38048 Federal Register / Vol. 76, No. 125 / Wednesday, June 29, 2011 / Rules and Regulations 

(Pub. L. 111–118) and similar sections 

in subsequent DoD appropriations acts. 

* * * * * 

■ 3. Amend section 212.504 by revising 

paragraph (a)(xix) to read as follows: 

212.504 Applicability of certain laws to 

subcontracts for the acquisition of 

commercial items. 

(a) * * * 

(xix) Section 8116 of the Defense 

Appropriations Act for Fiscal Year 2010 

(Pub. L. 111–118) and similar sections 

in subsequent DoD appropriations acts. 

* * * * * 

Subpart 222.74—Restrictions on the 

Use of Mandatory Arbitration 

Agreements 

■ 4. Revise section 222.7400 to read as 

follows: 

222.7400 Scope of subpart. 

This subpart implements section 8116 

of the Defense Appropriations Act for 

Fiscal Year 2010 (Pub. L. 111–118) and 

similar sections in subsequent DoD 

appropriations acts. 

■ 5. Amend section 222.7402 as follows: 

■ (a) Revise the introductory text to 

paragraph (a) as set forth below; and 

■ (b) Revise paragraph (b) as set forth 

below. 

222.7402 Policy. 

(a) Departments and agencies are 

prohibited from using funds 

appropriated or otherwise made 

available by the Fiscal Year 2010 

Defense Appropriations Act (Pub. L. 

111–118) or subsequent DoD 

appropriations acts for any contract 

(including task or delivery orders and 

bilateral modifications adding new 

work) in excess of $1 million, unless the 

contractor agrees not to— 

* * * * * 

(b) No funds appropriated or 

otherwise made available by the Fiscal 

Year 2010 Defense Appropriations Act 

(Pub. L. 111–118) or subsequent DoD 

appropriations acts may be expended 

unless the contractor certifies that it 

requires each covered subcontractor to 

agree not to enter into, and not to take 

any action to enforce, any provision of 

any agreement, as described in 

paragraph (a) of this section, with 

respect to any employee or independent 

contractor performing work related to 

such subcontract. 

■ 6. Revise section 222.7405 as follows: 

222.7405 Contract clause. 

Use the clause at 252.222–7006, 

Restrictions on the Use of Mandatory 

Arbitration Agreements, in all 

solicitations and contracts (including 

task or delivery orders and bilateral 

modifications adding new work) valued 

in excess of $1 million utilizing funds 

appropriated or otherwise made 

available by the Defense Appropriations 

Act for Fiscal Year 2010 (Pub. L. 111– 

118) or subsequent DoD appropriations 

acts, except in contracts for the 

acquisition of commercial items, 

including commercially available offthe-shelf items. 

[FR Doc. 2011–16315 Filed 6–28–11; 8:45 am] 

BILLING CODE 5001–08–P 

DEPARTMENT OF DEFENSE 

Defense Acquisition Regulations 

System 

48 CFR Parts 212 and 252 

RIN 0750–AH27 

Defense Federal Acquisition 

Regulation Supplement; Pilot Program 

for Acquisition of Military-Purpose 

Nondevelopmental Items (DFARS Case 

2011–D034) 

AGENCY: Defense Acquisition 

Regulations System, Department of 

Defense (DoD). 

ACTION: Interim rule. 

SUMMARY: DoD is issuing an interim rule 

to amend the Defense Federal 

Acquisition Regulation Supplement 

(DFARS) to implement section 866 of 

the National Defense Authorization Act 

for Fiscal Year 2011. Section 866 

authorized the Secretary of Defense to 

establish a pilot program to assess the 

feasibility and advisability of acquiring 

military-purpose nondevelopmental 

items in accordance with the 

streamlined procedures of the pilot 

program. 

DATES: Effective Date: June 29, 2011. 

Comment date: Comments on the 

interim rule should be submitted in 

writing to the address shown below on 

or before August 29, 2011, to be 

considered in the formation of the final 

rule. 

