81 FR 6488 - Defense Federal Acquisition Regulation Supplement: DFARS Case 2016-D017, Independent Research and Development Expenses

DEPARTMENT OF DEFENSE
Defense Acquisition Regulations System

Federal Register Volume 81, Issue 25 (February 8, 2016)

DoD is seeking information that will assist in the development of a revision to the DFARS to ensure that substantial future independent research and development (IR&D) expenses as a means to reduce evaluated bid prices in competitive source selections are evaluated in a uniform way during competitive source selections. In addition to the request for written comments on this proposed rulemaking, DoD will hold a public meeting to hear the views of interested parties.

[Federal Register Volume 81, Number 25 (Monday, February 8, 2016)]
[Proposed Rules]
[Pages 6488-6489]
From the Federal Register Online  [www.thefederalregister.org]
[FR Doc No: 2016-02396]


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DEPARTMENT OF DEFENSE

Defense Acquisition Regulations System

48 CFR Parts 215 and 252

RIN 0750-AI84


Defense Federal Acquisition Regulation Supplement: DFARS Case 
2016-D017, Independent Research and Development Expenses

AGENCY: Defense Acquisition Regulations System, Department of Defense 
(DoD).

ACTION: Advance notice of proposed rulemaking.

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SUMMARY: DoD is seeking information that will assist in the development 
of a revision to the DFARS to ensure that substantial future 
independent research and development (IR&D) expenses as a means to 
reduce evaluated bid prices in competitive source selections are 
evaluated in a uniform way during competitive source selections. In 
addition to the request for written comments on this proposed 
rulemaking, DoD will hold a public meeting to hear the views of 
interested parties.

DATES: Submission of comments: Interested parties should submit written 
comments to the address shown below on or before April 8, 2016, to be 
considered in the development of any proposed DFARS rule.
    Public meeting: A public meeting will be held in the General 
Services Administration (GSA), Central Office Auditorium, 1800 F Street 
NW., Washington DC, 20405, on March 3, 2016, from 12:00 p.m. to 4:00 
p.m., local time. The GSA Auditorium is located on the main floor of 
the building.
    Individuals wishing to attend the public meeting should register by 
February 25, 2016, to ensure adequate accommodations, to facilitate 
entry into the building, and to create an attendee list for secure 
entry to the GSA building for anyone who is not a Federal Government 
employee with a Government badge. Interested parties may register at 
the Web site, http://www.acq.osd.mil/dpap/dars/IR&D.html, by providing 
the following information:
     Company or organization name;
     Names, telephone numbers and email addresses of persons 
planning to attend;
     Last four digits of social security number for each 
attendee (non-Federal employees only); and
     Identify if company or organization desires to make a 
presentation; limit to one presentation per company or organization. 
Presentations will be limited to approximately 10 minutes as time 
permits.
    One valid, government-issued photo identification card will be 
required to enter the building. Non-U.S. citizens may use their valid 
passport as photo identification. Attendees are encouraged to arrive at 
least 30 minutes early to accommodate security procedures.
    Special Accommodations: The public meeting location is physically 
accessible to persons with disabilities. Requests for sign language 
interpretation or other auxiliary aids should be directed to Mr. Mark 
Gomersall, telephone 703-602-0302, at least 10 working days prior to 
the meeting date.

ADDRESSES: Submit comments identified by DFARS Case 2016-D017, using 
any of the following methods:
    [cir] Regulations.gov: http://www.regulations.gov. Submit comments 
via the Federal eRulemaking portal by entering ``DFARS Case 2016-D017'' 
under the heading ``Enter keyword or ID'' and selecting ``Search.'' 
Select the link ``Submit a Comment'' that corresponds with ``DFARS Case 
2016-D017.'' Follow the instructions provided at the ``Submit a 
Comment'' screen. Please include your name, company name (if any), and 
``DFARS Case 2016-D017'' on your attached document.
    [cir] Email: [email protected]. Include DFARS Case 2016-D017 in 
the subject line of the message.
    [cir] Fax: 571-372-6099.
    [cir] Mail: Defense Acquisition Regulations System, Attn: Mr. Mark 
Gomersall, OUSD (AT&L) DPAP/DARS, Room 3B941, 3060 Defense Pentagon, 
Washington, DC 20301-3060.
    Comments received generally will be posted without change to http://www.regulations.gov, including any personal information provided. To 
confirm receipt of your comment(s), please check www.regulations.gov, 
approximately two to three days after submission to verify posting 
(allow 30 days for posting of comments submitted by mail).

FOR FURTHER INFORMATION CONTACT: Mr. Mark Gomersall, telephone 571-372-
6099; facsimile 571-372-6101.

SUPPLEMENTARY INFORMATION: 

I. Background

    As expressed in the ``Implementation Directive for Better Buying 
Power 3.0--Achieving Dominant Capabilities Through Technical Excellence 
and Innovation,'' dated April 9, 2015, the Under Secretary of Defense 
for Acquisition, Technology and Logistics noted a concern when 
``promised future IRAD [Independent Research and Development] 
expenditures are used to substantially reduce the bid price on 
competitive procurements. In these cases, development price proposals 
are reduced by using a separate source of government funding (allowable 
IRAD overhead expenses spread across the total business) to gain a 
price advantage in a specific competitive bid. This is not the intended 
purpose of making IRAD an allowable cost.''
    DoD is considering a proposed approach whereby solicitations would 
require offerors to describe in detail the nature and value of 
prospective IR&D projects on which the offeror would rely to perform 
the resultant contract. Then, as a standard approach, DoD would 
evaluate proposals in a manner that would take into account that 
reliance by adjusting the total evaluated price to the Government, for 
evaluation purposes only, to include the value of related future IR&D 
projects.

II. Solicitation of Public Comment

    DoD is seeking comments on this planned approach in order to assist 
in the development of a proposed DFARS rule. Specifically, the 
Department is interested in understanding whether the planned approach 
would achieve the objective of treating the proposed use of substantial 
future IR&D expenses as a

[[Page 6489]]

means to reduce evaluated bid prices in competitive source selections 
in a uniform manner that is consistent with the objective of making 
IR&D an allowable cost.

List of Subjects in 48 CFR Parts 215 and 252

    Government procurement.

Jennifer L. Hawes,
Editor, Defense Acquisition Regulations System.
[FR Doc. 2016-02396 Filed 2-5-16; 8:45 am]
BILLING CODE 5001-06-P