E6-15447. Defense Priorities and Allocations System (DPAS): Assistance Programs With Canada and Other Nations

AGENCY:

Bureau of Industry and Security, U.S. Department of Commerce.

ACTION:

Final rule.

SUMMARY:

The Bureau of Industry and Security (BIS) is amending the Defense Priorities and Allocations System (DPAS) Regulation (15 CFR part 700) to provide additional guidance on how persons in Canada and other foreign nations may apply for priority rating authority and special priorities assistance to obtain items in the United States, and to provide information on how persons in the United States may obtain informal assistance in Italy, the Netherlands, Sweden, and the United Kingdom to obtain items in support of approved programs. These amendments do not alter the substance or effect of the DPAS regulation.

DATES:

This rule is effective September 20, 2006.

FOR FURTHER INFORMATION CONTACT:

Liam McMenamin, Office of Strategic Industries and Economic Security, Bureau of Industry and Security, U.S. Department of Commerce, Telephone: [phone].

SUPPLEMENTARY INFORMATION:

Background

Under Title I of the Defense Production Act (DPA) of 1950, as amended, (50 U.S.C. App. 2061, et seq.), the President is authorized to require preferential acceptance and performance of contracts or orders supporting certain approved national defense and energy programs, and to allocate materials, services, and facilities in such a manner as to promote these approved programs. Additional priorities authority is found in section 18 of the Selective Service Act of 1948 (50 U.S.C. App. 468), 10 U.S.C. 2538, and 50 U.S.C. 82. The President delegated the priorities and allocations authorities of the DPA in Executive Order 12919 (June 3, 1994; amended by Executive Order 13286, February 28, 2003). As part of that delegation, the President designated the Secretary of Commerce to administer the Defense Priorities and Allocations System. DPAS authority has also been extended to support emergency preparedness activities under Title VI of the Robert T. Stafford Disaster Relief and Emergency Assistance Act, as amended (42 U.S.C. 5195, et seq.). The DPAS regulation is found at 15 CFR part 700.

Amendments to the DPAS Regulation

The Defense Production Act's definition of “national defense” includes “military assistance to any foreign nation.” Section 700.55 of the DPAS regulation currently provides guidance on how persons in Canada and in other foreign nations can apply for authority to place priority rated orders and special priorities assistance to obtain items in the United States. Persons in the United States receiving a priority rated order must give the rated order preference over all unrated orders as necessary to meet required delivery dates. Special priorities assistance is provided by the Department of Commerce and the DPAS Delegate Agencies as appropriate to expedite deliveries, resolve delivery conflicts, place rated orders, locate suppliers, or to verify information provided by customers and vendors. Special priorities assistance may also be used to request authority to place rated orders.

The Department of Commerce and the Government of Canada have provided mutual assistance to the defense industries located in both countries since 1950. The Department of Commerce has determined that it would be useful to provide additional guidance on how persons in Canada producing items to support U.S. and Canadian approved programs may request priority rating authority and special priorities assistance to obtain items in the United States through the Canadian Public Works and Government Services Canada. This rule provides additional point of contact information in section 700.55(b) for Public Works and Government Services Canada, including branch and directorate names, mailing address, telephone, and fax numbers. These changes do not alter the substance or effect of the DPAS regulation.

The DPAS regulation provides that persons in foreign nations other than Canada may apply to the Department of Defense for priority rating authority and special priorities assistance to obtain items in the United States. Requests endorsed by the Department of Defense are forwarded to the Department of Commerce for appropriate action. The Department of Commerce has determined that it would be useful to provide additional guidance on how persons in foreign nations other than Canada may request priority rating authority and special priorities assistance through the Department of Defense. This rule provides additional point of contact information in section 700.55(c) for the Department of Defense, including office name, mailing address, telephone, and fax numbers. This rule also clarifies that if the end product is being acquired by a foreign nation, the request must be sponsored prior to its submission to the Department of Defense by the government of the foreign nation that will use the end product. This rule clarifies that if the end product is being acquired by a U.S. government agency, the request should be submitted to the Department of Defense through the U.S. contract administration representative. These changes do not alter the substance or effect of the DPAS regulation.

The Department of Defense has entered into bilateral security of supply arrangements with Italy, the Netherlands, Sweden, and the United Kingdom that allow the Department of Defense to request the priority delivery for Department of Defense contracts, subcontracts, and orders from companies in these countries. The Department of Commerce has determined that it would be useful to provide information on the bilateral security of supply arrangements in sections 700.55(a) and in a new section 700.55(d), and to provide guidance on how persons in the United States may request assistance through the Department of Defense in obtaining items from Italy, the Netherlands, Sweden, and the United Kingdom to support approved programs. Although these supply arrangements are new enterprises within the Department of Defense, the creation of these arrangements does not impact the existing authorities of the DPAS regulation. The new paragraph (d) in section 700.55 is only intended to provide persons in the U.S. with information on how to contact the Department of Defense to facilitate requests for priorities assistance in these countries. Persons in Italy, The Netherlands, Sweden, and the United Kingdom would continue to request assistance in accordance with section 700.55(c). These changes do not alter the existing authorities or requirements of the DPAS regulation.

Rulemaking Requirements

1. This rule has been determined to be not significant for purposes of Executive Order 12866.

2. Notwithstanding any other provision of law, no person is required to respond to, nor shall any person be subject to a penalty for failure to comply with a collection of information, subject to the requirements of the Paperwork Reduction Act of 1995 (44 U.S.C. 3501, et seq.) unless the collection of information displays a currently valid Office of Management and Budget control number. This rule does not involve any collections of information that are subject to the Paperwork Reduction Act.

