Defense Federal Acquisition Regulation Supplement: Prohibition on Certain Procurements From the Xinjiang Uyghur Autonomous Region (DFARS Case 2022-D008), 76980-76984 [2022-26727]

Agencies

• Defense Acquisition Regulations System
• DEPARTMENT OF DEFENSE

[Federal Register Volume 87, Number 241 (Friday, December 16, 2022)]
[Rules and Regulations]
[Pages 76980-76984]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2022-26727]


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DEPARTMENT OF DEFENSE

Defense Acquisition Regulations System

48 CFR Parts 212, 225, and 252

[Docket DARS-2022-0032]
RIN 0750-AL59


Defense Federal Acquisition Regulation Supplement: Prohibition on 
Certain Procurements From the Xinjiang Uyghur Autonomous Region (DFARS 
Case 2022-D008)

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

ACTION: Interim rule.

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SUMMARY: DoD is issuing an interim rule amending the Defense Federal 
Acquisition Regulation Supplement (DFARS) to implement a section of the 
National Defense Authorization Act of Fiscal Year 2022 that prohibits 
the use of funds to knowingly procure any products mined, produced, or 
manufactured wholly or in part by forced labor from the Xinjiang Uyghur 
Autonomous Region.

DATES: 
    Effective date: December 30, 2022.
    Comment due date: Comments on the interim rule should be submitted 
in writing to the address shown below on or before February 14, 2023, 
to be considered in the formation of a final rule.

ADDRESSES: Submit comments identified by DFARS Case 2022-D008, using 
any of the following methods:
    [cir] Federal eRulemaking Portal: https://www.regulations.gov. 
Search for ``DFARS Case 2022-D008.'' Select ``Comment'' and follow the 
instructions to submit a comment. Please include your name, company 
name (if any), and ``DFARS Case 2022-D008'' on any attached document.
    [cir] Email: [email protected]. Include DFARS Case 2022-D008 in 
the subject line of the message.
    Comments received generally will be posted without change to 
https://www.regulations.gov, including any personal information 
provided. To confirm receipt of your comment(s), please check https://www.regulations.gov, approximately two to three days after submission 
to verify posting.

FOR FURTHER INFORMATION CONTACT: Ms. Kimberly Bass, telephone 703-717-
3446.

SUPPLEMENTARY INFORMATION: 

[[Page 76981]]

I. Background

    This interim rule revises the DFARS to implement section 848 of the 
National Defense Authorization Act (NDAA) for Fiscal Year (FY) 2022 
(Pub. L. 117-81). Section 848 prohibits the use of funds to knowingly 
procure any products mined, produced, or manufactured wholly or in part 
by forced labor from the Xinjiang Uyghur Autonomous Region of the 
People's Republic of China (XUAR) and requires a certification from 
offerors for contracts with DoD stating the offeror has made a good 
faith effort to determine that forced labor from XUAR was not or will 
not be used in the performance of a contract.

II. Discussion and Analysis

    This interim rule makes the following changes to the DFARS to 
implement section 848 of the NDAA for FY 2022:

A. Definitions

    The interim rule adds a new section for definitions in DFARS 
225.7022-2. ``Forced labor'' is defined as all work or service which is 
exacted from any person under the menace of any penalty for its 
nonperformance and for which the worker does not offer themselves 
voluntarily.
    In addition, the rule defines ``person'' as--
    a. A natural person, corporation, company, business association, 
partnership, society, trust, or any other nongovernmental entity, 
organization, or group; or
    b. Any successor, subunit, parent entity, or subsidiary of, or any 
entity under common ownership or control with, any entity described in 
item a.
    Lastly, ``XUAR'' is added and is defined as the Xinjiang Uyghur 
Autonomous Region of the People's Republic of China.

B. Prohibition

    At DFARS 225.7022-3, the statutory prohibition is added that DoD 
shall not award a contract utilizing funds appropriated or otherwise 
made available for fiscal year 2022 to an entity that uses forced labor 
from XUAR.

