5332 Federal Register / Vol. 79, No. 21 / Friday, January 31, 2014 / Proposed Rules 

be filed using AEI privileges. The 

remaining shipments may be filed using 

predeparture reporting or current 

postdeparture reporting (if the USPPI is 

an approved postdeparture filer); 

(G) Promptly report any problems 

encountered during the duration of the 

pilot to the Census Bureau and/or CBP; 

(H) Participate in the evaluation and 

debriefing of the pilot; and 

(I) Have their systems ready and able 

to transmit live AEI pilot data to the 

AES 60 days after notification of 

acceptance in the pilot program. 

Additional Conditions: 

(J) Commodities controlled under 

Bureau of Industry and Security (BIS) 

Export Control Classification Numbers 

will not be permitted for AEI pilot 

reporting, with the exception of those 

specifically permitted to be filed 

postdeparture by the BIS; 

(K) Any commodity under a general 

or specific license issued by any U.S. 

government agency will not be eligible 

for AEI pilot reporting; and 

(L) All shipments required to be 

transmitted predeparture, pursuant to 

15 CFR 30.4(a), will not be eligible for 

AEI pilot reporting. 

Failure to maintain the conditions of 

participation outlined in this section or 

the eligibility requirements defined 

above, or any other reason determined 

by the Census Bureau, may result in 

removal from the AEI pilot program. 

Filing Methods 

AEI pilot participants or their 

authorized agent may submit AEI data 

directly to the AES mainframe. Further 

technical information related to filing 

AEI data to the AES will be provided to 

the AEI pilot participants following 

acceptance into the program. 

Costs to AEI Pilot Participants 

AEI pilot participants are responsible 

for all costs incurred as a result of their 

participation in the pilot and such costs 

will vary, depending on their preexisting infrastructures. Costs may 

include, but are not limited to, 

programming and staff training. Costs 

incurred as a result of the AEI pilot may 

not be recouped if a resulting AEI 

program is not implemented, or is 

modified prior to implementation. 

Benefits to AEI Pilot Participants 

While the benefits to AEI pilot 

participants will vary, there are several 

advantages to participating. The benefits 

include but are not limited to: 

• The opportunity to provide input 

into the Census Bureau’s and CBP’s 

efforts to establish, test, and refine the 

AEI program; 

• The opportunity for your business 

model to be considered in the 

development and implementation of the 

AEI program; 

• Facilitation of filing when not all 

information is known prior to export; 

• Facilitation of corporate 

preparedness for future implementation 

of an AEI program and the 

discontinuation of the current 

postdeparture program; and 

• If an AEI program is implemented 

based on this pilot, the participants that 

are in good standing, as determined by 

the Census Bureau, will not have to 

reapply for the AEI program. 

Regulatory and Statutory Requirements 

Participants in the AEI pilot are 

subject to the Conditions of 

Participation; however, this does not 

alter the participant’s obligations to 

comply with applicable statutory and 

regulatory requirements, including but 

not limited to 15 CFR, Parts 30, 700– 

799; 19 CFR, Parts 1–199; and 22 CFR, 

Parts 120–130. Participants remain 

subject to all applicable penalties for 

non-compliance. 

Evaluation of the AEI Pilot 

The results of the AEI pilot will help 

determine whether the advanced export 

information permits CBP to effectively 

screen exports and will help identify 

and mitigate risks with the least impact 

practicable on trade operations. 

Additionally, the pilot will help 

determine whether any other related 

procedures and policies would be 

needed for any AEI program that may 

result. 

While the pilot is in progress, the 

Census Bureau and CBP will evaluate 

the program and make a determination 

as to whether the pilot will be extended. 

If the pilot is extended, the Census 

Bureau will publish another notice in 

the Federal Register. When sufficient 

pilot analysis and evaluation has been 

conducted, the Census Bureau intends 

to begin rulemaking to address the 

future of postdeparture filing. If an AEI 

program is implemented based on this 

pilot, the participants that are in good 

standing, as determined by the Census 

Bureau, will not have to reapply for the 

AEI program. 

Dated: January 22, 2014. 

John H. Thompson, 

Director, Bureau of the Census. 

[FR Doc. 2014–01716 Filed 1–30–14; 8:45 am] 

BILLING CODE 3510–07–P 

DEPARTMENT OF COMMERCE 

Bureau of Industry and Security 

15 CFR Part 700 

[Docket No. 0912311453–0016–01] 

RIN 0694–AE81 

Revisions to Defense Priorities and 

Allocations System Regulations 

AGENCY: Bureau of Industry and 

Security, Department of Commerce. 

ACTION: Proposed rule. 

SUMMARY: This proposed rule would 

clarify existing standards and 

procedures by which the Bureau of 

Industry and Security (BIS) may require 

that certain contracts or orders that 

promote the national defense be given 

priority over other contracts or orders. It 

also proposes new standards and 

procedures for such prioritization with 

respect to contracts or orders for 

emergency preparedness activities. 

Finally, this rule proposes new 

standards and procedures by which BIS 

may allocate materials, services and 

facilities to promote the national 

defense. This rule implements 

provisions in the Defense Production 

Act Reauthorization of 2009 (123 Stat. 

2006) (111 Pub. L. 67) (September 30, 

2009) regarding publication of 

regulations providing standards and 

procedures for prioritization of contracts 

and orders and for allocation of 

materials, services, and facilities to 

promote the national defense under 

emergency and non-emergency 

conditions. 

DATES: Comments must be received by 

April 1, 2014. 

ADDRESSES: You may submit comments 

by any of the following methods: 

• Federal eRulemaking Portal: http:// 

www.regulations.gov. The ID number for 

this rulemaking is BIS–2010–0021. 

• By email directly to 

publiccomments@bis.doc.gov. Include 

RIN 0694–AE81 in the subject line. 

• By mail or delivery to Regulatory 

Policy Division, Bureau of Industry and 

Security, U.S. Department of Commerce, 

Room 2099B, 14th Street and 

Pennsylvania Avenue NW, Washington, 

DC 20230. Refer to RIN 0694–AE81. 

FOR FURTHER INFORMATION CONTACT: 

Liam McMenanim at (202) 482–2233, 

liam.mcmenamin@bis.doc.gov. 

SUPPLEMENTARY INFORMATION: 

Executive Summary 

Purpose of the Regulatory Action 

This proposed rule would update the 

priorities and allocations provisions set 


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forth in the Defense Priorities and 

Allocations System regulations (15 CFR 

part 700) (DPAS) and implemented by 

the Bureau of Industry and Security 

(BIS) consistent with its authorities 

under Title I of the Defense Production 

Act of 1950 (as amended) (DPA). This 

rule also would establish certain new 

administrative procedures through 

which BIS will implement the 

allocations provisions of the DPA. In 

addition, this proposed rule would 

revise definitions found in § 700.8 of the 

DPAS regulations. 

This rule implements the provisions 

in the Defense Production Act 

Reauthorization of 2009 (Pub. L. 111– 

67, 123 Stat. 2006, September 30, 2009) 

(Reauthorization Act), which require 

agencies with priorities and allocations 

authorities to issue rules establishing 

standards and procedures by which 

those authorities shall be used to 

promote the national defense, under 

both emergency and non-emergency 

conditions. This rule is part of a multiagency effort that forms the Federal 

priorities and allocations system. 

Background 

The Reauthorization Act requires each 

Federal agency delegated priorities and 

allocations authority consistent with 

section 101 of the DPA to issue final 

rules establishing standards and 

procedures by which that authority is 

used to promote the national defense, 

during both emergency and nonemergency conditions. In the 

Reauthorization Act, Congress further 

directed that, to the extent practicable, 

the Federal agencies with priorities and 

allocations authoritiy should work 

together to develop a consistent and 

unified Federal priorities and 

allocations system. 

In order to meet this mandate, BIS 

worked in conjunction with the 

Departments of Agriculture (USDA), 

Defense (DoD), Energy (DOE), Health 

and Human Services (HHS), Homeland 

Security (DHS), and Transportation 

(DOT) to develop common provisions 

based on the DPAS that can be used by 

each Department in its own regulation. 

The six regulations to be promulgated, 

one by each Department with delegated 

DPA Title I authority, comprise the 

Federal priorities and allocations 

system. 

This proposed rule would update and 

expand the DPAS. BIS relies upon and 

uses the DPAS to implement priority 

and allocation actions involving 

industrial resources. BIS administers the 

DPAS pursuant to authority under Title 

I of the DPA (50 U.S.C. app. 2071, et 

seq.) as delegated by Executive Order 

13603, March 16, 2012 (77 FR 16651, 3 

CFR, 2012 Comp., p. 225). The DPAS 

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’’ means programs for military 

and energy production or construction, 

homeland security, stockpiling, space, 

emergency preparedness, and critical 

infrastructure protection and 

restoration. The term also includes 

foreign military and critical 

infrastructure assistance. 

The Reauthorization Act required that 

within 270 days of its enactment, 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 

non-emergency situations. The 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 that have 

been or will be published to implement 

the provisions of the Reauthorization 

Act. The final rules of the agencies with 

Reauthorization Act authorities, which 

are the USDA, DOE, HHS, DOT, DoD, 

and DOC, will comprise the Federal 

priorities and allocations system. 

June 2010 Proposed Rule, Comment 

and Response. 

Proposed Rule and Comment 

On June 7, 2010, BIS published a 

proposed rule to update and expand 15 

CFR part 700 (75 FR 32122, June 7, 

2010). BIS received one comment on 

that proposed rule. The commenter 

noted that Section 700.11 of the 

proposed rule discussed prioritization 

directives and referred to Section 

700.12. The commenter noted that 

Section 700.12 stated that prioritization 

directives take precedence over all DX 

rated orders, DO rated orders, and 

unrated orders but that allocation orders 

take precedence over all. The 

commenter also noted the inference that 

prioritization directives may be different 

from DX rated orders. The commenter 

stated that he could find no provision 

that told how to mark an order as a 

prioritization directive so that the 

contractor could clearly tell that it was 

dealing with a prioritization directive. 

Response 

The June 7, 2010, proposed rule, the 

existing DPAS, and this proposed rule 

contemplate that directives will be 

issued by BIS to specific persons. BIS 

will provide the directive to the person 

to whom it applies. To the extent that 

directives modify or conflict with a DO 

or DX rated order or unrated order, the 

directive takes precedence. As will be 

further discussed below, this proposed 

rule does not draw a distinction 

between prioritization directives and 

allocation directives. 

Due to the limited response to the 

June 2010 proposed rule and because 

BIS has reassessed some aspects of the 

June 2010 proposed rule, BIS has made 

several amendments and issued this 

second proposed rule for public 

consideration. 

Summary of Principal Differences 

Between This Proposed Rule and the 

June 2010 Proposed Rule 

Retention of Existing DPAS Format 

The June 2010 proposed rule would 

have substantially reorganized the 

format of the DPAS. This proposed rule 

would largely retain the existing format. 

Upon reconsideration, BIS has 

concluded that the benefits of the 

revised format did not outweigh its 

drawbacks. Companies and government 

agencies that use the current DPAS are 

familiar with the current regulatory 

structure. They would have to incur the 

cost of learning any new structure that 

might be imposed. For example, the 

Department of Defense uses DPAS 

authority delegated to it by the 

Department of Commerce to place 

ratings on approximately 300,000 

contracts annually. The Departments of 

Commerce and Defense estimate that, in 

addition, approximately 400,000 rated 

contracts are placed annually to satisfy 

national defense requirements. Parties 

who receive these rated contracts have 

not expressed to BIS any desire to 

reformat the regulations. 

In addition to familiarity by current 

users, retaining the existing DPAS 

format simplifies identifying the 

substantive and procedural changes that 

this proposed rule would make and 

distinguishing those changes from the 

editorial changes that this proposed rule 

would also make. 

Complementary Roles of Priorities and 

Allocations and Single Set of Deadlines 

Although the June 2010 proposed rule 

did not explicitly state that priority 


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authority and allocations authority were 

mutually exclusive, it strongly implied 

that such was the case. For example, 

§ 700.62 in the June 2010 proposed rule 

indicated that allocation orders would 

take precedent over priority ratings. BIS 

does not intend to issue conflicting 

orders or ratings. Currently, BIS issues 

only priority ratings. However, BIS can 

envision situations in which some 

combination of priorities and 

allocations would be needed. 

Accordingly, this proposed rule would 

not assign precedence between 

priorities and allocations by regulation. 

Instead, it would opt for flexibility 

when dealing with the situations that 

call for allocation orders. A description 

of the relationship between allocation 

orders and previously or subsequently 

received rated orders and unrated orders 

would be included in any allocation 

orders issued. 

In connection with BIS’ judgment that 

priorities authority and allocations 

authority might be used in a 

complementary manner, BIS has now 

concluded that shorter time limits than 

what the June 2010 proposed rule 

would have imposed with respect to 

filing requests for exception or 

adjustment of allocation orders, appeals 

of decisions denying those requests and 

BIS responses to those filings are not 

necessary. Therefore this proposed rule 

would apply, to both priorities and 

allocations, the time limits that the 

current DPAS applies to filing requests 

for exception or adjustment of priority 

rated orders, appeals of decisions 

denying those requests, and BIS 

responses to those filings. Although 

allocations would be used only in the 

circumstances described in the 

paragraph immediately below, BIS does 

not believe that such circumstances 

would necessarily require shorter time 

limits for the above-noted actions. 

BIS does not intend or expect that 

allocations will be issued routinely or 

frequently. Under this proposed rule, 

allocations may be used to control the 

distribution of a material in the civilian 

market only upon approval by the 

President of a finding by the Secretary 

of Commerce or his or her designee that 

such material is a scarce and critical 

material essential to the national 

defense, and that the requirements of 

the national defense for such material 

cannot otherwise be met without 

creating a significant dislocation of the 

normal distribution of such material in 

the civilian market to such a degree as 

to create appreciable hardship. The June 

2010 rule proposed that such findings 

be made by the Secretary of Commerce. 

This proposed rule adds language that 

would allow the Secretary or a designee 

of the Secretary to make such findings. 

This change recognizes that a 

Department Organization Order of the 

Department of Commerce delegates to 

the Under Secretary for Industry and 

Security those DPA authorities that have 

been delegated to the Secretary of 

Commerce. Even a narrower use of 

allocations authority under this 

proposed rule would also be subject to 

the policy set forth in § 700.30 which 

provides that allocations will be used 

only when there is insufficient supply 

of a material, service, or facility to 

satisfy national defense requirements 

through use of priorities authority or 

when the use of priorities authority 

would cause a severe and prolonged 

disruption in the supply of materials, 

services or facilities available to support 

normal U.S. economic activity. Given 

these requirements and its past practice, 

BIS anticipates that use of allocations 

will be a rare event. 

Reduced Time for Written Follow-Up of 

Verbal Notice That a Party is Unable To 

Comply With An Order 

Under the current DPAS, a party who 

gives verbal notice that performance of 

a priority rated order will be delayed 

must provide a written confirmation 

within five working days. The June 2010 

proposed rule would have retained this 

provision and would have imposed the 

same time limit for written confirmation 

that a party is unable to comply with an 

allocation order. Upon further 

consideration, BIS has concluded that 

such written confirmation should be 

transmitted within one working day of 

the verbal notice. A party making such 

a notice would know at the time of the 

verbal notice the reasons that it cannot 

meet the specified delivery date or 

comply with the order. Rated orders are 

issued to satisfy requirements related to 

military and energy production or 

construction, military or critical 

infrastructure assistance to any foreign 

nation, homeland security, stockpiling, 

space, emergency preparedness, and 

critical infrastructure protection and 

restoration. Reducing the reason to 

writing should not take longer than one 

working day and the nature of these 

orders justifies requiring expeditious 

communication. 

Issuance of Allocations Orders by an 

Authorized Employee or Official Other 

Than the Secretary 

The June 2010 proposed rule stated 

that allocations orders would be signed 

by or include the name of the Secretary 

of Commerce and be addressed to the 

person to whom the order applies. This 

proposed rule would provide that an 

authorized official or employee sign 

allocations orders, consistent with 

existing practices. Both the June 2010 

proposed rule and this proposed rule 

would require the President’s approval 

of the finding before allocations could 

be used to control the general 

distribution of a material in the civilian 

market. BIS believes that, given this 

requirement, a requirement that the 

Secretary sign every order that may be 

issued to implement an allocation 

decision would serve no purpose. 

