Federal Register / Vol. 75, No. 67 / Thursday, April 8, 2010 / Rules and Regulations 18035 

updated the policy at 235.006 to address 

requirements for other than MDAPs. 

Two sources submitted comments on 

the interim rule. DoD’s single response 

to both comments is provided following 

the comments. 

1. Comment: One respondent 

suggested that the interim rule appears 

to be requiring written determinations 

on MDAPs and non-MDAPs that are 

exactly the opposite of one another. For 

MDAPS, 234.004(iii) requires a written 

determination by the MDA at the time 

of Milestone B approval if a fixed-price 

contract is not selected, and for nonMDAPs, 235.006(b)(i)(A)(3) requires a 

written determination if a fixed-price 

contract is selected for a developmental 

program. The respondent indicated that 

it is hard for him to understand the logic 

that would discourage the use of fixedprice development contracts for nonmajor programs, but would encourage 

their use for major programs. Moreover, 

he suggested that fixed-price 

development contracts are likely to be a 

source of numerous requests for 

equitable adjustments or claims, and 

concluded that instituting such a policy 

would be challenging and ill-timed even 

for a robust, experienced, and 

disciplined workforce. 

2. Comment: The respondent stated 

that the interim rule appears to 

introduce additional burdens on DoD 

program managers and contracting 

personnel to justify the decision to issue 

a shipbuilding contract on a cost-type 

basis. The respondent believes that, 

when selecting a contract type for any 

program, DoD’s focus should be on 

‘‘whether a product, system, or item is 

still developing or has reached 

maturity.’’ Further, although they are 

MDAPs, the respondent believes that 

the first several ships of a new class 

should be viewed as developmental 

products that are procured most 

efficiently through cost-type contracts 

because of the inherently high level of 

risk and uncertainty associated with 

them. Therefore, for the first several 

ships of a class, the burden placed upon 

the MDA should most often be to 

explain why a fixed-price contract type 

is selected rather than why a cost-type 

contract is selected. For this reason, the 

respondent believes that the interim 

rule is flawed since the requirements 

should be in reverse order when applied 

to shipbuilding contracts. 

DoD Response: For MDAPs, the 

procedures in DFARS 234.004 are 

mandated by section 818 of the FY07 

NDAA. For other than MDAPs, DoD 

determined that it would be in the best 

interest of the Government to retain the 

policy in DFARS 235.006 for a written 

determination if a fixed-price contract is 

selected for a development program. 

Therefore, DoD has made no change to 

the language set forth in the interim 

rule, and is adopting the interim rule as 

a final rule without change. 

This rule was not subject to Office of 

Management and Budget review under 

Executive Order 12866, dated 

September 30, 1993. 

B. Regulatory Flexibility Act 

DoD certifies that this 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 the rule relates to internal DoD 

considerations and documentation 

requirements relating to the selection of 

contract type for development programs. 

No comments were received in response 

to publication of the interim rule with 

respect to any impact on small entities. 

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. 

List of Subjects in 48 CFR Parts 234 and 

235 

Government procurement. 

Ynette R. Shelkin, 

Editor, Defense Acquisition Regulations 

System. 

Interim Rule Adopted as Final Without 

Change 

■ Accordingly, the interim rule 

amending 48 CFR parts 234 and 235, 

which was published at 73 FR 4117 on 

January 24, 2008, is adopted as a final 

rule without change. 

[FR Doc. 2010–7259 Filed 4–7–10; 8:45 am] 

BILLING CODE 5001–08–P 

DEPARTMENT OF DEFENSE 

Defense Acquisition Regulations 

System 

48 CFR Parts 206, 225, and 252 

RIN 0750–AG02 

Defense Federal Acquisition 

Regulation Supplement; Acquisitions 

in Support of Operations in Iraq or 

Afghanistan (DFARS Case 2008–D002) 

AGENCY: Defense Acquisition 

Regulations System, Department of 

Defense (DoD). 

ACTION: Final rule. 

SUMMARY: DoD is adopting as final, with 

minor changes, an interim rule 

amending the Defense Federal 

Acquisition Regulation Supplement 

(DFARS) to implement sections 886 and 

892 of the National Defense 

Authorization Act for Fiscal Year 2008. 

Section 886 provides authority for DoD 

to limit competition when acquiring 

products or services in support of 

operations in Iraq or Afghanistan. 

