Defense Federal Acquisition Regulation Supplement: Restrictions on Acquisitions From Foreign Sources (DFARS Case 2017-D011), 65560-65562 [2018-27557]
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65560
Federal Register / Vol. 83, No. 245 / Friday, December 21, 2018 / Rules and Regulations
orders expected under the contract are
so integrally related that only a single
source can ‘‘efficiently perform the
work,’’ instead of ‘‘reasonably perform
the work’’ as required by the FAR.
V. Executive Order 13771
This rule is not an E.O. 13771
regulatory action, because this rule is
not significant under E.O. 12866.
VI. Regulatory Flexibility Act
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).
List of Subjects in 48 CFR Part 216
Government procurement.
Therefore, 48 CFR part 216 is
amended as follows:
PART 216—TYPES OF CONTRACTS
1. The authority citation for part 216
continues to read as follows:
■
Authority: 41 U.S.C. 1303 and 48 CFR
chapter 1.
2. Amend section 216.504 by—
a. Adding headings to paragraphs (c)
and (c)(1); and
■ b. Revising paragraph (c)(1)(ii)(D).
The additions and revision read as
follows:
■
■
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Indefinite-quantity contracts.
(c) Multiple award preference—(1)
Planning the acquisition. (ii)(D) A copy
of each determination made in
accordance with FAR 16.504(c)(1)(ii)(D)
shall be submitted to the Director,
Defense Procurement and Acquisition
Policy, via the OUSD(AT&L)DPAP/CPIC
email address at osd.pentagon.ousdatl.mbx.cpic@mail.mil.
(1) The authority to make the
determination authorized in FAR
16.504(c)(1)(ii)(D)(1) shall not be
delegated below the level of the senior
procurement executive.
(i) In accordance with section 816 of
the National Defense Authorization Act
for Fiscal Year 2019 (Pub. L. 115–232),
when making the determination at FAR
16.504(c)(1)(ii)(D)(1)(i), the agency head
shall determine that the task or delivery
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II. Discussion and Analysis
RIN 0750–AJ22
The public comment received
addressed concern with regard to
importation of radioactive steel and use
of radioactively contaminated scrap
metal. This issue is outside the scope of
this rule. There were no changes from
the proposed rule as a result of this
public comment.
However, the final rule is affected by
a change in the baseline. On May 30,
2018, DoD published a final rule in the
Federal Register (83 FR 24890) to
amend the DFARS to implement section
813(a) of the NDAA for FY 2018 (Pub.
L. 115–91), which amended 10 U.S.C.
2534(c) to establish a sunset date of
October 1, 2018, for the limitation on
procurement of chemical weapons
antidote contained in automatic
injectors (and components for such
injectors). The final rule deleted DFARS
225.7005 in its entirety to remove the
limitation as implemented in the
DFARS. As a result, this final rule does
not include the changes proposed to
DFARS 225.7005–1.
BILLING CODE 5001–06–P
DEPARTMENT OF DEFENSE
Defense Acquisition Regulations
System
Defense Federal Acquisition
Regulation Supplement: Restrictions
on Acquisitions From Foreign Sources
(DFARS Case 2017–D011)
Defense Acquisition
Regulations System, Department of
Defense (DoD).
ACTION: Final rule.
AGENCY:
DoD is issuing a final rule
amending the Defense Federal
Acquisition Regulation Supplement
(DFARS) to implement sections of the
National Defense Authorization Act for
Fiscal Year 2017 to apply domestic
source requirements to acquisitions at or
below the simplified acquisition
threshold when acquiring athletic
footwear to be furnished to enlisted
members of the Armed Forces upon
their initial entry into the Armed
Forces, and add Australia and the
United Kingdom to the definition of the
‘‘National Technology and Industrial
Base.’’
DATES: Effective December 21, 2018.
FOR FURTHER INFORMATION CONTACT: Ms.
Amy G. Williams, telephone 571–372–
6106.
SUPPLEMENTARY INFORMATION:
SUMMARY:
Jennifer Lee Hawes,
Regulatory Control Officer, Defense
Acquisition Regulations System.
VerDate Sep<11>2014
[Docket DARS–2018–0004]
[FR Doc. 2018–27560 Filed 12–20–18; 8:45 am]
Because a notice of proposed
rulemaking and an opportunity for
public comment are not required to be
given for this rule under 41 U.S.C.
