Defense Federal Acquisition Regulation Supplement; Definition of “Qualifying Country End Product” (DFARS Case 2011-D028), 32845-32846 [2011-13367]
Download as PDF
Federal Register / Vol. 76, No. 108 / Monday, June 6, 2011 / Proposed Rules
I. Background
DEPARTMENT OF DEFENSE
Defense Acquisition Regulations
System
48 CFR Part 252
RIN 0750–AH21
Defense Federal Acquisition
Regulation Supplement; Definition of
‘‘Qualifying Country End Product’’
(DFARS Case 2011–D028)
Defense Acquisition
Regulations System, Department of
Defense (DoD).
ACTION: Proposed rule.
AGENCY:
DoD is issuing a proposed
rule to amend the definition of
‘‘qualifying country end product’’ by
eliminating the component test for
qualifying country end products that are
commercially available off-the-shelf
items.
SUMMARY:
Comments on the proposed rule
should be submitted in writing to the
address shown below on or before
August 5, 2011, to be considered in the
formation of the final rule.
ADDRESSES: Submit comments
identified by DFARS Case 2011–D028,
using any of the following methods:
Æ Regulations.gov: https://
www.regulations.gov.
Submit comments via the Federal
eRulemaking portal by inputting
‘‘DFARS Case 2011–D028’’ under the
heading ‘‘Enter keyword or ID’’ and
selecting ‘‘Search.’’ Select the link
‘‘Submit a Comment’’ that corresponds
with ‘‘DFARS Case 2011–D028.’’ Follow
the instructions provided at the ‘‘Submit
a Comment’’ screen. Please include your
name, company name (if any), and
‘‘DFARS Case 2011–D028’’ on your
attached document.
Æ E-mail: dfars@osd.mil. Include
DFARS Case 2011–D028 in the subject
line of the message.
Æ Fax: 703–602–0350.
Æ Mail: Defense Acquisition
Regulations System, Attn: Amy G.
Williams, OUSD (AT&L) DPAP/DARS,
Room 3B855, 3060 Defense Pentagon,
Washington, DC 20301–3060.
Comments received generally will be
posted without change to https://
www.regulations.gov, including any
personal information provided. To
confirm receipt of your comment(s),
please check https://www.regulations.gov
approximately two to three days after
submission to verify posting (except
allow 30 days for posting of comments
submitted by mail).
SUPPLEMENTARY INFORMATION:
mstockstill on DSK4VPTVN1PROD with PROPOSALS3
DATES:
VerDate Mar<15>2010
17:39 Jun 03, 2011
Jkt 223001
This rule proposes to amend the
definition of ‘‘qualifying country end
product’’ to remove the component test
for qualifying country end products that
are commercially available off-the-shelf
items.
Under the Buy American Act, there is
a two-part test to define a domestic end
product. The product must be
manufactured in the United States and
there is a formula based on the cost of
foreign components compared to the
cost of all components. Under FAR Case
2000–305, the component test was
waived for the acquisition of
commercially available off-the-shelf
(COTS) items (see FAR 25.001(c)(1)).
Likewise, the component test for the
DFARS definition of ‘‘domestic end
product’’ was waived by the interim rule
of DFARS Case 2008–D009 (74 FR 2422,
January 15, 2009) and final rule
published December 24, 2009 (74 FR
68384). These changes were based on a
determination signed by the
Administrator for Federal Procurement
Policy on February 14, 2008, regarding
laws applicable to the acquisition of
COTS items. According to the
determination, the component test of
the Buy American Act (41 U.S.C.
chapter 83) does not apply to COTS
items.
The definition of ‘‘qualifying country
end product’’ is not statutory, but it was
modeled after the definition of
‘‘domestic end product’’ as a matter of
policy. Therefore, it is within the
authority of DoD to change this
definition as a matter of policy, to waive
the component test for qualifying
country end products that are COTS
items, so that it will not be necessary to
try to track the origin of components of
COTS items that are manufactured in a
qualifying country, in order to
determine that an end product is a
qualifying country end product.
