47560 Federal Register / Vol. 79, No. 157 / Thursday, August 14, 2014 / Rules and Regulations 

number of small entities under the 

criteria of the Regulatory Flexibility Act. 

The FAA’s authority to issue rules 

regarding aviation safety is found in 

Title 49 of the United States Code. 

Subtitle I, Section 106 describes the 

authority of the FAA Administrator. 

Subtitle VII, Aviation Programs, 

describes in more detail the scope of the 

agency’s authority. 

This rulemaking is promulgated 

under the authority described in 

Subtitle VII, Part A, Subpart I, Section 

40103. Under that section, the FAA is 

charged with prescribing regulations to 

assign the use of the airspace necessary 

to ensure the safety of aircraft and the 

efficient use of airspace. This regulation 

is within the scope of that authority as 

it modifies the route structure as 

necessary to preserve the safe and 

efficient flow of air traffic within the 

NAS. 

Environmental Review 

The FAA has determined that this 

action qualifies for categorical exclusion 

under the National Environmental 

Policy Act in accordance with FAA 

Order 1050.1E, ‘‘Environmental 

Impacts: Policies and Procedures,’’ 

paragraph 311a. This airspace action is 

not expected to cause any potentially 

significant environmental impacts, and 

no extraordinary circumstances exist 

that warrant preparation of an 

environmental assessment. 

List of Subjects in 14 CFR Part 71 

Airspace, Incorporation by reference, 

Navigation (air). 

Adoption of the Amendment 

In consideration of the foregoing, the 

Federal Aviation Administration 

amends 14 CFR part 71 as follows: 

PART 71—DESIGNATION OF CLASS A, 

B, C, D, AND E AIRSPACE AREAS; AIR 

TRAFFIC SERVICE ROUTES; AND 

REPORTING POINTS 

■ 1. The authority citation for part 71 

continues to read as follows: 

Authority: 49 U.S.C. 106(g), 40103, 40113, 

40120; E.O. 10854, 24 FR 9565, 3 CFR, 1959– 

1963 Comp., p. 389. 

§ 71.1 [Amended] 

■ 2. The incorporation by reference in 

14 CFR 71.1 of FAA Order 7400.9X, 

Airspace Designations and Reporting 

Points, dated August 7, 2013 and 

effective September 15, 2013, is 

amended as follows: 

Paragraph 6010(a)—Domestic VOR Federal 

Airways 

* * * * * 

V–243 [Amended] 

From Craig, FL; Waycross, GA; Vienna, 

GA; LaGrange, GA; INT LaGrange 342° and 

Choo Choo, GA, 189° radials; Choo Choo; to 

Bowling Green, KY. 

Paragraph 6011—United States Area 

Navigation Routes 

* * * * * 

T–325 Bowling Green, KY to Terre Haute, IN [New] 

Bowling Green, KY (BWG) VORTAC (Lat. 36°55′44′′ N., long. 086°26′36′′ W.) 

RENRO, KY WP (Lat. 37°28′51′′ N., long. 086°39′19′′ W.) 

LOONE, KY WP (Lat. 37°44′14′′ N., long. 086°45′18′′ W.) 

APALO, IN WP (Lat. 38°00′21′′ N., long. 086°51′35′′ W.) 

BUNKA, IN WP (Lat. 39°04′57′′ N., long. 087°09′07′′ W.) 

Terre Haute, IN (TTH) VORTAC (Lat. 39°29′20′′ N., long. 087°14′57′′ W.) 

Issued in Washington, DC, on August 7, 

2014. 

Gary A. Norek, 

Manager, Airspace Policy and Regulations 

Group. 

[FR Doc. 2014–19204 Filed 8–13–14; 8:45 am] 

BILLING CODE 4910–13–P 

DEPARTMENT OF COMMERCE 

Bureau of Industry and Security 

15 CFR Part 700 

[Docket No. 0912311453–4308–03] 

RIN 0694–AE81 

Revisions to Defense Priorities and 

Allocations System Regulations 

AGENCY: Bureau of Industry and 

Security, Department of Commerce. 

ACTION: Final rule. 

SUMMARY: This rule clarifies existing 

standards and procedures by which the 

Bureau of Industry and Security (BIS) 

may require that certain contracts or 

orders that promote the national defense 

be given priority over other contracts or 

orders. It also sets new standards and 

procedures for such prioritization with 

respect to contracts or orders for 

emergency preparedness activities. 

Finally, this rule sets new standards and 

procedures by which BIS may allocate 

materials, services and facilities to 

promote the national defense. This rule 

implements provisions in the Defense 

Production Act Reauthorization of 2009 

(September 30, 2009) (herein the 

Reauthorization Act) regarding 

publication of regulations providing 

standards and procedures for 

prioritization of contracts and orders 

and for allocation of materials, services, 

and facilities to promote the national 

defense under emergency and nonemergency conditions. 

DATES: Effective Date: September 15, 

2014. 

FOR FURTHER INFORMATION CONTACT: 

Liam McMenamin, Defense Programs 

Division, Office of Strategic Industries 

and Economic Security at (202) 482– 

2233, liam.mcmenamin@bis.doc.gov. 

SUPPLEMENTARY INFORMATION: 

Background 

This rule updates and expands the 

Defense Priorities and Allocations 

System (DPAS) regulations (15 CFR part 

700). BIS relies upon and uses the DPAS 

regulations to implement priority and 

allocation actions involving industrial 

resources. The DPAS has two principal 

components—priorities and allocations. 

Under the priorities component, 

contracts needed to support programs 

that have been approved for priorities 

support are required to be given priority 

over other contracts to facilitate 

expedited delivery in promotion of the 

U.S. national defense. Such contracts 

may be between the government and 

private parties or between private 

parties. Under the allocations 

component, materials, services, and 

facilities may be allocated to promote 

the national defense. For both 

components, the term ‘‘national 

defense’’ means programs for military 

and energy production or construction, 

homeland security, stockpiling, space, 

emergency preparedness, and critical 

infrastructure protection and 

restoration. The term also includes 

foreign military and critical 

infrastructure assistance. 

The Reauthorization Act (123 Stat. 

2006) (Pub. L. 111–67) required agencies 

with priorities and allocations 


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authorities to issue rules establishing 

standards and procedures by which 

those authorities will be used to 

promote the national defense, under 

both emergency and non-emergency 

conditions. Pursuant to the 

Reauthorization Act, BIS issued two 

proposed rules to amend its DPAS 

regulations. The first such proposed rule 

was published on June 7, 2010 (75 FR 

32122) (herein the first proposed rule). 

BIS received one comment in response 

to that rule. Based on that comment and 

on its internal deliberations, BIS 

concluded that sufficient changes would 

be needed from its proposal to require 

a second proposed rule. Accordingly, 

BIS published a second proposed rule 

on January 31, 2014 (79 FR 5332) 

(herein the second proposed rule). The 

principal differences between the first 

proposed rule and the second proposed 

rule are summarized in the latter at 79 

FR 5332 and not repeated here. BIS 

received no comments on the second 

proposed rule. Therefore, BIS is 

publishing the text that it proposed in 

the second proposed rule, without 

substantive change, as this final rule. 

The Reauthorization Act requires each 

Federal agency that is delegated 

priorities and allocations authority 

consistent with section 101 of the 

Defense Production Act (50 U.S.C. app. 

2071, et seq.) to issue final rules 

establishing standards and procedures 

by which that authority is used to 

promote the national defense, during 

both emergency and non-emergency 

conditions. In the Reauthorization Act, 

Congress further directed that, to the 

extent practicable, the Federal agencies 

with priorities and allocations authority 

should work together to develop a 

consistent and unified Federal priorities 

and allocations system. In order to meet 

this mandate, BIS worked in 

conjunction with the Departments of 

Agriculture (USDA), Defense (DoD), 

Energy (DOE), Health and Human 

Services (HHS), Homeland Security 

(DHS), and Transportation (DOT) to 

develop common provisions based on 

the DPAS that can be used by each 

Department in its own regulation. The 

regulations promulgated, or to be 

promulgated, by each Department with 

delegated DPA Title I authority 

comprise the Federal priorities and 

allocations system. 

Summary of Changes to the DPAS Made 

by This Rule 

The following lists provide highlights 

of the changes to the DPAS 

implemented by this rule. A more 

detailed explanation of the changes and 

reasons therefor appears in the preamble 

to the second proposed rule. Because 

this final rule adopts the changes to the 

DPAS that were in the second proposed 

rule for the reasons set forth in the 

preamble to that rule without 

substantive change, BIS is not repeating 

them in full here. Interested persons 

may read them at 79 FR 5332, 5332– 

5341, January 31, 2014. 

Highlights of Changes Related to 

Priorities 

• The scope of reasons for which 

rated orders may be issued has been 

expanded to include homeland security, 

emergency preparedness, and critical 

infrastructure protection and restoration 

activities. 

• The definitions section has been 

expanded to include definitions of 

terms related to allocations and terms 

related to emergency preparedness 

activities. 

• Most rated orders will continue to 

require acceptance or rejection within 

10 or 15 days depending on the type of 

rating; however, rated orders for 

emergency preparedness requirements 

may require acceptance or rejection 

within a shorter timeframe but no less 

than six hours for emergencies that have 

occurred, or 12 hours if needed to 

prepare for an imminent hazard. 

• Procedures for persons to obtain 

priority ratings for items supporting 

homeland security, emergency 

preparedness, critical infrastructure 

protection and restoration, and 

information about how persons in the 

United States may seek such assistance 

have been added. 

• Procedures for persons in Canada to 

obtain priority ratings for items in the 

United States and information about 

how persons in the United States may 

seek assistance in obtaining defense 

items in Canada have been updated and 

moved into a separate section. 

• Procedures for persons in foreign 

nations other than Canada to obtain 

priority ratings for items in the United 

States and information about how 

persons in the United States may seek 

assistance in obtaining defense items 

from Australia, Finland, Italy, the 

Netherlands, Sweden and the United 

Kingdom have been updated and moved 

into a separate section. This section has 

been expanded to provide procedures 

for international organizations to obtain 

priority ratings. 

• The table in Schedule I to part 700 

has been updated to list all programs 

currently approved for priorities 

support and the delegate agency for 

each program. 

Highlights of Changes Related to 

Allocations 

• The rule provides that allocations 

will be used only when there is 

insufficient supply of a material, 

service, or facility to satisfy national 

defense requirements through the use of 

the priorities authority, or when the use 

of the priorities authority would cause 

a severe and prolonged disruption in the 

supply of materials, services, or 

facilities available to support normal 

U.S. economic activities, and precludes 

use of allocations to ration materials or 

services at the retail level. 