1707(a)(1) (see section III. of this
preamble), the analytical requirements
of the Regulatory Flexibility Act (5
U.S.C. 601 et seq.) are not applicable.
Accordingly, no regulatory flexibility
analysis is required, and none has been
prepared.
216.504
48 CFR Parts 225 and 252
United Kingdom of Great Britain and
Northern Ireland to the United States
and Canada as the countries within
which the activities of the national
technology and industrial base are
conducted. 10 U.S.C. 2534,
Miscellaneous Limitations on the
Procurement of Goods Other Than
United States Goods, requires that DoD
only procure certain items if the
manufacturer of the items is part of the
national technology and industrial base.
One respondent submitted a public
comment in response to the proposed
rule.
I. Background
DoD published a proposed rule in the
Federal Register at 83 FR 42828 on
August 24, 2018, to implement sections
817 and 881(b) of the National Defense
Authorization Act (NDAA) for Fiscal
Year (FY) 2017.
Section 817 extends the domestic
source requirements of 10 U.S.C. 2533a
(the Berry Amendment) below the
simplified acquisition threshold, when
acquiring athletic footwear to be
furnished to the members of the Army,
Navy, Air Force, or Marine Corps upon
their initial entry into the Armed
Forces.
Section 881(b) amends 10 U.S.C.
2500(1) by adding Australia and the
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III. Applicability to Contracts at or
Below the Simplified Acquisition
Threshold and for Commercial Items,
Including Commercially Available Offthe-Shelf Items
This rule amends the applicability of
existing DFARS solicitation provisions
and contract clauses as follows:
• To implement section 817 of the
NDAA for FY 2017, this rule extends
use of DFARS clause 252.225–7012,
Preference for Certain Domestic
Commodities, to acquisitions at or
below the simplified acquisition
threshold (SAT) when buying athletic
footwear to be furnished to enlisted
members of the Armed Forces upon
their initial entry into the Armed
Forces. This clause is already prescribed
for use in solicitations and contracts
using FAR part 12 procedures for the
acquisition of commercial items,
including commercially available offthe-shelf (COTS) items.
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• To implement section 881(b) of the
NDAA for FY 2017, this rule modifies
the provision at DFARS 252.225–7037,
Evaluation of Offers for Air Circuit
Breakers, and the clause at DFARS
252.225–7038, Restriction on
Acquisition of Air Circuit Breakers, to
add Australia as a country from which
items restricted by 10 U.S.C. 2534 may
be purchased. This rule does not change
the prescriptions for the use of this
provision or clause, which are already
required for use in solicitations and
contracts for commercial items,
including COTS items. The clause does
not apply below the SAT.
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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 SAT. 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
Federal Acquisition Regulation (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 Pricing and Contracting (DPC),
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.
B. Applicability to Contracts for the
Acquisition of Commercial Items,
Including Commercially Available Offthe-Shelf (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,
DPC, is the appropriate authority to
make comparable determinations for
regulations to be published in the
VerDate Sep<11>2014
16:23 Dec 20, 2018
Jkt 247001
DFARS, which is part of the FAR system
of regulations.
C. Determinations
A determination under 41 U.S.C. 1905
is not required to prescribe DFARS
252.225–7012 for use in solicitations
and contracts valued at or below the
SAT, because section 817 of the NDAA
for FY 2017 specifically states that DoD
shall acquire athletic footwear that
complies with the requirements of 10
U.S.C. 2533a ‘‘without regard to the
applicability of any simplified
acquisition threshold under chapter 137
of title 10 (or any other provision of
law).’’
A determination under 41 U.S.C. 1906
and 1907 is not required to apply the
requirements of DFARS 252.225–7037
and 252.225–7038 to acquisitions for
commercial items, including COTS
items, because the statute that this
provision and clause implements is not
a covered statute subject to 41 U.S.C.
1905–1907. At the time of the Federal
Acquisition Streamlining Act of 1994
(FASA) (Pub. L. 103–355), now codified
in part at 41 U.S.C. 1905–1907, this
provision and clause were a single
clause, DFARS 252.225–7029,
Restriction on Acquisition of Air Circuit
Breakers, which implemented 10 U.S.C.
2534. Because 10 U.S.C. 2534 predated
FASA, it was not subject to 41 U.S.C.
