Defense Federal Acquisition Regulation Supplement: Data Requirements for Commercial Products for Major Weapon Systems (DFARS Case 2023-D010), 88554-88558 [2023-27941]

Download as PDF ddrumheller on DSK120RN23PROD with PROPOSALS1 88554 Federal Register / Vol. 88, No. 245 / Friday, December 22, 2023 / Proposed Rules claimed to be CBI or other information whose disclosure is restricted by statute. Do not submit electronically to https:// www.regulations.gov/ any information that you consider to be CBI or other information whose disclosure is restricted by statute. This type of information should be submitted as discussed below. The EPA may publish any comment received to its public docket. Multimedia submissions (audio, video, etc.) must be accompanied by a written comment. The written comment is considered the official comment and should include discussion of all points you wish to make. The EPA will generally not consider comments or comment contents located outside of the primary submission (i.e., on the Web, cloud, or other file sharing system). For additional submission methods, the full EPA public comment policy, information about CBI or multimedia submissions, and general guidance on making effective comments, please visit https://www.epa.gov/dockets/ commenting-epa-dockets. The https://www.regulations.gov/ website allows you to submit your comment anonymously, which means the EPA will not know your identity or contact information unless you provide it in the body of your comment. If you send an email comment directly to the EPA without going through https:// www.regulations.gov/, your email address will be automatically captured and included as part of the comment that is placed in the public docket and made available on the internet. If you submit an electronic comment, the EPA recommends that you include your name and other contact information in the body of your comment and with any digital storage media you submit. If the EPA cannot read your comment due to technical difficulties and cannot contact you for clarification, the EPA may not be able to consider your comment. Electronic files should not include special characters or any form of encryption and be free of any defects or viruses. For additional information about the EPA’s public docket, visit the EPA Docket Center homepage at https:// www.epa.gov/dockets. Submitting CBI. Do not submit information containing CBI to the EPA through https://www.regulations.gov/. Clearly mark the part or all of the information that you claim to be CBI. For CBI information on any digital storage media that you mail to the EPA, note the docket ID, mark the outside of the digital storage media as CBI, and identify electronically within the digital storage media the specific information that is claimed as CBI. In addition to VerDate Sep<11>2014 16:16 Dec 21, 2023 Jkt 262001 one complete version of the comments that includes information claimed as CBI, you must submit a copy of the comments that does not contain the information claimed as CBI directly to the public docket through the procedures outlined in Instructions above. If you submit any digital storage media that does not contain CBI, mark the outside of the digital storage media clearly that it does not contain CBI and note the docket ID. Information not marked as CBI will be included in the public docket and the EPA’s electronic public docket without prior notice. Information marked as CBI will not be disclosed except in accordance with procedures set forth in 40 Code of Federal Regulations (CFR) part 2. Our preferred method to receive CBI is for it to be transmitted electronically using email attachments, File Transfer Protocol, or other online file sharing services (e.g., Dropbox, OneDrive, Google Drive). Electronic submissions must be transmitted directly to the Office of Air Quality Planning and Standards (OAQPS) CBI Office at the email address oaqpscbi@epa.gov, and as described earlier in this preamble, should include clear CBI markings and note the docket ID. If assistance is needed with submitting large electronic files that exceed the file size limit for email attachments, and if you do not have your own file sharing service, please email oaqpscbi@epa.gov to request a file transfer link. If sending CBI information through the postal service, please send it to the following address: U.S. Environmental Protection Agency, Attention Docket ID No. EPA– HQ–OAR–2019–0392, OAQPS Document Control Officer (C404–02), OAQPS, 109 T.W. Alexander Drive, P.O. Box 12055, Research Triangle Park, North Carolina 27711. The mailed CBI material should be double wrapped and clearly marked. Any CBI markings should not show through the outer envelope. Penny Lassiter, Director, Sector Policy and Programs Division. [FR Doc. 2023–28252 Filed 12–21–23; 8:45 am] BILLING CODE 6560–50–P PO 00000 DEPARTMENT OF DEFENSE Defense Acquisition Regulations System 48 CFR Parts 212, 215, 234, and 252 [Docket DARS–2023–0047] RIN 0750–AL83 Defense Federal Acquisition Regulation Supplement: Data Requirements for Commercial Products for Major Weapon Systems (DFARS Case 2023–D010) 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 James M. Inhofe National Defense Authorization Act for Fiscal Year 2023 that clarifies the data to be provided for certain procurements related to major weapon systems. SUMMARY: Comments on the proposed rule should be submitted in writing to the address shown below on or before February 20, 2024, to be considered in the formation of a final rule. ADDRESSES: Submit comments identified by DFARS Case 2023–D010, using either of the following methods: Æ Federal eRulemaking Portal: https://www.regulations.gov. Search for DFARS Case 2023–D010. Select ‘‘Comment’’ and follow the instructions to submit a comment. Please include ‘‘DFARS Case 2023–D010’’ on any attached documents. Æ Email: osd.dfars@mail.mil. Include DFARS Case 2023–D010 in the subject line of the message. Comments received generally will be posted without change to https:// www.regulations.gov, including any personal information provided. To confirm receipt of your comment(s), please check https:// www.regulations.gov, approximately two to three days after submission to verify posting. FOR FURTHER INFORMATION CONTACT: Ms. Jeanette Snyder, 703–508–7524. SUPPLEMENTARY INFORMATION: DATES: I. Background DoD is proposing to revise the DFARS to implement section 803 of the James M. Inhofe National Defense Authorization Act (NDAA) for Fiscal Year (FY) 2023 (Pub. L. 117–263). Section 803 modifies 10 U.S.C. 3455 to Frm 00014 Fmt 4702 Sfmt 4702 E:\FR\FM\22DEP1.SGM 22DEP1 Federal Register / Vol. 88, No. 245 / Friday, December 22, 2023 / Proposed Rules provide additional guidance regarding data requirements to support a determination of commerciality and price reasonableness for certain procurements associated with major weapon systems. II. Discussion and Analysis This rule proposes to modify DFARS 234.7002 to implement section 803 of the James M. Inhofe NDAA for FY 2023. Section 803 clarifies the data an offeror is required to provide when a subsystem of major weapon system or a component or spare part for a major weapon system or