and
0
m. By revising paragraphs (f)(xv)(A) and (B), (f)(xx)(B), and 
(f)(xxi)(A) and (D).
    The revisions read as follows:


212.301   Solicitation provisions and contract clauses for the 
acquisition of commercial products and commercial services.

* * * * *
    (f) * * *
    (ii) * * *
    (B) Use the provision at 252.204-7008, Compliance with Safeguarding 
Covered Defense Information Controls, as prescribed in 204.7304(a), to 
comply with section 941 of the National Defense Authorization Act for 
Fiscal Year 2013 (Pub. L. 112-239) and section 1632 of the National 
Defense Authorization Act for Fiscal Year 2015 (Pub. L. 113-291).
    (C) Use the clause at 252.204-7009, Limitations on the Use or 
Disclosure of Third-Party Contractor Reported Cyber Incident 
Information, as prescribed in 204.7304(b), to comply with section 941 
of the National Defense Authorization Act for Fiscal Year 2013 (Pub. L. 
112-239) and section 1632 of the National

[[Page 90236]]

Defense Authorization Act for Fiscal Year 2015 (Pub. L. 113-291).
    (D) Use the clause at 252.204-7012, Safeguarding Covered Defense 
Information and Cyber Incident Reporting, as prescribed in 204.7304(c), 
to comply with section 941 of the National Defense Authorization Act 
for Fiscal Year 2013 (Pub. L. 112-239) and section 1632 of the National 
Defense Authorization Act for Fiscal Year 2015 (Pub. L. 113-291).
* * * * *
    (viii) * * *
    (D) Use the provision at 252.219-7012, Competition for Religious-
Related Services, as prescribed in 219.270-3, to comply with section 
898 of the National Defense Authorization Act for Fiscal Year 2016 
(Pub. L. 114-92).
* * * * *
    (x) * * *
    (J) Use the clause at 252.225-7016, Restriction on Acquisition of 
Ball and Roller Bearings, as prescribed in 225.7009-5, to comply with 
section 8065 of Public Law 107-117 and the same restriction in 
subsequent DoD appropriations acts.
    (K) Use the clause at 252.225-7017, Photovoltaic Devices, as 
prescribed in 225.7017-4(a), to comply with section 846 of the National 
Defense Authorization Act for Fiscal Year 2011 (Pub. L. 111-383).
    (L) Use the provision at 252.225-7018, Photovoltaic Devices--
Certificate, as prescribed in 225.7017-4(b), to comply with section 846 
of the National Defense Authorization Act for Fiscal Year 2011 (Pub. L. 
111-383).
* * * * *
    (U) Use the clause at 252.225-7029, Acquisition of Uniform 
Components for Afghan Military or Afghan National Police, as prescribed 
in 225.7703-4(d), to comply with section 826 of the National Defense 
Authorization Act for Fiscal Year 2013 (Pub. L. 112-239).
* * * * *
    (Y) Use the clause at 252.225-7039, Defense Contractors Performing 
Private Security Functions Outside the United States, as prescribed in 
225.302-6, to comply with section 862 of the National Defense 
Authorization Act for Fiscal Year 2008 (Pub. L. 110-181).
* * * * *
    (xi) * * *
    (B) Use the provision at 252.226-7002, Representation for 
Demonstration Project for Contractors Employing Persons with 
Disabilities, as prescribed in 226.7203, to comply with section 853 of 
the National Defense Authorization Act for Fiscal Year 2004 (Pub. L. 
108-136).
* * * * *
    (xv) * * *
    (A) Use the clause at 252.237-7010, Prohibition on Interrogation of 
Detainees by Contractor Personnel, as prescribed in 237.173-5, to 
comply with section 1038 of the National Defense Authorization Act for 
Fiscal Year 2010 (Pub. L. 111-84).
    (B) Use the clause at 252.237-7019, Training for Contractor 
Personnel Interacting with Detainees, as prescribed in 237.171-4, to 
comply with section 1092 of the National Defense Authorization Act for 
Fiscal Year 2005 (Pub. L. 108-375).
* * * * *
    (xx) * * *
    (B) Use the clause at 252.246-7004, Safety of Facilities, 
Infrastructure, and Equipment for Military Operations, as prescribed in 
246.270-4, to comply with section 807 of the National Defense 
Authorization Act for Fiscal Year 2010 (Pub. L. 111-84).
* * * * *
    (xxi) * * *
    (A) Use the clause at 252.247-7003, Pass-Through of Motor Carrier 
Fuel Surcharge Adjustment to the Cost Bearer, as prescribed in 247.207, 
to comply with section 884 of the National Defense Authorization Act 
for Fiscal Year 2009 (Pub. L. 110-417).
* * * * *
    (D) Use the provision at 252.247-7026, Evaluation Preference for 
Use of Domestic Shipyards--Applicable to Acquisition of Carriage by 
Vessel for DoD Cargo in the Coastwise or Noncontiguous Trade, as 
prescribed in 247.574(c), to comply with section 1017 of the National 
Defense Authorization Act for Fiscal Year 2007 (Pub. L. 109-364).
* * * * *

