Defense Federal Acquisition Regulation Supplement: Inapplicability of Additional Defense-Unique Laws and Certain Non-Statutory DFARS Clauses to Commercial Item Contracts (DFARS Case 2018-D074)

<RULE> DEPARTMENT OF DEFENSE <SUBAGY>Defense Acquisition Regulations System</SUBAGY> <CFR>48 CFR Parts 203, 204, 205, 212, 215, and 225</CFR> <DEPDOC>[Docket DARS-2023-0043]</DEPDOC> <RIN>RIN 0750-AK33</RIN> <SUBJECT>Defense Federal Acquisition Regulation Supplement: Inapplicability of Additional Defense-Unique Laws and Certain Non-Statutory DFARS Clauses to Commercial Item Contracts (DFARS Case 2018-D074)</SUBJECT> <HD SOURCE="HED">AGENCY:</HD> Defense Acquisition Regulations System, Department of Defense (DoD). <HD SOURCE="HED">ACTION:</HD> Final rule. <SUM> <HD SOURCE="HED">SUMMARY:</HD> DoD is issuing a final rule amending the Defense Federal Acquisition Regulation Supplement (DFARS) to implement sections of the National Defense Authorization Acts for Fiscal Years 2018 and 2019 regarding the applicability of certain solicitation provisions and contract clauses to contracts and subcontracts for commercial products, commercial services, and commercially available off-the-shelf items. </SUM> <EFFDATE> <HD SOURCE="HED">DATES:</HD> Effective November 25, 2024. </EFFDATE> <FURINF> <HD SOURCE="HED">FOR FURTHER INFORMATION CONTACT:</HD> Ms. Jeanette Snyder, telephone 703-508-7524. </FURINF> <SUPLINF> <HD SOURCE="HED">SUPPLEMENTARY INFORMATION:</HD> <HD SOURCE="HD1">I. Background</HD> DoD published a proposed rule in the <E T="04">Federal Register</E> at 88 FR 80468 on November 17, 2023, to amend the DFARS to implement paragraphs (b) and (c) of section 849 of the National Defense Authorization Act (NDAA) for Fiscal Year (FY) 2018 (Pub. L. 115-91) and section 837 of the NDAA for FY 2019 (Pub. L. 115-232). Paragraph (b) of section 849 requires that DoD review the DFARS and propose revisions to eliminate certain contract clause requirements applicable to Federal Acquisition Regulation (FAR) part 12 commercial product and commercial service acquisitions, except for regulations required by law or Executive order, unless the Secretary of Defense determines that there is a specific reason not to eliminate the regulation. Paragraph (c) of section 849 requires that DoD review the DFARS and propose revisions to eliminate certain contract clause requirements applicable to commercially available off-the-shelf (COTS) item subcontracts, except for regulations required by law or Executive order, unless the Secretary of Defense determines that there is a specific reason not to eliminate the regulation. Paragraph (a) of section 837 of the NDAA for FY 2019 revises 10 U.S.C. 2375(b)(2), redesignated as 10 U.S.C. 3452(b)(2), by deleting the date “January 1, 2015” and adding the date “October 13, 1994” (the date of the Federal Acquisition Streamlining Act (FASA) of 1994). DoD published an extension to the comment period in the <E T="04">Federal Register</E> on December 27, 2023, at 88 FR 89357. Two respondents submitted public comments in response to the proposed rule. <HD SOURCE="HD1">II. Discussion and Analysis</HD> DoD reviewed the public comments in the development of the final rule; however, no changes were made to the rule as a result of the comments received. A discussion of the comments is provided, as follows: <HD SOURCE="HD2">A. Summary of Significant Changes From the Proposed Rule</HD> DFARS 212.371 is amended to add the contract clauses at DFARS 252.204-7012, Safeguarding Covered Defense Information and Cyber Incident Reporting, and 252.205-7000, Provision of Information to Cooperative Agreement Holders, to the list of solicitation provisions and contract clauses that are inapplicable to contracts for the acquisition of COTS items. These clauses are not applicable to contracts solely for the acquisition of COTS items. DFARS 212.301 is amended to restore, to the list of provisions and clauses that apply to commercial products and commercial services, the clause at DFARS 252.203-7005, Representation Relating to Compensation of Former DoD Officials, that was removed from the list in the proposed rule. This change aligns this final rule with the final rule for DFARS Case 2010-D020 published in the <E T="04">Federal Register</E> on November 18, 2011 (76 FR 71826). <HD SOURCE="HD2">B. Analysis of Public Comments</HD> <E T="03">Comment:</E> One respondent recommended that DFARS clause 252.225-7029, Acquisition of Uniform Components for Afghan Military or Afghan National Police, be removed from the DFARS as it is obsolete, since the United States is no longer involved in Afghanistan and is no longer purchasing uniform components for the Afghan military or the Afghan National Police. <E T="03">Response:</E> DoD acknowledges the respondent's concern relating to the applicability of DFARS clause 252.225-7029; however, the clause cannot be removed from the DFARS until the underlying statutory