Defense Federal Acquisition Regulation Supplement; Waiver of Specialty Metals Restriction for Acquisition of Commercially Available Off-the-Shelf Items (DFARS Case 2007-D013), 35960-35961 [E7-12763]

Download as PDF 35960 Federal Register / Vol. 72, No. 126 / Monday, July 2, 2007 / Proposed Rules (Catalog of Federal Domestic Assistance No. 97.022, ‘‘Flood Insurance.’’) Dated: June 18, 2007. David I. Maurstad, Federal Insurance Administrator of the National Flood Insurance Program, Federal Emergency Management Agency, Department of Homeland Security. [FR Doc. E7–12692 Filed 6–29–07; 8:45 am] BILLING CODE 9110–12–P DEPARTMENT OF DEFENSE Defense Acquisition Regulations System 48 CFR Parts 212 and 225 RIN 0750–AF74 Defense Federal Acquisition Regulation Supplement; Waiver of Specialty Metals Restriction for Acquisition of Commercially Available Off-the-Shelf Items (DFARS Case 2007–D013) Defense Acquisition Regulations System, Department of Defense (DoD). ACTION: Proposed rule with request for comments. rwilkins on PROD1PC63 with PROPOSALS-1 AGENCY: SUMMARY: DoD is proposing to amend the Defense Federal Acquisition Regulation Supplement (DFARS) to waive application of 10 U.S.C. 2533b for acquisitions of commercially available off-the-shelf (COTS) items. 10 U.S.C. 2533b, established by section 842 of the National Defense Authorization Act for Fiscal Year 2007, places restrictions on the acquisition of specialty metals not melted or produced in the United States. DATES: Comments on the proposed rule should be submitted in writing to the address shown below on or before August 1, 2007, to be considered in the formation of the final rule. ADDRESSES: You may submit comments, identified by DFARS Case 2007–D013, 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 2007–D013 in the subject line of the message. Fax: (703) 602–7887. 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. VerDate Aug<31>2005 19:40 Jun 29, 2007 Jkt 211001 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: A. Background Section 842(a) of the National Defense Authorization Act for Fiscal Year 2007 (Pub. L. 109–364) establishes a new specialty metals domestic source restriction, which is codified at 10 U.S.C. 2533b. A proposed rule is being developed to comprehensively implement 10 U.S.C. 2533b in the DFARS. However, this proposed rule is being published separately in order to expedite the exercise of a statutory exception to the requirements of 10 U.S.C. 2533b for COTS items. As defined in subsection (c) of 41 U.S.C. 431 (Section 35 of the Office of Federal Procurement Policy Act), ‘‘COTS item’’— (i) Means any item of supply that is— (A) A commercial item; (B) Sold in substantial quantities in the commercial marketplace; and (C) Offered to the Government, without modification, in the same form in which it is sold in the commercial marketplace; and (ii) Does not include bulk cargo, as defined in section 3 of the Shipping Act of 1984 (46 U.S.C. App. 1702), such as agricultural products and petroleum products. 41 U.S.C. 431(a) requires that the acquisition regulations list the provisions of law that are inapplicable to contracts and subcontracts for COTS items. Covered provisions of law must be included on that list unless the Administrator of the Office of Federal Procurement Policy (OFPP) makes a written determination that it would not be in the best interest of the United States to exempt such contracts from the applicability of that provision of law. Covered provisions of law are those that, as determined by OFPP, impose on contractors Government-unique policies, procedures, requirements, or restrictions, except for— Æ A provision of law that provides for criminal or civil penalties; or Æ A provision of law that specifically refers to 41 U.S.C. 431, and states that the law is nevertheless applicable to COTS items. 