[Federal Register Volume 89, Number 81 (Thursday, April 25, 2024)]
[Proposed Rules]
[Pages 31680-31681]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2024-08437]


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DEPARTMENT OF DEFENSE

Defense Acquisition Regulations System

48 CFR Part 206

[Docket DARS-2024-0014]
RIN 0750-AL65


Defense Federal Acquisition Regulation Supplement: Modification 
of Prize Authority for Advanced Technology Achievements (DFARS Case 
2022-D014)

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 a section of the National 
Defense Authorization Act for Fiscal Year 2022 that provides procedures 
and approval and reporting requirements for contracts awarded as prizes 
for advanced technology achievements.

DATES: Comments on the proposed rule should be submitted in writing to 
the address shown below on or before June 24, 2024, to be considered in 
the formation of a final rule.

ADDRESSES: Submit comments identified by DFARS Case 2022-D014, using 
either of the following methods:
    [cir] Federal eRulemaking Portal: https://www.regulations.gov. 
Search for DFARS Case 2022-D014. Select ``Comment'' and follow the 
instructions to submit a comment. Please include ``DFARS Case 2022-
D014'' on any attached documents.
    [cir] Email: [email protected]. Include DFARS Case 2022-D014 in 
the subject line of the message.
    Comments received generally will be posted without change to 
https://www.regulations.gov, including any personal information 
provided. To confirm receipt of your comment(s), please check https://www.regulations.gov, approximately two to three days after submission 
to verify posting.

FOR FURTHER INFORMATION CONTACT: Mr. Jon Snyder, telephone 703-945-
5341.

SUPPLEMENTARY INFORMATION:

I. Background

    DoD is proposing to revise the DFARS to implement section 822 of 
the National Defense Authorization Act (NDAA) for Fiscal Year (FY) 2022 
(Pub. L. 117-81), which amends 10 U.S.C. 4025. Section 822 provides the 
authority to carry out advanced technology prize programs to award 
contracts to recognize outstanding achievements in basic, advanced, and 
applied research; technology development; and prototype development. 
Section 822 specifies the award of a contract as a prize is a 
competitive procedure if the solicitation is widely advertised. Section 
822 also requires approval of such awards that exceed $10,000 and 
congressional reporting for contracts that exceed $10 million.

II. Discussion and Analysis

    This proposed rule includes changes to the DFARS to implement 
section 822 of the NDAA for FY 2022. Changes are proposed to DFARS 
206.102-70, Other competitive procedures, to provide that the award of 
a contract, for the competitive selection of prize recipients, is a 
competitive procedure, when the solicitation is widely advertised 
including through the Governmentwide point of entry (https://sam.gov).

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 proposed 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 
valued at or below the simplified acquisition threshold, for commercial 
products including COTS items, or for commercial services.

IV. Expected Impact of the Rule

    Prior to the enactment of the NDAA for FY 2022, 10 U.S.C. 4025 
(formerly 10 U.S.C. 2374a) did not provide for the award of contracts 
as prizes for outstanding achievements in basic, advanced, and applied 
research; technology development; and prototype development. This 
proposed rule will implement the authority to award contracts as prizes 
under certain conditions.
    DoD expects this proposed rule, when finalized, may increase 
participation in prize competitions and decrease the lead time to 
deliver to the warfighter achievements in basic, advanced, and applied 
research; technology development; and prototype development. This 
proposed rule may help to expand the defense industrial base by 
providing a way for entities that are new to DoD procurement to obtain 
DoD contracts. It may also streamline the competitive process, which 
could reduce Government administrative costs associated with 
competitive negotiated acquisitions. For this reason, the difference in 
the cost of managing a contract instead of another type of prize is 
expected to be negligible.
    Data provided from the Office of the Under Secretary of Defense for 
Research and Engineering indicates there were a total of 809 cash 
prizes awarded from FY 2021 to FY 2023, or approximately 270 per year, 
worth a total of about $3.5 million annually. DoD estimates 20 percent 
of these 270 historical cash prize awards, or 54 cash prize awards 
worth a total of approximately $700,000, would be converted to 
contracts. Therefore, DoD estimates that approximately 54 entities per 
year would be awarded contracts or a combination of contracts, other 
agreements (e.g., grants, cooperative agreements, other transaction 
agreements), and cash prizes as a result of the changes in this 
proposed rule.

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, as amended.

VI. Regulatory Flexibility Act

    DoD does not expect this proposed rule, when finalized, 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., because DoD estimates that

[[Page 31681]]

approximately 127 small businesses would be awarded contracts or a 
combination of contracts and other prizes. However, an initial 
regulatory flexibility analysis has been performed and is summarized as 
follows:
    DoD is proposing to implement section 822 of the National Defense 
Authorization Act (NDAA) for Fiscal Year (FY) 2022 (Pub. L. 117-81), 
which amends 10 U.S.C. 4025, Prizes for advanced technology 
achievements. Section 822 provides advanced technology prize programs 
authority to award contracts to recognize outstanding achievements in 
basic, advanced, and applied research; technology development; and 
prototype development. This proposed rule also provides that the award 
of a contract as a prize is a competitive procedure if the prize 
program solicitation is widely advertised. Section 822 also requires 
approval of such awards exceeding $10,000 and congressional reporting 
for contracts exceeding $10 million.
    The objective of the proposed rule is to implement section 822 of 
the NDAA for FY 2022, which is the legal basis for the rule.
    DoD does not have data on contracts awarded as prizes to recognize 
outstanding achievements in basic, advanced, and applied research; 
technology development; and prototype development. Contracts were not 
authorized as a prize. However, analyzing data provided from the Office 
of the Under Secretary of Defense for Research and Engineering, there 
were 809 cash prizes awarded from FY 2021 to FY 2023. During this 
three-year period, DoD awarded a total of 636 cash prizes to small 
businesses, which is an average of 212 per year. DoD estimates 20 
percent of the 212 historical cash prize awards per year would be 
converted to contracts. Therefore, DoD estimates that approximately 42 
small businesses per year would be awarded contracts or a combination 
of contracts and other prizes as a result of this proposed rule. 
Therefore, DoD does not anticipate that this proposed rule, when 
finalized, will have a significant impact on small entities.
    This rule does not impose any new reporting, recordkeeping, or 
other compliance requirements for small entities.
    This rule does not duplicate, overlap, or conflict with any other 
Federal rules.
    There are no known alternatives that would accomplish the stated 
objectives of the applicable statute.
    DoD invites comments from small business concerns and other 
interested parties on the expected impact of this proposed rule on 
small entities.
    DoD will also consider comments from small entities concerning the 
existing regulations in subparts affected by this proposed 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 2022-
D014), in correspondence.

VII. Paperwork Reduction Act

    This proposed 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 proposed to be 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. Amend section 206.102-70 by--
0
a. Designating the text as paragraph (a); and
0
b. Adding a new paragraph (b) to read as follows:


206.102-70  Other competitive procedures.

    (a) * * *
    (b) The award of a contract as a prize resulting from a competitive 
selection of prize recipients for advanced technology achievements is a 
competitive procedure (10 U.S.C. 4025(f)), when the solicitation is 
widely advertised, including through the Governmentwide point of entry 
(see FAR part 5). See PGI 206.102-70 for approval requirements.

[FR Doc. 2024-08437 Filed 4-24-24; 8:45 am]
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