[Federal Register Volume 69, Number 210 (Monday, November 1, 2004)]
[Rules and Regulations]
[Pages 63329-63330]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 04-24284]


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DEPARTMENT OF DEFENSE

48 CFR Part 212

[DFARS Case 2003-D106]


Defense Federal Acquisition Regulation Supplement; Transition of 
Weapons-Related Prototype Projects to Follow-On Contracts

AGENCY: Department of Defense (DoD).

ACTION: Interim rule with request for comments.

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SUMMARY: DoD has issued an interim rule amending the Defense Federal 
Acquisition Regulation Supplement (DFARS) to implement Section 847 of 
the National Defense Authorization Act for Fiscal Year 2004. Section 
847 authorizes DoD to carry out a pilot program that permits the use of 
streamlined contracting procedures for the production of items or 
processes begun as prototype projects under other transaction 
agreements.

DATES: Effective date: November 1, 2004.
    Comment date: Comments on the interim rule should be submitted to 
the address shown below on or before January 3, 2005, to be considered 
in the formation of the final rule.

ADDRESSES: You may submit comments, identified by DFARS Case 2003-D106, 
using any of the following methods:
     Federal eRulemaking Portal: http://www.regulations.gov. 
Follow the instructions for submitting comments.
     Defense Acquisition Regulations Web Site: http://emissary.acq.osd.mil/dar/dfars.nsf/pubcomm. Follow the instructions for 
submitting comments.
     E-mail: [email protected]. Include DFARS Case 2003-D106 in the 
subject line of the message.
     Fax: (703) 602-0350.
     Mail: Defense Acquisition Regulations Council, Attn: Ms. 
Amy Williams, OUSD(AT&L)DPAP(DAR), IMD 3C132, 3062 Defense Pentagon, 
Washington, DC 20301-3062.
     Hand Delivery/Courier: Defense Acquisition Regulations 
Council, Crystal Square 4, Suite 200A, 241 18th Street, Arlington, VA 
22202-3402.
    All comments received will be posted to http://emissary.acq.osd.mil/dar/dfars.nsf.

FOR FURTHER INFORMATION CONTACT: Ms. Amy Williams, (703) 602-0328.

SUPPLEMENTARY INFORMATION:

A. Background

    This interim rule adds a new DFARS subpart to implement Section 847 
of the National Defense Authorization Act for Fiscal Year 2004 (Pub. L. 
108-136). Section 847 authorizes DoD to carry out a pilot program for 
follow-on contracting for the production of items or processes begun as 
prototype projects under other transaction agreements. Contracts and 
subcontracts awarded under the program may be treated as those for the 
acquisition of commercial items; and items or processes acquired under 
the program may be treated as developed in part with Federal funds and 
in part at private expense for purposes of negotiating rights in 
technical data.
    This rule was not subject to Office of Management and Budget review 
under Executive Order 12866, dated September 30, 1993.

B. Regulatory Flexibility Act

    DoD does not expect this rule to have a significant economic impact 
on a substantial number of small entities within the meaning of the 
Regulatory Flexibility Act, 5 U.S.C. 601, et seq., because the rule 
applies only to production contracts for DoD weapons and weapon 
systems. Such contracts typically are not awarded to small business 
concerns. Therefore, DoD has not performed an initial regulatory 
flexibility analysis. DoD invites comments from small businesses and 
other interested parties. DoD also will consider comments from small 
entities concerning the affected DFARS subparts in accordance with 5 
U.S.C. 610. Such comments should be submitted separately and should 
cite DFARS Case 2003-D106.

C. Paperwork Reduction Act

    The Paperwork Reduction Act does not apply because the rule does 
not impose any information collection requirements that require the 
approval of the Office of Management and Budget under 44 U.S.C. 3501, 
et seq.

D. Determination To Issue an Interim Rule

    A determination has been made under the authority of the Secretary 
of Defense that urgent and compelling reasons exist to publish an 
interim rule prior to affording the public an opportunity to comment. 
This interim rule implements Section 847 of the National Defense 
Authorization Act for Fiscal Year 2004 (Pub. L. 108-136). Section 847 
authorizes DoD to carry out a pilot program that permits the use of 
streamlined contracting procedures for the production of items or 
processes begun as prototype projects under other transaction 
agreements. The program is intended to ease the transition of 
nontraditional defense contractors from prototype transactions to 
standard

[[Page 63330]]

contracts. Section 847 became effective upon enactment on November 24, 
2003, and expires on September 30, 2008. Comments received in response 
to this interim rule will be considered in the formation of the final 
rule.

