Federal Acquisition Regulation: Definition of “Commercial Item”, 20607-20609 [2019-09703]

Download as PDF Federal Register / Vol. 84, No. 91 / Friday, May 10, 2019 / Proposed Rules 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); • 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 is not approved to 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 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, Incorporation by reference, Intergovernmental relations, Nitrogen dioxide, Ozone, Reporting and recordkeeping requirements, Volatile organic compounds. khammond on DSKBBV9HB2PROD with PROPOSALS Authority: 42 U.S.C. 7401 et seq. Dated: April 29, 2019. Deborah Jordan, Acting Regional Administrator, Region IX. [FR Doc. 2019–09596 Filed 5–9–19; 8:45 am] BILLING CODE 6560–50–P VerDate Sep<11>2014 17:08 May 09, 2019 Jkt 247001 20607 [FAR Case 2018–008; Docket No. 2018– 0008, Sequence No. 1] allow 30 days for posting of comments submitted by mail). FOR FURTHER INFORMATION CONTACT: For clarification of content, contact Ms. Zenaida Delgado, Procurement Analyst, at 202–969–7207. For information pertaining to status or publication schedules, contact the Regulatory Secretariat Division at 202–501–4755. Please cite ‘‘FAR Case 2018–008.’’ SUPPLEMENTARY INFORMATION: RIN 9000–AN68 I. Background Federal Acquisition Regulation: Definition of ‘‘Commercial Item’’ DoD, GSA, and NASA are proposing to amend the Federal Acquisition Regulation (FAR) to change the definition of ‘‘commercial item’’ at FAR 2.101, so that the regulatory definition conforms to statutory changes made to the definition by section 847 of the National Defense Authorization Act (NDAA) for Fiscal Year (FY) 2018 (Pub. L. 115–91, enacted December 12, 2017). The rule would broaden the definition to allow certain additional items developed exclusively at private expense to qualify for the benefits associated with being treated as a commercial item. Section 847 amends the definition of ‘‘commercial item’’ at 41 U.S.C. 103(8) to expand the universe of nondevelopmental items (NDIs) that qualify as commercial items to include items sold in substantial quantities on a competitive basis to multiple foreign governments. The statutory and regulatory definition of ‘‘commercial item’’ is broad and covers a wide range of products and services. It includes: • Products, other than real property, that have been offered for sale, lease, or license to the public. Possible indications that an item is commercial are a commercial sales history, listing in catalogs or brochures, an established price, and distributors. Examples of commercial items bought by agencies are transport aircraft, computers, medicine, and fuel. The commercial market is global; commercial items are not limited to the domestic commercial market. • Products that evolved through advances in technology or performance and will be available in the commercial market in time to meet the delivery requirements of the solicitation. Examples of such items are product updates, model changes, and product improvements such as new versions of software. • Products that have received minor modifications to meet agency requirements. To be considered minor, a modification may not significantly alter the product’s nongovernmental function or essential physical DEPARTMENT OF DEFENSE GENERAL SERVICES ADMINISTRATION NATIONAL AERONAUTICS AND SPACE ADMINISTRATION 48 CFR Part 2 Department of Defense (DoD), General Services Administration (GSA), and National Aeronautics and Space Administration (NASA). ACTION: Proposed rule. AGENCY: DoD, GSA and NASA are proposing to amend the Federal Acquisition Regulation (FAR) to implement a section of the National Defense Authorization Act for Fiscal Year 2018 to revise the definition of a ‘‘commercial item.’’ DATES: Interested parties should submit comments to the Regulatory Secretariat Division at one of the addresses shown below on or before July 9, 2019 to be considered in the formulation of a final rule. ADDRESSES: Submit comments in response to FAR Case 2018–008 by any of the following methods: • Regulations.gov: http:// www.regulations.gov. Submit comments via the Federal eRulemaking portal by entering ‘‘FAR Case 2018–008’’ under the heading ‘‘Enter Keyword or ID’’ and selecting ‘‘Search.’’ Select the link ‘‘Comment Now’’ that corresponds with ‘‘FAR Case 2018–008.’’ Follow the instructions provided on the screen. Please include your name, company name (if any), and ‘‘FAR Case 2018–008’’ on your attached document. • Mail: General Services Administration, Regulatory Secretariat Division (MVCB), ATTN: Ms. Lois Mandell, 1800 F Street NW, 2nd floor, Washington, DC 20405. Instructions: Please submit comments only and cite ‘‘FAR case 2018–008’’ in all correspondence related to this case. All comments received will be posted without change to http:// www.regulations.gov, including any personal and/or business confidential 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 SUMMARY: PO 00000 Frm 00019 Fmt 4702 Sfmt 4702 E:\FR\FM\10MYP1.SGM 10MYP1 khammond on DSKBBV9HB2PROD with PROPOSALS 20608 Federal Register / Vol. 84, No. 91 / Friday, May 10, 2019 / Proposed Rules characteristics. In determining whether a modification is minor, agencies should consider the value and size of the modification and the comparative value and size of the final product. • Products that were created by integrating commercial subsystems and components into a unique system. For example, a computer system composed of commercial subsystems would be considered a commercial item. Another example is industrial plant equipment that combines commercial components into a unique item based on customer needs. • Installation services, maintenance services, repair services, training services, and other services procured to support a commercial product. Help desks, call centers, warranty repair services, user training, equipment installation, and other services related to item support are examples. • Standalone services offered and sold competitively, in substantial quantities, in the commercial marketplace based on established catalog or market prices for specific tasks performed and under standard commercial terms and conditions. Construction, research and development (R&D), warehousing, garbage collection, and transportation of household goods are examples. • NDIs, if the procuring agency determines the item was developed exclusively at private expense and sold in substantial quantities, on a competitive basis, to multiple State and local governments. NDI is defined separately in FAR 2.101. An NDI includes an item of supply used exclusively for governmental purposes by a Federal agency, a State or local government, or a foreign government with which the United States has a mutual defense cooperation agreement. Examples include— Æ Protective vests used by police departments and rescue equipment used by fire and rescue units; Æ Defense products previously developed by defense agencies of U.S. allies and used exclusively for governmental purposes by Federal agencies, state or local governments, or a foreign government; Æ Items that require only minor modifications to meet the requirements of the procuring agency; and Æ A mechanical dereefer (mechanism for releasing parachute reefing lines) used with the U.S. Army’s cargo parachutes that was developed for and first used by the Canadian Army. II. Discussion and Analysis This proposed rule will amend the definition of commercial item in FAR VerDate Sep<11>2014 17:08 May 09, 2019 Jkt 247001 part 2 to reflect the statutory change made by section 847. Specifically, the rule would add the phrase ‘‘or to multiple foreign governments’’ at the end of paragraph (8). III. Expected Impact of the Proposed Rule This rule allows for more transactions to follow requirements for commercial items. This simplifies the transaction in terms of fewer Government reporting requirements and should decrease the cost per transaction for both the Government and the contractor. Under the proposed rule, for the first time, NDIs that are developed exclusively at private expense and sold in substantial quantities to multiple foreign governments may be treated as commercial items. Because commercial items, which include commercially available off-theshelf items, are sold to the Government in the same way as NDIs, the Government can take advantage of the previous testing and general acceptance of the product in the commercial marketplace or by a state, local, or foreign government. To promote the Government’s acquisition of commercial items, the law and FAR part 12 create a preference for buying commercial items and provide relief from certain record-keeping, reporting, and compliance requirements. According to an analysis published by the Section 809 Panel in its May 2017 Interim Report, commercial item acquisitions are subject to up to 138 contract clauses, while acquisitions for NDIs that do not meet the commercial item definition as well as acquisitions for non-commercial items could be subject to nearly 500 clauses, depending on the principal type and purpose of the contract. For example, a commercial firm selling an NDI today to multiple foreign