Source: https://regulations.justia.com/regulations/fedreg/2019/09/26/2019-20555.html
Timestamp: 2020-01-20 12:15:45
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Defense Federal Acquisition Regulation Supplement: Exception to Competition for Certain Follow-On Production Contracts (DFARS Case 2019-D031), 50811-50812 [2019-20555] :: Defense Acquisition Regulations System :: Department Of Defense :: Regulation Tracker :: Justia
Justia Regulation Tracker Department Of Defense Defense Acquisition Regulations System Defense Federal Acquisition Regulation Supplement: Exception to Competition for Certain Follow-On Production Contracts (DFARS Case 2019-D031), 50811-50812 [2019-20555]
Defense Federal Acquisition Regulation Supplement: Exception to Competition for Certain Follow-On Production Contracts (DFARS Case 2019-D031), 50811-50812 [2019-20555]
Download as PDF Federal Register / Vol. 84, No. 187 / Thursday, September 26, 2019 / Proposed Rules Ms. Carrie Moore, telephone 571–372–6093. SUPPLEMENTARY INFORMATION: FOR FURTHER INFORMATION CONTACT: DEPARTMENT OF DEFENSE Defense Acquisition Regulations System 48 CFR Part 206 [Docket DARS–2019–0051] RIN 0750–AK67 Defense Federal Acquisition Regulation Supplement: Exception to Competition for Certain Follow-On Production Contracts (DFARS Case 2019–D031) Defense Acquisition Regulations System, Department of Defense (DoD). ACTION: Proposed rule. AGENCY: DoD is proposing to amend the Defense Federal Acquisition Regulation Supplement (DFARS) to implement a section of the National Defense Authorization Act for Fiscal Year 2016 that modifies the criteria required to exempt from competition certain follow-on productions contracts. DATES: Comments on the proposed rule should be submitted in writing to the address shown below on or before November 25, 2019, to be considered in the formation of a final rule. ADDRESSES: Submit comments identified by DFARS Case 2019–D031, using any of the following methods: Æ Regulations.gov: http:// www.regulations.gov. Submit comments via the Federal eRulemaking portal by entering ‘‘DFARS Case 2019–D031’’ under the heading ‘‘Enter keyword or ID’’ and selecting ‘‘Search.’’ Select the link ‘‘Submit a Comment’’ that corresponds with ‘‘DFARS Case 2019– D031.’’ Follow the instructions provided at the ‘‘Submit a Comment’’ screen. Please ‘‘DFARS Case 2019–D031’’ on any attached documents. Æ Email: osd.dfars@mail.mil. Include DFARS Case 2019–D031 in the subject line of the message. Æ Fax: 571–372–6094. Æ Mail: Defense Acquisition Regulations System, Attn: Carrie Moore, OUSD(A&S)DPC/DARS, Room 3B941, 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), please check www.regulations.gov, approximately two to three days after submission to verify posting (except allow 30 days for posting of comments submitted by mail). khammond on DSKJM1Z7X2PROD with PROPOSALS SUMMARY: VerDate Sep<11>2014 17:55 Sep 25, 2019 Jkt 247001 I. Background DoD is amending the DFARS to implement section 815 of the National Defense Authorization Act (NDAA) for Fiscal Year (FY) 2016 (Pub. L. 114–92). Section 815 repeals and replaces section 845 of the NDAA for FY 1994 (Pub. L. 103–160; 10 U.S.C. 2371 note) with 10 U.S.C. 2371b, which modifies the authority of DoD to carry out certain prototype project transactions, as well as the criteria required to award an associated follow-on production contract to a participant in the transaction without the use of competitive procedures. Currently, DFARS 206.001(S–70) states that the award of a follow-on production contract for products developed under the authority of 10 U.S.C. 2371 is excepted from the use of competitive procedures, if: (1) The prototype project transaction agreement includes a provision for a follow-on production contract; (2) specific criteria in 10 U.S.C. 2371 note are met; and (3) the quantities and prices for the followon contract do not exceed the quantities and target prices established in the transaction agreement. Section 815 no longer limits a follow-on production contract to quantities and target prices that were established in the transaction agreement. As a result, this rule removes the limitation from the requisite criteria to exempt a follow-on contract from competitive procedures in subpart 206. II. Discussion and Analysis This rule updates the DFARS 206.001(S–70) references to 10 U.S.C. 2371 to the equivalent parts of 10 U.S.C. 2371b; and, adds to the list of criteria necessary to award a follow-on production contract without competition, the requirement that— • A written determination was executed by certain acquisition officials for transactions in excess of specified dollar values; • The follow-on contract be awarded to participants in the transaction for the prototype project; • Competitive procedures were used to selected the parties in the transaction; and • The participants in the transaction successfully completed the prototype project provided for in the transaction. The additions to the criteria do not implement new requirements. The statutes and regulations that implement DoD’s other transaction authority permit DoD to provide, in the agreement, for the award of