subsystem is proposed as a commercial product. This proposed rule also clarifies the data to be provided to the contracting officer to determine price reasonableness for such actions. This proposed rule affords the offeror the flexibility to either submit the data or provide the contracting officer access to the data and to redact certain customer information. This proposed rule modifies the solicitation provision at DFARS 252.215–7010, Requirements for Certified Cost or Pricing Data and Data Other Than Certified Cost or Pricing Data, to align with the revisions made to DFARS 234.7002. This proposed rule also makes conforming changes to DFARS parts 212 and 215 to add crossreferences to DFARS 234.7002. ddrumheller on DSK120RN23PROD with PROPOSALS1 III. Applicability to Contracts at or Below the Simplified Acquisition Threshold (SAT), for Commercial Products (Including Commercially Available Off-the-Shelf (COTS) Items), and for Commercial Services This proposed rule amends the provision at DFARS 252.215–7010, Requirements for Certified Cost or Pricing Data and Data Other Than Certified Cost or Pricing Data. However, this proposed rule does not impose any new requirements on contracts at or below the SAT, for commercial products including COTS items, or for commercial services. The provision will continue to apply to acquisitions at or below the SAT, to acquisitions of commercial products, excluding COTS items, and to acquisitions of commercial services. IV. Expected Impact of the Rule DoD does not expect this proposed rule, when finalized, to have a significant impact on offerors because it merely clarifies the data an offeror is required to provide to the contracting officer when a subsystem of a major weapon system or a component or spare part of a major weapon system or subsystem is proposed as a commercial product. Specifically, this proposed rule VerDate Sep<11>2014 16:16 Dec 21, 2023 Jkt 262001 clarifies the data an offeror is required to provide to support the contracting officer’s determination of price reasonableness and commerciality. This proposed rule will also allow an offeror to give the contracting officer access to the data, in lieu of submitting it, and to redact certain customer information from such data. This proposed rule is expected to result in the timely submission of data, which may decrease the time it takes for a contracting officer to determine a product to be commercial, to determine price reasonableness, and to award the contract. 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, as amended. VI. Regulatory Flexibility Act DoD does not expect this proposed rule, when finalized, 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., because this rule merely clarifies the data to be provided for certain procurements related to major weapon systems. However, an initial regulatory flexibility analysis has been performed and is summarized as follows: This proposed rule is necessary to implement section 803 of the James M. Inhofe National Defense Authorization Act (NDAA) for Fiscal Year (FY) 2023. Section 803 clarifies the data an offeror is required to provide when a subsystem of a major weapon system or a component or spare part for a major weapon system or subsystem is proposed as a commercial product. Section 803 also clarifies the data to be provided to the contracting officer to determine price reasonableness for such actions. In addition, section 803 affords the offeror the flexibility to either submit the data or provide the contracting officer access to the data and to redact certain customer information. PO 00000 Frm 00015 Fmt 4702 Sfmt 4702 88555 The objective of this proposed rule is to implement section 803 of the James M. Inhofe NDAA for FY 2023, which modifies 10 U.S.C. 3455. The legal basis of the rule is section 803 of the James M. Inhofe NDAA for FY 2023. Based on data from the Federal Procurement Data System for fiscal years 2021 through 2023, DoD awarded an average of approximately 50,260 commercial contracts related to major weapon systems to an average of 2,685 unique small entities per year. Therefore, this proposed rule is expected to apply to approximately 2,685 small entities per fiscal year. This proposed rule does not impose any new reporting, recordkeeping, or other compliance requirements for small entities. The information being collected falls under the currently approved information collection recordkeeping requirements under OMB control number 0704–0574, Defense Federal Acquisition Regulation Supplement (DFARS) Part 215; Only One Offer and Related Clauses in DFARS 252. This proposed rule does not duplicate, overlap, or conflict with any other Federal rules. There are no known alternatives that would accomplish the stated objectives of the applicable statute. DoD invites comments from small business concerns and other interested parties on the expected impact of this proposed rule on small entities. DoD will also consider comments from small entities concerning the existing regulations in subparts affected by this proposed 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 2023–D010), in correspondence. VII. Paperwork Reduction Act The Paperwork Reduction Act (44 U.S.C. chapter 35) applies to this proposed rule. However, these changes to the DFARS do not impose additional information collection requirements to the paperwork burden previously approved by the Office of Management and Budget (OMB) under OMB Control Number 0704–0574, entitled Defense Federal Acquisition Regulation Supplement (DFARS) Part 215; Only One Offer and Related Clauses in DFARS 252. E:\FR\FM\22DEP1.SGM 22DEP1 88556 Federal Register / Vol. 88, No. 245 / Friday, December 22, 2023 / Proposed Rules and components and spare parts of major weapon systems and subsystems. * * * * * List of Subjects in 48 CFR Parts 212, 215, 234, and 252 Government procurement. 215.403–3 Jennifer D. Johnson, Editor/Publisher, Defense Acquisition Regulations System. Therefore, 48 CFR parts 212, 215, 234, and 252 are proposed to be amended as follows: ■ 1. The authority citation for parts 212, 215, 234, and 252 continues to read as follows: Authority: 41 U.S.C. 1303 and 48 CFR chapter 1. PART 212—ACQUISITION OF COMMERCIAL PRODUCTS AND COMMERCIAL SERVICES 2. Amend section 212.102 by revising paragraph (a)(iii)(A) to read as follows: ■ 212.102 Applicability. (a) * * * (iii) * * * (A) Determine in writing that the acquisition meets the ‘‘commercial product’’ or ‘‘commercial service’’ definition in FAR 2.101. See 234.7002(b) and (c) for subsystems of major weapon systems and components and spare parts of major weapon systems and subsystems; * * * * * ■ 3. Amend section 212.209 by revising paragraph (a)(1) to read as follows: 212.209 Determination of price reasonableness. PART 215—CONTRACTING BY NEGOTIATION 4. Amend section 215.403–1 by revising paragraph (c)(3)(A) to read as follows: ddrumheller on DSK120RN23PROD with PROPOSALS1 ■ 215.403–1 Prohibition on obtaining certified cost or pricing data (10 U.S.C. chapter 271 and 41 U.S.C. chapter 35). * * * * (c) * * * (3) * * * (A) Follow the procedures at PGI 215.403–1(c)(3) for pricing commercial products or commercial