Defense Federal Acquisition Regulation Supplement: Rights in Technical Data (DFARS Case 2016-D008), 28812-28816 [2016-10827]

Download as PDF 28812 Federal Register / Vol. 81, No. 90 / Tuesday, May 10, 2016 / Proposed Rules not occur. We are proposing to approve UDEQ’s submittal with regard to the requirements of section 110(a)(2)(D)(i) prongs 1 and 2 for the 2008 Pb NAAQS. ehiers on DSK5VPTVN1PROD with PROPOSALS IV. Proposed Action The EPA is proposing to approve CAA section 110(a)(2)(D)(i)(I) prongs 1 and 2 for the 2008 Pb NAAQS, and proposing to disapprove prongs 1 and 2 for the 2008 ozone NAAQS based on consideration of modeling results in EPA’s August 4, 2015 NODA. The EPA is soliciting public comments on this proposed action and will consider public comments received during the comment period. V. Statutory and Executive Order Reviews Under the CAA, the Administrator is required to approve a SIP submission that complies with the provisions of the Act and applicable federal regulations. 42 U.S.C. 7410(k); 40 CFR 52.02(a). Thus, in reviewing SIP submissions, the EPA’s role is to approve state actions, provided that they meet the criteria of the Clean Air Act. Accordingly, this proposed action merely proposes approval of some state law as meeting federal requirements and proposes disapproval of other state law because it does not meet federal requirements; this proposed action does not propose additional requirements beyond those imposed by state law. For that reason, this proposed action: • Is not a significant regulatory action subject to review by the Office of Management and Budget under Executive Orders 12866 (58 FR 51735, October 4, 1993) and 13563 (76 FR 3821, January 21, 2011); • Does not impose an information collection burden under the provisions of the Paperwork Reduction Act (44 U.S.C. 3501 et seq.); • Is certified as not having a significant economic impact on a substantial number of small entities under the Regulatory Flexibility Act (5 U.S.C. 601 et seq.); • Does not contain any unfunded mandate or significantly or uniquely affect small governments, as described in the Unfunded Mandates Reform Act of 1995 (Pub. L.104–4); • Does not have Federalism implications as specified in Executive Order 13132 (64 FR 43255, August 10, 1999); • Is not an economically significant regulatory action based on health or safety risks subject to Executive Order 13045 (62 FR 19885, April 23, 1997); • Is not a significant regulatory action subject to Executive Order 13211 (66 FR 28355, May 22, 2001); VerDate Sep<11>2014 15:20 May 09, 2016 Jkt 238001 • Is not subject to requirements of Section 12(d) of the National Technology Transfer and Advancement Act of 1995 (15 U.S.C. 272 note) because application of those requirements would be inconsistent with the Clean Air Act; and • Does not provide the EPA with the discretionary authority to address, as appropriate, disproportionate human health or environmental effects, using practicable and legally permissible methods, under Executive Order 12898 (59 FR 7629, February 16, 1994). In addition, the SIP does not apply on any Indian reservation land or in any other area where the EPA or an Indian tribe has demonstrated that a tribe has jurisdiction. In those areas of Indian country, the proposed rule does not have tribal implications and will not impose substantial direct costs on tribal governments or preempt tribal law as specified by Executive Order 13175 (65 FR 67249, November 9, 2000). List of Subjects in 40 CFR Part 52 Environmental protection, Air pollution control, Carbon monoxide, Incorporation by reference, Intergovernmental relations, Lead, Nitrogen dioxide, Ozone, Particulate matter, Reporting and recordkeeping requirements, Sulfur oxides, Volatile organic compounds. Authority: 42 U.S.C. 7401 et seq. Dated: April 26, 2016. Shaun L. McGrath, Regional Administrator, Region 8. [FR Doc. 2016–10893 Filed 5–9–16; 8:45 am] BILLING CODE 6560–50–P DEPARTMENT OF DEFENSE Defense Acquisition Regulations System 48 CFR Parts 227 and 252 [Docket DARS–2016–0010] RIN 0750–AI91 Defense Federal Acquisition Regulation Supplement: Rights in Technical Data (DFARS Case 2016– D008) 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 SUMMARY: PO 00000 Frm 00077 Fmt 4702 Sfmt 4702 Year 2016 that addresses rights in technical data relating to major weapon systems, expanding application of the presumption that a commercial item has been developed entirely at private expense. DATES: Comments on the proposed rule should be submitted in writing to the address shown below on or before July 11, 2016, to be considered in the formation of a final rule. ADDRESSES: Submit comments identified by DFARS Case 2016–D008, using any of the following methods: Æ Regulations.gov: http:// www.regulations.gov. Submit comments via the Federal eRulemaking portal by entering ‘‘DFARS Case 2016–D008’’ under the heading ‘‘Enter keyword or ID’’ and selecting ‘‘Search.’’ Select the link ‘‘Submit a Comment’’ that corresponds with ‘‘DFARS Case 2016– D008.’’ Follow the instructions provided at the ‘‘Submit a Comment’’ screen. Please include your name, company name (if any), and ‘‘DFARS Case 2016– D008’’ on your attached document. Æ Email: osd.dfars@mail.mil. Include DFARS Case 2016–D008 in the subject line of the message. Æ Fax: 571–372–6094. Æ Mail: Defense Acquisition Regulations System, Attn: Ms. Amy G. Williams, OUSD(AT&L)DPAP/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). FOR FURTHER INFORMATION CONTACT: Ms. Amy G. Williams, telephone 571–372– 6106. SUPPLEMENTARY INFORMATION: I. Background DoD is proposing to revise the DFARS to implement section 813(a) of the National Defense Authorization Act (NDAA) for Fiscal Year (FY) 2016 (Pub. L. 114–92) that modifies 10 U.S.C. 2321(f) to address rights in technical data relating to major weapon systems. The validation of asserted restrictions on technical data is based on statutory requirements, codified primarily at 10 U.S.C. 2321, which are implemented in the DFARS at 227.7102–3 for commercial technical data and at 227.7103–13 for noncommercial technical data, and incorporated into individual contracts via the clause E:\FR\FM\10MYP1.SGM 10MYP1 ehiers on DSK5VPTVN1PROD with PROPOSALS Federal Register / Vol. 81, No. 90 / Tuesday, May 10, 2016 / Proposed Rules DFARS 252.227–7037, Validation of Restrictive Markings on Technical Data, for both commercial technical data and noncommercial technical data. By longstanding policy, these requirements and procedures are adapted and applied to noncommercial computer software (see 227.7203–13 and clause 252.227–7019, Validation of Asserted Restrictions— Computer Software), but are not applied to commercial computer software. Since 1995, these validation procedures have included specialized presumptions and procedures for commercial technical data. For discussion purposes, these specialized requirements will be referred to as the ‘‘Commercial Rule’’ (see 10 U.S.C. 2320(b)(1) and 2321(f)). Under the Commercial Rule, a contracting officer is required to presume that a commercial item has been developed entirely at private expense, unless shown otherwise in accordance with the procedures at 10 U.S.C. 2321(f). Subsequently, section 802(b) of the NDAA for FY 2007, as amended by section 815(a)(2) of the NDAA for FY 2008, modified 10 U.S.C. 2321(f)(2) to establish another specialized set of procedures for technical data related to major systems (including subsystems or components thereof). For discussion purposes, this second set of specialized requirements has been referred to as the ‘‘Major Systems Rule.’’ Under the Major Systems Rule, a contracting officer’s challenge to asserted restrictions on technical data relating to a major system shall be sustained unless the contractor or subcontractor submits information demonstrating that the item was developed exclusively at private expense; except for commercially available off-the-shelf (COTS) items, which remained subject to the Commercial Rule in all cases. The Major Systems Rule, as an exception to the Commercial Rule, was implemented in the DFARS via DFARS Case 2007–D003, which was published for comments as a proposed rule in the Federal Register on May 07, 2010 (75 FR 25161), and subsequently became effective via a final rule published on September 20, 2011 (76 FR 58144). As a result, the Commercial Rule was implemented for technical data at DFARS 227.7103–13(c)(1) and in the clause at DFARS 252.227–7037(b)(1), and the Major Systems Rule was implemented at 227.7103–13(c)(2) and 252.227–7037(b)(2). Additionally, the Major Systems Rule was applied to noncommercial computer software at 227.7203–13(d) and in the clause at 252.227–7019(f), although in the noncommercial computer software implementation the Major Systems Rule VerDate Sep<11>2014 15:20 May 09, 2016 Jkt 238001 stands alone, rather than as an exception to the Commercial Rule, because neither the Commercial Rule, nor any element of the validation procedures overall, has been applied to commercial computer software. Section 813(a) revised 10 U.S.C. 2321(f) to amend both the Commercial Rule and the Major Systems Rule in two primary ways: (1) The major systems rule was narrowed to apply only to major weapon systems—essentially converting the Major Systems Rule into the Major Weapon Systems Rule. (2) The COTS exception to the Major Systems Rule was expanded to include three additional exceptions. More specifically, the formerly COTS-only exception was expanded to include— (i) COTS items with modifications of a type customarily available in the commercial marketplace or minor modifications made to meet Federal Government requirements; (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). II. Discussion and Analysis A. Implementation of the Statutory Changes for Validation of Asserted Restrictions on Technical Data Because the DFARS already included an implementation of the Commercial Rule and Major Systems Rule, and section 813(a) revised only particular characteristics and subelements of the Major Systems Rule, the implementation of the statutory changes is relatively straightforward. More specifically, the Major Systems Rule is amended to apply only in the case of a major weapon system (see revised DFARS 227.7103–13(c)(2)(ii), and 252.227–7037(b)(2)), and the exception to the Major Systems Rule that previously referenced only COTS items, was expanded to include the three new exceptions, as well (see new DFARS 227.7103–13(c)(2)(ii)(1) through (3), and 252.227–7037(b)(2)(i)). In addition, a minor change was made to the coverage for the Commercial Rule, which had previously referred to COTS items as always being covered by the Commercial Rule. Under the new schema, which includes four categories of items that are exceptions to the Major Weapon Systems Rule, and thereby are always governed by the Commercial Rule, it was deemed to be too PO 00000 Frm 00078 Fmt 4702 Sfmt 4702 28813 complicated to refer to all four exceptions in both the coverage for the Commercial Rule and the Major Weapon Systems Rule. Accordingly, the exceptions are listed only within the Major Weapon Systems Rule, and the Commercial Rule merely crossreferences that coverage as an exception to the Commercial Rule. In addition to avoiding unnecessary duplication in the coverage, this approach provides an advantage in circumstances involving an assertion regarding any type of commercial item that is not part of a major weapon system or subsystem thereof, such that there would be no need to parse through the entire Major Weapon Systems Rule only to find that the item is covered by one of the exceptions to the Major Weapon Systems Rule, and thus still covered by the Commercial Rule. B. Application of the Revised Requirements and Procedures to Validation of Asserted Restrictions on Computer Software DoD has made no additional edits to extend the section 813(a) construct to noncommercial computer software, and has deleted the baseline coverage of noncommercial computer software in major systems, currently at DFARS 227.7203–13(d) and 252.227–7019(f), because the purpose for the Major Weapon Systems Rule is to function as an exception to the Commercial Rule; but in the context of computer software, these validation procedures do not apply to commercial computer software, and the coverage for noncommercial computer software is concerned only with the Major Weapon Systems Rule procedures for noncommercial computer software. In the end, the application of the Major Weapon Systems Rule in those cases is extremely unlikely to reach a result that is any different from the application of the ‘‘normal’’ rules for noncommercial computer software. More specifically, in all cases the Government cannot initiate a challenge unless it has a reasonable basis to do so (see DFARS 227.7203– 13(a) and (e)(3)(i), and 252.227– 7019(d)(3) and (e)(1) for noncommercial computer software; see also 227.7103– 13(a), (c)(1), and (d)(4), and 252.227– 7037(d)(2) for technical data). After a challenge is initiated, both the Major Weapon Systems Rule and the ‘‘normal’’ validation procedures would result in the challenge being sustained unless the contractor provides information to demonstrate that the noncommercial computer software was developed exclusively at private expense. E:\FR\FM\10MYP1.SGM 10MYP1 28814 Federal Register / Vol. 81, No. 90 / Tuesday, May 10, 2016 / Proposed Rules III. Applicability to Contracts at or Below the Simplified Acquisition Threshold (SAT) and for Commercial Items, Including Commercially Available Off-the-Shelf (COTS) Items This proposed rule does not add any new provisions or clauses or add new requirements to existing provision or clauses. Rather, when acquiring major weapon systems, it expands the circumstances relating to commerciality in which the contracting officer shall presume that development was exclusively at private expense. ehiers on DSK5VPTVN1PROD with PROPOSALS IV. 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 a significant regulatory action and, therefore, was 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. Regulatory Flexibility Act DoD does not expect this proposed 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 proposed rule was initiated to implement section 813(a) of the National Defense Authorization Act (NDAA) for Fiscal Year (FY) 2016 (Pub. L. 114–92). The objective of this rule is to reduce the requirement to respond to Government challenges of restricted rights, by expanding the applicability of the presumption regarding development exclusively at private expense in accordance with section 813(a) of the NDAA for FY 2016. DoD cannot accurately determine the number of small entities that will be affected by this change in the regulations, because DoD does not have sufficient information about subcontract awards of subsystems and components of major weapon systems. However, DoD estimates an annual reduction of 50 prechallenge requests for information and 2 challenges of asserted technical VerDate Sep<11>2014 15:20 May 09, 2016 Jkt 238001 data restrictions. DoD further estimates, based on data from the DoD FY 2014 Small Business Procurement Scorecard, that this reduction in challenges will affect about 17 small businesses (52 prechallenges/challenges × 33 percent of subcontract awards to small businesses). The proposed rule reduces the requirement to