Defense Federal Acquisition Regulation Supplement: Limitation on Use of Cost-Reimbursement Line Items (DFARS Case 2013-D016), 4631-4633 [2014-01276]
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Federal Register / Vol. 79, No. 19 / Wednesday, January 29, 2014 / Rules and Regulations
DEPARTMENT OF DEFENSE
Defense Acquisition Regulations
System
48 CFR Parts 202, 207, 209, 216, and
234
RIN 0750–AI16
Defense Federal Acquisition
Regulation Supplement: Limitation on
Use of Cost-Reimbursement Line Items
(DFARS Case 2013–D016)
Defense Acquisition
Regulations System, Department of
Defense (DoD).
ACTION: Interim rule.
AGENCY:
DoD is issuing an interim rule
amending the Defense Federal
Acquisition Regulation Supplement
(DFARS) to implement a section of the
National Defense Authorization Act for
Fiscal Year 2013, which prohibits DoD
from entering into cost-type contracts
for production of major defense
acquisition programs.
DATES: Effective January 29, 2014.
Comment Date: Comments on the
interim rule should be submitted in
writing to the address shown below on
or before March 31, 2014 to be
considered in the formation of the final
rule.
ADDRESSES: Submit comments
identified by DFARS Case 2013–D016
by any of the following methods:
Æ Regulations.gov: https://
www.regulations.gov. Submit comments
via the Federal eRulemaking portal by
entering ‘‘DFARS Case 2013–D016’’
under the heading ‘‘Enter Keyword or
ID’’ and selecting ‘‘Search’’. Select the
link ‘‘Submit a Comment’’ that
corresponds with ‘‘DFARS Case 2013–
D016’’. Follow the instructions provided
at the ‘‘Submit a Comment’’ screen.
Please include your name, company
name (if any), and ‘‘DFARS Case 2013–
D016’’ on your attached document.
Æ Email: dfars@mail.mil. Include
DFARS Case 2013–D016 in the subject
line of the message.
Æ Fax: 202–501–4067.
Æ Mail: Defense Acquisition
Regulations System, ATTN: Susan
Williams, OUSD/AT&L/DPAP/DARS,
3060 Defense Pentagon, Room 3B855,
Washington, DC 20301–3060.
Comments received generally will be
posted without change to https://
www.regulations.gov, including any
personal information provided. To
confirm receipt of your comment(s),
please check https://www.regulations.gov
approximately two to three days after
submission to verify posting (except
tkelley on DSK3SPTVN1PROD with RULES
SUMMARY:
VerDate Mar<15>2010
15:55 Jan 28, 2014
Jkt 232001
allow 30 days for posting of comments
submitted by mail).
FOR FURTHER INFORMATION CONTACT: Ms.
Susan Williams, Senior Procurement
Analyst, Defense Acquisition
Regulations System, ATTN: Lesa Scott,
OUSD/AT&L/DPAP/DARS, 3060
Defense Pentagon, Room 3B855,
Washington, DC 20301–3060, telephone
571–372–6092.
SUPPLEMENTARY INFORMATION:
I. Background
This interim rule amends the DFARS
to implement section 811 of the
National Defense Authorization Act
(NDAA) for Fiscal Year (FY) 2013 (Pub.
L. 112–239), which was enacted January
2, 2013. Section 811(a) requires DoD to
modify the acquisition regulations to
prohibit DoD from entering into costtype contracts for the production of
major defense acquisition programs
(MDAPS) for contracts entered into on
or after October 1, 2014, with one
exception in section 811(b). Under
section 811(b), the Under Secretary of
Defense for Acquisition, Technology,
and Logistics may submit to the
congressional defense committees: (1) A
written certification that the particular
cost-type contract is needed to provide
a required capability in a timely, costeffective manner; and (2) An
explanation of the steps taken to ensure
that the use of cost-type pricing is
limited to only those line items or
portions of the contact where such
pricing is needed to achieve the purpose
of the exception.
In implementing section 811 of the
NDAA for FY 2013, DoD further defined
the prohibition on entering into costtype contracts to explicitly state the
prohibition also applies to entering into
cost-reimbursement line items for the
production of MDAPS.
