81 FR 65565 - Defense Federal Acquisition Regulation Supplement: Rights in Technical Data (DFARS Case 2016-D008)

DEPARTMENT OF DEFENSE
Defense Acquisition Regulations System

Federal Register Volume 81, Issue 185 (September 23, 2016)

Page Range		65565-65567
FR Document		2016-22570
DoD is issuing a final rule to amend the Defense Federal Acquisition Regulation Supplement (DFARS) to implement a section of the National Defense Authorization Act for Fiscal Year 2016 that addresses rights in technical data relating to major weapon systems, expanding application of the presumption that a commercial item has been developed entirely at private expense.
Federal Register, Volume 81 Issue 185 (Friday, September 23, 2016)
[Federal Register Volume 81, Number 185 (Friday, September 23, 2016)]
[Rules and Regulations]
[Pages 65565-65567]
From the Federal Register Online  [www.thefederalregister.org]
[FR Doc No: 2016-22570]


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DEPARTMENT OF DEFENSE

Defense Acquisition Regulations System

48 CFR Parts 227 and 252

[Docket DARS-2016-0010]
RIN 0750-AI91


Defense Federal Acquisition Regulation Supplement: Rights in 
Technical Data (DFARS Case 2016-D008)

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

ACTION: Final rule.

-----------------------------------------------------------------------

SUMMARY: DoD is issuing a final rule to amend the Defense Federal 
Acquisition Regulation Supplement (DFARS) to implement a section of the 
National Defense Authorization Act for Fiscal Year 2016 that addresses 
rights in technical data relating to major weapon systems, expanding 
application of the presumption that a commercial item has been 
developed entirely at private expense.

DATES: Effective September 23, 2016.

FOR FURTHER INFORMATION CONTACT: Ms. Amy G. Williams, telephone 571-
372-6106.

SUPPLEMENTARY INFORMATION: 

I. Background

    DoD published a proposed rule in the Federal Register at 81 FR 
28812 on May 10, 2016, to implement section 813(a) of the National 
Defense Authorization Act (NDAA) for Fiscal Year (FY) 2016 (Pub. L. 
114-92). Section 813(a) modifies 10 U.S.C. 2321(f) to address rights in 
technical data relating to major weapon systems.
    Until now, except for commercially available off-the-shelf (COTS) 
items, a contracting officer's challenge to asserted restrictions on 
technical data relating to a major system was sustained unless the 
contractor or subcontractor submitted information demonstrating that 
the item was developed exclusively at private expense.
    Section 813(a) revised 10 U.S.C. 2321(f) in two primary ways: (1) 
The major systems rule was narrowed to apply only to major weapon 
systems; and (2) the exception to the major systems rule for 
commercially available off-the-shelf (COTS) items was expanded to 
include three additional exceptions. More specifically, the formerly 
COTS-only exception was expanded to include (i) COTS items with 
modifications of a type customarily available in the commercial 
marketplace or minor modifications made to meet Federal Government 
requirements; (ii) commercial subsystems or components of a major 
weapon system, if the major weapon system was acquired as a commercial 
item in accordance with 10 U.S.C. 2379(a); and (iii) components of a 
subsystem, if the subsystem was acquired as a commercial item in 
accordance with 10 U.S.C. 2379(b).
    There were no public comments submitted in response to the proposed 
rule. There are no significant changes from the proposed rule made in 
the final rule.
    Although there were no comments received on the substance of the 
proposed rule, DoD did receive a request to suspend the rulemaking 
process on any case (including this case) relating to rights in 
technical data until such time as the final report of the Government-
Industry Advisory Panel (the Panel), established in accordance with 
section 813(b) of the NDAA for FY 2016, has been submitted to Congress. 
After consultation with the Chair of the Panel, DoD determined to 
proceed with publication of the final rule on this case. This case 
implements section 813(a) of the NDAA for FY 2016, the same section 
that set up the Panel, with no indication that DoD should delay 
implementation. Furthermore, the law is very prescriptive and the 
proposed rule is a nearly verbatim implementation of the statutory 
language, so there could be no substantive change to this rule without 
a corresponding statutory change to 10 U.S.C. 2321. The statute was 
effective upon implementation, and is expected to be beneficial to 
industry, including small businesses.

