2018-D022 (i) Supporting Statement OIRA

2018-D022 (i) Supporting Statement OIRA.docx

Defense Federal Acquisition Regulation Supplement (DFARS) Part 204, Covered Defense Telecommunications Equipment or Services

OMB: 0750-0002

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SUPPORTING STATEMENT

OMB Control Number 0704-0XXX – Defense Federal Acquisition Regulation Supplement (DFARS) Part 204, Covered Defense Telecommunications Equipment or Services


A. JUSTIFICATION


1. Need for the Information Collection


This justification supports new information collections under Office of Management and Budget (OMB) Control Number 0704-0XXX. These information collection requirements are necessary to implement section 1656 of the National Defense Authorization Act (NDAA) for Fiscal Year (FY) 2018 (Pub. L. 115-91). Section 1656 prohibits DoD from procuring or obtaining, or extending or renewing a contract to procure or obtain, any equipment, system, or service to carry out the DoD nuclear deterrence or homeland defense missions that uses covered defense telecommunications equipment or services as a substantial or essential component of any system, or as a critical technology as a part of any system. The new information collection requirements to implement section 1656 are as follows:


  • The provision at DFARS 252.204-70WW, Covered Defense Telecommunications Equipment or Services—Representation, requires an offeror to represent whether it does or does not provide covered defense telecommunications equipment or services as part of its offered products or services to the Government. This representation is completed at least annually in the System for Award Management (SAM) at https://www.sam.gov/ by any company interested in doing business with DoD.


  • The provision at DFARS 252.204-70XX, Prohibition on Acquisition of Covered Telecommunications Equipment or Services—Representation, requires that if an offeror provides an affirmative representation under the provision at 252.204-70WW, Covered Defense Telecommunications Equipment or Services—Representation, the offeror is required to represent whether it will or will not provide under the contract covered defense telecommunications equipment or services. If the offeror responds affirmatively, the offeror is required to further disclose information about the covered defense telecommunications equipment or services.


  • The clause at DFARS 252.204-70YY, Prohibition on the Acquisition of Covered Defense Telecommunications Equipment or Services, requires contractors and subcontractors to report through https://dibnet.dod.mil, any discovery of covered telecommunications equipment or services during the course of contract performance.


2. Use of the Information


The information obtained through DFARS 252.204-70WW, 252.204-70XX, and 252.204-70YY is used to (1) ensure contracting officers do not violate the prohibition under section 1656; (2) determine whether an offer presents a risk to national security; (3) determine whether a waiver would be needed in order to award to an otherwise successful offeror; and (4) ensure DoD is made aware during contract performance of any equipment, systems, or services to carry out the DoD nuclear deterrence or homeland defense missions that could jeopardize national security.


3. Use of Information Technology


PERCENTAGE Information technology is used to collect the information under DFARS 252.204-70WW and 252.204-70YY. Specifically, offerors complete the representation under DFARS provision 252.204-70WW at least annually in SAM at https://www.sam.gov/. This representation is rarely completed outside of SAM. Contractors provide the reports under DFARS clause 252.204-70YY to DIBNET at https://dibnet.dod.mil. The representation and disclosure under 252.204-70XX are submitted as part of an offeror’s response to a DoD solicitation in the format specified in the solicitation.


4. Non-duplication


As a matter of policy, DoD reviews the Federal Acquisition Regulation to determine if adequate language already exists. DoD requires DoD–unique provisions to address the requirements of section 1656 of the NDAA for FY 2018. A similar Governmentwide prohibition under section 889 of the NDAA for FY 2019 is implemented in FAR subpart 4.21. However, the DoD prohibition under 1656 differs from the Governmentwide prohibition under 889(1)(1)(A) in that it: applies to equipment, systems, or services to carry out the DoD nuclear deterrence or homeland defense missions; includes different definitions of “covered telecommunications equipment or services” and “covered foreign country”; does not include exceptions from the prohibition; and provides independent waiver authority to the Secretary of Defense. As such, the DFARS requires additional representations and disclosures from offerors and contractors to ensure compliance with the statutory prohibition.


5. Burden on Small Business


The burden applied to small business is the minimum consistent with applicable laws, Executive orders, regulations, and prudent business practices.


6. Less Frequent Collection


The frequency for collecting this information was reviewed by the DoD specialists who are most knowledgeable of the requirements and the need for the information. Every attempt has been made to keep the frequency of collection to a minimum. For example, only offerors who represent that they do provide covered defense telecommunications equipment or services in the annual SAM representation will be required to provide the offer-by-offer representation in the provision at DFARS 252.204-70XX.


7. Paperwork Reduction Act Guidelines


There are no special circumstances for collection. Collection of this information is consistent with the guidelines at 5 CFR 1320.5(d)(2).


8. Consultation and Public Comments


a. The Acquisition Law Team—International Acquisition and special advisers from the DoD CIO and Contracting e-Business were consulted with regard to some of the burden estimates for which supporting data is not available in the Federal Procurement Data System.


b. This information collection is consistent with the guidelines in 5 CFR 1320.6. Public comments were solicited in the Federal Register on DATE (XX FR XXXX). ____ comments were received in response to this notice.

c. A notice of submission to OMB for clearance of this information collection was published in the Federal Register on DATE (XX FR XXXX).


