18034 Federal Register / Vol. 75, No. 67 / Thursday, April 8, 2010 / Rules and Regulations 

List of Subjects in 48 CFR Parts 204, 

235, and 252 

Government procurement. 

Ynette R. Shelkin, 

Editor, Defense Acquisition Regulations 

System. 

■ Accordingly, the interim rule 

amending 48 CFR parts 204, 235, and 

252, which was published at 74 FR 

42274, July 21, 2008, is adopted as a 

final rule with the following changes: 

■ 1. The authority citation for 48 CFR 

parts 204, 235, and 252 continues to 

read as follows: 

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

chapter 1. 

PART 204—ADMINISTRATIVE 

MATTERS 

■ 2. Subpart 204.73 is revised to read as 

follows: 

Subpart 204.73—Export-Controlled Items 

Sec. 

204.7300 Scope of subpart. 

204.7301 Definitions. 

204.7302 General. 

204.7303 Policy. 

204.7304 Contract clauses. 

Subpart 204.73—Export-Controlled 

Items 

204.7300 Scope of subpart. 

This subpart implements section 

890(a) of the National Defense 

Authorization Act for Fiscal Year 2008 

(Pub. L. 110–181). 

204.7301 Definitions. 

Export-controlled items, as used in 

this subpart, is defined in the clause at 

252.204–7008. 

204.7302 General. 

Certain types of items are subject to 

export controls in accordance with the 

Arms Export Control Act (22 U.S.C. 

2751, et seq.), the International Traffic 

in Arms Regulations (22 CFR parts 120– 

130), the Export Administration Act of 

1979, as amended (50 U.S.C. App. 2401, 

et seq.), and the Export Administration 

Regulations (15 CFR parts 730–774). See 

PGI 204.7302 for additional information. 

204.7303 Policy. 

(a) It is in the interest of both the 

Government and the contractor to be 

aware of export controls as they apply 

to the performance of DoD contracts. 

(b) It is the contractor’s responsibility 

to comply with all applicable laws and 

regulations regarding export-controlled 

items. This responsibility exists 

independent of, and is not established 

or limited by, this subpart. 

204.7304 Contract clauses. 

Use the clause at 252.204–7008, 

Export-Controlled Items, in all 

solicitations and contracts. 

PART 252—SOLICITATION 

PROVISIONS AND CONTRACT 

CLAUSES 

■ 3. Section 252.204–7008 is revised to 

read as follows: 

252.204–7008 Export-Controlled Items. 

As prescribed in 204.7304, use the 

following clause: 

Export-Controlled Items (Apr 2010) 

(a) Definition. Export-controlled items, as 

used in this clause, means items subject to 

the Export Administration Regulations (EAR) 

(15 CFR parts 730–774) or the International 

Traffic in Arms Regulations (ITAR) (22 CFR 

parts 120–130). The term includes: 

(1) Defense items, defined in the Arms 

Export Control Act, 22 U.S.C. 2778(j)(4)(A), 

as defense articles, defense services, and 

related technical data, and further defined in 

the ITAR, 22 CFR part 120. 

(2) Items, defined in the EAR as 

‘‘commodities, software, and technology,’’ 

terms that are also defined in the EAR, 15 

CFR 772.1. 

(b) The Contractor shall comply with all 

applicable laws and regulations regarding 

export-controlled items, including, but not 

limited to, the requirement for Contractors to 

register with the Department of State in 

accordance with the ITAR. The Contractor 

shall consult with the Department of State 

regarding any questions relating to 

compliance with the ITAR and shall consult 

with the Department of Commerce regarding 

any questions relating to compliance with the 

EAR. 

(c) The Contractor’s responsibility to 

comply with all applicable laws and 

regulations regarding export-controlled items 

exists independent of, and is not established 

or limited by, the information provided by 

this clause. 

(d) Nothing in the terms of this contract 

adds to, changes, supersedes, or waives any 

of the requirements of applicable Federal 

laws, Executive orders, and regulations, 

including but not limited to— 

(1) The Export Administration Act of 1979, 

as amended (50 U.S.C. App. 2401, et seq.); 

(2) The Arms Export Control Act (22 U.S.C. 

2751, et seq.); 

(3) The International Emergency Economic 

Powers Act (50 U.S.C. 1701, et seq.); 

(4) The Export Administration Regulations 

(15 CFR parts 730–774); 

(5) The International Traffic in Arms 

Regulations (22 CFR parts 120–130); and 

(6) Executive Order 13222, as extended. 

(e) The Contractor shall include the 

substance of this clause, including this 

paragraph (e), in all subcontracts. 

(End of clause) 

Section 252.204–7009 [Removed and 

Reserved] 

■ 4. Section 252.204–7009 is removed 

and reserved. 

[FR Doc. 2010–7258 Filed 4–7–10; 8:45 am] 

BILLING CODE 5001–08–P 

DEPARTMENT OF DEFENSE 

Defense Acquisition Regulations 

System 

48 CFR Parts 234 and 235 

RIN 0750–AF79 

Defense Federal Acquisition 

Regulation Supplement; Research and 

Development Contract Type 

Determination (DFARS Case 2006– 

D053) 

AGENCY: Defense Acquisition 

Regulations System, Department of 

Defense (DoD). 

ACTION: Final rule. 

SUMMARY: DoD is adopting as final, 

without change, an interim rule that 

requires the Milestone Decision 

Authority (MDA) for a major defense 

acquisition program (MDAP) to select 

the contract type for a development 

program that is consistent with the level 

of program risk in accordance with 

section 818 of the National Defense 

Authorization Act (NDAA) for Fiscal 

Year 2007. 

DATES: Effective Date: April 8, 2010. 

FOR FURTHER INFORMATION CONTACT: Mr. 

Mark Gomersall, 703–602–0302. Please 

cite DFARS case 2006–D053. 

SUPPLEMENTARY INFORMATION: 

A. Background 

DoD published an interim rule at 73 

FR 4117 on January 24, 2008, to 

implement section 818 of the National 

Defense Authorization Act for Fiscal 

Year 2007 (Pub. L. 109–364). Section 

818 requires DoD to modify regulations 

regarding the determination of contract 

type for development programs. Such 

regulations require the Milestone 

Decision Authority (MDA) for a major 

defense acquisition program (MDAP) to 

select the contract type for a 

development program that is consistent 

with the level of program risk. The MDA 

may select a fixed-price type contract, 

including a fixed-price incentive 

contract; or a cost-type contract, 

provided certain written determination 

requirements are satisfied. 

The interim rule added a new section 

at DFARS 234.004 to implement the 

requirements of section 818 of Public 

Law 109–364, applicable to MDAPs, and 


jlentini on DSKJ8SOYB1PROD with RULES2
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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