Defense Federal Acquisition Regulation Supplement: Covered Defense Telecommunications Equipment or Services (DFARS Case 2018-D022), 72231-72239 [2019-27824]
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Federal Register / Vol. 84, No. 250 / Tuesday, December 31, 2019 / Rules and Regulations
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INFORMATION section for electronic
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FOR FURTHER INFORMATION CONTACT:
Jillonne Kevala, Center for Food Safety
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and Applied Nutrition, Food and Drug
Administration, 5001 Campus Dr.,
College Park, MD 20740, 240–402–1450.
SUPPLEMENTARY INFORMATION:
I. Background
We are announcing the availability of
a final guidance for industry entitled
‘‘Food Labeling: Serving Sizes of Foods
That Can Reasonably Be Consumed At
One Eating Occasion, Reference
Amounts Customarily Consumed,
Serving Size-Related Issues, DualColumn Labeling, and Miscellaneous
Topics.’’ We are issuing this guidance
consistent with our good guidance
practices regulation (21 CFR 10.115).
The guidance represents the current
thinking of FDA on this topic. It does
not establish any rights for any person
and is not binding on FDA or the public.
You can use an alternative approach if
it satisfies the requirements of the
applicable statutes and regulations.
In the Federal Register of November
5, 2018 (83 FR 55323), we announced
the availability of a draft guidance
entitled, ‘‘Food Labeling: Serving Sizes
of Foods That Can Reasonably Be
Consumed At One Eating Occasion,
Reference Amounts Customarily
Consumed, Serving Size-Related Issues,
Dual-Column Labeling, and
Miscellaneous Topics.’’ The draft
guidance was intended to provide
questions and answers on topics related
primarily to two final rules: (1) ‘‘Food
Labeling: Serving Sizes of Foods That
Can Reasonably Be Consumed At One
Eating Occasion; Dual-Column Labeling;
Updating, Modifying, and Establishing
Certain Reference Amounts Customarily
Consumed; Serving Size for Breath
Mints; and Technical Amendments’’ (81
FR 34000 (May 27, 2016)); and (2)
‘‘Food Labeling: Revision of the
Nutrition and Supplement Facts Labels’’
(81 FR 33742 (May 27, 2016)).
We gave interested parties until
January 4, 2019, to submit comments for
us to consider before beginning work on
the final version of the guidance. We
received over 40 comments on the draft
guidance and have modified the final
guidance where appropriate. Changes to
the guidance include:
• Providing additional background
information in response to a question
regarding reference amounts
customarily consumed (RACCs) for nonjuice beverages for infants and young
children;
• Modifying for clarity a question and
response concerning whether the
Nutrition Facts label for products sold
in small packages (e.g., certain sugarfree chewing gums) must list all
nutrients that are contained in
insignificant amounts; and
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• Modifying the response to a
question regarding the placement of the
Nutrition Facts and Supplement Facts
labels to clarify that the Nutrition Facts
or Supplement Facts label should not be
placed on the bottom of packages (such
as the bottom of boxes, cans, and
bottles), unless they are visible during
normal retail display and consumer
handling.
The guidance announced in this
notice finalizes the draft guidance dated
November 2018.
II. Paperwork Reduction Act of 1995
This final guidance refers to
previously approved collections of
information found in FDA regulations.
These collections of information are
subject to review by the Office of
Management and Budget (OMB) under
the Paperwork Reduction Act of 1995
(44 U.S.C. 3501–3521). The collections
of information in 21 CFR part 101 have
been approved under OMB control
number 0910–0381.
III. Electronic Access
Persons with access to the internet
may obtain the guidance at either
https://www.fda.gov/FoodGuidances or
https://www.regulations.gov. Use the
FDA website listed in the previous
sentence to find the most current
version of the guidance.
Dated: December 19, 2019.
Lowell J. Schiller,
Principal Associate Commissioner for Policy.
[FR Doc. 2019–27868 Filed 12–30–19; 8:45 am]
BILLING CODE 4164–01–P
DEPARTMENT OF DEFENSE
Defense Acquisition Regulations
System
48 CFR Parts 204, 212, 213, and 252
[Docket DARS–2019–0063]
RIN 0750–AJ84
Defense Federal Acquisition
Regulation Supplement: Covered
Defense Telecommunications
Equipment or Services (DFARS Case
2018–D022)
Defense Acquisition
Regulations System, Department of
Defense (DoD).
ACTION: Interim rule.
AGENCY:
DoD is issuing an interim rule
amending the Defense Federal
Acquisition Regulation Supplement
(DFARS) to implement sections of the
National Defense Authorization Acts for
Fiscal Years 2018 and 2019 related to
SUMMARY:
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the procurement of covered
telecommunications equipment or
services. Specifically, the rule prohibits
the procurement of any equipment,
system, or service to carry out the DoD
nuclear deterrence or homeland defense
missions that uses covered
telecommunications equipment or
services as a substantial or essential
component of any system, or as a
critical technology as a part of any
system. Covered telecommunications
equipment or services includes
telecommunications equipment or
services from certain Chinese entities,
including their subsidiaries and
affiliates, and from any other entities
that the Secretary of Defense reasonably
believes to be owned or controlled by or
otherwise connected to, the government
of the People’s Republic of China or the
Russian Federation.
DATES:
Effective Date: December 31, 2019.
Applicability: Contracting officers
shall include the provisions at DFARS
252.204–7016, Covered Defense
Telecommunications Equipment or
Services—Representation, and DFARS
252.204–7017, Prohibition on the
Acquisition of Covered Defense
Telecommunications Equipment or
Services—Representation, as
prescribed—
• In solicitations issued on or after
December 31, 2019; and
• In solicitations issued before
December 31, 2019, provided the
resulting award occurs on or after
December 31, 2019.
Contracting officers shall include the
clause at DFARS 252.204–7018,
Prohibition on the Acquisition of
Covered Defense Telecommunications
Equipment or Services, as prescribed, in
all awards made on or after December
31, 2019.
Contracting officers shall modify, in
accordance with Federal Acquisition
Regulation (FAR) 1.108(d), existing
indefinite-delivery contracts, blanket
purchase agreements, or basic ordering
agreements to include the DFARS clause
for future orders or calls, prior to
placing any future orders or calls.
If modifying an existing contract,
order, or call to extend the period of
performance, including exercising an
option, contracting officers shall include
the DFARS clause in accordance with
FAR 1.108(d).
Comment Date: Comments on the
interim rule should be submitted in
writing to the address shown below on
or before March 2, 2020, to be
considered in the formation of a final
rule.
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Submit comments
identified by DFARS Case 2018–D022,
using any of the following methods:
Æ Federal eRulemaking Portal: https://
www.regulations.gov. Search for
‘‘DFARS Case 2018–D022’’. Select
‘‘Comment Now’’ and follow the
instructions provided to submit a
comment. Please include ‘‘DFARS Case
2018–D022’’ on any attached
documents.
Æ Email: osd.dfars@mail.mil. Include
DFARS Case 2018–D022 in the subject
line of the message.
Æ Fax: 571–372–6094.
Æ Mail: Defense Acquisition
Regulations System, Attn: Ms. Heather
Kitchens, OUSD(A&S)DPC/DARS, Room
3B941, 3060 Defense Pentagon,
Washington, DC 20301–3060.
Comments received generally will be
posted without change to https://
www.regulations.gov, including any
personal information provided. To
confirm receipt of your comment(s),
please check www.regulations.gov,
approximately two to three days after
submission to verify posting (except
allow 30 days for posting of comments
submitted by mail).
FOR FURTHER INFORMATION CONTACT: Ms.
Heather Kitchens, telephone 571–372–
6104.
ADDRESSES:
SUPPLEMENTARY INFORMATION:
I. Background
The Federal Acquisition Regulations
System codifies and publishes uniform
policies and procedures for acquisition
by all executive agencies. The Federal
Acquisition Regulations System consists
of the Federal Acquisition Regulation
(FAR), which is the primary document,
and agency acquisition regulations that
implement or supplement the FAR. The
DFARS is a supplement to the FAR that
provides DoD-specific acquisition
regulations that DoD contracting
officers—and those contractors doing
business with DoD—must follow in the
procurement process for supplies and
services.
Section 1656 of the National Defense
Authorization Act (NDAA) for Fiscal
Year (FY) 2018 (Pub. L. 115–91)
prohibited DoD from procuring or
obtaining, or extending or renewing a
contract to procure or obtain, any
equipment, system, or service to carry
out the DoD nuclear deterrence or
homeland defense missions that uses
covered telecommunications equipment
or services as a substantial or essential
component of any system, or as a
critical technology as a part of any
system. Covered telecommunications
equipment or services includes
telecommunications equipment or
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services from certain Chinese entities,
including their subsidiaries and
affiliates, and from any other entities
that the Secretary of Defense reasonably
believes to be an entity owned or
controlled by, or otherwise connected
to, the government of the People’s
Republic of China or the Russian
Federation.
Likewise, section 889(a)(1)(A) of the
NDAA for FY 2019 (Pub. L. 115–232)
established a Governmentwide
prohibition on procuring or obtaining,
or extending or renewing a contract to
procure or obtain, any equipment,
system, or service that uses covered
telecommunications equipment or
services as a substantial or essential
component of any system, or as a
critical technology as a part of any
system. Covered telecommunications
equipment or services includes certain
video surveillance and
telecommunications equipment or
services from certain Chinese entities,
including their subsidiaries and
affiliates, and from any other entities
that the Secretary of Defense, in
consultation with the Director of
National Intelligence or the Director of
the Federal Bureau of Investigation,
reasonably believes to be an entity
owned or controlled by, or otherwise
connected to, the government of the
People’s Republic of China.
The DoD prohibition under 1656
differs from the Governmentwide
prohibition under 889(a)(1)(A) in that it:
Applies to equipment, systems, or
services to carry out the DoD nuclear
deterrence or homeland defense
missions; includes different definitions
of ‘‘covered telecommunications
equipment or services’’ and ‘‘covered
foreign country’’; does not include
exceptions from the prohibition; and
provides independent waiver authority
to the Secretary of Defense. This interim
DFARS rule implements the section
1656 prohibition for DoD, and is
structured to align with the FAR
implementation of the section
889(a)(1)(A) Governmentwide
prohibition.
To implement section 889(a)(1)(A) of
the NDAA, DoD, the General Services
Administration (GSA), and the National
Aeronautics and Space Administration
(NASA) published an interim rule in the
Federal Register at 84 FR 40216 on
August 13, 2019, as amended by the
interim rule published at 84 FR 68314
on December 13, 2019 (reference FAR
Case 2018–017, Prohibition on
Contracting for Certain
Telecommunications and Video
Surveillance Services or Equipment).
This interim DFARS rule implements
the section 1656 and 889(a)(1)(A)
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prohibitions for DoD, and is structured
to align with the FAR implementation of
the section 889(a)(1)(A)
Governmentwide prohibition. The
interim rule should increase security of
systems and critical technology that is
part of any system used to carry out the
nuclear deterrence and homeland
defense missions of DoD by prohibiting
the use of telecommunications
equipment or services from certain
Chinese entities, including their
subsidiaries and affiliates, and from any
other entities that the Secretary of
Defense reasonably believes to be
owned or controlled by or otherwise
connected to, the government of the
People’s Republic of China or the
Russian Federation.
II. Discussion and Analysis
To implement the section 1656
prohibition and the DoD-specific
procedures associated with the
889(a)(1)(A) prohibition in the FAR, this
rule adds: DFARS subpart 204.21,
Prohibition on Contracting for Certain
telecommunications and Video
Surveillance Services or Equipment; the
provision at DFARS 252.204–7016,
Covered Defense Telecommunications
Equipment or Services—Representation;
the provision at DFARS 252.204–7017,
Prohibition on the Acquisition of
Covered Defense Telecommunications
Equipment or Services—Representation;
and the clause at DFARS 252.204–7018,
Prohibition on the Acquisition of
Covered Defense Telecommunications
Equipment or Services. The new DFARS
subpart, provisions, and clause mirror
the FAR implementation of section
889(a)(1)(A) at FAR subpart 4.21, the
provisions at FAR 52.204–24 and
52.204–26, and the clause at FAR
52.204–25, but the subpart addresses the
section 1656 prohibition. The section
889(a)(1)(A) prohibition remains
implemented in the FAR, except that
the DoD-specific procedures for
handling representations from offerors
and reports from contractors contained
in this rule apply to both the section
1656 and 889 prohibitions.
