[Federal Register Volume 63, Number 23 (Wednesday, February 4, 1998)]
[Rules and Regulations]
[Pages 5744-5746]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 98-2649]
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DEPARTMENT OF DEFENSE
48 CFR Parts 225 and 252
[DFARS Case 97-D321]
Defense Federal Acquisition Regulation Supplement; Waiver of
Domestic Source Restrictions
AGENCY: Department of Defense (DoD).
ACTION: Interim rule with request for comments.
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SUMMARY: The Director of Defense Procurement has issued an interim rule
amending the Defense Federal Acquisition Regulation Supplement (DFARS)
to implement Section 811 of the National Defense Authorization Act for
Fiscal Year 1998. Section 811 limits the authority for waiver of the
domestic source restrictions of 10 U.S.C. 2534(a).
DATES: Effective date: February 4, 1998.
Comment date: Comments on the interim rule should be submitted in
writing to the address shown below on or before April 6, 1998, to be
considered in the formulation of the final rule.
ADDRESSES: Interested parties should submit written comments to:
Defense Acquisition Regulations Council, Attn: Ms. Amy Williams, PDUSD
(A&T)DP(DAR), IMD 3D139, 3062 Defense Pentagon, Washington, DC 20301-
3062. Telefax number: (703) 602-0350.
E-mail comments submitted over the Internet should be addressed to:
dfars@acq.osd.mil
Please cite DFARS Case 97-D321 in all correspondence related to
this issue. E-mail comments should cite DFARS Case 97-D321 in the
subject line.
FOR FURTHER INFORMATION CONTACT:
Ms. Amy Williams, (703) 602-0131.
SUPPLEMENTARY INFORMATION:
A. Background
10 U.S.C. 2534(a) contains domestic source restrictions applicable
to procurement of the following items: buses, chemical weapons
antidote, components for naval vessels (including air circuit breakers,
anchor and mooring chain, and totally enclosed lifeboats), and ball and
roller bearings. Section 810 of the National Defense Authorization Act
for Fiscal Year 1997 (Public Law 104-201) added authority at 10 U.S.C.
2534(d) to permit DoD to waive the restrictions of 10 U.S.C. 2534(a),
if application of the restrictions would impede the reciprocal
procurement of defense items under a memorandum of understanding with a
foreign country. On April 7, 1997, the Under Secretary of Defense
(Acquisition and Technology) exercised this authority by waiving the
restrictions of 10 U.S.C. 2534(a) for items procured from qualifying
countries, i.e., the countries listed in DFARS 225.872-1. The
provisions of the waiver were incorporated in an interim DFARS rule
published in the Federal Register on June 24, 1997 (62 FR 34114) (DAC
91-12, Item XVIII, DFARS Case 96-319).
Section 811 of the National Defense Authorization Act for Fiscal
Year 1998 (Public Law 105-85) amended 10 U.S.C. 2534 to provide that
DoD may exercise the waiver authority of 10 U.S.C. 2534(d) only if the
waiver is made for a particular item and for a particular foreign
country. Therefore, the blanket waiver signed by the Under Secretary of
Defense (Acquisition and Technology) on April 1, 1997, is no longer
applicable. This interim rule amends DFARS Parts 225 and 252 to
implement Section 811 of Public Law 105-85. DFARS Case 96-D319 has been
closed into this new DFARS Case 97-D321.
B. Regulatory Flexibility Act
This interim rule is not expected 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., because there
are no known small business manufacturers of buses, air circuit
breakers, or the restricted chemical weapons antidote; the acquisition
of anchor and mooring chain, totally enclosed lifeboat survival
systems, and noncommercial ball and roller bearings is presently
restricted to domestic sources by defense appropriations acts; and the
restrictions of 10 U.S.C. 2534(a) do not apply to purchases of
commercial items incorporating ball or roller bearings. An initial
regulatory flexibility analysis has therefore not been prepared.
Comments are invited from small businesses and other interested
parties. Comments from small entities concerning the affected DFARS
subparts also will be considered in accordance with 5 U.S.C. 610. Such
comments should be submitted separately and should cite DFARS Case 97-
D321 in correspondence.
C. Paperwork Reduction Act
The Paperwork Reduction Act does not apply, because this interim
rule does not impose any information
[[Page 5745]]
collection requirements that require the approval of the Office of
Management and Budget under 44 U.S.C. 3501, et seq.
D. 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 publish this
interim rule prior to affording the public an opportunity to comment.
