Defense Federal Acquisition Regulation Supplement: Export-Controlled Items (DFARS Case 2018-D053), 17357-17360 [2023-05676]
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Federal Register / Vol. 88, No. 55 / Wednesday, March 22, 2023 / Proposed Rules
DEPARTMENT OF DEFENSE
Defense Acquisition Regulations
System
48 CFR Parts 212, 225, and 252
[Docket DARS–2023–0005]
RIN 0750–AK35
Defense Federal Acquisition
Regulation Supplement: ExportControlled Items (DFARS Case 2018–
D053)
Defense Acquisition
Regulations System, Department of
Defense (DoD).
ACTION: Proposed rule.
AGENCY:
DoD is proposing to amend
the Defense Federal Acquisition
Regulation Supplement (DFARS) to
implement a requirement for certain
contractors to provide export
authorizations.
SUMMARY:
Comments on the proposed rule
should be submitted in writing to the
address shown below on or before May
22, 2023, to be considered in the
formation of a final rule.
ADDRESSES: Submit comments
identified by DFARS Case 2018–D053,
using either of the following methods:
• Federal eRulemaking Portal:
https://www.regulations.gov. Search for
‘‘DFARS Case 2018–D053.’’ Select
‘‘Comment’’ and follow the instructions
to submit a comment. Please include
‘‘DFARS Case 2018–D053’’ on any
attached documents.
• Email: osd.dfars@mail.mil. Include
DFARS Case 2018–D053 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:
Kimberly Bass, telephone 703–717–
3446.
DATES:
SUPPLEMENTARY INFORMATION:
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I. Background
DoD is proposing to amend the
DFARS to enable the Defense Contract
Management Agency (DCMA) to obtain
export authorizations from certain
contractors. Specifically, when a
contract requires government quality
assurance surveillance oversight and
has delivery to, or production or
performance in, government quality
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assurance countries, DoD proposes to
require the contractor to provide
relevant export authorizations (i.e.,
export license exemptions, export
license exceptions, export licenses, or
other approvals) to the cognizant DCMA
administrative contracting officer along
with contact information for the
empowered official or the export point
of contact. Government quality
assurance countries include the
following countries: Australia, Belgium,
Canada, Czech Republic, Denmark,
Finland, France, Germany, Greece,
Israel, Italy, Republic of Korea,
Netherlands, Norway, Poland, Romania,
Slovakia, Spain, Sweden, Turkey, and
the United Kingdom.
DCMA has found that a significant
amount of time is required to determine
whether or not a contractor’s export
license allows for foreign auditors to
perform required quality assurance
functions in lieu of DCMA. Currently,
DCMA is not able to review the export
authorization unless their personnel
travel to the contractor’s worksite. If
DCMA is able to receive and review an
export authorization from the contractor
to determine whether or not they can
delegate the work to foreign auditors,
this problem would be resolved.
II. Discussion and Analysis
The proposed rule updates DFARS
clause 252.225–7048, Export-Controlled
Items, by adding to the clause at
paragraph (e) a requirement for certain
contractors to provide relevant export
authorizations to the cognizant DCMA
administrative contracting officer along
with contact information for the
empowered official or the export point
of contact. A contractor will be required
to submit this information if their
contract requires—
(1) Performance in or delivery to a
government quality assurance country;
and
(2) Government quality assurance
surveillance oversight.
The proposed rule revises the term
export-controlled items and adds the
following terms to the list of definitions
at 252.225–7048: Empowered official,
export license exception, export license
exemption, government quality
assurance countries, other approval, and
relevant export authorization. The
purpose of adding these definitions to
the clause is to clarify for contractors
the requirement that is proposed to be
added at 252.225–7048(e).
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17357
III. Applicability to Contracts at or
Below the Simplified Acquisition
Threshold, for Commercial Products
Including Commercially Available Offthe-Shelf Items, and for Commercial
Services
The proposed rule applies to contracts
at or below the simplified acquisition
threshold, for commercial products
including commercially available offthe-shelf items, and for commercial
services. This proposed rule requires
relevant export authorizations and the
contact information of the export point
of contact or the empowered official be
provided to DCMA for DoD contracts
that require government quality
assurance surveillance oversight and
have delivery to, or performance in,
government quality assurance countries.
Therefore, the proposed rule will apply
to contracts at or below the simplified
acquisition threshold, for commercial
products including commercially
available off-the-shelf items, and for
commercial services.
IV. Expected Impact of the Proposed
Rule
Currently, DCMA is required to cite
Federal Acquisition Regulation 4.703(a)
in order to obtain access to a
contractor’s export authorization, which
only requires the contractor to make the
information available to DCMA, not to
submit the information directly to
DCMA. Therefore, DCMA personnel are
not able to review the information
unless they travel to the contractor’s
international worksite to inspect the
export authorization in person.
This proposed rule would require the
contractor to provide the information to
DCMA and identify a point of contact to
answer questions. Receiving the
information directly will allow DCMA,
without traveling internationally, to
make an informed determination
regarding whether quality assurance
activities must be performed by a U.S.
contract administrator or may be
delegated to a qualified foreign
inspector.