1905–1907. The DFARS clause 252.225–
7029 was included on the initial list of
statutes applicable to the acquisition of
commercial items at DFARS 252.212–
7001, incorporated in the DFARS by
DFARS Case 95–D712 on November 30,
1995 (Defense Acquisition Circular 91–
9).
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.
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65561
V. Executive Order 13771
This final rule is not subject to E.O.
13771, because this rule is not
significant under E.O. 12866.
VI. Regulatory Flexibility Act
A final regulatory flexibility analysis
has been prepared and is summarized as
follows:
This rule implements sections 817
and 881(b) of the National Defense
Authorization Act (NDAA) for Fiscal
Year (FY) 2017 (Pub. L. 114–328). The
objective of the rule is to—
• Remove the exception to domestic
source restriction of the Berry
Amendment (10 U.S.C. 2533a) for
acquisitions at or below the simplified
acquisition threshold when buying
athletic footwear to be furnished to
enlisted members of the Armed Forces
upon their initial entry into the Armed
Forces, as required by section 817 of the
NDAA for FY 2017; and
• Allow acquisition of certain items
from Australia and the United Kingdom,
for which purchase is currently
restricted to items from the United
States or Canada, in accordance with 10
U.S.C. 2534, in accordance with section
881(b) of the NDAA for FY 2017 and 10
U.S.C. 2534.
There were no significant issues
raised by the public comment in
response to the initial regulatory
flexibility analysis.
With regard to implementation of
section 817, this rule may apply to only
a few small entities, because there are
few sources that meet the domestic
source requirements of the Berry
Amendment with regard to athletic
footwear. The Defense Logistics Agency
(DLA) estimates a potential annual
demand for approximately 200,000 to
250,000 pairs of athletic shoes to be
delivered at the rate of approximately
27,500 pairs per month. In response to
a request for information issued by DLA
in December 2016, there were 5
responses from athletic footwear
manufacturers, one of which was a
small business. Small entities who are
athletic shoe manufacturers could likely
support portions of the Department’s
total requirements for athletic footwear.
In addition, there are likely a number of
domestic component suppliers who are
small entities who would benefit from
this new requirement as well. On the
other hand, small entities that cannot
provide athletic shoes that meet the
domestic source requirements of the
Berry Amendment, will no longer be
able to compete for acquisition of
athletic footwear at or below the
simplified acquisition threshold that are
for the purpose of providing athletic
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Federal Register / Vol. 83, No. 245 / Friday, December 21, 2018 / Rules and Regulations
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footwear to enlisted members of the
Armed Forces upon their initial entry
into the Armed Forces.
With regard to implementation of
section 881(b), this rule will not apply
to any small entities at the prime
contract level, as there are only a few
prime contractors for the restricted
items, which are all U.S. firms that are
other than small businesses. For the
definition of ‘‘small business,’’ the
Regulatory Flexibility Act refers to the
Small Business Act, which in turn
allows the U.S. Small Business
Administration (SBA) Administrator to
specify detailed definitions or standards
(5 U.S.C. 601(3) and 15 U.S.C. 632(a)).
The SBA regulations at 13 CFR
121.105(a)(1) discuss who is a small
business, providing that except for small
agricultural cooperatives, a business
concern eligible for assistance from SBA
as a small business is a business entity
organized for profit, with a place of
business located in the United States,
and which operates primarily within the
United States or which makes a
significant contribution to the U.S.
economy through payment of taxes or
use of American products, materials or
labor. Therefore, if an item currently
purchased from a U.S. entity that is
other than a small business were to be
purchased from an entity in the
Australia or the United Kingdom, there
could be an impact on a few small
entities that are currently subcontractors
to a U.S. prime contractor.
There are no reporting, recordkeeping,
or other compliance requirements of the
rule, other than to furnish athletic
footwear compliant with the Berry
Amendment and the other restricted
items manufactured by a manufacturer
that is part of the national technology
and industrial base (which is now
expanded to include the United
Kingdom and Australia, as well as the
United States and Canada).
By extending the restriction of the
Berry Amendment to acquisitions that
do not exceed simplified acquisition
threshold, this rule may benefit small
entities that can provide Berry
Amendment-compliant athletic
footwear, because they may be more
able to compete for smaller acquisitions.
DoD was unable to identify any
alternatives that would meet the
requirements of the statutes).
VII. Paperwork Reduction Act
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Jkt 247001
Government procurement.
