Defense Federal Acquisition Regulation Supplement: Inapplicability of Certain Laws and Regulations to Commercial Items (DFARS Case 2017-D010), 30646-30656 [2018-14043]

Agencies

• Defense Acquisition Regulations System
• DEPARTMENT OF DEFENSE

[Federal Register Volume 83, Number 126 (Friday, June 29, 2018)]
[Proposed Rules]
[Pages 30646-30656]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2018-14043]



[[Page 30646]]

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DEPARTMENT OF DEFENSE

Defense Acquisition Regulations System

48 CFR Parts 212, 219, and 252

[Docket DARS-2018-0035]
RIN 0750-AJ21


Defense Federal Acquisition Regulation Supplement: 
Inapplicability of Certain Laws and Regulations to Commercial Items 
(DFARS Case 2017-D010)

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

ACTION: Proposed rule.

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SUMMARY: DoD is proposing to amend the Defense Federal Acquisition 
Regulation Supplement (DFARS) to implement a section of the National 
Defense Authorization Act for Fiscal Year 2017 that addresses the 
inapplicability of certain laws and regulations to the acquisition of 
commercial items, including 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 28, 2018, to be considered 
in the formation of a final rule.

ADDRESSES: Submit comments identified by DFARS Case 2017-D010, using 
any of the following methods:
     Federal eRulemaking Portal: https://www.regulations.gov. 
Follow the instructions for sending comments.
     Email: [email protected]. Include DFARS Case 2017-D010 in 
the subject line of the message.
     Fax: 571-372-6094.
     Mail: Defense Acquisition Regulations System, Attn: Ms. 
Amy G. Williams, OUSD (AT&L) DPAP/DARS, Room 3B941, 3060 Defense 
Pentagon, Washington, DC 20301-3060.
    Instructions: Search for ``DFARS Case 2017-D010.'' Select ``Comment 
Now'' and follow the instructions provided to submit a comment. All 
submissions received must include the agency name and docket number or 
Regulatory Information Number (RIN) for this rulemaking. 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 www.regulations.gov, 
approximately two to three days after submission to verify posting 
(except allow 30 days for posting of comments submitted by mail).
    Docket: For access to the docket to read background documents or 
comments received, go to: https://www.regulations.gov.

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

SUPPLEMENTARY INFORMATION:

I. Background

    DoD is proposing to amend the DFARS to implement section 874 of the 
National Defense Authorization Act for Fiscal Year 2017. Section 874--
     Amends 10 U.S.C. 2375, Relationship of commercial item 
provisions to other provisions of law, to provide that--
    [cir] No contract for the acquisition of a commercial item, 
subcontract under a contract for the procurement of a commercial item, 
or contract for the procurement of a commercially available off-the-
shelf (COTS) item shall be subject to any law properly listed in the 
Federal Acquisition Regulation (FAR) pursuant to 41 U.S.C. 1906 or 
1907, respectively; and
    [cir] The DFARS shall include lists of defense-unique provisions of 
law and contract clause requirements based on Governmentwide 
acquisition regulations, policies, or Executive orders not expressly 
authorized in law, that are inapplicable to--
    [ssquf] The acquisition of a commercial item;
    [ssquf] Subcontracts for commercial items under a contract for the 
procurement of commercial items; or
    [ssquf] Contracts for the procurement of a COTS item;
     Provides that a covered provision of law or contract 
clause requirement is a provision of law or contract clause requirement 
that the Under Secretary of Defense for Acquisition, Technology, and 
Logistics determines sets forth policies, procedures, requirements, or 
restrictions for the procurement of property or services by the Federal 
Government, except for a provision of law or contract clause 
requirement that--
    [cir] Provides for civil or criminal penalties;
    [cir] Requires that certain articles be bought from American 
sources pursuant to 10 U.S.C. 2533a; or requires that strategic 
materials critical to national security be bought from American sources 
pursuant to 10 U.S.C. 2533b; or
    [cir] Specifically refers to this section and provides that, 
notwithstanding this section, it shall be applicable to contracts for 
the procurement of commercial items.
     Provides that a covered provision of law or contract 
clause requirement shall be included on the list unless the Under 
Secretary of Defense for Acquisition, Technology, and Logistics makes a 
written determination that such exemption would not be in the best 
interest of DoD.
     Requires the Under Secretary of Defense for Acquisition, 
Technology, and Logistics to ensure that, to the maximum extent 
practicable--
    [cir] The DFARS shall not require the inclusion of contract clauses 
in contracts for the procurement of commercial items (including COTS 
items), unless such clauses are required to implement provisions of law 
or Executive orders applicable to such contracts, or determined to be 
consistent with standard commercial practice; and
    [cir] The flowdown of contract clauses to subcontracts under 
contracts for the procurement of commercial items (including COTS 
items) is prohibited unless such flowdown is required to implement 
provisions of law or Executive orders applicable to such subcontracts; 
and
     Defines the term ``subcontract'' to exclude agreements 
entered into by a contractor for the supply of commodities that are 
intended for use in the performance of multiple contracts with the DoD 
and other parties, and are not identifiable to any particular contract.

II. Discussion and Analysis

    10 U.S.C. 2375(b)(2) limits the required review of applicability of 
provisions of law and contract clauses to prime contracts for 
commercial items to those provisions of law and contract clauses 
enacted after January 1, 2015. Although the subsequent paragraphs (c) 
and (d) relating to applicability of provisions of law and contract 
clauses to subcontracts for commercial items and contracts for COTS 
items are in all other regards parallel, the date of January 1, 2015, 
is not repeated in the subsequent paragraphs. DoD has interpreted the 
date as equally applicable to all three paragraphs, because the three 
paragraphs are closely inter-related. Any law or clause that is 
inapplicable to a contract for commercial items is also inapplicable to 
a contract for COTS items (which are commercial items). The COTS list 
builds on the list of laws and clauses inapplicable to commercial items 
in general. Further, laws and clauses that are inapplicable to 
contracts for commercial items will also be inapplicable to 
subcontracts for commercial items, even though there may be a few 
additional laws or clauses that are just inapplicable at the 
subcontract level.

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    Therefore, as the first step toward implementation of section 874 
of the NDAA for FY 2017 in the DFARS, DoD identified all new DFARS and 
FAR provisions and clauses published as interim or final rules after 
January 1, 2015; determined whether these provisions and clauses were 
based on statute or Executive order, and reviewed their applicability 
to commercial items.

A. Governmentwide Statutes

    Since the DFARS supplements the FAR, the lists of inapplicable 
statutes at FAR 12.503 through 12.505 are applicable to DoD. This rule 
proposes language at DFARS 212.503, 212.504, and 212.505, to emphasize 
that the DFARS lists of statutes are in addition to the FAR lists, not 
in place of them.