II. Discussion and Analysis
This interim rule makes the following
changes to the DFARS:
• The definition for ‘‘major defense
acquisition program’’ is added to section
201.101, Definitions, and is removed
from section 209.571–1, Definitions.
• Section 207.106(b)(1)(S–74) adds a
cross-reference to see section 234.004,
Acquisition Strategy, when selecting
contract type.
• A new policy statement is added at
section 216.102, Policies.
• A new definition of ‘‘production of
major defense acquisition program’’ is
added to section 234.001.
• Section 234.004, Acquisition
Strategy, paragraph (2) is revised and
reformatted.
PO 00000
Frm 00019
Fmt 4700
Sfmt 4700
4631
III. Executive Orders 12866 and 13563
Executive Orders (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.
IV. 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.
However, an initial regulatory flexibility
analysis has been performed and is
summarized as follows:
This interim rule implements section
811 of the National Defense
Authorization Act for Fiscal Year 2013.
Small entities are not expected to be
directly affected by this rule as it
establishes policy and sets parameters
for DoD contracting officers concerning
selection of appropriate contract types
when entering into contracts for the
production of major defense acquisition
programs (MDAPS). Cost-type contracts
and cost-reimbursement line items may
not be employed for production of
MDAPS on or after October 1, 2014.
Generally, small entities are not
involved as prime contractors in the
production of MDAPS due to the
complex nature of these contracts and
the associated requirement to employ
extensive business and management
systems.
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 the rule in accordance with 5 U.S.C.
601. Interested parties must submit such
comments separately and should cite 5
U.S.C. 610 (DFARS Case 2013–D016) in
correspondence.
V. Paperwork Reduction Act
The rule does not contain any
information collection requirements that
E:\FR\FM\29JAR1.SGM
29JAR1
4632
Federal Register / Vol. 79, No. 19 / Wednesday, January 29, 2014 / Rules and Regulations
require the approval of the Office of
Management and Budget under the
Paperwork Reduction Act (44 U.S.C.
chapter 35.
1. The authority citation for 48 CFR
parts 202, 207, 209, 216, and 234
continues to read as follows:
■
tkelley on DSK3SPTVN1PROD with RULES
VI. 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 comment.
This interim rule implements section
811 of the National Defense
Authorization Act for Fiscal Year 2013
(Pub. L. 112–239). Section 811(a)
instructs DoD to modify the acquisition
regulations to prohibit DoD from
entering into cost-type contracts for the
production of major defense acquisition
programs (MDAPS) for contracts entered
into on or after October 1, 2014, with
one exception in section 811(b). Under
section 811(b), the Under Secretary of
Defense for Acquisition, Technology,
and Logistics may submit to the
congressional defense committees: (1) A
written certification that the particular
cost-type contract is needed to provide
a required capability in a timely, costeffective manner; and (2) An
explanation of the steps taken to ensure
that the use of cost-type pricing is
limited to only those line items or
portions of the contact where such
pricing is needed to achieve the purpose
of the exception. If implementation is
delayed, contracting officers and
program managers may be unaware of
the prohibition on using cost-type
contracts or cost-reimbursement line
items for production of MDAPS on or
after October 1, 2014, and, as a
consequence, unable to perform
appropriate acquisition planning to
select a contract type that complies with
the law. Failure to implement this rule
in a timely manner may further harm
the Government, because award of a
cost-type contract for production of
MDAPS, at this phase in the acquisition
cycle, would inappropriately shift the
responsibility for performance cost risk
from the contractor to the Government.
However, pursuant to 41 U.S.C. 1707
and FAR 1.501–3(b), DoD will consider
public comments received in response
to this interim rule in the formation of
the final rule.
List of Subjects in 48 CFR Parts 202,
207, 209, 216, and 234
Government procurement.
Manuel Quinones,
Editor, Defense Acquisition Regulations
System.
15:55 Jan 28, 2014
Jkt 232001
PART 202—DEFINITIONS OF WORDS
AND TERMS
2. Amend section 202.101 by adding,
in alphabetical order, the definition of
‘‘Major defense acquisition program’’ to
read as follows:
■
202.101
Definitions.
