Defense Federal Acquisition Regulation Supplement: Defense Commercial Solutions Opening (DFARS Case 2022-D006), 55937-55940 [2023-17557]
Download as PDF
<![CDATA[
Federal Register / Vol. 88, No. 158 / Thursday, August 17, 2023 / Rules and Regulations
(ii) Enhanced A–CAM carriers must
describe how and certify that, in the
previous calendar year, they continued
to participate in the Affordable
Connectivity Program or any
substantially similar successor program,
as required by the terms of their
Enhanced A–CAM offers.
(iii) Enhanced A–CAM carriers must
certify that they have maintained their
cybersecurity and supply chain risk
management plans pursuant to
§ 54.308(e), report whether they filed
any substantive modifications pursuant
to § 54.308(e)(6) in the prior year, and
report the date they filed any
substantive modifications.
*
*
*
*
*
6. Amend § 54.316 by adding
paragraph (a)(9), revising paragraph
(b)(2), and adding paragraph (b)(8) to
read as follows:
■
(a) * * *
(9) Recipients subject to the
requirements of § 54.308(a)(3) shall
report the number of locations for each
state and locational information,
including geocodes, indicating whether
they are offering service providing
speeds of at least 100 Mbps
downstream/20 Mbps upstream.
(b) * * *
(2) Rate-of-return carriers electing
CAF–ACAM support pursuant to
§ 54.311, other than Enhanced A–CAM
carriers, shall provide:
*
*
*
*
*
(8) Enhanced A–CAM carriers shall
provide, no later than March 1 following
each service milestone specified in
§ 54.311(d)(3), a certification that by the
end of the prior calendar year, it was
offering broadband meeting the requisite
public interest obligations to the
required percentage of its required
locations in the state.
*
*
*
*
*
[FR Doc. 2023–16674 Filed 8–16–23; 8:45 am]
ddrumheller on DSK120RN23PROD with RULES1
BILLING CODE 6712–01–P
VerDate Sep<11>2014
16:02 Aug 16, 2023
Jkt 259001
II. Discussion and Analysis
DEPARTMENT OF DEFENSE
Defense Acquisition Regulations
System
48 CFR Parts 203, 204, 206, 212, 215
and 235
[Docket DARS–2023–0002]
Defense Federal Acquisition
Regulation Supplement: Defense
Commercial Solutions Opening
(DFARS Case 2022–D006)
Defense Acquisition
Regulations System, Department of
Defense (DoD).
ACTION: Final rule.
AGENCY:
DoD is issuing a final rule
amending the Defense Federal
Acquisition Regulation Supplement
(DFARS) to implement a section of the
National Defense Authorization Act for
Fiscal Year 2022 that authorizes DoD to
acquire innovative commercial products
and commercial services using general
solicitation competitive procedures.
This final rule also implements a
section of the National Defense
Authorization Act for Fiscal Year 2023.
DATES: Effective August 17, 2023.
FOR FURTHER INFORMATION CONTACT: Ms.
Jeanette Snyder, 703–508–7524.
SUPPLEMENTARY INFORMATION:
I. Background
DoD published a proposed rule in the
Federal Register at 88 FR 6605 on
January 31, 2023, to implement section
803 of the National Defense
Authorization Act (NDAA) for Fiscal
Year (FY) 2022 (Pub. L. 117–81). Section
803 modifies 10 U.S.C. 2380c
(redesignated as 10 U.S.C. 3458) to give
DoD the authority to acquire innovative
commercial products and commercial
services through a competitive selection
of proposals resulting from a general
solicitation and the peer review of such
proposals. Section 803 of the NDAA for
FY 2022 also repealed section 879 of the
NDAA for FY 2017, which authorized a
pilot program providing the same
authority for a limited period of time. In
addition, section 814 of the NDAA for
FY 2023 (Pub. L. 117–263) amended 10
U.S.C. 3458 by striking ‘‘fixed-price
incentive fee contracts’’ and inserting
‘‘fixed-price incentive contracts’’.
Therefore, this final rule incorporates
this statutory amendment. One
respondent submitted a public comment
in response to the proposed rule.
PO 00000
Frm 00029
Fmt 4700
Sfmt 4700
DoD reviewed the public comment in
the development of the final rule;
however, no changes were made to the
rule as a result of the comment received.
A discussion of the comment and a
summary of significant changes is
provided, as follows:
A. Summary of Significant Changes
From the Proposed Rule
RIN 0750–AL57
SUMMARY:
§ 54.316 Broadband deployment reporting
and certification requirements for high-cost
recipients.
55937
Section 814 of the NDAA for FY 2023
(Pub. L. 117–263) amended section 3458
of title 10, United States Code, by
striking ‘‘fixed-price incentive fee
contracts’’ and inserting ‘‘fixed-price
incentive contracts’’. Therefore, this
final rule amends DFARS 212.7002(b) to
clarify the contract types that may be
used in conjunction with a commercial
solutions opening.
B. Analysis of Public Comments
Comment: One respondent submitted
a comment regarding banking practices
involving Oregon.
