Defense Federal Acquisition Regulation Supplement: Photovoltaic Devices From the United States (DFARS Case 2015-D007), 72599-72606 [2015-29551]

Agencies

• Defense Acquisition Regulations System
• DEPARTMENT OF DEFENSE

[Federal Register Volume 80, Number 224 (Friday, November 20, 2015)]
[Rules and Regulations]
[Pages 72599-72606]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2015-29551]


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DEPARTMENT OF DEFENSE

Defense Acquisition Regulations System

48 CFR Parts 212, 225, and 252

[Docket DARS-2015-0024]
RIN 0750-AI41


Defense Federal Acquisition Regulation Supplement: Photovoltaic 
Devices From the United States (DFARS Case 2015-D007)

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

ACTION: Final rule.

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[[Page 72600]]

SUMMARY: DoD is issuing a final rule amending the Defense Federal 
Acquisition Regulation Supplement (DFARS) to implement a section of the 
National Defense Authorization Act for Fiscal Year 2015 that revises 
the restrictions relating to utilization of domestic photovoltaic 
devices.

DATES: Effective November 20, 2015.

FOR FURTHER INFORMATION CONTACT: Ms. Amy G. Williams, telephone 571-
372-6106; facsimile 571-372-6101.

SUPPLEMENTARY INFORMATION: 

I. Background

    DoD published a proposed rule in the Federal Register at 80 FR 
30119 on May 26, 2015, to implement section 858 of the National Defense 
Authorization Act (NDAA) for Fiscal Year (FY) 2015 (Pub. L. 113-291), 
which addresses utilization of domestic photovoltaic devices. Three 
respondents submitted comments on the proposed rule.

II. Discussion and Analysis

A. Summary of Significant Changes From the Proposed Rule

    There are no significant changes from the proposed rule.

B. Analysis of Public Comments

1. Trade Agreements Act
    Comment: One respondent was very supportive of the exceptions for 
use of photovoltaic devices from designated countries in acquisitions 
covered by a Trade agreement. The respondent cited legal reasons for 
the exception (i.e., section 858 specifically states that the 
restrictions are ``subject to exceptions provided in the Trade 
Agreements Act of 1979 (19 U.S.C. 2501 et seq.) or otherwise provided 
by law.'' In addition, the respondent considered the preservation of 
the Trade Agreements Act exception critical to the deployment of 
photovoltaic devices to meet the needs of the DoD market in a timely 
and cost-efficient manner.
    Response: Both section 846 and section 858 state that the 
restrictions are subject to the exceptions provided in the Trade 
Agreements Act or otherwise provided by law. The Trade Agreements Act 
(19 U.S.C. 2501 et seq.) provides authority for the President to waive 
the Buy American Act and other discriminatory provisions (e.g., 
sections 846 and 858) for eligible products from designated countries. 
This authority has been delegated to the United States Trade 
Representative (USTR). The USTR has confirmed that the trade agreements 
provide an exception to the domestic source restrictions of section 
858. Since the Trade Agreements Act exception is specifically provided 
in law, it remains in the final rule.
2. Covered Contract
a. Enhanced Use Leases
    Comment: One respondent recommended that DoD should clarify that 
while the real estate procurement action related to the development of 
photovoltaic generating assets on DoD land is not subject to the DFARS, 
the purchase of the output of the photovoltaic devices is (1) a 
separate procurement action; (2) an acquisition under DoD procurement 
regulations; and (3) a covered contract under section 858. According to 
the respondent, DoD may accept the provision of payment of utility 
services as in-kind consideration for leasing DoD real property 
interests in an amount not less than the fair market value of the 
leasehold. Although the respondent agreed that the DFARS does not cover 
land leases, the respondent asserted that a power purchase agreement 
for the procurement of power generated from a photovoltaic device 
located on land awarded through enhanced-use lease (EUL) authority, 
whether a combined procurement or a separate procurement after the EUL 
is awarded, is not a real estate transaction, but is a covered contract 
because it is installed on DoD property and is an acquisition subject 
to the DFARS.
    Response: DoD land leases are not governed by the Federal 
Acquisition Regulations (FAR) or the DFARS, as the FAR system only 
covers acquisition of supplies and services. The term ``supplies'' is 
defined in the FAR as all property except land or interest in land. 
Therefore, power generated from a photovoltaic device and provided to 
an installation as in-kind consideration under a land lease is not 
governed by the FAR, DFARS, or this rule. Real property transactions 
are addressed under other authorities. To the extent the DoD is 
contracting for power through a FAR-type contract, this DFARS provision 
would apply. A separately signed power purchase agreement for the power 
generated by a photovoltaic device installed on DoD land outgranted 
under a DoD lease, is (1) a FAR contract and (2) a covered contract for 
the purposes of this rule.
b. Off-Site Power Generation
    Comment: One respondent recommended that DoD should clarify that 
section 858 applies to covered contracts awarded by DoD components 
utilizing photovoltaic devices located on off-site, private property, 
so long as the photovoltaic devices are reserved for the use of DoD for 
the full economic life of the device.
    Response: The final Regulatory Flexibility Act analysis has been 
revised to clarify that section 858 applies to DoD when purchasing 
renewable power generated via photovoltaic devices. DoD can either 
purchase the photovoltaic devices (own, operate and maintain the 
devices for their full economic life), enter into Energy Savings 
Performance Contracts, or enter into power purchase agreements for the 
purchase of the power output from photovoltaic devices that are 
installed on DoD land or buildings, or off-site on private land.
c. Need for Trade Agreements Act Exception
    Comment: According to one respondent, the broadened definition of 
``covered contract'' will further enable expansion of the market 
transition to utility scale procurement of photovoltaic devices for 
military use. However, the respondent stated that without the Trade 
Agreements Act exception, the market will not be able to be served in a 
timely and efficient manner.
    Response: The Trade Agreements Act exception is specifically 
provided in law and remains in the final rule.
3. Definitions
a. ``Domestic Photovoltaic Device''
    Comment: According to one respondent, the modification of the 
definition of ``domestic photovoltaic device'' to include the 
requirement that the cost of all components mined, produced, or 
manufactured in the United States must exceed 50 percent of the cost of 
all components, makes the Trade Agreements Act exception even more 
essential.
    Response: The Trade Agreements Act exception is specifically 
provided in law and remains in the final rule.
b. ``Substantial Transformation''
    Comment: One respondent stated that DoD should amend paragraph (c) 
of the provision at DFARS 252.225-7018, Photovoltaic Devices--
Certificate, to explicitly adopt and apply the Department of Commerce's 
definition of ``substantial transformation'' for photovoltaic devices, 
stating that substantial transformation of a photovoltaic device takes 
place in the country where a photovoltaic device's cell is 
manufactured.
    Response: The interpretation of ``substantial transformation'' is 
outside the scope of this case. Section 858 did not address or modify 
the meaning of ``substantial transformation.'' Paragraph (c) of the 
provision at DFARS 252.225-