a follow-on production PO 00000 Frm 00021 Fmt 4702 Sfmt 4702 50811 contract to a participant in the prototype project. Agreements made under DoD’s other transaction authority are not subject to the Federal Acquisition Regulation or DFARS; however, the award of a follow-on production contract resulting from such a transaction agreement is subject to these acquisition regulations. As such, this addition serves as notice to contracting officers that: When the transaction agreement included a provision for the award of a follow-on production contract, and the award of the contract will be made without competition, certain criteria must be met for the follow-on contract award and certain criteria must have been met during the other transaction authority process. This addition will help ensure contracting officers are aware of and in compliance with DoD’s other transactional authority when awarding a resultant follow-on production contract. III. Applicability to Contracts at or Below the Simplified Acquisition Threshold and for Commercial Items, Including Commercially Available Offthe-Shelf Items This rule only impacts the internal operating procedures of the agency. The rule does not impose any new requirements on contracts at or below the simplified acquisition threshold and for commercial items, including commercially available off-the-shelf items. IV. Executive Orders 12866 and 13563 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, dated September 30, 1993. This rule is not a major rule under 5 U.S.C. 804. V. Executive Order 13771 This rule is not expected to be subject to E.O. 13771, because this rule is not a significant regulatory action under E.O. 12866. VI. Regulatory Flexibility Act DoD does not expect this proposed rule to have a significant economic E:\FR\FM\26SEP1.SGM 26SEP1 khammond on DSKJM1Z7X2PROD with PROPOSALS 50812 Federal Register / Vol. 84, No. 187 / Thursday, September 26, 2019 / Proposed Rules 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 is not creating any new requirements for contractors or changing any existing policies and practices. However, an initial regulatory flexibility analysis has been performed and is summarized as follows: DoD is proposing to amend the Defense Federal Acquisition Regulation Supplement (DFARS) to implement section 815 of the National Defense Authorization Act (NDAA) for Fiscal Year (FY) 2016 (Pub. L. 114–92), which repeals and replaces section 845 of the NDAA for FY 1994 (Pub. L. 103–160; 10 U.S.C. 2371 note) with 10 U.S.C. 2371b. The objective of this proposed rule is to clarify for contracting officers the criteria that must be met to award, without competition, a follow-on production contract associated with a prototype project transaction agreement. DoD does not collect data on the number of follow-on production contracts that are awarded annually and associated with a prototype project transaction agreement made under the authority of 10 U.S.C. 2371b; therefore, DoD is unable to estimate the number of small entities that will be impacted by this rule. However, DoD does not expect small business entities to be significantly impacted by this rule, because the rule does not change any existing processes or impose any additional burdens. Instead, the rule simply clarifies instructions to contracting officers on the criteria that must be met in order to award an associated follow-on production contract without using competitive procedures. This proposed rule does not include any new reporting, recordkeeping, or other compliance requirements for small businesses. This rule does not duplicate, overlap, or conflict with any other Federal rules. There are no known alternatives available to meet the objectives of the statutes. 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 2019–D031) in correspondence. VII. Paperwork Reduction Act The rule does not contain any information collection requirements that VerDate Sep<11>2014 17:55 Sep 25, 2019 Jkt 247001 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 Part 206 Government procurement. Jennifer Lee Hawes, Regulatory Control Officer, Defense Acquisition Regulations System. Therefore, 48 CFR part 206 is proposed to be amended as follows: PART 206—COMPETITION REQUIREMENTS 1. The authority citation for 48 CFR part 206 continues to read as follows: ■ Authority: 41 U.S.C. 1303 and 48 C chapter 1. 2. Amend section 206.001 by revising paragraph (S–70) to read as follows: DEPARTMENT OF DEFENSE Defense Acquisition Regulations System 48 CFR Parts 210, 212, 215, and 234 [Docket DARS–2019–0050] RIN 0750–AK65 Defense Federal Acquisition Regulation Supplement: Market Research and Value Analysis for the Determination of Price Reasonableness (DFARS Case 2019– D027) Defense Acquisition Regulations System, Department of Defense (DoD). ACTION: Proposed rule. AGENCY: ■ 206.001 Applicability. * * * * * (S–70) Also excepted from the competition requirements of FAR part 6 are follow-on production contracts for products developed pursuant to the ‘‘other transactions’’ authority of 10 U.S.C. 2371b for prototype projects when— (1) The other transaction agreement includes provisions for a follow-on