Response: This comment is outside
the scope of this rule.
C. Other Changes
This final rule removes the reference
to section 803 of the NDAA for FY 2022
(Pub. L. 117–81) at DFARS 212.7000,
since the authority for commercial
solutions openings is now codified at 10
U.S.C. 3458. The new DFARS section
203.104–1 is reformatted to reflect
standard drafting conventions. The new
paragraph at 206.102 is moved to new
section 206.102–70 to reflect standard
drafting conventions. In section 212.102
paragraph (a)(i)(B), the obsolete term
‘‘commercial item determination’’ is
replaced with ‘‘commercial product or
commercial service determination.’’
This change was included in the final
rule for DFARS Case 2018–D066,
published at 88 FR 6578 on January 31,
2023; however, the change was not
made in the Code of Federal
Regulations.
III. Applicability to Contracts at or
Below the Simplified Acquisition
Threshold, for Commercial Products
Including Commercially Available Offthe-Shelf Items, and for Commercial
Services
This rule does not create any new
solicitation provisions or contract
clauses. It does not impact any existing
solicitation provisions or contract
clauses, or their applicability to
contracts valued at or below the
simplified acquisition threshold, for
commercial products including
commercially available off-the-shelf
items, or for commercial services.
E:\FR\FM\17AUR1.SGM
17AUR1
55938
Federal Register / Vol. 88, No. 158 / Thursday, August 17, 2023 / Rules and Regulations
IV. Expected Impact of the Rule
This final rule implements the
permanent statutory authorization for
DoD to acquire innovative commercial
products and commercial services
through a competitive selection of
proposals resulting from a general
solicitation known as a commercial
solutions opening and the peer review
of such proposals in conjunction with a
FAR part 12 contract. This rule is
expected to impact the Government and
large and small entities by simplifying
solicitation, evaluation, and award
procedures, which should decrease
acquisition cost and, thus, be less
burdensome for all parties. The use of
a commercial solutions opening in
conjunction with a FAR part 12 contract
is also expected to benefit offerors and
contractors as it will allow these entities
to utilize existing commercial
contracting procedures and operating
systems, which decreases burden on
both large and small entities. As a
result, large and small entities may be
more willing to enter into contracts with
DoD. Therefore, DoD expects to benefit
by having greater access to technologies
not previously accessible.
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 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.
ddrumheller on DSK120RN23PROD with RULES1
VI. Congressional Review Act
As required by the Congressional
Review Act (5 U.S.C. 801–808) before an
interim or final rule takes effect, DoD
will submit a copy of the interim or
final rule with the form, Submission of
Federal Rules under the Congressional
Review Act, to the U.S. Senate, the U.S.
House of Representatives, and the
Comptroller General of the United
States. A major rule under the
Congressional Review Act cannot take
effect until 60 days after it is published
in the Federal Register. The Office of
Information and Regulatory Affairs has
determined that this rule is not a major
rule as defined by 5 U.S.C. 804.
VerDate Sep<11>2014
16:02 Aug 16, 2023
Jkt 259001
VII. Regulatory Flexibility Act
A final regulatory flexibility analysis
has been prepared consistent with the
Regulatory Flexibility Act, 5 U.S.C. 601,
et seq. and is summarized as follows:
This final rule is necessary to
implement section 803 of the National
Defense Authorization Act (NDAA) for
Fiscal Year (FY) 2022 (Pub. L. 117–81)
and section 814 of the NDAA for FY
2023 (Pub. L. 117–263). Section 803
modifies 10 U.S.C. 2380c (redesignated
as 10 U.S.C. 3458) to permanently
authorize DoD to acquire innovative
commercial products and commercial
services through a competitive selection
of proposals resulting from a general
solicitation, known as a commercial
solutions opening (CSO), and the peer
review of such proposals in conjunction
with a FAR part 12 contract. Section 814
amends 10 U.S.C. 3458 to replace
‘‘fixed-price incentive fee contracts’’
with ‘‘fixed-price incentive contracts’’.
The objective of this rule is to
implement the authority for DoD to
obtain innovative solutions or potential
capabilities to fulfill requirements, close
capability gaps, or provide potential
technological advancements that are
new as of the date of submission of a
proposal or that is a new application as
of the date of submission of a proposal
of a technology, process, or method
existing as of such date. The use of a
CSO with a FAR part 12 commercial
contract is intended to bring new
entrants into the DoD marketplace.
No public comments were received in
response to the initial regulatory
flexibility analysis.
Section 879 of the NDAA for FY 2017
(Pub. L. 114–328) previously authorized
a pilot program for the Defense CSO (the
pilot), which was repealed by section
803 of the NDAA for FY 2022.
