[Federal Register Volume 78, Number 153 (Thursday, August 8, 2013)]
[Proposed Rules]
[Pages 48407-48410]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2013-19021]


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DEPARTMENT OF DEFENSE

Defense Acquisition Regulations System

48 CFR Parts 246 and 252

RIN 0750-AH95


Defense Federal Acquisition Regulation Supplement: Clauses With 
Alternates--Quality Assurance (DFARS Case 2013-D004)

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 create an overarching prescription for 
each set of quality assurance-related provisions/clauses with one or 
more alternates. In addition, the proposed rule would include the full 
text of each provision and/or clause alternate.

DATES: Comments on the proposed rule should be submitted in writing to 
the address shown below on or before October 7, 2013, to be considered 
in the formation of a final rule.

ADDRESSES: Submit comments identified by DFARS Case 2013-D004, using 
any of the following methods:
    [cir] Regulations.gov: http://www.regulations.gov. Submit comments 
via the Federal eRulemaking portal by entering ``DFARS Case 2013-D004'' 
under the heading ``Enter keyword or ID'' and selecting ``Search.'' 
Select the link ``Submit a Comment'' that corresponds with ``DFARS Case 
2013-D004.'' Follow the instructions provided at the ``Submit a 
Comment'' screen. Please include your name, company name (if any), and 
``DFARS Case 2013-D004'' on your attached document.
    [cir] Email: [email protected]. Include DFARS Case 2013-D004 in the 
subject line of the message.
    [cir] Fax: 571-372-6094.
    [cir] Mail: Defense Acquisition Regulations System, Attn: Ms. Susan 
Williams, 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 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. Susan Williams, Defense 
Acquisition Regulations System, OUSD(AT&L)DPAP/DARS, Room 3B855, 3060 
Defense Pentagon, Washington, DC 20301-3060. Telephone 571-372-6092; 
facsimile 571-372-6101.

SUPPLEMENTARY INFORMATION:

I. Background

    DoD is proposing to revise the DFARS to create an overarching 
prescription for the quality assurance clause with two alternates. The 
rule also proposes to add a separate prescription for the basic clause 
as well as each alternate. For clarity, the preface of each alternate 
will continue to explain what portions of that alternate are different 
from the basic clause.
    Separate prescriptions for the basic and alternates of DFARS 
clauses will facilitate the use of automated contract writing systems. 
The proposed rule will not revise the prescriptions in any substantive 
way or change the applicability of the clauses or their alternates.
    The inclusion of the full text of each clause alternate aims to 
make the terms of a clause alternate clearer to offerors and to DoD 
contracting officers. The current convention for alternates is to show 
only the changed paragraphs from the basic provision or clause. This 
proposed rule would include the full text of each clause and each 
alternate, which will assist in making solicitation and contract terms 
and conditions easier to read and understand. By placing alternates in 
full text, all paragraph substitutions from the basic clause will have 
already been made. Inapplicable paragraphs from the basic clause that 
are superseded by the alternate will not be included in the 
solicitation or contract in order to prevent confusion.
    Although this rule proposes to include each alternate in full, it 
retains the language that precedes the clause or alternate, which 
includes the location of the alternate's prescription and a statement 
that identifies which paragraphs were changed from the basic clause. 
Further, alternates are proposed to have individual titles that tie 
them to the basic clause, e.g., ``Warranty of Data--Alternate I'' in 
lieu of ``Alternate I.''

