Class Deviation 2020-O0020
Section 890 Pilot Program to Accelerate Contracting and Pricing Processes

Effective immediately, this class deviation rescinds and supersedes Class Deviation 2019-O0008, dated April 1, 2019, to further implement the pilot program authority provided by section 890 of the National Defense Authorization Act (NDAA) for Fiscal Year (FY) 2019 (Pub. L. 115-232), as amended by section 825 of the NDAA for FY 2020 (Pub. L. 116-92). For contract actions (e.g. solicitation of offers for contract award or contract modifications) approved by the Director, Defense Pricing and Contracting (DPC)/Pricing and Contracting Initiatives (PCI) for participation in the pilot program, the contracting officer may strategically establish the extent, structure, and level of detail of the historical actual cost data the contractor will be required to submit in lieu of providing complete certified cost or pricing data.

Section 890, as amended, authorizes DoD to conduct a pilot program for contract actions in excess of $50 million, which allows price reasonableness determinations to be based on actual cost and pricing data for purchases of the same or similar products for the DoD, and a reduction of the cost and pricing data to be submitted in accordance with 10 U.S.C. 2306a. Contract actions must be approved by the Director, DPC/PCI, to participate in the Section 890 pilot program prior to the issuance of a solicitation. Contracting officers may request approval to participate in the pilot program by completing and submitting the attached application template (Attachment 1) to osd.pentagon.ousd-a-s-mbx.dpc-pci@mail.mil. Participating contract actions must have an anticipated value of $50 million or more. Contract actions best suited for the pilot program are those of a recurring nature, for which there is reliable, historical actual cost data. It is preferable to conduct these pilots with companies that have approved business systems. Additionally, while not a condition for participation, use of a fixed-price-incentive contract type can reduce the cost risk for the participating parties and provide measurable results at the conclusion of the acquisition in relation to a target cost.

For those contract actions approved by the Director, DPC/PCI, the contracting officers shall—

  • Use the deviation provision provided in Attachment 2, in lieu of the basic or alternate of the provision at DFARS 252.215-7010, Requirements for Certified Cost or Pricing Data and Data Other Than Certified Cost or Pricing Data, and detail the subset of cost or pricing data and format to be required from the offeror and subcontractors to which the Section 890 pilot is flowed down, in lieu of complete cost or pricing data as defined at FAR 2.101;
  • Use the deviation clause provided in Attachment 3, which will apply to modifications approved for the Section 890 pilot in lieu of FAR 52.215-21, Requirements for Certified Cost of Pricing Data—Modifications, and detail in the request for proposal for the modification the specific cost or pricing data required to be submitted by the contractor and subcontractors to which the section 890 authority is flowed down;
  • Use the deviation clause 252.215-7998, Pilot Program to Accelerate Contracting and Pricing Processes, provided in Attachment 4 to ensure the contractor provides information necessary to evaluate the efficacy of the pilot program; and
  • Make price reasonableness determinations based primarily on contractor actual cost data on prior acquisitions, in combination with more traditional certified cost or pricing data that may be required to support aspects of the current acquisition for which the contractor’s historical cost experience may not be adequately representative of the current requirement.

The contracting officer may strategically establish the extent, structure, and level of detail of the historical actual cost data the contractor will be required to submit in lieu of complete certified cost or pricing data. It will be crucial for the contracting officer and contractor to have a detailed dialogue regarding the certified cost or pricing data that will be required under the authority of the pilot, to ensure that the contractor understands the contracting officer’s expectations with regard to the data necessary to support a price reasonableness determination, and the traceability of that data to the contractor’s proposal. Depending on the type and level of detail of certified cost or pricing data to be required in support of specific subcontracts to which the pilot authority is flowed down, the same discussion should take place between the contracting officer, the prime contractor, and the applicable subcontractors.

Measurement of pilot results will be provided at two junctures, as described at 252.215- 7998, Pilot Program to Accelerate Contracting and Pricing Processes (see Attachment 4). The first will be within three months after the contract action approved for participation in the pilot is placed on contract. The second will be upon completion of performance of the contract action, to measure how closely the actual cost of performance aligned with the acquisition team’s anticipated cost. Contracting officers shall submit both sets of results to osd.pentagon.ousd-a-s- mbx.dpc-pci@mail.mil as they become available.

This class deviation remains in effect until January 2, 2023, or until otherwise rescinded.

Status:
Active
Effective Date: August 14, 2020 (a year ago)
Expire Date: January 2, 2023 (in a year)
References: 2019-O0008
Official Documents: Memo
Official Attachments: 1 2 3 4
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