Section 892 addresses competition 

requirements for the procurement of 

small arms for assistance to Iraq or 

Afghanistan. 

DATES: Effective Date: April 8, 2010. 

FOR FURTHER INFORMATION CONTACT: Ms. 

Amy Williams, 703–602–0328. 

SUPPLEMENTARY INFORMATION: 

A. Background 

DoD published an interim rule at 73 

FR 53151 on September 15, 2008, to 

implement sections 886 and 892 of the 

National Defense Authorization Act for 

Fiscal Year 2008. The comment period 

closed on November 14, 2008. Four 

respondents provided comments. In 

consideration of the public comments 

received, several changes were made in 

developing the final rule. 

The final rule: 

• Clarifies applicability of the trade 

agreements (see response to comment 

3.a.) 

• Includes a modified definition of 

‘‘service from Iraq or Afghanistan’’ in the 

prescribed clauses, so that it reads ‘‘a 

service (including construction) that is 

performed in Iraq or Afghanistan. 

***’’. (See the DoD response to 

comment 4.c.) 

• Adds the Commander of the Joint 

Contracting Command—Iraq/ 

Afghanistan as an official authorized to 

make a determination that applies to an 

individual acquisition with a value of 

$78.5 million or more, or to a class of 

acquisitions. 

DoD received comments from four 

persons or organizations in response to 

the interim rule (available on the Web 

at regulations.gov). The comments are 

grouped into the following categories: 

1. Concern for U.S. industrial base. 

2. Concern for industrial base of Iraq 

and Afghanistan. 

3. Applicability of trade agreements. 

4. Definitions relating to sources, 

products, and services from Iraq or 

Afghanistan. 

5. Clarification of contracting officer 

flexibility with regard to the evaluation 

factor. 

6. Decision authority no higher than 

head of the contracting activity. 

7. Justification for issuing an interim 

rule. 


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The following is a discussion of the 

comments and the changes included in 

this final rule as a result of the public 

comments: 

1. Concern for the U.S. Industrial Base 

a. Two respondents disagreed with 

the proposed DFARS statement in 

225.7703–2(b)(1)(ii)(B) that the 

authorizing official may generally 

presume that there will not be an 

adverse effect on the U.S. industrial 

base as a result of using one of the 

procedures authorized by section 886. 

They advocated a change that would 

require that the effect on the U.S. 

industrial base should be considered in 

each contracting action, and should be 

presumed adverse unless otherwise 

documented. 

Response: The industrial base 

supporting defense is a vehicle for 

achieving the ultimate objective of the 

Department of Defense—the 

development, production, and support 

of defense materiel necessary to provide 

for the nation’s defense. Accordingly, 

DoD’s overarching objective is to ensure 

it has access to reliable and costeffective industrial capabilities 

sufficient to meet current and projected 

military requirements. When 

considering a contract’s potential 

impact on the U.S. industrial and 

technological base, DoD focuses on 

ensuring that the contract does not 

result in the loss of industrial or 

technological capabilities essential for 

the nation’s defense. It is extremely 

unlikely—because of both the relatively 

small size of such U.S.-funded 

procurements and the specific products/ 

services associated with such U.S.- 

funded procurements—that any 

contracts issued for products or services 

to be used for the military forces, police, 

or other security personnel of Iraq or 

Afghanistan would result in the loss of 

industrial or technological capabilities 

essential for the nation’s defense. 

Additionally, utilization of non-U.S. 

sources for the products or services 

likely to be acquired for the military/ 

security forces of Iraq and Afghanistan 

with U.S. funds will generally not 

impact the economic viability of 

individual elements of the U.S. national 

technology and industrial base because 

of the relatively small values of such 

acquisitions. To demonstrate, the first 

quarterly report to Congress in response 

to section 886 of the Fiscal Year 2008 

NDAA reported 91 percent of actions 

(there were 22 total actions with 11 

different contractors) using section 886 

authority were for construction/repair or 

services. The two supply items were for 

billboards for a total of $73 million. DoD 

has a relatively small role in the overall 

U.S. economy. In 2008, the total of all 

DoD budget authority represented only 

about 4 percent of the gross domestic 

product. Especially in dual-use market 

segments, DoD’s influence is very small. 