II. Discussion

    This proposed rule addresses only the single DFARS part 246 clause 
that has alternates. The remaining prescriptions

[[Page 48408]]

in part 246 are not proposed to be changed in any way by this rule. The 
affected clause is 252.246-7001, Warranty of Data, with two alternates. 
The naming convention results in proposed new clause titles, e.g., 
Warranty of Data--Basic and Warranty of Data--Alternate I.
    An umbrella prescription is proposed to be added for the elements 
common to the basic clause and both alternates. The specific 
prescription for the basic clause and each alternate would then address 
only the requirements for their use that enable the selection of the 
basic or one of the alternates. For example, the revised prescription 
for Warranty of Data--Alternate I would read as follows: ``Use the 
clause at 252.246-7001, Warranty of Data--Alternate I, in fixed-price 
incentive solicitations and contracts.'' The planned changes will 
increase the clarity and ease of use, but will not revise the 
applicability in any way. The text of the current DFARS 252.246-7001, 
Alternate I, would no longer consist solely of paragraph (d)(3), but 
would include the entire text of DFARS 252.246-7001 (basic clause) with 
the revised paragraph (d)(3) substituted for the corresponding 
paragraph of the basic clause. Inapplicable paragraphs from the basic 
version of the clause that are superseded by the alternate will not be 
included in the solicitation or contract in order to prevent confusion.
    Further, this proposed rule would also revise the applicable 
preface, i.e., the language in part 252 that precedes a provision, 
clause, or alternate. The proposed rule would replace the current 
preface language with a statement that identifies the specific changes 
from the basic version of the solicitations provision or clause.

III. Executive Orders 12866 and 13563

    Executive Orders (E.O.s) 12866 and 13563 direct agencies to assess 
all costs and benefits of available regulatory alternatives and, if 
regulation is necessary, to select regulatory approaches that maximize 
net benefits (including potential economic, environmental, public 
health and safety effects, distributive impacts, and equity). E.O. 
13563 emphasizes the importance of quantifying both costs and benefits, 
of reducing costs, of harmonizing rules, and of promoting flexibility. 
This is not a significant regulatory action and, therefore, was not 
subject to review under section 6(b) of E.O. 12866, Regulatory Planning 
and Review, dated September 30, 1993. This rule is not a major rule 
under 5 U.S.C. 804.

IV. 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., 
because it merely revises the prescriptions for solicitation provisions 
and clauses with alternates to be unique, as well as includes the full 
text of each provision or clause in each alternate. However, an initial 
regulatory flexibility analysis has been performed and is summarized as 
follows:
    The purpose of this proposed rule is to amend the Defense Federal 
Acquisition Regulation Supplement (DFARS) to create unique 
prescriptions for the basic version and each alternate of DFARS part 
246 solicitations provisions and clauses, and to include the full text 
of each clause alternate.
    The use of automated contract writing systems will be facilitated 
by having unique prescriptions for the basic version and each alternate 
of DFARS solicitations provisions and clauses. The current convention 
requires the prescription for the basic provision or clause to address 
all the possibilities covered by the alternates, and then the 
prescription for each alternate addresses only what is different for 
the use of that particular alternate. This rule will revise the 
prescriptions, so that the basic solicitation provision or clause and 
each alternate is unique and stands on its own. The prescriptions will 
not be revised in any way to change when they are applicable to 
offerors, contractors, or subcontractors.
    Additionally, the inclusion of the full text of each provision or 
clause alternate aims to make the terms of a provision or clause 
alternate clearer to offerors, as well as to DoD contracting officers. 
Instead of the current convention for alternates to show only 
paragraphs changed from the basic version of the provision or clause, 
this rule proposes to include the full text of each version of the 
clause. This will assist in making the terms of the clause clearer, 
because all paragraph substitutions will have already been made. 
Inapplicable paragraphs from the basic version of the clause that are 
superseded by the alternate are not included in the solicitation or 
contract to prevent confusion.
    Potential offerors, including small businesses, may be affected by 
this rule by seeing an unfamiliar format for clause alternates in 
solicitations and contracts issued by DoD contracting activities. An 
average of 12,618,521 new contracts was awarded in Fiscal Years 2011 
and 2012, and an average of 1,557,852 of these actions (12.35%) was 
awarded to small businesses. It is unknown how many of these contracts 
were awarded that included an alternate to a DFARS provision or clause. 
Nothing substantive will change in solicitations or contracts for 
potential offerors, and only the appearance of how clause alternates 
are presented in the solicitations and contracts will be changed. This 
rule may result in potential offerors, including small businesses, 
expending more time to become familiar with and to understand the new 
format of the clause alternates in full text contained in contracts 
issued by any DoD contracting activity. The rule also anticipates 
saving contractors time by making all paragraph substitutions from the 
basic version of the clause, and not requiring the contractors to read 
inapplicable paragraphs contained in the basic version of the clause 
where alternates are also included in the solicitations and contracts. 
The overall burden caused by this rule is expected to be negligible and 
will not be any greater on small businesses than it is on large 
businesses.
    This rule does not add any new information collection requirements. 
The rule does not duplicate, overlap, or conflict with any other 
Federal rules. No alternatives were identified that will accomplish the 
objectives of the rule.
    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 2013-D004), in 
correspondence.

