[Federal Register Volume 76, Number 232 (Friday, December 2, 2011)]
[Proposed Rules]
[Pages 75512-75517]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2011-30907]


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

DEPARTMENT OF DEFENSE

Defense Acquisition Regulations System

48 CFR Parts 215 and 252

RIN 0750-AH47


Defense Federal Acquisition Regulation Supplement: Proposal 
Adequacy Checklist (DFARS Case 2011-D042)

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

ACTION: Proposed rule.

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

SUMMARY: DoD is proposing to amend the Defense Federal Acquisition 
Regulation Supplement to incorporate a proposal adequacy checklist for 
proposals in response to solicitations that require submission of 
certified cost or pricing data.

DATES: Comments on the proposed rule should be submitted in writing to 
the address shown below on or before January 31, 2012, to be considered 
in the formation of a final rule.

ADDRESSES: Submit comments identified by DFARS Case 2011-D042, using 
any of the following methods:
    [cir] Regulations.gov: http://www.regulations.gov. Submit comments 
via the Federal eRulemaking portal by entering ``DFARS Case 2011-D042 
under the heading ``Enter keyword or ID'' and selecting ``Search.'' 
Select the link ``Submit a Comment'' that corresponds with ``DFARS Case 
2011-D042.'' Follow the instructions provided at the ``Submit a 
Comment'' screen. Please include your name, company name (if any), and 
``DFARS Case 2011-D011'' on your attached document.
    [cir] E-mail: [email protected]. Include DFARS Case 2011-D011 in the 
subject line of the message.
    [cir] Fax: 703-614-1254.
    [cir] Mail: Defense Acquisition Regulations System, Attn: Dustin 
Pitsch, OUSD (AT&L) DPAP/DARS, Room 3B855, 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 http://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: Mr. Dustin Pitsch, telephone 703-602-
0289.

SUPPLEMENTARY INFORMATION: 

I. Background

    This proposed rule supports one of DoD's Better Buying Power 
initiatives by incorporating the requirement for a proposal adequacy 
checklist into the Defense Federal Acquisition Regulation Supplement 
(DFARS) at section 215.408, and an associated solicitation provision at 
DFARS 252.215-70XX, to ensure offerors take responsibility for 
submitting thorough, accurate, and complete proposals. The provision 
should be included in solicitations that require the submission of 
certified cost or pricing data.

II. 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

[[Page 75513]]

and benefits, of reducing costs, of harmonizing rules, and of promoting 
flexibility. This is a significant regulatory action and, therefore, 
was 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.

III. Regulatory Flexibility Act

    DoD does not expect this proposed rule to have a significant 
economic impact on a substantial number of small entities within the 
meaning of the Regulatory Flexibility Act, 5 U.S.C. 601, et seq. 
However, an Initial Regulatory Flexibility Analysis has been performed 
and is summarized as follows:
    This proposed rule amends the DFARS to add a checklist for DoD 
contractors to complete under solicitations that require the submission 
of certified cost or pricing data, if the contracting officer chooses 
to use the provision. This rule will implement one of DoD's Better 
Buying Power initiatives.
    The objective of the rule is to ensure that offerors submit 
thorough, accurate, and complete proposals. By completing the 
checklist, offerors will be able to self validate the adequacy of their 
proposals. The legal basis for the rule is 41 U.S.C. 1303.
    The rule will apply to actions where cost and pricing data is 
required, at the discretion of the contracting officer. Based on data 
collected in FPDS-NG for FY2008-FY2010, there are on average 905 
actions per year that met the criteria where the proposal adequacy 
checklist could be utilized. On average, 420 of those actions were with 
small business concerns.
    The rule imposes no new reporting requirements. The rule does not 
duplicate, overlap, or conflict with any other Federal rules.
    No alternatives were identified that would meet the objectives of 
the rule. Excluding the small number of small business concerns that 
may be subject to the rule would not be in the best interest of the 
small business concerns or the Government, because the proposal 
adequacy checklist was created directly from requirements already in 
the Federal Acquisition Regulation. While the checklist does not add 
burden, it provides a useful tool for ensuring proposal adequacy.
    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 2011-D042), in 
correspondence.

IV. Paperwork Reduction Act

    The rule contains 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; however, these changes to the 
DFARS do not impose additional information collection requirements to 
the paperwork burden previously approved under OMB Control Number 9000-
0013, entitled ``Cost or Pricing Data Exemption Information.''

List of Subjects in 48 CFR Parts 215 and 252

    Government procurement.

Mary Overstreet,
Editor, Defense Acquisition Regulations System.