services, except see 234.7002(e) for pricing commercial subsystems of major weapon systems VerDate Sep<11>2014 16:16 Dec 21, 2023 Jkt 262001 PART 234—MAJOR SYSTEM ACQUISITION 6. Amend section 234.7002— a. By revising paragraph (b)(2); b. By adding paragraph (b)(3); c. By revising paragraphs (c)(1)(ii) and (c)(2); ■ d. By redesignating paragraph (d) as paragraph (e); ■ e. By adding a new paragraph (d); and ■ f. By revising newly redesignated paragraphs (e) introductory text, and (e)(1) through (3); ■ g. In newly redesignated paragraph (e)(4), by removing ‘‘paragraph (d)(3)’’ and ‘‘paragraphs (d)(1) and (2)’’ and adding ‘‘paragraph (e)(1)’’ in their places; and ■ h. In newly redesignated paragraph (e)(5), by removing ‘‘paragraphs (d)(1) and (2)’’ and ‘‘PGI 234.7002(d)(5)’’ and adding ‘‘paragraph (e)(1)’’ and ‘‘PGI 234.7002(e)(5)’’ in their places, respectively. The revisions and additions read as follows: ■ ■ ■ ■ 234.7002 Policy. * (a) * * * (1) In the case of major weapon systems, for subsystems of major weapon systems and components and spare parts of major weapon systems and subsystems acquired as commercial products in accordance with subpart 234.70, shall use information submitted under 234.7002(e); and * * * * * * [Amended] 5. Amend section 215.403–3 in paragraph (c) by removing ‘‘234.7002(d)’’ and adding ‘‘234.7002(e)’’ in its place. ■ * * * * (b) * * * (2) The contracting officer determines in writing that the subsystem is a commercial product in accordance with 212.102(a)(iii). For a subsystem of a major weapon system proposed as a commercial product that has not previously been determined to be a commercial product (see 212.102(a)(ii)), follow the procedures in paragraph (d) of this section. (3) This paragraph (b) shall apply only to subsystems of major weapon systems that are acquired by DoD through a— (i) Prime contract; (ii) Modification to a prime contract; or (iii) Subcontract under a prime contract for the acquisition of a subsystem proposed as a commercial product that has not previously been determined to be a commercial product (see 212.102(a)(ii)). (c) * * * (1) * * * (ii) The contracting officer determines in writing that the component or spare part is a commercial product in accordance with 212.102(a)(iii). For a PO 00000 Frm 00016 Fmt 4702 Sfmt 4702 component or spare part proposed as a commercial product that has not previously been determined to be a commercial product (see 212.102(a)(ii)), follow the procedures in paragraph (d) of this section. (2) This paragraph (c) shall apply only to components and spare parts that are acquired by DoD through a— (i) Prime contract; (ii) Modification to a prime contract; or (iii) Subcontract under a prime contract for the acquisition of a component or spare part proposed as a commercial product that has not previously been determined to be a commercial product (see 212.102(a)(ii)). (d) Commerciality determination. To the extent necessary to make a commercial product determination in accordance with 212.102(a)(iii) that relies on paragraph (1), (2), (3), (4), or (5) of the ‘‘commercial product’’ definition at FAR 2.101 for a subsystem, component, or spare part as described in paragraphs (b) and (c) of this section, the contracting officer shall require the offeror to— (1) Identify the comparable commercial product the offeror sells to the general public or nongovernmental entities for other than governmental purposes; (2) Provide a comparison between the physical characteristics and functionality of the comparable commercial product and the subsystem, component, or spare part, including— (i) For products under paragraph (3)(i) of the ‘‘commercial product’’ definition at FAR 2.101, a description of the modification and documentation to support that the modification is customarily available in the marketplace; or (ii) For products under paragraph (3)(ii) of the ‘‘commercial product’’ definition at FAR 2.101, a detailed description of the modification and detailed technical data to demonstrate that the modification is minor (e.g., information on production processes and material differences); and (3) Provide the national stock number (NSN) for the comparable commercial product, if one is assigned, and the NSN for the subsystem, component, or spare part, if one is assigned; or (4) If the offeror does not sell a comparable commercial product to the general public or nongovernmental entities for other than governmental purposes— (i) Notify the contracting officer in writing that it does not sell such a comparable product; and (ii) Provide the contracting officer a comparison of the physical E:\FR\FM\22DEP1.SGM 22DEP1 ddrumheller on DSK120RN23PROD with PROPOSALS1 Federal Register / Vol. 88, No. 245 / Friday, December 22, 2023 / Proposed Rules characteristics and functionality of the comparable commercial product and the subsystem, component, or spare part, if available. (e) Relevant information to determine price reasonableness. For products relying on paragraph (3)(ii) of the commercial product definition at FAR 2.101, see FAR 15.403–1(c)(3)(iii)(C). See 212.209(a) for requirements of 10 U.S.C. 3453 with regard to market research. (1) Unless an exception at FAR 15.403–1(b)(1) or (2) applies— (i) To the extent necessary to make a determination of price reasonableness, the contracting officer shall require the offeror to submit or provide to the contracting officer access to a representative sample, as determined by the contracting officer, of prices paid for the same or similar commercial products under comparable terms and conditions by both Government and commercial customers and the terms and conditions of such sales. (ii) If the contracting officer determines that the offeror cannot provide or give access to sufficient information described in this paragraph (e)(1) to determine the reasonableness of price, the contracting officer shall require the offeror to submit or provide the contracting officer access to a representative sample, as determined by the contracting officer, of the prices paid for the same or similar commercial products sold under different terms and conditions and the terms and conditions of such sales. (2) The contracting officer shall allow the offeror to redact only information provided pursuant to paragraph (e)(1) of this section that identifies the customer, if the offeror certifies in writing for each sale that the customer is a— (i) Government customer (e.g., Federal, State, local, or foreign government); (ii) Commercial customer purchasing the product for governmental purposes; or (iii) Commercial customer purchasing the product for a commercial, mixed, or unknown purpose. (3) If the contracting officer determines— (i) That the information submitted pursuant to paragraph (e)(1) of this section is not sufficient to determine the reasonableness of price because the comparable commercial product(s) provided by the offeror are not a valid basis for a price analysis; or (ii) That the proposed price is not reasonable after evaluating sales data, then the contracting officer shall obtain approval from an official one level above the contracting officer, without VerDate Sep<11>2014 16:16 Dec 21, 2023 