Federal Register / Vol. 75, No. 235 / Wednesday, December 8, 2010 / Rules and Regulations 76295 

proposed information collection burden 

‘‘for small business concerns with fewer 

than 25 employees,’’ pursuant to the 

Small Business Paperwork Relief Act of 

2002, Public Law 107–198, see 44 U.S.C. 

3506 (c)(4). The Commission will send 

a copy of this Report and Order in a 

report to be sent to Congress and the 

Government Accountability Office 

pursuant to the Congressional Review 

Act, see U.S.C. 801(a)(1)(A). 

List of Subjects in 47 CFR Part 73 

Radio, Radio broadcasting. 

■ For the reasons discussed in the 

preamble, the Federal Communications 

Commission amends 47 CFR Part 73 as 

follows: 

PART 73—RADIO BROADCAST 

SERVICES 

■ 1. The authority citation for Part 73 

continues to read as follows: 

Authority: 47 U.S.C. 154, 303, 334, 336. 

§ 73.202 [Amended] 

■ 2. Section 73.202(b), the Table of FM 

Allotments under Alaska, is amended 

by adding Fairbanks, Channels 224C2 

and 232C2. 

Federal Communications Commission. 

John A. Karousos, 

Assistant Chief, Audio Division, Media 

Bureau. 

[FR Doc. 2010–30851 Filed 12–7–10; 8:45 am] 

BILLING CODE 6712–01–P 

DEPARTMENT OF DEFENSE 

Defense Acquisition Regulations 

System 

48 CFR Parts 222 and 252 

RIN 0750–AG70 

Defense Federal Acquisition 

Regulation Supplement; Restrictions 

on the Use of Mandatory Arbitration 

Agreements (DFARS Case 2010–D004) 

AGENCY: Defense Acquisition 

Regulations System, Department of 

Defense (DoD). 

ACTION: Final rule. 

SUMMARY: DoD is converting an interim 

rule to a final rule with changes. The 

interim rule implemented section 8116 

of the DoD Appropriations Act for Fiscal 

Year 2010 to restrict the use of 

mandatory arbitration agreements when 

awarding contracts that exceed $1 

million when using Fiscal Year 2010 

funds appropriated or otherwise made 

available by the DoD Appropriations 

Act. It allows the Secretary of Defense 

to waive applicability to a particular 

contractor or subcontractor, if 

determined necessary to avoid harm to 

national security. 

DATES: Effective date: December 8, 2010. 

FOR FURTHER INFORMATION CONTACT: Mr. 

Julian E. Thrash, 703–602–0310. 

SUPPLEMENTARY INFORMATION: 

I. Background 

An interim rule was published in the 

Federal Register at 75 FR 27946 on May 

19, 2010, to implement section 8116 of 

the DoD Appropriations Act for Fiscal 

Year 2010 (Pub. L. 111–118). This 

section prohibits the use of funds 

appropriated or otherwise made 

available by the DoD Appropriations 

Act for Fiscal Year 2010 for any contract 

(including task or delivery orders and 

bilateral modifications adding new 

work) in excess of $1 million, if the 

contractor restricts its employees to 

arbitration for claims under title VII of 

the Civil Rights Act of 1964, or torts 

related to or arising out of sexual assault 

or harassment, including assault and 

battery, intentional infliction of 

emotional distress, false imprisonment, 

or negligent hiring, supervision, or 

retention (hereinafter the ‘‘covered 

areas’’). 

This rule does not apply to the 

acquisition of commercial items, 

including commercially available offthe-shelf items. After June 17, 2010, 

section 8116(b) requires the contractor 

to certify compliance by subcontractors. 

Additionally, enforcement of this rule 

does not affect the enforcement of other 

aspects of an agreement that is not 

related to the covered areas. 

This rule allows the Secretary of 

Defense to waive applicability to a 

particular contract or subcontract, if 

determined necessary to avoid harm to 

national security. 

The public comment period for the 

interim rule closed July 19, 2010. Four 

respondents submitted comments to the 

interim rule. A discussion of the 

comments and the changes made to the 

rule as a result of those comments is 

provided below. 

