[Federal Register Volume 84, Number 32 (Friday, February 15, 2019)]
[Rules and Regulations]
[Pages 4366-4368]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2019-02524]
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DEPARTMENT OF DEFENSE
Defense Acquisition Regulations System
48 CFR Part 211
[Docket DARS-2018-0021]
RIN 0750-AJ23
Defense Federal Acquisition Regulation Supplement: Use of
Commercial or Non-Government Standards (DFARS Case 2017-D014)
AGENCY: Defense Acquisition Regulations System, Department of Defense
(DoD).
ACTION: Final rule.
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SUMMARY: DoD is issuing a final rule amending the Defense Federal
Acquisition Regulation Supplement (DFARS) to implement a section of the
National Defense Authorization Act for Fiscal Year 2017 by encouraging
offerors to propose commercial or non-Government standards and
industry-wide practices that meet the intent of military or Government-
unique specifications and standards.
DATES: Effective February 15, 2019.
FOR FURTHER INFORMATION CONTACT: Ms. Kimberly Bass, telephone 571-372-
6174.
SUPPLEMENTARY INFORMATION:
I. Background
DoD published a proposed rule in the Federal Register at 83 FR
30644 on June 29, 2018, to implement section 875(c) of the National
Defense Authorization Act (NDAA) for Fiscal Year (FY) 2017 (Pub. L.
114-328), which requires DoD to revise the DFARS to encourage
contractors to propose commercial or non-Government standards and
industry-wide practices that meet the intent of military or Government-
unique specifications and standards. Four respondents submitted
comments on the proposed rule.
II. Discussion and Analysis
DoD reviewed the public comments in the development of the final
rule. A discussion of the comments received and any changes made to the
rule are provided as follows:
A. Summary of Significant Changes
There were no changes from the proposed rule made in the final rule
as a result of the public comments.
B. Analysis of Public Comments
1. Support for the Rule
Comment: Two respondents provided support for the proposed rule.
Response: DoD acknowledges the support for the rule.
2. Section 875 Implementation
Comment: Several respondents shared concerns with DoD's
implementation of section 875 of the NDAA for FY 2017, regarding how
standards would be added to the Acquisition Streamlining and
Standardization Information System (ASSIST) database in order to
implement the statutory requirements. The respondents also recommended
revisions to the rule to allow contractors to propose equally effective
standards and supporting data for reliance upon standards that meet the
intent of the Government's requirements and to require the Government
to determine that a commercial or non-Government requirement does not
meet a military specification or standard.
Response: Maintenance of the ASSIST database is beyond the scope of
this rule. Questions regarding standards and the ASSIST database should
be directed to the Defense Standardization Program Office. Contact
information is available at https://www.dsp.dla.mil/Contact-Us1/.
Removing the prohibition at DFARS 211.107(b) on DoD using Federal
Acquisition Regulation (FAR) 52.211-7, Alternatives to Government-
Unique Standards, allows offerors to propose standards as alternatives,
as intended. The language in the rule meets the intent of the statute
at section 875(c) of the NDAA for FY 2017.
3. ASSIST Database Instructions
Comment: One respondent supported the use of the ASSIST database as
a repository of voluntary consensus standards adopted by DoD and
recommended additional instructions and clarification on how non-
Government standards are selected for inclusion in the database.
Response: Maintenance or modification of the ASSIST database is
beyond the scope of this rule. Questions regarding standards and the
ASSIST database should be directed to the Defense Standardization
Program Office. Contact information is available at https://www.dsp.dla.mil/Contact-Us1/.
4. Applicability
Comment: Three respondents were concerned by the limitation on
applicability of section 875 of the NDAA for FY 2017 requirements to
contracts over the simplified acquisition threshold (SAT) and
noncommercial contracts.
Response: Section III of this final rule preamble clarifies that
the rule does not exclude solicitations for contracts valued at or
below the SAT. No change to the text of the rule is required, since the
proposed rule did not include a limitation to contracts valued above
the SAT in the clause prescription. This rule, however, is not
applicable to commercial contracts, including COTS, since Government-
or military-unique specifications and standards should not be used in
commercial contracts.
5. Use of FAR Provision 52.211-7
Comment: One respondent was concerned that the existing
solicitation provision at FAR 52.211-7, Alternatives to Government-
Unique Standards, uses a different standard in determining whether the
standard proposed by the contractor is acceptable. The respondent was
also concerned the rule required burden of proof from the contractor to
demonstrate the contractor's proposed standard meets the Government's
requirement.
