This section of the FEDERAL REGISTER

contains regulatory documents having general

applicability and legal effect, most of which

are keyed to and codified in the Code of

Federal Regulations, which is published under

50 titles pursuant to 44 U.S.C. 1510.

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Rules and Regulations Federal Register

33615 

Vol. 76, No. 111 

Thursday, June 9, 2011 

DEPARTMENT OF ENERGY 

10 CFR Part 217 

[RIN 1901–AB28] 

Energy Priorities and Allocations 

System Regulations 

AGENCY: Department of Energy. 

ACTION: Final rule. 

SUMMARY: This final rule establishes 

standards and procedures by which the 

Department of Energy (DOE) may 

require that certain contracts or orders 

that promote the national defense be 

given priority over other contracts or 

orders. This rule also sets new standards 

and procedures by which DOE may 

allocate materials, services and facilities 

to promote the national defense. DOE is 

publishing this rule to comply with a 

requirement of the Defense Production 

Act Reauthorization of 2009 to publish 

regulations providing standards and 

procedures for prioritization of contracts 

and orders and for allocation of 

materials, services and facilities to 

promote the national defense. 

DATES: This rule is effective on July 11, 

2011. 

ADDRESSES: Written comments 

regarding the burden-hour estimates or 

other aspects of the collection-ofinformation requirements contained in 

this final rule may be submitted to Dr. 

Kenneth Friedman, Office of 

Infrastructure Security and Energy 

Restoration, U.S. Department of Energy, 

Room 1E–256, 1000 Independence 

Avenue, SW., Washington, DC 20585 

and to Christine Kymn at 

Christine_J._Kymn@omb.eop.gov. 

FOR FURTHER INFORMATION CONTACT: Dr. 

Kenneth Friedman, Office of 

Infrastructure Security and Energy 

Restoration, U.S. Department of Energy, 

1000 Independence Ave., SW., 

Washington, DC 20585; (202) 536–0379 

(GC–76EPAS@hq.doe.gov). Lot H. 

Cooke, Office of the General Counsel 

(GC–76), U.S. Department of Energy, 

1000 Independence Ave., SW., 

Washington, DC 20585; (202) 586–0503 

(GC–76EPAS@hq.doe.gov). 

SUPPLEMENTARY INFORMATION: 

Background 

This rule expands upon 10 CFR part 

216, the Department of Energy’s (DOE) 

Energy Priorities and Allocations 

System (EPAS) regulations. 

10 CFR Part 216 implements DOE’s 

administration of priorities and 

allocations actions in order to maximize 

domestic energy supplies pursuant to its 

authority under Section 101(c) of the 

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

Section 2071 et seq.) (DPA) as delegated 

by Executive Order 12919 (June 3, 

1994). These regulations, codified at 10 

CFR part 217, implement DOE’s 

administration of priorities and 

allocations in order to promote the 

national defense pursuant to its DPA 

authorities other than section 101(c). 

The EPAS has two principal 

components: Priorities and allocations. 

Under the priorities component, certain 

contracts between the government and 

private parties or between private 

parties for the production or delivery of 

industrial resources are required to be 

given priority over other contracts to 

facilitate expedited delivery in 

promotion of the U.S. national defense. 

Under the allocations component, 

materials, services, and facilities may be 

allocated to promote the national 

defense. For both components, the term 

‘‘national defense’’ is defined broadly 

and can include critical infrastructure 

protection and restoration, emergency 

preparedness, and recovery from natural 

disasters. 

On September 30, 2009, the Defense 

Production Act Reauthorization of 2009 

(Pub. L. 111–67, 123 Stat. 2006, 

September 30, 2009) (DPAR) was 

enacted. The DPAR requires all agencies 

to which the President has delegated 

priorities and allocations authority 

under Title I of the DPA to publish final 

rules establishing standards and 

procedures by which that authority will 

be used to promote the national defense 

in both emergency and nonemergency 

situations. The DPAR also requires all 

such agencies to consult ‘‘as appropriate 

and to the extent practicable to develop 

a consistent and unified Federal 

priorities and allocations system.’’ (123 

Stat. 2006, at 2009). This rule is one of 

several rules to be published to 

implement the provisions of the DPAR. 

The final rules of the agencies with 

DPAR authorities, which are the 

Departments of Commerce, Energy, 

Transportation, Health and Human 

Services, Defense, and Agriculture, will 

comprise the Federal Priorities and 

Allocations System. 

