Revision of Department of Homeland Security Acquisition Regulation; Restrictions on Foreign Acquisition (HSAR Case 2009-004), 32676-32681 [2010-13804]

Agencies

• DEPARTMENT OF HOMELAND SECURITY

[Federal Register Volume 75, Number 110 (Wednesday, June 9, 2010)]
[Rules and Regulations]
[Pages 32676-32681]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2010-13804]


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DEPARTMENT OF HOMELAND SECURITY

48 CFR Parts 3025 and 3052

[Docket No. DHS-2009-0081]
RIN 1601-AA57


Revision of Department of Homeland Security Acquisition 
Regulation; Restrictions on Foreign Acquisition (HSAR Case 2009-004)

AGENCY: Office of the Chief Procurement Officer, DHS.

ACTION: Affirmation of interim rule as final rule.

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SUMMARY: The Department of Homeland Security is adopting the amendments 
to its Homeland Security Acquisition Regulation that were issued under 
an interim rule on August 17, 2009, as final, without change, to 
implement a statute limiting the acquisition of products containing 
textiles from sources outside the United States.

DATES: Effective Date: June 9, 2010.

FOR FURTHER INFORMATION CONTACT: Jeremy Olson, Department of Homeland 
Security, Office of the Chief Procurement Officer, Acquisition Policy 
and Legislation Branch, (202) 447-5197.

SUPPLEMENTARY INFORMATION:

I. Background
II. Disposition of Public Comments on the Interim Rule
III. Regulatory Requirements
    A. Small Entity Analysis
    B. Executive Order 12866 (Regulatory Planning and Review)
    C. Assistance for Small Entities
    D. Collection of Information

I. Background

    The American Recovery and Reinvestment Act of 2009 (``Recovery 
Act''), Public Law 111-5, 123 Stat. 115, 165-166 (Feb. 17, 2009), 
contains restrictions on the Department of Homeland Security's (DHS) 
acquisition of certain foreign textile products. Specifically, the 
Recovery Act at section 604, codified as 6 U.S.C. 453b, limits the 
Department's acquisition of foreign textile products under DHS contract 
actions entered into on or after August 16, 2009, using funds 
appropriated or otherwise made available to DHS on or before February 
17, 2009, the date of the Act. Section 604 is sometimes referred to as 
the ``Kissell Amendment.'' DHS may not use those funds for the 
procurement of certain clothing and other textile items directly 
related to the national security interests of the United States if such 
items are not domestically grown, reprocessed, reused, or produced in 
the United States.
    Section 604 does, however, contain exceptions. The law requires DHS 
to apply these restrictions in a manner consistent with United States 
obligations under international agreements (such as free trade 
agreements and the World Trade Organization Agreement on Government 
Procurement). Moreover, restrictions on some of the covered textile 
items do not apply to commercial item acquisitions. Also, the Recovery 
Act's restriction on the Department's acquisition of covered foreign 
textiles does not apply to: purchases for amounts not greater than the 
simplified acquisition threshold (SAT) (currently $100,000); when 
covered items of satisfactory quality and sufficient quantity cannot be 
procured as needed at United States market prices; when a covered item 
contains less than 10% non-compliant fibers; when the procurement is 
made by vessels in foreign waters; or for emergency procurements 
outside of the United States.
    On August 17, 2009, DHS published an interim rule with request for 
comments discussing the agency's implementation of the Kissell 
Amendment and providing specific amendments to the Homeland Security 
Acquisition Regulation (HSAR) at parts 3025 and 3052. 74 FR 41346, Aug. 
17, 2009. This final rule adopts that interim rule as final without 
change, revising the HSAR to add solicitation provisions, contract 
clauses and related policy statements implementing these requirements 
and exceptions for certain DHS contracts, option exercises and orders.