According to data from the Federal
Procurement Data System, during the
pilot (FY 2018 to FY 2022), DoD
awarded a total of 120 contracts as a
result of CSOs, of which 82, or 68
percent, were awarded to a total of 72
unique small entities. During FYs 2020,
2021, and 2022, 19 unique small entities
were awarded a contract resulting from
a CSO each year. In addition, one
unique small entity received such an
award in FY 2018, and 14 unique small
entities received such awards in FY
2019. This averages out to
approximately 14 unique small entities
receiving contracts resulting from a CSO
during the last five FYs. Data from the
System for Award Management revealed
there were 330,704 small entities
registered as of June 2023. However,
since the use of a CSO with a FAR part
12 contract is intended to attract new
PO 00000
Frm 00030
Fmt 4700
Sfmt 4700
entrants into the market, these numbers
may not fully capture the number of
small entities to which this rule may
apply. Therefore, DoD cannot provide a
more precise estimate of the number of
small entities to which this rule may
apply.
This final rule does not impose any
new reporting, recordkeeping, or other
compliance requirements for small
entities.
DoD did not identify any significant
alternatives that would minimize or
reduce the significant economic impact
on small entities, because there is no
significant impact on small entities.
VIII. Paperwork Reduction Act
This proposed rule does not contain
any new 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 Parts 203,
204, 206, 212, 215, and 235.
Government procurement.
Jennifer D. Johnson,
Editor/Publisher, Defense Acquisition
Regulations System.
Therefore, 48 CFR parts 203, 204, 206,
212, 215, and 235 are amended as
follows:
■ 1. The authority citation for parts 203,
204, 206, 212, 215, and 235 continues to
read as follows:
Authority: 41 U.S.C. 1303 and 48 CFR
chapter 1.
PART 203—IMPROPER BUSINESS
PRACTICES AND PERSONAL
CONFLICTS OF INTEREST
2. Add section 203.104–1 to subpart
203.1 to read as follows:
■
203.104–1
Definitions.
As used in this section—
Federal agency procurement, defined
at FAR 3.104–1, also includes
commercial solutions openings.
PART 204—ADMINISTRATIVE AND
INFORMATION MATTERS
3. Amend section 204.1603 by
revising paragraph (a)(3)(A)(2) and
adding a sentence at the end of
paragraph (a)(4) to read as follows:
■
204.1603
Procedures.
(a) * * *
(3) * * *
(A) * * *
(2) Use S to identify broad agency
announcements and commercial
solutions openings.
*
*
*
*
*
E:\FR\FM\17AUR1.SGM
17AUR1
Federal Register / Vol. 88, No. 158 / Thursday, August 17, 2023 / Rules and Regulations
(4) * * * Use C in position 10 to
identify the solicitation as a commercial
solutions opening.
*
*
*
*
*
commercial products or commercial
services through the use of a general
solicitation known as a commercial
solutions opening (CSO).
PART 206—COMPETITION
REQUIREMENTS
212.7001
4. Add section 206.102–70 to read as
follows:
■
206.102–70
Other competitive procedures.
Competitive selection of proposals
based on a review by scientific,
technological, or other subject-matter
expert peers resulting from a
commercial solutions opening as
described in subpart 212.70 (10 U.S.C.
3458) is a competitive procedure.
PART 212—ACQUISITION OF
COMMERCIAL PRODUCTS AND
COMMERCIAL SERVICES
5. Amend section 212.102—
a. In paragraph (a)(i)(B) introductory
text by removing ‘‘commercial item
determination’’ and adding
‘‘commercial product or commercial
service determination’’ in its place; and
■ b. By adding paragraph (a)(i)(B)(3).
The addition reads as follows:
■
■
212.102
Applicability.
(a) * * *
(i) * * *
(B) * * *
(3) 10 U.S.C. 3458—Supplies or
services resulting from a commercial
solutions opening pursuant to subpart
212.70.
*
*
*
*
*
■ 6. Amend section 212.203 by adding
paragraph (4) to read as follows:
212.203 Procedures for solicitation,
evaluation, and award.
*
*
*
*
(4) See subpart 212.70 for acquisitions
resulting from a commercial solutions
opening.
■ 7. Add subpart 212.70, consisting of
sections 212.7000 through 212.7005, to
read as follows:
ddrumheller on DSK120RN23PROD with RULES1
*
Subpart 212.70—Defense Commercial
Solutions Opening
Sec.
212.7000 Scope of subpart.
212.7001 Definition.
212.7002 Policy.
212.7003 Limitations.
212.7004 Procedures.
212.7005 Congressional notification.
Scope of subpart.
This subpart implements 10 U.S.C.
3458 for the acquisition of innovative
VerDate Sep<11>2014
16:02 Aug 16, 2023
Jkt 259001
212.7002
Policy.
(a) Contracting officers may only use
a CSO—
(1) To obtain innovative solutions or
potential capabilities that fulfill
requirements;
(2) To close capability gaps, or
provide potential innovative
technological advancements; and
(3) When meaningful proposals with
varying technical or scientific
approaches can be reasonably
anticipated.
(b) Notwithstanding FAR 12.207,
contracting officers shall use fixed-price
type contracts, including fixed-price
incentive contracts, for awards resulting
from a CSO. When using a fixed-price
incentive contract, see FAR 12.214 and
subpart 16.4 for additional
requirements.