The new DFARS subpart 204.21
notifies contracting officers of the
section 1656 prohibition, provides DoDspecific procedures for sections 1656
and 889(a)(1)(A), advises of the waiver
process for section 1656, and prescribes
the two new solicitation provisions and
the contract clause associated with
section 1656. To differentiate between
the FAR and DFARS prohibitions, this
DFARS rule uses the term ‘‘covered
defense telecommunications equipment
or services’’ instead of ‘‘covered
telecommunications equipment or
services,’’ and provides a new definition
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of ‘‘covered foreign country’’ for the
DFARS coverage of the section 1656
prohibition. These differences reflect
the additional requirements in section
1656, which only apply to the DFARS
rule.
This interim DFARS rule provides a
two-tier representation structure to
ensure contracting officers comply with
the section 1656 prohibition. The
DFARS provision 252.204–7016
requires offerors to represent in the
System for Award Management (SAM)
at least annually whether they provide
covered defense telecommunications
equipment or services as part of their
offerings to the Government. Only
offerors who represent that they do
provide covered defense
telecommunications equipment or
services in the annual representation
will be required to provide the offer-byoffer representation in the provision at
DFARS 252.204–7017. If an offeror
represents in its offer-by-offer
representation under 252.204–7017 that
it will provide covered defense
telecommunications equipment or
services as part of its offered products
or services to DoD in the performance of
any award resulting from the
solicitation, then the offeror must
provide certain disclosures about the
equipment or services. DoD will use the
information provided in the disclosure
to determine whether the award is
prohibited or if a waiver request may be
appropriate. Offerors should note that
annual representation in SAM is
currently provided under the number
252.204–70ZZ, which references the
clause at 252.204–YY; in the next
release of updates to SAM, the provision
will be updated to reflect 252.204–7016
and the clause will be updated to reflect
252.204–7018.
The FAR uses the same two-tier
representation structure to implement
the section 889(a)(1)(A) prohibition,
because it significantly reduces the
reporting burden on the public by
allowing for an annual representation,
in lieu of an offer-by-offer
representation, if an offeror does not
offer the prohibited products and
services to the Government. At FAR
4.2103(a), contracting officers are
directed to follow agency procedures
when an offeror represents that it will
include covered telecommunications
equipment or services in its offer, or if
the contracting officer has reason to
question an offeror’s representations.
To implement the section 889(a)(1)(A)
prohibition, in part, and the section
1656 prohibition, this interim DFARS
rule provides the agency procedures for
handling the offeror representations in
response to the FAR provisions at
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52.204–26, 52.212–3(v), and 52.204–24,
and the DFARS provisions at 252.204–
7016 and 252.204–7017. The agency
procedures require that, if the
contracting officer has reason to
question a negative representation from
an offeror, then the contracting officer is
instructed to consult with their
requiring activity and legal counsel. If
the offeror discloses information about
covered telecommunications equipment
or services to be included in its offer (as
required by paragraph (e) of FAR
52.204–24) or covered defense
telecommunications equipment or
services (as required by paragraph (e) of
DFARS 252.204–7017), then the
contracting officer is required to forward
the information to the requiring activity
and may not award to the offeror unless
the requiring activity advises that they
have obtained one of the waivers
described at FAR 4.2104 or DFARS
204.2104, as appropriate.
Similar to the clause at FAR 52.204–
25, the new DFARS clause 252.204–
7018 prohibits contractors from
providing equipment, system, or
services that use covered defense
telecommunications equipment or
services as a substantial or essential
component of any system, or as a
critical technology as a part of any
system. However, unlike the FAR
clause, this prohibition only applies if
the equipment, systems, or services are
to carry out the DoD nuclear deterrence
or homeland defense missions. The
clause requires contractors and
subcontractors to report through https://
dibnet.dod.mil any discovery of covered
defense telecommunications equipment
or services during the course of contract
performance.
FAR 4.2103(b) directs contracting
officers to follow agency procedures
when a contractor provides the report
required under FAR 52.204–25. This
interim DFARS rule provides the agency
procedures at DFARS 204.2103(b) for
handling reports received under FAR
52.204–25 and DFARS 252.204–7018.
Specifically, contracting officers are
advised that they will be notified by
Defense Cyber Crime Center regarding
any reports received and the contracting
officer shall consult with the requiring
activity on how to proceed with the
contract.
This interim rule also adds text in
DFARS subpart 212.3, Solicitation
Provisions and Contract Clauses for the
Acquisition of Commercial Items, and
DFARS subpart 213.2, Actions at or
Below the Micro-purchase Threshold, to
address application of section 1656 to
commercial items and micro-purchases.
This interim rule also amends DFARS
252.204–7007, Alternate A, Annual
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Representations and Certifications, by
updating the list of annual
representations and certifications to
include the new provision at DFARS
252.204–7016.
III. Applicability to Contracts at or
Below the Simplified Acquisition
Threshold and for Commercial Items,
Including Commercially Available Offthe-Shelf Items
This rule creates two new provisions
and a new clause, which apply to
contracts at or below the simplified
acquisition threshold (SAT) and to
commercial items (including
commercially available off-the-shelf
(COTS) items). The following provisions
and clause are created by this interim
rule:
• The provision at DFARS 252.204–
7016, Covered Defense
Telecommunications Equipment or
Services—Representation.
• The provision at DFARS 252.204–
7017, Prohibition on Acquisition of
Covered Defense Telecommunications
Equipment or Services—Representation.
• The clause at DFARS 252.204–7018,
Prohibition on the Acquisition of
Covered Defense Telecommunications
Equipment or Services.
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A. Applicability to Contracts at or Below
the Simplified Acquisition Threshold
41 U.S.C. 1905 governs the
applicability of laws to contracts or
subcontracts in amounts not greater
than the simplified acquisition
threshold. It is intended to limit the
applicability of laws to such contracts or
subcontracts. 41 U.S.C. 1905 provides
that if a provision of law contains
criminal or civil penalties, or if the FAR
Council makes a written determination
that it is not in the best interest of the
Federal Government to exempt contracts
or subcontracts at or below the SAT, the
law will apply to them. The Principal
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. DoD
has made that determination to apply
this rule at or below the simplified
acquisition threshold.
B. Applicability to Contracts for the
Acquisition of Commercial Items,
Including COTS Items
10 U.S.C. 2375 governs the
applicability of laws to contracts and
subcontracts for the acquisition of
commercial items, including COTS
items, and is intended to limit the
applicability of laws to contracts and
subcontracts for the acquisition of
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commercial items, including COTS
items. 10 U.S.C. 2375 provides that if a
provision of law contains criminal or
civil penalties, or if the Under Secretary
of Defense (Acquisition and
Sustainment) (USD(A&S)) 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. Based on delegations
of authority from USD(A&S), the
Principal Director, DPC, is the
appropriate authority to make this
determination. DoD has made that
determination to apply this rule to the
acquisition of commercial items,
including COTS items.
C. Determinations
Consistent with the determinations
that DoD has made with regard to the
application of the requirements of
section 1656 of the NDAA for FY 2018,
the two provisions and the clause apply
to all solicitations and contracts,
including solicitations and contracts
below the SAT and to the acquisition of
commercial items (including COTS
items). It is important to apply the
statutory prohibitions to all acquisitions
in order to protect the security of
nuclear command, control, and
communications systems and ballistic
missile defense from commercial
dependencies on equipment and
services from certain companies or
certain foreign countries that are
considered to create a risk to our
national security.
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 a significant
regulatory action and, therefore, was
subject to review under section 6(b) of
E.O. 12866, Regulatory Planning and
Review, dated September 30, 1993. This
rule is not a major rule under 5 U.S.C.
804.
V. Executive Order 13771
This rule is not subject to the
requirements of E.O. 13771, because the
rule is issued with respect to a national
security function of the United States.
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VI. Regulatory Flexibility Act
This interim rule may 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. An
initial regulatory flexibility analysis has
been performed and is summarized as
follows:
This interim rule is necessary to
implement section 1656 of the National
Defense Authorization Act (NDAA) for
Fiscal Year (FY) 2018 and section
889(a)(1)(A) of the NDAA for FY 2019.
The objective of this rule is to
increase security of systems and critical
technology that is part of any system
used to carry out the nuclear deterrence
and homeland defense missions of DoD
by prohibiting the use of
telecommunications equipment or
services from certain Chinese entities,
including their subsidiaries and
affiliates, and from any other entities
that the Secretary of Defense reasonably
believes to be owned or controlled by or
otherwise connected to, the government
of the People’s Republic of China or the
Russian Federation.
To implement the prohibition, this
rule creates two new representations
and a new reporting requirement. Data
from the Federal Procurement Data
System (FPDS) and the System for
Award Management (SAM) were used to
estimate the number of small businesses
that will be affected by this rule:
• DFARS provision 252.204–7016,
Covered Defense Telecommunications
Equipment or Services—Representation,
requires each offeror to represent
whether it provides covered defense
telecommunications equipment or
services as a part of its offered products
or services to the Government in the
performance of any contract,
subcontract, or other contractual
instrument. All offerors will be required
to complete this representation in the
SAM at least annually. As of July 31,
2019, there were 424,927 active
registrants in SAM. Approximately
49.78% (211,529) of the active SAM
registrants completed the DoD-specific
representations and certifications, of
which approximately 158,647 (75
percent) are estimated to be registered as
a small entity for their primary NAICS
code. These small entities would be
required to complete the representation
under DFARS 252.204–7016.
• DFARS 252.204–7017, Prohibition
on the Acquisition of Covered Defense
Telecommunications Equipment or
Services—Representation, requires that
if an offeror provides an affirmative
representation under the DFARS
provision 252.204–7016, then that
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offeror will be required to represent on
every solicitation whether it is
including covered defense
telecommunications equipment or
services as a part of its offer in response
to the solicitation. If the offeror
responds affirmatively, the offeror is
required to further disclose information
about the covered defense
telecommunications equipment or
services. According to data in FPDS for
fiscal years (FYs) 2016 through 2018, on
average DoD makes awards each year to
approximately 44,277 unique entities, of
which 30,762 are unique small entities.
DoD estimates that approximately 3,076
(10 percent) of the unique small entities
that receive DoD awards each year may
be required to submit the additional
offer-by-offer representation. DoD
further estimates that of the estimated
3,076 unique small entities that may be
required to represent on an offer-byoffer basis, it is estimated that 10
percent (308 unique small entities) may
also be required to provide the
additional disclosure within the
representation.
• DFARS clause 252.204–7018,
Prohibition on the Acquisition of
Covered Defense Telecommunications
Equipment or Services, requires
contractors and subcontractors to report
through https://dibnet.dod.mil, any
discovery of covered defense
telecommunications equipment or
services that is being used as a
substantial or essential component of
any system, or as critical technology as
part of any system, during the course of
contract performance. At this time, there
is no way for DoD to estimate how many
contractors (small or otherwise) may
make such discovery and be required to
submit a report; however, DoD expects
this number to be relatively low. DoD
estimates that approximately 1,538
entities (5 percent of the 30,762 unique
small entities that receive DoD awards
annually) may be required to submit a
report to DIBNET.
The rule does not duplicate, overlap,
or conflict with any other Federal rules.
This interim rule mirrors
implementation of a similar prohibition
in the Federal Acquisition Regulation
associated with section 889(a)(1)(A) of
the FY 2019 NDAA. It is necessary to
create additional representations and
reporting requirements in the DFARS to
implement the section 1656 prohibition
for DoD, because the statutory
definitions that form the basis of the
prohibitions are not the same. Section
889(a)(1)(A) includes certain types of
video surveillance equipment in the
definition of covered
telecommunications equipment or
services and defines ‘‘covered foreign
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country’’ as the People’s Republic of
China. In section 1656, covered
telecommunications equipment and
services includes only
telecommunications equipment and
services (not video surveillance
equipment or services); is limited to
equipment, system, or services used to
carry out the nuclear deterrence and
homeland defense missions; and
includes Russia in the definition of
‘‘covered foreign country.’’
