[Federal Register Volume 67, Number 207 (Friday, October 25, 2002)]
[Rules and Regulations]
[Pages 65509-65512]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 02-27109]
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DEPARTMENT OF DEFENSE
48 CFR Parts 208, 239, 251, and 252
[DFARS Case 2000-D023]
Defense Federal Acquisition Regulation Supplement; Enterprise
Software Agreements
AGENCY: Department of Defense (DoD).
ACTION: Final rule.
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SUMMARY: DoD has issued a final rule amending the Defense Federal
Acquisition Regulation Supplement (DFARS) to add policy pertaining to
the use of enterprise software agreements for the acquisition of
commercial software and software maintenance.
EFFECTIVE DATE: October 25, 2002.
FOR FURTHER INFORMATION CONTACT: Ms. Susan Schneider, Defense
Acquisition Regulations Council, OUSD (AT&L) DP (DAR), IMD 3C132, 3062
Defense Pentagon, Washington, DC 20301-3062. Telephone (703) 602-0326;
facsimile
[[Page 65510]]
(703) 602-0350. Please cite DFARS Case 2000-D023.
SUPPLEMENTARY INFORMATION:
A. Background
This rule adds a new DFARS Subpart 208.74 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. This initiative promotes the use of enterprise
software agreements with contractors that offer DoD favorable terms and
pricing for commercial software and related services. Associated DFARS
changes are made in Parts 208, 239, 251, and 252.
DoD published a proposed rule at 67 FR 4231 on January 29, 2002.
Five sources submitted comments on the proposed rule. DoD considered
all comments in the development of the final rule. A discussion of the
comments is provided below:
Comment: Due to a lack of central budget control, ``profit
centers'' cannot bargain as a unit to establish an Enterprise Software
Agreement (ESA), and vendors must contract with each organization
individually. DoD Response: The lack of a centralized approach to DoD
software budgeting is a prime reason for the existence of the
Enterprise Software Initiative (ESI). By consolidating established
department and agency requirements for commercial software, ESI gains
pricing and terms concessions not normally available to the individual
or the small command buyer.
Comment: New vendors may be at a competitive disadvantage. Lack of
objective performance criteria will deny new vendors the opportunity to
compete on merit versus familiarity. DoD Response: ESI does not
eliminate the need for acquisition planning and market research. Use of
ESAs is not mandatory, but must be considered only when requirements
for products available under the agreements have already been
established.
Comment: The term ``most favored customer'' at 208.7403(e)(2) is
vague and should be eliminated from the rule. DoD Response: The intent
is to give the software product manager (SPM) the opportunity to adjust
the ESA to provide the best value to the customer. The language at
208.7403(e)(2) has been revised to more clearly convey this intent.
Comment: The rule will reduce the number of vendors able to market
and sell commercial software products to DoD. DoD Response: Authorized
commercial resellers with General Services Administration (GSA) Federal
Supply Schedules are eligible to carry ESAs for commercial software
products. In this sense, the software manufacturer determines the
universe of potentially eligible resellers, and the resellers
themselves decide whether or not to apply for and maintain a GSA
Schedule, and whether or not to comply with the terms and conditions of
a DoD ESA.
Comment: The ``nonstandard'' methods of the rule may encourage
software manufacturers to keep products off ESAs. DoD Response: The use
of blanket purchase agreements against GSA Schedules is a standard DoD
acquisition practice. There is no evidence to indicate that this rule
will discourage manufacturers from seeking ESAs or from placing
commercial products on ESAs.
Comment: Industrial funding fees will cancel potential savings of
volume purchases. DoD Response: No additional resources are required to
manage ESAs. DoD ESAs result in lower overhead for contract maintenance
and result in net savings or cost avoidance for the Government.
Comment: Use of BPAs against GSA Schedules for the acquisition of
software implies incorporation of the clause at FAR 52.227-14, Rights
of Data. This clause may conflict with DoD policy on intellectual
property rights and uses. The rule should follow DoD, not GSA, policy.
DoD Response: Use of BPAs against GSA Schedules is a standard
acquisition practice in DoD and is in accordance with FAR subpart 8.4
and DFARS subpart 208.4.
Comment: Customized terms and conditions must often be negotiated.
The 90-day process for allowing the SPM to negotiate on behalf of the
purchaser adds needless delay and cost. DoD Response: Many ESAs contain
special provisions for pricing and other terms and conditions. Should
those provisions not be sufficient, the SPM is given up to 90 days to
renegotiate the ESA. Historically, the turn-around time has been much
quicker than 90 days. However, purchasers have the option to pursue a
waiver to the use of the ESA if the SPM cannot negotiate satisfactory
terms and conditions within the purchaser's required timeframe.