10 U.S.C. 2533b does not provide for criminal or civil penalties; nor does it refer to 41 U.S.C. 431 and state that the law is nevertheless applicable to COTS items. Accordingly, this proposed rule— Æ Creates a new DFARS section 212.570 to list 10 U.S.C. 2533b as PO 00000 Frm 00014 Fmt 4702 Sfmt 4702 inapplicable to contracts and subcontracts for the acquisition of COTS items; and Æ Includes acquisitions of COTS items containing specialty metals as an exception at DFARS 225.7002–2. Exercise of this statutory COTS waiver is critical to DoD’s access to the commercial marketplace. Manufacturers make component purchasing decisions based on factors such as cost, quality, availability, and maintaining the state of the art—not the country in which specialty metals in the components were melted. In addition, many commercial items commonly acquired in large quantities by DoD, such as computers, commercial-off-the shelf engines, and semi-conductors, may contain a small percentage of components made of specialty metals, subjecting the manufacturers to costly and burdensome, if not impossible, tracking requirements. Many manufacturers of COTS items are unwilling to change their existing processes, inventory systems, or facilities and incur the significant expense associated with tracking the sourcing of specialty metals in the components of a COTS item in order to generate sales to DoD, which typically represent a very small percentage of overall revenue for COTS items. Section 2533b permits DoD to process a domestic non-availability determination, but such process poses difficulties for DoD in meeting missionsensitive requirements in a timely manner. In order for DoD to be able to support a determination, a contractor must— (1) Work with its suppliers at every tier to identify non-compliant parts from among potentially hundreds of thousands of parts; (2) Determine that it cannot find a compliant source, either because lead times are longer than the contract permits, or because sufficient quantity is not available; and (3) Research whether and by when it can become compliant. Once the information on noncompliant parts and their nonavailability is provided to DoD, the Department must conduct a validation review and develop a report to document the determination. All of these efforts taken together may entail thousands of hours of work, at considerable cost to the taxpayer, and a significant addition in lead time to the acquisition cycle. For all of these reasons, an exemption from 10 U.S.C. 2533b for COTS items is in the best interest of the Government. This rule was not subject to Office of Management and Budget review under E:\FR\FM\02JYP1.SGM 02JYP1 Federal Register / Vol. 72, No. 126 / Monday, July 2, 2007 / Proposed Rules 212.570 Applicability of certain laws to contracts and subcontracts for the acquisition of commercially available offthe-shelf items. Executive Order 12866, dated September 30, 1993. B. Regulatory Flexibility Act This rule is not expected to 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 manufacturers of COTS items have not generally changed their manufacturing and purchasing practices based on DoD regulations. The burden generally falls on the Government to forego purchase of the item or to process a domestic nonavailability determination requested by the prime contractor. So far, only large contractors have had the resources to request a domestic nonavailability determination. If there is any impact of this proposed rule, it should be beneficial, because small businesses providing COTS items, many of whom are subcontractors, will not have to— Æ Rely on the prime contractor to request a domestic nonavailability determination from the Government; or Æ Face the decision whether to cease doing business with the Government or set up systems to track and segregate all DoD parts that contain specialty metals. Therefore, DoD has not performed an initial regulatory flexibility analysis. 