• No allocation action may be used to 

control the general distribution of a 

material in the civilian market unless 

the Department of Commerce makes, 

and the President approves, a finding 

that the requirements of the national 

defense for such material cannot 

otherwise be met without creating a 

significant dislocation of the normal 

distribution of such material in the 

civilian market to such a degree as to 

create appreciable hardship. 

• The rule specifies the minimum 

information that must be included in an 

allocation order and provides for issuing 

the order directly to affected persons or 

through publication of a constructive 

notice in the Federal Register. All 

allocation orders must explain the 

relationship between the allocation 

order and any previously or 

subsequently issued rated or unrated 

orders and the start and end dates of the 

order. 

• Allocation orders must be accepted 

and complied with. A person who is 

subject to an allocation order who 

believes that compliance is not possible 

must notify the Office of Strategic 

Industries and Economic Security. An 

allocation must be complied with to the 

extent possible until the Department of 

Commerce notifies the person that the 

order has been changed or cancelled. 

Regulatory Requirements 

1. Executive Orders 13563 and 12866 

direct agencies to assess all costs and 

benefits of available regulatory 

alternatives and, if regulation is 

necessary, to select regulatory 

approaches that maximize net benefits 

(including potential economic, 

environmental, public health and safety 

effects, distribute impacts, and equity). 

Executive Order 13563 emphasizes the 

importance of quantifying both costs 

and benefits, of reducing costs, of 

harmonizing rules, and of promoting 

flexibility. This rule has been 

designated a ‘‘significant regulatory 

action’’ under Executive Order 12866. 

Accordingly, the rule has been reviewed 


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47562 Federal Register / Vol. 79, No. 157 / Thursday, August 14, 2014 / Rules and Regulations 

by the Office of Management and 

Budget (OMB). 

2. Notwithstanding any other 

provision of law, no person is required 

to respond to, nor shall any person be 

subject to a penalty for failure to comply 

with a collection of information, subject 

to the requirements of the Paperwork 

Reduction Act of 1995 (44 U.S.C. 3501 

et seq.) (PRA), unless that collection of 

information displays a currently valid 

OMB control number. This regulation 

contains two collections previously 

approved by OMB. OMB control 

number 0694–0053 authorizes the 

requirement that recipients of rated 

orders notify the party placing the order 

whether or not they will fulfill the rated 

order. BIS believes that this rule will not 

materially change the burden imposed 

by this collection. OMB control number 

0694–0057 authorizes the collection of 

information that parties must send to 

BIS when seeking special priorities 

assistance or priority rating authority. 

BIS believes that this rule will not 

materially change the burden imposed 

by this collection. Send comments 

regarding this burden estimate or any 

other aspect of these collections of 

information, including suggestions for 

reducing the burden, to Jasmeet K. 

Seehra, Office of Management and 

Budget, by email at jseehra@

omb.eop.gov or by fax to (202) 395–7285 

and to Liam McMenamin, 

liam.mcmenamin@bis.doc.gov. 

3. This rule does not contain policies 

with Federalism implications as that 

term is defined under E.O. 13132. 

4. The Regulatory Flexibility Act 

(RFA), as amended by the Small 

Business Regulatory Enforcement 

Fairness Act of 1996 (SBREFA), 5 U.S.C. 

601 et seq., generally requires an agency 

to prepare a regulatory flexibility 

analysis of any rule subject to the notice 

and comment rulemaking requirements 

under the Administrative Procedure Act 

(5 U.S.C. 553) or any other statute. 

Under section 605(b) of the RFA, 

however, if the head of an agency 

certifies that a rule will not have a 

significant impact on a substantial 

number of small entities, the statute 

does not require the agency to prepare 

a regulatory flexibility analysis. 

Pursuant to section 605(b), the Chief 

Counsel for Regulation, Department of 

Commerce, certified to the Chief 

Counsel for Advocacy, Small Business 

Administration that this rule will not 

have a significant impact on a 

substantial number of small entities for 

the reasons explained below. No other 

law requires such an analysis. 

Consequently, no regulatory flexibility 

analysis is required and none has been 

prepared. The factual support for this 

certification is provided below. 

Number of Small Entities 

Small entities include small 

businesses, small organizations and 

small governmental jurisdictions. For 

purposes of assessing the impacts of this 

rule on small entities, a small business, 

as described in the Small Business 

Administration’s Table of Small 

Business Size Standards Matched to 

North American Industry Classification 

System Codes (Effective January 22, 

2014), has a maximum annual revenue 

of $35.5 million and a maximum of 

1,500 employees (for some business 

categories, these numbers are lower). A 

small governmental jurisdiction is a 

government of a city, town, school 

district or special district with a 

population of less than 50,000. A small 

organization is any not-for-profit 

enterprise which is independently 

owned and operated and is not 

dominant in its field. 

This rule sets criteria under which 

BIS (or agencies to which BIS delegates 

authority) will authorize prioritization 

of certain orders or contracts as well as 

criteria under which BIS would issue 

orders allocating resources or 

production facilities. This rule would 

affect organizations that enter into 

contracts to supply materials, services 

and facilities that are necessary for the 

national defense (broadly defined to 

include ‘‘Programs for military and 

energy production or construction, 

military or critical infrastructure 

assistance to any foreign nation, 

homeland security, stockpiling, space, 

and any directly related activity’’). BIS’s 

experience in administering its 

priorities authority indicates that forprofit businesses are the organizations 

that provide such materials, services 

and facilities. If it becomes necessary to 

exercise allocations authority, the same 

types of materials, services and facilities 

and the same types of providers are the 

ones likely to be affected. Therefore, BIS 

believes that two of the categories of 

small entities identified by the RFA, 

small organizations and small 

government jurisdictions, are unlikely 

to experience any economic impact as a 

result of this rule. However, BIS has no 

basis on which to estimate the number 

of small businesses that are likely to be 

affected by this rule. 

Impact 

BIS believes that any impact that this 

rule might have on small businesses 

would be minor. The rule has two 

principal components: Prioritization 

and allocation. Prioritization is the 

process that is, by far, more likely to be 

used. Under prioritization, BIS 

designates certain orders, which may be 

placed by Government or by private 

entities, and assigned under one of two 

possible priority levels. Once so 

designated, such orders are referred to 

as ‘‘rated orders.’’ The recipient of a 

rated order must give it priority over an 

unrated order. The recipient of a rated 

order with the higher priority rating 

must give that order priority over any 

rated orders with the lower priority 

rating and over unrated orders. A 

recipient of a rated order may place one 

or more orders at the same priority level 

with suppliers and subcontractors for 

supplies and services necessary to fulfill 

the recipient’s rated order and the 

suppliers and subcontractors must treat 

the request from the rated order 

recipient as a rated order with the same 

priority level as the original rated order. 

The rule does not require recipients to 

fulfill rated orders if the price or terms 

of sale are not consistent with the price 

or terms of sale of similar non-rated 

orders. The rule provides a defense from 

liability for damages or penalties for 

actions or inactions made in compliance 

with the rule. 

BIS expects that this rule will not 

result in any increase in the use of rated 

orders. The changes to the provisions of 

15 CFR part 700 that apply to rated 

orders are primarily simplifications and 

clarifications. The standards under 

which a rated order would be issued are 

not changed by this rule. 

Although rated orders could require a 

firm to fill one order prior to filling 

another, they would not require a 

reduction in the total volume of orders 

nor would they require the recipient to 

reduce prices or provide rated orders 

with more favorable terms than a similar 

non-rated order. Under these 

circumstances, the economic effects on 

the rated order recipient of substituting 

one order for another are likely to be 

offsetting, resulting in no net loss. 

Allocations could be used to control 

the general distribution of materials or 

services in the civilian market. Specific 

allocation actions that BIS might take 

are set-asides, directives and allotments. 

A set-aside is an official action that 

requires a person to reserve resource 

capacity in anticipation of receipt of 

rated orders. A directive is an official 

action that requires a person to take or 

refrain from taking certain actions in 

accordance with its provisions. A 

directive can require a person to stop or 

reduce production of an item, prohibit 

the use of selected items, or divert 

supply of one type of product to 

another, or to supply a specific quantity, 

size, shape, and type of an item within 

a specific time period. An allotment is 


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an official action that specifies the 

maximum quantity of a material, service 

or facility authorized for use in a 

specific program or application. 

According to available records, BIS 

has not taken any actions under its 

existing allocations authority in decades 

and any future allocations actions 

would be used only in extraordinary 

circumstances. As required by section 

101(b) of the Defense Production Act of 

1950, as amended, (50 U.S.C. app. 

2071), hereinafter ‘‘DPA,’’ and by 

Section 201(e) of Executive Order 13603 

of March 16, 2012, BIS may implement 

allocations to control the general 

distribution of a material in the civilian 

market only if the Department of 

Commerce made, and the President 

approved, a finding (1) that the material 

[or service] is a scarce and critical 

material [or service] essential to the 

national defense, and (2) that the 

requirements of the national defense for 

such material [or service] cannot 

otherwise be met without creating a 

significant dislocation of the normal 

distribution of such material [or service] 

in the civilian market to such a degree 

as to create appreciable hardship. The 

term ‘‘national defense’’ is defined to 

mean ‘‘programs for military and energy 

production or construction, military or 

critical infrastructure assistance to any 

foreign nation, homeland security, 

stockpiling, space, and any related 

activity. Such term includes emergency 

preparedness activities conducted 

pursuant to title VI of the Robert T. 

Stafford Disaster Relief and Emergency 

Assistance Act (42 U.S.C. 5195 et seq.) 

and critical infrastructure protection 

and restoration.’’ 

Even a narrower use of allocations 

authority under this rule will be subject 

to the policy that this rule will set forth 

in 15 CFR 700.30, providing that 

allocations will be used only when there 

is insufficient supply of a material, 

service, or facility to satisfy national 

defense requirements through use of 

priorities authority or when the use of 

priorities authority would cause a 

severe and prolonged disruption in the 

supply of materials, services or facilities 

available to support normal U.S. 

economic activity. 

Any allocation actions taken by BIS 

would also have to comply with Section 

701(e) of the DPA (50 U.S.C. app. 

2151(e)), which provides that ‘‘small 

business concerns shall be accorded, to 

the extent practicable, a fair share of the 

such material, in proportion to the share 

received by such business concerns 

under normal conditions, giving such 

special consideration as may be possible 

to emerging business concerns.’’ 

Conclusion 

Although BIS cannot determine 

precisely the number of small entities 

that would be affected by this rule, BIS 

believes that the overall impact on such 

entities would not be significant. With 

respect to priorities authority, this rule 

is not likely to increase the number of 

priority rated contracts compared to the 

number being issued currently. 