Additionally, DoD purchases non-U.S. 

materiel very judiciously; and the 

transactions contemplated here likely 

will be even smaller in value. For 

example— 

• As reported to Congress in its 

September 2008 report ‘‘Foreign Sources 

of Supply,’’ in Fiscal Year 2007, DoD 

awarded contracts to foreign suppliers 

for defense items and components 

totaling approximately $1.57 billion, 

less than one-half of one percent of all 

DoD contracts; and only about 1.5 

percent of all DoD contracts for defense 

items and components. The remaining 

99.5 percent of all DoD contracts and 

98.5 percent of all DoD contracts for 

defense items and components were 

awarded to U.S. prime contractors. 

• As reported to Congress in its July 

2008 report ‘‘Department of Defense 

Fiscal Year 2007 Purchases of Supplies 

Manufactured Outside the United 

States,’’ DoD procurement actions in 

Fiscal Year 2007 totaled approximately 

$316 billion. Of that amount, 

approximately $18.9 billion (5.9 

percent) was expended on purchases 

from foreign entities. ‘‘Weapons’’ 

purchases totaled $106.13 million (0.57 

percent) and ‘‘subsistence’’ purchases 

totaled $84.95 million (0.46 percent). 

Finally, DoD notes that both 

respondents supply rations or other 

shelf-stable meals. Title 10 United 

States Code, section 2533a(d) Exception 

for Certain Procurements provides that 

requirements to buy food from U.S. 

suppliers are excepted for procurements 

outside the United States in support of 

combat operations. The Congress has 

recognized that even food for U.S. 

Service members need not be procured 

from U.S. sources when the 

procurements take place outside the 

United States and are in support of 

combat operations. 

Therefore, an authorizing official’s 

presumption of no adverse impact on 

the U.S. industrial base is an 

appropriate posture. In the event of 

uncertainty, DFARS 225.7703– 

2(b)(1)(ii)(B) would require that the 

authorizing official coordinate with the 

applicable subject matter expert. This is 

reasonable and would protect industrial 

and technological capabilities essential 

for U.S. defense in those rare cases 

where contemplated procurements 

could have a negative impact. 

b. Comment: Two respondents 

believed that DoD should require 

evaluation of the impact on the U.S. 

industrial base for each acquisition, 

whether or not the products or services 

being acquired are to be used only by 

the military forces, police, or other 

security personnel of Iraq or 

Afghanistan. 

Response: According to subsection 

(b)(1) of section 886, a determination 

that the products or services being 

acquired are to be used only by the 

military forces, police, or other security 

personnel of Iraq or Afghanistan is 

adequate to support use of the 

procedures authorized by subsection (a). 

The interim rule at DFARS 225.7703– 

2(a) implements the law appropriately 

by not requiring an assessment of the 

impact on the industrial base in such 

cases. 

c. Comment: Two respondents 

requested that DoD define ‘‘U.S. 

industrial base’’ for the purpose of this 

DFARS rule narrowly enough for the 

impact analysis to be meaningful (e.g., 

as all potential U.S. contractors and 

subcontractors of the same or similar 

end product). 

Response: DoD does not consider it 

necessary for DFARS subpart 225.77 to 

define ‘‘U.S. industrial base’’, nor does 

DoD agree that the suggested definition 

would be appropriate. As indicated in 

the response to comment 1.a., when 

considering a contract’s potential 

impact on the U.S. industrial and 

technological base, DoD focuses on 

ensuring that the contract does not 

result in the loss of industrial or 

technological capabilities essential for 

the nation’s defense. For this purpose, 

the term ‘‘U.S. industrial base’’ is 

sufficiently clear without being defined. 

Also, for this purpose, ‘‘U.S. industrial 

base’’ has a broad meaning and not the 

narrow meaning suggested by the 

respondents. U.S.-funded procurements 

of products or services in support of 

military or stability operations in Iraq or 

Afghanistan are not likely to result in 

the loss of industrial or technological 

capabilities essential for the nation’s 

defense. 

d. Comment: Two respondents 

requested that DoD define ‘‘adversely 

affected’’ for the purpose of the 

industrial base evaluation required by 

this DFARS rule. According to these 

respondents, the definition should 

include loss of volume for prime 

contractors and their supplier networks 

and loss of key suppliers due to reduced 

volume of purchases. 