Jkt 262001 power of delegation, to require the offeror to submit other relevant information regarding the basis for price or cost, including information on labor costs, material costs, and overhead rates. * * * * * PART 252—SOLICITATION PROVISIONS AND CONTRACT CLAUSES 7. Amend section 252.215–7010— a. By removing the provision date ‘‘JAN 2023’’ and adding ‘‘DATE’’ in its place; ■ b. In paragraph (a) in the definition of ‘‘Sufficient non-Government sales’’ by removing ‘‘by FAR’’ and adding ‘‘by Federal Acquisition Regulation (FAR)’’ in its place; ■ c. By redesignating paragraphs (b)(1)(ii)(B) through (E) as (b)(1)(ii)(C) through (F); ■ d. By adding a new paragraph (b)(1)(ii)(B); ■ e. In paragraph (d)(1) by removing ‘‘DFARS 215.402(a)(i) and 215.404– 1(b)’’ and adding ‘‘Defense Federal Acquisition Regulation Supplement (DFARS) 215.402(a)(i), 215.404–1(b), and 234.7002(e)’’ in its place; ■ f. By redesignating paragraphs (d)(3) and (4) as (d)(4) and (5); ■ g. By adding a new paragraph (d)(3); ■ h. In newly redesignated paragraph (d)(4) by removing ‘‘FAR 15.403–3’’ and adding ‘‘FAR 15.403–3 or DFARS 234.7002(e)’’ in its place; ■ i. In Alternate I— ■ i. By revising the provision title and date; ■ ii. In paragraph (a) in the definition of ‘‘Sufficient non-Government sales’’ by removing ‘‘by FAR’’ and adding ‘‘by Federal Acquisition Regulation (FAR)’’; ■ iii. By redesignating paragraphs (b)(1)(ii)(B) through (E) as (b)(1)(ii)(C) through (F); ■ iv. By adding a new paragraph (b)(1)(ii)(B); ■ v. In paragraph (d)(1) by removing ‘‘DFARS 215.402(a)(i) and 215.404– 1(b)’’ and adding ‘‘Defense Federal Acquisition Regulation Supplement (DFARS) 215.402(a)(i), 215.404–1(b), and 234.7002(e)’’ in its place; ■ vi. By redesignating paragraphs (d)(3) and (4) as (d)(4) and (5); ■ vii. By adding a new paragraph (d)(3); and ■ viii. In newly redesignated paragraph (d)(4) by removing ‘‘FAR 15.403–3’’ and adding ‘‘FAR 15.403–3 or DFARS 234.7002(e)’’ in its place. The additions and revision read as follows: ■ ■ 88557 (b) * * * (1) * * * (ii) * * * (B) For subsystems of a major weapon system and components and spare parts of a major weapon system or subsystem of a major weapon system that have not previously been determined to be commercial— (1) The comparable commercial product the Offeror sells to the general public or nongovernmental entities; (2) A comparison between the physical characteristics and functionality of the comparable commercial product and the subsystem, component, or spare part, including— (i) For products under paragraph 3(i) of the ‘‘commercial product’’ definition at FAR 2.101, a description of the modification and documentation to support that the modification is customarily available in the marketplace; or (ii) For products under paragraph (3)(ii) of the ‘‘commercial product’’ definition at FAR 2.101, a detailed description of the modification and detailed technical data to demonstrate that the modification is minor (e.g., information on production processes and material differences); and (3) The national stock number (NSN) for the comparable commercial product, if one is assigned, and the NSN for the subsystem, component, or spare part, if one is assigned; or (4) If the Offeror does not sell a comparable commercial product to the general public or nongovernmental entities for purposes other than government purposes, the Offeror shall— (i) Notify the Contracting Officer in writing that it does not sell such a comparable product; and (ii) Provide the Contracting Officer with a comparison of the physical characteristics and functionality of the most comparable commercial product in the commercial market. * * * * * (d) * * * (3) If the Offeror redacts data that identifies the customer, then the Offeror shall include, for each sale, the following signed statement with the data submitted: 252.215–7010 Requirements for Certified Cost or Pricing Data and Data Other Than Certified Cost or Pricing Data. ‘‘By submission of this data, the Offeror [Offeror insert company name] certifies that the customer was [Offeror insert one or more of the following as applicable: a government customer; a commercial customer purchasing the same or similar product for governmental purposes (e.g., Federal, state, local, or foreign government); or a commercial customer purchasing the same or similar product for a commercial, mixed, or unknown purpose].’’ * * PO 00000 * * Frm 00017 * Fmt 4702 * Sfmt 4702 E:\FR\FM\22DEP1.SGM * * 22DEP1 * * 88558 Federal Register / Vol. 88, No. 245 / Friday, December 22, 2023 / Proposed Rules Alternate I. * * * Requirements for Certified Cost or Pricing Data and Data Other Than Certified Cost or Pricing Data— Alternate I (Date) * * * * (b) * * * (1) * * * (ii) * * * (B) For subsystems of a major weapon system and components and spare parts of a major weapon system or subsystem of a major weapon system that have not previously been determined to be commercial— (1) The comparable commercial product the Offeror sells to the general public or nongovernmental entities; (2) A comparison between the physical characteristics and functionality of the comparable commercial product and the subsystem, component, or spare part, including— (i) For products under paragraph 3(i) of the ‘‘commercial product’’ definition ddrumheller on DSK120RN23PROD with PROPOSALS1 * VerDate Sep<11>2014 19:55 Dec 21, 2023 Jkt 262001 at FAR 2.101, a description of the modification and documentation to support that the modification is customarily available in the marketplace; or (ii) For products under paragraph (3)(ii) of the ‘‘commercial product’’ definition at FAR 2.101, a detailed description of the modification and detailed technical data to demonstrate that the modification is minor (e.g., information on production processes and material differences); and (3) The national stock number (NSN) for the comparable commercial product, if one is assigned, and the NSN for the subsystem, component, or spare part; or (4) If the Offeror does not sell a comparable commercial product to the general public or nongovernmental entities for purposes other than government purposes, the Offeror shall— (i) Notify the Contracting Officer in writing that it does not sell such a comparable product; and PO 00000 Frm 00018 Fmt 4702 Sfmt 9990 (ii) Provide the Contracting Officer with a comparison of the physical characteristics and functionality of the most comparable commercial product in the commercial market. * * * * * (d) * * * (3) If the Offeror redacts data that identifies the customer, then the Offeror shall include, for each sale, the following signed statement with the data submitted: ‘‘By submission of this data, the Offeror [Offeror insert company name] certifies that the customer was [Offeror insert one or more of the following as applicable: a government customer (e.g., Federal, state, local, or foreign government); a commercial customer purchasing the same or similar product for governmental purposes; or a commercial customer purchasing the same or similar product for a commercial, mixed, or unknown purpose].’’ * * * * * [FR Doc. 2023–27941 Filed 12–21–23; 8:45 am] BILLING CODE 6001–FR–P E:\FR\FM\22DEP1.SGM 22DEP1