B. Defense-Unique Statutes

    Although the following defense-unique statutes were all enacted 
prior to January 1, 2015, and are therefore not covered statutes as 
defined in section 874, they are the basis for DFARS provisions and 
clauses issued after January 1, 2015, and have therefore been reviewed.
    1. The Director of Defense Procurement and Acquisition Policy, 
acting under authority delegated by the Under Secretary of Defense for 
Acquisition, Technology, and Logistics, has determined that the 
following statutes apply to the acquisition of commercial items, except 
for the acquisition of COTS items. Note that services are not COTS 
items, so no determination is required to exclude applicability to COTS 
items when acquiring services and the clause prescription and flowdown 
paragraph of the clause do not specify exclusion of COTS items.
    a. Section 941 of the NDAA for FY 2013 and section 1632 of NDAA for 
FY 2015 (DFARS Case 2013-D018, Network Penetration Reporting and 
Contracting of Cloud Services (80 FR 51739 and 81 FR 72986); DFARS 
252.204-7008, 252.204-7009, and 252.204-7012). This rule proposes to 
clarify that the flowdown requirement in paragraph (m) of the clause at 
DFARS 252.204-7012 excludes flowdown to COTS items. Although the final 
rule under DFARS case 2013-D018 stated the exclusion of applicability 
to COTS items for all provisions and clauses under the case and the 
clause prescriptions were amended, the corresponding amendment to 
paragraph (m) of the clause at DFARS 252.204-7012 did not explicitly 
exclude flowdown to COTS items. This statute has been added to the 
proposed list at DFARS 212.505.
    b. Section 862 of the NDAA for FY 2008 (DFARS Case 2015-D021, 
Defense Contractors Performing Private Security Functions (80 FR 81496 
and 81 FR 42559); DFARS 252.225-7039). This statute was not added to 
the proposed list at DFARS 212.505 because it is for the acquisition of 
services.
    2. The Director of Defense Procurement and Acquisition Policy, 
acting under authority delegated by the Under Secretary of Defense for 
Acquisition, Technology, and Logistics, determined that section 
818(c)(3) of the NDAA for FY 2012, as amended (DFARS Case 2014-D005, 
Detection and Avoidance of Counterfeit Parts--Further Implementation 
(80 FR 63735 and 81 FR 50635); DFARS 252.246-7008) applies to the 
acquisition of commercial items, including COTS items.
    3. The following two statutes are currently applied in the DFARS to 
the acquisition of commercial items, including COTS items. However, 
continued application to commercial items is dependent upon a 
determination by the Director of Defense Procurement and Acquisition 
Policy, acting under authority delegated by the Under Secretary of 
Defense for Acquisition and Sustainment, with regard to the 
applicability to commercial items:
    a. Section 1611 of the NDAA for FY 2014 (10 U.S.C. 2419) (DFARS 
Case 2014-D009, Advancing Small Business Growth (79 FR 65917 and 80 FR 
30115); DFARS 252.219-7000). The provision at DFARS 252.219-7000, 
Advancing Small Business Growth, is prescribed at DFARS 219.309 for use 
in solicitations, including solicitations using FAR part 12 procedures 
for acquisition of commercial items, when the estimated annual value of 
the contract is expected to exceed--
     The small business size standard, if expressed in dollars, 
for the North American Industry Classification System (NAICS) code 
assigned by the contracting officer; or
     $70 million, if the small business size standard is 
expressed as number of employees for the NAICS code assigned by the 
contracting officer.
    The provision is also listed at DFARS 212.301(f)(vii) as applicable 
to the acquisition of commercial items. The provision is inapplicable 
to subcontracts. This provision does not impose any burden on offerors, 
but is intended only to advise small businesses that entering into a 
DoD contract may eventually cause such businesses to exceed the small 
business size standard.
    b. Section 8123 of the DoD Appropriations Act and the same 
provision in subsequent annual defense appropriations acts (DFARS Case 
2015-D005, Acquisition of the American Flag (80 FR 10452 and 80 FR 
51748); DFARS 252.225-7006). The clause at DFARS 252.225-7006, 
Acquisition of the American Flag, is prescribed at 225.7002-3 for use 
in solicitations and contracts, including solicitations and contracts 
using FAR part 12 procedures for the acquisition of commercial items, 
that are for the acquisition of the American flag, with an estimated 
value that exceeds the simplified acquisition threshold, unless an 
exception at 225.7002-2 applies. The clause is also listed at 
212.301(f)(x)(C) as applicable to acquisition of commercial items. The 
clause does not flow down to subcontracts. Since most, if not all, 
flags are commercial items, this statute would be without affect if not 
applied to commercial items. Furthermore, this is an appropriations act 
restriction, which specifically prohibits the expenditure of any funds 
appropriated under these acts, unless the flags to be acquired are 
manufactured in the United States (regardless of whether the flags are 
commercial items).

C. FAR and DFARS Provisions and Clauses, Issued Since January 1, 2015, 
Not Expressly Authorized in Law

    1. The following DFARS and FAR provisions are not required for use 
in solicitations for the acquisition of commercial items, including 
COTS items. FAR 12.301(e) provides for discretionary use of provisions 
and clause not required for use solicitations and contracts using FAR 
part 12 procedures for the acquisition of commercial items, when their 
use is consistent with the limitations contained in FAR 12.302. These 
provisions do not apply to subcontracts. Both provisions are proposed 
for addition to the proposed list at DFARS 212.370. DoD welcomes 
comments as to whether use of these provisions in solicitations for 
commercial items should be prohibited, or whether their use might be 
appropriate for discretionary use.
    a. 252.219-7010, Notification of Competition Limited to Eligible 
8(a) Concerns--Partnership Agreement (DFARS Case 2015-D017, 80 FR 58669 
and 81 FR 17045), is prescribed at DFARS 219.811-3 for use in lieu of 
the clause at FAR 52.219-18, Notification of Competition Limited to 
Eligible 8(a) Concerns, in competitive solicitations and contracts when 
the acquisition is accomplished using the procedures of FAR 19.805 and 
processed in accordance with the partnership agreement cited in DFARS 
219.800. It is

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not listed at 212.301(f) as applicable to acquisitions using FAR part 
12 procedures for the acquisition of commercial items.
    This rule proposes to modify the clause prescription to 
specifically exclude applicability to acquisitions using FAR part 12 
procedures for the acquisition of commercial items.
    b. 52.204-22, Alternative Line Item Proposals (FAR Case 2013-014, 
79 FR 45408 and 82 FR 4709), is prescribed at FAR 4.1008 for use in all 
solicitations. However, this provision is not prescribed for use in FAR 
part 12. In accordance with FAR 12.301(d), notwithstanding 
prescriptions contained elsewhere in the FAR, when acquiring commercial 
items, contracting officers are only required to use those provisions 
and clauses prescribed in FAR part 12. This rule proposes to modify the 
clause prescription to specifically exclude applicability to 
acquisitions using FAR part 12 procedures for the acquisition of 
commercial items.
    2. The following DFARS and FAR provisions and clause are applicable 
to the acquisition of commercial items, except for COTS items. In 
accordance with section 874, continued applicability to commercial 
items is dependent upon a determination by the Director of Defense 
Procurement and Acquisition Policy, acting under authority delegated by 
the Under Secretary of Defense for Acquisition, Technology, and 
Logistics, with regard to the applicability to commercial items:
    a. DFARS 252.239-7009, Representation of Use of Cloud Computing, 
and 252.239-7010, Cloud Computing Services (DFARS Case 2013-D018, 80 FR 
51739, 80 FR 81472, and 81 FR 50635), are prescribed at DFARS 239.7604 
for use in solicitations and contracts using FAR part 12 procedures for 
the acquisition of commercial items, for information technology 
services and are also listed at DFARS 212.301(f)(xvi)(A) and (B) as 
applicable to acquisitions of commercial items. The clause also flows 
down to all subcontracts that involve or may involve cloud services, 
including subcontracts for commercial items. This provision and clause 
are not listed at proposed DFARS 212.371 because this provision and 
clause apply to the acquisition of services, which are not COTS items.
    DoD applies this provision and clause to the acquisition of 
commercial items, excluding COTS items, because the harm that could 
result from the loss or compromise of defense information is the same 
under a FAR part 12 contract as it would be under any other contract. 
Recent high-profile breaches of Federal information show the need to 
ensure that information security protections are clearly, effectively, 
and consistently addressed in contracts. Failure to apply this 
provision and clause to acquisition of cloud services may cause harm to 
the Government which could directly impact national security. The 
information collection requirement for this provision and clause is 
approved under OMB clearance 0704-0478, Safeguarding Covered Defense 
Information, Cyber Incident Reporting, and Cloud Computing, in the 
amount of 250,850 total annual burden hours, which also includes burden 
hours associated with Safeguarding and cyber incident reporting.
    b. FAR 52.204-21, Basic Safeguarding of Covered Contractor 
Information Systems (FAR Case 2011-020, 77 FR 51496 and 82 FR 4709), is 
prescribed at FAR 4.1903, for use when the contractor or a 
subcontractor at any tier may have Federal contract information 
residing in or transiting through the information system. FAR 
12.301(d)(3) requires use in solicitations and contracts for commercial 
items (except for acquisitions of COTS items), as prescribed in FAR 
4.1903. Paragraph (c) of FAR 52.204-21 requires flowdown to 
subcontracts, including subcontracts for the acquisition of commercial 
items, other than COTS items, in which the contractor may have Federal 
contract information residing in or transiting through its information 
system. Flowdown to subcontracts for commercial item, other than 
subcontracts for COTS items, is also required at FAR 52.244-
6(c)(1)(iv), if flowdown is required in accordance with FAR 52.204-
21(c).
    This clause requires only a basic level of safeguarding of 
contractor information systems reflective of actions any prudent 
business person would employ. The exclusion of COTS items was 
incorporated in the final rule in response to public comments. This 
clause does not impose any information collection burden on 
contractors.
    c. FAR 52.222-62, Paid Sick Leave Under Executive Order 13706 (FAR 
Case 2017-001, 81 FR 91627, interim rule), is prescribed at FAR 
22.2110, for use in solicitations and contracts that include the clause 
52.222-6, Construction Wage Rate Requirements, or 52.222-41, Service 
Contract Labor Standards, where work is to be performed, in whole or in 
part, in the United States. Use of the clause when using part 12 
procedures for the acquisition of commercial items is provided at FAR 
52.212-5(c)(9). The clause flows down to all subcontracts, regardless 
of dollar value, that are subject to the Service Contract Labor 
Standards statute or the Wage Rate Requirements (Construction) statute 
and are also to be performed in whole or in part in the United States. 
Flowdown to commercial subcontracts (excluding COTS items) is provided 
at FAR 52.212-5(e)(1)(xix) and 52.244-6(c).
    This rule implements Executive Order 13706, which does not exempt 
contracts for the acquisition of commercial items. The implementing 
regulations by the Department of Labor were issued on September 30, 
2016 (81 FR 67598). The rule applies to contracts that are covered by 
the Service Contract Labor Standards statute or the Wage Rate 
Requirements (Construction) statute, and meet or exceed the thresholds 
specified in those statutes. However, since these statutes do not apply 
to contracts for acquisition of supplies, the rule does not cover 
acquisitions of COTS items.
    The Executive Order seeks to increase efficiency and cost savings 
in the work performed by parties who contract with the Government by 
ensuring that employees on those contracts can earn up to 7 days or 
more of paid sick leave annually. The Executive order was first 
implemented in Department of Labor regulations (81 FR 67598), which 
OIRA declared to be an economically significant rule and a major rule. 
Most of the costs associated with this rule are transfer costs from 
employers to employees. The information collection requirements 
associated with the Department of Labor final rule were cleared under 
OMB clearances 1235-0018, 1235-0021, 1235-0029. The FAR rule does not 
impose any additional burdens.
    3. The following DFARS and FAR provisions and clause are applicable 
to the acquisition of commercial items, including COTS items. In 
accordance with section 874, continued applicability to commercial 
items is dependent upon a determination by the Director of Defense 
Procurement and Acquisition Policy, acting under authority delegated by 
the Under Secretary of Defense for Acquisition, Technology, and 
Logistics, with regard to the applicability to commercial items:
    a. DFARS 252.213-7000, Notice to Prospective Suppliers on Use of 
Past Performance Information Retrieval System--Statistical Reporting in 
Past Performance Evaluation (DFARS Case 2014-D015, 80 FR 4848 and 80 FR 
30117), is prescribed at DFARS 213.106-2-70, in competitive 
solicitations for supplies when using FAR part 13 simplified 
acquisition procedures, including competitive solicitations using FAR 
part 12

