32638 Federal Register / Vol. 75, No. 109 / Tuesday, June 8, 2010 / Rules and Regulations 

Authority: 41 U.S.C. 421 and 48 CFR 

chapter 1. 

225.1101 [Amended] 

■ 2. Section 225.1101 is amended in 

paragraph (11)(i) introductory text by 

removing ‘‘$194,000’’ and adding in its 

place ‘‘$203,000’’; and in paragraphs 

(11)(i)(A) and (11)(i)(B) by removing 

‘‘$67,826’’ and adding in its place 

‘‘$70,079’’. 

225.7503 [Amended] 

■ 3. Section 225.7503 is amended in 

paragraph (a) by removing ‘‘$7,443,000’’ 

and adding in its place ‘‘$7,804,000’’; 

and in paragraph (b) by removing 

‘‘$7,443,000’’ and adding in its place 

‘‘$7,804,000’’, and by removing 

‘‘$8,817,449’’ and adding in its place 

‘‘$9,110,318’’. 

[FR Doc. 2010–13523 Filed 6–7–10; 8:45 am] 

BILLING CODE 5001–08–P 

DEPARTMENT OF DEFENSE 

Defense Acquisition Regulations 

System 

48 CFR Parts 217 and 234 

Defense Federal Acquisition 

Regulation Supplement; Contract 

Authority for Advanced Component 

Development or Prototype Units 

(DFARS Case 2009–D034) 

AGENCY: Defense Acquisition 

Regulations System, Department of 

Defense (DoD). 

ACTION: Interim rule with request for 

comments. 

SUMMARY: DoD is issuing an interim rule 

amending the Defense Federal 

Acquisition Regulation Supplement 

(DFARS) to implement section 819 of 

the National Defense Authorization Act 

for Fiscal Year 2010. Section 819 places 

limitations on certain types of line items 

and contract options that may be 

included in contracts initially awarded 

pursuant to competitive solicitations. 

When the prohibition applies, it limits 

the dollar value, period of performance, 

and time for exercise of such contract 

line items or contract options. 

DATES: Effective Date: June 8, 2010. 

Comment Date: Comments on the 

interim rule should be submitted in 

writing to the address shown below on 

or before August 9, 2010, to be 

considered in the formation of the final 

rule. 

ADDRESSES: Submit comments 

identified by DFARS Case 2009–D034, 

using any of the following methods: 

Æ Federal eRulemaking Portal: http: 

//www.regulations.gov. Follow the 

instructions for submitting comments. 

Æ E-mail: dfars@osd.mil. Include 

DFARS Case 2009–D034 in the subject 

line of the message. 

Æ Fax: 703–602–0350. 

Æ Mail: Defense Acquisition 

Regulations System, Attn: Ms. Meredith 

Murphy, 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. 

FOR FURTHER INFORMATION CONTACT: Ms. 

Meredith Murphy, 703–602–1302. 

SUPPLEMENTARY INFORMATION: 

A. Background 

This DFARS case implements section 

819 of the National Defense 

Authorization Act for Fiscal Year 2010 

(Pub. L. 111–84, enacted October 28, 

2009). Section 819 is entitled ‘‘Contract 

Authority for Advanced Component 

Development or Prototype Units.’’ 

Section 819 is intended to prevent a 

contract for new technology that is 

initially awarded as a result of 

competition from becoming a 

noncompetitive effort for the 

development of advanced components 

or the procurement of prototype units. 

To do so, section 819 places limitations 

on the (a) Dollar value, (b) period of 

performance, and (c) time for exercise of 

contract line items or contract options 

for advanced component development 

or procurement of prototype items. 

Specifically, the contract line item or 

contract option must be limited to the 

minimal amount of initial or additional 

prototype items that will allow for 

timely competitive solicitation and 

award of a follow-on development or 

production contract for those items. The 

term of the contract line item or contract 

option cannot be for a period longer 

than 12 months, and the dollar value of 

the work to be performed pursuant to 

the contract line item or contract option 

may not exceed the lesser of the amount 

that is three times the dollar value of the 

work previously performed under the 

contract or $20 million. 