Constructive Notice of Allocations 

Orders Through Federal Register 

Publication 

The June 2010 proposed rule would 

have required that allocations orders 

(and modifications or cancellations of 

such orders) be issued directly to 

affected persons. This proposed rule 

would permit such orders to be issued 

directly to affected persons or by 

constructive notice through publication 

in the Federal Register. The Federal 

Register notice might apply to a 

specified class of persons rather than 

naming all affected persons. For 

example, an allocation order published 

in the Federal Register might apply to 

all manufacturers of a specified product 

but not name every manufacturer of that 

product in the order. BIS believes that 

situations might arise in which 

allocations are justified and that, 

although BIS would be able to identify 

the material to be allocated, it would not 

be able to identify all of the suppliers 

of that material. In such situations, 

constructive notice to the affected class 

of persons by publication in the Federal 

Register would be consistent with the 

procedure that the government uses 

generally when notice must be given to 

large numbers of persons or to persons 

not all of whom can be individually 

identified. 

Use of Rated Orders for Emergency 

Preparedness Activities 

This proposed rule would authorize 

use of rated orders for emergency 

preparedness activities and would 

authorize such orders to require 

acceptance or rejection within a shorter 

time than the 10 or 15 working days 

required for acceptance or rejection of 

other DX and DO rated orders. 

Emergency preparedness rated orders 

may require acceptance or rejection in 

as little as six hours after receipt of the 

order if the order is in response to a 

hazard that has occurred or 12 hours if 

the order is to prepare for an imminent 

hazard. This proposed rule would also 

require use of rated orders to obtain 

items needed to fill an emergency 

preparedness rated order and would 

require use of the reduced times for 


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acceptance or rejection noted above. 

The June 2010 proposed rule did not 

provide the option of imposing a shorter 

timeframe for acceptance or rejection of 

rated orders for emergency preparedness 

activities issued by the Department of 

Commerce, although it did note that 

rated orders issued by other agencies 

that are delegated authority by the 

Department of Commerce might have 

shorter timeframes for acceptance or 

rejection. This proposed rule provides 

for the option of shorter timeframes for 

all orders issued for emergency 

preparedness activities. 

Removal of Limits on Use of do Rated 

Orders for the Metalworking Machine 

Industry 

As discussed more fully in the 

description of the proposed changes to 

§ 700.31 below, this proposed rule 

would remove completely the special 

treatment of the metalworking machine 

industry currently found in § 700.31. 

That section limits the amount of DO 

rated orders that metal working machine 

producers are required to accept. In 

recent years, there have been so few DO 

rated orders for metalworking machines 

that the maximum set by § 700.31 has 

never been met. Therefore, BIS believes 

that the maximum limitation is not 

needed. The June 2010 proposed rule 

made no changes to these limits. 

Removal of Mandatory Criteria for 

Evaluating Whether Certain Materials, 

Equipment, and Services Used To 

Maximize Energy Supplies Are ‘‘Scarce’’ 

As discussed more fully in the 

description of the proposed changes to 

§ 700.21 below, this proposed rule 

would clarify that the criteria listed for 

determining whether certain materials, 

equipment, and services related to 

energy production are ‘‘scarce’’ and 

whether priorities authority is needed 

are illustrative lists of criteria that the 

Department of Commerce may use. The 

June 2010 proposed rule would have 

retained the language currently in 

§ 700.21. 

Procedure for Requesting Assistance in 

Obtaining Rated Items or Priority Rating 

Authority for Homeland Security, 

Emergency Preparedness, and Critical 

Infrastructure Protection and 

Restoration Assistance Programs Within 

the United States 

As discussed more fully in the 

description of proposed § 700.55 below, 

this proposed rule would provide a 

procedure for requesting assistance in 

obtaining rated items or priority rating 

authority for homeland security, 

emergency preparedness, and critical 

infrastructure protection and restoration 

assistance programs within the United 

States. 

Revision to Schedule I 

This proposed rule would revise 

Schedule I to part 700 to provide a 

program symbol for programs intended 

to provide critical infrastructure 

assistance to foreign nations. 

Additionally, this proposed rule would 

make format changes and a clarification, 

both of which are more fully described 

below. 

Section-by-Section Analysis of the 

Changes That This Proposed Rule 

Would Make to the Existing DPAS 

The following discussion explains the 

changes that this proposed rule would 

make to the existing DPAS. 

Revisions to Subpart A—Purpose 

Proposed § 700.1—Purpose of this 

part. The header of this section would 

be changed from ‘‘Purpose’’ to ‘‘Purpose 

of this part’’ to be more specific. This 

section would state the purpose of the 

DPAS in general terms and would 

largely restate information that appears 

at 15 CFR 700.1 in the existing 

regulations. However, extensive 

language about the source of BIS’ legal 

authority would not be incorporated 

into the proposed § 700.1 on the 

grounds that such language is not 

regulatory in nature. BIS believes that 

the language regarding the DPAS’s 

purpose would be clearer if it is not 

submerged in extensive discussions of 

legal authority. 

Revisions to Subpart B—Overview 

Section 700.2—Introduction. This 

rule would add references to homeland 

security and critical infrastructure 

protection and restoration activities to 

paragraph (a) to conform to the current 

definition of national defense in the 

DPA. Paragraph (b) would explicitly 

state that the Department of Commerce 

may exercise priorities and allocations 

authority. Paragraph (c) would state that 

recipients of rated orders have authority 

to place ratings on contracts with 

contractors, subcontractors, or 

suppliers. BIS is proposing to make 

these changes so that the introductory 

paragraph will give a more complete 

description of the DPAS and will reflect 

changes brought about by the 2009 

amendments to the DPA under the 

Reauthorization Act. BIS believes that 

these changes would make this 

introduction more descriptive and 

useful. 

Section 700.3—Priority ratings and 

rated orders. This section would be 

shortened to remove material that is 

covered elsewhere in 15 CFR part 700. 

References to ‘‘these regulations’’ would 

be changed to ‘‘this part’’ to make clear 

that the regulations referred to are 15 

CFR part 700. 

Sections 700.4, 700.5, 700.6 and 700.7 

would be removed because the 

information that they contain is 

duplicated elsewhere the DPAS. 

Revisions to Subpart C—Definitions 

Section 700.8—Definitions. This rule 

would remove the reference to 

definitions in the DPA and Stafford Act. 

Definitions from those acts that also 

apply to the DPAS would be set forth 

separately in this section. 

New definitions would be added for 

‘‘allocation,’’ ‘‘allocation order’’ and 

‘‘allotment.’’ These definitions relate to 

the expanded allocations provisions in 

Subpart F, which is needed to 

implement the amendments set forth in 

the Reauthorization Act. 

A new definition for ‘‘working day’’ 

also would be added. This term 

currently is in the DPAS, but is not 

defined. The term would be defined as 

‘‘any day that the recipient of an order 

is open for business.’’ 

As newly defined, this term would 

apply to time limits for acceptance or 

rejection of rated orders (other than 

orders placed for emergency 

preparedness activities), written 

confirmation of verbal notice that 

delivery or performance of a rated order 

will be delayed, and written 

confirmation of verbal notice of inability 

to comply with an allocation order. 

The definitions of ‘‘critical 

infrastructure,’’ ‘‘homeland security’’ 

and ‘‘national defense’’ that appear in 

the DPA would be added so that readers 

would not need to refer to the statute for 

the definitions. 

The definition of ‘‘Maintenance, 

repair and operating supplies (MRO)’’ 

would be amended by replacing the 

term ‘‘Maintenance, repair and 

operating supplies’’ with the term 

‘‘Maintenance, repair and/or operating 

supplies.’’ For years, BIS has interpreted 

the term MRO to apply to maintenance, 

to repair, to operating supplies, to any 

combination of two of the three, or to all 

three. BIS is proposing to revise the 

language because it believes that the 

proposed language more clearly 

expresses the meaning that BIS has 

applied for years. In other respects, the 

definition is unchanged. 

The new definitions of ‘‘emergency 

preparedness’’ and ‘‘hazard’’ relate 

primarily to the issuance of rated orders 

for emergency preparedness 

requirements, a topic addressed in 

§§ 700.13 and 700.15 of this proposed 

rule. The definitions of ‘‘emergency 


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preparedness’’ and ‘‘hazard’’ are taken 

from the Stafford Act. 

The definition of ‘‘official action’’ 

would be changed to cover actions 

related to allocations as well as 

priorities. This change is needed to 

address the expanded material regarding 

allocations in §§ 700.30 through 700.34 

and references to allocations in other 

sections of this proposed rule. 

New definitions would be added for 

the terms ‘‘priority rating’’ and 

‘‘program identification symbols.’’ 

These definitions are not substantively 

different than the descriptions of 

priority ratings and program 

identification symbols that currently 

appear in § 700.11 of the DPAS. BIS 

believes that priority ratings and 

program identification symbols are 

sufficiently central to the concept of 

priorities under the DPAS to warrant 

inclusion in the definitions section. 

The definition of ‘‘person’’ would be 

expanded to include international 

organizations to conform to proposed 

new §§ 700.57 and 700.58, which 

address military and critical 

infrastructure assistance to international 

organizations as well as to foreign 

governments. 

The definition of ‘‘set-aside’’ would 

be revised to match the text of the 

definition of this term in each agency’s 

regulations (noted above) that together 

will comprise the Federal priorities and 

allocations system. 

This proposed rule would remove the 

text currently at the beginning of the 

first sentence in § 700.8, which reads 

‘‘In addition to the definitions provided 

in Section 702 of the Defense 

Production Act (excepting the definition 

of ‘‘industrial resources’’ and Section 

602(a) of the Stafford Act) . . .’’ because 

the relevant definitions from those Acts 

would be added to § 700.8 of the DPAS 

under this proposed rule. This change 

would spare readers of the DPAS from 

the need to consult those two statutes to 

understand the meaning of terms used 

in 15 CFR part 700. 

Revisions to Subpart D—Industrial 

Priorities 

Section 700.10—Authority. Paragraph 

(a) would be revised to replace the 

reference to Executive Order 12919 with 

a reference Executive Order 13603, 

which revoked and superseded 

Executive Order 12919. Paragraph (b) 

would be revised to remove a reference 

to an internal delegation by the 

Department of Commerce, because that 

reference is unnecessary. The 

description of the priorities and 

allocations authority conveyed by 

statute or executive order to other 

government agencies currently found in 

§ 700.18(b)(1) would be moved to a new 

paragraph (c) of Section 700.10. The 

language describing the authority of the 

Department of Agriculture would be 

revised to conform to the language in 

Executive Order 13603. The information 

currently in § 700.18(b)(2) would be 

removed because it merely describes an 

internal government procedure. The text 

regarding communications services 

would be revised to cite Executive 

Order 13618 of July 6, 2012. That 

executive order revoked Executive 

Order 12472, which currently is cited in 

§ 700.18(b)(2). BIS believes that placing 

all of the statements of agency authority 

in a single section would aid 

understanding of the Defense Priorities 

and Allocations System Regulations. 

700.11—Priority ratings. The phrase 

‘‘to this part’’ would be added 

immediately following ‘‘Schedule I’’ in 

the second sentence of paragraph (b) to 

precisely identify the schedule. This is 

not a substantive change. 

700.12—Elements of a rated order. 

Revised paragraph (a) of this section 

would be headed ‘‘Elements required for 

all rated orders’’ and would incorporate 

all of the elements of current paragraphs 

(a), (b) and (c) of § 700.12. In addition, 

in paragraph (a), this proposed rule 

would revise the parenthetical listing of 

rated order symbol examples by 

replacing ‘‘DO–H1’’, which is rarely 

used, with ‘‘DO–N1’’, which is more 

commonly used and which indicates a 

Federal emergency preparedness, 

mitigation, response and recovery action 

approved for DPAS support by the 

Department of Homeland Security. 

Paragraph (b), headed ‘‘Additional 

element required for certain emergency 

preparedness rated orders,’’ would be 

added. This new paragraph would 

provide that if a rated order is placed for 

the purpose of emergency preparedness 

requirements, and if expedited action is 

necessary or appropriate to meet those 

requirements, the order must include a 

statement informing the recipient that 

the order is for the purpose of 

emergency preparedness and of the 

amount of time within which the 

recipient must accept or reject the order. 

The minimum amount of time that must 

be allowed for acceptance or rejection 

would be governed by proposed 

§ 700.13(d)(2). 

Section 700.13—Acceptance and 

rejection of rated orders. In paragraph 

(c), introductory text, the word 

‘‘Commerce’’ would be replaced with 

the phrase ‘‘the Department of 

Commerce.’’ 

Paragraph (d)—Customer notification 

requirements. This paragraph would be 

changed in the following manner. 

Paragraph (d)(1) would continue to 

apply to most rated orders and would be 

substantively unchanged from existing 

paragraph (d)(1). The currently 

undefined term ‘‘working days’’ would 

be subject to the definition proposed in 

§ 700.8 of this proposed rule. DO rated 

orders would have to be accepted or 

rejected within 15 working days after 

receipt, and DX rated orders would have 

to be accepted or rejected within 10 

working days after receipt. Paragraph 

(d)(2) would be revised to address 

customer notification requirements for 

orders placed for emergency 

preparedness requirements where 

expedited action is necessary or 

appropriate to meet those requirements. 

Such orders would have to be accepted 

or rejected in the time frame noted in 

the order. That time frame could be as 

short as six hours if the order is issued 

by an authorized person in response to 

a hazard that has occurred, or 12 hours 

if the order is issued by an authorized 

person in response to an imminent 

hazard. Existing paragraph (d)(2), which 

requires persons who have accepted 

rated orders to give notice if 

performance will be delayed, would 

become paragraph (d)(3). The time limit 

in which to provide written 

confirmation of a verbal notice would be 

changed from five working days to one 

working day. BIS believes that the 

nature of rated orders, supporting 

national defense requirements, justifies 

expeditious communications and that 

once a verbal notice of delayed 

performance has been given, putting 

that notice into writing should not take 

more than one working day. 

Section 700.14—Preferential 

scheduling. The proposed changes to 

this section are all non-substantive. To 

enhance clarity, an additional sentence 

emphasizing the priority of DX rated 

orders over DO rated orders would be 

added to the example at the end of 

paragraph (b). Paragraph (c) which 

addresses conflicting rated orders would 

be amended by changing references to 

‘‘§§ 700.50 through 700.54’’ to ‘‘Subpart 

H of this part’’ to more completely state 

the provisions that deal with resolution 

of conflicting rated orders. 

Section 700.15—Extension of priority 

ratings. This section requires persons 

who receive rated orders to use rated 

orders with suppliers to obtain items 

needed to fill a rated order. This 

proposed rule makes non-substantive 

changes to paragraphs (a) and (b). The 

term ‘‘this regulation’’ in paragraph (a) 

is replaced with ‘‘this part’’ to make 

clear that the regulation to which the 

sentence refers is 15 CFR part 700. The 

second sentence of paragraph (b) is 

revised to state expressly that the rating 


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continues throughout the entire supply 

chain. 

Paragraph (c) would be added. The 

new paragraph would require use of 

rated orders to obtain items needed to 

fill an emergency preparedness rated 

order. It would require persons who 

have received emergency preparedness 

rated orders that have shortened 

timeframes for acceptance or rejection to 

impose shortened time frames for 

transmission of acceptance or rejection 

on rated orders placed with suppliers. 

Section 700.16—Changes or 

cancellations of priority ratings and 

rated orders. 

A substantive change would be made 

to paragraph (d), which lists 

amendments to a rated order that do not 

constitute a new rated order. The phrase 

‘‘prior to the start of production’’ would 

be added immediately following the 

phrase ‘‘a minor variation in size or 

design.’’ Once production of an item is 

commenced, changes in design that 

would be minor prior to production can 

become significant. Therefore, BIS 

believes that the rule should allow for 

only changes in size or design that are 

specified before production starts to be 

considered merely an amendment to an 

existing rated order rather than a new 

rated order. 

Paragraph (e), which imposes a duty 

to cancel rated orders that have been 

placed with suppliers, or to cancel the 

ratings on those orders if the items so 

ordered are no longer needed to fill a 

rated order, would be modified. This 

rule would amend this paragraph to 

make it clear that the person who placed 

the rated orders with the suppliers (or 

that person’s successor in interest) has 

the duty to cancel them. 

