Defense Federal Acquisition Regulation Supplement; Notification Requirements for Critical Safety Items (DFARS Case 2004-D008), 2633-2637 [E7-733]

Download as PDF sroberts on PROD1PC70 with RULES Federal Register / Vol. 72, No. 13 / Monday, January 22, 2007 / Rules and Regulations may use the Governmentwide commercial purchase card to make a purchase that exceeds the micropurchase threshold but does not exceed the simplified acquisition threshold if certain conditions are met. See 213.301(3). (5) Imprest funds and third party drafts. Imprest funds are authorized for use without further approval for overseas transactions at or below the micro-purchase threshold in support of a contingency operation or a humanitarian or peacekeeping operation. See 213.305–3(d)(iii)(A). (6) Standard Form (SF) 44, Purchase Order-Invoice-Voucher. SF 44s may be used for purchases not exceeding the simplified acquisition threshold for overseas transactions by contracting officers in support of a contingency operation or a humanitarian or peacekeeping operation. See 213.306(a)(1)(B). (7) Undefinitized contract actions. The head of the agency may waive certain limitations for undefinitized contract actions if the head of the agency determines that the waiver is necessary to support a contingency operation or a humanitarian or peacekeeping operation. See 217.7404– 5(b). (8) Prohibited sources. DoD personnel are authorized to make emergency acquisitions in direct support of U.S. or allied forces deployed in military contingency, humanitarian, or peacekeeping operations in a country or region subject to economic sanctions administered by the Department of the Treasury, Office of Foreign Assets Control. See 225.701–70. (9) Authorization Acts, Appropriations Acts, and other statutory restrictions on foreign acquisition. Acquisitions in the following categories are not subject to the restrictions of 225.7002, Restrictions on food, clothing, fabrics, specialty metals, and hand or measuring tools: (1) Acquisitions at or below the simplified acquisition threshold; (2) Acquisitions outside the United States in support of combat operations; (3) Acquisitions of perishable foods by or for activities located outside the United States for personnel of those activities; (4) Acquisitions of food, specialty metals, or hand or measuring tools in support of contingency operations, or for which the use of other than competitive procedures has been approved on the basis of unusual and compelling urgency in accordance with FAR 6.302– 2; (5) Emergency acquisitions by activities located outside the United States for personnel of those activities; VerDate Aug<31>2005 15:59 Jan 19, 2007 Jkt 211001 and (6) Acquisitions by vessels in foreign waters. See 225.7002–2. (10) Electronic submission and processing of payment requests. Contractors do not have to submit payment requests in electronic form for contracts awarded by deployed contracting officers in the course of military operations, including contingency operations or humanitarian or peacekeeping operations. See 232.7002(a)(4). 218.202 Defense or recovery from certain attacks. Policy for unique item identification. Contractors will not be required to provide DoD unique item identification if the items, as determined by the head of the agency, are to be used to facilitate defense against or recovery from nuclear, biological, chemical, or radiological attack. See 211.274–2(b). 218.203 Incidents of national significance, emergency declaration, or major disaster declaration. (1) Establishing or maintaining alternative sources. PGI contains a sample format for Determination and Findings citing the authority of FAR 6.202(a), regarding exclusion of a particular source in order to establish or maintain an alternative source or sources. Alternate 2 of the sample format addresses having a supplier available for furnishing supplies or services in case of a national emergency. See PGI 206.202. (2) Electronic submission and processing of payment requests. Contractors do not have to submit payment requests in electronic form for contracts awarded by contracting officers in the conduct of emergency operations, such as responses to natural disasters or national or civil emergencies. See 232.7002(a)(4). [FR Doc. E7–730 Filed 1–19–07; 8:45 am] BILLING CODE 5001–08–P DEPARTMENT OF DEFENSE Defense Acquisition Regulations System 48 CFR Parts 212, 244, 246, and 252 RIN 0750–AF12 Defense Federal Acquisition Regulation Supplement; Notification Requirements for Critical Safety Items (DFARS Case 2004–D008) Defense Acquisition Regulations System, Department of Defense (DoD). ACTION: Final rule. AGENCY: PO 00000 Frm 00037 Fmt 4700 Sfmt 4700 2633 SUMMARY: DoD has issued a final rule amending the Defense Federal Acquisition Regulation Supplement (DFARS) to add policy regarding notification of potential safety issues under DoD contracts. The rule contains a contract clause requiring contractors to promptly notify the Government of any nonconformance or deficiency that could impact item safety. DATES: Effective Date: January 22, 2007. FOR FURTHER INFORMATION CONTACT: Mr. Mark Gomersall, Defense Acquisition Regulations System, OUSD (AT&L) DPAP (DARS), IMD 3C132, 3062 Defense Pentagon, Washington, DC 20301–3062. Telephone (703) 602–0302; facsimile (703) 602–0350. Please cite DFARS Case 2004–D008. SUPPLEMENTARY INFORMATION: A. Background This final rule contains a new contract clause requiring contractors to notify the Government of any nonconformance or deficiency that could impact the safety of items acquired by or serviced for the Government. The rule is a result of Section 8143 of the Fiscal Year 2004 DoD Appropriations Act (Pub. L. 108– 87), which required examination of appropriate standards and procedures to ensure timely notification to the Government and contractors regarding safety issues, including defective parts. DoD published a proposed rule at 70 FR 44077 on August 1, 2005. Thirteen respondents submitted comments on the proposed rule. A discussion of the comments is provided below. 1. Comment: One respondent recommended amending the clause prescription at DFARS 246.371(a)(2) and (3) to change the term ‘‘system’’ to ‘‘critical safety system.’’ DoD Response: The term ‘‘system’’ relates to an assemblage of subsystems, assemblies, and components that comprise an end item. Adding ‘‘critical safety’’ to the term ‘‘system’’ is unnecessary and would be confusing where major or less-than-major systems are not described in terms such as ‘‘critical safety.’’ 2. Comment: Five respondents suggested requiring the use of the Government-Industry Data Exchange Program (GIDEP) as the method for notification of safety issues and for reporting all types of technical data and reliability information. DoD Response: The primary objective of this DFARS rule is to ensure that contractors who have delivered defective products with potential safety implications notify affected contracting offices quickly, using whatever method E:\FR\FM\22JAR1.SGM 22JAR1 sroberts on PROD1PC70 with RULES 2634 Federal Register / Vol. 72, No. 13 / Monday, January 22, 2007 / Rules and Regulations the contractor determines to be most expeditious. GIDEP may not be the most efficient or effective notification approach in many situations. 3. Comment: One respondent suggested DoD include integrated environmental safety and occupational health issues in the coverage. DoD Response: Environmental safety and occupational health issues were not included in the mandate that resulted in the issuance of this DFARS rule (Section 8143 of the Fiscal Year 2004 DoD Appropriations Act (Pub. L. 108–87)). 4. Comment: One respondent recommended that the DFARS rule include a timeframe for reaction by the Government after notification. DoD Response: The intent of the DFARS rule is to ensure timely notification of potential safety defects. The time required by the Government to respond to and effectively investigate each incident will depend upon the circumstances of the situation. 