[Federal Register Volume 83, Number 126 (Friday, June 29, 2018)]
[Proposed Rules]
[Pages 30656-30659]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2018-14062]


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DEPARTMENT OF DEFENSE

Defense Acquisition Regulations System

48 CFR Parts 215 and 252

[Docket DARS-2018-0008]
RIN 0750-AJ19


Defense Federal Acquisition Regulation Supplement: Only One Offer 
(DFARS Case 2017-D009)

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 partially implement a section of the 
National Defense Authorization Act for Fiscal Year 2017 to address the 
requirement for certification of cost or pricing data and potential 
submission of additional certified cost or pricing data when only one 
offer is received in response to a competitive solicitation.

DATES: Comments on the proposed rule should be submitted in writing to 
the address shown below on or before August 28, 2018, to be considered 
in the formation of a final rule.

ADDRESSES: Submit comments identified by DFARS Case 2017-D009, using 
any of the following methods:
    [cir] Federal eRulemaking Portal: http://www.regulations.gov. 
Search for ``DFARS Case 2017-D009.'' Select ``Comment Now'' and follow 
the instructions provided to submit a comment. Please include ``DFARS 
Case 2017-D009'' on any attached document.
    [cir] Email: osd.dfars@mail.mil. Include DFARS Case 2017-D009 in 
the subject line of the message.
    [cir] Fax: 571-372-6094.
    [cir] Mail: Defense Acquisition Regulations System, Attn: Ms. Amy 
Williams, OUSD(AT&L)DPAP/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 2 to 3 days after submission to verify posting (except 
allow 30 days for posting of comments submitted by mail).

FOR FURTHER INFORMATION CONTACT: Ms. Amy G. Williams, telephone 571-
372-6106.

SUPPLEMENTARY INFORMATION:

I. Background

    DoD is proposing to revise the DFARS to partially implement section 
822 of the National Defense Authorization Act (NDAA) for Fiscal Year 
(FY) 2017 (Pub. L. 114-328) to (1) address the potential requirement 
for certification of cost or pricing data and potential requirement for 
additional certified cost or pricing data when only one offer is 
received in response to a competitive solicitation and (2) make prime 
contractors responsible for determining whether a subcontract qualifies 
for an exception from the requirement for submission of certified cost 
based on adequate price competition. This DFARS rule supplements the 
rule proposed under FAR Case 2017-006, Exception from Certified Cost or 
Pricing Data Requirements-Adequate Price Competition, which proposes to 
modify the standards for adequate price competition at FAR 15.403-1(c) 
for DoD, NASA, and the Coast Guard (83 FR 27303, June 12, 2018). 
Section 822 requires that for DoD, NASA, and the Coast Guard, adequate 
price competition requires a price that is based on adequate 
competition that results in at least two or more responsive and viable 
offers from independently competing offerors.

II. Discussion and Analysis

A. Current DFARS

    DoD published a final rule in the Federal Register on June 29, 2012 
(77 FR 39126) to address acquisitions using competitive procedures in 
which only one offer is received (DFARS Case 2011-D013). That rule was 
initiated to implement one of the aspects of the initiative on 
promoting real competition that was presented by the Under Secretary of 
Defense for Acquisition, Technology, and Logistics in the

[[Page 30657]]

November 3, 2010, memorandum entitled, ``Implementation Directive for 
Better Buying Power--Obtaining Greater Efficiency and Productivity in 
Defense Spending.'' The rule created a new section at DFARS 215.371 and 
a provision at DFARS 252.215-7008, both entitled ``Only One Offer.'' 
The provision requires that an offeror agree to submit additional cost 
or pricing data if the contracting officer notifies the offeror that 
only one offer was received in response to a solicitation, and 
additional cost or pricing data are required in order to determine 
whether the price is fair and reasonable or to comply with the 
statutory requirement for certified cost or pricing data (10 U.S.C. 
2306a and FAR 15.403-3).