*
*
*
*
*
Major defense acquisition program is
defined in 10.U.S.C. 2430(a).
*
*
*
*
*
PART 207—ACQUISITION PLANNING
3. Amend section 207.106 by adding
paragraph (S–74) to read as follows:
■
207.106 Additional requirements for major
systems.
*
*
*
*
*
(S–74) When selecting contract type,
see 234.004 (section 811 of the National
Defense Authorization Act for Fiscal
Year 2013 (Pub. L. 112–239)).
PART 209—CONTRACTOR
QUALIFICATIONS
209.571–1
Definitions [Amended]
4. Amend section 209.571–1 by
removing ‘‘ ‘Major Defense Acquisition
Program’ is defined in 10 U.S.C. 2430.’’
■
PART 216—TYPES OF CONTRACTS
5. Add section 216.102 to read as
follows:
■
216.102
Policies.
In accordance with section 811 of the
National Defense Authorization Act for
Fiscal Year 2013 (Pub. L. 112–239), use
of any cost-reimbursement line item for
the acquisition of production of major
defense acquisition programs is
prohibited unless the exception at
234.004(2)(ii) applies.
PART 234—MAJOR SYSTEM
ACQUISITION
6. Amend section 234.001 by—
a. Revising the section heading; and
b. Adding, in alphabetical order, the
definition for ‘‘Production of major
defense acquisition program’’.
The revision and addition read as
follows:
■
■
■
234.001
Definitions.
*
Therefore, 48 CFR parts 202, 207, 209,
216, and 234 are amended as follows:
VerDate Mar<15>2010
Authority: 41 U.S.C. 1303 and 48 CFR
Chapter 1.
*
*
*
*
Production of major defense
acquisition program means the
PO 00000
Frm 00020
Fmt 4700
Sfmt 4700
production and deployment of a major
system that is intended to achieve an
operational capability that satisfies
mission needs, or an activity otherwise
defined as Milestone C under
Department of Defense Instruction
5000.02 or related authorities.
*
*
*
*
*
■ 7. Section 234.004 is amended by
revising paragraph (2) to read as follows:
234.004
Acquisition strategy.
*
*
*
*
*
(2) Contract type.
(i) In accordance with section 818 of
the National Defense Authorization Act
for Fiscal Year 2007 (Pub. L. 109–364),
for major defense acquisition programs
at Milestone B—
(A) The Milestone Decision Authority
shall select, with the advice of the
contracting officer, the contract type for
a development program at the time of
Milestone B approval or, in the case of
a space program, Key Decision Point B
approval;
(B) The basis for the contract type
selection shall be documented in the
acquisition strategy. The
documentation—
(1) Shall include an explanation of the
level of program risk; and
(2) If program risk is determined to be
high, shall outline the steps taken to
reduce program risk and the reasons for
proceeding with Milestone B approval
despite the high level of program risk;
and
(C) If a cost-type reimbursement
contract is selected, the contract file
shall include the Milestone Decision
Authority’s written determination that—
(1) The program is so complex and
technically challenging that it would
not be practicable to reduce program
risk to a level that would permit the use
of a fixed-price type contract; and
(2) The complexity and technical
challenge of the program is not the
result of a failure to meet the
requirements of 10 U.S.C. 2366a.
(ii) In accordance with section 811 of
the National Defense Authorization Act
for Fiscal Year 2013 (Pub. L. 112–239),
for contracts entered into on or after
October 1, 2014, the contracting officer
shall—
(A) Not use cost-reimbursement line
items for the acquisition of production
of major defense acquisition programs,
unless USD(AT&L) submits to the
congressional defense committees—
(1) A written certification that the
particular cost-reimbursement line
times are needed to provide a required
capability in a timely and cost effective
manner; and
(2) An explanation of the steps taken
to ensure that cost-reimbursement line
E:\FR\FM\29JAR1.SGM
29JAR1
Federal Register / Vol. 79, No. 19 / Wednesday, January 29, 2014 / Rules and Regulations
times are used only when to achieve the
purposes of the exception; and
(B) Include a copy of such
congressional certification in the
contract file.