Therefore the priorities authorities’ 

provisions of this rule are unlikely to 

have any economic impact. BIS’s lack of 

recent experience with allocations 

makes gauging the impact of an 

allocation, should one occur, difficult. 

However, because (1) all allocation 

actions require planning that includes 

evaluation of the impact on the civilian 

market, (2) allocations to control the 

general distribution of a material in the 

civilian market may be imposed only 

after a determination by the President, 

and (3) BIS has taken no allocation 

actions in decades, one can expect 

allocations will be a rare occurrence 

going forward. BIS believes that the 

expected unchanged level of contract 

prioritizations, planning and review 

requirements and requirements of 

section 701 of the DPA, which are 

directed at protecting the interests of 

small businesses, provide reasonable 

assurance that any impact on small 

business will not be significant. For the 

reasons set forth above, the Chief 

Counsel for Regulations at the 

Department of Commerce certified that 

this action would not have a significant 

impact on a substantial number of small 

entities. 

List of Subjects in 15 CFR Part 700 

Administrative practice and 

procedure, Business and industry, 

Government contracts, National defense, 

Reporting and recordkeeping 

requirements, Strategic and critical 

materials. 

For the reasons stated in the 

preamble, 15 CFR part 700 is amended 

as follows: 

PART 700—[AMENDED] 

■ 1. The authority citation for part 700 

is revised to read as follows: 

Authority: 50 U.S.C. App. 2061, et seq.; 42 

U.S.C. 5195, et seq.; 50 U.S.C. App 468; 10 

U.S.C. 2538; 50 U.S.C. 82; E.O. 12656, 53 FR 

226, 3 CFR, 1988, Comp. 585; E.O. 12742, 56 

FR 1079, 3 CFR, 1991 Comp. 309; E.O. 13603, 

77 FR 16651, 3 CFR, 2012 Comp., p. 225. 

■ 2. Section 700.1 is revised to read as 

follows: 

§ 700.1 Purpose of this part. 

This part implements the Defense 

Priorities and Allocations System 

(DPAS) that is administered by the 

Department of Commerce, Bureau of 

Industry and Security. The DPAS 

implements the priorities and 

allocations authority of the Defense 

Production Act, including use of that 

authority to support emergency 

preparedness activities pursuant to Title 

VI of the Robert T. Stafford Disaster 

Relief and Emergency Assistance Act 

(42 U.S.C. 5195 et seq.), and the 

priorities authority of the Selective 

Service Act and related statutes, all with 

respect to industrial resources. The 

DPAS establishes procedures for the 

placement, acceptance, and 

performance of priority rated contracts 

and orders and for the allocation of 

materials, services, and facilities. The 

guidance and procedures in this part are 

generally consistent with the guidance 

and procedures provided in other 

regulations issued under Executive 

Order 13603 authority. 

■ 3. Section 700.2 is revised to read as 

follows: 

§ 700.2 Introduction. 

(a) Certain national defense and 

energy programs (including military, 

emergency preparedness, homeland 

security, and critical infrastructure 

protection and restoration activities) are 

approved for priorities and allocations 

support. A complete list of currently 

approved programs is provided at 

Schedule I to this part. 

(b) The Department of Commerce 

administers the DPAS and may exercise 

priorities and allocations authority to 

ensure the timely delivery of industrial 

items to meet approved program 

requirements. 

(c) The Department of Commerce has 

delegated authority to place priority 

ratings on contracts or orders necessary 

or appropriate to promote the national 

defense to certain government agencies 

that issue such contracts or orders. Such 

delegations include authority to 

authorize recipients of rated orders to 

place ratings on contracts or orders to 

contractors, subcontractors, and 

suppliers. Schedule I to this part 

includes a list of agencies to which the 

Department of Commerce has delegated 

authority. 

■ 4. In § 700.3, paragraphs (a), (b), and 

(e) are revised to read as follows: 

§ 700.3 Priority ratings and rated orders. 

(a) Rated orders are identified by a 

priority rating and a program 

identification symbol. Rated orders take 

precedence over all unrated orders as 

necessary to meet required delivery 

dates. Among rated orders, DX rated 

orders take precedence over DO rated 

orders. Program identification symbols 


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indicate which approved program is 

attributed to the rated order. 

(b) Persons receiving rated orders 

must give them preferential treatment as 

required by this part. 

* * * * * 

(e) Persons may place a priority rating 

on orders only when they are in receipt 

of a rated order, have been explicitly 

authorized to do so by the Department 

of Commerce or a Delegate Agency, or 

are otherwise permitted to do so by this 

part. 

§§ 700.4, 700.5, 700.6, and 700.7 [Removed 

and Reserved] 

■ 5. Sections 700.4, 700.5, 700.6, and 

700.7 are removed and reserved. 

■ 6. Section 700.8 is revised to read as 

follows: 

§ 700.8 Definitions. 

The definitions in this section apply 

throughout this part: 

Allocation. The control of the 

distribution of materials, services or 

facilities for a purpose deemed 

necessary or appropriate to promote the 

national defense. 

Allocation order. An official action to 

control the distribution of materials, 

services, or facilities for a purpose 

deemed necessary or appropriate to 

promote the national defense. 

Allotment. An official action that 

specifies the maximum quantity of a 

material, service, or facility authorized 

for a specific use to promote the 

national defense. 

Approved program. A program 

determined as necessary or appropriate 

for priorities and allocations support to 

promote the national defense by the 

Secretary of Defense, the Secretary of 

Energy, or the Secretary of Homeland 

Security, under the authority of the 

Defense Production Act and Executive 

Order 13603, or the Selective Service 

Act and Executive Order 12742. 

Construction. The erection, addition, 

extension, or alteration of any building, 

structure, or project, using materials or 

products which are to be an integral and 

permanent part of the building, 

structure, or project. Construction does 

not include maintenance and repair. 

Critical infrastructure. Any systems 

and assets, whether physical or cyberbased, so vital to the United States that 

the degradation or destruction of such 

systems and assets would have a 

debilitating impact on national security, 

including, but not limited to, national 

economic security and national public 

health or safety. 

Defense Production Act. The Defense 

Production Act of 1950, as amended (50 

U.S.C. App. 2061, et seq.). 

Delegate Agency. A government 

agency authorized by delegation from 

the Department of Commerce to place 

priority ratings on contracts or orders 

needed to support approved programs. 

Directive. An official action which 

requires a person to take or refrain from 

taking certain actions in accordance 

with its provisions. 

Emergency preparedness. All 

activities and measures designed or 

undertaken to prepare for or minimize 

the effects of a hazard upon the civilian 

population, to deal with the immediate 

emergency conditions which would be 

created by the hazard, and to effectuate 

emergency repairs to, or the emergency 

restoration of, vital utilities and 

facilities destroyed or damaged by the 

hazard. Emergency preparedness 

includes the following: 

(1) Measures to be undertaken in 

preparation for anticipated hazards 

(including the establishment of 

appropriate organizations, operational 

plans, and supporting agreements, the 

recruitment and training of personnel, 

the conduct of research, the 

procurement and stockpiling of 

necessary materials and supplies, the 

provision of suitable warning systems, 

the construction or preparation of 

shelters, shelter areas, and control 

centers, and, when appropriate, the 

nonmilitary evacuation of the civilian 

population); 

(2) Measures to be undertaken during 

a hazard (including the enforcement of 

passive defense regulations prescribed 

by duly established military or civil 

authorities, the evacuation of personnel 

to shelter areas, the control of traffic and 

panic, and the control and use of 

lighting and civil communications); and 

(3) Measures to be undertaken 

following a hazard (including activities 

for firefighting, rescue, emergency 

medical, health and sanitation services, 

monitoring for specific dangers of 

special weapons, unexploded bomb 

reconnaissance, essential debris 

clearance, emergency welfare measures, 

and immediately essential emergency 

repair or restoration of damaged vital 

facilities). 

Hazard. An emergency or disaster 

resulting from: 

(1) A natural disaster, or 

(2) An accidental or man-caused 

event. 

Homeland security. Includes efforts: 

(1) To prevent terrorist attacks within 

the United States; 

(2) To reduce the vulnerability of the 

United States to terrorism; 

(3) To minimize damage from a 

terrorist attack in the United States; and 

(4) To recover from a terrorist attack 

in the United States. 

Industrial resources. All materials, 

services, and facilities, including 

construction materials, the authority for 

which has not been delegated to other 

agencies under Executive Order 13603. 

This term also includes the term ‘‘item’’ 

as defined and used in this part. 

Item. Any raw, in process, or 

manufactured material, article, 

commodity, supply, equipment, 

component, accessory, part, assembly, 

or product of any kind, technical 

information, process, or service. 

Maintenance and repair and/or 

operating supplies (MRO). (1) 

Maintenance is the upkeep necessary to 

continue any plant, facility, or 

equipment in working condition. 

(2) Repair is the restoration of any 

plant, facility, or equipment to working 

condition when it has been rendered 

unsafe or unfit for service by wear and 

tear, damage, or failure of parts. 

(3) Operating supplies are any items 

carried as operating supplies according 

to a person’s established accounting 

practice. Operating supplies may 

include hand tools and expendable 

tools, jigs, dies, fixtures used on 

production equipment, lubricants, 

cleaners, chemicals and other 

expendable items. 

(4) MRO does not include items 

produced or obtained for sale to other 

persons or for installation upon or 

attachment to the property of another 

person, or items required for the 

production of such items; items needed 

for the replacement of any plant, 

facility, or equipment; or items for the 

improvement of any plant, facility, or 

equipment by replacing items which are 

still in working condition with items of 

a new or different kind, quality, or 

design. 

National defense. Programs for 

military and energy production or 

construction, military or critical 

infrastructure assistance to any foreign 

nation, homeland security, stockpiling, 

space, and any directly related activity. 

Such term includes emergency 

preparedness activities conducted 

pursuant to Title VI of The Robert T. 

Stafford Disaster Relief and Emergency 

Assistance Act (42 U.S.C. 5195 et seq.) 

and critical infrastructure protection 

and restoration. 

Official action. An action taken by the 

Department of Commerce under the 

authority of the Defense Production Act, 

the Selective Service Act and related 

statutes, and this part. Such actions 

include the issuance of rating 

authorizations, directives, letters of 

understanding, demands for 

information, inspection authorizations, 

administrative subpoenas and allocation 

orders. 


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Person. Any individual, corporation, 

partnership, association, or any other 

organized group of persons, or legal 

successor or representative thereof; or 

any authorized State or local 

government or agency thereof; and for 

purposes of administration of this part, 

includes the United States Government 

and any authorized foreign government 

or international organization or agency 

thereof, delegated authority as provided 

in this part. 

