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Panoptic Enterprises' FEDERAL CONTRACTS DISPATCH

DATE: October 25, 2002

SUBJECT: Defense Federal Acquisition Regulation Supplement (DFARS); Enterprise Software Agreements

SOURCE: Federal Register, October 25, 2002, Vol. 67, No. 207, page 65509

AGENCIES: Department of Defense (DOD)

ACTION: Final Rule

SYNOPSIS: DOD is adding DFARS Subpart 208.74, Enterprise Software Agreements, to address the use of "enterprise software agreements" for the acquisition of commercial software and software maintenance in accordance with the DOD Enterprise Software Initiative.

EDITOR'S NOTE: For more on the proposed rule, see the January 29, 2002, FEDERAL CONTRACTS DISPATCH "Defense Federal Acquisition Regulation Supplement (DFARS); Enterprise Software Agreements."

FOR FURTHER INFORMATION CONTACT: Susan Schneider, Defense Acquisition Regulations Council, OUSD (AT&L) DP (DAR), IMD 3C132, 3062 Defense Pentagon, Washington, DC 20301-3062; 703-602-0326; fax: 703-602-0350. Cite "DFARS Case 2000-D023" when referring to this final rule.

SUPPLEMENTAL INFORMATION: The DOD Enterprise Software Initiative (ESI) promotes the use of enterprise software agreements (ESAs) with contractors that allow DOD to obtain favorable terms and pricing for commercial software and related services. On January 29, 2002, a proposed rule was published which would add DFARS Subpart 208.74 to address the use of ESAs for the acquisition of commercial software and software maintenance in accordance with the initiative. Five respondents submitted comments, and the proposed rule is finalized with several changes. The following are the major provisions of DFARS Subpart 208.74 and other associated changes to the DFARS, with the differences between the proposed rule and the final rule noted:

• DFARS 208.7400, Scope of Subpart, states that the subpart prescribes "policy and procedures for acquisition of commercial software and software maintenance, including software and software maintenance that is acquired (a) as part of a system or system upgrade, where practicable; (b) under a service contract; (c) under a contract or agreement administered by another agency (e.g., under an interagency agreement); (d) under a Federal Supply Schedule contract or blanket purchase agreement established in accordance with FAR 8.404(b)(4) [Using Schedules]; or (e) by a contractor that is authorized to order from a government supply source pursuant to FAR 51.101 [Policy]." The words "where practicable" are added to the final version of (a), and (d) is added.
  
  
• DFARS 208.7401, Definitions, includes definitions for an ESA ("a blanket purchase agreement or a contract that is used to acquire designated commercial software or related services such as software maintenance"); the ESI ("an initiative led by the DOD Chief Information Officer to develop processes for DOD-wide software asset management"); "Golden Disk" ("a purchased license or entitlement to distribute an unlimited or bulk number of copies of software throughout DOD"); "software maintenance" ("services normally provided by a software company as standard services at established catalog or market prices, e.g., the right to receive and use upgraded versions of software, updates, and revisions"; and "software product manager" (" the person who manages an enterprise software agreement"). The definition of "software maintenance" is added.
  
  
• DFARS 208.7402, General, requires departments and agencies to "fulfill requirements for commercial software and related services, such as software maintenance, in accordance with the DOD Enterprise Software Initiative (ESI) (see Web site at http://www.don-imit.navy.mil/esi). ESI promotes the use of enterprise software agreements (ESA) with contractors that allow DOD to obtain favorable terms and pricing for commercial software and related services. ESI does not dictate the products or services to be acquired."
  
  
• DFARS 208.7403, Acquisition Procedures, requires "the requiring official [to] review the information at the ESI website to determine if the required commercial software or related services are available from DOD inventory (e.g., Golden Disks and DOD-wide software maintenance agreements). If the software or services are available, the requiring official shall fulfill the requirement from the DOD inventory...If the required commercial software or related service are not in the DOD inventory, and not on an ESA, the contracting officer or requiring official may fulfill the requirement by other means...If the commercial software or related services are on an ESA, the contracting officer or requiring official shall review the terms and conditions and prices in accordance with otherwise applicable source selection requirements. If an ESA's terms and conditions and prices represent the best value to the government, the contracting officer or requiring official shall fulfill the requirement for software or services through the ESA. If existing ESAs do not represent the best value to the government, the software product manager (SPM) shall be given an opportunity to provide the same or a better value to the fovernment under the ESAs before the contracting officer or requiring official may continue with alternate acquisition methods." Substantial portions of the section are rewritten to clarify procedures for determining when use of an ESA is appropriate.
  
  
• DFARS Subpart 239.1, General, is added, and it consists of DFARS 239.101, Policy, which states, "See Subpart 208.74 when acquiring commercial software or software maintenance."
  
  
• Table 51-1, Authorization To Purchase From Government Supply Sources, in DFARS 251.102, Authorization to Use Government Supply Sources, as well as DFARS 252.251-7000, Ordering From Government Supply Sources, are revised to address ESAs.

FOR FURTHER INFORMATION CONTACT: Panoptic Enterprises at 703-451-5953 or by e-mail to Panoptic@FedGovContracts.com.

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