DoD Issues Three Final DFARS Rules

The Department of Defense has issued three final rules amending the Defense Federal Acquisition Regulation Supplement: Acquisition of Commercial Items (DFARS Case 2008-D011); Ownership or Control by a Foreign Government (DFARS Case 2010-D010); and Technical Amendments (no case number). Each rule carries an effective date of April 19, 2011.

Commercial Items

The rule in DFARS Case 2008-D011 adopts as final, with minor editorial changes, an interim rule (¶70,016.516 ; corrected by ¶70,016.522) that implemented Sections 805 and 815 of the National Defense Authorization Act for Fiscal Year 2008 (PL 110-181) to specify the conditions under which a time-and-materials or labor-hour contract may be used for the acquisition of commercial items. The rule adds new DFARS 212.207, which authorizes the use of T&M and L-H contracts for commercial items only for services acquired for support of a commercial item, and for emergency repair services. T&M and L-H contracts may also be used for other commercial services, but only when the agency head approves a contracting officer’s determination that meets the four requirements set out in DFARS 212.207 (b)(iii). Also, the rule revises DFARS 234.7002 to specify when major weapon systems, subsystems, components, and parts may be treated as commercial items. DFARS 234.7002 (a) is amended to require –as another condition of procuring major weapon systems as commercial items –offerors to have submitted sufficient information to evaluate price reasonableness. Revised DFARS 234.7002 (b) and new DFARS 234.7002 (c) address the conditions under which subsystems of major weapons systems, and components and spare parts for major weapons systems, may be treated as commercial items. Another new provision, DFARS 234.7002 (d), authorizes the CO to request offerors to submit prices paid for the same or similar commercial items, under comparable terms and conditions by both government and commercial customers, and other relevant information regarding the basis for price or cost. Finally, the rule modifies the definitional provision at DFARS 202.101 to clarify, with regard to sales of commercial items, that the terms “general public” and “nongovernmental entities” do not include the federal government, or a state, local, or foreign government. For the text of the final rule, see ¶70,016.634.

Foreign Government Control

The DFARS Case 2010-D010 rule finalizes, without change, an interim rule (¶70,016.577) that implemented revisions to Department of Defense Directive-Type Memorandum 09-019, “Policy Guidance for Foreign Ownership, Control, or Influence (FOCI).” The rule revises DFARS 209.104-1 to state that the Undersecretary of Defense for Intelligence is the responsible office. Additionally, the rule amends subparagraph (a)(4) of DFARS 252.209-7002, Disclosure of Ownership or Control by a Foreign Government, to reflect changes required by the memorandum to the definition of “proscribed information.” DoD received no comments on the interim rule. The text of the final rule appears at ¶70,016.635.

Technical Amendments

In the last of the three final rules, the Department of Defense makes technical amendments to the Defense Federal Acquisition Regulation Supplement. The rule amends DFARS 202.101, DFARS 204.7201, DFARS 204.7202-1, and DFARS 204.7204 to updates references to the Defense Logistics Agency. The rule also makes editorial changes in the heading and in the introductory text of DFARS 252.216-7004. For the text of this final rule, see ¶70,016.636.