DFARS & The Proposed Section 803 Rule

DFARS (the Defense Federal Acquisition Regulation SupplementThe focuses on federal cyber-security issues. This amendment is to existing rules the Department of Defense (DoD), has used for some time.

It’s used for overseeing the buying of goods and services.

It is crucial to enforce Controlled Unclassified Information protection (CUI), as contractors from private governments are constantly expected to update and improve their security systems. 

Companies can respond more effectively to the changing threats they face today from hostile or foreign actors.

In practice, how is DFARS used?

To be able to do business with DoD properly, private businesses must comply to strict regulations. 

Security education and training will be required. It is also focused on ‘offline’ security, such as vetting the physical defense of the workplace and the full integrity of the personnel working within.

Which DFARS rules are being proposed and what does that mean for contractors?

At August 30, 2021 the United States DOD had proposed an addition DFARS rule aimed at implementing additional data and pricing requirements. On October 29, 2021, the United States DOD will accept comments on its proposed rule.

This is Section 803 in the FY2020 National Defense Authorization Act. This rule is intended to prevent contracting proposals from basing their decisions on historic prices set by the government when determining whether a subcontracting or contracting price is reasonable and fair. 

If enacted, this proposed amendment would mean that an offeror that fails to make a ‘good faith effort’ in order to comply with a request other than cost or pricing data, may be declared unable or ineligible for award. However, this may be subverted should the head of the contracting activity (HCA) deem it necessary to grant that award in the best interest of  said governmental department.

Of course, it’s not always reasonable to assume that accurate pricing data can be found and a good faith effort can be made. 

In such a case, the rule says that unreliable market research is not necessary and prices for comparable items or recent information received from offerors can be used to price them under similar terms. This will continue to be a valuable comparison point.

This is a proposal rule, but contractors must be able to accept the new procurement standard and incorporate it in any instances that a contracting official does not. It is important that contractors are aware of what happens if they don’t follow these rules.

You can get the latest advice and guidance on how to put in place compliance measures. SysArcThese rules will help guide you and your company and make it easier to understand the proposed rules as well as managed cybersecurity assessments, which run in conjunction with the DFARS legislation. 

You can keep your eligibility as an intelligent, valued contractor.

Follow Us