(c) Contracting officers shall treat
products and services acquired using a
CSO as commercial products or
commercial services.
(d) When using a CSO to acquire
research and development, contracting
officers shall use the procedures of this
subpart in conjunction with FAR part 35
and part 235. A CSO is not subject to the
limitations at 235.016 and may be used
to fulfill requirements for research and
development, ranging from advanced
component development through
operational systems development.
212.7003
Limitations.
Contracting officers shall follow the
procedures at PGI 212.7003 to obtain
senior procurement executive approval
to award a contract in excess of $100
million resulting from a CSO.
212.7004
Subpart 212.70—Defense Commercial
Solutions Opening
212.7000
Definition.
As used in this subpart—
Innovative means—
(1) Any technology, process, or
method, including research and
development, that is new as of the date
of submission of a proposal; or
(2) Any application that is new as of
the date of submission of a proposal of
a technology, process, or method
existing as of such date.
Procedures.
This section prescribes procedures for
the use of a CSO.
(a) The CSO shall—
(1) Describe the agency’s interest for
an individual program requirement or
for broadly defined areas of interest
covering the full range of the agency’s
requirements;
PO 00000
Frm 00031
Fmt 4700
Sfmt 4700
55939
(2) Specify the technical data required
that may be necessary to meet DoD’s
minimum requirements (see 227.7102
and 227.7202);
(3) Describe the evaluation factors for
selecting proposals to include—
(i) Technical and importance to
agency programs as the primary
evaluation factors;
(ii) Price to the extent appropriate, but
at a minimum to determine that the
price is fair and reasonable; and
(iii) Relative importance of the factors,
and the method of evaluation;
(4) Specify the period of time during
which proposals submitted in response
to the CSO will be accepted; and
(5) Contain instructions for the
preparation and submission of
proposals.
(b) The contracting officer shall
publicize the CSO through the
Governmentwide point of entry and, if
authorized pursuant to FAR subpart 5.5,
may also publish a notice regarding the
CSO in noted scientific, technical, or
engineering periodicals. The contracting
officer shall publish the notice at least
annually.
(c) Proposals received in response to
the CSO shall be evaluated in
accordance with evaluation factors
specified therein through a scientific,
technological, or other subject-matter
expert peer review process. Written
evaluation reports on individual
proposals are required, but proposals
need not be evaluated against each other
since they are not submitted in response
to a common performance work
statement or statement of work.
(d) Synopsis of proposed contract
actions under FAR subpart 5.2 of
individual contract actions based upon
proposals received in response to the
CSO is not required. The notice
published pursuant to paragraph (b) of
this section fulfills the synopsis
requirement.
(e) When a small business concern
would otherwise be selected for award
but is considered not responsible,
follow the Small Business
Administration Certificate of
Competency procedure (see FAR
subpart 19.6).
(f) The contracting officer shall
document the decision that the
requirements of this subpart have been
met and include the documentation in
the contract file.
212.7005
Congressional notification.
See PGI 212.7005 for congressional
notification requirements for contracts
valued at more than $100 million that
are awarded pursuant to a CSO.
E:\FR\FM\17AUR1.SGM
17AUR1
55940
Federal Register / Vol. 88, No. 158 / Thursday, August 17, 2023 / Rules and Regulations
PART 215—CONTRACTING BY
NEGOTIATION
8. Amend section 215.371–4—
a. In paragraph (a)(4) by removing
‘‘or’’;
■ b. In paragraph (a)(5) by removing the
period and adding ‘‘; or’’ in its place;
and
■ c. Adding paragraph (a)(6).
The addition reads as follows:
■
■
215.371–4
Exceptions.
(a) * * *
(6) Acquisitions under a commercial
solutions opening pursuant to subpart
212.70.
*
*
*
*
*
■ 9. Add subpart 215.6, consisting of
sections 215.602 and 215.604, to read as
follows:
Subpart 215.6—Unsolicited Proposals
215.602
Policy.
The policy at FAR 15.602 applies to
commercial solutions openings.
215.604
Agency points of contact.
(a)(3) The guidance at FAR
15.604(a)(3) applies to commercial
solutions openings.
PART 235—RESEARCH AND
DEVELOPMENT CONTRACTING
10. Amend section 235.006–71 by
revising paragraph (a) to read as follows:
■
235.006–71
Competition.
(a)(1) Use of a broad agency
announcement with peer or scientific
review for the award of science and
technology proposals in accordance
with 235.016(a) fulfills the requirement
for full and open competition (see
206.102(d)(2)).
(2) Use of a commercial solutions
opening with scientific, technological,
or other subject-matter expert peer
review for the award of innovative
solutions or potential capabilities in
accordance with subpart 212.70 fulfills
the requirement for full and open
competition (see 206.102–70).
*
*
*
*
*
[FR Doc. 2023–17557 Filed 8–16–23; 8:45 am]
ddrumheller on DSK120RN23PROD with RULES1
BILLING CODE 5001–06–P
VerDate Sep<11>2014
16:02 Aug 16, 2023
Jkt 259001
List of Subjects in 48 CFR Parts 215,
225, 234 and 252.