Paragraph (f), which imposes a duty 

to inform suppliers when a priority 

rating is placed on an order or when a 

priority rating is changed or cancelled, 

would be modified to make clear that 

the person who placed the rating on the 

order or who changed or cancelled the 

rating has the duty to inform the 

suppliers of the priority rating activity. 

Section 700.17—Use of rated orders. 

Currently § 700.17(f) provides that a 

person is not required to place a priority 

rating on an order for items with a value 

of less than $50,000 or one half the 

Federal Acquisition Regulation (FAR) 

Simplified Acquisition Threshold, 

whichever is larger, if delivery can be 

obtained in a timely fashion without the 

priority rating. This proposed rule 

would raise the threshold from the 

current value of $50,000 to a new value 

of $75,000—which is one half the FAR 

Simplified Acquisition Threshold. None 

of the other changes to this section are 

substantive. Paragraph (d) describes 

combining rated and unrated orders. In 

paragraph (d)(1)(ii), which refers to the 

elements of a rated order as set forth in 

§ 700.12, the word ‘‘four’’ would be 

removed because under this proposed 

rule, a rated order could have either four 

or five elements depending on whether 

or not the order is for certain emergency 

preparedness activities 

Section 700.18—Limitations on 

placing rated orders. This proposed rule 

would make several clarifying and 

stylistic changes to this section. 

Paragraph (a)(1) would be revised to 

apply only to rated orders that are made 

pursuant to 15 CFR part 700 because 

some rated orders may be issued 

pursuant to regulations of other 

agencies. A more explicit description of 

the authorizations to place rated orders 

would be added. 

The sentence in paragraph (a)(1)(ii), 

which begins: ‘‘Separate rated orders . . 

.’’ would be moved to a separate 

paragraph (a)(3) and revised to read: 

‘‘Separate rated orders may not be 

placed solely for obtaining minimum 

procurable quantities on each order if 

the minimum procurable quantity 

would be sufficient to cover more than 

one rated order.’’ BIS believes that this 

change improves syntax and more 

clearly expresses the intent behind the 

sentence. 

Existing paragraph (b)(1) would be 

moved to a new paragraph (c) in section 

700.10 as discussed above. 

Existing paragraph (b)(2) would be 

eliminated entirely because it refers to 

internal government documents and 

does not provide any useful information 

to the public. 

Existing paragraph (b)(3) would 

become paragraph (b). The first clause 

in this new paragraph (b) would be 

revised to state more clearly the policy 

regarding the items listed in paragraph 

(b), which are: Copper raw materials, 

crushed stone, gravel, scrap, slag, 

central steam heat and waste paper. The 

new language would be: 

‘‘Notwithstanding language authorizing 

or requiring the placement of rated 

orders found elsewhere in this part, no 

person may place a rated order to obtain 

the following items unless such order is 

authorized by an official action of the 

Department of Commerce.’’ BIS believes 

that the foregoing proposed language is 

clearer than the corresponding language 

currently in § 700.18(b)(3), which reads: 

‘‘The following items under the 

jurisdiction of Commerce are currently 

excluded from the rating provisions of 

this regulation; however, these items are 

subject to Commerce Directives.’’ BIS 

does not regard this change as 

substantive. 

Revisions to Subpart E—Industrial 

Priorities for Energy Programs 

Section 700.21—Application for 

priority rating authority. This section 

sets forth the procedures to be used 

when applying for priority rating 

authority and provides information 

about the criteria considered by BIS in 

approving such applications. The 

proposed rule would make three 

changes. First, the rule would remove 

existing paragraph (b), which describes 

activities of the Department of Energy. 

BIS believes that this information is 

unnecessary. 

Second, existing paragraph (c) would 

be the basis for new paragraph (b). The 

rule would rephrase proposed new 

paragraph (b) to emphasize that two 

Department of Commerce findings are 

needed to authorize priorities authority. 

Those findings are whether the items in 

question are scarce, and whether there 

is a need to use the priorities authority. 

The rule would add language 

emphasizing that the list of factors that 

the Department of Commerce may use 

in making those two findings is 

illustrative. This proposed rule also 

would add language to paragraph (b) 

making clear that if scarcity is not 

found, the Department of Commerce 

will not consider whether priority 

authority is needed. Applications for 

priority rating authority to maximize 

domestic energy supplies are rare. BIS 

has not received one in more than a 

decade. BIS recognizes that it must 

make fact-based decisions on these 

applications in a consistent manner. 

However, the rarity of these applications 

makes devising a list of all of the factors 

that could be relevant to every 

application impossible. Therefore, BIS 

believes that the list of factors in the 

rule must be illustrative and that the 

actual relevant factors must be 

determined on a case-by-case basis. 

The proposed rule also would remove 

existing paragraph (d), which provides 

that if the Department of Commerce 

does not find the items to be scarce, it 

will not analyze the need for priorities 

and allocations authorities because the 

concept would addressed in paragraph 

(b). 

Existing paragraph (e) would become 

paragraph (c) with minor changes to add 

clarity and precision. Existing paragraph 

(f) would become paragraph (d). The 

word ‘‘Commerce’’ would be replaced 

by ‘‘the Department of Commerce’’ 

throughout the section. 


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Revisions to Subpart F—National 

Emergency Preparedness and Critical 

Items. Subpart F Would Be Retitled 

Allocation Actions 

Section 700.30—Policy. This section 

would be rewritten. The current 

heading, ‘‘Priorities and allocations in a 

national emergency’’ would be revised 

to ‘‘Policy’’. 

The section would state that 

allocations authority would be used 

only when priority authority is unable 

to provide a sufficient supply of a 

material, service, or facility to meet the 

national defense, or when the use of 

priority authority would cause a severe 

and prolonged disruption in the supply 

of materials, services, or facilities 

available to support normal U.S. 

economic activities. This policy does 

not mean that priorities and allocations 

would, in all instances, be mutually 

exclusive. In some circumstances, the 

best course may be to use priority 

authority and allocations authority in a 

complementary manner. An example of 

such a situation is one in which 

national defense activities need less 

than the entire supply of a particular 

material, service or facility and priority 

authority could provide a sufficient 

supply to meet that need but only by 

causing a severe and prolonged 

disruption in the supply to support 

normal U.S. economic activities. If the 

national defense need were sufficiently 

critical, the best course overall might be 

to use priority authority to meet the 

national defense need and use 

allocation authority to distribute the 

remaining supply among other 

economic activities. Throughout this 

section, the definition of ‘‘national 

defense’’ in § 700.8 of this proposed rule 

would apply. Allocation authority 

would not be used to ration materials or 

services at the retail level. 

Section 700.31—General procedures. 

This section also would be rewritten. 

The heading would be changed from 

‘‘Metalworking machines’’ to ‘‘General 

procedures.’’ The proposed procedures 

set out in this section and in proposed 

§ 700.32 are intended to provide a 

reasonable assurance that allocations 

authority would be used only in 

situations where use of such authority is 

justified. Section 700.31 would set a list 

of the elements that must be in a plan 

that the Department of Commerce 

would be required to develop before 

using its allocations authority to address 

a supply problem in all instances, 

whether or not the allocation would 

control the general distribution of a 

material in the civilian market. The 

section would not preclude the 

Department of Commerce from 

including additional elements in the 

plan; it would merely require that the 

following elements be included. 

• A copy of the written determination 

made in accordance with section 202 of 

Executive Order 13603, that the program 

or programs that would be supported by 

the allocation action are necessary or 

appropriate to promote the national 

defense; 

• A detailed description of the 

situation to include any unusual events 

or circumstances that have created the 

requirement for an allocation action; 

• A statement of the specific 

objective(s) of the allocation action; 

• A list of the materials, services, or 

facilities to be allocated; 

• A list or description of the sources 

of the materials, services, or facilities 

that will be subject to the allocation 

action; 

• A detailed description of the 

provisions that will be included in the 

allocation order, including the type(s) of 

allocation orders, the percentages or 

quantity of capacity or output to be 

allocated for each purpose, the 

relationship with previously or 

subsequently received priority rated and 

unrated contracts and orders, and the 

duration of the allocation action (e.g., 

anticipated start and end dates); 

• An evaluation of the impact of the 

proposed allocation action on the 

civilian market; and 

• Proposed actions, if any, to mitigate 

disruptions to civilian market 

operations. 

The text of existing § 700.31— 

‘‘Metalworking machines’’ would be 

removed from the DPAS. Section 700.31 

of the DPAS applies only when the 

metalworking machines that would be 

the subjects of a rated order have a list 

price in excess of $2,500. Section 700.13 

currently allows any metalworking 

machine producer to reject any DO rated 

order that calls for delivery in any one 

month of more than 60 percent of that 

month’s scheduled production of 

machines of the size called for in the 

order. Section 700.13 also currently 

allows any metalworking machine 

producer to reject any DO rated order 

that it receives less than three months 

prior to the beginning of the month for 

which delivery is requested. 

BIS previously published a notice of 

inquiry seeking comments on the effects 

of eliminating this provision (73 FR 

19666, April 17, 2006). BIS received no 

comments. Section 700.31, in effect, sets 

a limit on the amount of production 

capacity that a producer of 

metalworking machines could be 

required to set-aside in anticipation of 

rated orders. BIS has issued no 

directives or other official actions 

requiring such set-asides in many years. 

BIS believes that priority ratings affect 

an insignificant portion of the 

metalworking machine industry output. 

On that basis, BIS believes that a special 

provision that sets, by regulation, the 

maximum allocation that may be 

applied to this one industry, while 

allocations would be set for all other 

industries through fact-based, case-bycase basis determinations, is 

unwarranted. 

Section 700.32—Controlling the 

general distribution of a material in the 

civilian market. This section would be 

new. It would set forth the findings that 

the Secretary of Commerce (or the 

Secretary’s designee) must make and 

that the President must approve before 

the Department of Commerce may use 

allocations to control the distribution of 

a material in the civilian market. Those 

findings, which are required by § 101(b) 

of the DPA, are: Such material is a 

scarce and critical material essential to 

the national defense, and 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. Section 201(e) of Executive 

Order 13603 directs each agency with 

delegated authority under section 101 of 

the DPA to make the finding required by 

section 101(b) and submit the finding 

for the President’s approval through the 

Assistant to the President and National 

Security Advisor and the Assistant to 

the President for Homeland Security 

and Counterterrorism. 

Section 700.33—Types of allocation 

orders. This new section proposes to 

describe the three types of allocations 

orders the Department of Commerce 

might issue: A set-aside; a directive; or 

an allotment. A set-aside is an official 

action that would require a person to 

reserve a resource capacity in 

anticipation of receipt of rated orders. A 

directive is an official action that would 

require a person to take or refrain from 

taking certain actions in accordance 

with its provisions. For example, a 

directive could require a person to stop 

or reduce production of an item or 

service; prohibit the use of selected 

materials, services or facilities; divert 

supply of one type of material, service 

or facility to another; or to supply a 

specific quantity, size, shape, and type 

of an item or service within a specific 

time period. An allotment is an official 

action that would specify the maximum 

quantity of a material, service, or facility 

authorized for use in a specific program 

or application. 


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Section 700.34—Elements of an 

allocation order. This section sets forth 

certain elements that would be required 

in allocations orders issued by the 

Department of Commerce. Two 

elements would be required for all 

allocations orders: An explanation of 

the relationship between the allocation 

order and any previously or 

subsequently issued rated or unrated 

orders; and the specific start and end 

dates of each required allocation action. 

If an order is issued directly to the 

person to whom it applies, it must 

contain the written signature or name of 

an authorized official or employee of the 

Department of Commerce and a 

statement identifying the person to 

whom it applies by name. The order 

must state that it is for national defense 

and state the obligation to comply with 

the order and with the DPAS. If the 

order provides constructive notice 

through publication in the Federal 

Register, the order must be signed by an 

authorized official or employee of the 

Department of Commerce and the 

statement may either refer to the 

party(ies) to which the order applies by 

name or specify the class of persons to 

whom the order applies. The order must 

state the requirement to comply with 

the order itself and with the DPAS. 

Original signatures are not reproduced 

in the Federal Register. 

Section 700.35—Mandatory 

acceptance of an allocation order. 

Paragraph (a) of this section would 

require a person to accept and comply 

with allocations orders. Paragraph (b) 

would state that a person may not 

discriminate against an allocation order 

in any manner, such as by charging 

higher prices or imposing terms and 

conditions on allocations orders that are 

different from what the person imposed 

on contracts or orders for the same 

resource prior to receiving the allocation 

order. Paragraph (c) would provide that 

a person who is unable to comply fully 

with the required actions specified in an 

allocation order must notify the Office 

of Strategic Industries and Economic 

Security immediately, explain the 

extent to which compliance is possible, 

and give reasons why full compliance is 

not possible. Such notice would not 

release the person from complying with 

the allocation order to the fullest extent 

possible until notified by the 

Department of Commerce that the order 

has been changed or cancelled. If the 

notice is given verbally, written or 

electronic confirmation must be 

provided within one working day. 

Section 700.36—Changes or 

cancellations of allocation orders. This 

section would state that the Department 

of Commerce may change or cancel an 

allocation order through an official 

action. Notice of such changes or 

cancellations may be provided directly 

to persons to whom the order being 

cancelled or modified applies or 

constructive notice may be provided by 

publication in the Federal Register. 

Revisions to Subpart H—Special 

Priorities Assistance 

Section 700.50—General Provisions. 

No substantive changes would be made 

to this section. The first sentence of 

paragraph (a) would be revised from 

‘‘The DPAS is designed to be largely 

self-executing’’ to ‘‘Once a priority 

rating has been authorized pursuant to 

this part, further action by the 

Department of Commerce generally is 

not needed.’’ BIS believes that the 

proposed revised sentence is a more 

precise introduction to paragraph (a) 

because § 700.50 applies to priority 

ratings and not to the DPAS as a whole, 

which would include allocations. In 

addition, the priority rating process is 

not truly self-executing. A person must 

place ratings on orders and respond to 

rated orders within the specified time 

limits. However, once the rating is 

authorized, in most instances no further 

action by the Department of Commerce 

or a Delegate Agency is needed. 

Paragraph (b) would be revised to 

replace the phrase ‘‘in support of this 

regulation’’ with the phrase ‘‘consistent 

with this part’’ to more precisely state 

the purposes of special priorities 

assistance. In addition the phrase ‘‘not 

automatically ratable under this 

regulation’’ would be replaced with 

‘‘not otherwise ratable under this part’’ 

because ratings do not occur 

automatically and to make clear that the 

regulation referred to is 15 CFR Part 

700. A new sentence would be added to 

this paragraph to inform the public that 

if the Department of Commerce is 

unable to resolve the problem or to 

authorize the use of a priority rating and 

believes additional assistance is 

warranted, the Department of Commerce 

may forward the request for assistance 

to another resource agency, as 

appropriate, for action. 

Section 700.51—Requests for priority 

rating authority. This proposed rule 

would remove one factor from the nonexclusive list of factors that the 

Department of Commerce will consider 

in evaluating requests for priority rating 

authority. The factor proposed for 

removal is ‘‘the political sensitivity of 

the project.’’ BIS believes that 

considering such a factor when 

evaluating a request for priority rating 

authority is an extremely unlikely 

possibility and should be removed from 

the list. This proposed rule also makes 

two non-substantive editorial changes to 

§ 700.51. It changes ‘‘Commerce’’ to ‘‘the 

Department of Commerce’’ and changes 

the phrase ‘‘this regulation’’ to ‘‘this 

part’’ to make clear that the regulation 

being referred to is 15 CFR part 700. 

Sections 700.53—Criteria for 

assistance, and 700.54 Instances where 

assistance will not be provided. This 

proposed rule would make only the 

non-substantive editorial revision of 

changing ‘‘Commerce’’ to read ‘‘the 

Department of Commerce’’ in these two 

sections. 

Section 700.55—Homeland security, 

emergency preparedness, and critical 

infrastructure protection and restoration 

assistance programs within the United 

States. The text of this proposed section 

is entirely new. The topic covered by 

§ 700.55 in the existing DPAS 

‘‘Assistance programs with Canada and 

other nations’’ would be dealt with in 

the new §§ 700.56 and 700.57. 

