DoD issues a final rule relating to commercial item acquisitions

By Paul M. Bailey, CPA, Managing Director and S. Chase Kunk, J.D., Vice President, Contracts & Procurement

DoD issued a final rule, published and effective today, January 31, 2018 to implement sections of the National Defense Authorization Act for Fiscal Years 2013, 2016 and 2018 relating to commercial item acquisitions.

About the proposed rule:

The DoD published a proposed rule in the Federal Register on August 11, 2016, to provide guidance to contracting officers for making price reasonableness determinations, promote consistency in making commercial item determinations, and expand opportunities for nontraditional defense contractors to do business with the DoD.

The final rule amends the DFARS to provide additional guidance to contracting officers and additional details on the types of ‘‘other than certified cost or pricing data’’ that offerors should include in their proposal for the purpose of determining whether proposed prices for commercial items are fair and reasonable.

Who does this affect?

This rule will apply to contractors that compete for contracts being awarded using FAR Part 15 Negotiation procedures that are valued at $750,000 or more.

Overview of the rule:

The final rule prescribes the use of a new DFARS provision 252.215–7010, to be used in lieu of FAR provision 52.215–20, Requirements for Certified Cost or Pricing Data and Data Other Than Certified Cost or Pricing Data. The new DFARS provision includes the existing requirement under FAR provision 52.215–20 for offerors to submit certified cost and pricing data and data other than certified cost or pricing data, as appropriate; further, the new DFARS provision implements a statutory exemption to the requirement for ‘‘certified cost or pricing data’’ for nontraditional defense contractors.

Finally, the rule advises contracting officers that they may presume that a prior commercial item determination made by another DoD component shall serve as a determination for subsequent procurements of such items, unless the contracting officer obtains a determination from the head of the contracting activity that the item is not commercial and the basis for that decision.

The DoD guidebooks

The DoD guidebooks for Commercial Item Determinations (Part A) and Commercial Item Pricing (Part B) were expected to be released concurrent with this final rule. The guidebooks were subject to extensive comments from industry and associations. The final rule indicates these guidebooks will be finalized to provide further guidance to contracting officers.

Executive Order 13771 & Cost Analysis

The final rule is considered to be a deregulatory action and therefore not subject to E.O. 13771, Reducing Regulation and Controlling Regulatory Costs. DoD has estimated the cost savings for this rule which can be accessed at www.regulations.gov, DFARS Case 2016–D006, Supporting Documents. An estimate of hours to prepare Cost or Pricing Data by business type is provided.

More on this rule:

The final rule, including discussion commentary may be accessed at: https://www.gpo.gov/fdsys/pkg/FR-2018-01-31/pdf/2018-01781.pdf?

#DFARS #DoD #NDAA #Commercial_Item_Determinations #Defense _Contractor

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