II. Discussion and Analysis

    In order to implement the statutory changes for validation of 
asserted restrictions on technical data, and apply the revised 
requirements and procedures to validation of asserted restrictions on 
computer software, this final rule amends--
     DFARS 227.7103-13, Government right to review, verify, 
challenge, and validate asserted restrictions;
     DFARS 227.7203-13, Government right to review, verify, 
challenge, and validate asserted restrictions;
     DFARS 252.227-7019, Validation of Asserted Restrictions--
Computer Software; and
     DFARS 252.227-7037, Validation of Restrictive Markings on 
Technical Data.

III. Applicability to Contracts at or Below the Simplified Acquisition 
Threshold (SAT) and for Commercial Items, Including Commercially 
Available Off-the-Shelf (COTS) Items

    This final rule does not add any new provisions or clauses or add 
new requirements to existing provision or clauses. Rather, when 
acquiring major weapon systems, it expands the circumstances relating 
to commerciality in which the contracting officer shall presume that 
development was exclusively at private expense.

IV. 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, dated September 30, 1993. This rule is not a major rule 
under 5 U.S.C. 804.

V. Regulatory Flexibility Act

    A final regulatory flexibility analysis (FRFA) has been prepared 
consistent with the Regulatory Flexibility Act, 5 U.S.C. 601, et seq. 
The FRFA is summarized as follows:
    This rule was initiated to implement section 813(a) of the National 
Defense Authorization Act (NDAA) for Fiscal Year (FY) 2016 (Pub. L. 
114-92). The objective of this rule is to reduce the requirement to 
respond to Government

[[Page 65566]]

challenges of restricted rights, by expanding the applicability of the 
presumption regarding development exclusively at private expense in 
accordance with section 813(a) of the NDAA for FY 2016.
    There were no public comments in response to the initial regulatory 
flexibility analysis.
    DoD cannot accurately determine the number of small entities that 
will be affected by this change in the regulations, because DoD does 
not have sufficient information about subcontract awards of subsystems 
and components of major weapon systems. However, DoD estimates an 
annual reduction of 50 prechallenge requests for information and 2 
challenges of asserted technical data restrictions. DoD further 
estimates, based on data from the DoD FY 2014 Small Business 
Procurement Scorecard, that this reduction in challenges will affect 
about 17 small businesses (52 x 0.33).
    The final rule reduces the requirement to respond to Government 
challenge of restricted rights. Under current regulations, the 
presumption regarding development exclusively at private expense does 
not apply to major systems or subsystems or components thereof, except 
for commercially available off-the-shelf items. This rule expands 
applicability of the presumption regarding development exclusively at 
private expense with regard to a major weapon system, or a subsystem or 
component thereof, to cover--
     A commercial subsystem or component of a major weapon 
system, if the major weapon system was acquired as a commercial item in 
accordance with DFARS subpart 234.70 (10 U.S.C. 2379(a));
     A component of a subsystem, if the subsystem was acquired 
as a commercial item in accordance with DFARS subpart 234.70 (10 U.S.C. 
2379(b)); and
     Commercially available off-the-shelf items with 
modifications of a type customarily available in the commercial 
marketplace or minor modifications made to meet Federal Government 
requirements.
    The classes of small entities that will be affected by this 
reduction are small businesses that provide any items in the above 
categories that are not challenged due to the new statute.
    This rule reduces the burden on small entities to the maximum 
extent permitted by the statute.

VI. Paperwork Reduction Act

    This rule contains information collection requirements that have 
been approved by the Office of Management and Budget under the 
Paperwork Reduction Act (44 U.S.C. chapter 35). This information 
collection requirement has been assigned OMB Control Number 0704-0369, 
entitled ``Defense Federal Acquisition Regulation Supplement (DFARS) 
Subpart 227.71, Rights in Technical Data, and Subpart 227.72, Rights in 
Computer Software and Computer Software Documentation, and related 
provisions and clauses.''

List of Subjects in 48 CFR Parts 227 and 252

    Government procurement.

Jennifer L. Hawes,
Editor, Defense Acquisition Regulations System.