V. 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 Parts 246 and 252

    Government procurement.

Manuel Quinones,
Editor, Defense Acquisition Regulations System.

    Therefore, 48 CFR parts 246 and 252 are proposed to be amended as 
follows:

0
1. The authority citation for parts 246 and 252 continue to read as 
follows:


[[Page 48409]]


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

PART 246--QUALITY ASSURANCE

0
2. Revise section 246.710 to read as follows:


246.710  Contract clauses.

    (a) Use a clause substantially the same as the basic or one of the 
alternates of the clause at 252.246-7001, Warranty of Data, in 
solicitations and contracts that include the clause at 252.227-7013, 
Rights in Technical Data and Computer Software, when there is a need 
for greater protection or period of liability than provided by the 
inspection and warranty clauses prescribed in FAR part 46.
    (1) Use the clause at 252.246-7001, Warranty of Data--Basic, in 
solicitations and contracts that are not firm-fixed price or fixed-
price incentive.
    (2) Use the clause at 252.246-7001, Warranty of Data--Alternate I, 
in fixed-price-incentive solicitations and contracts.
    (3) Use the clause at 252.246-7001, Warranty of Data--Alternate II, 
in firm-fixed-price solicitations and contracts.
    (b) Use the clause at 252.246-7002, Warranty of Construction 
(Germany), instead of the clause at FAR 52.246-21, Warranty of 
Construction, in solicitations and contracts for construction when a 
fixed-price contract will be awarded and contract performance will be 
in Germany.
    (c)(1) In addition to 252.211-7003, Item Identification and 
Valuation, which is prescribed in 211.274-6(a), use the following 
provision and clause in solicitations and contracts when it is 
anticipated that the resulting contract will include a warranty for 
serialized items:
    (i) 252.246-7005, Notice of Warranty Tracking of Serialized Items 
(include only if offerors will be required to enter data with the 
offer); and
    (ii) 252.246-7006, Warranty Tracking of Serialized Items.
    (2) If the Government specifies a warranty, include in the 
solicitation the appropriate warranty attachment from DFARS 246.710-70. 
The contracting officer shall request the requiring activity to provide 
information to ensure that Attachment ----, Warranty Tracking 
Information, is populated with data specifying the Government's 
required warranty provision by contract line item number, subline item 
number, or exhibit line item number prior to solicitation. In such case 
do not include 252.246-7005 in the solicitation.
    (3) If the Government does not specify a warranty, include 252.246-
7005 in the solicitation, and the warranty attachment from DFARS 
246.710-70. The contractor may offer a warranty and shall then populate 
Attachment ----, Warranty Tracking Information, as appropriate, as part 
of its offer as required by 252.246-7005.
    (4) All warranty tracking information that is indicated with a 
single asterisk (*) in Attachment ----, Warranty Tracking Information, 
shall be completed prior to award. Data indicated with two asterisks 
(**) may be completed at the time of award. Data indicated with three 
asterisks (***) may be completed at or after the time of award.
    (5) The contractor shall provide warranty repair source 
instructions (as prescribed in the attachment) no later than the time 
of delivery.

PART 252--SOLICITATION PROVISIONS AND CONTRACT CLAUSES

0
3. Revise section 252.246-7001 to read as follows:


252.246-7001  Warranty of Data.