1. Definition of a ‘‘contractor.’’ One 

respondent objected to the interim rule’s 

application of the term ‘‘contractor’’ only 

to the entity that has the contract. In the 

Federal Register Notice, the term 

‘‘contractor’’ was used in one of several 

examples provided to help determine 

rule applicability. In the particular 

example, the term ‘‘contractor’’ was 

described as being narrowly applied 

only to the entity that has the contract. 

Unless a parent or subsidiary 

corporation is a party to the contract, 

they are not affected. The respondent 

stated that there was no justification for 

using such a narrow definition of a 

‘‘contractor’’ and there is good reason to 

use a broader definition. The 

respondent suggested that the narrow 

definition of ‘‘contractor’’ heightens the 

potential for contractors to establish 

shell companies to circumvent the law. 

The respondent stated that in past 

regulations, different contexts have led 

to different definitions of ‘‘contractor’’— 

sometimes broader, sometimes 

narrower, and that the definition used 

in the Federal Register is not absolutely 

determined by fixed precedent or other 

controlling authority. 

Response: Expanding the definition of 

‘‘contractor’’ to include parents and 

subsidiaries would require a change to 

the language of section 8116, which by 

its terms, is limited to employees of the 

contractor who was awarded the 

contract. The text of the statute does not 

provide a basis for making a broader 

application. With respect to the concern 

regarding the potential for the 

establishment of shell companies as a 

means of circumventing the 

requirement, such practices would be 

noted in responsibility determinations. 

In addition, guidance will be included 

in Procedures Guidance and 

Information which cautions contracting 

officers that, if they believe that, in fact, 

there is evidence that a contractor has 

created a shell company for the purpose 

of obviating section 8116, the 

contracting officer shall not award the 

contract and shall report such a 

condition to the Director, Defense 

Procurement and Acquisition Policy. 

2. Definition of a ‘‘covered contract.’’ 

One respondent recommended that 

252.222–7006, Restrictions on the Use 

of Mandatory Arbitration Agreements, 

be amended to include a definition of a 

‘‘covered contract.’’ 

Response: DoD does not agree. DFARS 

222.7401, Policy, and 222.7404, 

Contract Clause, provide sufficient 

detail on the use of 252.222–7006, 

Restrictions on the Use of Mandatory 

Arbitration Agreements, and make it 

clear what constitutes a ‘‘covered 

contract.’’ There is no additional benefit 

to be derived from repeating the 

language set forth at either 222.7401 or 

222.7404 in a separate definition of a 

‘‘covered contract.’’ 

3. Definition of ‘‘subcontract.’’ One 

respondent recommended that the final 

rule should delete the definition of 

‘‘subcontract’’ at 222.7401, Policy. The 

respondent stated that since FAR 44.101 

already defines the term ‘‘subcontract,’’ 

an additional definition is unnecessary. 

Response: DoD does not agree. It 

appears that the respondent incorrectly 

referenced 222.7401, Policy. The 


jlentini on DSKJ8SOYB1PROD with RULES
76296 Federal Register / Vol. 75, No. 235 / Wednesday, December 8, 2010 / Rules and Regulations 

interim rule at 222.7401 does not 

include a definition of a ‘‘subcontract.’’ 

It may be that the respondent was 

referring to the definition of 

‘‘subcontract’’ included in 252.222– 

7006(a), Restrictions on the Use of 

Mandatory Arbitration Agreements. DoD 

has determined that the definition 

included therein is appropriate because 

it makes clear that subcontracts are 

limited to those contracts placed by the 

contractor or higher-tier subcontractors 

that are specifically for the furnishing of 

supplies or services for the performance 

of the contract, not supplies or services 

a contractor or higher-tier subcontractor 

might purchase for other purposes. 

4. Secretary of Defense waiver 

process. Two respondents 

recommended that the final rule explain 

how the Secretary of Defense’s waiver 

authority is to be exercised. 

Response: DoD agrees. The waiver 

process and the conditions under which 

it is to be exercised and reported to 

Congress as set forth in section 8116(d) 

are set out in the final rule at 222.7403. 