respond to Government challenge of restricted rights. Under current regulations, the presumption regarding development exclusively at private expense does not apply to major systems or subsystems or components thereof, except for commercially available off-the-shelf items. This rule expands applicability of the presumption regarding development exclusively at private expense with regard to a major weapon system, or a subsystem or component thereof, to cover— • A commercial subsystem or component of a major weapon system, if the major weapon system was acquired as a commercial item in accordance with DFARS subpart 234.70 (10 U.S.C. 2379(a)); • A component of a subsystem, if the subsystem was acquired as a commercial item in accordance with DFARS subpart 234.70 (10 U.S.C. 2379(b)); and • Commercially available off-the-shelf items with modifications of a type customarily available in the commercial marketplace or minor modifications made to meet Federal Government requirements. The classes of small entities that will be affected by this reduction are small businesses that provide any items in the above categories that are not challenged due to the new statute. The rule does not duplicate, overlap, or conflict with any other Federal rules. This rule reduces the burden on small entities to the maximum extent permitted by the statute. 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 2016–D008), in correspondence. VI. Paperwork Reduction Act This rule affects the information collection requirements in the provisions at DFARS 252.227–7019 and 252.227–7037, currently approved under OMB Control Number 0704–0369, entitled ‘‘Defense Federal Acquisition PO 00000 Frm 00079 Fmt 4702 Sfmt 4702 Regulation Supplement (DFARS): Rights in Technical Data and Computer Software,’’ in accordance with the Paperwork Reduction Act (44 U.S.C. chapter 35). The rule is expected to result in a reduction of 1,040 hours in the total estimated burden hours. DoD will submit a change request to OMB to document the reduction in burden hours at the final rule stage. A. Based on the advice of DoD subject matter experts, DoD currently estimates approximately 500 prechallenge requests for information and approximately 20 challenges per year associated with DFARS clause 252.227– 7019, Validation of Asserted Restrictions—Computer Software, and 252.227–7037, Validation of Restrictive Markings on Technical Data. Including the time for reviewing instructions, searching existing data sources, gathering and maintaining the data needed, and completing and reviewing the collection of information, the estimated average burden to respond to a prechallenge request for information is 10 hours, and the estimated average burden to respond to each challenge, is 270 hours, resulting in a weighted average of approximately 20 hours per response. Under current regulations, the presumption regarding development exclusively at private expense does not apply to major systems or subsystems or components thereof, except for commercially available off-the-shelf items. This rule expands applicability of the presumption regarding development exclusively at private expense with regard to a major weapon system, or a subsystem or component thereof, to cover— • A commercial subsystem or component of a major weapon system, if the major weapon system was acquired as a commercial item in accordance with DFARS subpart 234.70 (10 U.S.C. 2379(a)); • A component of a subsystem, if the subsystem was acquired as a commercial item in accordance with DFARS subpart 234.70 (10 U.S.C. 2379(b)); and • Commercially available off-the-shelf items with modifications of a type customarily available in the commercial marketplace or minor modifications made to meet Federal Government requirements. Therefore, DoD estimates a reduction of about 10 percent in the estimated number of prechallenge requests for information and challenges under DFARS 252.227–7019 and 252.227– 7037 as follows: E:\FR\FM\10MYP1.SGM 10MYP1 28815 Federal Register / Vol. 81, No. 90 / Tuesday, May 10, 2016 / Proposed Rules Current requirement Revised Delta Respondents ................................................................................................................................ Responses per respondent ......................................................................................................... 520 1 468 1 52 1 Total annual responses ........................................................................................................ Preparation hours per response .................................................................................................. 520 20 468 20 52 20 Total response burden hours ........................................................................................ 10,400 9,360 1,040 ehiers on DSK5VPTVN1PROD with PROPOSALS B. Request for Comments Regarding Paperwork Burden List of Subjects in 48 CFR Parts 227 and 252 Written comments and recommendations on the proposed information collection, including suggestions for reducing this burden, should be sent to Ms. Jasmeet Seehra at the Office of Management and Budget, Desk Officer for DoD, Room 10236, New Executive Office Building, Washington, DC 20503, or email Jasmeet_K._Seehra@ omb.eop.gov, with a copy to the Defense Acquisition Regulations System, Attn: Ms. Amy G. Williams, OUSD(AT&L)DPAP/DARS, Room 3B941, 3060 Defense Pentagon, Washington, DC 20301–3060. Comments can be received from 30 to 60 days after the date of this proposed rule, but comments to OMB will be most useful if received by OMB within 30 days after the date of this proposed rule. Public comments are particularly invited on: whether this collection of information is necessary for the proper performance of functions of the DFARS, and will have practical utility; whether our estimate of the public burden of this collection of information is accurate, and based on valid assumptions and methodology; ways to enhance the quality, utility, and clarity of the information to be collected; and ways in which we can minimize the burden of the collection of information on those who are to respond, through the use of appropriate technological collection techniques or other forms of information technology. To request more information on this proposed information collection or to obtain a copy of the proposal and associated collection instruments, please write to the Defense Acquisition Regulations System, Attn: Ms. Amy G. Williams, OUSD(AT&L)DPAP/DARS, Room 3B941, 3060 Defense Pentagon, Washington, DC 20301–3060, or email osd.dfars@mail.mil. Include DFARS Case 2016–D008 in the subject line of the message. VerDate Sep<11>2014 15:20 May 09, 2016 Jkt 238001 Government procurement. Jennifer L. Hawes, Editor, Defense Acquisition Regulations System. Therefore, 48 CFR parts 227 and 252 is proposed to be amended as follows: ■ 1. The authority citation for parts 227 and 252 continues to read as follows: Authority: 41 U.S.C. 1303 and 48 CFR chapter 1. PART 227—PATENT, DATA, AND COPYRIGHTS 2. Amend section 227.7103–13 by— a. In paragraph (c)(1), removing ‘‘commercial item, component, or process’’ and adding ‘‘commercial item’’ in its place and removing ‘‘the item, component or process’’ and adding ‘‘that item’’ in its place; and ■ b. Revising paragraphs (c)(2)(i) and (ii). The revisions read as follows: ■ ■ 227.7103–13 Government right to review, verify, challenge and validate asserted restrictions. * * * * * (c) * * * (2) * * * (i) Commercial items. Except as provided in paragraph (c)(2)(ii) of this subsection, contracting officers shall presume that a commercial item was developed exclusively at private expense whether or not a contractor