DoD has been unable to identify any
significant alternatives that would
accomplish the stated objectives of the
statute and minimize any significant
economic impact of the rule. Because
this rule is a matter of national security,
it must apply to acquisitions that do not
exceed the simplified acquisition
threshold (including micro-purchases),
and acquisitions of commercial items
(including commercially available offthe-shelf items). Small entities cannot
be exempted from coverage without
increased risk to national security. The
rule is not expected to have significant
economic impact, except on entities that
currently or plan to include covered
defense telecommunications equipment
or services as part of their offered
products and services to the
Government.
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 2018–D022), in
correspondence.
VII. Paperwork Reduction Act
DoD has requested and the Office of
Management and Budget has approved
an emergency clearance of information
collection requirements under the
Paperwork Reduction Act (44 U.S.C.
chapter 35). DoD is soliciting comments
on this emergency clearance 0750–0002,
titled ‘‘Covered Defense
Telecommunications Equipment or
Services.’’
A. Estimate of Public Reporting Burden
The annual public reporting burden is
estimated as follows:
DFARS 252.204–7016
Representation
Respondents: 211,529.
Responses per respondent: 1.
Total annual responses: 211,529.
Hours per response: 0.08333.
Total Burden Hours: 17,627.
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DFARS 252.204–7017
72235
Representation
Respondents: 4,428.
Responses per respondent: 45.
Total annual responses: 199,260.
Hours per response: 0.08333.
Total burden hours: 16,604.
DFARS 252.204–7017
Disclosure
Respondents: 443.
Responses per respondent: 45.
Total annual responses: 19,935.
Hours per response: 3.
Total burden hours: 59,805.
DFARS 252.204–7018
Reporting
Respondents: 443.
Responses per respondent: 5.
Total annual responses: 2,215.
Hours per response: 1.5.
Total burden hours: 3,323.
Total Public Responses and Hours
Total annual responses: 432,939.
Total burden hours: 97,359.
B. Request for Comments Regarding
Paperwork Burden
Written comments and
recommendations on the information
collection, including suggestions for
reducing this burden, should be sent to
Ms. Jasmeet Seehra at the Office of
Management and Budget, Desk Officer
for DoD, Room 10236, New Executive
Office Building, Washington, DC 20503,
or email Jasmeet_K._Seehra@
omb.eop.gov, with a copy to the Defense
Acquisition Regulations System, Attn:
Ms. Heather Kitchens, OUSD(A&S)DPC/
DARS, Room 3B941, 3060 Defense
Pentagon, Washington, DC 20301–3060.
Comments can be received from 30 to 60
days after the date of this notice, but
comments to OMB will be most useful
if received by OMB within 30 days after
the date of this notice.
Public comments are particularly
invited on: Whether this collection of
information is necessary for the proper
performance of functions of the DFARS,
and will have practical utility; whether
our estimate of the public burden of this
collection of information is accurate,
and based on valid assumptions and
methodology; ways to enhance the
quality, utility, and clarity of the
information to be collected; and ways in
which we can minimize the burden of
the collection of information on those
who are to respond, through the use of
appropriate technological collection
techniques or other forms of information
technology.
To request more information on this
proposed information collection or to
obtain a copy of the proposal and
associated collection instruments,
please write to the Defense Acquisition
Regulations System, Attn: Ms. Heather
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Kitchens, OUSD(A&S)DPC/DARS, Room
3B941, 3060 Defense Pentagon,
Washington, DC 20301–3060, or email
osd.dfars@mail.mil. Include DFARS
Case 2018–D022 in the subject line of
the message.
VIII. Determination To Issue an Interim
Rule
A determination has been made under
the authority of the Secretary of Defense
that urgent and compelling reasons exist
to promulgate this interim rule without
prior opportunity for public comment. It
is critical that the DFARS is
immediately revised to include the
requirements of this statute for the
reason described below.
Section 1656 of the National Defense
Authorization Act (NDAA) for Fiscal
Year (FY) 2018 (Pub. L. 115–91)
provides that DoD may not procure or
obtain, or extend or renew a contract to
procure or obtain, any equipment,
system, or service to carry out the DoD
nuclear deterrence or homeland defense
missions that uses covered defense
telecommunications equipment or
services as a substantial or essential
component of any system or as a critical
technology as a part of any system. The
section 1656 prohibition is similar to
the Government-wide prohibition
enacted under section 889 of the NDAA
for FY 2019 (Pub. L. 115–232) on the
procurement of equipment, systems, or
services that use covered
telecommunications and video
surveillance equipment or services as a
substantial or essential component of
any system or as a critical technology as
a part of any system. The rule also
implements DoD-specific procedures
associated with the section 889(a)(1)(A)
prohibition in the FAR.
While DoD worked closely with GSA,
NASA, and the Office of Federal
Procurement Policy to develop the
framework for these types of
prohibitions in the FAR rule
implementing section 889, DoD issued
internal guidance to establish an
approval process for the procurement of
certain telecommunications and video
surveillance services or equipment.
However, codification of this
prohibition in the DFARS and the
procedures contained in this rule are
urgent, because the rule aligns with the
rollout of the annual representation
from offerors in the System for Award
Management. The representations from
offerors required by this rule will give
the Department the assurances it needs
that it is not violating the statutory
prohibition and that it can rely on the
integrity and security of equipment that
is critical to the DoD nuclear deterrence
mission of DoD and the homeland
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defense mission. It is essential that DoD
be able to protect against entities that
may intentionally try to deliver
products or services that could infiltrate
and exploit our military
communications and jeopardize our
national security network.
DoD’s highest priority missions (to
include nuclear command, control, and
communications, continuity of
Government; and ballistic missile
defense) must be executed with
complete confidence on the security,
reliability, and resiliency to operate in
a cyber-contested environment. DoD
must take immediate action to eliminate
vulnerabilities in the supply chain that
would undermine the security of our
nation. However, pursuant to 41 U.S.C.
1707 and FAR 1.501–3(b), DoD will
consider public comments received in
response to this interim rule in the
formation of the final rule.
List of Subjects in 48 CFR Parts 204,
212, 213, and 252
Government procurement.
Jennifer Lee Hawes,
Regulatory Control Officer, Defense
Acquisition Regulations System.
Therefore, 48 CFR parts 204, 212, 213,
and 252 are amended as follows:
■ 1. The authority citation for 48 CFR
parts 204, 212, 213, and 252 continues
to read as follows:
Authority: 41 U.S.C. 1303 and 48 CFR
chapter 1.
PART 204—ADMINISTRATIVE
MATTERS
2. Amend section 204.1202 by—
a. Redesignating paragraphs (2)(i)
through (xiii) as paragraphs (2)(ii)
through (xix); and
■ b. Adding paragraph (2)(i).
The addition reads as follows:
■
■
204.1202
SUBPART 204.21—PROHIBITION ON
CONTRACTING FOR CERTAIN
TELECOMMUNICATIONS AND VIDEO
SURVEILLANCE SERVICES OR
EQUIPMENT
PO 00000
Scope of subpart.
Definitions.
Prohibition.
Procedures.
Waivers.
Frm 00010
Fmt 4700
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SUBPART 204.21—PROHIBITION ON
CONTRACTING FOR CERTAIN
TELECOMMUNICATIONS AND VIDEO
SURVEILLANCE SERVICES OR
EQUIPMENT
204.2100
Scope of subpart.
This subpart implements section 1656
of the National Defense Authorization
Act for Fiscal Year 2018 (Pub. L. 115–
91) and section 889(a)(1)(A) of the
National Defense Authorization Act for
Fiscal Year 2019 (Pub. L. 115–232).
204.2101
Definitions.
As used in this subpart—
Covered defense telecommunications
equipment or services means—
(1) Telecommunications equipment
produced by Huawei Technologies
Company or ZTE Corporation, or any
subsidiary or affiliate of such entities;
(2) Telecommunications services
provided by such entities or using such
equipment; or
(3) Telecommunications equipment or
services produced or provided by an
entity that the Secretary of Defense
reasonably believes to be an entity
owned or controlled by, or otherwise
connected to, the government of a
covered foreign country.
Covered foreign country means—
(1) The People’s Republic of China; or
(2) The Russian Federation.
Covered missions means—
(1) The nuclear deterrence mission of
DoD, including with respect to nuclear
command, control, and
communications, integrated tactical
warning and attack assessment, and
continuity of Government; or
(2) The homeland defense mission of
DoD, including with respect to ballistic
missile defense.
204.2102
Solicitation provision.
(2) * * *
(i) 252.204–7016, Covered Defense
Telecommunications Equipment or
Services—Representation.
■ 3. Add subpart 204.21, consisting of
204.2100 through 204.2105, to read as
follows:
Sec.
204.2100
204.2101
204.2102
204.2103
204.2104
204.2105 Solicitation provisions and
contract clause.
Prohibition.
(a) Prohibited equipment, systems, or
services. In addition to the prohibition
at FAR 4.2102(a), unless the covered
defense telecommunications equipment
or services are subject to a waiver
described in 204.2104, the contracting
officer shall not procure or obtain, or
extend or renew a contract (e.g., exercise
an option) to procure or obtain, any
equipment, system, or service to carry
out covered missions that uses covered
defense telecommunications equipment
or services as a substantial or essential
component of any system, or as critical
technology as part of any system.
204.2103
Procedures.
(a) Representations.
(1)(i) If the offeror selects ‘‘does not’’
in response to the provision at DFARS
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252.204–7016, the contracting officer
may rely on the representation, unless
the contracting officer has an
independent reason to question the
representation. If the contracting officer
has a reason to question the ‘‘does not’’
representation in FAR 52.204–26, FAR
52.212–3(v), or 252.204–7016, then the
contracting officer shall consult with the
requiring activity and legal counsel.
(ii) If the offeror selects ‘‘does’’ in
paragraph (c) of the provision at DFARS
252.204–7016, the offeror must
complete the representation at DFARS
252.204–7017.
(2)(i) If the offeror selects ‘‘will not’’
in paragraph (d) of the provision at
DFARS 252.204–7017, the contracting
officer may rely on the representation,
unless the contracting officer has an
independent reason to question the
representation. If the contracting officer
has a reason to question the ‘‘will not’’
representation in FAR 52.204–24 or
DFARS 252.204–7017, then the
contracting officer shall consult with the
requiring activity and legal counsel.
(ii) If an offeror selects ‘‘will’’ in
paragraph (d) of the provision at DFARS
252.204–7017, the offeror must provide
the information required by paragraph
(e) of the provision. When an offeror
completes paragraph (e) of either of the
provisions at FAR 52.204–24 or DFARS
252.204–7017, the contracting officer
shall—
(A) Forward the offeror’s
representation and disclosure
information to the requiring activity;
and
(B) Not award to the offeror unless the
requiring activity advises—
(1) For equipment, systems, or
services that use covered
telecommunications equipment or
services as a substantial or essential
component of any system, or as critical
technology as part of any system, that a
waiver as described at FAR 4.2104 has
been granted; or
(2) For equipment, systems, or
services to be used to carry out covered
missions that use covered defense
telecommunications equipment or
services as a substantial or essential
component of any system, or as critical
technology as part of any system, that a
waiver as described at DFARS 204.2104
has been granted.
(b) Reporting. If a contractor reports
information to https://dibnet.dod.mil in
accordance with the clause at FAR
52.204–25 or DFARS 252.204–7018, the
Defense Cyber Crime Center will notify
the contracting officer, who will consult
with the requiring activity on how to
proceed with the contract.
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204.2104
Waivers.
The Secretary of Defense may waive
the prohibition in 204.2102(a) on a caseby-case basis for a single, one-year
period, if the Secretary—
(a) Determines such waiver to be in
the national security interests of the
United States; and
(b) Certifies to the Congressional
defense committees that—
(1) There are sufficient mitigations in
place to guarantee the ability of the
Secretary to carry out the covered
missions; and
(2) The Secretary is removing the use
of covered defense telecommunications
equipment or services in carrying out
such missions.
