[Federal Register Volume 88, Number 101 (Thursday, May 25, 2023)]
[Rules and Regulations]
[Pages 33834-33835]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2023-11140]


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DEPARTMENT OF DEFENSE

Defense Acquisition Regulations System

48 CFR Part 206

[Docket DARS-2023-0021]
RIN 0750-AL79


Defense Federal Acquisition Regulation Supplement: Modification 
of Authority of the Department of Defense To Carry Out Certain 
Prototype Projects (DFARS Case 2023-D006)

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 2023.

DATES: Effective May 25, 2023.

FOR FURTHER INFORMATION CONTACT: Ms. Kimberly R. Ziegler, telephone 
703-901-3176.

SUPPLEMENTARY INFORMATION: 

I. Background

    DoD is amending the DFARS to implement section 842 of the National 
Defense Authorization Act (NDAA) for Fiscal Year (FY) 2023 (Pub. L. 
117-263), which amends 10 U.S.C. 4022(f)(2) to permit the award of a 
follow-on production contract without the use of competitive 
procedures, even if explicit notification was not listed within the 
request for proposal for the prototype project transaction. This 
revision modifies the criteria required to award a follow-on production 
contract without the use of competitive procedures at DFARS 206.001-
70(a), which requires other transaction solicitations and agreements to 
include provisions for a follow-on contract in order to qualify for an 
exception to competition requirements.
    The statutory revision to the criteria does not implement new 
requirements; instead it removes one of the requirements. The statutes 
and regulations that implement DoD's other transactions authority 
permit DoD to provide, in the agreement, for the award of a follow-on 
production contract to a participant in the prototype project. 
Agreements made under DoD's other transactions authority are not 
subject to the Federal Acquisition Regulation (FAR) or DFARS; however, 
the award of a follow-on production contract resulting from such an 
other transaction agreement is subject to these acquisition 
regulations.
    DoD issued a final rule for DFARS case 2019-D031 (87 FR 10989) on 
February 28, 2022, to implement section 815 of the NDAA for FY 2016 
(Pub. L. 114-92), which modified the criteria required to exempt from 
competition certain follow-on production contracts at DFARS 206.001-
70(a)(1) and (2).
    This final rule removes from DFARS 206.001-70(a)(1) the other 
transaction solicitation requirement and clarifies that an other 
transaction agreement is still statutorily required (10 U.S.C. 
4022(f)(1)) to provide for the award of a follow-on production contract 
in order for a contracting officer to award the follow-on production 
contract without obtaining competition. DFARS 206.001-70(a)(2) is 
revised to require documentation from the agreements officer for the 
other transaction agreement that, where applicable for the prototype 
project, the threshold at 10 U.S.C. 4022(a)(2)(C) and the requirements 
at 10 U.S.C. 4022(f)(2)(A) and (B) have been met. These and additional 
revisions in 206.001-70(a) are intended to ensure an accurate 
interpretation of the statutory requirements of 10 U.S.C. 4022 that are 
subject to the DFARS.

II. Publication of This Final Rule for Public Comment Is Not Required 
by Statute

    The statute that applies to the publication of the FAR is 41 U.S.C. 
1707, Publication of Proposed Regulations. Subsection (a)(1) of the 
statute requires that a procurement policy, regulation, procedure, or 
form (including an amendment or modification thereof) must be published 
for public comment if it relates to the expenditure of appropriated 
funds, and has either a significant effect beyond the internal 
operating procedures of the agency issuing the policy, regulation, 
procedure, or form, or has a significant cost or administrative impact 
on contractors or offerors. This final rule is not required to be 
published for public comment, because DoD is removing a requirement 
that is no longer mandated by statute and that affects only the 
internal operating procedures of DoD.

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

    This rule does not impose any new requirements on contracts at or 
below the simplified acquisition threshold, for commercial services, or 
for commercial products, including commercially available off-the-shelf 
items.

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.

V. 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 to the Comptroller General of the United 
States. A major rule under the

[[Page 33835]]

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 as 
defined by 5 U.S.C. 804.

VI. Regulatory Flexibility Act

    The Regulatory Flexibility Act does not apply to this rule because 
this final rule does not constitute a significant DFARS revision within 
the meaning of FAR 1.501-1, and 41 U.S.C. 1707 does not require 
publication for public comment.

VII. 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 Part 206

    Government procurement.

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

    Therefore, 48 CFR part 206 is amended as follows:

PART 206--COMPETITION REQUIREMENTS

0
1. The authority citation for 48 CFR part 206 continues to read as 
follows:

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


0
2. Revise section 206.001-70 to read as follows:


206.001-70  Exception for prototype projects for follow-on production 
contracts.

    (a) Also excepted from this part are follow-on production contracts 
for products developed pursuant to the ``other transactions'' authority 
of 10 U.S.C. 4022 for prototype projects, when the contracting officer 
receives sufficient documentation from the agreements officer issuing 
the other transaction agreement for the prototype project that--
    (1) The other transaction agreement included provisions for a 
follow-on production contract (10 U.S.C. 4022(f)(1)); and
    (2) Where applicable, the threshold at 10 U.S.C. 4022(a)(2)(C) and 
the requirements at 10 U.S.C. 4022(f)(2)(A) and (B) have been met.
    (b) See PGI 206.001-70 for additional guidance.

[FR Doc. 2023-11140 Filed 5-24-23; 8:45 am]
BILLING CODE 5001-06-P