    As prescribed in 246.710(1), use one of the following clauses:
    (a) Warranty of Data--Basic. For the specific prescription for use 
of the basic clause, see 246.710(1)(i).

WARRANTY OF DATA--BASIC (DATE)

    (a) Definition. ``Technical data'' has the same meaning as given 
in the clause in this contract entitled, Rights in Technical Data 
and Computer Software.
    (b) Warranty. Notwithstanding inspection and acceptance by the 
Government of technical data furnished under this contract, and 
notwithstanding any provision of this contract concerning the 
conclusiveness of acceptance, the Contractor warrants that all 
technical data delivered under this contract will at the time of 
delivery conform with the specifications and all other requirements 
of this contract. The warranty period shall extend for three years 
after completion of the delivery of the line item of data (as 
identified in DD Form 1423, Contract Data Requirements List) of 
which the data forms a part; or any longer period specified in the 
contract.
    (c) Contractor Notification. The Contractor agrees to notify the 
Contracting Officer in writing immediately of any breach of the 
above warranty which the Contractor discovers within the warranty 
period.
    (d) Remedies. The following remedies shall apply to all breaches 
of the warranty, whether the Contractor notifies the Contracting 
Officer in accordance with paragraph (c) of this clause or if the 
Government notifies the Contractor of the breach in writing within 
the warranty period:
    (1) Within a reasonable time after such notification, the 
Contracting Officer may--
    (i) By written notice, direct the Contractor to correct or 
replace at the Contractor's expense the nonconforming technical data 
promptly; or
    (ii) If the Contracting Officer determines that the Government 
no longer has a requirement for correction or replacement of the 
data, or that the data can be more reasonably corrected by the 
Government, inform the Contractor by written notice that the 
Government elects a price or fee adjustment instead of correction or 
replacement.
    (2) If the Contractor refuses or fails to comply with a 
direction under paragraph (d)(1)(i) of this clause, the Contracting 
Officer may, within a reasonable time of the refusal or failure--
    (i) By contract or otherwise, correct or replace the 
nonconforming technical data and charge the cost to the Contractor; 
or
    (ii) Elect a price or fee adjustment instead of correction or 
replacement.
    (3) The remedies in this clause represent the only way to 
enforce the Government's rights under this clause.
    (e) The provisions of this clause apply anew to that portion of 
any corrected or replaced technical data furnished to the Government 
under paragraph (d)(1)(i) of this clause.

    (End of clause)
    (b) Warranty of Data--Alternate I. For the specific prescription 
for use of Alternate I, see 246.710(1)(ii). Alternate I uses a 
different paragraph (d)(3) than the basic clause.

WARRANTY OF DATA--ALTERNATE I (DATE)

    (a) Definition. ``Technical data'' has the same meaning as given 
in the clause in this contract entitled, Rights in Technical Data 
and Computer Software.
    (b) Warranty. Notwithstanding inspection and acceptance by the 
Government of technical data furnished under this contract, and 
notwithstanding any provision of this contract concerning the 
conclusiveness of acceptance, the Contractor warrants that all 
technical data delivered under this contract will at the time of 
delivery conform with the specifications and all other requirements 
of this contract. The warranty period shall extend for three years 
after completion of the delivery of the line item of data (as 
identified in DD Form 1423, Contract Data Requirements List) of 
which the data forms a part; or any longer period specified in the 
contract.
    (c) Contractor Notification. The Contractor agrees to notify the 
Contracting Officer in writing immediately of any breach of the 
above warranty which the Contractor discovers within the warranty 
period.
    (d) Remedies. The following remedies shall apply to all breaches 
of the warranty, whether the Contractor notifies the Contracting 
Officer in accordance with paragraph (c) of this clause or if the 
Government notifies the Contractor of the breach in writing within 
the warranty period:
    (1) Within a reasonable time after such notification, the 
Contracting Officer may--
    (i) By written notice, direct the Contractor to correct or 
replace at the Contractor's expense the nonconforming technical data 
promptly; or
    (ii) If the Contracting Officer determines that the Government 
no longer has a