ADDRESSES: You may submit comments, 

identified by DFARS Case 2011–D034, 

using any of the following methods: 

Æ Regulations.gov: http:// 

www.regulations.gov. Submit comments 

via the Federal eRulemaking portal by 

inputting ‘‘DFARS Case 2011–D034’’ 

under the heading ‘‘Enter keyword or 

ID’’ and selecting ‘‘Search.’’ Select the 

link ‘‘Submit a Comment’’ that 

corresponds with ‘‘DFARS Case 2011– 

D034.’’ Follow the instructions provided 

at the ‘‘Submit a Comment’’ screen. 

Please include your name, company 

name (if any), and ‘‘DFARS Case 2011– 

D034’’ on your attached document. 

Æ E-mail: dfars@osd.mil. Include 

DFARS Case 2011–D034 in the subject 

line of the message. 

Æ Fax: 703–602–0350. 

Æ Mail: Defense Acquisition 

Regulations Council, Attn: Mr. Manuel 

Quinones, OUSD(AT&L)DPAP(DAR), 

Room 3B855, 3060 Defense Pentagon, 

Washington, DC 20301–3060. 

Instructions: Please submit comments 

only and cite ‘‘DFARS Case 2011–D034’’ 

in all correspondence related to this 

case. All comments received will be 

posted without change to http:// 

www.regulations.gov, including any 

personal information provided. 

To confirm receipt of your 

comment(s), please check http:// 

www.regulations.gov approximately two 

to three days after submission to verify 

posting (except allow 30 days for 

posting of comments submitted by 

mail). 

FOR FURTHER INFORMATION CONTACT: Mr. 

Manuel Quinones, telephone 703–602– 

8383. 

SUPPLEMENTARY INFORMATION: 

I. Background 

Section 866 of the National Defense 

Authorization Act (NDAA) for Fiscal 

Year (FY) 2011 (Pub. L. 111–383), 

enacted on January 7, 2011, authorized 

the Secretary of Defense to carry out a 

pilot program to assess the feasibility 

and advisability of acquiring militarypurpose nondevelopmental items in 

accordance with the streamlined 

procedures of the pilot program. The 

authority for this pilot program expires 

on January 6, 2016. Under this pilot 

program, DoD may enter into contracts 

with nontraditional defense contractors 

for the purpose of— 

—Enabling DoD to acquire items that 

otherwise might not have been available 

to DoD; 

—Assisting DoD in the rapid 

acquisition and fielding of capabilities 

needed to meet urgent operational 

needs; and 

—Protecting the interests of the 

United States in paying fair and 

reasonable prices for the item or items 

acquired. 

This pilot program is designed to test 

whether the streamlined procedures, 

similar to those available for 

commercial items, can serve as an 

effective incentive for nontraditional 

defense contractors to (1) channel 

investment and innovation into areas 

that are useful to DoD and (2) provide 

items developed exclusively at private 

expense to meet validated military 

requirements. 

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Federal Register / Vol. 76, No. 125 / Wednesday, June 29, 2011 / Rules and Regulations 38049 

II. Executive Orders 12866 and 13563 

Executive Orders 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). Executive Order 13563 

emphasizes the importance of 

quantifying both costs and benefits, of 

reducing costs, of harmonizing rules, 

and of promoting flexibility. This is a 

significant regulatory action and, 

therefore, was subject to review under 

Section 6(b) of Executive Order 12866, 

Regulatory Planning and Review, dated 

September 30, 1993. This rule is not a 

major rule under 5 U.S.C. 804. 

III. Regulatory Flexibility Act 

DoD has prepared an initial regulatory 

flexibility analysis consistent with 5 

U.S.C. 604. A copy of the analysis may 

be obtained from the point of contact 

specified herein. The analysis is 

summarized as follows. 

