[Federal Register: May 22, 1998 (Volume 63, Number 99)][Rules and Regulations]

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: Final rule.

SUMMARY: The Director of Defense Procurement has adopted as final, with changes, an interim rule that was published in the Federal Register on February 4, 1998. The rule amends 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).

EFFECTIVE DATE: May 22, 1998.

FOR FURTHER INFORMATION CONTACT:

Ms. Amy Williams, (703) 602-0131.

SUPPLEMENTARY INFORMATION:

A. Background

An interim rule with request for comments was published at 63 FR 5744 on February 4, 1998. The rule amended DFARS Parts 225 and 252 to implement Section 811 of the National Defense Authorization Act for Fiscal Year 1998 (Pub. L. 105-85). Section 811 provides that DoD may exercise the authority of 10 U.S.C. 2534(d), to waive the domestic source restrictions of 10 U.S.C. 2534(a), only if the waiver is made for a particular item and for a particular foreign country. 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. One source submitted comments in response to the interim rule. The comments were considered in the formation of the final rule. The final rule adds guidance to clarify that, for contracts entered into prior to the effective date of a waiver, provided adequate consideration is received to modify the contract, such waiver shall be applied as directed or authorized in the waiver to (1) subcontracts entered into on or after the effective date of the waiver; and (2) options for the procurement of items that are exercised after the effective date of the waiver, if the option prices are adjusted for any reason other than the application of the waiver.

B. Regulatory Flexibility Act

DoD certifies that this final rule will not 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.

C. Paperwork Reduction Act

The Paperwork Reduction Act does not apply, because this final rule does not impose any information collection requirements that require the approval of the Office of Management and Budget under 44 U.S.C 3501, et seq.

List of Subjects in 48 CFR Parts 225 and 252

Government procurement.

Michele P. Peterson,

Executive Editor, Defense Acquisition Regulations Council.

Interim Rule Adopted as Final With Changes

Accordingly, the interim rule amending 48 CFR Parts 225 and 252, which was published at 63 FR 5744 on February 4, 1998, is adopted as final with the following changes:

1. The authority citation for 48 CFR Parts 225 and 252 continues to read as follows:

Authority: 41 U.S.C. 421 and 48 CFR Chapter 1.

PART 225--FOREIGN ACQUISITION

2. Section 225.7005 is amended by adding paragraph (a)(4) to read as follows:

225.7005 Waiver of certain restrictions.

* * * * *

(a) * * *

(4) For contracts entered into prior to the effective date of a waiver, provided adequate consideration is received to modify the contract, such waiver shall be applied as directed or authorized in the waiver to--

(i) Subcontracts entered into on or after the effective date of the waiver; and

(ii) Options for the procurement of items that are exercised after the effective date of the waiver, if the option prices are adjusted for any reason other than the application of the waiver.

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3. Section 225.7019-3 is amended by adding paragraph (b)(4) to read as follows:

225.7019-3 Waiver.

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(b) * * *

(4) For contracts entered into prior to the effective date of a waiver, provided adequate consideration is received to modify the contract, such waiver shall be applied as directed or authorized in the waiver to--

(1) Subcontracts entered into on or after the effective date of the waiver; and

(ii) Options for the procurement of items that are exercised after the effective date of the waiver, if the option prices are adjusted for any reason other than the application of the waiver.

* * * * *