DOE published its proposed EPAS 

rule on July 16, 2010 (75 FR 41405). 

DOE solicited public comment on the 

proposed rule, but no comments were 

received. DOE now publishes this final 

rule pursuant to the provision of the 

DPAR noted above. DOE believes that 

its existing rules at 10 CFR part 216 

satisfy the DPAR’s requirement that 

agencies have standards and procedures 

in place to implement the DPA’s 101(c) 

authorities. However, in the interest of 

promoting a unified priorities and 

allocations system, and to implement 

DOE’s DPA authorities other than those 

set forth in section 101(c), DOE sets 

forth this EPAS rule. DOE’s EPAS 

provisions are consistent with the 

Federal Priorities and Allocations 

System regulations being issued by 

other agencies. The specific proposals in 

this rule are more fully described below. 

Analysis of the Priorities and 

Allocations System 

Subpart A 

Subpart A sets forth the purpose of 

the regulation. 

Section 217.1 states the purpose of the 

EPAS, which provides guidance and 

procedures for use of the DPA priorities 

and allocations authority (other than the 

authorities set forth in section 101(c)) 

with respect to all forms of energy 

necessary or appropriate to promote the 

national defense. 

Section 217.2 provides an overview of 

the EPAS program. This section 

describes briefly all aspects of the EPAS, 

including the resource jurisdiction of 

other agencies delegated priorities and 

allocations authority under the DPA. 

Subpart B 

The ‘‘Definitions’’ section appears in 

section 217.20 in Subpart B and 

provides definitions for the relevant 

regulatory terms. 

Subpart C 

Subpart C, titled ‘‘Placement of Rated 

Orders,’’ reflects the fact that the subpart 

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33616 Federal Register / Vol. 76, No. 111 / Thursday, June 9, 2011 / Rules and Regulations 

addresses only DOE’s priorities 

authorities; allocations authorities are 

addressed in Subpart E. 

Section 217.30, ‘‘Delegation of 

Authority,’’ describes fully the 

President’s delegations to the 

Department of Energy. It also describes 

the items subject to DOE’s jurisdiction 

and notes that the Department of 

Commerce has delegated certain 

authorities to DOE. This provision 

facilitates public understanding of the 

role that each delegate agency plays in 

the overall priorities and allocations 

system. 

Section 217.31, ‘‘Priority ratings,’’ 

describes the different levels of priority 

and program symbols used when rating 

an order. 

Section 217.32, ‘‘Elements of a rated 

order,’’ describes in detail what each 

rated order must include, consisting of 

the appropriate priority rating, delivery 

date information, signatures and 

required language. 

Language in section 217.33, 

‘‘Acceptance and rejection of rated 

orders,’’ details when orders placed by 

DOE may or must be accepted or 

rejected, and what the procedures are 

for both, including customer 

notification requirements and certain 

exceptions for emergency preparedness 

conditions. 

Specifically, persons must accept or 

reject rated orders for emergency 

response-related approved programs 

within two days of receipt of the order. 

DOE establishes the shorter time limit in 

which the recipient must respond to a 

rated order issued in connection with an 

emergency response related program 

because such programs would involve 

disaster assistance, emergency response 

or similar activities. DOE believes that 

the exigent circumstances inherent in 

such activities justify requiring a shorter 

response time. 

Section 217.34, ‘‘Preferential 

scheduling,’’ details procedures in cases 

where a person receives two or more 

conflicting rated orders. If a person is 

unable to resolve such a conflict, this 

section refers them to special priorities 

assistance as provided in sections 

217.40 through 217.44. 

Language in section 217.35, 

‘‘Extension of priority ratings,’’ requires 

a person to use rated orders with 

suppliers to obtain items or services 

needed to fill a rated order. This allows 

the priority rating to ‘‘extend’’ from 

contractor to subcontractor to supplier 

throughout the entire procurement 

chain. 

Section 217.36, ‘‘Changes or 

cancellations of priority ratings and 

rated orders,’’ provides procedures for 

changing or cancelling a rated order, 

both by DOE or other persons who 

placed the order. 

Section 217.37, ‘‘Use of rated orders,’’ 

lists what items must be rated. It also 

introduces the use of certain program 

identification symbols used when rated 

orders may be combined, and details the 

procedures for combining two or more 

rated orders, as well as rated and 

unrated orders. 