or subcontractor submits a justification in response to a challenge notice. When a challenge is warranted, a contractor’s or subcontractor’s failure to respond to the challenge notice cannot be the sole basis for issuing a final decision denying the validity of an asserted restriction. (ii) Major weapon systems. When the contracting officer challenges an asserted restriction regarding technical data for a major weapon system or a subsystem or component thereof on the basis that the technology was not developed exclusively at private expense— (A) The presumption in paragraph (c)(2)(i) of this subsection applies to— PO 00000 Frm 00080 Fmt 4702 Sfmt 4702 (1) A commercial subsystem or component of a major weapon system, if the major weapon system was acquired as a commercial item in accordance with subpart 234.70 (10 U.S.C. 2379(a)); (2) A component of a subsystem, if the subsystem was acquired as a commercial item in accordance with subpart 234.70 (10 U.S.C. 2379(b)); and (3) Any other component, if the component is a commercially available off-the-shelf item or a commercially available off-the-shelf item with modifications of a type customarily available in the commercial marketplace or minor modifications made to meet Federal Government requirements; and (B) In all other cases, the contracting officer shall sustain the challenge unless information provided by the contractor or subcontractor demonstrates that the item was developed exclusively at private expense. * * * * * 227.7203–13 [Amended] 3. Section 227.7203–13 is amended by removing paragraph (d) and redesignating paragraphs (e), (f), and (g) as paragraphs (d), (e), and (f), respectively. ■ PART 252—SOLICITATION PROVISIONS AND CONTRACT CLAUSES 4. Amend section 252.227–7019 by— a. Removing the clause date ‘‘(SEPT 2011)’’ and adding ‘‘(DATE)’’ in its place; ■ b. Removing paragraph (f); ■ c. Redesignating paragraphs (g), (h), (i), and (j) as paragraphs (f), (g), (h), and (i), respectively; ■ d. In newly redesignated paragraph (f)(5)— ■ i. Removing ‘‘(g)(1)’’ and adding ‘‘(f)(1)’’ in its place; ■ ii. Removing ‘‘Officer will’’ and adding ‘‘Officer shall’’ in its place; and ■ iii. Removing ‘‘paragraph (f) of this clause and’’; ■ f. In newly redesignated paragraph (f)(6) introductory text, removing ‘‘the written explanation furnished pursuant to paragraph (f)(1) of this clause, or any other’’ and adding ‘‘any’’ in its place; ■ ■ E:\FR\FM\10MYP1.SGM 10MYP1 28816 Federal Register / Vol. 81, No. 90 / Tuesday, May 10, 2016 / Proposed Rules g. In newly redesignated paragraph (g)(1) introductory text, removing ‘‘(h)(3)’’ and adding ‘‘(g)(3)’’ in its place; and ■ h. In newly redesignated paragraph (g)(3), removing ‘‘(h)(1)’’ and adding ‘‘(g)(1)’’ in its place. ■ 5. Amend section 252.227–7037 by— ■ a. Removing the clause date ‘‘(JUN 2013)’’ and adding ‘‘(DATE)’’ in its place; and ■ b. Revising paragraphs (b)(1) and (2). The revision reads as follows: ■ ehiers on DSK5VPTVN1PROD with PROPOSALS Jkt 238001 BILLING CODE 5001–06–P DEPARTMENT OF DEFENSE Defense Acquisition Regulations System 48 CFR Part 252 RIN 0750–AI94 (b) * * * (1) Commercial items. (i) Except as provided in paragraph (b)(2) of this clause, the Contracting Officer will presume that the Contractor’s or a subcontractor’s asserted use or release restrictions with respect to a commercial item is justified on the basis that the item was developed exclusively at private expense. (ii) The Contracting Officer will not challenge such assertions unless the Contracting Officer has information that demonstrates that the commercial item was not developed exclusively at private expense. (2) Major weapon systems. In the case of a challenge to a use or release restriction that is asserted with respect to data of the Contractor or a subcontractor for a major weapon system or a subsystem or component thereof on the basis that the major weapon system, subsystem, or component was developed exclusively at private expense— (i) The presumption in paragraph (b)(1) of this clause applies to— (A) A commercial subsystem or component of a major weapon system, if the major weapon system was acquired as a commercial item in accordance with DFARS subpart 234.70 (10 U.S.C. 2379(a)); (B) A component of a subsystem, if the subsystem was acquired as a commercial item in accordance with DFARS subpart 234.70 (10 U.S.C. 2379(b)); and (C) Any other component, if the component is a commercially available off-the-shelf item or a commercially available off-the-shelf item with modifications of a type customarily available in the commercial marketplace or minor modifications made to meet Federal Government requirements; and (ii) In all other cases, the challenge to the use or release restriction will be sustained unless information provided by the Contractor or a subcontractor demonstrates that the item or process 15:20 May 09, 2016 [FR Doc. 2016–10827 Filed 5–9–16; 8:45 am] [Docket DARS–2016–0016] 252.227–7037 Validation of restrictive markings on technical data. VerDate Sep<11>2014 was developed exclusively at private expense. * * * * * Defense Federal Acquisition Regulation Supplement: Display of Hotline Posters (DFARS Case 2016– D018) 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 consolidate the multiple hotline posters into one poster that delineates multiple reportable offenses. DATES: Comments on the proposed rule should be submitted in writing to the address shown below on or before July 11, 2016, to be considered in the formation of a final rule. ADDRESSES: Submit comments identified by DFARS Case 2016–D018, using any of the following methods: Æ Regulations.gov: http:// www.regulations.gov. Submit comments via the Federal eRulemaking portal by entering ‘‘DFARS Case 2016–D018’’ under the heading ‘‘Enter keyword or ID’’ and selecting ‘‘Search.’’ Select the link ‘‘Submit a Comment’’ that corresponds with ‘‘DFARS Case 2016– D018.’’ Follow the instructions provided at the ‘‘Submit a Comment’’ screen. Please include your name, company name (if any), and ‘‘DFARS Case 2016– D018’’ on your attached document. Æ Email: osd.dfars@mail.mil. Include DFARS Case 2016–D018 in the subject line of the message. Æ Fax: 571–372–6094. Æ Mail: Defense Acquisition Regulations System, Attn: Mr. Christopher Stiller, OUSD(AT&L)DPAP/ 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, SUMMARY: PO 00000 Frm 00081 Fmt 4702 Sfmt 4702 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: Mr. Christopher Stiller, telephone 571–372– 6176. SUPPLEMENTARY INFORMATION: I. Background This rule proposes to revise the DFARS to update DFARS clause 252.203–7004, Display of Hotline Posters. This clause currently requires the display of a DoD fraud hotline poster, a separate combating trafficking in persons poster, and a whistleblower protection poster. DoD has consolidated the posters into one poster to reduce the number of posters required to be displayed and proposes updating the clause accordingly. This rule also removes the United States-only restriction for use of the DoD poster, because the human trafficking poster requires display outside the United States, even though the fraud hotline poster did not. Additionally, if the contract is funded, in whole or in part, by the Department of Homeland Security (DHS) disaster relief funds and the work is to be performed in the United States, the DHS fraud hotline poster must also be displayed. The clause also is amended to provide contact information for obtaining the DHS poster. II. 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. III. Regulatory Flexibility Act DoD does not expect this proposed 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: E:\FR\FM\10MYP1.SGM 10MYP1

