[Federal Register Volume 87, Number 82 (Thursday, April 28, 2022)]
[Rules and Regulations]
[Pages 25144-25145]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2022-08815]


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DEPARTMENT OF DEFENSE

Defense Acquisition Regulations System

48 CFR Parts 217, 234, and 235

[Docket DARS-2021-0020]
RIN 0750-AL49


Defense Federal Acquisition Regulation Supplement: Contract 
Authority for Development and Demonstration of Prototypes (DFARS Case 
2021-D025)

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 2021 that amends the 
types of line items and contract options that may be included, subject 
to limitations, in certain contracts initially awarded pursuant to 
competitive solicitations.

DATES: Effective April 28, 2022.

FOR FURTHER INFORMATION CONTACT: Ms. Barbara J. Salcido, telephone 571-
372-6102.

SUPPLEMENTARY INFORMATION: 

I. Background

    DoD published a proposed rule in the Federal Register at 86 FR 
59951 on October 29, 2021, to revise the DFARS to implement paragraph 
(a)(2) of section 831 of the National Defense Authorization Act (NDAA) 
for Fiscal Year (FY) 2021 (Pub. L. 116-283). Section 831(a)(2) amends 
10 U.S.C. 2302e(a) to revise the type of contract line items or options 
that may be included, without additional competition, in contracts 
initially awarded from the competitive selection of a proposal 
resulting from a broad agency announcement.
    One respondent submitted a public comment in response to the 
proposed rule.

II. Discussion and Analysis

    DoD reviewed the public comment in the development of the final 
rule. The public comment is outside the scope of this rule; therefore, 
there are no changes made to the final rule.

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

    This rule does not create any new solicitation provisions or 
contract clauses. It does not impact any existing solicitation 
provisions or contract clauses or their applicability to contracts at 
or below the simplified acquisition threshold, for commercial products 
including COTS items, or for commercial services.

IV. Expected Impact of the Rule

    The final rule impacts DoD acquisition planning decisions for 
contract awards that will result from the competitive selection of a 
proposal in response to a broad agency announcement for which DoD 
intends to include a contract line item or option

[[Page 25145]]

for the development and demonstration of technology developed under the 
contract. The final rule broadens the scope of effort for which these 
contract line items and contract options can be awarded and the type of 
funding that may be used to fund these line items or options. This 
final rule also helps streamline the process for moving technologies 
developed under such contracts from science and technology into 
production.

V. 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.

VI. Congressional Review Act

    As required by the Congressional Review Act (5 U.S.C. 801-808) 
before an interim or final rule takes effect, DoD will submit a copy of 
the interim or final rule with the form, Submission of Federal Rules 
under the Congressional Review Act, to the U.S. Senate, the U.S. House 
of Representatives, and the Comptroller General of the United States. A 
major rule under the Congressional Review Act cannot take effect until 
60 days after it is published in the Federal Register. The Office of 
Information and Regulatory Affairs has determined that this rule is not 
a major rule under 5 U.S.C. 804.

VII. 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 paragraph (a)(2) of section 831 of the 
National Defense Authorization Act (NDAA) for Fiscal Year (FY) 2021 
(Pub. L. 116-283). The objective of this rule is to revise the type of 
contract line items or options that may be included, without additional 
competition, in contracts initially awarded from the competitive 
selection of a proposal resulting from a broad agency announcement.
    When awarding such a contract, contracting officers may now include 
a contract line item or contract option for the ``development and 
demonstration'' of technology developed under the contract. This 
revision provides a broader scope of effort and funding for which these 
contract line items and contract options can be awarded, which in turn 
helps streamline the process for moving technologies developed under 
such contracts from science and technology into production.
    There were no significant issues raised by public comments in 
response to the initial regulatory flexibility analysis.
    Based on data from the Federal Procurement Data System for FY 2018 
through FY 2020, on average, DoD annually awards 300 contracts to 200 
unique small entities using the competitive selection of proposals 
resulting from a broad agency announcement.
    This rule does not impose any new reporting, recordkeeping, or 
other compliance requirements.
    There are no significant alternatives to this rule that would 
accomplish the objective of the statute.

VIII. 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 217, 234, and 235

    Government procurement.

Jennifer D. Johnson,
Editor/Publisher, Defense Acquisition Regulations System.

    Therefore, 48 CFR parts 217, 234, and 235 are amended as follows:

0
1. The authority citation for 48 CFR parts 217, 234, and 235 continues 
to read as follows:

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

PART 217--SPECIAL CONTRACTING METHODS

0
2. Amend section 217.202 by revising paragraph (2) to read as follows:


217.202   Use of options.

* * * * *
    (2) For a contract that is initially awarded from the competitive 
selection of a proposal resulting from a broad agency announcement, see 
234.005-1 for the use of contract options for the development and 
demonstration or initial production of technology developed under the 
contract or the delivery of initial or additional items.

PART 234--MAJOR SYSTEM ACQUISITION

0
3. Amend section 234.005-1 by revising the introductory text and 
paragraph (1) to read as follows:


234.005-1   Competition.

    A contract that is initially awarded from the competitive selection 
of a proposal resulting from a broad agency announcement (see 235.016) 
may contain a contract line item or contract option using funds not 
limited to those identified in 235.016 for the development and 
demonstration or initial production of technology developed under the 
contract, or the delivery of initial or additional items if the item or 
a prototype thereof is created as the result of work performed under 
the contract, only when it adheres to the following limitations:
    (1) The contract line item or contract option shall be limited to 
the delivery of the minimal amount of initial or additional items or 
prototypes that will allow for timely competitive solicitation and 
award of a follow-on development or production contract for those 
items.
* * * * *

PART 235--RESEARCH AND DEVELOPMENT CONTRACTING

0
4. Amend section 235.006-71 by revising paragraph (b) to read as 
follows:


235.006-71   Competition.

* * * * *
    (b) For a contract that is initially awarded from the competitive 
selection of a proposal resulting from a broad agency announcement, see 
234.005-1 for the use of contract line items or contract options for 
the development and demonstration or initial production of technology 
developed under the contract or the delivery of initial or additional 
items.

[FR Doc. 2022-08815 Filed 4-27-22; 8:45 am]
BILLING CODE 5001-06-P