Section 217.38, ‘‘Limitations on 

placing rated orders,’’ prohibits the use 

of rated orders in a list of specific 

circumstances. This section also 

specifically excludes the use of rated 

orders for resources within the resource 

jurisdiction of agencies other than DOE 

with DPA priorities and allocations 

authority. 

Subpart D 

Subpart D ‘‘Special Priorities 

Assistance’’ describes instances in 

which DOE can provide assistance in 

resolving matters related to priority 

rated contracts and orders. 

Section 217.40 ‘‘General provisions’’ 

illustrates when and how DOE can 

provide special priorities assistance, 

and provides specific DOE points of 

contact and the form to be used for 

requesting such assistance. Special 

priorities assistance may generally be 

requested for any reason. 

Section 217.41, ‘‘Requests for priority 

rating authority,’’ directs persons to the 

Department of Energy or Department of 

Commerce (DOC), as appropriate, to 

request priority rating authority in the 

event a rated order is likely to be 

delayed. This section also identifies 

circumstances in which DOE or DOC, as 

appropriate, may authorize a person to 

place a priority rating on an order to a 

supplier in advance of the issuance of 

a rated prime contract, and lists factors 

the agencies will consider in deciding 

whether to grant this authority. 

Section 217.42, ‘‘Examples of 

assistance,’’ provides a number of 

examples of when special priorities 

assistance may be provided, although it 

may generally be provided for any 

reason. 

Section 217.43 lists the criteria for 

granting assistance, and section 217.44 

lists instances in which assistance may 

not be provided (i.e., to secure a price 

advantage). 

Subpart E 

Subpart E, ‘‘Allocation Actions,’’ 

provides the public with detailed 

information on the procedures 

governing allocations actions. 

Allocations actions would most likely 

be used in extreme circumstances, such 

as in response to a national emergency. 

Sections 217.50 through 217.52 

describe allocations and when and how 

allocation orders may be used. 

Specifically, allocation orders may be 

used only if priorities authority would 

not provide a sufficient supply of 

material, services or facilities for 

national defense requirements, or when 

use of priorities authority would cause 

a severe and prolonged disruption in the 

supply of resources available to support 

normal U.S. economic activities. 

Allocation orders would not be used to 

ration materials or services at the retail 

level. Allocation orders will be 

distributed equitably among the 

suppliers of the resource(s) being 

allocated and will not require any 

person to relinquish a disproportionate 

share of the civilian market. The 

standards set forth in sections 217.50 

through 217.52 to ensure that allocation 

orders will be used only in situations 

where the circumstances justify such 

orders. 

Section 217.53 describes the three 

types of allocation orders that DOE 

might issue, which are a set-aside, an 

allocation directive, and an allotment. A 

set-aside is an official action that 

requires a person to reserve resource 

capacity in anticipation of receipt of 

rated orders. An allocation directive is 

an official action that requires a person 

to take or refrain from taking certain 

actions in accordance with its 

provisions (an allocation directive can 

require a person to stop or reduce 

production of an item, prohibit the use 

of selected items, divert supply of one 

type of product to another, or to supply 

a specific quantity, size, shape, and type 

of an item within a specific time 

period). An allotment is an official 

action that specifies the maximum 

quantity of an item authorized for use in 

a specific program or application. DOE 

establishes these three types of 

allocation orders because it believes 

that, collectively they describe the types 

of actions that might be taken in any 

situation in which allocation is justified. 

Section 217.54, ‘‘Elements of an 

allocation order,’’ sets forth the 

minimum elements of an allocation 

order. Those elements are: 

(a) A detailed description of the 

required allocation action(s); 

(b) Specific start and end calendar 

dates for each required allocation 

action; 

(c) The written signature on a 

manually placed order, or the digital 

signature or name on an electronically 

placed order, of the Secretary of Energy. 

The signature or use of the name 

certifies that the order is authorized 

under this regulation and that the 

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Federal Register / Vol. 76, No. 111 / Thursday, June 9, 2011 / Rules and Regulations 33617 

requirements of this regulation are being 

followed; 

(d) A statement that reads in 

substance: ‘‘This is an allocation order 

certified for national defense use. [Insert 

the legal name of the person receiving 

the order] is required to comply with 

this order, in accordance with the 

provisions of the Energy Priorities and 

Allocations System regulation (10 CFR 

part 217), which is part of the Federal 

Priorities and Allocations System’’; and 

(e) A current copy of the Energy 

Priorities and Allocations System (10 

CFR part 217). 