Contractors would already have the
export authorization. Therefore, the
only burden associated with this
proposed rule is providing a copy to the
DCMA administrative contracting
officer. DoD has calculated this burden
in section VIII of this preamble.
V. 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
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Federal Register / Vol. 88, No. 55 / Wednesday, March 22, 2023 / Proposed Rules
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(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.
VI. Regulatory Flexibility Act
DoD does not expect this proposed
rule to have a significant economic
impact on a substantial number of small
entities within the meaning of the
Regulatory Flexibility Act, 5 U.S.C. 601,
et seq. However, an initial regulatory
flexibility analysis has been performed
and is summarized as follows:
This proposed rule is required to
enable DCMA to obtain export
authorizations from certain contractors.
Currently, DCMA is not able to review
the information unless their personnel
travel to the contractor’s worksite. Until
DCMA determines if export control
items are present and the licenses are
examined, DCMA is unable to exercise
Host Nation Agreements. Requiring the
export control license will allow DCMA
to make the determination necessary to
exercise Host Nation Agreements.
The objective of this proposed rule is
to require certain contractors and
subcontractors to provide, upon receipt,
relevant export authorizations (i.e.,
export license exemptions, export
license exceptions, export licenses, or
other approvals) to the cognizant DCMA
administrative contracting officer along
with contact information for the
empowered official or the export point
of contact. The legal basis for the
proposed rule is 41 U.S.C. 1303.
Based on the extrapolation from the
DCMA Compass database, it is
estimated that 723 small entities were
awarded DoD contracts that require
government quality assurance oversight
surveillance and have delivery to, or
performance in, government quality
assurance countries from May 2018
through May 2019. It is estimated that
most of these small entities have
subcontracts with delivery to, or
performance in, government quality
assurance countries. The government
quality assurance countries are as
follows: Australia, Belgium, Canada,
Czech Republic, Denmark, Finland,
France, Germany, Greece, Israel, Italy,
Republic of Korea, Netherlands,
Norway, Poland, Romania, Slovakia,
Spain, Sweden, Turkey, and the United
Kingdom. Any additional burden from
having to submit relevant export
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authorizations along with contact
information for the empowered official
or the export point of contact to DCMA
will impact these small entities.
There are reporting, recordkeeping, or
other compliance requirements
associated with this proposed rule. The
proposed rule may result in a reporting
or recordkeeping burden requirement.
The proposed rule does not duplicate,
overlap, or conflict with any other
Federal rules.
There are no known significant
alternative approaches to the proposed
rule that would meet the proposed
objectives.
DoD invites comments from small
business concerns and other interested
parties on the expected impact of this
proposed rule on small entities.
DoD will also consider comments
from small entities concerning the
existing regulations in subparts affected
by this proposed rule in accordance
with 5 U.S.C. 610. Interested parties
must submit such comments separately
and should cite 5 U.S.C 610 (DFARS
Case 2018–D053), in correspondence.
VII. Paperwork Reduction Act
This proposed 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). Accordingly, DoD has
submitted a request for approval of a
new information collection requirement
concerning 2018–D053, ExportControlled Items, to the Office of
Management and Budget.
A. Estimate of Public Burden
Public reporting burden for this
collection of information is estimated to
average 4 hours per response for: (1) the
contractor to locate the contact
information for the cognizant DCMA
Office using the DCMA locater website;
(2) the contractor to provide relevant
export authorizations and contact
information for the empowered official
or export point of contact to DCMA; and
(3) if necessary, for the empowered
official to provide clarifications to
DCMA.
The annual reporting burden is
estimated as follows for all contractors
with awards that require government
quality assurance surveillance oversight
and have delivery to, or production or
performance in, government quality
assurance countries:
Respondents: 3,614.
Responses per Respondent: 1.
Total Annual Responses: 3,614.
Preparation Hours per Response: 4
hours.
Total Response Burden Hours: 14,456.
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B. Request for Comments Regarding
Paperwork Burden
Written comments and
recommendations on the proposed
information collection, including
suggestions for reducing this burden,
should be submitted using the Federal
eRulemaking Portal at https://
www.regulations.gov. Search for
‘‘DFARS Case 2018–D053.’’ Select
‘‘Comment’’ and follow the instructions
to submit a comment. Please include
‘‘Paperwork Burden—DFARS Case
2018–D053’’ on any attached
documents. Comments must be
submitted by the date for submission of
public comments shown in the DATES
section of this preamble.
Public comments are particularly
invited on: whether this collection of
information is necessary for the proper
performance of functions of the DFARS,
and will have practical utility; whether
our estimate of the public burden of this
collection of information is accurate,
and based on valid assumptions and
methodology; ways to enhance the
quality, utility, and clarity of the
information to be collected; and ways to
minimize the burden of the collection of
information on those who are to
respond, through the use of appropriate
technological collection techniques or
other forms of information technology.
