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[Federal Register: July 16, 2010 (Volume 75, Number 136)]
[Proposed Rules]               
[Page 41405-41421]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr16jy10-16]                         

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DEPARTMENT OF ENERGY

10 CFR Part 217

RIN 1901-AB28

 
Energy Priorities and Allocations System Regulations

AGENCY: Department of Energy.

ACTION: Proposed rule.

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SUMMARY: This proposed rule would establish standards and procedures by 
which the U.S. Department of Energy (DOE) may require that certain 
contracts or orders that promote the national defense be given priority 
over other contracts or orders. This rule also sets new standards and 
procedures by which DOE may allocate materials, services and facilities 
to promote the national defense. DOE is publishing this rule to comply 
with a requirement of the Defense Production Act Reauthorization of 
2009 (Pub. L. 111-67) to publish regulations providing standards and 
procedures for prioritization of contracts and orders and for 
allocation of materials, services and facilities to promote the 
national defense.

DATES: Comments must be received by August 16, 2010.

ADDRESSES: You may submit comments, identified by RIN 1901-AB28, by any 
of the following methods:
     Federal eRulemaking Portal: http://www.regulations.gov. 
Follow the instructions for submitting comments.
     By e-mail directly to GC-76EPAS@hq.doe.gov. Include RIN 
1901-AB28 in the subject line.
     By mail or delivery to Dr. Kenneth Friedman, Office of 
Infrastructure Security and Energy Restoration, U.S. Department of 
Energy, Room 1E-256, 1000 Independence, Avenue, SW., Washington, DC 
20585.
    Written comments regarding the burden-hour estimates or other 
aspects of the collection-of-information requirements contained in this 
proposed rule may be submitted to Dr. Kenneth Friedman (see ADDRESSES) 
and by e-mail to Christine_J._Kymn@omb.eop.gov.

FOR FURTHER INFORMATION CONTACT: Dr. Kenneth Friedman, Office of 
Infrastructure Security and Energy Restoration, U.S. Department of 
Energy, 1000 Independence Ave., SW., Washington, DC 20585; (202) 536-
0379 (GC-76EPAS@hq.doe.gov). Ms. S. Becca Smith, Office of the General 
Counsel (GC-76), U.S. Department of Energy, 1000 Independence Ave., 
SW., Washington, DC 20585; (202) 586-9788 (GC-76EPAS@hq.doe.gov).

SUPPLEMENTARY INFORMATION:

Background

    This rule expands upon Title 10 of the Code of Federal Regulations 
(10 CFR) part 216, DOE Energy Priorities and Allocations System (EPAS) 
regulations.
    10 CFR part 216 implements DOE's administration of priorities and 
allocations actions in order to maximize domestic energy supplies 
pursuant to its authority under Section 101(c) of the Defense 
Production Act (50 U.S.C. app. Sec.  2071 et seq.) (DPA) as delegated 
by Executive Order 12919 (June 3, 1994). These proposed regulations, to 
be codified at 10 CFR part 217, would implement DOE's administration of 
priorities and allocations in order to promote the national defense 
pursuant to its DPA authorities other than section 101(c). The EPAS has 
two principal components: priorities and allocations. Under the 
priorities component, certain contracts between the government and 
private parties or between private parties for the production or 
delivery of industrial resources are required to be given priority over 
other contracts to facilitate expedited delivery in promotion of the 
U.S. national defense. Under the allocations component, materials, 
services, and facilities may be allocated to promote the national 
defense. For both components, the term ``national defense'' is defined 
broadly and can include critical infrastructure protection and 
restoration, emergency preparedness, and recovery from natural 
disasters.

[[Page 41406]]

    On September 30, 2009, the Defense Production Act Reauthorization 
of 2009 (Pub. L. 111-67, 123 Stat. 2006, September 30, 2009) (DPAR) was 
enacted. That act requires that within 270 days of its enactment (that 
is, by June 20, 2010), all agencies to which the President has 
delegated priorities and allocations authority under Title I of the DPA 
must publish final rules establishing standards and procedures by which 
that authority will be used to promote the national defense in both 
emergency and nonemergency situations. That act also required all such 
agencies to consult ``as appropriate and to the extent practicable to 
develop a consistent and unified Federal priorities and allocations 
system.'' (123 Stat. 2006, at 2009). This rule is one of several rules 
to be published to implement the provisions of the DPAR. The final 
rules of the agencies with DPAR authorities, which are the Departments 
of Commerce, Energy, Transportation, Health and Human Services, 
Defense, and Agriculture, will comprise the Federal Priorities and 
Allocations System.
    DOE is publishing this proposed rule as the initial rulemaking 
stage in compliance with the provision of the DPAR noted above. DOE 
believes that its existing rules at 10 CFR part 216 satisfy the DPAR's 
requirement that agencies have standards and procedures in place to 
implement the DPA's 101(c) authorities. However, in the interest of 
promoting a unified priorities and allocations system, and to implement 
DOE's DPA authorities other than those set forth in section 101(c), DOE 
is setting forth the proposed EPAS rule. DOE's proposed EPAS provisions 
are consistent with the Federal Priorities and Allocations System 
regulations being issued by other agencies. The specific proposals in 
this rule are more fully described below.

Analysis of the Proposed Priorities and Allocations System

Subpart A

    Proposed Subpart A would set forth the purpose of the regulation.
    Proposed Sec.  217.1 would state the purpose of the EPAS in general 
terms, as providing guidance and procedures for use of the Defense 
Production Act Section priorities and allocations authority (other than 
the authorities set forth in section 101(c)) with respect to all forms 
of energy necessary or appropriate to promote the national defense.
    Proposed Sec.  217.2 would provide an overview of the EPAS program. 
This section would describe briefly all aspects of the EPAS, including 
the resource jurisdiction of other agencies delegated priorities and 
allocations authority under the DPA.

Subpart B

    The ``Definitions'' section would appear in proposed Sec.  217.20 
in Subpart B and provide definitions for the relevant regulatory terms.

Subpart C

    Proposed Subpart C would be titled ``Placement of Rated Orders,'' 
reflecting the fact that the subpart will address only DOE's priorities 
authorities; allocations authorities will be addressed in Subpart E.
    Proposed Sec.  217.30, ``Delegation of Authority,'' would describe 
fully the President's delegations to the Department of Energy. It would 
also describe, in general terms, the items subject to DOE's 
jurisdiction and note that the Department of Commerce has delegated 
certain authorities to DOE. DOE is proposing this provision to 
facilitate public understanding of the role that each delegate agency 
plays in the overall priorities and allocations system.
    Proposed Sec.  217.31, ``Priority ratings,'' describes the 
different levels of priority and program symbols used when rating an 
order.
    Proposed Sec.  217.32, ``Elements of a rated order,'' describes in 
detail what each rated order must include, consisting of the 
appropriate priority rating, delivery date information, signatures and 
required language. DOE seeks comment specifically on the text of this 
provision.
    Language in proposed Sec.  217.33, ``Acceptance and rejection of 
rated orders,'' details when orders placed by DOE may or must be 
accepted or rejected, and what the procedures are for both, including 
customer notification requirements and certain exceptions for emergency 
preparedness conditions. Specifically, persons must accept or reject 
rated orders for emergency response-related approved programs within 
five days (or two days, depending on the circumstance). DOE is 
proposing the shorter time limit in which the recipient must respond to 
a rated order issued in connection with an emergency response related 
program because such programs would involve disaster assistance, 
emergency response or similar activities. DOE believes that the exigent 
circumstances inherent in such activities justify requiring a shorter 
response time.
    Proposed Sec.  217.34, ``Preferential scheduling,'' details 
procedures in cases where a person receives two or more conflicting 
rated orders. If a person is unable to resolve such a conflict, this 
section refers them to special priorities assistance as provided in 
Sec. Sec.  217.40 through 217.44. Language in proposed Sec.  217.35, 
``Extension of priority ratings,'' requires a person to use rated 
orders with suppliers to obtain items or services needed to fill a 
rated order. This allows the priority rating to ``extend'' from 
contractor to subcontractor to supplier throughout the entire 
procurement chain.
    Proposed Sec.  217.36, ``Changes or cancellations of priority 
ratings and rated orders,'' provides procedures for changing or 
cancelling a rated order, both by DOE or other persons who placed the 
order.
    Proposed Sec.  217.37, ``Use of rated orders,'' lists what items 
must be rated. It also introduces the use of certain program 
identification symbols used when rated orders may be combined, and 
details the procedures for combining two or more rated orders, as well 
as rated and unrated orders.
    Proposed Sec.  217.38, ``Limitations on placing rated orders,'' 
prohibits the use of rated orders in a list of specific circumstances. 
This section also specifically excludes the use of rated orders for 
resources within the resource jurisdiction of agencies other than DOE 
with DPA priorities and allocations authority.