204.2105 Solicitation provisions and
contract clause.
(a) Use the provision at 252.204–7016,
Covered Defense Telecommunications
Equipment or Services—Representation,
in all solicitations, including
solicitations using FAR part 12
procedures for the acquisition of
commercial items and, solicitations for
task and delivery orders, basic ordering
agreements (BOAs), orders against
BOAs, blanket purchase agreements
(BPAs), and calls against BPAs.
(b) Use the provision at 252.204–7017,
Prohibition on the Acquisition of
Covered Defense Telecommunications
Equipment or Services—Representation,
in all solicitations, including
solicitations using FAR part 12
procedures for the acquisition of
commercial items, and solicitations for
task and delivery orders, BOAs, orders
against BOAs, BPAs, and calls against
BPAs.
(c) Use the clause at 252.204–7018,
Prohibition on the Acquisition of
Covered Defense Telecommunications
Equipment or Services, in all
solicitations and resultant awards,
including solicitations and contracts
using FAR part 12 procedures for the
acquisition of commercial items, and
solicitations and awards for task and
delivery orders, BOAs, orders against
BOAs, BPAs, and calls against BPAs.
PART 212—ACQUISITION OF
COMMERCIAL ITEMS
4. Amend section 212.301 by adding
paragraphs (f)(ii)(H), (I), and (J) to read
as follows:
■
212.301 Solicitation provisions and
contract clauses for the acquisition of
commercial items.
*
*
*
*
*
(f) * * *
(ii) * * *
(H) Use the provision at 252.204–
7016, Covered Defense
PO 00000
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72237
Telecommunications Equipment or
Services—Representation, as prescribed
in 204.2105(a), to comply with section
1656 of the National Defense
Authorization Act for Fiscal Year 2018
(Pub. L. 115–91).
(I) Use the provision at 252.204–7017,
Prohibition on the Acquisition of
Covered Defense Telecommunications
Equipment or Services—Representation,
as prescribed in 204.2105(b), to comply
with section 1656 of the National
Defense Authorization Act for Fiscal
Year 2018 (Pub. L. 115–91).
(J) Use the clause at 252.204–7018,
Prohibition on the Acquisition of
Covered Defense Telecommunications
Equipment or Services, as prescribed in
204.2105(c), to comply with section
1656 of the National Defense
Authorization Act for Fiscal Year 2018
(Pub. L. 115–91).
*
*
*
*
*
PART 213—SIMPLIFIED ACQUISITION
PROCEDURES
5. Amend section 213.201 by adding
a new paragraph (j) to read as follows:
■
213.201
General.
*
*
*
*
*
(j) Do not procure or obtain, or extend
or renew a contract to procure or obtain,
any equipment, system, or service to
carry out covered missions that use
covered defense telecommunications
equipment or services as a substantial or
essential component of any system, or
as critical technology as part of any
system, unless a waiver is granted. (See
subpart 204.21.)
PART 252—SOLICITATION
PROVISIONS AND CONTRACT
CLAUSES
6. Amend section 252.204–7007 by—
a. Removing the clause date ‘‘JUN
2019’’ and adding ‘‘DEC 2019’’ in its
place;
■ b. Redesignate paragraphs (d)(1)(i)
through (viii) as paragraphs (d)(1)(ii)
through (ix), respectively; and
■ c. Adding paragraph (d)(1)(i).
The addition reads as follows:
■
■
252.204–7007 Alternate A, Annual
Representations and Certifications.
*
*
*
*
*
(d)(1) * * *
(i) 252.204–7016, Covered Defense
Telecommunications Equipment or
Services—Representation. Applies to all
solicitations.
*
*
*
*
*
■ 7. Add sections 252.204–7016,
252.204–7017, and 252.204–7018 to
read as follows:
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252.204–7016 Covered Defense
Telecommunications Equipment or
Services—Representation.
As prescribed in 204.2105(a), use the
following provision:
Covered Defense Telecommunications
Equipment or Services—Representation (Dec
2019)
(a) Definitions. As used in this provision,
covered defense telecommunications
equipment or services has the meaning
provided in the clause 252.204–7018,
Prohibition on the Acquisition of Covered
Defense Telecommunications Equipment or
Services.
(b) Procedures. The Offeror shall review
the list of excluded parties in the System for
Award Management (SAM) (https://
www.sam.gov) for entities excluded from
receiving federal awards for ‘‘covered defense
telecommunications equipment or services’’.
(c) Representation. The Offeror represents
that it [ ] does, [ ] does not provide
covered defense telecommunications
equipment or services as a part of its offered
products or services to the Government in the
performance of any contract, subcontract, or
other contractual instrument.
(End of provision)
252.204–7017 Prohibition on the
Acquisition of Covered Defense
Telecommunications Equipment or
Services—Representation.
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As prescribed in 204.2105(b), use the
following provision:
Prohibition on the Acquisiton of Covered
Defense Telecommunications Equipment or
Services—Representation (Dec 2019)
The Offeror is not required to complete the
representation in this provision if the Offeror
has represented in the provision at 252.204–
7016, Covered Defense Telecommunications
Equipment or Services—Representation, that
it ‘‘does not provide covered defense
telecommunications equipment or services as
a part of its offered products or services to
the Government in the performance of any
contract, subcontract, or other contractual
instrument.’’
(a) Definitions. Covered defense
telecommunications equipment or services,
covered mission, critical technology, and
substantial or essential component, as used
in this provision, have the meanings given in
the 252.204–7018 clause, Prohibition on the
Acquisition of Covered Defense
Telecommunications Equipment or Services,
of this solicitation.
(b) Prohibition. Section 1656 of the
National Defense Authorization Act for Fiscal
Year 2018 (Pub. L. 115–91) prohibits agencies
from procuring or obtaining, or extending or
renewing a contract to procure or obtain, any
equipment, system, or service to carry out
covered missions that uses covered defense
telecommunications equipment or services as
a substantial or essential component of any
system, or as critical technology as part of
any system.
(c) Procedures. The Offeror shall review
the list of excluded parties in the System for
Award Management (SAM) at https://
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www.sam.gov for entities that are excluded
when providing any equipment, system, or
service to carry out covered missions that
uses covered defense telecommunications
equipment or services as a substantial or
essential component of any system, or as
critical technology as part of any system,
unless a waiver is granted.
(d) Representation. If in its annual
representations and certifications in SAM the
Offeror has represented in paragraph (c) of
the provision at 252.204–7016, Covered
Defense Telecommunications Equipment or
Services—Representation, that it ‘‘does’’
provide covered defense telecommunications
equipment or services as a part of its offered
products or services to the Government in the
performance of any contract, subcontract, or
other contractual instrument, then the
Offeror shall complete the following
additional representation:
The Offeror represents that it [ ] will [ ] will
not provide covered defense
telecommunications equipment or services as
a part of its offered products or services to
DoD in the performance of any award
resulting from this solicitation.
(e) Disclosures. If the Offeror has
represented in paragraph (d) of this provision
that it ‘‘will provide covered defense
telecommunications equipment or services,’’
the Offeror shall provide the following
information as part of the offer:
(1) A description of all covered defense
telecommunications equipment and services
offered (include brand or manufacturer;
product, such as model number, original
equipment manufacturer (OEM) number,
manufacturer part number, or wholesaler
number; and item description, as applicable).
(2) An explanation of the proposed use of
covered defense telecommunications
equipment and services and any factors
relevant to determining if such use would be
permissible under the prohibition referenced
in paragraph (b) of this provision.
(3) For services, the entity providing the
covered defense telecommunications services
(include entity name, unique entity
identifier, and Commercial and Government
Entity (CAGE) code, if known).
(4) For equipment, the entity that produced
or provided the covered defense
telecommunications equipment (include
entity name, unique entity identifier, CAGE
code, and whether the entity was the OEM
or a distributor, if known).
(End of provision)
252.204–7018 Prohibition on the
Acquisition of Covered Defense
Telecommunications Equipment or
Services.
As prescribed in 204.2105(c), use the
following clause:
Prohibition on the Acquisition of Covered
Defense Telecommunications Equipment or
Services (Dec 2019)
(a) Definitions. As used in this clause—
Covered defense telecommunications
equipment or services means—
(1) Telecommunications equipment
produced by Huawei Technologies Company
or ZTE Corporation, or any subsidiary or
affiliate of such entities;
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(2) Telecommunications services provided
by such entities or using such equipment; or
(3) Telecommunications equipment or
services produced or provided by an entity
that the Secretary of Defense reasonably
believes to be an entity owned or controlled
by, or otherwise connected to, the
government of a covered foreign country.
Covered foreign country means—
(1) The People’s Republic of China; or
(2) The Russian Federation.
Covered missions means—
(1) The nuclear deterrence mission of DoD,
including with respect to nuclear command,
control, and communications, integrated
tactical warning and attack assessment, and
continuity of Government; or
(2) The homeland defense mission of DoD,
including with respect to ballistic missile
defense.
‘‘Critical technology’’ means—
(1) Defense articles or defense services
included on the United States Munitions List
set forth in the International Traffic in Arms
Regulations under subchapter M of chapter I
of title 22, Code of Federal Regulations;
(2) Items included on the Commerce
Control List set forth in Supplement No. 1 to
part 774 of the Export Administration
Regulations under subchapter C of chapter
VII of title 15, Code of Federal Regulations,
and controlled—
(i) Pursuant to multilateral regimes,
including for reasons relating to national
security, chemical and biological weapons
proliferation, nuclear nonproliferation, or
missile technology; or
(ii) For reasons relating to regional stability
or surreptitious listening;
(3) Specially designed and prepared
nuclear equipment, parts and components,
materials, software, and technology covered
by part 810 of title 10, Code of Federal
Regulations (relating to assistance to foreign
atomic energy activities);
(4) Nuclear facilities, equipment, and
material covered by part 110 of title 10, Code
of Federal Regulations (relating to export and
import of nuclear equipment and material);
(5) Select agents and toxins covered by part
331 of title 7, Code of Federal Regulations,
part 121 of title 9 of such Code, or part 73
of title 42 of such Code; or
(6) Emerging and foundational
technologies controlled pursuant to section
1758 of the Export Control Reform Act of
2018 (50 U.S.C. 4817).
Substantial or essential component means
any component necessary for the proper
function or performance of a piece of
equipment, system, or service.
(b) Prohibition. In accordance with section
1656 of the National Defense Authorization
Act for Fiscal Year 2018 (Pub. L. 115–91), the
contractor shall not provide to the
Government any equipment, system, or
service to carry out covered missions that
uses covered defense telecommunications
equipment or services as a substantial or
essential component of any system, or as
critical technology as part of any system,
unless the covered defense
telecommunication equipment or services are
covered by a waiver described in Defense
Federal Acquisition Regulation Supplement
204.2104.
E:\FR\FM\31DER1.SGM
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Federal Register / Vol. 84, No. 250 / Tuesday, December 31, 2019 / Rules and Regulations
(c) Procedures. The Contractor shall review
the list of excluded parties in the System for
Award Management (SAM) at https://
www.sam.gov for entities that are excluded
when providing any equipment, system, or
service, to carry out covered missions, that
uses covered defense telecommunications
equipment or services as a substantial or
essential component of any system, or as
critical technology as part of any system,
unless a waiver is granted.
(d) Reporting.
(1) In the event the Contractor identifies
covered defense telecommunications
equipment or services used as a substantial
or essential component of any system, or as
critical technology as part of any system,
during contract performance, the Contractor
shall report at https://dibnet.dod.mil the
information in paragraph (d)(2) of this clause.
(2) The Contractor shall report the
following information pursuant to paragraph
(d)(1) of this clause:
(i) Within one business day from the date
of such identification or notification: The
contract number; the order number(s), if
applicable; supplier name; brand; model
number (original equipment manufacturer
number, manufacturer part number, or
wholesaler number); item description; and
any readily available information about
mitigation actions undertaken or
recommended.
(ii) Within 10 business days of submitting
the information in paragraph (d)(2)(i) of this
clause: Any further available information
about mitigation actions undertaken or
recommended. In addition, the Contractor
shall describe the efforts it undertook to
prevent use or submission of a covered
defense telecommunications equipment or
services, and any additional efforts that will
be incorporated to prevent future use or
submission of covered telecommunications
equipment or services.