To obtain a copy of the supporting
statement and associated collection
instruments, please email osd.dfars@
mail.mil. Include DFARS Case 2018–
D053 in the subject line of the message.
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 proposed to be amended as
follows:
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 PRODUCTS AND
COMMERCIAL SERVICES
2. Amend section 212.301 by—
a. Redesignating paragraphs (f)(ix)(CC)
through (MM) as (f)(ix)(DD) through
(NN); and
■ b. Adding a new paragraph (f)(ix)(CC).
The addition reads as follows:
■
■
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Federal Register / Vol. 88, No. 55 / Wednesday, March 22, 2023 / Proposed Rules
212.301 Solicitation provisions and
contract clauses for the acquisition of
commercial products and commercial
services.
*
*
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*
(f) * * *
(ix) * * *
(CC) Use the clause at 252.225–7048,
Export-Controlled Items, as prescribed
in 225.7901–4, to comply with section
890(a) of the National Defense
Authorization Act for Fiscal Year 2008
(Pub. L. 110–181).
*
*
*
*
*
PART 225—FOREIGN ACQUISITION
Definitions.
As used in this section—
Export-controlled items means—
(1) Any information or material that
cannot be released to foreign nationals
or representatives of a foreign entity,
without first obtaining approval or
license from the Department of State or
the Department of Commerce;
(2) Items subject to the International
Traffic in Arms Regulations (ITAR) (22
CFR parts 120 through 130) or the
Export Administration Regulations
(EAR) (15 CFR parts 730 through 774);
and
(3) Includes—
(i) ‘‘Defense article’’ (22 CFR 120.31),
which means any item or technical data
that is specifically designed, developed,
configured, adapted, or modified for a
military or other controlled use listed on
the U.S. Munitions List;
(ii) ‘‘Defense service’’ (22 CFR
120.32), which means providing
technical data, assistance, or training to
a foreign person in the design,
manufacture, installation, repair, or
operation of a defense article;
(iii) ‘‘Technical data’’ (22 CFR
120.33), which means any information
for the design, development, assembly,
production, operation, repair, testing,
maintenance, or modification of a
defense article; and
(iv) ‘‘Item,’’ defined in the EAR (15
CFR 772.1) as ‘‘commodities, software,
and technology’’.
225.7901–2
[Amended]
4. Amend section 225.7901–2 by
removing ‘‘International Traffic in Arms
Regulations’’ and ‘‘Export
Administration Regulations’’ and
adding ‘‘ITAR’’ and ‘‘EAR’’ in their
places, respectively.
■ 5. Revise section 225.7901–4 to read
as follows:
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■
225.7901–4
Contract clause.
Use the clause at 252.225–7048,
Export-Controlled Items, in all
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225.7902–2
[Amended]
6. Amend section 225.7902–2 by
removing ‘‘International Traffic in Arms
Regulation (ITAR)’’ and adding ‘‘ITAR’’
in its place.
■
PART 252—SOLICITATION
PROVISIONS AND CONTRACT
CLAUSES
7. Amend section 252.225–7048–
a. In the clause heading, by removing
the date ‘‘(JUN 2013)’’ and adding
‘‘(DATE)’’ in its place;
■ b. By revising paragraph (a);
■ c. In paragraphs (d)(4) and (5), by
removing ‘‘Parts’’ and adding ‘‘parts’’ in
its place;
■ d. By redesignating paragraph (e) as
paragraph (f);
■ e. By adding a new paragraph (e); and
■ f. By revising the newly redesignated
paragraph (f).
The revisions and addition read as
follows.
■
■
3. Revise section 225.7901–1 to read
as follows:
■
225.7901–1
solicitations and contracts, including
solicitations and contracts using FAR
part 12 procedures for the acquisition of
commercial products and commercial
services.
252.225-7048
Export-Controlled Items.
*
*
*
*
*
(a) Definitions. As used in this
clause—
Empowered official, as defined in the
International Traffic in Arms
Regulations (ITAR) at 22 CFR 120.67,
means—
(1) A U.S. person who—
(i) Is directly employed by the
applicant or a subsidiary in a position
having authority for policy or
management within the applicant
organization;
(ii) Is legally empowered in writing by
the applicant to sign license
applications or other requests for
approval on behalf of the applicant;
(iii) Understands the provisions and
requirements of the various export
control statutes and regulations, and the
criminal liability, civil liability, and
administrative penalties for violating
the Arms Export Control Act and the
ITAR; and
(iv) Has the independent authority
to—
(A) Inquire into any aspect of a
proposed export, temporary import, or
brokering activity by the applicant;
(B) Verify the legality of the
transaction and the accuracy of the
information to be submitted; and
(C) Refuse to sign any license
application or other request for approval
without prejudice or other adverse
recourse.
(2) For the purposes of a broker who
is a foreign person, the empowered
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17359
official may be a foreign person who
otherwise meets the criteria for an
empowered official in paragraph (1) of
this definition.