Because the coverage is most likely to 

apply to major systems acquisitions, it 

has been added as a new DFARS 

subsection 234.005–1, entitled 

‘‘Competition.’’ However, because the 

language applies to the exercise and 

content of certain contract options, a 

reference to 234.005–1 has been added 

to DFARS 217.202, entitled ‘‘Use of 

Options.’’ 

This is not a significant regulatory 

action and, therefore, is not 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. 

B. Regulatory Flexibility Act 

DoD does not expect that this interim 

rule will 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 the rule does not impose 

any additional requirements on small 

businesses. Therefore, an Initial 

Regulatory Flexibility Analysis has not 

been performed. 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 2009–D034) in 

correspondence. 

C. Paperwork Reduction Act 

The Paperwork Reduction Act does 

not apply because the interim rule does 

not contain any information collection 

requirements that require the approval 

of the Office of Management and Budget 

under 44 U.S.C., et seq. 

D. Determination To Issue an Interim 

Rule 

A determination has been made under 

the authority of the Secretary of Defense 

(DoD) that urgent and compelling 

circumstances exist to promulgate this 

interim rule without prior opportunity 

for public comments. This action is 

necessary because section 819 of the 

National Defense Authorization Act for 

Fiscal Year 2010 became effective upon 

enactment on October 28, 2009. Section 

819 places limitations on certain types 

of line items and contract options that 

may be included in contracts initially 

awarded pursuant to competitive 

solicitations. In order to prevent a 

contract for new technology that is 

initially awarded as a result of 

competition from becoming a 

noncompetitive effort for the 

development of advanced components 

or procurement of prototype units, it is 

necessary to publish this rule as an 

interim rule prior to affording the public 

an opportunity to comment. However, 

pursuant to 41 U.S.C. 418b and FAR 

1.501–3, DoD will consider public 

comments received in response to this 

interim rule in the formation of the final 

rule. 


emcdonald on DSK2BSOYB1PROD with RULES2
Federal Register / Vol. 75, No. 109 / Tuesday, June 8, 2010 / Rules and Regulations 32639 

List of Subjects in 48 CFR Parts 217 and 

234 

Government procurement. 

Ynette R. Shelkin, 

Editor, Defense Acquisition Regulations 

System. 

■ Therefore, 48 CFR parts 217 and 234 

are amended as follows: 

■ 1. The authority citation for 48 CFR 

parts 217 and 234 continues to read as 

follows: 

Authority: 41 U.S.C. 421 and 48 CFR 

chapter 1. 

PART 217—SPECIAL CONTRACTING 

METHODS 

■ 2. Section 217.202 is revised as 

follows: 

217.202 Use of options. 

(1) See PGI 217.202 for guidance on 

the use of options. 

(2) See 234.005–1 for limitations on 

the use of contract options for the 

provision of advanced component 

development or prototype of technology 

developed under the contract or the 

delivery of initial or additional 

prototype items. 

PART 234—MAJOR SYSTEM 

ACQUISITION 

■ 3. Section 234.005–1 is added to read 

as follows: 

234.005–1 Competition. 

(1) A contract that is initially awarded 

from the competitive selection of a 

proposal resulting from a general 

solicitation may contain a contract line 

item or contract option for the provision 

of advanced component development or 

prototype of technology developed 

under the contract or the delivery of 

initial or additional prototype items if 

the item or a prototype thereof is created 

as the result of work performed under 

the contract only when it adheres to the 

following limitations: 

(i) The contract line item or contract 

option shall be limited to the minimal 

amount of initial or additional prototype 

items that will allow for timely 

competitive solicitation and award of a 

follow-on development or production 

contract for those items. 

(ii) The term of the contract line item 

or contract option shall be for not more 

than 12 months. 

(iii) The dollar value of the work to 

be performed pursuant to the contract 

line item or contract option shall not 

exceed the lesser of— 

(A) The amount that is three times the 

dollar value of the work previously 

performed under the contract; or 

(B) $20 million. 

(2) A contract line item or contract 

option may not be exercised under this 

authority after September 30, 2014. 

