[Federal Register Volume 84, Number 211 (Thursday, October 31, 2019)]
[Rules and Regulations]
[Pages 58332-58334]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2019-23812]


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DEPARTMENT OF DEFENSE

Defense Acquisition Regulations System

48 CFR Parts 207, 215, 216, and 234

[Docket DARS-2019-0026]
RIN 0750-AK38


Defense Federal Acquisition Regulation Supplement: Reliability 
and Maintainability in Weapon System Design (DFARS Case 2019-D003)

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 2018 that requires 
the use of reliability and maintainability sustainment factors in 
weapon system design.

DATES: Effective October 31, 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 84 FR 125 
on June 28, 2019, to implement section 834 of the National Defense 
Authorization Act (NDAA) for Fiscal Year (FY) 2018. Section 834 of the 
NDAA for FY 2018 amends 10 U.S.C. to add section 2443, sustainment 
factors in weapon system design which requires program managers or 
comparable requiring activity officials exercising program management 
responsibilities to ensure that reliability and maintainability are 
included in the performance attributes of the key performance 
parameters on sustainment during the development of capabilities 
requirements for major weapon systems design and contracts for the--
     Engineering and manufacturing development of a weapon 
system, including embedded software; or
     Production of a weapon system, including embedded 
software.
    As a matter of policy, the Under Secretary of Defense for 
Acquisition and Sustainment directed the application of the 
requirements of 10 U.S.C. 2443 to the technical maturation and risk 
reduction phase. No public comments were received on the proposed rule, 
and no changes are made in the final rule.

II. 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 create any new provisions or clauses 
or impact any existing provisions or clauses.

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.

[[Page 58333]]

IV. Executive Order 13771

    This final rule is not subject to E.O. 13771, because this rule is 
not a significant regulatory action under E.O. 12866.

V. 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 is necessary to implement section 834 of the 
National Defense Authorization Act (NDAA) for Fiscal Year (FY) 2018. 
Section 834 of the NDAA for FY 2018 amends Title 10, United States 
Code, to add section 2443, Sustainment factors in weapon system design. 
Section 2443 requires program managers or comparable requiring activity 
officials, exercising program management responsibilities, to ensure 
that reliability and maintainability are included in the performance 
attributes of the key performance parameters on sustainment during the 
development of capabilities requirements for major weapon systems 
design and contracts for the technical maturation and risk reduction 
and engineering and manufacturing development of a weapon system, 
including embedded software; or production of a weapon system. The 
objective of this final rule is to implement section 834 of the NDAA 
for FY 2018.
    There were no issues raised by the public in response to the 
initial regulatory flexibility analysis provided in the proposed rule.
    The final rule will apply to all small entities that have been or 
will be awarded contracts for the development of major weapon systems. 
Small business statistics were obtained from the Federal Procurement 
Data System for FY 2018 data identifying the DoD research and 
development engineering development awards issued, including task and 
delivery orders under single-award indefinite delivery indefinite 
quantity contracts and Basic Ordering Agreements as of February 26, 
2019. Of the 78 contract awards, 15 awards or approximately 19 percent 
were made to unique small business entities.
    This rule does not include any new reporting, recordkeeping, or 
other compliance requirements for small businesses.
    There are no known significant alternative approaches to the 
proposed rule that would meet the proposed objectives of the statute.

VI. 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 207, 215, 216, and 234

    Government procurement.

Jennifer Lee Hawes,
Regulatory Control Officer, Defense Acquisition Regulations System.