II. Disposition of Public Comments

    In response to the request for comments on the interim rule, DHS 
received comments from 26 commenters, consisting of trade associations, 
individuals, companies and a Member of Congress. The majority of the 
commenters expressed their favorable views of section 604 and suggested 
that DHS consider several technical changes to improve that 
implementation.
    The changes to the interim rule that were most commonly recommended 
by commenters fall into four categories:
     Make the ``de minimis'' exception a post-award forbearance 
decision; do not make the ``de minimis'' exception an advance 
regulatory exemption in the HSAR;
     Eliminate the HSAR definition of ``national security 
interests''; cover all DHS acquisitions as being related to ``national 
security interests'' of the United States;

[[Page 32677]]

     Do not list Mexico, Canada or Chile in the HSAR; let 
individual contracting officers determine for themselves which 
countries have international agreements that impact individual 
procurements;
     Mirror the Department of Defense implementation of the 
Berry Amendment.
    These comments and others are described below along with discussion 
of DHS's consideration and disposition of all comments to the interim 
rule.
    Comment on Post-award De Minimis Authority--Commenters suggested 
that the interim rule's de minimis exception in section 604(d) should 
be interpreted as post-procurement authority. These commenters observed 
that the manner in which this section was developed suggests that the 
Secretary has latitude to override section 604's fiber sourcing 
requirement when non-compliant fibers have been incorporated in a 
product in an otherwise compliant, completed procurement. Commenters 
observed that Congress is silent on this issue and that such silence 
provides the Secretary of Homeland Security the option to accept 
delivery of an item produced with fiber out of compliance with the 
Act's U.S. domestic procurement mandate, in instances where the non-
compliant fiber in question does not exceed 10% of the value of the 
delivered product.
    DHS response to the comment. Do not concur. The statute addresses 
delivery of noncompliant items as follows: (d) De Minimis Exception--
Notwithstanding subsection (a), the Secretary of Homeland Security may 
accept delivery of an item covered by subsection (b) that contains non-
compliant fibers if the total value of non-compliant fibers contained 
in the end item does not exceed 10 percent of the total purchase price 
of the end item. This subsection of section 604 provides authority to 
the Department that can be implemented either pre-award (as addressed 
in the interim rule) or post-award (as the commenters recommended). DHS 
determined that it would be highly impractical to implement a post-
award exception for homeland security procurements. Items containing de 
minimis amounts of non-compliant materials could be rejected after they 
were delivered. A contractor would not know in advance if such an 
exception would or would not be granted. Facing this risk, planning 
flexibility available to DHS contractors would be substantially 
reduced. DHS determined that the best way to communicate its intentions 
under this authority was to grant the approval for all de minimis 
content items in advance within the regulation. By following this path, 
DHS gives its potential contractors the advantage of certainty and the 
information necessary for them to make the most advantageous offer 
possible to the government, without the risk that delivery might be 
rejected for inclusion of de minimis amounts after the contractor's 
proposal was accepted and the resulting contract was awarded. Further, 
given the authority in subsection (d), and its characterization as a de 
minimis exception, DHS finds it hard to envision a circumstance in 
which a delivery containing de minimis amounts of non-compliant 
materials could be rejected in a principled way. Accordingly, advance 
approval of such deliveries is the best approach for compliance with 
section 604, subsection (d), under the regulation.
    Comment on National Security Interests--Commenters argued that DHS 
has adopted an unnecessarily restrictive definition of items ``directly 