C. Certification

    The statute requires a certification from offerors for all DoD 
contracts stating the offeror has made a good faith effort to determine 
that forced labor from XUAR was not or will not be used in the 
performance of such contract. A solicitation provision is created to 
facilitate receipt of the good faith certification from offerors. A 
contract clause is created to provide the associated terms and 
conditions for compliance, as they will apply to the contract. The 
solicitation provision and contract clause are added to the list at 
DFARS 212.301 of clauses and provisions that apply to the acquisition 
of commercial items.

D. Solicitation Provision and Contract Clause

    A new solicitation provision at 252.225-7059, Prohibition on 
Certain Procurements From the Xinjiang Uyghur Autonomous Region-
Certification, is added for use in solicitations, including 
solicitations using FAR part 12 procedures for the acquisition of 
commercial services, commercial products, or commercially available 
off-the-shelf (COTS) items. The provision is used in solicitations that 
contain the clause at 252.225-7060, Prohibition on Certain Procurements 
from the Xinjiang Uyghur Autonomous Region. This provision will be used 
to determine whether the offeror is subject to the statutory 
prohibition and therefore is prohibited from consideration for contract 
award. If the offeror responds that it does not certify that it has 
made a good faith effort to determine that forced labor from XUAR was 
not or will not be used in the performance of a contract resulting from 
the solicitation, then the offeror is ineligible for contract award.
    A new contract clause at 252.225-7060, Prohibition on Certain 
Procurements from the Xinjiang Uyghur Autonomous Region, is added for 
use in solicitations and contracts, utilizing funds appropriated or 
otherwise made available for fiscal year 2022, including solicitations 
and contracts using FAR part 12 procedures for the acquisition of 
commercial services, commercial products, or COTS items. The new clause 
prohibits contractors from providing, throughout the period of 
performance of the contract, any products mined, produced, or 
manufactured wholly or in part by forced labor from XUAR or from an 
entity that has used labor from within or transferred from XUAR as part 
of any forced labor programs.

E. Exceptions

    The section 848 prohibition will not apply to--
     Purchases under the micro-purchase threshold made using 
the Governmentwide commercial purchase card; or
     Purchases using the SF 44, Purchase Order-Invoice-Voucher, 
in accordance with 213.306.

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

    This DFARS rule implements section 848 of the NDAA for FY 2022. 
Section 848 prohibits the use of funds to knowingly procure any 
products mined, produced, or manufactured wholly or in part by forced 
labor from XUAR and requires a certification from offerors for DoD 
contracts.
    This rule creates a new solicitation provision at DFARS 252.225-
7059, Prohibition on Certain Procurements from the Xinjiang Uyghur 
Autonomous Region-Certification, and a new contract clause at DFARS 
252.225-7060, Prohibition on Certain Procurements from the Xinjiang 
Uyghur Autonomous Region. The clause at DFARS 252.225-7060 is 
prescribed for use in solicitations and contracts utilizing funds 
appropriated or otherwise made available for fiscal year 2022, 
including solicitations using FAR part 12 procedures for the 
acquisition of commercial services and commercial products including 
COTS items. DoD has made the determination to apply the rule to 
contracts valued at or below the simplified acquisition threshold (SAT) 
and to the acquisition of commercial services and commercial products, 
including COTS items, as defined at FAR 2.101.

A. Applicability to Contracts at or Below the Simplified Acquisition 
Threshold

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

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

    The statute at 10 U.S.C. 2375 (redesignated 10 U.S.C. 3452) exempts

[[Page 76982]]

contracts and subcontracts for the acquisition of commercial services 
and commercial products (including COTS items) from provisions of law 
enacted after October 13, 1994, that, as determined by the Under 
Secretary of Defense for Acquisition and Sustainment (USD (A&S)), set 
forth policies, procedures, requirements, or restrictions for the 
acquisition of property or services unless--
    The provision of law--

--Provides for criminal or civil penalties;
--Requires that certain articles be bought from American sources 
pursuant to 10 U.S.C. 2533a or that strategic materials critical to 
national security be bought from American sources pursuant to 10 U.S.C. 
2533b; or
--Specifically refers to 10 U.S.C. 2375 (now 10 U.S.C. 3452) and states 
that it shall apply to contracts and subcontracts for the acquisition 
of commercial services and commercial products (including COTS items); 
or USD (A&S) determines in writing that it would not be in the best 
interest of the Government to exempt contracts or subcontracts for the 
acquisition of commercial products and services from the applicability 
of the provision. This authority has been delegated to the Principal 
Director, Defense Pricing and Contracting.