■ 8. Add section 234.005 heading to
read as follows:
234.005
General requirements.
[FR Doc. 2014–01276 Filed 1–28–14; 8:45 am]
BILLING CODE 5001–06–P
DEPARTMENT OF DEFENSE
Defense Acquisition Regulations
System
48 CFR Part 252
RIN 0750–AI15
Defense Federal Acquisition
Regulation Supplement: Proposal
Adequacy Checklist Revision (DFARS
Case 2013–D033)
Defense Acquisition
Regulations System, Department of
Defense (DoD).
ACTION: Final rule.
AGENCY:
DoD is issuing a final rule
amending the Defense Federal
Acquisition Regulation Supplement
(DFARS) to remove a redundant item
from the solicitation provision, Proposal
Adequacy Checklist.
DATES: Effective January 29, 2014.
FOR FURTHER INFORMATION CONTACT:
Susan Williams, telephone 571–372–
6092.
SUPPLEMENTARY INFORMATION:
tkelley on DSK3SPTVN1PROD with RULES
SUMMARY:
I. Discussion
DoD is revising the DFARS to remove
and reserve item 19 of the solicitation
provision at DFARS 252.215–7009,
Proposal Adequacy Checklist. Item 19
required price analysis for all
commercial items offered that are not
available to the general public. Through
further research and discussion, DOD
has determined that item 19 listed on
the Proposal Adequacy Checklist is
duplicative in nature. DoD has
concluded that items proposed with a
commercial basis under subcontracts in
the proposal require price analysis by
the offeror. Furthermore, DoD has also
concluded that question 14 under the
Material and Service section and
question 17 under the Subcontracts
section on the Proposal Adequacy
Checklist currently address the
VerDate Mar<15>2010
15:55 Jan 28, 2014
Jkt 232001
requirement for price analysis of the
proposed commercial item that is
produced or performed by others.
II. Publication of This Final Rule for
Public Comment Is Not Required by
Statute
‘‘Publication of proposed
regulations,’’ 41 U.S.C. 1707, is the
statute which applies to the publication
of the Federal Acquisition Regulation.
Paragraph (a)(1) of the statute requires
that a procurement policy, regulation,
procedure or form (including an
amendment or modification thereof)
must be published for public comment
if it relates to the expenditure of
appropriated funds, and has either a
significant effect beyond the internal
operating procedures of the agency
issuing the policy, regulation, procedure
or form, or has a significant cost or
administrative impact on contractors or
offerors. This final rule is not required
to be published for public comment,
because the changes are not substantive
and will not place any additional
burden on the public.
III. Executive Orders 12866 and 13563
Executive Orders (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.
4633
Paperwork Reduction Act (44 U.S.C.
chapter 35).
List of Subjects in 48 CFR Part 252
Government procurement.
Manuel Quinones,
Editor, Defense Acquisition Regulations
System.
Therefore, 48 CFR part 252 is
amended as follows:
PART 252—SOLICITATION
PROVISIONS AND CONTRACT
CLAUSES
1. The authority citation for 48 CFR
part 252 continues to read as follows:
■
Authority: 41 U.S.C. 1303 and 48 CFR
Chapter 1.
252.215–7009
[Amended]
2. Amend section 252.215–7009 by—
a. Removing the provision date
‘‘(MAR 2013)’’ and adding ‘‘(JAN 2014)’’
in its place; and
■ b. Removing from the Proposal
Adequacy Checklist, item 19—
■ i. Under the ‘‘References’’ column,
‘‘FAR 15.408, Table 15–2, Section II,
Paragraph A’’; and
■ ii. Under the ‘‘Submission Item’’
column, ‘‘Does the proposal include a
price analysis for all commercial items
offered that are not available to the
general public?’’ and adding in its place
‘‘[Reserved]’’.