    Therefore, 48 CFR parts 227 and 252 are amended as follows:

0
1. The authority citation for parts 227 and 252 continues to read as 
follows:

    Authority:  41 U.S.C. 1303 and 48 CFR chapter 1.

PART 227--PATENTS, DATA, AND COPYRIGHTS

0
2. Amend section 227.7103-13 by--
0
a. Revising the section heading;
0
b. In paragraph (c)(1), removing ``commercial item, component, or 
process'' and adding ``commercial item'' in its place and removing 
``the item, component or process'' and adding ``that item'' in its 
place; and
0
c. Revising paragraphs (c)(2)(i) and (ii).
    The revisions read as follows:


227.7103-13   Government right to review, verify, challenge, and 
validate asserted restrictions.

* * * * *
    (c) * * *
    (2) * * *
    (i) Commercial items. Except as provided in paragraph (c)(2)(ii) of 
this section, contracting officers shall presume that a commercial item 
was developed exclusively at private expense whether or not a 
contractor or subcontractor submits a justification in response to a 
challenge notice. When a challenge is warranted, a contractor's or 
subcontractor's failure to respond to the challenge notice cannot be 
the sole basis for issuing a final decision denying the validity of an 
asserted restriction.
    (ii) Major weapon systems. When the contracting officer challenges 
an asserted restriction regarding technical data for a major weapon 
system or a subsystem or component thereof on the basis that the 
technology was not developed exclusively at private expense--
    (A) The presumption in paragraph (c)(2)(i) of this section applies 
to--
    (1) A commercial subsystem or component of a major weapon system, 
if the major weapon system was acquired as a commercial item in 
accordance with subpart 234.70 (10 U.S.C. 2379(a));
    (2) A component of a subsystem, if the subsystem was acquired as a 
commercial item in accordance with subpart 234.70 (10 U.S.C. 2379(b)); 
and
    (3) Any other component, if the component is a commercially 
available off-the-shelf item or a commercially available off-the-shelf 
item with modifications of a type customarily available in the 
commercial marketplace or minor modifications made to meet Federal 
Government requirements; and
    (B) In all other cases, the contracting officer shall sustain the 
challenge unless information provided by the contractor or 
subcontractor demonstrates that the item was developed exclusively at 
private expense.
* * * * *


227.7203-13   [Amended]

0
3. Amend section 227.7203-13 by--
0
a. In the section heading, adding a comma after ``challenge'';
0
b. Removing paragraph (d); and
0
c. Redesignating paragraphs (e), (f), and (g) as paragraphs (d), (e), 
and (f), respectively.

PART 252--SOLICITATION PROVISIONS AND CONTRACT CLAUSES

0
4. Amend section 252.227-7019 by--
0
a. Removing the clause date ``(SEP 2011)'' and adding ``(SEP 2016)'' in 
its place;
0
b. Removing paragraph (f);
0
c. Redesignating paragraphs (g), (h), (i), and (j) as paragraphs (f), 
(g), (h), and (i), respectively;
0
d. In newly redesignated paragraph (f)(5)--
0
i. Removing ``(g)(1)'' and adding ``(f)(1)'' in its place;
0
ii. Removing ``Officer will'' and adding ``Officer shall'' in its 
place; and
0
iii. Removing ``paragraph (f) of this clause and'';
0
f. In newly redesignated paragraph (f)(6) introductory text, removing 
``the written explanation furnished pursuant to paragraph (f)(1) of 
this clause, or any other'' and adding ``any'' in its place;
0
g. In newly redesignated paragraph (g)(1) introductory text, removing 
``(h)(3)'' and adding ``(g)(3)'' in its place; and
0
h. In newly redesignated paragraph (g)(3), removing ``(h)(1)'' and 
adding ``(g)(1)'' in its place.

[[Page 65567]]


0
5. Amend section 252.227-7037 by--
0
a. Removing the clause date ``(JUN 2013)'' and adding ``(SEP 2016)'' in 
its place; and
0
b. Revising paragraphs (b)(1) and (2).
    The revisions read as follows:


252.227-7037   Validation of restrictive markings on technical data.