[[Page 4367]]
Response: Although the statute uses the phrase ``encourage
contractors to propose commercial or non-Government standards and
industry-wide practices that meet the intent of the military
specifications and standards,'' DoD retains the responsibility to
ensure the requirements are met. Although offerors are encouraged to
propose alternative standards, they must be subject to DoD's review and
approval. DoD standards ensure that essential mission requirements are
met. It is the offeror's responsibility to demonstrate that its
proposed alternative standards meet the essential DoD mission
requirements.
6. Revise DFARS Clause 252.211-7005
Comment: One respondent recommended revising DFARS clause 252.211-
7005, Substitutions for Military or Federal Specifications and
Standards, to meet the intent of the requirements in section 875.
Response: The rule revises the prescription to require the use of
the provision at FAR 52.211-7 when Government-unique specifications and
standards are included in DoD solicitations; use of this provision was
previously optional. This approach meets the intent of section 875
requirements.
7. Revise DFARS 211.201
Comment: One respondent recommended revising DFARS 211.201 to add
the new requirements established in section 875, which require military
specifications to be used in acquisitions only to define an exact
design solution when there is no acceptable commercial or non-
Government standard, or when the use of a commercial or non-Government
standard is not cost effective.
Response: DoD has determined it is unnecessary to revise DFARS
211.201, since the rule removes the prohibition at DFARS 211.107(b).
This rule requires DoD to use FAR provision 52.211-7 to permit offerors
to propose commercial or non-Government standards and industry-wide
practices.
C. Other Changes
A reference to section 875(c) of the NDAA for FY 2017 is added at
211.107(b) and a minor editorial change is made to DFARS 211.201 to
revise the name of the database from ``DLA ASSIST database'' to
``ASSIST database''.
III. Applicability to Contracts at or Below the Simplified Acquisition
Threshold and Contracts for Commercial Items, Including Commercially
Available Off-the-Shelf Items
The purpose of this rule is to implement section 875(c) of the NDAA
for FY 2017, which requires DoD to revise the DFARS to encourage
offerors to propose commercial or non-Government standards and
industry-wide practices that meet the intent of military or Government-
unique specifications and standards. The rule does not add any new
provisions or clauses; however, to comply with section 875(c), the rule
requires DoD contracting officers to use the provision at FAR 52.211-7
in DoD solicitations that include military or Government-unique
specifications and standards.
A. Applicability to Contracts at or Below the Simplified Acquisition
Threshold
41 U.S.C. 1905 governs the applicability of laws to contracts or
subcontracts in amounts not greater than the SAT. It is intended to
limit the applicability of laws to such contracts or subcontracts. 41
U.S.C. 1905 provides that if a provision of law contains criminal or
civil penalties, or if the FAR Council makes a written determination
that it is not in the best interest of the Federal Government to exempt
contracts or subcontracts at or below the SAT, the law will apply to
them. The Principal Director, Defense Pricing and Contracting (DPC), is
the appropriate authority to make comparable determinations for
regulations to be published in the DFARS, which is part of the FAR
system of regulations.
In accordance with 41 U.S.C. 1905, the Principal Director, DPC, has
determined that it would not be in the best interest of the Federal
Government to exempt acquisitions not greater than the SAT from the
requirements of section 875(c) of the NDAA for FY 2017. This rule
prescribes the use of the provision at FAR 52.211-7 in DoD
solicitations that include military or Government-unique specifications
and standards, which include those for acquisitions valued at or below
the SAT. It is possible that contracts valued at or below this
threshold (currently $250,000), could contain military or Government-
unique specifications or standards; therefore, it is necessary and
appropriate to include this provision in such contracts in order to
give potential offerors an opportunity to propose alternatives to such
specifications and standards. Providing such opportunities to offerors
may increase competition and ultimately drive down costs associated
with compliance with military or Government-unique specifications and
standards.
