By Justin Ganderson, Susan Cassidy, Alexis Dyschkant and Jason Workmaster (September 12, 2018, 3:07 PM EDT) -- Over the summer, pursuant to Section 874 of the fiscal year 2017 National Defense Authorization Act,[1] the U.S. Department of Defense issued a proposed rule[2] to exclude the application of certain laws and regulations to the acquisition of commercial items, including commercially available off-the-shelf items. Among other things, the proposed rule identifies certain Defense Federal Acquisition Regulation Supplement and Federal Acquisition Regulation clauses that should be excluded from commercial item contracts and subcontracts, and sets forth a narrower definition of "subcontract" that would carve out a category of lower-tier commercial item agreements from the reach of certain flow-down requirements. A summary of the proposed rule and our key observations and takeaways are below....