Proposed § 700.55 would direct 

persons seeking priority rating authority 

or assistance in obtaining rated items 

supporting homeland security, 

emergency preparedness and critical 

infrastructure protection and restoration 

related activities, to direct their requests 

to the Federal Emergency Management 

Agency. This section is in accordance 

with Section 202(c) of Executive Order 

13603, which authorizes the Secretary 

of Homeland Security to determine 

whether ‘‘all other defense programs, 

including civil defense and continuity 

of Government’’ are ‘‘necessary or 

appropriate to promote the national 

defense.’’ A determination that a 

program is necessary or appropriate to 

promote the national defense must be 

made before the Department of 

Commerce may authorize issuance of 

priority ratings for contracts in support 

of that program. 

Section 700.56—Military assistance 

programs with Canada. Proposed 

section 700.56 addresses situations in 

which a person in Canada, producing 

items for the Canadian government, 

seeks priorities assistance for items 

produced in the United States. BIS is 

proposing to create a new section that 

speaks only to military assistance with 

respect to Canada because the Canadian 

Government has been authorized to 

place priority ratings in the United 

States to support approved defense 

programs. Persons in other foreign 

countries may place priority ratings in 

the United States if their requests for 

military assistance are sponsored by 

their government and have DOD 

approval and endorsement. The existing 

DPAS address military assistance 

programs in Canada and other foreign 

nations in a single section. However, 


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BIS believes that the unique procedures 

that apply to requesting military 

assistance in Canada justify a separate 

section. Proposed § 700.56 also would 

update the contact information that 

applies to the government of Canada. 

Section 700.57—Military assistance 

programs with other nations and 

international organizations. Proposed 

§ 700.57 is little changed from 

§ 700.55(c) and (d) of the existing DPAS. 

Contact information for the Department 

of Defense would be updated. Also, this 

section would expressly recognize that 

persons in international organizations 

may seek assistance in obtaining items 

in the United States or priority ratings 

for items to be purchased in the United 

States. BIS has provided assistance to 

international organizations in the past 

and believes that adding a reference to 

international organizations in proposed 

§ 700.57 would merely codify existing 

agency practice and would not represent 

a change in policy. Proposed § 700.57(c) 

would add Australia and Finland to the 

listing of countries that have entered 

into bilateral security of supply 

arrangements with the United States 

Department of Defense and revise 

Department of Defense contact 

information to make both current. 

Section 700.58—Critical 

infrastructure assistance programs to 

foreign nations and international 

organizations. This section directs 

persons in foreign nations and 

international organizations who are 

seeking assistance in obtaining items to 

be purchased in the United States for 

support of critical infrastructure 

protection or restoration to contact the 

Federal Emergency Management 

Agency. This section is included in 

accordance with Section 202(c) of 

Executive Order 13603, which 

authorizes the Secretary of Homeland 

Security to determine whether ‘‘all other 

defense programs, including civil 

defense and continuity of Government’’ 

are ‘‘necessary or appropriate to 

promote the national defense.’’ A 

determination that a program is 

necessary or appropriate to promote the 

national defense must be made before 

the Department of Commerce may 

authorize issuance of priority ratings for 

contracts in support of that program. 

Revisions to Subpart I—Official Actions 

Section 700.60—General provisions. 

Only non-substantive changes would be 

made to this section. References to 

‘‘Commerce’’ would be changed to ‘‘the 

Department of Commerce’’ and 

references to ‘‘this regulation’’ would be 

changed to ‘‘this part’’ to make clear that 

the regulation referred to is 15 CFR part 

700. This section of the proposed rule 

also would notify readers that directives 

are discussed in § 700.62. 

Sections 700.61—Rating 

authorizations, 700.62 Directories, and 

700.63 Letters of understanding. These 

sections would receive only nonsubstantive editorial changes. The rule 

would correct capitalizations and 

replace ‘‘Commerce’’ with ‘‘the 

Department of Commerce.’’ 

Revisions to Subpart J—Compliance 

Section 700.70—General provisions. 

This proposed rule would remove 

paragraph (b) of the existing DPAS from 

this section. Paragraph (b) provides that 

persons who place rated orders 

‘‘should’’ be familiar with the DPAS and 

must comply with its provisions. BIS 

believes that the former is aspirational 

rather than mandatory, and that the 

latter is redundant of specific language 

setting forth violations in section 

700.74. This proposed rule would also 

make non-substantive editorial changes 

to section 700.70 by replacing reference 

to ‘‘this regulation’’ with references to 

‘‘this part’’ to make clear that the 

regulation referred to is 15 CFR part 

700. 

Section 700.71—Investigations and 

audits. This section would be revised in 

several ways. The requirement for 

personal service of an administrative 

subpoena would be revised to allow 

leaving a copy of the document with 

someone at least 18 years old at the 

person’s last known dwelling or place of 

business. Currently, section 700.70 

allows leaving the document with a 

‘‘person of suitable age and discretion.’’ 

BIS believes that setting a minimum age 

is more precise and will help to prevent 

misunderstandings about who is 

authorized to receive service. This 

proposed rule would remove the term 

‘‘official action’’ from paragraphs (a), 

(c)(1), (c)(2) and (c)(3), because, as used 

in those paragraphs, compliance with an 

‘‘official action’’ would be subsumed by 

a requirement to comply with the DPAS. 

References to ‘‘this regulation’’ would 

be replaced with references to ‘‘this 

part’’ to make clear that the regulation 

referred to is 15 CFR part 700. 

Section 700.72—Compulsory process. 

This section would be revised to make 

clear that if a representative of the 

Department of Commerce is denied 

access to premises or sources of 

information necessary to the 

administration or for enforcement of the 

DPA or the DPAS, the Department of 

Commerce may seek compulsory 

process. The current language of 

§ 700.72 could be read as stating that 

only the representative who was denied 

access may seek compulsory process. 

BIS believes that such a reading would 

be erroneous. However, in an effort to 

prevent confusion, the proposed rule 

would state that ‘‘the Department of 

Commerce may seek compulsory 

process. . . .’’ This proposed rule also 

would revise the word ‘‘Commerce’’ to 

read ‘‘the Department of Commerce’’ 

and would replace the reference to ‘‘this 

regulation or official actions’’ with ‘‘this 

part.’’ 

Section 700.73—Notification of 

failure to comply. The phrase ‘‘this 

regulation’’ would be changed to read 

‘‘this part’’ to make clear that the 

regulation referred to is 15 CFR part 

700. 

Section 700.74—Violations, penalties, 

and remedies. Only minor changes 

would be made to this section. The 

phrase ‘‘this regulation or an official 

action,’’ would be replaced with the 

phrase ‘‘of this part.’’ In five additional 

places the word ‘‘regulation’’ would be 

replaced with the word ‘‘part’’ to make 

clear that the regulation referred to is 15 

CFR part 700. The phrase ‘‘this 

provision’’ would be replaced with ‘‘this 

section’’ to make clear that the provision 

referred to is § 700.74. 

Revisions to Subpart K—Adjustments, 

Exceptions, and Appeals 

Section 700.80—Adjustments or 

exceptions. This proposed rule would 

add a requirement that the Office of 

Strategic Industries and Economic 

Security respond to requests for 

exceptions to or adjustments of the 

requirements of 15 CFR part 700, or of 

any official action taken by the 

Department of Commerce in connection 

with that part, within 25 days, not 

including Saturdays, Sundays, or 

government holidays. All other 

proposed changes to this section are 

non-substantive. 

Section 700.81—Appeals. Nonsubstantive changes would be made to 

this section. The address to which 

appeals must be sent would be updated 

and moved from paragraph (b) to 

paragraph (a). The phrase ‘‘for good 

cause shown’’ currently at the end of 

last sentence of paragraph (b) would be 

removed. That sentence addresses 

when, at the discretion of the Assistant 

Secretary for Export Administration, 

appeals may be accepted after the 45 

day deadline. BIS believes that the 

phrase adds nothing of substance to the 

rule. In paragraph (g) the phrase ‘‘this 

regulation’’ would be replaced by ‘‘this 

part’’ to clarify that the regulation 

referred to is 15 CFR part 700. 

Revisions to Subpart L—Miscellaneous 

Provisions 

Section 700.90—Protection against 

claims. One non-substantive change 


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would be made to this section. The 

phrase ‘‘this regulation’’ would be 

replaced with ‘‘this part’’ to make clear 

that the regulation referred to is 15 CFR 

part 700. 

Section 700.91—Records and reports. 

Only non-substantive changes would be 

made to this section. The phrase ‘‘this 

regulation’’ would be replaced with the 

phrase ‘‘this part’’ in four places to 

make clear that the regulation referred 

to is 15 CFR part 700. The word 

‘‘Commerce’’ would be replaced with 

‘‘the Department of Commerce.’’ In 

paragraph (e), which quotes the 

confidentiality provision of the DPA, 

the references to Section 705(e) of the 

DPA would be corrected to read Section 

705(d), which is the section quoted. 

Section 700.92—Applicability of this 

part and official actions. Only nonsubstantive changes would be made to 

§ 700.92. The phrase ‘‘this regulation’’ 

would be replaced with ‘‘this part’’ in 

the heading and in paragraphs (a), (b) 

and (c) to clarify that the regulation 

referred to is 15 CFR part 700. The 

phrase ‘‘the Department of’’ would be 

added immediately preceding the word 

‘‘Commerce’’ at both places where the 

later appears in paragraph (c). The 

phrase ‘‘the regulations’’ would be 

replaced with the phrase ‘‘any provision 

of this part’’ in paragraph (d). 

Section 700.93—Communications. 

This section would be revised to add an 

email address, delete the facsimile 

number, and clarify that the email 

address and telephone number listed in 

§ 700.93 apply to requests for general 

information such as how to obtain 

copies of the DPAS, explanatory 

information, and requests for guidance 

or clarification. The section would 

expressly state that requests for special 

priorities assistance, adjustments, 

exceptions or appeals must be 

submitted in the matter specified in the 

sections governing those activities. The 

phrase ‘‘this regulation’’ would be 

replaced with the phrase ‘‘this part’’ to 

make clear that the regulation referred 

to is 15 CFR part 700. 

Schedule I to Part 700—Approved 

Programs and Delegate Agencies 

This proposed rule would revise the 

table in Schedule I to provide a new 

program symbol ‘‘G4’’ for a new topic 

heading ‘‘Critical Infrastructure 

Assistance to Other Nations.’’ To 

improve readability, the proposed rule 

would reformat the table by centering 

the topic headings and revising the 

headings for ‘‘Military Assistance to 

Canada,’’ ‘‘Military Assistance to Other 

Foreign Nations’’ and ‘‘Co-production’’ 

into full stand-alone topic headings 

rather than subheadings under the 

heading ‘‘International Defense 

Programs.’’ This rule would spell out 

the name of the approving agency on 

each line that identifies a program for 

which that agency has approval 

authority rather than use the 

abbreviation ‘‘Do.,’’ which stands for 

‘‘ditto,’’ and would revise the term ‘‘this 

regulation’’ that appears in the footnote 

to read ‘‘this part’’ to make clear that the 

regulation referred to is 15 CFR part 

700. Additionally, a footnote would be 

added to explain that program entries 

where the ‘‘Department of Commerce’’ 

appears in the third column require 

Department of Commerce authorization 

even though strictly speaking, the 

Department of Commerce is not a 

delegate agency. 

Request for Comments 

BIS seeks comments on all aspects of 

this proposed rule. BIS will consider all 

comments received on or before April 1, 

2014. Comments received after that date 

will be considered if feasible, but 

consideration cannot be assured. All 

comments (including any personally 

identifying information that those 

comments or transmittal emails contain) 

will be made available for public 

inspection and copying. Parties who 

wish to comment anonymously may do 

so by submitting their comments via 

Regulations.gov, leaving the fields that 

would identify the commenter blank 

and including no identifying 

information in the comment itself. 

Regulatory Requirements 

1. Executive Orders 13563 and 12866 

direct agencies to assess all costs and 

benefits of available regulatory 

alternatives and, if regulation is 

necessary, to select regulatory 

approaches that maximize net benefits 

(including potential economic, 

environmental, public health and safety 

effects, distribute impacts, and equity). 

Executive Order 13563 emphasizes the 

importance of quantifying both costs 

and benefits, of reducing costs, of 

harmonizing rules, and of promoting 

flexibility. This rule has been 

designated a ‘‘significant regulatory 

action,’’ although not economically 

significant, under section 3(f) of 

Executive Order 12866. Accordingly, 

the rule has been reviewed by the Office 

of Management and Budget (OMB). 

2. Notwithstanding any other 

provision of law, no person is required 

to respond to, nor is subject to a penalty 

for failure to comply with, a collection 

of information, subject to the 

requirements of the Paperwork 

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

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

information displays a currently valid 

OMB control number. This regulation 

contains two collections previously 

approved by OMB. OMB control 

number 0694–0053 authorizes the 

requirement that recipients of rated 

orders notify the party placing the order 

whether or not they will fulfill the rated 

order. BIS believes that this rule will not 

materially change the burden imposed 

by this collection. OMB control number 

0694–0057 authorizes the collection of 

information that parties must send to 

BIS when seeking special priorities 

assistance or priority rating authority. 

BIS believes that this rule will not 

materially change the burden imposed 

by this collection. Send comments 

regarding this burden estimate or any 

other aspect of these collections of 

information, including suggestions for 

reducing the burden, to Jasmeet K. 

Seehra, Office of Management and 

Budget, by email at jseehra@

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

and to Liam McMenamin, 

liam.mcmenamin@bis.doc.gov. 

3. This rule does not contain policies 

with Federalism implications as that 

term is defined under E.O. 13132. 

4. The Regulatory Flexibility Act 

(RFA), as amended by the Small 

Business Regulatory Enforcement 

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

601 et seq., generally requires an agency 

to prepare a regulatory flexibility 

analysis of any rule subject to the notice 

and comment rulemaking requirements 

under the Administrative Procedure Act 

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

Under section 605(b) of the RFA, 

however, if the head of an agency 

certifies that a rule will not have a 

significant impact on a substantial 

number of small entities, the statute 

does not require the agency to prepare 

a regulatory flexibility analysis. 

Pursuant to section 605(b), the Chief 

Counsel for Regulations, Department of 

Commerce, certified to the Chief 

Counsel for Advocacy, Small Business 

Administration that this proposed rule, 

if promulgated, will not have a 

significant impact on a substantial 

number of small entities for the reasons 

explained below. Consequently, BIS has 

not prepared a regulatory flexibility 

analysis. The factual support for this 

certification is provided below. 

Number of Small Entities 

Small entities include small 

businesses, small organizations and 

small governmental jurisdictions. For 

purposes of assessing the impacts of this 

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 


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Classification System Codes (Effective 

March 26, 2012), has a maximum 

annual revenue of $35.5 million and a 

maximum of 1,500 employees (for some 

business categories, these numbers are 

lower). A small governmental 

jurisdiction is a government of a city, 

town, school district or special district 

with a population of less than 50,000. A 

small organization is any not-for-profit 

enterprise which is independently 

owned and operated and is not 

dominant in its field. 

This rule sets criteria under which 

BIS (or agencies to which BIS delegates 

authority) will authorize prioritization 

of certain orders or contracts as well as 

criteria under which BIS would issue 

orders allocating resources or 

production facilities. This rule would 

affect organizations that enter into 

contracts to supply materials, services 

and facilities that are necessary for the 

national defense (broadly defined to 

include ‘‘Programs for military and 

energy production or construction, 

military or critical infrastructure 

assistance to any foreign nation, 

homeland security, stockpiling, space, 

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

experience in administering its 

priorities authority indicates that forprofit businesses are the organizations 

that provide such materials, services 

and facilities. If it becomes necessary to 

exercise allocations authority, the same 

types of materials, services and facilities 

and the same types of providers are the 

ones likely to be affected. Therefore, BIS 

believes that two of the categories of 

small entities identified by the RFA, 

small organizations and small 

government jurisdictions, are unlikely 

to experience any economic impact as a 

result of this rule. However, BIS has no 

basis on which to estimate the number 

of small businesses that are likely to be 

affected by this rule. 