[[Page 48410]]

requirement for correction or replacement of the data, or that the 
data can be more reasonably corrected by the Government, inform the 
Contractor by written notice that the Government elects a price or 
fee adjustment instead of correction or replacement.
    (2) If the Contractor refuses or fails to comply with a 
direction under paragraph (d)(1)(i) of this clause, the Contracting 
Officer may, within a reasonable time of the refusal or failure--
    (i) By contract or otherwise, correct or replace the 
nonconforming technical data and charge the cost to the Contractor; 
or
    (ii) Elect a price or fee adjustment instead of correction or 
replacement.
    (3) In addition to the remedies under paragraphs (d)(1) and (2) 
of this clause, the Contractor shall be liable to the Government for 
all damages to the Government as a result of the breach of warranty.
    (i) The additional liability under paragraph (d)(3) of this 
clause shall not exceed 75 percent of the target profit.
    (ii) if the breach of the warranty is with respect to the data 
supplied by an equipment subcontractor, the limit of the 
Contractor's liability shall be--
    (A) Ten percent of the total subcontract price in a firm fixed 
price subcontract;
    (B) Seventy-five percent of the total subcontract fee in a cost-
plus-fixed-fee or cost-plus-award-fee subcontract; or
    (C) Seventy-five percent of the total subcontract target profit 
or fee in a fixed-price or cost-plus-incentive-type contract.
    (iii) Damages due the Government under the provisions of this 
warranty are not an allowable cost.
    (iv) The additional liability in paragraph (d)(3) of this clause 
shall not apply--
    (A) With respect to the requirements for product drawings and 
associated lists, special inspection equipment (SIE) drawings and 
associated lists, special tooling drawings and associated lists, SIE 
operating instructions, SIE descriptive documentation, and SIE 
calibration procedures under MIL-T-31000, General Specification for 
Technical Data Packages, Amendment 1, or MIL-T-47500, General 
Specification for Technical Data Packages, Supp 1, or drawings and 
associated lists under level 2 or level 3 of MIL-D-1000A, 
Engineering and Associated Data Drawings, or DoD-D-1000B, 
Engineering and Associated Lists Drawings (Inactive for New Design) 
Amendment 4, Notice 1; or drawings and associated lists under 
category E or I of MIL-D-1000, Engineering and Associated Lists 
Drawings, provided that the data furnished by the Contractor was 
current, accurate at time of submission, and did not involve a 
significant omission of data necessary to comply with the 
requirements; or
    (B) To defects the Contractor discovers and gives written notice 
to the Government before the Government discovers the error.
    (4) The provisions of this clause apply anew to that portion of 
any corrected or replaced technical data furnished to the Government 
under paragraph (d)(1)(i) of this clause.

    (End of clause)
    (c) Warranty of Data--Alternate II. For the specific prescription 
for use of Alternate II, see 246.710(1)(iii). Alternate II uses a 
different paragraph (d)(3) than the basic clause.

WARRANTY OF DATA--ALTERNATE II (DATE)