9. Gifts or Payment


DoD will not provide a payment or gift to respondents to this information collection requirement.


10. Confidentiality


This information is disclosed only to the extent consistent with statutory requirements, current regulations, and prudent business practices. The collection of information does not include any personally identifiable information; therefore, no Privacy Impact Assessment or Privacy Act System of Records Notice is required.

11. Sensitive Questions


No sensitive questions are involved in the information collection.


12. Respondent Burden and its Labor Costs


a. 252.204-70WW, Covered Defense Telecommunications Equipment or Services—Representation. This provision requires the offeror to represent in SAM on an at least annual basis whether it does or does not provide covered defense telecommunications equipment or services as a part of its offered products or services to the Government in the performance of any contract, subcontract, or other contractual instrument.


Data from SAM indicates that there were 424,927 active registrants (DoD and non-DoD awardees) in August 2019. According to the SAM data, 49.78 percent of total active SAM registrants or 211,529 unique entities completed DoD-specific representations and certifications associated with the DFARS. In order to maintain an active registration in SAM and continue to be considered for award of DoD contracts, these 211,529 entities will be required to complete the 252.204-70WW representation in SAM. This estimate does not include the number of entities that will complete the representation outside of SAM; however, those incidences are expected to be rare. It is estimated that it will take a respondent 5 minutes (0.08333 hour) to review and make the annual representation. The following is a summary of the estimated public burden hours and labor cost associated with the annual representation:


Estimation of Respondent Burden: 252.204-70WW

Number of respondents

211,529

Responses per respondent

1

Number of responses

211,529

Hours per response

0.08333

Estimated hours

17,626.71

Cost per hour (hourly wage) *

$55.19

Cost per response

~$4.60

Annual public burden (ro)

$972,818.21

* The cost per hour is based on the Office of Personnel Management (OPM) General Schedule (GS) 12, Step 5, base hourly rate for calendar year (CY) 2019 plus rest of US locality pay ($40.51) plus the 36.25% ($14.68) civilian personnel full fringe benefit rate from OMB Memo M-08-13 ($55.19).


b. 252.204-70XX, Prohibition on Acquisition of Covered Defense Telecommunications Equipment or Services—Representation. This provision requires that if an offeror provides an affirmative representation under the provision at 252.204-70WW, Covered Defense Telecommunications Equipment or Services—Representation, then that offeror will be required to represent in paragraph (d) of the provision whether it will or will not provide under a specific contract any covered defense telecommunications equipment or services. If the offeror responds affirmatively, the offeror is required to further disclose information identified in paragraph (e) of the provision about the covered defense telecommunications equipment or services.

Data from the Federal Procurement Data System (FPDS) for FY 2016 through 2018 indicates that each year on average DoD awards contracts to 44,277 unique awardees. DoD does not currently have data to indicate how many offerors may be required to respond to the offer-by-offer representation at 252.204-70XX. To be conservative DoD estimates that 10 percent of the DoD unique awardees (4,427 entities) will respond that they do provide covered defense telecommunications equipment or services as part of their offered products or services to the Government in the provision at 252.204-70WW and will, therefore, be required to complete the representation at 252.204-70XX(d). Based on the FPDS data, DoD estimates that for the 4,428 offerors required to respond to 252.204-70YY, each are estimated to have to complete 45 offer-by-offer representations per year in response to 15 solicitations for basic contracts and 30 solicitations for orders. It is estimated that it will take an offeror 5 minutes (0.08333 hour) to complete this representation for each solicitation. The following is a summary of the estimated public burden hours and labor cost associated with the offer-by-offer representation:

Estimation of Respondent Burden: 252.204-70XX(d) Representation

Number of respondents

4,428

Responses per respondent

45

Number of responses

199,260

Hours per response

0.08333

Estimated hours

16,604.34

Cost per hour (hourly wage) *

$55.19

Cost per response

~$4.60

Annual public burden

$916,393.29

* The cost per hour is based on the OPM GS 12, Step 5, base hourly rate for CY 2019 plus rest of US locality pay ($40.51) plus the 36.25% ($14.68) civilian personnel full fringe benefit rate from OMB Memo M-08-13 ($55.19).


DoD does not currently have data to indicate how many offerors may respond affirmatively to the representation in 252.204-70XX(d) and will, therefore, be required to provide the additional disclosure on the covered telecommunications equipment or services to be included in the offer. To be conservative, DoD estimates that 10 percent (approximately 443) of 4,428 offerors may provide an affirmative response to the representation in 252.204-70XX(d) and have to provide the additional information identified in paragraph (e) of the provision. It is estimated that such offerors may provide up to 45 responses per year and require 3 hours per response to respond. The following is a summary of the estimated public burden hours and labor cost associated with the disclosure:


Estimation of Respondent Burden: 252.204-70XX(e) Disclosure

Number of respondents

443

Responses per respondent

45

Number of responses

19,935

Hours per response

3

Estimated hours

59,805

Cost per hour (hourly wage) *

$55.19

Cost per response

$165.57

Annual public burden

$3,300,637.95

* The cost per hour is based on the OPM GS 12, Step 5, base hourly rate for CY 2019 plus rest of US locality pay ($40.51) plus the 36.25% ($14.68) civilian personnel full fringe benefit rate from OMB Memo M-08-13 ($55.19).


c. 252.204-70YY, Prohibition on the Acquisition of Covered Defense Telecommunications Equipment or Services. This clause requires contractors and subcontractors to report through https://dibnet.dod.mil, any discovery of covered telecommunications equipment or services during the course of contract performance.