List of Subjects in 48 CFR Part 212

    Government procurement.

Michele P. Peterson,
Executive Editor, Defense Acquisition Regulations Council.


0
Therefore, 48 CFR part 212 is amended as follows:
0
1. The authority citation for 48 CFR part 212 continues to read as 
follows:

    Authority: 41 U.S.C. 421 and 48 CFR Chapter 1.

PART 212--ACQUISITION OF COMMERCIAL ITEMS

0
2. Section 212.212 is added to read as follows:


212.212  Computer software.

    The DoD policy for acquiring commercial computer software is at 
227.7202.

0
3. Subpart 212.70 is added to read as follows:

Subpart 212.70--Pilot Program for Transition to Follow-On 
Contracting After Use of Other Transaction Authority

Sec.
212.7000 Scope.
212.7001 Definitions.
212.7002 Pilot program.
212.7002-1 Contracts under the program.
212.7002-2 Subcontracts under the program.
212.7003 Rights in technical data and computer software.


212.7000  Scope.

    This subpart establishes the pilot program authorized by Section 
847 of the National Defense Authorization Act for Fiscal Year 2004 
(Pub. L. 108-136).


212.7001  Definitions.

    As used in this subpart--
    Nontraditional defense contractor means a business unit that--
    (1) Has entered into an other transaction agreement with DoD; and
    (2) Has not, for a period of at least 1 year prior to the date of 
the other transaction agreement, entered into or performed on--
    (i) Any contract that is subject to full coverage under the cost 
accounting standards described in FAR Part 30; or
    (ii) Any other contract exceeding $500,000 to carry out prototype 
projects or to perform basic, applied, or advanced research projects 
for a Federal agency that is subject to the FAR.
    Other transaction means a transaction that--
    (1) Is other than a contract, grant, or cooperative agreement;
    (2) Is not subject to the FAR or its supplements; and
    (3) Is entered into in accordance with 32 CFR part 3.


212.7002  Pilot program.


212.7002-1  Contracts under the program.

    (a) The contracting officer may use FAR part 12 procedures to award 
a contract for an item or process that does not meet the definition of 
``commercial item,'' if the contract--
    (1) Is awarded to a nontraditional defense contractor;
    (2) Is a follow-on contract for the production of an item or 
process begun as a prototype project under an other transaction 
agreement;
    (3) Does not exceed $50,000,000;
    (4) Is awarded on or before September 30, 2008; and
    (5) Is either--
    (i) A firm-fixed-price contract; or
    (ii) A fixed-price contract with economic price adjustment.
    (b) See 212.7003 for special procedures pertaining to rights in 
technical data and computer software.


212.7002-2  Subcontracts under the program.

    Except as provided in 212.7003, a subcontract for an item or 
process that does not meet the definition of ``commercial item'' may be 
treated as a subcontract for a commercial item, if the subcontract--
    (a) Is under a contract awarded in accordance with 212.7002-1;
    (b) Is awarded to a nontraditional defense contractor; and
    (c) Is either--
    (1) A firm-fixed-price subcontract; or
    (2) A fixed-price subcontract with economic price adjustment.


212.7003  Rights in technical data and computer software.

    For purposes of determining rights in technical data under 227.7102 
and rights in computer software under 227.7202, items or processes 
acquired under a contract or subcontract awarded in accordance with 
212.7002 may be treated as developed in part with Federal funds and in 
part at private expense (i.e., mixed funding). When this occurs--
    (a) For technical data, use the clauses at 252.227-7013, Rights in 
Technical Data--Noncommercial Items, and 252.227-7037, Validation of 
Restrictive Markings on Technical Data;
    (b) For computer software, use the clauses at 252.227-7014, Rights 
in Noncommercial Computer Software and Noncommercial Computer Software 
Documentation, and 252.227-7019, Validation of Asserted Restrictions--
Computer Software;
    (c) Require the contractor to include the clauses prescribed by 
paragraphs (a) and (b) of this section in subcontracts awarded in 
accordance with 212.7002-2; and
    (d) Negotiate for the appropriate technical data and computer 
software deliverables and special license rights in those deliverables, 
in view of the parties' relative contributions to the development of 
the items or processes.

[FR Doc. 04-24284 Filed 10-29-04; 8:45 am]
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