Emergency Management Priorities and Allocations System (EMPAS), 28500-28520 [2020-10294]

Agencies

• Federal Emergency Management Agency
• DEPARTMENT OF HOMELAND SECURITY

[Federal Register Volume 85, Number 93 (Wednesday, May 13, 2020)]
[Rules and Regulations]
[Pages 28500-28520]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2020-10294]


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DEPARTMENT OF HOMELAND SECURITY

Federal Emergency Management Agency

44 CFR Part 333

[Docket ID FEMA-2020-0019]
RIN 1660-AB04


Emergency Management Priorities and Allocations System (EMPAS)

AGENCY: Federal Emergency Management Agency, DHS.

ACTION: Interim final rule.

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SUMMARY: This interim final rule establishes standards and procedures 
by which the Federal Emergency Management Agency (FEMA) may require 
certain contracts or orders that promote the national defense be given 
priority over other contracts or orders. This rule also sets new 
standards and procedures by which FEMA may allocate materials, 
services, and facilities to promote the national defense under 
emergency and non-emergency conditions pursuant to section 101 of the 
Defense Production Act of 1950, as amended. These regulations are part 
of FEMA's response to the ongoing COVID-19 emergency.

DATES: This rule is effective May 13, 2020.
    Comment Date: Comments must be received on or before June 12, 2020.

ADDRESSES: You may submit comments, identified by Docket ID FEMA-2020-
0019, via the Federal eRulemaking Portal: https://www.regulations.gov. 
Follow the instructions for submitting comments.

FOR FURTHER INFORMATION CONTACT: Marc Geier, Office of Policy and 
Program Analysis, 202-924-0196, [email protected].

SUPPLEMENTARY INFORMATION:

I. Public Participation

    Interested persons are invited to participate in this rulemaking by 
submitting comments and related materials. We will consider all 
comments and material received during the comment period.
    If you submit a comment, include the Docket ID FEMA-2020-0019, 
indicate the specific section of this document to which each comment 
applies, and give the reason for each comment. All submissions may be 
posted, without change, to the Federal e-Rulemaking Portal at https://www.regulations.gov, and will include any personal information you 
provide. Therefore, submitting this information makes it public.
    Viewing comments and documents: For access to the docket to read 
background documents or comments received, go to the Federal e-
Rulemaking Portal at https://www.regulations.gov.

II. Background

    Section 101 of the Defense Production Act of 1950, as amended (DPA 
or the Act), authorizes the President to require that performance under 
contracts or orders (other than contracts of employment) which he deems 
necessary or appropriate to promote the national defense take priority 
over performance under any other contract or order.\1\ For the purpose 
of assuring such priority, the President may require acceptance and 
performance of such contracts or orders in preference to other 
contracts or orders by any person he finds to be capable of their 
performance.\2\ Section 101 also authorizes the President to allocate 
materials, services, and facilities in such manner, upon such 
conditions, and to such extent as he shall deem necessary or 
appropriate to promote the national defense.\3\ For the purposes of 
this discussion, these authorities are referred to as the

[[Page 28501]]

President's ``priorities'' and ``allocations'' authorities.
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    \1\ 50 U.S.C. 4511(a)(1).
    \2\ 50 U.S.C. 4511(a)(1).
    \3\ 50 U.S.C. 4511(a)(2).
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    FEMA is publishing this rule to comply with Section 101(d), which 
requires agencies delegated authority under Section 101 to issue final 
rules to establish standards and procedures by which the priorities and 
allocations authority is used to promote the national defense, under 
both emergency and non-emergency conditions. Executive Order 13911, 
``Delegating Additional Authority Under the Defense Production Act With 
Respect to Health and Medical Resources To Respond to the Spread of 
COVID-19,'' 85 FR 18403 (Apr. 1, 2020), delegates the President's 
authority under Section 101 to the Secretary of Homeland Security with 
respect to health and medical resources needed to respond to the spread 
of Coronavirus Disease 2019 (COVID-19) within the United States. 
Executive Order 13911 provides that the Secretary may use the authority 
under section 101 of the Act to determine, in consultation with the 
heads of other executive departments and agencies as appropriate, the 
proper nationwide priorities and allocation of health and medical 
resources, including by controlling the distribution of such materials 
(including applicable services) in the civilian market, for responding 
to the spread of COVID-19 within the United States. Executive Order 
13911 also delegates implementing authorities, such as enforcement 
authority under section 705 of the Act.\4\
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    \4\ 50 U.S.C. 4555.
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    The Secretary of Homeland Security has further delegated these 
authorities to the FEMA Administrator.\5\ Priorities authorities (and 
other authorities delegated by the President to the Secretary of 
Homeland Security and re-delegated to the FEMA Administrator) may be 
re-delegated by the Administrator, to the extent consistent with the 
requirements of 3 U.S.C. 301 and the delegation of Presidential 
authority under which FEMA is operating. The Administrator retains 
authority for allocations.
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    \5\ DHS Delegation 09052 Rev. 00.1, ``Delegation of Defense 
Production Act Authority to the Administrator of the Federal 
Emergency Management Agency'' (Apr. 1, 2020).
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    This final rule establishes the Emergency Management Priorities and 
Allocations System (EMPAS), which will become part of the Federal 
Priorities and Allocations System (FPAS), which is the body of 
regulations that establishes standards and procedures for implementing 
the President's authority under Section 101(a) of the DPA. Pursuant to 
Section 101(d) of the DPA, heads of Federal agencies to which the 
President delegates authority under section 101 must issue rules that 
establish standards and procedures by which the priorities and 
allocations authority is used, and develop a consistent and unified 
Federal priorities and allocations system.''
    The EMPAS regulations have two principal components: Priorities and 
allocations. Under the priorities component, contracts, or orders 
necessary or appropriate to support programs that have been approved 
for priorities support are required to be accepted and given priority 
over other contracts or orders to facilitate expedited delivery to 
promote the U.S. national defense. Under the allocations component, 
materials, services, and facilities may be allocated to promote the 
national defense. For both components, the term ``national defense'' is 
defined broadly and includes critical infrastructure protection and 
restoration, emergency preparedness and response, and recovery from 
man-made disasters.\6\
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    \6\ See 50 U.S.C. 4552(14).
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    Section 101(d)(2) requires agencies with delegated authority under 
section 101 to consult as appropriate and to the extent practicable 
with other Federal agencies to develop a consistent and unified Federal 
priorities and allocations system. This rule is one of several rules 
published to implement Section 101 of the Act. The final rules of the 
agencies with Section 101 authorities, which are the Departments of 
Commerce, Energy, Health and Human Services, Transportation, and 
Agriculture,\7\ currently constitute the FPAS. FEMA is publishing this 
interim final rule in compliance with Section 101(d) and FEMA's EMPAS 
provisions are consistent with the FPAS regulations issued by other 
agencies.
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    \7\ See Executive Order 13603, ``National Defense Resources 
Preparedness,'' section 201, 77 FR 16651 (Mar. 22, 2012).
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    Given the context in which the President delegated these 
authorities to the Secretary of Homeland Security, who then redelegated 
such authorities to the FEMA Administrator, FEMA prioritized 
consistency with those FPAS regulations that FEMA already uses and are 
most relevant to the current pandemic crisis. The regulations therefore 
draw heavily on (1) the Department of Commerce's Defense Priorities and 
Allocations System (DPAS) regulations, found at 15 CFR part 700, which 
are the most commonly referenced and used FPAS regulations and which 
FEMA currently relies upon pursuant to a delegation of authority,\8\ 
and (2) the Department of Health and Human Services' Health Resources 
Priorities and Allocations System (HRPAS) regulations, found at 45 CFR 
part 101, which relate to a resource category similar to the immediate 
impetus for this rulemaking. In general, in choosing between competing 
provisions, FEMA has favored those provisions that allow FEMA to 
respond to emergency circumstances, including the current pandemic 
crisis, with the greatest flexibility and speed.
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    \8\ See generally U.S. Dep't of Commerce, DPAS Delegation 4, 
Delegation of Authority to the Secretary of Homeland Security, 
https://www.fema.gov/media-library-data/1484838423965-e82805cf10b55929142fab1fced213d8/DPAS_Delegation_4.pdf (Mar. 8, 
2016) (delegating authority to DHS); DHS Delegation 09052 Rev. 00.1 
(Apr. 1, 2020) (delegating authority to FEMA). The Department of 
Commerce is the resource department for ``all other materials, 
services, and facilities, including construction materials'' under 
Executive Order 13603 section 201, 77 FR 16651 (Mar. 22, 2012).
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    The specific proposals in this rule are more fully described below.

III. Discussion of the Interim Final Rule

    This interim final rule adds 44 CFR part 333 to establish standards 
and procedures for prioritization of contracts and orders and for 
allocation of materials, services, and facilities to promote the 
national defense under both emergency and non-emergency conditions.

A. Subpart A--Purpose

    Section 333.1 states that the purpose of the EMPAS, in general 
terms, is providing standards and procedures for use of those 
priorities and allocations authorities under the Defense Production Act 
that are the subject of a delegation from the President to DHS or FEMA. 
This includes, but is not limited to, use of such authority to support 
emergency preparedness activities pursuant to Title VI of the Robert T. 
Stafford Disaster Relief and Emergency Assistance Act (42 U.S.C. 5195 
et seq.), and related statutes, with respect to health and medical 
resources needed to respond to the spread of COVID-19 within the United 
States pursuant to Executive Order 13911.
    FEMA has not limited the applicability of this rule to the COVID-19 
context because of FEMA's unique mission set. Although FEMA's current 
authority under section 101--which relates to health and medical 
resources needed to respond to the spread of COVID-19 within the United 
States--is based on Executive Order 13911, FEMA believes that it is 
critical to ensure that FEMA has an established set of EMPAS

[[Page 28502]]

regulations available for immediate use in the event that the President 
delegates to DHS or FEMA additional priorities and allocations 
authorities in the future, including during an emergency situation. As 
stated in the description of section 333.2 below, FEMA does not 
anticipate a conflict with the delegated authorities of other resource 
agencies.

B. Subpart B--Overview

1. Section 333.2 Program Eligibility
    Consistent with DPAS regulations at 15 CFR 700.2 and HRPAS 
regulations at 45 CFR 101.3, section 333.2 provides an overview of 
program eligibility and clarifies FEMA's ability to delegate authority 
to place priority ratings on contracts or orders to certain Federal 
Government agencies, to the extent consistent with the delegation of 
Presidential authority under which FEMA is operating. FEMA will post 
announcements regarding approved programs to www.fema.gov.
2. Section 333.3 Priority Ratings and Rated Orders
    Consistent with the DPAS regulations at 15 CFR 700.3, Section 333.3 
explains what priority ratings and rated orders are and generally how 
they will operate within EMPAS. Sections 333.4 through 333.7 are 
reserved.

C. Subpart C--Definitions

    The ``Definitions'' section appears in Section 333.8 and provides 
definitions for the relevant regulatory terms, consistent with DPAS 
regulations at 15 CFR 700.8 and the HRPAS regulations at 45 CFR 101.20. 
Section 333.9 is reserved. For purposes of this rulemaking, FEMA has 
chosen to define ``health and medical resources'' consistent with the 
definition of ``health resources'' in the HRPAS and other FPAS 
regulations for convenience and consistent with currently anticipated 
needs. FEMA may revise this definition by rulemaking, to the extent 
consistent with Executive Order 13911, at a future time. FEMA welcomes 
comment on this issue.
    In contrast to other FPAS regulations, FEMA has chosen to 
specifically define ``written'' and ``in writing'' to make clear that 
FEMA will accept either tangible or electronic documents as ``written'' 
communications or records under this rule. FEMA wishes to allow 
electronic communication to the greatest extent possible, to allow for 
more efficient operations. In addition, FEMA has defined ``written 
electronic'' to mean written and in electronic form, except that when 
electronic form is impracticable under the circumstances, FEMA may 
construe this term to allow for a tangible format. As noted below, FEMA 
has made clear in certain provisions that it will not just permit, but 
also require, electronic communications.

D. Subpart D--Priorities and Placement of Rated Orders

1. Section 333.10 Authority
    Section 333.10 describes the authority under which FEMA is 
implementing DPA Section 101. Consistent with section 333.1, although 
this rule is being issued to implement the delegation of authority in 
Executive Order 13911 with respect to health and medical resources 
needed to respond to the spread of COVID-19 within the United States, 
section 333.10 provides that FEMA may operate this rule under any 
authorities that the President may delegate to DHS or FEMA (or through 
DHS to FEMA) under section 101 of the Defense Production Act. This 
approach will ensure that FEMA is fully and immediately capable of 
fulfilling its emergency response and DPA coordination duties, 
including such duties as DHS and FEMA have long held under 104(b) of 
Executive Order 13603, to the extent that the President decides to 
further delegate priorities and allocations authorities to DHS or FEMA 
to carry out such duties.
    FEMA does not anticipate that this approach will result in any 
conflicts with the delegated authorities of other resource agencies, 
because these regulations are specifically tied to presidential 
delegations of authority. Except in contexts where the President has 
delegated additional priorities and allocations authorities to DHS or 
FEMA, FEMA will continue to rely on other agencies' existing FPAS 
regulations, and the delegations issued thereunder, with respect to 
priorities and allocations issues.
2. Section 333.11 Priority Ratings
    Consistent with the DPAS regulations at 15 CFR 700.11 and HRPAS 
regulations at 45 CFR 101.31, section 333.11 describes the two possible 
levels of priority and the program identification symbols used when 
rating an order. FEMA also clarifies that a priorities directive is a 
directive issued by FEMA regarding priority treatment for a given item. 
Such directives take precedence over any DX-rated order, DO-rated 
order, or unrated order, as stipulated in the directive.
3. Section 333.12 Elements of Rated Order
    Consistent with the DPAS regulations at 15 CFR 700.12, section 
333.12 describes in detail what each rated order must include, 
consisting of the appropriate priority rating, delivery date 
information, signatures, and required language. Like the DPAS 
regulations, this provision requires certain emergency preparedness-
related orders to include a statement regarding the time limits for 
accepting or rejecting the order. Unlike the DPAS regulations, FEMA is 
requiring that the statement also include specific reference to the 
mandatory acceptance and rejection provisions of section 333.13. The 
parallel DPAS regulation does not require this level of specificity, 
but FEMA thought it appropriate to require this text in the interest of 
clarity.
    FEMA has added new text to section 333.12, to specify additional 
elements that must be included when FEMA or a Delegate Agency issues a 
rated order to facilitate a sale from the person to a third party, 
regardless of the nature of the third party's relationship with the 
Federal Government, if any. FEMA or a Delegate Agency may take such an 
action in the event that FEMA determines that such an order is 
necessary or appropriate to promote the national defense. Paragraph (c) 
requires all rated orders used to facilitate sales to third parties to 
include language making clear to the person receiving the order that 
the order is being placed to facilitate a sale to a third party. FEMA 
believes the additional required language in these rated orders will 
ensure those receiving the order clearly understand that the order is 
for the facilitation of a sale to a third party, and may help avoid any 
confusion or delay that might otherwise occur. Section 333.19, 
discussed below, also details special provisions for these orders. 
Requiring the additional notification in paragraph (c) of this section 
ensures that persons receiving such orders are fully informed of the 
applicability of the special provisions in section 333.19.
    As part of the COVID-19 response, FEMA is coordinating efforts to 
assist third parties in obtaining critical health and medical resource 
supplies. Including this language in each rated order involving a third 
party ensures clarity, including with respect to the applicability of 
section 333.19, and is consistent with FEMA's role in facilitating the 
delivery of these critical resources to effectively respond to the 
current COVID-19 crisis.