Impact 

BIS believes that any impact that this 

rule might have on small businesses 

would be minor. The rule has two 

principle components: prioritization 

and allocation. Prioritization is the 

process that is, by far, more likely to be 

used. Under prioritization, BIS 

designates certain orders, which may be 

placed by Government or by private 

entities, and assigned under one of two 

possible priority levels. Once so 

designated, such orders are referred to 

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

rated order must give it priority over an 

unrated order. The recipient of a rated 

order with the higher priority rating 

must give that order priority over any 

rated orders with the lower priority 

rating and over unrated orders. A 

recipient of a rated order may place one 

or more orders at the same priority level 

with suppliers and subcontractors for 

supplies and services necessary to fulfill 

the recipient’s rated order and the 

suppliers and subcontractors must treat 

the request from the rated order 

recipient as a rated order with the same 

priority level as the original rated order. 

The rule does not require recipients to 

fulfill rated orders if the price or terms 

of sale are not consistent with the price 

or terms of sale of similar non-rated 

orders. The rule provides a defense from 

liability for damages or penalties for 

actions or inactions made in compliance 

with the rule. BIS expects that this rule 

will not result in any increase in the use 

of rated orders. The changes to the 

provisions of 15 CFR part 700 that apply 

to rated orders are primarily 

simplifications and clarifications. The 

standards under which a rated order 

would be issued are not changed by this 

rule. 

Although rated orders could require a 

firm to fill one order prior to filling 

another, they would not require a 

reduction in the total volume of orders 

nor would they require the recipient to 

reduce prices or provide rated orders 

with more favorable terms than a similar 

non-rated order. Under these 

circumstances, the economic effects on 

the rated order recipient of substituting 

one order for another are likely to be 

offsetting, resulting in no net loss. 

Allocations could be used to control 

the general distribution of materials or 

services in the civilian market. Specific 

allocation actions that BIS might take 

are set-asides, directives and allotments. 

A set-aside is an official action that 

requires a person to reserve resource 

capacity in anticipation of receipt of 

rated orders. A directive is an official 

action that requires a person to take or 

refrain from taking certain actions in 

accordance with its provisions. A 

directive can require a person to stop or 

reduce production of an item, prohibit 

the use of selected items, or divert 

supply of one type of product to 

another, or to supply a specific quantity, 

size, shape, and type of an item within 

a specific time period. An allotment is 

an official action that specifies the 

maximum quantity of a material, service 

or facility authorized for use in a 

specific program or application. 

According to available records, BIS 

has not taken any actions under its 

existing allocations authority in decades 

and any future allocations actions 

would be used only in extraordinary 

circumstances. As required by section 

101(b) of the Defense Production Act of 

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

2071), hereinafter ‘‘DPA,’’ and by 

Section 201(e) of Executive Order 13603 

of March 16, 2012, BIS may implement 

allocations to control the general 

distribution of a material in the civilian 

market only if the Department of 

Commerce made, and the President 

approved, a finding (1) that the material 

[or service] is a scarce and critical 

material [or service] essential to the 

national defense, and (2) that the 

requirements of the national defense for 

such material [or service] cannot 

otherwise be met without creating a 

significant dislocation of the normal 

distribution of such material [or service] 

in the civilian market to such a degree 

as to create appreciable hardship. The 

term ‘‘national defense’’ is defined to 

mean ‘‘programs for military and energy 

production or construction, military or 

critical infrastructure assistance to any 

foreign nation, homeland security, 

stockpiling, space, and any related 

activity. Such term includes emergency 

preparedness activities conducted 

pursuant to title 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.’’ 

Even a narrower use of allocations 

authority under this proposed rule 

would be subject to the policy set forth 

in § 700.30 which provides that 

allocations will be used only when there 

is insufficient supply of a material, 

service, or facility to satisfy national 

defense requirements through use of 

priorities authority or when the use of 

priorities authority would cause a 

severe and prolonged disruption in the 

supply of materials, services or facilities 

available to support normal U.S. 

economic activity. 

Any allocation actions taken by BIS 

would also have to comply with Section 

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

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

business concerns shall be accorded, to 

the extent practicable, a fair share of the 

such material [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.’’ 

Conclusion 

Although BIS cannot determine 

precisely the number of small entities 

that would be affected by this rule, BIS 

believes that the overall impact on such 

entities would not be significant. With 

respect to priorities authority, this rule 

is not likely to increase the number of 

priority rated contracts compared to the 

number being issued currently. 

Therefore the priorities authorities’ 

provisions of this rule are unlikely to 


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have any economic impact. BIS’s lack of 

recent experience with allocations 

makes gauging the impact of an 

allocation, should one occur, difficult. 

However, because (1) all allocation 

actions require planning that includes 

evaluation of the impact on the civilian 

market, (2) allocations to control the 

general distribution of a material in the 

civilian market may be imposed only 

after a determination by the President, 

and (3) BIS has taken no allocation 

actions in decades, one can expect 

allocations will be a rare occurrence. 

BIS believes that the expected 

unchanged level of contract 

prioritizations, planning and review 

requirements and requirements of 

section 701 of the DPA, which are 

directed at protecting the interests of 

small businesses provide reasonable 

assurance that any impact on small 

business will not be significant. For the 

reasons set forth above, the Chief 

Counsel for Regulations at the 

Department of Commerce certified that 

this action would not have a significant 

impact on a substantial number of small 

entities. 

List of Subjects in 15 CFR Part 700 

Administrative practice and 

procedure, Business and industry, 

Government contracts, National defense, 

Reporting and recordkeeping 

requirements, Strategic and critical 

materials. 

For the reasons stated in the 

preamble, 15 CFR part 700 is proposed 

to be amended as follows: 

PART 700—[AMENDED] 

■ 1. The authority citations paragraph 

for part 700 is revised to read as follows: 

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

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

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

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

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

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

■ 2. Section 700.1 is revised to read as 

follows: 

§ 700.1 Purpose of this part. 

This part implements the Defense 

Priorities and Allocations System 

(DPAS) that is administered by the 

Department of Commerce, Bureau of 

Industry and Security. The DPAS 

implements the priorities and 

allocations authority of the Defense 

Production Act, including use of that 

authority to support emergency 

preparedness activities pursuant to Title 

VI of the Robert T. Stafford Disaster 

Relief and Emergency Assistance Act 

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

priorities authority of the Selective 

Service Act and related statutes, all with 

respect to industrial resources. The 

DPAS establishes procedures for the 

placement, acceptance, and 

performance of priority rated contracts 

and orders and for the allocation of 

materials, services, and facilities. The 

guidance and procedures in this part are 

generally consistent with the guidance 

and procedures provided in other 

regulations issued under Executive 

Order 13603 authority. 

■ 3. Section 700.2 is revised to read as 

follows: 

§ 700.2 Introduction. 

(a) Certain national defense and 

energy programs (including military, 

emergency preparedness, homeland 

security, and critical infrastructure 

protection and restoration activities) are 

approved for priorities and allocations 

support. A complete list of currently 

approved programs is provided at 

Schedule I to this part. 

(b) The Department of Commerce 

administers the DPAS and may exercise 

priorities and allocations authority to 

ensure the timely delivery of industrial 

items to meet approved program 

requirements. 

(c) The Department of Commerce has 

delegated authority to place priority 

ratings on contracts or orders necessary 

or appropriate to promote the national 

defense to certain government agencies 

that issue such contracts or orders. Such 

delegations include authority to 

authorize recipients of rated orders to 

place ratings on contracts or orders to 

contractors, subcontractors, and 

suppliers. Schedule I to this part 

includes a list of agencies to which the 

Department of Commerce has delegated 

authority. 

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

(e) are revised to read as follows: 

§ 700.3 Priority ratings and rated orders. 

(a) Rated orders are identified by a 

priority rating and a program 

identification symbol. Rated orders take 

precedence over all unrated orders as 

necessary to meet required delivery 

dates. Among rated orders, DX rated 

orders take precedence over DO rated 

orders. Program identification symbols 

indicate which approved program is 

attributed to the rated order. 

(b) Persons receiving rated orders 

must give them preferential treatment as 

required by this part. 

* * * * * 

(e) Persons may place a priority rating 

on orders only when they are in receipt 

of a rated order, have been explicitly 

authorized to do so by the Department 

of Commerce or a Delegate Agency, or 

are otherwise permitted to do so by this 

part. 

§ 700.4 [Removed and Reserved] 

■ 5. Section 700.4 is removed and 

reserved. 

§ 700.5 [Removed and Reserved] 

■ 6. Section 700.5 is removed and 

reserved. 

§ 700.6 [Removed and Reserved] 

■ 7. Section 700.6 is removed and 

reserved. 

§ 700.7 [Removed and Reserved] 

■ 8. Section 700.7 is removed and 

reserved. 

■ 9. Section 700.8 is revised to read as 

follows: 

§ 700.8 Definitions. 

The definitions in this section apply 

throughout this part: 

Allocation. The control of the 

distribution of materials, services or 

facilities for a purpose deemed 

necessary or appropriate to promote the 

national defense. 

Allocation order. An official action to 

control the distribution of materials, 

services, or facilities for a purpose 

deemed necessary or appropriate to 

promote the national defense. 

Allotment. An official action that 

specifies the maximum quantity of a 

material, service, or facility authorized 

for a specific use to promote the 

national defense. 

Approved program. A program 

determined as necessary or appropriate 

for priorities and allocations support to 

promote the national defense by the 

Secretary of Defense, the Secretary of 

Energy, or the Secretary of Homeland 

Security, under the authority of the 

Defense Production Act and Executive 

Order 13603, or the Selective Service 

Act and Executive Order 12742. 

Construction. The erection, addition, 

extension, or alteration of any building, 

structure, or project, using materials or 

products which are to be an integral and 

permanent part of the building, 

structure, or project. Construction does 

not include maintenance and repair. 

Critical infrastructure. Any systems 

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

the degradation or destruction of such 

systems and assets would have a 

debilitating impact on national security, 

including, but not limited to, national 

economic security and national public 

health or safety. 

Defense Production Act. The Defense 

Production Act of 1950, as amended (50 

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

Delegate Agency. A government 

agency authorized by delegation from 


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the Department of Commerce to place 

priority ratings on contracts or orders 

needed to support approved programs. 

Directive. An official action which 

requires a person to take or refrain from 

taking certain actions in accordance 

with its provisions. 

Emergency preparedness. All 

activities and measures designed or 

undertaken to prepare for or minimize 

the effects of a hazard upon the civilian 

population, to deal with the immediate 

emergency conditions which would be 

created by the hazard, and to effectuate 

emergency repairs to, or the emergency 

restoration of, vital utilities and 

facilities destroyed or damaged by the 

hazard. Emergency preparedness 

includes the following: 

(1) Measures to be undertaken in 

preparation for anticipated hazards 

(including the establishment of 

appropriate organizations, operational 

plans, and supporting agreements, the 

recruitment and training of personnel, 

the conduct of research, the 

procurement and stockpiling of 

necessary materials and supplies, the 

provision of suitable warning systems, 

the construction or preparation of 

shelters, shelter areas, and control 

centers, and, when appropriate, the 

nonmilitary evacuation of the civilian 

population); 

(2) Measures to be undertaken during 

a hazard (including the enforcement of 

passive defense regulations prescribed 

by duly established military or civil 

authorities, the evacuation of personnel 

to shelter areas, the control of traffic and 

panic, and the control and use of 

lighting and civil communications); and 

(3) Measures to be undertaken 

following a hazard (including activities 

for firefighting, rescue, emergency 

medical, health and sanitation services, 

monitoring for specific dangers of 

special weapons, unexploded bomb 

reconnaissance, essential debris 

clearance, emergency welfare measures, 

and immediately essential emergency 

repair or restoration of damaged vital 

facilities). 

Hazard. An emergency or disaster 

resulting from: 

(1) A natural disaster, or 

(2) An accidental or man-caused 

event. 

Homeland security. Includes efforts: 

(1) To prevent terrorist attacks within 

the United States; 

(2) To reduce the vulnerability of the 

United States to terrorism; 

(3) To minimize damage from a 

terrorist attack in the United States; and 

(4) To recover from a terrorist attack 

in the United States. 

Industrial resources. All materials, 

services, and facilities, including 

construction materials, the authority for 

which has not been delegated to other 

agencies under Executive Order 13603. 

This term also includes the term ‘‘item’’ 

as defined and used in this part. 

Item. Any raw, in process, or 

manufactured material, article, 

commodity, supply, equipment, 

component, accessory, part, assembly, 

or product of any kind, technical 

information, process, or service. 

Maintenance and repair and/or 

operating supplies (MRO): 

(1) Maintenance is the upkeep 

necessary to continue any plant, facility, 

or equipment in working condition. 

(2) Repair is the restoration of any 

plant, facility, or equipment to working 

condition when it has been rendered 

unsafe or unfit for service by wear and 

tear, damage, or failure of parts. 

(3) Operating supplies are any items 

carried as operating supplies according 

to a person’s established accounting 

practice. Operating supplies may 

include hand tools and expendable 

tools, jigs, dies, fixtures used on 

production equipment, lubricants, 

cleaners, chemicals and other 

expendable items. 

(4) MRO does not include items 

produced or obtained for sale to other 

persons or for installation upon or 

attachment to the property of another 

person, or items required for the 

production of such items; items needed 

for the replacement of any plant, 

facility, or equipment; or items for the 

improvement of any plant, facility, or 

equipment by replacing items which are 

still in working condition with items of 

a new or different kind, quality, or 

design. 

National defense. Programs for 

military and energy production or 

construction, military or critical 

infrastructure assistance to any foreign 

nation, homeland security, stockpiling, 

space, and any directly related activity. 

Such term includes emergency 

preparedness activities conducted 

pursuant to Title VI of The Robert T. 

Stafford Disaster Relief and Emergency 

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

and critical infrastructure protection 

and restoration. 

Official action. An action taken by the 

Department of Commerce under the 

authority of the Defense Production Act, 

the Selective Service Act and related 

statutes, and this part. Such actions 

include the issuance of rating 

authorizations, directives, letters of 

understanding, demands for 

information, inspection authorizations, 

administrative subpoenas and allocation 

orders. 

Person. Any individual, corporation, 

partnership, association, or any other 

organized group of persons, or legal 

successor or representative thereof; or 

any authorized State or local 

government or agency thereof; and for 

purposes of administration of this part, 

includes the United States Government 

and any authorized foreign government 

or international organization or agency 

thereof, delegated authority as provided 

in this part. 

Priorities authority. The authority of 

the Department of Commerce, pursuant 

to Section 101 of the Defense 

Production Act, to require priority 

performance of contracts and orders for 

industrial resource items for use in 

approved programs. 

Priority rating. An identifying code 

assigned by a Delegate Agency or 

authorized person placed on all rated 

orders and consisting of the rating 

symbol and the program identification 

symbol. 

Production equipment. Any item of 

capital equipment used in producing 

materials or furnishing services that has 

a unit acquisition cost of $2,500 or 

more, an anticipated service life in 

excess of one year, and the potential for 

maintaining its integrity as a capital 

item. 

Program identification symbols. 

Abbreviations used to indicate which 

approved program is supported by a 

rated order. 

Rated order. A prime contract, a 

subcontract, or a purchase order in 

support of an approved program issued 

in accordance with the provisions of 

this part. 

Selective Service Act. Section 18 of 

the Selective Service Act of 1948 (50 

U.S.C. app. 468). 

Set-aside. An official action that 

requires a person to reserve materials, 

services, or facilities capacity in 

anticipation of the receipt of rated 

orders. 

Stafford Act. Title VI (Emergency 

Preparedness) of the Robert T. Stafford 

Disaster Relief and Emergency 

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

5195, et seq.). 

Working day. Any day that the 

recipient of an order is open for 

business. 

■ 10. Section 700.10 is revised to read 

as follows: 

§ 700.10 Authority. 

(a) Delegations to the Department of 

Commerce. The priorities and 

allocations authorities of the President 

under Title I of the Defense Production 

Act with respect to industrial resources 

have been delegated to the Secretary of 

Commerce under Executive Order 13603 

of March 16, 2012 (77 FR 16651, 3 CFR, 

2012 Comp., p. 225). The priorities 


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authorities of the President under the 

Selective Service Act and related 

statutes with respect to industrial 

resources have also been delegated to 

the Secretary of Commerce under 

Executive Order 12742 of January 8, 

1991 (56 FR 1079, 3 CFR, 1991 Comp. 