Export-controlled items means—
(1) Any information or material that
cannot be released to foreign nationals
or representatives of a foreign entity,
without first obtaining approval or
license from the Department of State or
the Department of Commerce;
(2) Items subject to the ITAR (22 CFR
parts 120 through 130) or the Export
Administration Regulations (EAR) (15
CFR parts 730 through 774); and
(3) Includes—
(i) ‘‘Defense article’’ (22 CFR 120.31),
which means any item or technical data
that is specifically designed, developed,
configured, adapted, or modified for a
military or other controlled use listed on
the U.S. Munitions List;
(ii) ‘‘Defense service’’ (22 CFR
120.32), which means providing
technical data, assistance, or training to
a foreign person in the design,
manufacture, installation, repair, or
operation of a defense article;
(iii) ‘‘Technical data’’ (22 CFR
120.33), which means any information
for the design, development, assembly,
production, operation, repair, testing,
maintenance, or modification of a
defense article; and
(iv) ‘‘Item,’’ defined in the EAR (15
CFR 772.1) as ‘‘commodities, software,
and technology’’.
Export license exception means a
special authorization that allows export
or re-export, under stated conditions, of
items that are subject to the EAR that
would otherwise require an export
license. Export license exceptions are
detailed in the EAR, 15 CFR 740.
Export license exemption means the
authorization that exempts the item or
items from the otherwise applicable
licensing requirements under certain
conditions. Export license exemptions
are detailed in the ITAR, 22 CFR parts
120 through 130.
Government quality assurance
countries means countries that have
current Government Reciprocal Quality
Assurance agreements with the
Department of Defense or Reciprocal
Government Quality Assurance annexes
contained in a Reciprocal Defense
Procurement Memorandum of
Understanding. Accordingly, the
following are government quality
assurance countries: Australia, Belgium,
Canada, Czech Republic, Denmark,
Finland, France, Germany, Greece,
Israel, Italy, Republic of Korea,
Netherlands, Norway, Poland, Romania,
Slovakia, Spain, Sweden, Turkey, and
the United Kingdom.
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‘‘Other approval’’ as defined in the
ITAR at 22 CFR 120.57, means a
document issued by the Deputy
Assistant Secretary of State for Defense
Trade Controls, or authorized designee,
that approves an activity regulated by
the ITAR (e.g., approvals for brokering
activities or retransfer authorizations),
or the use of an exemption to the license
requirements as described in the ITAR.
Relevant export authorization means
an export license exemption, export
license exception, export license, or
other approval.
*
*
*
*
*
(e)(1) If the contract requires
government quality assurance
surveillance oversight and has delivery
to, or production or performance in,
government quality assurance countries,
the Contractor shall, upon receipt of
relevant export authorizations, provide
to the Defense Contract Management
Agency (DCMA) Administrative
Contracting Officer—
(i) A copy of the relevant export
authorizations; and
(ii) Contact information for the
empowered official or the export point
of contact.
(2) The DCMA administrative
contracting officer locater can be found
at https://pubmini.dcma.mil/CMT_
View/CMT_View_Search.cfm.
(f) Subcontracts. The Contractor shall
include the substance of this clause,
including this paragraph (f), in all
subcontracts.
*
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[FR Doc. 2023–05676 Filed 3–21–23; 8:45 am]
BILLING CODE 50010–06–P
DEPARTMENT OF DEFENSE
Defense Acquisition Regulations
System
48 CFR Part 225
[Docket DARS–2023–0006]
RIN 0750–AL39
Defense Federal Acquisition
Regulation Supplement: Restrictions
on Overhaul and Repair of Naval
Vessels in Foreign Shipyards (DFARS
Case 2021–D021)
Defense Acquisition
Regulations System, Department of
Defense (DoD).
ACTION: Proposed rule.
lotter on DSK11XQN23PROD with PROPOSALS3
AGENCY:
DoD is proposing to amend
the Defense Federal Acquisition
Regulation Supplement (DFARS) to
implement a section of the National
Defense Authorization Act for Fiscal
SUMMARY:
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Year 2021 that restricts overhaul and
repair of a naval vessel in a shipyard
outside the United States or Guam.
DATES: Comments on the proposed rule
should be submitted in writing to the
address shown below on or before May
22, 2023, to be considered in the
formation of a final rule.
ADDRESSES: Submit comments
identified by DFARS Case 2021–D021,
using any of the following methods:
Æ Federal eRulemaking Portal:
https://www.regulations.gov. Search for
‘‘DFARS Case 2021–D021.’’ Select
‘‘Comment’’ and follow the instructions
to submit a comment. Please include
‘‘DFARS Case 2021–D021’’ on any
attached documents.
Æ Email: osd.dfars@mail.mil. Include
DFARS Case 2021–D021 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:
Kimberly Bass, telephone 703–717–
3446.
SUPPLEMENTARY INFORMATION:
I. Background
DoD is proposing to revise the DFARS
to implement section 1025 of the
National Defense Authorization Act
(NDAA) for Fiscal Year (FY) 2021 (Pub.