DOE establishes these elements 

because it believes that they provide a 

proper balance between the need for 

standards to permit the public to 

recognize and understand an allocation 

order if one is issued, and the 

expectation that any actual allocation 

orders will have to be tailored to meet 

unforeseeable circumstances. The 

language of section 217.54 does not 

preclude DOE from including additional 

information in an allocation order if 

circumstances warrant doing so. 

Section 217.55, ‘‘Mandatory 

acceptance of allocation orders,’’ 

requires that an allocation order must be 

accepted if a person is capable of 

fulfilling the order. If a person is unable 

to comply fully with the required 

actions specific in an allocation order, 

the person must notify DOE 

immediately, explain the extent to 

which compliance is possible, and give 

reasons why full compliance is not 

possible. This section also states that a 

person may not discriminate against an 

allocation order in any manner, such as 

by charging higher prices or imposing 

terms and conditions different than 

what the person imposed on contracts 

or orders for the same resource(s) that 

were received prior to receiving the 

allocation order. DOE establishes 

section 217.55 to clarify that the limited 

circumstances and emergency situations 

that trigger issuance of an allocation 

order require immediate response to 

address the situation in an expedient 

fashion. 

Section 217.56, ‘‘Changes or 

cancellations of an allocation order’’ 

provides that an allocation order may be 

changed or cancelled by the Department 

of Energy. 

Subpart F 

Subpart F, ‘‘Official Actions,’’ 

provides the specific official actions the 

DOE may take to implement the 

provisions of this regulation. These 

official actions include Rating 

Authorizations, Directives, and 

Memoranda of Understanding. 

Section 217.61, ‘‘Rating 

Authorizations,’’ defines a rating 

authorization as an official action 

granting specific priority rating 

authority, and refers persons to section 

217.21 to request such priority rating 

authority. 

Section 217.62, ‘‘Directives,’’ defines a 

directive as an official action that 

requires a person to take or refrain from 

taking certain actions in accordance 

with its provisions. This section details 

directive compliance for the public. 

Section 217.63, ‘‘Letters and 

Memoranda of Understanding,’’ defines 

a letter or memorandum of 

understanding as an official action that 

may be issued in resolving special 

priorities assistance cases to reflect an 

agreement reached by all parties, and 

explains its use. 

Subpart G 

Subpart G, ‘‘Compliance,’’ provides 

DOE authority to enforce the 

administration of the DPA and other 

applicable statutes, this regulation, or an 

official action. This subpart provides 

that willful violations of the provisions 

of title I or section 705 of the DPA, this 

regulation, or a DOE official action, are 

criminal acts, punishable as provided in 

the DPA, and as set forth below in 

section 217.74. 

Section 217.71, ‘‘Audits and 

investigations,’’ details the procedures 

for official examinations of books, 

records, documents, and other writings 

and information to ensure that the 

provisions of the DPA and other 

applicable statutes, this regulation, and 

official actions have been properly 

followed. An audit or investigation may 

also include interviews and a systems 

evaluation to detect problems or failures 

in the implementation of this regulation. 

Section 217.72, ‘‘Compulsory 

process,’’ provides that if a person 

refuses to permit a duly authorized DOE 

representative to have access to 

necessary information, DOE may seek 

the institution of appropriate legal 

action, including ex parte application 

for an inspection warrant, in any forum 

of appropriate jurisdiction. 

Sections 217.73 and 217.74 both 

provide procedures for notification of 

failure to comply with the DPA, these 

regulations, or DOE official actions, and 

the violations, penalties and remedies 

that may result. 

Section 217.75, ‘‘Compliance 

Conflicts,’’ requires that persons 

immediately contact DOE should 

compliance with the DPA, these 

regulations, or an official action prevent 

a person from filling a rated order or 

from complying with another provision 

of the DPA and other applicable 

statutes, this regulation, or an official 

action. 

Subpart H 

Section 217.80, ‘‘Adjustments, 

Exceptions, and Appeals,’’ sets forth the 

procedures to request an adjustment or 

exception to the provisions of these 

regulations on the grounds of 

exceptional hardship or compliance 

would be contrary to the intent of the 

DPA. These requests must be submitted 

in writing to the DOE contact provided 

in this section. 