In the waiver process, a waiver 

determination must set forth the 

grounds for the waiver with specificity, 

state any alternatives considered, and 

explain why each of the alternatives 

would not avoid harm to national 

security interests. DFARS 222.7403, 

Waiver, was revised to incorporate text 

on the particular requirements for the 

waiver determination previously 

reserved for the DFARS companion 

resource, Procedures, Guidance, and 

Information. The text was reordered and 

clarified by adding paragraph numbers. 

5. Applicability to task or delivery 

orders. One respondent recommended 

that the language at 222.7401(a), Policy, 

delete the reference to task or delivery 

orders and bilateral modifications 

adding new work. 

Response: DoD does not agree. In 

accordance with FAR 2.101, a contract 

includes all types of commitments that 

obligate the Government to an 

expenditure of appropriated funds. Task 

orders and delivery orders obligate 

funding, and if they utilize funds 

appropriated or otherwise made 

available by the DoD Appropriations 

Act for Fiscal Year 2010 that are in 

excess of $1 million, the section 8116 

restriction would apply. 

6. Modification to the contract for 

latest version of clause. One respondent 

recommended that contractors may 

request, and the contracting officers 

provide, a modification to the contract 

that incorporates the latest version of 

the clause with no consideration to be 

given to the contractor. 

Response: DoD does not agree. The 

contracting officer can agree to a 

bilateral modification of the contract in 

accordance with FAR 1.108(d), which 

requires consideration. However, the 

contracting officer has flexibility in 

determining what would represent 

adequate consideration. 

7. First-tier certification. One 

respondent recommended that the final 

rule should provide that prime 

contractors are required to certify only 

their first-tier subcontractors’ 

compliance with the rule. 

Response: DoD does not agree. DoD 

did not find language in the DoD 

Appropriations Act for Fiscal Year 2010 

that restricts coverage to subcontracts at 

the first-tier. The prohibition extends to 

‘‘covered subcontracts’’ at all tiers. 

8. Clause prescription. Two 

respondents recommended the addition 

of language to the prescription at 

222.7404 (now 222.7405) that would 

specify the applicability dates for the 

use of the clause. 

Response: DoD does not agree, since 

these dates are already set forth at 

222.7402(b). 

9. Certification. One respondent 

recommended that 252.222–7006, 

Restrictions on the Use of Mandatory 

Arbitration Agreements, be revised at 

paragraph (b)(2) by replacing the 

existing language ‘‘by signature of the 

contract, for contracts awarded after 

June 17, 2010’’ with the text ‘‘by 

signature of any covered contract 

awarded after June 17, 2010.’’ 

Response: DoD does not agree. The 

contracting officer will only include the 

clause in a covered contract, in 

accordance with the clause prescription 

at 222.7404. It is the signature of the 

particular contract in which the clause 

is included that binds the contractor. 

10. Scope of section 8116. Two 

respondents submitted comments 

requesting that the final rule clearly 

define the scope of section 8116’s 

applicability to how narrowly (or 

broadly) the anti-arbitration prohibition 

is intended to apply to employees and 

independent contractors of covered 

contractors and subcontractors. 

Response: DoD does not agree. The 

Federal Register Notice published at 75 

FR 27946 on May 19, 2010, made it 

clear that an entity or firm that does not 

have a contract in excess of $1 million 

appropriated or otherwise made 

available by the DoD Appropriations 

Act for Fiscal Year 2010 is not affected 

by the clause. The term ‘‘contractor’’ is 

narrowly applied only to the entity that 

has the contract. Unless a parent or 

subsidiary corporation is a party to the 

contract, the entity is not affected. 

Therefore, the anti-arbitration bar 

applies to any contractor employee of 

the entity, with respect to any covered 

claim. 

II. Executive Order 12866 

This is a significant regulatory action, 

and therefore, was subject to review 

under section 6(b) of Executive Order 

12866, Regulatory Planning and Review, 

dated September 30, 1993. This rule is 

not a major rule under 5 U.S.C. 804. 