governments in substantial quantities could face compliance costs with the Truth In Negotiations Act (TINA), which requires implementation of government-specific business systems for any modifications to competitively awarded items. Policies governing commercial item acquisitions favor reliance on commercial sector business practices and use of standard commercial terms and conditions to the maximum extent practicable. Each of these dimensions of the commercial item framework contributes to more simplified and less costly transactions. DoD, GSA, and NASA are unable to monetize the cost savings, because procurement data is not captured in a manner that enables a determination to be made regarding how many NDIs PO 00000 Frm 00020 Fmt 4702 Sfmt 4702 developed exclusively at private expense have been sold or are expected to be sold to multiple foreign governments in substantial quantities, that are not also sold in substantial quantities to multiple State and local governments. Accordingly, DoD, GSA, and NASA welcome feedback, especially from respondents who would expressly benefit from this rulemaking, such as: (i) Identification of any transactional information (e.g., Procurement Instrument Identifiers (PIIDs)) associated with contracts awarded in the past 10 years that would have benefitted from the rule had it been in effect; (ii) any information that might help the regulatory drafters better understand—both qualitatively and quantitatively—the savings and/or cost avoidance that the rule will provide; and (iii) -potential burden reductions associated with future regulatory actions that facilitate broader acquisition of commercial items. In responding to item (ii), respondents are encouraged to discuss, to the extent possible, specific components of savings and costavoidance (e.g., identify savings and/or cost-avoidance associated with specific clauses that would no longer be required as a result of this regulatory change). IV. Applicability To Contract At or Below the Simplified Acquisition Threshold and for Commercial Items, Including Commercially Available Offthe-Shelf Items This rule proposes to amend the FAR to change the definition of ‘‘commercial item’’. The revision does not add any new solicitation provisions or clauses, or impact any existing provisions or clauses. V. 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 rule is not a significant regulatory action and therefore, this rule was not subject to the review of the Office of Information and Regulatory Affairs (OIRA) under section 6(b) of E.O. 12866. This rule is not a major rule under 5 U.S.C. 804. E:\FR\FM\10MYP1.SGM 10MYP1 Federal Register / Vol. 84, No. 91 / Friday, May 10, 2019 / Proposed Rules VI. Executive Order 13771 This proposed rule is expected to be an E.O. 13771 deregulatory action. Details are provided in section III of this preamble. with 5 U.S.C. 610. Interested parties must submit such comments separately and should cite 5 U.S.C. 610 (FAR Case 2018–008) in correspondence. VII. Regulatory Flexibility Act DoD, GSA, and NASA do not expect this 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 (IRFA) has been performed and is summarized as follows: This rule does not contain any information collection requirements that require the approval of the Office of Management and Budget under the Paperwork Reduction Act (44 U.S.C. chapter 35). khammond on DSKBBV9HB2PROD with PROPOSALS DoD, GSA, and NASA are proposing to amend the Federal Acquisition Regulation (FAR) to change the definition of ‘‘commercial item’’ so that NDIs that are developed exclusively at private expense and sold in substantial quantities to multiple foreign governments may be treated as commercial items. The objective is to implement section 847 of the NDAA for FY18. The legal basis for this rule is 41 U.S.C. 103(8). The proposed rule impacts all entities who do business with the Federal Government, including the over 327,458 small business registrants in the System for Award Management database. This proposed rule expands the definition of ‘‘commercial item’’ for nondevelopmental items (NDIs) to include those sold to multiple foreign governments. This change will allow more acquisitions to fall under the definition of commercial item procurements and use standard commercial terms and conditions to the maximum extent practicable. This will result in a reduction of statutory and regulatory requirements as FAR part 12 contract actions are exempt at the prime or subcontract level from various statutes, policies, and contracting requirements unique to the federal procurement