309). 

(b) Delegations by the Department of 

Commerce. The Department of 

Commerce has authorized the Delegate 

Agencies to assign priority ratings to 

orders for industrial resources needed 

for use in approved programs. 

(c) Jurisdiction limitations. (1) The 

priorities and allocations authority for 

certain items have been delegated under 

Executive Order 13603, other executive 

orders, or Interagency Memoranda of 

Understanding between other agencies. 

Unless otherwise agreed to by the 

concerned agencies, the provisions of 

this part are not applicable to those 

other items which include: 

(i) Food resources, food resource 

facilities, livestock resources, veterinary 

resources, plant health resources, and 

the domestic distribution of farm 

equipment and commercial fertilizer 

(delegated to the Department of 

Agriculture); 

(ii) All forms of energy (delegated to 

the Department of Energy); 

(iii) Health resources (delegated to the 

Department of Health and Human 

Services); 

(iv) All forms of civil transportation 

(delegated to the Department of 

Transportation); and 

(v) Water resources (delegated to the 

Department of Defense/U.S. Army Corps 

of Engineers). 

(2) The priorities and allocations 

authority set forth in this part may not 

be applied to communications services 

subject to Executive Order 13618 of July 

6, 2012—Assignment of National 

Security and Emergency Preparedness 

Communications Functions (77 FR 

40779, 3 CFR, 2012 Comp., p. 273). 

■ 11. Section 700.11 is amended by 

revising the second sentence of 

paragraph (b) to read as follows: 

§ 700.11 Priority ratings. 

* * * * * 

(b) Program identification symbols. 

* * * The list of approved programs 

and their identification symbols is 

found in Schedule I to this part. * * * 

* * * * * 

■ 12. Section 700.12 is revised to read 

as follows: 

§ 700.12 Elements of a rated order. 

(a) Elements required for all rated 

orders. (1) The appropriate priority 

rating and program identification 

symbol (e.g., DO–A1, DX–A4, DO–N1). 

(2) A required delivery date or dates. 

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

as possible’’ do not constitute a delivery 

date. When a ‘‘requirements contract,’’ 

‘‘basic ordering agreement,’’ ‘‘prime 

vendor contract,’’ or similar 

procurement document bearing a 

priority rating contains no specific 

delivery date or dates, but provides for 

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

specific purchase orders, such as 

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

orders,’’ the purchase orders supporting 

such contracts or agreements must 

specify a required delivery date or dates 

and are to be considered as rated as of 

the date of their receipt by the supplier 

and not as of the date of the original 

procurement document. 

(3) The written signature on a 

manually placed order, or the digital 

signature or name on an electronically 

placed order, of an individual 

authorized to sign rated orders for the 

person placing the order. The signature, 

manual or digital, certifies that the rated 

order is authorized under this part and 

that the requirements of this part are 

being followed. 

(4) A statement that reads in 

substance: This is a rated order certified 

for national defense use and you are 

required to follow all the provisions of 

the Defense Priorities and Allocations 

System regulations (15 CFR part 700). 

(b) Additional element required for 

certain emergency preparedness rated 

orders. If a rated order is placed for the 

purpose of emergency preparedness 

requirements and expedited action is 

necessary or appropriate to meet these 

requirements, the following statement 

must be included in the order. ‘‘This 

rated order is placed for the purpose of 

emergency preparedness. It must be 

accepted or rejected within [Insert a 

time limit no less than the minimum 

applicable time limit specified in 

§ 700.13(d)(2)t.].’’ 

■ 13. Section 700.13 is amended by 

revising paragraph (d) to read as 

follows: 

§ 700.13 Acceptance and rejection of rated 

orders. 

* * * * * 

(d) Customer notification 

requirements. (1) Except as provided in 

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

must accept or reject a rated order in 

writing (hard copy), or in electronic 

format, within fifteen (15) working days 

after receipt of a DO rated order and 

within ten (10) working days after 

receipt of a DX rated order. If the order 

is rejected, the person must give reasons 

in writing or electronically for the 

rejection. 

(2) If a rated order is placed for the 

purpose of emergency preparedness 

requirements and expedited action is 

necessary or appropriate to meet these 

requirements and the order includes the 

statement set forth in § 700.12(b), a 

person must accept or reject the rated 

order and transmit the acceptance or 

rejection in writing or in an electronic 

format within the time specified in the 

rated order. The minimum times for 

acceptance or rejection that such orders 

may specify are six (6) hours after 

receipt of the order if the order is issued 

by an authorized person in response to 

a hazard that has occurred, or twelve 

(12) hours after receipt if the order is 

issued by an authorized person to 

prepare for an imminent hazard. 

(3) If a person has accepted a rated 

order and subsequently finds that 

shipment or performance will be 

delayed, the person must notify the 

customer immediately, give the reasons 

for the delay, and advise of a new 

shipment or performance date. If 

notification is given verbally, written 

(hard copy) or electronic confirmation 

must be provided within one working 

day of the verbal notice. 

* * * * * 

■ 14. Section 700.14 is amended by 

adding a sentence at the end of the 

examples paragraph in paragraph (b) 

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

as follows: 

§ 700.14 Preferential scheduling. 

* * * * * 

(b) * * * 

Examples: * * * However, if business 

operations cannot be altered to meet both the 

June 3 and July 15 delivery dates, then the 

DX rated order must be given priority over 

the DO rated order. 

(c) * * * 

(2) If a person is unable to resolve 

rated order delivery or performance 

conflicts under this section, the person 

should promptly seek special priorities 

assistance as provided in Subpart H of 

this part. If the person’s customer 

objects to the rescheduling of delivery 

or performance of a rated order, the 

customer should promptly seek special 

priorities assistance as provided in 

Subpart H of this part. For any rated 

order against which delivery or 

performance will be delayed, the person 

must notify the customer as provided in 

§ 700.13(d)(3). 

* * * * * 

■ 15. Section 700.15 is amended by 

revising the second sentence of 

paragraph (a), the undesignated 

paragraph following paragraph (a), 

revising the second sentence of 


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paragraph (b), and by adding paragraph 

(c) to read as follows: 

§ 700.15 Extension of priority ratings. 

(a) * * * The person must use the 

priority rating indicated on the 

customer’s rated order, except as 

otherwise provided in this part or as 

directed by the Department of 

Commerce. * * * 

Example: If a person is in receipt of a DO– 

A3 rated order for a navigation system and 

needs to purchase semiconductors for its 

manufacture, that person must use a DO–A3 

rated order to obtain the needed 

semiconductors. 

(b) * * * Therefore, the inclusion of 

the rating will continue from contractor 

to subcontractor to supplier throughout 

the entire supply chain. 

(c) A person must use rated orders 

with suppliers to obtain items needed to 

fill an emergency preparedness rated 

order. That person must require 

acceptance or rejection, and 

transmission of that acceptance or 

rejection by the supplier within the time 

limit stated in the rated order that is 

being filled. 

■ 16. Section 700.16 is amended by 

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

read as follows: 

§ 700.16 Changes or cancellations of 

priority ratings and rated orders. 

* * * * * 

(d) The following amendments do not 

constitute a new rated order: a change 

in shipping destination; a reduction in 

the total amount of the order; an 

increase in the total amount of the order 

which has negligible impact upon 

deliveries; a minor variation in size or 

design (prior to the start of production); 

or a change which is agreed upon 

between the supplier and the customer. 

(e) A person must cancel any rated 

orders that the person (or a predecessor 

in interest) has placed with suppliers or 

cancel the priority ratings on those 

orders if the person no longer needs the 

items in those orders to fill a rated 

order. 

(f) A person adding a rating to an 

unrated order, or changing or cancelling 

a priority rating must promptly notify 

all suppliers to whom the order was 

sent of the addition, change or 

cancellation. 

■ 17. Section 700.17 is amended by 

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

read as follows: 

§ 700.17 Use of rated orders. 

* * * * * 

(d) * * * 

(1) * * * 

(ii) The elements of a rated order, as 

required by § 700.12, are included on 

the order with the statement required in 

§ 700.12(a)(4) modified to read in 

substance: ‘‘This purchase order 

contains rated order quantities certified 

for national defense use, and you are 

required to follow all the provisions of 

the Defense Priorities and Allocations 

System regulations (15 CFR part 700) as 

it pertains to the rated quantities.’’ 

* * * * * 

(f) A person is not required to place 

a priority rating on an order for less than 

$75,000, or one half of the Simplified 

Acquisition Threshold (as established in 

the Federal Acquisition Regulation 

(FAR) (see FAR section 2.101), 

whichever amount is greater, provided 

that delivery can be obtained in a timely 

fashion without the use of the priority 

rating. 

■ 18. Section 700.18 is revised to read 

as follows: 

§ 700.18 Limitations on placing rated 

orders. 

(a) General limitations. (1) A person 

may not place a rated order pursuant to 

this part unless the person is in receipt 

of a rated order, has been explicitly 

authorized to do so by the Department 

of Commerce or a Delegate Agency or is 

otherwise permitted to do so by this 

part. 

(2) Rated orders may not be used to 

obtain: 

(i) Delivery on a date earlier than 

needed; 

(ii) A greater quantity of the item than 

needed, except to obtain a minimum 

procurable quantity; 

(iii) Items in advance of the receipt of 

a rated order, except as specifically 

authorized by the Department of 

Commerce (see § 700.41(c) for 

information on obtaining authorization 

for a priority rating in advance of a rated 

order); or 

(iv) Any of the following items unless 

specific priority rating authority has 

been obtained from a Delegate Agency 

or the Department of Commerce: 

(A) Items for plant improvement, 

expansion or construction, unless they 

will be physically incorporated into a 

construction project covered by a rated 

order; or 

(B) Production or construction 

equipment or items to be used for the 

manufacture of production equipment 

(for information on requesting priority 

rating authority, see § 700.41). 

(v) Any items related to the 

development of chemical or biological 

warfare capabilities or the production of 

chemical or biological weapons, unless 

such development or production has 

been authorized by the President or the 

Secretary of Defense. 

(3) Separate rated orders may not be 

placed solely for obtaining minimum 

procurable quantities on each order if 

the minimum procurable quantity 

would be sufficient to cover more than 

one rated order. 

(b) Specific item limitations. 

Notwithstanding any authorization or 

requirement to place a rated order stated 

elsewhere in this part, no person may 

place a rated order to obtain the 

following items unless such order is 

authorized by an official action of the 

Department of Commerce. 

(1) Copper raw materials. 

(2) Crushed stone. 

(3) Gravel. 

(4) Sand. 

(5) Scrap. 

(6) Slag. 

(7) Steam heat, central. 

(8) Waste paper. 

■ 19. Section 700.21 is revised to read 

as follows: 

§ 700.21 Application for priority rating 

authority. 

(a) For projects believed to maximize 

domestic energy supplies, a person may 

request priority rating authority for 

scarce, critical, and essential supplies of 

materials, equipment, and services 

(related to the production of materials or 

equipment, or the installation, repair, or 

maintenance of equipment) by 

submitting a request to the Department 

of Energy. Further information may be 

obtained from the Department of 

Energy, Office of Electricity Delivery 

and Energy Reliability, 1000 

Independence Avenue SW., 

Washington, DC 20585. 

(b) If the Department of Energy 

notifies the Department of Commerce 

that the project maximizes domestic 

energy supplies and that the materials, 

equipment, or services are critical and 

essential, the Department of Commerce 

will determine whether the items in 

question are scarce, and, if they are 

scarce, whether there is a need to use 

the priorities authority. 

(1) Scarcity implies an unusual 

difficulty in obtaining the materials, 

equipment, or services in a time frame 

consistent with the timely completion of 

the energy project. In determining 

scarcity, the Department of Commerce 

may consider factors such as the 

following: 

(i) Value and volume of material or 

equipment shipments; 

(ii) Consumption of material and 

equipment; 

(iii) Volume and market trends of 

imports and exports; 

(iv) Domestic and foreign sources of 

supply; 

(v) Normal levels of inventories; 


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(vi) Rates of capacity utilization; 

(vii) Volume of new orders; and 

(viii) Lead times for new orders. 

(2) In finding whether there is a need 

to use the priorities authority, the 

Department of Commerce may consider 

alternative supply solutions and other 

measures. 

(c) After the Department of Commerce 

has conducted its analysis, it will advise 

the Department of Energy whether the 

two findings have been satisfied. If the 

findings are satisfied, the Department of 

Commerce will authorize the 

Department of Energy to grant the use of 

a priority rating to the applicant. 

(d) Schedule I to this part includes a 

list of approved programs to support the 

maximization of domestic energy 

supplies. A Department of Energy 

regulation setting forth the procedures 

and criteria used by the Department of 

Energy in making its determination and 

findings is published in 10 CFR part 

216. 

Subpart F—Allocation Actions 

■ 20. The heading of Subpart F is 

revised to read as set forth above. 

■ 21. Section 700.30 is revised to read 

as follows: 

§ 700.30 Policy. 

(a) Allocation orders will: 

(1) Be used only when there is 

insufficient supply of a material, 

service, or facility to satisfy national 

defense requirements through the use of 

the priorities authority or when the use 

of the priorities authority would cause 

a severe and prolonged disruption in the 

supply of materials, services, or 

facilities available to support normal 

U.S. economic activities; and 

(2) Not be used to ration materials or 

services at the retail level. 

(b) Allocation orders, when used, will 

be distributed equitably among the 

suppliers of the materials, services, or 

facilities being allocated and not require 

any person to relinquish a 

disproportionate share of the civilian 

market. 

■ 22. Section 700.31 is revised to read 

as follows: 

§ 700.31 General procedures. 

Before the Department of Commerce 

uses its allocations authority to address 

a supply problem within its resource 

jurisdiction, it will develop a plan that 

includes: 

(a) A copy of the written 

determination made in accordance with 

section 202 of Executive Order 13603, 

that the program or programs that would 

be supported by the allocation action 

are necessary or appropriate to promote 

the national defense; 

(b) A detailed description of the 

situation to include any unusual events 

or circumstances that have created the 

requirement for an allocation action; 

(c) A statement of the specific 

objective(s) of the allocation action; 

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

facilities to be allocated; 

(e) A list or description of the sources 

of the materials, services, or facilities 

that will be subject to the allocation 

action; 

(f) A detailed description of the 

provisions that will be included in the 

allocations orders, including the type(s) 

of allocations orders, the percentages or 

quantity of capacity or output to be 

allocated for each purpose, the 

relationship with previously or 

subsequently received priority rated and 

unrated contracts and orders, and the 

duration of the allocation action (e.g., 

anticipated start and end dates); 

(g) An evaluation of the impact of the 

proposed allocation action on the 

civilian market; and 

(h) Proposed actions, if any, to 

mitigate disruptions to civilian market 

operations. 

■ 23. In Subpart F, add § 700.32 to read 

as follows: 

§ 700.32 Controlling the general 

distribution of a material in the civilian 

market. 

No allocation action by the 

Department of Commerce may be used 

to control the general distribution of a 

material in the civilian market unless 

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

(c) of this section are met. 

(a) The Secretary has made a written 

finding that: 

(1) Such material is a scarce and 

critical material essential to the national 

defense, and 

(2) The requirements of the national 

defense for such material cannot 

otherwise be met without creating a 

significant dislocation of the normal 

distribution of such material in the 

civilian market to such a degree as to 

create appreciable hardship. 

(b) The Secretary has submitted the 

finding for the President’s approval 

through the Assistant to the President 

and National Security Advisor and the 

Assistant to the President for Homeland 

Security and Counterterrorism. 

(c) The President has approved the 

finding. 

(d) In this section, the term, 

‘‘Secretary’’ means the Secretary of 

Commerce or his or her designee. 

■ 24. In Subpart F, add § 700.33 to read 

as follows: 

§ 700.33 Types of allocations orders. 

There are three types of allocations 

orders available for communicating 

allocation actions. 

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

action that requires a person to reserve 

materials, services, or facilities capacity 

in anticipation of the receipt of rated 

orders. 

(b) Directive. A directive is an official 

action that requires a person to take or 

refrain from taking certain actions in 

accordance with its provisions. For 

example, a directive can require a 

person to: Stop or reduce production of 

an item; prohibit the use of selected 

materials, services, or facilities; or divert 

the use of materials, services, or 

facilities from one purpose to another. 

