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DOD/DARC RIN: 0750-AL94 Publication ID: Fall 2023 
Title: ●Pilot Program to Incentivize Contracting With Employee-Owned Businesses (DFARS Case 2023-D017) 

DoD is proposing to amend the Defense Federal Acquisition Regulation Supplement to implement section 874 of the National Defense Authorization Act for Fiscal Year 2022 (Pub. L. 117-81). Section 874 authorizes DoD to establish a pilot program to allow for the noncompetitive award of follow-on contracts, to a qualified business, for the continued development, production, or provision of products or services that are the same as or substantially similar to the products or services procured by DoD under a prior contract held by a qualified business. A qualified business is an S corporation in accordance with section 1361(a)(1) of the Internal Revenue Code of 1986 for which 100% of the outstanding stock is held through an employee stock ownership plan as defined in section 4975(e)(7) of such code. The number of noncompetitive awards that may be made to a qualified business under the pilot program is limited to one.

Agency: Department of Defense(DOD)  Priority: Substantive, Nonsignificant 
RIN Status: First time published in the Unified Agenda Agenda Stage of Rulemaking: Proposed Rule Stage 
Major: Undetermined  Unfunded Mandates: No 
CFR Citation: 48 CFR 226   
Legal Authority: 41 U.S.C. 1303    Pub. L.117-81, sec. 874   
Legal Deadline:  None
Action Date FR Cite
NPRM  06/00/2024 
Regulatory Flexibility Analysis Required: No  Government Levels Affected: Federal 
Federalism: No 
Included in the Regulatory Plan: No 
RIN Data Printed in the FR: No 
Agency Contact:
Jennifer D. Johnson
Office of the Under Secretary of Defense for Acquisition and Sustainment
Department of Defense
Defense Acquisition Regulations Council
Defense Pricing and Contracting, Defense Acquisition Regulations System, Room 3B938, 3060 Pentagon,
Washington, DC 20301-3060
Phone:703 717-8226