Priorities authority. The authority of 

the Department of Commerce, pursuant 

to Section 101 of the Defense 

Production Act, to require priority 

performance of contracts and orders for 

industrial resource items for use in 

approved programs. 

Priority rating. An identifying code 

assigned by a Delegate Agency or 

authorized person placed on all rated 

orders and consisting of the rating 

symbol and the program identification 

symbol. 

Production equipment. Any item of 

capital equipment used in producing 

materials or furnishing services that has 

a unit acquisition cost of $2,500 or 

more, an anticipated service life in 

excess of one year, and the potential for 

maintaining its integrity as a capital 

item. 

Program identification symbols. 

Abbreviations used to indicate which 

approved program is supported by a 

rated order. 

Rated order. A prime contract, a 

subcontract, or a purchase order in 

support of an approved program issued 

in accordance with the provisions of 

this part. 

Selective Service Act. Section 18 of 

the Selective Service Act of 1948 (50 

U.S.C. app. 468). 

Set-aside. An official action that 

requires a person to reserve materials, 

services, or facilities capacity in 

anticipation of the receipt of rated 

orders. 

Stafford Act. Title VI (Emergency 

Preparedness) of the Robert T. Stafford 

Disaster Relief and Emergency 

Assistance Act, as amended (42 U.S.C. 

5195, et seq.). 

Working day. Any day that the 

recipient of an order is open for 

business. 

■ 7. Section 700.10 is revised to read as 

follows: 

§ 700.10 Authority. 

(a) Delegations to the Department of 

Commerce. The priorities and 

allocations authorities of the President 

under Title I of the Defense Production 

Act with respect to industrial resources 

have been delegated to the Secretary of 

Commerce under Executive Order 13603 

of March 16, 2012 (3 CFR, 2012 Comp., 

p. 225). The priorities authorities of the 

President under the Selective Service 

Act and related statutes with respect to 

industrial resources have also been 

delegated to the Secretary of Commerce 

under Executive Order 12742 of January 

8, 1991 (3 CFR, 1991 Comp. 309). 

(b) Delegations by the Department of 

Commerce. The Department of 

Commerce has authorized the Delegate 

Agencies to assign priority ratings to 

orders for industrial resources needed 

for use in approved programs. 

(c) Jurisdiction limitations. (1) The 

priorities and allocations authority for 

certain items have been delegated under 

Executive Order 13603, other executive 

orders, or Interagency Memoranda of 

Understanding between other agencies. 

Unless otherwise agreed to by the 

concerned agencies, the provisions of 

this part are not applicable to those 

other items which include: 

(i) Food resources, food resource 

facilities, livestock resources, veterinary 

resources, plant health resources, and 

the domestic distribution of farm 

equipment and commercial fertilizer 

(delegated to the Department of 

Agriculture); 

(ii) All forms of energy (delegated to 

the Department of Energy); 

(iii) Health resources (delegated to the 

Department of Health and Human 

Services); 

(iv) All forms of civil transportation 

(delegated to the Department of 

Transportation); and 

(v) Water resources (delegated to the 

Department of Defense/U.S. Army Corps 

of Engineers). 

(2) The priorities and allocations 

authority set forth in this part may not 

be applied to communications services 

subject to Executive Order 13618 of July 

6, 2012—Assignment of National 

Security and Emergency Preparedness 

Communications Functions (3 CFR, 

2012 Comp., p. 273). 

■ 8. Section 700.11 is amended by 

revising the second sentence of 

paragraph (b) to read as follows: 

§ 700.11 Priority ratings. 

* * * * * 

(b) Program identification symbols. 

* * * The list of approved programs 

and their identification symbols is 

found in Schedule I to this part. * * * 

* * * * * 

■ 9. Section 700.12 is revised to read as 

follows: 

§ 700.12 Elements of a rated order. 

(a) Elements required for all rated 

orders. (1) The appropriate priority 

rating and program identification 

symbol (e.g., DO–A1, DX–A4, DO–N1). 

(2) A required delivery date or dates. 

The words ‘‘immediately’’ or ‘‘as soon 

as possible’’ do not constitute a delivery 

date. When a ‘‘requirements contract,’’ 

‘‘basic ordering agreement,’’ ‘‘prime 

vendor contract,’’ or similar 

procurement document bearing a 

priority rating contains no specific 

delivery date or dates, but provides for 

the furnishing of items from time-totime or within a stated period against 

specific purchase orders, such as 

‘‘calls,’’ ‘‘requisitions,’’ and ‘‘delivery 

orders,’’ the purchase orders supporting 

such contracts or agreements must 

specify a required delivery date or dates 

and are to be considered as rated as of 

the date of their receipt by the supplier 

and not as of the date of the original 

procurement document. 

(3) The written signature on a 

manually placed order, or the digital 

signature or name on an electronically 

placed order, of an individual 

authorized to sign rated orders for the 

person placing the order. The signature, 

manual or digital, certifies that the rated 

order is authorized under this part and 

that the requirements of this part are 

being followed. 

(4) A statement that reads in 

substance: ‘‘This is a rated order 

certified for national defense use and 

you are required to follow all the 

provisions of the Defense Priorities and 

Allocations System regulations (15 CFR 

part 700).’’ 

(b) Additional element required for 

certain emergency preparedness rated 

orders. If a rated order is placed for the 

purpose of emergency preparedness 

requirements and expedited action is 

necessary or appropriate to meet these 

requirements, the following statement 

must be included in the order: ‘‘This 

rated order is placed for the purpose of 

emergency preparedness. It must be 

accepted or rejected within [Insert a 

time limit no less than the minimum 

applicable time limit specified in 

§ 700.13(d)(2)].’’ 

■ 10. Section 700.13 is amended by 

revising paragraph (d) to read as 

follows: 

§ 700.13 Acceptance and rejection of rated 

orders. 

* * * * * 

(d) Customer notification 

requirements. (1) Except as provided in 

paragraph (d)(2) of this section, a person 

must accept or reject a rated order in 

writing (hard copy), or in electronic 

format, within fifteen (15) working days 

after receipt of a DO rated order and 

within ten (10) working days after 

receipt of a DX rated order. If the order 

is rejected, the person must give reasons 


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in writing or electronically for the 

rejection. 

(2) If a rated order is placed for the 

purpose of emergency preparedness 

requirements and expedited action is 

necessary or appropriate to meet these 

requirements and the order includes the 

statement set forth in § 700.12(b), a 

person must accept or reject the rated 

order and transmit the acceptance or 

rejection in writing or in an electronic 

format within the time specified in the 

rated order. The minimum times for 

acceptance or rejection that such orders 

may specify are six (6) hours after 

receipt of the order if the order is issued 

by an authorized person in response to 

a hazard that has occurred, or twelve 

(12) hours after receipt if the order is 

issued by an authorized person to 

prepare for an imminent hazard. 

(3) If a person has accepted a rated 

order and subsequently finds that 

shipment or performance will be 

delayed, the person must notify the 

customer immediately, give the reasons 

for the delay, and advise of a new 

shipment or performance date. If 

notification is given verbally, written 

(hard copy) or electronic confirmation 

must be provided within one working 

day of the verbal notice. 

■ 11. Section 700.14 is amended by 

adding a sentence at the end of the 

examples paragraph in paragraph (b) 

and by revising paragraph (c)(2) to read 

as follows: 

§ 700.14 Preferential scheduling. 

* * * * * 

(b) * * * 

Examples: * * * However, if business 

operations cannot be altered to meet 

both the June 3 and July 15 delivery 

dates, then the DX rated order must be 

given priority over the DO rated order. 

(c) * * * 

(2) If a person is unable to resolve 

rated order delivery or performance 

conflicts under this section, the person 

should promptly seek special priorities 

assistance as provided in subpart H of 

this part. If the person’s customer 

objects to the rescheduling of delivery 

or performance of a rated order, the 

customer should promptly seek special 

priorities assistance as provided in 

subpart H of this part. For any rated 

order against which delivery or 

performance will be delayed, the person 

must notify the customer as provided in 

§ 700.13(d)(3). 

* * * * * 

■ 12. Section 700.15 is amended by 

revising the second sentence of 

paragraph (a), the example following 

paragraph (a), the second sentence of 

paragraph (b), and by adding paragraph 

(c) to read as follows: 

§ 700.15 Extension of priority ratings. 

(a) * * * The person must use the 

priority rating indicated on the 

customer’s rated order, except as 

otherwise provided in this part or as 

directed by the Department of 

Commerce. 

Example: If a person is in receipt of 

a DO–A3 rated order for a navigation 

system and needs to purchase 

semiconductors for its manufacture, that 

person must use a DO–A3 rated order to 

obtain the needed semiconductors. 

(b) * * * Therefore, the inclusion of 

the rating will continue from contractor 

to subcontractor to supplier throughout 

the entire supply chain. 

(c) A person must use rated orders 

with suppliers to obtain items needed to 

fill an emergency preparedness rated 

order. That person must require 

acceptance or rejection, and 

transmission of that acceptance or 

rejection by the supplier within the time 

limit stated in the rated order that is 

being filled. 

■ 13. Section 700.16 is amended by 

revising paragraphs (d), (e), and (f) to 

read as follows: 

§ 700.16 Changes or cancellations of 

priority ratings and rated orders. 

* * * * * 

(d) The following amendments do not 

constitute a new rated order: a change 

in shipping destination; a reduction in 

the total amount of the order; an 

increase in the total amount of the order 

which has negligible impact upon 

deliveries; a minor variation in size or 

design (prior to the start of production); 

or a change which is agreed upon 

between the supplier and the customer. 

(e) A person must cancel any rated 

orders that the person (or a predecessor 

in interest) has placed with suppliers or 

cancel the priority ratings on those 

orders if the person no longer needs the 

items in those orders to fill a rated 

order. 

(f) A person adding a rating to an 

unrated order, or changing or cancelling 

a priority rating must promptly notify 

all suppliers to whom the order was 

sent of the addition, change or 

cancellation. 

■ 14. Section 700.17 is amended by 

revising paragraphs (d)(1)(ii) and (f) to 

read as follows: 

§ 700.17 Use of rated orders. 

* * * * * 

(d) * * * 

(1) * * * 

(ii) The elements of a rated order, as 

required by § 700.12, are included on 

the order with the statement required in 

§ 700.12(a)(4) modified to read in 

substance: ‘‘This purchase order 

contains rated order quantities certified 

for national defense use, and you are 

required to follow all the provisions of 

the Defense Priorities and Allocations 

System regulations (15 CFR part 700) as 

it pertains to the rated quantities.’’ 

* * * * * 

(f) A person is not required to place 

a priority rating on an order for less than 

$75,000, or one half of the Simplified 

Acquisition Threshold (as established in 

the Federal Acquisition Regulation 

(FAR)) (see FAR section 2.101), 

whichever amount is greater, provided 

that delivery can be obtained in a timely 

fashion without the use of the priority 

rating. 