Agencies

[Federal Register Volume 81, Number 90 (Tuesday, May 10, 2016)]
[Proposed Rules]
[Pages 28812-28816]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2016-10827]


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DEPARTMENT OF DEFENSE

Defense Acquisition Regulations System

48 CFR Parts 227 and 252

[Docket DARS-2016-0010]
RIN 0750-AI91


Defense Federal Acquisition Regulation Supplement: Rights in 
Technical Data (DFARS Case 2016-D008)

AGENCY: Defense Acquisition Regulations System, Department of Defense 
(DoD).

ACTION: Proposed rule.

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SUMMARY: 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 addresses rights in 
technical data relating to major weapon systems, expanding application 
of the presumption that a commercial item has been developed entirely 
at private expense.

DATES: Comments on the proposed rule should be submitted in writing to 
the address shown below on or before July 11, 2016, to be considered in 
the formation of a final rule.

ADDRESSES: Submit comments identified by DFARS Case 2016-D008, using 
any of the following methods:
    [cir] Regulations.gov: http://www.regulations.gov. Submit comments 
via the Federal eRulemaking portal by entering ``DFARS Case 2016-D008'' 
under the heading ``Enter keyword or ID'' and selecting ``Search.'' 
Select the link ``Submit a Comment'' that corresponds with ``DFARS Case 
2016-D008.'' Follow the instructions provided at the ``Submit a 
Comment'' screen. Please include your name, company name (if any), and 
``DFARS Case 2016-D008'' on your attached document.
    [cir] Email: osd.dfars@mail.mil. Include DFARS Case 2016-D008 in 
the subject line of the message.
    [cir] Fax: 571-372-6094.
    [cir] Mail: Defense Acquisition Regulations System, Attn: Ms. Amy 
G. Williams, OUSD(AT&L)DPAP/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).

FOR FURTHER INFORMATION CONTACT: Ms. Amy G. Williams, telephone 571-
372-6106.

SUPPLEMENTARY INFORMATION: 

I. Background

    DoD is proposing to revise the DFARS to implement section 813(a) of 
the National Defense Authorization Act (NDAA) for Fiscal Year (FY) 2016 
(Pub. L. 114-92) that modifies 10 U.S.C. 2321(f) to address rights in 
technical data relating to major weapon systems.
    The validation of asserted restrictions on technical data is based 
on statutory requirements, codified primarily at 10 U.S.C. 2321, which 
are implemented in the DFARS at 227.7102-3 for commercial technical 
data and at 227.7103-13 for noncommercial technical data, and 
incorporated into individual contracts via the clause

[[Page 28813]]