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procedures for the acquisition of commercial item and acquisitions 
values at less than or equal to $1 million under the authority at FAR 
subpart 13.5 procedures. This provision is also listed at DFARS 
212.301(f)(v) as applicable to solicitations and contracts using FAR 
part 12 procedures for the acquisition of commercial items. There is no 
flowdown because this is a provision.
    DoD developed and deployed the Past Performance Information 
Retrieval System--Statistical Reporting (PPIRS- SR) module to fill the 
need for past performance data on lower dollar value contracts. This 
objective data on past performance will assist contracting officers in 
making better-informed best value award decisions on small dollar value 
acquisitions for supplies, while also eliminating the burden of 
collecting subjective past performance information on contractors for 
smaller dollar value contracts. This benefit is equally applicable, 
whether or not the items to be acquired are commercial. There is no 
information collection burden on offerors.
    b. DFARS 252.229-7014, Taxes--Foreign Contracts in Afghanistan, and 
252.229-7015, Taxes--Foreign Contracts in Afghanistan (North Atlantic 
treaty Organization Status of Forces Agreement) (DFARS Case 2014-D003, 
79 FR 35715 and 80 FR 81467), are prescribed at 229.402-70 (k) and (l), 
respectively.
     DFARS 252.229-7014, Taxes--Foreign Contracts in 
Afghanistan, is for use in solicitations and contracts, including 
solicitations and contracts using FAR part 12 procedures for the 
acquisition of commercial items, with performance in Afghanistan, 
unless the clause at 252.229-7015 is used.
     DFARS 252.229-7015, Taxes--Foreign Contracts in 
Afghanistan (North Atlantic Treaty Organization Status of Forces 
Agreement), is for use instead of the clause at 252.229-7014, Taxes--
Foreign Contracts in Afghanistan, in solicitations and contracts, 
including solicitations and contracts using FAR part 12 procedures for 
the acquisition of commercial items, with performance in Afghanistan 
awarded on behalf of the North Atlantic Treaty Organization (NATO), 
which are governed by the NATO Status of Forces Agreement (SOFA), if 
approval from the Director, Defense Procurement and Acquisition Policy, 
Office of the Under Secretary of Defense for Acquisition, Technology, 
and Logistics, has been obtained prior to each use.
    These clause are also listed at DFARS 212.301(f)(xiii) as 
applicable to solicitations and contracts using FAR part 12 procedures 
for the acquisition of commercial items. Both clauses flow down to all 
subcontracts, including subcontracts for commercial items.
    The objective of these clauses is to exempt DoD contracts performed 
in Afghanistan from payment liability for Afghan taxes pursuant to the 
bilateral security agreement between Afghanistan and the United States 
and the North Atlantic Treaty Organization (NATO) Status of Forces 
Agreement (SOFA). DoD applies these two clauses to solicitations and 
contracts for the acquisition of commercial items, including COTS 
items, for contracts performed in Afghanistan. Not applying this 
guidance to contracts for the acquisition of commercial items, 
including COTS items, would result in DoD paying unnecessary taxes, 
reducing the funds available for pursuing the war effort in 
Afghanistan. These clauses do not impose any information collection 
burden on offerors or contractors.
    c. FAR 52.223-11, Ozone-Depleting Substances and High Global 
Warming Potential Hydrofluorocarbons; FAR 52.223-12, Maintenance, 
Service, Repair, or Disposal of Refrigeration Equipment and Air 
Conditioner; FAR 52.223-20, Aerosols; and FAR 52.223-21, Foams (FAR 
Case 2014-026, 80 FR 26883 and 81 FR 30429), are prescribed at FAR 
23.804(a) for use as follows:
    (1) FAR 52.223-11, Ozone-Depleting Substances and High Global 
Warming Potential Hydrofluorocarbons, in solicitations and contracts 
for--
    (i) Refrigeration equipment (in product or service code (PSC) 
4110);
    (ii) Air conditioning equipment (PSC 4120);
    (iii) Clean agent fire suppression systems/equipment (e.g., 
installed room flooding systems, portable fire extinguishers, aircraft/
tactical vehicle fire/explosion suppression systems) (in PSC 4210);
    (iv) Bulk refrigerants and fire suppressants (in PSC 6830);
    (v) Solvents, dusters, freezing compounds, mold release agents, and 
any other miscellaneous chemical specialty that may contain ozone-
depleting substances or high global warming potential 
hydrofluorocarbons (in PSC 6850);
    (vi) Corrosion prevention compounds, foam sealants, aerosol mold 
release agents, and any other preservative or sealing compound that may 
contain ozone-depleting substances or high global warming potential 
hydrofluorocarbons (in PSC 8030);
    (vii) Fluorocarbon lubricants (primarily aerosols) (in PSC 9150); 
and
    (viii) Any other manufactured end products that may contain or be 
manufactured with ozone-depleting substances.
    (2) FAR 52.223-12, Maintenance, Service, Repair, or Disposal of 
Refrigeration Equipment and Air Conditioners, in solicitations and 
contracts that include the maintenance, service, repair, or disposal 
of--
    (i) Refrigeration equipment, such as refrigerators, chillers, or 
freezers; or
    (ii) Air conditioners, including air conditioning systems in motor 
vehicles.
    (3) FAR 52.223-20, Aerosols, in solicitations and contracts--
    (i) For products that may contain high global warming potential 
hydrofluorocarbons as a propellant, or as a solvent; or
    (ii) That involve maintenance or repair of electronic or mechanical 
devices.
    (4) FAR 52.223-21, Foams, in solicitations and contracts for--
    (i) Products that may contain high global warming potential 
hydrofluorocarbons or refrigerant blends containing hydrofluorocarbons 
as a foam blowing agent, such as building foam insulation or appliance 
foam insulation; or
    (ii) Construction of buildings or facilities. A majority of the 
acquisitions involving high GWP HFCs involve the acquisition of 
commercial items. Applicability of the requirements to commercial items 
is necessary to be effective. The information collection requirements 
associated with this case are covered under OMB clearance 9000-0191, 
High Global Warming Potential Hydrofluorocarbons, in the amount of 
25,376 total annual burden hours.
    d. FAR 52.223-22, Public Disclosure of Greenhouse Gas Emissions and 
Reduction Goals--Representation (FAR Case 2015-024, 81 FR 33192 and 81 
FR 83092), is prescribed for use at FAR 23.804(b). The provision at 
52.223-22, Public Disclosure of Greenhouse Gas Emissions and Reduction 
Goals--Representation, is required only when 52.204-7, System for Award 
Management, is included in the solicitation (see 52.204-8, Annual 
Representations and Certifications).
    The information obtained from these representations will assist 
agencies in developing strategies to engage with offerors to reduce 
supply chain emissions, as directed in Executive Order 13693, Planning 
for Federal Sustainability in the Next Decade. In response to the 
proposed rule, one respondent remarked that the rule should not exclude 
commercial item or COTS item vendors from the disclosure requirements, 
because then the benefits of the rule would be ``sub-optimal.''