[[Page 28503]]

4. Section 333.13 Acceptance and Rejection of Rated Orders
    Section 333.13 details when orders placed by FEMA may or must be 
accepted or rejected, and what the procedures are for both, including 
customer notification requirements for emergency conditions. 
Specifically, paragraph (a) requires acceptance of every rated order 
received regardless of any other rated or unrated orders that have been 
accepted and prohibits discrimination against rated orders such as by 
charging higher prices or imposing different terms and conditions. 
Paragraph (b) requires rejection of rated orders for delivery on a 
specified date if the person is unable to fill the order by that date, 
and requires the person to inform the customer of the earliest date on 
which delivery can be made and offer to accept the order on that basis. 
Paragraph (b) also provides for mandatory rejection based on the order 
rating, if other rated orders would be impacted. Paragraph (c) provides 
for optional rejection of rated orders in limited circumstances, 
consistent with DPAS regulations at 15 CFR 700.13(c) and HRPAS 
regulations at 45 CFR 101.33(c). Paragraph (d) details the customer 
notification requirements for rated orders. Consistent with DPAS 
regulations at 15 CFR 700.13(d)(2), FEMA is adopting a requirement that 
persons must accept or reject rated orders for emergency preparedness 
approved programs within the timeframe stated on the order. The 
regulation provides minimum time frames of 6 hours after receipt of the 
order if in response to a hazard (including, for instance, an outbreak 
of infectious disease) that has occurred, or 12 hours after receipt if 
the order is issued to prepare for an imminent hazard. FEMA is adopting 
these timeframes because such orders would require a shorter time frame 
to ensure delivery in time to provide disaster assistance, emergency 
response, or similar activities. FEMA believes that the exigent 
circumstances inherent in such activities justify requiring a shorter 
response time. Further, FEMA is requiring written electronic 
confirmation of shipment or performance delays within a 24-hour period 
(rather than the one-working-day requirement in the DPAS regulations) 
given the exigent circumstances under which the agency must provide 
emergency preparedness, mitigation, response, and recovery services and 
the need for clear, reliable statements regarding such delays to ensure 
the ultimate timely delivery of these services.
5. Section 333.14 Preferential Scheduling
    Consistent with DPAS regulation at 15 CFR 700.14, section 333.14 
details procedures for scheduling rated orders. Paragraph (a) explains 
generally that operations must be scheduled to satisfy delivery 
requirements of each rated order. Paragraph (b) details the appropriate 
production preferences based on rating order. Where rating orders 
conflict, paragraph (c) explains the appropriate preferences. If a 
person is unable to resolve such a conflict, this section refers them 
to special priorities assistance provided in Sections 333.20 through 
333.24. Paragraph (d) allows the use of inventoried production items to 
fill rated orders when a person is unable to purchase the needed 
production items in time to fill a rated order and allows for their 
replacement with the use of a rated order.
6. Section 333.15 Extension of Priority Ratings
    This section requires a person to use rated orders with suppliers 
to obtain items needed to fill a rated order, allowing the priority 
rating to ``extend'' from contractor to subcontractor to supplier 
throughout the entire procurement chain. In paragraph (c), FEMA is 
adopting the DPAS requirement in 15 CFR 700.15(c) that a person must 
use rated orders with suppliers to obtain items needed to fill an 
emergency preparedness order and that the supplier must accept or 
reject within the required time limit stated in the rated order that is 
being filled. FEMA is adopting the DPAS requirement to ensure delivery 
in time to provide disaster assistance, emergency response, or similar 
services. FEMA believes that the exigent circumstances inherent in such 
activities justify requiring a shorter response time.
7. Section 333.16 Changes or Cancellations of Priority Ratings and 
Rated Orders
    Consistent with both DPAS regulation at 15 CFR 700.16 and HRPAS 
regulations at 45 CFR 101.36, this section provides procedures for 
changing or cancelling a rated order by FEMA, a Federal Government 
agency authorized by delegation from FEMA to place priority ratings on 
contracts or orders needed to support approved programs (a ``Delegate 
Agency''), and/or other persons who placed the order. Paragraph (a) 
explains how a priority rating on a rated order may be changed or 
cancelled and requires written electronic notification from the person 
who placed the rated order to expedite processing. Paragraph (b) 
explains that suppliers must give the appropriate preferential 
treatment to the order when it is changed to a higher priority rating. 
Paragraphs (c) and (d) describe what types of amendments do and do not 
constitute a new rated order, respectively. Paragraph (e) requires 
cancellation of rated orders or priority ratings on orders if the 
person no longer needs the items from suppliers. Paragraph (f) requires 
prompt notification to all suppliers of rating additions, changes, or 
cancellations via written electronic notification to expedite 
processing.
8. Section 333.17 Use of Rated Orders
    This section lists what items must be rated. Paragraph (a) details 
what rated orders must be used to obtain. Consistent with both DPAS 
regulation at 15 CFR 700.17(b) and HRPAS regulations at 101.37(b), 
paragraph (b) allows a person to use a rated order to replace 
inventoried items if such items were used to fill rated orders, under 
certain circumstances. Paragraphs (c) and (d) describe the use of 
program identification symbols when rated orders are combined, and 
detail the procedures for combining two or more rated orders, as well 
as rated and unrated orders. Paragraph (e) addresses rated orders for 
the minimum commercially procurable quantity, and paragraph (f) 
discusses ratings on contracts and orders for less than one half of the 
Simplified Acquisition Threshold as established by the Federal 
Acquisition Regulation (FAR). See 48 CFR 2.101. FEMA's provision is 
consistent with the parallel DPAS and HRPAS provisions, except that 
FEMA's provision eliminates the specific dollar amount to ensure 
consistency with the current and future FAR provisions.\9\
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    \9\ See, e.g., 84 FR 52420 (Oct. 2, 2019) (proposed increase to 
micro-purchase and simplified acquisition thresholds).
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9. Section 333.18 Limitations on Placing Rated Orders
    Consistent with DPAS regulations at 15 CFR 700.18, section 333.18 
prohibits the use of rated orders under specific circumstances. 
Paragraph (a) sets forth the general limitations on placing a rated 
order, and paragraph (b) prohibits the use of rated orders to obtain 
earlier than needed delivery dates, greater than needed quantities of 
items, items in advance of the receipt of a rated order, or other 
specific items.

[[Page 28504]]

10. Section 333.19 Special Provisions Applicable to Rated Orders for 
Third Parties
    In addition to the required language for each rated order regarding 
third party facilitations provided in section 333.12, FEMA is adding 
section 333.19 to specifically address rated orders for third parties. 
Given the unique circumstances faced in the COVID-19 pandemic, it may 
be necessary or appropriate for FEMA to use its priority rating 
authority under section 101(a)(1) of the DPA to facilitate the sale of 
health and medical resources to third parties. FEMA believes that it 
may be able to use such transactions to assist third parties in 
obtaining critical health and medical resource supplies as part of the 
current response for COVID-19. Such transactions may also be useful in 
other emergency circumstances. Adding a regulatory provision regarding 
this type of order benefits all parties, by creating a clear framework 
for such transactions.
    Paragraph (a) makes clear that the EMPAS applies to rated orders 
placed by FEMA or a Delegate Agency to facilitate sales to third 
parties, unless otherwise specified. Paragraph (b) provides that where 
FEMA or a Delegate Agency has placed a rated order to facilitate a sale 
to a third party, the third party will be responsible for satisfying 
the applicable terms of sale and payment. The Federal Government will 
not be liable for any failure to meet the terms of sale or payment for 
rated orders to facilitate sales to third parties. Paragraph (c) 
provides that FEMA or the Delegate Agency may amend or cancel the rated 
order pursuant to section 333.16 if the third party is unable to 
satisfy the applicable terms of sale or payment. Paragraph (c) confirms 
that an amendment to such an order to provide for delivery to FEMA, the 
Delegate Agency, or another third party would not constitute a new 
rated order. FEMA believes these additional provisions are essential to 
clarify the requirements for rated orders to facilitate sales to third 
parties.
    In the event that FEMA determines that facilitation of sales to 
third-parties is necessary or appropriate to support the national 
defense, this provision of the EMPAS regulations will help clarify the 
roles and responsibilities of FEMA and/or the Delegate Agency, the 
third party, and the person(s) receiving the order. FEMA seeks comment 
on this section.

E. Subpart E--Special Priorities Assistance

1. Section 333.20 General Provisions
    Consistent with DPAS regulations at 15 CFR 700.50 and with 
Department of Agriculture regulations at 7 CFR 789.20, this section 
lays out how and when FEMA may provide special priorities assistance 
and how a person should contact FEMA or the Delegate Agency (as 
appropriate) when seeking assistance. Paragraph (a) describes what 
special priorities assistance is and the circumstances in which it 
might be needed. Paragraph (b) explains that special priorities 
assistance is available for any reason consistent with part 333 and 
offers specific examples of issues that special priorities assistance 
may help to resolve, including authorizing the use of priority ratings 
on orders to obtain items not otherwise ratable under this part. The 
examples provided in this section are not a full and complete list of 
the types of issues that special priorities assistance may help to 
resolve, but merely a sample of common issues offered as guidance. 
Paragraph (c) provides information about how requests for special 
priorities assistance may be submitted.
2. Section 333.21 Requests for Priority Rating Authority
    Consistent with HRPAS regulations at 45 CFR 101.41, this section 
identifies circumstances in which a person may request authority to use 
a priority rating on orders to obtain items not normally rated under 
this part; provides information on where to submit requests for 
priority rating authority for production or construction equipment and 
when such orders may be used to lease such equipment; and details when 
FEMA may authorize a person to place a priority rating on an order to a 
supplier in advance of the issuance of a rated prime contract, and 
lists factors FEMA will consider in deciding whether to grant this 
authority.
    Paragraph (a) provides that when a rated order is likely to be 
delayed because a person is unable to obtain items not normally rated 
under this part, the person may request authority to use a priority 
rating in ordering the items.
    Paragraph (b)(1) explains that requests for priority rating 
authority for production or construction equipment must be submitted to 
the Department of Commerce using the appropriate form. Paragraph (b)(2) 
provides that when the use of a priority rating is authorized for the 
procurement of production or construction equipment, a rated order may 
be used either to purchase or to lease such equipment. However, in the 
latter case, the equipment may be leased only from a person engaged in 
the business of leasing such equipment or from a person willing to 
lease rather than sell.
    Paragraph (c) sets forth the requirements for placing a priority 
rating on an order in advance of the issuance of a rated prime 
contract. Paragraph (c)(1) provides that upon specific request, FEMA 
may authorize such a placement to promote the national defense. The 
requestor must obtain sponsorship of the request from FEMA or the 
appropriate Delegate Agency, and the requestor must assume any business 
risk associated with the advanced placement of rated orders in the 
event the rated prime contract is not issued. Paragraph (c)(2) contains 
a statement that must be included in requests for authority to place a 
priority rating on an order in advance of a rated prime contract. This 
statement, when included as part of a request, ensures the requestors 
understand and accept the liability they assume, as required in 
paragraph (c)(1), for any business risk associated with the advance 
placement of rated orders in the event the rated prime contract is not 
issued. Paragraph (c)(3) provides that when reviewing requests for 
rating authority in advance of a rated prime contract, FEMA will 
consider, among other things, five specific criteria: The probability 
that the prime contract will be awarded; the impact of the resulting 
rated orders on suppliers and on other authorized programs; whether the 
contractor is the sole source; whether the item being produced has a 
long lead time; and the time period for which the rating is being 
requested. Paragraph (c)(4) permits FEMA to require periodic reports on 
the use of the authority granted under paragraph (c), in order to 
ensure appropriate oversight. Paragraph (c)(5) requires that when 
advance rating authority has been granted but a rated prime contract is 
not issued, the person who requested the advance rating authority must 
promptly notify all suppliers who have receive rated orders pursuant to 
the advance rating authority that the priority rating on those orders 
is cancelled.
3. Section 333.22 Examples of Assistance
    Consistent with DPAS regulations at 15 CFR 700.52 and HRPAS 
regulations at 45 CFR 101.42, this section provides a number of 
examples of situations where special priorities assistance may be 
provided. Although such assistance may generally be provided for any 
reason in support of this part, special

[[Page 28505]]

priorities assistance is usually provided in situations where there is 
difficulty obtaining delivery against a rated order by the required 
delivery date or difficulty locating a supplier for an item needed to 
fill a rated order. The examples provided in this section are not a 
full and complete list of the types of assistance available under this 
subpart, but merely an illustrative sample offered as guidance.
4. Section 333.23 Criteria for Assistance
    Consistent with both DPAS regulations at 15 CFR 700.53 and HRPAS 
regulations at 45 CFR 101.43, this section provides criteria for 
granting requests for special priorities assistance. Consistent with 
the requirements of this part, requests for special priorities 
assistance must establish that there is an urgent need for the item and 
that the person making the request has made a reasonable effort to 
resolve the problem. Requests should also be submitted in a timely 
manner, to allow sufficient time for FEMA or the Delegate Agency to 
provide a meaningful resolution to the problem; requests submitted too 
late to allow for such a resolution waste limited administrative 
resources and time, both of which are crucial in emergency situations.
5. Section 333.24 Instances Where Assistance Will Not Be Provided
    Consistent with both DPAS regulations at 15 CFR 700.54 and HRPAS 
regulations at 45 CFR 101.44, this section makes clear that special 
priorities assistance is provided at the discretion of FEMA or the 
Delegate Agency and provides examples of instances in which assistance 
may not be provided. The examples provided are not a full and complete 
list of the cases in which assistance may not be provided, but simply a 
few common cases where assistance is not warranted to meet the 
objectives of this part, and therefore may not be granted.