Section 217.81, ‘‘Appeals,’’ provides 

the procedures, timing and contact 

information for appealing a decision 

made on a request for relief in the 

previous section. 

Subpart I 

Subpart I, ‘‘Miscellaneous Provisions,’’ 

addresses a number of remaining issues, 

including protection against claims, 

records and reports, applicability issues, 

and communications. 

Section 217.90, ‘‘Protection against 

claims,’’ provides that a person shall not 

be held liable for damages or penalties 

for any act or failure to act resulting 

directly or indirectly from compliance 

with any part of this regulation, or an 

official action. 

Section 217.91, ‘‘Records and reports,’’ 

requires that persons make and preserve 

for at least three years, accurate and 

complete records of any transaction 

covered by this regulation or an official 

action. Various requirements and 

procedures regarding such records are 

provided in this section. The 

confidentiality provisions of the DPA 

governing the submission of information 

pursuant to the DPA and these 

regulations are also set forth. 

Section 217.92, ‘‘Applicability of this 

regulation and official actions,’’ provides 

the jurisdictional applicability of this 

regulation and official actions. 

Section 217.93, ‘‘Communications,’’ 

provides a DOE point of contact for all 

communications regarding this 

regulation. 

Public Comments Received 

DOE received no comments on its 

proposed EPAS regulation. DOE 

finalizes its proposed regulation without 

change. 

A. Review Under Executive Order 12866 

This rule has been determined to be 

significant for purposes of Executive 

Order 12866. 

B. Review Under the Regulatory 

Flexibility Act 

The Regulatory Flexibility Act (5 

U.S.C. 601 et seq.) requires preparation 

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33618 Federal Register / Vol. 76, No. 111 / Thursday, June 9, 2011 / Rules and Regulations 

of an initial regulatory flexibility 

analysis for any rule that by law must 

be proposed for public comment, unless 

the agency certifies that the rule, if 

promulgated, will not have a significant 

economic impact on a substantial 

number of small entities. As required by 

Executive Order 13272, ‘‘Proper 

Consideration of Small Entities in 

Agency Rulemaking,’’ 67 FR 53461 

(August 16, 2002), DOE published 

procedures and policies on February 19, 

2003, to ensure that the potential 

impacts of its rules on small entities are 

properly considered during the 

rulemaking process. 68 FR 7990. DOE 

has made its procedures and policies 

available on the Office of the General 

Counsel’s Web site, http:// 

www.gc.doe.gov. 

DOE reviewed today’s final rule under 

the provisions of the Regulatory 

Flexibility Act and the procedures and 

policies published on February 19, 

2003. 

Number of Small Entities 

Small entities include small 

businesses, small organizations and 

small governmental jurisdictions. For 

purposes of assessing the impacts of this 

final rule on small entities, a small 

business, as described in the Small 

Business Administration’s Table of 

Small Business Size Standards Matched 

to North American Industry 

Classification System Codes (August 

2008 Edition), has a maximum annual 

revenue of $ 33.5 million and a 

maximum of 1,500 employees (for some 

business categories, these number are 

lower). A small governmental 

jurisdiction is a government of a city, 

town, school district or special district 

with a population of less than 50,000. A 

small organization is any not-for-profit 

enterprise which is independently 

owned and operated and is not 

dominant in its field. 

This rule sets criteria under which 

DOE (or agencies to which DOE 

delegates authority) will authorize 

prioritization of certain orders or 

contracts as well as criteria under which 

DOE would issue orders allocating 

resources or production facilities. 

Because the rule affects commercial 

transactions, DOE believes that small 

organizations and small governmental 

jurisdictions are unlikely to be affected 

by this rule. To date, DOE has not 

exercised its existing allocations 

authority. As such, DOE has no basis on 

which to estimate the number of small 

businesses that may be affected by this 

rule. 

Impact 

The final rule has two principle 

components: Prioritization and 

allocation. Under prioritization, DOE or 

its Delegate Agency designates certain 

orders as one of two possible priority 

levels. Once so designated, such orders 

are referred to as ‘‘rated orders.’’ The 

recipient of a rated order must give it 

priority over an unrated order or an 

order with a lower priority rating. A 

recipient of a rated order may place 

orders at the same priority level with 

suppliers and subcontractors for 

supplies and services necessary to fulfill 

the recipient’s rated order and the 

suppliers and subcontractors must treat 

the request from the rated order 

recipient as a rated order with the same 

priority level as the original rated order. 