[[Page 30650]]

    The Federal Acquisition Regulatory Council determined that the rule 
would apply to acquisitions of commercial items, including commercially 
available off-the-shelf (COTS) items, if the contractor has been 
awarded contracts of more than $7.5 million in goods and services 
during the prior Government fiscal year. The FAR Council considered (i) 
The benefits of the policy in furthering Administration goals; (ii) the 
extent to which the benefits of the policy would be reduced if 
exemptions are provided; and (iii) the burden on contractors if the 
policy is applied to these categories of spend. By developing an 
inventory of contractor greenhouse gas (GHG) management practices, the 
Government can more fully understand the current state of activity by 
companies doing business with the Government and work with contractors 
over time to develop appropriate strategies to reduce supply chain 
emissions. GHG reporting is becoming increasingly commonplace in the 
commercial marketplace. If an exclusion were provided to sellers of 
commercial items and COTS, a large number of contractors that sell in 
both the commercial and Federal marketplace would be exempted and the 
rule would fail at providing the type of information and insight that 
is needed to help agencies assess supplier GHG management practices. 
With respect to the third factor, the FAR Council sought to minimize 
burden associated with the disclosure requirement. Specifically, the 
disclosure will apply only to major Federal suppliers who have been 
awarded contracts totaling more than $7.5 million in goods and services 
in the prior Government fiscal year. Based on fiscal year (FY) 2015 
data, the FAR Council estimated this requirement would cover 
approximately 5,500 unique entities, including about 2,700 small 
businesses. This represents approximately 3.5 percent of total entities 
that did business with the Federal Government in FY 2015, and 2.6 
percent of small businesses. The FAR Council projected a minimal 
paperwork burden associated with the disclosure, approximately .25 
hours per response for annual reporting for the 5,500 contractor, or 
1,375 hours (OMB clearance 9000-0194, Public Disclosure of Greenhouse 
Gas Emissions and Reduction Goals). Accordingly, the FAR Council 
determined that it would not be in the best interest of the Government 
to exclude application of the rule for acquisitions, or sellers, of 
commercial items or COTS.

D. Limitation on Inclusion of Contract Clauses in Contracts for the 
Procurement of Commercial Items

    Section 874(b) requires that the Under Secretary of Defense for 
Acquisition, Technology, and Logistics (now Under Secretary of Defense 
for Acquisition and Sustainment) shall ensure that the DFARS does not 
require inclusion of contract clauses in contracts for the procurement 
of commercial items or contracts for the procurement of COTS items, 
unless those clauses are required to implement provisions of law or 
executive orders applicable to such contracts, or determined to be 
consistent with standard commercial practice. This requirement is 
essentially the same as the requirement at 41 U.S.C. 3307, which is 
implemented at FAR 12.301(a). Since the DFARS supplements the FAR, FAR 
12.301(a) is already applicable to DoD.

E. Prohibition of Flowdown of Certain Contract Clauses to Subcontracts 
Under Contracts for the Procurement of Commercial Items, Including COTS 
Items

    Currently, FAR clauses 52.212-5, 52.244-6, and DFARS clause 52.244-
7000, require flowdown of certain clauses to subcontracts for 
commercial items, but allow the contractor to flow down ``a minimal 
number of additional clauses necessary to satisfy its contractual 
obligations.'' One of the respondents to the proposed rule under DFARS 
Case 2011-D056, Solicitation Provisions and Contract Clauses for the 
Acquisition of Commercial Items, (Proprietary Industries Association) 
commented back in May of 2012 that this allowance of a minimal number 
of necessary clauses was being abused by contractors, who were 
overloading commercial item subcontracts ``with whatever flowdown 
clauses they felt were even remotely deemed necessary, regardless of 
any harmful consequences to the Governments commercial item acquisition 
process.'' We now have a statutory prohibition on such discretionary 
overloading of commercial item subcontracts (although still providing 
``to the maximum extent practicable). This rule proposes that any 
discretion to impose flowdown of clauses that are not based on statute 
or Executive order shall rest with the Government, not with the 
contractors. They will be prohibited from flowing down FAR or DFARS 
clauses to commercial items, unless flow down is specifically required 
in the FAR or DFARS. A contractor can, of course, still impose its own 
requirements on subcontractors, but cannot just flow down FAR and DFARS 
clauses as a whole. DoD invites specific comment on the extent to which 
FAR and DFARS clauses are flowed down to subcontracts on an optional 
basis and the expected burden reduction that may result from this 
prohibition.

F. Definition of ``Subcontract''

    10 U.S.C. 2375(c)(3) provides a definition of ``subcontract'' that 
includes transfers of commercial items between divisions, subsidiaries, 
or affiliates, of a contractor or subcontractor, but excludes supplier 
agreements entered into by a contractor for the supply of commodities 
that are intended for use in the performance of multiple contracts with 
DoD and other parties and are not identifiable to any particular 
contract. This definition is similar to the definition of 
``subcontract'' at FAR 44.101, which states that the subcontract is 
``entered into by a subcontractor to furnish supplies or services for 
performance of a prime contract or subcontract,'' but is more explicit 
in the exclusion of supplier agreements that are not associated with a 
single contract. This definition has been added to the clause at DFARS 
252.244-7000 and each DFARS clause that requires flowdown to 
subcontracts for the acquisition of commercial items, with specified 
applicability to the flowdown paragraph of the clause. In general, the 
clauses now clearly exclude flowdown to supplier agreements that are 
not identifiable to any particular contract.
    However, DoD has determined that the provisions of section 818 of 
Public Law 112-81 for the prohibitions against counterfeit and suspect 
counterfeit electronic items and the requirements for systems to detect 
such parts must flow down to all levels of the supply chain without 
exception for any contractual instrument that could be used to acquire 
electronic parts. Therefore, with regard to the DFARS clauses 252.246-
7007, Contractor Counterfeit Electronic Part Detection and Avoidance 
System, and 252.246-7008, Sources of Electronic Parts, the flowdown has 
been modified to include flowdown to contractual instruments other than 
subcontracts (such supplier agreements), because electronic commodity 
types are often acquired from suppliers through supplier agreements 
that do not meet the new definition of ``subcontract.'' Exempting 
acquisitions of such electronic parts from the DFARS 252.246-7007 and 
252.246-7008 flowdown requirements would create unacceptable risks of 
introducing counterfeit or suspect counterfeit electronic parts into 
the

[[Page 30651]]

Defense supply chain. Counterfeit electronic parts, regardless of 
dollar value, can seriously disrupt the DoD supply chain, cause 
critical failure of fielded systems, such as aircraft, ships, and other 
weapon systems, and endanger troops' lives.

