[Federal Register Volume 84, Number 187 (Thursday, September 26, 2019)]
[Proposed Rules]
[Pages 50812-50814]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2019-20558]
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DEPARTMENT OF DEFENSE
Defense Acquisition Regulations System
48 CFR Parts 210, 212, 215, and 234
[Docket DARS-2019-0050]
RIN 0750-AK65
Defense Federal Acquisition Regulation Supplement: Market
Research and Value Analysis for the Determination of Price
Reasonableness (DFARS Case 2019-D027)
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 implement several sections of the
National Defense Authorization Act for Fiscal Year 2017 to address how
contracting officers may require the offeror to submit relevant
information to support market research for price analysis and allow an
offeror to submit information relating to the value of a commercial
item to aid in the determination of the reasonableness of the price of
such item.
DATES: Comments on the proposed rule should be submitted in writing to
the address shown below on or before November 25, 2019, to be
considered in the formation of a final rule.
ADDRESSES: Submit comments identified by DFARS Case 2019-D027, using
any of the following methods:
[cir] Regulations.gov: http://www.regulations.gov. Submit comments
via the Federal eRulemaking portal by entering ``DFARS Case 2019-D027''
under the heading ``Enter keyword or ID'' and selecting ``Search.''
Select the link ``Submit a Comment'' that corresponds with ``DFARS Case
2019-D027.'' Follow the instructions provided at the ``Submit a
Comment'' screen. Please ``DFARS Case 2019-D027'' on any attached
documents.
[cir] Email: [email protected]. Include DFARS Case 2019-D027 in
the subject line of the message.
[cir] Fax: 571-372-6094.
[cir] Mail: Defense Acquisition Regulations System, Attn: Ms. Amy
G. Williams, OUSD(A&S)DPC/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
[[Page 50813]]
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. Amy G. Williams, telephone 571-
372-6106.
SUPPLEMENTARY INFORMATION:
I. Background
DoD is proposing to revise the DFARS to implement sections 871 and
872 of the National Defense Authorization Act for Fiscal Year 2017
(Pub. L. 114-328). Section 871 modifies 10 U.S.C. 2377, Preference for
acquisition of commercial items, to address how contracting officers
may require the offeror to submit relevant information to support
market research for price analysis for the acquisition of commercial
items. Section 872 modifies 10 U.S.C. 2379, Requirement for
determination by Secretary of Defense and notification to Congress
before procurement of major weapon systems as commercial items, to
allow an offeror to submit information or analysis relating to the
value of a commercial item.
II. Discussion and Analysis
This proposed rule implements the requirements of section 871 at
DFARS 212.209(a), which addresses the determination of price
reasonableness when acquiring commercial items. The focus of this
requirement is that agencies shall conduct market research to support
the determination of price reasonableness for commercial items. The
rule proposes to add the reference to 10 U.S.C. 2377 and directs
contracting officers to use: The information submitted under DFARS
234.7002(d) when acquiring major weapon systems as commercial items in
accordance with 10 U.S.C. 2379; or, in the case of other items, other
relevant information as described in DFARS 212.209.
This proposed rule implements the requirements of section 872 in
DFARS subpart 234.70, which addresses the acquisition of major weapon
systems as commercial items. DFARS 234.7002(d) addresses the relevant
information necessary to make a determination of price reasonableness.
To implement section 872, this rule proposes a new paragraph (d)(5) at
DFARS 234.7002, which does not impose a requirement, but allows an
offeror to submit information or analysis relating to the value of a
commercial item, to aid in the determination of the reasonableness of
the price of such item. A contracting officer may consider such
information or analysis in addition to the information submitted
pursuant to other paragraphs in DFARS 234.7002(d). To assist in
understanding value analysis, a definition of ``value analysis'' is
added at DFARS 234.7001. A cross-reference is also added at DFARS
210.001.
This rule does not impose additional requirements on offerors. The
information required is consistent with the existing requirement at
DFARS 215.404-1(b)(iii)(D), which requires an offeror to submit other
relevant information that can serve as the basis for determining the
reasonableness of price. The DFARS provision 252.215-7010, Requirements
for Certified Cost or Pricing Data and Data other Than Certified Cost
or Pricing Data, is the existing mechanism for obtaining the minimum
information necessary to permit a determination that the proposed price
is fair and reasonable, to include the requirements of DFARS 215.404-
1(b).
III. Applicability to Contracts at or Below the Simplified Acquisition
Threshold and for Commercial Items, Including Commercially Available
Off-the-Shelf Items
This rule does not propose to add or modify any provisions or
clauses or the prescriptions for any provisions or clauses.