process. Therefore, small businesses would benefit from the streamlined processes. The proposed rule does not include additional reporting or record keeping requirements. The rule does not duplicate, overlap, or conflict with any other Federal rules. There are no available alternatives to the proposed rule to accomplish the desired objective of the statute. Small businesses will benefit from the streamlined commercial acquisition procedures. The Regulatory Secretariat Division has submitted a copy of the IRFA to the Chief Counsel for Advocacy of the Small Business Administration. A copy of the IRFA may be obtained from the Regulatory Secretariat Division. DoD, GSA and NASA invite comments from small business concerns and other interested parties on the expected impact of this rule on small entities. DoD, GSA, and NASA will also consider comments from small entities concerning the existing regulations in subparts affected by this rule consistent VerDate Sep<11>2014 18:02 May 09, 2019 Jkt 247001 VIII. Paperwork Reduction Act List of Subjects in 48 CFR Part 2 Government procurement. Dated: April 22, 2019. William F. Clark, Director, Office of Government-wide Acquisition Policy, Office of Acquisition Policy, Office of Government-wide Policy. Therefore, DoD, GSA, and NASA are proposing to amend 48 CFR part 2 as set forth below: PART 2—DEFINITIONS OF WORDS AND TERMS 1. The authority citation for 48 CFR part 2 continues to read as follows: ■ Authority: 40 U.S.C. 121(c); 10 U.S.C. chapter 137; and 51 U.S.C. 20113. 2.101 [Amended] 2. In paragraph (b)(2), amend paragraph (8) in the definition of ‘‘Commercial item’’ by removing ‘‘local governments’’ and adding in its place ‘‘local governments or to multiple foreign governments’’. ■ [FR Doc. 2019–09703 Filed 5–9–19; 8:45 am] BILLING CODE 6820–EP–P DEPARTMENT OF COMMERCE National Oceanic and Atmospheric Administration 50 CFR Part 648 [Docket No. 190214116–9116–01] RIN 0648–BI69 Fisheries of the Northeastern United States; Northeast Multispecies Fishery; Fishing Year 2019 Recreational Management Measures National Marine Fisheries Service (NMFS), National Oceanic and Atmospheric Administration (NOAA), Commerce. ACTION: Proposed rule; request for comments. AGENCY: NMFS proposes fishing year 2019 recreational management measures for Gulf of Maine cod and haddock and Georges Bank cod. This action is SUMMARY: PO 00000 Frm 00021 Fmt 4702 Sfmt 4702 20609 necessary to respond to updated catch and other scientific information. The proposed measures are intended to ensure the recreational fishery achieves, but does not exceed, its fishing year 2019 catch limits. Comments must be received by May 28, 2019. DATES: You may submit comments on this document, identified by NOAA– NMFS–2018–0140, by either of the following methods: • Electronic Submission: Submit all electronic public comments via the Federal e-Rulemaking Portal. 1. Go to www.regulations.gov/ #!docketDetail;D=NOAA-NMFS-2018– 0140. 2. Click the ‘‘Comment Now!’’ icon, complete the required fields, and 3. Enter or attach your comments. • Mail: Submit written comments to: Michael Pentony, Regional Administrator, National Marine Fisheries Service, 55 Great Republic Drive, Gloucester, MA 01930. Mark the outside of the envelope, ‘‘Comments on the Fishing Year 2019 Groundfish Recreational Measures.’’ Instructions: Comments sent by any other method, to any other address or individual, or received after the end of the comment period, may not be considered by NMFS. All comments received are a part of the public record and will generally be posted for public viewing on www.regulations.gov without change. All personal identifying information (e.g., name, address, etc.), confidential business information, or otherwise sensitive information submitted voluntarily by the sender will be publicly accessible. NMFS will accept anonymous comments (enter ‘‘N/ A’’ in the required fields if you wish to remain anonymous). Copies of the analyses supporting this rulemaking, including the Framework Adjustment 57 environmental assessment (EA) prepared by the New England Fishery Management Council are available from: Michael Pentony, Regional Administrator, National Marine Fisheries Service, 55 Great Republic Drive, Gloucester, MA 01930. The supporting documents are also accessible via the internet at: http:// www.nefmc.org/management-plans/ northeast-multispecies or http:// www.regulations.gov. ADDRESSES: FOR FURTHER INFORMATION CONTACT: Emily Keiley, Fishery Management Specialist, phone: 978–281–9116; email: Emily.Keiley@noaa.gov. SUPPLEMENTARY INFORMATION: E:\FR\FM\10MYP1.SGM 10MYP1