III. Applicability to Contracts At or Below the Simplified Acquisition 
Threshold (SAT) and for Commercial Items, Including Commercially 
Available Off-the-Shelf (COTS) Items

    This rule reviews the current applicability of defense-unique 
statute and Governmentwide provisions and clause, issued since January 
1, 2015, not expressly authorized in law. DoD solicits public comments, 
especially with regard to the applicability of the two defense-unique 
statutes at section II.B.3 of this preamble and the FAR and DFARS 
provisions and clauses at section II.C.2. and II.C.3., for which the 
Director of Defense Procurement and Acquisition Policy is considering 
whether to sign a determination and finding in support of continued 
applicability to commercial items, or whether all commercial items or 
just COTS items should be exempt from a particular requirement. Please 
provide specific rationale for any recommendations.

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. Executive Order 13771

    This rule is not an E.O. 13771, Reducing Regulation and Controlling 
Regulatory Costs, regulatory action, because this rule is not 
significant under E.O. 12866.

VI. Regulatory Flexibility Act

    DoD does not expect this proposed rule to have a significant 
economic impact on a substantial number of small entities within the 
meaning of the Regulatory Flexibility Act, 5 U.S.C. 601 et seq. 
However, an initial regulatory flexibility analysis has been performed 
and is summarized as follows:

    This proposed rule is required in order to implement section 874 
of the National Defense Authorization Act (NDAA) for Fiscal Year 
(FY) 2017, which amended 10 U.S.C. 2375 and required certain changes 
to the Defense Federal Acquisition Regulation Supplement (DFARS).
    The objective of the rule is to reduce any unnecessary burdens 
on contractors and subcontractors that were awarded DoD contracts or 
subcontracts for the acquisition of commercial items, including 
commercially available off-the-shelf items. The legal basis for the 
rule is section 874 of the NDAA for FY 2017.
    There were 29,833 unique entities awarded DoD contracts 
exceeding the micro-purchase threshold and using FAR part 12 
procedures in FY 2016, of which 21,857 were unique small entities. 
DoD estimates there may be at least twice that many small entities 
receiving subcontracts for commercial items. Any reductions in the 
applicability of provisions and clauses to contracts and 
subcontracts for the acquisition of commercial items may be 
beneficial to these small entities.
    There are no projected reporting, recordkeeping, or other 
compliance requirements associated with this rule. The final rule 
may result in some reductions of reporting or recordkeeping 
requirements, currently approved under--
     OMB Control Number 0704-0478, Safeguarding Covered 
Defense Information, Cyber Incident Reporting, and Cloud Computing.
     OMB Control Number 9000-0191, High Global Warming 
Potential Hydrofluorocarbons.
     OMB Control Number 9000-0194, Public Disclosure of 
Greenhouse Gas Emissions and Reduction Goals.
    The rule does not duplicate, overlap, or conflict with any other 
Federal rules.
    Any impacts of this rule will have a positive impact on small 
business entities.

    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 2017-D010), in 
correspondence.

VII. 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). However, if some of 
the requirements are made inapplicable to the acquisition of all 
commercial items, or just COTS items, then the estimated burden of the 
following information collection requirements could be reduced:
     OMB Control Number 0704-0478, Safeguarding Covered Defense 
Information, Cyber Incident Reporting, and Cloud Computing.
     OMB Control Number 9000-0191, High Global Warming 
Potential Hydrofluorocarbons.
     OMB Control Number 9000-0194, Public Disclosure of 
Greenhouse Gas Emissions and Reduction Goals.

List of Subjects in 48 CFR Parts 212, 219, and 252

    Government procurement.

Amy G. Williams,
Deputy, Defense Acquisition Regulations System.

    Therefore, 48 CFR parts 212, 219, and 252 are proposed to be 
amended as follows:

0
1. The authority citation for parts 212, 219, and 252 continues to read 
as follows:

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

PART 212--ACQUISITION OF COMMERCIAL ITEMS

0
2. Amend section 212.001 by adding the definition of ``Subcontract'' in 
alphabetical order to read as follows:


212.001  Definitions.

* * * * *
    Subcontract means any contract, as defined in FAR subpart 2.1, 
entered into by a subcontractor to furnish supplies or services for 
performance of a prime contract or a subcontract. The term--
    (1) Includes a transfer of commercial items between divisions, 
subsidiaries, or affiliates of a contractors or subcontractor; and
    (2) Does not include agreements entered into by a contractor for 
the supply of commodities that are intended for use in the performance 
of multiple contracts with the Department of Defense and other parties 
and are not identifiable to any particular contract. (10 U.S.C. 
2375(c)(3))
* * * * *
0
3. Add section 212.370 to read as follows:


212.370  Inapplicability of certain provisions and clauses to contracts 
and subcontracts for the acquisition of commercial items, including 
commercially available off-the-shelf items.

    The following provisions and clauses, not expressly authorized in 
law, are inapplicable to contracts for the acquisition of commercial 
items:

[[Page 30652]]

    (a) FAR 52.204-22, Alternative Line Item Proposal.
    (b) 252.219-7010, Notification of Competition Limited to Eligible 
8(a) Concerns--Partnership Agreement.
0
4. Add section 212.371 to read as follows:


212.371  Inapplicability of certain provisions and clauses to contracts 
for the acquisition of commercially available off-the-shelf items.

    Commercially available off-the-shelf (COTS) items are a subset of 
commercial items. Therefore, any provisions and clauses are 
inapplicable to contracts or subcontracts for the acquisition of COTS 
items if listed in section 212.370 of this subpart as inapplicable to 
contracts or subcontracts for the acquisition of commercial items. In 
addition, the following provisions and clauses published after January 
1, 2015, not expressly authorized in law, are inapplicable to the 
acquisition of COTS items (provisions and clauses for the acquisition 
of services, which by definition are not COTS items, are not listed):
    (a) FAR 52.204-21, Basic Safeguarding of Covered Contractor 
Information Systems.
    (b) Reserved
0
5. Amend section 212.503 by--
0
a. In the section heading, removing ``executive'' and adding 
``Executive'' in its place;
0
b. Revising paragraph (a) introductory text; and
0
c. Amending paragraph (a)(ix) by removing ``(Section 843(a), Public Law 
103-160)'' and adding ``(section 843(a), Pub. L. 103-160)''.


212.503  Applicability of certain laws to Executive agency contracts 
for the acquisition of commercial items.

    (a) In addition to the laws listed at FAR 12.503, the following 
laws are not applicable to contracts for the acquisition of commercial 
items:
* * * * *
0
6. Amend section 212.504 by--
0
a. Revising paragraph (a) introductory text; and
0
b. In paragraph (a)(xvii), removing ``(Pub. L. 111-118)'' and adding 
``(Pub. L. 111-118) (prohibits mandatory arbitration)'' in its place.


212.504  Applicability of certain laws to subcontracts for the 
acquisition of commercial items.

    (a) In addition to the laws listed at FAR 12.504, the following 
laws are not applicable to subcontracts at any tier for the acquisition 
of commercial items or commercial components:
* * * * *


212.570  [Redesignated as 212.505]

0
7. Redesignate section 212.570 as 212.505 and revise newly redesignated 
section 212.505 to read as follows:


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

    Commercially available off-the-shelf (COTS) items are a subset of 
commercial items. Therefore, any laws listed at FAR 12.503, FAR 12.504, 
212.503, or 212.504 are also inapplicable or modified in their 
applicability to contracts or subcontracts for the acquisition of COTS 
items. In addition to the laws listed at FAR 12.505 as specifically 
inapplicable to COTS items, the following laws are inapplicable to 
contracts or subcontracts for the acquisition of COTS items:
    (1) Paragraph (a)(1) of 10 U.S.C. 2533b, Requirement to buy 
strategic materials critical to national security from American 
sources, except as provided at 225.7003-3(b)(2)(i).
    (2) Section 941 of the National Defense Authorization Act for 
Fiscal Year 2013 (Reports to Department of Defense on penetration of 
networks and information systems of certain contractors) and section 
1632 of the National Defense Authorization Act for Fiscal year 2015 
(Reporting on cyber incidents with respect to networks and information 
systems of operationally critical contractors).