related to national security interests'' for purposes of applying the 
Kissell Amendment. The commenters further suggested that it appears 
that the interim rule intends to unnecessarily exclude certain textile 
products from operation of the Kissell Amendment. According to the 
commenters, the Kissell Amendment was intended to be an extension of 
the Berry Amendment to DHS. By creating a new definition for purposes 
of applying this amendment, the commenters argued that DHS is 
undermining the intent of Congress and creating unnecessary 
complications in the procurement process. The current rules governing 
the Berry Amendment apply to all goods at the Department of Defense 
(DoD), except in certain limited instances. Within that spirit, the 
commenters believe that the final rule should not deviate in any manner 
from the original intent of Congress.
    DHS response to the comment. Do not concur. Section 604 has certain 
language in common with the Berry Amendment (10 U.S.C. 2533a), but its 
language is by no means identical, nor even varied solely to import the 
requirements of the Berry Amendment to a non-DoD agency. As such, 
section 604 is not ``an extension'' of the Berry Amendment to DHS. 
Section 604 is an independent statutory requirement. If the 
requirements of section 604 were meant to apply to all DHS 
acquisitions, the qualifying and limiting language of section 604 (i.e. 
that the covered item be ``directly related to national security 
interests'') would be unnecessary. Given that these limits in scope are 
included in the plain language of section 604, DHS has no choice but to 
honor them. DHS considered, but rejected, an interpretation under which 
all DHS acquisitions of covered textile items would be considered to be 
``directly related to the national security interests of the United 
States'' because it would have rendered those words a nullity. DHS 
cannot interpret the presence of these limiting words as having no 
meaning or effect. Because section 604 did not define this expression, 
DHS was obliged to define it reasonably, which is explained in the 
preamble to the interim rule.
    Comment on NAFTA and U.S.-Chile Free Trade Agreement--Commenters 
observed that the interim rule specifically identifies items from Free 
Trade Agreement (FTA) partners Mexico, Canada, and Chile as eligible 
for procurement benefits, notwithstanding the basic provisions of the 
Kissell Amendment. The commenters also said that after the enactment of 
the Kissell Amendment, it was learned that the U.S. Trade 
Representative did not properly notify FTA partners Mexico, Canada, and 
Chile that DHS agencies could fall under stricter procurement rules for 
national security purposes. The commenters pointed out that under the 
rules of the FTAs and international procurement agreements, proper 
notification is required. The commenters objected to the specific 
mention in the interim rule of these countries by name. In the event 
that the Office of the United States Trade Representative (USTR) were 
to establish a new understanding with these three countries, the 
commenters argued that DHS will have to issue new regulations, complete 
with a public comment period in order to properly remove the countries 
from the rule. The commenters observed that this will cause further 
delay and negatively impact the ability to seek the full benefit of the 
Kissell Amendment.
    DHS response to the comment. Do not concur. The regulation, which 
among other purposes functions as guidance for DHS contracting 
officers, must convey what requirements apply to items that may or may 
not be covered by the requirements of section 604. Deletion of the 
named countries would complicate understanding of the rule under legal 
requirements that exist today, and would further require each 
individual contracting officer to determine the applicability of 
section 604 in the event items are offered that originate in any of the 
three listed countries. The agreements with these countries were 
identified specifically only because they exist as exceptions to the 
Transportation Security Administration's (TSA) exclusion from coverage 
under international agreements. If, in the future, TSA were excluded 
from these

