Does this supplier moving out of production constitute DMSMS? There is no FAR/DFARS definition and some definitions by the Defense Standardization Program Office and within DoDI 4245.15 would appear to include a supplier discontinuing production as DMSMS.
This is an awesome question. I hope my response is not too late.
Correct, there is no FAR/DFARS reference for this because it is really not a contracting issue; it's a logistics and supply chain issue. This is precisely why we do acquisition planning (see FAR 7.105 and DFARS 207.105).
One concern from a contracting perspective would be "who owns the data rights or what are the data rights for the part in question?" See FAR part 27 and DFARS part 227.
After that, from a contracting perspective, it could come down to a statutory level of competition question (full and open, full and open after exclusion of sources, or other than full and open competition. See FAR part 6 and DFARS part 206.
Back to your question, I think this could definitely be a scenario that constitutes diminishing manufacturing sources and material shortages (DMSMS) or be rapidly approaching one depending on all of the facts and circumstances.
I have another reference for you that should significantly improve the guidance for you. See this link DoD 4140.-1-R DoD Supply Chain Material Management Regulation. Then do a ctrl+f search on "DMSMS"; it has great information and guidance.
Additionally, we have a fantastic search capability in the AAP site. Using the term "DMSMS" I discovered six previous questions we answered that might help you with your scenario: AAP Search (dau.edu)