[[Page 72601]]

7018 was not included in the Federal Register notice of the proposed 
rule under this case. The preamble to the proposed rule under this case 
specifically stated that the previous rule published to clarify this 
DoD policy will remain unaffected.
    Paragraph (c) was added to the provision at DFARS 252.225-7017 
under DFARS Case 2014-D006, Photovoltaic Devices, to clarify how 
offerors should assess the rules of origin for photovoltaic devices to 
be utilized under covered DoD contracts. Paragraph (c) advises offerors 
to be consistent with country of origin determinations by the U.S. 
Customs and Border Protection with regard to importation of the same or 
similar photovoltaic devices into the United States. If the offeror is 
uncertain as to the origin of a photovoltaic device, the provision 
directs the offeror to request a determination from U.S. Customs and 
Border Protection. It is not within the purview of DoD to make such 
determinations. DoD published the final rule on April 21, 2014, after 
consultation with the United States Trade Representative and thorough 
analysis of the public comments received.
c. ``U.S.-Made Photovoltaic Device''
    Comment: One respondent recommended that DoD should revise the 
definition of U.S.-made photovoltaic device to conform to the other 
country of origin definitions applicable to photovoltaic devices and 
require U.S.-made photovoltaic devices to be wholly manufactured or 
substantially transformed in the United States.
    Response: The FAR was modified in February 2000 (FAC 97-15) to 
include the term ``U.S.-made end product,'' defined to mean an article 
that is mined, produced, or manufactured in the United States or that 
is substantially transformed in the United States into a new and 
different article of commerce with a name, character, or use distinct 
from that of the article or articles from which it was transformed. 
This term was introduced to provide an opportunity, when an acquisition 
is subject to the World Trade Organization Government Procurement 
Agreement, for products made in the United States (which are not 
designated country end products, and therefore not subject to the trade 
agreements rules of origin) to compete with designated country end 
products. Through a public interest class determination, DoD does not 
apply the Buy American Act to U.S.-made end products if the World Trade 
Organization Government Procurement Agreement applies. Therefore, when 
section 846 of the NDAA for FY 2011 required certain covered contracts 
awarded by DoD to contain a provision requiring the photovoltaic 
devices provided under the contract to comply with the Buy American 
Act, subject to the exceptions provided in the Trade Agreements Act of 
1979, the DFARS applied the existing public interest class 
determination to exempt the utilization of U.S.-made photovoltaic 
devices (treating photovoltaic devices as a specific item fitting 
within the existing FAR definition of ``U.S.-made end products'') from 
the restrictions of section 846 and the Buy American Act.
4. Public Interest Determinations
a. Impact on Domestic Manufacturing
    Comment: One respondent contended that issuing a public interest 
waiver as a work around to addressing differing documentation 
requirements between U.S.-based and designated country photovoltaic 
manufacturers would reduce the desired connection to domestic 
manufacturing activities, and therefore presents a suboptimal approach.
    Response: The public interest waiver of section 858 for acquisition 
of U.S.-made photovoltaic devices was not only to address differing 
documentation requirements, but to enable acquisition from a broad 
range of U.S. companies. Section 858 of the NDAA for FY 2015 allows the 
head of the department concerned to determine, on a case-by-case basis 
that application of section 858 is not in the public interest. As 
delegated in this rule, the head of the contracting activity concerned 
may make such a public interest determination for a variety of reasons. 
The rule provides a sample determination based on the utilization of a 
U.S.-made device because this is consistent with existing practice, 
except that now an individual determination is required each time 
utilization of U.S.-made devices is proposed. Use of this determination 
was suggested only when the value of the acquisition exceeds $204,000 
and the World Trade Organization Government Procurement Agreement 
applies. It is in the Government's best interest to foster a 
competitive environment and encourage manufacturing in the United 
States.
b. Time Delay
    Comment: One respondent, while recognizing that public interest 
determinations can provide flexibility, was concerned that obtaining an 
individual public interest determination on a case-by-case basis could 
cause delay in project implementation.
    Response: Section 858 specifically requires approval of public 
interest determinations on a case-by-case basis. The DFARS rule 
specifies the head of the contracting activity as approval authority. 
This approval process is not anticipated to unreasonably delay DoD 
procurements.
5. Sanctioned Countries
    Comment: One respondent recommended that the rule should ensure 
that companies from the list of sanctioned countries should be 
prohibited from undertaking U.S. military solar projects, regardless of 
where or how the goods are manufactured.
    Response: Since the FAR and DFARS contain specific implementation 
of the Office of Foreign Assets Control restrictions and additional 
title 10, U.S.C., statutory restrictions on contracting with prohibited 
sources that apply to both DoD prime contractors and to their 
subcontractors in accordance with flow down provisions, the rule does 
not need to be modified. Such prohibitions are already effectively 
implemented in the regulations that apply to contracts awarded by 
executive branch agencies U.S. Government and to contracts awarded by 
DoD military departments and defense agencies.