L. 116–283). Section 1025 amends 10
U.S.C. 8680(a) to restrict the overhaul or
repair of a naval vessel in a shipyard
outside the United States or Guam. The
restriction does not apply to voyage
repairs or to repairs required for damage
sustained due to hostile actions or
interventions. In addition, the
restriction does not apply to a naval
vessel classified as a littoral combat ship
operating on deployment for corrective
and preventive maintenance or repair
and facilities maintenance.
The proposed rule also establishes the
criteria under which foreign workers or
foreign contractors may be used to
perform corrective and preventive
maintenance or repair or facilities
maintenance on a naval vessel.
II. Discussion and Analysis
A. Overhaul and Repair Restrictions
The proposed revisions to the DFARS
implement the 10 U.S.C. 8680(a)
restrictions and identify the exceptions
for the repair of damage sustained as a
result of hostile actions or interventions
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and for corrective and preventive
maintenance and facilities maintenance
on a littoral combat ship operating on
deployment. DFARS 225.7013 is revised
to add definitions at 225.7013–1 and
expand restrictions at 225.7013–2.
B. Definitions
DFARS 225.7013–1, Definitions, is
added to define the terms ‘‘corrective
and preventive maintenance or repair’’
and ‘‘facilities maintenance’’ as defined
in 10 U.S.C. 8680.
C. Restrictions and Exceptions
DFARS 225.7013–2(a) restates the
restriction previously located at DFARS
225.7013(a) to not award a contract to
construct a vessel or major component
of a vessel in a foreign shipyard. DFARS
225.7013–2(b) provides the restriction to
not overhaul, repair, or maintain in a
shipyard outside the United States or
Guam, except the restriction does not
apply to: (1) voyage repairs or repairs
necessary to correct damage sustained
due to hostile actions or interventions;
and (2) corrective and preventive
maintenance or repair or facilities
maintenance on a naval vessel classified
as a littoral combat ship operating on
deployment.
D. Foreign Workers and Contractors
DFARS 225.7013–2(b) also specifies
the circumstances in which foreign
workers and contractors may be used to
maintain or repair littoral combat ships
operating on deployment. Foreign
workers may be used only if the
Secretary of the Navy, without further
delegation, determines that travel by
U.S. Government or contractor
personnel is not advisable for health or
safety reasons. Foreign contractors may
be used to perform facilities
maintenance only as approved by the
Secretary of Navy.
III. Applicability to Contracts at or
Below the Simplified Acquisition
Threshold and for Commercial
Products, Including Commercially
Available Off-the-Shelf Items, and
Commercial Services
This proposed rule does not create
any new solicitation provisions or
contract clauses. It does not impact any
existing solicitation provisions or
contract clauses or prescriptions for
their use.
IV. Expected Impact of the Proposed
Rule
Currently, DFARS 225.7013 includes
the restrictions on the construction or
repair of vessels in foreign shipyards.
This proposed rule adds the exception
for repairs necessary to correct damage
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]]>Agencies
[Federal Register Volume 88, Number 55 (Wednesday, March 22, 2023)]
[Proposed Rules]
[Pages 17357-17360]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2023-05676]
Federal Register / Vol. 88, No. 55 / Wednesday, March 22, 2023 /
Proposed Rules
[[Page 17357]]
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DEPARTMENT OF DEFENSE
Defense Acquisition Regulations System
48 CFR Parts 212, 225, and 252
[Docket DARS-2023-0005]
RIN 0750-AK35
Defense Federal Acquisition Regulation Supplement: Export-
Controlled Items (DFARS Case 2018-D053)
AGENCY: Defense Acquisition Regulations System, Department of Defense
(DoD).
ACTION: Proposed rule.
-----------------------------------------------------------------------
SUMMARY: DoD is proposing to amend the Defense Federal Acquisition
Regulation Supplement (DFARS) to implement a requirement for certain
contractors to provide export authorizations.
DATES: Comments on the proposed rule should be submitted in writing to
the address shown below on or before May 22, 2023, to be considered in
the formation of a final rule.
ADDRESSES: Submit comments identified by DFARS Case 2018-D053, using
either of the following methods:
Federal eRulemaking Portal: https://www.regulations.gov.
Search for ``DFARS Case 2018-D053.'' Select ``Comment'' and follow the
instructions to submit a comment. Please include ``DFARS Case 2018-
D053'' on any attached documents.
Email: [email protected]. Include DFARS Case 2018-D053 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: Kimberly Bass, telephone 703-717-3446.
SUPPLEMENTARY INFORMATION:
I. Background
DoD is proposing to amend the DFARS to enable the Defense Contract
Management Agency (DCMA) to obtain export authorizations from certain
contractors. Specifically, when a contract requires government quality
assurance surveillance oversight and has delivery to, or production or
performance in, government quality assurance countries, DoD proposes to
require the contractor to provide relevant export authorizations (i.e.,
export license exemptions, export license exceptions, export licenses,
or other approvals) to the cognizant DCMA administrative contracting
officer along with contact information for the empowered official or
the export point of contact. Government quality assurance countries
include the following countries: Australia, Belgium, Canada, Czech
Republic, Denmark, Finland, France, Germany, Greece, Israel, Italy,
Republic of Korea, Netherlands, Norway, Poland, Romania, Slovakia,
Spain, Sweden, Turkey, and the United Kingdom.