production contract; (2) The follow-on contract will be awarded to the participants in the other transaction for the prototype project; (3) Competitive procedures are used for the selection of parties for participation in the transaction; (4) The participants in the transaction successfully completes the prototype or sub-prototype project provided for in the transaction; and (5)(i) There is a written determination that— (A) The requirements of 10 U.S.C. 2371b(d) are met; and (B) The use of the authority of 10 U.S.C. 2371b is essential to promoting the success of the prototype project; and (ii)(A) For actions in excess of $100 million, but not in excess of $500 million including all options, the determination is executed by the senior procurement executive; and (B) For actions in excess of $500 million including all options, the determination is— (1) Executed by the Under Secretary of Defense for Research and Engineering or the Under Secretary of Defense for Acquisition and Sustainment; and (2) Provided to the congressional defense committees at least 30 days prior to contract award. [FR Doc. 2019–20555 Filed 9–25–19; 8:45 am] BILLING CODE 5001–06–P PO 00000 Frm 00022 Fmt 4702 Sfmt 4702 DoD is proposing to amend the Defense Federal Acquisition Regulation Supplement (DFARS) to implement several sections of the National Defense Authorization Act for Fiscal Year 2017 to address how contracting officers may require the offeror to submit relevant information to support market research for price analysis and allow an offeror to submit information relating to the value of a commercial item to aid in the determination of the reasonableness of the price of such item. DATES: Comments on the proposed rule should be submitted in writing to the address shown below on or before November 25, 2019, to be considered in the formation of a final rule. ADDRESSES: Submit comments identified by DFARS Case 2019–D027, using any of the following methods: Æ Regulations.gov: http:// www.regulations.gov. Submit comments via the Federal eRulemaking portal by entering ‘‘DFARS Case 2019–D027’’ under the heading ‘‘Enter keyword or ID’’ and selecting ‘‘Search.’’ Select the link ‘‘Submit a Comment’’ that corresponds with ‘‘DFARS Case 2019– D027.’’ Follow the instructions provided at the ‘‘Submit a Comment’’ screen. Please ‘‘DFARS Case 2019–D027’’ on any attached documents. Æ Email: osd.dfars@mail.mil. Include DFARS Case 2019–D027 in the subject line of the message. Æ Fax: 571–372–6094. Æ Mail: Defense Acquisition Regulations System, Attn: Ms. Amy G. Williams, OUSD(A&S)DPC/DARS, Room 3B941, 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 SUMMARY: E:\FR\FM\26SEP1.SGM 26SEP1
[Federal Register Volume 84, Number 187 (Thursday, September 26, 2019)]
[Pages 50811-50812]
[FR Doc No: 2019-20555]
[[Page 50811]]
48 CFR Part 206
[Docket DARS-2019-0051]
RIN 0750-AK67
Defense Federal Acquisition Regulation Supplement: Exception to
Competition for Certain Follow-On Production Contracts (DFARS Case
2019-D031)
Regulation Supplement (DFARS) to implement a section of the National
Defense Authorization Act for Fiscal Year 2016 that modifies the
criteria required to exempt from competition certain follow-on
productions contracts.
DATES: Comments on the proposed rule should be submitted in writing to
the address shown below on or before November 25, 2019, to be
ADDRESSES: Submit comments identified by DFARS Case 2019-D031, using
via the Federal eRulemaking portal by entering ``DFARS Case 2019-D031''
2019-D031.'' Follow the instructions provided at the ``Submit a
Comment'' screen. Please ``DFARS Case 2019-D031'' on any attached
[cir] Email: [email protected]. Include DFARS Case 2019-D031 in
[cir] Mail: Defense Acquisition Regulations System, Attn: Carrie
Moore, OUSD(A&S)DPC/DARS, Room 3B941, 3060 Defense Pentagon,
DoD is amending the DFARS to implement section 815 of the National
Defense Authorization Act (NDAA) for Fiscal Year (FY) 2016 (Pub. L.
114-92). Section 815 repeals and replaces section 845 of the NDAA for
FY 1994 (Pub. L. 103-160; 10 U.S.C. 2371 note) with 10 U.S.C. 2371b,
which modifies the authority of DoD to carry out certain prototype
project transactions, as well as the criteria required to award an
associated follow-on production contract to a participant in the
transaction without the use of competitive procedures.
Currently, DFARS 206.001(S-70) states that the award of a follow-on
production contract for products developed under the authority of 10
U.S.C. 2371 is excepted from the use of competitive procedures, if: (1)
The prototype project transaction agreement includes a provision for a
follow-on production contract; (2) specific criteria in 10 U.S.C. 2371
note are met; and (3) the quantities and prices for the follow-on
contract do not exceed the quantities and target prices established in
the transaction agreement. Section 815 no longer limits a follow-on
production contract to quantities and target prices that were
established in the transaction agreement. As a result, this rule
removes the limitation from the requisite criteria to exempt a follow-
on contract from competitive procedures in subpart 206.