III. Applicability

    Consistent with the determinations that DoD made with regard to 
application of the requirements of section 846 of NDAA for FY 2011, 
this rule does not apply the requirements of section 858 of the NDAA 
for FY 2015 to contracts at or below the simplified acquisition 
threshold (SAT), but does apply to contracts for the acquisition of 
commercial items, including commercially available off-the-shelf (COTS) 
items.

A. Applicability to Contracts at or Below the SAT

    41 U.S.C. 1905 governs the applicability of laws to contracts or 
subcontracts in amounts not greater than the simplified acquisition 
threshold. It is intended to limit the applicability of laws to such 
contracts or subcontracts. 41 U.S.C. 1905 provides that if a provision 
of law contains criminal or civil penalties, or if the FAR Council 
makes a written determination that it is not in the best interest of 
the Federal Government to exempt contracts or subcontracts at or below 
the SAT, the law will apply to them. The Director, Defense Procurement 
and Acquisition Policy (DPAP), is the appropriate authority to make 
comparable determinations for regulations to be

[[Page 72602]]

published in the DFARS, which is part of the FAR system of regulations. 
DoD did not make that determination. Therefore, this rule does not 
apply below the simplified acquisition threshold.

B. Applicability to Contracts for the Acquisition of Commercial Items, 
Including COTS Items

    41 U.S.C. 1906 governs the applicability of laws to contracts for 
the acquisition of commercial items, and is intended to limit the 
applicability of laws to contracts for the acquisition of commercial 
items. 41 U.S.C. 1906 provides that if a provision of law contains 
criminal or civil penalties, or if the FAR Council makes a written 
determination that it is not in the best interest of the Federal 
Government to exempt commercial item contracts, the provision of law 
will apply to contracts for the acquisition of commercial items. 
Likewise, 41 U.S.C. 1907 governs the applicability of laws to COTS 
items, with the Administrator for Federal Procurement Policy the 
decision authority to determine that it is in the best interest of the 
Government to apply a provision of law to acquisitions of COTS items in 
the FAR. The Director, DPAP, is the appropriate authority to make 
comparable determinations for regulations to be published in the DFARS, 
which is part of the FAR system of regulations.
    Given that the requirements of section 858 of the NDAA for FY 2015 
were enacted to promote utilization of domestic photovoltaic devices, 
and since photovoltaic devices are generally COTS items, DoD has 
determined that it is in the best interest of the Federal Government to 
apply the rule to contracts for the acquisition of commercial items, 
including COTS items, as defined at FAR 2.101. An exception for 
contracts for the acquisition of commercial items, including COTS 
items, would exclude the contracts intended to be covered by the law, 
thereby undermining the overarching public policy purpose of the law.

IV. 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 not a significant regulatory action and, therefore, was not 
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.