PART 219--SMALL BUSINESS PROGRAMS

0
8. Amend section 219.811-3 by revising paragraph (2) to read as 
follows:


219.811-3  Contract clauses.

* * * * *
    (2) Use the clause at 252.219-7010, Notification of Competition 
Limited to Eligible 8(a) Concerns-Partnership Agreement, in lieu of the 
clause at FAR 52.219-18, Notification of Competition Limited to 
Eligible 8(a) Concerns, in competitive solicitations and contracts, 
excluding solicitations and contracts using FAR part 12 procedures for 
the acquisition of commercial items, when the acquisition is 
accomplished using the procedures of FAR 19.805 and processed in 
accordance with the partnership agreement cited in 219.800.
* * * * *

PART 252--SOLICITATION PROVISIONS AND CONTRACT CLAUSES

0
9. Amend section 252.204-7009 by--
0
a. Removing the clause date of ``(OCT 2016)'' and adding ``(DATE)'' in 
its place; and
0
b. In paragraph (a), adding the definition of ``Subcontract'' in 
alphabetical order to read as follows:


252.204-7009  Limitations on the Use or Disclosure of Third-Party 
Contractor Reported Cyber Incident Information.

* * * * *
    (a) * * *
    Subcontract, as used in paragraph (c) of this clause, means any 
contract, as defined in FAR subpart 2.1, entered into by a 
subcontractor to furnish supplies or services for performance of a 
prime contract or a subcontract. The term--
    (1) Includes a transfer of commercial items between divisions, 
subsidiaries, or affiliates of a contractors or subcontractor; and
    (2) Does not include agreements entered into by a contractor for 
the supply of commodities that are intended for use in the performance 
of multiple contracts with the Department of Defense and other parties 
and are not identifiable to any particular contract. (10 U.S.C. 
2375(c)(3))
* * * * *
0
10. Amend section 252.204-7012 by--
0
a. Removing the clause date of ``(OCT 2016)'' and adding ``(DATE)'' in 
its place; and
0
b. In paragraph (a), adding the definition of ``Subcontract'' in 
alphabetical order; and
0
c. Revising paragraph (m)(1).
    The addition and revision reads as follows:


252.204-7012  Safeguarding Covered Defense Information and Cyber 
Incident Reporting.

* * * * *
    (a) * * *
    Subcontract, as used in paragraph (m) of this clause, means any 
contract, as defined in FAR subpart 2.1, entered into by a 
subcontractor to furnish supplies or services for performance of a 
prime contract or a subcontract. The term--
    (1) Includes a transfer of commercial items between divisions, 
subsidiaries, or affiliates of a contractors or subcontractor; and
    (2) Does not include agreements entered into by a contractor for 
the supply of commodities that are intended for use in the performance 
of multiple contracts with the Department of Defense and other parties 
and are not identifiable to any particular contract. (10 U.S.C. 
2375(c)(3))
* * * * *
    (m) * * *
    (1) Include this clause, including this paragraph (m), without 
alteration except to identify the parties, in subcontracts, or similar 
contractual instruments, for operationally critical support, or for

[[Page 30653]]

which subcontract performance will involve covered defense information, 
including subcontracts for commercial items, except subcontracts for 
commercially available off-the-shelf items. The Contractor shall 
determine if the information required for subcontractor performance 
retains its identity as covered defense information and will require 
protection under this clause, and, if necessary, consult with the 
Contracting Officer; and
* * * * *
0
11. Amend section 252.204-7014 by--
0
a. Removing the clause date of ``(MAY 2016)'' and adding ``(DATE)'' in 
its place; and
0
b. In paragraph (a), adding the definition of ``Subcontract'' in 
alphabetical order to read as follows:


252.204-7014  Limitations on the Use or Disclosure of Information by 
Litigation Support Contractors.

* * * * *
    (a) * * *
    Subcontract, as used in paragraph (f) of this clause, means any 
contract, as defined in FAR subpart 2.1, entered into by a 
subcontractor to furnish supplies or services for performance of a 
prime contract or a subcontract. The term--
    (1) Includes a transfer of commercial items between divisions, 
subsidiaries, or affiliates of a contractors or subcontractor; and
    (2) Does not include agreements entered into by a contractor for 
the supply of commodities that are intended for use in the performance 
of multiple contracts with the Department of Defense and other parties 
and are not identifiable to any particular contract. (10 U.S.C. 
2375(c)(3))
* * * * *
0
12. Amend section 252.204-7015 by--
0
a. Removing the clause date of ``(MAY 2016)'' and adding ``(DATE)'' in 
its place; and
0
b. In paragraph (a), adding the definition of ``Subcontract'' in 
alphabetical order to read as follows:


252.204-7015  Notice of Authorized Disclosure of Information for 
Litigation Support.

* * * * *
    (a) * * *
    Subcontract, as used in paragraph (c) of this clause, means any 
contract, as defined in FAR subpart 2.1, entered into by a 
subcontractor to furnish supplies or services for performance of a 
prime contract or a subcontract. The term--
    (1) Includes a transfer of commercial items between divisions, 
subsidiaries, or affiliates of a contractors or subcontractor; and
    (2) Does not include agreements entered into by a contractor for 
the supply of commodities that are intended for use in the performance 
of multiple contracts with the Department of Defense and other parties 
and are not identifiable to any particular contract. (10 U.S.C. 
2375(c)(3))
* * * * *
0
13. Amend section 252.211-7003 by--
0
a. Removing the clause date of ``(MAR 2016)'' and adding ``(DATE)'' in 
its place; and
0
b. In paragraph (a), adding the definition of ``Subcontract'' in 
alphabetical order to read as follows:


252.211-7003  Item Unique Identification and Valuation.

* * * * *
    (a) * * *
    Subcontract, as used in paragraph (g) of this clause, means any 
contract, as defined in FAR subpart 2.1, entered into by a 
subcontractor to furnish supplies or services for performance of a 
prime contract or a subcontract. The term--
    (1) Includes a transfer of commercial items between divisions, 
subsidiaries, or affiliates of a contractors or subcontractor; and
    (2) Does not include agreements entered into by a contractor for 
the supply of commodities that are intended for use in the performance 
of multiple contracts with the Department of Defense and other parties 
and are not identifiable to any particular contract. (10 U.S.C. 
2375(c)(3)
* * * * *
0
14. Amend section 252.223-7008 by--
0
a. Removing the clause date of ``(JUN 2013)'' and adding ``(DATE)'' in 
its place; and
0
b. In paragraph (a), adding the definition of ``Subcontract'' in 
alphabetical order to read as follows:


252.223-7008  Prohibition of Hexavalent Chromium.

* * * * *
    (a) * * *
    Subcontract, as used in paragraph (d) of this clause, means any 
contract, as defined in FAR subpart 2.1, entered into by a 
subcontractor to furnish supplies or services for performance of a 
prime contract or a subcontract. The term--
    (1) Includes a transfer of commercial items between divisions, 
subsidiaries, or affiliates of a contractors or subcontractor; and
    (2) Does not include agreements entered into by a contractor for 
the supply of commodities that are intended for use in the performance 
of multiple contracts with the Department of Defense and other parties 
and are not identifiable to any particular contract. (10 U.S.C. 
2375(c)(3))
* * * * *
0
15. Amend section 252.225-7009 by--
0
a. Removing the clause date of ``(OCT 2014)'' and adding ``(DATE)'' in 
its place; and
0
b. In paragraph (a), adding the definition of ``Subcontract'' in 
alphabetical order to read as follows:


252.225-7009  Restriction on Acquisition of Certain Articles Containing 
Specialty Metals.

* * * * *
    (a) * * *
    Subcontract, as used in paragraph (e) of this clause, means any 
contract, as defined in FAR subpart 2.1, entered into by a 
subcontractor to furnish supplies or services for performance of a 
prime contract or a subcontract. The term--
    (1) Includes a transfer of commercial items between divisions, 
subsidiaries, or affiliates of a contractors or subcontractor; and
    (2) Does not include agreements entered into by a contractor for 
the supply of commodities that are intended for use in the performance 
of multiple contracts with the Department of Defense and other parties 
and are not identifiable to any particular contract. (10 U.S.C. 
2375(c)(3))
* * * * *
0
16. Amend section 252.225-7039 by--
0
a. Removing the clause date of ``(JUN 2016)'' and adding ``(DATE)'' in 
its place; and
0
b. In paragraph (a), adding the definition of ``Subcontract'' in 
alphabetical order to read as follows:


252.225-7039  Defense Contractors Performing Private Security Functions 
Outside the United States.