■
■
[FR Doc. 2014–01274 Filed 1–28–14; 8:45 am]
BILLING CODE 5001–06–P
DEPARTMENT OF TRANSPORTATION
Federal Railroad Administration
49 CFR Part 213
[Docket No. FRA–2011–0058, Notice No. 2]
RIN 2130–AC28
IV. Regulatory Flexibility Act
The Regulatory Flexibility Act does
not apply to this rule because this final
rule does not constitute a significant
DFARS revision within the meaning of
FAR 1.501–1, and 41 U.S.C. 1707 does
not require publication for public
comment.
Track Safety Standards; Improving Rail
Integrity
V. Paperwork Reduction Act
The rule does not contain any
information collection requirements that
require the approval of the Office of
Management and Budget under the
§ 213.113
PO 00000
Frm 00021
Fmt 4700
Sfmt 4700
Correction
In rule document 2014–01387,
appearing on pages 4234–4260 in the
issue of Friday, January 24, 2014, make
the following correction:
Defective rails. [Corrected]
On page 4256, the Table titled
‘‘REMEDIAL ACTION TABLE’’, in
Subpart D—Track Structure, of Part 213,
is corrected to read as follows:
E:\FR\FM\29JAR1.SGM
29JAR1
]]>Agencies
[Federal Register Volume 79, Number 19 (Wednesday, January 29, 2014)]
[Rules and Regulations]
[Pages 4631-4633]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2014-01276]
[[Page 4631]]
-----------------------------------------------------------------------
DEPARTMENT OF DEFENSE
Defense Acquisition Regulations System
48 CFR Parts 202, 207, 209, 216, and 234
RIN 0750-AI16
Defense Federal Acquisition Regulation Supplement: Limitation on
Use of Cost-Reimbursement Line Items (DFARS Case 2013-D016)
AGENCY: Defense Acquisition Regulations System, Department of Defense
(DoD).
ACTION: Interim rule.
-----------------------------------------------------------------------
SUMMARY: DoD is issuing an interim rule amending the Defense Federal
Acquisition Regulation Supplement (DFARS) to implement a section of the
National Defense Authorization Act for Fiscal Year 2013, which
prohibits DoD from entering into cost-type contracts for production of
major defense acquisition programs.
DATES: Effective January 29, 2014.
Comment Date: Comments on the interim rule should be submitted in
writing to the address shown below on or before March 31, 2014 to be
considered in the formation of the final rule.
ADDRESSES: Submit comments identified by DFARS Case 2013-D016 by any of
the following methods:
[cir] Regulations.gov: https://www.regulations.gov. Submit comments
via the Federal eRulemaking portal by entering ``DFARS Case 2013-D016''
under the heading ``Enter Keyword or ID'' and selecting ``Search''.
Select the link ``Submit a Comment'' that corresponds with ``DFARS Case
2013-D016''. Follow the instructions provided at the ``Submit a
Comment'' screen. Please include your name, company name (if any), and
``DFARS Case 2013-D016'' on your attached document.
[cir] Email: dfars@mail.mil. Include DFARS Case 2013-D016 in the
subject line of the message.
[cir] Fax: 202-501-4067.
[cir] Mail: Defense Acquisition Regulations System, ATTN: Susan
Williams, OUSD/AT&L/DPAP/DARS, 3060 Defense Pentagon, Room 3B855,
Washington, DC 20301-3060.
Comments received generally will be posted without change to https://www.regulations.gov, including any personal information provided. To
confirm receipt of your comment(s), please check https://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: Ms. Susan Williams, Senior Procurement
Analyst, Defense Acquisition Regulations System, ATTN: Lesa Scott,
OUSD/AT&L/DPAP/DARS, 3060 Defense Pentagon, Room 3B855, Washington, DC
20301-3060, telephone 571-372-6092.