Jennifer Lee Hawes,
Regulatory Control Officer, Defense
Acquisition Regulations System.
Therefore, 48 CFR parts 225 and 252
are amended as follows:
■ 1. The authority citation for 48 CFR
parts 225 and 252 continues to read as
follows:
Authority: 41 U.S.C. 1303 and 48 CFR
chapter 1.
PART 225—FOREIGN ACQUISITION
2. Amend section 225.7002–2 by
revising paragraph (a) to read as follows:
■
225.7002–2
Exceptions.
*
*
*
*
*
(a) Acquisitions at or below the
simplified acquisition threshold, except
for athletic footwear purchased by DoD
for use by members of the Army, Navy,
Air Force, or Marine Corps upon their
initial entry into the Armed Forces
(section 817 of the National Defense
Authorization Act for Fiscal Year 2017
(Pub. L. 114–328)).
*
*
*
*
*
225.7002–3
[Amended]
3. Amend section 225.7002–3, in
paragraph (a) by removing ‘‘commercial
items, that exceed the simplified
acquisition threshold’’ and adding
‘‘commercial items’’ in its place.
■
225.7004–1
225.7006–3
Waiver.
The waiver criteria at 225.7008(a)
apply to this restriction.
■ 8. Amend section 225.7006–4 by
revising paragraphs (a)(2) and (b)(2) to
read as follows:
225.7006–4 Solicitation provision and
contract clause.
(a) * * *
(2) A waiver has been granted.
(b) * * *
(2) A waiver has been granted.
PART 252—SOLICITATION
PROVISIONS AND CONTRACT
CLAUSES
252.225–7037
[Amended]
9. Amend section 252.225–7037 by:
a. Removing the provision date of
‘‘(JUN 2012)’’ and adding ‘‘(DEC 2018)’’
in its place; and
■ b. In paragraphs (a) and (b), removing
‘‘outlying areas, Canada,’’ and adding
‘‘outlying areas, Australia, Canada,’’ in
its place in both places.
■
■
252.225–7038
[Amended]
10. Amend section 252.225–7038 by:
a. Removing the provision date of
‘‘(JUN 2005)’’ and adding ‘‘(DEC 2018)’’
on its place; and
■ b. Removing ‘‘outlying areas,
Canada,’’ and adding ‘‘outlying areas,
Australia, Canada,’’ in its place.
■
■
[FR Doc. 2018–27557 Filed 12–20–18; 8:45 am]
BILLING CODE 5001–06–P
DEPARTMENT OF DEFENSE
[Amended]
4. Amend section 225.7004–1 by
removing ‘‘United States or Canada’’
and adding ‘‘United States, Australia,
Canada, or the United Kingdom’’ in its
place.
Defense Acquisition Regulations
System
225.7004–3
RIN 0750–AJ42
■
[Amended]
5. Amend section 225.7004–3 by:
a. In paragraph (a) by removing
‘‘manufactured in the United States or
Canada’’ and adding ‘‘manufactured in
the United States, Australia, Canada, or
the United Kingdom’’ in two places.
■ b. In paragraphs (a), (b), and (c) by
removing ‘‘United States and Canada’’
and adding ‘‘United States, Australia,
Canada, or the United Kingdom’’ in its
place wherever it appears.
■
■
225.7006–1
[Amended]
6. Amend section 225.7006–1 by
removing ‘‘United States or Canada’’
and adding ‘‘United States, Australia,
Canada, or the United Kingdom’’ in its
place.
■ 7. Revise section 225.7006–3 to read
as follows:
■
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).
VerDate Sep<11>2014
List of Subjects in 48 CFR Parts 225 and
252
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48 CFR Part 252
[Docket DARS–2018–0018]
Defense Federal Acquisition
Regulation Supplement: Submission of
Summary Subcontract Reports
(DFARS Case 2017–D005)
Defense Acquisition
Regulations System, Department of
Defense (DoD).
ACTION: Final rule.
AGENCY:
DoD is issuing a final rule
amending the Defense Federal
Acquisition Regulation Supplement
(DFARS) to change the entity to which
contractors submit Summary
Subcontract Reports in the Electronic
Subcontracting Reporting System (eSRS)
and to change the entity that
acknowledges receipt of, or rejects, the
reports in eSRS.