DFARS 252.227-7037, Validation of Restrictive Markings on Technical 
Data, for both commercial technical data and noncommercial technical 
data. By long-standing policy, these requirements and procedures are 
adapted and applied to noncommercial computer software (see 227.7203-13 
and clause 252.227-7019, Validation of Asserted Restrictions--Computer 
Software), but are not applied to commercial computer software.
    Since 1995, these validation procedures have included specialized 
presumptions and procedures for commercial technical data. For 
discussion purposes, these specialized requirements will be referred to 
as the ``Commercial Rule'' (see 10 U.S.C. 2320(b)(1) and 2321(f)). 
Under the Commercial Rule, a contracting officer is required to presume 
that a commercial item has been developed entirely at private expense, 
unless shown otherwise in accordance with the procedures at 10 U.S.C. 
2321(f).
    Subsequently, section 802(b) of the NDAA for FY 2007, as amended by 
section 815(a)(2) of the NDAA for FY 2008, modified 10 U.S.C. 
2321(f)(2) to establish another specialized set of procedures for 
technical data related to major systems (including subsystems or 
components thereof). For discussion purposes, this second set of 
specialized requirements has been referred to as the ``Major Systems 
Rule.'' Under the Major Systems Rule, a contracting officer's challenge 
to asserted restrictions on technical data relating to a major system 
shall be sustained unless the contractor or subcontractor submits 
information demonstrating that the item was developed exclusively at 
private expense; except for commercially available off-the-shelf (COTS) 
items, which remained subject to the Commercial Rule in all cases.
    The Major Systems Rule, as an exception to the Commercial Rule, was 
implemented in the DFARS via DFARS Case 2007-D003, which was published 
for comments as a proposed rule in the Federal Register on May 07, 2010 
(75 FR 25161), and subsequently became effective via a final rule 
published on September 20, 2011 (76 FR 58144). As a result, the 
Commercial Rule was implemented for technical data at DFARS 227.7103-
13(c)(1) and in the clause at DFARS 252.227-7037(b)(1), and the Major 
Systems Rule was implemented at 227.7103-13(c)(2) and 252.227-
7037(b)(2). Additionally, the Major Systems Rule was applied to 
noncommercial computer software at 227.7203-13(d) and in the clause at 
252.227-7019(f), although in the noncommercial computer software 
implementation the Major Systems Rule stands alone, rather than as an 
exception to the Commercial Rule, because neither the Commercial Rule, 
nor any element of the validation procedures overall, has been applied 
to commercial computer software.
    Section 813(a) revised 10 U.S.C. 2321(f) to amend both the 
Commercial Rule and the Major Systems Rule in two primary ways:
    (1) The major systems rule was narrowed to apply only to major 
weapon systems--essentially converting the Major Systems Rule into the 
Major Weapon Systems Rule.
    (2) The COTS exception to the Major Systems Rule was expanded to 
include three additional exceptions. More specifically, the formerly 
COTS-only exception was expanded to include--
    (i) COTS items with modifications of a type customarily available 
in the commercial marketplace or minor modifications made to meet 
Federal Government requirements;
    (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).

II. Discussion and Analysis

A. Implementation of the Statutory Changes for Validation of Asserted 
Restrictions on Technical Data

    Because the DFARS already included an implementation of the 
Commercial Rule and Major Systems Rule, and section 813(a) revised only 
particular characteristics and subelements of the Major Systems Rule, 
the implementation of the statutory changes is relatively 
straightforward. More specifically, the Major Systems Rule is amended 
to apply only in the case of a major weapon system (see revised DFARS 
227.7103-13(c)(2)(ii), and 252.227-7037(b)(2)), and the exception to 
the Major Systems Rule that previously referenced only COTS items, was 
expanded to include the three new exceptions, as well (see new DFARS 
227.7103-13(c)(2)(ii)(1) through (3), and 252.227-7037(b)(2)(i)).
    In addition, a minor change was made to the coverage for the 
Commercial Rule, which had previously referred to COTS items as always 
being covered by the Commercial Rule. Under the new schema, which 
includes four categories of items that are exceptions to the Major 
Weapon Systems Rule, and thereby are always governed by the Commercial 
Rule, it was deemed to be too complicated to refer to all four 
exceptions in both the coverage for the Commercial Rule and the Major 
Weapon Systems Rule. Accordingly, the exceptions are listed only within 
the Major Weapon Systems Rule, and the Commercial Rule merely cross-
references that coverage as an exception to the Commercial Rule. In 
addition to avoiding unnecessary duplication in the coverage, this 
approach provides an advantage in circumstances involving an assertion 
regarding any type of commercial item that is not part of a major 
weapon system or subsystem thereof, such that there would be no need to 
parse through the entire Major Weapon Systems Rule only to find that 
the item is covered by one of the exceptions to the Major Weapon 
Systems Rule, and thus still covered by the Commercial Rule.

B. Application of the Revised Requirements and Procedures to Validation 
of Asserted Restrictions on Computer Software

    DoD has made no additional edits to extend the section 813(a) 
construct to noncommercial computer software, and has deleted the 
baseline coverage of noncommercial computer software in major systems, 
currently at DFARS 227.7203-13(d) and 252.227-7019(f), because the 
purpose for the Major Weapon Systems Rule is to function as an 
exception to the Commercial Rule; but in the context of computer 
software, these validation procedures do not apply to commercial 
computer software, and the coverage for noncommercial computer software 
is concerned only with the Major Weapon Systems Rule procedures for 
noncommercial computer software. In the end, the application of the 
Major Weapon Systems Rule in those cases is extremely unlikely to reach 
a result that is any different from the application of the ``normal'' 
rules for noncommercial computer software. More specifically, in all 
cases the Government cannot initiate a challenge unless it has a 
reasonable basis to do so (see DFARS 227.7203-13(a) and (e)(3)(i), and 
252.227-7019(d)(3) and (e)(1) for noncommercial computer software; see 
also 227.7103-13(a), (c)(1), and (d)(4), and 252.227-7037(d)(2) for 
technical data). After a challenge is initiated, both the Major Weapon 
Systems Rule and the ``normal'' validation procedures would result in 
the challenge being sustained unless the contractor provides 
information to demonstrate that the noncommercial computer software was 
developed exclusively at private expense.

[[Page 28814]]

III. Applicability to Contracts at or Below the Simplified Acquisition 
Threshold (SAT) and for Commercial Items, Including Commercially 
Available Off-the-Shelf (COTS) Items

    This proposed rule does not add any new provisions or clauses or 
add new requirements to existing provision or clauses. Rather, when 
acquiring major weapon systems, it expands the circumstances relating 
to commerciality in which the contracting officer shall presume that 
development was exclusively at private expense.