V. Regulatory Flexibility Act

    A final regulatory flexibility analysis has been prepared 
consistent with the Regulatory Flexibility Act, 5 U.S.C. 601, et seq., 
and is summarized as follows:
    This rule implements section 858 of the National Defense 
Authorization Act (NDAA) for Fiscal Year (FY) 2015 (Pub. L. 113-291), 
by changing the regulatory coverage on utilization of domestic 
photovoltaic devices under certain covered contracts.
    The objective of this rule is to further promote utilization of 
domestic photovoltaic devices under DoD covered contracts, while 
maintaining compliance with trade agreements, reciprocal defense 
procurement memoranda of understanding, and DoD policy with regard to 
the acquisition of designated country photovoltaic devices, qualifying 
country photovoltaic devices, and U.S.-made photovoltaic devices.
    There were no significant issues raised by the public comments in 
response to the initial regulatory flexibility analysis. There was one 
comment on the terminology used to describe the applicability of the 
rule to small entities, but this did not impact the numerical analysis 
or the rule itself.
    This rule generally applies at the prime contract level to other 
than small entities. When purchasing renewable power generated via 
photovoltaic devices, DoD can either purchase the photovoltaic devices 
and thereby own, operate, and maintain the devices for their full 
economic life (already covered in DFARS part 225 under standard Buy 
American Act/Trade Agreements regulations) or, for example, may do some 
variation of the following:
    a. Enter into an energy savings performance contract, which is a 
contracting method in which the contractor provides capital to 
facilitate energy savings projects and maintains them in exchange for a 
portion of the energy savings generated. Under this arrangement, the 
Government would take title to the devices during contract performance 
or at the conclusion of the contract. For example, the Defense 
Logistics Agency-Energy uses the master Department of Energy indefinite 
delivery-indefinite quantity contract and awards task orders off that 
contract. Of the 16 contractors, all are large businesses. There are 
subcontracting goals that each contractor has to meet, but the ultimate 
task order award is made to a large business.
    b. Enter into a power purchase agreement, also referred to as a 
utility service contract, for the purchase of the power output of 
photovoltaic devices that are installed on DoD land or buildings, or on 
private land, but are owned, operated, and maintained by the 
contractor. At the conclusion of the contract, DoD would either require 
the contractor to dismantle and remove the photovoltaic equipment or 
abandon the equipment in place. Prime contractors for this type of 
contract would generally be large businesses, based on the capital 
costs involved in these projects. However, many developers tend to 
subcontract out the majority of work to smaller companies.
    There are approximately 80 manufacturers of photovoltaic devices. 
We do not currently have data available on whether any of the 
manufacturers of photovoltaic devices are small entities, because the 
Federal Procurement Data System does not collect such data on 
subcontractors.
    There are no new reporting burdens under this rule. There are some 
negligible variations to the existing reporting burdens. Furthermore, 
since the prime contractors subject to this rule are other than small 
businesses, the reporting requirements will not impact small entities.
    However, under section 858, if the aggregate value of the 
photovoltaic devices to be utilized under a contract is less than 
$204,000, or unless a waiver is obtained for the utilization of U.S.-
made products when the aggregate value of the photovoltaic devices is 
$204,000 or more, there will be a requirement to track the origin of 
the components of the domestic photovoltaic devices. However, DoD 
estimates that most covered contracts will involve utilization of 
photovoltaic devices with an aggregate value in excess of $204,000 and 
expects to grant waivers as appropriate.
    DoD did not identify any significant alternatives that meet the 
requirements of the statute and would have less impact on small 
entities. The ability for the Government to grant a waiver of section 
858 if it is inconsistent with the public interest to preclude 
utilization of U.S.-made photovoltaic devices when the World Trade 
Organization Government Procurement Agreement is applicable (i.e., the 
aggregate value of the photovoltaic devices to be utilized is $204,000 
or more) will greatly reduce the burden on manufacturers of

[[Page 72603]]

photovoltaic devices, regardless of the size of the entity.

VI. Paperwork Reduction Act

    The rule contains 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); however, these changes to the 
DFARS do not impose additional information collection requirements to 
the paperwork burden previously approved under OMB Control Number 0704-
0229, entitled ``Defense Federal Acquisition Regulation Supplement 
(DFARS) Part 225, Foreign Acquisition, and related clauses at DFARS 
252.225.''

List of Subjects in 48 CFR Parts 212, 225, and 252

    Government procurement.

Jennifer L. Hawes,
Editor, Defense Acquisition Regulations System.

    Therefore, 48 CFR parts 212, 225, and 252 are amended as follows:

0
1. The authority citation for parts 212, 225, and 252 continues to read 
as follows:

    Authority:  41 U.S.C. 1303 and 48 CFR chapter 1.