[[Page 32678]]

agreements, the Department will amend these rules, as appropriate.
    Comment on Adoption of the Defense Federal Acquisition Regulation 
Supplement (DFARS)--Commenters stated they are concerned with the 
interim rule unnecessarily plowing new ground with its definition of 
``Item directly related to national security interests'' in Subpart 
3025.7001(e)(5) and the inclusion of that phrase as an exception in 
Subpart 3025.7002-2(b). The commenters argue that this language will 
greatly complicate the ability of contractors and government 
procurement officers to implement and comply with the new rule due to 
its uncertainty of meaning and the lack of precedent in administering 
the language at issue. A simpler and more reasonable approach, the 
commenters argue, would be for DHS to eliminate Subpart 3025.7001(e) 
and to replace Subpart 3025.7002-2(b) with regulatory language 
contained in 48 CFR 225.7002.2(m) and (n), and adhere to its 
accompanying guidance and precedents.
    DHS response to the comment. Do not concur. The commenters suggest 
that the DHS regulation adopt regulatory language developed and 
promulgated by the DoD to comply with the ``Berry Amendment.'' DHS 
cannot do so credibly. The statutory requirements applicable to DoD do 
not include any requirement that covered items must be ``directly 
related to the national security interests of the United States.'' If 
there were such a statutory requirement applicable to DoD, DHS might be 
able to look to DoD regulatory requirements as a guide in that area, 
but no such requirement exists.
    Comment on Possible Modifications of International Agreements--
Commenters noted that the Office of the U.S. Trade Representative is 
actively seeking to make technical corrections to the North American 
Free Trade Agreement (NAFTA) and the U.S.-Chile Free Trade Agreement 
with respect to the coverage of the government procurement provisions 
of those agreements to TSA. The commenters object to the language of 
Subpart 3025.7002-3(a)(3) affecting TSA as drafted. Specifically, the 
commenters object to the inclusion of the following language, ``* * * 
except those from Mexico, Canada or Chile because TSA is listed as a 
covered governmental entity in the North American Free Trade Agreement 
(NAFTA) and the U.S.-Chile Free Trade Agreement * * *''
    DHS response to the comment. Do not concur. This guidance is 
necessary in order to ensure complete coverage of the statute and 
timely guidance to DHS contracting officers and the public. If in the 
future, TSA were excluded from these agreements, DHS will amend these 
rules, as appropriate.
    Comment on Individual Contracts verses HSAR Coverage Regarding 
International Agreements--Commenters suggested that the interim rule at 
HSAR 3025.7002-3(a)(3) not list Mexico, Canada and Chile as countries 
from which items offered under TSA solicitations and contracts would be 
exempt from the procurement restrictions because of U.S. obligations 
under NAFTA and the U.S.-Chile FTA. In place of listing these countries 
in the HSAR, the commenters suggest that individual solicitations and 
contracts list these countries. They say that Mexico, Canada, and Chile 
should be listed in individual contract solicitations as countries with 
whom the United States has a trade agreement where TSA is listed as 
covered governmental entity and thus (HSAR) 48 CFR 3025.7002 will not 
apply.
    DHS response to the comment. Do not concur. The commenter suggests 
that individual solicitations list these countries rather than listing 
the countries in the HSAR clause. Such an individual listing in each 
covered solicitation would be impractical. For individual contracting 
officers to list each covered country in each solicitation, each 
