Public Comments 2004-D010-B.Israel

VIA EMAIL: dfars@osd.mil September 19, 2008 Defense Acquisition Regulation Systems Attn: Ms. Felisha Hitt OUSD (AT&L) DPAP (DARS), IMD 3D139 3062 Defense Pentagon Washington, D.C. 20301-3062 Re: DFARS Case 2004—D010 Dear Ms. Hitt, I am pleased, on behalf of Arizona State University (ASU), to respond to the July 21, 2008 Federal Register Notice soliciting comments on the interim Defense Federal Acquisition Regulation Supplement (DFARS) rule addressing requirements for complying with export control laws and regulations when performing DOD contracts (RIN 0750-AF13). In this regard, ASU fully supports the comments offered by the Council on Governmental Relations (COGR) and the Association of American Universities (AAU) concerning the interim rule. ASU applauds DOD for its June 26, 2008 memorandum (Memorandum) issued by the Undersecretary of Defense for Acquisition, Technology and Logistics on "Contracted Fundamental Research." However, ASU believes that the interim rule should explicitly reference the Memorandum and incorporate the guidance provided to DOD officials when contracting with universities for fundamental research. The Memorandum, which reaffirms National Security Decision Directive (NSDD)-189, provides a clear directive with respect to the acceptability of restrictions on fundamental research. If it is not possible to reference the Memorandum in the interim rule, the policy statement in the interim rule should directly incorporate the Memorandum’s guidance. Without specifically referencing the Memorandum’s guidance or directly incorporating its language, we agree with the COGR/AAU position that the clauses in the interim rule are ambiguous and subject to misinterpretation inconsistent with the Memorandum’s guidance. This ambiguity is particularly evident in the applied research commentary set forth in the Federal Register Supplementary Information at Section A.2.b.(1). ASU is concerned that the commentary’s ambiguity will result in DOD contracting officers’ use of clause 252.204—7008 in discovery-focused applied research situations in a manner contrary to the clear intent of the Memorandum. We agree that some DOD-sponsored research that has the objective of developing advanced technologies for specific applications may be subject to export controls. However, the commentary discusses a transition point where fundamental research may evolve into more advanced applied research “specific enough” to involve export- controlled information or technology. This statement puzzles us because the Memorandum states that fundamental research conducted in universities should be managed in such a manner so as to prevent this transition, with exceptions requiring careful scrutiny and high level supervisory concurrence. The Memorandum also indicates that research funded by DOD Research, Development, Test and Evaluation Budget Activity 2 (Applied Research) and performed on a university campus is to be considered fundamental except “in those rare and exceptional circumstances where the 6.2-funded effort presents a high likelihood of disclosing performance characteristics of military systems or manufacturing technologies that are unique and critical to defense, and where agreement on restrictions have been recorded in the contract or grant.” These exceptional circumstances should be incorporated in the interim rule. Further, DOD must recognize that the context of the research being conducted in an open university setting free of controls and restrictions is the most important factor in characterizing it as fundamental, not the source of funding. Interim Clause 252.204-7009 provides for the termination of the contract by the Government for its convenience if, during the course of performance, the contractor becomes aware that it will generate or need access to export-controlled items. Where the Government exercises its unilateral right to modify a contract to include export control requirements, a contractor that is unable to accept an export controlled project and that accepted the agreement under the assumption that no export-controlled items would be involved should also have the right to terminate for convenience. The interim rule should also provide a termination for convenience provision for the contractor. We suggest, as a model, the Federal Acquisition Regulations (FAR) clause for contracts that require access to confidential, secret, or top secret information (FAR 52.204-2, Alternate I; see http://www.arnet.gov/far/current/html/52_200_206.html#wp1137568 <http://www.arnet.gov/far/current/html/52_200_206.html#wp1137568> ). This clause applies to research and development contracts with educational institutions and provides for termination for convenience by contractors under analogous circumstances - where a change in security requirements results in the inability of the contractor to continue performance. This should be added to Interim Clause 252.204-7009. In conclusion ASU would like to thank you for giving us the opportunity to comment on this important interim rule. We believe this dialogue is important and, ultimately, benefits us all. Again, we wish to state our support for the points raised in the COGR/AAU letter of September 19, 2008. Sincerely, Beth H. Israel ----- Beth H. Israel Assoc. Vice President Research Administration Office of the Vice President for Research & Economic Affairs Arizona State University P.O. Box 877205 Tempe, AZ 85287-7205 (t) 480-965-8751; (f) 480-965-8293