    Therefore, 48 CFR parts 215 and 252 are proposed to be amended as 
follows:
    1. The authority citation for 48 CFR parts 215 and 252 continues to 
read as follows:

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

PART 215--CONTRACTING BY NEGOTIATION

    2. Amend Section 215.408 to add new paragraph (3) to read as 
follows:


215.408  Solicitation provisions and contract clauses.

* * * * *
    (3) When the solicitation requires the submission of certified cost 
and pricing data, the contracting officer should include 252.215-70XX, 
Proposal Adequacy Checklist, in the solicitation.

PART 252--SOLICITATION PROVISIONS AND CONTRACT CLAUSES

    3. Add section 252.215-70XX to read as follows:


252.215-70XX  Proposal Adequacy Checklist.

    As prescribed in 215.408(3), use the following provision:

PROPOSAL ADEQUACY CHECKLIST (DATE)

    The offeror shall complete the following checklist, providing 
location of requested information, or an explanation of why the 
requested information is not provided. Completion of this checklist 
in no way reduces the responsibility to fully comply with all of the 
requirements of 41 U.S.C. chapter 35, Truthful Cost or Pricing Data, 
and any other special requirements of the solicitation.

                                           Proposal Adequacy Checklist
----------------------------------------------------------------------------------------------------------------
                                                                                                 If not provided
                                                                                Proposal page   EXPLAIN (may use
             References                           Submission item                    No.          continuation
                                                                                                     pages)
----------------------------------------------------------------------------------------------------------------
                                              GENERAL INSTRUCTIONS
----------------------------------------------------------------------------------------------------------------
1. Paragraph A(1) FAR 15.408, Table   Is there a properly completed first     ................  ................
 15-2, Section I.                      page of the proposal per FAR 15.408
                                       Table 15-2 I.A or as specified in the
                                       solicitation?
----------------------------------------------------------------------------------------------------------------
2. Paragraph A(7) FAR 15.408, Table   Does the proposal identify the need     ................  ................
 15-2, Section I.                      for Government-furnished material/
                                       tooling/test equipment? Include the
                                       lending contract number and
                                       Contracting Officer contact
                                       information if known.
----------------------------------------------------------------------------------------------------------------

[[Page 75514]]