Response: ‘‘Adversely affected,’’ the 

terminology used in section 886, is 

sufficiently clear to enable the type of 

assessment required by section 886. The 

term does not need to be defined in 

DFARS subpart 225.77. 

e. Comment: Two respondents 

recommended that DoD should not 


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allow performance requirements to be 

reduced to match the potential (local) 

bidders’ capabilities. 

Response: The interim rule does not 

regulate the development of 

performance requirements. Operational 

users and program managers are 

responsible for defining requirements, 

and contracting officers are responsible 

for awarding and managing contracts 

that will satisfy those requirements. 

f. Comment: Two respondents stated 

that U.S. competitors should not be 

excluded from any contracting action, 

i.e., should be allowed to participate in 

every procurement conducted using a 

procedure authorized by section 886. 

Response: If the DFARS were changed 

as suggested, it would not include two 

procedures specifically authorized by 

section 886, and, therefore, would 

deprive DoD contracting officers of the 

flexibility provided and intended by the 

law. Section 886(a) authorizes two 

procedures that, if used, preclude U.S. 

firms from competing: Competition 

limited to products or services that are 

from Iraq or Afghanistan (subsection 

(a)(1)), and a procedure other than a 

competitive procedure used to award to 

a particular source or sources from Iraq 

or Afghanistan (subsection (a)(2)). 

Conference Report 110–477 explains 

that the legislation’s purpose is to 

provide a stable source of jobs and 

employment in Iraq and Afghanistan in 

cases where the preference will not have 

an adverse effect on U.S. military 

operations or the U.S. industrial base. 

The interim rule, as written, 

appropriately implements the law and 

facilitates achievement of the law’s 

intended purpose. 

g. Comment: One respondent 

recommended that DoD should not 

apply the 50 percent penalty in 

225.7703–1(a) to offers of U.S. products. 

In the respondent’s view, this aspect of 

the DFARS rule is not stated or inferred 

in section 886. 

Response: Section 886 is specifically 

intended to provide a stable source of 

jobs and employment in Iraq and 

Afghanistan. To that end, it authorizes 

a preference for, and only for, products 

or services that are from Iraq or 

Afghanistan. The 50 percent mark-up 

applied to offers of products or services 

that are NOT from Iraq or Afghanistan 

is the mechanism that provides the 

intended preference by putting offers of 

products from other countries, 

including the U.S., at a competitive 

disadvantage. If the DFARS were 

changed so that the mark-up was never 

applied to offers of U.S. products, the 

preference intended for Iraqi and 

Afghani products would also be applied 

to U.S. products. That would not be 

consistent with section 886 and would 

negate significantly the intended boost 

to the Iraqi and Afghani industrial base. 

2. Concern for the Industrial Base of 

Iraq and Afghanistan 

a. Comment: Two respondents 

recommended changing the interim rule 

to compel local bidders to work toward 

creation of a supplier network within 

Iraq and Afghanistan in order to achieve 

the goal of section 886. The respondents 

stated that this could be done by— 

(1) Requiring 100 percent of the 

product to be from Iraq or Afghanistan, 

without allowances to use non-Iraqi or 

non-Afghani components (see 252.225– 

7021(a)(14)(ii)); or 

(2) Specifically prohibiting award of 

contracts to brokers, distributors, and 

middlemen such that contracts must be 

awarded to Iraqi/Afghani producers that 

are part of a true Iraqi or Afghani 

national industrial base. 

Response: The interim rule 

encourages rather than compels 

achievement of the goal of section 886, 

consistent with the authorities provided 

by section 886. Regarding 2.a.(1), even 

the Buy American Act allows 50 percent 

of the value of components of a 

domestic end product to be of foreign 

origin. See also the response regarding 

substantial transformation at paragraph 

3.b., below. Regarding 2.a.(2), the 

interim rule appropriately implements 

the section 886 focus on products and 

services from Iraq or Afghanistan rather 

than on the national affiliation of the 

entity receiving the contract award. The 

rule has its intended effect without 

prohibiting award to brokers, 

distributors, or middlemen. If a 

distributor from the U.S. or a third 

country offers and delivers a ‘‘product 

from Iraq or Afghanistan,’’ as defined in 

section 886 and the interim rule, the 

procurement facilitates the development 

of the industrial base of Iraq or 

Afghanistan. On the other hand, if a 

distributor in Iraq or Afghanistan 

offered and delivered a product from 

other than Iraq or Afghanistan, the 

procurement would not strengthen the 

Iraqi or Afghani industrial base. 

b. Comment: Two respondents 

recommended limiting the percentage of 

non-Iraqi/non-Afghani components or, 

alternatively, when evaluating 

competitive offers of products or 

services that are not products or services 

of Iraq or Afghanistan, increasing by 50 

percent the prices of all non-Iraqi or 

non-Afghani raw materials, ingredients, 

components, and/or items that are part 

of the end product offered. 