* * * * *
    (a) * * *
    Subcontract, as used in paragraph (f) of this clause, means any 
contract, as defined in FAR subpart 2.1, entered into by a 
subcontractor to furnish supplies or services for performance of a 
prime contract or a subcontract. The term--
    (1) Includes a transfer of commercial items between divisions, 
subsidiaries, or affiliates of a contractors or subcontractor; and
    (2) Does not include agreements entered into by a contractor for 
the supply of commodities that are intended for use in the performance 
of multiple contracts with the Department of Defense and other parties 
and are not identifiable to any particular contract. (10 U.S.C. 
2375(c)(3))
* * * * *
0
17. Amend section 252.229-7014 by--
0
a. Removing the clause date of ``(DEC 2015)'' and adding ``(DATE)'' in 
its place;
0
b. Redesignating paragraph (b) as paragraph (b)(2);

[[Page 30654]]

0
c. Redesignating paragraph (a) as paragraph (b)(1);
0
d. Adding a new paragraph (a);
0
e. In paragraph (e), adding a paragraph heading.
    The additions read as follows:


252.229-7014  Taxes--Foreign Contracts in Afghanistan.

* * * * *
    (a) Definition. As used in this clause--
    Subcontract, as used in paragraph (e) of this clause, means any 
contract, as defined in FAR subpart 2.1, entered into by a 
subcontractor to furnish supplies or services for performance of a 
prime contract or a subcontract. The term--
    (1) Includes a transfer of commercial items between divisions, 
subsidiaries, or affiliates of a contractors or subcontractor; and
    (2) Does not include agreements entered into by a contractor for 
the supply of commodities that are intended for use in the performance 
of multiple contracts with the Department of Defense and other parties 
and are not identifiable to any particular contract.
* * * * *
    (e) Subcontracts. * * *
* * * * *
0
18. Amend section 252.229-7015 by--
0
a. Removing the clause date of ``(DEC 2015)'' and adding ``(DATE)'' in 
its place;
0
b. Redesignating paragraph (b) as paragraph (b)(2);
0
c. Redesignating paragraph (a) as paragraph (b)(1);
0
d. Adding a new paragraph (a);
0
e. In paragraph (e), adding a paragraph heading.
    The additions read as follows:


252.229-7015  Taxes--Foreign Contracts in Afghanistan (North Atlantic 
Treaty Organization Status of Forces Agreement).

* * * * *
    (a) Definition. As used in this clause--
    Subcontract, as used in paragraph (e) of this clause, means any 
contract, as defined in FAR subpart 2.1, entered into by a 
subcontractor to furnish supplies or services for performance of a 
prime contract or a subcontract. The term--
    (1) Includes a transfer of commercial items between divisions, 
subsidiaries, or affiliates of a contractors or subcontractor; and
    (2) Does not include agreements entered into by a contractor for 
the supply of commodities that are intended for use in the performance 
of multiple contracts with the Department of Defense and other parties 
and are not identifiable to any particular contract. (10 U.S.C. 
2375(c)(3))
* * * * *
    (e) Subcontracts. * * *
* * * * *
0
19. Amend 252.237-7010 Prohibition on Interrogation of Detainees by 
Contractor Personnel by--
0
a. Removing the clause date of ``(JUN 2013)'' and adding ``(DATE)'' in 
its place; and
0
b. In paragraph (a), adding the definition of ``Subcontract'' in 
alphabetical order to read as follows:


252.237-7010  Prohibition on Interrogation of Detainees by Contractor 
Personnel.

* * * * *
    (a) * * *
    Subcontract, as used in paragraph (c) of this clause, means any 
contract, as defined in FAR subpart 2.1, entered into by a 
subcontractor to furnish supplies or services for performance of a 
prime contract or a subcontract. The term--
    (1) Includes a transfer of commercial items between divisions, 
subsidiaries, or affiliates of a contractors or subcontractor; and
    (2) Does not include agreements entered into by a contractor for 
the supply of commodities that are intended for use in the performance 
of multiple contracts with the Department of Defense and other parties 
and are not identifiable to any particular contract. (10 U.S.C. 
2375(c)(3))
* * * * *
0
20. Amend section 252.237-7019 by--
0
a. Removing the clause date of ``(JUN 2013)'' and adding ``(DATE)'' in 
its place; and
0
b. In paragraph (a), adding the definition of ``Subcontract'' in 
alphabetical order to read as follows:


252.237-7019  Training for Contractor Personnel Interacting with 
Detainees.

* * * * *
    (a) * * *
    Subcontract, as used in paragraph (c) of this clause, means any 
contract, as defined in FAR subpart 2.1, entered into by a 
subcontractor to furnish supplies or services for performance of a 
prime contract or a subcontract. The term--
    (1) Includes a transfer of commercial items between divisions, 
subsidiaries, or affiliates of a contractors or subcontractor; and
    (2) Does not include agreements entered into by a contractor for 
the supply of commodities that are intended for use in the performance 
of multiple contracts with the Department of Defense and other parties 
and are not identifiable to any particular contract. (10 U.S.C. 
2375(c)(3))
* * * * *
0
21. Amend section 252.239-7010 by--
0
a. Removing the clause date of ``(OCT 2016)'' and adding ``(DATE)'' in 
its place; and
0
b. In paragraph (a), adding the definition of ``Subcontract'' in 
alphabetical order to read as follows:


252.239-7010  Cloud Computing Services.

* * * * *
    (a) * * *
    Subcontract, as used in paragraph (l) of this clause, means any 
contract, as defined in FAR subpart 2.1, entered into by a 
subcontractor to furnish supplies or services for performance of a 
prime contract or a subcontract. The term--
    (1) Includes a transfer of commercial items between divisions, 
subsidiaries, or affiliates of a contractors or subcontractor; and
    (2) Does not include agreements entered into by a contractor for 
the supply of commodities that are intended for use in the performance 
of multiple contracts with the Department of Defense and other parties 
and are not identifiable to any particular contract. (10 U.S.C. 
2375(c)(3))
* * * * *
0
22. Amend section 252.244-7000 by--
0
a. Removing the clause date of ``(JUN 2013)'' and adding ``(DATE)'' in 
its place;
0
b. Removing paragraph (b);
0
c. Redesignating paragraph (a) as paragraph (b);
0
d. Adding a new paragraph (a);
0
e. Revising the newly redesignated paragraph (b); and
0
f. In paragraph (c), adding a paragraph heading.
    The additions read as follows:


252.244-7000  Subcontracts for Commercial Items.

* * * * *
    (a) Definition. As used in this clause--
    Subcontract means any contract, as defined in FAR subpart 2.1, 
entered into by a subcontractor to furnish supplies or services for 
performance of a prime contract or a subcontract. The term--
    (1) Includes a transfer of commercial items between divisions, 
subsidiaries, or affiliates of a contractors or subcontractor; and
    (2) Does not include agreements entered into by a contractor for 
the supply of commodities that are intended for use in the performance 
of multiple contracts with the Department of Defense and other parties 
and are not identifiable to any particular contract. (10 U.S.C. 
2375(c)(3))
    (b) The Contractor shall not flow down the terms of any Federal 
Acquisition Regulation (FAR) clause or Defense Federal Acquisition 
Regulation Supplement (DFARS) clause in subcontracts for commercial 
items at any tier under this contract, unless--
    (1) For DFARS clauses, it is so specified in the particular clause; 
or

[[Page 30655]]

    (2) For FAR clauses, the clause is listed at FAR 12.301(d) or it is 
so specified in paragraph (e)(1) of the clause at FAR 52.212-5 or 
paragraph (b)(1) of the clause at FAR 542.244-6, as applicable.
    (c) Subcontracts. * * *
* * * * *
0
23. Amend section 252.246-7003 by--
0
a. Removing the clause date of ``(JUN 2013)'' and adding ``(DATE)'' in 
its place;
0
b. In paragraph (a) adding the definition of ``Subcontract'' in 
alphabetical order and revising the definition of ``Subcontractor;
0
c. In paragraph (f)(1), adding a paragraph heading.
    The additions and revision read as follows:


252.246-7003   Notification of Potential Safety Issues.