II. Executive Orders 12866 and 13563
Executive Orders (E.O.s) 12866 and
13563 direct agencies to assess all costs
and benefits of available regulatory
alternatives and, if regulation is
necessary, to select regulatory
approaches that maximize net benefits
(including potential economic,
environmental, public health and safety
effects, distributive impacts, and
equity). E.O. 13563 emphasizes the
importance of quantifying both costs
and benefits, of reducing costs, of
harmonizing rules, and of promoting
flexibility. This is a significant
regulatory action and, therefore, was
subject to review under section 6(b) of
E.O. 12866, Regulatory Planning and
PO 00000
Frm 00001
Fmt 4701
Sfmt 4702
32845
Review, dated September 30, 1993. This
rule is not a major rule under 5 U.S.C.
804.
III. Regulatory Flexibility Act
DoD does not expect this rule to have
a significant 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 only affects manufacturers of COTS
items in qualifying countries, removing
an administrative burden for the
qualifying country manufacturer and the
Government personnel acquiring the
items. The Regulatory Flexibility Act is
intended to protect small entities in the
United States, not foreign entities,
regardless of size. For the definition of
‘‘small business’’, the Regulatory
Flexibility Act refers to the Small
Business Act, which in turn allows the
SBA Administrator to specify detailed
definitions or standards. 5 U.S.C. 601(3)
and 15 U.S.C. 632(a). The SBA
regulations at 13 CFR 121.105 discuss
who is a small business: ’’ (a)(1) Except
for small agricultural cooperatives, a
business concern eligible for assistance
from SBA as a small business is a
business entity organized for profit,
with a place of business located in the
United States, and which operates
primarily within the United States or
which makes a significant contribution
to the U.S. economy through payment of
taxes or use of American products,
materials or labor.’’ The comparable
change has already been enacted for the
benefit of U.S. manufacturers of COTS
items in the DFARS which aligns with
the FAR. Therefore, an initial regulatory
flexibility analysis has not been
performed. DoD invites comments from
small business concerns and other
interested parties on the expected
impact of this rule on small entities.
DoD will also consider comments
from small entities concerning the
existing regulations in subparts affected
by this rule in accordance with 5 U.S.C.
610. Interested parties must submit such
comments separately and should cite 5
U.S.C. 610 (DFARS Case 2011–D029) in
correspondence.
V. Paperwork Reduction Act
The rule does not contain any
information collection requirements that
require the approval of the Office of
Management and Budget under the
Paperwork Reduction Act (44 U.S.C.
chapter 35).
E:\FR\FM\06JNP3.SGM
06JNP3
32846
Federal Register / Vol. 76, No. 108 / Monday, June 6, 2011 / Proposed Rules
List of Subjects in 48 CFR Part 252
Government procurement.
Ynette R. Shelkin,
Editor, Defense Acquisition Regulations
System.
Therefore, 48 CFR part 252 is
proposed to be amended as follows:
PART 252—SOLICITATION
PROVISIONS AND CONTRACT
CLAUSES
1. The authority citation for 48 CFR
part 252 continues to read as follows:
Authority: 41 U.S.C. 1303 and 48 CFR
chapter 1.
2. Amend section 252.212–7001 by
revising the clause date, and paragraphs
(b)(5)(i), (b)(11)(i), (b)(14)(i), (b)(20), and
(b)(21) to read as as follows:
252.212–7001 Contract terms and
conditions required to implement statutes
or executive orders applicable to defense
acquisitions of commercial items.
*
*
*
*
*
CONTRACT TERMS AND
CONDITIONS REQUIRED TO
IMPLEMENT STATUTES OR
EXECUTIVE ORDERS APPLICABLE TO
DEFENSE ACQUISITIONS OF
COMMERCIAL ITEMS (DATE)
*
*
*
*
*
(b) * * *
(5)(i)____252.225–7001, Buy American Act
and Balance of Payments Program (DATE)
(41 U.S.C. chapter 83, E.O. 10582).
*
*
*
*
*
(11)(i)____252.225–7021, Trade
Agreements (DATE) (19 U.S.C. 2501–2518
and 19 U.S.C. 3301 note)
*
*
*
*
*
(14)(i)____ 252.225–7036, Buy American
Act—Free Trade Agreements—Balance of
Payments Program (DATE) (41 U.S.C. chapter
83 and 19 U.S.C. 3301 note)
*
*
*
*
*
(20)____252.237–7010, Prohibition on
Interrogation of Detainees by Contractor
Personnel (NOV 2010) (Section 1038 of Pub.