Response: Section 886 authorizes a 

procedure in which a preference is 

provided for ‘‘products or services’’ that 

are from Iraq or Afghanistan, and goes 

on to define those terms. The provision 

at 252.225–7023 and the clause at 

252.225–7024 state that the contracting 

officer will increase by 50 percent the 

prices of offers of ‘‘products or services’’ 

that are not products or services from 

Iraq or Afghanistan. (The definition of 

‘‘product from Iraq or Afghanistan’’ is 

identical to that in section 886, and the 

definition of ‘‘service from Iraq or 

Afghanistan’’ adds only the word 

‘‘predominantly’’ to the definition from 

section 886.) The comment suggests that 

the preference be applied not only at the 

level of products, but also at the level 

of the raw materials, ingredients, 

components, and/or items that are part 

of the end product offered. DoD 

understands that this would create a 

greater competitive advantage for 

products with a higher proportion of 

Iraqi or Afghani content. However, it 

would also complicate significantly the 

rule and the submission and evaluation 

of offers and probably contribute to 

lengthening solicitation and evaluation 

periods. Therefore, DoD has not 

changed the final rule in response to 

this comment. 

3. Applicability of Trade Agreements 

a. Comment: One respondent 

suggested that the rule should 

emphasize that acquisitions under the 

authority of section 886 are exempt from 

application of the trade agreements. 

Response: 

i. Acquisitions with a preference for 

Iraqi or Afghani products. The Trade 

Agreements Act applies to those 

acquisitions in which only a preference 

for Iraqi or Afghani products is 

imposed, as authorized by 225.7703– 

1(a)(1). However, based on consultation 

with legal counsel prior to publishing 

the interim rule, DoD concluded that 

when using this new authority to 

provide a preference for Iraqi products, 

the Trade Agreements Act purchasing 

prohibition does not apply with regard 

to purchases of products or services 

from Iraq. Afghani end products are 

already acceptable in any covered 

procurement because Afghanistan is a 

‘‘designated country,’’ as that term is 

defined in FAR 25.003. Therefore, the 

interim rule provided an Alternate I to 

the Trade Agreements clause at FAR 

52.225–7021, and a new certification to 

replace the FAR Trade Agreements 

Certification at 52.225–7020, unless the 

preference applies only to the products 

of Afghanistan. 

ii. Acquisitions that are limited to 

products or services from Iraq or 

Afghanistan. FAR 25.401(a)(5) provides 

that the trade agreements do not apply 

to acquisitions not using full and open 


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18038 Federal Register / Vol. 75, No. 67 / Thursday, April 8, 2010 / Rules and Regulations 

competition, if authorized by subpart 

6.2 or 6.3, when the limitation of 

competition would preclude use of the 

procedures of subpart 25.4. Although 

the procedures at 225.7703–1(a)(2) and 

(a)(3) are not authorized by subpart 6.2 

or 6.3, section 886 has provided 

comparable separate statutory 

authorization, which precludes the use 

of the procedures of subpart 25.4, since 

such application would be inconsistent 

with implementation of section 886. 

This principle is implemented at 

225.1101(6)(iii)(B), which prohibits use 

of any Trade Agreements provision or 

clause, if the clause at 252.225–7026, 

Acquisition Restricted to Products or 

Services from Iraq or Afghanistan, is 

included in the solicitation and 

contract. However, DoD has further 

clarified the application of trade 

agreements in the final rule (see 

225.401–71 and 225.7703–5(f)). 

b. Comment: Two respondents 

recommended that DoD should not 

allow the ‘‘substantial transformation’’ 

test in 252.225–7021(a)(14)(ii) to be 

applied to contracting actions made 

under the authority of this DFARS rule. 