 
3. Paragraph A(8) FAR 15.408, Table   Does the proposal include               ................  ................
 15-2, Section I.                      identification of any CAS non-
                                       compliances, or other estimating
                                       deficiencies that may impact the
                                       proposed price?
----------------------------------------------------------------------------------------------------------------
4. Paragraph A(8) FAR 15.408, Table   Does the proposal disclose any other    ................  ................
 15-2, Section I.                      known activity that could materially
                                       impact the costs; such as, existing
                                       excess material, changes in
                                       production methods, make-or-buy
                                       decisions, company re-organizations,
                                       new business, or new technology?
----------------------------------------------------------------------------------------------------------------
5. Paragraph B FAR 15.408, Table 15-  Is an Index of all certified cost or    ................  ................
 2, Section I.                         pricing data and information
                                       accompanying or identified in the
                                       proposal provided and appropriately
                                       referenced?
----------------------------------------------------------------------------------------------------------------
6. FAR 15.403-1(b)..................  Are there any exceptions to submission  ................  ................
                                       of certified cost or pricing data
                                       pursuant to FAR 15.403-1(b)? If so,
                                       is supporting documentation included
                                       in the proposal?
----------------------------------------------------------------------------------------------------------------
7. Paragraph C(2)(i) FAR 15.408,      Does the proposal disclose the          ................  ................
 Table 15-2, Section I.                judgmental factors applied and the
                                       mathematical or other methods used in
                                       the estimate, including those used in
                                       projecting from known data?
----------------------------------------------------------------------------------------------------------------
8. Paragraph C(2)(ii) FAR 15.408,     Does the proposal disclose the nature   ................  ................
 Table 15-2, Section I.                and amount of any contingencies
                                       included in the proposed price?
----------------------------------------------------------------------------------------------------------------
9. Paragraph D FAR 15.408, Table 15-  Does the proposal explain the basis of  ................  ................
 2, Section I.                         all cost estimating relationships
                                       (CERs) (labor hours or material)
                                       proposed on other than a discrete
                                       basis?
----------------------------------------------------------------------------------------------------------------
10. Paragraphs D and E FAR 15.408,    Is there a summary of total cost by     ................  ................
 Table 15-2, Section I.                element of cost and are the elements
                                       of cost cross-referenced to the
                                       supporting cost or pricing data?
                                       (Breakdowns for each cost element
                                       must be consistent with your cost
                                       accounting system.)
----------------------------------------------------------------------------------------------------------------
11. Paragraph D FAR 15.408, Table 15- Is total price by cost element          ................  ................
 2, Section I.                         provided by year? Identify if by
                                       Calendar Year (CY) or Government
                                       Fiscal Year (GFY) or both, as
                                       required.
----------------------------------------------------------------------------------------------------------------
12. Paragraphs D and E FAR 15.408,    If more than one Contract Line Item     ................  ................
 Table 15-2, Section I.                Number (CLIN) or sub Contract Line
                                       Item Number (sub-CLIN) is proposed as
                                       required by the RFP, are there
                                       summary total amounts covering all
                                       line items for each element of cost
                                       and is it cross-referenced to the
                                       supporting cost or pricing data?
----------------------------------------------------------------------------------------------------------------
13. Paragraph E FAR 15.408, Table 15- Are CLIN prices by cost element         ................  ................
 2, Section I.                         provided by year? Identify if by CY
                                       or GFY or both, as required.
----------------------------------------------------------------------------------------------------------------
14. Paragraph E FAR 15.408, Table 15- Are recurring and non-recurring costs   ................  ................
 2, Section I.                         segregated at both the CLIN/sub-CLIN
                                       and total cost levels?
----------------------------------------------------------------------------------------------------------------
15. Paragraph F FAR 15.408, Table 15- Does the proposal identify any          ................  ................
 2, Section I.                         incurred costs for work performed
                                       before the submission of the
                                       proposal?
----------------------------------------------------------------------------------------------------------------
16. Paragraph G FAR 15.408, Table 15- Is there a Government forward pricing   ................  ................
 2, Section I.                         rate agreement (FPRA)? If so,
                                       identify and include.
----------------------------------------------------------------------------------------------------------------
                                                  COST ELEMENTS
                                             MATERIALS AND SERVICES
----------------------------------------------------------------------------------------------------------------
17. Paragraph AFAR 15.408, Table 15-  Does the proposal include a             ................  ................
 2, Section II.                        description of supplies or services
                                       and the basis on which the supply or
                                       service meets the Government's
                                       requirements?
----------------------------------------------------------------------------------------------------------------
18. Paragraph A FAR 15.408, Table 15- Does the proposal include a             ................  ................
 2, Section II.                        consolidated summary of individual
                                       material and services to include the
                                       basis for pricing? The offeror's
                                       consolidated summary shall include
                                       raw materials, parts, components,
                                       assemblies, subcontracts and services
                                       to be produced or performed by
                                       others, identifying as a minimum the
                                       item, source, quantity, and price.
----------------------------------------------------------------------------------------------------------------

[[Page 75515]]