DoD is issuing an interim rule to 

amend the DFARS to implement section 

866 of the National Defense 

Authorization Act for Fiscal Year 2011 

(Pub. L. 111–383). Section 866 

authorized the Secretary of Defense to 

establish a pilot program to assess the 

feasibility and advisability of acquiring 

military-purpose nondevelopmental 

items. 

The objective of this rule is to 

establish a new DoD pilot program at 

DFARS Subpart 212.71, entitled Pilot 

Program for Acquisition of MilitaryPurpose Nondevelopmental Items. 

Under this pilot program, DoD may 

enter into contracts with nontraditional 

defense contractors for the purpose of 

(1) Enabling DoD to acquire items that 

otherwise might not have been available 

to DoD; (2) assisting DoD in the rapid 

acquisition and fielding of capabilities 

needed to meet urgent operational 

needs; and (3) protecting the interests of 

the United States in paying fair and 

reasonable prices for the item or items 

acquired. It is anticipated that items 

similar to commercial all-terrain 

vehicles or programmable robots, which 

can be modified for use in a contingency 

environment, may result from use of 

this authority. The legal basis is section 

866 of the National Defense 

Authorization Act for Fiscal Year 2011. 

Since this is a new pilot program, data 

to support potential impact to small 

entities is not yet available. Consistent 

with the overall purpose of the program 

to attract nontraditional defense 

contractors, DoD anticipates that this 

rule will have a positive economic 

impact to small entities. 

The interim rule affects contractors 

that are not currently performing and 

have not performed, for at least the oneyear period preceding the solicitation of 

sources by DoD for the procurement or 

transaction, any of the following for 

DoD— 

—Any contract or subcontract that is 

subject to full coverage under the cost 

accounting standards prescribed 

pursuant to section 26 of the Office of 

Federal Procurement Policy Act (41 

U.S.C. 1502) and the regulations 

implementing such section; or 

—Any other contract in excess of the 

certified cost or pricing data threshold 

under which the contractor is required 

to submit certified cost or pricing data. 

This interim rule does not impose any 

new reporting, recordkeeping or other 

compliance requirements on 

contractors. There are no rules that 

duplicate, overlap or conflict with this 

rule. There are no known significant 

alternatives to the rule. 

Accordingly, DoD does not expect this 

rule 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. 

DoD invites comments from small 

business concerns and other interested 

parties on the expected impact of this 

rule on small entities. 

DoD will also consider comments 

from small entities concerning the 

existing regulations in subparts affected 

by this 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 2011–D034) in 

correspondence. 

IV. Paperwork Reduction Act 

The rule does not impose 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). 

V. Determination To Issue an Interim 

Rule 

A determination has been made under 

the authority of the Secretary of Defense 

that urgent and compelling reasons exist 

to promulgate this interim rule without 

prior opportunity for public comments. 

The rule implements section 866 of the 

National Defense Authorization Act for 

Fiscal Year 2011 (Pub. L. 111–383). 

Section 866 was effective upon 

enactment on January 7, 2011. This 

action is necessary as DoD continues to 

search for ways to acquire and deploy 

innovative technologies and solutions to 

meet urgent operational needs. Without 

this interim rule, DoD will be unable to 

test whether the streamlined procedures 

similar to those available for 

commercial items can serve as an 

effective incentive for non-traditional 

defense contractors to (1) channel 

investment and innovation into areas 

that are useful to DOD and (2) provide 

items developed exclusively at private 

expense to meet validated military 

requirements. 

List of Subjects in 48 CFR Parts 212 and 

252 

Government procurement. 

Mary Overstreet, 

Editor, Defense Acquisition Regulations 

System. 

Therefore, 48 CFR parts 212 and 252 

are amended as follows: 

■ 1. The authority citation for 48 CFR 

parts 212 and 252 continues to read as 

follows: 

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

chapter 1. 