[FR Doc. 2010–13524 Filed 6–7–10; 8:45 am] 

BILLING CODE 5001–08–P 

DEPARTMENT OF DEFENSE 

Defense Acquisition Regulations 

System 

48 CFR Part 217 

RIN 0750–AG67 

Defense Federal Acquisition 

Regulation Supplement; Limitations on 

Procurements With Non-Defense 

Agencies (DFARS Case 2009–D027) 

AGENCY: Defense Acquisition 

Regulations System, Department of 

Defense (DoD). 

ACTION: Interim rule with request for 

comments. 

SUMMARY: DoD is issuing an interim rule 

to implement section 806 of the 

National Defense Authorization Act for 

Fiscal Year 2010 authorizing the placing 

of contracts for property and services in 

excess of the simplified acquisition 

threshold by certain non-DoD agencies 

for the performance of a joint program 

conducted to meet the needs of DoD and 

the non-DoD agency. 

DATES: Effective Date: June 8, 2010. 

Comment Date: Comments on the 

interim rule should be submitted in 

writing to the address shown below on 

or before August 9, 2010, to be 

considered in the formation of the final 

rule. 

ADDRESSES: Submit comments 

identified by DFARS Case 2009–D027, 

using any of the following methods: 

Æ Federal eRulemaking Portal: http:// 

www.regulations.gov. Follow the 

instructions for submitting comments. 

Æ E-mail: dfars@osd.mil. Include 

DFARS Case 2009–D027 in the subject 

line of the message. 

Æ Fax: (703) 602–0350. 

Æ Mail: Defense Acquisition 

Regulations System, Attn: Meredith 

Murphy, OUSD(AT&L)DPAP(DARS), 

3060 Defense Pentagon, Room 3B855, 

Washington, DC 20301–3060. 

Comments received generally will be 

posted without change to http:// 

www.regulations.gov, including any 

personal information provided. 

FOR FURTHER INFORMATION CONTACT: Ms. 

Meredith Murphy, Telephone 703–602– 

1302. 

SUPPLEMENTARY INFORMATION: 

A. Background 

Section 854 of the National Defense 

Authorization Act for Fiscal Year 2005 

(Pub. L. 108–375) prescribed policy for 

the acquisition of supplies and services 

through the use of contracts or orders 

issued by non-DoD agencies. Section 

801(b) of the National Defense 

Authorization Act for Fiscal Year 2008 

(Pub. L. 110–181) authorized a DoD 

acquisition official to procure property 

and services in excess of the simplified 

acquisition threshold through a nonDoD agency only if: (1) The non-DoD 

agency agreed to adhere to defense 

procurement requirements; or (2) the 

Under Secretary of Defense (AT&L) 

certified that the procurement is in the 

best interest of DoD. 

Section 806 of the National Defense 

Authorization Act for Fiscal Year 2010 

(Pub. L. 111–84) amended the 

limitations placed on procurements by 

non-DoD agencies by exempting such 

procurements that are (a) entered into 

by a non-DoD agency that is an element 

of the intelligence community and (b) 

when the procurement is for the 

performance of a joint program 

conducted to meet the needs of DoD and 

the non-DoD agency. Section 806 

referred to section 3(4) of the National 

Security Act of 1947 (50 U.S.C. 401a(4)) 

to identify non-DoD agencies that are an 

element of the intelligence community. 

B. Discussion 

The National Security Act of 1947 

defines the term ‘‘intelligence 

community’’ to include a number of 

defense and non-defense agencies and 

portions of such agencies. The 

definition of ‘‘non-DoD agency that is an 

element of the intelligence community’’ 

replicates the statutory list, absent the 

DoD agencies. 

DFARS subpart 217.78 is amended by 

adding the definition at 217.7801 and 

excluding such agencies from the 

requirements of 217.7802(a) when the 

procurement is for performance of a 

joint program conducted to meet the 

needs of DoD and the non-DoD agency. 

This is not a significant regulatory 

action, and, therefore, was not 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. 

604. 

C. Regulatory Flexibility Act 

DoD does not expect this interim 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, et seq., 

because section 806 affects only internal 


emcdonald on DSK2BSOYB1PROD with RULES2