DCMA has found that a significant amount of time is required to
determine whether or not a contractor's export license allows for
foreign auditors to perform required quality assurance functions in
lieu of DCMA. Currently, DCMA is not able to review the export
authorization unless their personnel travel to the contractor's
worksite. If DCMA is able to receive and review an export authorization
from the contractor to determine whether or not they can delegate the
work to foreign auditors, this problem would be resolved.
II. Discussion and Analysis
The proposed rule updates DFARS clause 252.225-7048, Export-
Controlled Items, by adding to the clause at paragraph (e) a
requirement for certain contractors to provide relevant export
authorizations to the cognizant DCMA administrative contracting officer
along with contact information for the empowered official or the export
point of contact. A contractor will be required to submit this
information if their contract requires--
(1) Performance in or delivery to a government quality assurance
country; and
(2) Government quality assurance surveillance oversight.
The proposed rule revises the term export-controlled items and adds
the following terms to the list of definitions at 252.225-7048:
Empowered official, export license exception, export license exemption,
government quality assurance countries, other approval, and relevant
export authorization. The purpose of adding these definitions to the
clause is to clarify for contractors the requirement that is proposed
to be added at 252.225-7048(e).
III. Applicability to Contracts at or Below the Simplified Acquisition
Threshold, for Commercial Products Including Commercially Available
Off-the-Shelf Items, and for Commercial Services
The proposed rule applies to contracts at or below the simplified
acquisition threshold, for commercial products including commercially
available off-the-shelf items, and for commercial services. This
proposed rule requires relevant export authorizations and the contact
information of the export point of contact or the empowered official be
provided to DCMA for DoD contracts that require government quality
assurance surveillance oversight and have delivery to, or performance
in, government quality assurance countries. Therefore, the proposed
rule will apply to contracts at or below the simplified acquisition
threshold, for commercial products including commercially available
off-the-shelf items, and for commercial services.
IV. Expected Impact of the Proposed Rule
Currently, DCMA is required to cite Federal Acquisition Regulation
4.703(a) in order to obtain access to a contractor's export
authorization, which only requires the contractor to make the
information available to DCMA, not to submit the information directly
to DCMA. Therefore, DCMA personnel are not able to review the
information unless they travel to the contractor's international
worksite to inspect the export authorization in person.
This proposed rule would require the contractor to provide the
information to DCMA and identify a point of contact to answer
questions. Receiving the information directly will allow DCMA, without
traveling internationally, to make an informed determination regarding
whether quality assurance activities must be performed by a U.S.
contract administrator or may be delegated to a qualified foreign
inspector.
Contractors would already have the export authorization. Therefore,
the only burden associated with this proposed rule is providing a copy
to the DCMA administrative contracting officer. DoD has calculated this
burden in section VIII of this preamble.
V. 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
[[Page 17358]]
(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.
VI. Regulatory Flexibility Act
DoD does not expect this proposed rule to have a significant
economic impact on a substantial number of small entities within the
meaning of the Regulatory Flexibility Act, 5 U.S.C. 601, et seq.
However, an initial regulatory flexibility analysis has been performed
and is summarized as follows:
This proposed rule is required to enable DCMA to obtain export
authorizations from certain contractors. Currently, DCMA is not able to
review the information unless their personnel travel to the
contractor's worksite. Until DCMA determines if export control items
are present and the licenses are examined, DCMA is unable to exercise
Host Nation Agreements. Requiring the export control license will allow
DCMA to make the determination necessary to exercise Host Nation
Agreements.
The objective of this proposed rule is to require certain
contractors and subcontractors to provide, upon receipt, relevant
export authorizations (i.e., export license exemptions, export license
exceptions, export licenses, or other approvals) to the cognizant DCMA
administrative contracting officer along with contact information for
the empowered official or the export point of contact. The legal basis
for the proposed rule is 41 U.S.C. 1303.
Based on the extrapolation from the DCMA Compass database, it is
estimated that 723 small entities were awarded DoD contracts that
require government quality assurance oversight surveillance and have
delivery to, or performance in, government quality assurance countries
from May 2018 through May 2019. It is estimated that most of these
small entities have subcontracts with delivery to, or performance in,
government quality assurance countries. The government quality
assurance countries are as follows: Australia, Belgium, Canada, Czech
Republic, Denmark, Finland, France, Germany, Greece, Israel, Italy,
Republic of Korea, Netherlands, Norway, Poland, Romania, Slovakia,
Spain, Sweden, Turkey, and the United Kingdom. Any additional burden
from having to submit relevant export authorizations along with contact
information for the empowered official or the export point of contact
to DCMA will impact these small entities.
There are reporting, recordkeeping, or other compliance
requirements associated with this proposed rule. The proposed rule may
result in a reporting or recordkeeping burden requirement.
The proposed rule does not duplicate, overlap, or conflict with any
other Federal rules.