DoD does not currently have data to indicate how many contractors may have to report a discovery covered telecommunications equipment or services in accordance with the clause at 252.204-70YY. To be conservative, DoD estimates that 1 percent (443 prime contractors) of the 44,277 unique awardees may discover covered telecommunications equipment or services during the course of contract performance and, therefore, be required to report information to DIBNET. It is expected that each respondent may make up to 5 reports a year and each report may take up to 1.5 hours to complete. The following is a summary of the estimated public burden hours and labor cost associated with the reporting requirement:


Estimation of Respondent Burden: 252.204-70YY

Number of respondents

443

Responses per respondent

5

Number of responses

2,215

Hours per response

1.5

Estimated hours

3322.5

Cost per hour (hourly wage) *

$55.19

Cost per response

~$82.79

Annual public burden

$183,368.78

* The cost per hour is based on the OPM GS 12, Step 5, base hourly rate for CY 2019 plus rest of US locality pay ($40.51) plus the 36.25% ($14.68) civilian personnel full fringe benefit rate from OMB Memo M-08-13 ($55.19).


d. Total Respondent Burden Hours Costs.

Summary of Public Burden Estimate

Responses

Hours

Dollars

252.204-70WW Representation

211,529

17,627

$972,818

252.204-70XX(d) Representation

199,260

16,604

$916,393

252.204-70XX(e) Disclosure

19,935

59,805

$330,638

252.204-70YY Reporting

2,215

3,323

$183,369

Total Public Burden *

432,939

97,359

$5,373,218

* Totals for responses, hours, and dollars are rounded


13. Respondent Costs Other Than Burden Hour Costs

DoD does not estimate any annual cost burden apart from the hourly burden in Item 12 above.


14. Cost to the Federal Government


The following is a summary of the estimated hours and cost associated with Government review of the representations, disclosures, and reports described in section 12 of this supporting statement:


Estimation of Government Burden

252.204-

70WW

70XX(d)

70XX(e)

70YY

Total

Number of responses

211,529

199,260

19,935

2,215

432,939

Hours per response

0.08333

0.08333

3

3

---

Estimated hours

~17,627

~16,604

59,805

6,645

100,681

Cost per hour *

$55.19

$55.19

$55.19

$55.19

---

Cost per response

~$4.60

~$4.60

$165.57

$165.57

---

Annual Govt burden

$972,818

$916,393

$3,300,638

$366,738

$5,556,587

* The cost per hour is based on the OPM GS 12, Step 5, base hourly rate for CY 2019 plus rest of US locality pay ($40.51) plus the 36.25% ($14.68) civilian personnel full fringe benefit rate from OMB Memo M-08-13 ($55.19).


15. Reasons for Change in Burden

This is a new information collection requirement.


16. Publication of Results

Results of this collection will not be published.


17. Non-Display of OMB Expiration Date

DoD does not seek approval to not display the expiration dates for OMB approval of the information collection.


18. Exceptions to "Certification for Paperwork Reduction Submissions"


There are no exceptions to the certification accompanying this Paperwork Reduction Act submission.


B. COLLECTION OF INFORMATION EMPLOYING STATISTICAL METHODS

Statistical methods will not be employed.


ATTENTION: THIS IS A CONFIDENTIAL, DELIBERATIVE, AND PRE-DECISIONAL DEFENSE ACQUISITION REGULATIONS SYSTEM DOCUMENT, PROTECTED FROM UNAUTHORIZED DISCLOSURE PURSUANT TO THE FREEDOM OF INFORMATION ACT AND OTHER LEGAL AUTHORITIES. THIS DOCUMENT SHALL NOT BE DISTRIBUTED OUTSIDE AUTHORIZED RULEMAKING CHANNELS WITHOUT THE PRIOR APPROVAL OF A REPRESENTATIVE OF THE DEFENSE ACQUISITION REGULATIONS SYSTEM. IF YOU HAVE RECEIVED THIS DOCUMENT IN ERROR, YOU MAY NOT READ, COPY, DISTRIBUTE, OR USE THE DOCUMENT OR INFORMATION CONTAINED THEREIN. FURTHERMORE, YOU MUST IMMEDIATELY NOTIFY THE SENDER BY REPLY EMAIL OR OTHER MEANS AND THEN DELETE OR DESTROY ALL COPIES OF THE DOCUMENT.

ANY DISTRIBUTION OF THIS DOCUMENT MUST CONTAIN THIS LEGEND.

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