L. 111–84).
(21)____252.237–7019, Training for
Contractor Personnel Interacting with
Detainees (SEP 2006) (Section 1092 of Public
Law 108–375).
mstockstill on DSK4VPTVN1PROD with PROPOSALS3
*
*
*
*
*
3. Amend section 252.225–7001 by
revising the clause date, paragraph
(a)(8), and paragraph (b) to read as
follows:
*
*
*
*
*
*
*
*
*
(b) This clause implements the Buy
American Act (41 U.S.C. chapter 83). In
accordance with 41 U.S.C. 1907, the
component test of the Buy American Act is
waived for an end product that is a COTS
item (see section 12.505(a)(1) of the Federal
Acquisition Regulation). Unless otherwise
specified, this clause applies to all line items
in the contract.
*
*
*
*
*
4. Amend section 252.225–7021 by
revising the clause date and paragraph
(a)(10) to read as follows:
252.225–7021
*
*
*
Trade agreements.
*
*
TRADE AGREEMENTS (DATE)
(a) * * *
(10) Qualifying country end product
means—
(i) An unmanufactured end product mined
or produced in a qualifying country; or
(ii) An end product manufactured in a
qualifying country if—
(A) The cost of the following types of
components exceeds 50 percent of the cost of
all its components:
(1) Components mined, produced, or
manufactured in a qualifying country.
(2) Components mined, produced, or
manufactured in the United States.
(3) Components of foreign origin of a class
or kind for which the Government has
determined that sufficient and reasonably
available commercial quantities of a
satisfactory quality are not mined, produced,
or manufactured in the United States; or
(B) The end product is a COTS item.
*
*
*
*
*
5. Amend section 252.225–7036 by
revising the clause date and paragraph
(a)(13) to read as follows:
*
*
BUY AMERICAN ACT AND BALANCE
OF PAYMENTS PROGRAM (DATE)
*
*
*
*
BUY AMERICAN ACT—FREE TRADE
AGREEMENTS—BALANCE OF
PAYMENTS PROGRAM (DATE)
(a) * * *
(a) * * *
VerDate Mar<15>2010
(13) Qualifying country end product
means—
(i) An unmanufactured end product mined
or produced in a qualifying country; or
(ii) An end product manufactured in a
qualifying country if—
(A) The cost of the following types of
components exceeds 50 percent of the cost of
all its components:
(1) Components mined, produced, or
manufactured in a qualifying country.
(2) Components mined, produced, or
manufactured in the United States.
(3) Components of foreign origin of a class
or kind for which the Government has
determined that sufficient and reasonably
available commercial quantities of a
satisfactory quality are not mined, produced,
or manufactured in the United States; or
(B) The end product is a COTS item.
252.225–7036 Buy American Act—Free
Trade Agreements—Balance of Payments
Program.
252.225–7001 Buy American Act and
Balance of Payments Program.
*
(8) Qualifying country end product
means—
(i) An unmanufactured end product mined
or produced in a qualifying country; or
(ii) An end product manufactured in a
qualifying country if—
(A) The cost of the following types of
components exceeds 50 percent of the cost of
all its components:
(1) Components mined, produced, or
manufactured in a qualifying country.
(2) Components mined, produced, or
manufactured in the United States.
(3) Components of foreign origin of a class
or kind for which the Government has
determined that sufficient and reasonably
available commercial quantities of a
satisfactory quality are not mined, produced,
or manufactured in the United States; or
(B) The end product is a COTS item.
17:39 Jun 03, 2011
Jkt 223001
PO 00000
Frm 00002
Fmt 4701
Sfmt 4702
*
*
*
*
[FR Doc. 2011–13367 Filed 6–3–11; 8:45 am]
BILLING CODE 5001–08–P
DEPARTMENT OF DEFENSE
Defense Acquisition Regulations
System
48 CFR Parts 203, 204, and 252
RIN 0750–AG99
Defense Federal Acquisition
Regulation Supplement;
Representation Relating to
Compensation of Former DoD Officials
(DFARS Case 2010–D020)
Defense Acquisition
Regulations System; Department of
Defense (DoD).