Agencies

[Federal Register Volume 84, Number 91 (Friday, May 10, 2019)]
[Proposed Rules]
[Pages 20607-20609]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2019-09703]


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DEPARTMENT OF DEFENSE

GENERAL SERVICES ADMINISTRATION

NATIONAL AERONAUTICS AND SPACE ADMINISTRATION

48 CFR Part 2

[FAR Case 2018-008; Docket No. 2018-0008, Sequence No. 1]
RIN 9000-AN68


Federal Acquisition Regulation: Definition of ``Commercial Item''

AGENCY: Department of Defense (DoD), General Services Administration 
(GSA), and National Aeronautics and Space Administration (NASA).

ACTION: Proposed rule.

-----------------------------------------------------------------------

SUMMARY: DoD, GSA and NASA are proposing to amend the Federal 
Acquisition Regulation (FAR) to implement a section of the National 
Defense Authorization Act for Fiscal Year 2018 to revise the definition 
of a ``commercial item.''

DATES: Interested parties should submit comments to the Regulatory 
Secretariat Division at one of the addresses shown below on or before 
July 9, 2019 to be considered in the formulation of a final rule.

ADDRESSES: Submit comments in response to FAR Case 2018-008 by any of 
the following methods:
     Regulations.gov: http://www.regulations.gov.
    Submit comments via the Federal eRulemaking portal by entering 
``FAR Case 2018-008'' under the heading ``Enter Keyword or ID'' and 
selecting ``Search.'' Select the link ``Comment Now'' that corresponds 
with ``FAR Case 2018-008.'' Follow the instructions provided on the 
screen. Please include your name, company name (if any), and ``FAR Case 
2018-008'' on your attached document.
     Mail: General Services Administration, Regulatory 
Secretariat Division (MVCB), ATTN: Ms. Lois Mandell, 1800 F Street NW, 
2nd floor, Washington, DC 20405.
    Instructions: Please submit comments only and cite ``FAR case 2018-
008'' in all correspondence related to this case. All comments received 
will be posted without change to http://www.regulations.gov, including 
any personal and/or business confidential 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: For clarification of content, contact 
Ms. Zenaida Delgado, Procurement Analyst, at 202-969-7207. For 
information pertaining to status or publication schedules, contact the 
Regulatory Secretariat Division at 202-501-4755. Please cite ``FAR Case 
2018-008.''

SUPPLEMENTARY INFORMATION: 

I. Background

    DoD, GSA, and NASA are proposing to amend the Federal Acquisition 
Regulation (FAR) to change the definition of ``commercial item'' at FAR 
2.101, so that the regulatory definition conforms to statutory changes 
made to the definition by section 847 of the National Defense 
Authorization Act (NDAA) for Fiscal Year (FY) 2018 (Pub. L. 115-91, 
enacted December 12, 2017). The rule would broaden the definition to 
allow certain additional items developed exclusively at private expense 
to qualify for the benefits associated with being treated as a 
commercial item. Section 847 amends the definition of ``commercial 
item'' at 41 U.S.C. 103(8) to expand the universe of nondevelopmental 
items (NDIs) that qualify as commercial items to include items sold in 
substantial quantities on a competitive basis to multiple foreign 
governments.
    The statutory and regulatory definition of ``commercial item'' is 
broad and covers a wide range of products and services. It includes:
     Products, other than real property, that have been offered 
for sale, lease, or license to the public. Possible indications that an 
item is commercial are a commercial sales history, listing in catalogs 
or brochures, an established price, and distributors. Examples of 
commercial items bought by agencies are transport aircraft, computers, 
medicine, and fuel. The commercial market is global; commercial items 
are not limited to the domestic commercial market.
     Products that evolved through advances in technology or 
performance and will be available in the commercial market in time to 
meet the delivery requirements of the solicitation. Examples of such 
items are product updates, model changes, and product improvements such 
as new versions of software.
     Products that have received minor modifications to meet 
agency requirements. To be considered minor, a modification may not 
significantly alter the product's nongovernmental function or essential 
physical