PART 212—ACQUISITION OF 

COMMERCIAL ITEMS 

■ 2. Amend part 212 by adding new 

subpart 212.71 to read as follows: 

Subpart 212.71—Pilot Program for 

Acquisition of Military-Purpose 

Nondevelopmental Items 

212.7100 Scope. 

212.7101 Definitions. 

212.7102 Pilot program. 

212.7103 Solicitation provision. 

212.7100 Scope. 

This subpart establishes the pilot 

program authorized by section 866 of 

the National Defense Authorization Act 

for Fiscal Year 2011 (Pub. L. 111–383). 

212.7101 Definitions. 

Military-purpose nondevelopmental 

item, nondevelopmental item, and 

nontraditional defense contractor, as 

used in this subpart, are defined in the 

provision at 252.212–7002. 

212.7102 Pilot program. 

212.7102–1 Contracts under the program. 

The contracting officer may enter into 

contracts with nontraditional defense 

contractors for the acquisition of 

military-purpose nondevelopmental 

items. See PGI 212.7102 for file 

documentation requirements. Each 

contract entered into under the pilot 

program shall— 

(a) Be awarded using competitive 

procedures; 

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38050 Federal Register / Vol. 76, No. 125 / Wednesday, June 29, 2011 / Rules and Regulations 

(b) Be a firm-fixed-price contract, or a 

fixed-price contract with an economic 

price adjustment clause; 

(c) Be in an amount not in excess of 

$50 million; 

(d) Provide— 

(1) For the delivery of an initial lot of 

production quantities of completed 

items not later than nine months after 

the date of the award of such contract; 

and 

(2) That failure to make delivery as 

provided for under paragraph (d)(1) may 

result in termination for cause; and 

(e) Be— 

(1) Exempt from the requirement to 

submit certified cost or pricing data; 

(2) Exempt from the cost accounting 

standards under section 26 of the Office 

of Procurement Policy Act (41 U.S.C. 

1502); and 

(3) Subject to the requirement to 

provide data other than certified cost or 

pricing data for the purpose of price 

reasonableness determinations. 

212.7102–2 Reporting requirements. 

Departments and agencies shall 

prepare a consolidated annual report to 

provide information about contracts 

awarded under this pilot authority. The 

report shall be submitted to the Office 

of the Deputy Director, Defense 

Procurement and Acquisition Policy 

(Contract Policy and International 

Contracting), by October 31 each year in 

accordance with the procedures at PGI 

212.7102. See PGI 212.7102 for annual 

reporting format. 

212.7102–3 Sunset of the pilot authority. 

(a) The authority to carry out the pilot 

program described in this subpart 

expires on January 6, 2016. 

(b) The expiration under paragraph (a) 

of this section of the authority to carry 

out the pilot program will not affect the 

validity of any contract awarded under 

the pilot program before the expiration 

of the pilot program under that 

paragraph. 

212.7103 Solicitation provision. 

Use the provision at 252.212–7002, 

Pilot Program for Acquisition of 

Military-Purpose Nondevelopmental 

Items, in all solicitations that meet the 

applicability criteria of 212.7102–1 for 

this pilot program. 

PART 252—SOLICITATION 

PROVISIONS AND CONTRACT 

CLAUSES 

■ 3. Amend part 252 by adding new 

section 252.212–7002 to read as follows: 

252.212–7002 Pilot Program for 

Acquisition of Military-Purpose 

Nondevelopmental Items. 

As prescribed in 212.7103, use the 

following provision: 

PILOT PROGRAM FOR ACQUISITION 

OF MILITARY-PURPOSE 

NONDEVELOPMENTAL ITEMS (JUN 

2011) 

(a) Definitions. As used in this provision— 

Military-purpose nondevelopmental item 

means a nondevelopmental item that meets 

a validated military requirement, as 

determined in writing by the responsible 

program manager, and has been developed 

exclusively at private expense. An item shall 

not be considered to be developed at private 

expense if development of the item was paid 

for in whole or in part through— 

(1) Independent research and development 

costs or bid and proposal costs, per the 

definition in FAR 31.205–18, that have been 

reimbursed directly or indirectly by a Federal 

agency or have been submitted to a Federal 

agency for reimbursement; or 

(2) Foreign government funding. 