C. Determinations

    Section 848 is silent on applicability to contracts and 
subcontracts in amounts at or below the SAT or for the acquisition of 
commercial products and commercial services. Also, the statute does not 
provide for civil or criminal penalties. Therefore, it does not apply 
to the acquisition of contracts or subcontracts in amounts not greater 
than the SAT or the acquisition of commercial services and commercial 
products (including COTS items), unless the Principal Director, Defense 
Pricing and Contracting, makes a written determination as provided for 
in 41 U.S.C. 1905 and 10 U.S.C. 2375 (redesignated 10 U.S.C. 3452).
    The solicitation provision and contract clause provided are 
necessary to implement the statutory restrictions and to protect the 
contracting officer from violating the prohibition on the use of funds 
to knowingly procure any products mined, produced, or manufactured 
wholly or in part by forced labor from XUAR or from an entity that has 
used labor from within or transferred from XUAR as part of a forced 
labor program.
    If the solicitation provision and contract clause are not included 
in solicitations and contracts valued at or below the SAT and for the 
acquisition of commercial services and commercial products (including 
COTS items) it becomes more likely that a contracting officer could 
procure a prohibited product, thereby undermining the overarching 
public policy purpose of the law. Subjecting FAR part 13 simplified 
acquisitions to section 848 will not impact simplified acquisitions 
conducted without issuance of a purchase order through the use of the 
Governmentwide commercial purchase card or the SF 44, as these 
acquisitions are excepted from section 848.
    An exception for contracts for the acquisition of commercial 
services and commercial products, including COTS items, would exclude 
some high dollar value contracts, thereby undermining the overarching 
public policy purpose of the law. However, the prohibition in section 
848 covers only ``knowingly'' procuring covered items. It would be 
unreasonable to expect the parties to a procurement through the use of 
the Governmentwide commercial purchase card or the SF 44 to know 
whether the commercial products or commercial services being procured 
are mined, produced, or manufactured wholly or in part by forced labor 
from XUAR or from an entity that has used labor from within or 
transferred from XUAR as part of a forced labor program.
    Based on the findings above, it would not be in the best interest 
of the United States to exempt acquisitions not greater than the SAT 
(except for purchases made regardless of dollar value through the use 
of the Governmentwide commercial purchase card or the SF 44) and 
acquisitions of commercial services or commercial products, including 
COTS items, from the applicability of section 848 of the NDAA for FY 
2022.

IV. Executive Orders 12866 and 13563

    Executive Orders (E.O.s) 12866 and 13563 direct agencies to assess 
all costs and benefits of available regulatory alternatives and, if 
regulation is necessary, to select regulatory approaches that maximize 
net benefits (including potential economic, environmental, public 
health and safety effects, distributive impacts, and equity). E.O. 
13563 emphasizes the importance of quantifying both costs and benefits, 
of reducing costs, of harmonizing rules, and of promoting flexibility. 
This is not a significant regulatory action and, therefore, was not 
subject to review under section 6(b) of E.O. 12866, Regulatory Planning 
and Review, dated September 30, 1993.

V. Congressional Review Act

    As required by the Congressional Review Act (5 U.S.C. 801-808) 
before an interim or final rule takes effect, DoD will submit a copy of 
the interim or final rule with the form, Submission of Federal Rules 
under the Congressional Review Act, to the U.S. Senate, the U.S. House 
of Representatives, and the Comptroller General of the United States. A 
major rule under the Congressional Review Act cannot take effect until 
60 days after it is published in the Federal Register. The Office of 
Information and Regulatory Affairs has determined that this rule is not 
a major rule as defined by 5 U.S.C. 804.

