Source: https://www.arnoldporter.com/en/perspectives/publications/2016/05/dod-proposes-to-expand-presumption-of-development
Timestamp: 2018-07-23 07:44:38
Document Index: 223511317

Matched Legal Cases: ['§ 2379', '§ 2379', '§ 2321', 'art 252', '§ 2321', 'art 252', 'art 2', 'art 2', 'art 234', 'arts 227', 'arts 227']

DoD Proposes to Expand Presumption of Development at Private Expense for “Major Weapons Systems” | Publications and Presentations | Arnold & Porter
(1) the "Commercial Rule," wherein a contracting officer is required to presume that a commercial item has been developed entirely at private expense, unless shown otherwise in accordance with certain procedures;1 and
(2) the "Major Systems Rule,"2 which functions as an exception to the Commercial Rule, and provides that a contracting officer's challenge to asserted restrictions on technical data relating to a major system3 shall be sustained unless the contractor or subcontractor submits information demonstrating that the item was developed exclusively at private expense. However, there is an exception to the Major Systems Rule for commercially available off-the-shelf (COTS) items, which remain subject to the Commercial Rule in all cases.
While the Commercial Rule generally works to the advantage of the contractor, an item that qualifies as a major system, or a component or subsystem of a major subsystem, is not entitled to the presumption of the Commercial Rule if the item is commercial but does not rise to the level of a COTS item.4 This includes minor modifications to a major system, component, or subsystem. In each case, the item is presumed to have been developed at the Government's expense even if it is a commercial item. This leaves the decision to challenge the data rights assertion in the discretion of the contracting officer, and can result in unnecessary challenges – expending unnecessary time and resources of both the contractor and the contracting officer.
First, the Major Systems Rule would be revised to only apply to major weapons systems5 – and more appropriately retitled the "Major Weapons System Rule."6 Thus, major systems that are not major weapons systems would remain subject to the beneficial presumption of the Commercial Rule.
(ii) commercial subsystems or components of a major weapon system, if the major weapon system was acquired as a commercial item in accordance with 10 U.S.C. § 2379(a); and
(iii) components of a subsystem, if the subsystem was acquired as a commercial item in accordance with 10 U.S.C. § 2379(b).7
See 10 U.S.C. § 2321(f)(1); see also DFARS Part 252.227-7037(b)(1).
See 10 U.S.C. § 2321(f)(2); see also DFARS Part 252.227-7037(b)(2).
In the context of DoD acquisitions, a "major system" generally refers to a system fulfilling a mission need and for which the total expenditures for research, development, test, and evaluation for the system are estimated to be more than US$185 million. See FAR Part 2.101.
In order to qualify as a "COTS" item, the item must not only be a commercial item, but must also be sold in substantial quantities in the commercial marketplace, and offered to the Government without modification and in the same form in which it is sold in the commercial marketplace. See FAR Part 2.101.
A "major weapon system" is a weapon system acquired pursuant to a major defense acquisition program. See DFARS Part 234.7001.
See (proposed) revised DFARS Parts 227.7103-13(c)(2)(ii) and 252.227-7037(b)(2).
See (proposed) DFARS Parts 227.7103-13(c)(2)(ii)(1) through (3), and 252.227- 7037(b)(2)(i)).