5. Comment: One respondent requested a more specific definition of ‘‘safety’’ in the rule. DoD Response: DoD has reexamined all references to safety in the DFARS rule and has determined that the term is adequately explained in its context each time it is used. 6. Comment: Five respondents submitted comments regarding timeframes for notification of potential safety defects. One respondent indicated that the requirement for notifying the procuring contracting officer (PCO) and the administrative contracting officer (ACO) within 72 hours of potential safety issues may cause over-reporting, because the contractor will have insufficient time to investigate the situation internally. The respondent requested flexibility regarding notification but did not provide a proposed timeframe for notification. Another respondent questioned whether 72 hours would be realistic but provided no recommended time frame. Other respondents recommended notification periods of 3 business days; 5 business days; and 10–30 working days. DoD Response: DoD concurs in lengthening the written notification period to 5 working days, but does not concur in making the initial reporting period for a potential safety defect flexible. The initial notification of 72 hours is intended to ensure that the customer is aware of potential safety issues in delivered products, has a basic understanding of the circumstances, and has a point of contact to begin addressing a mutually acceptable plan of action. Because of the potential safety implications, the initial notification is a VerDate Aug<31>2005 15:59 Jan 19, 2007 Jkt 211001 matter of urgency. The 5-day written notification period is consistent with similar requirements in the civil sector. The Federal Aviation Administration regulations at 14 CFR 21.3(e) require reporting of aviation failures, malfunctions, or defects within 24 hours after it has been determined that the failure, malfunction, or defect has occurred. Similarly, federal regulations governing motor vehicles at 49 CFR 573.6(b) require submission of a report not more than 5 working days after a safety-related defect or noncompliance has been determined to exist. 7. Comment: One respondent expressed concern that the DFARS rule does not indicate what information has to be communicated or the distribution or communication method. DoD Response: Paragraph (c) of the contract clause specifically describes the communication and information requirements. 8. Comment: One respondent stated that the definition of ‘‘replenishment part’’ in 246.101 is satisfactory, but the phrase ‘‘purchased after provisioning’’ in the definition needs to be clarified or deleted. The phrase, as currently written, can cause confusion on whether initial provisioning orders are covered. DoD Response: DoD has amended the rule to remove the references to provisioning. The rule applies to all repairable and consumable parts identified as critical safety items. 9. Comment: One respondent recommended limiting notification to truly significant threats to safety from malfunctioning systems or subsystems. DoD Response: Defining ‘‘truly significant threats to safety’’ would be difficult and could result in inconsistent application. Also, ‘‘build-to-print’’ manufacturers produce many critical safety items and may not have knowledge of an item’s ultimate application or failure consequences. 10. Comment: One respondent expressed concern that a contracting officer might not know whether an item was a critical safety item and might include the notification requirement when it is unnecessary. DoD Response: The contract clause specifies that the notification requirement for parts applies to those items identified as critical safety items. The contracting officer will receive input from technical/requirements personnel as to which items fall into that category, and will identify those items in the contract. 11. Comment: One respondent was concerned that the contracting officer may not know whether a system, subsystem, assembly, or subassembly is ‘‘integral to a system,’’ as stated in PO 00000 Frm 00038 Fmt 4700 Sfmt 4700 DFARS 246.371, and may unnecessarily impose the notification requirement. DoD Response: The pertinent aspect of the rule is that notification be provided when there is a nonconformance or deficiency that may result in a safety impact for a system or its constituent components. A contracting officer or contractor involved with systems, subsystems, assemblies, or subassemblies will know the application of the product and whether it is integral to a system. The phrase ‘‘integral to a system’’ is used in FAR Part 34 in conjunction with items of supply that may be replaced during the service life of a system. 12. Comment: One respondent expressed confusion as to whether the notification requirement applies to repair, maintenance, logistics support, or overhaul services contracts where a system, subsystem, assembly, or subassembly is integral to a system and failure or malfunction poses a safety risk; or only to repairs that are integral to the overall system regardless of effects on subsystems, assemblies, and subassemblies. DoD Response: Within the context of the DFARS rule, ‘‘integral to a system’’ means items of supply within a system that may be replaced during the service life of a system. 13. Comment: One respondent suggested moving the definition of ‘‘critical safety item’’ from the contract clause to 246.101. DoD Response: The definition is appropriately placed within the contract clause, where the term is used. 14. Comment: One respondent stated that the notification requirement in paragraph (b)(2) of the contract clause was more expansive than the definition in 246.101, because it included the phrase ‘‘or parts.’’ The respondent also questioned whether the notification requirement applied to parts or software bugs that had no effect on the safety of the item as a whole. DoD Response: The final rule excludes the definition of ‘‘replenishment part’’ from 246.101, and clarifies, in 246.371(a), that the contract clause applies to the acquisition of repairable or consumable parts identified as critical safety items. Paragraph (b) of the contract clause specifies that the notification requirement applies to all nonconformances for parts identified as critical safety items; and all nonconformances or deficiencies that may result in a safety impact for systems, or subsystems, assemblies, subassemblies, or parts integral to a system. E:\FR\FM\22JAR1.SGM 22JAR1 sroberts on PROD1PC70 with RULES Federal Register / Vol. 72, No. 13 / Monday, January 22, 2007 / Rules and Regulations 15. Comment: One respondent expressed concern that the DFARS clause permitted subcontractors to bypass the prime or higher-tier subcontractor and directly notify the PCO and the ACO. The respondent was concerned that this did not allow the prime or higher-tier subcontractor to independently evaluate the information and assess its credibility, accuracy, or impact. DoD Response: Paragraph (f)(2)(i) of the contract clause specifically requires the subcontractor to notify the prime or higher-tier subcontractor. Paragraph (f)(2)(ii) of the clause requires the subcontractor to also notify the ACO and the PCO if the subcontractor is aware of the ACO and the PCO for the contract. Nothing in the clause precludes the prime contractor or higher-tier subcontractor from independently evaluating the information provided by the subcontractor. 16. Comment: Two respondents expressed concern regarding the flowdown requirements of the contract clause. One respondent expressed concern about flow-down to commercial item subcontractors and to any subcontractors whose work does not involve critical safety items. Another respondent recommended that flowdown be limited to only the acquisition of replacement or replenishment spares. DoD Response: The final rule clarifies that the clause applies to contracts and subcontracts for both commercial and non-commercial items. This includes contracts and subcontracts for parts identified as critical safety items; systems and subsystems, assemblies and subassemblies integral to a system; and repair, maintenance, logistics support, or overhaul services for systems and subsystems, assemblies, subassemblies, and parts integral to a system. 17. Comment: One respondent stated that the Government should supply and maintain a comprehensive list of critical safety items that is accessible to contractors. DoD Response: The parts that the Government has designated as critical safety items will be identified in the applicable contracts. 18. Comment: Two respondents recommended clarification of the term ‘‘technical nonconformance’’. DoD Response: DoD agrees that the term ‘‘technical nonconformance’’ could cause confusion and, therefore, has replaced this term with ‘‘nonconformance’’ in paragraph (b)(1) of the contract clause. 19. Comment: Two respondents stated that the term ‘‘safety impact’’ in the VerDate Aug<31>2005 15:59 Jan 19, 2007 Jkt 211001 contract clause is not tangible or properly defined. DoD Response: The definition is consistent with MIL–STD–882D, Standard Practice for System Safety, Appendix A, for critical mishap severity categorization and mishap risk impact. 