65560 Federal Register / Vol. 83, No. 245 / Friday, December 21, 2018 / Rules and Regulations 

V. Executive Order 13771 

This rule is not an E.O. 13771 

regulatory action, because this rule is 

not significant under E.O. 12866. 

VI. Regulatory Flexibility Act 

Because a notice of proposed 

rulemaking and an opportunity for 

public comment are not required to be 

given for this rule under 41 U.S.C. 

1707(a)(1) (see section III. of this 

preamble), the analytical requirements 

of the Regulatory Flexibility Act (5 

U.S.C. 601 et seq.) are not applicable. 

Accordingly, no regulatory flexibility 

analysis is required, and none has been 

prepared. 

VII. Paperwork Reduction Act 

The rule does not contain any 

information collection requirements that 

require the approval of the Office of 

Management and Budget under the 

Paperwork Reduction Act (44 U.S.C. 

chapter 35). 

List of Subjects in 48 CFR Part 216 

Government procurement. 

Jennifer Lee Hawes, 

Regulatory Control Officer, Defense 

Acquisition Regulations System. 

Therefore, 48 CFR part 216 is 

amended as follows: 

PART 216—TYPES OF CONTRACTS 

■ 1. The authority citation for part 216 

continues to read as follows: 

Authority: 41 U.S.C. 1303 and 48 CFR 

chapter 1. 

■ 2. Amend section 216.504 by— 

■ a. Adding headings to paragraphs (c) 

and (c)(1); and 

■ b. Revising paragraph (c)(1)(ii)(D). 

The additions and revision read as 

follows: 

216.504 Indefinite-quantity contracts. 

(c) Multiple award preference—(1) 

Planning the acquisition. (ii)(D) A copy 

of each determination made in 

accordance with FAR 16.504(c)(1)(ii)(D) 

shall be submitted to the Director, 

Defense Procurement and Acquisition 

Policy, via the OUSD(AT&L)DPAP/CPIC 

email address at osd.pentagon.ousdatl.mbx.cpic@mail.mil. 

(1) The authority to make the 

determination authorized in FAR 

16.504(c)(1)(ii)(D)(1) shall not be 

delegated below the level of the senior 

procurement executive. 

(i) In accordance with section 816 of 

the National Defense Authorization Act 

for Fiscal Year 2019 (Pub. L. 115–232), 

when making the determination at FAR 

16.504(c)(1)(ii)(D)(1)(i), the agency head 

shall determine that the task or delivery 

orders expected under the contract are 

so integrally related that only a single 

source can ‘‘efficiently perform the 

work,’’ instead of ‘‘reasonably perform 

the work’’ as required by the FAR. 

[FR Doc. 2018–27560 Filed 12–20–18; 8:45 am] 

BILLING CODE 5001–06–P 

DEPARTMENT OF DEFENSE 

Defense Acquisition Regulations 

System 

48 CFR Parts 225 and 252 

[Docket DARS–2018–0004] 

RIN 0750–AJ22 

Defense Federal Acquisition 

Regulation Supplement: Restrictions 

on Acquisitions From Foreign Sources 

(DFARS Case 2017–D011) 

AGENCY: Defense Acquisition 

Regulations System, Department of 

Defense (DoD). 

ACTION: Final rule. 

SUMMARY: DoD is issuing a final rule 

amending the Defense Federal 

Acquisition Regulation Supplement 

(DFARS) to implement sections of the 

National Defense Authorization Act for 

Fiscal Year 2017 to apply domestic 

source requirements to acquisitions at or 

below the simplified acquisition 

threshold when acquiring athletic 

footwear to be furnished to enlisted 

members of the Armed Forces upon 

their initial entry into the Armed 

Forces, and add Australia and the 

United Kingdom to the definition of the 

‘‘National Technology and Industrial 

Base.’’ 

DATES: Effective December 21, 2018. 

FOR FURTHER INFORMATION CONTACT: Ms. 

Amy G. Williams, telephone 571–372– 

6106. 

SUPPLEMENTARY INFORMATION: 

I. Background 

DoD published a proposed rule in the 

Federal Register at 83 FR 42828 on 

August 24, 2018, to implement sections 

817 and 881(b) of the National Defense 

Authorization Act (NDAA) for Fiscal 

Year (FY) 2017. 