* * * * *
    (b) * * *
    (1) Commercial items. (i) Except as provided in paragraph (b)(2) of 
this clause, the Contracting Officer will presume that the Contractor's 
or a subcontractor's asserted use or release restrictions with respect 
to a commercial item is justified on the basis that the item was 
developed exclusively at private expense.
    (ii) The Contracting Officer will not challenge such assertions 
unless the Contracting Officer has information that demonstrates that 
the commercial item was not developed exclusively at private expense.
    (2) Major weapon systems. In the case of a challenge to a use or 
release restriction that is asserted with respect to data of the 
Contractor or a subcontractor for a major weapon system or a subsystem 
or component thereof on the basis that the major weapon system, 
subsystem, or component was developed exclusively at private expense--
    (i) The presumption in paragraph (b)(1) of this clause applies to--
    (A) A commercial subsystem or component of a major weapon system, 
if the major weapon system was acquired as a commercial item in 
accordance with DFARS subpart 234.70 (10 U.S.C. 2379(a));
    (B) A component of a subsystem, if the subsystem was acquired as a 
commercial item in accordance with DFARS subpart 234.70 (10 U.S.C. 
2379(b)); and
    (C) Any other component, if the component is a commercially 
available off-the-shelf item or a commercially available off-the-shelf 
item with modifications of a type customarily available in the 
commercial marketplace or minor modifications made to meet Federal 
Government requirements; and
    (ii) In all other cases, the challenge to the use or release 
restriction will be sustained unless information provided by the 
Contractor or a subcontractor demonstrates that the item or process was 
developed exclusively at private expense.
* * * * *
[FR Doc. 2016-22570 Filed 9-22-16; 8:45 am]
 BILLING CODE 5001-06-P
Federal Register / Vol. 81, No. 185 / Friday, September 23, 2016 / Rules and Regulations 65565