20. Comment: One respondent recommended clarification that contractor notification is required only for parts sold to the Government and does not include parts scrapped by the contractor. DoD Response: Paragraph (b) of the contract clause specifies that the notification requirement applies to items acquired by or serviced for the Government under the contract. 21. Comment: Three respondents requested clarification of the term ‘‘credible information’’ as used in the contract clause. DoD Response: DoD has added a definition of ‘‘credible information’’ to the contract clause, based upon a recommended definition provided by one of the respondents. 22. Comment: One respondent recommended that, instead of all critical safety items being subject to the reporting requirements of the contract clause, the reporting be limited to those situations resulting in safety impacts. DoD Response: A significant percentage of critical safety items purchased by DoD are provided by small businesses that may not know the end item application of the components they are supplying, nor the failure modes and effects of the items. Many of these small businesses may be unaware of whether a nonconformance would have a safety impact. Therefore, the recommended change was not adopted. 23. Comment: One respondent stated that the definition of ‘‘critical safety item’’ does not indicate the level of damage sufficient to constitute ‘‘serious’’ damage, and that it is unclear what level of risk of personal injury would be ‘‘unacceptable.’’ The respondent recommended that the language established for ‘‘safety impact’’ be used in the definition of ‘‘critical safety item’’ to preclude ambiguity. DoD Response: DoD has revised the definition of ‘‘critical safety item’’ in the contract clause to replace the potentially ambiguous language with a reference to the definition of ‘‘safety impact’’ within the contract clause. 24. Comment: Two respondents expressed concern with the definition of ‘‘safety impact’’ and associated dollar thresholds for property damage. One respondent stated that ‘‘safety impact’’ should focus on risk of injury or loss of life instead of property damage. The respondent suggested deleting ‘‘loss of a PO 00000 Frm 00039 Fmt 4700 Sfmt 4700 2635 weapon system; or property damage exceeding $200,000’’ from the definition of ‘‘safety impact’’ or, alternatively, replacing ‘‘$200,000’’ with ‘‘$1,000,000’’ to reflect realistic thresholds. Another respondent recommended that the definition of ‘‘safety impact’’ be revised for consistency with the MIL–STD–882 Risk Hazard Matrix, rather than the arbitrary property damage value of $200,000. DoD Response: DoD does not agree that notification requirements should apply only to risk of injury or loss of life situations. However, the monetary value specified in the rule has been revised to $1,000,000 for consistency with MIL– STD–882D, Appendix A, Table A–I. 25. Comment: One respondent stated that the assertion in paragraph (e) of the contract clause, that notification of safety issues will neither be an admission of responsibility nor a release of liability, would not adequately protect contractors from potential law suits. The respondent suggested that the clause include language that would reimburse the contractor for liabilities and expenses incidental to such liabilities to third persons not compensated by insurance or otherwise without regard to and as an exception to any limitation of cost or the limitation of funds clause in the contract. DoD Response: DoD cannot establish a clause that grants Government indemnification for liabilities to third parties arising from compliance with the clause. Absent express statutory authority, the Government may not enter into an agreement to hold harmless or indemnify where the amount of the Government’s liability is indefinite, indeterminable, or potentially unlimited. 26. Comment: One respondent stated that the rule does not adequately define ‘‘critical safety items’’ and suggests that the probability of failure be incorporated in the definition. DoD Response: The definition of ‘‘critical safety item’’ is based on public law and existing DoD policies. Further, probability of failure assumes a part will be manufactured as specified. The DFARS rule addresses notification when a delivered item is nonconforming or defective; thus, probability of failure may not be meaningful. 27. Comment: One respondent recommended that the requirement for notification of safety defects be limited to aviation products. DoD Response: DoD does not agree that the notification requirement should be limited to the aviation community. While the initial focus of critical safety items resulted from Section 802 of the National Defense Authorization Act for E:\FR\FM\22JAR1.SGM 22JAR1 2636 Federal Register / Vol. 72, No. 13 / Monday, January 22, 2007 / Rules and Regulations Fiscal Year 2004 (Pub. L. 108–136), Section 8143 of the Fiscal Year 2004 DoD Appropriations Act (Public Law 108–87) required DoD to examine appropriate standards and procedures for timely notification regarding safety issues, including defective parts. It is essential that the Government be notified of all potential safety defects, regardless of product line. 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 certifies that this final rule will not have a significant economic impact on a substantial number of small entities within the meaning of the Regulatory Flexibility Act, 5 U.S.C. 601, et seq., because the rule applies only in situations where nonconformances or deficiencies could impact item safety. The occurrence of such situations is expected to be limited. C. Paperwork Reduction Act This final rule contains a new information collection requirement. The Office of Management and Budget has approved the information collection for use through December 31, 2009, under Control Number 0704–0441. List of Subjects in 48 CFR Parts 212, 244, 246, and 252 Government procurement. Michele P. Peterson, Editor, Defense Acquisition Regulations System. Therefore, 48 CFR parts 212, 244, 246, and 252 are amended as follows: I 1. The authority citation for 48 CFR parts 212, 244, 246, and 252 continues to read as follows: I Authority: 41 U.S.C. 421 and 48 CFR Chapter 1. 2. Section 212.301 is amended by adding paragraph (f)(xii) to read as follows: 212.301 Solicitation provisions and contract clauses for the acquisition of commercial items. sroberts on PROD1PC70 with RULES (f) * * * (xii) Use the clause at 252.246–7003, Notification of Potential Safety Issues, as prescribed in 246.371. 3. Section 244.403 is revised to read as follows: VerDate Aug<31>2005 15:59 Jan 19, 2007 Jkt 211001 PART 246—QUALITY ASSURANCE 4. Section 246.371 is added to read as follows: I 246.371 issues. Notification of potential safety (a) Use the clause at 252.246–7003, Notification of Potential Safety Issues, in solicitations and contracts for the acquisition of— (1) Repairable or consumable parts identified as critical safety items; (2) Systems and subsystems, assemblies, and subassemblies integral to a system; or (3) Repair, maintenance, logistics support, or overhaul services for systems and subsystems, assemblies, subassemblies, and parts integral to a system. (b) Follow the procedures at PGI 246.371 for the handling of notifications received under the clause at 252.246– 7003. PART 252—SOLICITATION PROVISIONS AND CONTRACT CLAUSES 5. Section 252.244–7000 is revised to read as follows: I As prescribed in 244.403, use the following clause: I I Contract clause. Use the clause at 252.244–7000, Subcontracts for Commercial Items and Commercial Components (DoD Contracts), in solicitations and contracts for supplies or services other than commercial items, that contain any of the following clauses: (1) 252.225–7014 Preference for Domestic Specialty Metals, Alternate I. (2) 252.246–7003 Notification of Potential Safety Issues. (3) 252.247–7023 Transportation of Supplies by Sea. (4) 252.247–7024 Notification of Transportation of Supplies by Sea. 252.244–7000 Subcontracts for Commercial Items and Commercial Components (DoD Contracts). PART 212—ACQUISITION OF COMMERCIAL ITEMS PART 244—SUBCONTRACTING POLICIES AND PROCEDURES 244.403 Subcontracts for Commercial Items and Commercial Components (DOD Contracts) (JAN 2007) In addition to the clauses listed in paragraph (c) of the Subcontracts for Commercial Items clause of this contract (Federal Acquisition Regulation 52.244–6), the Contractor shall include the terms of the following clauses, if applicable, in subcontracts for commercial items or commercial components, awarded at any tier under this contract: (a) 252.225–7014 Preference for Domestic Specialty Metals, Alternate I (10 U.S.C. 2241 note). (b) 252.246–7003 Notification of Potential Safety Issues. PO 00000 Frm 00040 Fmt 4700 Sfmt 4700 (c) 252.247–7023 Transportation of Supplies by Sea (10 U.S.C. 