Section 817 extends the domestic 

source requirements of 10 U.S.C. 2533a 

(the Berry Amendment) below the 

simplified acquisition threshold, when 

acquiring athletic footwear to be 

furnished to the members of the Army, 

Navy, Air Force, or Marine Corps upon 

their initial entry into the Armed 

Forces. 

Section 881(b) amends 10 U.S.C. 

2500(1) by adding Australia and the 

United Kingdom of Great Britain and 

Northern Ireland to the United States 

and Canada as the countries within 

which the activities of the national 

technology and industrial base are 

conducted. 10 U.S.C. 2534, 

Miscellaneous Limitations on the 

Procurement of Goods Other Than 

United States Goods, requires that DoD 

only procure certain items if the 

manufacturer of the items is part of the 

national technology and industrial base. 

One respondent submitted a public 

comment in response to the proposed 

rule. 

II. Discussion and Analysis 

The public comment received 

addressed concern with regard to 

importation of radioactive steel and use 

of radioactively contaminated scrap 

metal. This issue is outside the scope of 

this rule. There were no changes from 

the proposed rule as a result of this 

public comment. 

However, the final rule is affected by 

a change in the baseline. On May 30, 

2018, DoD published a final rule in the 

Federal Register (83 FR 24890) to 

amend the DFARS to implement section 

813(a) of the NDAA for FY 2018 (Pub. 

L. 115–91), which amended 10 U.S.C. 

2534(c) to establish a sunset date of 

October 1, 2018, for the limitation on 

procurement of chemical weapons 

antidote contained in automatic 

injectors (and components for such 

injectors). The final rule deleted DFARS 

225.7005 in its entirety to remove the 

limitation as implemented in the 

DFARS. As a result, this final rule does 

not include the changes proposed to 

DFARS 225.7005–1. 

III. Applicability to Contracts at or 

Below the Simplified Acquisition 

Threshold and for Commercial Items, 

Including Commercially Available Offthe-Shelf Items 

This rule amends the applicability of 

existing DFARS solicitation provisions 

and contract clauses as follows: 

• To implement section 817 of the 

NDAA for FY 2017, this rule extends 

use of DFARS clause 252.225–7012, 

Preference for Certain Domestic 

Commodities, to acquisitions at or 

below the simplified acquisition 

threshold (SAT) when buying athletic 

footwear to be furnished to enlisted 

members of the Armed Forces upon 

their initial entry into the Armed 

Forces. This clause is already prescribed 

for use in solicitations and contracts 

using FAR part 12 procedures for the 

acquisition of commercial items, 

including commercially available offthe-shelf (COTS) items. 


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Federal Register / Vol. 83, No. 245 / Friday, December 21, 2018 / Rules and Regulations 65561 

• To implement section 881(b) of the 

NDAA for FY 2017, this rule modifies 

the provision at DFARS 252.225–7037, 

Evaluation of Offers for Air Circuit 

Breakers, and the clause at DFARS 

252.225–7038, Restriction on 

Acquisition of Air Circuit Breakers, to 

add Australia as a country from which 

items restricted by 10 U.S.C. 2534 may 

be purchased. This rule does not change 

the prescriptions for the use of this 

provision or clause, which are already 

required for use in solicitations and 

contracts for commercial items, 

including COTS items. The clause does 

not apply below the SAT. 

A. Applicability to Contracts at or Below 

the SAT 

41 U.S.C. 1905 governs the 

applicability of laws to contracts or 

subcontracts in amounts not greater 

than the SAT. It is intended to limit the 

applicability of laws to such contracts or 

subcontracts. 41 U.S.C. 1905 provides 

that if a provision of law contains 

criminal or civil penalties, or if the 

Federal Acquisition Regulation (FAR) 

Council makes a written determination 

that it is not in the best interest of the 

Federal Government to exempt contracts 

or subcontracts at or below the SAT, the 

law will apply to them. The Director, 

Defense Pricing and Contracting (DPC), 

is the appropriate authority to make 

comparable determinations for 

regulations to be published in the 

DFARS, which is part of the FAR system 

of regulations. 