(c) Allotment. An allotment is an 

official action that specifies the 

maximum quantity of a material, 

service, or facility authorized for a 

specific use to promote the national 

defense. 

■ 25. In Subpart F, add § 700.34 to read 

as follows: 

§ 700.34 Elements of an allocation order. 

Allocation orders may be issued 

directly to the affected persons or by 

constructive notice to the parties 

through publication in the Federal 

Register. This section describes the 

elements that each order must include. 

(a) Elements to be included in all 

allocation orders. 

(1) A detailed description of the 

required allocation action(s), including 

its relationship to previously or 

subsequently received DX rated orders, 

DO rated orders and unrated orders. 

(2) Specific start and end calendar 

dates for each required allocation 

action. 

(b) Elements to be included in orders 

issued directly to affected persons. 

(1) A statement that reads in 

substance: ‘‘This is an allocation order 

certified for national defense use. [Insert 

the name of the person receiving the 

order] is required to comply with this 

order, in accordance with the provisions 

of the Defense Priorities and Allocations 

System regulations (15 CFR part 700).’’ 

(2) The written signature on a 

manually placed order, or the digital 

signature or name on an electronically 

placed order, of an authorized official or 

employee of the Department of 

Commerce. 

(c) Elements to be included in an 

allocation order that gives constructive 

notice through publication in the 

Federal Register. 

(1) A statement that reads in 

substance: ‘‘This is an allocation order 

certified for national defense use. [Insert 

the name(s) of the person(s) to whom 


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the order applies or a description of the 

class of persons to whom the order 

applies] is (are) required to comply with 

this order, in accordance with the 

provisions of the Defense Priorities and 

Allocations System regulations (15 CFR 

part 700).’’ 

(2) The order must be signed by an 

authorized official or employee of the 

Department of Commerce. 

■ 26. In Subpart F, add § 700.35 to read 

as follows: 

§ 700.35 Mandatory acceptance of an 

allocation order. 

(a) Except as otherwise specified in 

this section, a person shall accept and 

comply with every allocation order 

received. 

(b) A person shall not discriminate 

against an allocation order in any 

manner such as by charging higher 

prices for materials, services, or 

facilities covered by the order or by 

imposing terms and conditions for 

contracts and orders involving allocated 

materials, services, or facilities that 

differ from the person’s terms and 

conditions for contracts and orders for 

the materials, services, or facilities prior 

to receiving the allocation order. 

(c) If a person is unable to comply 

fully with the required action(s) 

specified in an allocation order, the 

person must notify the Office of 

Strategic Industries and Economic 

Security immediately, explain the 

extent to which compliance is possible, 

and give the reasons why full 

compliance is not possible. If 

notification is given verbally, written or 

electronic confirmation must be 

provided within one working day. Such 

notification does not release the person 

from complying with the order to the 

fullest extent possible, until the person 

is notified by the Department of 

Commerce that the order has been 

changed or cancelled. 

■ 27. In Subpart F, add § 700.36 to read 

as follows: 

§ 700.36 Changes or cancellations of 

allocation orders. 

An allocation order may be changed 

or cancelled by an official action from 

the Department of Commerce. Notice of 

such changes or cancellations may be 

provided directly to persons to whom 

the order being cancelled or modified 

applies or constructive notice may be 

provided by publication in the Federal 

Register. 

■ 28. Section 700.50 is amended by 

revising the first sentence of paragraph 

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

follows: 

§ 700.50 General provisions. 

(a) Once a priority rating has been 

authorized pursuant to this part, further 

action by the Department of Commerce 

generally is not needed. * * * 

(b) Special priorities assistance can be 

provided for any reason consistent with 

this part, such as assisting in obtaining 

timely deliveries of items needed to 

satisfy rated orders or authorizing the 

use of priority ratings on orders to 

obtain items not otherwise ratable under 

this part. If the Department of 

Commerce is unable to resolve the 

problem or to authorize the use of a 

priority rating and believes additional 

assistance is warranted, the Department 

of Commerce may forward the request to 

another agency, identified in 

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

* * * * * 

§ 700.51 [Amended] 

■ 29. Section 700.51 is amended by: 

■ a. Removing the word ‘‘regulation’’ 

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

in paragraph (a), introductory text; 

■ b. Adding the phrase ‘‘the Department 

of’’ immediately preceding the word 

‘‘Commerce’’ in the first sentence of 

paragraph (c)(1); 

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

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

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

■ e. Redesignating paragraph (c)(3)(vi) 

as (c)(3)(v). 

§ 700.53 [Amended] 

■ 30. Section 700.53 is amneded by 

adding the words ‘‘the Department of’’ 

between the word ‘‘or’’ and the word 

‘‘Commerce’’ in the introductory text. 

§ 700.54 [Amended] 

■ 31. Section 700.54 is amended by 

adding the words ‘‘the Department of’’ 

between the word ‘‘or’’ and the word 

‘‘Commerce’’ in the introductory text. 

■ 32. Section 700.55 is revised to read 

as follows: 

§ 700.55 Homeland security, emergency 

preparedness, and critical infrastructure 

protection and restoration assistance 

programs within the United States. 

Any person requesting priority rating 

authority or requiring assistance in 

obtaining rated items supporting 

homeland security, emergency 

preparedness, and critical infrastructure 

protection and restoration related 

activities should submit a request for 

such assistance or priority rating 

authority to the Office of Policy and 

Program Analysis, Federal Emergency 

Management Agency, Department of 

Homeland Security, 500 C Street SW., 

Washington, DC, 20472; telephone: 

(202) 646–3520; Fax: (202) 646–4060; 

Email: fema-dpas@dhs.gov, Web site: 

http://www.fema.gov/defenseproduction-act-program-division. 

■ 33. In Subpart H, § 700.56 is added to 

read as follows: 

§ 700.56 Military assistance programs with 

Canada. 

(a) To promote military assistance to 

Canada, this section provides for 

authorizing priority ratings to persons in 

Canada to obtain items in the United 

States in support of approved programs. 

Although priority ratings have no legal 

authority outside of the United States, 

this section also provides information 

on how persons in the United States 

may obtain informal assistance in 

Canada in support of approved 

programs. 

(b) The joint United States-Canadian 

military arrangements for the defense of 

North America and the integrated nature 

of the United States and Canadian 

defense industries require close 

coordination and the establishment of a 

means to provide mutual assistance to 

the defense industries located in both 

countries. 

(c) The Department of Commerce 

coordinates with the Canadian Public 

Works and Government Services Canada 

on all matters of mutual concern 

relating to the administration of this 

part. 

(d) Any person in the United States 

ordering defense items in Canada in 

support of an approved program should 

inform the Canadian supplier that the 

items being ordered are to be used to fill 

a rated order. The Canadian supplier 

should be informed that if production 

materials are needed from the United 

States by the supplier or the supplier’s 

vendor to fill the order, the supplier or 

vendor should contact the Canadian 

Public Works and Government Services 

Canada for authority to place rated 

orders in the United States: Public 

Works and Government Services 

Canada, Acquisitions Branch, Business 

Management Directorate, Phase 3, Place 

du Portage, Level 0A1, 11 Laurier Street, 

Gatineau, Quebec, K1A 0S5, Canada; 

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

956–7827, or electronically at DGA

Prioritesdedefense.ACQBDefence

Priorities@tpsgc-pwgsc.gc.ca. 

(e) Any person in Canada producing 

defense items for the Canadian 

government may also obtain priority 

rating authority for items to be 

purchased in the United States by 

applying to the Canadian Public Works 

and Government Services Canada, 

Acquisitions Branch, Business 

Management Directorate, in accordance 

with its procedures. (f) Persons in 

Canada needing special priorities 


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assistance in obtaining defense items in 

the United States may apply to the 

Canadian Public Works and 

Government Services Canada, 

Acquisitions Branch, Business 

Management Directorate, for such 

assistance. Public Works and 

Government Services Canada will 

forward appropriate requests to the 

Department of Commerce. 

(g) Any person in the United States 

requiring assistance in obtaining items 

in Canada must submit a request 

through the Delegate Agency to the 

Office of Strategic Industries and 

Economic Security, U.S. Department of 

Commerce on Form BIS–999. The 

Department of Commerce will forward 

appropriate requests to the Canadian 

Public Works and Government Services 

Canada. 

■ 34. In Subpart H, § 700.57 is added to 

read as follows: 

§ 700.57 Military assistance programs with 

other nations and international 

organizations. 

(a) Scope. To promote military 

assistance to foreign nations and 

international organizations (for example 

the North Atlantic Treaty Organization 

or the United Nations), this section 

provides for authorizing priority ratings 

to persons in foreign nations or 

international organizations to obtain 

items in the United States in support of 

approved programs. Although priority 

ratings have no legal authority outside 

of the United States, this section also 

provides information on how persons in 

the United States may obtain informal 

assistance in Australia, Finland, Italy, 

The Netherlands, Sweden, and the 

United Kingdom in support of approved 

programs. (b) Foreign nations and 

international organizations. (1) Any 

person in a foreign nation other than 

Canada, or any person in an 

international organization, requiring 

assistance in obtaining items in the 

United States or priority rating authority 

for items to be purchased in the United 

States, should submit a request for such 

assistance or priority rating authority to: 

The Department of Defense DPAS Lead 

in the Office of the Deputy Assistant 

Secretary of Defense for Manufacturing 

and Industrial Base Policy, 3330 

Defense Pentagon, Washington, DC 

20301; Telephone: (703) 697–0051; Fax: 

(703) 695–4885; Email: MIBP@osd.mil, 

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

(i) If the end product is being acquired 

by a U.S. Government agency, the 

request should be submitted to the 

Department of Defense DPAS Lead 

through the U.S. contract administration 

representative. 

(ii) If the end product is being 

acquired by a foreign nation or 

international organization, the request 

must be sponsored prior to its 

submission to the Department of 

Defense DPAS Lead by the government 

of the foreign nation or the international 

organization that will use the end 

product. 

(2) If the Department of Defense 

endorses the request, it will be 

forwarded to the Department of 

Commerce for appropriate action. 

(c) Requesting assistance in Australia, 

Finland, Italy, The Netherlands, 

Sweden, and the United Kingdom. 

(1) The Department of Defense has 

entered into bilateral security of supply 

arrangements with Australia, Finland, 

Italy, The Netherlands, Sweden, and the 

United Kingdom that allow the 

Department of Defense to request the 

priority delivery for Department of 

Defense contracts, subcontracts, and 

orders from companies in these 

countries. 

(2) Any person in the United States 

requiring assistance in obtaining the 

priority delivery of a contract, 

subcontract, or order in Australia, 

Finland, Italy, The Netherlands, 

Sweden, or the United Kingdom to 

support an approved program should 

contact the Department of Defense 

DPAS Lead in the Office of the Deputy 

Assistant Secretary of Defense for 

Manufacturing and Industrial Base 

Policy for assistance. Persons in 

Australia, Finland, Italy, The 

Netherlands, Sweden, and the United 

Kingdom should request assistance in 

accordance with paragraph (b)(1) of this 

section. 

■ 35. In Subpart H, § 700.58 is added to 

read as follows: 

§ 700.58 Critical infrastructure assistance 

programs to foreign nations and 

international organizations. 

(a) Scope. To promote critical 

infrastructure assistance to foreign 

nations, this section provides for 

authorizing priority ratings to persons in 

foreign nations or international 

organizations (for example the North 

Atlantic Treaty Organization or the 

United Nations) to obtain items in the 

United States in support of approved 

programs. 

(b) Foreign nations or international 

organizations. Any person in a foreign 

nation or representing an international 

organization requiring assistance in 

obtaining items to be purchased in the 

United States for support of critical 

infrastructure protection and restoration 

should submit a request for such 

assistance or priority rating authority to 

the Office of Policy and Program 

Analysis, Federal Emergency 

Management Agency, Department of 

Homeland Security, 500 C Street SW., 

Washington, DC 20472; telephone: (202) 

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

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

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

■ 36. Section 700.60 is revised to read 

as follows: 

§ 700.60 General provisions. 

(a) The Department of Commerce 

may, from time-to-time, take specific 

official actions to implement or enforce 

the provisions of this part. 

(b) Some of these official actions 

(rating authorizations and letters of 

understanding) are discussed in this 

subpart. Official actions that pertain to 

compliance (administrative subpoenas, 

demands for information, and 

inspection authorizations) are discussed 

in § 700.71(c). Directives are discussed 

in § 700.62. 

■ 37. Section 700.61 is amended by 

revising the heading and paragraph (a) 

introductory text to read as follows: 

§ 700.61 Rating authorizations. 

(a) A rating authorization is an official 

action granting specific priority rating 

authority that: 

* * * * * 

§ 700.62 [Amended] 

■ 38. Section 700.62 is amended by 

removing ‘‘Directive’’ wherever it 

appears and by adding in its place 

‘‘directive’’. 

§ 700.63 [Amended] 

■ 39. Section 700.63 is amended by: 

■ a. Removing ‘‘Letter of 

Understanding’’ wherever it appears 

and adding in its place ‘‘letter of 

understanding’’; and 

■ b. Adding the words ‘‘the Department 

of’’ immediately preceding the word 

‘‘Commerce’’. 

§ 700.70 [Amended] 

■ 40. Section 700.70 is amended by: 

■ a. Removing paragraph (b); 

■ b. Redesignating paragraph (c) as 

paragraph (b); and 

■ c. Removing the word ‘‘regulation’’ 

wherever it appears and adding in its 

place the word ‘‘part’’. 

■ 41. Section 700.71 is revised to read 

as follows: 

§ 700.71 Audits and investigations. 

(a) Audits and investigations are 

official actions involving the 

examination of books, records, 

documents, other writings and 

information to ensure that the 

provisions of the Defense Production 

Act, the Selective Service Act and 


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related statutes, and this part have been 

properly followed. An audit or 

investigation may also include 

interviews and a systems evaluation to 

detect problems or failures in the 

implementation of this part. 

(b) When undertaking an audit, 

investigation, or other inquiry, the 

Department of Commerce shall: 

(1) Define the scope and purpose in 

the official action given to the person 

under investigation, and 

(2) Have ascertained that the 

information sought or other adequate 

and authoritative data are not available 

from any Federal or other responsible 

agency. 

(c) In administering this part, the 

Department of Commerce may issue the 

following documents, which constitute 

official actions: 

(1) Administrative subpoenas. An 

administrative subpoena requires a 

person to appear as a witness before an 

official designated by the Department of 

Commerce to testify under oath on 

matters of which that person has 

knowledge relating to the enforcement 

or the administration of the Defense 

Production Act, the Selective Service 

Act and related statutes, or this part. An 

administrative subpoena may also 

require the production of books, papers, 

records, documents and physical objects 

or property. 

(2) Demand for information. A 

demand for information requires a 

person to furnish to a duly authorized 

representative of the Department of 

Commerce any information necessary or 

appropriate to the enforcement or the 

administration of the Defense 

Production Act, the Selective Service 

Act, or this part. 

(3) Inspection authorizations. An 

inspection authorization requires a 

person to permit a duly authorized 

representative of the Department of 

Commerce to interview the person’s 

employees or agents, to inspect books, 

records, documents, other writings and 

information in the person’s possession 

or control at the place where that person 

usually keeps them, and to inspect a 

person’s property when such interviews 

and inspections are necessary or 

appropriate to the enforcement or the 

administration of the Defense 

Production Act, the Selective Service 

Act, or this part. 

(d) The production of books, records, 

documents, other writings and 

information will not be required at any 

place other than where they are usually 

kept if, prior to the return date specified 

in the administrative subpoena or 

demand for information, a duly 

authorized official of the Department of 

Commerce is furnished with copies of 

such material that are certified under 

oath to be true copies. As an alternative, 

a person may enter into a stipulation 

with a duly authorized official of the 

Department of Commerce as to the 

content of the material. 

(e) An administrative subpoena, 

demand for information, or inspection 

authorization shall include the name, 

title or official position of the person to 

be served, the evidence sought to be 

adduced, and its general relevance to 

the scope and purpose of the audit, 

investigation, or other inquiry. If 

employees or agents are to be 

interviewed; if books, records, 

documents, other writings, or 

information are to be produced; or if 

property is to be inspected; the 

administrative subpoena, demand for 

information, or inspection authorization 

will describe them with particularity. 

