OFFICE OF THE UNDER SECRETARY OF DEFENSE

3000 DEFENSE PENTAGON

WASHINGTON DC 20301-3000

August 17, 1998

ACQUISITION ANDTECHNOLOGY

In reply refer to

DFARS Case: 98-DO16

D.L. 98-019

MEMORANDUM FOR DIRECTORS OF DEFENSE AGENCIES DEPUTY FOR ACQUISITION AND BUSINESS MANAGEMENT,ASN (RD&A) /ABM DEPUTY ASSISTANT SECRETARY OF THE AIR FORCE (CONTRACTING) SAF/AQC

SUBJECT: Waiver of 10 U.S.C. 2534 - United Kingdom

The attached interini DFARS rule is effective immediately.

[Federal Register: August 17, 1998 (Volume 63, Number 158)] [Rules and Regulations]

From the Federal Register Online via GPO Access [wais.access.gpo.gov]

DEPARTMENT OF DEFENSE

48 CFR Parts 225 and 252

[DFARS Case 98-D016]

Defense Federal Acquisition Regulation Supplement; Waiver of 10 U.S.C. 2534--United Kingdom

AGENCY: Department of Defense (DoD).

ACTION: Interim rule with request for comments.

SUMMARY: The Director of Defense Procurement has issued an interim rule amending the Defense Federal Acquisition Regulation Supplement (DFARS) to implement a waiver of domestic source restrictions for certain defense items produced in the United Kingdom. The waiver was executed by the Under Secretary of Defense (Acquisition and Technology) and became effective on August 4, 1998.

DATES: Effective date: August 17, 1998.

Comment date: Comments on the interim rule should be submitted in writing to the address shown below on or before October 16, 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 (703) 602-0350.

E-mail comments submitted over the Internet should be addressed to: dfars@acq.osd.mil

Please cite DFARS Case 98-D016 in all correspondence related to this issue. E-mail comments should cite DFARS Case 98-D016 in the subject line.

FOR FURTHER INFORMATION CONTACT:

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

SUPPLEMENTARY INFORMATION:

A. Background

This interim rule amends DFARS Subpart 225.70 and the clauses at DFARS 252.225-7016 and 252.225-7029 to implement a waiver of the domestic source restrictions of 10 U.S.C. 2534(a) for certain defense items produced in the United Kingdom. A notice of the waiver was published in the Federal Register on July 20, 1998 (63 FR 38815). This rule amends DFARS guidance pertaining to the acquisition of air circuit breakers for naval vessels, ball and roller bearings, and totally enclosed lifeboats. Anchor and mooring chain, which is covered by the waiver, is not addressed in this rule, as the more stringent defense appropriations act restrictions on the acquisition of anchor and mooring chain presently take precedence over the restrictions of 10 U.S.C. 2534. The other items listed in the July 20, 1998, notice of waiver are not covered in the DFARS and, therefore, are not addressed in this rule.

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 the restricted air circuit breakers; defense appropriations acts presently impose domestic source restrictions on the acquisition of totally enclosed lifeboats and noncommercial ball and roller bearings;and the restrictions of 10 U.S.C. 2534(a) do not apply to acquisitions of commercial items incorporating ball or roller bearings. An initial regulatory flexibility analysis has, therefore, not been performed. Comments are invited from small businesses and other interested parties. Comments from small entities concerning the affected DFARS subpart also will be considered in accordance with 5 U.S.C. 610. Such comments should be submitted separately and should cite DFARS Case 98-D016 in correspondence.

C. Paperwork Reduction Act

The Paperwork Reduction Act does not apply because the 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.

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 a waiver of the domestic source restrictions of 10 U.S.C. 2534(a) for certain items manufactured in the United Kingdom. The Under Secretary of Defense (Acquisition and Technology) has determined that application of the limitation at 10 U.S.C. 2534(a) impedes the reciprocal procurement of defense items under DoD's memorandum of understanding with the United Kingdom. The waiver became effective on August 4, 1998. 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 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 redesignating the paragraphs as follows:

Paragraph

Redesignated as

Introductory text

(a) introductory text.