 
                                 SUBCONTRACTS (Purchased materials or services)
----------------------------------------------------------------------------------------------------------------
19..................................  Does the proposal identify those        ................  ................
                                       actions for which assist audits have
                                       been requested by the contractor or a
                                       subcontractor and identify the
                                       request date and scheduled receipt
                                       date?
----------------------------------------------------------------------------------------------------------------
20. FAR 15.404-3(c).................  Per the thresholds of FAR 15.404-3(c),  ................  ................
                                       Subcontract Pricing Considerations,
                                       does the proposal include a copy of
                                       the applicable subcontractor's
                                       proposal(s)?
----------------------------------------------------------------------------------------------------------------
21. Paragraph A FAR 15.408, Table 15- Is the subcontractor Price/Cost         ................  ................
 2, Section II.                        Analysis establishing the
                                       reasonableness of each proposed
                                       subcontract included with the
                                       proposal?
----------------------------------------------------------------------------------------------------------------
22..................................  If the offeror's Price/Cost Analyses    ................  ................
                                       are not provided with the proposal,
                                       does the proposal include a matrix
                                       identifying dates for receipt of
                                       subcontractor proposal, completion of
                                       fact finding for purposes of Price/
                                       Cost Analysis, and submission of the
                                       Price/Cost Analysis?
----------------------------------------------------------------------------------------------------------------
                                         COMMERCIAL ITEM DETERMINATIONS
----------------------------------------------------------------------------------------------------------------
23. FAR 2.101 FAR 15.403-1 (b)(3) or  Are commercial items being proposed     ................  ................
 (b)(5).                               either at the prime or subcontractor
                                       level that would be exempt from
                                       certified cost or pricing data
                                       requirements?
----------------------------------------------------------------------------------------------------------------
24. FAR 2.101.......................  Has the contractor specifically         ................  ................
                                       identified the type of commercial
                                       item claim (FAR 2.101 commercial item
                                       definition, paragraphs (1) through
                                       (8)), and the basis on which the item
                                       meets the definition?
----------------------------------------------------------------------------------------------------------------
25. FAR 2.101 FAR 15.403-1..........  For modified commercial items (FAR      ................  ................
                                       2.101 commercial item definition
                                       paragraph (3)); did the contractor
                                       classify the modification(s) as
                                       either--
                                       A modification of a type       ................  ................
                                       customarily available in the
                                       commercial marketplace (paragraph
                                       (3)(i)); or
                                       A minor modification           ................  ................
                                       (paragraph (3)(ii)) of a type not
                                       customarily available in the
                                       commercial marketplace made to meet
                                       Federal Government requirements not
                                       exceeding the thresholds in FAR
                                       15.403-1(c)(3)(iii)(B)? (see note
                                       below)
----------------------------------------------------------------------------------------------------------------
26. FAR 2.101.......................  For proposed commercial items ``of a    ................  ................
                                       type'', or ``evolved'' or modified
                                       (FAR 2.101 commercial item definition
                                       paragraphs (1) through (3)), did the
                                       contractor provide a technical
                                       description of the differences
                                       between the proposed item and the
                                       comparison item(s)?
----------------------------------------------------------------------------------------------------------------
27. FAR 15.402(a)(2) FAR 15.403-      Does the proposal include a             ................  ................
 1(c)(3)(ii) FAR 15.403-3(c) FAR       determination of price reasonableness
 15.404-3(b) FAR 15.404-3(c) FAR       for all commercial items offered?
 15.406-2.
----------------------------------------------------------------------------------------------------------------
                                           ADEQUATE PRICE COMPETITION
----------------------------------------------------------------------------------------------------------------
28. Paragraph A(1) FAR 15.408, Table  Does the proposal support the degree    ................  ................
 15-2, Section II.                     of competition and the basis for
                                       establishing the source and
                                       reasonableness of price for each
                                       subcontract or purchase order priced
                                       on a competitive basis exceeding the
                                       threshold for certified cost or
                                       pricing data?
----------------------------------------------------------------------------------------------------------------
                                          INTERORGANIZATIONAL TRANSFERS
----------------------------------------------------------------------------------------------------------------
29. Paragraph A.(2) FAR 15.408,       For inter-organizational transfers      ................  ................
 Table 15-2, Section II.               proposed at cost, does the proposal
                                       include a complete cost proposal in
                                       compliance with Table 15-2?
----------------------------------------------------------------------------------------------------------------

[[Page 75516]]