ACTION: Proposed rule.
AGENCY:
DoD is proposing to amend
the Defense Federal Acquisition
Regulation Supplement (DFARS) to
require that offerors represent whether
former DoD officials employed by the
offeror are in compliance with postemployment restrictions.
DATES: Comments on the proposed rule
should be submitted in writing to the
address shown below on or before
August 5, 2011, to be considered in the
formation of the final rule.
ADDRESSES: Submit comments
identified by DFARS Case 2010–D020,
using any of the following methods:
Æ Regulations.gov: https://
www.regulations.gov.
Submit comments via the Federal
eRulemaking portal by inputting
‘‘DFARS Case 2010–D020’’ under the
heading ‘‘Enter keyword or ID’’ and
selecting ‘‘Search.’’ Select the link
‘‘Submit a Comment’’ that corresponds
with ‘‘DFARS Case 2010–D020.’’ Follow
the instructions provided at the ‘‘Submit
a Comment’’ screen. Please include your
name, company name (if any), and
SUMMARY:
E:\FR\FM\06JNP3.SGM
06JNP3
Agencies
[Federal Register Volume 76, Number 108 (Monday, June 6, 2011)]
[Proposed Rules]
[Pages 32845-32846]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2011-13367]
Federal Register / Vol. 76, No. 108 / Monday, June 6, 2011 / Proposed
Rules
[[Page 32845]]
-----------------------------------------------------------------------
DEPARTMENT OF DEFENSE
Defense Acquisition Regulations System
48 CFR Part 252
RIN 0750-AH21
Defense Federal Acquisition Regulation Supplement; Definition of
``Qualifying Country End Product'' (DFARS Case 2011-D028)
AGENCY: Defense Acquisition Regulations System, Department of Defense
(DoD).
ACTION: Proposed rule.
-----------------------------------------------------------------------
SUMMARY: DoD is issuing a proposed rule to amend the definition of
``qualifying country end product'' by eliminating the component test
for qualifying country end products that are commercially available
off-the-shelf items.
DATES: Comments on the proposed rule should be submitted in writing to
the address shown below on or before August 5, 2011, to be considered
in the formation of the final rule.
ADDRESSES: Submit comments identified by DFARS Case 2011-D028, using
any of the following methods:
[cir] Regulations.gov: https://www.regulations.gov.
Submit comments via the Federal eRulemaking portal by inputting
``DFARS Case 2011-D028'' under the heading ``Enter keyword or ID'' and
selecting ``Search.'' Select the link ``Submit a Comment'' that
corresponds with ``DFARS Case 2011-D028.'' Follow the instructions
provided at the ``Submit a Comment'' screen. Please include your name,
company name (if any), and ``DFARS Case 2011-D028'' on your attached
document.
[cir] E-mail: dfars@osd.mil. Include DFARS Case 2011-D028 in the
subject line of the message.
[cir] Fax: 703-602-0350.
[cir] Mail: Defense Acquisition Regulations System, Attn: Amy G.
Williams, OUSD (AT&L) DPAP/DARS, Room 3B855, 3060 Defense Pentagon,
Washington, DC 20301-3060.
Comments received generally will be posted without change to https://www.regulations.gov, including any personal information provided. To
confirm receipt of your comment(s), please check https://www.regulations.gov approximately two to three days after submission to
verify posting (except allow 30 days for posting of comments submitted
by mail).
SUPPLEMENTARY INFORMATION:
I. Background
This rule proposes to amend the definition of ``qualifying country
end product'' to remove the component test for qualifying country end
products that are commercially available off-the-shelf items.
Under the Buy American Act, there is a two-part test to define a
domestic end product. The product must be manufactured in the United
States and there is a formula based on the cost of foreign components
compared to the cost of all components. Under FAR Case 2000-305, the
component test was waived for the acquisition of commercially available
off-the-shelf (COTS) items (see FAR 25.001(c)(1)). Likewise, the
component test for the DFARS definition of ``domestic end product'' was
waived by the interim rule of DFARS Case 2008-D009 (74 FR 2422, January
15, 2009) and final rule published December 24, 2009 (74 FR 68384).