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 rule is not expected to be an E.O. 13771 regulatory action,
because this rule is not significant 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 performed
and is summarized as follows:
This proposed rule is issued in order to implement sections 871 and
872 of the National Defense Authorization Act (NDAA) for Fiscal Year
(FY) 2017 (Pub. L. 114-328).
The objective of this rule is to address the use of market research
and value analysis to support the determination of price reasonableness
when acquiring commercial items. The legal basis of the rule is
sections 871 and 872 of the NDAA for FY 2017.
Based on data from the Federal Procurement Data System, DoD awarded
38,000 new commercial contracts to 16,429 small entities in FY 2018.
There are an additional unknown number of small entities that submitted
offers and did not receive awards (estimated at several thousand).
This rule does not impose any new reporting, recordkeeping, or
other compliance requirements on small entities. DFARS 252.215-7010,
Requirements for Certified Cost or Pricing Data, and Data Other Than
Certified Cost or Pricing Data, already requires offerors to provide
information necessary to determine that the price is fair and
reasonable. Offerors are allowed, but not required, to submit
information or analysis relating to the value of a commercial item for
consideration by the contracting officer in determining price
reasonableness.
The rule does not duplicate, overlap, or conflict with any other
Federal rules.
DoD did not identify any significant alternatives that would
minimize or reduce the significant economic impact, because there is no
significant impact on small entities.
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 2019-D027), in
correspondence.
VII. Paperwork Reduction Act
The rule does not contain any new 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) or
impact any existing information collection requirements.
[[Page 50814]]
List of Subjects in 48 CFR Parts 210, 212, 215 and 234
Government procurement.
Jennifer Lee Hawes,
Regulatory Control Officer, Defense Acquisition Regulations System.
Therefore, 48 CFR parts 210, 212, 215, and 234 are proposed to be
amended as follows:
0
1. The authority citation for 48 CFR parts 210, 212, and 234 continues
to read as follows:
Authority: 41 U.S.C. 1303 and 48 CFR chapter 1.
PART 210--MARKET RESEARCH
0
2. Amend section 210.001 by adding paragraph (a)(iii) to read as
follows:
210.001 Policy.
(a) * * *
(iii) Use market research, where appropriate, to inform price
reasonableness determinations (see 212.209 and 234.7002).
PART 212--ACQUISITION OF COMMERCIAL ITEMS
0
3. Amend section 212.209 by--
0
a. Revising paragraph (a); and
0
b. In paragraph (b), removing ``market research pursuant to paragraph
(a) of this section,'' and adding ``market research'' in its place.
The revision reads as follows:
212.209 Determination of price reasonableness.
(a) In accordance with 10 U.S.C. 2377(d), agencies shall conduct or
obtain market research to support the determination of the
reasonableness of price for commercial items contained in any bid or
offer submitted in response to an agency solicitation. To the extent
necessary to support such market research, the contracting officer for
the solicitation--
(1) In the case of major weapon systems items acquired under 10
U.S.C. 2379, shall use information submitted under 234.7002(d); and
(2) In the case of other items, may require the offeror to submit
other relevant information as described in this section.
* * * * *
PART 215--CONTRACTING BY NEGOTIATION
0
4. Amend section 215.403-3 by adding paragraph (c) to read as follows:
215.403-3 Requiring data other than certified cost or pricing data.
* * * * *
(c) Commercial items. For determination of price reasonableness of
major weapon systems acquired as commercial items, see 234.7002(d).
PART 234--MAJOR SYSTEMS ACQUISITION
0
5. Revise section 234.7001 to read as follows:
234.7001 Definitions.
As used in this subpart--
Major weapon system means a weapon system acquired pursuant to a
major defense acquisition program.
Value analysis means a systematic and objective evaluation of the
function of a product and its related costs, whose purpose is to ensure
optimum value.
0
6. Amend section 234.7002 by--
0
a. Revising the paragraph (d) introductory text; and
0
b. Adding a new paragraph (d)(5).
The revision and addition read as follows:
234.7002 Policy.
* * * * *
(d) Relevant information. This section implements 10 U.S.C. 2379.
See also DFARS 212.209(a).
* * * * *
(5) An offeror may submit information or analysis relating to the
value of a commercial item to aid in the determination of the
reasonableness of the price of such item. Value analysis is used to
understand what features or characteristics of a given product or
service, or offered terms and conditions warrant consideration as
having legitimate value to the Government. A contracting officer may
consider such information or analysis in addition to the information
submitted pursuant to paragraphs (d)(1) and (d)(2) of this section. For
additional guidance on use of value analysis see PGI 234.7002(d)(5).
[FR Doc. 2019-20558 Filed 9-25-19; 8:45 am]
BILLING CODE 5001-06-P