[[Page 20608]]

characteristics. In determining whether a modification is minor, 
agencies should consider the value and size of the modification and the 
comparative value and size of the final product.
     Products that were created by integrating commercial 
subsystems and components into a unique system. For example, a computer 
system composed of commercial subsystems would be considered a 
commercial item. Another example is industrial plant equipment that 
combines commercial components into a unique item based on customer 
needs.
     Installation services, maintenance services, repair 
services, training services, and other services procured to support a 
commercial product. Help desks, call centers, warranty repair services, 
user training, equipment installation, and other services related to 
item support are examples.
     Standalone services offered and sold competitively, in 
substantial quantities, in the commercial marketplace based on 
established catalog or market prices for specific tasks performed and 
under standard commercial terms and conditions. Construction, research 
and development (R&D), warehousing, garbage collection, and 
transportation of household goods are examples.
     NDIs, if the procuring agency determines the item was 
developed exclusively at private expense and sold in substantial 
quantities, on a competitive basis, to multiple State and local 
governments. NDI is defined separately in FAR 2.101. An NDI includes an 
item of supply used exclusively for governmental purposes by a Federal 
agency, a State or local government, or a foreign government with which 
the United States has a mutual defense cooperation agreement. Examples 
include--
    [cir] Protective vests used by police departments and rescue 
equipment used by fire and rescue units;
    [cir] Defense products previously developed by defense agencies of 
U.S. allies and used exclusively for governmental purposes by Federal 
agencies, state or local governments, or a foreign government;
    [cir] Items that require only minor modifications to meet the 
requirements of the procuring agency; and
    [cir] A mechanical dereefer (mechanism for releasing parachute 
reefing lines) used with the U.S. Army's cargo parachutes that was 
developed for and first used by the Canadian Army.

II. Discussion and Analysis

    This proposed rule will amend the definition of commercial item in 
FAR part 2 to reflect the statutory change made by section 847. 
Specifically, the rule would add the phrase ``or to multiple foreign 
governments'' at the end of paragraph (8).

III. Expected Impact of the Proposed Rule

    This rule allows for more transactions to follow requirements for 
commercial items. This simplifies the transaction in terms of fewer 
Government reporting requirements and should decrease the cost per 
transaction for both the Government and the contractor. Under the 
proposed rule, for the first time, NDIs that are developed exclusively 
at private expense and sold in substantial quantities to multiple 
foreign governments may be treated as commercial items.
    Because commercial items, which include commercially available off-
the-shelf items, are sold to the Government in the same way as NDIs, 
the Government can take advantage of the previous testing and general 
acceptance of the product in the commercial marketplace or by a state, 
local, or foreign government.
    To promote the Government's acquisition of commercial items, the 
law and FAR part 12 create a preference for buying commercial items and 
provide relief from certain record-keeping, reporting, and compliance 
requirements. According to an analysis published by the Section 809 
Panel in its May 2017 Interim Report, commercial item acquisitions are 
subject to up to 138 contract clauses, while acquisitions for NDIs that 
do not meet the commercial item definition as well as acquisitions for 
non-commercial items could be subject to nearly 500 clauses, depending 
on the principal type and purpose of the contract. For example, a 
commercial firm selling an NDI today to multiple foreign governments in 
substantial quantities could face compliance costs with the Truth In 
Negotiations Act (TINA), which requires implementation of government-
specific business systems for any modifications to competitively 
awarded items. Policies governing commercial item acquisitions favor 
reliance on commercial sector business practices and use of standard 
commercial terms and conditions to the maximum extent practicable. Each 
of these dimensions of the commercial item framework contributes to 
more simplified and less costly transactions.
    DoD, GSA, and NASA are unable to monetize the cost savings, because 
procurement data is not captured in a manner that enables a 
determination to be made regarding how many NDIs developed exclusively 
at private expense have been sold or are expected to be sold to 
multiple foreign governments in substantial quantities, that are not 
also sold in substantial quantities to multiple State and local 
governments.
    Accordingly, DoD, GSA, and NASA welcome feedback, especially from 
respondents who would expressly benefit from this rulemaking, such as: 
(i) Identification of any transactional information (e.g., Procurement 
Instrument Identifiers (PIIDs)) associated with contracts awarded in 
the past 10 years that would have benefitted from the rule had it been 
in effect; (ii) any information that might help the regulatory drafters 
better understand--both qualitatively and quantitatively--the savings 
and/or cost avoidance that the rule will provide; and (iii) -potential 
burden reductions associated with future regulatory actions that 
facilitate broader acquisition of commercial items. In responding to 
item (ii), respondents are encouraged to discuss, to the extent 
possible, specific components of savings and cost-avoidance (e.g., 
identify savings and/or cost-avoidance associated with specific clauses 
that would no longer be required as a result of this regulatory 
change).

