DATE: November 1, 2004

SUBJECT: Defense Federal Acquisition Regulation Supplement (DFARS); Transition of Weapons-Related Prototype Projects to Follow-On Contracts

SOURCE: Federal Register, November 1, 2004, Vol. 69, No. 210, page 63329

AGENCIES: Department of Defense (DOD)

ACTION: Interim Rule

SYNOPSIS: DOD is adding DFARS Subpart 212.70, Pilot Program for Transition to Follow-On Contracting After Use of Other Transaction Authority, to implement Section 847 of the National Defense Authorization Act for Fiscal Year 2004 (Public Law 108-136), which authorizes DOD to carry out a pilot program that permits the use of streamlined contracting procedures for the production of items or processes begun as prototype projects under "other transaction" agreements.

EDITOR'S NOTE: The regulations for OTs ("transactions other than contracts, grants, or cooperative agreements for prototype projects") are in Title 32 of the Code of Federal Regulations (CFR), Chapter 1, Office of the Secretary of Defense, Part 3, Transactions Other Than Contracts, Grants, or Cooperative Agreements for Prototype Projects. Additional guidance on OTs can be found on the Defense Procurement website at http://acc.dau.mil/simplify/ev_en.php?ID=1271_201&ID2=DO_TOPIC.

For more on the acquisition-related provisions of Public Law 108-136, see the November 25, 2003, FEDERAL CONTRACTS DISPATCH "Enactment of the National Defense Authorization Act for Fiscal Year 2004."

DATES: This interim rule is effective November 1, 2004. Comments on the interim rule should be submitted on or before January 3, 2005.

ADDRESSES: Respondents may submit comments directly on the Federal eRulemaking website at http://www.regulations.gov, or to the Defense Acquisition Regulations website at http://emissary.acq.osd.mil/dar/dfars.nsf/pubcomm. As an alternative, respondents may e-mail comments to: dfars@acq.osd.mil. Also, respondents who cannot submit comments through the website or by e-mail may submit comments to Defense Acquisition Regulations Council, Attn: Amy Williams, OUSD(AT&L)DP(DAR), IMD 3C132, 3062 Defense Pentagon, Washington, DC 20301-3062; by hand delivery or courier to Defense Acquisition Regulations Council, Crystal Square 4, Suite 200A, 241 18th Street, Arlington, VA 22202-3402; or by fax to 703-602-0350. Cite "DFARS Case 2003-D106" when making comments on this interim rule.

FOR FURTHER INFORMATION CONTACT: Amy Williams, 703-602-0328.

SUPPLEMENTAL INFORMATION: Section 845 of the National Defense Authorization Act for Fiscal Year 1994 (Public Law 103-160) authorized the secretary of a military department, the director of Defense Advanced Research Projects Agency (DARPA), and any other official designated by the Secretary of Defense, to enter into "transactions other than contracts, grants or cooperative agreements for prototype projects that are directly relevant to weapons or weapon systems proposed to be acquired or developed by the Department of Defense." These are commonly referred to as "other transactions" (OTs) and they are generally exempt from all the statutes and regulations that govern federal contracts and grants. The purpose of OTs is to overcome the reluctance of "nontraditional defense contractors" with significant technological advances and innovations to share their innovations with the government because of the significant statutory and regulatory requirements involved in government contracts and grants. When using OTs, DOD contracting officials are not required to include standard contract provisions that typically address such issues as financial management or intellectual property rights, but may structure the agreements as they consider appropriate.

This interim rule adds DFARS Subpart 212.70 to implement Section 847 of Public Law 108-136. Section 847 authorizes DOD to institute a pilot program for follow-on contracting for the production of items or processes begun as prototype projects under other transaction agreements. Contracts and subcontracts awarded under the program may be treated as acquisitions of commercial items, and items or processes acquired under the program may be treated as developed in part with federal funds and in part at private expense for purposes of negotiating rights in technical data.

DFARS Subpart 212.70 contains the following key provisions:

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

Copyright 2004 by Panoptic Enterprises. All Rights Reserved.

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