236.215 Special procedures for cost- technical data relating to major weapon II. Discussion and Analysis
reimbursement contracts for construction. systems. In order to implement the statutory
For contracts in connection with a Until now, except for commercially changes for validation of asserted
military construction project or military available off-the-shelf (COTS) items, a restrictions on technical data, and apply
family housing project, see the contracting officer’s challenge to the revised requirements and
prohibition at 216.301–3. asserted restrictions on technical data procedures to validation of asserted
■ 5. Revise section 236.271 to read as relating to a major system was sustained restrictions on computer software, this
follows: unless the contractor or subcontractor final rule amends—
submitted information demonstrating • DFARS 227.7103–13, Government
236.271 Cost-plus-fixed-fee contracts. right to review, verify, challenge, and
that the item was developed exclusively
Annual military construction at private expense. validate asserted restrictions;
appropriations acts restrict the use of • DFARS 227.7203–13, Government
cost-plus-fixed-fee contracts (see Section 813(a) revised 10 U.S.C.
right to review, verify, challenge, and
216.306(c)). See also 216.301–3 2321(f) in two primary ways: (1) The
validate asserted restrictions;
regarding the prohibition on the use of major systems rule was narrowed to • DFARS 252.227–7019, Validation of
certain cost-reimbursement contracts in apply only to major weapon systems; Asserted Restrictions—Computer
connection with a military construction and (2) the exception to the major Software; and
project or military family housing systems rule for commercially available • DFARS 252.227–7037, Validation of
project. off-the-shelf (COTS) items was Restrictive Markings on Technical Data.
expanded to include three additional
[FR Doc. 2016–22569 Filed 9–22–16; 8:45 am] III. Applicability to Contracts at or
exceptions. More specifically, the
BILLING CODE 5001–06–P formerly COTS-only exception was Below the Simplified Acquisition
expanded to include (i) COTS items Threshold (SAT) and for Commercial
with modifications of a type customarily Items, Including Commercially
DEPARTMENT OF DEFENSE Available Off-the-Shelf (COTS) Items
available in the commercial marketplace
Defense Acquisition Regulations or minor modifications made to meet This final rule does not add any new
System Federal Government requirements; (ii) provisions or clauses or add new
commercial subsystems or components requirements to existing provision or
48 CFR Parts 227 and 252 of a major weapon system, if the major clauses. Rather, when acquiring major
weapon system was acquired as a weapon systems, it expands the
[Docket DARS–2016–0010] commercial item in accordance with 10 circumstances relating to commerciality
RIN 0750–AI91 U.S.C. 2379(a); and (iii) components of in which the contracting officer shall
a subsystem, if the subsystem was presume that development was
Defense Federal Acquisition acquired as a commercial item in exclusively at private expense.
Regulation Supplement: Rights in accordance with 10 U.S.C. 2379(b).
IV. Executive Orders 12866 and 13563
Technical Data (DFARS Case 2016– There were no public comments
D008) submitted in response to the proposed Executive Orders (E.O.s) 12866 and
rule. There are no significant changes 13563 direct agencies to assess all costs
AGENCY: Defense Acquisition and benefits of available regulatory
from the proposed rule made in the final
Regulations System, Department of alternatives and, if regulation is
rule.
Defense (DoD). necessary, to select regulatory
ACTION: Final rule.
Although there were no comments approaches that maximize net benefits
received on the substance of the (including potential economic,
SUMMARY: DoD is issuing a final rule to proposed rule, DoD did receive a environmental, public health and safety
amend the Defense Federal Acquisition request to suspend the rulemaking effects, distributive impacts, and
Regulation Supplement (DFARS) to process on any case (including this case) equity). E.O. 13563 emphasizes the
implement a section of the National relating to rights in technical data until importance of quantifying both costs
Defense Authorization Act for Fiscal such time as the final report of the and benefits, of reducing costs, of
Year 2016 that addresses rights in Government-Industry Advisory Panel harmonizing rules, and of promoting
technical data relating to major weapon (the Panel), established in accordance flexibility. This is not a significant
systems, expanding application of the with section 813(b) of the NDAA for FY regulatory action and, therefore, was not
presumption that a commercial item has 2016, has been submitted to Congress. subject to review under section 6(b) of
been developed entirely at private After consultation with the Chair of the E.O. 12866, Regulatory Planning and
expense. Panel, DoD determined to proceed with Review, dated September 30, 1993. This
publication of the final rule on this case. rule is not a major rule under 5 U.S.C.
DATES:Effective September 23, 2016.
This case implements section 813(a) of 804.
FOR FURTHER INFORMATION CONTACT: Ms. the NDAA for FY 2016, the same section
Amy G. Williams, telephone 571–372– that set up the Panel, with no indication V. Regulatory Flexibility Act
6106. that DoD should delay implementation. A final regulatory flexibility analysis
SUPPLEMENTARY INFORMATION: Furthermore, the law is very (FRFA) has been prepared consistent
prescriptive and the proposed rule is a with the Regulatory Flexibility Act, 5
I. Background nearly verbatim implementation of the U.S.C. 601, et seq. The FRFA is
DoD published a proposed rule in the statutory language, so there could be no
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summarized as follows:
Federal Register at 81 FR 28812 on May substantive change to this rule without This rule was initiated to implement
10, 2016, to implement section 813(a) of a corresponding statutory change to 10 section 813(a) of the National Defense
the National Defense Authorization Act U.S.C. 2321. The statute was effective Authorization Act (NDAA) for Fiscal
(NDAA) for Fiscal Year (FY) 2016 (Pub. upon implementation, and is expected Year (FY) 2016 (Pub. L. 114–92). The
L. 114–92). Section 813(a) modifies 10 to be beneficial to industry, including objective of this rule is to reduce the
U.S.C. 2321(f) to address rights in small businesses. requirement to respond to Government