III. Regulatory Flexibility Act 

DoD has prepared a final regulatory 

flexibility analysis consistent with 5 

U.S.C. 604. A copy of the analysis may 

be obtained from the point of contact 

specified herein. The analysis is 

summarized as follows: 

The objective of this rule is to 

implement section 8116 of the DoD 

Appropriations Act for Fiscal Year 2010 

(Pub. L. 111–118). The clause at 

252.222–7006, Restrictions on the Use 

of Mandatory Arbitration Agreements, 

prohibits the use of funds appropriated 

or otherwise made available by the DoD 

Appropriations Act for Fiscal Year 2010 

for any contract (including task or 

delivery orders and bilateral 

modifications adding new work) in 

excess of $1 million, if the contractor 

restricts its employees to arbitration for 

claims under title VII of the Civil Rights 

Act of 1964, or torts related to or arising 

out of sexual assault or harassment, 

including assault and battery, 

intentional infliction of emotional 

distress, false imprisonment, or 

negligent hiring, supervision, or 

retention. This rule does not apply to a 

contract for the acquisition of 

commercial items, including 

commercially available off-the-shelf 

items. It was published as an interim 

rule in the Federal Register at 75 FR 

27946 on May 19, 2010. No comments 

were received from small entities on the 

affected DFARS subpart with regard to 

small businesses. 

Most contractors should not be 

impacted unless they have a covered 

claim. A significant number of small 

businesses provide only commercial 

items to the Government, and this rule 

does not apply to that portion of the 

business community. We anticipate that 

there will be limited, if any, additional 

costs imposed on small businesses 

unless there is a covered claim filed 

against a particular contractor. 

IV. Paperwork Reduction Act 

The Paperwork Reduction Act does 

not apply because the rule does not 

impose any information collection 

requirements that require the approval 

of the Office of Management and Budget 

under 44 U.S.C. 3501, et seq. 


jlentini on DSKJ8SOYB1PROD with RULES
Federal Register / Vol. 75, No. 235 / Wednesday, December 8, 2010 / Rules and Regulations 76297 

List of Subjects in 48 CFR Parts 222 and 

252 

Government procurement. 

Clare M. Zebrowski, 

Editor, Defense Acquisition Regulations 

System. 

■ Accordingly, the interim rule 

amending 48 CFR parts 222 and 252, 

which was published in the Federal 

Register at 75 FR 27946 on May 19, 

2010, is adopted as final with the 

following changes: 

■ 1. The authority citation for 48 CFR 

parts 222, and 252 continues to read as 

follows: 

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

chapter 1. 

PART 222—APPLICATION OF LABOR 

LAWS TO GOVERNMENT 

ACQUISITIONS 

[Sections 222.7401 through 222.7404 

redesignated as sections 222.7402 

through 222.7405] 

■ 2. Redesignate sections 222.7401 

through 222.7404 as section 222.7402 

through 222.7405 respectively. 

■ 3. Add a new section 222.7401 to read 

as follows: 

222.7401 Definition. 

Covered subcontractor, as used in this 

subpart, is defined in the clause at 

252.222–7006, Restrictions on the Use 

of Mandatory Arbitration Agreements. 

■ 4. Revise newly designated sections 

222.7403 through 222.7405 to read as 

follows: 

222.7403 Applicability. 

This requirement does not apply to 

the acquisition of commercial items 

(including commercially available offthe-shelf items). 

222.7404 Waiver. 

(a) The Secretary of Defense may 

waive, in accordance with paragraphs 

(b) through (d) of this section, the 

applicability of paragraphs (a) or (b) of 

222.7402 to a particular contract or 

subcontract, if the Secretary or the 

Deputy Secretary personally determines 

that the waiver is necessary to avoid 

harm to national security interests of the 

United States, and that the term of the 

contract or subcontract is not longer 

than necessary to avoid such harm. 

(b) The waiver determination shall set 

forth the grounds for the waiver with 

specificity, stating any alternatives 

considered, and explain why each of the 

alternatives would not avoid harm to 

national security interests. 

(c) The contracting officer shall 

submit requests for waivers in 

accordance with agency procedures. 