Subpart D

    Proposed Subpart D ``Special Priorities Assistance'' describes 
instances in which DOE would provide assistance in resolving matters 
related to priority rated contracts and orders.
    Proposed Sec.  217.40 ``General provisions'' illustrates when and 
how DOE can provide special priorities assistance, and provides 
specific DOE points of contact and the form to be used for requesting 
such assistance. Special priorities assistance may generally be 
requested for any reason.
    Proposed Sec.  217.41, ``Requests for priority rating authority,'' 
directs persons to the Department of Commerce to request rating 
authority for production or construction equipment. This section also 
identifies circumstances in which DOE may authorize a person to place a 
priority rating on an order to a supplier in advance of the issuance of 
a rated prime contract, and lists factors DOE will consider in deciding 
whether to grant this authority.
    Proposed Sec.  217.42, ``Examples of assistance,'' provides a 
number of examples of when special priorities assistance may be 
provided, although it

[[Page 41407]]

may generally be provided for any reason.
    Proposed Sec.  217.43 lists the criteria for granting assistance, 
and proposed Sec.  217.44 lists instances in which assistance may not 
be provided (i.e., to secure a price advantage).

Subpart E

    Proposed Subpart E, ``Allocation Actions,'' would provide the 
public with detailed information on the procedures governing 
allocations actions. Allocations actions would most likely be used in 
extreme circumstances, such as in response to a national emergency.
    Proposed Sec. Sec.  217.50 through 217.52 describe allocations and 
when and how allocation orders would be used. Specifically, allocation 
orders would be used only if priorities authority would not provide a 
sufficient supply of material, services or facilities for national 
defense requirements, or when use of priorities authority would cause a 
severe and prolonged disruption in the supply of resources available to 
support normal U.S. economic activities. Allocation orders would not be 
used to ration materials or services at the retail level. Allocation 
orders would be distributed equitably among the suppliers of the 
resource(s) being allocated and would not require any person to 
relinquish a disproportionate share of the civilian market. DOE is 
proposing the standards set forth in proposed Sec. Sec.  217.50 through 
217.52 to provide reasonable assurance that allocation orders will be 
used only in situations where the circumstances justify such orders.
    Proposed Sec.  217.53 describes the three types of allocation 
orders that DOE might issue, which are a set-aside, an allocation 
directive, and an allotment. A set-aside is an official action that 
would require a person to reserve resource capacity in anticipation of 
receipt of rated orders. An allocation directive is an official action 
that would require a person to take or refrain from taking certain 
actions in accordance with its provisions (an allocation directive can 
require a person to stop or reduce production of an item, prohibit the 
use of selected items, 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 an official action that 
would specify the maximum quantity of an item authorized for use in a 
specific program or application. DOE is proposing these three types of 
allocation orders because it believes that, collectively they describe 
the types of actions that might be taken in any situation in which 
allocation is justified.
    Proposed Sec.  217.54, ``Elements of an allocation order,'' sets 
forth the minimum elements of an allocation order. Those elements are:
    (a) A detailed description of the required allocation action(s);
    (b) Specific start and end calendar dates for each required 
allocation action;
    (c) The written signature on a manually placed order, or the 
digital signature or name on an electronically placed order, of the 
Secretary of Energy. The signature or use of the name certifies that 
the order is authorized under this regulation and that the requirements 
of this regulation are being followed;
    (d) A statement that reads in substance: ``This is an allocation 
order certified for national defense use. [Insert the legal name of the 
person receiving the order] is required to comply with this order, in 
accordance with the provisions of the Energy Priorities and Allocations 
System regulation (10 CFR 217), which is part of the Federal Priorities 
and Allocations System''; and
    (e) A current copy of the Energy Priorities and Allocations System 
(10 CFR part 217).
    DOE is proposing these elements because it believes that they 
provide a proper balance between the need for standards to permit the 
public to recognize and understand an allocation order if one is 
issued, and the expectation that any actual allocation orders will have 
to be tailored to meet unforeseeable circumstances. The language of 
proposed Sec.  217.54 would not preclude DOE from including additional 
information in an allocation order if circumstances warrant doing so.
    Proposed Sec.  217.55, ``Mandatory acceptance of allocation 
orders,'' would require that an allocation order must be accepted if a 
person is capable of fulfilling the order. If a person is unable to 
comply fully with the required actions specific in an allocation order, 
the person must notify DOE immediately, explain the extent to which 
compliance is possible, and give reasons why full compliance is not 
possible. This section also states that a person may not discriminate 
against an allocation order in any manner, such as by charging higher 
prices or imposing terms and conditions different than what the person 
imposed on contracts or orders for the same resource(s) that were 
received prior to receiving the allocation order. DOE is proposing 
Sec.  217.55 to make it clear to the public that the limited 
circumstances and emergency situations that trigger issuance of an 
allocation order require immediate response from the public in order to 
address the situation in an expedient fashion.
    Proposed Sec.  217.56, ``Changes or cancellations of an allocation 
order'' provides that an allocation order may be changed or cancelled 
by the Department of Energy.

Subpart F

    Proposed Subpart F, ``Official Actions,'' provides the specific 
official actions the DOE may take to implement the provisions of this 
regulation. These official actions include Rating Authorizations, 
Directives, and Memoranda of Understanding.
    Proposed Sec.  217.61, ``Rating Authorizations,'' defines a rating 
authorization as an official action granting specific priority rating 
authority, and refers persons to Sec.  217.21 to request such priority 
rating authority.
    Proposed Sec.  217.62, ``Directives,'' defines a directive as an 
official action that requires a person to take or refrain from taking 
certain actions in accordance with its provisions. This section details 
directive compliance for the public.
    Proposed Sec.  217.63, ``Letters and Memoranda of Understanding,'' 
defines a letter or memorandum of understanding as an official action 
that may be issued in resolving special priorities assistance cases to 
reflect an agreement reached by all parties, and explains its use.

Subpart G

    Proposed Subpart G, ``Compliance,'' provides DOE authority to 
enforce the administration of the DPA and other applicable statutes, 
this regulation, or an official action. This subpart provides that 
willful violations of the provisions of title I or section 705 of the 
DPA, this regulation, or a DOE official action, are criminal acts, 
punishable as provided in the DPA, and as set forth below in Sec.  
217.74.
    Proposed Sec.  217.71, ``Audits and investigations,'' details the 
procedures for official examinations of books, records, documents, and 
other writings and information to ensure that the provisions of the DPA 
and other applicable statutes, this regulation, and official actions 
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 regulation.
    Proposed Sec.  217.72, ``Compulsory process,'' provides that if a 
person refuses to permit a duly authorized DOE representative to have 
access to necessary information, DOE may seek the institution of 
appropriate legal action, including ex parte application

[[Page 41408]]

for an inspection warrant, in any forum of appropriate jurisdiction.
    Proposed Sec. Sec.  217.73 and 217.74 both provide procedures for 
notification of failure to comply with the DPA, these regulations, or 
DOE official actions, and the violations, penalties and remedies that 
may result.
    Proposed Sec.  217.75, ``Compliance Conflicts,'' requires that 
persons immediately contact DOE should compliance with the DPA, these 
regulations, or an official action prevent a person from filling a 
rated order or from complying with another provision of the DPA and 
other applicable statutes, this regulation, or an official action.

Subpart H

    Proposed Sec.  217.80, ``Adjustments, Exceptions, and Appeals,'' 
would reflect the procedures necessary to request an adjustment or 
exception to the provisions of these regulations on the grounds of 
exceptional hardship or compliance would be contrary to the intent of 
the DPA. These requests must be written and submitted to the DOE 
contact provided in this section.
    Proposed Sec.  217.81, ``Appeals,'' provides the procedures, timing 
and contact information for appealing a decision made on a request for 
relief in the previous section.

Subpart I

    Proposed Subpart I, ``Miscellaneous Provisions,'' addresses a 
number of remaining issues, including protection against claims, 
records and reports, applicability issues, and communications.
    Proposed Sec.  217.90, ``Protection against claims,'' provides that 
a person shall not be held liable for damages or penalties for any act 
or failure to act resulting directly or indirectly from compliance with 
any part of this regulation, or an official action.
    Proposed Sec.  217.91, ``Records and reports,'' would require that 
persons are required to make and preserve for at least three years, 
accurate and complete records of any transaction covered by this 
regulation or an official action. Various requirements and procedures 
regarding such records are provided in this section. The 
confidentiality provisions of the DPA governing the submission of 
information pursuant to the DPA and these regulations are also set 
forth.
    Proposed Sec.  217.92, ``Applicability of this regulation and 
official actions,'' would provide the jurisdictional applicability of 
this regulation and official actions.
    Proposed Sec.  217.93, ``Communications,'' would provide a DOE 
point of contact for all communications regarding this regulation.

A. Review Under Executive Order 12866

    This rule has been determined to be significant for purposes of 
Executive Order 12866.

B. Review Under the Regulatory Flexibility Act

    The Regulatory Flexibility Act (5 U.S.C. 601 et seq.) requires 
preparation of an initial regulatory flexibility analysis for any rule 
that by law must be proposed for public comment, unless the agency 
certifies that the rule, if promulgated, will not have a significant 
economic impact on a substantial number of small entities. As required 
by Executive Order 13272, ``Proper Consideration of Small Entities in 
Agency Rulemaking,'' 67 FR 53461 (August 16, 2002), DOE published 
procedures and policies on February 19, 2003, to ensure that the 
potential impacts of its rules on small entities are properly 
considered during the rulemaking process. 68 FR 7990. DOE has made its 
procedures and policies available on the Office of the General 
Counsel's Web site, http://www.gc.doe.gov.
    DOE reviewed today's final rule under the provisions of the 
Regulatory Flexibility Act and the procedures and policies published on 
February 19, 2003.