Agencies

[Federal Register Volume 88, Number 245 (Friday, December 22, 2023)]
[Proposed Rules]
[Pages 88554-88558]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2023-27941]


=======================================================================
-----------------------------------------------------------------------

DEPARTMENT OF DEFENSE

Defense Acquisition Regulations System

48 CFR Parts 212, 215, 234, and 252

[Docket DARS-2023-0047]
RIN 0750-AL83


Defense Federal Acquisition Regulation Supplement: Data 
Requirements for Commercial Products for Major Weapon Systems (DFARS 
Case 2023-D010)

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

ACTION: Proposed rule.

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

SUMMARY: DoD is proposing to amend the Defense Federal Acquisition 
Regulation Supplement (DFARS) to implement a section of the James M. 
Inhofe National Defense Authorization Act for Fiscal Year 2023 that 
clarifies the data to be provided for certain procurements related to 
major weapon systems.

DATES: Comments on the proposed rule should be submitted in writing to 
the address shown below on or before February 20, 2024, to be 
considered in the formation of a final rule.

ADDRESSES: Submit comments identified by DFARS Case 2023-D010, using 
either of the following methods:
    [cir] Federal eRulemaking Portal: https://www.regulations.gov. 
Search for DFARS Case 2023-D010. Select ``Comment'' and follow the 
instructions to submit a comment. Please include ``DFARS Case 2023-
D010'' on any attached documents.
    [cir] Email: [email protected]. Include DFARS Case 2023-D010 in 
the subject line of the message.
    Comments received generally will be posted without change to 
https://www.regulations.gov, including any personal information 
provided. To confirm receipt of your comment(s), please check https://www.regulations.gov, approximately two to three days after submission 
to verify posting.

FOR FURTHER INFORMATION CONTACT: Ms. Jeanette Snyder, 703-508-7524.

SUPPLEMENTARY INFORMATION:

I. Background

    DoD is proposing to revise the DFARS to implement section 803 of 
the James M. Inhofe National Defense Authorization Act (NDAA) for 
Fiscal Year (FY) 2023 (Pub. L. 117-263). Section 803 modifies 10 U.S.C. 
3455 to

[[Page 88555]]

provide additional guidance regarding data requirements to support a 
determination of commerciality and price reasonableness for certain 
procurements associated with major weapon systems.

II. Discussion and Analysis

    This rule proposes to modify DFARS 234.7002 to implement section 
803 of the James M. Inhofe NDAA for FY 2023. Section 803 clarifies the 
data an offeror is required to provide when a subsystem of major weapon 
system or a component or spare part for a major weapon system or 
subsystem is proposed as a commercial product. This proposed rule also 
clarifies the data to be provided to the contracting officer to 
determine price reasonableness for such actions. This proposed rule 
affords the offeror the flexibility to either submit the data or 
provide the contracting officer access to the data and to redact 
certain customer information.
    This proposed rule modifies the solicitation provision at DFARS 
252.215-7010, Requirements for Certified Cost or Pricing Data and Data 
Other Than Certified Cost or Pricing Data, to align with the revisions 
made to DFARS 234.7002. This proposed rule also makes conforming 
changes to DFARS parts 212 and 215 to add cross-references to DFARS 
234.7002.

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

    This proposed rule amends the provision at DFARS 252.215-7010, 
Requirements for Certified Cost or Pricing Data and Data Other Than 
Certified Cost or Pricing Data. However, this proposed rule does not 
impose any new requirements on contracts at or below the SAT, for 
commercial products including COTS items, or for commercial services. 
The provision will continue to apply to acquisitions at or below the 
SAT, to acquisitions of commercial products, excluding COTS items, and 
to acquisitions of commercial services.