DEPARTMENT OF DEFENSE
Defense Acquisition Regulations
System
48 CFR Parts 215, 225, 234 and 252
[Docket DARS–2023–0001]
Defense Federal Acquisition
Regulation Supplement; Technical
Amendments
Defense Acquisition
Regulations System, Department of
Defense (DoD).
ACTION: Final rule; technical
amendment.
AGENCY:
DoD is amending the Defense
Federal Acquisition Regulation
Supplement (DFARS) in order to make
needed editorial changes.
DATES: Effective August 17, 2023.
FOR FURTHER INFORMATION CONTACT: Ms.
Jennifer D. Johnson, Defense
Acquisition Regulations System,
telephone 703–717–8226.
SUPPLEMENTARY INFORMATION: This final
rule amends the DFARS to make needed
editorial changes to 48 CFR parts 215,
225, 234, and 252.
(1) DFARS 215.406–2 is amended to
remove obsolete text that pointed to
DFARS Procedures, Guidance, and
Information, and to reserve the section.
(2) DFARS 225.1101(10)(i)(D) is
amended by removing the phrase
‘‘equals or exceeds $25,000, but’’ to
correct the CFR. The final rule for
DFARS Case 2020–D032, published at
87 FR 76984 on December 16, 2022, and
effective December 30, 2022, made this
change.
(3) DFARS 234.004(2)(i)(C)
introductory text is amended by
removing ‘‘authority’s’s’’ and adding
‘‘authority’s’’ in its place to correct the
CFR.
(4) DFARS 252.206–7000 is amended
by removing ‘‘10 U.S.C. 2304(c)(3)’’ and
adding ‘‘10 U.S.C. 3204(a)(3)’’ in its
place to correct the CFR. The final rule
for DFARS Case 2022–D018, published
at 87 FR 76988 on December 16, 2022,
and effective December 30, 2022, made
this change.
SUMMARY:
PO 00000
Frm 00032
Fmt 4700
Sfmt 9990
Government procurement.
Jennifer D. Johnson,
Editor/Publisher, Defense Acquisition
Regulations System.
Therefore, 48 CFR parts 215, 225, and
252 are amended as follows:
1. The authority citation for 48 CFR
parts 215, 225, 234, and 252 continues
to read as follows:
■
Authority: 41 U.S.C. 1303 and 48 CFR
chapter 1.
PART 215—CONTRACTING BY
NEGOTIATION
215.406–2
[Removed and Reserved]
2. Remove and reserve section
215.406–2.
■
PART 225—FOREIGN ACQUISITION
225.1101
[Amended]
3. Amend section 225.1101 in
paragraph (10)(i)(D) by removing
‘‘equals or exceeds $25,000, but’’.
■
PART 234—MAJOR SYSTEM
ACQUISITION
234.004
[Amended]
4. Amend section 234.004(2)(i)(C)
introductory text by removing
‘‘authority’s’s’’ and adding ‘‘authority’s’’
in its place.
■
PART 252—SOLICITATION
PROVISIONS AND CONTRACT
CLAUSES
252.206–7000
[Amended]
5. Amend section 252.206–7000—
■ a. By removing the clause date ‘‘(DEC
2022)’’ and adding ‘‘(AUG 2023)’’ in its
place; and
■ b. In the provision by removing ‘‘10
U.S.C. 2304(c)(3)’’ and adding ‘‘10
U.S.C. 3204(a)(3)’’ in its place.
■
[FR Doc. 2023–17558 Filed 8–16–23; 8:45 am]
BILLING CODE 5001–06–P
E:\FR\FM\17AUR1.SGM
17AUR1
]]>Agencies
[Federal Register Volume 88, Number 158 (Thursday, August 17, 2023)]
[Rules and Regulations]
[Pages 55937-55940]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2023-17557]
=======================================================================
-----------------------------------------------------------------------
DEPARTMENT OF DEFENSE
Defense Acquisition Regulations System
48 CFR Parts 203, 204, 206, 212, 215 and 235
[Docket DARS-2023-0002]
RIN 0750-AL57
Defense Federal Acquisition Regulation Supplement: Defense
Commercial Solutions Opening (DFARS Case 2022-D006)
AGENCY: Defense Acquisition Regulations System, Department of Defense
(DoD).
ACTION: Final rule.
-----------------------------------------------------------------------
SUMMARY: DoD is issuing a final rule amending the Defense Federal
Acquisition Regulation Supplement (DFARS) to implement a section of the
National Defense Authorization Act for Fiscal Year 2022 that authorizes
DoD to acquire innovative commercial products and commercial services
using general solicitation competitive procedures. This final rule also
implements a section of the National Defense Authorization Act for
Fiscal Year 2023.
DATES: Effective August 17, 2023.
FOR FURTHER INFORMATION CONTACT: Ms. Jeanette Snyder, 703-508-7524.
SUPPLEMENTARY INFORMATION:
I. Background
DoD published a proposed rule in the Federal Register at 88 FR 6605
on January 31, 2023, to implement section 803 of the National Defense
Authorization Act (NDAA) for Fiscal Year (FY) 2022 (Pub. L. 117-81).