Number of Small Entities

    Small entities include small businesses, small organizations and 
small governmental jurisdictions. For purposes of assessing the impacts 
of this proposed 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 (August 2008 Edition), has a maximum annual revenue of $33.5 
million and a maximum of 1,500 employees (for some business categories, 
these number 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 DOE (or agencies to which DOE 
delegates authority) will authorize prioritization of certain orders or 
contracts as well as criteria under which DOE would issue orders 
allocating resources or production facilities. Because the rule affects 
commercial transactions, DOE believes that small organizations and 
small governmental jurisdictions are unlikely to be affected by this 
rule. To date, DOE has not exercised its existing allocations 
authority. As such, DOE has no basis on which to estimate the number of 
small businesses that may be affected by this rule.

Impact

    The proposed rule has two principle components: prioritization and 
allocation. Under prioritization, DOE or its Delegate Agency designates 
certain orders as 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 
or an order with a lower priority rating. A recipient of a rated order 
may place 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 any liability for 
damages or penalties for actions taken in, or inactions required for, 
compliance with the rule.
    Although rated orders could require a firm to fill one order prior 
to filling another, they would not necessarily require a reduction in 
the total volume of orders. The regulations would also not require the 
recipient of a rated order 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 mutually 
offsetting, resulting in no net economic impact.
    Allocations could be used to control the general distribution of 
materials or services in the civilian market. Specific allocation 
actions that DOE might take are as follows:

    Set-aside: an official action that requires a person to reserve 
resource capacity in anticipation of receipt of rated orders.
    Allocations directive: an official action that requires a person 
to take or refrain from taking certain actions in accordance with 
its provisions. An allocation directive can require a person to stop 
or reduce production

[[Page 41409]]

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.
    Allotment: an official action that specifies the maximum 
quantity of an item authorized for use in a specific program or 
application.

DOE has not yet taken any actions under its existing allocations 
authority, 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. Sec.  
2071), hereinafter ``DPA,'' and by Section 201(d) of Executive Order 
12919 of June 3, 1994, as amended, DOE may implement allocations only 
if the Secretary of Energy makes, and the President approves, 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 IV of the Robert T. 
Stafford Disaster Relief and Emergency Assistance Act (42 U.S.C. 5195 
et seq.) and critical infrastructure protection and restoration.
    Any allocation actions taken by DOE would also have to comply with 
Section 701(e) of the DPA (50 U.S.C. app. Sec.  2151(e)), which 
provides that ``small business concerns shall be accorded, to the 
extent practicable, a fair share of the such material [including 
services] 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.'' Such a provision may even 
provide an economic benefit to small businesses.

Conclusion

    Although DOE cannot determine precisely the number of small 
entities that would be affected by this rule, DOE believes that the 
overall impact on such entities would not be significant. In most 
instances, rated contracts would be fulfilled in addition to other 
(unrated) contracts and could actually increase the total amount of 
business of the firm that receives a rated contract.
    Because allocations can be imposed only after an agency 
determination confirmed by the President, and because DOE has not yet 
used its allocations authority that has existed since passage of the 
Defense Production Act in 1950, one can expect allocations will be 
ordered only in particular circumstances. However, DOE believes that 
the requirement for a Presidential determination and the provisions of 
section 701 of the DPA indicate that any impact on small business will 
not be significant.
    Therefore, for the reasons set forth above, the Assistant General 
Counsel for Legislation, Regulation, and Energy Efficiency certifies 
that this proposed rule, if implemented, would not have a significant 
economic impact on a substantial number of small entities.

C. Review Under the Paperwork Reduction Act

    This proposed rule contains a collection-of-information requirement 
subject to review and approval by OMB under the Paperwork Reduction Act 
(PRA). This requirement has been submitted to OMB for approval. Public 
reporting burden for submission of Form DOE-XXX is estimated to average 
30 minutes per response, including the time for reviewing instructions, 
searching existing data sources, gathering and maintaining the data 
needed, and completing and reviewing the collection of information.
    Public comment is sought regarding: whether this proposed 
collection of information is necessary for the proper performance of 
the functions of the agency, including whether the information shall 
have practical utility; the accuracy of the burden estimate; ways to 
enhance the quality, utility, and clarity of the information to be 
collected; and ways to minimize the burden of the collection of 
information, including through the use of automated collection 
techniques or other forms of information technology. Send comments on 
these or any other aspects of the collection of information to Dr. 
Kenneth Friedman (see ADDRESSES), and e-mail to Christine_J._Kymn@omb.eop.gov.
    Notwithstanding any other provision of the 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 PRA, unless that collection of information displays 
a currently valid OMB Control Number.

D. Review Under Executive Order 13211

    Executive Order 13211, ``Actions Concerning Regulations That 
Significantly Affect Energy Supply, Distribution, or Use,'' 66 FR 28355 
(May 22, 2001) requires Federal agencies to prepare and submit to the 
Office of Information and Regulatory Affairs (OIRA) a Statement of 
Energy Effects for any proposed significant energy action. DOE 
determined that today's proposed rule, which sets forth procedures for 
compliance with the Defense Production Act (separate from the 
procedures set forth at 10 CFR part 216), is not a ``significant energy 
action'' within the meaning of Executive Order 13211. The Administrator 
of the Office of Information and Regulatory Affairs at OMB also did not 
designate this action as a significant energy action. Therefore, DOE 
has tentatively concluded that today's proposed rule is not a 
significant energy action within the meaning of Executive Order 13211 
and has not prepared a Statement of Energy Effects.

E. Review Under Executive Order 13132

    DOE reviewed this rule pursuant to Executive Order 13132, 
``Federalism,'' 64 FR 43255 (August 4, 1999), which imposes certain 
requirements on agencies formulating and implementing policies or 
regulations that preempt State law or that have federalism 
implications. DOE also reviewed this rule pursuant to DOE's statement 
of policy describing the intergovernmental consultation process it will 
follow in the development of regulations that have federalism 
implications, 65 FR 13735 (March 14, 2000). DOE determined that the 
rule would not have a substantial direct effect on the States, on the 
relationship between the National Government and the States, or on the 
distribution of power and responsibilities among the various levels of 
Government.

F. Approval of the Office of the Secretary

    The Secretary of Energy has approved publication of this notice of 
proposed rulemaking.

List of Subjects in 10 CFR Part 217

    Administrative practice and procedure, Business and industry, 
Government contracts, National defense, Reporting and recordkeeping 
requirements, Strategic and critical materials.

[[Page 41410]]

    Issued in Washington, DC on June 3, 2010.
Patricia Hoffman,
Principal Deputy Assistant Secretary, Electricity Delivery and Energy 
Reliability.
    For the reasons stated in the preamble, DOE proposes to add a new 
part 217 to chapter II of title 10 of the Code of Federal Regulations, 
to read as set forth below:

PART 217--ENERGY PRIORITIES AND ALLOCATIONS SYSTEM

Subpart A--General
Sec.
217.1 Purpose of this part.
217.2 Priorities and allocations authority.
217.3 Program eligibility.
Subpart B--Definitions
217.20 Definitions.
Subpart C--Placement of Rated Orders
217.30 Delegations of authority.
217.31 Priority ratings.
217.32 Elements of a rated order.
217.33 Acceptance and rejection of rated orders.
217.34 Preferential scheduling.
217.35 Extension of priority ratings.
217.36 Changes or cancellations of priority ratings and rated 
orders.
217.37 Use of rated orders.
217.38 Limitations on placing rated orders.
Subpart D--Special Priorities Assistance
217.40 General provisions.
217.41 Requests for priority rating authority.
217.42 Examples of assistance.
217.43 Criteria for assistance.
217.44 Instances where assistance may not be provided.
Subpart E--Allocation Actions
217.50 Policy.
217.51 General procedures.
217.52 Controlling the general distribution of a material in the 
civilian market.
217.53 Types of allocation orders.
217.54 Elements of an allocation order.
217.55 Mandatory acceptance of an allocation order.
217.56 Changes or cancellations of an allocation order.
Subpart F--Official Actions
217.60 General provisions.
217.61 Rating Authorizations.
217.62 Directives.
217.63 Letters and Memoranda of Understanding.
Subpart G--Compliance
217.70 General provisions.
217.71 Audits and investigations.
217.72 Compulsory process.
217.73 Notification of failure to comply.
217.74 Violations, penalties, and remedies.
217.75 Compliance conflicts.
Subpart H--Adjustments, Exceptions, and Appeals
217.80 Adjustments or exceptions.
217.81 Appeals.
Subpart I--Miscellaneous Provisions
217.90 Protection against claims.
217.91 Records and reports.
217.92 Applicability of this part and official actions.
217.93 Communications.
Appendix I to Part 217-Sample Form DOE-XXX

    Authority: Defense Production Act of 1950, as amended, 50 U.S.C. 
App. 2061-2171; E. O. 12919, as amended, (59 FR 29525, June 7, 1994)

Subpart A--General

Sec.  217.1  Purpose of this part.