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 2007–D013. C. Paperwork Reduction Act The Paperwork Reduction Act (44 U.S.C. 3501, et seq.) does not apply, because the proposed rule contains no information collection requirements. List of Subjects in 48 CFR Parts 212 and 225 Government procurement. Michele P. Peterson, Editor, Defense Acquisition Regulations System. rwilkins on PROD1PC63 with PROPOSALS-1 Therefore, DoD proposes to amend 48 CFR parts 212 and 225 as follows: 1. The authority citation for 48 CFR parts 212 and 225 continues to read as follows: Authority: 41 U.S.C. 421 and 48 CFR Chapter 1. PART 212—ACQUISITION OF COMMERCIAL ITEMS 2. Section 212.570 is added to read as follows: VerDate Aug<31>2005 19:40 Jun 29, 2007 Jkt 211001 10 U.S.C. 2533b, Requirement to buy strategic materials critical to national security from American sources, is not applicable to contracts and subcontracts for the acquisition of commercially available off-the-shelf items as defined in 41 U.S.C. 431(c). PART 225—FOREIGN ACQUISITION 3. Section 225.7002–2 is amended by adding paragraph (q) to read as follows: 225.7002–2 Exceptions. * * * * * (q) Acquisitions of commercially available off-the-shelf items containing specialty metals. [FR Doc. E7–12763 Filed 6–29–07; 8:45 am] BILLING CODE 5001–08–P DEPARTMENT OF TRANSPORTATION Pipeline and Hazardous Materials Safety Administration 49 CFR Part 172 [RSPA Docket No. 2006–26322 (HM–206F)] RIN 2137–AE21 Hazardous Materials: Revision of Requirements for Emergency Response Telephone Numbers Pipeline and Hazardous Materials Safety Administration (PHMSA), DOT. ACTION: Notice of Proposed Rulemaking (NPRM). AGENCY: SUMMARY: In this NPRM, PHMSA proposes to amend the Hazardous Materials Regulations (HMR) to clarify requirements governing emergency response information services provided by arrangement with hazardous materials offerors. In order to preserve the effectiveness of these arrangements for providing accurate and timely emergency response information, PHMSA proposes to require that basic identifying information (offeror name or contract number) be included in shipping papers. This information will enable the service provider to identify the shipper on whose behalf it is accepting responsibility for providing emergency response information in the event of a hazardous materials incident. DATES: Comments must be received by August 31, 2007. To the extent possible, we will consider late filed comments as we determine what further action will be taken. PO 00000 Frm 00015 Fmt 4702 Sfmt 4702 35961 You may submit comments by any of the following methods: • Federal Rulemaking Portal: https:// www.regulations.gov. Follow the instructions for submitting comments. • Web Site: https://dms/dot/gov. Follow the instructions for submitting comments on the DOT electronic docket site. • Fax: 1–202–493–2251. • Mail: Docket Management System; U.S. Department of Transportation, Dockets Operations, M–30, Ground Floor, Room W12–140, 1200 New Jersey Avenue, SE., Washington, DC 20590– 0001. • Hand Delivery: To U.S. Department of Transportation, Dockets Operations, M–30, Ground Floor, Room W12–140, 1200 New Jersey Avenue, SE., Washington, DC 20590–0001 between 9 a.m. and 5 p.m. Monday through Friday, except Federal holidays. Instructions: Include the agency name and docket number PHMSA–06–26322 (HM–206F) or the Regulatory Identification Number (RIN) for this rulemaking at the beginning of your comment. Note that all comments received will be posted without change to https://dms.dot.gov including any personal information provided. If sent by mail, comments must be submitted in duplicate. Persons wishing to receive confirmation of receipt of their comments must include a self-addressed stamped postcard or access our Web site at https://dms.dot.gov. Docket: You may view the public docket through the Internet at https:// dms.dot.gov or in person at the Docket Operations office at the above address. FOR FURTHER INFORMATION CONTACT: Joan McIntyre, Office of Hazardous Materials Standards, telephone (202) 366–8553, Pipeline and Hazardous Materials Safety Administration. FOR FURTHER INFORMATION CONTACT: Joan McIntyre, Office of Hazardous Materials Standards, (202) 366–8553, Pipeline and Hazardous Materials Safety Administration, U.S. Department of Transportation. ADDRESSES: SUPPLEMENTARY INFORMATION: I. Background The proposed rule would make a narrow, clarifying change to the requirements of the Hazardous Materials Regulations (HMR; 49 CFR parts 171– 180) applicable to shipping papers for certain hazardous materials shipments. With limited exceptions not applicable here, the HMR require that shipments of hazardous materials be accompanied by shipping papers and other documentation designed to communicate to transport workers and E:\FR\FM\02JYP1.SGM 02JYP1