■ 15. Section 700.18 is revised to read 

as follows: 

§ 700.18 Limitations on placing rated 

orders. 

(a) General limitations. (1) A person 

may not place a rated order pursuant to 

this part unless the person is in receipt 

of a rated order, has been explicitly 

authorized to do so by the Department 

of Commerce or a Delegate Agency or is 

otherwise permitted to do so by this 

part. 

(2) Rated orders may not be used to 

obtain: 

(i) Delivery on a date earlier than 

needed; 

(ii) A greater quantity of the item than 

needed, except to obtain a minimum 

procurable quantity; 

(iii) Items in advance of the receipt of 

a rated order, except as specifically 

authorized by the Department of 

Commerce (see § 700.41(c) for 

information on obtaining authorization 

for a priority rating in advance of a rated 

order); or 

(iv) Any of the following items unless 

specific priority rating authority has 

been obtained from a Delegate Agency 

or the Department of Commerce: 

(A) Items for plant improvement, 

expansion or construction, unless they 

will be physically incorporated into a 

construction project covered by a rated 

order; or 

(B) Production or construction 

equipment or items to be used for the 

manufacture of production equipment 

(for information on requesting priority 

rating authority, see § 700.41). 

(v) Any items related to the 

development of chemical or biological 

warfare capabilities or the production of 

chemical or biological weapons, unless 

such development or production has 

been authorized by the President or the 

Secretary of Defense. 

(3) Separate rated orders may not be 

placed solely for obtaining minimum 

procurable quantities on each order if 

the minimum procurable quantity 


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would be sufficient to cover more than 

one rated order. 

(b) Specific item limitations. 

Notwithstanding any authorization or 

requirement to place a rated order stated 

elsewhere in this part, no person may 

place a rated order to obtain the 

following items unless such order is 

authorized by an official action of the 

Department of Commerce. 

(1) Copper raw materials. 

(2) Crushed stone. 

(3) Gravel. 

(4) Sand. 

(5) Scrap. 

(6) Slag. 

(7) Steam heat, central. 

(8) Waste paper. 

■ 16. Section 700.21 is revised to read 

as follows: 

§ 700.21 Application for priority rating 

authority. 

(a) For projects believed to maximize 

domestic energy supplies, a person may 

request priority rating authority for 

scarce, critical, and essential supplies of 

materials, equipment, and services 

(related to the production of materials or 

equipment, or the installation, repair, or 

maintenance of equipment) by 

submitting a request to the Department 

of Energy. Further information may be 

obtained from the Department of 

Energy, Office of Electricity Delivery 

and Energy Reliability, 1000 

Independence Avenue SW., 

Washington, DC 20585. 

(b) If the Department of Energy 

notifies the Department of Commerce 

that the project maximizes domestic 

energy supplies and that the materials, 

equipment, or services are critical and 

essential, the Department of Commerce 

will determine whether the items in 

question are scarce, and, if they are 

scarce, whether there is a need to use 

the priorities authority. 

(1) Scarcity implies an unusual 

difficulty in obtaining the materials, 

equipment, or services in a time frame 

consistent with the timely completion of 

the energy project. In determining 

scarcity, the Department of Commerce 

may consider factors such as the 

following: 

(i) Value and volume of material or 

equipment shipments; 

(ii) Consumption of material and 

equipment; 

(iii) Volume and market trends of 

imports and exports; 

(iv) Domestic and foreign sources of 

supply; 

(v) Normal levels of inventories; 

(vi) Rates of capacity utilization; 

(vii) Volume of new orders; and 

(viii) Lead times for new orders. 

(2) In finding whether there is a need 

to use the priorities authority, the 

Department of Commerce may consider 

alternative supply solutions and other 

measures. 

(c) After the Department of Commerce 

has conducted its analysis, it will advise 

the Department of Energy whether the 

two findings have been satisfied. If the 

findings are satisfied, the Department of 

Commerce will authorize the 

Department of Energy to grant the use of 

a priority rating to the applicant. 

(d) Schedule I to this part includes a 

list of approved programs to support the 

maximization of domestic energy 

supplies. A Department of Energy 

regulation setting forth the procedures 

and criteria used by the Department of 

Energy in making its determination and 

findings is published in 10 CFR part 

216. 

■ 17. The heading of subpart F is 

revised to read as follows: 

Subpart F—Allocation Actions 

■ 18. Section 700.30 is revised to read 

as follows: 

§ 700.30 Policy. 

(a) Allocation orders will: 

(1) Be used only when there is 

insufficient supply of a material, 

service, or facility to satisfy national 

defense requirements through the use of 

the priorities authority or when the use 

of the priorities authority would cause 

a severe and prolonged disruption in the 

supply of materials, services, or 

facilities available to support normal 

U.S. economic activities; and 

(2) Not be used to ration materials or 

services at the retail level. 

(b) Allocation orders, when used, will 

be distributed equitably among the 

suppliers of the materials, services, or 

facilities being allocated and not require 

any person to relinquish a 

disproportionate share of the civilian 

market. 

■ 19. Section 700.31 is revised to read 

as follows: 

§ 700.31 General procedures. 

Before the Department of Commerce 

uses its allocations authority to address 

a supply problem within its resource 

jurisdiction, it will develop a plan that 

includes: 

(a) A copy of the written 

determination made in accordance with 

section 202 of Executive Order 13603, 

that the program or programs that would 

be supported by the allocation action 

are necessary or appropriate to promote 

the national defense; 

(b) A detailed description of the 

situation to include any unusual events 

or circumstances that have created the 

requirement for an allocation action; 

(c) A statement of the specific 

objective(s) of the allocation action; 

(d) A list of the materials, services, or 

facilities to be allocated; 

(e) A list or description of the sources 

of the materials, services, or facilities 

that will be subject to the allocation 

action; 

(f) A detailed description of the 

provisions that will be included in the 

allocations orders, including the type(s) 

of allocations orders, the percentages or 

quantity of capacity or output to be 

allocated for each purpose, the 

relationship with previously or 

subsequently received priority rated and 

unrated contracts and orders, and the 

duration of the allocation action (e.g., 

anticipated start and end dates); 

(g) An evaluation of the impact of the 

proposed allocation action on the 

civilian market; and 

(h) Proposed actions, if any, to 

mitigate disruptions to civilian market 

operations. 

■ 20. In subpart F, add §§ 700.32, 

700.33, 700.34, 700.35, and 700.36 to 

read as follows: 

§ 700.32 Controlling the general 

distribution of a material in the civilian 

market. 

No allocation action by the 

Department of Commerce may be used 

to control the general distribution of a 

material in the civilian market unless 

the conditions of paragraphs (a), (b), and 

(c) of this section are met. 

(a) The Secretary has made a written 

finding that: 

(1) Such material is a scarce and 

critical material essential to the national 

defense, and 

(2) The requirements of the national 

defense for such material cannot 

otherwise be met without creating a 

significant dislocation of the normal 

distribution of such material in the 

civilian market to such a degree as to 

create appreciable hardship. 

(b) The Secretary has submitted the 

finding for the President’s approval 

through the Assistant to the President 

and National Security Advisor and the 

Assistant to the President for Homeland 

Security and Counterterrorism. 

(c) The President has approved the 

finding. 

(d) In this section, the term, 

‘‘Secretary’’ means the Secretary of 

Commerce or his or her designee. 

§ 700.33 Types of allocations orders. 

There are three types of allocations 

orders available for communicating 

allocation actions. 

(a) Set-aside. A set-aside is an official 

action that requires a person to reserve 

materials, services, or facilities capacity 


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in anticipation of the receipt of rated 

orders. 

(b) Directive. A directive is an official 

action that requires a person to take or 

refrain from taking certain actions in 

accordance with its provisions. For 

example, a directive can require a 

person to: stop or reduce production of 

an item; prohibit the use of selected 

materials, services, or facilities; or divert 

the use of materials, services, or 

facilities from one purpose to another. 

(c) Allotment. An allotment is an official 

action that specifies the maximum 

quantity of a material, service, or facility 

authorized for a specific use to promote 

the national defense. 

§ 700.34 Elements of an allocation order. 

Allocation orders may be issued 

directly to the affected persons or by 

constructive notice to the parties 

through publication in the Federal 

Register. This section describes the 

elements that each order must include. 

(a) Elements to be included in all 

allocation orders. (1) A detailed 

description of the required allocation 

action(s), including its relationship to 

previously or subsequently received DX 

rated orders, DO rated orders and 

unrated orders. 

(2) Specific start and end calendar 

dates for each required allocation 

action. 

(b) Elements to be included in orders 

issued directly to affected persons. (1) A 

statement that reads in substance: ‘‘This 

is an allocation order certified for 

national defense use. [Insert the name of 

the person receiving the order] is 

required to comply with this order, in 

accordance with the provisions of the 

Defense Priorities and Allocations 

System regulations (15 CFR part 700).’’ 

(2) The written signature on a 

manually placed order, or the digital 

signature or name on an electronically 

placed order, of an authorized official or 

employee of the Department of 

Commerce. 

(c) Elements to be included in an 

allocation order that gives constructive 

notice through publication in the 

Federal Register. (1) A statement that 

reads in substance: ‘‘This is an 

allocation order certified for national 

defense use. [Insert the name(s) of the 

person(s) to whom the order applies or 

a description of the class of persons to 

whom the order applies] is (are) 

required to comply with this order, in 

accordance with the provisions of the 

Defense Priorities and Allocations 

System regulations (15 CFR part 700).’’ 

(2) The order must be signed by an 

authorized official or employee of the 

Department of Commerce. 

§ 700.35 Mandatory acceptance of an 

allocation order. 

(a) Except as otherwise specified in 

this section, a person shall accept and 

comply with every allocation order 

received. 

(b) A person shall not discriminate 

against an allocation order in any 

manner such as by charging higher 

prices for materials, services, or 

facilities covered by the order or by 

imposing terms and conditions for 

contracts and orders involving allocated 

materials, services, or facilities that 

differ from the person’s terms and 

conditions for contracts and orders for 

the materials, services, or facilities prior 

to receiving the allocation order. 

(c) If a person is unable to comply 

fully with the required action(s) 

specified in an allocation order, the 

person must notify the Office of 

Strategic Industries and Economic 

Security immediately, explain the 

extent to which compliance is possible, 

and give the reasons why full 

compliance is not possible. If 

notification is given verbally, written or 

electronic confirmation must be 

provided within one working day. Such 

notification does not release the person 

from complying with the order to the 

fullest extent possible, until the person 

is notified by the Department of 

Commerce that the order has been 

changed or cancelled. 