F. Subpart F--Allocation Actions

    Generally, the standards set forth in Sections[thinsp]333.30 
through 333.32 mirror similar provisions in the DPAS regulations at 15 
CFR 700.30 through 700.32 and HRPAS regulations at 45 CFR 101.50 
through 101.52 and provide reasonable assurance that allocation orders 
will be used only in situations where the circumstances justify such 
orders. Sections 333.33 through 333.36 address the types of allocation 
orders, elements required for an allocation order, and the process for 
acceptance, modification, and cancellation of allocation orders.
1. Section 333.30 Policy
    The DPAS regulations at 15 CFR 700.30 and HRPAS regulations at 45 
CFR 101.50 include statements of allocations policy. Under these 
provisions, allocation orders will only be used if priorities authority 
will not provide a sufficient supply of materials, services, or 
facilities for national defense requirements, or when use of priorities 
authority will cause a severe and prolonged disruption in the supply of 
resources available to support normal U.S. economic activities. 
Allocation orders will not be used to ration materials or services at 
the retail level. Allocation orders will be distributed equitably among 
the suppliers of the resource(s) being allocated and will not require 
any person to relinquish a disproportionate share of the civilian 
market. Although these policies may be prudent outside the context of a 
national emergency, and FEMA will strive to abide by such policies to 
the extent practicable and appropriate, FEMA requires flexibility to 
depart from them in the emergency context. Many different forms of 
allocations may need to be exercised in the emergency context when a 
hazard has occurred or is imminent, including but not limited to, full 
allocation of the entire supply of a material, end-use restrictions, 
conservation measures, set-asides or allotments for emergency 
requirements, set-asides or allotments for small businesses, inventory 
restrictions, and other appropriate measures of control as warranted by 
the emergency conditions. FEMA must be able to order such allocations 
regardless of whether such allocations implicate paragraphs (a) or (b) 
of section 333.30.
    FEMA has therefore incorporated these general policies in section 
333.30, with an exception for emergency situations where a hazard has 
occurred or is imminent.
2. Section 333.31 General Procedures
    Before FEMA uses its allocations authority to address a supply 
problem, the agency will develop a plan pursuant to section 333.31 that 
includes a copy of the written determination that the program or 
programs to be supported by the allocation action are necessary or 
appropriate for the national defense, as well as other elements 
consistent with the requirements found in the DPAS regulations at 15 
CFR 700.31 and HRPAS regulations at 45 CFR 101.51.
3. Section 333.32 Controlling the General Distribution of a Material in 
the Civilian Market
    Section 333.32 prohibits allocation action by FEMA to control the 
general distribution of a material in the civilian market unless very 
specific conditions are met. Consistent with DPAS regulations at 15 CFR 
700.32, FEMA's Administrator must make a written finding that such 
material is a scarce and critical material essential to the national 
defense, and that national defense requirements cannot otherwise be met 
without creating a significant dislocation of the normal distribution 
of such material in the civilian market to such a degree as to create 
appreciable hardship.
    With respect to the present COVID-19 emergency, the President has 
already found that health and medical resources needed to respond to 
the spread of COVID-19, including personal protective equipment and 
ventilators, meet the criteria specified in section 101(b) of the Act. 
The President has specifically delegated, to the Secretary of Health 
and Human Services and the Secretary of Homeland Security, authority to 
identify additional specific health and medical resources that meet the 
criteria of section 101(b). 85 FR 16227 (Mar. 23, 2020) (delegation to 
HHS); 85 FR 18403 (delegation to DHS). The Administrator has already 
issued an allocation order on the basis of that Presidential 
determination and related direction. See 85 FR 20195 (Apr. 10, 
2020).\10\ Thus, with respect to health and medical resources needed to 
respond to the spread of COVID-19, no further action under new section 
333.32 is necessary.
---------------------------------------------------------------------------

    \10\ Although FEMA effectuated such allocation order via a 
temporary rule that predates the regulations announced here, FEMA 
retains authority to administer and enforce that allocation order 
according to its terms, and to issue future allocation orders 
consistent with the procedures announced here.
---------------------------------------------------------------------------

4. Section 333.33 Types of Allocation Orders
    Section 333.33 describes the three types of allocation orders that 
FEMA might issue. The types of allocation orders are a set-aside, a 
directive, and an allotment. A set-aside is an official action that 
will require a person to reserve resource capacity in anticipation of 
receipt of rated orders. An allocation directive is an official action 
that will require a person to take or refrain from taking certain 
actions in accordance with its provisions (a directive may, among other 
things, require a person to stop or reduce production of an item, 
prohibit the use of selected materials, or

[[Page 28506]]

divert the use of materials, services, or facilities from one purpose 
to another). An allotment is an official action that will specify the 
maximum quantity of a resource authorized for a specific use. 
Consistent with DPAS regulations at 15 CFR 700.33 and HRPAS regulations 
at 45 CFR 101.53, FEMA is specifying these three types of allocation 
orders because it believes that, collectively, they describe the types 
of actions that might be taken in any situation in which allocation is 
justified.
5. Section 333.34 Elements of an Allocation Order
    FEMA sets forth the elements of an allocation order in section 
333.34. Specifically, FEMA is adopting the DPAS regulation at 15 CFR 
700.34 to allow allocation orders to be issued directly to the affected 
persons or by constructive notice. Pursuant to paragraph (a), all 
allocation orders must include a detailed description of the required 
allocation action(s), including its relationship to previously or 
subsequently received rated and/or unrated orders, and specific start 
and end calendar dates for each required allocation action. Paragraph 
(b) sets forth the elements of the allocation order when issued 
directly to the affected persons, including the necessary statement 
regarding to whom the allocation order is issued, the purpose of the 
allocation order (for national defense), a citation to the EMPAS 
regulations, and the written signature of the Administrator. Paragraph 
(c) sets forth the elements of the allocation order when issued by 
constructive notice through publication in the Federal Register. 
Specifically, paragraph (c) requires FEMA to publish a notice in the 
Federal Register with a statement regarding to whom the allocation 
order is issued, the purpose of the allocation order, a citation to the 
EMPAS regulations, and the signature of the Administrator.
    FEMA is adopting constructive notice to ensure timely notice to 
impacted persons. Given the unique emergency preparedness, mitigation, 
response, and recovery conditions under which FEMA will utilize this 
authority, the agency believes allowing for constructive notice, 
similar to the DPAS regulations, is appropriate.
    Consistent with DPAS regulations at 15 CFR 700.34 and HRPAS 
regulations at 45 CFR 101.54, FEMA requires the specific elements for 
each order because it believes that they provide a proper balance 
between the need for standards to permit the public to recognize and 
understand an allocation order if one is issued, and the expectation 
that any actual allocation orders will have to be tailored to meet 
unforeseeable circumstances.
6. Section 333.35 Mandatory Acceptance of an Allocation Order
    Section 333.35(a) requires that except as otherwise specified in 
this section, an allocation order must be accepted. Section 333.35(b) 
prohibits persons from discriminating against an allocation order in 
any manner, such as by charging higher prices or imposing terms and 
conditions different than what the person imposed on contracts or 
orders for the same resource(s) that were received prior to receiving 
the allocation order. If a person is unable to comply fully with the 
required actions specified in an allocation order, Section 333.35(c) 
requires the person to notify FEMA immediately, explain the extent to 
which compliance is possible, and give reasons why full compliance is 
not possible. FEMA is adopting the requirement that if such 
notification is given verbally, written electronic confirmation must be 
provided within 24 hours (rather than the one-working-day requirement 
in the DPAS regulations) given the urgency with which emergency 
preparedness, mitigation, response, and recovery operations must occur 
and the need for clear, reliable statements regarding such delays to 
ensure the ultimate timely delivery of these operations. Section 333.35 
makes it clear to the public that the limited circumstances and 
emergency situations that trigger issuance of an allocation order 
require immediate response to address the situation in an expeditious 
fashion.
7. Section 333.36 Changes or Cancellations of Allocation Orders
    Section 333.36 requires an official action from FEMA to change or 
cancel an allocation order. Consistent with DPAS regulations at 15 CFR 
700.36, FEMA is allowing notice of changes or cancellations of 
allocation orders to be provided either directly to persons to whom the 
order applies or by constructive notice. FEMA may complete constructive 
notice by publication in the Federal Register.

G. Subpart G [Reserved]

H. Subpart H--Official Actions
1. Section 333.50 General Provisions
    From time to time, FEMA may take specific official actions to 
implement or enforce the EMPAS regulations. Consistent with DPAS 
regulations at 15 CFR 700.60, Section 333.50 provides an overview of 
this subpart and clarifies in paragraph (b) that some official actions 
pertaining to compliance are discussed in section 333.61, which is in 
Subpart I.
2. Section 333.51 Rating Authorizations
    Consistent with both the DPAS regulations at 15 CFR 700.61 and 
HRPAS regulations at 45 CFR 101.61, section 333.51 defines a rating 
authorization as an official action granting specific priority rating 
authority and refers persons to section 333.21 to request such priority 
rating authority.
3. Section 333.52 Directives
    Section 333.52(a) defines a directive as an official action that 
requires a person to take or refrain from taking certain actions in 
accordance with its provisions. Paragraph (b) details directive 
compliance for the public, prohibiting persons from using or extending 
a directive to obtain items from a supplier, unless expressly 
authorized to do so in the directive. Consistent with HRPAS regulations 
at 45 CFR 101.62(c) and (d), FEMA is clarifying in paragraph (c) that a 
priorities directive takes precedence over all rated orders, and 
unrated orders previously or subsequently received, unless a contrary 
instruction appears in the directive. FEMA is also clarifying in 
paragraph (d) that an allocations directive takes precedence over all 
priorities directives, rated orders, and unrated orders previously or 
subsequently received, unless a contrary instruction appears in the 
directive. FEMA believes this additional clarification helps better 
explain the role of directives in the EMPAS process.
4. Section 333.53 Letters and Memoranda of Understanding
    Consistent with HRPAS regulations at 45 CFR 101.63, FEMA defines a 
letter or memorandum of understanding as an official action that may be 
issued to resolve special priorities assistance cases to reflect an 
agreement reached by all parties, and explains its use. FEMA is 
clarifying in paragraph (a) that letters and memorandum of 
understanding may be issued electronically for efficiency. Given the 
urgency with which emergency preparedness, response, and recovery 
operations must occur, FEMA believes written electronic communication 
is the most efficient and effective method for these official actions.

I. Subpart I--Compliance

1. Section 333.60 General Provisions
    This section details the actions which may be taken by FEMA to 
enforce or

[[Page 28507]]

administer the DPA and other applicable statutes. FEMA is clarifying in 
paragraph (a) that compliance actions include audits, investigations, 
and other inquiries. The agency may use other official actions such as 
administrative subpoenas, demands for information, or inspection 
authorizations as part of the compliance process. Consistent with HRPAS 
regulations at 45 CFR 101.70(b), paragraph (b) reiterates that any 
person who places or receives a rated order or an allocation order must 
comply with this part and paragraph (c) states that willful violation 
of the provisions of title I or section 705 of the DPA or other 
applicable statutes, this part, or a FEMA official action is a criminal 
act punishable as provided in the DPA and other applicable statutes. 
FEMA is mirroring the HRPAS regulations at 45 CFR 101.70(b) and (c) in 
paragraphs (b) and (c) as they provide clarity to the public regarding 
the need for compliance and the repercussions of failing to comply.
2. Section 333.61 Audits and Investigations
    Consistent with the DPAS regulations at 15 CFR 700.71 and HRPAS 
regulations at 45 CFR 101.71, Section 333.61 details the procedures for 
audits and investigations. Paragraph (a) defines audits and 
investigations as official actions involving the examination of books, 
records, documents, and other writings and information, including 
electronically stored information, to ensure that the provisions of the 
DPA and other applicable statutes, this part, and official actions 
taken by FEMA have been properly followed. An audit or investigation 
may also include interviews and a systems evaluation to detect problems 
or failures in the implementation of this part. Paragraph (b) explains 
that FEMA will define the scope and purpose in the official action 
given to the person under investigation and confirm that the 
information sought is not available from any Federal or other 
responsible agency. Consistent with HRPAS regulations at 45 CFR 
101.71(c), paragraph (c) discusses how FEMA will administer audits and 
investigations, including how the agency will utilize administrative 
subpoenas, demands for information, and inspection authorizations. 
Paragraph (d) discusses how writings and information will be reviewed 
and paragraph (e) details the required elements of administrative 
subpoenas, demands for information, and inspection authorizations. 
Paragraph (f) provides an explanation of how service of documents will 
be made. As compared to other FPAS regulations, paragraph (f) contains 
an additional flexibility appropriate to FEMA's emergency response 
functions. Specifically, this paragraph provides that when a hazard has 
occurred or is imminent, service of a demand for information or 
inspection authorization may additionally be made by written electronic 
communication.
3. Section 333.62 Compulsory Process
    Paragraph (a) of section 333.62 provides that if a person refuses 
to permit a duly authorized FEMA representative to have access to 
necessary information, FEMA may seek to institute appropriate legal 
action, including ex parte application for an inspection warrant, in 
any forum of appropriate jurisdiction. Consistent with DPAS regulations 
at 15 CFR 700.72(b), paragraph (b) explains that compulsory process may 
be sought in advance of an audit, investigation, or other inquiry if in 
the judgment of the Administrator, in consultation with the FEMA Chief 
Counsel, there is a reason to believe that a person will refuse to 
permit an audit, investigation, or other inquiry, or that other 
circumstances exist which make such process desirable or necessary.
4. Section 333.63 Notification of Failure To Comply
    Consistent with HRPAS regulations at 45 CFR 101.73, section 
333.63(a) states that FEMA may provide notification, following an 
audit, investigation, or other inquiry, of failure to comply with the 
DPA, other applicable statutes, these regulations, or official actions. 
FEMA has revised paragraph (a), as compared to other FPAS regulations, 
to make clear that FEMA may provide such notification irrespective of 
whether the person's failure to comply was inadvertent or willful. 
Paragraph (b) permits FEMA to allow for corrective action to be taken 
for an inadvertent failure to comply with the DPA, and notes that 
failure to take corrective action may be construed as willful violation 
of the relevant authority.
5. Section 333.64 Violations, Penalties, and Remedies
    Section 333.64 describes the resulting penalties and remedies for 
failure to comply, as well as other measures that may be taken and 
actions that are prohibited. FEMA is mirroring the HRPAS regulations at 
45 CFR 101.74 for this section.
6. Section 333.65 Compliance Conflicts
    This section requires that persons immediately contact FEMA should 
compliance with the DPA or other applicable statutes, this part, or an 
official action prevent a person from filling a rated order or from 
complying with another provision of the DPA or other applicable 
statutes, this part, or an official action.

J. Subpart J--Adjustments, Exceptions, and Appeals

1. Section 333.70 Adjustments or Exceptions
    Section 333.70 reflects the procedures necessary to request an 
adjustment or exception to the provisions of these regulations. 
Paragraph (a) allows a person to submit a request to FEMA for an 
adjustment or exception where (1) a provision of this part or an 
official action results in undue or exceptional hardship not suffered 
generally by others in similar situations and circumstances; or (2) the 
consequences of following a provision of this part or an official 
action is contrary to the intent of the DPA and other applicable 
statutes, or this part. Paragraph (b) details the required elements of 
each request for adjustment or exception. Paragraph (c) explains that a 
request for adjustment of exception does not relieve any person from 
the obligation of complying while the request is being considered, 
unless interim relief is granted in writing. Similar to the 
corresponding HRPAS provision at 45 CFR 101.80(c), and in contrast to 
the corresponding DPAS provision at 15 CFR 700.80(c), FEMA does not 
impose a specific deadline for responding to such a request, to provide 
maximum flexibility in the event of a surge in such requests. FEMA 
intends to respond to all such requests within a reasonable timeframe. 
Paragraph (d) states that decisions may be appealed to the 
Administrator.
2. Section 333.71 Appeals
    This section provides the procedures, timing, and contact 
information for appealing a decision made on a request for relief in 
the previous section and is generally consistent with DPAS regulations 
at 15 CFR 700.81 and HRPAS regulations at 45 CFR 101.81. Paragraph (b) 
incorporates the timeline in HRPAS regulations for adjustment or 
exception involving rated orders placed for the purpose of health and 
medical resources, set at 15 days after receipt of a written notice of 
denial consistent with the exigent circumstances under which FEMA is 
operating in emergency preparedness situations where a hazard has 
occurred or is imminent. Paragraph (g) reiterates that filing an appeal 
does not relieve any obligation to comply

[[Page 28508]]

with the provisions of this part or any official action in question 
while the appeal is being considered, unless such relief is granted in 
writing by FEMA. Paragraph (h) incorporates the requirements from the 
DPAS regulations at 15 CFR 700.81(h) that a decision be made in writing 
within a reasonable time after receipt of the appeal and shall be the 
final administrative action.