These changes were based on a determination signed by the Administrator
for Federal Procurement Policy on February 14, 2008, regarding laws
applicable to the acquisition of COTS items. According to the
determination, the component test of the Buy American Act (41 U.S.C.
chapter 83) does not apply to COTS items.
The definition of ``qualifying country end product'' is not
statutory, but it was modeled after the definition of ``domestic end
product'' as a matter of policy. Therefore, it is within the authority
of DoD to change this definition as a matter of policy, to waive the
component test for qualifying country end products that are COTS items,
so that it will not be necessary to try to track the origin of
components of COTS items that are manufactured in a qualifying country,
in order to determine that an end product is a qualifying country end
product.
II. Executive Orders 12866 and 13563
Executive Orders (E.O.s) 12866 and 13563 direct agencies to assess
all costs and benefits of available regulatory alternatives and, if
regulation is necessary, to select regulatory approaches that maximize
net benefits (including potential economic, environmental, public
health and safety effects, distributive impacts, and equity). E.O.
13563 emphasizes the importance of quantifying both costs and benefits,
of reducing costs, of harmonizing rules, and of promoting flexibility.
This is a significant regulatory action and, therefore, was subject to
review under section 6(b) of E.O. 12866, Regulatory Planning and
Review, dated September 30, 1993. This rule is not a major rule under 5
U.S.C. 804.
III. Regulatory Flexibility Act
DoD does not expect this rule to have a significant 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
only affects manufacturers of COTS items in qualifying countries,
removing an administrative burden for the qualifying country
manufacturer and the Government personnel acquiring the items. The
Regulatory Flexibility Act is intended to protect small entities in the
United States, not foreign entities, regardless of size. For the
definition of ``small business'', the Regulatory Flexibility Act refers
to the Small Business Act, which in turn allows the SBA Administrator
to specify detailed definitions or standards. 5 U.S.C. 601(3) and 15
U.S.C. 632(a). The SBA regulations at 13 CFR 121.105 discuss who is a
small business: '' (a)(1) Except for small agricultural cooperatives, a
business concern eligible for assistance from SBA as a small business
is a business entity organized for profit, with a place of business
located in the United States, and which operates primarily within the
United States or which makes a significant contribution to the U.S.
economy through payment of taxes or use of American products, materials
or labor.'' The comparable change has already been enacted for the
benefit of U.S. manufacturers of COTS items in the DFARS which aligns
with the FAR. Therefore, an initial regulatory flexibility analysis has
not been performed. DoD invites comments from small business concerns
and other interested parties on the expected impact of this rule on
small entities.
DoD will also consider comments from small entities concerning the
existing regulations in subparts affected by this rule in accordance
with 5 U.S.C. 610. Interested parties must submit such comments
separately and should cite 5 U.S.C. 610 (DFARS Case 2011-D029) in
correspondence.
V. Paperwork Reduction Act
The rule does not contain any information collection requirements
that require the approval of the Office of Management and Budget under
the Paperwork Reduction Act (44 U.S.C. chapter 35).
[[Page 32846]]
List of Subjects in 48 CFR Part 252
Government procurement.
Ynette R. Shelkin,
Editor, Defense Acquisition Regulations System.
Therefore, 48 CFR part 252 is proposed to be amended as follows:
PART 252--SOLICITATION PROVISIONS AND CONTRACT CLAUSES
1. The authority citation for 48 CFR part 252 continues to read as
follows:
Authority: 41 U.S.C. 1303 and 48 CFR chapter 1.
2. Amend section 252.212-7001 by revising the clause date, and
paragraphs (b)(5)(i), (b)(11)(i), (b)(14)(i), (b)(20), and (b)(21) to
read as as follows:
252.212-7001 Contract terms and conditions required to implement
statutes or executive orders applicable to defense acquisitions of
commercial items.
