FAR 7.106—Additional requirements for major systems.
Plain-English Summary
FAR 7.106 addresses additional planning requirements for major systems and focuses on building long-term competition and supply flexibility into both development and production contracts. It covers what planners should consider when soliciting major system development contracts, including whether offerors should propose design choices that use items already available in the agency supply system, the broader national supply system, or the commercial market, and whether the Government should be able to compete future purchases of items likely to be needed in substantial quantities over the system’s service life. It also covers major system production contracts, where planners should consider requiring offerors to identify ways to ensure future competitive acquisition of items likely to be bought in large quantities, including proposals for Government rights in technical data and proposals to qualify or develop multiple sources of supply. The section further explains how planners should decide whether to apply these requirements by considering the purpose of the system and the technology needed to meet performance requirements. In practice, this rule is meant to reduce long-term dependence on a single source, improve competition, and lower lifecycle costs, while balancing those goals against mission needs and technical realities. It also tells contracting officers how to use these proposals in source selection or, in noncompetitive awards, as negotiation objectives.
Key Rules
Development contracts: design for availability
For major system development solicitations, planners shall consider requiring offerors to propose designs that incorporate items already available in the agency supply system, elsewhere in the national supply system, or commercially from more than one source. The goal is to avoid unique, hard-to-replace components when practical.
Development contracts: future competition
Planners shall also consider requiring proposals for items that the Government is likely to need in substantial quantities during the system’s service life and that should be competitively acquirable in the future. This is intended to preserve future competition and reduce sole-source dependence.
Production contracts: competitive future buys
For major system production solicitations, planners shall consider requiring offerors to identify opportunities to ensure the Government can obtain certain items on a competitive basis later in the system life cycle. The focus is on items acquired in connection with the system that are likely to be bought in substantial quantities over time.
Technical data rights option
One acceptable proposal approach is to give the Government rights to use technical data furnished under the contract for future competitive acquisitions, including identifying any cost to the Government for those rights. This supports future competition by allowing other sources to manufacture or supply the item.
Multiple-source qualification
Another acceptable proposal approach is qualification or development of multiple sources of supply for future competitive acquisitions. This can reduce supply risk and improve pricing, but may require upfront investment and planning.
Decision factors for applying the rule
Planners must consider the purpose of the system and the technology needed to meet required capabilities when deciding whether to apply these requirements. The rule is not automatic; it depends on whether the competition and supply benefits make sense for the specific system.
Evaluation and negotiation use
If these proposals are required, the contracting officer must evaluate them as part of competing offers. In noncompetitive awards, the same factors may be used as negotiation objectives rather than formal evaluation criteria.
Responsibilities
Planners
Consider whether to include these requirements in solicitations for major system development and production contracts, taking into account the system’s purpose and the technology needed to meet performance needs. They must weigh lifecycle competition benefits against technical and mission constraints.
Offerors
When the solicitation includes these requirements, submit proposals addressing design use of available items, future competitive acquisition opportunities, technical data rights, or multiple-source strategies as requested.
Contracting Officer
If the solicitation requires these proposals, evaluate them in source selection. For noncompetitive awards, use the development and production competition factors as negotiation objectives when structuring the contract.
Agency
Support acquisition planning for major systems by identifying supply-chain, technical data, and competition strategies that can reduce long-term dependence on single sources and improve future procurement flexibility.
Practical Implications
This section is about lifecycle planning, not just the initial buy. Contractors and acquisition teams should think beyond delivery of the first system and ask how future parts, upgrades, and replacements will be sourced competitively.
A common pitfall is designing a system around proprietary or unique components without considering future sustainment costs and competition barriers. That can lock the Government into expensive sole-source follow-on buys.
Another risk is treating technical data rights as an afterthought. If the Government does not secure the needed rights up front, future competition for spare parts or related items may be difficult or impossible.
Planners should not apply these requirements mechanically. The technology and mission need may justify unique solutions, but the decision should be deliberate and documented.
For contracting officers, if the solicitation calls for these proposals, they must be part of the evaluation framework; if the award is noncompetitive, they should still shape negotiations around future competition and supply assurance.
Official Regulatory Text
(a) In planning for the solicitation of a major system (see part 34 ) development contract, planners shall consider requiring offerors to include, in their offers, proposals to incorporate in the design of a major system- (1) Items which are currently available within the supply system of the agency responsible for the major system, available elsewhere in the national supply system, or commercially available from more than one source; and (2) Items which the Government will be able to acquire competitively in the future if they are likely to be needed in substantial quantities during the system’s service life. (b) In planning for the solicitation of a major system (see part 34 ) production contract, planners shall consider requiring offerors to include, in their offers, proposals identifying opportunities to assure that the Government will be able to obtain, on a competitive basis, items acquired in connection with the system that are likely to be acquired in substantial quantities during the service life of the system. Proposals submitted in response to such requirements may include the following: (1) Proposals to provide the Government the right to use technical data to be provided under the contract for competitive future acquisitions, together with the cost to the Government, if any, of acquiring such technical data and the right to use such data. (2) Proposals for the qualification or development of multiple sources of supply for competitive future acquisitions. (c) In determining whether to apply paragraphs (a) and (b) of this section, planners shall consider the purposes for which the system is being acquired and the technology necessary to meet the system’s required capabilities. If such proposals are required, the contracting officer shall consider them in evaluating competing offers. In noncompetitive awards, the factors in paragraphs (a) and (b) of this section, may be considered by the contracting officer as objectives in negotiating the contract.