contracting officer would need to know they are required to include 
such a list, and it would require each contracting officer to know 
which countries to list. Further, the public would not be given the 
opportunity to review or comment on these contract terms that would 
appear in multiple solicitations and contracts. The only practical way 
to disseminate such knowledge to the public and to contracting officers 
is to include it in the HSAR, which DHS has done.
    Comment Regarding International Agreements--Commenters urge DHS to 
write a final rule in a way that it will not need to be rewritten if in 
the future, TSA were to be excluded from trade agreements covering 
Mexico, Canada, and Chile.
    DHS response to the comment. Do not concur. This regulation is 
written in this way to give complete and current coverage of the 
statute to the public and guidance to DHS contracting officers. If in 
the future, TSA were to be excluded from these international 
agreements, DHS will amend these rules, as appropriate.
    Comment on Mirroring DFARS--Commenters contend that this rule needs 
to mirror the DoD Berry Amendment regulations as closely as possible 
and that they certainly do not need to refer to two different sets of 
regulations.
    DHS response to the comment. Generally concur. However, the rule 
must comply with, and independently implement, its own statutory 
language and requirements, which are not the same as the DoD Berry 
Amendment.
    Comment on Mirroring Berry Amendment--Commenters observed that in 
pursuing the enactment of the Recovery Act the Administration and 
Congress distinguished that the express purpose of this legislation was 
to stimulate the U.S. economy by creating jobs and encouraging 
investment. Specifically, they observe that the Kissell Amendment and 
the accompanying floor debate clearly outline that the intent of this 
Amendment is to bring the procurement practices of DHS in line with 
those of the Berry Amendment as applied to the DoD. As a major supplier 
of inputs for DoD textile and apparel products, a commenter believes it 
is essential that, subject to its respective statutory language, the 
Kissell Amendment implementing regulations mirror the DoD rules 
governing the Berry Amendment to ensure the ability of contractors and 
government procurement officers to implement and comply with the new 
rule. As currently drafted, commenters advise that they are concerned 
that the interim rule creates unnecessary uncertainty with its 
definition of ``Item directly related to national security interests'' 
in Subpart 3025.7001(e) and the inclusion of that term as an exception 
in Subpart 3025.7002-2(b).
    DHS response to the comment. Concur in part. Section 604 has 
language in common with the Berry Amendment, but its language is by no 
means identical, nor even varied solely to import the requirements of 
the Berry Amendment to a non-DOD agency. As such, section 604 is not 
``an extension'' of the Berry Amendment to DHS per se. The limitation 
of section 604's application to items ``directly related to national 
security'' is pursuant to express statutory language. Section 604 is an 
independent statutory requirement. If the requirements of section 604 
were meant to apply to all DHS acquisitions, the qualifying and 
limiting language of section 604 (i.e., that the covered item be 
``directly related to national security interests'') would be 
unnecessary. Given that these limits in scope are included in the plain 
language of section 604, DHS has no choice but to honor them. DHS 
considered, but rejected, an interpretation under which all DHS 
acquisitions of covered textile items would be considered to be 
``directly

