Defense Federal Acquisition Regulation Supplement; Incentive Program for Purchase of Capital Assets Manufactured in the United States, 29643-29644 [05-10233]

Agencies

• DEPARTMENT OF DEFENSE

[Federal Register Volume 70, Number 99 (Tuesday, May 24, 2005)]
[Rules and Regulations]
[Pages 29643-29644]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 05-10233]


-----------------------------------------------------------------------

DEPARTMENT OF DEFENSE

48 CFR Parts 215 and 216

[DFARS Case 2005-D003]


Defense Federal Acquisition Regulation Supplement; Incentive 
Program for Purchase of Capital Assets Manufactured in the United 
States

AGENCY: Department of Defense (DoD).

ACTION: Interim rule with request for comments.

-----------------------------------------------------------------------

SUMMARY: DoD has issued an interim rule amending the Defense Federal 
Acquisition Regulation Supplement (DFARS) to implement Section 822 of 
the National Defense Authorization Act for Fiscal Year 2004. Section 
822 requires the Secretary of Defense to establish an incentive program 
for contractors to purchase capital assets manufactured in the United 
States, and to provide consideration for offerors with eligible capital 
assets in source selections for major defense acquisition programs.

DATES: Effective Date: May 24, 2005.
    Comment date: Comments on the interim rule should be submitted to 
the address shown below on or before July 25, 2005, to be considered in 
the formation of the final rule.

ADDRESSES: You may submit comments, identified by DFARS Case 2005-D003, 
using any of the following methods:
    [ctrcir] Federal eRulemaking Portal: https://www.regulations.gov. 
Follow the instructions for submitting comments.
    [ctrcir] Defense Acquisition Regulations Web Site: https://
emissary.acq.osd.mil/dar/dfars.nsf/pubcomm. Follow the instructions for 
submitting comments.
    [ctrcir] E-mail: dfars@osd.mil. Include DFARS Case 2005-D003 in the 
subject line of the message.
    [ctrcir] Fax: (703) 602-0350.
    [ctrcir] Mail: Defense Acquisition Regulations Council, Attn: Ms. 
Amy Williams, OUSD (AT&L) DPAP (DAR), IMD 3C132, 3062 Defense Pentagon, 
Washington, DC 20301-3062.
    [ctrcir] Hand Delivery/Courier: Defense Acquisition Regulations 
Council, Crystal Square 4, Suite 200A, 241 18th Street, Arlington, VA 
22202-3402.
    All comments received will be posted to https://
emissary.acq.osd.mil/dar/dfars.nsf.

FOR FURTHER INFORMATION CONTACT: Ms. Amy Williams, (703) 602-0328.

SUPPLEMENTARY INFORMATION:

A. Background

    This interim rule amends DFARS 215.304 and 216.470 to implement 
Section 822 of the National Defense Authorization Act for Fiscal Year 
2004 (Public Law 108-136). Section 822 added 10 U.S.C. 2436, which 
requires the Secretary of Defense to (1) establish an incentive program 
for contractors to purchase capital assets manufactured in the United 
States under contracts for major defense acquisition programs; and (2) 
provide consideration for offerors with eligible capital assets in 
source selections for major defense acquisition programs.
    In addition, 10 U.S.C. 2436 authorizes the Secretary of Defense to 
use the Defense Industrial Capabilities Fund, established under Section 
814 of the National Defense Authorization Act for Fiscal Year 2004, for 
incentive payments under the program. However, no funds have been 
appropriated for the Industrial Capabilities Fund.
    This rule was not subject to Office of Management and Budget review 
under Executive Order 12866, dated September 30, 1993.

B. Regulatory Flexibility Act

    DoD has prepared an initial regulatory flexibility analysis 
consistent with 5 U.S.C. 603. The analysis is summarized as follows:
    The objective of the rule is to increase the use of capital assets 
manufactured in the United States under DoD contracts for major defense 
acquisition programs. The rule implements 10 U.S.C. 2436, as added by 
Section 822 of the National Defense Authorization Act for Fiscal Year 
2004. Most prime contractors for major defense acquisition programs are 
large business concerns. However, the rule is expected to have a 
positive impact on U.S. small business manufacturers of machine tools 
and other capital assets used in major defense acquisition programs, as 
their sales to DoD prime contractors should increase.
    DoD invites comments from small businesses and other interested 
parties. DoD also will consider comments from small entities concerning 
the affected DFARS subparts in accordance with 5 U.S.C. 610. Such 
comments should be submitted separately and should cite DFARS Case 
2005-D003.

C. Paperwork Reduction Act

    The Paperwork Reduction Act does not apply, because the rule does 
not impose any information collection requirements that require the 
approval of the Office of Management and Budget under 44 U.S.C. 3501, 
et seq.

D. Determination To Issue an Interim Rule

    A determination has been made under the authority of the Secretary 
of Defense that urgent and compelling reasons exist to publish an 
interim rule prior to affording the public an opportunity to comment. 
This interim rule implements Section 822 of the National Defense 
Authorization Act for Fiscal Year 2004 (Pub. L. 108-136). Section 822 
requires DoD to establish an incentive program for contractors to 
purchase capital assets manufactured in the United States under 
contracts for major defense acquisition programs. In addition, Section 
822 authorizes DoD to prescribe interim regulations as necessary to 
carry out the requirements of Section 822 and exempts DoD from 
compliance with the notice and comment requirements of 5 U.S.C. 553 for 
those regulations. Section 822 applies with respect to contracts 
entered into on or after May 24, 2005. Comments received in response to 
this interim rule will be considered in the formation of the final 
rule.

[[Page 29644]]

List of Subjects in 48 CFR Parts 215 and 216

    Government procurement.

Michele P. Peterson,
Editor, Defense Acquisition Regulations System.

0
Therefore, 48 CFR parts 215 and 216 are amended as follows:
0
1. The authority citation for 48 CFR parts 215 and 216 continues to 
read as follows:

    Authority: 41 U.S.C. 421 and 48 CFR Chapter 1.

PART 215--CONTRACTING BY NEGOTIATION

0
2. Section 215.304 is amended by adding paragraph (c)(iii) to read as 
follows:


215.304  Evaluation factors and significant subfactors.

    (c) * * *
    (iii) In accordance with 10 U.S.C. 2436, consider the purchase and 
use of capital assets (including machine tools) manufactured in the 
United States, in source selections for all major defense acquisition 
programs, as defined in 10 U.S.C. 2430, when it is pertinent to the 
best value determination.

PART 216--TYPES OF CONTRACTS

0
3. Section 216.470 is amended as follows:
0
a. In the introductory text by removing the dash and adding a colon in 
its place;
0
b. By redesignating paragraphs (1) through (5) as paragraphs (a) 
through (e) respectively; and
0
c. By revising newly designated paragraph (a) to read as follows:


216.470  Other applications of award fees.

* * * * *
    (a) The Government wishes to motivate and reward a contractor for--
    (1) Purchase and use of capital assets (including machine tools) 
manufactured in the United States, on major defense acquisition 
programs; or
    (2) Management performance in areas which cannot be measured 
objectively and where normal incentive provisions cannot be used. For 
example, logistics support, quality, timeliness, ingenuity, and cost 
effectiveness are areas under the control of management which may be 
susceptible only to subjective measurement and evaluation.
* * * * *

[FR Doc. 05-10233 Filed 5-23-05; 8:45 am]
BILLING CODE 5001-08-P