Section 803 modifies 10 U.S.C. 2380c (redesignated as 10 U.S.C. 3458)
to give DoD the authority to acquire innovative commercial products and
commercial services through a competitive selection of proposals
resulting from a general solicitation and the peer review of such
proposals. Section 803 of the NDAA for FY 2022 also repealed section
879 of the NDAA for FY 2017, which authorized a pilot program providing
the same authority for a limited period of time. In addition, section
814 of the NDAA for FY 2023 (Pub. L. 117-263) amended 10 U.S.C. 3458 by
striking ``fixed-price incentive fee contracts'' and inserting ``fixed-
price incentive contracts''. Therefore, this final rule incorporates
this statutory amendment. One respondent submitted a public comment in
response to the proposed rule.
II. Discussion and Analysis
DoD reviewed the public comment in the development of the final
rule; however, no changes were made to the rule as a result of the
comment received. A discussion of the comment and a summary of
significant changes is provided, as follows:
A. Summary of Significant Changes From the Proposed Rule
Section 814 of the NDAA for FY 2023 (Pub. L. 117-263) amended
section 3458 of title 10, United States Code, by striking ``fixed-price
incentive fee contracts'' and inserting ``fixed-price incentive
contracts''. Therefore, this final rule amends DFARS 212.7002(b) to
clarify the contract types that may be used in conjunction with a
commercial solutions opening.
B. Analysis of Public Comments
Comment: One respondent submitted a comment regarding banking
practices involving Oregon.
Response: This comment is outside the scope of this rule.
C. Other Changes
This final rule removes the reference to section 803 of the NDAA
for FY 2022 (Pub. L. 117-81) at DFARS 212.7000, since the authority for
commercial solutions openings is now codified at 10 U.S.C. 3458. The
new DFARS section 203.104-1 is reformatted to reflect standard drafting
conventions. The new paragraph at 206.102 is moved to new section
206.102-70 to reflect standard drafting conventions. In section 212.102
paragraph (a)(i)(B), the obsolete term ``commercial item
determination'' is replaced with ``commercial product or commercial
service determination.'' This change was included in the final rule for
DFARS Case 2018-D066, published at 88 FR 6578 on January 31, 2023;
however, the change was not made in the Code of Federal Regulations.
III. Applicability to Contracts at or Below the Simplified Acquisition
Threshold, for Commercial Products Including Commercially Available
Off-the-Shelf Items, and for Commercial Services
This rule does not create any new solicitation provisions or
contract clauses. It does not impact any existing solicitation
provisions or contract clauses, or their applicability to contracts
valued at or below the simplified acquisition threshold, for commercial
products including commercially available off-the-shelf items, or for
commercial services.
[[Page 55938]]
IV. Expected Impact of the Rule
This final rule implements the permanent statutory authorization
for DoD to acquire innovative commercial products and commercial
services through a competitive selection of proposals resulting from a
general solicitation known as a commercial solutions opening and the
peer review of such proposals in conjunction with a FAR part 12
contract. This rule is expected to impact the Government and large and
small entities by simplifying solicitation, evaluation, and award
procedures, which should decrease acquisition cost and, thus, be less
burdensome for all parties. The use of a commercial solutions opening
in conjunction with a FAR part 12 contract is also expected to benefit
offerors and contractors as it will allow these entities to utilize
existing commercial contracting procedures and operating systems, which
decreases burden on both large and small entities. As a result, large
and small entities may be more willing to enter into contracts with
DoD. Therefore, DoD expects to benefit by having greater access to
technologies not previously accessible.
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 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.
VI. Congressional Review Act
As required by the Congressional Review Act (5 U.S.C. 801-808)
before an interim or final rule takes effect, DoD will submit a copy of
the interim or final rule with the form, Submission of Federal Rules
under the Congressional Review Act, to the U.S. Senate, the U.S. House
of Representatives, and the Comptroller General of the United States. A
major rule under the Congressional Review Act cannot take effect until
60 days after it is published in the Federal Register. The Office of
Information and Regulatory Affairs has determined that this rule is not
a major rule as defined by 5 U.S.C. 804.
VII. Regulatory Flexibility Act
A final regulatory flexibility analysis has been prepared
consistent with the Regulatory Flexibility Act, 5 U.S.C. 601, et seq.
and is summarized as follows:
This final rule is necessary to implement section 803 of the
National Defense Authorization Act (NDAA) for Fiscal Year (FY) 2022
(Pub. L. 117-81) and section 814 of the NDAA for FY 2023 (Pub. L. 117-
263). Section 803 modifies 10 U.S.C. 2380c (redesignated as 10 U.S.C.
3458) to permanently authorize DoD to acquire innovative commercial
products and commercial services through a competitive selection of
proposals resulting from a general solicitation, known as a commercial
solutions opening (CSO), and the peer review of such proposals in
conjunction with a FAR part 12 contract. Section 814 amends 10 U.S.C.