    (a) Definition. ``Technical data'' has the same meaning as given 
in the clause in this contract entitled, Rights in Technical Data 
and Computer Software.
    (b) Warranty. Notwithstanding inspection and acceptance by the 
Government of technical data furnished under this contract, and 
notwithstanding any provision of this contract concerning the 
conclusiveness of acceptance, the Contractor warrants that all 
technical data delivered under this contract will at the time of 
delivery conform with the specifications and all other requirements 
of this contract. The warranty period shall extend for three years 
after completion of the delivery of the line item of data (as 
identified in DD Form 1423, Contract Data Requirements List) of 
which the data forms a part; or any longer period specified in the 
contract.
    (c) Contractor Notification. The Contractor agrees to notify the 
Contracting Officer in writing immediately of any breach of the 
above warranty which the Contractor discovers within the warranty 
period.
    (d) Remedies. The following remedies shall apply to all breaches 
of the warranty, whether the Contractor notifies the Contracting 
Officer in accordance with paragraph (c) of this clause or if the 
Government notifies the Contractor of the breach in writing within 
the warranty period:
    (1) Within a reasonable time after such notification, the 
Contracting Officer may--
    (i) By written notice, direct the Contractor to correct or 
replace at the Contractor's expense the nonconforming technical data 
promptly; or
    (ii) If the Contracting Officer determines that the Government 
no longer has a requirement for correction or replacement of the 
data, or that the data can be more reasonably corrected by the 
Government, inform the Contractor by written notice that the 
Government elects a price or fee adjustment instead of correction or 
replacement.
    (2) If the Contractor refuses or fails to comply with a 
direction under paragraph (d)(1)(i) of this clause, the Contracting 
Officer may, within a reasonable time of the refusal or failure--
    (i) By contract or otherwise, correct or replace the 
nonconforming technical data and charge the cost to the Contractor; 
or
    (ii) Elect a price or fee adjustment instead of correction or 
replacement.
    (3) In addition to the remedies under paragraphs (d)(1) and (2) 
of this clause, the Contractor shall be liable to the Government for 
all damages to the Government as a result of the breach of the 
warranty.
    (i) The additional liability under paragraph (d)(3) of this 
clause shall not exceed ten percent of the total contract price.
    (ii) If the breach of the warranty is with respect to the data 
supplied by an equipment subcontractor, the limit of the 
Contractor's liability shall be--
    (A) Ten percent of the total subcontract price in a firm fixed-
price subcontract;
    (B) Seventy-five percent of the total subcontract fee in a cost-
plus-fixed-fee or cost-plus-award-fee subcontract; or
    (C) Seventy-five percent of the total subcontract target profit 
or fee in a fixed-price or cost-plus-incentive-type contract.
    (iii) The additional liability specified in paragraph (d)(3) of 
this clause shall not apply--
    (A) With respect to the requirements for product drawings and 
associated lists, special inspection equipment (SIE) drawings and 
associated lists, special tooling drawings and associated lists, SIE 
operating instructions, SIE descriptive documentation, and SIE 
calibration procedures under MIL-T-31000, General Specification for 
Technical Data Packages, Amendment 1, or MIL-T-47500, General 
Specification for Technical Data Packages, Supp 1, or drawings and 
associated lists under level 2 or level 3 of MIL-D-1000A, 
Engineering and Associated Data Drawings, or DoD-D-1000B, 
Engineering and Associated Lists Drawings (Inactive for New Design) 
Amendment 4, Notice 1; or drawings and associated lists under 
category E or I of MIL-D-1000, Engineering and Associated Lists 
Drawings, provided that the data furnished by the Contractor was 
current, accurate at time of submission, and did not involve a 
significant omission of data necessary to comply with the 
requirements; or
    (B) To defects the Contractor discovers and gives written notice 
to the Government before the Government discovers the error.
    (4) The provisions of this clause apply anew to that portion of 
any corrected or replaced technical data furnished to the Government 
under paragraph (d)(1)(i) of this clause.

    (End of clause)


252.246-7002  [Amended]

0
4. Amend introductory text of section 252.246-7002 by removing ``As 
prescribed in 246.710(4)'' and adding ``As prescribed in 246.710(2)'' 
in its place.


252.246-7005  [Amended]

0
5. Amend introductory text of section 252.246-7005 by removing ``As 
prescribed in 246.710(5)(i)(A)'' and adding ``As prescribed in 
246.710(3)(i)(A)'' in its place.


252.246-7006  [Amended]

0
6. Amend introductory text of section 252.246-7006 by removing ``As 
prescribed in 246.710(5)(i)(B)'' and adding ``As prescribed in 
246.710(3)(i)(B)'' in its place.

[FR Doc. 2013-19021 Filed 8-7-13; 8:45 am]
BILLING CODE 5001-06-P