Source: http://www.fedgovcontracts.com/pe04-174.htm
Timestamp: 2018-08-19 21:46:53
Document Index: 490289764

Matched Legal Cases: ['art 212', 'art 3', 'art 212', 'art 212', 'art 30', 'art 3', 'art 12', 'art 212']

11/1/04 Dispatch: Defense FAR Supplement - Transition of Weapons-Related Prototype Projects
SUBJECT: Defense Federal Acquisition Regulation Supplement (DFARS); Transition of Weapons-Related Prototype Projects to Follow-On Contracts
SOURCE: Federal Register, November 1, 2004, Vol. 69, No. 210, page 63329
SYNOPSIS: DOD is adding DFARS Subpart 212.70, Pilot Program for Transition to Follow-On Contracting After Use of Other Transaction Authority, to implement Section 847 of the National Defense Authorization Act for Fiscal Year 2004 (Public Law 108-136), which authorizes DOD to carry out a pilot program that permits the use of streamlined contracting procedures for the production of items or processes begun as prototype projects under "other transaction" agreements.
EDITOR'S NOTE: The regulations for OTs ("transactions other than contracts, grants, or cooperative agreements for prototype projects") are in Title 32 of the Code of Federal Regulations (CFR), Chapter 1, Office of the Secretary of Defense, Part 3, Transactions Other Than Contracts, Grants, or Cooperative Agreements for Prototype Projects. Additional guidance on OTs can be found on the Defense Procurement website at http://acc.dau.mil/simplify/ev_en.php?ID=1271_201&ID2=DO_TOPIC.
For more on the acquisition-related provisions of Public Law 108-136, see the November 25, 2003, FEDERAL CONTRACTS DISPATCH "Enactment of the National Defense Authorization Act for Fiscal Year 2004."
DATES: This interim rule is effective November 1, 2004. Comments on the interim rule should be submitted on or before January 3, 2005.
ADDRESSES: Respondents may submit comments directly on the Federal eRulemaking website at http://www.regulations.gov, or to the Defense Acquisition Regulations website at http://emissary.acq.osd.mil/dar/dfars.nsf/pubcomm. As an alternative, respondents may e-mail comments to: dfars@acq.osd.mil. Also, respondents who cannot submit comments through the website or by e-mail may submit comments to Defense Acquisition Regulations Council, Attn: Amy Williams, OUSD(AT&L)DP(DAR), IMD 3C132, 3062 Defense Pentagon, Washington, DC 20301-3062; by hand delivery or courier to Defense Acquisition Regulations Council, Crystal Square 4, Suite 200A, 241 18th Street, Arlington, VA 22202-3402; or by fax to 703-602-0350. Cite "DFARS Case 2003-D106" when making comments on this interim rule.
SUPPLEMENTAL INFORMATION: Section 845 of the National Defense Authorization Act for Fiscal Year 1994 (Public Law 103-160) authorized the secretary of a military department, the director of Defense Advanced Research Projects Agency (DARPA), and any other official designated by the Secretary of Defense, to enter into "transactions other than contracts, grants or cooperative agreements for prototype projects that are directly relevant to weapons or weapon systems proposed to be acquired or developed by the Department of Defense." These are commonly referred to as "other transactions" (OTs) and they are generally exempt from all the statutes and regulations that govern federal contracts and grants. The purpose of OTs is to overcome the reluctance of "nontraditional defense contractors" with significant technological advances and innovations to share their innovations with the government because of the significant statutory and regulatory requirements involved in government contracts and grants. When using OTs, DOD contracting officials are not required to include standard contract provisions that typically address such issues as financial management or intellectual property rights, but may structure the agreements as they consider appropriate.
This interim rule adds DFARS Subpart 212.70 to implement Section 847 of Public Law 108-136. Section 847 authorizes DOD to institute a pilot program for follow-on contracting for the production of items or processes begun as prototype projects under other transaction agreements. Contracts and subcontracts awarded under the program may be treated as acquisitions of commercial items, and items or processes acquired under the program may be treated as developed in part with federal funds and in part at private expense for purposes of negotiating rights in technical data.
DFARS Subpart 212.70 contains the following key provisions:
DFARS 212.7001, Definitions, which includes definitions for "nontraditional defense contractor" ("a business unit that (1) has entered into an other transaction agreement with DOD; and (2) has not, for a period of at least 1 year prior to the date of the other transaction agreement, entered into or performed on (i) any contract that is subject to full coverage under the cost accounting standards described in FAR Part 30 [Cost Accounting Standards Administration]; or (ii) any other contract exceeding $500,000 to carry out prototype projects or to perform basic, applied, or advanced research projects for a federal agency that is subject to the FAR"), and "other transaction" ("a transaction that (1) is other than a contract, grant, or cooperative agreement; (2) is not subject to the FAR or its supplements; and (3) is entered into in accordance with 32 CFR Part 3").
DFARS 212.7002, Pilot Program, consists of DFARS 212.7002-1, Contracts Under the Program, and DFARS 212.7002-2, Subcontracts Under the Program.
DFARS 212.7002-1 provides that the contracting officer may use the procedures in FAR Part 12, Acquisition of Commercial Items, "to award a contract for an item or process that does not meet the definition of 'commercial item' if the contract (1) is awarded to a nontraditional defense contractor; (2) is a follow-on contract for the production of an item or process begun as a prototype project under an other transaction agreement; (3) does not exceed $50,000,000; (4) is awarded on or before September 30, 2008; and (5) is either (i) a firm-fixed-price contract; or (ii) a fixed-price contract with economic price adjustment."
DFARS 212.7002-2 provides that a subcontract for an item or process that does not meet the definition of "commercial item" may be treated as a subcontract for a commercial item if the subcontract is under a contract awarded in accordance with DFARS 212.7002-1, is awarded to a nontraditional defense contractor, and is either firm-fixed-price or fixed-price with economic price adjustment.
DFARS 212.7003, Rights in Technical Data and Computer Software, addresses the clauses to include in contracts and subcontracts executed in accordance with DFARS Subpart 212.70 "for purposes of determining rights in technical data under [DFARS] 227.7102 [Commercial Items, Components, or Processes] and rights in computer software under [DFARS] 227.7202 [Commercial Computer Software and Commercial Computer Software Documentation]..."