    Therefore, 48 CFR parts 207, 215, 216, and 234 are amended as 
follows:

0
1. The authority citation for 48 CFR parts 207, 215, 216, and 234 
continues to read as follows:

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

PART 207--ACQUISITION PLANNING

0
2. Amend section 207.106 by--
0
a. In paragraph (S-70)(1), removing ``Section 802(a)'' and adding 
``section 802(a)'' in its place;
0
b. Redesignating paragraphs (S-70)(2)(ii) through (iv) as paragraphs 
(iii) through (v), respectively;
0
c. Adding a new paragraph (S-70)(2)(ii); and
0
d. Adding paragraph (S-72)(5).
    The additions read as follows:


207.106  Additional requirements for major systems.

* * * * *
    (S-70) * * *
    (2) * * *
    (ii) In accordance with 10 U.S.C. 2443, to emphasize reliability 
and maintainability in weapon system design, ensure that reliability 
and maintainability are included in the performance attributes of the 
key performance parameters on sustainment during the development of 
capabilities requirements. For additional guidance see PGI 
207.105(b)(14)(ii)(2);
* * * * *
    (S-72) * * *
    (5) In accordance with 10 U.S.C. 2443, acquisition plans for 
engineering manufacturing and development and production of major 
systems as defined in 10 U.S.C. 2302 and 2302d and for major defense 
acquisition programs as defined in 202.101, shall include performance 
measures that are developed using best practices for responding to the 
positive or negative performance of a contractor for the engineering 
and manufacturing development or production of a weapon system, 
including embedded software. At a minimum the contracting officer 
shall--
    (i) Encourage the use of incentive fees and penalties as 
appropriate; and
    (ii) Allow the program manager or comparable requiring activity 
official exercising program management responsibilities, to base 
determinations of a contractor's performance on reliability and 
maintainability data collected during the program. Such data collection 
and associated evaluation metrics shall be described in detail in the 
contract; and to the maximum extent practicable, the data shall be 
shared with appropriate contractor and Government organizations.
* * * * *

PART 215--CONTRACTING BY NEGOTIATION

0
3. Amend section 215.304 by adding paragraph (c)(vi) to read as 
follows:


215.304   Evaluation factors and significant subfactors.

    (c) * * *
    (vi) Ensure source selections emphasize sustainment factors and 
objective reliability and maintainability evaluation criteria in 
competitive contracts for the--
    (A) Technical maturation and risk reduction phase of weapon system 
design (see guidance at PGI 207.105(b)(14)(ii)(2));
    (B) Engineering and manufacturing development phase of a weapon 
system, including embedded software (10 U.S.C. 2443); or
    (C) Production and deployment phase of a weapon system, including 
embedded software (10 U.S.C. 2443).

PART 216--TYPES OF CONTRACTS

0
4. Amend section 216.402-2 by--
0
a. Designating the text as paragraph (1); and
0
b. Adding paragraph (2).
    The addition reads as follows:


216.402-2   Technical performance incentives.

* * * * *
    (2) Contracting officers shall ensure requirements about the 
payment of incentive fees or the imposition of penalties are included 
in the solicitation for a contract for the engineering and 
manufacturing development or production of a weapon system, including 
embedded software, if the program manager or comparable requiring 
activity official exercising program manager responsibilities 
includes--
    (i) Provisions for the payment of incentive fees to the contractor, 
based on achievement of design specification requirements for 
reliability and maintainability of weapons systems under the contract; 
or

[[Page 58334]]

    (ii) The imposition of penalties to be paid by the contractor to 
the Government for failure to achieve such design specification 
requirements (10 U.S.C. 2443).

PART 234--MAJOR SYSTEM ACQUISITION

0
5. Amend section 234.004 by adding paragraph (3) to read as follows:


234.004   Acquisition strategy.

* * * * *
    (3) The contracting officer shall include in solicitations for 
contracts for the technical maturation and risk reduction phase, 
engineering and manufacturing development phase or production phase of 
a weapon system, including embedded software--
    (i) Clearly defined measurable criteria for engineering activities 
and design specifications for reliability and maintainability provided 
by the program manager, or the comparable requiring activity official 
performing program management responsibilities; or
    (ii) Ensure a copy of the justification, executed by the program 
manager or the comparable requiring activity official performing 
program management responsibilities for the decision that engineering 
activities and design specifications for reliability and 
maintainability should not be a requirement, is included in the 
contract file (10 U.S.C. 2443).

[FR Doc. 2019-23812 Filed 10-30-19; 8:45 am]
 BILLING CODE 5001-06-P