PART 212--ACQUISITION OF COMMERCIAL ITEMS

0
2. In section 212.301, revise paragraphs (f)(x)(J) and (f)(x)(K) to 
read as follows:


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

* * * * *
    (f) * * *
    (x) * * *
    (J) Use the clause at 252.225-7017, Photovoltaic Devices, as 
prescribed in 225.7017-5(a), to comply with section 858 of Public Law 
113-291).
    (K) Use the provision at 252.225-7018, Photovoltaic Devices--
Certificate, as prescribed in 225.7017-5(b), to comply with section 858 
of Public Law 113-291.
* * * * *

PART 225--FOREIGN ACQUISITION

0
3. Amend section 225.7017 by--
0
a. Revising sections 225.7017-1 through 225.7017-3;
0
b. Redesignating section 225.7017-4 as 225.7017-5;
0
c. Adding new section 225.7017-4; and
0
d. In the newly redesignated 225.7017-5, revising the section heading 
and paragraph (a).
    The revisions and addition read as follows:


225.7017   Utilization of domestic photovoltaic devices.


225.7017-1   Definitions.

    As used in this section--
    Caribbean Basin country photovoltaic device means a photovoltaic 
device that--
    (1) Is wholly manufactured in a Caribbean Basin country; or
    (2) In the case of a photovoltaic device that consists in whole or 
in part of materials from another country, has been substantially 
transformed in a Caribbean Basin country into a new and different 
article of commerce with a name, character, or use distinct from that 
of the article or articles from which it was transformed, provided that 
the photovoltaic device is not subsequently substantially transformed 
outside of a Caribbean Basin country.
    Covered contract means contract awarded by DoD that, by means other 
than DoD purchase as end products, provides for a photovoltaic device 
to be--
    (1) Installed in the United States on DoD property or in a facility 
owned by DoD; or
    (2) Reserved for the exclusive use of DoD in the United States for 
the full economic life of the device.
    Designated country photovoltaic device means a World Trade 
Organization Government Procurement Agreement (WTO GPA) country 
photovoltaic device, a Free Trade Agreement country photovoltaic 
device, a least developed country photovoltaic device, or a Caribbean 
Basin country photovoltaic device.
    Domestic photovoltaic device means a photovoltaic device that--
    (1) Is manufactured in the United States; and
    (2) The cost of its components that are mined, produced, or 
manufactured in the United States exceeds 50 percent of the cost of all 
components. The cost of components includes transportation costs to the 
place of incorporation into the end product and U.S. duty (whether or 
not a duty-free entry certificate is issued). Scrap generated, 
collected, and prepared for processing in the United States is 
considered domestic.
    Foreign photovoltaic device means a photovoltaic device other than 
a domestic photovoltaic device.
    Free Trade Agreement country photovoltaic device means a 
photovoltaic device that--
    (1) Is wholly manufactured in a Free Trade Agreement country; or
    (2) In the case of a photovoltaic device that consists in whole or 
in part of materials from another country, has been substantially 
transformed in a Free Trade Agreement country into a new and different 
article of commerce with a name, character, or use distinct from that 
of the article or articles from which it was transformed, provided that 
the photovoltaic device is not subsequently substantially transformed 
outside of a Free Trade Agreement country.
    Least developed country photovoltaic device means a photovoltaic 
device that--
    (1) Is wholly manufactured in a least developed country; or
    (2) In the case of a photovoltaic device that consists in whole or 
in part of materials from another country, has been substantially 
transformed in a least developed country into a new and different 
article of commerce with a name, character, or use distinct from that 
of the article or articles from which it was transformed, provided that 
the photovoltaic device is not subsequently substantially transformed 
outside of a least developed country.
    Photovoltaic device means a device that converts light directly 
into electricity through a solid-state, semiconductor process.
    Qualifying country photovoltaic device means a photovoltaic device 
manufactured in a qualifying country.
    U.S.-made photovoltaic device means a photovoltaic device that--
    (1) Is manufactured in the United States; or
    (2) Is substantially transformed in the United States into a new 
and different article of commerce with a name, character, or use 
distinct from that of the article or articles from which it was 
transformed, provided that the photovoltaic device is not subsequently 
substantially transformed outside of the United States.
    WTO GPA country photovoltaic device means a photovoltaic device 
that--
    (1) Is wholly manufactured in a WTO GPA country; or
    (2) In the case of a photovoltaic device that consists in whole or 
in part of materials from another country, has been substantially 
transformed in a WTO GPA country into a new and different article of 
commerce with a name, character, or use distinct from that of the 
article or articles from which it was transformed, provided that the 
photovoltaic device is not subsequently substantially transformed 
outside of a WTO GPA country.


225.7017-2   Restriction.

    In accordance with section 858 of the National Defense 
Authorization Act for Fiscal Year 2015, photovoltaic devices

[[Page 72604]]

provided under any covered contract shall be domestic photovoltaic 
devices, except as provided in 225.7017-3 and 225.7017-4.


225.7017-3   Exceptions.