‘‘Nondevelopmental item’’ is defined in 

FAR 2.101 and for the purpose of this subpart 

also includes previously developed items of 

supply that require modifications other than 

those customarily available in the 

commercial marketplace if such 

modifications are consistent with the 

requirement of DFARS 212.7102–2(d)(1). 

Nontraditional defense contractor means 

an entity that is not currently performing and 

has not performed, for at least the one-year 

period preceding the solicitation of sources 

by the Department of Defense for the 

procurement or transaction, any of the 

following for the Department of Defense— 

(1) Any contract or subcontract that is 

subject to full coverage under the cost 

accounting standards prescribed pursuant to 

Section 26 of the Office of Federal 

Procurement Policy Act (41 U.S.C. section 

1502) and the regulations implementing such 

section; or 

(2) Any other contract in excess of the 

certified cost or pricing data threshold under 

which the contractor is required to submit 

certified cost or pricing data. 

(b) Notice. This is a procurement action 

under section 866 of the National Defense 

Authorization Act for Fiscal Year 2011, Pilot 

Program for Acquisition of Military-Purpose 

Nondevelopmental Items, and is subject to 

the limitations outlined in DFARS 212.7102. 

(c) Representation. By submission of its 

offer, the offeror represents that it is a 

nontraditional defense contractor. 

(End of provision) 

* * * * * 

[FR Doc. 2011–16316 Filed 6–28–11; 8:45 am] 

BILLING CODE 5001–08–P 

DEPARTMENT OF DEFENSE 

Defense Acquisition Regulations 

System 

48 CFR Part 215 

RIN 0750–AH30 

Defense Federal Acquisition 

Regulation Supplement; Management 

of Manufacturing Risk in Major 

Defense Acquisition Programs (DFARS 

Case 2011–D031) 

AGENCY: Defense Acquisition 

Regulations System, Department of 

Defense (DoD). 

ACTION: Interim rule. 

SUMMARY: DoD is issuing an interim rule 

to implement section 812 of the 

National Defense Authorization Act for 

Fiscal Year 2011. Section 812(b)(5) 

instructs DoD to issue guidance that, at 

a minimum, shall require appropriate 

consideration of the manufacturing 

readiness and manufacturing-readiness 

processes of potential contractors and 

subcontractors as a part of the source 

selection process for major defense 

acquisition programs. 

DATES: Effective June 29, 2011. 

Comments on the interim rule should be 

submitted in writing to the address 

shown below on or before August 29, 

2011 to be considered in the formation 

of a final rule. 

ADDRESSES: Submit comments 

identified by DFARS Case 2011–D031, 

using any of the following methods: 

Æ Regulations.gov: http:// 

www.regulations.gov. 

Submit comments via the Federal 

eRulemaking portal by inputting 

‘‘DFARS Case 2011–D031’’ under the 

heading ‘‘Enter keyword or ID’’ and 

selecting ‘‘Search.’’ Select the link 

‘‘Submit a Comment’’ that corresponds 

with ‘‘DFARS Case 2011–D031.’’ Follow 

the instructions provided at the ‘‘Submit 

a Comment’’ screen. Please include your 

name, company name (if any), and 

‘‘DFARS Case 2011–D031’’ on your 

attached document. 

Æ E-mail: dfars@osd.mil. Include 

DFARS Case 2011–D031 in the subject 

line of the message. 

Æ Fax: 703–602–0350. 

Æ Mail: Defense Acquisition 

Regulations System, Attn: Mr. Dustin 

Pitsch, OUSD (AT&L) DPAP/DARS, 

Room 3B855, 3060 Defense Pentagon, 

Washington, DC 20301–3060. 

Comments received generally will be 

posted without change to http:// 

www.regulations.gov, including any 

personal information provided. To 

confirm receipt of your comment(s), 

mstockstill on DSK4VPTVN1PROD with RULES