III.  Regulatory Flexibility Act

DoD has prepared an initial regulatory flexibility analysis consistent with 5 U.S.C. 604. A copy of the analysis may be obtained from the point of contact specified herein. The analysis is summarized as follows.

DoD is issuing an interim rule to amend the DFARS to implement section 866 of the National Defense Authorization Act for Fiscal Year 2011 (Pub. L. 111-383). Section 866 authorized the Secretary of Defense to establish a pilot program to assess the feasibility and advisability of acquiring military-purpose nondevelopmental items.

The objective of this rule is to establish a new DoD pilot program at DFARS Subpart 212.71, entitled Pilot Program for Acquisition of Military-Purpose Nondevelopmental Items. Under this pilot program, DoD may enter into contracts with nontraditional defense contractors for the purpose of (1) Enabling DoD to acquire items that otherwise might not have been available to DoD; (2) assisting DoD in the rapid acquisition and fielding of capabilities needed to meet urgent operational needs; and (3) protecting the interests of the United States in paying fair and reasonable prices for the item or items acquired. It is anticipated that items similar to commercial all-terrain vehicles or programmable robots, which can be modified for use in a contingency environment, may result from use of this authority. The legal basis is section 866 of the National Defense Authorization Act for Fiscal Year 2011.

Since this is a new pilot program, data to support potential impact to small entities is not yet available. Consistent with the overall purpose of the program to attract nontraditional defense contractors, DoD anticipates that this rule will have a positive economic impact to small entities.

The interim rule affects contractors that are not currently performing and have not performed, for at least the one-year period preceding the solicitation of sources by DoD for the procurement or transaction, any of the following for DoD--

--Any contract or subcontract that is subject to full coverage under the cost accounting standards prescribed pursuant to section 26 of the Office of Federal Procurement Policy Act (41 U.S.C. 1502) and the regulations implementing such section; or

--Any other contract in excess of the certified cost or pricing data threshold under which the contractor is required to submit certified cost or pricing data.

This interim rule does not impose any new reporting, recordkeeping or other compliance requirements on contractors. There are no rules that duplicate, overlap or conflict with this rule. There are no known significant alternatives to the rule.

Accordingly, DoD does not expect this rule to 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.

DoD invites comments from small business concerns and other interested parties on the expected impact of this rule on small entities.

DoD will also consider comments from small entities concerning the existing regulations in subparts affected by this rule in accordance with 5 U.S.C. 610. Interested parties must submit such comments separately and should cite 5 U.S.C. 610 (DFARS Case 2011-D034) in correspondence.