    This part provides guidance and procedures for use of the Defense 
Production Act section 101(a) priorities and allocations authority with 
respect to all forms of energy necessary or appropriate to promote the 
national defense. (The guidance and procedures in this part are 
consistent with the guidance and procedures provided in other 
regulations that, as a whole, form the Federal Priorities and 
Allocations System. Guidance and procedures for use of the Defense 
Production Act priorities and allocations authority with respect to 
other types of resources are provided for: food resources, food 
resource facilities, and the domestic distribution of farm equipment 
and commercial fertilizer in [CFR citation to be inserted in final 
rule]; health resources in [CFR citation to be inserted in final rule]; 
all forms of civil transportation in [CFR citation to be inserted in 
final rule]; water resources in [CFR citation to be inserted in final 
rule]; and all other materials, services, and facilities, including 
construction materials in the Defense Priorities and Allocations System 
(DPAS) regulation (15 CFR part 700).) DOE regulations at 10 CFR Part 
216 describe and establish the procedures to be used by DOE in 
considering and making certain findings required by section 
101(c)(2)(A) of the Defense Production Act of 1950, as amended.

Sec.  217.2  Priorities and allocations authority.

    (a) Section 201 of E. O. 12919 [59 FR 29525] delegates the 
President's authority under section 101 of the Defense Production Act 
to require acceptance and priority performance of contracts and orders 
(other than contracts of employment) to promote the national defense 
over performance of any other contracts or orders, and to allocate 
materials, services, and facilities as deemed necessary or appropriate 
to promote the national defense to:
    (1) The Secretary of Agriculture with respect to food resources, 
food resource facilities, and the domestic distribution of farm 
equipment and commercial fertilizer;
    (2) The Secretary of Energy with respect to all forms of energy;
    (3) The Secretary of Health and Human Services with respect to 
health resources;
    (4) The Secretary of Transportation with respect to all forms of 
civil transportation;
    (5) The Secretary of Defense with respect to water resources; and
    (6) The Secretary of Commerce for all other materials, services, 
and facilities, including construction materials.
    (b) Section 202 of E.O. 12919 states that the priorities and 
allocations authority delegated in section 201 of this order may be 
used only to support programs that have been determined in writing as 
necessary or appropriate to promote the national defense:
    (1) By the Secretary of Defense with respect to military production 
and construction, military assistance to foreign nations, stockpiling, 
outer space, and directly related activities;
    (2) By the Secretary of Energy with respect to energy production 
and construction, distribution and use, and directly related 
activities; and
    (3) By the Secretary of Homeland Security with respect to essential 
civilian needs supporting national defense, including civil defense and 
continuity of government and directly related activities.

Sec.  217.3  Program eligibility.

    Certain programs to promote the national defense are eligible for 
priorities and allocations support. These include programs for military 
and energy production or construction, military or critical 
infrastructure assistance to any foreign nation, deploying and 
sustaining military forces, homeland security, stockpiling, space, and 
any directly related activity. Other eligible programs include 
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.

Subpart B--Definitions

Sec.  217.20  Definitions.

    The following definitions pertain to all sections of this part:
    Allocation order means 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 means an official action that specifies the maximum 
quantity or

[[Page 41411]]

use of a material, service, or facility authorized for a specific use 
to promote the national defense.
    Approved program means a program determined by the Secretary of 
Defense, the Secretary of Energy, or the Secretary of Homeland Security 
to be necessary or appropriate to promote the national defense, in 
accordance with section 202 of E.O. 12919.
    Civil transportation includes movement of persons and property by 
all modes of transportation in interstate, intrastate, or foreign 
commerce within the United States, its territories and possessions, and 
the District of Columbia, and, without limitation, related public 
storage and warehousing, ports, services, equipment and facilities, 
such as transportation carrier shop and repair facilities. However, 
``civil transportation'' shall not include transportation owned or 
controlled by the Department of Defense, use of petroleum and gas 
pipelines, and coal slurry pipelines used only to supply energy 
production facilities directly. As applied herein, ``civil 
transportation'' shall include direction, control, and coordination of 
civil transportation capacity regardless of ownership.
    Construction means 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 means any systems and assets, whether 
physical or cyber-based, 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 means the Defense Production Act of 1950, as 
amended (50 U.S.C. App. 2061 et seq.).
    Delegate Agency means a Federal government agency authorized by 
delegation from the Department of Energy to place priority ratings on 
contracts or orders needed to support approved programs.
    Directive means an official action that requires a person to take 
or refrain from taking certain actions in accordance with its 
provisions.
    Emergency preparedness means all those 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. Such term 
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).
    (3) Measures to be undertaken following a hazard (including 
activities for fire fighting, 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).
    Energy means all forms of energy including petroleum, gas (both 
natural and manufactured), electricity, solid fuels (including all 
forms of coal, coke, coal chemicals, coal liquification, and coal 
gasification), and atomic energy, and the production, conservation, 
use, control, and distribution (including pipelines) of all of these 
forms of energy.
    Facilities includes all types of buildings, structures, or other 
improvements to real property (but excluding farms, churches or other 
places of worship, and private dwelling houses), and services relating 
to the use of any such building, structure, or other improvement.
    Farm equipment means equipment, machinery, and repair parts 
manufactured for use on farms in connection with the production or 
preparation for market use of food resources.
    Fertilizer means any product or combination of products that 
contain one or more of the elements--nitrogen, phosphorus, and 
potassium--for use as a plant nutrient.
    Food resources means all commodities and products, simple, mixed, 
or compound, or complements to such commodities or products, that are 
capable of being ingested by either human beings or animals, 
irrespective of other uses to which such commodities or products may be 
put, at all stages of processing from the raw commodity to the products 
thereof in vendible form for human or animal consumption. ``Food 
resources'' also means all starches, sugars, vegetable and animal or 
marine fats and oils, cotton, tobacco, wool, mohair, hemp, flax fiber, 
and naval stores, but does not mean any such material after it loses 
its identity as an agricultural commodity or agricultural product.
    Food resource facilities means plants, machinery, vehicles 
(including on-farm), and other facilities required for the production, 
processing, distribution, and storage (including cold storage) of food 
resources, livestock and poultry feed and seed, and for the domestic 
distribution of farm equipment and fertilizer (excluding transportation 
thereof).
    Hazard means an emergency or disaster resulting from:
    (1) A natural disaster; or
    (2) An accidental or human-caused event.
    Health resources means materials, facilities, health supplies, and 
equipment (including pharmaceutical, blood collecting and dispensing 
supplies, biological, surgical textiles, and emergency surgical 
instruments and supplies) required to prevent the impairment of, 
improve, or restore the physical and mental health conditions of the 
population.
    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 means all materials, services, and facilities, 
including construction materials, but not including: food resources, 
food resource facilities, and the domestic distribution of farm 
equipment and commercial fertilizer; all forms of energy; health 
resources; all forms of civil transportation; and water resources.
    Item means 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 operating supplies or MRO--

[[Page 41412]]

    (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 resources 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.
    Materials includes--
    (1) Any raw materials (including minerals, metals, and advanced 
processed materials), commodities, articles, components (including 
critical components), products, and items of supply; and
    (2) Any technical information or services ancillary to the use of 
any such materials, commodities, articles, components, products, or 
items.
    (3) Natural resources such as oil and gas.
    National defense means 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 means an action taken by the Department of Energy 
or another resource agency under the authority of the Defense 
Production Act, E.O. 12919, and this part or another regulation under 
the Federal Priorities and Allocations System. Such actions include the 
issuance of Rating Authorizations, Directives, Set Asides, Allotments, 
Letters of Understanding, Memoranda of Understanding, Demands for 
Information, Inspection Authorizations, and Administrative Subpoenas.
    Person includes an individual, corporation, partnership, 
association, or any other organized group of persons, or legal 
successor or representative thereof, or any State or local government 
or agency thereof.
    Rated order means a prime contract, a subcontract, or a purchase 
order in support of an approved program issued in accordance with the 
provisions of this part.
    Resource agency means any agency delegated priorities and 
allocations authority as specified in Sec.  217.2.
    Secretary means the Secretary of Energy.
    Services includes any effort that is needed for or incidental to -
    (1) The development, production, processing, distribution, 
delivery, or use of an industrial resource or a critical technology 
item;
    (2) The construction of facilities;
    (3) The movement of individuals and property by all modes of civil 
transportation; or
    (4) Other national defense programs and activities.
    Set-aside means an official action that requires a person to 
reserve materials, services, or facilities capacity in anticipation of 
the receipt of rated orders.
    Stafford Act means title VI (Emergency Preparedness) of the Robert 
T. Stafford Disaster Relief and Emergency Assistance Act, as amended 
(42 U.S.C. 5195-5197g).
    Water resources means all usable water, from all sources, within 
the jurisdiction of the United States, which can be managed, 
controlled, and allocated to meet emergency requirements.

Subpart C--Placement of Rated Orders

Sec.  217.30  Delegations of authority.