B. Applicability to Contracts for the 

Acquisition of Commercial Items, 

Including Commercially Available Offthe-Shelf (COTS) Items 

41 U.S.C. 1906 governs the 

applicability of laws to contracts for the 

acquisition of commercial items and is 

intended to limit the applicability of 

laws to contracts for the acquisition of 

commercial items. 41 U.S.C. 1906 

provides that if a provision of law 

contains criminal or civil penalties, or if 

the FAR Council makes a written 

determination that it is not in the best 

interest of the Federal Government to 

exempt commercial item contracts, the 

provision of law will apply to contracts 

for the acquisition of commercial items. 

Likewise, 41 U.S.C. 1907 governs the 

applicability of laws to COTS items, 

with the Administrator for Federal 

Procurement Policy the decision 

authority to determine that it is in the 

best interest of the Government to apply 

a provision of law to acquisitions of 

COTS items in the FAR. The Director, 

DPC, is the appropriate authority to 

make comparable determinations for 

regulations to be published in the 

DFARS, which is part of the FAR system 

of regulations. 

C. Determinations 

A determination under 41 U.S.C. 1905 

is not required to prescribe DFARS 

252.225–7012 for use in solicitations 

and contracts valued at or below the 

SAT, because section 817 of the NDAA 

for FY 2017 specifically states that DoD 

shall acquire athletic footwear that 

complies with the requirements of 10 

U.S.C. 2533a ‘‘without regard to the 

applicability of any simplified 

acquisition threshold under chapter 137 

of title 10 (or any other provision of 

law).’’ 

A determination under 41 U.S.C. 1906 

and 1907 is not required to apply the 

requirements of DFARS 252.225–7037 

and 252.225–7038 to acquisitions for 

commercial items, including COTS 

items, because the statute that this 

provision and clause implements is not 

a covered statute subject to 41 U.S.C. 

1905–1907. At the time of the Federal 

Acquisition Streamlining Act of 1994 

(FASA) (Pub. L. 103–355), now codified 

in part at 41 U.S.C. 1905–1907, this 

provision and clause were a single 

clause, DFARS 252.225–7029, 

Restriction on Acquisition of Air Circuit 

Breakers, which implemented 10 U.S.C. 

2534. Because 10 U.S.C. 2534 predated 

FASA, it was not subject to 41 U.S.C. 

1905–1907. The DFARS clause 252.225– 

7029 was included on the initial list of 

statutes applicable to the acquisition of 

commercial items at DFARS 252.212– 

7001, incorporated in the DFARS by 

DFARS Case 95–D712 on November 30, 

1995 (Defense Acquisition Circular 91– 

9). 

IV. Executive Orders 12866 and 13563 

Executive Orders (E.O.s) 12866 and 

13563 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, distributive impacts, and 

equity). E.O. 13563 emphasizes the 

importance of quantifying both costs 

and benefits, of reducing costs, of 

harmonizing rules, and of promoting 

flexibility. This is not a significant 

regulatory action and, therefore, was not 

subject to review under section 6(b) of 

E.O. 12866, Regulatory Planning and 

Review, dated September 30, 1993. This 

rule is not a major rule under 5 U.S.C. 

804. 

V. Executive Order 13771 

This final rule is not subject to E.O. 

13771, because this rule is not 

significant under E.O. 12866. 

VI. Regulatory Flexibility Act 

A final regulatory flexibility analysis 

has been prepared and is summarized as 

follows: 

This rule implements sections 817 

and 881(b) of the National Defense 

Authorization Act (NDAA) for Fiscal 

Year (FY) 2017 (Pub. L. 114–328). The 

objective of the rule is to— 

• Remove the exception to domestic 

source restriction of the Berry 

Amendment (10 U.S.C. 2533a) for 

acquisitions at or below the simplified 

acquisition threshold when buying 

athletic footwear to be furnished to 

enlisted members of the Armed Forces 

upon their initial entry into the Armed 

Forces, as required by section 817 of the 

NDAA for FY 2017; and 

• Allow acquisition of certain items 

from Australia and the United Kingdom, 

for which purchase is currently 

restricted to items from the United 

States or Canada, in accordance with 10 

U.S.C. 2534, in accordance with section 

881(b) of the NDAA for FY 2017 and 10 

U.S.C. 2534. 