SUPPLEMENTARY INFORMATION:
I. Background
This interim rule amends the DFARS to implement section 811 of the
National Defense Authorization Act (NDAA) for Fiscal Year (FY) 2013
(Pub. L. 112-239), which was enacted January 2, 2013. Section 811(a)
requires DoD to modify the acquisition regulations to prohibit DoD from
entering into cost-type contracts for the production of major defense
acquisition programs (MDAPS) for contracts entered into on or after
October 1, 2014, with one exception in section 811(b). Under section
811(b), the Under Secretary of Defense for Acquisition, Technology, and
Logistics may submit to the congressional defense committees: (1) A
written certification that the particular cost-type contract is needed
to provide a required capability in a timely, cost-effective manner;
and (2) An explanation of the steps taken to ensure that the use of
cost-type pricing is limited to only those line items or portions of
the contact where such pricing is needed to achieve the purpose of the
exception.
In implementing section 811 of the NDAA for FY 2013, DoD further
defined the prohibition on entering into cost-type contracts to
explicitly state the prohibition also applies to entering into cost-
reimbursement line items for the production of MDAPS.
II. Discussion and Analysis
This interim rule makes the following changes to the DFARS:
The definition for ``major defense acquisition program''
is added to section 201.101, Definitions, and is removed from section
209.571-1, Definitions.
Section 207.106(b)(1)(S-74) adds a cross-reference to see
section 234.004, Acquisition Strategy, when selecting contract type.
A new policy statement is added at section 216.102,
Policies.
A new definition of ``production of major defense
acquisition program'' is added to section 234.001.
Section 234.004, Acquisition Strategy, paragraph (2) is
revised and reformatted.
III. Executive Orders 12866 and 13563
Executive Orders (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.
IV. 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.
However, an initial regulatory flexibility analysis has been performed
and is summarized as follows:
This interim rule implements section 811 of the National Defense
Authorization Act for Fiscal Year 2013. Small entities are not expected
to be directly affected by this rule as it establishes policy and sets
parameters for DoD contracting officers concerning selection of
appropriate contract types when entering into contracts for the
production of major defense acquisition programs (MDAPS). Cost-type
contracts and cost-reimbursement line items may not be employed for
production of MDAPS on or after October 1, 2014. Generally, small
entities are not involved as prime contractors in the production of
MDAPS due to the complex nature of these contracts and the associated
requirement to employ extensive business and management systems.
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 the rule in accordance
with 5 U.S.C. 601. Interested parties must submit such comments
separately and should cite 5 U.S.C. 610 (DFARS Case 2013-D016) in
correspondence.
V. Paperwork Reduction Act
The rule does not contain any information collection requirements
that
[[Page 4632]]
require the approval of the Office of Management and Budget under the
Paperwork Reduction Act (44 U.S.C. chapter 35.
VI. 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 comment. This interim
rule implements section 811 of the National Defense Authorization Act
for Fiscal Year 2013 (Pub. L. 112-239). Section 811(a) instructs DoD to
modify the acquisition regulations to prohibit DoD from entering into
cost-type contracts for the production of major defense acquisition
programs (MDAPS) for contracts entered into on or after October 1,
2014, with one exception in section 811(b). Under section 811(b), the
Under Secretary of Defense for Acquisition, Technology, and Logistics
may submit to the congressional defense committees: (1) A written
certification that the particular cost-type contract is needed to
provide a required capability in a timely, cost-effective manner; and
(2) An explanation of the steps taken to ensure that the use of cost-
type pricing is limited to only those line items or portions of the
contact where such pricing is needed to achieve the purpose of the
exception. If implementation is delayed, contracting officers and
program managers may be unaware of the prohibition on using cost-type
contracts or cost-reimbursement line items for production of MDAPS on
or after October 1, 2014, and, as a consequence, unable to perform
appropriate acquisition planning to select a contract type that
complies with the law. Failure to implement this rule in a timely
manner may further harm the Government, because award of a cost-type
contract for production of MDAPS, at this phase in the acquisition
cycle, would inappropriately shift the responsibility for performance
cost risk from the contractor to the Government. However, pursuant to
41 U.S.C. 1707 and FAR 1.501-3(b), DoD will consider public comments
received in response to this interim rule in the formation of the final
rule.
List of Subjects in 48 CFR Parts 202, 207, 209, 216, and 234
Government procurement.
Manuel Quinones,
Editor, Defense Acquisition Regulations System.