Response: According to 225.7703–5(d) 

of the interim rule, contracting officers 

are to use the appropriate provision and 

clause when the Trade Agreements Act 

applies to the acquisition. The 

‘‘substantial transformation’’ test applies 

in procurements covered by the Trade 

Agreements Act. The objective of 

Alternate I to 252.225–7021 is to enable 

the purchase of Iraqi (or Afghani) end 

products in such procurements, not to 

change the rules, such as the 

‘‘substantial transformation’’ test, that 

otherwise apply to such procurements. 

4. Definitions Relating to Sources, 

Products, and Services From Iraq or 

Afghanistan 

a. Comment: One respondent 

recommended that DoD define or clarify 

‘‘located in Iraq or Afghanistan’’ as the 

term is used in the DFARS 225.7701 

definition of ‘‘source from Iraq or 

Afghanistan.’’ 

Response: ‘‘Located in Iraq or 

Afghanistan’’ is self-explanatory and 

does not require definition or 

clarification. 

b. Comment: One respondent 

requested that DoD add 

‘‘predominantly’’ to the definition of 

‘‘product from Iraq or Afghanistan.’’ 

Response: The DFARS definition of 

‘‘product from Iraq or Afghanistan,’’ 

taken directly from section 886, is ‘‘a 

product that is mined, produced, or 

manufactured in Iraq or Afghanistan.’’ 

Without a modifier, the implication is 

that the end product is entirely mined, 

produced, or manufactured in Iraq or 

Afghanistan. A change to 

‘‘predominantly mined, produced, or 

manufactured’’ would reduce the 

standard from the implied ‘‘entirely’’ to 

‘‘predominantly.’’ This would weaken 

rather than strengthen the effectiveness 

of the rule in facilitating development of 

the industrial base of Iraq and 

Afghanistan. This does not mean that all 

the components must be from Iraq or 

Afghanistan. Unlike the Buy American 

Act definition of ‘‘domestic end 

product,’’ there is no component test in 

the statutory definition of ‘‘product from 

Iraq or Afghanistan.’’ However, if the 

Trade Agreements Act applies, the item 

must be substantially transformed in 

Iraq or Afghanistan. 

c. Comment: One respondent 

requested that DoD add ‘‘construction’’ 

as a stand-alone type of acquisition, 

since it does not appropriately fit in 

either the ‘‘products’’ or ‘‘services’’ 

category. 

Response: The interim rule makes 

clear that construction is included in 

the meaning of ‘‘service.’’ See DFARS 

225.7703–1(a). However, while this is 

clear in the DFARS text, it is not stated 

in the clauses. Accordingly, the final 

rule includes a modified definition of 

‘‘service from Iraq or Afghanistan’’ in the 

prescribed clauses, so that it reads ‘‘a 

service (including construction) that is 

performed in Iraq or Afghanistan. 

***’’. DoD cannot make 

‘‘construction’’ a stand-alone category 

because the law provides these special 

authorizations only for the acquisition 

of products and services from Iraq or 

Afghanistan. 

5. Clarify Contracting Officer Flexibility 

With Regard to the Evaluation Factor 

Comment: One respondent requested 

clarification that contracting officers are 

allowed to determine the percentage 

evaluation factor to apply to non-local/ 

national products and services and 

eliminate the 50 percent factor 

(225.7703–5; 252.225–7023). 

Response: The interim rule at 

225.7703–5(a)(2) clearly establishes that 

the contracting officer may modify the 

50 percent evaluation factor in 

accordance with contracting office 

procedures. This approach is consistent 

with DFARS writing standards. The 

provision (252.225–7023) includes a 

default percentage, and the prescription 

(225.7703–5(a)) for using the provision 

enables the contracting officer to modify 

that percentage. Contracting offices are 

responsible for establishing procedures 

to be used for this purpose, and for 

ensuring contracting officers are aware 

of the discretion provided by the 

DFARS and how it can be applied. 

6. Decision Authority No Higher Than 

Head of the Contracting Activity 

Comment: One respondent requested 

that DoD add language to allow the head 

of the contracting agency, rather than 

acquisition executives, to make class 

determinations (225.7703–2). 