IV. 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 a significant regulatory action and, therefore, was 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. Regulatory Flexibility Act

    DoD does not expect this proposed 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 proposed rule was initiated to implement section 813(a) of the 
National Defense Authorization Act (NDAA) for Fiscal Year (FY) 2016 
(Pub. L. 114-92).
    The objective of this rule is to reduce the requirement to respond 
to Government challenges of restricted rights, by expanding the 
applicability of the presumption regarding development exclusively at 
private expense in accordance with section 813(a) of the NDAA for FY 
2016.
    DoD cannot accurately determine the number of small entities that 
will be affected by this change in the regulations, because DoD does 
not have sufficient information about subcontract awards of subsystems 
and components of major weapon systems. However, DoD estimates an 
annual reduction of 50 prechallenge requests for information and 2 
challenges of asserted technical data restrictions. DoD further 
estimates, based on data from the DoD FY 2014 Small Business 
Procurement Scorecard, that this reduction in challenges will affect 
about 17 small businesses (52 prechallenges/challenges x 33 percent of 
subcontract awards to small businesses).
    The proposed rule reduces the requirement to respond to Government 
challenge of restricted rights. Under current regulations, the 
presumption regarding development exclusively at private expense does 
not apply to major systems or subsystems or components thereof, except 
for commercially available off-the-shelf items. This rule expands 
applicability of the presumption regarding development exclusively at 
private expense with regard to a major weapon system, or a subsystem or 
component thereof, to cover--
     A commercial subsystem or component of a major weapon 
system, if the major weapon system was acquired as a commercial item in 
accordance with DFARS subpart 234.70 (10 U.S.C. 2379(a));
     A component of a subsystem, if the subsystem was acquired 
as a commercial item in accordance with DFARS subpart 234.70 (10 U.S.C. 
2379(b)); and
     Commercially available off-the-shelf items with 
modifications of a type customarily available in the commercial 
marketplace or minor modifications made to meet Federal Government 
requirements.
    The classes of small entities that will be affected by this 
reduction are small businesses that provide any items in the above 
categories that are not challenged due to the new statute.
    The rule does not duplicate, overlap, or conflict with any other 
Federal rules.
    This rule reduces the burden on small entities to the maximum 
extent permitted by the statute.
    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 2016-D008), in 
correspondence.

VI. Paperwork Reduction Act

    This rule affects the information collection requirements in the 
provisions at DFARS 252.227-7019 and 252.227-7037, currently approved 
under OMB Control Number 0704-0369, entitled ``Defense Federal 
Acquisition Regulation Supplement (DFARS): Rights in Technical Data and 
Computer Software,'' in accordance with the Paperwork Reduction Act (44 
U.S.C. chapter 35). The rule is expected to result in a reduction of 
1,040 hours in the total estimated burden hours. DoD will submit a 
change request to OMB to document the reduction in burden hours at the 
final rule stage.
    A. Based on the advice of DoD subject matter experts, DoD currently 
estimates approximately 500 prechallenge requests for information and 
approximately 20 challenges per year associated with DFARS clause 
252.227-7019, Validation of Asserted Restrictions--Computer Software, 
and 252.227-7037, Validation of Restrictive Markings on Technical Data. 
Including the time for reviewing instructions, searching existing data 
sources, gathering and maintaining the data needed, and completing and 
reviewing the collection of information, the estimated average burden 
to respond to a prechallenge request for information is 10 hours, and 
the estimated average burden to respond to each challenge, is 270 
hours, resulting in a weighted average of approximately 20 hours per 
response.
    Under current regulations, the presumption regarding development 
exclusively at private expense does not apply to major systems or 
subsystems or components thereof, except for commercially available 
off-the-shelf items. This rule expands applicability of the presumption 
regarding development exclusively at private expense with regard to a 
major weapon system, or a subsystem or component thereof, to cover--
     A commercial subsystem or component of a major weapon 
system, if the major weapon system was acquired as a commercial item in 
accordance with DFARS subpart 234.70 (10 U.S.C. 2379(a));
     A component of a subsystem, if the subsystem was acquired 
as a commercial item in accordance with DFARS subpart 234.70 (10 U.S.C. 
2379(b)); and
     Commercially available off-the-shelf items with 
modifications of a type customarily available in the commercial 
marketplace or minor modifications made to meet Federal Government 
requirements.
    Therefore, DoD estimates a reduction of about 10 percent in the 
estimated number of prechallenge requests for information and 
challenges under DFARS 252.227-7019 and 252.227-7037 as follows:

[[Page 28815]]



----------------------------------------------------------------------------------------------------------------
                                                                      Current
                                                                    requirement       Revised          Delta
----------------------------------------------------------------------------------------------------------------
Respondents.....................................................             520             468              52
Responses per respondent........................................               1               1               1
                                                                 -----------------------------------------------
    Total annual responses......................................             520             468              52
Preparation hours per response..................................              20              20              20
                                                                 -----------------------------------------------
        Total response burden hours.............................          10,400           9,360           1,040
----------------------------------------------------------------------------------------------------------------

B. Request for Comments Regarding Paperwork Burden

    Written comments and recommendations on the proposed information 
collection, including suggestions for reducing this burden, should be 
sent to Ms. Jasmeet Seehra at the Office of Management and Budget, Desk 
Officer for DoD, Room 10236, New Executive Office Building, Washington, 
DC 20503, or email Jasmeet_K._Seehra@omb.eop.gov, with a copy to the 
Defense Acquisition Regulations System, Attn: Ms. Amy G. Williams, 
OUSD(AT&L)DPAP/DARS, Room 3B941, 3060 Defense Pentagon, Washington, DC 
20301-3060. Comments can be received from 30 to 60 days after the date 
of this proposed rule, but comments to OMB will be most useful if 
received by OMB within 30 days after the date of this proposed rule.
    Public comments are particularly invited on: whether this 
collection of information is necessary for the proper performance of 
functions of the DFARS, and will have practical utility; whether our 
estimate of the public burden of this collection of information is 
accurate, and based on valid assumptions and methodology; ways to 
enhance the quality, utility, and clarity of the information to be 
collected; and ways in which we can minimize the burden of the 
collection of information on those who are to respond, through the use 
of appropriate technological collection techniques or other forms of 
information technology.
    To request more information on this proposed information collection 
or to obtain a copy of the proposal and associated collection 
instruments, please write to the Defense Acquisition Regulations 
System, Attn: Ms. Amy G. Williams, OUSD(AT&L)DPAP/DARS, Room 3B941, 
3060 Defense Pentagon, Washington, DC 20301-3060, or email 
osd.dfars@mail.mil. Include DFARS Case 2016-D008 in the subject line of 
the message.

