Government Contracts Proposed DFARS Rule on Commercial Items Price Reasonableness
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Thursday, October 24, 2019

Proposed DFARS Rule on Commercial Items Price Reasonableness

By Government Contracts Editorial Staff

The Department of Defense is proposing to amend the Defense Federal Acquisition Regulation Supplement to implement sections 871 and 872 of the National Defense Authorization Act for Fiscal Year 2017 (PL 114-328). Section 871 modified 10 USC 2377, Preference for acquisition of commercial items, to address how contracting officers may require an offeror to submit relevant information to support market research for price analysis for commercial items acquisitions. The rule proposes to add these requirements at DFARS 212.209(a), which addresses the determination of price reasonableness when acquiring commercial items. The focus of this requirement is for agencies to conduct market research to support a commercial items price reasonableness determination. The rule would direct COs to use the information submitted under DFARS 234.7002(d) when acquiring major weapon systems as commercial items in accordance with 10 USC 2379, Requirement for determination by Secretary of Defense and notification to Congress before procurement of major weapon systems as commercial items. For other items, COs are instructed to use other relevant information as described in DFARS 212.209.

Value Analysis. Section 872 of the 2017 NDAA modified 10 USC 2379 to allow offerors to submit information or analysis relating to the value of a commercial item. These requirements would be added at DFARS Subpart 234.70, which addresses the acquisition of major weapon systems as commercial items. Proposed DFARS 234.7002(d)(5) would allow an offeror to submit information or analysis relating to the value of a commercial item to aid in the determination of price reasonableness. A CO may consider such information or analysis in addition to the information submitted pursuant to other paragraphs in DFARS 234.7002(d). The rule would also add a definition of “value analysis” at DFARS 234.7001 and cross-references at DFARS 210.001 and DFARS 215.403-3. DoD is also proposing to add guidance on value analysis to the DFARS companion resource, Procedures, Guidance, and Information, at PGI 234.7002. This rule does not impose additional requirements on offerors. Submit comments referencing DFARS Case 2019-D027 by November 25, 2019. For the text of the rule, see ¶70,020.443.

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