2631). (d) 252.247–7024 Notification of Transportation of Supplies by Sea (10 U.S.C. 2631). (End of clause) I 6. Section 252.246–7003 is added to read as follows: 252.246–7003 Notification of Potential Safety Issues. As prescribed in 246.371(a), use the following clause: Notification of Potential Safety Issues (JAN 2007) (a) Definitions. As used in this clause— Credible information means information that, considering its source and the surrounding circumstances, supports a reasonable belief that an event has occurred or will occur. Critical safety item means a part, subassembly, assembly, subsystem, installation equipment, or support equipment for a system that contains a characteristic, any failure, malfunction, or absence of which could have a safety impact. Safety impact means the occurrence of death, permanent total disability, permanent partial disability, or injury or occupational illness requiring hospitalization; loss of a weapon system; or property damage exceeding $1,000,000. Subcontractor means any supplier, distributor, vendor, or firm that furnishes supplies or services to or for the Contractor or another subcontractor under this contract. (b) The Contractor shall provide notification, in accordance with paragraph (c) of this clause, of— (1) All nonconformances for parts identified as critical safety items acquired by the Government under this contract; and (2) All nonconformances or deficiencies that may result in a safety impact for systems, or subsystems, assemblies, subassemblies, or parts integral to a system, acquired by or serviced for the Government under this contract. (c) The Contractor— (1) Shall notify the Administrative Contracting Officer (ACO) and the Procuring Contracting Officer (PCO) as soon as practicable, but not later than 72 hours, after discovering or acquiring credible information concerning nonconformances and deficiencies described in paragraph (b) of this clause; and (2) Shall provide a written notification to the ACO and the PCO within 5 working days that includes— (i) A summary of the defect or nonconformance; (ii) A chronology of pertinent events; (iii) The identification of potentially affected items to the extent known at the time of notification; (iv) A point of contact to coordinate problem analysis and resolution; and (v) Any other relevant information. (d) The Contractor— (1) Is responsible for the notification of potential safety issues occurring with regard to an item furnished by any subcontractor; and E:\FR\FM\22JAR1.SGM 22JAR1 Federal Register / Vol. 72, No. 13 / Monday, January 22, 2007 / Rules and Regulations (2) Shall facilitate direct communication between the Government and the subcontractor as necessary. (e) Notification of safety issues under this clause shall be considered neither an admission of responsibility nor a release of liability for the defect or its consequences. This clause does not affect any right of the Government or the Contractor established elsewhere in this contract. (f)(1) The Contractor shall include the substance of this clause, including this paragraph (f), in subcontracts for— (i) Parts identified as critical safety items; (ii) Systems and subsystems, assemblies, and subassemblies integral to a system; or (iii) Repair, maintenance, logistics support, or overhaul services for systems and subsystems, assemblies, subassemblies, and parts integral to a system. (2) For those subcontracts described in paragraph (f)(1) of this clause, the Contractor shall require the subcontractor to provide the notification required by paragraph (c) of this clause to— (i) The Contractor or higher-tier subcontractor; and (ii) The ACO and the PCO, if the subcontractor is aware of the ACO and the PCO for the contract. (End of clause) [FR Doc. E7–733 Filed 1–19–07; 8:45 am] BILLING CODE 5001–08–P Comment date: Comments on the interim rule should be submitted in writing to the address shown below on or before March 23, 2007, to be considered in the formation of the final rule. ADDRESSES: You may submit comments, identified by DFARS Case 2006–D031, using any of the following methods: • Federal eRulemaking Portal: https:// www.regulations.gov. Follow the instructions for submitting comments. • E-mail: dfars@osd.mil. Include DFARS Case 2006–D031 in the subject line of the message. • Fax: (703) 602–0350. • Mail: Defense Acquisition Regulations System, Attn: Ms. Amy Williams, OUSD (AT&L) DPAP (DARS), IMD 3C132, 3062 Defense Pentagon, Washington, DC 20301–3062. • Hand Delivery/Courier: Defense Acquisition Regulations System, Crystal Square 4, Suite 200A, 241 18th Street, Arlington, VA 22202–3402. Comments received generally will be posted without change to https:// www.regulations.gov, including any personal information provided. FOR FURTHER INFORMATION CONTACT: Ms. Amy Williams, (703) 602–0328. SUPPLEMENTARY INFORMATION: DEPARTMENT OF DEFENSE A. Background Defense Acquisition Regulations System This interim rule amends DFARS 225.7002–1 and the corresponding contract clause at 252.225–7012 to implement Section 833(b) of the National Defense Authorization Act for Fiscal Year 2006 (Pub. L. 109–163). Section 833(b) amended 10 U.S.C. 2533a (the Berry Amendment) to expand the foreign source restrictions applicable to the acquisition of clothing to also include clothing materials and components, other than sensors, electronics, or other items added to, and not normally associated with, clothing and the materials and components thereof. The rule also includes examples of items subject to the restrictions. This rule was not subject to Office of Management and Budget review under Executive Order 12866, dated September 30, 1993. 48 CFR Parts 225 and 252 RIN 0750–AF54 Defense Federal Acquisition Regulation Supplement; Berry Amendment Restrictions—Clothing Materials and Components Covered (DFARS Case 2006–D031) Defense Acquisition Regulations System, Department of Defense (DoD). ACTION: Interim rule with request for comments. sroberts on PROD1PC70 with RULES AGENCY: SUMMARY: DoD has issued an interim rule amending the Defense Federal Acquisition Regulation Supplement (DFARS) to implement Section 833(b) of the National Defense Authorization Act for Fiscal Year 2006. Section 833(b) expands the foreign source restrictions applicable to the acquisition of clothing to also include clothing materials and components, other than sensors, electronics, or other items added to, and not normally associated with, clothing and the materials and components thereof. DATES: Effective date: January 22, 2007. VerDate Aug<31>2005 15:59 Jan 19, 2007 Jkt 211001 B. Regulatory Flexibility Act DoD has prepared an initial regulatory flexibility analysis consistent with 5 U.S.C. 603. A copy of the analysis may be obtained from the point of contact specified herein. The analysis is summarized as follows: The objective of the rule is to provide for the acquisition of clothing, and clothing materials and components, from domestic sources in accordance with statutory requirements. The legal PO 00000 Frm 00041 Fmt 4700 Sfmt 4700 2637 basis for the rule is 10 U.S.C. 2533a (the Berry Amendment), as amended by Section 833(b) of the National Defense Authorization Act for Fiscal Year 2006 (Pub. L. 109–163). The rule will apply to entities interested in receiving DoD contracts or subcontracts for the acquisition of clothing. Based on data generated from the DD Form 350, Individual Contracting Action Report, DoD awarded 6,072 contract actions relating to the acquisition of clothing items during fiscal year 2005. These actions had a total dollar value of $1.868 billion and involved 1,110 contractors. Of these actions, 4,087 totaling $.81 billion involved 906 contractors that were small business concerns. This rule may have a positive impact on small businesses that manufacture clothing materials and components, by reducing foreign competition. However, the rule could have a negative impact on small businesses that have been using foreign components in the manufacture of clothing products. 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 2006–D031. 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 833(b) of the National Defense Authorization Act for Fiscal Year 2006 (Public Law 109–163). Section 833(b) expands the foreign source restrictions applicable to the acquisition of clothing, to also include clothing materials and components, other than sensors, electronics, or other items added to, and not normally associated with, clothing and the materials and components thereof. Section 833(b) became effective upon enactment on January 6, 2006. Comments received in response to this interim rule will be considered in the formation of the final rule. E:\FR\FM\22JAR1.SGM 22JAR1