    (a) The priorities and allocations authorities of the President 
under Title I of the Defense Production Act with respect to all forms 
of energy have been delegated to the Secretary of Energy under E.O. 
12919 of June 3, 1994 (59 FR 29525).
    (b) The Department of Commerce has delegated authority to the 
Department of Energy to provide for extension of priority ratings for 
``industrial resources,'' as provided in Sec.  261.35 of this part, to 
support rated orders for all forms of energy.

Sec.  217.31  Priority ratings.

    (a) Levels of priority.
    (1) There are two levels of priority established by Federal 
Priorities and Allocations System regulations, identified by the rating 
symbols ``DO'' and ``DX''.
    (2) All DO-rated orders have equal priority with each other and 
take precedence over unrated orders. All DX-rated orders have equal 
priority with each other and take precedence over DO-rated orders and 
unrated orders. (For resolution of conflicts among rated orders of 
equal priority, see Sec.  217.34(c).)
    (3) In addition, a Directive regarding priority treatment for a 
given item issued by the Department of Energy for that item takes 
precedence over any DX-rated order, DO-rated order, or unrated order, 
as stipulated in the Directive. (For a full discussion of Directives, 
see Sec.  217.62.)
    (b) Program identification symbols. Program identification symbols 
indicate which approved program is being supported by a rated order. 
The list of currently approved programs and their identification 
symbols are listed in Schedule 1, set forth as an Appendix to 15 CFR 
Part 700. For example, DO-E-F3 identifies a domestic energy 
construction program. Additional programs may be approved under the 
procedures of E.O.12919 at any time. Program identification symbols do 
not connote any priority.
    (c) Priority ratings. A priority rating consists of the rating 
symbol--DO or DX--and the program identification symbol, such as DO-E 
or DX-E. Thus, a contract for a domestic energy construction program 
will contain a DO-E-F3 or DX-E-F3 priority rating.

Sec.  217.32  Elements of a rated order.

    Each rated order must include:
    (a) The appropriate priority rating (e.g. DO-E or DX-E)
    (b) A required delivery date or dates. The words ``immediately'' or 
``as soon as possible'' do not constitute a delivery date. A 
``requirements contract'', ``basic ordering agreement'', ``prime vendor 
contract'', or similar procurement document bearing a priority rating 
may contain no specific delivery date or dates and may provide for the 
furnishing of items or service from time-to-time or within a stated 
period against specific purchase orders, such as ``calls'', 
``requisitions'', and ``delivery orders''. These purchase orders 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;
    (c) 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

[[Page 41413]]

person placing the order. The signature or use of the name certifies 
that the rated order is authorized under this part and that the 
requirements of this part are being followed; and
    (d) (1) 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 Energy 
Priorities and Allocations System regulation at 10 CFR part 217.

    (2) If the rated order is placed in support of emergency 
preparedness requirements and expedited action is necessary and 
appropriate to meet these requirements, the following sentences should 
be added following the statement set forth in paragraph (d)(1) of this 
section:

    This rated order is placed for the purpose of emergency 
preparedness. It must be accepted or rejected within 2 days after 
receipt of the order if (1) The order is issued in response to a 
hazard that has occurred; or (2) If the order is issued to prepare 
for an imminent hazard, as specified in EPAS Section 217.33(e), 10 
CFR 217.33(e).

Sec.  217.33  Acceptance and rejection of rated orders.

    (a) Mandatory acceptance. (1) Except as otherwise specified in this 
section, a person shall accept every rated order received and must fill 
such orders regardless of any other rated or unrated orders that have 
been accepted.
    (2) A person shall not discriminate against rated orders in any 
manner such as by charging higher prices or by imposing different terms 
and conditions than for comparable unrated orders.
    (b) Mandatory rejection. Unless otherwise directed by the 
Department of Energy for a rated order involving all forms of energy:
    (1) A person shall not accept a rated order for delivery on a 
specific date if unable to fill the order by that date. However, the 
person must inform the customer of the earliest date on which delivery 
can be made and offer to accept the order on the basis of that date. 
Scheduling conflicts with previously accepted lower rated or unrated 
orders are not sufficient reason for rejection under this section.
    (2) A person shall not accept a DO-rated order for delivery on a 
date which would interfere with delivery of any previously accepted DO- 
or DX-rated orders. However, the person must offer to accept the order 
based on the earliest delivery date otherwise possible.
    (3) A person shall not accept a DX-rated order for delivery on a 
date which would interfere with delivery of any previously accepted DX-
rated orders, but must offer to accept the order based on the earliest 
delivery date otherwise possible.
    (4) If a person is unable to fill all of the rated orders of equal 
priority status received on the same day, the person must accept, based 
upon the earliest delivery dates, only those orders which can be 
filled, and reject the other orders. For example, a person must accept 
order A requiring delivery on December 15 before accepting order B 
requiring delivery on December 31. However, the person must offer to 
accept the rejected orders based on the earliest delivery dates 
otherwise possible.
    (c) Optional rejection. Unless otherwise directed by the Department 
of Energy for a rated order involving all forms of energy, rated orders 
may be rejected in any of the following cases as long as a supplier 
does not discriminate among customers:
    (1) If the person placing the order is unwilling or unable to meet 
regularly established terms of sale or payment;
    (2) If the order is for an item not supplied or for a service not 
capable of being performed;
    (3) If the order is for an item or service produced, acquired, or 
provided only for the supplier's own use for which no orders have been 
filled for two years prior to the date of receipt of the rated order. 
If, however, a supplier has sold some of these items or provided 
similar services, the supplier is obligated to accept rated orders up 
to that quantity or portion of production or service, whichever is 
greater, sold or provided within the past two years;
    (4) If the person placing the rated order, other than the U.S. 
Government, makes the item or performs the service being ordered;
    (5) If acceptance of a rated order or performance against a rated 
order would violate any other regulation, official action, or order of 
the Department of Energy, issued under the authority of the Defense 
Production Act or another relevant statute.
    (d) Customer notification requirements. (1) Except as provided in 
this paragraph, a person must accept or reject a rated order in writing 
or electronically 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 in 
writing or electronically for the rejection.
    (2) 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 or electronic confirmation must be provided within five (5) 
working days.
    (e) Exception for emergency preparedness conditions. If the rated 
order is placed for the purpose of emergency preparedness, a person 
must accept or reject a rated order and transmit the acceptance or 
rejection in writing or in an electronic format within 2 days after 
receipt of the order if:
    (1) The order is issued in response to a hazard that has occurred; 
or
    (2) The order is issued to prepare for an imminent hazard.

Sec.  217.34  Preferential scheduling.

    (a) A person must schedule operations, including the acquisition of 
all needed production items or services, in a timely manner to satisfy 
the delivery requirements of each rated order. Modifying production or 
delivery schedules is necessary only when required delivery dates for 
rated orders cannot otherwise be met.
    (b) DO-rated orders must be given production preference over 
unrated orders, if necessary to meet required delivery dates, even if 
this requires the diversion of items being processed or ready for 
delivery or services being performed against unrated orders. Similarly, 
DX-rated orders must be given preference over DO-rated orders and 
unrated orders. (Examples: If a person receives a DO-rated order with a 
delivery date of June 3 and if meeting that date would mean delaying 
production or delivery of an item for an unrated order, the unrated 
order must be delayed. If a DX-rated order is received calling for 
delivery on July 15 and a person has a DO-rated order requiring 
delivery on June 2 and operations can be scheduled to meet both 
deliveries, there is no need to alter production schedules to give any 
additional preference to the DX-rated order.)
    (c) Conflicting rated orders.
    (1) If a person finds that delivery or performance against any 
accepted rated orders conflicts with the delivery or performance 
against other accepted rated orders of equal priority status, the 
person shall give precedence to the conflicting orders in the sequence 
in which they are to be delivered or performed (not to the receipt 
dates). If the conflicting orders are scheduled to be delivered or 
performed on the same day, the person shall give precedence to those 
orders that have the earliest receipt dates.
    (2) If a person is unable to resolve rated order delivery or 
performance conflicts under this section, the person should promptly 
seek special priorities

[[Page 41414]]

assistance as provided in Sec. Sec.  217.40 through 217.44. 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 Sec. Sec.  217.40 through 217.44. 
For any rated order against which delivery or performance will be 
delayed, the person must notify the customer as provided in Sec.  
217.33.
    (d) If a person is unable to purchase needed production items in 
time to fill a rated order by its required delivery date, the person 
must fill the rated order by using inventoried production items. A 
person who uses inventoried items to fill a rated order may replace 
those items with the use of a rated order as provided in Sec.  
217.37(b).

Sec.  217.35  Extension of priority ratings.

    (a) A person must use rated orders with suppliers to obtain items 
or services needed to fill a rated order. 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 
Energy. For example, if a person is in receipt of a DO-E-F1 rated order 
for an electric power sub-station, and needs to purchase a transformer 
for its manufacture, that person must use a DO-E-F1 rated order to 
obtain the needed transformer.
    (b) The priority rating must be included on each successive order 
placed to obtain items or services needed to fill a customer's rated 
order. This continues from contractor to subcontractor to supplier 
throughout the entire procurement chain.

Sec.  217.36  Changes or cancellations of priority ratings and rated 
orders.