This interim rule implements Section 811 of the National Defense
Authorization Act for Fiscal Year 1998 (Public Law 105-85). Section 811
limits the waiver authority provided in 10 U.S.C. 2534(d). Therefore,
the waiver of the restrictions of 10 U.S.C. 2534(a), that was signed by
the Under Secretary of Defense (Acquisition and Technology) on April 7,
1997, under the prior authority of 10 U.S.C. 2534(d), is no longer
applicable. Section 811 was effective upon enactment on November 18,
1997. Comments received in response to the publication of this interim
rule will be considered in formulating the final rule.
List of Subjects in 48 CFR Parts 225 and 252
Government procurement.
Michele P. Peterson,
Executive Editor, Defense Acquisition Regulations Council.
Therefore, 48 CFR Parts 225 and 252 are amended as follows:
1. The authority citation for 48 CFR Parts 225 and 525 continues to
read as follows:
Authority: 41 U.S.C. 421 and 48 CFR Chapter 1.
PART 225--FOREIGN ACQUISITION
225.872-1 [Amended]
2. Section 225.872-1 is amended by removing paragraph (d).
3. Section 225.7005 is revised to read as follows:
225.7005 Waiver of certain restrictions.
Where provided for elsewhere in this subpart, the restrictions on
certain foreign purchases under 10 U.S.C. 2534(a) may be waived as
follows:
(a)(1) The Under Secretary of Defense (Acquisition and Technology),
without power of delegation, may waive the restriction for a particular
item for a particular foreign country upon determination that--
(i) United States producers of the item would not be jeopardized by
competition from a foreign country, and that country does not
discriminate against defense items produced in the United States to a
greater degree than the United States discriminates against defense
items produced in that country; or
(ii) Application of the restriction would impede cooperative
programs entered into between DoD and a foreign country, or would
impede the reciprocal procurement of defense items under a memorandum
of understanding providing for reciprocal procurement of defense items
under 225.872, and that country does not discriminate against defense
items produced in the United States to a greater degree than the United
States discriminates against defense items produced in that country.
(2) A notice of determination to exercise the waiver authority must
be published in the Federal Register and submitted to the congressional
defense committees at least 15 days before the effective date of the
waiver.
(3) Such waiver shall be in effect for a period not greater than 1
year.
(b) The head of the contracting activity may waive the restriction
on a case-by-case basis upon execution of a determination and findings
that any of the following applies:
(1) The restriction would cause unreasonable delays.
(2) Satisfactory quality items manufactured in the United States or
Canada are not available.
(3) Application of the restriction would result in the existence of
only one source for the item in the United States or Canada.
(4) Application of the restriction is not in the national security
interests of the United States.
(5) Application of the restriction would adversely affect a U.S.
company.
(c) The restriction is waived when it would cause unreasonable
costs. The cost of the item of U.S. or Canadian origin is unreasonable
if it exceeds 150 percent of the offered price, inclusive of duty, of
items which are not of U.S. or Canadian origin.
4. Section 225.7007-1 is revised to read as follows:
225.7007-1 Restriction.
In accordance with 10 U.S.C. 2534, do not acquire a multipassenger
motor vehicle (bus) unless it is manufactured in the United States or
Canada.
5. Section 225.7007-3 is revised to read as follows:
225.7007-3 Exceptions.
This restriction does not apply in any of the following
circumstances:
(a) Buses manufactured outside the United States and Canada are
needed for temporary use because buses manufactured in the United
States or Canada are not available to satisfy requirements that cannot
be postponed. Such use may not, however, exceed the lead time required
for acquisition and delivery of buses manufactured in the United States
or Canada.
(b) The requirement for buses is temporary in nature. For example,
to meet a special, nonrecurring requirement or a sporadic and
infrequent recurring requirement, buses manufactured outside the United
States and Canada may be used for temporary periods of time. Such use
may not, however, exceed the period of time needed to meet the special
requirement.
(c) Buses manufactured outside the United States and Canada are
available at no cost to the U.S. Government.
(d) The acquisition is for an amount that does not exceed the
simplified acquisition threshold.
6. Section 225.7007-4 is revised to read as follows:
225.7007-4 Waiver.
The waiver criteria at 225.7005 apply to this restriction.
7. Section 225.7010-1 is amended by revising the introductory text
to read as follows:
225.7010-1 Restriction.
In accordance with 10 U.S.C. 2534 and defense industrial
mobilization requirements (see subpart 208.72), do not acquire chemical
weapons antidote contained in automatic injectors, or the components
for such injectors, unless the chemical weapons antidote or component
is manufactured in the United States or Canada by a company that--
* * * * *
8. Section 225.7010-2 is revised to read as follows:
225.7010-2 Exception.
The restriction of 225.7010-1 does not apply if--the acquisition is
for an amount that does not exceed the simplified acquisition
threshold.