[[Page 32679]]

related to the national security interests of the United States'' 
because it would have rendered those words a nullity. DHS cannot 
interpret the presence of these limiting words as having no meaning or 
effect. Because section 604 did not define this expression, DHS was 
obliged to define it reasonably, which was explained in the preamble to 
the interim rule. The first and best evidence of both Congressional 
intent and Executive assent is the plain language of the statute. DHS 
has endeavored to use the legislative history, where appropriate, to 
inform a definition that is consistent with both the plain meaning of 
the expression and its usage in this statute.
    Comment on ``Component'' Definition--Section 3025.7001(b) defines 
``component'' as ``any item supplied to the Government as part of an 
end product or of another component.'' A commenter argues that, in a 
global supply chain, this is an overly burdensome requirement, as it 
potentially requires suppliers to reestablish content down many layers 
of components. The commenter recommends that this definition be 
modified as follows: (b) ``Component'' means any article, material or 
supply incorporated directly into an end product.
    The commenter explained that this definition establishes a 
component as an item ``one off'' from the finished good, and is a 
practicable and feasible requirement both for the supplier to meet and 
DHS to administer. The commenter understands that the definition in the 
interim rule is consistent with Federal procurement regulations and 41 
U.S.C. 403, but because this term is not defined in the Act, the 
commenter requests DHS flexibility in changing this definition.
    DHS response to the comment. Do not concur. The definition of 
``Component'' also appears in DFARS clause 252.225-7012 (Preference for 
certain domestic commodities) and other clauses concerning restrictions 
of procurements to domestic products. Where consistent with the 
statutory language of section 604 and otherwise feasible, DHS has 
attempted to harmonize the treatment of textile items under section 
604, the Berry Amendment, and more generally articulated procurement 
definitions.
    Comment on Definition of ``produced''--A commenter notes that in 
section 3025.7002-1, DHS will not acquire any national security product 
or component that ``has not been grown, reprocessed, reused or produced 
in the United States.'' The commenter requests that DHS provide clear, 
plain English definitions of the terms ``reprocessed,'' ``reused,'' and 
``produced'' as they relate to the interim rule.
    DHS response to the comment. Do not concur. This phrase is straight 
from section 604, paragraph (a). Additionally, these terms are the same 
terms used in the DFARS implementation of the Berry Amendment 
restrictions on clothing and fabrics. Neither section 604 nor the DFARS 
define these terms; their meaning is plain enough to support 
application of the statute.
    Comment on Definition of ``protective equipment''--A commenter 
noted that in section 3025.7002-1(a)(2), there is a reference to 
``protective equipment (such as body armor).'' The commenter contends 
that there are numerous types of protective equipment that may be 
subject to this regulation and requests that DHS clarify its intent 
with a definition of ``protective equipment,'' as this term relates to 
the interim rule.
    DHS response to the comment. Do not concur. This term is used in 
the statute and the Federal Acquisition Regulation without definition 
and is a readily understood term that does not require a definition.
    Comment on Intent of ``individual equipment''--A commenter points 
out in section 3025-7002-1(b)(7), there is a reference to ``individual 
equipment manufactured from or containing any of the fibers, yarns, 
fabrics, or materials listed in this paragraph (b).'' While the 
commenter recognizes that this language is taken from the Kissell 
Amendment, it is unclear to the commenter what type of equipment, other 
than those categories enumerated in paragraph (a), would be categorized 
as ``individual equipment.'' For example, the commenter observes that 
the DoD Federal Supply Classification 8465 for ``individual equipment'' 
lists many of the same items listed in paragraph (a). The commenter 
requests that DHS clarify its intent with a definition of ``individual 
equipment,'' as this term relates to the interim rule.
    DHS response to the comment. Do not concur. The term ``individual 
equipment'' is not a category of specific items as listed in the 
Federal Supply Classes (FSC's), but, rather, it is a descriptive 
phrase. The phrase ``individual equipment'' could have been defined in 
section 604 to be limited to the FSC category 8465, Individual 
Equipment, but there is no indication in the section or its history 
that this category of covered items was intended to be limited only to 
FSC 8465. Accordingly, DHS intends to rely on the plain meaning of the 
phrase and will not limit it or define it further in this final rule.
    Comment on Dual Use Safety Equipment--A commenter asks DHS to 
clarify whether the interim rule covers items acquired by the 
Department to protect DHS employees from exposure to recognized 
occupational health and safety hazards while these individuals are 
engaged in protecting the nation's borders, transportation system, 
maritime domain or critical infrastructure. The commenter suggests that 
one example might be high visibility safety apparel worn by those DHS 
employees in TSA or U.S. Customs and Border Protection (CBP), who work 
near moving vehicles and need to be highly visible to avoid being 
struck. Even though the workers are engaged in activities crucial to 
national security, the commenter states its belief that the Department 
does not intend that such dual-use protective equipment would fall 
under the ``national security interests'' definition of the rule.
    DHS response to the comment. Do not concur. The HSAR definition of 
``directly related to the national security interests of the United 
States'' is intended to be interpreted by DHS officials knowledgeable 
of individual items and individual acquisitions in a multitude of 
circumstances. DHS declines the invitation to determine in advance, 
divorced from context, and in a more detailed fashion than it has 
already, which items and which acquisitions are or are not likely to be 
covered.
    Comment on Applicability to Grants--A commenter asks that DHS 
clarify that the interim rule does not apply to grant programs, such as 
the Assistance to Firefighters Grant Program, the Urban Area Security 
Initiative or the State Homeland Security Grant Program. The commenter 
believes the interim rule does not apply to DHS grant programs because 
it regulates Departmental acquisitions. The commenter also points out 
that DHS also notes that congressional floor remarks indicate this 
provision ``as principally pertaining to border and transportation 
security * * *,'' while grant programs provide funds for state and 
local emergency response. Moreover, neither the HSAR nor the Homeland 
Security Acquisition Manual refers to grantees.
    DHS response to the comment. To the extent that the commenter 
requests the HSAR implementation to affirmatively state that the 
section only applies to procurements, DHS declines the invitation. The 
HSAR applies only to contracts and does not apply to grants. There is 
no need to repeat in this rule that the HSAR is applicable only to 
contracts, nor is the HSAR an