3458 to replace ``fixed-price incentive fee contracts'' with ``fixed-
price incentive contracts''. The objective of this rule is to implement
the authority for DoD to obtain innovative solutions or potential
capabilities to fulfill requirements, close capability gaps, or provide
potential technological advancements that are new as of the date of
submission of a proposal or that is a new application as of the date of
submission of a proposal of a technology, process, or method existing
as of such date. The use of a CSO with a FAR part 12 commercial
contract is intended to bring new entrants into the DoD marketplace.
No public comments were received in response to the initial
regulatory flexibility analysis.
Section 879 of the NDAA for FY 2017 (Pub. L. 114-328) previously
authorized a pilot program for the Defense CSO (the pilot), which was
repealed by section 803 of the NDAA for FY 2022. According to data from
the Federal Procurement Data System, during the pilot (FY 2018 to FY
2022), DoD awarded a total of 120 contracts as a result of CSOs, of
which 82, or 68 percent, were awarded to a total of 72 unique small
entities. During FYs 2020, 2021, and 2022, 19 unique small entities
were awarded a contract resulting from a CSO each year. In addition,
one unique small entity received such an award in FY 2018, and 14
unique small entities received such awards in FY 2019. This averages
out to approximately 14 unique small entities receiving contracts
resulting from a CSO during the last five FYs. Data from the System for
Award Management revealed there were 330,704 small entities registered
as of June 2023. However, since the use of a CSO with a FAR part 12
contract is intended to attract new entrants into the market, these
numbers may not fully capture the number of small entities to which
this rule may apply. Therefore, DoD cannot provide a more precise
estimate of the number of small entities to which this rule may apply.
This final rule does not impose any new reporting, recordkeeping,
or other compliance requirements for small entities.
DoD did not identify any significant alternatives that would
minimize or reduce the significant economic impact on small entities,
because there is no significant impact on small entities.
VIII. Paperwork Reduction Act
This proposed rule does not contain any new 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 Parts 203, 204, 206, 212, 215, and 235.
Government procurement.
Jennifer D. Johnson,
Editor/Publisher, Defense Acquisition Regulations System.
Therefore, 48 CFR parts 203, 204, 206, 212, 215, and 235 are
amended as follows:
0
1. The authority citation for parts 203, 204, 206, 212, 215, and 235
continues to read as follows:
Authority: 41 U.S.C. 1303 and 48 CFR chapter 1.
PART 203--IMPROPER BUSINESS PRACTICES AND PERSONAL CONFLICTS OF
INTEREST
0
2. Add section 203.104-1 to subpart 203.1 to read as follows:
203.104-1 Definitions.
As used in this section--
Federal agency procurement, defined at FAR 3.104-1, also includes
commercial solutions openings.
PART 204--ADMINISTRATIVE AND INFORMATION MATTERS
0
3. Amend section 204.1603 by revising paragraph (a)(3)(A)(2) and adding
a sentence at the end of paragraph (a)(4) to read as follows:
204.1603 Procedures.
(a) * * *
(3) * * *
(A) * * *
(2) Use S to identify broad agency announcements and commercial
solutions openings.
* * * * *
[[Page 55939]]
(4) * * * Use C in position 10 to identify the solicitation as a
commercial solutions opening.
* * * * *
PART 206--COMPETITION REQUIREMENTS
0
4. Add section 206.102-70 to read as follows:
206.102-70 Other competitive procedures.
Competitive selection of proposals based on a review by scientific,
technological, or other subject-matter expert peers resulting from a
commercial solutions opening as described in subpart 212.70 (10 U.S.C.
3458) is a competitive procedure.
PART 212--ACQUISITION OF COMMERCIAL PRODUCTS AND COMMERCIAL
SERVICES
0
5. Amend section 212.102--
0
a. In paragraph (a)(i)(B) introductory text by removing ``commercial
item determination'' and adding ``commercial product or commercial
service determination'' in its place; and
0
b. By adding paragraph (a)(i)(B)(3).
The addition reads as follows:
212.102 Applicability.
(a) * * *
(i) * * *
(B) * * *
(3) 10 U.S.C. 3458--Supplies or services resulting from a
commercial solutions opening pursuant to subpart 212.70.
* * * * *
0
6. Amend section 212.203 by adding paragraph (4) to read as follows:
212.203 Procedures for solicitation, evaluation, and award.
* * * * *
(4) See subpart 212.70 for acquisitions resulting from a commercial
solutions opening.
0
7. Add subpart 212.70, consisting of sections 212.7000 through
212.7005, to read as follows:
Subpart 212.70--Defense Commercial Solutions Opening
Sec.
212.7000 Scope of subpart.
212.7001 Definition.
212.7002 Policy.
212.7003 Limitations.
212.7004 Procedures.
212.7005 Congressional notification.
Subpart 212.70--Defense Commercial Solutions Opening
212.7000 Scope of subpart.
This subpart implements 10 U.S.C. 3458 for the acquisition of
innovative commercial products or commercial services through the use
of a general solicitation known as a commercial solutions opening
(CSO).