IV. Expected Impact of the Rule

    DoD does not expect this proposed rule, when finalized, to have a 
significant impact on offerors because it merely clarifies the data an 
offeror is required to provide to the contracting officer when a 
subsystem of a major weapon system or a component or spare part of a 
major weapon system or subsystem is proposed as a commercial product. 
Specifically, this proposed rule clarifies the data an offeror is 
required to provide to support the contracting officer's determination 
of price reasonableness and commerciality. This proposed rule will also 
allow an offeror to give the contracting officer access to the data, in 
lieu of submitting it, and to redact certain customer information from 
such data.
    This proposed rule is expected to result in the timely submission 
of data, which may decrease the time it takes for a contracting officer 
to determine a product to be commercial, to determine price 
reasonableness, and to award the contract.

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, as amended.

VI. Regulatory Flexibility Act

    DoD does not expect this proposed rule, when finalized, 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., because this rule merely clarifies the data to be provided for 
certain procurements related to major weapon systems. However, an 
initial regulatory flexibility analysis has been performed and is 
summarized as follows:
    This proposed rule is necessary to implement section 803 of the 
James M. Inhofe National Defense Authorization Act (NDAA) for Fiscal 
Year (FY) 2023. Section 803 clarifies the data an offeror is required 
to provide when a subsystem of a major weapon system or a component or 
spare part for a major weapon system or subsystem is proposed as a 
commercial product. Section 803 also clarifies the data to be provided 
to the contracting officer to determine price reasonableness for such 
actions. In addition, section 803 affords the offeror the flexibility 
to either submit the data or provide the contracting officer access to 
the data and to redact certain customer information.
    The objective of this proposed rule is to implement section 803 of 
the James M. Inhofe NDAA for FY 2023, which modifies 10 U.S.C. 3455. 
The legal basis of the rule is section 803 of the James M. Inhofe NDAA 
for FY 2023.
    Based on data from the Federal Procurement Data System for fiscal 
years 2021 through 2023, DoD awarded an average of approximately 50,260 
commercial contracts related to major weapon systems to an average of 
2,685 unique small entities per year. Therefore, this proposed rule is 
expected to apply to approximately 2,685 small entities per fiscal 
year.
    This proposed rule does not impose any new reporting, 
recordkeeping, or other compliance requirements for small entities. The 
information being collected falls under the currently approved 
information collection recordkeeping requirements under OMB control 
number 0704-0574, Defense Federal Acquisition Regulation Supplement 
(DFARS) Part 215; Only One Offer and Related Clauses in DFARS 252.
    This proposed rule does not duplicate, overlap, or conflict with 
any other Federal rules.
    There are no known alternatives that would accomplish the stated 
objectives of the applicable statute.
    DoD invites comments from small business concerns and other 
interested parties on the expected impact of this proposed rule on 
small entities.
    DoD will also consider comments from small entities concerning the 
existing regulations in subparts affected by this proposed 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 2023-
D010), in correspondence.

VII. Paperwork Reduction Act

    The Paperwork Reduction Act (44 U.S.C. chapter 35) applies to this 
proposed rule. However, these changes to the DFARS do not impose 
additional information collection requirements to the paperwork burden 
previously approved by the Office of Management and Budget (OMB) under 
OMB Control Number 0704-0574, entitled Defense Federal Acquisition 
Regulation Supplement (DFARS) Part 215; Only One Offer and Related 
Clauses in DFARS 252.

[[Page 88556]]

List of Subjects in 48 CFR Parts 212, 215, 234, and 252

    Government procurement.

Jennifer D. Johnson,
Editor/Publisher, Defense Acquisition Regulations System.

    Therefore, 48 CFR parts 212, 215, 234, and 252 are proposed to be 
amended as follows:

0
1. The authority citation for parts 212, 215, 234, and 252 continues to 
read as follows:

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

PART 212--ACQUISITION OF COMMERCIAL PRODUCTS AND COMMERCIAL 
SERVICES

0
2. Amend section 212.102 by revising paragraph (a)(iii)(A) to read as 
follows:


212.102  Applicability.

    (a) * * *
    (iii) * * *
    (A) Determine in writing that the acquisition meets the 
``commercial product'' or ``commercial service'' definition in FAR 
2.101. See 234.7002(b) and (c) for subsystems of major weapon systems 
and components and spare parts of major weapon systems and subsystems;
* * * * *
0
3. Amend section 212.209 by revising paragraph (a)(1) to read as 
follows:


212.209  Determination of price reasonableness.

    (a) * * *
    (1) In the case of major weapon systems, for subsystems of major 
weapon systems and components and spare parts of major weapon systems 
and subsystems acquired as commercial products in accordance with 
subpart 234.70, shall use information submitted under 234.7002(e); and
* * * * *

PART 215--CONTRACTING BY NEGOTIATION

0
4. Amend section 215.403-1 by revising paragraph (c)(3)(A) to read as 
follows:


215.403-1  Prohibition on obtaining certified cost or pricing data (10 
U.S.C. chapter 271 and 41 U.S.C. chapter 35).

* * * * *
    (c) * * *
    (3) * * *
    (A) Follow the procedures at PGI 215.403-1(c)(3) for pricing 
commercial products or commercial services, except see 234.7002(e) for 
pricing commercial subsystems of major weapon systems and components 
and spare parts of major weapon systems and subsystems.
* * * * *


215.403-3  [Amended]

0
5. Amend section 215.403-3 in paragraph (c) by removing ``234.7002(d)'' 
and adding ``234.7002(e)'' in its place.