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65566 Federal Register / Vol. 81, No. 185 / Friday, September 23, 2016 / Rules and Regulations

challenges of restricted rights, by approved by the Office of Management (A) The presumption in paragraph
expanding the applicability of the and Budget under the Paperwork (c)(2)(i) of this section applies to—
presumption regarding development Reduction Act (44 U.S.C. chapter 35). (1) A commercial subsystem or
exclusively at private expense in This information collection requirement component of a major weapon system,
accordance with section 813(a) of the has been assigned OMB Control Number if the major weapon system was
NDAA for FY 2016. 0704–0369, entitled ‘‘Defense Federal acquired as a commercial item in
There were no public comments in Acquisition Regulation Supplement accordance with subpart 234.70 (10
response to the initial regulatory (DFARS) Subpart 227.71, Rights in U.S.C. 2379(a));
flexibility analysis. Technical Data, and Subpart 227.72, (2) A component of a subsystem, if the
DoD cannot accurately determine the Rights in Computer Software and subsystem was acquired as a
number of small entities that will be Computer Software Documentation, and commercial item in accordance with
affected by this change in the related provisions and clauses.’’ subpart 234.70 (10 U.S.C. 2379(b)); and
regulations, because DoD does not have (3) Any other component, if the
sufficient information about subcontract List of Subjects in 48 CFR Parts 227 and component is a commercially available
awards of subsystems and components 252 off-the-shelf item or a commercially
of major weapon systems. However, Government procurement. available off-the-shelf item with
DoD estimates an annual reduction of 50 modifications of a type customarily
Jennifer L. Hawes,
prechallenge requests for information available in the commercial marketplace
and 2 challenges of asserted technical Editor, Defense Acquisition Regulations or minor modifications made to meet
System.
data restrictions. DoD further estimates, Federal Government requirements; and
based on data from the DoD FY 2014 Therefore, 48 CFR parts 227 and 252 (B) In all other cases, the contracting
Small Business Procurement Scorecard, are amended as follows: officer shall sustain the challenge unless
that this reduction in challenges will ■ 1. The authority citation for parts 227 information provided by the contractor
affect about 17 small businesses (52 × and 252 continues to read as follows: or subcontractor demonstrates that the
0.33). Authority: 41 U.S.C. 1303 and 48 CFR item was developed exclusively at
The final rule reduces the chapter 1. private expense.
requirement to respond to Government * * * * *
challenge of restricted rights. Under PART 227—PATENTS, DATA, AND
current regulations, the presumption COPYRIGHTS 227.7203–13 [Amended]
regarding development exclusively at ■ 3. Amend section 227.7203–13 by—
private expense does not apply to major ■ 2. Amend section 227.7103–13 by— ■ a. In the section heading, adding a
systems or subsystems or components ■ a. Revising the section heading; comma after ‘‘challenge’’;
thereof, except for commercially ■ b. In paragraph (c)(1), removing ■ b. Removing paragraph (d); and
available off-the-shelf items. This rule ‘‘commercial item, component, or ■ c. Redesignating paragraphs (e), (f),
expands applicability of the process’’ and adding ‘‘commercial item’’ and (g) as paragraphs (d), (e), and (f),
presumption regarding development in its place and removing ‘‘the item, respectively.
exclusively at private expense with component or process’’ and adding
regard to a major weapon system, or a ‘‘that item’’ in its place; and PART 252—SOLICITATION
subsystem or component thereof, to ■ c. Revising paragraphs (c)(2)(i) and PROVISIONS AND CONTRACT
cover— (ii). CLAUSES
• A commercial subsystem or The revisions read as follows:
component of a major weapon system, ■ 4. Amend section 252.227–7019 by—
227.7103–13 Government right to review, ■ a. Removing the clause date ‘‘(SEP
if the major weapon system was verify, challenge, and validate asserted
acquired as a commercial item in 2011)’’ and adding ‘‘(SEP 2016)’’ in its
restrictions.
accordance with DFARS subpart 234.70 place;
* * * * * ■ b. Removing paragraph (f);
(10 U.S.C. 2379(a));
• A component of a subsystem, if the (c) * * * ■ c. Redesignating paragraphs (g), (h),
subsystem was acquired as a (2) * * * (i), and (j) as paragraphs (f), (g), (h), and
commercial item in accordance with (i) Commercial items. Except as (i), respectively;
DFARS subpart 234.70 (10 U.S.C. provided in paragraph (c)(2)(ii) of this ■ d. In newly redesignated paragraph
2379(b)); and section, contracting officers shall (f)(5)—
• Commercially available off-the-shelf presume that a commercial item was ■ i. Removing ‘‘(g)(1)’’ and adding
items with modifications of a type developed exclusively at private ‘‘(f)(1)’’ in its place;
customarily available in the commercial expense whether or not a contractor or ■ ii. Removing ‘‘Officer will’’ and
marketplace or minor modifications subcontractor submits a justification in adding ‘‘Officer shall’’ in its place; and
made to meet Federal Government response to a challenge notice. When a ■ iii. Removing ‘‘paragraph (f) of this
requirements. challenge is warranted, a contractor’s or clause and’’;
The classes of small entities that will subcontractor’s failure to respond to the ■ f. In newly redesignated paragraph
be affected by this reduction are small challenge notice cannot be the sole basis (f)(6) introductory text, removing ‘‘the
businesses that provide any items in the for issuing a final decision denying the written explanation furnished pursuant
above categories that are not challenged validity of an asserted restriction. to paragraph (f)(1) of this clause, or any
due to the new statute. (ii) Major weapon systems. When the other’’ and adding ‘‘any’’ in its place;
contracting officer challenges an
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This rule reduces the burden on small ■ g. In newly redesignated paragraph
entities to the maximum extent asserted restriction regarding technical (g)(1) introductory text, removing
permitted by the statute. data for a major weapon system or a ‘‘(h)(3)’’ and adding ‘‘(g)(3)’’ in its place;
subsystem or component thereof on the and
VI. Paperwork Reduction Act basis that the technology was not ■ h. In newly redesignated paragraph
This rule contains information developed exclusively at private (g)(3), removing ‘‘(h)(1)’’ and adding
collection requirements that have been expense— ‘‘(g)(1)’’ in its place.