Comment: The use of the term ``commercial software or related
services such as software maintenance'' is overly broad. The phrase
``related services'' should be deleted. DoD Response: The phrase
``related services'' does address a broad range of services. It is the
intent of ESI to address software asset management across the spectrum
and throughout the life cycle of enterprise software management, rather
than limit its scope to software acquisition and software maintenance.
Comment: The term ``software maintenance'' should be defined. DoD
Response: A definition of ``software maintenance'' has been added at
208.7401.
Comment: Read literally, the rule could require DoD customers to
acquire hardware without preloaded software. DoD Response: The rule is
not intended to preclude the acquisition of preloaded software with
computers from the original equipment manufacturer. The language at
208.7400(a) has been revised to clarify the intent.
Comment: The rule appears to support the development of software
acquisition processes without the benefit of public comment. This may
result in processes inconsistent with Federal Acquisition Streamlining
Act requirements pertaining to the acquisition of commercial items. DoD
Response: DoD policy is to make maximum practical use of GSA Schedules,
and ESI has established BPAs against GSA Schedules for DoD use.
Software asset management encompasses all aspects of life-cycle
management. Should any elements of implementing the software asset
management process require public comment, those elements will be
published accordingly as has been done for this DFARS rule.
Comment: Software manufacturers and resellers cannot be expected to
offer the favorable terms and discounts sought through ESI without
DoD's commitment to purchase the quantities that result in the lowest
prices. There is no evidence that DoD is willing or is able to make
such a commitment. DoD Response: Many manufacturers and resellers have
offered favorable terms and conditions without a commitment to specific
quantities, for a chance at increased market share or additional DoD
exposure.
Comment: The acquisition procedures in 208.7403 should be revised
for clarity and for consistency with DoD Chief Information Officer
Guidance and Policy Memorandum No. 12-8430 dated July 26, 2000,
pertaining to requirements for use of ESAs, rationale for use of
alternate sources, and reimbursement of funds to the SPM. DoD Response:
This section has been revised to clarify procedures for determining
when use of an ESA is appropriate, and to clarify documentation
requirements when use of an alternate source is deemed necessary.
However, SPM reimbursement of funds is a procedure handled outside of
the contracting arena, and, therefore, is not considered
[[Page 65511]]
appropriate for inclusion in this DFARS rule.
This rule was not subject to Office of Management and Budget review
under Executive Order 12866, dated September 30, 1993.
B. Regulatory Flexibility Act
DoD certifies that this final rule will not have a significant
economic impact on a substantial number of small entities within the
meaning of the Regulatory Flexibility Act, 5 U.S.C. 601, et seq.,
because most enterprise software agreements are blanket purchase
agreements established under Federal Supply Schedules. Establishment of
such agreements is already permitted by section 8.404(b)(4) of the
Federal Acquisition Regulation.
C. Paperwork Reduction Act
The Paperwork Reduction Act does not apply because the rule does
not impose any information collection requirements that require the
approval of the Office of Management and Budget under 44 U.S.C. 3501,
et seq.
List of Subjects in 48 CFR Parts 208, 239, 251, and 252
Government procurement.
Michele P. Peterson,
Executive Editor, Defense Acquisition Regulations Council.
Therefore, 48 CFR Parts 208, 239, 251, and 252 are amended as
follows:
1. The authority citation for 48 CFR Parts 208, 239, 251, and 252
continues to read as follows:
Authority: 41 U.S.C. 421 and 48 CFR Chapter 1.
PART 208--REQUIRED SOURCES OF SUPPLIES AND SERVICES
2. Section 208.001 is amended by revising paragraph (a)(1)(v) to
read as follows:
208.001 Priorities for use of Government supply sources.
(a)(1)(v) See Subpart 208.70, Coordinated Acquisition, and Subpart
208.74, Enterprise Software Agreements.
* * * * *
3. Subpart 208.74 is added to read as follows:
Subpart 208.74--Enterprise Software Agreements
Sec.
208.7400 Scope of subpart.
208.7401 Definitions.
208.7402 General.
208.7403 Acquisition procedures.
208.7400 Scope of subpart.
This 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); or
(e) By a contractor that is authorized to order From a Government
supply source pursuant to FAR 51.101.
208.7401 Definitions.
As used in this subpart--
Enterprise software agreement means an agreement or a contract that
is used to acquire designated commercial software or related services
such as software maintenance.
Enterprise Software Initiative means an initiative led by the DoD
Chief Information Officer to develop processes for DoD-wide software
asset management.
Golden Disk means a purchased license or entitlement to distribute
an unlimited or bulk number of copies of software throughout DoD.
Software maintenance means 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.
Software product manager means the Government official who manages
an enterprise software agreement.
208.7402 General.
Departments and agencies shall 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 (ESAs) 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.
208.7403 Acquisition procedures.
(a) After requirements are determined, the requiring official shall
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.