    (a) The priority rating on a rated order may be changed or canceled 
by:
    (1) An official action of the Department of Energy; or
    (2) Written notification from the person who placed the rated 
order.
    (b) If an unrated order is amended so as to make it a rated order, 
or a DO rating is changed to a DX rating, the supplier must give the 
appropriate preferential treatment to the order as of the date the 
change is received by the supplier.
    (c) An amendment to a rated order that significantly alters a 
supplier's original production or delivery schedule shall constitute a 
new rated order as of the date of its receipt. The supplier must accept 
or reject the amended order according to the provisions of Sec.  
217.33.
    (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; 
or a change which is agreed upon between the supplier and the customer.
    (e) If a person no longer needs items or services to fill a rated 
order, any rated orders placed with suppliers for the items or 
services, or the priority rating on those orders, must be canceled.
    (f) When a priority rating is added to an unrated order, or is 
changed or canceled, all suppliers must be promptly notified in 
writing.

Sec.  217.37  Use of rated orders.

    (a) A person must use rated orders to obtain:
    (1) Items which will be physically incorporated into other items to 
fill rated orders, including that portion of such items normally 
consumed or converted into scrap or by-products in the course of 
processing;
    (2) Containers or other packaging materials required to make 
delivery of the finished items against rated orders;
    (3) Services, other than contracts of employment, needed to fill 
rated orders; and
    (4) MRO needed to produce the finished items to fill rated orders.
    (b) A person may use a rated order to replace inventoried items 
(including finished items) if such items were used to fill rated 
orders, as follows:
    (1) The order must be placed within 90 days of the date of use of 
the inventory.
    (2) A DO rating and the program identification symbol indicated on 
the customer's rated order must be used on the order. A DX rating may 
not be used even if the inventory was used to fill a DX-rated order.
    (3) If the priority ratings on rated orders from one customer or 
several customers contain different program identification symbols, the 
rated orders may be combined. In this case, the program identification 
symbol ``H1'' must be used (i.e., DO-H1).
    (c) A person may combine DX- and DO-rated orders from one customer 
or several customers if the items or services covered by each level of 
priority are identified separately and clearly. If different program 
identification symbols are indicated on those rated orders of equal 
priority, the person must use the program identification symbol ``H1'' 
(i.e., DO-H1 or DX-H1).
    (d) Combining rated and unrated orders.
    (1) A person may combine rated and unrated order quantities on one 
purchase order provided that:
    (i) The rated quantities are separately and clearly identified; and
    (ii) The four elements of a rated order, as required by Sec.  
217.32, are included on the order with the statement required in Sec.  
217.32(d) modified to read in substance:

    This purchase order contains rated order quantities certified 
for national defense use, and you are required to follow all 
applicable provisions of the Energy Priorities and Allocations 
System regulations at 10 CFR part 217 only as it pertains to the 
rated quantities.

    (2) A supplier must accept or reject the rated portion of the 
purchase order as provided in Sec.  217.33 and give preferential 
treatment only to the rated quantities as required by this part. This 
part may not be used to require preferential treatment for the unrated 
portion of the order.
    (3) Any supplier who believes that rated and unrated orders are 
being combined in a manner contrary to the intent of this part or in a 
fashion that causes undue or exceptional hardship may submit a request 
for adjustment or exception under Sec.  217.80.
    (e) A person may place a rated order for the minimum commercially 
procurable quantity even if the quantity needed to fill a rated order 
is less than that minimum. However, a person must combine rated orders 
as provided in paragraph (c) of this section, if possible, to obtain 
minimum procurable quantities.
    (f) A person is not required to place a priority rating on an order 
for less than $50,000, or one-half of the Simplified Acquisition 
Threshold (as established in the Federal Acquisition Regulation (FAR) 
(see FAR section 2.101) or in other authorized acquisition regulatory 
or management systems) whichever amount is greater, provided that 
delivery can be obtained in a timely fashion without the use of the 
priority rating.

Sec.  217.38  Limitations on placing rated orders.

    (a) General limitations.
    (1) A person may not place a DO- or DX-rated order unless entitled 
to do so under 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 or services than needed, except 
to obtain a minimum procurable quantity. Separate rated orders may not 
be placed solely for the purpose of obtaining minimum procurable 
quantities on each order;
    (iii) Items or services in advance of the receipt of a rated order, 
except as

[[Page 41415]]

specifically authorized by the Department of Energy (see Sec.  
217.41(c) for information on obtaining authorization for a priority 
rating in advance of a rated order);
    (iv) Items that are not needed to fill a rated order, except as 
specifically authorized by the Department of Energy, or as otherwise 
permitted by this part; or
    (v) Any of the following items unless specific priority rating 
authority has been obtained from the Department of Energy, a Delegate 
Agency, or the Department of Commerce, as appropriate:
    (A) Items for plant improvement, expansion, or construction, unless 
they will be physically incorporated into a construction project 
covered by a rated order; and
    (B) Production or construction equipment or items to be used for 
the manufacture of production equipment. [For information on requesting 
priority rating authority, see Sec.  217.21.]
    (vi) 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.
    (b) Jurisdictional limitations. Unless authorized by the resource 
agency with jurisdiction, the provisions of this part are not 
applicable to the following resources:
    (1) Food resources, food resource facilities, and the domestic 
distribution of farm equipment and commercial fertilizer (Resource 
agency with jurisdiction--Department of Agriculture);
    (2) Health resources (Resource agency with jurisdiction--Department 
of Health and Human Services);
    (3) All forms of civil transportation (Resource agency with 
jurisdiction--Department of Transportation);
    (4) Water resources (Resource agency with jurisdiction--Department 
of Defense/U.S. Army Corps of Engineers); and
    (5) Communications services (Resource agency with jurisdiction--
National Communications System under E. O. 12472 of April 3, 1984).

Subpart D--Special Priorities Assistance

Sec.  217.40  General provisions.

    (a) The six regulations that comprise the Federal Priorities and 
Allocations System are designed to be largely self-executing. However, 
from time-to-time production or delivery problems will arise. In this 
event, a person should immediately contact the Office of Infrastructure 
Security and Energy Restoration, for guidance or assistance (Contact 
the Senior Policy Advisor for the Office of Electricity Delivery and 
Energy Reliability, as listed in Sec.  217.93). If the problem(s) 
cannot otherwise be resolved, special priorities assistance should be 
sought from the Department of Energy through the Office of 
Infrastructure Security and Energy Restoration (Contact the Senior 
Policy Advisor for the Office of Electricity Delivery and Energy 
Reliability, as listed in Sec.  217.93). If the Department of Energy is 
unable to resolve the problem or to authorize the use of a priority 
rating and believes additional assistance is warranted, the Department 
of Energy may forward the request to another agency with resource 
jurisdiction, as appropriate, for action. Special priorities assistance 
is provided to alleviate problems that do arise.
    (b) Special priorities assistance is available for any reason 
consistent with this part. Generally, special priorities assistance is 
provided to expedite deliveries, resolve delivery conflicts, place 
rated orders, locate suppliers, or to verify information supplied by 
customers and vendors. Special priorities assistance may also be used 
to request rating authority for items that are not normally eligible 
for priority treatment.
    (c) A request for special priorities assistance or priority rating 
authority must be submitted on Form DOE-XXX [OMB control number to be 
inserted in the final rule] to the Senior Policy Advisor for the Office 
of Electricity Delivery and Energy Reliability, as listed in Sec.  
217.93. Form DOE-999 may be obtained from the Department of Energy or a 
Delegate Agency. A sample Form DOE-999 is attached at Appendix I to 
this part.

Sec.  217.41  Requests for priority rating authority.

    (a) If a rated order is likely to be delayed because a person is 
unable to obtain items or services not normally rated under this part, 
the person may request the authority to use a priority rating in 
ordering the needed items or services.
    (b) Rating authority for production or construction equipment.
    (1) A request for priority rating authority for production or 
construction equipment must be submitted to the U.S. Department of 
Commerce on Form BIS-999.
    (2) When the use of a priority rating is authorized for the 
procurement of production or construction equipment, a rated order may 
be used either to purchase or to lease such equipment. However, in the 
latter case, the equipment may be leased only from a person engaged in 
the business of leasing such equipment or from a person willing to 
lease rather than sell.
    (c) Rating authority in advance of a rated prime contract. (1) In 
certain cases and upon specific request, the Department of Energy, in 
order to promote the national defense, may authorize a person to place 
a priority rating on an order to a supplier in advance of the issuance 
of a rated prime contract. In these instances, the person requesting 
advance rating authority must obtain sponsorship of the request from 
the Department of Energy or the appropriate Delegate Agency. The person 
shall also assume any business risk associated with the placing of 
rated orders in the event the rated prime contract is not issued.
    (2) The person must state the following in the request:

    It is understood that the authorization of a priority rating in 
advance of our receiving a rated prime contract from the Department 
of Energy and our use of that priority rating with our suppliers in 
no way commits the Department of Energy or any other government 
agency to enter into a contract or order or to expend funds. 
Further, we understand that the Federal Government shall not be 
liable for any cancellation charges, termination costs, or other 
damages that may accrue if a rated prime contract is not eventually 
placed and, as a result, we must subsequently cancel orders placed 
with the use of the priority rating authorized as a result of this 
request.