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■ 5. Amend section 252.227–7037 by— DEPARTMENT OF DEFENSE III. Publication of This Final Rule for
■ a. Removing the clause date ‘‘(JUN Public Comment Is Not Required by
2013)’’ and adding ‘‘(SEP 2016)’’ in its Defense Acquisition Regulations Statute
place; and System The statute that applies to the
■ b. Revising paragraphs (b)(1) and (2). publication of the Federal Acquisition
The revisions read as follows: 48 CFR Part 252 Regulation (FAR) is 41 U.S.C. 1707
entitled ‘‘Publication of Proposed
252.227–7037 Validation of restrictive [Docket DARS–2016–0032] Regulations.’’ Paragraph (a)(1) of the
markings on technical data.
statute requires that a procurement
* * * * * RIN 0750–AJ07 policy, regulation, procedure, or form
(b) * * * (including an amendment or
(1) Commercial items. (i) Except as Defense Federal Acquisition modification thereof) must be published
provided in paragraph (b)(2) of this Regulation Supplement: New for public comment if it relates to the
clause, the Contracting Officer will Designated Country—Moldova (DFARS expenditure of appropriated funds, and
presume that the Contractor’s or a Case 2016–D028) has either a significant effect beyond the
subcontractor’s asserted use or release internal operating procedures of the
restrictions with respect to a AGENCY: Defense Acquisition agency issuing the policy, regulation,
commercial item is justified on the basis Regulations System, Department of procedure, or form, or has a significant
that the item was developed exclusively Defense (DoD). cost or administrative impact on
at private expense. ACTION: Final rule. contractors or offerors. This final rule is
(ii) The Contracting Officer will not not required to be published for public
challenge such assertions unless the SUMMARY: DoD is issuing a final rule to comment, because it is just updating the
Contracting Officer has information that amend the Defense Federal Acquisition lists of designated countries in order to
demonstrates that the commercial item Regulation Supplement (DFARS) to add reflect that Moldova is now a member
was not developed exclusively at Moldova as a new designated country of the WTO GPA. These requirements
private expense. under the World Trade Organization affect only the internal operating
(2) Major weapon systems. In the case Government Procurement Agreement. procedures of the Government.
of a challenge to a use or release DATES: Effective September 23, 2016. IV. Executive Orders 12866 and 13563
restriction that is asserted with respect Executive Orders (E.O.s) 12866 and
to data of the Contractor or a FOR FURTHER INFORMATION CONTACT: Ms.
13563 direct agencies to assess all costs
subcontractor for a major weapon Amy Williams, telephone 571–372–
and benefits of available regulatory
system or a subsystem or component 6176.
alternatives and, if regulation is
thereof on the basis that the major necessary, to select regulatory
SUPPLEMENTARY INFORMATION:
weapon system, subsystem, or approaches that maximize net benefits
component was developed exclusively I. Background (including potential economic,
at private expense— environmental, public health and safety
On June 29, 2016, the World Trade
(i) The presumption in paragraph effects, distributive impacts, and
Organization (WTO) Committee on
(b)(1) of this clause applies to— equity). E.O. 13563 emphasizes the
Government Procurement approved the
(A) A commercial subsystem or accession of Moldova to the WTO importance of quantifying both costs
component of a major weapon system, Government Procurement Agreement and benefits, of reducing costs, of
if the major weapon system was (GPA). This rule adds Moldova to the harmonizing rules, and of promoting
acquired as a commercial item in list of WTO GPA countries wherever it flexibility. This is not a significant
accordance with DFARS subpart 234.70 appears in the DFARS, as part of the regulatory action and, therefore, was not
(10 U.S.C. 2379(a)); definition of ‘‘designated country’’. subject to review under section 6(b) of
(B) A component of a subsystem, if E.O. 12866, Regulatory Planning and
the subsystem was acquired as a II. Applicability to Contracts at or Review, dated September 30, 1993. This
commercial item in accordance with Below the Simplified Acquisition rule is not a major rule under 5 U.S.C.
DFARS subpart 234.70 (10 U.S.C. Threshold and for Commercial Items, 804.
2379(b)); and Including Commercially Available Off-
the-Shelf Items V. Regulatory Flexibility Act
(C) Any other component, if the
component is a commercially available The Regulatory Flexibility Act does
This rule only updates the list of not apply to this rule because this final
off-the-shelf item or a commercially designated countries in the DFARS by
available off-the-shelf item with rule does not constitute a significant
adding the newly designated country of DFARS revision within the meaning of
modifications of a type customarily Moldova. The definition of ‘‘designated FAR 1.501–1, and 41 U.S.C. 1707 does
available in the commercial marketplace country’’ is updated in each of the not require publication for public
or minor modifications made to meet following clauses; however, this comment.
Federal Government requirements; and revision does not impact the clause
(ii) In all other cases, the challenge to prescriptions for use, or applicability at VI. Paperwork Reduction Act
the use or release restriction will be or below the simplified acquisition This rule affects the information
sustained unless information provided threshold, or applicability to collection requirements in the
by the Contractor or a subcontractor commercial items. The clauses are: provisions at DFARS 252.225–7018,
rmajette on DSK2TPTVN1PROD with RULES