IV. Applicability To Contract At or Below the Simplified Acquisition 
Threshold and for Commercial Items, Including Commercially Available 
Off-the-Shelf Items

    This rule proposes to amend the FAR to change the definition of 
``commercial item''. The revision does not add any new solicitation 
provisions or clauses, or impact any existing provisions or clauses.

V. 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 rule is not a significant regulatory action and therefore, this 
rule was not subject to the review of the Office of Information and 
Regulatory Affairs (OIRA) under section 6(b) of E.O. 12866. This rule 
is not a major rule under 5 U.S.C. 804.

[[Page 20609]]

VI. Executive Order 13771

    This proposed rule is expected to be an E.O. 13771 deregulatory 
action. Details are provided in section III of this preamble.

VII. Regulatory Flexibility Act

    DoD, GSA, and NASA do not expect this 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 (IRFA) has been performed 
and is summarized as follows:

    DoD, GSA, and NASA are proposing to amend the Federal 
Acquisition Regulation (FAR) to change the definition of 
``commercial item'' so that NDIs that are developed exclusively at 
private expense and sold in substantial quantities to multiple 
foreign governments may be treated as commercial items.
    The objective is to implement section 847 of the NDAA for FY18. 
The legal basis for this rule is 41 U.S.C. 103(8).
    The proposed rule impacts all entities who do business with the 
Federal Government, including the over 327,458 small business 
registrants in the System for Award Management database. This 
proposed rule expands the definition of ``commercial item'' for 
nondevelopmental items (NDIs) to include those sold to multiple 
foreign governments. This change will allow more acquisitions to 
fall under the definition of commercial item procurements and use 
standard commercial terms and conditions to the maximum extent 
practicable. This will result in a reduction of statutory and 
regulatory requirements as FAR part 12 contract actions are exempt 
at the prime or subcontract level from various statutes, policies, 
and contracting requirements unique to the federal procurement 
process. Therefore, small businesses would benefit from the 
streamlined processes.
    The proposed rule does not include additional reporting or 
record keeping requirements.
    The rule does not duplicate, overlap, or conflict with any other 
Federal rules.
    There are no available alternatives to the proposed rule to 
accomplish the desired objective of the statute. Small businesses 
will benefit from the streamlined commercial acquisition procedures.

    The Regulatory Secretariat Division has submitted a copy of the 
IRFA to the Chief Counsel for Advocacy of the Small Business 
Administration. A copy of the IRFA may be obtained from the Regulatory 
Secretariat Division. DoD, GSA and NASA invite comments from small 
business concerns and other interested parties on the expected impact 
of this rule on small entities.
    DoD, GSA, and NASA will also consider comments from small entities 
concerning the existing regulations in subparts affected by this rule 
consistent with 5 U.S.C. 610. Interested parties must submit such 
comments separately and should cite 5 U.S.C. 610 (FAR Case 2018-008) in 
correspondence.

VIII. Paperwork Reduction Act

    This rule does not contain any information collection requirements 
that require the approval of the Office of Management and Budget under 
the Paperwork Reduction Act (44 U.S.C. chapter 35).

List of Subjects in 48 CFR Part 2

    Government procurement.

    Dated: April 22, 2019.
William F. Clark,
Director, Office of Government-wide Acquisition Policy, Office of 
Acquisition Policy, Office of Government-wide Policy.

    Therefore, DoD, GSA, and NASA are proposing to amend 48 CFR part 2 
as set forth below:

PART 2--DEFINITIONS OF WORDS AND TERMS

0
1. The authority citation for 48 CFR part 2 continues to read as 
follows:

    Authority:  40 U.S.C. 121(c); 10 U.S.C. chapter 137; and 51 
U.S.C. 20113.


2.101   [Amended]

0
2. In paragraph (b)(2), amend paragraph (8) in the definition of 
``Commercial item'' by removing ``local governments'' and adding in its 
place ``local governments or to multiple foreign governments''.

[FR Doc. 2019-09703 Filed 5-9-19; 8:45 am]
 BILLING CODE 6820-EP-P