Overview
FAR Subpart 34.1 establishes policies and procedures for testing and qualifying industrial resources developed under Title III of the Defense Production Act (DPA). Its primary purpose is to ensure that the U.S. government supports the integration of domestically produced industrial capabilities into major defense systems by covering the costs associated with their validation.
Key Rules
- Government-Funded Testing: The government is legally required to pay for the testing and qualification of industrial resources developed with Title III assistance.
- Applicability Criteria: For a resource to be tested under this subpart, the Contracting Officer must determine that:
- The resource is (or potentially will be) used in a major system or "item of supply."
- The remaining quantities of the system to be acquired justify the cost of the testing.
- Definition of Item of Supply: This includes parts, components, subassemblies, and spare parts integral to a major system, but specifically excludes packaging and labeling.
- Mandatory Clause: The clause at 52.234-1 (Industrial Resources Developed under Title III, Defense Production Act) must be inserted into all contracts for major systems and items of supply.
Responsibilities
- Contractors:
- Must refer any requests for testing and qualification received from Title III project contractors to the Contracting Officer.
- If the contract is modified, they must perform the required testing and qualification.
- Contracting Officers (CO):
- Evaluate testing requests based on agency procedures and cost-benefit justification.
- Mandatory Consultation: Must consult with the Defense Production Act Office (Title III Program) at Wright Patterson Air Force Base before making a determination.
- Modify existing contracts to include testing requirements when determinations are affirmative.
- Defense Production Act Office (Title III Program):
- Consults with COs on the validity of testing requests.
- Responsible for providing the physical industrial resources (materials/components) to the contractor in sufficient quantities to perform the tests.
Practical Implications
- Shift of Financial Risk: This subpart removes the financial burden from prime contractors for qualifying new domestic sources of supply. Since the government pays for the testing, contractors are more likely to adopt Title III-developed technologies without impacting their own profit margins.
- Supply Chain Resilience: By mandating the use of the 52.234-1 clause, the FAR ensures there is a ready administrative mechanism to pivot toward domestic industrial resources if a Title III project develops a critical defense material.
- Administrative Coordination: Real-world application requires close coordination between the Procuring Contracting Officer (PCO) and the Air Force’s DPA Office. Contractors should expect a contract modification (and potentially a change in technical specifications) if a Title III resource is deemed viable for their system.
- Contractual Awareness: Contractors working on "major systems" must ensure 52.234-1 is present in their prime contracts, as it provides the legal framework for receiving government-furnished materials and reimbursement for testing activities.