K. Subpart K--Miscellaneous Provisions

1. Section 333.80 Protection Against Claims
    Consistent with DPAS regulations at 15 CFR 700.90 and HRPAS 
regulations at 45 CFR 101.90, this section provides that a person shall 
not be held liable for damages or penalties for any act or failure to 
act resulting directly or indirectly from compliance with any part of 
this regulation or an official action.
2. Section 333.81 Records and Reports
    Section 333.81 requires persons to make and preserve for at least 
three years, accurate and complete records of any transaction covered 
by this part or an official action. Various requirements and procedures 
regarding such records are provided in this section. The 
confidentiality provisions of the DPA governing the disclosure of 
information submitted pursuant to the DPA and this part are also set 
forth. Although the corresponding DPAS provision at 15 CFR 700.91(e) 
applies to ``information obtained under this section [15 CFR 700.91],'' 
the confidentiality provisions of section 705(d) of the Act apply to 
all information obtained under section 705. FEMA's section 333.81(e) 
therefore refers to all information obtained under section 705 of the 
act, rather than information obtained under 44 CFR 333.81.
3. Section 333.82 Applicability of This Part and Official Actions
    Consistent with the DPAS regulations at 15 CFR 700.92 and HRPAS 
regulations at 101.92, section 333.82 provides the scope and 
jurisdictional applicability of this part and official actions.
4. Section 333.83 Communications
    Section 333.83 provides a FEMA point of contact for general 
communications regarding this part.
5. Section 333.84 Severability
    Section 333.84 provides that FEMA intends the various provisions of 
this part to be severable from each other to the extent practicable, 
such that if a court of competent jurisdiction were to vacate or enjoin 
any one provision, the other provisions are intended to remain in 
effect unless they are dependent upon the vacated or enjoined 
provision.

IV. Regulatory Analysis

A. Administrative Procedure Act (APA)

    For the reasons that follow, FEMA is issuing this rule as an 
interim final rule pursuant to the APA's ``good cause'' exception for 
rules with respect to which ``notice and public procedure'' is 
``impracticable, unnecessary, or contrary to the public interest.'' 5 
U.S.C. 553(b)(B).
    Under section 709(a) of the Act (50 U.S.C. 4559(a)), rules 
implementing the DPA are generally not subject to sections 551 through 
559 of title 5, which includes the informal rulemaking procedures of 
the Administrative Procedure Act (APA) at 5 U.S.C. 553. However, 
section 101(d)(1) of the DPA, which this rule specifically implements, 
contains an exception to section 709(a), because it specifically 
directs resource agencies to issue, ``in accordance with section 553 of 
title 5,'' rules establishing the standards and procedures by which the 
priorities and allocations authority is used to promote the national 
defense, under both emergency and nonemergency conditions. FEMA is 
issuing this interim final rule ``in accordance with'' the requirements 
of 5 U.S.C. 553, including the good cause provisions in 5 U.S.C. 
553(b)(B) and (d).
    The exigent need for this rule is related to the COVID-19 pandemic. 
COVID-19 is a communicable disease caused by a novel (new) coronavirus, 
SARS-CoV-2, that was first identified as the cause of an outbreak of 
respiratory illness that began in Wuhan, Hubei Province, People's 
Republic of China. In severe cases, manifestations of the COVID-19 
disease have included severe pneumonia, acute respiratory distress 
syndrome, septic shock, multi-organ failure, and death.
    On January 30, 2020, the Director General of WHO declared that the 
outbreak of COVID-19 is a Public Health Emergency of International 
Concern under the International Health Regulations.\11\ The following 
day, the Secretary of HHS declared COVID-19 a public health emergency 
under the Public Health Service Act.\12\ On March 11, 2020, the WHO 
declared COVID-19 a pandemic.\13\ On March 13, 2020, the President 
declared a national emergency under the National Emergencies Act (50 
U.S.C. 1601 et seq.),\14\ and declared a nationwide emergency under the 
Robert T. Stafford Disaster Relief and Emergency Assistance Act (42 
U.S.C. 5121 et seq.), authorizing FEMA to provide assistance for 
emergency protective measures to respond to the COVID-19 pandemic.\15\
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    \11\ Statement on the second meeting of the International Health 
Regulations (2005) Emergency Committee regarding the outbreak of 
novel coronavirus (2019-nCoV) (January 30, 2020), available at 
https://www.who.int/news-room/detail/30-01-2020-statement-on-the-second-meeting-of-the-international-health-regulations-(2005)-
emergency-committee-regarding-the-outbreak-of-novel-coronavirus-
(2019-ncov).
    \12\ HHS, ``Determination that a Public Health Emergency 
Exists,'' available at https://www.phe.gov/emergency/news/healthactions/phe/Pages/2019-nCoV.aspx.
    \13\ ``WHO Director-General's opening remarks at the media 
briefing on COVID-19--11 March 2020,'' available at https://www.who.int/dg/speeches/detail/who-director-general-s-opening-remarks-at-the-media-briefing-on-covid-19---11-march-2020.
    \14\ ``Proclamation on Declaring a National Emergency Concerning 
the Novel Coronavirus Disease (COVID-19) Outbreak,'' March 13, 2020, 
available at https://www.whitehouse.gov/presidential-actions/proclamation-declaring-national-emergency-concerning-novel-coronavirus-disease-covid-19-outbreak/.
    \15\ ``Letter from President Donald J. Trump on Emergency 
Determination Under the Stafford Act,'' March 13, 2020, available at 
https://www.whitehouse.gov/briefings-statements/letter-president-donald-j-trump-emergency-determination-stafford-act/.
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    The President exercised his authority pursuant to the DPA to 
respond to the COVID-19 pandemic in Executive Orders 13909 and 13910, 
authorizing the Secretary of Health and Human Services to prioritize 
and allocate health and medical resources under section 101 of the DPA 
and prevent hoarding of such resources under section 102 of the DPA to 
respond to the spread of COVID-19.\16\ In Executive Order 13911, the 
President delegated additional authority under the DPA, including 
delegating to the Secretary of Homeland Security the authority 
conferred by section 101 of the DPA. The President has also delegated 
to the Secretary of Homeland Security the authority to promulgate 
regulations necessary to implement the Executive Order. The Secretary 
of Homeland Security has further delegated this authority to the FEMA 
Administrator.\17\ Any future COVID-19-related rated orders or 
allocations pursued under these delegations of authority would occur 
within the context of the framework established by these regulations.
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    \16\ Executive Order 13909, 85 FR 16227 (Mar. 23, 2020); 
Executive Order 13910, 85 FR 17001 (Mar. 26, 2020).
    \17\ DHS Delegation 09052 Rev. 00.1 (Apr. 1, 2020).
---------------------------------------------------------------------------

    As of April 30, 2020, there were over 1 million confirmed cases of 
COVID-19 reported in the United States, resulting in over 60,000 
confirmed deaths due to the disease, with new cases reported daily.\18\ 
Worldwide there have been

[[Page 28509]]

over 3 million confirmed cases, resulting in over 217,000 deaths.\19\ 
At this time, there is no vaccine that can prevent infection with 
COVID-19. Treatment is mainly limited to supportive (or palliative) 
care for patients who need it. Clinical management for hospitalized 
patients with COVID-19 is focused on supportive care for complications, 
including supplemental oxygen and advanced organ support for 
respiratory failure, septic shock, and multi-organ failure.\20\
---------------------------------------------------------------------------

    \18\ Information obtained from https://www.cdc.gov/coronavirus/2019-ncov/cases-updates/cases-in-us.html (accessed April 30, 2020).
    \19\ Information obtained from https://covid19.who.int/ 
(accessed April 30, 2020).
    \20\ Information obtained from https://www.cdc.gov/coronavirus/2019-ncov/hcp/clinical-guidance-management-patients.html (accessed 
April 30, 2020).
---------------------------------------------------------------------------

    Within the United States, widespread transmission of COVID-19 has 
occurred. Such transmission has resulted and will continue to result in 
large numbers of people needing medical care at the same time. Public 
health and healthcare systems may become overloaded, with elevated 
rates of hospitalizations and deaths, as well as elevated demand for 
health and medical resources.
    To summarize, the current situation is such that FEMA must 
establish the relevant regulatory framework without delay, so as to be 
able to respond with dispatch and without unnecessary confusion 
regarding the applicable standards and procedures. The Federal 
Government urgently needs to address issues related to production and 
distribution of critical medical supplies, equipment, and facilities 
associated with the response to COVID-19. FEMA has the lead role in 
coordinating the Federal response to COVID-19 and requires a clear, 
robust, and enforceable mechanism for exercising its authority under 
section 101 of the DPA and other applicable authorities. Given the 
national emergency caused by COVID-19, it would be impracticable and 
contrary to the public health--and, by extension, the public interest--
to delay these implementing regulations until a full public notice-and-
comment process is completed. Pursuant to 5 U.S.C. 553(b)(B), 
consistent with sections 101(d)(1) of the DPA, and for the reasons 
stated above, FEMA therefore concludes that there is good cause to 
dispense with prior public notice and the opportunity to comment on 
this rule before finalizing this rule. For the same reasons, FEMA has 
determined, pursuant to section 553(d) of the APA, that there is good 
cause to make this interim final rule effective immediately upon 
publication.
    While FEMA believes that there is good cause to issue the rule 
without advance notice and comment and with an immediate effective 
date, FEMA is interested in the views of the public and requests 
comment on all aspects of the interim final rule.

B. Executive Order 12866, Regulatory Planning and Review, Executive 
Order 13563, Improving Regulation and Regulatory Review, and Executive 
Order 13771, Reducing Regulation and Controlling Regulatory Costs

    Executive Orders 12866 (``Regulatory Planning and Review'') and 
13563 (``Improving Regulation and Regulatory Review'') direct agencies 
to assess the 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). 
Executive Order 13563 emphasizes the importance of quantifying both 
costs and benefits, of reducing costs, of harmonizing rules, and of 
promoting flexibility. Executive Order 13771 (``Reducing Regulation and 
Controlling Regulatory Costs'') directs agencies to reduce regulation 
and control regulatory costs and provides that ``for every one new 
regulation issued, at least two prior regulations be identified for 
elimination, and that the cost of planned regulations be prudently 
managed and controlled through a budgeting process.''
    This interim final rule has been drafted and reviewed in accordance 
with Executive Order 12866. DHS, in coordination with the Office of 
Management and Budget (OMB), has determined this rule to be an 
economically significant regulatory action as defined in Section 3(f) 
of the Executive Order. Although this rule has been deemed economically 
significant, FEMA proceeds without additional economic analysis under 
the emergency provision of section 6(a)(3)(D) of Executive Order 12866, 
for the reasons stated in the APA section above.

C. Regulatory Flexibility Act

    The Regulatory Flexibility Act (RFA) (5 U.S.C. 605(b)) requires an 
agency to consider whether the rules it proposes will have a 
significant economic impact on a substantial number of small entities. 
The RFA applies only to rules for which an agency publishes a general 
notice of proposed rulemaking pursuant to 5 U.S.C. 553(b). As discussed 
previously, FEMA is not issuing a notice of proposed rulemaking. 
Accordingly, FEMA has concluded that the RFA's requirements relating to 
initial and final regulatory flexibility analysis do not apply.
    Nevertheless, FEMA seeks comment on whether, and the extent to 
which, the interim final rule would have a significant economic impact 
on a substantial number of small entities.

D. Unfunded Mandates Reform Act of 1995

    FEMA has not issued a notice of proposed rulemaking for this 
regulatory action; therefore, the written statement provisions of the 
Unfunded Mandates Reform Act of 1995, as amended, do not apply to this 
regulatory action.

E. Paperwork Reduction Act of 1995

    This rule contains information collections necessary to support 
FEMA's implementation of the President's priorities and allocations 
authority under Title I of the Defense Production Act of 1950 (DPA), as 
amended (50 U.S.C. 4501, et seq.). The purpose of this authority is to 
ensure the timely delivery of products, materials, and services 
necessary or appropriate to promote the national defense.
    This new collection was submitted under OMB's emergency clearance 
procedures. Additionally, FEMA will seek public comments on the 
collection through the normal clearance process.

F. Privacy Act

    Under the Privacy Act of 1974, 5 U.S.C. 552a, an agency must 
determine whether implementation of a proposed regulation will result 
in a system of records. A ``record'' is any item, collection, or 
grouping of information about an individual that is maintained by an 
agency, including, but not limited to, his/her education, financial 
transactions, medical history, and criminal or employment history and 
that contains his/her name, or the identifying number, symbol, or other 
identifying particular assigned to the individual, such as a finger or 
voice print or a photograph. See 5 U.S.C. 552a(a)(4). A ``system of 
records'' is a group of records under the control of an agency from 
which information is retrieved by the name of the individual or by some 
identifying number, symbol, or other identifying particular assigned to 
the individual. An agency cannot disclose any record which is contained 
in a system of records except by following specific procedures.
    In accordance with DHS policy, FEMA has completed a Privacy 
Threshold Analysis (PTA) for this rule. DHS has determined that this 
rulemaking does not affect the 1660-NW122 OMB Control Number's 
compliance with the E-Government Act

[[Page 28510]]

of 2002 or the Privacy Act of 1974, as amended. Specifically, DHS has 
concluded that the 1660-NW122 OMB Control Number is covered by the DHS/
ALL/PIA-065 Electronic Contract Filing System (ECFS) Privacy Impact 
Assessment (PIA). Additionally, DHS has decided that the 1660-NW122 OMB 
Control Number is covered by the DHS/ALL-021 Department of Homeland 
Security Contractors and Consultants, 73 FR 63179 (Oct. 23, 2008) 
System of Records Notice (SORN).

G. Executive Order 13175, Consultation and Coordination With Indian 
Tribal Governments

    Executive Order 13175, ``Consultation and Coordination with Indian 
Tribal Governments,'' 65 FR 67249, November 9, 2000, applies to agency 
regulations that have Tribal implications, that is, regulations that 
have substantial direct effects on one or more Indian tribes, on the 
relationship between the Federal Government and Indian Tribes, or on 
the distribution of power and responsibilities between the Federal 
Government and Indian Tribes. Under this Executive Order, to the extent 
practicable and permitted by law, no agency shall promulgate any 
regulation that has Tribal implications, that imposes substantial 
direct compliance costs on Indian Tribal governments, and that is not 
required by statute, unless funds necessary to pay the direct costs 
incurred by the Indian Tribal government or the Tribe in complying with 
the regulation are provided by the Federal Government, or the agency 
consults with Tribal officials.
    FEMA has reviewed this interim final rule under Executive Order 
13175 and has determined that this interim final rule does not have a 
substantial direct effect on one or more Indian tribes, on the 
relationship between the Federal Government and Indian Tribes, or on 
the distribution of power and responsibilities between the Federal 
Government and Indian Tribes.