(e) Subcontracts. The Contractor shall
insert the substance of this clause, including
this paragraph (e), in all subcontracts and
other contractual instruments, including
subcontracts for the acquisition of
commercial items.
(End of clause)
*
*
*
*
*
[FR Doc. 2019–27824 Filed 12–30–19; 8:45 am]
khammond on DSKJM1Z7X2PROD with RULES
BILLING CODE 5001–06–P
DoD published an interim rule in the
Federal Register at 84 FR 18156 on
April 30, 2019, to implement section
871 of the National Defense
Authorization Act for Fiscal Year 2019,
codified at 10 U.S.C. 2533c. 10 U.S.C.
2533c prohibits acquisition of certain
magnets and tungsten from North Korea,
China, Russia, and Iran. Four
respondents submitted public
comments in response to the interim
rule.
tungsten (DFARS 225.7018) from
DFARS 225.7003 to DFARS 225.7001
and included them in the clause at
DFARS 252.225–7052.
2. Production of tungsten. Added a
description of the production of
tungsten at DFARS 225.7018–2(c), to
explain the applicability of the
restrictions on the production of
tungsten.
3. Exceptions. Since samarium-cobalt
magnets are restricted under 10 U.S.C.
2533b (specialty metals) as well as 10
U.S.C. 2533c—
• Added cross references to DFARS
Procedures, Guidance, and Information
(PGI) at DFARS 225.7018–3 to provide
guidance where the exceptions for
samarium-cobalt magnets under 10
U.S.C. 2533b are more stringent than the
comparable exceptions under 10 U.S.C.
2533c;
• Provided the statutory cite to 10
U.S.C. 2533b(m)(4) and added the
explanation of ‘‘required form’’ at
DFARS 225.7003–3 and 2352.225–
7009(c)(5), in lieu of the definitions of
‘‘required form’’ at DFARS 225.7003–1
and 252.225–7009(a), because it was not
actually a definition of ‘‘required form’’
and a different explanation of ‘‘required
form’’ is now required for the
restrictions on samarium-cobalt and
neodymium-iron-boron magnets; and
• Added a tailored explanation of
‘‘required form’’ to the nonavailability
exception for tungsten heavy alloy and
certain magnets at DFARS 225.7018–
3(d) and 252.225–7052(c)(2). No
explanation of required form is
necessary with regard to tungsten
powder.
4. Approval level for nonavailability
determination. Lowered the approval
level to head of the contracting activity
for individual nonavailability
determinations at DFARS 225.7018–4.
II. Discussion and Analysis
B. Analysis of Public Comments
DoD reviewed the public comments in
the development of the final rule. A
discussion of the comments and the
changes made to the rule as a result of
those comments is provided, as follows:
1. General.
a. Support for statute and rule.
Comment: Multiple respondents
expressed support for the statute and
strong implementation of the statute in
the interim rule. One respondent stated
support for DoD’s efforts to promulgate
a strong rule that will support a robust
and healthy domestic industrial base,
because a strong national strategic
materials industry is important to
national security. This respondent also
supported speedy implementation of a
final rule. Another respondent noted
that the interim rule will shield U.S.
critical resource needs from the
decisions of foreign adversaries.
Response: Noted.
b. Oppose the statute and the rule.
DEPARTMENT OF DEFENSE
Defense Acquisition Regulations
System
48 CFR Parts 212, 225, and 252
[Docket DARS–2019–0016]
RIN 0750–AK15
Defense Federal Acquisition
Regulation Supplement: Restriction on
the Acquisition of Certain Magnets and
Tungsten (DFARS Case 2018–D054)
Defense Acquisition
Regulations System, Department of
Defense (DoD).
ACTION: Final rule.
AGENCY:
DoD has adopted as final,
with changes, an interim rule amending
the Defense Federal Acquisition
Regulation Supplement (DFARS) to
implement a section of the National
Defense Authorization Act for Fiscal
Year 2019 that prohibits acquisition of
certain magnets and tungsten from
North Korea, China, Russia, and Iran.
DATES: Effective December 31, 2019.
FOR FURTHER INFORMATION CONTACT: Ms.
Amy Williams, telephone 571–372–
6106.
SUMMARY:
SUPPLEMENTARY INFORMATION:
I. Background
A. Summary of Significant Changes
From the Interim Rule
1. Definitions.
• Added definitions of ‘‘electronic
device’’ and ‘‘tungsten heavy alloy’’ at
DFARS 225.7018–1 and the associated
clause at DFARS 252.225–7052,
Restriction on the Acquisition of Certain
Magnets and Tungsten.
• Moved definitions of ‘‘assembly,’’
‘‘end item,’’ and ‘‘subsystem,’’ which
apply to both specialty metals (DFARS
225.7003) and certain magnets and
VerDate Sep<11>2014
15:44 Dec 30, 2019
Jkt 250001
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PO 00000
Frm 00013
Fmt 4700
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]]>Agencies
[Federal Register Volume 84, Number 250 (Tuesday, December 31, 2019)]
[Rules and Regulations]
[Pages 72231-72239]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2019-27824]
=======================================================================
-----------------------------------------------------------------------
DEPARTMENT OF DEFENSE
Defense Acquisition Regulations System
48 CFR Parts 204, 212, 213, and 252
[Docket DARS-2019-0063]
RIN 0750-AJ84
Defense Federal Acquisition Regulation Supplement: Covered
Defense Telecommunications Equipment or Services (DFARS Case 2018-D022)
AGENCY: Defense Acquisition Regulations System, Department of Defense
(DoD).
ACTION: Interim rule.
-----------------------------------------------------------------------
SUMMARY: DoD is issuing an interim rule amending the Defense Federal
Acquisition Regulation Supplement (DFARS) to implement sections of the
National Defense Authorization Acts for Fiscal Years 2018 and 2019
related to
[[Page 72232]]
the procurement of covered telecommunications equipment or services.
Specifically, the rule prohibits the procurement of any equipment,
system, or service to carry out the DoD nuclear deterrence or homeland
defense missions that uses covered telecommunications equipment or
services as a substantial or essential component of any system, or as a
critical technology as a part of any system. Covered telecommunications
equipment or services includes telecommunications equipment or services
from certain Chinese entities, including their subsidiaries and
affiliates, and from any other entities that the Secretary of Defense
reasonably believes to be owned or controlled by or otherwise connected
to, the government of the People's Republic of China or the Russian
Federation.
DATES:
Effective Date: December 31, 2019.
Applicability: Contracting officers shall include the provisions at
DFARS 252.204-7016, Covered Defense Telecommunications Equipment or
Services--Representation, and DFARS 252.204-7017, Prohibition on the
Acquisition of Covered Defense Telecommunications Equipment or
Services--Representation, as prescribed--
In solicitations issued on or after December 31, 2019; and
In solicitations issued before December 31, 2019, provided
the resulting award occurs on or after December 31, 2019.
Contracting officers shall include the clause at DFARS 252.204-
7018, Prohibition on the Acquisition of Covered Defense
Telecommunications Equipment or Services, as prescribed, in all awards
made on or after December 31, 2019.
Contracting officers shall modify, in accordance with Federal
Acquisition Regulation (FAR) 1.108(d), existing indefinite-delivery
contracts, blanket purchase agreements, or basic ordering agreements to
include the DFARS clause for future orders or calls, prior to placing
any future orders or calls.
If modifying an existing contract, order, or call to extend the
period of performance, including exercising an option, contracting
officers shall include the DFARS clause in accordance with FAR
1.108(d).
Comment Date: Comments on the interim rule should be submitted in
writing to the address shown below on or before March 2, 2020, to be
considered in the formation of a final rule.
ADDRESSES: Submit comments identified by DFARS Case 2018-D022, using
any of the following methods:
[cir] Federal eRulemaking Portal: https://www.regulations.gov.
Search for ``DFARS Case 2018-D022''. Select ``Comment Now'' and follow
the instructions provided to submit a comment. Please include ``DFARS
Case 2018-D022'' on any attached documents.
[cir] Email: [email protected]. Include DFARS Case 2018-D022 in
the subject line of the message.
[cir] Fax: 571-372-6094.
[cir] Mail: Defense Acquisition Regulations System, Attn: Ms.
Heather Kitchens, OUSD(A&S)DPC/DARS, Room 3B941, 3060 Defense Pentagon,
Washington, DC 20301-3060.
Comments received generally will be posted without change to https://www.regulations.gov, including any personal information provided. To
confirm receipt of your comment(s), please check www.regulations.gov,
approximately two to three days after submission to verify posting
(except allow 30 days for posting of comments submitted by mail).
FOR FURTHER INFORMATION CONTACT: Ms. Heather Kitchens, telephone 571-
372-6104.
SUPPLEMENTARY INFORMATION:
I. Background
The Federal Acquisition Regulations System codifies and publishes
uniform policies and procedures for acquisition by all executive
agencies. The Federal Acquisition Regulations System consists of the
Federal Acquisition Regulation (FAR), which is the primary document,
and agency acquisition regulations that implement or supplement the
FAR. The DFARS is a supplement to the FAR that provides DoD-specific
acquisition regulations that DoD contracting officers--and those
contractors doing business with DoD--must follow in the procurement
process for supplies and services.
Section 1656 of the National Defense Authorization Act (NDAA) for
Fiscal Year (FY) 2018 (Pub. L. 115-91) prohibited DoD from procuring or
obtaining, or extending or renewing a contract to procure or obtain,
any equipment, system, or service to carry out the DoD nuclear
deterrence or homeland defense missions that uses covered
telecommunications equipment or services as a substantial or essential
component of any system, or as a critical technology as a part of any
system. Covered telecommunications equipment or services includes
telecommunications equipment or services from certain Chinese entities,
including their subsidiaries and affiliates, and from any other
entities that the Secretary of Defense reasonably believes to be an
entity owned or controlled by, or otherwise connected to, the
government of the People's Republic of China or the Russian Federation.
Likewise, section 889(a)(1)(A) of the NDAA for FY 2019 (Pub. L.
115-232) established a Governmentwide prohibition on procuring or
obtaining, or extending or renewing a contract to procure or obtain,
any equipment, system, or service that uses covered telecommunications
equipment or services as a substantial or essential component of any
system, or as a critical technology as a part of any system. Covered
telecommunications equipment or services includes certain video
surveillance and telecommunications equipment or services from certain
Chinese entities, including their subsidiaries and affiliates, and from
any other entities that the Secretary of Defense, in consultation with
the Director of National Intelligence or the Director of the Federal
Bureau of Investigation, reasonably believes to be an entity owned or
controlled by, or otherwise connected to, the government of the
People's Republic of China.
The DoD prohibition under 1656 differs from the Governmentwide
prohibition under 889(a)(1)(A) in that it: Applies to equipment,
systems, or services to carry out the DoD nuclear deterrence or
homeland defense missions; includes different definitions of ``covered
telecommunications equipment or services'' and ``covered foreign
country''; does not include exceptions from the prohibition; and
provides independent waiver authority to the Secretary of Defense. This
interim DFARS rule implements the section 1656 prohibition for DoD, and
is structured to align with the FAR implementation of the section
889(a)(1)(A) Governmentwide prohibition.
To implement section 889(a)(1)(A) of the NDAA, DoD, the General
Services Administration (GSA), and the National Aeronautics and Space
Administration (NASA) published an interim rule in the Federal Register
at 84 FR 40216 on August 13, 2019, as amended by the interim rule
published at 84 FR 68314 on December 13, 2019 (reference FAR Case 2018-
017, Prohibition on Contracting for Certain Telecommunications and
Video Surveillance Services or Equipment).
This interim DFARS rule implements the section 1656 and
889(a)(1)(A)
[[Page 72233]]
prohibitions for DoD, and is structured to align with the FAR
implementation of the section 889(a)(1)(A) Governmentwide prohibition.
The interim rule should increase security of systems and critical
technology that is part of any system used to carry out the nuclear
deterrence and homeland defense missions of DoD by prohibiting the use
of telecommunications equipment or services from certain Chinese
entities, including their subsidiaries and affiliates, and from any
other entities that the Secretary of Defense reasonably believes to be
owned or controlled by or otherwise connected to, the government of the
People's Republic of China or the Russian Federation.