 
30. FAR 31.205-26(e) FAR 15.403-1...  For inter-organizational transfers      ................  ................
                                       proposed at price in accordance with
                                       FAR 31.205-26(e), does the proposal
                                       provide an analysis by the prime that
                                       supports the exception from certified
                                       cost or pricing data in accordance
                                       with FAR 15.403-1?
----------------------------------------------------------------------------------------------------------------
                                                  DIRECT LABOR
----------------------------------------------------------------------------------------------------------------
31. Paragraph B FAR 15.408, Table 15- Does the proposal include a time        ................  ................
 2, Section II.                        phased (i.e.; monthly, quarterly)
                                       breakdown of labor hours, rates and
                                       costs by category or skill level? If
                                       labor is the allocation base for
                                       indirect costs, the labor cost must
                                       be summarized in order that the
                                       applicable overhead rate can be
                                       applied.
----------------------------------------------------------------------------------------------------------------
32. Paragraph B FAR 15.408, Table 15- For labor Basis of Estimates (BOEs),
 2, Section II.                        does the proposal include labor
                                       categories, labor hours, task
                                       descriptions, Statement of Work
                                       reference, applicable CLIN, Work
                                       Breakdown Structure, rationale for
                                       estimate, applicable history, and
                                       time-phasing?
----------------------------------------------------------------------------------------------------------------
33. Paragraphs B and C, FAR 15.408,   Does the proposal include all rates     ................  ................
 Table 15-2, Section II.               and factors by year that are utilized
                                       in the development of the proposal
                                       and the basis of those rates and
                                       factors (FPRA/FPRP)? The Offeror
                                       shall identify the official submittal
                                       of such rate and factor data.
----------------------------------------------------------------------------------------------------------------
34. FAR subpart 22.10...............  If covered by the Service Contract      ................  ................
                                       Labor Standards statute (41 U.S.C.
                                       chapter 67), are the rates in the
                                       proposal in compliance with the
                                       minimum rates specified in the
                                       statute?
----------------------------------------------------------------------------------------------------------------
                                                 INDIRECT COSTS
----------------------------------------------------------------------------------------------------------------
35. Paragraph C FAR 15.408, Table 15- Does the proposal indicate the basis    ................  ................
 2, Section II.                        of estimate for proposed indirect
                                       costs? (Support for the indirect
                                       rates could consist of cost
                                       breakdowns, trends, and budgetary
                                       data.)
----------------------------------------------------------------------------------------------------------------
                                                   OTHER COSTS
----------------------------------------------------------------------------------------------------------------
36. Paragraph D FAR 15.408, Table 15- Does the proposal include other direct  ................  ................
 2, Section II.                        costs and the basis for pricing? If
                                       travel is included does the proposal
                                       include number of trips, number of
                                       people, number of days per trip,
                                       locations, and rates (e.g. airfare,
                                       per diem, hotel, car rental, etc)?
----------------------------------------------------------------------------------------------------------------
37. Paragraph E FAR 15.408, Table 15- If royalties exceed $1,500 does the     ................  ................
 2, Section II.                        proposal provide the information/data
                                       identified by Table 15-2?
----------------------------------------------------------------------------------------------------------------
38. Paragraph F FAR 15.408, Table 15- When facilities capital cost of money   ................  ................
 2, Section II.                        is proposed, does the proposal
                                       include submission of Form CASB-CMF
                                       or reference to an FPRP/FPRA and show
                                       the calculation of the proposed
                                       amount?
----------------------------------------------------------------------------------------------------------------
                                  FORMATS FOR SUBMISSION OF LINE ITEM SUMMARIES
----------------------------------------------------------------------------------------------------------------
39. FAR 15.408, Table 15-2, Section   Are all cost element breakdowns         ................  ................
 III.                                  provided using the applicable format
                                       prescribed in FAR 15.408, Table 15-2
                                       III? (or alternative format if
                                       specified in the RFP)
----------------------------------------------------------------------------------------------------------------
40. Paragraph B FAR 15.408, Table 15- If the proposal is for a modification   ................  ................
 2, Section III.                       or change order, have cost of work
                                       deleted (credits) and cost of work
                                       added (debits) been provided in the
                                       format described in FAR 15.408, Table
                                       15-2.III.B?
----------------------------------------------------------------------------------------------------------------
41. Paragraph C FAR 15.408, Table 15- For price revisions/redeterminations,   ................  ................
 2, Section III.                       does the proposal follow the format
                                       in FAR 15.408, Table 15-2.III.C?
----------------------------------------------------------------------------------------------------------------

[[Page 75517]]

 
                                                      OTHER
----------------------------------------------------------------------------------------------------------------
42. FAR 16.4........................  If an incentive contract type, does     ................  ................
                                       the proposal include offeror proposed
                                       target cost, target profit or fee,
                                       share ratio, and, when applicable,
                                       minimum/maximum fee, ceiling price?
----------------------------------------------------------------------------------------------------------------
43. FAR 15.404-4(c)(4)(i)...........  Is proposed fee in accordance with
                                       statutory guidance?
----------------------------------------------------------------------------------------------------------------
44. FAR 16.203-4(a)(1)..............  If Economic Price Adjustments are       ................  ................
                                       being proposed, does the proposal
                                       show the rationale and application
                                       for the proposed indices?
----------------------------------------------------------------------------------------------------------------
45. FAR 32.1000.....................  If the offeror is proposing             ................  ................
                                       Performance-Based Payments have they
                                       provided an expenditure profile,
                                       proposed events and their projected
                                       dates, proposed values for each
                                       event, completion criteria, and
                                       identification of which events are
                                       severable or cumulative?
----------------------------------------------------------------------------------------------------------------
46. FAR 15.408(n)...................  Excessive Pass-through Charges--        ................  ................
                                       Identification of Subcontract Effort:
                                       If the offeror intends to subcontract
                                       more than 70% of the total cost of
                                       work to be performed, does the
                                       proposal identify: (i) The amount of
                                       the offeror's indirect costs and
                                       profit applicable to the work to be
                                       performed by the proposed
                                       subcontractor(s); and (ii) a
                                       description of the added value
                                       provided by the offeror as related to
                                       the work to be performed by the
                                       proposed subcontractor(s)?
----------------------------------------------------------------------------------------------------------------
47..................................  Does the proposal identify the          ................  ................
                                       location and point of contact for any
                                       certified cost or pricing data
                                       referenced in, but not provided with,
                                       the proposal?
----------------------------------------------------------------------------------------------------------------

(End of provision)

 [FR Doc. 2011-30907 Filed 12-1-11; 8:45 am]
BILLING CODE 5001-06-P