Response: Although DoD is unwilling 

to provide this authority to all heads of 

contracting activities, the draft final rule 

adds the Commander of the Joint 

Contracting Command—Iraq/ 

Afghanistan to the list of officials at 

225.7703–2(b)(2)(ii) who are authorized, 

without power of redelegation, to make 

a determination in accordance with 

section 886 that applies to an individual 

acquisition of $78.5 million or more or 

to a class determination. 

Decision To Issue an Interim Rule 

Comment: One respondent requested 

explanation of the ‘‘urgent and 

compelling’’ reasons that supported 

DoD’s determination to publish an 

interim rule rather than a proposed rule. 

Response: First, this is a statutory 

requirement which became effective 

upon enactment. Further, there was and 

is an urgent and compelling need to 

achieve stability in Iraq and 

Afghanistan. Section 886 authorized the 

use of procurement procedures that 

could help provide a stable source of 

jobs and employment in those countries 

and as such, the Joint Contracting 

Command—Iraq/Afghanistan 

specifically requested immediate 

guidance on how to implement this 

section. DoD had an urgent and 

compelling need to implement section 

886 in a way that would enable 

contracting officers to use the new 

procedures as soon as possible, and thus 

facilitate the creation of stable jobs and 

employment sooner rather than later. 

B. Other Changes in the Final Rule 

In addition to the written responses 

posted on regulations.gov, DoD was 

informed by a telephone caller that 

Alternate I to DFARS clause 252.225– 

7021, Trade Agreements, added in the 

interim rule, was erroneously not added 

to the listing of that same clause in the 

commercial items clause at DFARS 

252.212–7001, Contract Terms and 

Conditions Required to Implement 

Statutes or Executive Orders Applicable 

to Defense Acquisitions of Commercial 

Items. DoD has corrected this oversight 

in the final rule. 

This is not a significant regulatory 

action and, therefore, was not subject to 

review under section 6(b) of Executive 

Order 12866, Regulatory Planning and 

Review, dated September 30, 1993. 


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C. 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 the rule does not impose any 

requirements on small businesses and 

only impacts acquisitions in Iraq and 

Afghanistan. There were no comments 

received on regulatory flexibility in 

response to the interim rule. 

D. 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. 

List of Subjects in 48 CFR Parts 206, 

225, and 252 

Government procurement. 

Ynette R. Shelkin, 

Editor, Defense Acquisition Regulations 

System. 

■ Accordingly, the interim rule 

amending 48 CFR parts 206, 225, and 

252, which was published at 73 FR 

53151, September 15, 2008, is adopted 

as a final rule 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 225.401–71 is revised to 

read as follows: 

225.401–71 Products or services in 

support of operations in Iraq or 

Afghanistan. 

When acquiring products or services, 

other than small arms, in support of 

operations in Iraq or Afghanistan— 

(a) If using the procedure specified in 

225.7703–1(a)(1), the purchase 

restriction at FAR 25.403(c) does not 

apply with regard to products or 

services from Iraq. 

(b) If using a procedure specified in 

225.7703–1(a)(2) or (3), the procedures 

of subpart 25.4 are not applicable. 

■ 3. Section 225.7701 is amended by 

revising the definition of ‘‘service from 

Iraq or Afghanistan’’ to read as follows: 

225.7701 Definitions. 

* * * * * 

Service from Iraq or Afghanistan means 

a service (including construction) that is 

performed in Iraq or Afghanistan 

predominantly by citizens or permanent 

resident aliens of Iraq or Afghanistan. 

* * * * * 

■ 4. Section 225.7703–2 is amended by 

revising paragraph (b)(2)(ii) introductory 

text and adding new paragraph 

(b)(2)(ii)(E) to read as follows: 

225.7703–2 Determination requirements. 

* * * * * 

(b) * * * 

(2) * * * 

(ii) The Director, Defense 

Procurement and Acquisition Policy, 

and the following officials, without 

power of redelegation, are authorized to 

make a determination that applies to an 

individual acquisition with a value of 

$78.5 million or more or to a class of 

acquisitions: 

* * * * * 

(E) Commander of the Joint 

Contracting Command—Iraq/ 

Afghanistan (JCC–I/A). 

* * * * * 

■ 5. Section 225.7703–4 is amended by 

revising the introductory text to read as 

follows: 

225.7703–4 Reporting requirement. 