List of Subjects in 48 CFR Parts 227 and 252

    Government procurement.

Jennifer L. Hawes,
Editor, Defense Acquisition Regulations System.

    Therefore, 48 CFR parts 227 and 252 is proposed to be amended as 
follows:

0
1. The authority citation for parts 227 and 252 continues to read as 
follows:

    Authority: 41 U.S.C. 1303 and 48 CFR chapter 1.

PART 227--PATENT, DATA, AND COPYRIGHTS

0
2. Amend section 227.7103-13 by--
0
a. In paragraph (c)(1), removing ``commercial item, component, or 
process'' and adding ``commercial item'' in its place and removing 
``the item, component or process'' and adding ``that item'' in its 
place; and
0
b. Revising paragraphs (c)(2)(i) and (ii).
    The revisions read as follows:


227.7103-13  Government right to review, verify, challenge and validate 
asserted restrictions.

* * * * *
    (c) * * *
    (2) * * *
    (i) Commercial items. Except as provided in paragraph (c)(2)(ii) of 
this subsection, contracting officers shall presume that a commercial 
item was developed exclusively at private expense whether or not a 
contractor or subcontractor submits a justification in response to a 
challenge notice. When a challenge is warranted, a contractor's or 
subcontractor's failure to respond to the challenge notice cannot be 
the sole basis for issuing a final decision denying the validity of an 
asserted restriction.
    (ii) Major weapon systems. When the contracting officer challenges 
an asserted restriction regarding technical data for a major weapon 
system or a subsystem or component thereof on the basis that the 
technology was not developed exclusively at private expense--
    (A) The presumption in paragraph (c)(2)(i) of this subsection 
applies to--
    (1) A commercial subsystem or component of a major weapon system, 
if the major weapon system was acquired as a commercial item in 
accordance with subpart 234.70 (10 U.S.C. 2379(a));
    (2) A component of a subsystem, if the subsystem was acquired as a 
commercial item in accordance with subpart 234.70 (10 U.S.C. 2379(b)); 
and
    (3) Any other component, if the component is a commercially 
available off-the-shelf item or a commercially available off-the-shelf 
item with modifications of a type customarily available in the 
commercial marketplace or minor modifications made to meet Federal 
Government requirements; and
    (B) In all other cases, the contracting officer shall sustain the 
challenge unless information provided by the contractor or 
subcontractor demonstrates that the item was developed exclusively at 
private expense.
* * * * *


227.7203-13  [Amended]

0
3. Section 227.7203-13 is amended by removing paragraph (d) and 
redesignating paragraphs (e), (f), and (g) as paragraphs (d), (e), and 
(f), respectively.

PART 252--SOLICITATION PROVISIONS AND CONTRACT CLAUSES

0
4. Amend section 252.227-7019 by--
0
a. Removing the clause date ``(SEPT 2011)'' and adding ``(DATE)'' in 
its place;
0
b. Removing paragraph (f);
0
c. Redesignating paragraphs (g), (h), (i), and (j) as paragraphs (f), 
(g), (h), and (i), respectively;
0
d. In newly redesignated paragraph (f)(5)--
0
i. Removing ``(g)(1)'' and adding ``(f)(1)'' in its place;
0
ii. Removing ``Officer will'' and adding ``Officer shall'' in its 
place; and
0
iii. Removing ``paragraph (f) of this clause and'';
0
f. In newly redesignated paragraph (f)(6) introductory text, removing 
``the written explanation furnished pursuant to paragraph (f)(1) of 
this clause, or any other'' and adding ``any'' in its place;

[[Page 28816]]

0
g. In newly redesignated paragraph (g)(1) introductory text, removing 
``(h)(3)'' and adding ``(g)(3)'' in its place; and
0
h. In newly redesignated paragraph (g)(3), removing ``(h)(1)'' and 
adding ``(g)(1)'' in its place.
0
5. Amend section 252.227-7037 by--
0
a. Removing the clause date ``(JUN 2013)'' and adding ``(DATE)'' in its 
place; and
0
b. Revising paragraphs (b)(1) and (2).
    The revision reads as follows:


252.227-7037  Validation of restrictive markings on technical data.

    (b) * * *
    (1) Commercial items. (i) Except as provided in paragraph (b)(2) of 
this clause, the Contracting Officer will presume that the Contractor's 
or a subcontractor's asserted use or release restrictions with respect 
to a commercial item is justified on the basis that the item was 
developed exclusively at private expense.
    (ii) The Contracting Officer will not challenge such assertions 
unless the Contracting Officer has information that demonstrates that 
the commercial item was not developed exclusively at private expense.
    (2) Major weapon systems. In the case of a challenge to a use or 
release restriction that is asserted with respect to data of the 
Contractor or a subcontractor for a major weapon system or a subsystem 
or component thereof on the basis that the major weapon system, 
subsystem, or component was developed exclusively at private expense--
    (i) The presumption in paragraph (b)(1) of this clause applies to--
    (A) A commercial subsystem or component of a major weapon system, 
if the major weapon system was acquired as a commercial item in 
accordance with DFARS subpart 234.70 (10 U.S.C. 2379(a));
    (B) A component of a subsystem, if the subsystem was acquired as a 
commercial item in accordance with DFARS subpart 234.70 (10 U.S.C. 
2379(b)); and
    (C) Any other component, if the component is a commercially 
available off-the-shelf item or a commercially available off-the-shelf 
item with modifications of a type customarily available in the 
commercial marketplace or minor modifications made to meet Federal 
Government requirements; and
    (ii) In all other cases, the challenge to the use or release 
restriction will be sustained unless information provided by the 
Contractor or a subcontractor demonstrates that the item or process was 
developed exclusively at private expense.
* * * * *
[FR Doc. 2016-10827 Filed 5-9-16; 8:45 am]
 BILLING CODE 5001-06-P