There are no known significant alternative approaches to the
proposed rule that would meet the proposed objectives.
DoD invites comments from small business concerns and other
interested parties on the expected impact of this proposed rule on
small entities.
DoD will also consider comments from small entities concerning the
existing regulations in subparts affected by this proposed rule in
accordance with 5 U.S.C. 610. Interested parties must submit such
comments separately and should cite 5 U.S.C 610 (DFARS Case 2018-D053),
in correspondence.
VII. Paperwork Reduction Act
This proposed 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). Accordingly, DoD
has submitted a request for approval of a new information collection
requirement concerning 2018-D053, Export-Controlled Items, to the
Office of Management and Budget.
A. Estimate of Public Burden
Public reporting burden for this collection of information is
estimated to average 4 hours per response for: (1) the contractor to
locate the contact information for the cognizant DCMA Office using the
DCMA locater website; (2) the contractor to provide relevant export
authorizations and contact information for the empowered official or
export point of contact to DCMA; and (3) if necessary, for the
empowered official to provide clarifications to DCMA.
The annual reporting burden is estimated as follows for all
contractors with awards that require government quality assurance
surveillance oversight and have delivery to, or production or
performance in, government quality assurance countries:
Respondents: 3,614.
Responses per Respondent: 1.
Total Annual Responses: 3,614.
Preparation Hours per Response: 4 hours.
Total Response Burden Hours: 14,456.
B. Request for Comments Regarding Paperwork Burden
Written comments and recommendations on the proposed information
collection, including suggestions for reducing this burden, should be
submitted using the Federal eRulemaking Portal at https://www.regulations.gov. Search for ``DFARS Case 2018-D053.'' Select
``Comment'' and follow the instructions to submit a comment. Please
include ``Paperwork Burden--DFARS Case 2018-D053'' on any attached
documents. Comments must be submitted by the date for submission of
public comments shown in the DATES section of this preamble.
Public comments are particularly invited on: whether this
collection of information is necessary for the proper performance of
functions of the DFARS, and will have practical utility; whether our
estimate of the public burden of this collection of information is
accurate, and based on valid assumptions and methodology; ways to
enhance the quality, utility, and clarity of the information to be
collected; and ways to minimize the burden of the collection of
information on those who are to respond, through the use of appropriate
technological collection techniques or other forms of information
technology.
To obtain a copy of the supporting statement and associated
collection instruments, please email [email protected]. Include DFARS
Case 2018-D053 in the subject line of the message.
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 proposed to be
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 PRODUCTS AND COMMERCIAL
SERVICES
0
2. Amend section 212.301 by--
0
a. Redesignating paragraphs (f)(ix)(CC) through (MM) as (f)(ix)(DD)
through (NN); and
0
b. Adding a new paragraph (f)(ix)(CC).
The addition reads as follows:
[[Page 17359]]
212.301 Solicitation provisions and contract clauses for the
acquisition of commercial products and commercial services.
* * * * *
(f) * * *
(ix) * * *
(CC) Use the clause at 252.225-7048, Export-Controlled Items, as
prescribed in 225.7901-4, to comply with section 890(a) of the National
Defense Authorization Act for Fiscal Year 2008 (Pub. L. 110-181).
* * * * *
PART 225--FOREIGN ACQUISITION
0
3. Revise section 225.7901-1 to read as follows:
225.7901-1 Definitions.
As used in this section--
Export-controlled items means--
(1) Any information or material that cannot be released to foreign
nationals or representatives of a foreign entity, without first
obtaining approval or license from the Department of State or the
Department of Commerce;
(2) Items subject to the International Traffic in Arms Regulations
(ITAR) (22 CFR parts 120 through 130) or the Export Administration
Regulations (EAR) (15 CFR parts 730 through 774); and
(3) Includes--
(i) ``Defense article'' (22 CFR 120.31), which means any item or
technical data that is specifically designed, developed, configured,
adapted, or modified for a military or other controlled use listed on
the U.S. Munitions List;
(ii) ``Defense service'' (22 CFR 120.32), which means providing
technical data, assistance, or training to a foreign person in the
design, manufacture, installation, repair, or operation of a defense
article;
(iii) ``Technical data'' (22 CFR 120.33), which means any
information for the design, development, assembly, production,
operation, repair, testing, maintenance, or modification of a defense
article; and
(iv) ``Item,'' defined in the EAR (15 CFR 772.1) as ``commodities,
software, and technology''.
225.7901-2 [Amended]
0
4. Amend section 225.7901-2 by removing ``International Traffic in Arms
Regulations'' and ``Export Administration Regulations'' and adding
``ITAR'' and ``EAR'' in their places, respectively.
0
5. Revise section 225.7901-4 to read as follows:
225.7901-4 Contract clause.
Use the clause at 252.225-7048, Export-Controlled Items, in all
solicitations and contracts, including solicitations and contracts
using FAR part 12 procedures for the acquisition of commercial products
and commercial services.