    (3) In reviewing requests for rating authority in advance of a 
rated prime contract, the Department of Energy will consider, among 
other things, the following criteria:
    (i) The probability that the prime contract will be awarded;
    (ii) The impact of the resulting rated orders on suppliers and on 
other authorized programs;
    (iii) Whether the contractor is the sole source;
    (iv) Whether the item being produced has a long lead time;
    (v) The time period for which the rating is being requested.
    (4) The Department of Energy may require periodic reports on the 
use of the rating authority granted under paragraph (c) of this 
section.
    (5) If a rated prime contract is not issued, the person shall 
promptly notify all suppliers who have received rated orders pursuant 
to the advanced rating authority that the priority rating on those 
orders is cancelled.

[[Page 41416]]

Sec.  217.42  Examples of assistance.

    (a) While special priorities assistance may be provided for any 
reason in support of this part, it is usually provided in situations 
where:
    (1) A person is experiencing difficulty in obtaining delivery 
against a rated order by the required delivery date; or
    (2) A person cannot locate a supplier for an item or service needed 
to fill a rated order.
    (b) Other examples of special priorities assistance include:
    (1) Ensuring that rated orders receive preferential treatment by 
suppliers;
    (2) Resolving production or delivery conflicts between various 
rated orders;
    (3) Assisting in placing rated orders with suppliers;
    (4) Verifying the urgency of rated orders; and
    (5) Determining the validity of rated orders.

Sec.  217.43  Criteria for assistance.

    Requests for special priorities assistance should be timely, i.e., 
the request has been submitted promptly and enough time exists for the 
Department of Energy, the Delegate Agency, or the Department of 
Commerce for industrial resources to effect a meaningful resolution to 
the problem, and must establish that:
    (a) There is an urgent need for the item; and
    (b) The applicant has made a reasonable effort to resolve the 
problem.

Sec.  217.44  Instances where assistance may not be provided.

    Special priorities assistance is provided at the discretion of the 
Department of Energy, the Delegate Agencies, or the Department of 
Commerce when it is determined that such assistance is warranted to 
meet the objectives of this part. Examples where assistance may not be 
provided include situations when a person is attempting to:
    (a) Secure a price advantage;
    (b) Obtain delivery prior to the time required to fill a rated 
order;
    (c) Gain competitive advantage;
    (d) Disrupt an industry apportionment program in a manner designed 
to provide a person with an unwarranted share of scarce items; or
    (e) Overcome a supplier's regularly established terms of sale or 
conditions of doing business.

Subpart E--Allocation Actions

Sec.  217.50  Policy.

    (a) It is the policy of the Federal Government that the allocations 
authority under title I of the Defense Production Act may:
    (1) Only be used when there is insufficient supply of a material, 
service, or facility to satisfy national defense supply 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.

Sec.  217.51  General procedures.

    When the Department of Energy plans to execute its allocations 
authority to address a supply problem within its resource jurisdiction, 
the Department shall develop a plan that includes the following 
information:
    (a) A copy of the written determination made, in accordance with 
section 202 of E. O. 12919, 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 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 allocation orders, including the type(s) of allocation orders, 
the percentages or quantity of capacity or output to be allocated for 
each purpose, and the duration of the allocation action (i.e., 
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.

Sec.  217.52  Controlling the general distribution of a material in the 
civilian market.

    No allocation action by the Department of Energy may be used to 
control the general distribution of a material in the civilian market, 
unless the Secretary of the Department of Energy has:
    (a) 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) Submitted the finding for the President's approval through the 
Assistant to the President for National Security Affairs; and
    (c) The President has approved the finding.

Sec.  217.53  Types of allocation orders.

    There are three types of allocation orders available for 
communicating allocation actions. These are:
    (a) Set-aside: an official action that requires a person to reserve 
materials, services, or facilities capacity in anticipation of the 
receipt of rated orders;
    (b) Directive: 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; and
    (c) Allotment: an official action that specifies the maximum 
quantity of a material, service, or facility authorized for a specific 
use.

Sec.  217.54  Elements of an allocation order.

    Each allocation order must include:
    (a) A detailed description of the required allocation action(s);
    (b) Specific start and end calendar dates for each required 
allocation action;
    (c) The written signature on a manually placed order, or the 
digital signature or name on an electronically placed order, of the 
Secretary of Energy. The signature or use of the name certifies that 
the order is authorized under this part and that the requirements of 
this part are being followed;
    (d) A statement that reads in substance: ``This is an allocation 
order certified for national defense use. [Insert the legal name of the 
person receiving the order] is required to comply with this order, in 
accordance with the provisions of the Energy Priorities and Allocations 
System regulation (10 CFR Part 217), which is part of the Federal 
Priorities and Allocations System''; and

[[Page 41417]]

    (e) A current copy of the Energy Priorities and Allocations System 
regulation (10 CFR part 217).

Sec.  217.55  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 
Department of Energy 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 five (5) working days. 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 Energy that the order has been changed or cancelled.

Sec.  217.56  Changes or cancellations of an allocation order.

    An allocation order may be changed or canceled by an official 
action of the Department of Energy.

Subpart F--Official Actions

Sec.  217.60  General provisions.

    (a) The Department of Energy may take specific official actions to 
implement the provisions of this part.
    (b) These official actions include Rating Authorizations, 
Directives, and Memoranda of Understanding.

Sec.  217.61  Rating Authorizations.

    (a) A Rating Authorization is an official action granting specific 
priority rating authority that:
    (1) Permits a person to place a priority rating on an order for an 
item or service not normally ratable under this part; or
    (2) Authorizes a person to modify a priority rating on a specific 
order or series of contracts or orders.
    (b) To request priority rating authority, see Sec.  217.41.

Sec.  217.62  Directives.

    (a) A Directive is an official action that requires a person to 
take or refrain from taking certain actions in accordance with its 
provisions.
    (b) A person must comply with each Directive issued. However, a 
person may not use or extend a Directive to obtain any items from a 
supplier, unless expressly authorized to do so in the Directive.
    (c) A Priorities Directive takes precedence over all DX-rated 
orders, DO-rated orders, and unrated orders previously or subsequently 
received, unless a contrary instruction appears in the Directive.
    (d) An Allocations Directive takes precedence over all Priorities 
Directives, DX-rated orders, DO-rated orders, and unrated orders 
previously or subsequently received, unless a contrary instruction 
appears in the Directive.

Sec.  217.63  Letters and Memoranda of Understanding.

    (a) A Letter or Memorandum of Understanding is an official action 
that may be issued in resolving special priorities assistance cases to 
reflect an agreement reached by all parties (the Department of Energy, 
the Department of Commerce (if applicable), a Delegate Agency (if 
applicable), the supplier, and the customer).
    (b) A Letter or Memorandum of Understanding is not used to alter 
scheduling between rated orders, to authorize the use of priority 
ratings, to impose restrictions under this part. Rather, Letters or 
Memoranda of Understanding are used to confirm production or shipping 
schedules that do not require modifications to other rated orders.

Subpart G--Compliance

Sec.  217.70  General provisions.

    (a) The Department of Energy may take specific official actions for 
any reason necessary or appropriate to the enforcement or the 
administration of the Defense Production Act and other applicable 
statutes, this part, or an official action. Such actions include 
Administrative Subpoenas, Demands for Information, and Inspection 
Authorizations.
    (b) Any person who places or receives a rated order or an 
allocation order must comply with the provisions of this part.
    (c) Willful violation of the provisions of title I or section 705 
of the Defense Production Act and other applicable statutes, this part, 
or an official action of the Department of Energy is a criminal act, 
punishable as provided in the Defense Production Act and other 
applicable statutes, and as set forth in Sec.  217.74 of this part.

Sec.  217.71  Audits and investigations.

    (a) Audits and investigations are official examinations of books, 
records, documents, other writings and information to ensure that the 
provisions of the Defense Production Act and other applicable statutes, 
this part, and official actions 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 or investigation, the Department of 
Energy 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 Energy may issue 
the following documents that 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 Energy to testify under oath on matters of which that 
person has knowledge relating to the enforcement or the administration 
of the Defense Production Act and other applicable statutes, this part, 
or official actions. An Administrative Subpoena may also require the 
production of books, papers, records, documents and physical objects or 
property.
    (2) Demands for Information. A Demand for Information requires a 
person to furnish to a duly authorized representative of the Department 
of Energy any information necessary or appropriate to the enforcement 
or the administration of the Defense Production Act and other 
applicable statutes, this part, or official actions.
    (3) Inspection Authorizations. An Inspection Authorization requires 
a person to permit a duly authorized representative of the Department 
of Energy to interview the person's employees or agents, to inspect 
books, records, documents, other writings, and information, including 
electronically-stored information, in the person's possession or 
control at the place where that person usually keeps them or otherwise, 
and to inspect a person's property when such interviews and inspections 
are necessary or appropriate to the enforcement or the administration

[[Page 41418]]

of the Defense Production Act and related statutes, this part, or 
official actions.
    (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 Energy 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 Department of Energy 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 old 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 over 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.

Sec.  217.72  Compulsory process.