    (a) Free Trade Agreements. For a covered contract that utilizes 
photovoltaic devices valued at $25,000 or more, photovoltaic devices 
may be utilized from a country covered under the acquisition by a Free 
Trade Agreement, depending upon dollar threshold (see FAR subpart 
25.4).
    (b) World Trade Organization--Government Procurement Agreement. For 
covered contracts that utilize photovoltaic devices that are valued at 
$204,000 or more, only domestic photovoltaic devices or designated 
country photovoltaic devices may be utilized, unless acquisition of 
U.S.-made or qualifying country photovoltaic devices is allowed 
pursuant to a waiver in accordance with 225.7017-4(a).


225.7017-4   Waivers.

    The head of the contracting activity is authorized to waive, on a 
case-by-case basis, the application of the restriction in 225.7017-2 
upon determination that one of the following circumstances applies (see 
PGI 225.7017-4 for sample determinations and findings):
    (a) Inconsistent with the public interest. For example, a public 
interest waiver may be appropriate to allow--
    (1) Utilization of U.S.-made photovoltaic devices if the aggregate 
value of the photovoltaic devices to be utilized under the contract 
exceeds $204,000; or
    (2) Utilization of photovoltaic devices from a qualifying country, 
regardless of dollar value.
    (b) Unreasonable cost. A determination that the cost of a domestic 
photovoltaic device is unreasonable may be appropriate if--
    (1) The aggregate value of the photovoltaic devices to be utilized 
under the contract does not exceed $204,000; and
    (2) The offeror documents that the price of the foreign 
photovoltaic devices plus 50 percent is less than the price of 
comparable domestic photovoltaic devices.


225.7017-5   Solicitation provision and contract clause.

    (a)(1) Use the clause at 252.225-7017, Photovoltaic Devices, in 
solicitations, including solicitations using FAR part 12 procedures for 
the acquisition of commercial items, for a contract that--
    (i) Is expected to exceed the simplified acquisition threshold; and
    (ii) May be a covered contract, i.e., a contract that provides for 
a photovoltaic device to be--
    (A) Installed in the United States on DoD property or in a facility 
owned by DoD; or
    (B) Reserved for the exclusive use of DoD in the United States for 
the full economic life of the device.
    (2) Use the clause in the resultant contract, including contracts 
using FAR part 12 procedures for the acquisition of commercial items, 
if it is a covered contract.
* * * * *

PART 252--SOLICITATION PROVISIONS AND CONTRACT CLAUSES

0
4. Amend section 252.225-7017--
0
a. In the introductory text, by removing ``225.7017-4(a)'' and adding 
``225.7017-5(a)'' in its place;
0
b. By removing the clause date ``(OCT 2015)'' and adding ``(NOV 2015)'' 
in its place;
0
c. In paragraph (a), by removing ``an article that'' and adding ``a 
photovoltaic device that'' in its place wherever it appears, and 
revising the definition of ``Domestic photovoltaic device''; and
0
d. By revising paragraphs (b) and (c).
    The revisions read as follows:


252.225-7017   Photovoltaic Devices.

* * * * *
    (a) * * *
    Domestic photovoltaic device means a photovoltaic device--
    (i) Manufactured in the United States; and
    (ii) The cost of its components that are mined, produced, or 
manufactured in the United States exceeds 50 percent of the cost of all 
components. The cost of components includes transportation costs to the 
place of incorporation into the end product and U.S. duty (whether or 
not a duty-free entry certificate is issued). Scrap generated, 
collected, and prepared for processing in the United States is 
considered domestic.
* * * * *
    (b) This clause implements section 858 of the National Defense 
Authorization Act for Fiscal Year 2015 (Pub. L. 113-291).
    (c) Restriction. If the Contractor specified in its offer in the 
Photovoltaic Devices--Certificate provision of the solicitation that 
the estimated value of the photovoltaic devices to be utilized in 
performance of this contract would be--
    (1) Less than $25,000, then the Contractor shall utilize only 
domestic photovoltaic devices unless, in its offer, it specified 
utilization of qualifying country or other foreign photovoltaic devices 
in paragraph (d)(2) of the Photovoltaic Devices--Certificate provision 
of the solicitation. If the Contractor certified in its offer that it 
will utilize a qualifying country photovoltaic device, then the 
Contractor shall utilize a qualifying country photovoltaic device as 
specified, or, at the Contractor's option, a domestic photovoltaic 
device;
    (2) $25,000 or more but less than $79,507, then the Contractor 
shall utilize in the performance of this contract only domestic 
photovoltaic devices unless, in its offer, it specified utilization of 
Canadian, qualifying country, or other foreign photovoltaic devices in 
paragraph (d)(3) of the Photovoltaic Devices--Certificate provision of 
the solicitation. If the Contractor certified in its offer that it will 
utilize a qualifying country photovoltaic device or a Canadian 
photovoltaic device, then the Contractor shall utilize a qualifying 
country photovoltaic device or a Canadian photovoltaic device as 
specified, or, at the Contractor's option, a domestic photovoltaic 
device;
    (3) $79,507 or more but less than $100,000, then the Contractor 
shall utilize under this contract only domestic photovoltaic devices or 
Free Trade Agreement country photovoltaic devices (other than 
Bahrainian, Korean, Moroccan, Panamanian, or Peruvian photovoltaic 
devices), unless, in its offer, it specified utilization of qualifying 
country or other foreign photovoltaic devices in paragraph (d)(4) of 
the Photovoltaic Devices--Certificate provision of the solicitation. If 
the Contractor certified in its offer that it will utilize a qualifying 
country photovoltaic device or a Free Trade Agreement country 
photovoltaic device (other than a Bahrainian, Korean, Moroccan, 
Panamanian, or Peruvian photovoltaic device), then the Contractor shall 
utilize a qualifying country photovoltaic device; a Free Trade 
Agreement country photovoltaic device (other than a Bahrainian, Korean, 
Moroccan, Panamanian, or Peruvian photovoltaic device) as specified; 
or, at the Contractor's option, a domestic photovoltaic device;
    (4) $100,000 or more but less than $204,000, then the Contractor 
shall utilize under this contract only domestic photovoltaic devices or 
Free Trade Agreement country photovoltaic devices (other than 
Bahrainian, Moroccan, Panamanian, or Peruvian photovoltaic devices), 
unless, in its offer, it specified utilization of qualifying country or 
other foreign photovoltaic devices in paragraph (d)(5)