[[Page 32680]]

appropriate place to determine grant policy or regulation.
    Comment on Transition Period--Safe Harbor/Domestic Non-Availability 
Determination Request Period--Related to Section 3025.7002-2(c). A 
commenter asks DHS to establish a period during which DHS vendors may 
come into compliance with the interim rule and/or submit Domestic Non-
Availability Determination (DNAD) requests.
    DHS response to the comment. Do not concur. There is no authority 
in section 604 to extend or delay the period during which section 604 
is effective.
    Comment on Posting Training Material--A commenter urges DHS to make 
publicly available any guidance and training documents provided to 
contracting officers who will implement this interim rule. The 
commenter suggests that making such guidance and training documents 
publicly available will allow vendors and contracting officers to 
communicate with each other clearly and effectively about DHS 
procurements covered by this interim rule. Public availability is also 
argued to allow the vendor community to know what is expected of them 
and their products in advance of proposal submissions and final 
procurement decisions. The commenter states that clear, plain English 
guidance would be especially helpful for compliance with section 
3025.7002-3 ``Specific application of trade agreements.''
    DHS response to the comment. Concur. Training slides will be 
posted, as permitted by law and DHS policy, on a publicly available Web 
site for viewing and use by the public.
    Comment on National Security--A commenter observes that DHS has 
adopted an unnecessarily restrictive definition of items ``directly 
related to national security interests'' for purposes of applying the 
Kissell Amendment. The commenter states that, furthermore, it appears 
that the interim rule intends to unnecessarily exclude certain textile 
products from operation of the Kissell Amendment. The commenter argues 
that the Kissell Amendment was intended to be an extension of the Berry 
Amendment to DHS and that, by creating a new definition for purposes of 
applying this amendment, DHS is undermining the intent of Congress and 
creating unnecessary complications in the procurement process. The 
commenter observes that the current rules governing the Berry Amendment 
apply to all goods at the DoD, except in certain limited instances. 
Within that spirit, the commenter believes that the final rule should 
not deviate in any manner from what the commenter argues is the 
original intent of Congress.
    DHS response to the comment. Do not concur. The current Berry 
Amendment is not restricted in application to textile ``items directly 
related to national security.'' DHS is not at liberty to ignore the 
plain language of a statute, which is the best evidence of 
congressional intent and, in this case, of the language to which the 
President assented. The Department believes that it came to the most 
accurate interpretation of this language in relation to the intent of 
Congress given the legislative record.
    Comment on Normally Associated Components--A commenter argued that 
DHS should amend the HSAR so that components and materials normally 
associated with items listed in section 604(b)(1)(B)-(D) are not 
covered under section 604 unless the components and materials are 
otherwise specifically enumerated as a covered item in section 604. The 
commenter stated that, presumably, like the Berry Amendment, when an 
item is covered under section 604, it will only be compliant when the 
manufacturing of that item occurs in the United States, regardless of 
whether the non-covered components or materials are of domestic origin, 
e.g., plastics. The commenter continues to state that, consequently, 
material and components that are normally associated with covered items 
should not be required to be compliant with section 604, except when 
they are specifically enumerated as a covered item under section 604.
    DHS response to the comment. Concur in part. With respect to 
clothing covered by paragraph (b)(1)(A), section 604 exempts ``other 
items not normally associated with'' clothing. However, there is no 
such exemption for the other covered items addressed in other 
paragraphs of the section. DHS believes it is impractical to list all 
items that might not be normally associated with clothing in the 
regulation. DHS believes a better solution is to leave decisions to 
individual officials based on the facts of the situation.
    Comment on Examples of Normally Associated Components--A commenter 
urged DHS to amend the HSAR to add examples of material and components 
that are normally associated with covered items, but which are not 
themselves covered. The commenter contends this will serve to eliminate 
confusion and assist industry to comply with section 604.
    DHS response to the comment. Do not concur. Such a list would serve 
no purpose other than to deprive contracting officers of discretion, 
where a position may or may not be borne out by the facts of an 
individual acquisition. DHS believes a better solution is to leave 
decisions to individual officials based on the facts of the individual 
acquisition.
    Comment on Para-aramid Fibers--A commenter suggested that DHS reach 
out to DoD in order to address the non-availability of fibers and yarns 
that are para-aramid fibers and yarns manufactured in qualifying 
countries, in a manner similar to exceptions granted by DoD. The 
commenter suggests DHS should determine if para-aramid fibers that are 
part of non-commercial items should be exempt (per a non-availability 
determination) (commercial para-aramid fibers are exempt under the 
interim rule).
    DHS response to the comment. Concur in part. To the extent items 
are procured by DHS that include para-aramid fibers and are covered by 
section 604, cognizant programs will have to address availability of 
para-aramid fibers and this will undoubtedly involve contacting 
appropriate DoD officials.
    Comment on Fire retardant thread non-availability--After stating a 
belief that this rule is an extension (to DHS) of the Berry Amendment, 
a commenter recounts a 2008 purchase of flame resistant uniforms for 
the U.S. Army at Ft. Belvoir in which the commenter worked within the 
boundaries of the Berry Amendment. However, the commenter found no 
domestic source for the thread needed to meet the fire resistant 
standards and had an exemption to have the uniform makers purchase the 
thread from Lenzing (Austria). The commenter believes DHS will need a 
way to likewise allow for exceptions not explicitly listed in the 
proposed rule, and should plan for that inevitable situation by 
indicating how exemption requests would need to be documented and 
approved (e.g., by the Agency Head).
    DHS response to the comment. Concur. The published rule describes 
who must approve the nonavailability exception (the DHS Chief 
Procurement Officer) and what information the request for approval must 
include. See 3025.7002-2(c) for details.