PART 234--MAJOR SYSTEM ACQUISITION

0
6. Amend section 234.7002--
0
a. By revising paragraph (b)(2);
0
b. By adding paragraph (b)(3);
0
c. By revising paragraphs (c)(1)(ii) and (c)(2);
0
d. By redesignating paragraph (d) as paragraph (e);
0
e. By adding a new paragraph (d); and
0
f. By revising newly redesignated paragraphs (e) introductory text, and 
(e)(1) through (3);
0
g. In newly redesignated paragraph (e)(4), by removing ``paragraph 
(d)(3)'' and ``paragraphs (d)(1) and (2)'' and adding ``paragraph 
(e)(1)'' in their places; and
0
h. In newly redesignated paragraph (e)(5), by removing ``paragraphs 
(d)(1) and (2)'' and ``PGI 234.7002(d)(5)'' and adding ``paragraph 
(e)(1)'' and ``PGI 234.7002(e)(5)'' in their places, respectively.
    The revisions and additions read as follows:


234.7002  Policy.

* * * * *
    (b) * * *
    (2) The contracting officer determines in writing that the 
subsystem is a commercial product in accordance with 212.102(a)(iii). 
For a subsystem of a major weapon system proposed as a commercial 
product that has not previously been determined to be a commercial 
product (see 212.102(a)(ii)), follow the procedures in paragraph (d) of 
this section.
    (3) This paragraph (b) shall apply only to subsystems of major 
weapon systems that are acquired by DoD through a--
    (i) Prime contract;
    (ii) Modification to a prime contract; or
    (iii) Subcontract under a prime contract for the acquisition of a 
subsystem proposed as a commercial product that has not previously been 
determined to be a commercial product (see 212.102(a)(ii)).
    (c) * * *
    (1) * * *
    (ii) The contracting officer determines in writing that the 
component or spare part is a commercial product in accordance with 
212.102(a)(iii). For a component or spare part proposed as a commercial 
product that has not previously been determined to be a commercial 
product (see 212.102(a)(ii)), follow the procedures in paragraph (d) of 
this section.
    (2) This paragraph (c) shall apply only to components and spare 
parts that are acquired by DoD through a--
    (i) Prime contract;
    (ii) Modification to a prime contract; or
    (iii) Subcontract under a prime contract for the acquisition of a 
component or spare part proposed as a commercial product that has not 
previously been determined to be a commercial product (see 
212.102(a)(ii)).
    (d) Commerciality determination. To the extent necessary to make a 
commercial product determination in accordance with 212.102(a)(iii) 
that relies on paragraph (1), (2), (3), (4), or (5) of the ``commercial 
product'' definition at FAR 2.101 for a subsystem, component, or spare 
part as described in paragraphs (b) and (c) of this section, the 
contracting officer shall require the offeror to--
    (1) Identify the comparable commercial product the offeror sells to 
the general public or nongovernmental entities for other than 
governmental purposes;
    (2) Provide a comparison between the physical characteristics and 
functionality of the comparable commercial product and the subsystem, 
component, or spare part, including--
    (i) For products under paragraph (3)(i) of the ``commercial 
product'' definition at FAR 2.101, a description of the modification 
and documentation to support that the modification is customarily 
available in the marketplace; or
    (ii) For products under paragraph (3)(ii) of the ``commercial 
product'' definition at FAR 2.101, a detailed description of the 
modification and detailed technical data to demonstrate that the 
modification is minor (e.g., information on production processes and 
material differences); and
    (3) Provide the national stock number (NSN) for the comparable 
commercial product, if one is assigned, and the NSN for the subsystem, 
component, or spare part, if one is assigned; or
    (4) If the offeror does not sell a comparable commercial product to 
the general public or nongovernmental entities for other than 
governmental purposes--
    (i) Notify the contracting officer in writing that it does not sell 
such a comparable product; and
    (ii) Provide the contracting officer a comparison of the physical

[[Page 88557]]

characteristics and functionality of the comparable commercial product 
and the subsystem, component, or spare part, if available.
    (e) Relevant information to determine price reasonableness. For 
products relying on paragraph (3)(ii) of the commercial product 
definition at FAR 2.101, see FAR 15.403-1(c)(3)(iii)(C). See 212.209(a) 
for requirements of 10 U.S.C. 3453 with regard to market research.
    (1) Unless an exception at FAR 15.403-1(b)(1) or (2) applies--
    (i) To the extent necessary to make a determination of price 
reasonableness, the contracting officer shall require the offeror to 
submit or provide to the contracting officer access to a representative 
sample, as determined by the contracting officer, of prices paid for 
the same or similar commercial products under comparable terms and 
conditions by both Government and commercial customers and the terms 
and conditions of such sales.
    (ii) If the contracting officer determines that the offeror cannot 
provide or give access to sufficient information described in this 
paragraph (e)(1) to determine the reasonableness of price, the 
contracting officer shall require the offeror to submit or provide the 
contracting officer access to a representative sample, as determined by 
the contracting officer, of the prices paid for the same or similar 
commercial products sold under different terms and conditions and the 
terms and conditions of such sales.
    (2) The contracting officer shall allow the offeror to redact only 
information provided pursuant to paragraph (e)(1) of this section that 
identifies the customer, if the offeror certifies in writing for each 
sale that the customer is a--
    (i) Government customer (e.g., Federal, State, local, or foreign 
government);
    (ii) Commercial customer purchasing the product for governmental 
purposes; or
    (iii) Commercial customer purchasing the product for a commercial, 
mixed, or unknown purpose.
    (3) If the contracting officer determines--
    (i) That the information submitted pursuant to paragraph (e)(1) of 
this section is not sufficient to determine the reasonableness of price 
because the comparable commercial product(s) provided by the offeror 
are not a valid basis for a price analysis; or
    (ii) That the proposed price is not reasonable after evaluating 
sales data, then the contracting officer shall obtain approval from an 
official one level above the contracting officer, without power of 
delegation, to require the offeror to submit other relevant information 
regarding the basis for price or cost, including information on labor 
costs, material costs, and overhead rates.
* * * * *