Therefore, 48 CFR parts 202, 207, 209, 216, and 234 are amended as
follows:
0
1. The authority citation for 48 CFR parts 202, 207, 209, 216, and 234
continues to read as follows:
Authority: 41 U.S.C. 1303 and 48 CFR Chapter 1.
PART 202--DEFINITIONS OF WORDS AND TERMS
0
2. Amend section 202.101 by adding, in alphabetical order, the
definition of ``Major defense acquisition program'' to read as follows:
202.101 Definitions.
* * * * *
Major defense acquisition program is defined in 10.U.S.C. 2430(a).
* * * * *
PART 207--ACQUISITION PLANNING
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3. Amend section 207.106 by adding paragraph (S-74) to read as follows:
207.106 Additional requirements for major systems.
* * * * *
(S-74) When selecting contract type, see 234.004 (section 811 of
the National Defense Authorization Act for Fiscal Year 2013 (Pub. L.
112-239)).
PART 209--CONTRACTOR QUALIFICATIONS
209.571-1 Definitions [Amended]
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4. Amend section 209.571-1 by removing `` `Major Defense Acquisition
Program' is defined in 10 U.S.C. 2430.''
PART 216--TYPES OF CONTRACTS
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5. Add section 216.102 to read as follows:
216.102 Policies.
In accordance with section 811 of the National Defense
Authorization Act for Fiscal Year 2013 (Pub. L. 112-239), use of any
cost-reimbursement line item for the acquisition of production of major
defense acquisition programs is prohibited unless the exception at
234.004(2)(ii) applies.
PART 234--MAJOR SYSTEM ACQUISITION
0
6. Amend section 234.001 by--
0
a. Revising the section heading; and
0
b. Adding, in alphabetical order, the definition for ``Production of
major defense acquisition program''.
The revision and addition read as follows:
234.001 Definitions.
* * * * *
Production of major defense acquisition program means the
production and deployment of a major system that is intended to achieve
an operational capability that satisfies mission needs, or an activity
otherwise defined as Milestone C under Department of Defense
Instruction 5000.02 or related authorities.
* * * * *
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7. Section 234.004 is amended by revising paragraph (2) to read as
follows:
234.004 Acquisition strategy.
* * * * *
(2) Contract type.
(i) In accordance with section 818 of the National Defense
Authorization Act for Fiscal Year 2007 (Pub. L. 109-364), for major
defense acquisition programs at Milestone B--
(A) The Milestone Decision Authority shall select, with the advice
of the contracting officer, the contract type for a development program
at the time of Milestone B approval or, in the case of a space program,
Key Decision Point B approval;
(B) The basis for the contract type selection shall be documented
in the acquisition strategy. The documentation--
(1) Shall include an explanation of the level of program risk; and
(2) If program risk is determined to be high, shall outline the
steps taken to reduce program risk and the reasons for proceeding with
Milestone B approval despite the high level of program risk; and
(C) If a cost-type reimbursement contract is selected, the contract
file shall include the Milestone Decision Authority's written
determination that--
(1) The program is so complex and technically challenging that it
would not be practicable to reduce program risk to a level that would
permit the use of a fixed-price type contract; and
(2) The complexity and technical challenge of the program is not
the result of a failure to meet the requirements of 10 U.S.C. 2366a.
(ii) In accordance with section 811 of the National Defense
Authorization Act for Fiscal Year 2013 (Pub. L. 112-239), for contracts
entered into on or after October 1, 2014, the contracting officer
shall--
(A) Not use cost-reimbursement line items for the acquisition of
production of major defense acquisition programs, unless USD(AT&L)
submits to the congressional defense committees--
(1) A written certification that the particular cost-reimbursement
line times are needed to provide a required capability in a timely and
cost effective manner; and
(2) An explanation of the steps taken to ensure that cost-
reimbursement line
[[Page 4633]]
times are used only when to achieve the purposes of the exception; and
(B) Include a copy of such congressional certification in the
contract file.
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8. Add section 234.005 heading to read as follows:
234.005 General requirements.
[FR Doc. 2014-01276 Filed 1-28-14; 8:45 am]
BILLING CODE 5001-06-P