SUMMARY:
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Agencies
[Federal Register Volume 83, Number 245 (Friday, December 21, 2018)]
[Rules and Regulations]
[Pages 65560-65562]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2018-27557]
-----------------------------------------------------------------------
DEPARTMENT OF DEFENSE
Defense Acquisition Regulations System
48 CFR Parts 225 and 252
[Docket DARS-2018-0004]
RIN 0750-AJ22
Defense Federal Acquisition Regulation Supplement: Restrictions
on Acquisitions From Foreign Sources (DFARS Case 2017-D011)
AGENCY: Defense Acquisition Regulations System, Department of Defense
(DoD).
ACTION: Final rule.
-----------------------------------------------------------------------
SUMMARY: DoD is issuing a final rule amending the Defense Federal
Acquisition Regulation Supplement (DFARS) to implement sections of the
National Defense Authorization Act for Fiscal Year 2017 to apply
domestic source requirements to acquisitions at or below the simplified
acquisition threshold when acquiring athletic footwear to be furnished
to enlisted members of the Armed Forces upon their initial entry into
the Armed Forces, and add Australia and the United Kingdom to the
definition of the ``National Technology and Industrial Base.''
DATES: Effective December 21, 2018.
FOR FURTHER INFORMATION CONTACT: Ms. Amy G. Williams, telephone 571-
372-6106.
SUPPLEMENTARY INFORMATION:
I. Background
DoD published a proposed rule in the Federal Register at 83 FR
42828 on August 24, 2018, to implement sections 817 and 881(b) of the
National Defense Authorization Act (NDAA) for Fiscal Year (FY) 2017.
Section 817 extends the domestic source requirements of 10 U.S.C.
2533a (the Berry Amendment) below the simplified acquisition threshold,
when acquiring athletic footwear to be furnished to the members of the
Army, Navy, Air Force, or Marine Corps upon their initial entry into
the Armed Forces.
Section 881(b) amends 10 U.S.C. 2500(1) by adding Australia and the
United Kingdom of Great Britain and Northern Ireland to the United
States and Canada as the countries within which the activities of the
national technology and industrial base are conducted. 10 U.S.C. 2534,
Miscellaneous Limitations on the Procurement of Goods Other Than United
States Goods, requires that DoD only procure certain items if the
manufacturer of the items is part of the national technology and
industrial base.
One respondent submitted a public comment in response to the
proposed rule.
II. Discussion and Analysis
The public comment received addressed concern with regard to
importation of radioactive steel and use of radioactively contaminated
scrap metal. This issue is outside the scope of this rule. There were
no changes from the proposed rule as a result of this public comment.
However, the final rule is affected by a change in the baseline. On
May 30, 2018, DoD published a final rule in the Federal Register (83 FR
24890) to amend the DFARS to implement section 813(a) of the NDAA for
FY 2018 (Pub. L. 115-91), which amended 10 U.S.C. 2534(c) to establish
a sunset date of October 1, 2018, for the limitation on procurement of
chemical weapons antidote contained in automatic injectors (and
components for such injectors). The final rule deleted DFARS 225.7005
in its entirety to remove the limitation as implemented in the DFARS.
As a result, this final rule does not include the changes proposed to
DFARS 225.7005-1.
III. Applicability to Contracts at or Below the Simplified Acquisition
Threshold and for Commercial Items, Including Commercially Available
Off-the-Shelf Items
This rule amends the applicability of existing DFARS solicitation
provisions and contract clauses as follows:
To implement section 817 of the NDAA for FY 2017, this
rule extends use of DFARS clause 252.225-7012, Preference for Certain
Domestic Commodities, to acquisitions at or below the simplified
acquisition threshold (SAT) when buying athletic footwear to be
furnished to enlisted members of the Armed Forces upon their initial
entry into the Armed Forces. This clause is already prescribed for use
in solicitations and contracts using FAR part 12 procedures for the
acquisition of commercial items, including commercially available off-
the-shelf (COTS) items.
[[Page 65561]]
To implement section 881(b) of the NDAA for FY 2017, this
rule modifies the provision at DFARS 252.225-7037, Evaluation of Offers
for Air Circuit Breakers, and the clause at DFARS 252.225-7038,
Restriction on Acquisition of Air Circuit Breakers, to add Australia as
a country from which items restricted by 10 U.S.C. 2534 may be
purchased. This rule does not change the prescriptions for the use of
this provision or clause, which are already required for use in
solicitations and contracts for commercial items, including COTS items.
The clause does not apply below the SAT.