(b) If the required commercial software or related services are not
in the DoD inventory, and not on an ESA, the contracting officer or
requiring official may fulfill the requirement by other means. Existing
ESAs are listed on the ESI website.
(c) 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.
(d) 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.
(e) 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 Government
under the ESAs before the contracting officer or requiring official may
continue with alternate acquisition methods.
(1) The contracting officer or requiring official shall notify the
SPM of specific concerns about existing ESA terms and conditions or
prices through the ESI webpage.
(2) The SPM shall consider adjusting, within the scope of the ESA,
terms and conditions or prices to provide the best value to the
customer.
(i) Within 3 working days, the SPM shall--
(A) Update the ESA;
(B) Provide an estimated date by which the update will be
accomplished; or
(C) Inform the contracting officer or requiring official that no
change will be made to the ESA.
(ii) If the SPM informs the contracting officer or requiring
official that no change will be made to the ESA terms and conditions or
prices, the contracting officer or requiring official may fulfill the
requirement by other means.
(iii) If the SPM does not respond within 3 working days or does not
plan to adjust the ESA within 90 days, the contracting officer or
requiring official may fulfill the requirement by other means.
(3) A management official designated by the department or agency
may waive the requirement to obtain commercial software or related
services through an ESA after the steps in paragraphs (e)(1) and
(e)(2)(i) of this section are complete. The rationale for use of an
alternate source shall be included in the waiver
[[Page 65512]]
request and shall be provided to the SPM.
PART 239--ACQUISITION OF INFORMATION TECHNOLOGY
4. Subpart 239.1 is added to read as follows:
Subpart 239.1--General
Sec.
239.101 Policy.
239.101 Policy.
See Subpart 208.74 when acquiring commercial software or software
maintenance.
PART 251--USE OF GOVERNMENT SOURCES BY CONTRACTORS
5. Section 251.102 is amended as follows:
a. By revising paragraph (f);
b. In Table 51-1, by revising paragraph 1.;
c. In Table 51-1, in paragraph 2.b.(1) in the last sentence, and in
paragraph 2.b.(2) in the last sentence, by removing ``telefax'' and
adding in its place ``facsimile'; and
d. In Table 51-1, by adding paragraph 2.c. to read as follows:
251.102 Authorization to use Government supply sources.
* * * * *
(f) The authorizing agency is also responsible for promptly
considering requests of the DoD supply source for authority to refuse
to honor requisitions from a contractor that is indebted to DoD and has
failed to pay proper invoices in a timely manner.
Table 51-1, Authorization To Purchase From Government Supply Sources
* * * * *
1. You are hereby authorized to use Government sources in
performing Contract No. -------- for ---------------- [insert
applicable military department or defense agency], as follows: --------
-------- [Insert applicable purchasing authority given to the
contractor.]
2. * * *
c. Enterprise Software Initiative. Place orders in accordance with
the terms and conditions of the attached Enterprise Software
Agreement(s), or instructions for obtaining commercial software or
software maintenance from Enterprise Software Initiative inventories,
and this authorization. Attach a copy of this authorization to the
order (unless a copy was previously furnished to the Enterprise
Software Agreement contractor).
Insert the following statement in the order:
This order is placed under written authorization from ----------
dated (*----------). In the event of any inconsistency between the
terms and conditions of this order, and those of the Enterprise
Software Agreement, the latter will govern.
* * * * *
PART 252--SOLICITATION PROVISIONS AND CONTRACT CLAUSES
6. Section 252.251-7000 is amended as follows:
a. By revising the clause date and paragraph (a);
b. By removing paragraph (b) and redesignating paragraphs (c)
through (f) as paragraphs (b) through (e); and
c. In newly designated paragraph (c)(4), in the last sentence, by
removing ``Such'' and adding in its place ``The''. The revised text
reads as follows:
252.251-7000 Ordering From Government Supply Sources.
* * * * *
Ordering from Government Supply Sources (OCT 2002)
(a) When placing orders under Federal Supply Schedules, Personal
Property Rehabilitation Price Schedules, or Enterprise Software
Agreements, the Contractor shall follow the terms of the applicable
schedule or agreement and authorization. Include in each order:
(1) A copy of the authorization (unless a copy was previously
furnished to the Federal Supply Schedule, Personal Property
Rehabilitation Price Schedule, or Enterprise Software Agreement
contractor).
(2) The following statement: Any price reductions negotiated as
part of an Enterprise Software Agreement issued under a Federal
Supply Schedule contract shall control. In the event of any other
inconsistencies between an Enterprise Software Agreement,
established as a Federal Supply Schedule blanket purchase agreement,
and the Federal Supply Schedule contract, the latter shall govern.
(3) The completed address(es) to which the Contractor's mail,
freight, and billing documents are to be directed.
* * * * *
[FR Doc. 02-27109 Filed 10-24-02; 8:45 am]
BILLING CODE 5001-08-P