DOD upcoming rules on CMMC, access, foreign-owned & more

      The Defense Dept. is preparing for dozens of new and final regulations this year, including proposals for beneficial owners, contractor business systems and accessibility for disabled people.

      Here are the most significant planned rules changes for contractors that DOD has disclosed for calendar 2023, in order of expected date of release:

• Feb. 2023 - Contractor Business Systems: A Notice of Proposed Rulemaking (NPRM) is planned to implement Section 893 of the National Defense Authorization Act (NDAA) for fiscal 2017 to revise the requirements for review of contractor business systems. The rule would authorize third-party independent auditor reviews and eliminate the need for DOD reviews. It applies to contractors with covered contracts that are at least 1% of their total gross revenue, except for those exempt from using full cost accounting standards.
• April 2023 - Mitigating Risks Related to Foreign Ownership or Control: NPRM to implement Section 847 of the NDAA for FY2020 and Section 819 of the NDAA for FY2021. Section 847 requires processes to assess and reduce risks related to foreign ownership control or influence in contracts. Section 819 requires DOD to assess and report on compliance with such requirements.
• April 2023 - Nondiscrimination on Basis of Disability: Final Rule to implement Sections 504 and 508 of the Rehabilitation Act of 1973 prohibiting discrimination on the basis of disability, updating complaint and enforcement procedures and requiring that electronic technology and information must be accessible to people with disabilities. It also implements the Architectural Barriers Act of 1968 requiring that DOD facilities be accessible to individuals with disabilities.
• April 2023 - Defense Industrial Base (DIB) Cybersecurity: NPRM to allow all defense contractors who process, store, develop or transit DOD controlled unclassified information to be eligible to receive cyber threat information.
• May 2023 - Cybersecurity Maturity Model Certification (CMMC) Program: NPRM to implement the CMMC Framework.
• May 2023 - Quick Closeout Procedures Threshold: NPRM to change the quick-closeout procedures threshold at FAR 42.708, partially in response to GAO report 17-738 (Federal Contracting: Additional Management Action Needed to Close Contracts and Reduce Audit Backlog). The proposed rule would allow DOD to maintain oversight of contract closeouts.
• May 2023 - Assessing Contractor Implementation of Cybersecurity Requirements: NPRM to amend an interim rule implementing the CMMC 2.0 framework to protect against theft of intellectual property and sensitive information from Defense Industrial Base (DIB) contractors. This rule also accounts for such information that flows to subcontractors.
• May 2023 - Limitations on Funding for Some Institutions of Higher Learning: NPRM to implement Section 1062 of the NDAA for 2021 requiring that no funds be made available to institutions of higher education that host a Confucius Institute, which is affiliated with Chinese government agencies. It does not withhold education assistance funds paid directly to students.
• May 2023 - Cost or Pricing Data Reporting Requirements: NPRM to 1) state the requirement for offerors to submit data other than cost or pricing data as necessary upon contracting officer request; (2) establish a standard $2 million threshold requiring data other than cost or pricing data with respect to subcontracts and price adjustments; and (3) require contracting officers to modify as soon as practicable contracts affected by a change in the threshold to submit data other than cost or pricing data.
• July 2023 - Defense Federal Acquisition Regulation Supplement (DFARS) Buy American Act - NPRM to implement the Buy American Act under Executive Order 14005. The NPRM would change DFARS to conform to changes in the FAR (Federal Acquisition Regulation).
• August 2023 - Beneficial Ownership Information Requirements: NPRM to implement section 6403 of the NDAA for 2021 regarding the requirement for contractors or subcontractors to disclose beneficial ownership information when bidding for a contract over the simplified acquisition threshold. Section 6403 exempts contracts that are subject to beneficial owner requirements under Section 847 of the NDAA for 2020.
• November 2023 - Small Business Innovation Research (SBIR) Data Rights: A Final Rule to implement changes related to data rights in the Small Business Administration’s Policy Directive for the SBIR program. The proposed rule dates from April 2019.
• November 2023 - Undefinitized Contract Actions: Final Rule to implement recommendations from the DOD Inspector General (May 11, 2020 report) regarding undefinitized contract actions. The rule specifies that failing to meet the qualifying proposal date in the definitization schedule could result in the government withholding a percentage of all subsequent financing requests.

(Next issue: GSA’s upcoming rules)

More Information:
DOD Regulations 2023 Full List: https://bit.ly/3DZEoPN

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