§ 700.36 Changes or cancellations of 

allocation orders. 

An allocation order may be changed 

or cancelled by an official action from 

the Department of Commerce. Notice of 

such changes or cancellations may be 

provided directly to persons to whom 

the order being cancelled or modified 

applies or constructive notice may be 

provided by publication in the Federal 

Register. 

■ 21. Section 700.50 is amended by 

revising the first sentence of paragraph 

(a) and revising paragraph (b) to read as 

follows: 

§ 700.50 General provisions. 

(a) Once a priority rating has been 

authorized pursuant to this part, further 

action by the Department of Commerce 

generally is not needed. * * * 

(b) Special priorities assistance can be 

provided for any reason consistent with 

this part, such as assisting in obtaining 

timely deliveries of items needed to 

satisfy rated orders or authorizing the 

use of priority ratings on orders to 

obtain items not otherwise ratable under 

this part. If the Department of 

Commerce is unable to resolve the 

problem or to authorize the use of a 

priority rating and believes additional 

assistance is warranted, the Department 

of Commerce may forward the request to 

another agency, identified in 

§ 700.10(c), as appropriate, for action. 

* * * * * 

§ 700.51—[Amended] 

■ 22. Section 700.51 is amended by: 

■ a. Removing the word ‘‘regulation’’ 

and adding in its place the word ‘‘part’’ 

in paragraph (a), introductory text; 

■ b. Adding the phrase ‘‘the Department 

of’’ immediately preceding the word 

‘‘Commerce’’ in the first sentence of 

paragraph (c)(1); 

■ c. Adding the phrase ‘‘the Department 

of’’ immediately preceding the word 

‘‘Commerce’’ in paragraph (c)(3), 

introductory text; 

■ d. Adding the word ‘‘and’’ at the end 

of paragraph (c)(3)(iv); 

■ e. Removing paragraph (c)(3)(v); and 

■ f. Redesignating paragraph (c)(3)(vi) as 

paragraph (c)(3)(v). 

§ 700.53—[Amended] 

■ 23. Section 700.53 is amended by 

adding the words ‘‘the Department of’’ 

between the word ‘‘or’’ and the word 

‘‘Commerce’’ in the introductory text. 

§ 700.54—[Amended] 

■ 24. Section 700.54 is amended by 

adding the words ‘‘the Department of’’ 

between the word ‘‘and’’ and the word 

‘‘Commerce’’ in the introductory text. 

■ 25. Section 700.55 is revised to read 

as follows: 

§ 700.55 Homeland security, emergency 

preparedness, and critical infrastructure 

protection and restoration assistance 

programs within the United States. 

Any person requesting priority rating 

authority or requiring assistance in 

obtaining rated items supporting 

homeland security, emergency 

preparedness, and critical infrastructure 

protection and restoration related 

activities should submit a request for 

such assistance or priority rating 

authority to the Office of Policy and 

Program Analysis, Federal Emergency 

Management Agency, Department of 

Homeland Security, 500 C Street SW., 

Washington, DC 20472; telephone: (202) 

646–3520; Fax: (202) 646–4060; Email: 

fema-dpas@dhs.gov, Web site: http://

www.fema.gov/defense-production-actprogram-division. 

■ 26. In subpart H, §§ 700.56, 700.57, 

and 700.58 are added to read as follows: 

§ 700.56 Military assistance programs with 

Canada. 

(a) To promote military assistance to 

Canada, this section provides for 

authorizing priority ratings to persons in 

Canada to obtain items in the United 


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States in support of approved programs. 

Although priority ratings have no legal 

authority outside of the United States, 

this section also provides information 

on how persons in the United States 

may obtain informal assistance in 

Canada in support of approved 

programs. 

(b) The joint United States-Canadian 

military arrangements for the defense of 

North America and the integrated nature 

of the United States and Canadian 

defense industries require close 

coordination and the establishment of a 

means to provide mutual assistance to 

the defense industries located in both 

countries. 

(c) The Department of Commerce 

coordinates with the Canadian Public 

Works and Government Services Canada 

on all matters of mutual concern 

relating to the administration of this 

part. 

(d) Any person in the United States 

ordering defense items in Canada in 

support of an approved program should 

inform the Canadian supplier that the 

items being ordered are to be used to fill 

a rated order. The Canadian supplier 

should be informed that if production 

materials are needed from the United 

States by the supplier or the supplier’s 

vendor to fill the order, the supplier or 

vendor should contact the Canadian 

Public Works and Government Services 

Canada for authority to place rated 

orders in the United States: Public 

Works and Government Services 

Canada, Acquisitions Branch, Business 

Management Directorate, Phase 3, Place 

du Portage, Level 0A1, 11 Laurier Street, 

Gatineau, Quebec, K1A 0S5, Canada; 

Telephone: (819) 956–6825; Fax: (819) 

956–7827, or electronically at DGA

Prioritesdedefense.ACQBDefence

Priorities@tpsgc-pwgsc.gc.ca. 

(e) Any person in Canada producing 

defense items for the Canadian 

government may also obtain priority 

rating authority for items to be 

purchased in the United States by 

applying to the Canadian Public Works 

and Government Services Canada, 

Acquisitions Branch, Business 

Management Directorate, in accordance 

with its procedures. 

(f) Persons in Canada needing special 

priorities assistance in obtaining 

defense items in the United States may 

apply to the Canadian Public Works and 

Government Services Canada, 

Acquisitions Branch, Business 

Management Directorate, for such 

assistance. Public Works and 

Government Services Canada will 

forward appropriate requests to the 

Department of Commerce. 

(g) Any person in the United States 

requiring assistance in obtaining items 

in Canada must submit a request 

through the Delegate Agency to the 

Office of Strategic Industries and 

Economic Security, U.S. Department of 

Commerce on Form BIS–999. The 

Department of Commerce will forward 

appropriate requests to the Canadian 

Public Works and Government Services 

Canada. 

§ 700.57 Military assistance programs with 

other nations and international 

organizations. 

(a) Scope. To promote military 

assistance to foreign nations and 

international organizations (for 

example, the North Atlantic Treaty 

Organization or the United Nations), 

this section provides for authorizing 

priority ratings to persons in foreign 

nations or international organizations to 

obtain items in the United States in 

support of approved programs. 

Although priority ratings have no legal 

authority outside of the United States, 

this section also provides information 

on how persons in the United States 

may obtain informal assistance in 

Australia, Finland, Italy, The 

Netherlands, Sweden, and the United 

Kingdom in support of approved 

programs. 

(b) Foreign nations and international 

organizations. (1) Any person in a 

foreign nation other than Canada, or any 

person in an international organization, 

requiring assistance in obtaining items 

in the United States or priority rating 

authority for items to be purchased in 

the United States, should submit a 

request for such assistance or priority 

rating authority to: the Department of 

Defense DPAS Lead in the Office of the 

Deputy Assistant Secretary of Defense 

for Manufacturing and Industrial Base 

Policy, 3330 Defense Pentagon, Room 

3B854, Washington, DC 20301; 

Telephone: (703) 697–0051; Fax: (703) 

695–4885; Email: MIBP@osd.mil, Web 

site: http://www.acq.osd.mil/mibp. 

(i) If the end product is being acquired 

by a U.S. Government agency, the 

request should be submitted to the 

Department of Defense DPAS Lead 

through the U.S. contract administration 

representative. 

(ii) If the end product is being 

acquired by a foreign nation or 

international organization, the request 

must be sponsored prior to its 

submission to the Department of 

Defense DPAS Lead by the government 

of the foreign nation or the international 

organization that will use the end 

product. 

(2) If the Department of Defense 

endorses the request, it will be 

forwarded to the Department of 

Commerce for appropriate action. 

(c) Requesting assistance in Australia, 

Finland, Italy, The Netherlands, 

Sweden, and the United Kingdom. (1) 

The Department of Defense has entered 

into bilateral security of supply 

arrangements with Australia, Finland, 

Italy, The Netherlands, Sweden, and the 

United Kingdom that allow the 

Department of Defense to request the 

priority delivery for Department of 

Defense contracts, subcontracts, and 

orders from companies in these 

countries. 

(2) Any person in the United States 

requiring assistance in obtaining the 

priority delivery of a contract, 

subcontract, or order in Australia, 

Finland, Italy, The Netherlands, 

Sweden, or the United Kingdom to 

support an approved program should 

contact the Department of Defense 

DPAS Lead in the Office of the Deputy 

Assistant Secretary of Defense for 

Manufacturing and Industrial Base 

Policy for assistance. Persons in 

Australia, Finland, Italy, The 

Netherlands, Sweden, and the United 

Kingdom should request assistance in 

accordance with paragraph (b)(1) of this 

section. 

§ 700.58 Critical infrastructure assistance 

programs to foreign nations and 

international organizations. 

(a) Scope. To promote critical 

infrastructure assistance to foreign 

nations, this section provides for 

authorizing priority ratings to persons in 

foreign nations or international 

organizations (for example the North 

Atlantic Treaty Organization or the 

United Nations) to obtain items in the 

United States in support of approved 

programs. 

(b) Foreign nations or international 

organizations. Any person in a foreign 

nation or representing an international 

organization requiring assistance in 

obtaining items to be purchased in the 

United States for support of critical 

infrastructure protection and restoration 

should submit a request for such 

assistance or priority rating authority to 

the Office of Policy and Program 

Analysis, Federal Emergency 

Management Agency, Department of 

Homeland Security, 500 C Street SW., 

Washington, DC 20472; telephone: (202) 

646–3520; Fax: (202) 646–4060; Email: 

fema-dpas@dhs.gov, Web site: http://

www.fema.gov/defense-production-actprogram-division. 

■ 27. Section 700.60 is revised to read 

as follows: 

§ 700.60 General provisions. 

(a) The Department of Commerce 

may, from time-to-time, take specific 


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official actions to implement or enforce 

the provisions of this part. 

(b) Some of these official actions 

(rating authorizations and letters of 

understanding) are discussed in this 

subpart. Official actions that pertain to 

compliance (administrative subpoenas, 

demands for information, and 

inspection authorizations) are discussed 

in § 700.71(c). Directives are discussed 

in § 700.62. 

■ 28. Section 700.61 is amended by 

revising the heading and paragraph (a) 

introductory text to read as follows: 

§ 700.61 Rating authorizations. 

(a) A rating authorization is an official 

action granting specific priority rating 

authority that: 

* * * * * 

§ 700.62 [Amended] 

■ 29. Section 700.62 is amended by 

removing ‘‘Directive’’ wherever it 

appears and by adding in its place 

‘‘directive’’. 