requirement is repealed. <E T="03">Comment:</E> One respondent indicated that the proposed rule did not sufficiently address the extent to which DoD reviewed, on a case-by-case basis, the applicability of all regulations that require specific contract clauses for contracts using the procedures in part 12 of the FAR and for subcontracts for COTS items. The respondent requested that DoD publish a second proposed rule that explains and describes the case-by-case determinations that DoD made with respect to each of these regulations. <E T="03">Response:</E> Section II of the preamble of the proposed rule provided a description of the analysis performed. In addition, the proposed rule for DFARS Case 2017-D010 (83 FR 30646) provided a description of the analysis performed of commercial product and commercial service applicability for DoD-unique statutes and associated contract clauses issued on or after January 1, 2015. In reviewing the remaining provisions and clauses, DoD considered procurement-related reasons including, but not limited to, the following: national security, common commercial practice, domestic preference, prohibited sources, trade agreements, protection of the Government, health and safety, and foreign military sales requirements. <HD SOURCE="HD2">C. Other Changes</HD> A conforming change is made to the prescription at 205.470 for the clause at DFARS 252.205-7000. Language at 203.171-4(b) regarding applicability to commercial products and commercial services, which was proposed for deletion, has been restored in the prescription for the provision at DFARS 252.203-7005. DFARS 212.205, Offers, is removed to align with changes made at DFARS 215.371-4(a)(7). DFARS 212.371 is amended to change the date “October 14, 1994”, to “October 13, 1994” to align with 10 U.S.C. 3452. The prescription at DFARS 225.1103(4) for the clause at 252.225-7007, Prohibition on Acquisition of Certain Items from Communist Chinese Military Companies, is amended to add the requirement to include the clause in solicitations and contracts using FAR part 12 procedures for the acquisition of commercial products and commercial services, to align with the determination made in the final rule for DFARS Case 2018-D020 published on December 21, 2018, at 83 FR 66066. <HD SOURCE="HD1">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</HD> This final rule does not create any new solicitation provisions or contract clauses. However, the final rule clarifies the applicability of the following provisions and clause by amending the list under paragraph (f) at DFARS 212.301, Solicitation provisions and contract clauses for the acquisition of commercial products and commercial services, to remove DFARS clause 252.203-7003, Agency Office of the Inspector General, and DFARS provision 252.215-7007, Notice of Intent to Resolicit. This rule also clarifies the applicability of certain provisions and clauses by amending the list at DFARS 212.370, Inapplicability of certain provisions and clauses to contracts and subcontracts for the acquisition of commercial products, commercial services, and COTS items, to add the following: (1) DFARS clause 252.203-7003, Agency Office of the Inspector General; and (3) DFARS provision 252.215-7007, Notice of Intent to Resolicit. In addition, this rule makes similar clarifications at DFARS 212.371, Inapplicability of certain provisions and clauses to contracts for the acquisition of COTS items, to add the following: (1) DFARS clause 252.205-7000, Provision of Information to Cooperative Agreement Holders; (2) DFARS provision 252.204-7008, Compliance with Safeguarding Covered Defense Information Controls; (3) DFARS clause 252.204-7012, Safeguarding Covered Defense Information and Cyber Incident Reporting; (4) DFARS provision 252.204-7019, Notice of NIST SP 800-171 DoD Assessment Requirements; (5) DFARS clause 252.204-7020, NIST SP 800-171 DoD Assessment Requirements; and (6) DFARS clause 252.204-7021, Cybersecurity Maturity Model Certification Requirements. <HD SOURCE="HD1">IV. Expected Impact of the Proposed Rule</HD> This final rule could impact any large or small business that is awarded a commercial contract by DoD. This rule does not add any new solicitation provisions or contract clauses. Rather, there may be a reduction in burden on contractors by making one solicitation provision and one contract clause no longer applicable to solicitations and contracts for commercial products, commercial services, and COTS items, and by making two provisions and four clauses no longer applicable to solicitations and contracts for COTS items. <HD SOURCE="HD1">V. Executive Orders 12866 and 13563</HD> 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 ━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━ Preview showing 10k of 27k characters. Full document text is stored and available for version comparison. ━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━