H. Executive Order 13132, Federalism

    Executive Order 13132, ``Federalism,'' 64 FR 43255, August 10, 
1999, sets forth principles and criteria that agencies must adhere to 
in formulating and implementing policies that have federalism 
implications, that is, regulations that have ``substantial direct 
effects on the States, on the relationship between the national 
government and the States, or on the distribution of power and 
responsibilities among the various levels of government.'' Federal 
agencies must closely examine the statutory authority supporting any 
action that would limit the policymaking discretion of the States, and 
to the extent practicable, must consult with State and local officials 
before implementing any such action.
    FEMA has determined that this rulemaking does not have a 
substantial direct effect on the States, on the relationship between 
the national government and the States, or on the distribution of power 
and responsibilities among the various levels of government, and 
therefore does not have federalism implications as defined by the 
Executive Order.

I. National Environmental Policy Act of 1969 (NEPA)

    Under the National Environmental Policy Act of 1969 (NEPA), as 
amended, 42 U.S.C. 4321 et seq., an agency must prepare an 
environmental assessment or environmental impact statement for any 
rulemaking that significantly affects the quality of the human 
environment. FEMA has determined that this rulemaking does not 
significantly affect the quality of the human environment and 
consequently has not prepared an environmental assessment or 
environmental impact statement.
    Rulemaking is a major Federal action subject to NEPA. Categorical 
exclusion A3 included in the list of exclusion categories at Department 
of Homeland Security Instruction Manual 023-01-001-01, Revision 01, 
Implementation of the National Environmental Policy Act, Appendix A, 
issued November 6, 2014, covers the promulgation of rules, issuance of 
rulings or interpretations, and the development and publication of 
policies, orders, directives, notices, procedures, manuals, and 
advisory circulars if they meet certain criteria provided in A3(a-f). 
This interim final rule meets Categorical Exclusion A3(a), ``[t]hose of 
a strictly administrative or procedural nature,'' and A3(b), ``[t]hose 
that implement, without substantive change, statutory or regulatory 
requirements.''

J. Congressional Review of Agency Rulemaking

    Under the Congressional Review of Agency Rulemaking Act (CRA), 5 
U.S.C. 801-808, before a rule can take effect, the Federal agency 
promulgating the rule must: Submit to Congress and to the Government 
Accountability Office (GAO) a copy of the rule; a concise general 
statement relating to the rule, including whether it is a major rule; 
the proposed effective date of the rule; a copy of any cost-benefit 
analysis; descriptions of the agency's actions under the Regulatory 
Flexibility Act and the Unfunded Mandates Reform Act; and any other 
information or statements required by relevant executive orders.
    FEMA has submitted this rule to the Congress and to GAO pursuant to 
the CRA. The Office of Management and Budget has determined that this 
rule is a ``major rule'' within the meaning of the CRA. Pursuant to 5 
U.S.C. 808(2), since this rule is promulgated under the ``good cause'' 
exemption of the APA, there is no delay in its effective date under the 
CRA.

List of Subjects in 44 CFR Part 333

    Administrative practice and procedure, Business and industry, 
Government contracts, National defense, Reporting and recordkeeping 
requirements, Strategic and critical materials.

0
For the reasons discussed in the preamble, the Federal Emergency 
Management Agency (FEMA) adds part 333 to subchapter F of title 44 of 
the Code of Federal Regulations, to read as follows:

PART 333--EMERGENCY MANAGEMENT PRIORITIES AND ALLOCATIONS SYSTEM

Subpart A--Purpose
Sec.
333.1 Purpose of this part.
Subpart B--Overview
333.2 Program Eligibility.
333.3 Priority ratings and rated orders.
333.4-333.7 [Reserved]
Subpart C--Definitions
333.8 Definitions.
Subpart D--Priorities and Placement of Rated Orders
333.10 Authority.
333.11 Priority ratings.
333.12 Elements of a rated order.
333.13 Acceptance and rejection of rated orders.
333.14 Preferential scheduling.
333.15 Extension of priority ratings.
333.16 Changes or cancellations of priority ratings and rated 
orders.
333.17 Use of rated orders.
333.18 Limitations on placing rated orders.
333.19 Special provisions applicable to rated orders for third 
parties.
Subpart E--Special Priorities Assistance
333.20 General provisions.
333.21 Requests for priority rating authority.
333.22 Examples of assistance.
333.23 Criteria for assistance.
333.24 Instances where assistance will not be provided.
Subpart F--Allocation Actions
333.30 Policy.
333.31 General procedures.
333.32 Controlling the general distribution of a material in the 
civilian market.

[[Page 28511]]

333.33 Types of allocation orders.
333.34 Elements of an allocation order.
333.35 Mandatory acceptance of an allocation order.
333.36 Changes or cancellations of allocation orders.
Subpart G [Reserved]
Subpart H--Official Actions
333.50 General provisions.
333.51 Rating authorizations.
333.52 Directives.
333.53 Letters and memoranda of understanding.
Subpart I--Compliance
333.60 General provisions.
333.61 Audits and investigations.
333.62 Compulsory process.
333.63 Notification of failure to comply.
333.64 Violations, penalties, and remedies.
333.65 Compliance conflicts.
Subpart J--Adjustments, Exceptions, and Appeals
333.70 Adjustments or exceptions.
333.71 Appeals.
Subpart K--Miscellaneous Provisions
333.80 Protection against claims.
333.81 Records and reports.
333.82 Applicability of this part and official actions.
333.83 Communications.
333.84 Severability.

    Authority: 6 U.S.C. 313, 314; Sections 101 et seq. of the 
Defense Production Act of 1950, 50 U.S.C. 4511, et seq.; Executive 
Order 13603, 77 FR 16651 (Mar. 22, 2012); Executive Order 13909, 85 
FR 16227 (Mar. 23, 2020); Executive Order 13911, 85 FR 18403 (Apr. 
1, 2020); DHS Delegation 09052, Rev. 00.1 (Apr. 1, 2020).

Subpart A--Purpose


Sec.  333.1  Purpose of this part.

    The Federal Emergency Management Agency (FEMA) refers to this part 
as the Emergency Management Priorities and Allocations System (EMPAS). 
The EMPAS implements those priorities and allocations authorities under 
the Defense Production Act that are the subject of a delegation from 
the President to the Secretary of DHS and re-delegated to the FEMA 
Administrator, or to the FEMA Administrator directly, as described in 
Sec.  333.10 of this part. This includes the use of authority to 
support critical infrastructure restoration and protection, 
stockpiling, and emergency preparedness activities pursuant to Title VI 
of the Robert T. Stafford Disaster Relief and Emergency Assistance Act 
(42 U.S.C. 5195 et seq.), and related statutes, with respect to health 
and medical resources needed to respond to the spread of COVID-19 
within the United States.

Subpart B--Overview


Sec.  333.2  Program Eligibility.

    (a) Certain programs to promote the national defense are eligible 
for priorities and allocations support. These include programs for 
military and energy production or construction, military or critical 
infrastructure assistance to any foreign nation, deployment and 
sustainment of military forces, homeland security, stockpiling, space, 
and any directly related activity. Other eligible programs include 
emergency preparedness activities conducted pursuant to Title VI of the 
Robert T. Stafford Disaster Relief and Emergency Assistance Act (42 
U.S.C. 5195 et seq.) and critical infrastructure protection and 
restoration. For a current and complete list reflecting the latest 
changes to approved programs, please visit FEMA's website at 
www.FEMA.gov.
    (b) FEMA may delegate authority to place priority ratings on 
contracts or orders necessary to promote the national defense to 
appropriate officials in certain Federal Government agencies that issue 
such contracts or orders, to the extent consistent with the delegation 
of Presidential authority under which FEMA is operating. Such 
delegations may include authority to authorize recipients of rated 
orders to place ratings on contracts or orders to contractors, 
subcontractors, and suppliers.


Sec.  333.3  Priority ratings and rated orders.

    (a) Rated orders are identified by a priority rating and a program 
identification symbol. Rated orders take precedence over all unrated 
orders as necessary to meet required delivery dates. Among rated 
orders, DX rated orders take precedence over DO rated orders.
    (b) Persons receiving rated orders must give them preferential 
treatment as required by this part.
    (c) All rated orders must be scheduled to the extent possible to 
ensure delivery by the required delivery date.
    (d) Persons who receive rated orders must in turn place rated 
orders with their suppliers for the items they need to fill the orders. 
This provision ensures that suppliers will give priority treatment to 
rated orders from contractor to subcontractor to suppliers throughout 
the procurement chain.
    (e) Persons may place a priority rating on orders only when they 
are in receipt of a rated order, have been explicitly authorized to do 
so by FEMA or a Delegate Agency, or are otherwise permitted to do so by 
this part.


Sec. Sec.  333.4-333.7  [Reserved]

Subpart C--Definitions


Sec.  333.8  Definitions.

    The definitions in this section apply throughout this part:
    Act or DPA means the Defense Production Act of 1950, as amended (50 
U.S.C. 4501, et seq.).
    Administrator means the Administrator of the Federal Emergency 
Management Agency.
    Allocation means the control of the distribution of materials, 
services or facilities for a purpose deemed necessary or appropriate to 
promote the national defense.
    Allocation order means an official action to control the 
distribution of materials, services, or facilities for a purpose deemed 
necessary or appropriate to promote the national defense.
    Allotment means an official action that specifies the maximum 
quantity of a material, service, or facility authorized for a specific 
use to promote the national defense.
    Approved program means a program determined as necessary or 
appropriate for priorities and allocations support to promote the 
national defense by the Secretary of Defense, the Secretary of Energy, 
or the Secretary of Homeland Security, under the authority of the 
Defense Production Act and Executive Order 13603.
    Construction means the erection, addition, extension, or alteration 
of any building, structure, or project, using materials or products 
which are to be an integral and permanent part of the building, 
structure, or project. Construction does not include maintenance and 
repair.
    Critical infrastructure means any systems and assets, whether 
physical or cyber-based, so vital to the United States that the 
degradation or destruction of such systems and assets would have a 
debilitating impact on national security, including, but not limited 
to, national economic security and national public health or safety.
    Delegate Agency means a Federal Government agency authorized by 
delegation from FEMA to place priority ratings on contracts or orders 
needed to support approved programs.
    Directive means an official action which requires a person to take 
or refrain from taking certain actions in accordance with its 
provisions.
    Emergency preparedness means all those activities and measures 
designed or undertaken to prepare for or minimize the effects of a 
hazard upon the civilian population, to deal with the

[[Page 28512]]

immediate emergency conditions which would be created by the hazard, 
and to effectuate emergency repairs to, or the emergency restoration 
of, vital utilities and facilities destroyed or damaged by the hazard. 
``Emergency preparedness'' includes the following:
    (1) Measures to be undertaken in preparation for anticipated 
hazards (including the establishment of appropriate organizations, 
operational plans, and supporting agreements, the recruitment and 
training of personnel, the conduct of research, the procurement and 
stockpiling of necessary materials and supplies, the provision of 
suitable warning systems, the construction or preparation of shelters, 
shelter areas, and control centers, and, when appropriate, the 
nonmilitary evacuation of the civilian population).
    (2) Measures to be undertaken during a hazard (including the 
enforcement of passive defense regulations prescribed by duly 
established military or civil authorities, the evacuation of personnel 
to shelter areas, the control of traffic and panic, and the control and 
use of lighting and civil communications).
    (3) Measures to be undertaken following a hazard (including 
activities for firefighting, rescue, emergency medical, health and 
sanitation services, monitoring for specific dangers of special 
weapons, unexploded bomb reconnaissance, essential debris clearance, 
emergency welfare measures, and immediately essential emergency repair 
or restoration of damaged vital facilities).
    Facilities includes all types of buildings, structures, or other 
improvements to real property (but excluding farms, churches or other 
places of worship, and private dwelling houses), and services related 
to the use of any such building, structure, or other improvement.
    Hazard means an emergency or disaster resulting from:
    (1) A natural disaster, or
    (2) An accidental or man-caused event.
    Health and medical resources means drugs, biological products, 
medical devices, materials, facilities, health supplies, services, and 
equipment required to diagnose, mitigate, prevent the impairment of, 
improve, treat, cure, or restore the physical or mental health 
conditions of the population.
    Homeland security includes efforts:
    (1) To prevent terrorist attacks within the United States;
    (2) To reduce the vulnerability of the United States to terrorism;
    (3) To minimize damage from a terrorist attack in the United 
States; and
    (4) To recover from a terrorist attack in the United States.
    Industrial resources means all materials, services, and facilities, 
including construction materials, but not including: food resources, 
food resource facilities, and the domestic distribution of farm 
equipment and commercial fertilizer; all forms of health resources; all 
forms of civil transportation; and water resources. This term also 
includes the term ``item'' as defined and used in this part.
    Item means any raw, in process, or manufactured material, article, 
commodity, supply, equipment, component, accessory, part, assembly, or 
product of any kind, technical information, process, or service.
    Maintenance and repair and/or operating supplies (MRO).
    (1) Maintenance is the upkeep necessary to continue any plant, 
facility, or equipment in working condition.
    (2) Repair is the restoration of any plant, facility, or equipment 
to working condition when it has been rendered unsafe or unfit for 
service by wear and tear, damage, or failure of parts.
    (3) Operating supplies are any items carried as operating supplies 
according to a person's established accounting practice. Operating 
supplies may include hand tools and expendable tools, jigs, dies, 
fixtures used on production equipment, lubricants, cleaners, chemicals, 
and other expendable items.
    (4) MRO does not include items produced or obtained for sale to 
other persons or for installation upon or attachment to the property of 
another person, or items required for the production of such items; 
items needed for the replacement of any plant, facility, or equipment; 
or items for the improvement of any plant, facility, or equipment by 
replacing items which are still in working condition with items of a 
new or different kind, quality, or design.
    Materials includes:
    (1) Any raw materials (including minerals, metals, and advanced 
processed materials), commodities, articles, components (including 
critical components), products, and items of supply; and
    (2) Any technical information or services ancillary to the use of 
any such materials, commodities, articles, components, products, or 
items.
    National defense means programs for military and energy production, 
or construction, military or critical infrastructure assistance to any 
foreign nation, homeland security, stockpiling, space, and any directly 
related activity. Such term includes emergency preparedness activities 
conducted pursuant to Title VI of The Robert T. Stafford Disaster 
Relief and Emergency Assistance Act (42 U.S.C. 5195 et seq.) and 
critical infrastructure protection and restoration.
    Official action means an action taken by FEMA under the authority 
of the Defense Production Act, the Robert T. Stafford Disaster Relief 
and Emergency Assistance Act and related statutes, or this part. Such 
actions include the issuance of rating authorizations, directives, 
letters and memoranda of understanding, demands for information, 
inspection authorizations, administrative subpoenas, and allocation 
orders.
    Person includes any individual, corporation, partnership, 
association, or any other organized group of persons, or legal 
successor or representative thereof; or any State or local government 
or agency thereof; and for purposes of administration of this part, 
includes the Federal Government and any authorized foreign government 
or international organization or agency thereof, delegated authority as 
provided in this part.
    Priorities authority means the authority of FEMA, pursuant to 
Section 101 of the Defense Production Act, to require acceptance and 
priority performance of contracts and orders for health and medical 
resource items and other resources as further delegated by the 
President to the Secretary of Homeland Security or Administrator for 
use in approved programs.
    Priority rating means an identifying code assigned by a Delegate 
Agency, FEMA, or authorized person placed on all rated orders and 
consisting of the rating symbol and the program identification symbol.
    Production equipment means any item of capital equipment used in 
producing materials or furnishing services that has a unit acquisition 
cost of $2,500 or more, an anticipated service life in excess of one 
year, and the potential for maintaining its integrity as a capital 
item.
    Program identification symbols means abbreviations used to indicate 
which approved program is supported by a rated order.
    Rated order means a prime contract, a subcontract, or a purchase 
order in support of an approved program issued in accordance with the 
provisions of this part.
    Services includes any effort that is needed for or incidental to:
    (1) The development, production, processing, distribution, 
delivery, or use of an industrial resource or a critical technology 
item;

[[Page 28513]]

    (2) The construction of facilities;
    (3) The movement of individuals and property by all modes of civil 
transportation; or
    (4) Other national defense programs and activities.
    Set-aside means an official action that requires a person to 
reserve materials, services, or facilities capacity in anticipation of 
the receipt of rated orders.
    Written and in writing mean documented via printing, typewriting, 
handwriting, or similar means, whether in tangible or electronic form.
    Written electronic means written and in electronic form, except 
that when electronic form is impracticable under the circumstances, 
FEMA may construe this term to allow for a tangible format.