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 SAT. 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 Federal Acquisition Regulation (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 Pricing and
Contracting (DPC), 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.
B. Applicability to Contracts for the Acquisition of Commercial Items,
Including Commercially Available Off-the-Shelf (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, DPC, 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.
C. Determinations
A determination under 41 U.S.C. 1905 is not required to prescribe
DFARS 252.225-7012 for use in solicitations and contracts valued at or
below the SAT, because section 817 of the NDAA for FY 2017 specifically
states that DoD shall acquire athletic footwear that complies with the
requirements of 10 U.S.C. 2533a ``without regard to the applicability
of any simplified acquisition threshold under chapter 137 of title 10
(or any other provision of law).''
A determination under 41 U.S.C. 1906 and 1907 is not required to
apply the requirements of DFARS 252.225-7037 and 252.225-7038 to
acquisitions for commercial items, including COTS items, because the
statute that this provision and clause implements is not a covered
statute subject to 41 U.S.C. 1905-1907. At the time of the Federal
Acquisition Streamlining Act of 1994 (FASA) (Pub. L. 103-355), now
codified in part at 41 U.S.C. 1905-1907, this provision and clause were
a single clause, DFARS 252.225-7029, Restriction on Acquisition of Air
Circuit Breakers, which implemented 10 U.S.C. 2534. Because 10 U.S.C.
2534 predated FASA, it was not subject to 41 U.S.C. 1905-1907. The
DFARS clause 252.225-7029 was included on the initial list of statutes
applicable to the acquisition of commercial items at DFARS 252.212-
7001, incorporated in the DFARS by DFARS Case 95-D712 on November 30,
1995 (Defense Acquisition Circular 91-9).
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 final rule is not subject to E.O. 13771, because this rule is
not significant under E.O. 12866.
VI. Regulatory Flexibility Act
A final regulatory flexibility analysis has been prepared and is
summarized as follows:
This rule implements sections 817 and 881(b) of the National
Defense Authorization Act (NDAA) for Fiscal Year (FY) 2017 (Pub. L.
114-328). The objective of the rule is to--
Remove the exception to domestic source restriction of the
Berry Amendment (10 U.S.C. 2533a) for acquisitions at or below the
simplified acquisition threshold when buying athletic footwear to be
furnished to enlisted members of the Armed Forces upon their initial
entry into the Armed Forces, as required by section 817 of the NDAA for
FY 2017; and
Allow acquisition of certain items from Australia and the
United Kingdom, for which purchase is currently restricted to items
from the United States or Canada, in accordance with 10 U.S.C. 2534, in
accordance with section 881(b) of the NDAA for FY 2017 and 10 U.S.C.
2534.
There were no significant issues raised by the public comment in
response to the initial regulatory flexibility analysis.
With regard to implementation of section 817, this rule may apply
to only a few small entities, because there are few sources that meet
the domestic source requirements of the Berry Amendment with regard to
athletic footwear. The Defense Logistics Agency (DLA) estimates a
potential annual demand for approximately 200,000 to 250,000 pairs of
athletic shoes to be delivered at the rate of approximately 27,500
pairs per month. In response to a request for information issued by DLA
in December 2016, there were 5 responses from athletic footwear
manufacturers, one of which was a small business. Small entities who
are athletic shoe manufacturers could likely support portions of the
Department's total requirements for athletic footwear. In addition,
there are likely a number of domestic component suppliers who are small
entities who would benefit from this new requirement as well. On the
other hand, small entities that cannot provide athletic shoes that meet
the domestic source requirements of the Berry Amendment, will no longer
be able to compete for acquisition of athletic footwear at or below the
simplified acquisition threshold that are for the purpose of providing
athletic
[[Page 65562]]
footwear to enlisted members of the Armed Forces upon their initial
entry into the Armed Forces.
With regard to implementation of section 881(b), this rule will not
apply to any small entities at the prime contract level, as there are
only a few prime contractors for the restricted items, which are all
U.S. firms that are other than small businesses. For the definition of
``small business,'' the Regulatory Flexibility Act refers to the Small
Business Act, which in turn allows the U.S. Small Business
Administration (SBA) Administrator to specify detailed definitions or
standards (5 U.S.C. 601(3) and 15 U.S.C. 632(a)). The SBA regulations
at 13 CFR 121.105(a)(1) discuss who is a small business, providing that
except for small agricultural cooperatives, a business concern eligible
for assistance from SBA as a small business is a business entity
organized for profit, with a place of business located in the United
States, and which operates primarily within the United States or which
makes a significant contribution to the U.S. economy through payment of
taxes or use of American products, materials or labor. Therefore, if an
item currently purchased from a U.S. entity that is other than a small
business were to be purchased from an entity in the Australia or the
United Kingdom, there could be an impact on a few small entities that
are currently subcontractors to a U.S. prime contractor.