[[Page 72605]]

of the Photovoltaic Devices--Certificate provision of the solicitation. 
If the Contractor certified in its offer that it will utilize a 
qualifying country photovoltaic device or a Free Trade Agreement 
country photovoltaic device (other than a Bahrainian, Moroccan, 
Panamanian, or Peruvian photovoltaic device), then the Contractor shall 
utilize a qualifying country photovoltaic device; a Free Trade 
Agreement country photovoltaic device (other than a Bahrainian, 
Moroccan, Panamanian, or Peruvian photovoltaic device) as specified; 
or, at the Contractor's option, a domestic photovoltaic device; or
    (5) $204,000 or more, then the Contractor shall utilize under this 
contract only domestic or designated country photovoltaic devices 
unless, in its offer, it specified utilization of U.S.-made or 
qualifying country photovoltaic devices in paragraph (d)(6)(ii) or 
(iii) respectively of the Photovoltaic Devices--Certificate provision 
of the solicitation. If the Contractor certified in its offer that it 
will utilize a designated country, U.S.-made, or qualifying country 
photovoltaic device, then the Contractor shall utilize a designated 
country, U.S.-made, or qualifying country photovoltaic device as 
specified, or, at the Contractor's option, a domestic photovoltaic 
device.
    (End of clause)

0
5. Amend section 252.225-7018--
0
a. In the introductory text, by removing ``225.7017-4(b)'' and adding 
``225.7017-5(b)'' in its place;
0
b. By removing the clause date ``(OCT 2015)'' and adding ``(NOV 2015)'' 
in its place;
0
c. By revising paragraph (b);
0
d. In paragraph (c), by removing ``(See https://www.cbp.gov/xp/cgov/trade/legal/rulings.)'' and adding ``(See https://www.cbp.gov/trade/rulings.)'' in its place; and
0
e. By revising paragraph (d).
    The revisions read as follows:


252.225-7018   Photovoltaic Devices--Certificate.