B. Proposed Changes

1. Exception at FAR 15.403-1(b)
    Once it has been determined that only one offer was received, the 
exception to the requirement for certified cost or pricing data based 
on adequate price competition at FAR 15.403-1(b)(1) can no longer 
apply. Therefore, cross references to FAR 15.403-1(b) are limited to 
the other exceptions at paragraphs (b)(2) through (5) of that section 
(see DFARS 215.371-3(a) and (b) and 252.215-7008(a)(2)).
2. Standard at FAR 15.403-1(c)(1)(ii) and DFARS 215.371-3(a)
    When there is a reasonable expectation of competition, but only one 
offer is received, FAR 15.403-1(c)(1)(ii) allows in limited 
circumstances, with approval at a level above the contracting officer, 
a determination that the proposed price was based on adequate price 
competition and was reasonable. Without such determination, certified 
cost or pricing data would be required for acquisitions that exceed the 
threshold for obtaining certified cost or pricing data, unless another 
exception at FAR 15.403-1(b) applies. This limited exception, based on 
a determination at a level above the contracting officer, is no longer 
applicable to DoD. Therefore, DFARS 215.371-3(a) is removed.
3. Requirements at DFARS 215.371-3(b)
    The requirements at DFARS 215.371-3(b) are streamlined (proposed as 
DFARS 215.371-3(a) through (d)), with additional emphasis on the 
requirement to obtain certified cost or pricing data when only one 
offer is received. The introductory text is also revised to exempt 
contracts valued at or below simplified acquisition threshold.
4. Prescriptions at DFARS 215.408
    The prescription at DFARS 215.408(3)(i) for DFARS provision 
252.215-7008 is also being revised to exempt contracts valued at or 
below simplified acquisition threshold and remove the reference to the 
exceptions at DFARS 215.371-4(a), which are not applicable to the 
requirement to obtain certified cost or pricing data. In addition, 
paragraph (3)(ii) of the prescription is removed; the requirement to 
use the provision at DFARS 252.215-7010 (previously FAR 52.215-20) in 
solicitations that include DFARS 252.215-7008 is relocated to the 
prescription for DFARS 252.215-7010 at DFARS 215.408(5).
5. Streamlining DFARS 252.215-7008
    DFARS provision 252.215-7008 covers the requirements for when only 
one offer is received in response to a DoD solicitation, but also 
contains much of the same text as FAR provision 52.215-20, Requirements 
for Certified Cost or Pricing Data and Data Other Than Certified Cost 
or Pricing Data, because this provision was prescribed for use in lieu 
of the FAR provision. However, on January 31, 2018, DoD published a 
final rule in the Federal Register (83 FR 4431) under DFARS Case 2016-
D006, Procurement of Commercial Items, which prescribes the use of a 
new DFARS provision 252.215-7010, Requirement for Certified Cost or 
Pricing Data and Data Other than Certified Cost or Pricing Data (Basic 
and Alternate), in lieu of the provisions at FAR 52.215-20, of the same 
title. DFARS 252.215-7010 now also contains much of the same text as 
FAR 52.215-20, as well as DoD specific requirements based on statute. 
Since DFARS 252.215-7010 is always used when 252.215-7008 is included 
in a solicitation, DFARS 252.215-7008 is streamlined to only address 
requirements for when only one offer is received in response to a DoD 
solicitation by removing all text now covered by DFARS 252.215-7010.
6. Responsibility of Offeror With Regard to Subcontractors
    In addition, a new paragraph is added to DFARS 252.215-7010 (basic 
and alternate), to state that the offeror is responsible for 
determining whether a subcontractor qualifies for an exception from the 
requirement for submission of certified cost on the basis of adequate 
price competition.

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

    This rule does not create a new provision, but amends the existing 
provisions at DFARS 252.215-7008 and 252.215-7010. Although the 
existing provisions apply to solicitations for the acquisition of 
commercial items (including COTS items), the changes due to this rule 
do not impact the acquisition of commercial item, including COTS items, 
because the rule retains the exceptions to the requirements for 
certified cost or pricing data relating to acquisition of commercial 
items. In addition, DFARS 252.215-7010 already applies to contracts 
valued at or below the SAT, while DFARS 252.215-7008 does not.

IV. 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.

V. Executive Order 13771

    This final rule is not subject to E.O. 13771, Reducing Regulation 
and controlling Regulatory Costs, 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 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 prepared 
and is summarized as follows:
    The reason for this rule is to further implement section 822 of the 
National Defense Authorization Act for Fiscal Year 2017 (Pub. L. 114-
328) to (1) address the potential requirement for certified cost or 
pricing data when only one offer is received in response to a 
competitive solicitation, if no other exception to the requirements for 
certified cost or pricing data applies; and (2) make prime contractors 
responsible for determining whether a subcontract qualifies for an 
exception from the requirement for submission of certified cost based 
on adequate price competition. This DFARS rule