3. This rule does not contain policies with federalism implications as this term is defined in Executive Order 13132.

4. The Department finds that there is good cause under 5 U.S.C. 553(b)(B) to waive the provisions of the Administrative Procedure Act (APA) requiring prior notice and the opportunity for public comment. Because these revisions consist of minor technical changes which involve no exercise of agency discretion, it is unnecessary to provide notice and opportunity for public comment. In addition, the 30-day delay in effectiveness required by 5 U.S.C. 553(d) is not applicable because this rule is not a substantive rule. It is purely administrative in nature and does not affect the existing rights of the public. No other law requires that a notice of proposed rulemaking and an opportunity for public comment be given for this rule.

The analytical requirements of the Regulatory Flexibility Act (5 U.S.C. 601, et seq.) are not applicable because notice of proposed rulemaking and opportunity for public comment are not required to be given for this rule under the Administrative Procedure Act or by any other law.

List of Subjects in 15 CFR Part 700

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

For the reasons discussed in the preamble, the Department of Commerce amends 15 CFR part 700 as follows:

PART 700—DEFENSE PRIORITIES AND ALLOCATIONS SYSTEM

1. The authority citation for part 700 continues to read as follows:

Authority: Titles I and VII of the Defense Production Act of 1950, as amended (50 U.S.C. App. 2061, et seq.), Title VI of the Robert T. Stafford Disaster Relief and Emergency Assistance Act (42 U.S.C. 5195, et seq.), Executive Order 12919, 59 FR 29525, 3 CFR, 1994 Comp. 901, and Executive Order 13286, 68 FR 10619, 3 CFR, 2003 Comp. 166; section 18 of the Selective Service Act of 1948 (50 U.S.C. App. 468), 10 U.S.C. 2538, 50 U.S.C. 82, and Executive Order 12742, 56 FR 1079, 3 CFR, 1991 Comp. 309; and Executive Order 12656, 53 FR 226, 3 CFR, 1988 Comp. 585.

2. In § 700.55, revise the second sentence in paragraph (a), revise paragraphs (b)(3), (4) and (5) and (c)(1), and add paragraph (d) to read as follows:

§ 700.55

Assistance Programs with Canada and other nations.

(a) * * * Although priority ratings have no legal authority outside of the United States, this section also provides information on how persons in the United States may obtain informal assistance in Canada, Italy, The Netherlands, Sweden, and the United Kingdom in support of approved programs.

(b) * * *

(3) Any person in the United States ordering defense items in Canada in support of an approved program should inform the Canadian supplier that the items being ordered are to be used to fill a rated order. The Canadian supplier should be informed that if production materials are needed from the United States by the supplier or the supplier's vendor to fill the order, the supplier or vendor should contact the Canadian Public Works and Government Services Canada, for authority to place rated orders in the United States: Public Works and Government Services Canada, Acquisitions Branch, Business Management Directorate, Phase 3, Place du Portage, Level 0A1, 11 Laurier Street, Gatineau, Quebec, K1A 0S5, Canada; telephone: [phone]; Fax: [phone].

(4) Any person in Canada producing defense items for the Canadian government may also obtain priority rating authority for items to be purchased in the United States by applying to the Canadian Public Works and Government Services Canada, Acquisitions Branch, Business Management Directorate, in accordance with its procedures.

(5) Persons in Canada needing special priorities assistance in obtaining defense items in the United States may apply to the Canadian Public Works and Government Services Canada, Acquisitions Branch, Business Management Directorate, for such assistance. Public Works and Government Services Canada will forward appropriate requests to the U.S. Department of Commerce.

* * * * *

(c) Foreign nations.

(1) Any person in a foreign nation other than Canada requiring assistance in obtaining defense items in the United States or priority rating authority for defense items to be purchased in the United States, should submit a request for such assistance or rating authority to the Office of the Deputy Under Secretary of Defense (Industrial Policy): Office of the Deputy Under Secretary of Defense (Industrial Policy), 3330 Defense Pentagon, Washington, DC 20301; telephone: [phone]; Fax: [phone].

(i) If the end product is being acquired by a U.S. government agency, the request should be submitted to the Office of the Deputy Under Secretary of Defense (Industrial Policy) through the U.S. contract administration representative.

(ii) If the end product is being acquired by a foreign nation, the request must be sponsored prior to its submission to the Office of the Deputy Under Secretary of Defense (Industrial Policy) by the government of the foreign nation that will use the end product.

* * * * *

(d) Requesting assistance in Italy, The Netherlands, Sweden, and the United Kingdom.

(1) The U.S. Department of Defense has entered into bilateral security of supply arrangements with Italy, The Netherlands, Sweden, and the United Kingdom that allow the U.S. Department of Defense to request the priority delivery for U.S. Department of Defense contracts, subcontracts, and orders from companies in these countries.

(2) Any person in the United States requiring assistance in obtaining the priority delivery of a contract, subcontract, or order in Italy, The Netherlands, Sweden, or the United Kingdom to support an approved program should contact the Office of the Deputy Under Secretary of Defense (Industrial Policy) for assistance. Persons in Italy, The Netherlands, Sweden, and the United Kingdom should request assistance in accordance with § 700.55(c)(1).

Dated: September 8, 2006.

Matthew S. Borman,

Deputy Assistant Secretary for Export Administration.