Subpart D--Priorities and Placement of Rated Orders


Sec.  333.10   Authority.

    (a) The priorities and allocations authorities of the President 
under Title I of the Act that have been delegated to the Secretary of 
Homeland Security have been redelegated to the Administrator. These 
rules are issued pursuant to Title I of the Act, and implementing 
authorities, including such authorities as are contained in subchapter 
III of chapter 55 of title 50, United States Code (50 U.S.C. 4554, 
4555, 4556, and 4560), which have been delegated to FEMA.
    (b) Delegations by FEMA. FEMA may authorize Delegate Agencies to 
assign priority ratings to orders under these regulations as 
authorized.
    (c) Jurisdictional limitations. Unless delegated by the President 
to DHS or FEMA, the provisions of this part are not applicable to the 
following resource categories, as defined in Executive Order 13603, a 
successor executive order, or implementing regulations issued 
thereunder:
    (1) Food resources, food resource facilities, and the domestic 
distribution of farm equipment and commercial fertilizer (Resource 
department with jurisdiction--Department of Agriculture);
    (2) Energy supplies (Resources agency with jurisdiction--Department 
of Energy);
    (3) All forms of civil transportation (Resource department with 
jurisdiction--Department of Transportation);
    (4) Health resources (Resource department with jurisdiction--
Department of Health and Human Services), except that pursuant to 
Executive Order 13911, the provisions of this part are applicable to 
health and medical resources needed to respond to the spread of COVID-
19;
    (5) Water resources (Resource department with jurisdiction--
Department of Defense); and
    (6) All other materials, services, and facilities, including 
construction materials (``industrial resources'') (Resource department 
with jurisdiction--Department of Commerce).


Sec.  333.11   Priority ratings.

    (a) Levels of priority. (1) There are two levels of priority 
established by Federal Priorities and Allocations System regulations, 
identified by the rating symbols ``DO'' and ``DX.''
    (2) All DO rated orders have equal priority with each other and 
take preference over unrated orders. All DX rated orders have equal 
priority with each other and take preference over DO rated orders and 
unrated orders. (For resolution of conflicts among rated orders of 
equal priority, see Sec.  333.14(c)).
    (3) In addition, a Directive issued by FEMA regarding priority 
treatment for a given item takes preference over any DX rated order, DO 
rated order, or unrated order, as stipulated in the Directive. (For a 
full discussion of Directives, see Sec.  333.52).
    (b) Program identification symbols. Program identification symbols 
indicate which approved program is being supported by a rated order. 
Program identification symbols, in themselves, do not connote any 
priority.
    (c) Priority ratings. A priority rating consists of the rating 
symbol--DO or DX--and the program identification symbol.


Sec.  333.12   Elements of a rated order.

    (a) Elements required for all rated orders. (1) The appropriate 
priority rating and program identification symbol;
    (2) A required delivery date or dates. The words ``immediately'' or 
``as soon as possible'' do not constitute a delivery date. When a 
``requirements contract,'' ``basic ordering agreement,'' ``prime vendor 
contract,'' or similar procurement document bearing a priority rating 
contains no specific delivery date or dates, but provides for the 
furnishing of items from time-to-time or within a stated period against 
specific purchase orders, such as ``calls,'' ``requisitions,'' and 
``delivery orders,'' the purchase orders under such contracts or 
agreements must specify a required delivery date or dates and are to be 
considered as rated as of the date of their receipt by the supplier and 
not as of the date of the original procurement document.
    (3) The written signature on a manually placed order, or the 
digital signature or name on an electronically placed order, of an 
individual authorized to sign rated orders for the person placing the 
order. The signature, manual or digital, certifies that the rated order 
is authorized under this part and that the requirements of this part 
are being followed; and
    (4) A statement that reads in substance: ``This is a rated order 
certified for national defense use and you are required to follow all 
the provisions of the Emergency Management Priorities and Allocations 
System regulations (44 CFR part 333).''
    (b) Additional element required for certain emergency preparedness 
rated orders. If a rated order is placed for the purpose of emergency 
preparedness requirements and expedited action is necessary or 
appropriate to meet these requirements, the following statement must be 
included in the order: ``This rated order is placed for the purpose of 
emergency preparedness. It must be accepted or rejected pursuant to the 
mandatory acceptance and mandatory rejection requirements found in 44 
CFR 333.13 within [Insert a time limit no less than the minimum 
applicable time limit specified in Sec.  333.13(d)(2)].''
    (c) Additional elements required for rated orders issued by FEMA or 
a Delegate Agency to facilitate sales to third parties. If a rated 
order is placed by FEMA or the Delegate Agency to facilitate a sale to 
a third party who desires to order the materials, the following 
statement must also be included in the order: ``This rated order is 
placed for the purpose of facilitating a sale to [Insert third party] 
to promote the national defense. It must be accepted or rejected 
pursuant to the mandatory acceptance and mandatory rejection 
requirements found in 44 CFR 333.13 within [Insert the applicable time 
limit consistent with Sec.  333.13(d)], and it is subject to the 
additional requirements of 44 CFR 333.19. [Third party] is responsible 
for satisfying the applicable terms of sale and payment. The Federal 
Government is not be liable for any failure to meet the terms of sale 
or payment. For purposes of these and any other notification 
requirements set forth in FEMA's Emergency Management Priorities and 
Allocations System regulations (44 CFR part 333), both [Insert FEMA or 
Delegate Agency] and [Insert third party] are the `customer.'''


Sec.  333.13  Acceptance and rejection of rated orders.

    (a) Mandatory acceptance. (1) Except as otherwise specified in this 
section, a

[[Page 28514]]

person must accept every rated order received and must fill such orders 
regardless of any other rated or unrated orders that have been 
accepted.
    (2) A person must not discriminate against rated orders in any 
manner such as by charging higher prices or by imposing different terms 
and conditions than for comparable unrated orders.
    (b) Mandatory rejection. Unless otherwise directed by FEMA:
    (1) A person must not accept a rated order for delivery on a 
specific date if unable to fill the order by that date. However, the 
person must inform the customer of the earliest date on which delivery 
can be made and offer to accept the order on the basis of that date. 
Scheduling conflicts with previously accepted lower rated or unrated 
orders are not sufficient reason for rejection under this section.
    (2) A person must not accept a DO rated order for delivery on a 
date which would interfere with delivery of any previously accepted DO 
or DX rated orders. However, the person must offer to accept the order 
based on the earliest delivery date otherwise possible.
    (3) A person must not accept a DX rated order for delivery on a 
date which would interfere with delivery of any previously accepted DX 
rated orders, but must offer to accept the order based on the earliest 
delivery date otherwise possible.
    (4) If a person is unable to fill all the rated orders of equal 
priority status received on the same day, the person must accept, based 
upon the earliest delivery dates, only those orders which can be 
filled, and reject the other orders. For example, a person must accept 
order A requiring delivery on December 15 before accepting order B 
requiring delivery on December 31. However, the person must offer to 
accept the rejected orders based on the earliest delivery dates 
otherwise possible.
    (c) Optional rejection. Unless otherwise directed by FEMA, rated 
orders may be rejected in any of the following cases as long as a 
supplier does not discriminate among customers:
    (1) If the person placing the order is unwilling or unable to meet 
regularly established terms of sale or payment;
    (2) If the order is for an item not supplied or for a service not 
performed;
    (3) If the order is for an item produced, acquired, or provided 
only for the supplier's own use for which no orders have been filled 
for two years prior to the date of receipt of the rated order. If, 
however, a supplier has sold some of these items, the supplier is 
obligated to accept rated orders up to that quantity or portion of 
production, whichever is greater, sold within the past two years;
    (4) If the person placing the rated order, other than the Federal 
Government, makes the item or performs the service being ordered;
    (5) If acceptance of a rated order or performance against a rated 
order would violate any other regulation, official action, or order of 
FEMA issued under the authority of the Defense Production Act or 
another relevant statute.
    (d) Customer notification requirements. (1) Except as provided in 
paragraph (d)(2) of this section, a person must accept or reject a 
rated order in written electronic format within 15 working days after 
receipt of a DO rated order and within 10 working days after receipt of 
a DX rated order. If the order is rejected, the person must give 
reasons in written electronic format for the rejection.
    (2) If a rated order is placed for the purpose of emergency 
preparedness requirements and expedited action is necessary or 
appropriate to meet these requirements and the order includes the 
statement set forth in Sec.  333.12(b), a person must accept or reject 
the rated order and transmit the acceptance or rejection in written 
electronic format within the time specified in the rated order. The 
minimum times for acceptance or rejection that such orders may specify 
are 6 hours after receipt of the order if the order is issued by an 
authorized person in response to a hazard that has occurred, or 12 
hours after receipt if the order is issued by an authorized person to 
prepare for an imminent hazard.
    (3) If a person has accepted a rated order and subsequently finds 
that shipment or performance will be delayed, the person must notify 
the customer immediately, give the reasons for the delay, and advise of 
a new shipment or performance date. If notification is given verbally, 
written electronic confirmation must be provided within 24 hours of the 
verbal notice.


Sec.  333.14  Preferential scheduling.

    (a) A person must schedule operations, including the acquisition of 
all needed production items, in a timely manner to satisfy the delivery 
requirements of each rated order. Modifying production or delivery 
schedules is necessary only when required delivery dates for rated 
orders cannot otherwise be met.
    (b) DO rated orders must be given production preference over 
unrated orders, if necessary, to meet required delivery dates, even if 
this requires the diversion of items being processed or ready for 
delivery against unrated orders. Similarly, DX rated orders must be 
given preference over DO rated orders and unrated orders.
    (1) Examples: If a person receives a DO rated order with a delivery 
date of June 3 and if meeting that date would mean delaying production 
or delivery of an item for an unrated order, the unrated order must be 
delayed. If a DX rated order is received calling for delivery on July 
15 and a person has a DO rated order requiring delivery on June 2 and 
operations can be scheduled to meet both deliveries, there is no need 
to alter production schedules to give any additional preference to the 
DX rated order. However, if business operations cannot be altered to 
meet both the June 3 and July 15 delivery dates, then the DX rated 
order must be given priority over the DO rated order.
    (2) [Reserved]
    (c) Conflicting rated orders. (1) If a person finds that delivery 
or performance against any accepted rated orders conflicts with the 
delivery or performance against other accepted rated orders of equal 
priority status, the person must give preference to the conflicting 
orders in the sequence in which they are to be delivered or performed 
(not to the receipt dates). If the conflicting rated orders are 
scheduled to be delivered or performed on the same day, the person must 
give preference to those orders which have the earliest receipt dates.
    (2) If a person is unable to resolve rated order delivery or 
performance conflicts under this section, the person should promptly 
seek special priorities assistance as provided in subpart E of this 
part. If the person's customer objects to the rescheduling of delivery 
or performance of a rated order, the customer should promptly seek 
special priorities assistance as provided in subpart E of this part. 
For any rated order against which delivery or performance will be 
delayed, the person must notify the customer as provided in Sec.  
333.13(d)(3).
    (d) If a person is unable to purchase needed production items in 
time to fill a rated order by its required delivery date, the person 
must fill the rated order by using inventoried production items. A 
person who uses inventoried items to fill a rated order may replace 
those items with the use of a rated order as provided in Sec.  
333.17(b).


Sec.  333.15  Extension of priority ratings.

    (a) A person must use rated orders with suppliers to obtain items 
needed to fill a rated order. The person must use the priority rating 
indicated on the customer's rated order, except as

[[Page 28515]]

otherwise provided in this part or as directed by FEMA.
    (b) The priority rating must be included on each successive order 
placed to obtain items needed to fill a customer's rated order. 
Therefore, the inclusion of the rating will continue from contractor to 
subcontractor to supplier throughout the entire supply chain.
    (c) A person must use rated orders with suppliers to obtain items 
needed to fill an emergency preparedness rated order. That person must 
require acceptance or rejection, and transmission of that acceptance or 
rejection by the supplier within the time limit stated in the rated 
order that is being filled.


Sec.  333.16  Changes or cancellations of priority ratings and rated 
orders.

    (a) The priority rating on a rated order may be changed or 
cancelled by:
    (1) An official action of FEMA; or
    (2) Written electronic notification from the person who placed the 
rated order (including a Delegate Agency).
    (b) If an unrated order is amended so as to make it a rated order, 
or a DO rating is changed to a DX rating, the supplier must give the 
appropriate preferential treatment to the order as of the date the 
change is received by the supplier.
    (c) An amendment to a rated order that significantly alters a 
supplier's original production or delivery schedule shall constitute a 
new rated order as of the date of its receipt. The supplier must accept 
or reject the amended order according to the provisions of Sec.  
333.13.
    (d) The following amendments do not constitute a new rated order: A 
change in shipping destination; A reduction in the total amount of the 
order; an increase in the total amount of the order which has 
negligible impact upon deliveries; a minor variation in size or design 
(prior to the start of production); or a change which is agreed upon 
between the supplier and the customer.
    (e) A person must cancel any rated orders that the person (or a 
predecessor in interest) has placed with suppliers or cancel the 
priority ratings on those orders if the person no longer needs the 
items in those orders to fill a rated order.
    (f) A person adding a rating to an unrated order, or changing or 
cancelling a priority rating must promptly provide written electronic 
notification to all suppliers to whom the order was sent of the 
addition, change, or cancellation.


Sec.  333.17  Use of rated orders.