III. Regulatory Requirements

A. Small Entity Analysis

    Because this rule was initiated as an interim rule, the Regulatory 
Flexibility Act requires neither an Initial nor a Final Regulatory 
Flexibility analysis. Nonetheless, we considered whether the interim 
rule would have a significant economic impact on a substantial number 
of small entities at 74 FR 41348-41349. We received no comments on our 
analysis and continue to believe that this rule would not have

[[Page 32681]]

a significant economic impact on a substantial number of small 
entities.

B. Executive Order 12866 (Regulatory Planning and Review)

    This rule is not a significant regulatory action under section 3(f) 
of Executive Order 12866, and the Office of Management and Budget has 
not reviewed it under that Order.

C. Assistance for Small Entities

    Under section 213(a) of the Small Business Regulatory Enforcement 
Fairness Act of 1996 (Pub. L. 104-121), we want to assist small 
entities in understanding the rule so that they can better evaluate its 
effects on them and participate in the rulemaking. Small businesses may 
send comments on the actions of Federal employees who enforce, or 
otherwise determine compliance with, Federal regulations to the Small 
Business and Agriculture Regulatory Enforcement Ombudsman and the 
Regional Small Business Regulatory Fairness Boards. The Ombudsman 
evaluates these actions annually and rates each agency's responsiveness 
to small business. If you wish to comment on actions by DHS employees, 
call 1-888-REG-FAIR (1-888-734-3247). The DHS will not retaliate 
against small entities that question or complain about this interim 
rule or any DHS policy.

D. Collection of Information

    The Paperwork Reduction Act (Pub. L. 104-13) does not apply because 
the rule contains no information collection requirements. Accordingly, 
the Department will not submit a change request for any burdens 
concerning this rule to the Office of Management and Budget under 44 
U.S.C. 3501, et seq.

List of Subjects in 48 CFR Parts 3025 and 3052

    Government procurement.

0
Accordingly, the interim rule amending 48 CFR Parts 3025 and 3052 which 
was published at 74 FR 41346, on August 17, 2009, is adopted as a final 
rule without change.

Richard K. Gunderson,
Acting Chief Procurement Officer, Department of Homeland Security.
[FR Doc. 2010-13804 Filed 6-8-10; 8:45 am]
BILLING CODE 9110-9B-P