DFARS Part 234: Major System Acquisition

In plain English

DFARS Part 234 implements DoD policies for major system acquisitions, including major defense acquisition programs and major weapon systems. It covers acquisition strategy, competition, earned value management, commercial item treatment, and cost and software data reporting. These rules affect contractors by imposing specific requirements on contract types, EVMS, and reporting for large DoD programs.

Key rules

• For major defense acquisition programs at Milestone B, the milestone decision authority must select the contract type with advice from the contracting officer, and if a cost-reimbursement contract is chosen, a written determination is required that the program is too complex for a fixed-price contract. (234.004)
• A contract initially awarded from a broad agency announcement may include a line item or option for initial production or delivery of items only if it is limited to the minimal amount needed for timely competition of a follow-on contract, has a term of not more than 2 years, and does not exceed $100 million in fiscal year 2017 constant dollars. (234.005-1)
• The lowest price technically acceptable source selection process is prohibited for engineering and manufacturing development of a major defense acquisition program for which budgetary authority is requested beginning in fiscal year 2019. (234.005-2)
• For cost or incentive contracts and subcontracts valued at $20 million or more, the earned value management system must comply with ANSI/EIA-748 guidelines; for those valued at $50 million or more, the contractor must have an EVMS determined compliant by the cognizant Federal agency. (234.201)
• For cost or incentive contracts valued at $20 million or more, and for other contracts where EVMS will be applied, use the provision at 252.234-7001 and the clause at 252.234-7002 instead of the corresponding FAR provisions and clause. (234.203)
• A DoD major weapon system may be treated as a commercial product only if the Secretary of Defense determines it is a commercial product and such treatment is necessary for national security, and Congress is notified at least 30 days in advance; this authority cannot be delegated below the Deputy Secretary of Defense. (234.7002)
• Cost and software data reporting is mandatory for major defense acquisition programs, and before contract award, the contracting officer must consult with the Defense Cost and Resource Center to ensure the offeror's proposed CSDR system complies with DoDI 5000.02 and the CSDR Manual. (234.7100)
• Use the basic or alternate provision at 252.234-7003 and the basic or alternate clause at 252.234-7004 for cost and software data reporting: the basic clause for major defense acquisition programs exceeding $50 million, and the alternate I clause for those valued at $20 million to $50 million when directed by the program manager with approval from the OSD Deputy Director, Cost Assessment. (234.7101)

Who does what

In practice

• If you are bidding on a major defense acquisition program, expect the contract type to be selected at Milestone B and be prepared to justify your proposed approach if cost-reimbursement is used.
• For contracts valued at $20 million or more, you will likely need an EVMS that complies with ANSI/EIA-748, and for $50 million or more, your system must be determined compliant by the government.
• For major defense acquisition programs, you must comply with cost and software data reporting requirements, including proposing a standard CSDR system.
• If you are proposing a major weapon system as a commercial product, be aware that it requires a determination by the Secretary of Defense and congressional notification.

Common pitfalls

• Do not assume you can use a cost-reimbursement contract for a major defense acquisition program without a written determination that the program is too complex for a fixed-price contract.
• Do not use the lowest price technically acceptable source selection process for engineering and manufacturing development of a major defense acquisition program for which budgetary authority is requested beginning in fiscal year 2019.
• Do not apply earned value management to firm-fixed-price contracts without obtaining a waiver, as it is discouraged.
• Do not treat a major weapon system as a commercial product without the required Secretary of Defense determination and congressional notification.

Written by AI from this part's codified text (2026-10-04); cited sections are checked against the part. A guide, not legal advice: the regulation text, the solicitation and your contract rule.