    (a) A person must use rated orders to obtain:
    (1) Items which will be physically incorporated into other items to 
fill rated orders, including that portion of such items normally 
consumed, or converted into scrap or by-products, in the course of 
processing;
    (2) Containers or other packaging materials required to make 
delivery of the finished items against rated orders;
    (3) Services, other than contracts of employment, needed to fill 
rated orders; and
    (4) MRO needed to produce the finished items to fill rated orders.
    (b) A person may use a rated order to replace inventoried items 
(including finished items) if such items were used to fill rated 
orders, as follows:
    (1) The order must be placed within 90 days of the date of use of 
the inventory.
    (2) A DO rating symbol and the program identification symbol 
indicated on the customer's rated order must be used on the order. A DX 
rating symbol may not be used even if the inventory was used to fill a 
DX rated order.
    (3) If the priority ratings on rated orders from one customer or 
several customers contain different program identification symbols, the 
rated orders may be combined.
    (c) A person may combine DX and DO rated orders from one customer 
or several customers if the items covered by each level of priority are 
identified separately and clearly.
    (d) Combining rated and unrated orders. (1) A person may combine 
rated and unrated order quantities on one purchase order provided that:
    (i) The rated quantities are separately and clearly identified; and
    (ii) The elements of a rated order, as required by Sec.  333.12, 
are included on the order with the statement required in Sec.  
333.12(d) modified to read in substance: ``This purchase order contains 
rated order quantities certified for national defense use, and you are 
required to follow all the provisions of the Emergency Management 
Priorities and Allocations System regulations (44 CFR part 333) as it 
pertains to the rated quantities.''
    (2) A supplier must accept or reject the rated portion of the 
purchase order as provided in Sec.  333.13 and give preferential 
treatment only to the rated quantities as required by this part. This 
part may not be used to give preferential treatment to the unrated 
portion of the order.
    (3) Any supplier who believes that rated and unrated orders are 
being combined in a manner contrary to the intent of this part or in a 
fashion that causes undue or exceptional hardship may submit a request 
for adjustment or exception under Sec.  333.70.
    (e) A person may place a rated order for the minimum commercially 
procurable quantity even if the quantity needed to fill a rated order 
is less than that minimum. However, a person must combine rated orders 
as provided in paragraph (c) of this section, if possible, to obtain 
minimum procurable quantities.
    (f) A person is not required to place a priority rating on an order 
for less than one half of the Simplified Acquisition Threshold (as 
established in the Federal Acquisition Regulation (FAR)) (see 48 CFR 
2.101) or in other authorized acquisition regulatory or management 
systems, provided that delivery can be obtained in a timely fashion 
without the use of the priority rating.


Sec.  333.18  Limitations on placing rated orders.

    (a) General limitations on placing rated orders. A person may not 
place a DO or DX rated order pursuant to this part unless the person is 
in receipt of a rated order, has been explicitly authorized to do so by 
FEMA or a Delegate Agency or is otherwise permitted to do so by this 
part.
    (b) Specific limitations on placing rated orders. Rated orders may 
not be used to obtain:
    (1) Delivery on a date earlier than needed;
    (2) A greater quantity of the item than needed, except to obtain a 
minimum procurable quantity. Separate rated orders may not be placed 
solely for the purpose of obtaining minimum procurable quantities on 
each order if the minimum procurable quantity would be sufficient to 
cover more than one rated order;
    (3) Items in advance of the receipt of a rated order, except as 
specifically authorized by FEMA (see Sec.  333.21(c) for information on 
obtaining authorization for a priority rating in advance of a rated 
order); or
    (4) Any of the following items unless specific priority rating 
authority has been obtained from FEMA, a Delegate Agency, or the 
Department of Commerce:
    (i) Items for plant improvement, expansion, or construction, unless 
they will be physically incorporated into a construction project 
covered by a rated order; or
    (ii) Production or construction equipment or items to be used for 
the manufacture of production equipment (for information on requesting 
priority rating authority, see Sec.  333.21).
    (5) Any items related to the development of chemical or biological

[[Page 28516]]

warfare capabilities or the production of chemical or biological 
weapons, unless such development or production has been authorized by 
the President or the Secretary of Defense.


Sec.  333.19  Special provisions applicable to rated orders for third 
parties.

    (a) The provisions of this part apply to rated orders placed by 
FEMA or a Delegate Agency to facilitate sales to third parties, 
regardless of the nature of their relationship to the Federal 
Government, unless otherwise specified.
    (b) Where FEMA or a Delegate Agency has placed a rated order to 
facilitate a sale to a third party, the third party is responsible for 
satisfying the applicable terms of sale and payment. The Federal 
Government shall not be liable for any failure to meet the terms of 
sale or payment.
    (c) If a third party is unable to satisfy the applicable terms of 
sale or payment, FEMA or the Delegate Agency may amend or cancel the 
rated order pursuant to Sec.  333.16 of this part. If FEMA or the 
Delegate Agency amend the rated order to provide that delivery shall be 
made to FEMA, the Delegate Agency, or another third party instead of 
the original third party, and the amendment shall not constitute a new 
rated order.

Subpart E--Special Priorities Assistance


Sec.  333.20  General provisions.

    (a) EMPAS is designed to be largely self-executing. However, if 
production or delivery problems arise, a person should immediately 
contact FEMA (or the Delegate Agency, as appropriate) for special 
priorities assistance pursuant to Sec. Sec.  333.20 through 333.24 and 
as directed by Sec.  333.83. If FEMA (or the Delegate Agency, as 
appropriate) is unable to resolve the problem or to authorize the use 
of a priority rating and believes additional assistance is warranted, 
FEMA (or the Delegate Agency, as appropriate) may forward the request 
to another resource agency, as appropriate, for action. Special 
priorities assistance is a service provided to alleviate problems.
    (b) Special priorities assistance can be provided for any reason 
consistent with this part, such as assisting in obtaining timely 
deliveries of items needed to satisfy rated orders or authorizing the 
use of priority ratings on orders to obtain items not otherwise ratable 
under this part. Special priorities assistance may also be used to 
request rating authority for items that are not normally eligible for 
priority treatment.
    (c) A request for special priorities assistance or priority rating 
authority may be submitted on FEMA Form 009-0-142 (OMB control number 
1660-NW122) to FEMA. Form 009-0-142 may be obtained from the Delegate 
Agency or from FEMA.


Sec.  333.21  Requests for priority rating authority.

    (a) If a rated order is likely to be delayed because a person is 
unable to obtain items not normally rated under this part, the person 
may request the authority to use a priority rating in ordering the 
needed items.
    (b) Rating authority for production or construction equipment. (1) 
A request for priority rating authority for production or construction 
equipment, if needed, must be submitted to the U.S. Department of 
Commerce on Form BIS-999.
    (2) When the use of a priority rating is authorized for the 
procurement of production or construction equipment, a rated order may 
be used either to purchase or to lease such equipment. However, in the 
latter case, the equipment may be leased only from a person engaged in 
the business of leasing such equipment or from a person willing to 
lease rather than sell.
    (c) Rating authority in advance of a rated prime contract. (1) In 
certain cases, and upon specific request, FEMA, in order to promote the 
national defense, may authorize a person to place a priority rating on 
an order to a supplier in advance of the issuance of a rated prime 
contract. In these instances, the person requesting advance rating 
authority must obtain sponsorship of the request from FEMA or the 
appropriate Delegate Agency. The person shall also assume any business 
risk associated with the placing of rated orders if these orders have 
to be cancelled in the event the rated prime contract is not issued.
    (2) The person must state the following in the request: ``It is 
understood that the authorization of a priority rating in advance of 
our receiving a rated prime contract from FEMA (or a Delegate Agency) 
and our use of that priority rating with our suppliers in no way 
commits the Delegate Agency, FEMA, or any other Federal Government 
agency to enter into a contract or order or to expend funds. Further, 
we understand that the Federal Government shall not be liable for any 
cancellation charges, termination costs, or other damages that may 
accrue if a rated prime contract is not eventually placed and, as a 
result, we must subsequently cancel orders placed with the use of the 
priority rating authorized as a result of this request.''
    (3) In reviewing requests for rating authority in advance of a 
rated prime contract, FEMA will consider, among other things, the 
following criteria:
    (i) The probability that the prime contract will be awarded;
    (ii) The impact of the resulting rated orders on suppliers and on 
other authorized programs;
    (iii) Whether the contractor is the sole source;
    (iv) Whether the item being produced has a long lead time; and
    (v) The time period for which the rating is being requested.
    (4) FEMA may require periodic reports on the use of the rating 
authority granted under paragraph (c) of this section.
    (5) If a rated prime contract is not issued, the person must 
promptly notify all suppliers who have received rated orders pursuant 
to the advance rating authority that the priority rating on those 
orders is cancelled.


Sec.  333.22   Examples of assistance.

    (a) While special priorities assistance may be provided for any 
reason in support of this part, it is usually provided in situations 
where:
    (1) A person is experiencing difficulty in obtaining delivery 
against a rated order by the required delivery date; or
    (2) A person cannot locate a supplier for an item needed to fill a 
rated order.
    (b) Other examples of special priorities assistance include:
    (1) Ensuring that rated orders receive preferential treatment by 
suppliers;
    (2) Resolving production or delivery conflicts between various 
rated orders;
    (3) Assisting in placing rated orders with suppliers;
    (4) Verifying the urgency of rated orders; and
    (5) Determining the validity of rated orders.


Sec.  333.23  Criteria for assistance.

    Requests for special priorities assistance should be timely, i.e., 
the request must be submitted promptly and in enough time for FEMA or 
the Delegate Agency to effect a meaningful resolution to the problem, 
and must establish that:
    (a) There is an urgent need for the item; and
    (b) The applicant has made a reasonable effort to resolve the 
problem.


Sec.  333.24   Instances where assistance will not be provided.

    Special priorities assistance is provided at the discretion of FEMA 
or the Delegate Agency when it is determined that such assistance is 
warranted to meet the objectives of this

[[Page 28517]]

part. Examples where assistance may not be provided include situations 
when a person is attempting to:
    (a) Secure a price advantage;
    (b) Obtain delivery prior to the time required to fill a rated 
order;
    (c) Gain competitive advantage;
    (d) Disrupt an industry apportionment program in a manner designed 
to provide a person with an unwarranted share of scarce items; or
    (e) Overcome a supplier's regularly established terms of sale or 
conditions of doing business.

Subpart F--Allocation Actions


Sec.  333.30  Policy.

    (a) Allocation orders will:
    (1) Be used only when there is insufficient supply of a material, 
service, or facility to satisfy national defense requirements through 
the use of the priorities authority or when the use of the priorities 
authority would cause a severe and prolonged disruption in the supply 
of materials, services, or facilities available to support normal U.S. 
economic activities; and
    (2) Not be used to ration materials or services at the retail 
level.
    (b) Allocation orders, when used, will be distributed equitably 
among the suppliers of the materials, services, or facilities being 
allocated and not require any person to relinquish a disproportionate 
share of the civilian market.
    (c) When a hazard has occurred or is imminent, an allocation order 
may be used without regard to paragraphs (a) and (b) of this section 
whenever it is deemed by the Administrator to be necessary or 
appropriate to promote the national defense.


Sec.  333.31  General procedures.

    Before FEMA uses its allocations authority to address a supply 
problem within its resource jurisdiction, it will develop a plan that 
includes:
    (a) A copy of the written determination that the program or 
programs that would be supported by the allocation action are necessary 
or appropriate to promote the national defense;
    (b) A detailed description of the situation to include any unusual 
events or circumstances that have created the requirement for an 
allocation action;
    (c) A statement of the specific objective(s) of the allocation 
action;
    (d) A list of the materials, services, or facilities to be 
allocated;
    (e) A list or description of the sources of the materials, 
services, or facilities that will be subject to the allocation action;
    (f) A detailed description of the provisions that will be included 
in the allocation orders, including the type(s) of allocation orders, 
the percentages or quantity of capacity or output to be allocated for 
each purpose, and the duration of the allocation action (e.g., 
anticipated start and end dates);
    (g) An evaluation of the impact of the proposed allocation action 
on the civilian market; and
    (h) Proposed actions, if any, to mitigate disruptions to civilian 
market operations.


Sec.  333.32   Controlling the general distribution of a material in 
the civilian market.

    No allocation action by FEMA may be used to control the general 
distribution of a material in the civilian market unless the President, 
the Administrator, or another official with lawful authority under 
section 101(b) of the Act has made a written finding that:
    (a) Such material is a scarce and critical material essential to 
the national defense, and
    (b) The requirements of the national defense for such material 
cannot otherwise be met without creating a significant dislocation of 
the normal distribution of such material in the civilian market to such 
a degree as to create appreciable hardship.


Sec.  333.33  Types of allocation orders.

    There are three types of allocation orders available for 
communicating allocation actions.
    (a) Set-aside. A set-aside is an official action that requires a 
person to reserve materials, services, or facilities capacity in 
anticipation of the receipt of rated orders.
    (b) Directive. A directive is an official action that requires a 
person to take or refrain from taking certain actions in accordance 
with its provisions. For example, a directive can require a person to: 
Stop or reduce production of an item; prohibit the use of selected 
materials, services, or facilities; or divert the use of materials, 
services, or facilities from one purpose to another.
    (c) Allotment. An allotment is an official action that specifies 
the maximum quantity of a material, service, or facility authorized for 
a specific use to promote the national defense.


Sec.  333.34   Elements of an allocation order.

    Allocation orders may be issued directly to the affected persons or 
by constructive notice through publication in the Federal Register. 
This section describes the elements that each order must include.
    (a) Elements to be included in all allocation orders.
    (1) A detailed description of the required allocation action(s), 
including its relationship to previously or subsequently received DX 
rated orders, DO rated orders, and unrated orders.
    (2) Specific start and end calendar dates for each required 
allocation action.
    (b) Elements to be included in orders issued directly to affected 
persons.
    (1) A statement that reads in substance: ``This is an allocation 
order certified for national defense use. [Insert the name of the 
person receiving the order] is required to comply with this order, in 
accordance with the provisions of the Emergency Management Priorities 
and Allocations System regulations (44 CFR part 333), which is part of 
the Federal Priorities and Allocations System.''
    (2) The written signature on a manually placed order, or the 
digital signature or name on an electronically placed order, of the 
FEMA Administrator.
    (c) Elements to be included in an allocation order that gives 
constructive notice through publication in the Federal Register (1) A 
statement that reads in substance: ``This is an allocation order 
certified for national defense use. [Insert the name(s) of the 
person(s) to whom the order applies or a description of the class of 
persons to whom the order applies] is (are) required to comply with 
this order, in accordance with the provisions of the Emergency 
Management Priorities and Allocations System regulations (44 CFR part 
333), which is part of the Federal Priorities and Allocations System.''
    (2) The order must be signed by the FEMA Administrator.


Sec.  333.35   Mandatory acceptance of an allocation order.

    (a) Except as otherwise specified in this section, a person must 
accept and comply with every allocation order received.
    (b) A person must not discriminate against an allocation order in 
any manner such as by charging higher prices for materials, services, 
or facilities covered by the order or by imposing terms and conditions 
for contracts and orders involving allocated materials, services, or 
facilities that differ from the person's terms and conditions for 
contracts and orders for the materials, services, or facilities prior 
to receiving the allocation order.
    (c) If a person is unable to comply fully with the required 
action(s) specified in an allocation order, the person must notify FEMA 
immediately,

[[Page 28518]]

explain the extent to which compliance is possible, and give the 
reasons why full compliance is not possible. If notification is given 
verbally, written, electronic confirmation must be provided within 24 
hours. Such notification does not release the person from complying 
with the order to the fullest extent possible, until the person is 
notified by FEMA that the order has been changed or cancelled.


Sec.  333.36   Changes or cancellations of allocation orders.

    An allocation order may be changed or cancelled by an official 
action from FEMA. Notice of such changes or cancellations may be 
provided directly to persons to whom the order being cancelled or 
modified applies or constructive notice may be provided by publication 
in the Federal Register.

Subpart G--[Reserved]

Subpart H--Official Actions


Sec.  333.50   General provisions.

    (a) FEMA may, from time-to-time, take specific official actions to 
implement or enforce the provisions of this part.
    (b) Some of these official actions (rating authorizations and 
letters and memoranda of understanding) are discussed in this subpart. 
Official actions that pertain to compliance (administrative subpoenas, 
demands for information, and inspection authorizations) are discussed 
in Sec.  333.61(c). Directives are discussed in Sec.  333.52.


