Defense Federal Acquisition Regulation Supplement: Exception to Competition for Certain Follow-On Production Contracts (DFARS Case 2019-D031)
| Published date | 26 September 2019 |
| Record Number | 2019-20555 |
| Section | Proposed rules |
| Court | Defense Acquisition Regulations System |
Federal Register, Volume 84 Issue 187 (Thursday, September 26, 2019)
[Federal Register Volume 84, Number 187 (Thursday, September 26, 2019)]
[Proposed Rules]
[Pages 50811-50812]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2019-20555]
[[Page 50811]]
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DEPARTMENT OF DEFENSE
Defense Acquisition Regulations System
48 CFR Part 206
[Docket DARS-2019-0051]
RIN 0750-AK67
Defense Federal Acquisition Regulation Supplement: Exception to
Competition for Certain Follow-On Production Contracts (DFARS Case
2019-D031)
AGENCY: Defense Acquisition Regulations System, Department of Defense
(DoD).
ACTION: Proposed rule.
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SUMMARY: DoD is proposing to amend the Defense Federal Acquisition
Regulation Supplement (DFARS) to implement a section of the National
Defense Authorization Act for Fiscal Year 2016 that modifies the
criteria required to exempt from competition certain follow-on
productions contracts.
DATES: Comments on the proposed rule should be submitted in writing to
the address shown below on or before November 25, 2019, to be
considered in the formation of a final rule.
ADDRESSES: Submit comments identified by DFARS Case 2019-D031, using
any of the following methods:
[cir] Regulations.gov: http://www.regulations.gov. Submit comments
via the Federal eRulemaking portal by entering ``DFARS Case 2019-D031''
under the heading ``Enter keyword or ID'' and selecting ``Search.''
Select the link ``Submit a Comment'' that corresponds with ``DFARS Case
2019-D031.'' Follow the instructions provided at the ``Submit a
Comment'' screen. Please ``DFARS Case 2019-D031'' on any attached
documents.
[cir] Email: [email protected]. Include DFARS Case 2019-D031 in
the subject line of the message.
[cir] Fax: 571-372-6094.
[cir] Mail: Defense Acquisition Regulations System, Attn: Carrie
Moore, OUSD(A&S)DPC/DARS, Room 3B941, 3060 Defense Pentagon,
Washington, DC 20301-3060.
Comments received generally will be posted without change to http://www.regulations.gov, including any personal information provided. To
confirm receipt of your comment(s), please check www.regulations.gov,
approximately two to three days after submission to verify posting
(except allow 30 days for posting of comments submitted by mail).
FOR FURTHER INFORMATION CONTACT: Ms. Carrie Moore, telephone 571-372-
6093.
SUPPLEMENTARY INFORMATION:
I. Background
DoD is amending the DFARS to implement section 815 of the National
Defense Authorization Act (NDAA) for Fiscal Year (FY) 2016 (Pub. L.
114-92). Section 815 repeals and replaces section 845 of the NDAA for
FY 1994 (Pub. L. 103-160; 10 U.S.C. 2371 note) with 10 U.S.C. 2371b,
which modifies the authority of DoD to carry out certain prototype
project transactions, as well as the criteria required to award an
associated follow-on production contract to a participant in the
transaction without the use of competitive procedures.
Currently, DFARS 206.001(S-70) states that the award of a follow-on
production contract for products developed under the authority of 10
U.S.C. 2371 is excepted from the use of competitive procedures, if: (1)
The prototype project transaction agreement includes a provision for a
follow-on production contract; (2) specific criteria in 10 U.S.C. 2371
note are met; and (3) the quantities and prices for the follow-on
contract do not exceed the quantities and target prices established in
the transaction agreement. Section 815 no longer limits a follow-on
production contract to quantities and target prices that were
established in the transaction agreement. As a result, this rule
removes the limitation from the requisite criteria to exempt a follow-
on contract from competitive procedures in subpart 206.
II. Discussion and Analysis
This rule updates the DFARS 206.001(S-70) references to 10 U.S.C.
2371 to the equivalent parts of 10 U.S.C. 2371b; and, adds to the list
of criteria necessary to award a follow-on production contract without
competition, the requirement that--
A written determination was executed by certain
acquisition officials for transactions in excess of specified dollar
values;
The follow-on contract be awarded to participants in the
transaction for the prototype project;
Competitive procedures were used to selected the parties
in the transaction; and
The participants in the transaction successfully completed
the prototype project provided for in the transaction.
The additions to the criteria do not implement new requirements.
The statutes and regulations that implement DoD's other transaction
authority permit DoD to provide, in the agreement, for the award of a
follow-on production contract to a participant in the prototype
project. Agreements made under DoD's other transaction authority are
not subject to the Federal Acquisition Regulation or DFARS; however,
the award of a follow-on production contract resulting from such a
transaction agreement is subject to these acquisition regulations. As
such, this addition serves as notice to contracting officers that: When
the transaction agreement included a provision for the award of a
follow-on production contract, and the award of the contract will be
made without competition, certain criteria must be met for the follow-
on contract award and certain criteria must have been met during the
other transaction authority process. This addition will help ensure
contracting officers are aware of and in compliance with DoD's other
transactional authority when awarding a resultant follow-on production
contract.