Agencies

[Federal Register Volume 72, Number 13 (Monday, January 22, 2007)]
[Rules and Regulations]
[Pages 2633-2637]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: E7-733]


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DEPARTMENT OF DEFENSE

Defense Acquisition Regulations System

48 CFR Parts 212, 244, 246, and 252

RIN 0750-AF12


Defense Federal Acquisition Regulation Supplement; Notification 
Requirements for Critical Safety Items (DFARS Case 2004-D008)

AGENCY: Defense Acquisition Regulations System, Department of Defense 
(DoD).

ACTION: Final rule.

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SUMMARY: DoD has issued a final rule amending the Defense Federal 
Acquisition Regulation Supplement (DFARS) to add policy regarding 
notification of potential safety issues under DoD contracts. The rule 
contains a contract clause requiring contractors to promptly notify the 
Government of any nonconformance or deficiency that could impact item 
safety.

DATES: Effective Date: January 22, 2007.

FOR FURTHER INFORMATION CONTACT: Mr. Mark Gomersall, Defense 
Acquisition Regulations System, OUSD (AT&L) DPAP (DARS), IMD 3C132, 
3062 Defense Pentagon, Washington, DC 20301-3062. Telephone (703) 602-
0302; facsimile (703) 602-0350. Please cite DFARS Case 2004-D008.

SUPPLEMENTARY INFORMATION:

A. Background

    This final rule contains a new contract clause requiring 
contractors to notify the Government of any nonconformance or 
deficiency that could impact the safety of items acquired by or 
serviced for the Government. The rule is a result of Section 8143 of 
the Fiscal Year 2004 DoD Appropriations Act (Pub. L. 108-87), which 
required examination of appropriate standards and procedures to ensure 
timely notification to the Government and contractors regarding safety 
issues, including defective parts.
    DoD published a proposed rule at 70 FR 44077 on August 1, 2005. 
Thirteen respondents submitted comments on the proposed rule. A 
discussion of the comments is provided below.
    1. Comment: One respondent recommended amending the clause 
prescription at DFARS 246.371(a)(2) and (3) to change the term 
``system'' to ``critical safety system.''
    DoD Response: The term ``system'' relates to an assemblage of 
subsystems, assemblies, and components that comprise an end item. 
Adding ``critical safety'' to the term ``system'' is unnecessary and 
would be confusing where major or less-than-major systems are not 
described in terms such as ``critical safety.''
    2. Comment: Five respondents suggested requiring the use of the 
Government-Industry Data Exchange Program (GIDEP) as the method for 
notification of safety issues and for reporting all types of technical 
data and reliability information.
    DoD Response: The primary objective of this DFARS rule is to ensure 
that contractors who have delivered defective products with potential 
safety implications notify affected contracting offices quickly, using 
whatever method