The following organizations shall 

submit periodic reports to the Deputy 

Director, Contingency Contracting & 

Acquisition Policy, Defense 

Procurement and Acquisition Policy, in 

accordance with PGI 225.7703–4, to 

address the organization’s use of the 

procedures authorized by this section: 

* * * * * 

■ 6. Section 225.7703–5 is amended by 

revising paragraph (d); removing 

paragraph (e)(4); redesignating existing 

paragraphs (e)(5) through (e)(8) as 

paragraphs (e)(4) through (e)(7), 

respectively; and adding paragraph (f) to 

read as follows: 

225.7703–5 Solicitation provisions and 

contract clauses. 

* * * * * 

(d) When the Trade Agreements Act 

applies to the acquisition, use the 

appropriate clause and provision as 

prescribed at 225.1101 (5), (6), or (7). 

(f) Do not use the following clause or 

provision in solicitations or contracts 

that include the clause at 252.225–7026: 

(1) 252.225–7020, Trade Agreements 

Certificate. 

(2) 252.225–7021, Trade Agreements. 

(3) 252.225–7022, Trade Agreements 

Certificate—Inclusion of Iraqi End 

Products. 

PART 252—SOLICITATION 

PROVISIONS AND CONTRACT 

CLAUSES 

■ 8. Section 252.212–7001 is amended 

by revising the clause date and revising 

paragraph (b)(11) to read as follows: 

252.212–7001 Contract terms and 

conditions required to implement statutes 

or Executive orders applicable to Defense 

acquisitions of commercial items. 

* * * * * 

CONTRACT TERMS AND CONDITIONS 

REQUIRED TO IMPLEMENT STATUTES OR 

EXECUTIVE ORDERS APPLICABLE TO 

DEFENSE ACQUISITIONS OF 

COMMERCIAL ITEMS (APR 2010) 

* * * * * 

(b) * * * 

(11)(i)ll 252.225–7021, Trade 

Agreements (NOV 2009) (19 U.S.C. 2501– 

2518 and 19 U.S.C. 3301 note). 

(ii) Alternate I (SEP 2008). 

* * * * * 

■ 9. Section 252.225–7023 is amended 

by revising the clause date and revising 

paragraph (b)(2) to read as follows: 

252.225–7023 Preference for products or 

services from Iraq or Afghanistan. 

* * * * * 

PREFERENCE FOR PRODUCTS OR 

SERVICES FROM IRAQ OR AFGHANISTAN 

(APR 2010) 

* * * * * 

(b) * * * 

(2) Paragraph (c)(2) of the provision 

entitled Trade Agreements Certificate,’’ or 

‘‘Trade Agreements Certificate—Inclusion of 

Iraqi End Products,’’ if included in this 

solicitation. 

* * * * * 

■ 10. Section 252.225–7024 is amended 

by revising the clause date and revising 

paragraph (a)(2) to read as follows: 

252.225–7024 Requirement for products or 

services from Iraq or Afghanistan. 

* * * * * 

REQUIREMENT FOR PRODUCTS OR 

SERVICES FROM IRAQ OR AFGHANISTAN 

(APR 2010) 

(a) * * * 

(2) Service from Iraq or Afghanistan means 

a service (including construction) that is 

performed in Iraq or Afghanistan 

predominantly by citizens or permanent 

resident aliens of Iraq or Afghanistan. 

* * * * * 

■ 11. Section 252.225–7026 is amended 

by revising the clause date and revising 

paragraph (a)(2) to read as follows: 

252.225–7026 Acquisition restricted to 

products or services from Iraq or 

Afghanistan. 

* * * * * 


jlentini on DSKJ8SOYB1PROD with RULES2
18040 Federal Register / Vol. 75, No. 67 / Thursday, April 8, 2010 / Rules and Regulations 

ACQUISITION RESTRICTED TO 

PRODUCTS OR SERVICES FROM IRAQ OR 

AFGHANISTAN (APR 2010) 

(a) * * * 

(2) Service from Iraq or Afghanistan means 

a service (including construction) that is 

performed in Iraq or Afghanistan 

predominantly by citizens or permanent 

resident aliens of Iraq or Afghanistan. 

* * * * * 

[FR Doc. 2010–7261 Filed 4–7–10; 8:45 am] 

BILLING CODE 5001–08–P 


jlentini on DSKJ8SOYB1PROD with RULES2