0
7. Amend section 212.370 by adding paragraphs (b) and (c) to read as 
follows:


212.370   Inapplicability of certain provisions and clauses to 
contracts and subcontracts for the acquisition of commercial products, 
commercial services, and commercially available off-the-shelf items.

* * * * *
    (b) 252.203-7003, Agency Office of the Inspector General.
    (c) 252.215-7007, Notice of Intent to Resolicit.

0
8. Amend section 212.371 by--
0
a. Revising the introductory text;
0
b. Redesignating paragraphs (b) through (d) as paragraphs (h) through 
(j), respectively; and
0
c. Adding new paragraphs (b) through (g).
    The revision and additions read as follows:


212.371   Inapplicability of certain provisions and clauses to 
contracts for the acquisition of commercially available off-the-shelf 
items.

    Commercially available off-the-shelf (COTS) items are a subset of 
commercial products. Therefore, the provisions and clauses listed in 
212.370 as not applicable to contracts or subcontracts for the 
acquisition of commercial products are also not applicable to contracts 
or subcontracts for the acquisition of COTS items. In addition, the 
following provisions and clauses published after October 13, 1994, not 
expressly authorized in law, are not applicable or are modified in 
their applicability to contracts for the acquisition of COTS items:
* * * * *
    (b) 252.204-7008, Compliance with Safeguarding Covered Defense 
Information Controls.
    (c) 252.204-7012, Safeguarding Covered Defense Information and 
Cyber Incident Reporting.
    (d) 252.204-7019, Notice of NIST SP 800-171 DoD Assessment 
Requirements.
    (e) 252.204-7020, NIST SP 800-171 DoD Assessment Requirements.
    (f) 252.204-7021, Cybersecurity Maturity Model Certification 
Requirements.
    (g) 252.205-7000, Provision of Information to Cooperative Agreement 
Holders.
* * * * *


212.504   [Amended]

0
9. Amend section 212.504--
0
a. By removing paragraph (a)(xiii);
0
b. By redesignating paragraphs (a)(xiv) and (xv) as paragraphs 
(a)(xiii) and (xiv), respectively; and
0
c. In the newly redesignated paragraph (a)(xiv) by removing ``(section 
8065 of Pub. L. 107-117)'' and adding ``(section 8065, Pub. L. 107-
117)'' in its place.


212.505   [Amended]

0
10. Amend section 212.505 in the second sentence of the introductory 
text by removing ``or modified in their applicability'' and adding ``or 
are modified in their applicability'' in its place.

PART 215--CONTRACTING BY NEGOTIATION

0
11. Amend section 215.371-4--
0
a. In paragraph (a) introductory text by removing ``section''; and
0
b. By adding paragraph (a)(7).
    The addition reads as follows:


215.371-4   Exceptions.

    (a) * * *

[[Page 90237]]

    (7) Acquisitions of commercial products and commercial services 
using FAR part 12 procedures.
* * * * *

0
12. Revise section 215.371-6 to read as follows:


215.371-6   Solicitation provision.

    Use the provision at 252.215-7007, Notice of Intent to Resolicit, 
in competitive solicitations that will be solicited for fewer than 30 
days, unless an exception at 215.371-4 applies or the requirement is 
waived in accordance with 215.371-5.

PART 225--FOREIGN ACQUISITION

0
13. Amend section 225.1103 by revising paragraph (4) to read as 
follows:


225.1103   Other provisions and clauses.

* * * * *
    (4) Unless an exception in 225.770-3 applies, use the clause at 
252.225-7007, Prohibition on Acquisition of Certain Items from 
Communist Chinese Military Companies, in solicitations and contracts, 
including solicitations and contracts using FAR part 12 procedures for 
the acquisition of commercial products and commercial services, 
involving the delivery of items covered by the United States Munitions 
List or the 600 series of the Commerce Control List.

[FR Doc. 2024-26054 Filed 11-14-24; 8:45 am]
BILLING CODE 6001-FR-P`