B. Applicability to Contracts and Subcontracts for the Procurement of
Commercial Items, Including Commercially Available Off-the-Shelf Items
10 U.S.C. 2375 governs the applicability of Defense-unique statutes
to contracts and subcontracts for procurement of commercial items,
including commercially available off-the-shelf (COTS) items. It is
intended to limit the applicability of these laws to such contracts or
subcontracts. 10 U.S.C. 2375(b)(2) provides that if a provision of law
contains criminal or civil penalties, or if the Under Secretary of
Defense for Acquisition and Sustainment makes a written determination
that it is not in the best interest of the Department of Defense to
exempt contracts for the procurement of commercial items, then the
provision of law will apply to contracts for the procurement of
commercial items. 10 U.S.C. 2375(c)(2) and (d)(2) make similar
provisions for subcontracts under contracts for the procurement of
commercial items, and for the procurement of commercially available
off-the-shelf (COTS) items.
Determinations in accordance with 10 U.S.C. 2375 have not been
made. This rule does not prescribe the provision at FAR 52.211-7 for
use in solicitations issued using FAR part 12 procedures for the
acquisition of commercial items, including COTS, since such contracts
should not include military or Government-unique specifications or
standards.
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.
[[Page 4368]]
V. Executive Orders 13771
This final rule is an E.O. 13771 regulatory action, because this
rule is not significant under E.O. 12866.
VI. Regulatory Flexibility Act
A final regulatory flexibility analysis (FRFA) has been prepared
consistent with the Regulatory Flexibility Act, 5 U.S.C. 601, et seq.
The FRFA is summarized as follows:
This final rule implements section 875(c) of the National Defense
Authorization Act (NDAA) for Fiscal Year (FY) 2017 (Pub. L. 114-328).
The objective of this rule is to require the use of FAR 52.211-7,
Alternatives to Government-Unique Standards, in DoD solicitations that
include military or Government-unique specifications and standards.
This will encourage and permit offerors to propose alternatives to
Government-unique standards by using an existing FAR provision. The
legal basis for this rule is section 875(c) of the NDAA for FY 2017.
There were no significant issues raised by the public in response
to the initial regulatory flexibility analysis.
Based on Federal Procurement Data System data for Product Service
Code 5342 (hardware, weapon systems), this rule could potentially apply
to approximately 710 unique entities, of which 565 are small
businesses. This is based on the number of DoD contract awards in FY
2017. However, of that total, and given the DoD policy of discouraging
the use of military specifications and standards in solicitations, this
rule would likely impact no more than 40 offerors or potential
contractors (the approximate number of DoD contractors involved in
major weapons systems). Accordingly, DoD estimates that this rule will
have limited impact. Given the fact that some small number of DoD
solicitations may include a military or Government-unique specification
or standard generally limited to those involving a major weapons
system, this rule provides a means for offerors to propose alternatives
on a given solicitation.
This rule contains reporting and recordkeeping requirements for
those entities that, in response to a DoD solicitation containing
military or Government-unique standards, wish to propose voluntary
consensus standards that meet the Government's requirements as
alternatives to the Government-unique standards. The professional skill
sets required are those of mid-level administrative personnel.
There are no known significant alternative approaches to the rule
that would meet the requirements of the statute. DoD considers the
approach described in the rule to be the most practical and beneficial
for both Government and industry.
VII. Paperwork Reduction Act
The Paperwork Reduction Act (44 U.S.C. chapter 35) applies. The
rule contains information collection requirements. OMB has cleared this
information collection requirement under OMB control number 9000-0153,
titled, OMB Circular A-119; FAR Sections Affected: 52.211-7 and 53.105.
List of Subjects in 48 CFR Part 211
Government procurement.
Jennifer Lee Hawes,
Regulatory Control Officer, Defense Acquisition Regulations System.
Therefore, 48 CFR part 211 is amended as follows:
PART 211--DESCRIBING AGENCY NEEDS
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1. The authority citation for part 211 continues to read as follows:
Authority: 41 U.S.C. 1303 and 48 CFR chapter 1.
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2. Revise section 211.107 to read as follows:
211.107 Solicitation provision.
(b) To comply with section 875(c) of the National Defense
Authorization Act for Fiscal Year 2017 (Pub. L. 114-328), use the
provision at FAR 52.211-7, Alternatives to Government-Unique Standards,
in DoD solicitations that include military or Government-unique
specifications and standards.
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3. Revise section 211.201 to read as follows:
211.201 Identification and availability of specifications.
Follow the procedures at PGI 211.201 for obtaining specifications,
standards, and data item descriptions from the ASSIST database,
including DoD adoption notices on voluntary consensus standards.
[FR Doc. 2019-02524 Filed 2-14-19; 8:45 am]
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