There are no reporting, recordkeeping, or other compliance
requirements of the rule, other than to furnish athletic footwear
compliant with the Berry Amendment and the other restricted items
manufactured by a manufacturer that is part of the national technology
and industrial base (which is now expanded to include the United
Kingdom and Australia, as well as the United States and Canada).
By extending the restriction of the Berry Amendment to acquisitions
that do not exceed simplified acquisition threshold, this rule may
benefit small entities that can provide Berry Amendment-compliant
athletic footwear, because they may be more able to compete for smaller
acquisitions. DoD was unable to identify any alternatives that would
meet the requirements of the statutes).
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).
List of Subjects in 48 CFR Parts 225 and 252
Government procurement.
Jennifer Lee Hawes,
Regulatory Control Officer, Defense Acquisition Regulations System.
Therefore, 48 CFR parts 225 and 252 are amended as follows:
0
1. The authority citation for 48 CFR parts 225 and 252 continues to
read as follows:
Authority: 41 U.S.C. 1303 and 48 CFR chapter 1.
PART 225--FOREIGN ACQUISITION
0
2. Amend section 225.7002-2 by revising paragraph (a) to read as
follows:
225.7002-2 Exceptions.
* * * * *
(a) Acquisitions at or below the simplified acquisition threshold,
except for athletic footwear purchased by DoD for use by members of the
Army, Navy, Air Force, or Marine Corps upon their initial entry into
the Armed Forces (section 817 of the National Defense Authorization Act
for Fiscal Year 2017 (Pub. L. 114-328)).
* * * * *
225.7002-3 [Amended]
0
3. Amend section 225.7002-3, in paragraph (a) by removing ``commercial
items, that exceed the simplified acquisition threshold'' and adding
``commercial items'' in its place.
225.7004-1 [Amended]
0
4. Amend section 225.7004-1 by removing ``United States or Canada'' and
adding ``United States, Australia, Canada, or the United Kingdom'' in
its place.
225.7004-3 [Amended]
0
5. Amend section 225.7004-3 by:
0
a. In paragraph (a) by removing ``manufactured in the United States or
Canada'' and adding ``manufactured in the United States, Australia,
Canada, or the United Kingdom'' in two places.
0
b. In paragraphs (a), (b), and (c) by removing ``United States and
Canada'' and adding ``United States, Australia, Canada, or the United
Kingdom'' in its place wherever it appears.
225.7006-1 [Amended]
0
6. Amend section 225.7006-1 by removing ``United States or Canada'' and
adding ``United States, Australia, Canada, or the United Kingdom'' in
its place.
0
7. Revise section 225.7006-3 to read as follows:
225.7006-3 Waiver.
The waiver criteria at 225.7008(a) apply to this restriction.
0
8. Amend section 225.7006-4 by revising paragraphs (a)(2) and (b)(2) to
read as follows:
225.7006-4 Solicitation provision and contract clause.
(a) * * *
(2) A waiver has been granted.
(b) * * *
(2) A waiver has been granted.
PART 252--SOLICITATION PROVISIONS AND CONTRACT CLAUSES
252.225-7037 [Amended]
0
9. Amend section 252.225-7037 by:
0
a. Removing the provision date of ``(JUN 2012)'' and adding ``(DEC
2018)'' in its place; and
0
b. In paragraphs (a) and (b), removing ``outlying areas, Canada,'' and
adding ``outlying areas, Australia, Canada,'' in its place in both
places.
252.225-7038 [Amended]
0
10. Amend section 252.225-7038 by:
0
a. Removing the provision date of ``(JUN 2005)'' and adding ``(DEC
2018)'' on its place; and
0
b. Removing ``outlying areas, Canada,'' and adding ``outlying areas,
Australia, Canada,'' in its place.
[FR Doc. 2018-27557 Filed 12-20-18; 8:45 am]
BILLING CODE 5001-06-P