III. Applicability to Contracts at or Below the Simplified Acquisition
Threshold and for Commercial Items, Including Commercially Available
Off-the-Shelf Items
This rule only impacts the internal operating procedures of the
agency. The rule does not impose any new requirements on contracts at
or below the simplified acquisition threshold and for commercial items,
including commercially available off-the-shelf items.
IV. Executive Orders 12866 and 13563
E.O.s 12866 and 13563 direct agencies to assess all costs and
benefits of available regulatory alternatives and, if regulation is
necessary, to select regulatory approaches that maximize net benefits
(including potential economic, environmental, public health and safety
effects, distributive impacts, and equity). E.O. 13563 emphasizes the
importance of quantifying both costs and benefits, of reducing costs,
of harmonizing rules, and of promoting flexibility. This is not a
significant regulatory action and, therefore, was not subject to review
under section 6(b) of E.O. 12866, Regulatory Planning and Review, dated
September 30, 1993. This rule is not a major rule under 5 U.S.C. 804.
V. Executive Order 13771
This rule is not expected to be subject to E.O. 13771, because this
rule is not a significant regulatory action under E.O. 12866.
VI. Regulatory Flexibility Act
DoD does not expect this proposed rule to have a significant
economic
[[Page 50812]]
impact on a substantial number of small entities within the meaning of
the Regulatory Flexibility Act, 5 U.S.C. 601, et seq., because the rule
is not creating any new requirements for contractors or changing any
existing policies and practices. However, an initial regulatory
flexibility analysis has been performed and is summarized as follows:
DoD is proposing to amend the Defense Federal Acquisition
Regulation Supplement (DFARS) to implement section 815 of the National
Defense Authorization Act (NDAA) for Fiscal Year (FY) 2016 (Pub. L.
114-92), which repeals and replaces section 845 of the NDAA for FY 1994
(Pub. L. 103-160; 10 U.S.C. 2371 note) with 10 U.S.C. 2371b.
The objective of this proposed rule is to clarify for contracting
officers the criteria that must be met to award, without competition, a
follow-on production contract associated with a prototype project
transaction agreement.
DoD does not collect data on the number of follow-on production
contracts that are awarded annually and associated with a prototype
project transaction agreement made under the authority of 10 U.S.C.
2371b; therefore, DoD is unable to estimate the number of small
entities that will be impacted by this rule. However, DoD does not
expect small business entities to be significantly impacted by this
rule, because the rule does not change any existing processes or impose
any additional burdens. Instead, the rule simply clarifies instructions
to contracting officers on the criteria that must be met in order to
award an associated follow-on production contract without using
competitive procedures.
This proposed rule does not include any new reporting,
recordkeeping, or other compliance requirements for small businesses.
This rule does not duplicate, overlap, or conflict with any other
Federal rules.
There are no known alternatives available to meet the objectives of
the statutes.
DoD invites comments from small business concerns and other
interested parties on the expected impact of this rule on small
entities. DoD will also consider comments from small entities
concerning the existing regulations in subparts affected by this rule
in accordance with 5 U.S.C. 610. Interested parties must submit such
comments separately and should cite 5 U.S.C. 610 (DFARS Case 2019-D031)
in correspondence.
VII. Paperwork Reduction Act
The rule does not contain any information collection requirements
that require the approval of the Office of Management and Budget under
the Paperwork Reduction Act (44 U.S.C. chapter 35).
List of Subjects in 48 CFR Part 206
Government procurement.
Jennifer Lee Hawes,
Regulatory Control Officer, Defense Acquisition Regulations System.
Therefore, 48 CFR part 206 is proposed to be amended as follows:
PART 206--COMPETITION REQUIREMENTS
0
1. The authority citation for 48 CFR part 206 continues to read as
follows:
Authority: 41 U.S.C. 1303 and 48 C chapter 1.
0
2. Amend section 206.001 by revising paragraph (S-70) to read as
follows:
206.001 Applicability.
* * * * *
(S-70) Also excepted from the competition requirements of FAR part
6 are follow-on production contracts for products developed pursuant to
the ``other transactions'' authority of 10 U.S.C. 2371b for prototype
projects when--
(1) The other transaction agreement includes provisions for a
follow-on production contract;
(2) The follow-on contract will be awarded to the participants in
the other transaction for the prototype project;
(3) Competitive procedures are used for the selection of parties
for participation in the transaction;
(4) The participants in the transaction successfully completes the
prototype or sub-prototype project provided for in the transaction; and
(5)(i) There is a written determination that--
(A) The requirements of 10 U.S.C. 2371b(d) are met; and
(B) The use of the authority of 10 U.S.C. 2371b is essential to
promoting the success of the prototype project; and
(ii)(A) For actions in excess of $100 million, but not in excess of
$500 million including all options, the determination is executed by
the senior procurement executive; and
(B) For actions in excess of $500 million including all options,
the determination is--
(1) Executed by the Under Secretary of Defense for Research and
Engineering or the Under Secretary of Defense for Acquisition and
Sustainment; and
(2) Provided to the congressional defense committees at least 30
days prior to contract award.
[FR Doc. 2019-20555 Filed 9-25-19; 8:45 am]
BILLING CODE 5001-06-P