    (a) If a person refuses to permit a duly authorized representative 
of the Department of Energy to have access to any premises or source of 
information necessary to the administration or the enforcement of the 
Defense Production Act and other applicable statutes, this part, or 
official actions, the Department of Energy representative may seek 
compulsory process. Compulsory process means the institution of 
appropriate legal action, including ex parte application for an 
inspection warrant or its equivalent, in any forum of appropriate 
jurisdiction.
    (b) Compulsory process may be sought in advance of an audit, 
investigation, or other inquiry, if, in the judgment of the Senior 
Policy Advisor for the Office of Electricity Delivery and Energy 
Reliability, as listed in Sec.  217.93, there is reason to believe that 
a person will refuse to permit an audit, investigation, or other 
inquiry, or that other circumstances exist which make such process 
desirable or necessary.

Sec.  217.73  Notification of failure to comply.

    (a) At the conclusion of an audit, investigation, or other inquiry, 
or at any other time, the Department of Energy may inform the person in 
writing where compliance with the requirements of the Defense 
Production Act and other applicable statutes, this part, or an official 
action were not met.
    (b) In cases where the Department of Energy determines that failure 
to comply with the provisions of the Defense Production Act and other 
applicable statutes, this part, or an official action 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 and other applicable statutes, this part, or an official action.

Sec.  217.74  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 (when applicable), this 
part, or an official action, is a crime and upon conviction, a person 
may be punished by fine or imprisonment, or both. The maximum penalties 
provided by the Defense Production Act are a $10,000 fine, or one year 
in prison, or both. The maximum penalties provided by the Selective 
Service Act and related statutes are 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 and other applicable statutes, this part, and official 
actions, the following are prohibited:
    (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 and other applicable statutes, 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 and other applicable statutes, 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 and other applicable 
statutes, this part, or an official action. In such instances, the 
person must immediately notify the Department of Energy that, in 
accordance with this provision, delivery has not been made.

Sec.  217.75  Compliance conflicts.

    If compliance with any provision of the Defense Production Act and 
other applicable statutes, this part, or an official action would 
prevent a person from filling a rated order or from complying with 
another provision of the Defense Production Act and other applicable 
statutes, this part, or an official action, the person must immediately 
notify the Department of Energy for resolution of the conflict.

Subpart H--Adjustments, Exceptions, and Appeals

Sec.  217.80  Adjustments or exceptions.

    (a) A person may submit a request to the Senior Policy Advisor for 
the Office of Electricity Delivery and Energy Reliability, as listed in 
section 217.93, for an adjustment or exception on the ground that:
    (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 consequences of following a provision of this part or an 
official

[[Page 41419]]

action is contrary to the intent of the Defense Production Act and 
other applicable 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 
provision of this part or official action in question while the request 
is being considered unless such interim relief is granted in writing by 
the Senior Policy Advisor for the Office of Electricity Delivery and 
Energy Reliability, as listed in Sec.  217.93.
    (d) A decision of the Senior Policy Advisor for the Office of 
Electricity Delivery and Energy Reliability, as listed in Sec.  217.93, 
under this section may be appealed to the Office of Infrastructure 
Security and Energy Restoration (For information on the appeal 
procedure, see Sec.  217.81.)

Sec.  217.81  Appeals.

    (a) Any person who has had a request for adjustment or exception 
denied by the Senior Policy Advisor for the Office of Electricity 
Delivery and Energy Reliability, as listed in Sec.  217.93, under Sec.  
217.80, may appeal to the Office of Infrastructure Security and Energy 
Restoration who shall review and reconsider the denial.
    (b) (1) Except as provided in paragraph (b)(2) of this section, an 
appeal must be received by the Office of Infrastructure Security and 
Energy Restoration no later than 45 days after receipt of a written 
notice of denial from the Senior Policy Advisor for the Office of 
Electricity Delivery and Energy Reliability, as listed in Sec.  217.93. 
After this 45-day period, an appeal may be accepted at the discretion 
of the Office of Infrastructure Security and Energy Restoration for 
good cause shown.
    (2) For requests for adjustment or exception involving rated orders 
placed for the purpose of emergency preparedness (see Sec.  217.14(d)), 
an appeal must be received by the Office of Infrastructure Security and 
Energy Restoration, no later than 15 days after receipt of a written 
notice of denial from the Senior Policy Advisor for the Office of 
Electricity Delivery and Energy Reliability, as listed in Sec.  217.93. 
Contract performance under the order shall not be stayed pending 
resolution of the appeal.
    (c) Each appeal must be in writing and contain a complete statement 
of all the facts and circumstances related to the action appealed from 
and a full and precise statement of the reasons the decision should be 
modified or reversed.
    (d) In addition to the written materials submitted in support of an 
appeal, an appellant may request, in writing, an opportunity for an 
informal hearing. This request may be granted or denied at the 
discretion of the Office of Infrastructure Security and Energy 
Restoration.
    (e) When a hearing is granted, the Office of Infrastructure 
Security and Energy Restoration may designate an employee to conduct 
the hearing and to prepare a report. The hearing officer shall 
determine all procedural questions and impose such time or other 
limitations deemed reasonable. In the event that the hearing officer 
decides that a printed transcript is necessary, all expenses shall be 
borne by the appellant.
    (f) When determining an appeal, the Office of Infrastructure 
Security and Energy Restoration may consider all information submitted 
during the appeal as well as any recommendations, reports, or other 
relevant information and documents available to the Department of 
Energy or consult with any other persons or groups.
    (g) The submission of an appeal under this section shall not 
relieve any person from the obligation of complying with the provision 
of this part or official action in question while the appeal is being 
considered unless such relief is granted in writing by the Office of 
Infrastructure Security and Energy Restoration.
    (h) The decision of the Office of Infrastructure Security and 
Energy Restoration shall be made within five (5) days after receipt of 
the appeal, or within one (1) day for appeals pertaining to emergency 
preparedness and shall be the final administrative action. It shall be 
issued to the appellant in writing with a statement of the reasons for 
the decision.

Subpart I--Miscellaneous Provisions

Sec.  217.90  Protection against claims.

    A person shall not be held liable for damages or penalties for any 
act or failure to act resulting directly or indirectly from compliance 
with any provision of this part, or an official action, notwithstanding 
that such provision or action shall subsequently be declared invalid by 
judicial or other competent authority.

Sec.  217.91  Records and reports.

    (a) Persons are required to make and preserve for at least three 
years, accurate and complete records of any transaction covered by this 
part or an official action.
    (b) Records must be maintained in sufficient detail to permit the 
determination, upon examination, of whether each transaction complies 
with the provisions of this part or any official action. However, this 
part does not specify any particular method or system to be used.
    (c) Records required to be maintained by this part must be made 
available for examination on demand by duly authorized representatives 
of the Department of Energy as provided in Sec.  217.71.
    (d) In addition, persons must develop, maintain, and submit any 
other records and reports to the Department of Energy that may be 
required for the administration of the Defense Production Act and other 
applicable statutes, and this part.
    (e) Section 705(d) of the Defense Production Act, as implemented by 
E.O. 12919, provides that information obtained under this section which 
the Secretary deems confidential, or with reference to which a request 
for confidential treatment is made by the person furnishing such 
information, shall not be published or disclosed unless the Secretary 
determines that the withholding of this information is contrary to the 
interest of the national defense. Information required to be submitted 
to the Department of Energy in connection with the enforcement or 
administration of the Defense Production Act, this part, or an official 
action, is deemed to be confidential under section 705(d) of the 
Defense Production Act and shall be handled in accordance with 
applicable Federal law.

Sec.  217.92  Applicability of this part and official actions.

    (a) This part and all official actions, unless specifically stated 
otherwise, apply to transactions in any state, territory, or possession 
of the United States and the District of Columbia.
    (b) This part and all official actions apply not only to deliveries 
to other persons but also include deliveries to affiliates and 
subsidiaries of a person and deliveries from one branch, division, or 
section of a single entity to another branch, division, or section 
under common ownership or control.
    (c) This part and its schedules shall not be construed to affect 
any administrative actions taken by the Department of Energy, or any 
outstanding contracts or orders placed pursuant to any of the 
regulations,

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orders, schedules or delegations of authority previously issued by the 
Department of Energy pursuant to authority granted to the President in 
the Defense Production Act. Such actions, contracts, or orders shall 
continue in full force and effect under this part unless modified or 
terminated by proper authority.

Sec.  217.93  Communications.

    All communications concerning this part, including requests for 
copies of the part and explanatory information, requests for guidance 
or clarification, and requests for adjustment or exception shall be 
addressed to the Senior Policy Advisor for the Office of Electricity 
Delivery and Energy Reliability, Office of Infrastructure Security and 
Energy Restoration, U.S. Department of Energy, 1000 Independence Ave., 
SW., Washington, DC 20585; (202) 536-0379 (GC-76EPAS@hq.doe.gov).

Appendix I to Part 217--Sample Form DOE-XXX
[GRAPHIC] [TIFF OMITTED] TP16JY10.000

[[Page 41421]]

[FR Doc. 2010-17289 Filed 7-15-10; 8:45 am]
BILLING CODE 6450-01-P
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