[[Page 2634]]

the contractor determines to be most expeditious. GIDEP may not be the 
most efficient or effective notification approach in many situations.
    3. Comment: One respondent suggested DoD include integrated 
environmental safety and occupational health issues in the coverage.
    DoD Response: Environmental safety and occupational health issues 
were not included in the mandate that resulted in the issuance of this 
DFARS rule (Section 8143 of the Fiscal Year 2004 DoD Appropriations Act 
(Pub. L. 108-87)).
    4. Comment: One respondent recommended that the DFARS rule include 
a timeframe for reaction by the Government after notification.
    DoD Response: The intent of the DFARS rule is to ensure timely 
notification of potential safety defects. The time required by the 
Government to respond to and effectively investigate each incident will 
depend upon the circumstances of the situation.
    5. Comment: One respondent requested a more specific definition of 
``safety'' in the rule.
    DoD Response: DoD has reexamined all references to safety in the 
DFARS rule and has determined that the term is adequately explained in 
its context each time it is used.
    6. Comment: Five respondents submitted comments regarding 
timeframes for notification of potential safety defects. One respondent 
indicated that the requirement for notifying the procuring contracting 
officer (PCO) and the administrative contracting officer (ACO) within 
72 hours of potential safety issues may cause over-reporting, because 
the contractor will have insufficient time to investigate the situation 
internally. The respondent requested flexibility regarding notification 
but did not provide a proposed timeframe for notification. Another 
respondent questioned whether 72 hours would be realistic but provided 
no recommended time frame. Other respondents recommended notification 
periods of 3 business days; 5 business days; and 10-30 working days.
    DoD Response: DoD concurs in lengthening the written notification 
period to 5 working days, but does not concur in making the initial 
reporting period for a potential safety defect flexible. The initial 
notification of 72 hours is intended to ensure that the customer is 
aware of potential safety issues in delivered products, has a basic 
understanding of the circumstances, and has a point of contact to begin 
addressing a mutually acceptable plan of action. Because of the 
potential safety implications, the initial notification is a matter of 
urgency. The 5-day written notification period is consistent with 
similar requirements in the civil sector. The Federal Aviation 
Administration regulations at 14 CFR 21.3(e) require reporting of 
aviation failures, malfunctions, or defects within 24 hours after it 
has been determined that the failure, malfunction, or defect has 
occurred. Similarly, federal regulations governing motor vehicles at 49 
CFR 573.6(b) require submission of a report not more than 5 working 
days after a safety-related defect or noncompliance has been determined 
to exist.
    7. Comment: One respondent expressed concern that the DFARS rule 
does not indicate what information has to be communicated or the 
distribution or communication method.
    DoD Response: Paragraph (c) of the contract clause specifically 
describes the communication and information requirements.
    8. Comment: One respondent stated that the definition of 
``replenishment part'' in 246.101 is satisfactory, but the phrase 
``purchased after provisioning'' in the definition needs to be 
clarified or deleted. The phrase, as currently written, can cause 
confusion on whether initial provisioning orders are covered.
    DoD Response: DoD has amended the rule to remove the references to 
provisioning. The rule applies to all repairable and consumable parts 
identified as critical safety items.
    9. Comment: One respondent recommended limiting notification to 
truly significant threats to safety from malfunctioning systems or 
subsystems.
    DoD Response: Defining ``truly significant threats to safety'' 
would be difficult and could result in inconsistent application. Also, 
``build-to-print'' manufacturers produce many critical safety items and 
may not have knowledge of an item's ultimate application or failure 
consequences.
    10. Comment: One respondent expressed concern that a contracting 
officer might not know whether an item was a critical safety item and 
might include the notification requirement when it is unnecessary.
    DoD Response: The contract clause specifies that the notification 
requirement for parts applies to those items identified as critical 
safety items. The contracting officer will receive input from 
technical/requirements personnel as to which items fall into that 
category, and will identify those items in the contract.
    11. Comment: One respondent was concerned that the contracting 
officer may not know whether a system, subsystem, assembly, or 
subassembly is ``integral to a system,'' as stated in DFARS 246.371, 
and may unnecessarily impose the notification requirement.
    DoD Response: The pertinent aspect of the rule is that notification 
be provided when there is a nonconformance or deficiency that may 
result in a safety impact for a system or its constituent components. A 
contracting officer or contractor involved with systems, subsystems, 
assemblies, or subassemblies will know the application of the product 
and whether it is integral to a system. The phrase ``integral to a 
system'' is used in FAR Part 34 in conjunction with items of supply 
that may be replaced during the service life of a system.
    12. Comment: One respondent expressed confusion as to whether the 
notification requirement applies to repair, maintenance, logistics 
support, or overhaul services contracts where a system, subsystem, 
assembly, or subassembly is integral to a system and failure or 
malfunction poses a safety risk; or only to repairs that are integral 
to the overall system regardless of effects on subsystems, assemblies, 
and subassemblies.
    DoD Response: Within the context of the DFARS rule, ``integral to a 
system'' means items of supply within a system that may be replaced 
during the service life of a system.
    13. Comment: One respondent suggested moving the definition of 
``critical safety item'' from the contract clause to 246.101.
    DoD Response: The definition is appropriately placed within the 
contract clause, where the term is used.
    14. Comment: One respondent stated that the notification 
requirement in paragraph (b)(2) of the contract clause was more 
expansive than the definition in 246.101, because it included the 
phrase ``or parts.'' The respondent also questioned whether the 
notification requirement applied to parts or software bugs that had no 
effect on the safety of the item as a whole.
    DoD Response: The final rule excludes the definition of 
``replenishment part'' from 246.101, and clarifies, in 246.371(a), that 
the contract clause applies to the acquisition of repairable or 
consumable parts identified as critical safety items. Paragraph (b) of 
the contract clause specifies that the notification requirement applies 
to all nonconformances for parts identified as critical safety items; 
and all nonconformances or deficiencies that may result in a safety 
impact for systems, or subsystems, assemblies, subassemblies, or parts 
integral to a system.