9. Section 227.7010-3 is revised to read as follows:
225.7010-3 Waiver.
The waiver criteria at 225.7005 apply to this restriction.
10. Section 225.7016-1 is revised to read as follows:
225.7016-1 Restriction.
In accordance with 10 U.S.C. 2534, do not acquire air circuit
breakers for naval vessels unless they are manufactured in the United
States or Canada.
11. Section 225.7016-2 is amended in paragraph (b) by revising the
first sentence to read as follows:
[[Page 5746]]
225.7016-2 Exceptions.
* * * * *
(b) Spare or repair parts are needed to support air circuit
breakers manufactured outside the United States and Canada.* * *
12. Section 225.7016-3 is revised to read as follows:
225.7016-3 Waiver.
The waiver criteria at 225.7005 apply to this restriction.
13. Section 225.7019-1 is amended by revising paragraph (a) to read
as follows:
225.7019-1 Restrictions.
(a) In accordance with 10 U.S.C. 2534, through fiscal year 2000, do
not acquire ball and roller bearings or bearing components that are not
manufactured in the United States or Canada.
* * * * *
14. Section 225.7019-3 is amended by removing paragraphs
(a)(1)(iii) and (iv); redesignating paragraphs (a)(1)(v), (vi), and
(vii) as paragraphs (a)(1)(iii), (iv), and (v), respectively;
redesignating paragraph (b) as paragraph (c), and adding a new
paragraph (b) to read as follows:
225.7019-3 Waiver.
* * * * *
(b)(1) The Under Secretary of Defense (Acquisition and Technology),
without power of delegation, may waive the restriction in 225.7019-1(a)
for a particular foreign country upon determination that--
(i) United States producers of the item would not be jeopardized by
competition from a foreign country, and that country does not
discriminate against defense items produced in the United States to a
greater degree than the United States discriminates against defense
items produced in that country; or
(ii) Application of the restriction would impede cooperative
programs entered into between DoD and a foreign country, or would
impede the reciprocal procurement of defense items under a memorandum
of understanding providing for reciprocal procurement of defense items
under 225.872, and that country does not discriminate against defense
items produced in the United States to a greater degree than the United
States discriminates against defense items produced in that country.
(2) A notice of the determination to exercise the waiver authority
must be published in the Federal Register and submitted to the
congressional defense committees at least 15 days before the effective
date of the waiver.
(3) Such waiver shall be in effect for a period not greater than 1
year.
* * * * *
15. Section 225.7022-1 is amended in paragraph (b) by revising the
first sentence to read as follows:
225.7022-1 Restrictions.
* * * * *
(b) In accordance with 10 U.S.C. 2534(a)(3)(B), do not purchase a
totally enclosed lifeboat that is a component of a naval vessel, unless
it is manufactured in the United States or Canada. * * *
16. Section 225.7022-2 is amended by revising paragraph (b) to read
as follows:
225.7022-2 Exceptions.
* * * * *
(b) Spare or repair parts are needed to support totally enclosed
lifeboats manufactured outside the United States and Canada.
17. Section 225.7022-3 is revised to read as follows:
225.7022-3 Waiver.
The waiver criteria at 225.7005 apply only to the restriction of
225.7022-1(b).
PART 252--SOLICITATION PROVISIONS AND CONTRACT CLAUSES
18. Section 252.225-7016 is amended by revising the clause date and
paragraph (c)(1) to read as follows:
252.225-7016 Restriction on Acquisition of Ball and Roller Bearings.
* * * * *
RESTRICTION ON ACQUISITION OF BALL AND ROLLER BEARINGS (FEB 1998)
* * * * *
(c)(1) The restriction in paragraph (b) of this clause does not
apply to the extent that the end items or components containing ball
or roller bearings are commercial items.
* * * * *
19. Section 252.225-7029 is revised to read as follows:
252.225-7029 Preference for United States or Canadian Air Circuit
Breakers.
As prescribed in 225.7016-4, use the following clause:
PREFERENCE FOR UNITED STATES OR CANADIAN AIR CIRCUIT BREAKERS (FEB
1998)
(a) Unless otherwise specified in its offer, the Contractor
agrees that air circuit breakers for naval vessels provided under
this contract shall be manufactured in the United States or Canada.
(b) Unless an exception applies or a waiver is granted under
225.7005 (a) or (b) of the Defense Federal Acquisition Regulation
Supplement, preference will be given to air circuit breakers
manufactured in the United States or Canada by adding 50 percent for
evaluation purposes to the offered price of all other air circuit
breakers.
[End of clause]
[FR Doc. 98-2649 Filed 2-3-98; 8:45 am]
BILLING CODE 5000-04-M