II. Discussion and Analysis
To implement the section 1656 prohibition and the DoD-specific
procedures associated with the 889(a)(1)(A) prohibition in the FAR,
this rule adds: DFARS subpart 204.21, Prohibition on Contracting for
Certain telecommunications and Video Surveillance Services or
Equipment; the provision at DFARS 252.204-7016, Covered Defense
Telecommunications Equipment or Services--Representation; the provision
at DFARS 252.204-7017, Prohibition on the Acquisition of Covered
Defense Telecommunications Equipment or Services--Representation; and
the clause at DFARS 252.204-7018, Prohibition on the Acquisition of
Covered Defense Telecommunications Equipment or Services. The new DFARS
subpart, provisions, and clause mirror the FAR implementation of
section 889(a)(1)(A) at FAR subpart 4.21, the provisions at FAR 52.204-
24 and 52.204-26, and the clause at FAR 52.204-25, but the subpart
addresses the section 1656 prohibition. The section 889(a)(1)(A)
prohibition remains implemented in the FAR, except that the DoD-
specific procedures for handling representations from offerors and
reports from contractors contained in this rule apply to both the
section 1656 and 889 prohibitions.
The new DFARS subpart 204.21 notifies contracting officers of the
section 1656 prohibition, provides DoD-specific procedures for sections
1656 and 889(a)(1)(A), advises of the waiver process for section 1656,
and prescribes the two new solicitation provisions and the contract
clause associated with section 1656. To differentiate between the FAR
and DFARS prohibitions, this DFARS rule uses the term ``covered defense
telecommunications equipment or services'' instead of ``covered
telecommunications equipment or services,'' and provides a new
definition of ``covered foreign country'' for the DFARS coverage of the
section 1656 prohibition. These differences reflect the additional
requirements in section 1656, which only apply to the DFARS rule.
This interim DFARS rule provides a two-tier representation
structure to ensure contracting officers comply with the section 1656
prohibition. The DFARS provision 252.204-7016 requires offerors to
represent in the System for Award Management (SAM) at least annually
whether they provide covered defense telecommunications equipment or
services as part of their offerings to the Government. Only offerors
who represent that they do provide covered defense telecommunications
equipment or services in the annual representation will be required to
provide the offer-by-offer representation in the provision at DFARS
252.204-7017. If an offeror represents in its offer-by-offer
representation under 252.204-7017 that it will provide covered defense
telecommunications equipment or services as part of its offered
products or services to DoD in the performance of any award resulting
from the solicitation, then the offeror must provide certain
disclosures about the equipment or services. DoD will use the
information provided in the disclosure to determine whether the award
is prohibited or if a waiver request may be appropriate. Offerors
should note that annual representation in SAM is currently provided
under the number 252.204-70ZZ, which references the clause at 252.204-
YY; in the next release of updates to SAM, the provision will be
updated to reflect 252.204-7016 and the clause will be updated to
reflect 252.204-7018.
The FAR uses the same two-tier representation structure to
implement the section 889(a)(1)(A) prohibition, because it
significantly reduces the reporting burden on the public by allowing
for an annual representation, in lieu of an offer-by-offer
representation, if an offeror does not offer the prohibited products
and services to the Government. At FAR 4.2103(a), contracting officers
are directed to follow agency procedures when an offeror represents
that it will include covered telecommunications equipment or services
in its offer, or if the contracting officer has reason to question an
offeror's representations.
To implement the section 889(a)(1)(A) prohibition, in part, and the
section 1656 prohibition, this interim DFARS rule provides the agency
procedures for handling the offeror representations in response to the
FAR provisions at 52.204-26, 52.212-3(v), and 52.204-24, and the DFARS
provisions at 252.204-7016 and 252.204-7017. The agency procedures
require that, if the contracting officer has reason to question a
negative representation from an offeror, then the contracting officer
is instructed to consult with their requiring activity and legal
counsel. If the offeror discloses information about covered
telecommunications equipment or services to be included in its offer
(as required by paragraph (e) of FAR 52.204-24) or covered defense
telecommunications equipment or services (as required by paragraph (e)
of DFARS 252.204-7017), then the contracting officer is required to
forward the information to the requiring activity and may not award to
the offeror unless the requiring activity advises that they have
obtained one of the waivers described at FAR 4.2104 or DFARS 204.2104,
as appropriate.
Similar to the clause at FAR 52.204-25, the new DFARS clause
252.204-7018 prohibits contractors from providing equipment, system, or
services that use covered defense telecommunications equipment or
services as a substantial or essential component of any system, or as a
critical technology as a part of any system. However, unlike the FAR
clause, this prohibition only applies if the equipment, systems, or
services are to carry out the DoD nuclear deterrence or homeland
defense missions. The clause requires contractors and subcontractors to
report through https://dibnet.dod.mil any discovery of covered defense
telecommunications equipment or services during the course of contract
performance.
FAR 4.2103(b) directs contracting officers to follow agency
procedures when a contractor provides the report required under FAR
52.204-25. This interim DFARS rule provides the agency procedures at
DFARS 204.2103(b) for handling reports received under FAR 52.204-25 and
DFARS 252.204-7018. Specifically, contracting officers are advised that
they will be notified by Defense Cyber Crime Center regarding any
reports received and the contracting officer shall consult with the
requiring activity on how to proceed with the contract.
This interim rule also adds text in DFARS subpart 212.3,
Solicitation Provisions and Contract Clauses for the Acquisition of
Commercial Items, and DFARS subpart 213.2, Actions at or Below the
Micro-purchase Threshold, to address application of section 1656 to
commercial items and micro-purchases. This interim rule also amends
DFARS 252.204-7007, Alternate A, Annual
[[Page 72234]]
Representations and Certifications, by updating the list of annual
representations and certifications to include the new provision at
DFARS 252.204-7016.
III. Applicability to Contracts at or Below the Simplified Acquisition
Threshold and for Commercial Items, Including Commercially Available
Off-the-Shelf Items
This rule creates two new provisions and a new clause, which apply
to contracts at or below the simplified acquisition threshold (SAT) and
to commercial items (including commercially available off-the-shelf
(COTS) items). The following provisions and clause are created by this
interim rule:
The provision at DFARS 252.204-7016, Covered Defense
Telecommunications Equipment or Services--Representation.
The provision at DFARS 252.204-7017, Prohibition on
Acquisition of Covered Defense Telecommunications Equipment or
Services--Representation.
The clause at DFARS 252.204-7018, Prohibition on the
Acquisition of Covered Defense Telecommunications Equipment or
Services.
A. Applicability to Contracts at or Below the Simplified Acquisition
Threshold
41 U.S.C. 1905 governs the applicability of laws to contracts or
subcontracts in amounts not greater than the simplified acquisition
threshold. It is intended to limit the applicability of laws to such
contracts or subcontracts. 41 U.S.C. 1905 provides that if a provision
of law contains criminal or civil penalties, or if the FAR Council
makes a written determination that it is not in the best interest of
the Federal Government to exempt contracts or subcontracts at or below
the SAT, the law will apply to them. The Principal 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. DoD has made that
determination to apply this rule at or below the simplified acquisition
threshold.
B. Applicability to Contracts for the Acquisition of Commercial Items,
Including COTS Items
10 U.S.C. 2375 governs the applicability of laws to contracts and
subcontracts for the acquisition of commercial items, including COTS
items, and is intended to limit the applicability of laws to contracts
and subcontracts for the acquisition of commercial items, including
COTS items. 10 U.S.C. 2375 provides that if a provision of law contains
criminal or civil penalties, or if the Under Secretary of Defense
(Acquisition and Sustainment) (USD(A&S)) 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. Based on delegations of
authority from USD(A&S), the Principal Director, DPC, is the
appropriate authority to make this determination. DoD has made that
determination to apply this rule to the acquisition of commercial
items, including COTS items.
C. Determinations
Consistent with the determinations that DoD has made with regard to
the application of the requirements of section 1656 of the NDAA for FY
2018, the two provisions and the clause apply to all solicitations and
contracts, including solicitations and contracts below the SAT and to
the acquisition of commercial items (including COTS items). It is
important to apply the statutory prohibitions to all acquisitions in
order to protect the security of nuclear command, control, and
communications systems and ballistic missile defense from commercial
dependencies on equipment and services from certain companies or
certain foreign countries that are considered to create a risk to our
national security.
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 a significant regulatory action and, therefore, was subject to
review under section 6(b) of E.O. 12866, Regulatory Planning and
Review, dated September 30, 1993. This rule is not a major rule under 5
U.S.C. 804.
V. Executive Order 13771
This rule is not subject to the requirements of E.O. 13771, because
the rule is issued with respect to a national security function of the
United States.
VI. Regulatory Flexibility Act
This interim rule may 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. An initial regulatory
flexibility analysis has been performed and is summarized as follows:
This interim rule is necessary to implement section 1656 of the
National Defense Authorization Act (NDAA) for Fiscal Year (FY) 2018 and
section 889(a)(1)(A) of the NDAA for FY 2019.
The objective of this rule is to increase security of systems and
critical technology that is part of any system used to carry out the
nuclear deterrence and homeland defense missions of DoD by prohibiting
the use of telecommunications equipment or services from certain
Chinese entities, including their subsidiaries and affiliates, and from
any other entities that the Secretary of Defense reasonably believes to
be owned or controlled by or otherwise connected to, the government of
the People's Republic of China or the Russian Federation.
To implement the prohibition, this rule creates two new
representations and a new reporting requirement. Data from the Federal
Procurement Data System (FPDS) and the System for Award Management
(SAM) were used to estimate the number of small businesses that will be
affected by this rule:
DFARS provision 252.204-7016, Covered Defense
Telecommunications Equipment or Services--Representation, requires each
offeror to represent whether it provides covered defense
telecommunications equipment or services as a part of its offered
products or services to the Government in the performance of any
contract, subcontract, or other contractual instrument. All offerors
will be required to complete this representation in the SAM at least
annually. As of July 31, 2019, there were 424,927 active registrants in
SAM. Approximately 49.78% (211,529) of the active SAM registrants
completed the DoD-specific representations and certifications, of which
approximately 158,647 (75 percent) are estimated to be registered as a
small entity for their primary NAICS code. These small entities would
be required to complete the representation under DFARS 252.204-7016.
DFARS 252.204-7017, Prohibition on the Acquisition of
Covered Defense Telecommunications Equipment or Services--
Representation, requires that if an offeror provides an affirmative
representation under the DFARS provision 252.204-7016, then that
[[Page 72235]]
offeror will be required to represent on every solicitation whether it
is including covered defense telecommunications equipment or services
as a part of its offer in response to the solicitation. If the offeror
responds affirmatively, the offeror is required to further disclose
information about the covered defense telecommunications equipment or
services. According to data in FPDS for fiscal years (FYs) 2016 through
2018, on average DoD makes awards each year to approximately 44,277
unique entities, of which 30,762 are unique small entities. DoD
estimates that approximately 3,076 (10 percent) of the unique small
entities that receive DoD awards each year may be required to submit
the additional offer-by-offer representation. DoD further estimates
that of the estimated 3,076 unique small entities that may be required
to represent on an offer-by-offer basis, it is estimated that 10
percent (308 unique small entities) may also be required to provide the
additional disclosure within the representation.
DFARS clause 252.204-7018, Prohibition on the Acquisition
of Covered Defense Telecommunications Equipment or Services, requires
contractors and subcontractors to report through https://dibnet.dod.mil, any discovery of covered defense telecommunications
equipment or services that is being used as a substantial or essential
component of any system, or as critical technology as part of any
system, during the course of contract performance. At this time, there
is no way for DoD to estimate how many contractors (small or otherwise)
may make such discovery and be required to submit a report; however,
DoD expects this number to be relatively low. DoD estimates that
approximately 1,538 entities (5 percent of the 30,762 unique small
entities that receive DoD awards annually) may be required to submit a
report to DIBNET.