(d) The Secretary of Defense will 

transmit the determination to Congress 

and simultaneously publish it in the 

Federal Register, not less than 15 

business days before the contract or 

subcontract addressed in the 

determination may be awarded. 

222.7405 Contract clause. 

Use the clause at 252.222–7006, 

Restrictions on the Use of Mandatory 

Arbitration Agreements, in all 

solicitations and contracts (including 

task or delivery orders and bilateral 

modifications adding new work) valued 

in excess of $1 million utilizing funds 

appropriated or otherwise made 

available by the Defense Appropriations 

Act for Fiscal Year 2010 (Pub. L. 111– 

118), except in contracts for the 

acquisition of commercial items, 

including commercially available offthe-shelf items. 

PART 252—SOLICITATION 

PROVISIONS AND CONTRACT 

CLAUSES 

■ 5. Amend section 252.222–7006 by: 

■ a. Revising the introductory text; 

■ b. Revising the clause date; and 

■ c. Revising paragraphs (b)(2) and (d) to 

read as follows: 

252.222–7006 Restrictions on the Use of 

Mandatory Arbitration Agreements. 

As prescribed in 222.7405, use the 

following clause: 

RESTRICTIONS ON THE USE OF 

MANDATORY ARBITRATION 

AGREEMENTS (DEC 2010) 

* * * * * 

(b) * * * 

(2) Certifies, by signature of the contract, 

that it requires each covered subcontractor to 

agree not to enter into, and not to take any 

action to enforce, any provision of any 

existing agreements, as described in 

paragraph (b)(1) of this clause, with respect 

to any employee or independent contractor 

performing work related to such subcontract. 

* * * * * 

(d) The Secretary of Defense may waive the 

applicability of the restrictions of paragraph 

(b) of this clause in accordance with Defense 

Federal Acquisition Regulation Supplement 

222.7404. 

(End of clause) 

[FR Doc. 2010–30669 Filed 12–7–10; 8:45 am] 

BILLING CODE 5001–08–P 

DEPARTMENT OF DEFENSE 

Defense Acquisition Regulations 

System 

48 CFR Parts 225 and 252 

RIN 0750–AG57 

Defense Federal Acquisition 

Regulation Supplement; Restriction on 

Ball and Roller Bearings (DFARS Case 

2006–D029) 

AGENCY: Defense Acquisition 

Regulations System, Department of 

Defense (DoD) 

ACTION: Final rule. 

SUMMARY: DoD is issuing a final rule 

amending the Defense Federal 

Acquisition Regulation Supplement 

(DFARS) to revise the domestic source 

restriction on acquisition of ball and 

roller bearings. This final rule, which 

implements the DoD annual 

appropriations act domestic source 

restrictions, requires that each ball or 

roller bearing be manufactured in the 

United States, its outlying areas, or 

Canada, and that the cost of the bearing 

components manufactured in the United 

States, its outlying areas, or Canada, 

shall exceed 50 percent of the total cost 

of the bearing components of that ball 

or roller bearing. 

DATES: Effective Date: December 8, 2010. 

FOR FURTHER INFORMATION CONTACT: Ms. 

Amy Williams, 703–602–0328. 

SUPPLEMENTARY INFORMATION: 

I. Background 

The current DFARS restriction on ball 

and roller bearings (225.7009) 

implemented two statutory restrictions: 

10 U.S.C. 2534(a)(5) and annual 

appropriations act restrictions. 10 U.S.C. 

2534(a)(5) required that all ball and 

roller bearings and bearing components, 

either as end items or components of 

end items, be wholly manufactured in 

the United States or Canada. The annual 

defense appropriations act restrictions 

require that all ball and roller bearings 

be produced by a domestic source and 

be of domestic origin. This restriction 

does not apply to the acquisition of 

commercial items, either as components 

or end products, unless the commercial 

bearings themselves are purchased as 

the end products. 

II. Discussion and Analysis 

A. Analysis of Public Comments 

DoD published a proposed rule in the 

Federal Register on May 7, 2010 (75 FR 

25167). The comment period closed on 

July 6, 2010. Three respondents 

submitted comments. 


jlentini on DSKJ8SOYB1PROD with RULES