[[Page 30658]]

supplements the rule proposed by DoD, GSA, and NASA under FAR Case 
2017-006, which proposes to modify the standards for adequate price 
competition at FAR 15.403-1(c) for DoD, NASA, and the Coast Guard.
    The objective of this rule is to implement the new and more 
restrictive standard for ``adequate price competition'' as the basis 
for an exception to the requirement to provide certified cost or 
pricing data. The statutory basis is 10 U.S.C. 2306a, as amended by 
section 822 of the NDAA for FY 2017. DoD will now be required to obtain 
certified cost or pricing data from an offeror when only one offer is 
received and no other exception applies.
    According to data for FY 2016 from the Federal Procurement Data 
System, there were 918 noncommercial, competitive new DoD awards valued 
at greater than $750,000 (the certified cost or pricing data threshold) 
that were awarded on the basis of a solicitation that received only one 
offer. Of the 918 awards, 549 were awarded to small businesses (428 
unique small entities). DoD estimates that of these awards, all would 
require certification under the new rule, and might also require 
submission of additional data. With regard to subcontracts, DoD 
estimates that when certification or additional certified cost or 
pricing data are requested from the prime contractor, 1386 subcontract 
awards may be affected, of which 1,505 are awarded to small businesses 
(1,141 unique small entities). In addition, DoD awarded 839 negotiated 
contracts and orders valued as more than $750,000, for which certified 
cost or pricing data were required. DoD estimates that for each prime 
contractor providing certified cost or pricing data, there may be an 
average of one additional competitive subcontract for which certified 
cost or pricing data will now be required because there is only one 
offer on that subcontract. DoD estimated that 703 of those subcontracts 
are awarded to small businesses (504 unique small entities).
    The rule does not duplicate, overlap, or conflict with any other 
Federal rules.
    DoD was unable to identify any alternatives that would reduce 
burden on small business and still meet the requirements of the 
statute. Impact on small businesses is lessened because the requirement 
for certified cost or pricing data only applies to acquisitions that 
exceed $750,000 and there is an exception for the acquisition of 
commercial items, including COTS items.
    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 2017-D009), in 
correspondence.

VIII. 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). Accordingly, DoD has submitted a 
request for approval of a new information collection requirement 
concerning Only One Offer (DFARS Case 2017-D009) to the Office of 
Management and Budget.
    A. Public Reporting Burden. Public reporting burden for this 
collection of information is estimated to average about 37.7 hours per 
response, including the time for reviewing instructions, searching 
existing data sources, gathering and maintaining the data needed, and 
completing and reviewing the collection of information.
    The annual reporting burden estimated as follows:
    Respondents: 2,079.
    Responses per respondent: 1.73, approximately.
    Total annual responses: 3,593.
    Preparation hours per response: 37.7 hours, approximately.
    Total response Burden Hours: 135,330.
    B. Request for Comments Regarding Paperwork Burden.
    Written comments and recommendations on the proposed information 
collection, including suggestions for reducing this burden, should be 
sent to Ms. Jasmeet Seehra at the Office of Management and Budget, Desk 
Officer for DoD, Room 10236, New Executive Office Building, Washington, 
DC 20503, or email Jasmeet_K._Seehra@omb.eop.gov, with a copy to the 
Defense Acquisition Regulations System, Attn: Ms. Amy G. Williams, 
OUSD(AT&L)DPAP/DARS, Room 3B941, 3060 Defense Pentagon, Washington, DC 
20301-3060. Comments can be received from 30 to 60 days after the date 
of this notice, but comments to OMB will be most useful if received by 
OMB within 30 days after the date of this notice.
    Public comments are particularly invited on: Whether this 
collection of information is necessary for the proper performance of 
functions of the DFARS, and will have practical utility; whether our 
estimate of the public burden of this collection of information is 
accurate, and based on valid assumptions and methodology; ways to 
enhance the quality, utility, and clarity of the information to be 
collected; and ways in which we can minimize the burden of the 
collection of information on those who are to respond, through the use 
of appropriate technological collection techniques or other forms of 
information technology.
    To request more information on this proposed information collection 
or to obtain a copy of the proposal and associated collection 
instruments, please write to the Defense Acquisition Regulations 
System, Attn: Ms. Amy G. Williams, OUSD(AT&L)DPAP/DARS, Room 3B941, 
3060 Defense Pentagon, Washington, DC 20301-3060, or email 
osd.dfars@mail.mil. Include DFARS Case 2017-D009 in the subject line of 
the message.

List of Subjects in 48 CFR Parts 215 and 252

    Government procurement.

Amy G. Williams,
Deputy, Defense Acquisition Regulations System.

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

0
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

0
2. Revise section 215.371-3 to read as follows:


215.371-3   Fair and reasonable price and the requirement for 
additional cost or pricing data.