Agencies

[Federal Register Volume 72, Number 126 (Monday, July 2, 2007)]
[Proposed Rules]
[Pages 35960-35961]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: E7-12763]


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DEPARTMENT OF DEFENSE

Defense Acquisition Regulations System

48 CFR Parts 212 and 225

RIN 0750-AF74


Defense Federal Acquisition Regulation Supplement; Waiver of 
Specialty Metals Restriction for Acquisition of Commercially Available 
Off-the-Shelf Items (DFARS Case 2007-D013)

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

ACTION: Proposed rule with request for comments.

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

SUMMARY: DoD is proposing to amend the Defense Federal Acquisition 
Regulation Supplement (DFARS) to waive application of 10 U.S.C. 2533b 
for acquisitions of commercially available off-the-shelf (COTS) items. 
10 U.S.C. 2533b, established by section 842 of the National Defense 
Authorization Act for Fiscal Year 2007, places restrictions on the 
acquisition of specialty metals not melted or produced in the United 
States.

DATES: Comments on the proposed rule should be submitted in writing to 
the address shown below on or before August 1, 2007, to be considered 
in the formation of the final rule.

ADDRESSES: You may submit comments, identified by DFARS Case 2007-D013, 
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 2007-D013 in the subject 
line of the message.
    Fax: (703) 602-7887.
    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 http:/
/www.regulations.gov, including any personal information provided.

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

SUPPLEMENTARY INFORMATION:

A. Background

    Section 842(a) of the National Defense Authorization Act for Fiscal 
Year 2007 (Pub. L. 109-364) establishes a new specialty metals domestic 
source restriction, which is codified at 10 U.S.C. 2533b. A proposed 
rule is being developed to comprehensively implement 10 U.S.C. 2533b in 
the DFARS. However, this proposed rule is being published separately in 
order to expedite the exercise of a statutory exception to the 
requirements of 10 U.S.C. 2533b for COTS items.
    As defined in subsection (c) of 41 U.S.C. 431 (Section 35 of the 
Office of Federal Procurement Policy Act), ``COTS item''--
    (i) Means any item of supply that is--
    (A) A commercial item;
    (B) Sold in substantial quantities in the commercial marketplace; 
and
    (C) Offered to the Government, without modification, in the same 
form in which it is sold in the commercial marketplace; and
    (ii) Does not include bulk cargo, as defined in section 3 of the 
Shipping Act of 1984 (46 U.S.C. App. 1702), such as agricultural 
products and petroleum products.
    41 U.S.C. 431(a) requires that the acquisition regulations list the 
provisions of law that are inapplicable to contracts and subcontracts 
for COTS items. Covered provisions of law must be included on that list 
unless the Administrator of the Office of Federal Procurement Policy 
(OFPP) makes a written determination that it would not be in the best 
interest of the United States to exempt such contracts from the 
applicability of that provision of law. Covered provisions of law are 
those that, as determined by OFPP, impose on contractors Government-
unique policies, procedures, requirements, or restrictions, except 
for--
    [cir] A provision of law that provides for criminal or civil 
penalties; or
    [cir] A provision of law that specifically refers to 41 U.S.C. 431, 
and states that the law is nevertheless applicable to COTS items.
    10 U.S.C. 2533b does not provide for criminal or civil penalties; 
nor does it refer to 41 U.S.C. 431 and state that the law is 
nevertheless applicable to COTS items. Accordingly, this proposed 
rule--
    [cir] Creates a new DFARS section 212.570 to list 10 U.S.C. 2533b 
as inapplicable to contracts and subcontracts for the acquisition of 
COTS items; and
    [cir] Includes acquisitions of COTS items containing specialty 
metals as an exception at DFARS 225.7002-2.
    Exercise of this statutory COTS waiver is critical to DoD's access 
to the commercial marketplace. Manufacturers make component purchasing 
decisions based on factors such as cost, quality, availability, and 
maintaining the state of the art--not the country in which specialty 
metals in the components were melted. In addition, many commercial 
items commonly acquired in large quantities by DoD, such as computers, 
commercial-off-the shelf engines, and semi-conductors, may contain a 
small percentage of components made of specialty metals, subjecting the 
manufacturers to costly and burdensome, if not impossible, tracking 
requirements. Many manufacturers of COTS items are unwilling to change 
their existing processes, inventory systems, or facilities and incur 
the significant expense associated with tracking the sourcing of 
specialty metals in the components of a COTS item in order to generate 
sales to DoD, which typically represent a very small percentage of 
overall revenue for COTS items.
    Section 2533b permits DoD to process a domestic non-availability 
determination, but such process poses difficulties for DoD in meeting 
mission-sensitive requirements in a timely manner. In order for DoD to 
be able to support a determination, a contractor must--
    (1) Work with its suppliers at every tier to identify non-compliant 
parts from among potentially hundreds of thousands of parts;
    (2) Determine that it cannot find a compliant source, either 
because lead times are longer than the contract permits, or because 
sufficient quantity is not available; and
    (3) Research whether and by when it can become compliant.
    Once the information on noncompliant parts and their 
nonavailability is provided to DoD, the Department must conduct a 
validation review and develop a report to document the determination. 
All of these efforts taken together may entail thousands of hours of 
work, at considerable cost to the taxpayer, and a significant addition 
in lead time to the acquisition cycle.
    For all of these reasons, an exemption from 10 U.S.C. 2533b for 
COTS items is in the best interest of the Government.
    This rule was not subject to Office of Management and Budget review 
under