§ 700.63 [Amended] 

■ 30. Section 700.63 is amended by: 

■ a. Revising the section heading to read 

‘‘Letters of understanding’’; 

■ b. Removing ‘‘Letter of 

Understanding’’ wherever it appears 

and adding in its place ‘‘letter of 

understanding’’; 

■ c. Adding the words ‘‘the Department 

of’’ immediately preceding the word 

‘‘Commerce’’ in paragraph (a); and 

■ d. Removing ‘‘Letters of 

Understanding’’ and adding in its place 

‘‘letters of understanding’’ in paragraph 

(b). 

§ 700.70 [Amended] 

■ 31. Section 700.70 is amended by: 

■ a. Removing paragraph (b); 

■ b. Redesignating paragraph (c) as 

paragraph (b); and 

■ c. Removing the word ‘‘regulation’’ 

wherever it appears and adding in its 

place the word ‘‘part’’. 

■ 32. Section 700.71 is revised to read 

as follows: 

§ 700.71 Audits and investigations. 

(a) Audits and investigations are 

official actions involving the 

examination of books, records, 

documents, other writings and 

information to ensure that the 

provisions of the Defense Production 

Act, the Selective Service Act and 

related statutes, and this part have been 

properly followed. An audit or 

investigation may also include 

interviews and a systems evaluation to 

detect problems or failures in the 

implementation of this part. 

(b) When undertaking an audit, 

investigation, or other inquiry, the 

Department of Commerce shall: 

(1) Define the scope and purpose in 

the official action given to the person 

under investigation, and 

(2) Have ascertained that the 

information sought or other adequate 

and authoritative data are not available 

from any Federal or other responsible 

agency. 

(c) In administering this part, the 

Department of Commerce may issue the 

following documents, which constitute 

official actions: 

(1) Administrative subpoenas. An 

administrative subpoena requires a 

person to appear as a witness before an 

official designated by the Department of 

Commerce to testify under oath on 

matters of which that person has 

knowledge relating to the enforcement 

or the administration of the Defense 

Production Act, the Selective Service 

Act and related statutes, or this part. An 

administrative subpoena may also 

require the production of books, papers, 

records, documents and physical objects 

or property. 

(2) Demand for information. A 

demand for information requires a 

person to furnish to a duly authorized 

representative of the Department of 

Commerce any information necessary or 

appropriate to the enforcement or the 

administration of the Defense 

Production Act, the Selective Service 

Act, or this part. 

(3) Inspection authorizations. An 

inspection authorization requires a 

person to permit a duly authorized 

representative of the Department of 

Commerce to interview the person’s 

employees or agents, to inspect books, 

records, documents, other writings and 

information in the person’s possession 

or control at the place where that person 

usually keeps them, and to inspect a 

person’s property when such interviews 

and inspections are necessary or 

appropriate to the enforcement or the 

administration of the Defense 

Production Act, the Selective Service 

Act, or this part. 

(d) The production of books, records, 

documents, other writings and 

information will not be required at any 

place other than where they are usually 

kept if, prior to the return date specified 

in the administrative subpoena or 

demand for information, a duly 

authorized official of the Department of 

Commerce is furnished with copies of 

such material that are certified under 

oath to be true copies. As an alternative, 

a person may enter into a stipulation 

with a duly authorized official of the 

Department of Commerce as to the 

content of the material. 

(e) An administrative subpoena, 

demand for information, or inspection 

authorization shall include the name, 

title or official position of the person to 

be served, the evidence sought to be 

adduced, and its general relevance to 

the scope and purpose of the audit, 

investigation, or other inquiry. If 

employees or agents are to be 

interviewed; if books, records, 

documents, other writings, or 

information are to be produced; or if 

property is to be inspected; the 

administrative subpoena, demand for 

information, or inspection authorization 

will describe them with particularity. 

(f) Service of documents shall be 

made in the following manner: 

(1) Service of a demand for 

information or inspection authorization 

shall be made personally, or by certified 

mail—return receipt requested at the 

person’s last known address. Service of 

an administrative subpoena shall be 

made personally. Personal service may 

also be made by leaving a copy of the 

document with someone at least 18 

years of age at the person’s last known 

dwelling or place of business. 

(2) Service upon other than an 

individual may be made by serving a 

partner, corporate officer, or a managing 

or general agent authorized by 

appointment or by law to accept service 

of process. If an agent is served, a copy 

of the document shall be mailed to the 

person named in the document. 

(3) Any individual 18 years of age or 

older may serve an administrative 

subpoena, demand for information, or 

inspection authorization. When 

personal service is made, the individual 

making the service shall prepare an 

affidavit as to the manner in which 

service was made and the identity of the 

person served, and return the affidavit, 

and in the case of subpoenas, the 

original document, to the issuing officer. 

In case of failure to make service, the 

reasons for the failure shall be stated on 

the original document. 

■ 33. Section 700.72 is amended by 

revising the first sentence of paragraph 

(a) to read as follows: 

§ 700.72 Compulsory process. 

(a) If a person refuses to permit a duly 

authorized representative of the 

Department of Commerce to have access 

to any premises or source of information 

necessary to the administration or 

enforcement of the Defense Production 

Act or this part, the Department of 

Commerce may seek compulsory 

process. * * * 

* * * * * 

■ 34. Section 700.73 is revised to read 

as follows: 


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§ 700.73 Notification of failure to comply. 

(a) At the conclusion of an audit, 

investigation, or other inquiry, or at any 

other time, the Department of 

Commerce may inform the person in 

writing where compliance with the 

requirements of the Defense Production 

Act, the Selective Service Act and 

related statutes, or this part were not 

met. 

(b) In cases where the Department of 

Commerce determines that failure to 

comply with the provisions of the 

Defense Production Act, the Selective 

Service Act and related statutes, or this 

part was inadvertent, the person may be 

informed in writing of the particulars 

involved and the corrective action to be 

taken. Failure to take corrective action 

may then be construed as a willful 

violation of the Defense Production Act, 

this part, or an official action. 

■ 35. Section 700.74 is revised to read 

as follows: 

§ 700.74 Violations, penalties, and 

remedies. 

(a) Willful violation of the provisions 

of Title I or Sections 705 or 707 of the 

Defense Production Act, the priorities 

provisions of the Selective Service Act 

and related statutes or this part is a 

crime and upon conviction, a person 

may be punished by fine or 

imprisonment, or both. The maximum 

penalty provided by the Defense 

Production Act is a $10,000 fine, or one 

year in prison, or both. The maximum 

penalty provided by the Selective 

Service Act is a $50,000 fine, or three 

years in prison, or both. 

(b) The government may also seek an 

injunction from a court of appropriate 

jurisdiction to prohibit the continuance 

of any violation of, or to enforce 

compliance with, the Defense 

Production Act, this part, or an official 

action. 

(c) In order to secure the effective 

enforcement of the Defense Production 

Act, this part, and official actions, the 

following are prohibited (see section 

704 of the Defense Production Act; see 

also, for example, sections 2 and 371 of 

Title 18 United States Code): 

(1) No person may solicit, influence or 

permit another person to perform any 

act prohibited by, or to omit any act 

required by, the Defense Production 

Act, this part, or an official action. 

(2) No person may conspire or act in 

concert with any other person to 

perform any act prohibited by, or to 

omit any act required by, the Defense 

Production Act, this part, or an official 

action. 

(3) No person shall deliver any item 

if the person knows or has reason to 

believe that the item will be accepted, 

redelivered, held, or used in violation of 

the Defense Production Act, this part, or 

an official action. In such instances, the 

person must immediately notify the 

Department of Commerce that, in 

accordance with this section, delivery 

has not been made. 

■ 36. Section 700.80 is amended by 

revising paragraphs (a)(1) and (2), (b), 

and (c) to read as follows: 

§ 700.80 Adjustments or exceptions. 

(a) * * * 

(1) A provision of this part or an 

official action results in an undue or 

exceptional hardship on that person not 

suffered generally by others in similar 

situations and circumstances; or 

(2) The consequence of following a 

provision of this part or an official 

action is contrary to the intent of the 

Defense Production Act, the Selective 

Service Act and related statutes, or this 

part. 

(b) Each request for adjustment or 

exception must be in writing and 

contain a complete statement of all the 

facts and circumstances related to the 

provision of this part or official action 

from which adjustment is sought and a 

full and precise statement of the reasons 

why relief should be provided. 

(c) The submission of a request for 

adjustment or exception shall not 

relieve any person from the obligation of 

complying with the provisions of this 

part or official action in question while 

the request is being considered unless 

such interim relief is granted in writing 

by the Office of Strategic Industries and 

Economic Security. The Office of 

Strategic Industries and Economic 

Security shall respond to requests for 

adjustment of or exceptions to 

compliance with the provisions of this 

part or an official action within 25 

(twenty-five) days, not including 

Saturdays, Sundays or Government 

holidays, of the date of receipt. 

* * * * * 

■ 37. Section 700.81 is amended by 

revising paragraphs (a), (b), and (g), to 

read as follows: 

§ 700.81 Appeals. 

(a) Any person who has had a request 

for adjustment or exception denied by 

the Office of Strategic Industries and 

Economic Security under § 700.80, may 

appeal to the Assistant Secretary for 

Export Administration, Department of 

Commerce, who shall review and 

reconsider the denial. Such appeals 

should be submitted to the Office of the 

Assistant Secretary for Export 

Administration, Bureau of Industry and 

Security, Department of Commerce, 

Room 3886, Washington, DC 20230, Ref: 

DPAS Appeals. 

(b) Appeals of denied requests for 

exceptions from or adjustments to 

compliance with the provisions of this 

part or an official action must be 

received by the Assistant Secretary for 

Export Administration no later than 45 

days after receipt of a written notice of 

denial from the Office of Strategic 

Industries and Economic Security. After 

this 45-day period, an appeal may be 

accepted at the discretion of the 

Assistant Secretary for Export 

Administration. 

* * * * * 

(g) The submission of an appeal under 

this section shall not relieve any person 

from the obligation of complying with 

the provisions of this part or official 

action in question while the appeal is 

being considered, unless such relief is 

granted in writing by the Assistant 

Secretary for Export Administration. 

* * * * * 

§ 700.90—[Amended] 

■ 38. Section 700.90 is amended by 

removing the word ‘‘regulation’’ and 

adding in its place the word ‘‘part’’. 

§ 700.91—[Amended] 

■ 39. Section 700.91 is amended by: 

■ a. Removing the word ‘‘regulation’’ 

wherever it appears and adding in its 

place the word ‘‘part’’; 

■ b. Adding the phrase ‘‘the Department 

of’’ immediately preceding the word 

‘‘Commerce’’ wherever it appears; and 

■ c. Removing ‘‘705(e)’’ and adding in 

its place ‘‘705(d)’’ wherever it appears. 