[[Page 2635]]

    15. Comment: One respondent expressed concern that the DFARS clause 
permitted subcontractors to bypass the prime or higher-tier 
subcontractor and directly notify the PCO and the ACO. The respondent 
was concerned that this did not allow the prime or higher-tier 
subcontractor to independently evaluate the information and assess its 
credibility, accuracy, or impact.
    DoD Response: Paragraph (f)(2)(i) of the contract clause 
specifically requires the subcontractor to notify the prime or higher-
tier subcontractor. Paragraph (f)(2)(ii) of the clause requires the 
subcontractor to also notify the ACO and the PCO if the subcontractor 
is aware of the ACO and the PCO for the contract. Nothing in the clause 
precludes the prime contractor or higher-tier subcontractor from 
independently evaluating the information provided by the subcontractor.
    16. Comment: Two respondents expressed concern regarding the flow-
down requirements of the contract clause. One respondent expressed 
concern about flow-down to commercial item subcontractors and to any 
subcontractors whose work does not involve critical safety items. 
Another respondent recommended that flow-down be limited to only the 
acquisition of replacement or replenishment spares.
    DoD Response: The final rule clarifies that the clause applies to 
contracts and subcontracts for both commercial and non-commercial 
items. This includes contracts and subcontracts for parts identified as 
critical safety items; systems and subsystems, assemblies and 
subassemblies integral to a system; and repair, maintenance, logistics 
support, or overhaul services for systems and subsystems, assemblies, 
subassemblies, and parts integral to a system.
    17. Comment: One respondent stated that the Government should 
supply and maintain a comprehensive list of critical safety items that 
is accessible to contractors.
    DoD Response: The parts that the Government has designated as 
critical safety items will be identified in the applicable contracts.
    18. Comment: Two respondents recommended clarification of the term 
``technical nonconformance''.
    DoD Response: DoD agrees that the term ``technical nonconformance'' 
could cause confusion and, therefore, has replaced this term with 
``nonconformance'' in paragraph (b)(1) of the contract clause.
    19. Comment: Two respondents stated that the term ``safety impact'' 
in the contract clause is not tangible or properly defined.
    DoD Response: The definition is consistent with MIL-STD-882D, 
Standard Practice for System Safety, Appendix A, for critical mishap 
severity categorization and mishap risk impact.
    20. Comment: One respondent recommended clarification that 
contractor notification is required only for parts sold to the 
Government and does not include parts scrapped by the contractor.
    DoD Response: Paragraph (b) of the contract clause specifies that 
the notification requirement applies to items acquired by or serviced 
for the Government under the contract.
    21. Comment: Three respondents requested clarification of the term 
``credible information'' as used in the contract clause.
    DoD Response: DoD has added a definition of ``credible 
information'' to the contract clause, based upon a recommended 
definition provided by one of the respondents.
    22. Comment: One respondent recommended that, instead of all 
critical safety items being subject to the reporting requirements of 
the contract clause, the reporting be limited to those situations 
resulting in safety impacts.
    DoD Response: A significant percentage of critical safety items 
purchased by DoD are provided by small businesses that may not know the 
end item application of the components they are supplying, nor the 
failure modes and effects of the items. Many of these small businesses 
may be unaware of whether a nonconformance would have a safety impact. 
Therefore, the recommended change was not adopted.
    23. Comment: One respondent stated that the definition of 
``critical safety item'' does not indicate the level of damage 
sufficient to constitute ``serious'' damage, and that it is unclear 
what level of risk of personal injury would be ``unacceptable.'' The 
respondent recommended that the language established for ``safety 
impact'' be used in the definition of ``critical safety item'' to 
preclude ambiguity.
    DoD Response: DoD has revised the definition of ``critical safety 
item'' in the contract clause to replace the potentially ambiguous 
language with a reference to the definition of ``safety impact'' within 
the contract clause.
    24. Comment: Two respondents expressed concern with the definition 
of ``safety impact'' and associated dollar thresholds for property 
damage. One respondent stated that ``safety impact'' should focus on 
risk of injury or loss of life instead of property damage. The 
respondent suggested deleting ``loss of a weapon system; or property 
damage exceeding $200,000'' from the definition of ``safety impact'' 
or, alternatively, replacing ``$200,000'' with ``$1,000,000'' to 
reflect realistic thresholds. Another respondent recommended that the 
definition of ``safety impact'' be revised for consistency with the 
MIL-STD-882 Risk Hazard Matrix, rather than the arbitrary property 
damage value of $200,000.
    DoD Response: DoD does not agree that notification requirements 
should apply only to risk of injury or loss of life situations. 
However, the monetary value specified in the rule has been revised to 
$1,000,000 for consistency with MIL-STD-882D, Appendix A, Table A-I.
    25. Comment: One respondent stated that the assertion in paragraph 
(e) of the contract clause, that notification of safety issues will 
neither be an admission of responsibility nor a release of liability, 
would not adequately protect contractors from potential law suits. The 
respondent suggested that the clause include language that would 
reimburse the contractor for liabilities and expenses incidental to 
such liabilities to third persons not compensated by insurance or 
otherwise without regard to and as an exception to any limitation of 
cost or the limitation of funds clause in the contract.
    DoD Response: DoD cannot establish a clause that grants Government 
indemnification for liabilities to third parties arising from 
compliance with the clause. Absent express statutory authority, the 
Government may not enter into an agreement to hold harmless or 
indemnify where the amount of the Government's liability is indefinite, 
indeterminable, or potentially unlimited.
    26. Comment: One respondent stated that the rule does not 
adequately define ``critical safety items'' and suggests that the 
probability of failure be incorporated in the definition.
    DoD Response: The definition of ``critical safety item'' is based 
on public law and existing DoD policies. Further, probability of 
failure assumes a part will be manufactured as specified. The DFARS 
rule addresses notification when a delivered item is nonconforming or 
defective; thus, probability of failure may not be meaningful.
    27. Comment: One respondent recommended that the requirement for 
notification of safety defects be limited to aviation products.
    DoD Response: DoD does not agree that the notification requirement 
should be limited to the aviation community. While the initial focus of 
critical safety items resulted from Section 802 of the National Defense 
Authorization Act for

[[Page 2636]]

Fiscal Year 2004 (Pub. L. 108-136), Section 8143 of the Fiscal Year 
2004 DoD Appropriations Act (Public Law 108-87) required DoD to examine 
appropriate standards and procedures for timely notification regarding 
safety issues, including defective parts. It is essential that the 
Government be notified of all potential safety defects, regardless of 
product line.
    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 certifies that this final rule will not have a significant 
economic impact on a substantial number of small entities within the 
meaning of the Regulatory Flexibility Act, 5 U.S.C. 601, et seq., 
because the rule applies only in situations where nonconformances or 
deficiencies could impact item safety. The occurrence of such 
situations is expected to be limited.