[[Page 35961]]

Executive Order 12866, dated September 30, 1993.

B. Regulatory Flexibility Act

    This rule is not expected to 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 
manufacturers of COTS items have not generally changed their 
manufacturing and purchasing practices based on DoD regulations. The 
burden generally falls on the Government to forego purchase of the item 
or to process a domestic nonavailability determination requested by the 
prime contractor. So far, only large contractors have had the resources 
to request a domestic nonavailability determination. If there is any 
impact of this proposed rule, it should be beneficial, because small 
businesses providing COTS items, many of whom are subcontractors, will 
not have to--
    [cir] Rely on the prime contractor to request a domestic 
nonavailability determination from the Government; or
    [cir] Face the decision whether to cease doing business with the 
Government or set up systems to track and segregate all DoD parts that 
contain specialty metals.
    Therefore, DoD has not performed an initial regulatory flexibility 
analysis. 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 
2007-D013.

C. Paperwork Reduction Act

    The Paperwork Reduction Act (44 U.S.C. 3501, et seq.) does not 
apply, because the proposed rule contains no information collection 
requirements.

List of Subjects in 48 CFR Parts 212 and 225

    Government procurement.

Michele P. Peterson,
Editor, Defense Acquisition Regulations System.
    Therefore, DoD proposes to amend 48 CFR parts 212 and 225 as 
follows:
    1. The authority citation for 48 CFR parts 212 and 225 continues to 
read as follows:

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

PART 212--ACQUISITION OF COMMERCIAL ITEMS

    2. Section 212.570 is added to read as follows:


212.570  Applicability of certain laws to contracts and subcontracts 
for the acquisition of commercially available off-the-shelf items.

    10 U.S.C. 2533b, Requirement to buy strategic materials critical to 
national security from American sources, is not applicable to contracts 
and subcontracts for the acquisition of commercially available off-the-
shelf items as defined in 41 U.S.C. 431(c).

PART 225--FOREIGN ACQUISITION

    3. Section 225.7002-2 is amended by adding paragraph (q) to read as 
follows:


225.7002-2  Exceptions.

* * * * *
    (q) Acquisitions of commercially available off-the-shelf items 
containing specialty metals.
[FR Doc. E7-12763 Filed 6-29-07; 8:45 am]
BILLING CODE 5001-08-P