This rule updates the DFARS 206.001(S-70) references to 10 U.S.C.
2371 to the equivalent parts of 10 U.S.C. 2371b; and, adds to the list
of criteria necessary to award a follow-on production contract without
competition, the requirement that--
A written determination was executed by certain
acquisition officials for transactions in excess of specified dollar
The follow-on contract be awarded to participants in the
transaction for the prototype project;
Competitive procedures were used to selected the parties
in the transaction; and
The participants in the transaction successfully completed
the prototype project provided for in the transaction.
The additions to the criteria do not implement new requirements.
The statutes and regulations that implement DoD's other transaction
authority permit DoD to provide, in the agreement, for the award of a
follow-on production contract to a participant in the prototype
project. Agreements made under DoD's other transaction authority are
not subject to the Federal Acquisition Regulation or DFARS; however,
the award of a follow-on production contract resulting from such a
transaction agreement is subject to these acquisition regulations. As
such, this addition serves as notice to contracting officers that: When
the transaction agreement included a provision for the award of a
follow-on production contract, and the award of the contract will be
made without competition, certain criteria must be met for the follow-
on contract award and certain criteria must have been met during the
other transaction authority process. This addition will help ensure
contracting officers are aware of and in compliance with DoD's other
transactional authority when awarding a resultant follow-on production
agency. The rule does not impose any new requirements on contracts at
or below the simplified acquisition threshold and for commercial items,
including commercially available off-the-shelf items.
E.O.s 12866 and 13563 direct agencies to assess all costs and
benefits of available regulatory alternatives and, if regulation is
of harmonizing rules, and of promoting flexibility. This is not a
significant regulatory action and, therefore, was not subject to review
This rule is not expected to be subject to E.O. 13771, because this
rule is not a significant regulatory action under E.O. 12866.
[[Page 50812]]
the Regulatory Flexibility Act, 5 U.S.C. 601, et seq., because the rule
is not creating any new requirements for contractors or changing any
existing policies and practices. However, an initial regulatory
DoD is proposing to amend the Defense Federal Acquisition
Regulation Supplement (DFARS) to implement section 815 of the National
114-92), which repeals and replaces section 845 of the NDAA for FY 1994
(Pub. L. 103-160; 10 U.S.C. 2371 note) with 10 U.S.C. 2371b.
The objective of this proposed rule is to clarify for contracting
officers the criteria that must be met to award, without competition, a
follow-on production contract associated with a prototype project
DoD does not collect data on the number of follow-on production
contracts that are awarded annually and associated with a prototype
project transaction agreement made under the authority of 10 U.S.C.
2371b; therefore, DoD is unable to estimate the number of small
entities that will be impacted by this rule. However, DoD does not
expect small business entities to be significantly impacted by this
rule, because the rule does not change any existing processes or impose
any additional burdens. Instead, the rule simply clarifies instructions
to contracting officers on the criteria that must be met in order to
award an associated follow-on production contract without using
This proposed rule does not include any new reporting,
recordkeeping, or other compliance requirements for small businesses.
This rule does not duplicate, overlap, or conflict with any other
There are no known alternatives available to meet the objectives of
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 2019-D031)
in correspondence.
List of Subjects in 48 CFR Part 206
Therefore, 48 CFR part 206 is proposed to be amended as follows:
PART 206--COMPETITION REQUIREMENTS
1. The authority citation for 48 CFR part 206 continues to read as
Authority:  41 U.S.C. 1303 and 48 C chapter 1.
2. Amend section 206.001 by revising paragraph (S-70) to read as
206.001  Applicability.
(S-70) Also excepted from the competition requirements of FAR part
6 are follow-on production contracts for products developed pursuant to
the ``other transactions'' authority of 10 U.S.C. 2371b for prototype
projects when--
(1) The other transaction agreement includes provisions for a
follow-on production contract;
(2) The follow-on contract will be awarded to the participants in
the other transaction for the prototype project;
(3) Competitive procedures are used for the selection of parties
for participation in the transaction;
(4) The participants in the transaction successfully completes the
prototype or sub-prototype project provided for in the transaction; and
(5)(i) There is a written determination that--
(B) The use of the authority of 10 U.S.C. 2371b is essential to
promoting the success of the prototype project; and
(ii)(A) For actions in excess of $100 million, but not in excess of
$500 million including all options, the determination is executed by
the senior procurement executive; and
(B) For actions in excess of $500 million including all options,
the determination is--
(1) Executed by the Under Secretary of Defense for Research and
Engineering or the Under Secretary of Defense for Acquisition and
Sustainment; and
(2) Provided to the congressional defense committees at least 30
days prior to contract award.
[FR Doc. 2019-20555 Filed 9-25-19; 8:45 am]