* * * * *
    (b) Restrictions. The following restrictions apply, depending on 
the estimated aggregate value of photovoltaic devices to be utilized 
under a resultant contract:
    (1) If less than $204,000, then the Government will not accept an 
offer specifying the use of--
    (i) Other foreign photovoltaic devices in paragraph (d)(2)(iii), 
(d)(3)(iii), (d)(4)(iii), or (d)(5)(iii) of this provision, unless the 
offeror documents to the satisfaction of the Contracting Officer that 
the price of the foreign photovoltaic device plus 50 percent is less 
than the price of a comparable domestic photovoltaic device and the 
Government determines in accordance with DFARS 225.217-4(b) that the 
price of a comparable domestic photovoltaic device would be 
unreasonable; and
    (ii) A qualifying country photovoltaic device unless the Government 
determines in accordance with DFARS 225.217-4(a) that it is in the 
public interest to allow use of a qualifying country photovoltaic 
device.
    (2) If $204,000 or more, then the Government will consider only 
offers that utilize photovoltaic devices that are domestic or 
designated country photovoltaic devices, unless the Government 
determines in accordance with DFARS 225.7017-4(a) that it is in the 
public interest to allow use of a qualifying country photovoltaic 
device from Egypt or Turkey, or a U.S.-made photovoltaic device.
* * * * *
    (d) Certification and identification of country of origin. [The 
offeror shall check the block and fill in the blank for one of the 
following paragraphs, based on the estimated value and the country of 
origin of photovoltaic devices to be utilized in performance of the 
contract:]
    __(1) No photovoltaic devices will be utilized in performance of 
the contract.
    (2) If less than $25,000--
    __(i) The offeror certifies that each photovoltaic device to be 
utilized in performance of the contract is a domestic photovoltaic 
device;
    __(ii) The offeror certifies that each photovoltaic device to be 
utilized in performance of the contract is a qualifying country 
photovoltaic device [Offeror to specify country of origin__]; or
    __(iii) The foreign (other than qualifying country) photovoltaic 
devices to be utilized in performance of the contract are the product 
of ___. [Offeror to specify country of origin, if known, and provide 
documentation that the cost of a domestic photovoltaic device would be 
unreasonable in comparison to the cost of the proposed foreign 
photovoltaic device, i.e., that the price of the foreign photovoltaic 
device plus 50 percent is less than the price of a comparable domestic 
photovoltaic device.]
    (3) If $25,000 or more but less than $79,507--
    __(i) The offeror certifies that each photovoltaic device to be 
utilized in performance of the contract is a domestic photovoltaic 
device or a Canadian photovoltaic device [Offeror to specify country of 
origin__];
    __(ii) The offeror certifies that each photovoltaic device to be 
utilized in performance of the contract is a qualifying country 
photovoltaic device [Offeror to specify country of origin__]; or
    __(iii) The foreign (other than qualifying country or Canadian) 
photovoltaic devices to be utilized in performance of the contract are 
the product of ___. [Offeror to specify country of origin, if known, 
and provide documentation that the cost of a domestic photovoltaic 
device would be unreasonable in comparison to the cost of the proposed 
foreign photovoltaic device, i.e., that the price of the foreign 
photovoltaic device plus 50 percent is less than the price of a 
comparable domestic photovoltaic device.]
    (4) If $79,507 or more but less than $100,000--
    __(i) The offeror certifies that each photovoltaic device to be 
utilized in performance of the contract is a domestic photovoltaic 
device or a Free Trade Agreement country photovoltaic device (other 
than a Bahrainian, Korean, Moroccan, Panamanian, or Peruvian 
photovoltaic device) [Offeror to specify country of origin__];
    __(ii) The offeror certifies that each photovoltaic device to be 
utilized in performance of the contract is a qualifying country 
photovoltaic device (except an Australian or Canadian photovoltaic 
device, to be listed in paragraph (d)(4)(i) of this provision as a Free 
Trade Agreement country photovoltaic device) [Offeror to specify 
country of origin__]; or
    __(iii) The offered foreign photovoltaic devices (other than those 
from countries listed in paragraph (d)(4)(i) or (d)(4)(ii) of this 
provision) are the product of ___. [Offeror to specify country of 
origin, if known, and provide documentation that the cost of a domestic 
photovoltaic device would be unreasonable in comparison to the cost of 
the proposed foreign photovoltaic device, i.e., that the price of the 
foreign photovoltaic device plus 50 percent is less than the price of a 
comparable domestic photovoltaic device.]
    (5) If $100,000 or more but less than $204,000--
    __(i) The offeror certifies that each photovoltaic device to be 
utilized in performance of the contract is a domestic photovoltaic 
device or a Free Trade Agreement country photovoltaic device (other 
than a Bahrainian, Moroccan, Panamanian, or Peruvian photovoltaic 
device) [Offeror to specify country of origin__];
    __(ii) The offeror certifies that each photovoltaic device to be 
utilized in performance of the contract is a qualifying country 
photovoltaic device (except an Australian or Canadian

[[Page 72606]]

photovoltaic device, to be listed in paragraph (d)(5)(i) of this 
provision as a Free Trade Agreement country photovoltaic device) 
[Offeror to specify country of origin__]; or
    __(iii) The offered foreign photovoltaic devices (other than those 
from countries listed in paragraph (d)(5)(i) or (d)(5)(ii) of this 
provision) are the product of ___. [Offeror to specify country of 
origin, if known, and provide documentation that the cost of a domestic 
photovoltaic device would be unreasonable in comparison to the cost of 
the proposed foreign photovoltaic device, i.e., that the price of the 
foreign photovoltaic device plus 50 percent is less than the price of a 
comparable domestic photovoltaic device.]
    (6) If $204,000 or more, the Offeror certifies that each 
photovoltaic device to be used in performance of the contract is--
    __(i) A domestic or designated country photovoltaic device [Offeror 
to specify country of origin__];
    __(ii) A U.S.-made photovoltaic device; or
    __(iii) A qualifying country photovoltaic device from Egypt of 
Turkey (photovoltaic devices from other qualifying countries to be 
listed in paragraph (d)(6)(i) of this provision as designated country 
photovoltaic devices). [Offeror to specify country of origin__.]


(End of provision)

[FR Doc. 2015-29551 Filed 11-19-15; 8:45 am]
 BILLING CODE 5001-06-P