212.7001 Definition.
As used in this subpart--
Innovative means--
(1) Any technology, process, or method, including research and
development, that is new as of the date of submission of a proposal; or
(2) Any application that is new as of the date of submission of a
proposal of a technology, process, or method existing as of such date.
212.7002 Policy.
(a) Contracting officers may only use a CSO--
(1) To obtain innovative solutions or potential capabilities that
fulfill requirements;
(2) To close capability gaps, or provide potential innovative
technological advancements; and
(3) When meaningful proposals with varying technical or scientific
approaches can be reasonably anticipated.
(b) Notwithstanding FAR 12.207, contracting officers shall use
fixed-price type contracts, including fixed-price incentive contracts,
for awards resulting from a CSO. When using a fixed-price incentive
contract, see FAR 12.214 and subpart 16.4 for additional requirements.
(c) Contracting officers shall treat products and services acquired
using a CSO as commercial products or commercial services.
(d) When using a CSO to acquire research and development,
contracting officers shall use the procedures of this subpart in
conjunction with FAR part 35 and part 235. A CSO is not subject to the
limitations at 235.016 and may be used to fulfill requirements for
research and development, ranging from advanced component development
through operational systems development.
212.7003 Limitations.
Contracting officers shall follow the procedures at PGI 212.7003 to
obtain senior procurement executive approval to award a contract in
excess of $100 million resulting from a CSO.
212.7004 Procedures.
This section prescribes procedures for the use of a CSO.
(a) The CSO shall--
(1) Describe the agency's interest for an individual program
requirement or for broadly defined areas of interest covering the full
range of the agency's requirements;
(2) Specify the technical data required that may be necessary to
meet DoD's minimum requirements (see 227.7102 and 227.7202);
(3) Describe the evaluation factors for selecting proposals to
include--
(i) Technical and importance to agency programs as the primary
evaluation factors;
(ii) Price to the extent appropriate, but at a minimum to determine
that the price is fair and reasonable; and
(iii) Relative importance of the factors, and the method of
evaluation;
(4) Specify the period of time during which proposals submitted in
response to the CSO will be accepted; and
(5) Contain instructions for the preparation and submission of
proposals.
(b) The contracting officer shall publicize the CSO through the
Governmentwide point of entry and, if authorized pursuant to FAR
subpart 5.5, may also publish a notice regarding the CSO in noted
scientific, technical, or engineering periodicals. The contracting
officer shall publish the notice at least annually.
(c) Proposals received in response to the CSO shall be evaluated in
accordance with evaluation factors specified therein through a
scientific, technological, or other subject-matter expert peer review
process. Written evaluation reports on individual proposals are
required, but proposals need not be evaluated against each other since
they are not submitted in response to a common performance work
statement or statement of work.
(d) Synopsis of proposed contract actions under FAR subpart 5.2 of
individual contract actions based upon proposals received in response
to the CSO is not required. The notice published pursuant to paragraph
(b) of this section fulfills the synopsis requirement.
(e) When a small business concern would otherwise be selected for
award but is considered not responsible, follow the Small Business
Administration Certificate of Competency procedure (see FAR subpart
19.6).
(f) The contracting officer shall document the decision that the
requirements of this subpart have been met and include the
documentation in the contract file.
212.7005 Congressional notification.
See PGI 212.7005 for congressional notification requirements for
contracts valued at more than $100 million that are awarded pursuant to
a CSO.
[[Page 55940]]
PART 215--CONTRACTING BY NEGOTIATION
0
8. Amend section 215.371-4--
0
a. In paragraph (a)(4) by removing ``or'';
0
b. In paragraph (a)(5) by removing the period and adding ``; or'' in
its place; and
0
c. Adding paragraph (a)(6).
The addition reads as follows:
215.371-4 Exceptions.
(a) * * *
(6) Acquisitions under a commercial solutions opening pursuant to
subpart 212.70.
* * * * *
0
9. Add subpart 215.6, consisting of sections 215.602 and 215.604, to
read as follows:
Subpart 215.6--Unsolicited Proposals
215.602 Policy.
The policy at FAR 15.602 applies to commercial solutions openings.
215.604 Agency points of contact.
(a)(3) The guidance at FAR 15.604(a)(3) applies to commercial
solutions openings.
PART 235--RESEARCH AND DEVELOPMENT CONTRACTING
0
10. Amend section 235.006-71 by revising paragraph (a) to read as
follows:
235.006-71 Competition.
(a)(1) Use of a broad agency announcement with peer or scientific
review for the award of science and technology proposals in accordance
with 235.016(a) fulfills the requirement for full and open competition
(see 206.102(d)(2)).
(2) Use of a commercial solutions opening with scientific,
technological, or other subject-matter expert peer review for the award
of innovative solutions or potential capabilities in accordance with
subpart 212.70 fulfills the requirement for full and open competition
(see 206.102-70).
* * * * *
[FR Doc. 2023-17557 Filed 8-16-23; 8:45 am]
BILLING CODE 5001-06-P