(a)(1) Introductory text

(a)(1)(i) introductory text

(a)(1)(i)

(a)(1)(i)(A).

(a)(1)(ii)

(a)(1)(i)(B)

(a)(2)

(a)(1)(ii)

(a)(3)

(a)(1)(iii)

(a)(4) introductory text

(a)(1)(iv) introductory text.

(a)(4)(i)

(a)(1)(iv)(A)

(a)(4)(ii)

(a)(1)(iv)(B)

(b) introductory text

(a)(2) introductory text

(b)(1)

(a)(2)(i)

(b)(2)

(a)(2)(ii).

(b)(3)

(a)(2)(iii).

(b)(4).

(a)(2)(iv).

(b)(5)

(a)(2)(v)

(c)

(a)(3)

In addition, section 225.7005 is amended by adding a new paragraph (b) to read as follows:

225.7005 Waiver of certain restrictions.

* * * * *

(1) Procurements under solicitations issued on or after August 4, 1998; and

(2) Subcontracts and options under contracts entered into prior to August 4, 1998, under the conditions described in paragraphs (a)(1)(iv) of this section].

3. Section 225.7007-4 is revised to read as follows:

225.7007-4 Waiver.

The waiver criteria at 225.7005[(a)] apply to this restriction.

4. Section 225.7010-3 is revised to read as follows:

225.7010-3 Waiver.

The waiver criteria at 225.7005[(a)] apply to this restriction.

5. Section 225.7016-1 is revised to read as follows:

225.7016-1 Restriction.

In accordance with 10 U.S.C. 2534 [and 225.7005(b)], do not acquire air circuit breakers for naval vessels unless they are manufactured in the United States, Canada [,or the United Kingdom].

225.7016-2 [Amended]

6. Section 225.7016-2 is amended in paragraph (b) in the first sentence by removing at the end ``and Canada''.

7. Section 225.7016-3 is revised to read as follows:

225.7016-3 Waiver.

The waiver criteria at 225.7005[(a)] apply to this restriction.

8. 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[ and 225.7019-3(b)(5)], through fiscal year 2000, do not acquire ball and roller bearings or bearing components that are not manufactured in the United States, Canada, [or the United Kingdom].

* * * * *

9. Section 225.7019-3 is amended by paragraph (b)(5) to read as follows:

225.7019-3 Waiver.

* * * * *

(b) * * *

(i) Procurements under solicitations issued on or after August 4, 1998; and

(ii) Subcontracts and options under contracts entered into prior to August 4, 1998, under the conditions described in paragraph (b)(4) of this subsection.]

* * * * *

10. 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) and 225.7005(b), do not purchase a totally enclosed lifeboat that is a component of a naval vessel, unless it is manufactured in the United States, Canada, or the United Kingdom.

* * *

225.7022-2 [Amended]

11. Section 225.7022-2 is amended in paragraph (b) by removing at the end ``and Canada''.

12. Section 225.7022-3 is revised to read as follows:

225.7022-3 Waiver.

The waiver criteria at 225.7005[(a)] apply only to the restriction of 225.7022-1(b).

PART 252--SOLICITATION PROVISIONS AND CONTRACT CLAUSES

13. Section 252.225-7016 is amended by revising the clause date and paragraph (c)(1) to read as follows:

252.225-7016 Restriction of Acquisition of Ball and Roller Bearings.

* * * * *

RESTRICTION ON ACQUISITION OF BALL AND ROLLER BEARINGS [(AUG 1998)]

* * * * *

(c)(1) The restriction in paragraph (b) of this clause does not apply to the extent that[--

(i) T]he end items or components containing ball or roller bearings are commercial items[; or

(ii) The ball or roller bearings are commercial items manufactured in the United Kingdom.]

* * * * *

14. 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 [(AUG 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[,]Canada[, or the United Kingdom].

(b) Unless an exception applies [under Defense Federal Acquisition Regulation Supplement (DFARS) 225.7016-2] or a waiver is granted under [DFARS] 225.7005(a) [(1)] or [(2)], 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[, except those manufactured in the United Kingdom].

(End of clause)