PART 252--SOLICITATION PROVISIONS AND CONTRACT CLAUSES

0
7. Amend section 252.215-7010--
0
a. By removing the provision date ``JAN 2023'' and adding ``DATE'' in 
its place;
0
b. In paragraph (a) in the definition of ``Sufficient non-Government 
sales'' by removing ``by FAR'' and adding ``by Federal Acquisition 
Regulation (FAR)'' in its place;
0
c. By redesignating paragraphs (b)(1)(ii)(B) through (E) as 
(b)(1)(ii)(C) through (F);
0
d. By adding a new paragraph (b)(1)(ii)(B);
0
e. In paragraph (d)(1) by removing ``DFARS 215.402(a)(i) and 215.404-
1(b)'' and adding ``Defense Federal Acquisition Regulation Supplement 
(DFARS) 215.402(a)(i), 215.404-1(b), and 234.7002(e)'' in its place;
0
f. By redesignating paragraphs (d)(3) and (4) as (d)(4) and (5);
0
g. By adding a new paragraph (d)(3);
0
h. In newly redesignated paragraph (d)(4) by removing ``FAR 15.403-3'' 
and adding ``FAR 15.403-3 or DFARS 234.7002(e)'' in its place;
0
i. In Alternate I--
0
i. By revising the provision title and date;
0
ii. In paragraph (a) in the definition of ``Sufficient non-Government 
sales'' by removing ``by FAR'' and adding ``by Federal Acquisition 
Regulation (FAR)'';
0
iii. By redesignating paragraphs (b)(1)(ii)(B) through (E) as 
(b)(1)(ii)(C) through (F);
0
iv. By adding a new paragraph (b)(1)(ii)(B);
0
v. In paragraph (d)(1) by removing ``DFARS 215.402(a)(i) and 215.404-
1(b)'' and adding ``Defense Federal Acquisition Regulation Supplement 
(DFARS) 215.402(a)(i), 215.404-1(b), and 234.7002(e)'' in its place;
0
vi. By redesignating paragraphs (d)(3) and (4) as (d)(4) and (5);
0
vii. By adding a new paragraph (d)(3); and
0
viii. In newly redesignated paragraph (d)(4) by removing ``FAR 15.403-
3'' and adding ``FAR 15.403-3 or DFARS 234.7002(e)'' in its place.
    The additions and revision read as follows:


252.215-7010  Requirements for Certified Cost or Pricing Data and Data 
Other Than Certified Cost or Pricing Data.

* * * * *
    (b) * * *
    (1) * * *
    (ii) * * *
    (B) For subsystems of a major weapon system and components and 
spare parts of a major weapon system or subsystem of a major weapon 
system that have not previously been determined to be commercial--
    (1) The comparable commercial product the Offeror sells to the 
general public or nongovernmental entities;
    (2) A comparison between the physical characteristics and 
functionality of the comparable commercial product and the subsystem, 
component, or spare part, including--
    (i) For products under paragraph 3(i) of the ``commercial product'' 
definition at FAR 2.101, a description of the modification and 
documentation to support that the modification is customarily available 
in the marketplace; or
    (ii) For products under paragraph (3)(ii) of the ``commercial 
product'' definition at FAR 2.101, a detailed description of the 
modification and detailed technical data to demonstrate that the 
modification is minor (e.g., information on production processes and 
material differences); and
    (3) The national stock number (NSN) for the comparable commercial 
product, if one is assigned, and the NSN for the subsystem, component, 
or spare part, if one is assigned; or
    (4) If the Offeror does not sell a comparable commercial product to 
the general public or nongovernmental entities for purposes other than 
government purposes, the Offeror shall--
    (i) Notify the Contracting Officer in writing that it does not sell 
such a comparable product; and
    (ii) Provide the Contracting Officer with a comparison of the 
physical characteristics and functionality of the most comparable 
commercial product in the commercial market.
* * * * *
    (d) * * *
    (3) If the Offeror redacts data that identifies the customer, then 
the Offeror shall include, for each sale, the following signed 
statement with the data submitted:

    ``By submission of this data, the Offeror [Offeror insert 
company name] certifies that the customer was [Offeror insert one or 
more of the following as applicable: a government customer; a 
commercial customer purchasing the same or similar product for 
governmental purposes (e.g., Federal, state, local, or foreign 
government); or a commercial customer purchasing the same or similar 
product for a commercial, mixed, or unknown purpose].''
* * * * *

[[Page 88558]]

    Alternate I. * * *

Requirements for Certified Cost or Pricing Data and Data Other Than 
Certified Cost or Pricing Data--Alternate I (Date)

* * * * *
    (b) * * *
    (1) * * *
    (ii) * * *
    (B) For subsystems of a major weapon system and components and 
spare parts of a major weapon system or subsystem of a major weapon 
system that have not previously been determined to be commercial--
    (1) The comparable commercial product the Offeror sells to the 
general public or nongovernmental entities;
    (2) A comparison between the physical characteristics and 
functionality of the comparable commercial product and the subsystem, 
component, or spare part, including--
    (i) For products under paragraph 3(i) of the ``commercial product'' 
definition at FAR 2.101, a description of the modification and 
documentation to support that the modification is customarily available 
in the marketplace; or
    (ii) For products under paragraph (3)(ii) of the ``commercial 
product'' definition at FAR 2.101, a detailed description of the 
modification and detailed technical data to demonstrate that the 
modification is minor (e.g., information on production processes and 
material differences); and
    (3) The national stock number (NSN) for the comparable commercial 
product, if one is assigned, and the NSN for the subsystem, component, 
or spare part; or
    (4) If the Offeror does not sell a comparable commercial product to 
the general public or nongovernmental entities for purposes other than 
government purposes, the Offeror shall--
    (i) Notify the Contracting Officer in writing that it does not sell 
such a comparable product; and
    (ii) Provide the Contracting Officer with a comparison of the 
physical characteristics and functionality of the most comparable 
commercial product in the commercial market.
* * * * *
    (d) * * *
    (3) If the Offeror redacts data that identifies the customer, then 
the Offeror shall include, for each sale, the following signed 
statement with the data submitted:

    ``By submission of this data, the Offeror [Offeror insert 
company name] certifies that the customer was [Offeror insert one or 
more of the following as applicable: a government customer (e.g., 
Federal, state, local, or foreign government); a commercial customer 
purchasing the same or similar product for governmental purposes; or 
a commercial customer purchasing the same or similar product for a 
commercial, mixed, or unknown purpose].''
* * * * *
[FR Doc. 2023-27941 Filed 12-21-23; 8:45 am]
BILLING CODE 6001-FR-P

This site is protected by reCAPTCHA and the Google Privacy Policy and Terms of Service apply.