    For acquisitions that exceed the simplified acquisition threshold, 
if only one offer is received when competitive procedures were used and 
it is not necessary to resolicit in accordance with 215.371-2(a), 
then--
    (a) If no additional cost or pricing data are required to determine 
through cost or price analysis that the offered price is fair and 
reasonable, the contracting officer shall require that any cost or 
pricing data provided in the proposal be certified if the acquisition 
exceeds the certified cost or pricing data threshold and an exception 
to the requirement for certified cost or pricing data at FAR 15.403-
1(b)(2) through (5) does not apply.
    (b) Otherwise, the contracting officer shall obtain additional cost 
or pricing

[[Page 30659]]

data to determine a fair and reasonable price. If the acquisition 
exceeds the certified cost or pricing data threshold and an exception 
to the requirement for certified cost or pricing data at FAR 15.403-
1(b)(2) through (5) does not apply, the cost or pricing data shall be 
certified.
    (c) If the contracting officer is still unable to determine that 
the offered price is fair and reasonable, the contracting officer shall 
enter into negotiations with the offeror to establish a fair and 
reasonable price. The negotiated price should not exceed the offered 
price.
    (d) If the contracting officer is unable to negotiate a fair and 
reasonable price, see FAR 15.405(d).
0
3. Amend section 215.408 by--
0
a. Revising paragraph (3); and
0
b. In paragraph (5) introductory text, removing ``required'' and adding 
``required or when using the provision at DFARS 252.215-7008'' in its 
place.
    The revision reads as follows:


215.408   Solicitation provisions and contract clauses.

* * * * *
    (3) Use the provision at 252.215-7008, Only One Offer, in 
competitive solicitations that exceed the simplified acquisition 
threshold, including solicitations using FAR part 12 procedures for the 
acquisition of commercial items.
* * * * *

PART 252--SOLICITATION PROVISIONS AND CONTRACT CLAUSES

0
4. Amend section 252.215-7008 by--
0
a. Removing the provision date ``(OCT 2013)'' and adding ``(DATE)'' in 
its place;
0
b. Revising paragraph (a);
0
c. Removing paragraphs (b) and (d);
0
d. Redesignating paragraph (c) as paragraph (b); and
0
e. Adding a new paragraph (c).
    The revision and addition read as follows:


252.215-7008   Only One Offer.

* * * * *
    (a) After initial submission of offers, if the Contracting Officer 
notifies the Offeror that only one offer was received, the Offeror 
agrees to--
    (1) Submit any additional cost or pricing data that is required in 
order to determine whether the price is fair and reasonable or to 
comply with the statutory requirement for certified cost or pricing 
data (10 U.S.C. 2306a and FAR 15.403-3); and
    (2) Except as provided in paragraph (b) of this provision, if the 
acquisition exceeds the certified cost of pricing data threshold and an 
exception to the requirement for certified cost or pricing data at FAR 
15.403-1(b)(2) through (5) does not apply, certify all cost or pricing 
data in accordance with paragraph (c) of provision 252.215-7010, 
Requirements for Certified Cost or Pricing Data and Data Other Than 
Certified Cost or Pricing Data, of this solicitation.
* * * * *
    (c) Subcontracts. Unless the Offeror is the Canadian Commercial 
Corporation, the Offeror shall insert the substance of this provision, 
including this paragraph (c), in all subcontracts exceeding the 
simplified acquisition threshold defined in FAR part 2.
    (End of provision)
0
5. Amend section 252.215-7010 by--
0
a. In the basic provision--
0
i. Removing the provision date of ``(JAN 2018)'' and adding ``(DATE)'' 
in its place;
0
ii. In paragraph (c), adding new paragraph (3);
0
b. In the Alternate I clause--
0
i. Removing the provision date of ``(JAN 2018)'' and adding ``(DATE)'' 
in its place; and
0
ii. In paragraph (c), adding new paragraph (3).
    The additions read as follows:


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

* * * * *
    (c) * * *
    (3) The Offeror is responsible for determining whether a 
subcontractor qualifies for an exception from the requirement for 
submission of certified cost or pricing data on the basis of adequate 
price competition, i.e. two or more responsible offerors, competing 
independently, submit responsive and viable offers in accordance with 
FAR 15.403-1(c)(1)(ii).
* * * * *
Alternate I. * * *
* * * * *
    (c) * * *
    (3) The Offeror is responsible for determining whether a 
subcontractor qualifies for an exception from the requirement for 
submission of certified cost or pricing data on the basis of adequate 
price competition, i.e. two or more responsible offerors, competing 
independently, submit responsive and viable offers in accordance with 
FAR 15.403-1(c)(1)(ii).
* * * * *
[FR Doc. 2018-14062 Filed 6-28-18; 8:45 am]
 BILLING CODE 5001-06-P