VI. Regulatory Flexibility Act

    This interim rule may have a significant economic impact on a 
substantial number of small entities within the meaning of the 
Regulatory Flexibility Act, 5 U.S.C. 601, et seq. An initial regulatory 
flexibility analysis has been performed and is summarized as follows:
    DoD is amending the DFARS to implement section 848 of the National 
Defense Authorization act (NDAA) for Fiscal Year (FY) 2022 (Pub. L. 
117-81). Section 848 prohibits the use of funds to knowingly procure 
any products mined, produced, or manufactured wholly or in part by 
forced labor from the Xinjiang Uyghur Autonomous Region in the People's 
Republic of China (XUAR) or from an entity that has used labor from 
within or transferred from XUAR as part of any forced labor programs. 
In addition, section 848 requires a certification from offerors for DoD 
contracts stating the offeror has made a good faith effort to determine 
that forced labor from XUAR was not or will not be used in the 
performance of a contract.
    The objective of the rule is to implement the prohibition and 
certification requirement of section 848. The rule includes a new 
solicitation provision at DFARS 252.225-7059, Prohibition on Certain 
Procurements from the Xinjiang Uyghur Autonomous Region--Certification, 
which includes a certification requirement, and a new contract clause 
at DFARS 252.225-7060, Prohibition on Certain Procurements from the 
Xinjiang Uyghur Autonomous Region, which prohibits contractors from 
providing any products mined, produced, or manufactured wholly or in 
part by forced labor from XUAR or from an entity that has used labor 
from within or transferred from XUAR as part of any forced labor 
programs. The legal basis for this rule is section 848 of the NDAA for 
FY 2022.

[[Page 76983]]

    DoD reviewed data obtained from the Federal Procurement Data System 
(FPDS) for FY 2020, 2021, and 2022, for DoD purchases of supplies or 
end products valued above the micro-purchase threshold, including 
commercial products and COTS items. DoD made an average of 374,735 
awards to 16,122 unique entities, of which 154,515 awards were made to 
12,187 unique small entities. In addition to the small entities that 
received awards, DoD estimates there were approximately 621,718 
unsuccessful offerors. Note that the unsuccessful offerors are not 
unique entities; in other words, a single entity may have been counted 
more than once as an unsuccessful offeror. The rule will apply to 
successful offerors that receive awards and unsuccessful offerors.
    The solicitation provision at DFARS 252.225-7059, Prohibition on 
Certain Procurements from the Xinjiang Uyghur Autonomous Region--
Certification, requires offerors to certify that the offeror has made a 
good faith effort to determine that forced labor from XUAR was not or 
will not be used in the performance of a contract resulting from the 
solicitation containing the provision. Small entities that sell 
products to DoD will be subject to this requirement when they submit 
offers for DoD contracts. The rule does not require any other reporting 
or recordkeeping.
    The rule does not duplicate, overlap, or conflict with any other 
Federal rules.
    The section 848 prohibition will not apply to purchases under the 
micro-purchase threshold made using the Governmentwide commercial 
purchase card or to purchases using the SF 44, Purchase Order-Invoice-
Voucher (see DFARS 213.306). DoD was unable to identify any other 
alternatives that would reduce burden on small businesses and still 
meet the objectives of the statute.
    DoD invites comments from small business concerns and other 
interested parties on the expected impact of this rule on small 
entities.
    DoD will also consider comments from small entities concerning the 
existing regulations in subparts affected by this rule in accordance 
with 5 U.S.C. 610. Interested parties must submit such comments 
separately and should cite 5 U.S.C 610 (DFARS Case 2022-D008), in 
correspondence.

VII. Paperwork Reduction Act

    This rule contains information collection requirements that require 
the approval of the Office of Management and Budget under the Paperwork 
Reduction Act (44 U.S.C. chapter 35). This information collection 
requirement has been assigned OMB Control Number 0750-0007, entitled 
Prohibition on Certain Procurements from the Xinjiang Uyghur Autonomous 
Region--Certification.