C. Paperwork Reduction Act

    This final rule contains a new information collection requirement. 
The Office of Management and Budget has approved the information 
collection for use through December 31, 2009, under Control Number 
0704-0441.

List of Subjects in 48 CFR Parts 212, 244, 246, and 252

    Government procurement.

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

0
Therefore, 48 CFR parts 212, 244, 246, and 252 are amended as follows:
0
1. The authority citation for 48 CFR parts 212, 244, 246, and 252 
continues to read as follows:

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

PART 212--ACQUISITION OF COMMERCIAL ITEMS

0
2. Section 212.301 is amended by adding paragraph (f)(xii) to read as 
follows:


212.301  Solicitation provisions and contract clauses for the 
acquisition of commercial items.

    (f) * * *
    (xii) Use the clause at 252.246-7003, Notification of Potential 
Safety Issues, as prescribed in 246.371.

PART 244--SUBCONTRACTING POLICIES AND PROCEDURES

0
3. Section 244.403 is revised to read as follows:


244.403  Contract clause.

    Use the clause at 252.244-7000, Subcontracts for Commercial Items 
and Commercial Components (DoD Contracts), in solicitations and 
contracts for supplies or services other than commercial items, that 
contain any of the following clauses:
    (1) 252.225-7014 Preference for Domestic Specialty Metals, 
Alternate I.
    (2) 252.246-7003 Notification of Potential Safety Issues.
    (3) 252.247-7023 Transportation of Supplies by Sea.
    (4) 252.247-7024 Notification of Transportation of Supplies by Sea.

PART 246--QUALITY ASSURANCE

0
4. Section 246.371 is added to read as follows:


246.371  Notification of potential safety issues.

    (a) Use the clause at 252.246-7003, Notification of Potential 
Safety Issues, in solicitations and contracts for the acquisition of--
    (1) Repairable or consumable parts identified as critical safety 
items;
    (2) Systems and subsystems, assemblies, and subassemblies integral 
to a system; or
    (3) Repair, maintenance, logistics support, or overhaul services 
for systems and subsystems, assemblies, subassemblies, and parts 
integral to a system.
    (b) Follow the procedures at PGI 246.371 for the handling of 
notifications received under the clause at 252.246-7003.

PART 252--SOLICITATION PROVISIONS AND CONTRACT CLAUSES

0
5. Section 252.244-7000 is revised to read as follows:


252.244-7000  Subcontracts for Commercial Items and Commercial 
Components (DoD Contracts).

    As prescribed in 244.403, use the following clause:

Subcontracts for Commercial Items and Commercial Components (DOD 
Contracts) (JAN 2007)

    In addition to the clauses listed in paragraph (c) of the 
Subcontracts for Commercial Items clause of this contract (Federal 
Acquisition Regulation 52.244-6), the Contractor shall include the 
terms of the following clauses, if applicable, in subcontracts for 
commercial items or commercial components, awarded at any tier under 
this contract:
    (a) 252.225-7014 Preference for Domestic Specialty Metals, 
Alternate I (10 U.S.C. 2241 note).
    (b) 252.246-7003 Notification of Potential Safety Issues.
    (c) 252.247-7023 Transportation of Supplies by Sea (10 U.S.C. 
2631).
    (d) 252.247-7024 Notification of Transportation of Supplies by 
Sea (10 U.S.C. 2631).


(End of clause)
0
6. Section 252.246-7003 is added to read as follows:


252.246-7003  Notification of Potential Safety Issues.

    As prescribed in 246.371(a), use the following clause:

Notification of Potential Safety Issues (JAN 2007)

    (a) Definitions. As used in this clause--
    Credible information means information that, considering its 
source and the surrounding circumstances, supports a reasonable 
belief that an event has occurred or will occur.
    Critical safety item means a part, subassembly, assembly, 
subsystem, installation equipment, or support equipment for a system 
that contains a characteristic, any failure, malfunction, or absence 
of which could have a safety impact.
    Safety impact means the occurrence of death, permanent total 
disability, permanent partial disability, or injury or occupational 
illness requiring hospitalization; loss of a weapon system; or 
property damage exceeding $1,000,000.
    Subcontractor means any supplier, distributor, vendor, or firm 
that furnishes supplies or services to or for the Contractor or 
another subcontractor under this contract.
    (b) The Contractor shall provide notification, in accordance 
with paragraph (c) of this clause, of--
    (1) All nonconformances for parts identified as critical safety 
items acquired by the Government under this contract; and
    (2) All nonconformances or deficiencies that may result in a 
safety impact for systems, or subsystems, assemblies, subassemblies, 
or parts integral to a system, acquired by or serviced for the 
Government under this contract.
    (c) The Contractor--
    (1) Shall notify the Administrative Contracting Officer (ACO) 
and the Procuring Contracting Officer (PCO) as soon as practicable, 
but not later than 72 hours, after discovering or acquiring credible 
information concerning nonconformances and deficiencies described in 
paragraph (b) of this clause; and
    (2) Shall provide a written notification to the ACO and the PCO 
within 5 working days that includes--
    (i) A summary of the defect or nonconformance;
    (ii) A chronology of pertinent events;
    (iii) The identification of potentially affected items to the 
extent known at the time of notification;
    (iv) A point of contact to coordinate problem analysis and 
resolution; and
    (v) Any other relevant information.
    (d) The Contractor--
    (1) Is responsible for the notification of potential safety 
issues occurring with regard to an item furnished by any 
subcontractor; and

[[Page 2637]]

    (2) Shall facilitate direct communication between the Government 
and the subcontractor as necessary.
    (e) Notification of safety issues under this clause shall be 
considered neither an admission of responsibility nor a release of 
liability for the defect or its consequences. This clause does not 
affect any right of the Government or the Contractor established 
elsewhere in this contract.
    (f)(1) The Contractor shall include the substance of this 
clause, including this paragraph (f), in subcontracts for--
    (i) Parts identified as critical safety items;
    (ii) Systems and subsystems, assemblies, and subassemblies 
integral to a system; or
    (iii) Repair, maintenance, logistics support, or overhaul 
services for systems and subsystems, assemblies, subassemblies, and 
parts integral to a system.
    (2) For those subcontracts described in paragraph (f)(1) of this 
clause, the Contractor shall require the subcontractor to provide 
the notification required by paragraph (c) of this clause to--
    (i) The Contractor or higher-tier subcontractor; and
    (ii) The ACO and the PCO, if the subcontractor is aware of the 
ACO and the PCO for the contract.


(End of clause)

[FR Doc. E7-733 Filed 1-19-07; 8:45 am]
BILLING CODE 5001-08-P
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