There were no significant issues 

raised by the public comment in 

response to the initial regulatory 

flexibility analysis. 

With regard to implementation of 

section 817, this rule may apply to only 

a few small entities, because there are 

few sources that meet the domestic 

source requirements of the Berry 

Amendment with regard to athletic 

footwear. The Defense Logistics Agency 

(DLA) estimates a potential annual 

demand for approximately 200,000 to 

250,000 pairs of athletic shoes to be 

delivered at the rate of approximately 

27,500 pairs per month. In response to 

a request for information issued by DLA 

in December 2016, there were 5 

responses from athletic footwear 

manufacturers, one of which was a 

small business. Small entities who are 

athletic shoe manufacturers could likely 

support portions of the Department’s 

total requirements for athletic footwear. 

In addition, there are likely a number of 

domestic component suppliers who are 

small entities who would benefit from 

this new requirement as well. On the 

other hand, small entities that cannot 

provide athletic shoes that meet the 

domestic source requirements of the 

Berry Amendment, will no longer be 

able to compete for acquisition of 

athletic footwear at or below the 

simplified acquisition threshold that are 

for the purpose of providing athletic 


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65562 Federal Register / Vol. 83, No. 245 / Friday, December 21, 2018 / Rules and Regulations 

footwear to enlisted members of the 

Armed Forces upon their initial entry 

into the Armed Forces. 

With regard to implementation of 

section 881(b), this rule will not apply 

to any small entities at the prime 

contract level, as there are only a few 

prime contractors for the restricted 

items, which are all U.S. firms that are 

other than small businesses. For the 

definition of ‘‘small business,’’ the 

Regulatory Flexibility Act refers to the 

Small Business Act, which in turn 

allows the U.S. Small Business 

Administration (SBA) Administrator to 

specify detailed definitions or standards 

(5 U.S.C. 601(3) and 15 U.S.C. 632(a)). 

The SBA regulations at 13 CFR 

121.105(a)(1) discuss who is a small 

business, providing that except for small 

agricultural cooperatives, a business 

concern eligible for assistance from SBA 

as a small business is a business entity 

organized for profit, with a place of 

business located in the United States, 

and which operates primarily within the 

United States or which makes a 

significant contribution to the U.S. 

economy through payment of taxes or 

use of American products, materials or 

labor. Therefore, if an item currently 

purchased from a U.S. entity that is 

other than a small business were to be 

purchased from an entity in the 

Australia or the United Kingdom, there 

could be an impact on a few small 

entities that are currently subcontractors 

to a U.S. prime contractor. 

There are no reporting, recordkeeping, 

or other compliance requirements of the 

rule, other than to furnish athletic 

footwear compliant with the Berry 

Amendment and the other restricted 

items manufactured by a manufacturer 

that is part of the national technology 

and industrial base (which is now 

expanded to include the United 

Kingdom and Australia, as well as the 

United States and Canada). 

By extending the restriction of the 

Berry Amendment to acquisitions that 

do not exceed simplified acquisition 

threshold, this rule may benefit small 

entities that can provide Berry 

Amendment-compliant athletic 

footwear, because they may be more 

able to compete for smaller acquisitions. 

DoD was unable to identify any 

alternatives that would meet the 

requirements of the statutes). 

VII. Paperwork Reduction Act 

The rule does not contain any 

information collection requirements that 

require the approval of the Office of 

Management and Budget under the 

Paperwork Reduction Act (44 U.S.C. 

chapter 35). 

List of Subjects in 48 CFR Parts 225 and 

252 

Government procurement. 

Jennifer Lee Hawes, 

Regulatory Control Officer, Defense 

Acquisition Regulations System. 

Therefore, 48 CFR parts 225 and 252 

are amended as follows: 

■ 1. The authority citation for 48 CFR 

parts 225 and 252 continues to read as 

follows: 

Authority: 41 U.S.C. 1303 and 48 CFR 

chapter 1. 