VIII. Determination To Issue an Interim Rule

    A determination has been made under the authority of the Secretary 
of Defense that urgent and compelling reasons exist to promulgate this 
interim rule without prior opportunity for public comment (41 U.S.C. 
1707(d)). This action is necessary because section 848 of the NDAA for 
FY 2022 adds the prohibition that requires the offeror to provide a 
certification that it made a good faith effort to determine that forced 
labor from XUAR was not or will not be used in the performance of a 
contract. DoD recognizes that Congress considers this an important 
public policy to avoid further genocide (see the Joint Explanatory 
Statement to Accompany the National Defense Authorization Act for 
Fiscal Year 2022).
    Consequently, this interim rule is necessary to ensure 
implementation of the new statutory certification requirements in 
section 848. The law containing section 848 was enacted in December 
2021, and section 848 is currently in effect.
    However, pursuant to 41 U.S.C. 1707 and FAR 1.501-3(b), DoD will 
consider public comments received in response to this interim rule in 
the formation of the final rule.

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

    Government procurement.

Jennifer D. Johnson,
Editor/Publisher, Defense Acquisition Regulations System.

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

0
1. The authority citation for 48 CFR parts 212, 225, and 252 continues 
to read as follows:

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

PART 212--ACQUISITION OF COMMERCIAL ITEMS

0
2. Amend section 212.301 by adding paragraphs (f)(x)(KK) and (LL) to 
read as follows:


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

* * * * *
    (f) * * *
    (x) * * *
    (KK) Use the provision at 252.225-7059, Prohibition on Certain 
Procurements from the Xinjiang Uyghur Autonomous Region--Certification, 
as prescribed in 225.7022-5(a), to comply with section 848 of the 
National Defense Authorization Act for Fiscal Year 2022 (Pub. L. 117-
81).
    (LL) Use the clause at 252.225-7060, Prohibition on Certain 
Procurements from the Xinjiang Uyghur Autonomous Region, as prescribed 
in 225.7022-5(b), to comply with section 848 of the National Defense 
Authorization Act for Fiscal Year 2022 (Pub. L. 117-81).
* * * * *

PART 225-FOREIGN ACQUISITION

0
3. Add sections 225.7022, 225.7022-1, 225.7022-2, 225.7022-3, 225.7022-
4, and 225.7022-5 to subpart 225.70 to read as follows:
* * * * *
Sec.
225.7022 Prohibition on certain procurements from the Xinjiang 
Uyghur Autonomous Region.
225.7022-1 Scope.
225.7022-2 Definitions.
225.7022-3 Prohibition.
225.7022-4 Exceptions.
225.7022-5 Solicitation provision and contract clause.
* * * * *


225.7022  Prohibition on certain procurements from the Xinjiang Uyghur 
Autonomous Region.


225.7022-1  Scope.

    This section implements section 848 of the National Defense 
Authorization Act for Fiscal Year 2022 (Pub. L. 117-81).


225.7022-2  Definitions.

    As used in this section--
    Forced labor means all work or service which is exacted from any 
person under the menace of any penalty for its nonperformance and for 
which the worker does not offer themselves voluntarily.
    Person means--
    (1) A natural person, corporation, company, business association, 
partnership, society, trust, or any other nongovernmental entity, 
organization, or group; or
    (2) Any successor, subunit, parent entity, or subsidiary of, or any 
entity under common ownership or control with, any entity described in 
paragraph (1) of this definition.
    XUAR means the Xinjiang Uyghur Autonomous Region of the People's 
Republic of China.


225.7022-3  Prohibition.

    Contracting officers shall not award a contract utilizing funds 
appropriated or otherwise made available for fiscal year

[[Page 76984]]

2022 for any products mined, produced, or manufactured wholly or in 
part by forced labor from XUAR or from an entity that has used labor 
from within or transferred from XUAR as part of any forced labor 
programs, unless an exception applies.