* * * * *
CONTRACT TERMS AND CONDITIONS REQUIRED TO IMPLEMENT STATUTES OR
EXECUTIVE ORDERS APPLICABLE TO DEFENSE ACQUISITIONS OF COMMERCIAL ITEMS
(DATE)
* * * * *
(b) * * *
(5)(i)--------252.225-7001, Buy American Act and Balance of
Payments Program (DATE) (41 U.S.C. chapter 83, E.O. 10582).
* * * * *
(11)(i)--------252.225-7021, Trade Agreements (DATE) (19 U.S.C.
2501-2518 and 19 U.S.C. 3301 note)
* * * * *
(14)(i)-------- 252.225-7036, Buy American Act--Free Trade
Agreements--Balance of Payments Program (DATE) (41 U.S.C. chapter 83
and 19 U.S.C. 3301 note)
* * * * *
(20)--------252.237-7010, Prohibition on Interrogation of
Detainees by Contractor Personnel (NOV 2010) (Section 1038 of Pub.
L. 111-84).
(21)--------252.237-7019, Training for Contractor Personnel
Interacting with Detainees (SEP 2006) (Section 1092 of Public Law
108-375).
* * * * *
3. Amend section 252.225-7001 by revising the clause date,
paragraph (a)(8), and paragraph (b) to read as follows:
252.225-7001 Buy American Act and Balance of Payments Program.
* * * * *
BUY AMERICAN ACT AND BALANCE OF PAYMENTS PROGRAM (DATE)
(a) * * *
(8) Qualifying country end product means--
(i) An unmanufactured end product mined or produced in a
qualifying country; or
(ii) An end product manufactured in a qualifying country if--
(A) The cost of the following types of components exceeds 50
percent of the cost of all its components:
(1) Components mined, produced, or manufactured in a qualifying
country.
(2) Components mined, produced, or manufactured in the United
States.
(3) Components of foreign origin of a class or kind for which
the Government has determined that sufficient and reasonably
available commercial quantities of a satisfactory quality are not
mined, produced, or manufactured in the United States; or
(B) The end product is a COTS item.
* * * * *
(b) This clause implements the Buy American Act (41 U.S.C.
chapter 83). In accordance with 41 U.S.C. 1907, the component test
of the Buy American Act is waived for an end product that is a COTS
item (see section 12.505(a)(1) of the Federal Acquisition
Regulation). Unless otherwise specified, this clause applies to all
line items in the contract.
* * * * *
4. Amend section 252.225-7021 by revising the clause date and
paragraph (a)(10) to read as follows:
252.225-7021 Trade agreements.
* * * * *
TRADE AGREEMENTS (DATE)
(a) * * *
(10) Qualifying country end product means--
(i) An unmanufactured end product mined or produced in a
qualifying country; or
(ii) An end product manufactured in a qualifying country if--
(A) The cost of the following types of components exceeds 50
percent of the cost of all its components:
(1) Components mined, produced, or manufactured in a qualifying
country.
(2) Components mined, produced, or manufactured in the United
States.
(3) Components of foreign origin of a class or kind for which
the Government has determined that sufficient and reasonably
available commercial quantities of a satisfactory quality are not
mined, produced, or manufactured in the United States; or
(B) The end product is a COTS item.
* * * * *
5. Amend section 252.225-7036 by revising the clause date and
paragraph (a)(13) to read as follows:
252.225-7036 Buy American Act--Free Trade Agreements--Balance of
Payments Program.
* * * * *
BUY AMERICAN ACT--FREE TRADE AGREEMENTS--BALANCE OF PAYMENTS PROGRAM
(DATE)
(a) * * *
(13) Qualifying country end product means--
(i) An unmanufactured end product mined or produced in a
qualifying country; or
(ii) An end product manufactured in a qualifying country if--
(A) The cost of the following types of components exceeds 50
percent of the cost of all its components:
(1) Components mined, produced, or manufactured in a qualifying
country.
(2) Components mined, produced, or manufactured in the United
States.
(3) Components of foreign origin of a class or kind for which
the Government has determined that sufficient and reasonably
available commercial quantities of a satisfactory quality are not
mined, produced, or manufactured in the United States; or
(B) The end product is a COTS item.
* * * * *
[FR Doc. 2011-13367 Filed 6-3-11; 8:45 am]
BILLING CODE 5001-08-P