B. Definition of Military-Purpose Nondevelopmental Item

Comment: A respondent recommended amending the definition of the term "military-purpose nondevelopmental item" by revising the definitional criteria for determining whether an item meets the definition, including the extent to which independent research and development (IR&D) costs, and bid and proposal (B&P) costs, are considered in such a determination. The respondent cited section 824(b)(2) of the National Defense Authorization Act (NDAA) for Fiscal Year (FY) 2011, Pub. L. 111-383, as the basis for the recommended change.

Response: The interim rule uses the statutory definition of the term "military purpose nondevelopmental item" required by section 866 of the NDAA for FY 2011 and used only for purposes of this pilot program. The substantive revisions to the definition as proposed by the respondent would result in the Defense Federal Acquisition Regulation Supplement (DFARS) definition being noncompliant with the statutory definition and the criteria for applying the specialized procedures authorized for this pilot program. It is also important to note that the requirements for treatment of IR&D and B&P costs that are established by section 824 of the NDAA for FY2011 are being addressed through DFARS Case 2011-D022. No changes have been made to the final rule as a result of this comment.