(f) Service of documents shall be 

made in the following manner: 

(1) Service of a demand for 

information or inspection authorization 

shall be made personally, or by certified 

mail—return receipt requested at the 

person’s last known address. Service of 

an administrative subpoena shall be 

made personally. Personal service may 

also be made by leaving a copy of the 

document with someone at least 18 

years of age at the person’s last known 

dwelling or place of business. 

(2) Service upon other than an 

individual may be made by serving a 

partner, corporate officer, or a managing 

or general agent authorized by 

appointment or by law to accept service 

of process. If an agent is served, a copy 

of the document shall be mailed to the 

person named in the document. 

(3) Any individual 18 years of age or 

older may serve an administrative 

subpoena, demand for information, or 

inspection authorization. When 

personal service is made, the individual 

making the service shall prepare an 

affidavit as to the manner in which 

service was made and the identity of the 

person served, and return the affidavit, 

and in the case of subpoenas, the 

original document, to the issuing officer. 

In case of failure to make service, the 

reasons for the failure shall be stated on 

the original document. 

■ 42. Section 700.72 is amended by 

revising the first sentence of paragraph 

(a) to read as follows: 

§ 700.72 Compulsory process. 

(a) If a person refuses to permit a duly 

authorized representative of the 

Department of Commerce to have access 

to any premises or source of information 

necessary to the administration or 

enforcement of the Defense Production 

Act or this part, the Department of 

Commerce may seek compulsory 

process. * * * 

* * * * * 

■ 43. Section 700.73 is revised to read 

as follows: 

§ 700.73 Notification of failure to comply. 

(a) At the conclusion of an audit, 

investigation, or other inquiry, or at any 

other time, the Department of 

Commerce may inform the person in 

writing where compliance with the 

requirements of the Defense Production 

Act, the Selective Service Act and 

related statutes, or this part were not 

met. 

(b) In cases where the Department of 

Commerce determines that failure to 

comply with the provisions of the 

Defense Production Act, the Selective 

Service Act and related statutes, or this 

part was inadvertent, the person may be 

informed in writing of the particulars 

involved and the corrective action to be 

taken. Failure to take corrective action 

may then be construed as a willful 

violation of the Defense Production Act, 

this part, or an official action. 

■ 44. Section 700.74 is amended by 

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

and (c)(3) to read as follows: 

§ 700.74 Violations, penalties, and 

remedies. 

(a) Willful violation of the provisions 

of Title I or Sections 705 or 707 of the 

Defense Production Act, the priorities 

provisions of the Selective Service Act 

and related statutes or this part is a 

crime and upon conviction, a person 

may be punished by fine or 

imprisonment, or both. The maximum 

penalty provided by the Defense 

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

year in prison, or both. The maximum 

penalty provided by the Selective 

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

years in prison, or both. 

(b) The government may also seek an 

injunction from a court of appropriate 

jurisdiction to prohibit the continuance 

of any violation of, or to enforce 

compliance with, the Defense 

Production Act, this part, or an official 

action. 

(c) * * * 

(1) No person may solicit, influence or 

permit another person to perform any 

act prohibited by, or to omit any act 

required by, the Defense Production 

Act, this part, or an official action. 

(2) No person may conspire or act in 

concert with any other person to 

perform any act prohibited by, or to 

omit any act required by, the Defense 

Production Act, this part, or an official 

action. 

(3) No person shall deliver any item 

if the person knows or has reason to 


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1 Department of Defense includes: The Office of 

the Secretary of Defense, the Military Departments, 

the Joint Staff, the Combatant Commands, the 

Defense Agencies, the Defense Field Activities, all 

other organizational entities in the Department of 

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

Intelligence Agency and the National Aeronautics 

and Space Administration as associated agencies. 

2The Department of Commerce is also listed as 

an agency in the third column for programs where 

its authorization is necessary to place rated orders. 

believe that the item will be accepted, 

redelivered, held, or used in violation of 

the Defense Production Act, this part, or 

an official action. In such instances, the 

person must immediately notify the 

Department of Commerce that, in 

accordance with this section, delivery 

has not been made. 

■ 45. Section 700.80 is amended by 

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

and (c), and by revising the 

parenthetical sentence at the end of 

paragraph (d) to read as follows: 

§ 700.80 Adjustments or exceptions. 

(a) * * * 

(1) A provision of this part or an 

official action results in an undue or 

exceptional hardship on that person not 

suffered generally by others in similar 

situations and circumstances; or 

(2) The consequence of following a 

provision of this part or an official 

action is contrary to the intent of the 

Defense Production Act, the Selective 

Service Act and related statutes, or this 

part. 

(b) Each request for adjustment or 

exception must be in writing and 

contain a complete statement of all the 

facts and circumstances related to the 

provision of this part or official action 

from which adjustment is sought and a 

full and precise statement of the reasons 

why relief should be provided. 

(c) The submission of a request for 

adjustment or exception shall not 

relieve any person from the obligation of 

complying with the 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 Office of Strategic Industries and 

Economic Security. The Office of 

Strategic Industries and Economic 

Security shall respond to requests for 

adjustment of or exceptions to 

compliance with the provisions of this 

part or an official action within 25 

(twenty-five) days, not including 

Saturdays, Sundays or Government 

holidays, of the date of receipt. 

(d) * * * (For information on the 

appeal procedure, see § 700.81.) 

■ 46. Section 700.81 is amended by 

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

read as follows: 

§ 700.81 Appeals. 

(a) Any person who has had a request 

for adjustment or exception denied by 

the Office of Strategic Industries and 

Economic Security under § 700.80, may 

appeal to the Assistant Secretary for 

Export Administration, Department of 

Commerce, who shall review and 

reconsider the denial. Such appeals 

should be submitted to the Office of the 

Assistant Secretary for Export 

Administration, Bureau of Industry and 

Security, Department of Commerce, 

Room 3886, Washington, DC 20230, Ref: 

DPAS Appeals. 

(b) Appeals of denied requests for 

exceptions from or adjustments to 

compliance with the provisions of this 

part or an official action must be 

received by the Assistant Secretary for 

Export Administration no later than 45 

days after receipt of a written notice of 

denial from the Office of Strategic 

Industries and Economic Security. After 

this 45-day period, an appeal may be 

accepted at the discretion of the 

Assistant Secretary for Export 

Administration. 

* * * * * 

(g) The submission of an appeal under 

this section shall not relieve any person 

from the obligation of complying with 

the provision of this part or official 

action in question while the appeal is 

being considered, unless such relief is 

granted in writing by the Assistant 

Secretary for Export Administration. 

* * * * * 

§ 700.90 [Amended] 

■ 47. Section 700.90 is amended by 

removing the word ‘‘regulation’’ and 

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

§ 700.91 [Amended] 

■ 48. Section 700.91 is amended by: 

■ a. Removing the word ‘‘regulation’’ 

wherever it appears and adding in its 

place the word ‘‘part’’; 

■ b. Adding the phrase ‘‘the Department 

of’’ immediately preceding the word 

‘‘Commerce’’ wherever it appears; and 

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

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

§ 700.92 [Amended] 

■ 49. Section 700.92 is amended by: 

■ a. Removing the word ‘‘regulation’’ 

wherever it appears in the heading and 

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

in its place the word ‘‘part’’; 

■ b. Adding the phrase ‘‘the Department 

of’’ immediately preceding the word 

‘‘Commerce’’ wherever it appears; and 

■ c. Removing the phrase ‘‘the 

regulations’’ and adding in its place 

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

sentence of paragraph (d). 

§ 700.93 [Amended] 

■ 50. Section 700.93 is revised to read 

as follows: 

§ 700.93 Communications. 

General communications concerning 

this part, including how to obtain copies 

of this part and explanatory 

information, requests for guidance or 

clarification, may be addressed to the 

Office of Strategic Industries and 

Economic Security, Room 3876, 

Department of Commerce, Washington, 

DC 20230, Ref: DPAS; telephone (202) 

482–3634, email DPAS@bis.doc.gov. 

Request for priorities assistance under 

§ 700.50, adjustments or exceptions 

under § 700.80 of this part or appeals 

under § 700.81, must be submitted in 

the manner specified in those sections. 

■ 51. Schedule I to part 700 is revised 

to read as follows: 

Schedule I to Part 700—Approved 

Programs and Delegate Agencies 

The programs listed in this schedule 

have been approved for priorities 

support under this part by the 

Department of Defense,1 the Department 

of Energy or the Department of 

Homeland Security, in accordance with 

section 202 of Executive Order 13603. 

They have equal preferential status. The 

Department of Commerce has 

authorized the delegate agencies listed 

in the third column to use this part in 

support of those programs assigned to 

them, as indicated below.2

Program 

identification 

symbol 

Approved program Agency(ies) 

Defense Programs 

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

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

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


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Program 

identification 

symbol 

Approved program Agency(ies) 

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

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

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

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

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

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

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

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

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

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

facilities.

Department of Defense. 

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

Military Assistance to Canada 

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

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

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

Military Assistance to Other Foreign Nations 

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

commercial channels for export.

Department of Commerce. 

G2 ..................... Certain direct defense needs of foreign governments other than Canada ............. Department of Commerce. 

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

Critical Infrastructure Assistance to Foreign Nations 

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

Co-Production 

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

Atomic Energy Programs 

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

E2 ...................... Operations—including maintenance, repair, and operating supplies (MRO) .......... Department of Energy. 

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

Domestic Energy Programs 

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

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

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

Other Defense, Energy, and Related Programs 

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

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

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

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

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

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

Homeland Security Programs 

N1 ...................... Federal emergency preparedness, mitigation, response, and recovery .................. Department of Homeland Security. 

N2 ...................... State, local, tribal government emergency preparedness, mitigation, response, 

and recovery.

Department of Homeland Security. 

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

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

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

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

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

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


emcdonald on DSK67QTVN1PROD with PROPOSALS-1
Federal Register / Vol. 79, No. 21 / Friday, January 31, 2014 / Proposed Rules 5353 

Dated: January 21, 2014. 

Kevin J. Wolf, 

Assistant Secretary for Export 

Administration. 

[FR Doc. 2014–01613 Filed 1–30–14; 8:45 am] 

BILLING CODE 3510–JT–P 

DEPARTMENT OF HEALTH AND 

HUMAN SERVICES 

Food and Drug Administration 

21 CFR Parts 16 and 121 

[Docket No. FDA–2013–N–1425] 

Focused Mitigation Strategies To 

Protect Food Against Intentional 

Adulteration; Public Meetings on 

Proposed Rule 

AGENCY: Food and Drug Administration, 

HHS. 

ACTION: Notification of public meetings. 

SUMMARY: The Food and Drug 

Administration (FDA or we) is 

announcing two public meetings to 

discuss the proposed rule to require 

domestic and foreign food facilities that 

are required to register under the 

Federal Food, Drug, and Cosmetic Act 

(the FD&C Act) to address hazards that 

may be intentionally introduced by acts 

of terrorism. FDA proposed these 

requirements as part of our 

implementation of the FDA Food Safety 

Modernization Act (FSMA). The 

purpose of the public meetings is to 

inform the public of the provisions of 

the proposed rule and the rulemaking 

process (including how to submit 

comments, data, and other information 

to the rulemaking docket) as well as 

solicit oral stakeholder and public 

comments on the proposed rule and to 

respond to questions about the rule. 

DATES: See section II, ‘‘How to 

Participate in the Public Meeting’’ in the 

SUPPLEMENTARY INFORMATION section for 

dates and times of the public meetings, 

closing dates for advance registration, 

and information on deadlines for 

submitting either electronic or written 

comments to FDA’s Division of Dockets 

Management. 

ADDRESSES: See section II, ‘‘How to 

Participate in the Public Meeting’’ in the 

SUPPLEMENTARY INFORMATION section. 

FOR FURTHER INFORMATION CONTACT: For 

questions about registering for the 

meeting, to register by phone, or to 

submit a notice of participation by mail, 

FAX, or email, contact: Nick Cane, 

Nakamoto Group, Inc., 11820 Parklawn 

Dr., Suite 240, Rockville, MD 20852, 

240–357–1176, FAX: 301–468–6536, 

email: nick.cane@nakamotogroup.com. 

For general questions about the meeting; 

to request an opportunity to make an 

oral presentation at the public meeting; 

to submit the full text, comprehensive 

outline, or summary of an oral 

presentation; or for special 

accommodations due to a disability, 

contact: Juanita Yates, Center for Food 

Safety and Applied Nutrition (HFS– 

009), Food and Drug Administration, 

5100 Paint Branch Pkwy., College Park, 

MD 20740, 240–402–1731, email: 

Juanita.yates@fda.hhs.gov. 

SUPPLEMENTARY INFORMATION: 

I. Background 

FSMA (Pub. L. 111–353) was signed 

into law by President Obama on January 

4, 2011, to better protect public health 

by helping to ensure the safety and 

security of the food supply. FSMA 

amends the FD&C Act to establish the 

foundation of a modernized, preventionbased food safety system. Among other 

things, FSMA requires FDA to issue 

regulations requiring domestic and 

foreign food facilities that are required 

to register under the FD&C Act to 

address hazards that may be 

intentionally introduced by acts of 

terrorism. These food facilities would be 

required to identify and implement 

focused mitigation strategies to 

significantly minimize or prevent 

significant vulnerabilities identified at 

actionable process steps in a food 

operation. We expect the rulemaking 

would help to protect food from 

intentional adulteration caused by acts 

of terrorism. 

FDA is announcing additional public 

meetings so that the food industry, 

consumers, foreign governments, and 

other stakeholders can better evaluate 

and comment on the proposals. These 

meetings, following the College Park, 

MD, public event on February 20, are 

the final two public meetings FDA plans 

to hold during the proposed rule 

comment period. All three public 

meetings are intended to facilitate and 

support the proposed rule’s evaluation 

and commenting process. 

II. How To Participate in the Public 

Meetings 

FDA is holding the public meetings 

on ‘‘Focused Mitigation Strategies to 

Protect Food Against Intentional 

Adulteration’’ to: (1) Inform the public 

about the rulemaking process, including 

how to submit comments, data, and 

other information to the rulemaking 

docket; (2) respond to questions about 

the proposed rules; and (3) provide an 

opportunity for interested persons to 

make oral presentations. Due to limited 

space and time, FDA encourages all 

persons who wish to attend the 

meetings to register in advance. There is 

no fee to register for the public 

meetings, and registration will be on a 

first-come, first-served basis. Early 

registration is recommended because 

seating is limited. Onsite registration 

will be accepted, as space permits, after 

all preregistered attendees are seated. 

Those requesting an opportunity to 

make an oral presentation during the 

time allotted for public comment at the 

meetings are asked to submit a request 

and to provide the specific topic or 

issue to be addressed. Due to the 

anticipated high level of interest in 

presenting public comment and limited 

time available, FDA is allocating 3 

minutes to each speaker to make an oral 

presentation. Speakers will be limited to 

making oral remarks; there will not be 

an opportunity to display materials such 

as slide shows, videos, or other media 

during the meetings. If time permits, 

individuals or organizations that did not 

register in advance may be granted the 

opportunity to make an oral 

presentation. FDA would like to 

maximize the number of individuals 

who make a presentation at each 

meeting and will do our best to 

accommodate all persons who wish to 

make a presentation or express their 

opinions at a meeting. 

FDA encourages persons and groups 

who have similar interests to 

consolidate their information for 

presentation by a single representative. 

After reviewing the presentation 

requests, FDA will notify each 

participant before the meeting of the 

approximate time their presentation is 

scheduled to begin, and remind them of 

the presentation format (i.e., 3-minute 

oral presentation without visual media). 

While oral presentations from specific 

individuals and organizations will be 

necessarily limited due to time 

constraints during the public meetings, 

stakeholders may submit electronic or 

written comments discussing any issues 

of concern to the administrative record 

(the docket) for the rulemaking. All 

relevant data and documentation should 

be submitted with the comments to the 

relevant docket, i.e., Docket No. FDA– 

2013–N–1425. 

Table 1 of this document provides 

information on participation in the 

public meetings: 


emcdonald on DSK67QTVN1PROD with PROPOSALS-1