225.7022-4  Exceptions.

    The prohibition at 225.7022-3 does not apply to--
    (a) Purchases under the micro-purchase threshold made using the 
Governmentwide commercial purchase card; or
    (b) Purchases using the SF 44 in accordance with 213.306.


225.7022-5  Solicitation provision and contract clause.

    (a) Use the provision at 252.225-7059, Prohibition on Certain 
Procurements from the Xinjiang Uyghur Autonomous Region--Certification, 
in solicitations, including solicitations using FAR part 12 procedures 
for the acquisition of commercial items and COTS items, that contain 
the clause at 252.225-7060, Prohibition on Certain Procurements from 
the Xinjiang Uyghur Autonomous Region.
    (b) Use the clause at 252.225-7060, Prohibition on Certain 
Procurements from the Xinjiang Uyghur Autonomous Region, in 
solicitations, contracts, and orders for products utilizing funds 
appropriated or otherwise made available for fiscal year 2022, 
including solicitations and contracts using FAR part 12 procedures for 
the acquisition of commercial items and COTS items.

PART 252--SOLICITATION PROVISIONS AND CONTRACT CLAUSES

0
4. Add sections 252.225-7059 and 252.225-7060 to read as follows:


252.225-7059  Prohibition on Certain Procurements from the Xinjiang 
Uyghur Autonomous Region-Certification.

    As prescribed in 225.7022-5(a), use the following provision:

Prohibition on Certain Procurements From The Xinjiang Uyghur Autonomous 
Region--Certification (DEC 2022)

    (a) Definitions. Forced labor, person, and XUAR, as used in this 
provision, have the meaning given in the 252.225-7060, Prohibition 
on Certain Procurements from the Xinjiang Uyghur Autonomous Region, 
clause of this solicitation.
    (b) Prohibition. DoD may not knowingly procure any products 
mined, produced, or manufactured wholly or in part by forced labor 
from XUAR or from an entity that has used labor from within or 
transferred from XUAR as part of any forced labor programs, as 
specified in paragraph (b) of the 252.225-7060, Prohibition on 
certain procurements from the Xinjiang Uyghur Autonomous Region, 
clause of this solicitation.
    (c) Certification.
    (1) The Offeror does [ ] does not [ ] certify that the Offeror 
has made a good faith effort to determine that forced labor from 
XUAR was not or will not be used in the performance of a contract 
resulting from this solicitation.
    (2) Offerors who do not certify having made a good faith effort 
will not be eligible for award.

(End of provision)


252.225-7060  Prohibition on Certain Procurements from the Xinjiang 
Uyghur Autonomous Region.

    As prescribed in 225.7022-5(b), use the following clause:

Prohibition on Certain Procurements From The Xinjiang Uyghur Autonomous 
Region (DEC 2022)

    (a) Definitions. As used in this clause--
    Forced Labor means all work or service which is exacted from any 
person under the menace of any penalty for its nonperformance and 
for which the worker does not offer themselves voluntarily.
    Person means--
    (1) A natural person, corporation, company, business 
association, partnership, society, trust, or any other 
nongovernmental entity, organization, or group; or
    (2) Any successor, subunit, parent entity, or subsidiary of, or 
any entity under common ownership or control with, any entity 
described in paragraph (1) of this definition.
    XUAR means the Xinjiang Uyghur Autonomous Region of the People's 
Republic of China.
    (b) Prohibition. The Contractor shall not provide any products 
mined, produced, or manufactured wholly or in part by forced labor 
from XUAR or from an entity that has used labor from within or 
transferred from XUAR as part of any forced labor programs 
throughout the entire period of performance of the contract.
    (c) Subcontracts. The Contractor shall insert this clause, 
including this paragraph (c), without alteration other than to 
identify the appropriate parties, in subcontracts including 
subcontracts for commercial items and commercially available off-
the-shelf items.
(End of clause)

[FR Doc. 2022-26727 Filed 12-15-22; 8:45 am]
BILLING CODE 5001-06-P