§ 700.92—[Amended] 

■ 40. Section 700.92 is amended by: 

■ a. Removing the word ‘‘regulation’’ 

wherever it appears in the heading and 

in paragraphs (a), (b) and (c) and adding 

in its place the word ‘‘part’’; 

■ b. Adding the phrase ‘‘the Department 

of’’ immediately preceding the word 

‘‘Commerce’’ wherever it appears; and 

■ c. Removing the phrase ‘‘the 

regulations’’ and adding in its place 

‘‘any provision of this part’’ in the first 

sentence of paragraph (d). 

■ 41. Section 700.93 is revised to read 

as follows: 

§ 700.93 Communications. 

General communications concerning 

this part, including how to obtain copies 

of this part and explanatory 

information, requests for guidance or 

clarification, may be addressed to the 

Office of Strategic Industries and 

Economic Security, Room 3876, 

Department of Commerce, Washington, 

DC 20230, Ref: DPAS; telephone (202) 

482–3634, email DPAS@bis.doc.gov. 

Request for priorities assistance under 


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1 Department of Defense includes: The Office of 

the Secretary of Defense, the Military Departments, 

the Joint Staff, the Combatant Commands, the 

Defense Agencies, the Defense Field Activities, all 

other organizational entities in the Department of 

Defense, and, for purposes of this part, the Central 

Intelligence Agency and the National Aeronautics 

and Space Administration as associated agencies. 

2The Department of Commerce is also listed as 

an agency in the third column for programs where 

its authorization is necessary to place rated orders. 

§ 700.50, adjustments or exceptions 

under § 700.80, or appeals under 

§ 700.81, must be submitted in the 

manner specified in those sections. 

■ 42. Schedule I to part 700 is revised 

to read as follows: 

Schedule I to Part 700—Approved 

Programs and Delegate Agencies 

The programs listed in this schedule 

have been approved for priorities 

support under this part by the 

Department of Defense,1 the Department 

of Energy or the Department of 

Homeland Security, in accordance with 

section 202 of Executive Order 13603. 

They have equal preferential status. The 

Department of Commerce has 

authorized the delegate agencies listed 

in the third column to use this part in 

support of those programs assigned to 

them, as indicated below.2

Program identification symbol Approved program Agency(ies) 

Defense Programs 

A1 ..................... Aircraft ....................................................................................... Department of Defense. 

A2 ..................... Missiles ...................................................................................... Department of Defense. 

A3 ..................... Ships ......................................................................................... Department of Defense. 

A4 ..................... Tank—Automotive ..................................................................... Department of Defense. 

A5 ..................... Weapons ................................................................................... Department of Defense. 

A6 ..................... Ammunition ............................................................................... Department of Defense. 

A7 ..................... Electronic and communications equipment .............................. Department of Defense. 

B1 ..................... Military building supplies ........................................................... Department of Defense. 

B8 ..................... Production equipment (for defense contractor’s account) ........ Department of Defense. 

B9 ..................... Production equipment (Government owned) ............................ Department of Defense. 

C1 ..................... Food resources (combat rations) .............................................. Department of Defense. 

C2 ..................... Department of Defense construction ........................................ Department of Defense. 

C3 ..................... Maintenance, repair, and operating supplies (MRO) for Department of Defense facilities.Department of Defense. 

C9 ..................... Miscellaneous ............................................................................ Department of Defense. 

Military Assistance to Canada 

D1 ..................... Canadian military programs ...................................................... Department of Commerce. 

D2 ..................... Canadian production and construction ..................................... Department of Commerce. 

D3 ..................... Canadian atomic energy program ............................................ Department of Commerce. 

Military Assistance to Other Foreign Nations 

G1 ..................... Certain munitions items purchased by foreign governments 

through domestic commercial channels for export.

Department of Commerce. 

G2 ..................... Certain direct defense needs of foreign governments other 

than Canada.

Department of Commerce. 

G3 ..................... Foreign nations (other than Canada) production and construction.Department of Commerce. 

Critical Infrastructure Assistance to Foreign Nations 

G4 ..................... Foreign critical infrastructure programs .................................... Department of Commerce. 

Co-Production 

J1 ...................... F–16 Co-Production Program ................................................... Departments of Commerce and Defense. 

Atomic Energy Programs 

E1 ..................... Construction .............................................................................. Department of Energy. 

E2 ..................... Operations—including maintenance, repair, and operating 

supplies (MRO).

Department of Energy. 

E3 ..................... Privately owned facilities ........................................................... Department of Energy. 

Domestic Energy Programs 

F1 ..................... Exploration, production, refining, and transportation ................ Department of Energy. 

F2 ..................... Conservation ............................................................................. Department of Energy. 

F3 ..................... Construction, repair, and maintenance ..................................... Department of Energy. 

Other Defense, Energy, and Related Programs 

H1 ..................... Certain combined orders (see section 700.17(c)) .................... Department of Commerce. 

H5 ..................... Private domestic production ...................................................... Department of Commerce.

H6 ..................... Private domestic construction ................................................... Department of Commerce. 

H7 ..................... Maintenance, repair, and operating supplies (MRO) ................ Department of Commerce. 


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Program identification symbol Approved program Agency(ies) 

H8 ..................... Designated Programs ............................................................... Department of Commerce. 

K1 ..................... Federal supply items ................................................................. General Services Administration. 

Homeland Security Programs 

N1 ..................... Federal emergency preparedness, mitigation, response, and 

recovery.

Department of Homeland Security. 

N2 ..................... State, local, tribal government emergency preparedness, mitigation, response, and recovery.Department of Homeland Security. 

N3 ..................... Intelligence and warning systems ............................................. Department of Homeland Security. 

N4 ..................... Border and transportation security ............................................ Department of Homeland Security. 

N5 ..................... Domestic counter-terrorism, including law enforcement ........... Department of Homeland Security. 

N6 ..................... Chemical, biological, radiological, and nuclear countermeasures.Department of Homeland Security. 

N7 ..................... Critical infrastructure protection and restoration ....................... Department of Homeland Security. 

N8 ..................... Miscellaneous ............................................................................ Department of Homeland Security. 

Dated: August 8, 2014. 

Matthew S. Borman, 

Deputy Assistant Secretary for Export 

Administration. 

[FR Doc. 2014–19168 Filed 8–13–14; 8:45 am] 

BILLING CODE 3510–JT–P 

DEPARTMENT OF COMMERCE 

Bureau of Economic Analysis 

15 CFR Part 801 

[Docket No. 140424374–4639–01] 

RIN 0691–XC025 

Direct Investment Surveys: BE–13, 

Survey of New Foreign Direct 

Investment in the United States 

AGENCY: Bureau of Economic Analysis, 

Commerce. 

ACTION: Final rule. 

SUMMARY: This final rule amends 

regulations of the Department of 

Commerce’s Bureau of Economic 

Analysis (BEA) to reinstate the reporting 

requirements for the BE–13, Survey of 

New Foreign Direct Investment in the 

United States, which was discontinued 

in 2009. This survey will better measure 

Commerce Department efforts through 

the ‘‘Build It Here, Sell It Everywhere’’ 

initiative to expand foreign business 

investment in the United States and 

ensure complete coverage of BEA’s 

other foreign direct investment 

statistics. This survey collects 

information on the acquisition or 

establishment of U.S. business 

enterprises by foreign investors, which 

was collected on the previous BE–13 

survey, and information on expansions 

by existing U.S. affiliates of foreign 

companies, which was not previously 

collected. This mandatory survey will 

be conducted under the authority of the 

International Investment and Trade in 

Services Survey Act (the Act). Unlike 

other BEA surveys conducted pursuant 

to the Act, a response would be required 

from persons subject to the reporting 

requirements of the BE–13, Survey of 

New Foreign Direct Investment in the 

United States, whether or not they are 

contacted by BEA, in order to insure 

that respondents subject to the 

requirements for foreign direct 

investments in the U.S. are identified. 

DATES: This final rule is effective 

September 15, 2014. 

FOR FURTHER INFORMATION CONTACT: 

Barbara Hubbard, Chief, Direct 

Transactions and Positions Branch (BE– 

49NI), Bureau of Economic Analysis, 

U.S. Department of Commerce, 

Washington, DC 20230; phone (202) 

606–9846. 

SUPPLEMENTARY INFORMATION: On May 

28, 2014, BEA published a notice of 

proposed rulemaking that set forth 

revised reporting criteria for the BE–13, 

Survey of New Foreign Direct 

Investment in the United States (79 FR 

30503–30506). No comments on the 

proposed rule were received. Thus the 

proposed rule is adopted without 

change. This final rule adds 15 CFR 

801.7 to set forth the reporting 

requirements for the BE–13, Survey of 

New Foreign Direct Investment in the 

United States. 

BEA conducts the BE–13 survey 

under the authority of the International 

Investment and Trade in Services 

Survey Act (22 U.S.C. 3101–3108). 

By rule issued in 2012 (77 FR 24373), 

BEA established guidelines for 

collecting data on international trade in 

services and direct investment through 

notices, rather than through rulemaking. 

This final rule amends the regulations to 

provide for a revised BE–13 survey and 

requires a response from persons subject 

to the reporting requirements of the BE– 

13, whether or not they are contacted by 

BEA, in order to ensure complete 

coverage of new foreign direct 

investments. 

The BE–13 survey collects data on the 

acquisition or establishment of U.S. 

business enterprises by foreign investors 

and the expansion of existing U.S. 

affiliates of foreign companies to 

establish new production facilities. The 

data collected on the survey are used to 

measure the amount of new foreign 

direct investment in the United States, 

assess the impact on the U.S. economy, 

and based on this assessment, make 

informed policy decisions regarding 

foreign direct investment in the United 

States. Foreign direct investment in the 

United States is defined as the 

ownership or control, directly or 

indirectly, by one foreign person 

(foreign parent) of 10 percent or more of 

the voting securities of an incorporated 

U.S. business enterprise, or an 

equivalent interest of an unincorporated 

U.S. business enterprise, including a 

branch. 

BEA will make the survey available 

via eFile, BEA’s electronic filing system. 

Survey respondents will be notified of 

their obligation to file in November 

2014 and BEA will collect data 

retroactively back to January 1, 2014. 

Thereafter, notifications will be mailed 

to respondents as BEA becomes aware 

of a potentially reportable investment or 

when annual cost updates are needed. 

The forms are due no later than 45 days 

after the acquisition is completed, the 

new legal entity is established, the 

expansion is begun, or the cost update 

is requested. 

Description of Changes 

The changes amend the regulations 

and the survey forms for the BE–13 

survey. These amendments include 

changes in reporting requirements and 

questionnaire design as well as data 

items collected. 


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