* * * * *
    (a) * * *
    Subcontract, as used in paragraph (f) of this clause, means any 
contract, as defined in FAR subpart 2.1, entered into by a 
subcontractor to furnish supplies or services for performance of a 
prime contract or a subcontract. The term--
    (1) Includes a transfer of commercial items between divisions, 
subsidiaries, or affiliates of a contractors or subcontractor; and
    (2) Does not include agreements entered into by a contractor for 
the supply of commodities that are intended for use in the performance 
of multiple contracts with the Department of Defense and other parties 
and are not identifiable to any particular contract. (10 U.S.C. 
2375(c)(3))
    Subcontractor means any supplier, distributor, or vendor at any 
level below the prime contractor whose contractual obligation to 
perform results from, or is conditioned upon, award of the prime 
contract and who is performing any part of the work or other 
requirement of the prime contract.
* * * * *
    (f)(1) Subcontracts. * * *
* * * * *
0
24. Amend section 252.246-7007 by--
0
a. Removing the clause date of ``(AUG 2016)'' and adding ``(DATE)'' in 
its place;
0
b. In paragraph (a), adding the definition of ``Subcontract'' in 
alphabetical order;
0
c. In paragraph (c)(9), removing ``subcontractors'' and adding 
``subcontractors or other suppliers'' in its place; and
0
d. Revising paragraph (e).
    The addition and revision read as follows:


252.246-7007  Contractor Counterfeit Electronic Part Detection and 
Avoidance System.

* * * * *
    (a) * * *
    Subcontract, as used in paragraph (e) of this clause, means any 
contract, as defined in FAR subpart 2.1, entered into by a 
subcontractor to furnish supplies or services for performance of a 
prime contract or a subcontract. The term--
    (1) Includes a transfer of commercial items between divisions, 
subsidiaries, or affiliates of a contractors or subcontractor; and
    (2) Does not include agreements entered into by a contractor for 
the supply of commodities that are intended for use in the performance 
of multiple contracts with the Department of Defense and other parties 
and are not identifiable to any particular contract. (10 U.S.C. 
2375(c)(3))
* * * * *
    (e) Subcontracts. The Contractor shall include the substance of 
this clause, excluding the introductory text and including only 
paragraphs (a) through (e), in subcontracts and other contractual 
instruments, including subcontracts and other contractual instruments 
for commercial items, that are for electronic parts or assemblies 
containing electronic parts.
* * * * *
0
25. Amend section 252.246-7008 by--
0
a. Removing the clause date of ``(DEC 2017)'' and adding ``(DATE)'' in 
its place;
0
b. In paragraph (a), adding the definition of ``Subcontract'' in 
alphabetical order;
0
c. In paragraph (b)(3)(i)(A)(2), removing ``subcontractor'' and adding 
``subcontractor or other supplier'' in its place; and
0
d. Revising paragraph (e).
    The addition and revision read as follows:


252.246-7008  Sources of Electronic Parts.

* * * * *
    (a) * * *
    Subcontract means any contract, as defined in FAR subpart 2.1, 
entered into by a subcontractor to furnish supplies or services for 
performance of a prime contract or a subcontract. The term--
    (1) Includes a transfer of commercial items between divisions, 
subsidiaries, or affiliates of a contractors or subcontractor; and
    (2) Does not include agreements entered into by a contractor for 
the supply of commodities that are intended for use in the performance 
of multiple contracts with the Department of Defense and other parties 
and are not identifiable to any particular contract. (10 U.S.C. 
2375(c)(3))
* * * * *
    (e) Subcontracts and other contractual instruments. The Contractor 
shall include the substance of this clause, including this paragraph 
(e), in subcontracts and other contractual instruments, including 
subcontracts and other contractual instruments for commercial items, 
that are for electronic parts or assemblies containing electronic 
parts, unless the subcontractor or supplier is the original 
manufacturer.
* * * * *
0
26. Amend section 252.247-7003 by--
0
a. Removing the clause date of ``(JUN 2013)'' and adding ``(DATE)'' in 
its place;
0
b. Redesignating paragraphs (a), (b), and (c) as paragraphs (b), (c), 
and (d);
0
c. Adding a new paragraph (a); and
0
d. In the newly redesignated paragraph (d), adding a paragraph heading.
    The additions read as follows:


252.247-7003  Pass-Through of Motor Carrier Fuel Surcharge Adjustment 
to the Cost Bearer.

* * * * *
    (a) Definitions. As used in this clause--
    Subcontract, as used in paragraph (d) of this contract, means any 
contract, as defined in FAR subpart 2.1, entered into by a 
subcontractor to furnish supplies or services for performance of a 
prime contract or a subcontract. The term--
    (1) Includes a transfer of commercial items between divisions, 
subsidiaries, or affiliates of a contractors or subcontractor; and
    (2) Does not include agreements entered into by a contractor for 
the supply of commodities that are intended for use in the performance 
of multiple contracts with the Department of Defense and other parties 
and are not identifiable to any particular contract. (10 U.S.C. 
2375(c)(3))
* * * * *
    (d) Subcontracts. * * *
* * * * *
0
27. Amend section 252.247-7023 by--
0
a. Removing the clause date of ``(APR 2014)'' and adding ``(DATE)'' in 
its place;
0
b. In paragraph (a), adding the definition of ``Subcontract'' in 
alphabetical order; and
0
c. In paragraph (h), adding a new paragraph heading.
0
d. In Alternate I--
0
i. Removing the clause date of ``(APR 2014)'' and adding ``(DATE)'' in 
its place;

[[Page 30656]]

0
ii. In paragraph (a), adding the definition of ``Subcontract'' in 
alphabetical order; and
0
iii. In paragraph (h), adding a new paragraph heading.
0
e. In Alternate II--
0
i. Removing the clause date of ``(APR 2014)'' and adding ``(DATE)'' in 
its place;
0
ii. In paragraph (a), adding the definition of ``Subcontract'' in 
alphabetical order; and
0
iii. In paragraph (h), adding a new paragraph heading.
    The additions read as follows:


252.247-7023  Transportation of Supplies by Sea.

* * * * *
    (a) * * *
    Subcontract means any contract, as defined in FAR subpart 2.1, 
entered into by a subcontractor to furnish supplies or services for 
performance of a prime contract or a subcontract. The term--
    (1) Includes a transfer of commercial items between divisions, 
subsidiaries, or affiliates of a contractors or subcontractor; and
    (2) Does not include agreements entered into by a contractor for 
the supply of commodities that are intended for use in the performance 
of multiple contracts with the Department of Defense and other parties 
and are not identifiable to any particular contract.
* * * * *
    (h) Subcontracts. * * *
* * * * *
    Alternate I. * * *
* * * * *
    (a) * * *
    Subcontract means any contract, as defined in FAR subpart 2.1, 
entered into by a subcontractor to furnish supplies or services for 
performance of a prime contract or a subcontract. The term--
    (1) Includes a transfer of commercial items between divisions, 
subsidiaries, or affiliates of a contractors or subcontractor; and
    (2) Does not include agreements entered into by a contractor for 
the supply of commodities that are intended for use in the performance 
of multiple contracts with the Department of Defense and other parties 
and are not identifiable to any particular contract. (10 U.S.C. 
2375(c)(3))
* * * * *
    (h) Subcontracts. * * *
* * * * *
    Alternate II. * * *
* * * * *
    (a) * * *
    Subcontract means any contract, as defined in FAR subpart 2.1, 
entered into by a subcontractor to furnish supplies or services for 
performance of a prime contract or a subcontract. The term--
    (1) Includes a transfer of commercial items between divisions, 
subsidiaries, or affiliates of a contractors or subcontractor; and
    (2) Does not include agreements entered into by a contractor for 
the supply of commodities that are intended for use in the performance 
of multiple contracts with the Department of Defense and other parties 
and are not identifiable to any particular contract. (10 U.S.C. 
2375(c)(3))
* * * * *
    (h) Subcontracts. * * *
* * * * *
[FR Doc. 2018-14043 Filed 6-28-18; 8:45 am]
 BILLING CODE 5001-06-P