PART 225—FOREIGN ACQUISITION 

■ 2. Amend section 225.7002–2 by 

revising paragraph (a) to read as follows: 

225.7002–2 Exceptions. 

* * * * * 

(a) Acquisitions at or below the 

simplified acquisition threshold, except 

for athletic footwear purchased by DoD 

for use by members of the Army, Navy, 

Air Force, or Marine Corps upon their 

initial entry into the Armed Forces 

(section 817 of the National Defense 

Authorization Act for Fiscal Year 2017 

(Pub. L. 114–328)). 

* * * * * 

225.7002–3 [Amended] 

■ 3. Amend section 225.7002–3, in 

paragraph (a) by removing ‘‘commercial 

items, that exceed the simplified 

acquisition threshold’’ and adding 

‘‘commercial items’’ in its place. 

225.7004–1 [Amended] 

■ 4. Amend section 225.7004–1 by 

removing ‘‘United States or Canada’’ 

and adding ‘‘United States, Australia, 

Canada, or the United Kingdom’’ in its 

place. 

225.7004–3 [Amended] 

■ 5. Amend section 225.7004–3 by: 

■ a. In paragraph (a) by removing 

‘‘manufactured in the United States or 

Canada’’ and adding ‘‘manufactured in 

the United States, Australia, Canada, or 

the United Kingdom’’ in two places. 

■ b. In paragraphs (a), (b), and (c) by 

removing ‘‘United States and Canada’’ 

and adding ‘‘United States, Australia, 

Canada, or the United Kingdom’’ in its 

place wherever it appears. 

225.7006–1 [Amended] 

■ 6. Amend section 225.7006–1 by 

removing ‘‘United States or Canada’’ 

and adding ‘‘United States, Australia, 

Canada, or the United Kingdom’’ in its 

place. 

■ 7. Revise section 225.7006–3 to read 

as follows: 

225.7006–3 Waiver. 

The waiver criteria at 225.7008(a) 

apply to this restriction. 

■ 8. Amend section 225.7006–4 by 

revising paragraphs (a)(2) and (b)(2) to 

read as follows: 

225.7006–4 Solicitation provision and 

contract clause. 

(a) * * * 

(2) A waiver has been granted. 

(b) * * * 

(2) A waiver has been granted. 

PART 252—SOLICITATION 

PROVISIONS AND CONTRACT 

CLAUSES 

252.225–7037 [Amended] 

■ 9. Amend section 252.225–7037 by: 

■ a. Removing the provision date of 

‘‘(JUN 2012)’’ and adding ‘‘(DEC 2018)’’ 

in its place; and 

■ b. In paragraphs (a) and (b), removing 

‘‘outlying areas, Canada,’’ and adding 

‘‘outlying areas, Australia, Canada,’’ in 

its place in both places. 

252.225–7038 [Amended] 

■ 10. Amend section 252.225–7038 by: 

■ a. Removing the provision date of 

‘‘(JUN 2005)’’ and adding ‘‘(DEC 2018)’’ 

on its place; and 

■ b. Removing ‘‘outlying areas, 

Canada,’’ and adding ‘‘outlying areas, 

Australia, Canada,’’ in its place. 

[FR Doc. 2018–27557 Filed 12–20–18; 8:45 am] 

BILLING CODE 5001–06–P 

DEPARTMENT OF DEFENSE 

Defense Acquisition Regulations 

System 

48 CFR Part 252 

[Docket DARS–2018–0018] 

RIN 0750–AJ42 

Defense Federal Acquisition 

Regulation Supplement: Submission of 

Summary Subcontract Reports 

(DFARS Case 2017–D005) 

AGENCY: Defense Acquisition 

Regulations System, Department of 

Defense (DoD). 

ACTION: Final rule. 

SUMMARY: DoD is issuing a final rule 

amending the Defense Federal 

Acquisition Regulation Supplement 

(DFARS) to change the entity to which 

contractors submit Summary 

Subcontract Reports in the Electronic 

Subcontracting Reporting System (eSRS) 

and to change the entity that 

acknowledges receipt of, or rejects, the 

reports in eSRS. 


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