The rule does not duplicate, overlap, or conflict with any other
Federal rules. This interim rule mirrors implementation of a similar
prohibition in the Federal Acquisition Regulation associated with
section 889(a)(1)(A) of the FY 2019 NDAA. It is necessary to create
additional representations and reporting requirements in the DFARS to
implement the section 1656 prohibition for DoD, because the statutory
definitions that form the basis of the prohibitions are not the same.
Section 889(a)(1)(A) includes certain types of video surveillance
equipment in the definition of covered telecommunications equipment or
services and defines ``covered foreign country'' as the People's
Republic of China. In section 1656, covered telecommunications
equipment and services includes only telecommunications equipment and
services (not video surveillance equipment or services); is limited to
equipment, system, or services used to carry out the nuclear deterrence
and homeland defense missions; and includes Russia in the definition of
``covered foreign country.''
DoD has been unable to identify any significant alternatives that
would accomplish the stated objectives of the statute and minimize any
significant economic impact of the rule. Because this rule is a matter
of national security, it must apply to acquisitions that do not exceed
the simplified acquisition threshold (including micro-purchases), and
acquisitions of commercial items (including commercially available off-
the-shelf items). Small entities cannot be exempted from coverage
without increased risk to national security. The rule is not expected
to have significant economic impact, except on entities that currently
or plan to include covered defense telecommunications equipment or
services as part of their offered products and services to the
Government.
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 2018-D022), in
correspondence.
VII. Paperwork Reduction Act
DoD has requested and the Office of Management and Budget has
approved an emergency clearance of information collection requirements
under the Paperwork Reduction Act (44 U.S.C. chapter 35). DoD is
soliciting comments on this emergency clearance 0750-0002, titled
``Covered Defense Telecommunications Equipment or Services.''
A. Estimate of Public Reporting Burden
The annual public reporting burden is estimated as follows:
DFARS 252.204-7016 Representation
Respondents: 211,529.
Responses per respondent: 1.
Total annual responses: 211,529.
Hours per response: 0.08333.
Total Burden Hours: 17,627.
DFARS 252.204-7017 Representation
Respondents: 4,428.
Responses per respondent: 45.
Total annual responses: 199,260.
Hours per response: 0.08333.
Total burden hours: 16,604.
DFARS 252.204-7017 Disclosure
Respondents: 443.
Responses per respondent: 45.
Total annual responses: 19,935.
Hours per response: 3.
Total burden hours: 59,805.
DFARS 252.204-7018 Reporting
Respondents: 443.
Responses per respondent: 5.
Total annual responses: 2,215.
Hours per response: 1.5.
Total burden hours: 3,323.
Total Public Responses and Hours
Total annual responses: 432,939.
Total burden hours: 97,359.
B. Request for Comments Regarding Paperwork Burden
Written comments and recommendations on the information collection,
including suggestions for reducing this burden, should be sent to Ms.
Jasmeet Seehra at the Office of Management and Budget, Desk Officer for
DoD, Room 10236, New Executive Office Building, Washington, DC 20503,
or email [email protected], with a copy to the Defense
Acquisition Regulations System, Attn: Ms. Heather Kitchens,
OUSD(A&S)DPC/DARS, Room 3B941, 3060 Defense Pentagon, Washington, DC
20301-3060. Comments can be received from 30 to 60 days after the date
of this notice, but comments to OMB will be most useful if received by
OMB within 30 days after the date of this notice.
Public comments are particularly invited on: Whether this
collection of information is necessary for the proper performance of
functions of the DFARS, and will have practical utility; whether our
estimate of the public burden of this collection of information is
accurate, and based on valid assumptions and methodology; ways to
enhance the quality, utility, and clarity of the information to be
collected; and ways in which we can minimize the burden of the
collection of information on those who are to respond, through the use
of appropriate technological collection techniques or other forms of
information technology.
To request more information on this proposed information collection
or to obtain a copy of the proposal and associated collection
instruments, please write to the Defense Acquisition Regulations
System, Attn: Ms. Heather
[[Page 72236]]
Kitchens, OUSD(A&S)DPC/DARS, Room 3B941, 3060 Defense Pentagon,
Washington, DC 20301-3060, or email [email protected]. Include DFARS
Case 2018-D022 in the subject line of the message.
VIII. Determination To Issue an Interim Rule
A determination has been made under the authority of the Secretary
of Defense that urgent and compelling reasons exist to promulgate this
interim rule without prior opportunity for public comment. It is
critical that the DFARS is immediately revised to include the
requirements of this statute for the reason described below.
Section 1656 of the National Defense Authorization Act (NDAA) for
Fiscal Year (FY) 2018 (Pub. L. 115-91) provides that DoD may not
procure or obtain, or extend or renew a contract to procure or obtain,
any equipment, system, or service to carry out the DoD nuclear
deterrence or homeland defense missions that uses covered defense
telecommunications equipment or services as a substantial or essential
component of any system or as a critical technology as a part of any
system. The section 1656 prohibition is similar to the Government-wide
prohibition enacted under section 889 of the NDAA for FY 2019 (Pub. L.
115-232) on the procurement of equipment, systems, or services that use
covered telecommunications and video surveillance equipment or services
as a substantial or essential component of any system or as a critical
technology as a part of any system. The rule also implements DoD-
specific procedures associated with the section 889(a)(1)(A)
prohibition in the FAR.
While DoD worked closely with GSA, NASA, and the Office of Federal
Procurement Policy to develop the framework for these types of
prohibitions in the FAR rule implementing section 889, DoD issued
internal guidance to establish an approval process for the procurement
of certain telecommunications and video surveillance services or
equipment. However, codification of this prohibition in the DFARS and
the procedures contained in this rule are urgent, because the rule
aligns with the rollout of the annual representation from offerors in
the System for Award Management. The representations from offerors
required by this rule will give the Department the assurances it needs
that it is not violating the statutory prohibition and that it can rely
on the integrity and security of equipment that is critical to the DoD
nuclear deterrence mission of DoD and the homeland defense mission. It
is essential that DoD be able to protect against entities that may
intentionally try to deliver products or services that could infiltrate
and exploit our military communications and jeopardize our national
security network.
DoD's highest priority missions (to include nuclear command,
control, and communications, continuity of Government; and ballistic
missile defense) must be executed with complete confidence on the
security, reliability, and resiliency to operate in a cyber-contested
environment. DoD must take immediate action to eliminate
vulnerabilities in the supply chain that would undermine the security
of our nation. However, pursuant to 41 U.S.C. 1707 and FAR 1.501-3(b),
DoD will consider public comments received in response to this interim
rule in the formation of the final rule.
List of Subjects in 48 CFR Parts 204, 212, 213, and 252
Government procurement.
Jennifer Lee Hawes,
Regulatory Control Officer, Defense Acquisition Regulations System.
Therefore, 48 CFR parts 204, 212, 213, and 252 are amended as
follows:
0
1. The authority citation for 48 CFR parts 204, 212, 213, and 252
continues to read as follows:
Authority: 41 U.S.C. 1303 and 48 CFR chapter 1.
PART 204--ADMINISTRATIVE MATTERS
0
2. Amend section 204.1202 by--
0
a. Redesignating paragraphs (2)(i) through (xiii) as paragraphs (2)(ii)
through (xix); and
0
b. Adding paragraph (2)(i).
The addition reads as follows:
204.1202 Solicitation provision.
(2) * * *
(i) 252.204-7016, Covered Defense Telecommunications Equipment or
Services--Representation.
0
3. Add subpart 204.21, consisting of 204.2100 through 204.2105, to read
as follows:
SUBPART 204.21--PROHIBITION ON CONTRACTING FOR CERTAIN
TELECOMMUNICATIONS AND VIDEO SURVEILLANCE SERVICES OR EQUIPMENT
Sec.
204.2100 Scope of subpart.
204.2101 Definitions.
204.2102 Prohibition.
204.2103 Procedures.
204.2104 Waivers.
204.2105 Solicitation provisions and contract clause.
SUBPART 204.21--PROHIBITION ON CONTRACTING FOR CERTAIN
TELECOMMUNICATIONS AND VIDEO SURVEILLANCE SERVICES OR EQUIPMENT
204.2100 Scope of subpart.
This subpart implements section 1656 of the National Defense
Authorization Act for Fiscal Year 2018 (Pub. L. 115-91) and section
889(a)(1)(A) of the National Defense Authorization Act for Fiscal Year
2019 (Pub. L. 115-232).
204.2101 Definitions.
As used in this subpart--
Covered defense telecommunications equipment or services means--
(1) Telecommunications equipment produced by Huawei Technologies
Company or ZTE Corporation, or any subsidiary or affiliate of such
entities;
(2) Telecommunications services provided by such entities or using
such equipment; or
(3) Telecommunications equipment or services produced or provided
by an entity that the Secretary of Defense reasonably believes to be an
entity owned or controlled by, or otherwise connected to, the
government of a covered foreign country.
Covered foreign country means--
(1) The People's Republic of China; or
(2) The Russian Federation.
Covered missions means--
(1) The nuclear deterrence mission of DoD, including with respect
to nuclear command, control, and communications, integrated tactical
warning and attack assessment, and continuity of Government; or
(2) The homeland defense mission of DoD, including with respect to
ballistic missile defense.
204.2102 Prohibition.
(a) Prohibited equipment, systems, or services. In addition to the
prohibition at FAR 4.2102(a), unless the covered defense
telecommunications equipment or services are subject to a waiver
described in 204.2104, the contracting officer shall not procure or
obtain, or extend or renew a contract (e.g., exercise an option) to
procure or obtain, any equipment, system, or service to carry out
covered missions that uses covered defense telecommunications equipment
or services as a substantial or essential component of any system, or
as critical technology as part of any system.
204.2103 Procedures.
(a) Representations.
(1)(i) If the offeror selects ``does not'' in response to the
provision at DFARS
[[Page 72237]]
252.204-7016, the contracting officer may rely on the representation,
unless the contracting officer has an independent reason to question
the representation. If the contracting officer has a reason to question
the ``does not'' representation in FAR 52.204-26, FAR 52.212-3(v), or
252.204-7016, then the contracting officer shall consult with the
requiring activity and legal counsel.
(ii) If the offeror selects ``does'' in paragraph (c) of the
provision at DFARS 252.204-7016, the offeror must complete the
representation at DFARS 252.204-7017.
(2)(i) If the offeror selects ``will not'' in paragraph (d) of the
provision at DFARS 252.204-7017, the contracting officer may rely on
the representation, unless the contracting officer has an independent
reason to question the representation. If the contracting officer has a
reason to question the ``will not'' representation in FAR 52.204-24 or
DFARS 252.204-7017, then the contracting officer shall consult with the
requiring activity and legal counsel.
(ii) If an offeror selects ``will'' in paragraph (d) of the
provision at DFARS 252.204-7017, the offeror must provide the
information required by paragraph (e) of the provision. When an offeror
completes paragraph (e) of either of the provisions at FAR 52.204-24 or
DFARS 252.204-7017, the contracting officer shall--
(A) Forward the offeror's representation and disclosure information
to the requiring activity; and
(B) Not award to the offeror unless the requiring activity
advises--
(1) For equipment, systems, or services that use covered
telecommunications equipment or services as a substantial or essential
component of any system, or as critical technology as part of any
system, that a waiver as described at FAR 4.2104 has been granted; or
(2) For equipment, systems, or services to be used to carry out
covered missions that use covered defense telecommunications equipment
or services as a substantial or essential component of any system, or
as critical technology as part of any system, that a waiver as
described at DFARS 204.2104 has been granted.
(b) Reporting. If a contractor reports information to https://dibnet.dod.mil in accordance with the clause at FAR 52.204-25 or DFARS
252.204-7018, the Defense Cyber Crime Center will notify the
contracting officer, who will consult with the requiring activity on
how to proceed with the contract.
204.2104 Waivers.
The Secretary of Defense may waive the prohibition in 204.2102(a)
on a case-by-case basis for a single, one-year period, if the
Secretary--
(a) Determines such waiver to be in the national security interests
of the United States; and
(b) Certifies to the Congressional defense committees that--
(1) There are sufficient mitigations in place to guarantee the
ability of the Secretary to carry out the covered missions; and
(2) The Secretary is removing the use of covered defense
telecommunications equipment or services in carrying out such missions.