Sec.  333.51   Rating authorizations.

    (a) A rating authorization is an official action granting specific 
priority rating authority that:
    (1) Permits a person to place a priority rating on an order for an 
item not normally ratable under this part; or
    (2) Authorizes a person to modify a priority rating on a specific 
order or series of contracts or orders.
    (b) To request priority rating authority, see Sec.  333.21.


Sec.  333.52   Directives.

    (a) A directive is an official action which requires a person to 
take or refrain from taking certain actions in accordance with its 
provisions.
    (b) A person must comply with each directive issued. However, a 
person may not use or extend a directive to obtain any items from a 
supplier, unless expressly authorized to do so in the directive.
    (c) A priorities directive takes precedence over all DX-rated 
orders, DO-rated orders, and unrated orders previously or subsequently 
received, unless a contrary instruction appears in the directive.
    (d) An allocations directive takes precedence over all priorities 
directives, DX-rated orders, DO-rated orders, and unrated orders 
previously or subsequently received, unless a contrary instruction 
appears in the directive.


Sec.  333.53   Letters and memoranda of understanding.

    (a) A letter or memorandum of understanding is an official action, 
which may be issued electronically, to resolve special priorities 
assistance cases to reflect an agreement reached by all parties (FEMA, 
the Department of Commerce (if applicable), a Delegate Agency (if 
applicable), the supplier, and the customer).
    (b) A letter or memorandum of understanding is not used to alter 
scheduling between rated orders, to authorize the use of priority 
ratings, to impose restrictions under this part, or to take other 
official actions. Rather, letters or memoranda of understanding are 
used to confirm production or shipping schedules which do not require 
modifications to other rated orders.

Subpart I--Compliance


Sec.  333.60  General provisions.

    (a) Compliance actions may be taken for any reason necessary or 
appropriate to the enforcement or the administration of the Defense 
Production Act and related statutes, this part, or an official action. 
Compliance actions include audits, investigations, or other inquiries 
and FEMA may utilize other official actions, such as administrative 
subpoenas, demands for information, and inspection authorizations as 
part of the compliance actions under this part.
    (b) Any person who places or receives a rated order or an 
allocation order must comply with the provisions of this part.
    (c) Willful violation of any of the provisions of Title I or 
section 705 of the Defense Production Act and other applicable 
statutes, this part, or an official action of FEMA, is a criminal act, 
punishable as provided in the Defense Production Act and other 
applicable statutes, and as set forth in Sec.  333.64 of this part.


Sec.  333.61   Audits and investigations.

    (a) Audits and investigations are official actions involving the 
examination of books, records, documents, other writings and 
information to ensure that the provisions of the Defense Production Act 
and other applicable statutes, this part, and official actions have 
been properly followed. An audit or investigation may also include 
interviews and a systems evaluation to detect problems or failures in 
the implementation of this part.
    (b) When undertaking an audit, investigation, or other inquiry, 
FEMA must:
    (1) Define the scope and purpose in the official action given to 
the person under investigation, and
    (2) Have ascertained that the information sought, or other adequate 
and authoritative data are not available from any Federal or other 
responsible agency.
    (c) In administering this part, FEMA may issue the following 
documents, which constitute official actions:
    (1) Administrative subpoenas. An administrative subpoena requires a 
person to appear as a witness before an official designated by FEMA to 
testify under oath on matters of which that person has knowledge 
relating to the enforcement or the administration of the Defense 
Production Act and other applicable statutes, this part, or official 
actions. An administrative subpoena may also require the production of 
books, papers, records, documents and physical objects or property.
    (2) Demand for information. A demand for information requires a 
person to furnish to a duly authorized representative of FEMA any 
information necessary or appropriate to the enforcement or the 
administration of the Defense Production Act and other applicable 
statutes, this part, or official actions.
    (3) Inspection authorizations. An inspection authorization requires 
a person to permit a duly authorized representative of FEMA to 
interview the person's employees or agents; to inspect books, records, 
documents, other writings and information, including electronically-
stored information, in the person's possession or control at the place 
where that person usually keeps them or otherwise; and to inspect a 
person's property when such interviews and inspections are necessary or 
appropriate to the enforcement or the administration of the Defense 
Production Act and related statutes, this part, or official actions.
    (d) The production of books, records, documents, other writings and 
information will not be required at any place other than where they are 
usually kept if, prior to the return date specified in the 
administrative subpoena or demand for information, a duly authorized 
official of FEMA is furnished with copies of such material that are 
certified under oath to be true copies. As an alternative, a person may 
enter into a stipulation with a duly authorized

[[Page 28519]]

official of FEMA as to the content of the material.
    (e) An administrative subpoena, demand for information, or 
inspection authorization must include the name, title, or official 
position of the person to be served, the evidence sought to be adduced, 
and its general relevance to the scope and purpose of the audit, 
investigation, or other inquiry. If employees or agents are to be 
interviewed; if books, records, documents, other writings, or 
information are to be produced; or if property is to be inspected; the 
administrative subpoena, demand for information, or inspection 
authorization will describe them with particularity.
    (f) Service of documents must be made in the following manner:
    (1) Service of a demand for information or inspection authorization 
must be made personally, or by certified mail--return receipt requested 
at the person's last known address. Service of an administrative 
subpoena must be made personally. Personal service may also be made by 
leaving a copy of the document with someone at least 18 years of age at 
the person's last known dwelling or place of business. When a hazard 
has occurred or is imminent, service of a demand for information or 
inspection authorization may additionally be made by written electronic 
communication.
    (2) Service upon other than an individual may be made by serving a 
partner, corporate officer, or a managing or general agent authorized 
by appointment or by law to accept service of process. If an agent is 
served, a copy of the document must be mailed to the person named in 
the document.
    (3) Any individual 18 years of age or older may serve an 
administrative subpoena, demand for information, or inspection 
authorization. When personal service is made, the individual making the 
service shall prepare an affidavit as to the manner in which service 
was made and the identity of the person served, and return the 
affidavit, and in the case of subpoenas, the original document, to the 
issuing officer. In case of failure to make service, the reasons for 
the failure must be stated on the original document.


Sec.  333.62   Compulsory process.

    (a) If a person refuses to permit a duly authorized representative 
of FEMA to have access to any premises or source of information 
necessary to the administration or enforcement of the Defense 
Production Act and other applicable statutes, this part, or official 
actions, FEMA may seek compulsory process. Compulsory process means the 
institution of appropriate legal action, including ex parte application 
for an inspection warrant or its equivalent, in any forum of 
appropriate jurisdiction.
    (b) Compulsory process may be sought in advance of an audit, 
investigation, or other inquiry, if, in the judgment of the 
Administrator, in consultation with the FEMA Chief Counsel, there is 
reason to believe that a person will refuse to permit an audit, 
investigation, or other inquiry, or that other circumstances exist 
which make such process desirable or necessary.


Sec.  333.63   Notification of failure to comply.

    (a) At the conclusion of an audit, investigation, or other inquiry, 
or at any other time, FEMA may inform the person in writing where 
compliance with the requirements of the Defense Production Act and 
other applicable statutes, this part, or an official action were not 
met.
    (b) In cases where FEMA determines that a person, either willingly 
or inadvertently, has failed to comply with the provisions of the 
Defense Production Act and other applicable statutes, this part, or an 
official action, the person may be informed in writing of the 
particulars involved and the corrective action to be taken. Failure to 
take corrective action may then be construed as a willful violation of 
the Defense Production Act and other applicable statutes, this part, or 
an official action.


Sec.  333.64   Violations, penalties, and remedies.

    (a) Willful violation of the provisions of Title I or Sections 705 
or 707 of the Defense Production Act, this part, or an official action, 
is a crime and upon conviction, a person may be punished by fine or 
imprisonment, or both. The maximum penalty provided by the Defense 
Production Act is a $10,000 fine, or one year in prison, or both.
    (b) The government may also seek an injunction from a court of 
appropriate jurisdiction to prohibit the continuance of any violation 
of, or to enforce compliance with, the Defense Production Act and other 
applicable statutes, this part, or an official action.
    (c) In order to secure the effective enforcement of the Defense 
Production Act and other applicable statutes, this part, and official 
actions, the following are prohibited (see section 705 of the Defense 
Production Act; see also, for example, sections 2 and 371 of Title 18 
United States Code):
    (1) No person may solicit, influence, or permit another person to 
perform any act prohibited by, or to omit any act required by, the 
Defense Production Act and other applicable statutes, this part, or an 
official action.
    (2) No person may conspire or act in concert with any other person 
to perform any act prohibited by, or to omit any act required by, the 
Defense Production Act and other applicable statutes, this part, or an 
official action.
    (3) No person shall deliver any item if the person knows or has 
reason to believe that the item will be accepted, redelivered, held, or 
used in violation of the Defense Production Act and other applicable 
statutes, this part, or an official action. In such instances, the 
person must immediately notify FEMA that, in accordance with this 
section, delivery has not been made.


Sec.  333.65   Compliance conflicts.

    If compliance with any provision of the Defense Production Act and 
other applicable statutes, this part, or an official action would 
prevent a person from filling a rated order or from complying with 
another provision of the Defense Production Act, this part, or an 
official action, the person must immediately notify FEMA for resolution 
of the conflict.

Subpart J--Adjustments, Exceptions, and Appeals


Sec.  333.70   Adjustments or exceptions.

    (a) A person may submit a request to FEMA for an adjustment or 
exception on the ground that:
    (1) A provision of this part or an official action results in an 
undue or exceptional hardship on that person not suffered generally by 
others in similar situations and circumstances; or
    (2) The consequence of following a provision of this part or an 
official action is contrary to the intent of the Defense Production 
Act, other applicable statutes, or this part.
    (b) Each request for adjustment or exception must be in writing and 
contain a complete statement of all the facts and circumstances related 
to the provision of this part or official action from which adjustment 
is sought and a full and precise statement of the reasons why relief 
should be provided.
    (c) The submission of a request for adjustment or exception shall 
not relieve any person from the obligation of complying with the 
provisions of this part or official action in question while the 
request is being considered unless such interim relief is granted in 
writing by FEMA.
    (d) A decision of FEMA under this section may be appealed to the 
Administrator. (For information on the appeal procedure, see Sec.  
333.71.)

[[Page 28520]]

Sec.  333.71   Appeals.

    (a) Any person who has had a request for adjustment or exception 
denied by FEMA under Sec.  333.70 may appeal to the Administrator, who 
shall review and reconsider the denial. Such appeals should be 
submitted to the Office of Policy and Programs at [email protected], Ref: EMPAS Appeals.
    (b)(1) Appeals of denied requests for exceptions from or 
adjustments to compliance with the provisions of this part or an 
official action must be received by FEMA no later than 45 days after 
receipt of a written notice of denial from FEMA. After this 45-day 
period, an appeal may be accepted at the discretion of the 
Administrator.
    (2) For requests for adjustment or exception involving rated orders 
placed for the purpose of emergency preparedness in response to a 
hazard that has occurred or is imminent, an appeal must be received by 
FEMA no later than 15 days after receipt of a written notice of denial.
    (c) Each appeal must be in writing and contain a complete statement 
of all the facts and circumstances related to the action appealed from 
and a full and precise statement of the reasons the decision should be 
modified or reversed.
    (d) In addition to the written materials submitted in support of an 
appeal, an appellant may request, in writing, an opportunity for an 
informal hearing. This request may be granted or denied at the 
discretion of the Administrator.
    (e) When a hearing is granted, the Administrator may designate an 
employee of FEMA to conduct the hearing and to prepare a report. The 
hearing officer shall determine all procedural questions and impose 
such time or other limitations deemed reasonable. In the event that the 
hearing officer decides that a printed transcript is necessary, all 
expenses shall be borne by the appellant.
    (f) When determining an appeal, the Administrator may consider all 
information submitted during the appeal as well as any recommendations, 
reports, or other relevant information and documents available to FEMA, 
or consult with any other persons or groups.
    (g) The submission of an appeal under this section shall not 
relieve any person from the obligation of complying with the provisions 
of this part or official action in question while the appeal is being 
considered, unless such relief is granted in writing by the 
Administrator.
    (h) The decision of the Administrator shall be made within a 
reasonable time after receipt of the appeal and shall be the final 
administrative action. It shall be issued to the appellant in writing 
with a statement of the reasons for the decision.

Subpart K--Miscellaneous Provisions


Sec.  333.80   Protection against claims.

    A person shall not be held liable for damages or penalties for any 
act or failure to act resulting directly or indirectly from compliance 
with any provision of this part, or an official action, notwithstanding 
that such provision or action shall subsequently be declared invalid by 
judicial or other competent authority.


Sec.  333.81   Records and reports.

    (a) Persons are required to make and preserve for at least three 
years, accurate and complete records of any transaction covered by this 
part or an official action.
    (b) Records must be maintained in sufficient detail to permit the 
determination, upon examination, of whether each transaction complies 
with the provisions of this part or any official action. However, this 
part does not specify any particular method or system to be used.
    (c) Records required to be maintained by this part must be made 
available for examination on demand by duly authorized representatives 
of FEMA as provided in Sec.  333.61.
    (d) In addition, persons must develop, maintain, and submit any 
other records and reports to FEMA that may be required for the 
administration of the Defense Production Act and other applicable 
statutes, and this part.
    (e) Under section 705(d) of the Act and the ultimate delegation of 
that authority to the FEMA Administrator, information obtained under 
section 705 of the Act which the Administrator deems confidential, or 
with reference to which a request for confidential treatment is made by 
the person furnishing such information, shall not be published or 
disclosed unless the Administrator determines that the withholding of 
this information is contrary to the interest of the national defense. 
Information required to be submitted to FEMA in connection with the 
enforcement or administration of the Act, this part, or an official 
action, is deemed to be confidential under section 705(d) of the Act 
and shall not be published or disclosed except as required by 
applicable Federal law.


Sec.  333.82  Applicability of this part and official actions.

    (a) This part and all official actions, unless specifically stated 
otherwise, apply to transactions in any state, territory, or possession 
of the United States and the District of Columbia.
    (b) This part and all official actions apply not only to deliveries 
to other persons but also include deliveries to affiliates and 
subsidiaries of a person and deliveries from one branch, division, or 
section of a single entity to another branch, division, or section 
under common ownership or control.
    (c) This part shall not be construed to affect any administrative 
actions taken by FEMA, or any outstanding contracts or orders placed 
pursuant to any of the regulations, orders, schedules, or delegations 
of authority issued by FEMA prior to May 13, 2020. Such actions, 
contracts, or orders shall continue in full force and effect under this 
part unless modified or terminated by proper authority.


Sec.  333.83   Communications.

    General communications concerning this part, including how to 
obtain copies of this part and explanatory information, requests for 
guidance or clarification, may be addressed to FEMA's Office of Policy 
and Program Analysis at [email protected].


Sec.  333.84   Severability.

    FEMA intends the various provisions of this part to be severable 
from each other to the extent practicable, such that if a court of 
competent jurisdiction were to vacate or enjoin any one provision, the 
other provisions are intended to remain in effect unless they are 
dependent upon the vacated or enjoined provision.

Pete Gaynor,
Administrator, Federal Emergency Management Agency.
[FR Doc. 2020-10294 Filed 5-11-20; 4:15 pm]
BILLING CODE 9111-19-P