225.7902-2 [Amended]
0
6. Amend section 225.7902-2 by removing ``International Traffic in Arms
Regulation (ITAR)'' and adding ``ITAR'' in its place.
PART 252--SOLICITATION PROVISIONS AND CONTRACT CLAUSES
0
7. Amend section 252.225-7048-
0
a. In the clause heading, by removing the date ``(JUN 2013)'' and
adding ``(DATE)'' in its place;
0
b. By revising paragraph (a);
0
c. In paragraphs (d)(4) and (5), by removing ``Parts'' and adding
``parts'' in its place;
0
d. By redesignating paragraph (e) as paragraph (f);
0
e. By adding a new paragraph (e); and
0
f. By revising the newly redesignated paragraph (f).
The revisions and addition read as follows.
252.225[dash]7048 Export-Controlled Items.
* * * * *
(a) Definitions. As used in this clause--
Empowered official, as defined in the International Traffic in Arms
Regulations (ITAR) at 22 CFR 120.67, means--
(1) A U.S. person who--
(i) Is directly employed by the applicant or a subsidiary in a
position having authority for policy or management within the applicant
organization;
(ii) Is legally empowered in writing by the applicant to sign
license applications or other requests for approval on behalf of the
applicant;
(iii) Understands the provisions and requirements of the various
export control statutes and regulations, and the criminal liability,
civil liability, and administrative penalties for violating the Arms
Export Control Act and the ITAR; and
(iv) Has the independent authority to--
(A) Inquire into any aspect of a proposed export, temporary import,
or brokering activity by the applicant;
(B) Verify the legality of the transaction and the accuracy of the
information to be submitted; and
(C) Refuse to sign any license application or other request for
approval without prejudice or other adverse recourse.
(2) For the purposes of a broker who is a foreign person, the
empowered official may be a foreign person who otherwise meets the
criteria for an empowered official in paragraph (1) of this definition.
Export-controlled items means--
(1) Any information or material that cannot be released to foreign
nationals or representatives of a foreign entity, without first
obtaining approval or license from the Department of State or the
Department of Commerce;
(2) Items subject to the ITAR (22 CFR parts 120 through 130) or the
Export Administration Regulations (EAR) (15 CFR parts 730 through 774);
and
(3) Includes--
(i) ``Defense article'' (22 CFR 120.31), which means any item or
technical data that is specifically designed, developed, configured,
adapted, or modified for a military or other controlled use listed on
the U.S. Munitions List;
(ii) ``Defense service'' (22 CFR 120.32), which means providing
technical data, assistance, or training to a foreign person in the
design, manufacture, installation, repair, or operation of a defense
article;
(iii) ``Technical data'' (22 CFR 120.33), which means any
information for the design, development, assembly, production,
operation, repair, testing, maintenance, or modification of a defense
article; and
(iv) ``Item,'' defined in the EAR (15 CFR 772.1) as ``commodities,
software, and technology''.
Export license exception means a special authorization that allows
export or re-export, under stated conditions, of items that are subject
to the EAR that would otherwise require an export license. Export
license exceptions are detailed in the EAR, 15 CFR 740.
Export license exemption means the authorization that exempts the
item or items from the otherwise applicable licensing requirements
under certain conditions. Export license exemptions are detailed in the
ITAR, 22 CFR parts 120 through 130.
Government quality assurance countries means countries that have
current Government Reciprocal Quality Assurance agreements with the
Department of Defense or Reciprocal Government Quality Assurance
annexes contained in a Reciprocal Defense Procurement Memorandum of
Understanding. Accordingly, the following are government quality
assurance countries: Australia, Belgium, Canada, Czech Republic,
Denmark, Finland, France, Germany, Greece, Israel, Italy, Republic of
Korea, Netherlands, Norway, Poland, Romania, Slovakia, Spain, Sweden,
Turkey, and the United Kingdom.
[[Page 17360]]
``Other approval'' as defined in the ITAR at 22 CFR 120.57, means a
document issued by the Deputy Assistant Secretary of State for Defense
Trade Controls, or authorized designee, that approves an activity
regulated by the ITAR (e.g., approvals for brokering activities or
retransfer authorizations), or the use of an exemption to the license
requirements as described in the ITAR.
Relevant export authorization means an export license exemption,
export license exception, export license, or other approval.
* * * * *
(e)(1) If the contract requires government quality assurance
surveillance oversight and has delivery to, or production or
performance in, government quality assurance countries, the Contractor
shall, upon receipt of relevant export authorizations, provide to the
Defense Contract Management Agency (DCMA) Administrative Contracting
Officer--
(i) A copy of the relevant export authorizations; and
(ii) Contact information for the empowered official or the export
point of contact.
(2) The DCMA administrative contracting officer locater can be
found at https://pubmini.dcma.mil/CMT_View/CMT_View_Search.cfm.
(f) Subcontracts. The Contractor shall include the substance of
this clause, including this paragraph (f), in all subcontracts.
* * * * *
[FR Doc. 2023-05676 Filed 3-21-23; 8:45 am]
BILLING CODE 50010-06-P