204.2105 Solicitation provisions and contract clause.
(a) Use the provision at 252.204-7016, Covered Defense
Telecommunications Equipment or Services--Representation, in all
solicitations, including solicitations using FAR part 12 procedures for
the acquisition of commercial items and, solicitations for task and
delivery orders, basic ordering agreements (BOAs), orders against BOAs,
blanket purchase agreements (BPAs), and calls against BPAs.
(b) Use the provision at 252.204-7017, Prohibition on the
Acquisition of Covered Defense Telecommunications Equipment or
Services--Representation, in all solicitations, including solicitations
using FAR part 12 procedures for the acquisition of commercial items,
and solicitations for task and delivery orders, BOAs, orders against
BOAs, BPAs, and calls against BPAs.
(c) Use the clause at 252.204-7018, Prohibition on the Acquisition
of Covered Defense Telecommunications Equipment or Services, in all
solicitations and resultant awards, including solicitations and
contracts using FAR part 12 procedures for the acquisition of
commercial items, and solicitations and awards for task and delivery
orders, BOAs, orders against BOAs, BPAs, and calls against BPAs.
PART 212--ACQUISITION OF COMMERCIAL ITEMS
0
4. Amend section 212.301 by adding paragraphs (f)(ii)(H), (I), and (J)
to read as follows:
212.301 Solicitation provisions and contract clauses for the
acquisition of commercial items.
* * * * *
(f) * * *
(ii) * * *
(H) Use the provision at 252.204-7016, Covered Defense
Telecommunications Equipment or Services--Representation, as prescribed
in 204.2105(a), to comply with section 1656 of the National Defense
Authorization Act for Fiscal Year 2018 (Pub. L. 115-91).
(I) Use the provision at 252.204-7017, Prohibition on the
Acquisition of Covered Defense Telecommunications Equipment or
Services--Representation, as prescribed in 204.2105(b), to comply with
section 1656 of the National Defense Authorization Act for Fiscal Year
2018 (Pub. L. 115-91).
(J) Use the clause at 252.204-7018, Prohibition on the Acquisition
of Covered Defense Telecommunications Equipment or Services, as
prescribed in 204.2105(c), to comply with section 1656 of the National
Defense Authorization Act for Fiscal Year 2018 (Pub. L. 115-91).
* * * * *
PART 213--SIMPLIFIED ACQUISITION PROCEDURES
0
5. Amend section 213.201 by adding a new paragraph (j) to read as
follows:
213.201 General.
* * * * *
(j) Do not procure or obtain, or extend or renew a contract to
procure or obtain, any equipment, system, or service to carry out
covered missions that use covered defense telecommunications equipment
or services as a substantial or essential component of any system, or
as critical technology as part of any system, unless a waiver is
granted. (See subpart 204.21.)
PART 252--SOLICITATION PROVISIONS AND CONTRACT CLAUSES
0
6. Amend section 252.204-7007 by--
0
a. Removing the clause date ``JUN 2019'' and adding ``DEC 2019'' in its
place;
0
b. Redesignate paragraphs (d)(1)(i) through (viii) as paragraphs
(d)(1)(ii) through (ix), respectively; and
0
c. Adding paragraph (d)(1)(i).
The addition reads as follows:
252.204-7007 Alternate A, Annual Representations and Certifications.
* * * * *
(d)(1) * * *
(i) 252.204-7016, Covered Defense Telecommunications Equipment or
Services--Representation. Applies to all solicitations.
* * * * *
0
7. Add sections 252.204-7016, 252.204-7017, and 252.204-7018 to read as
follows:
[[Page 72238]]
252.204-7016 Covered Defense Telecommunications Equipment or
Services--Representation.
As prescribed in 204.2105(a), use the following provision:
Covered Defense Telecommunications Equipment or Services--
Representation (Dec 2019)
(a) Definitions. As used in this provision, covered defense
telecommunications equipment or services has the meaning provided in
the clause 252.204-7018, Prohibition on the Acquisition of Covered
Defense Telecommunications Equipment or Services.
(b) Procedures. The Offeror shall review the list of excluded
parties in the System for Award Management (SAM) (https://www.sam.gov) for entities excluded from receiving federal awards for
``covered defense telecommunications equipment or services''.
(c) Representation. The Offeror represents that it [ ] does, [ ]
does not provide covered defense telecommunications equipment or
services as a part of its offered products or services to the
Government in the performance of any contract, subcontract, or other
contractual instrument.
(End of provision)
252.204-7017 Prohibition on the Acquisition of Covered Defense
Telecommunications Equipment or Services--Representation.
As prescribed in 204.2105(b), use the following provision:
Prohibition on the Acquisiton of Covered Defense Telecommunications
Equipment or Services--Representation (Dec 2019)
The Offeror is not required to complete the representation in
this provision if the Offeror has represented in the provision at
252.204-7016, Covered Defense Telecommunications Equipment or
Services--Representation, that it ``does not provide covered defense
telecommunications equipment or services as a part of its offered
products or services to the Government in the performance of any
contract, subcontract, or other contractual instrument.''
(a) Definitions. Covered defense telecommunications equipment or
services, covered mission, critical technology, and substantial or
essential component, as used in this provision, have the meanings
given in the 252.204-7018 clause, Prohibition on the Acquisition of
Covered Defense Telecommunications Equipment or Services, of this
solicitation.
(b) Prohibition. Section 1656 of the National Defense
Authorization Act for Fiscal Year 2018 (Pub. L. 115-91) prohibits
agencies from procuring or obtaining, or extending or renewing a
contract to procure or obtain, any equipment, system, or service to
carry out covered missions that uses covered defense
telecommunications equipment or services as a substantial or
essential component of any system, or as critical technology as part
of any system.
(c) Procedures. The Offeror shall review the list of excluded
parties in the System for Award Management (SAM) at https://www.sam.gov for entities that are excluded when providing any
equipment, system, or service to carry out covered missions that
uses covered defense telecommunications equipment or services as a
substantial or essential component of any system, or as critical
technology as part of any system, unless a waiver is granted.
(d) Representation. If in its annual representations and
certifications in SAM the Offeror has represented in paragraph (c)
of the provision at 252.204-7016, Covered Defense Telecommunications
Equipment or Services--Representation, that it ``does'' provide
covered defense telecommunications equipment or services as a part
of its offered products or services to the Government in the
performance of any contract, subcontract, or other contractual
instrument, then the Offeror shall complete the following additional
representation:
The Offeror represents that it [ ] will [ ] will not provide
covered defense telecommunications equipment or services as a part
of its offered products or services to DoD in the performance of any
award resulting from this solicitation.
(e) Disclosures. If the Offeror has represented in paragraph (d)
of this provision that it ``will provide covered defense
telecommunications equipment or services,'' the Offeror shall
provide the following information as part of the offer:
(1) A description of all covered defense telecommunications
equipment and services offered (include brand or manufacturer;
product, such as model number, original equipment manufacturer (OEM)
number, manufacturer part number, or wholesaler number; and item
description, as applicable).
(2) An explanation of the proposed use of covered defense
telecommunications equipment and services and any factors relevant
to determining if such use would be permissible under the
prohibition referenced in paragraph (b) of this provision.
(3) For services, the entity providing the covered defense
telecommunications services (include entity name, unique entity
identifier, and Commercial and Government Entity (CAGE) code, if
known).
(4) For equipment, the entity that produced or provided the
covered defense telecommunications equipment (include entity name,
unique entity identifier, CAGE code, and whether the entity was the
OEM or a distributor, if known).
(End of provision)
252.204-7018 Prohibition on the Acquisition of Covered Defense
Telecommunications Equipment or Services.
As prescribed in 204.2105(c), use the following clause:
Prohibition on the Acquisition of Covered Defense Telecommunications
Equipment or Services (Dec 2019)
(a) Definitions. As used in this clause--
Covered defense telecommunications equipment or services means--
(1) Telecommunications equipment produced by Huawei Technologies
Company or ZTE Corporation, or any subsidiary or affiliate of such
entities;
(2) Telecommunications services provided by such entities or
using such equipment; or
(3) Telecommunications equipment or services produced or
provided by an entity that the Secretary of Defense reasonably
believes to be an entity owned or controlled by, or otherwise
connected to, the government of a covered foreign country.
Covered foreign country means--
(1) The People's Republic of China; or
(2) The Russian Federation.
Covered missions means--
(1) The nuclear deterrence mission of DoD, including with
respect to nuclear command, control, and communications, integrated
tactical warning and attack assessment, and continuity of
Government; or
(2) The homeland defense mission of DoD, including with respect
to ballistic missile defense.
``Critical technology'' means--
(1) Defense articles or defense services included on the United
States Munitions List set forth in the International Traffic in Arms
Regulations under subchapter M of chapter I of title 22, Code of
Federal Regulations;
(2) Items included on the Commerce Control List set forth in
Supplement No. 1 to part 774 of the Export Administration
Regulations under subchapter C of chapter VII of title 15, Code of
Federal Regulations, and controlled--
(i) Pursuant to multilateral regimes, including for reasons
relating to national security, chemical and biological weapons
proliferation, nuclear nonproliferation, or missile technology; or
(ii) For reasons relating to regional stability or surreptitious
listening;
(3) Specially designed and prepared nuclear equipment, parts and
components, materials, software, and technology covered by part 810
of title 10, Code of Federal Regulations (relating to assistance to
foreign atomic energy activities);
(4) Nuclear facilities, equipment, and material covered by part
110 of title 10, Code of Federal Regulations (relating to export and
import of nuclear equipment and material);
(5) Select agents and toxins covered by part 331 of title 7,
Code of Federal Regulations, part 121 of title 9 of such Code, or
part 73 of title 42 of such Code; or
(6) Emerging and foundational technologies controlled pursuant
to section 1758 of the Export Control Reform Act of 2018 (50 U.S.C.
4817).
Substantial or essential component means any component necessary
for the proper function or performance of a piece of equipment,
system, or service.
(b) Prohibition. In accordance with section 1656 of the National
Defense Authorization Act for Fiscal Year 2018 (Pub. L. 115-91), the
contractor shall not provide to the Government any equipment,
system, or service to carry out covered missions that uses covered
defense telecommunications equipment or services as a substantial or
essential component of any system, or as critical technology as part
of any system, unless the covered defense telecommunication
equipment or services are covered by a waiver described in Defense
Federal Acquisition Regulation Supplement 204.2104.
[[Page 72239]]
(c) Procedures. The Contractor shall review the list of excluded
parties in the System for Award Management (SAM) at https://www.sam.gov for entities that are excluded when providing any
equipment, system, or service, to carry out covered missions, that
uses covered defense telecommunications equipment or services as a
substantial or essential component of any system, or as critical
technology as part of any system, unless a waiver is granted.
(d) Reporting.
(1) In the event the Contractor identifies covered defense
telecommunications equipment or services used as a substantial or
essential component of any system, or as critical technology as part
of any system, during contract performance, the Contractor shall
report at https://dibnet.dod.mil the information in paragraph (d)(2)
of this clause.
(2) The Contractor shall report the following information
pursuant to paragraph (d)(1) of this clause:
(i) Within one business day from the date of such identification
or notification: The contract number; the order number(s), if
applicable; supplier name; brand; model number (original equipment
manufacturer number, manufacturer part number, or wholesaler
number); item description; and any readily available information
about mitigation actions undertaken or recommended.
(ii) Within 10 business days of submitting the information in
paragraph (d)(2)(i) of this clause: Any further available
information about mitigation actions undertaken or recommended. In
addition, the Contractor shall describe the efforts it undertook to
prevent use or submission of a covered defense telecommunications
equipment or services, and any additional efforts that will be
incorporated to prevent future use or submission of covered
telecommunications equipment or services.
(e) Subcontracts. The Contractor shall insert the substance of
this clause, including this paragraph (e), in all subcontracts and
other contractual instruments, including subcontracts for the
acquisition of commercial items.
(End of clause)
* * * * *
[FR Doc. 2019-27824 Filed 12-30-19; 8:45 am]
BILLING CODE 5001-06-P