demonstrates that the item or process DFARS 252.225–7017, Photovoltaic Photovoltaic Devices—Certificate, and
was developed exclusively at private Devices; DFARS 252.225–7021, Trade 252.225–7020, Trade Agreements
expense. Agreements; and DFARS 252.225–7045, Certificate, currently approved under
* * * * * Balance of Payments Program— OMB Control Number 0704–0229,
[FR Doc. 2016–22570 Filed 9–22–16; 8:45 am] Construction Material Under Trade entitled ‘‘Defense Federal Acquisition
BILLING CODE 5001–06–P Agreements. Regulation Supplement Part 225,

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Document Created: 2016-09-23 01:43:11
Document Modified: 2016-09-23 01:43:11
Category		Regulatory Information
Collection		Federal Register
sudoc Class		AE 2.7: GS 4.107: AE 2.106:
Publisher		Office of the Federal Register, National Archives and Records Administration
Section		Rules and Regulations
Action		Final rule.
Dates		Effective September 23, 2016.
Contact		Ms. Amy G. Williams, telephone 571- 372-6106.
FR Citation		81 FR 65565
RIN Number		0750-AI91
CFR Citation		48 CFR 227 48 CFR 252
81 FR 65565 - Defense Federal Acquisition Regulation Supplement: Rights in Technical Data (DFARS Case 2016-D008)

DEPARTMENT OF DEFENSEDefense Acquisition Regulations System

Federal Register Volume 81, Issue 185 (September 23, 2016)

DEPARTMENT OF DEFENSE
Defense Acquisition Regulations System