The rule does not require recipients to 

fulfill rated orders if the price or terms 

of sale are not consistent with the price 

or terms of sale of similar non-rated 

orders. The rule provides a defense from 

any liability for damages or penalties for 

actions taken in, or inactions required 

for, compliance with the rule. 

Although rated orders could require a 

firm to fill one order prior to filling 

another, they would not necessarily 

require a reduction in the total volume 

of orders. The regulations would also 

not require the recipient of a rated order 

to reduce prices or provide rated orders 

with more favorable terms than a similar 

non-rated order. Under these 

circumstances, the economic effects on 

the rated order recipient of substituting 

one order for another are likely to be 

mutually offsetting, resulting in no net 

economic impact. 

Allocations could be used to control 

the general distribution of materials or 

services in the civilian market. Specific 

allocation actions that DOE might take 

are as follows: 

Set-aside: An official action that requires a 

person to reserve resource capacity in 

anticipation of receipt of rated orders. 

Allocations directive: An official action 

that requires a person to take or refrain from 

taking certain actions in accordance with its 

provisions. An allocation directive can 

require a person to stop or reduce production 

of an item, prohibit the use of selected items, 

or divert supply of one type of product to 

another, or to supply a specific quantity, size, 

shape, and type of an item within a specific 

time period. 

Allotment: An official action that specifies 

the maximum quantity of an item authorized 

for use in a specific program or application. 

DOE has not yet taken any actions under 

its existing allocations authority, and 

any future allocations actions would be 

used only in extraordinary 

circumstances. As required by section 

101(b) of the Defense Production Act of 

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

section 2071), hereinafter ‘‘DPA,’’ and by 

Section 201(d) of Executive Order 12919 

of June 3, 1994, as amended, DOE may 

implement allocations only if the 

Secretary of Energy makes, and the 

President approves, a finding ‘‘(1) that 

the material [or service] is a scarce and 

critical material [or service] essential to 

the national defense, and (2) that the 

requirements of the national defense for 

such material [or service] cannot 

otherwise be met without creating a 

significant dislocation of the normal 

distribution of such material [or service] 

in the civilian market to such a degree 

as to create appreciable hardship.’’ The 

term ‘‘national defense’’ is defined to 

mean ‘‘programs for military and energy 

production or construction, military or 

critical infrastructure assistance to any 

foreign nation, homeland security, 

stockpiling, space, and any related 

activity. Such term includes emergency 

preparedness activities conducted 

pursuant to title IV of the Robert T. 

Stafford Disaster Relief and Emergency 

Assistance Act (42 U.S.C. section 5195 

et seq.) and critical infrastructure 

protection and restoration. 

Any allocation actions taken by DOE 

would also have to comply with Section 

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

section 2151(e)), which provides that 

‘‘small business concerns shall be 

accorded, to the extent practicable, a fair 

share of the such material [including 

services] in proportion to the share 

received by such business concerns 

under normal conditions, giving such 

special consideration as may be possible 

to emerging business concerns.’’ Such a 

provision may even provide an 

economic benefit to small businesses. 

Conclusion 

Although DOE cannot determine 

precisely the number of small entities 

that would be affected by this rule, DOE 

believes that the overall impact on such 

entities would not be significant. In 

most instances, rated contracts would be 

fulfilled in addition to other (unrated) 

contracts and could actually increase 

the total amount of business of the firm 

that receives a rated contract. 

Because allocations can be imposed 

only after an agency determination 

confirmed by the President, and because 

DOE has not yet used its allocations 

authority that has existed since passage 

of the Defense Production Act in 1950, 

one can expect allocations will be 

ordered only in particular 

circumstances. However, DOE believes 

that the requirement for a Presidential 

determination and the provisions of 

section 701 of the DPA indicate that any 

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Federal Register / Vol. 76, No. 111 / Thursday, June 9, 2011 / Rules and Regulations 33619 

impact on small business will not be 

significant. 

DOE received no comments on the 

certification or economic impacts of the 

rule at the proposed rule stage. 

Therefore, for the reasons set forth 

above, the Assistant General Counsel for 

Legislation, Regulation, and Energy 

Efficiency certifies that this rule will not 

have a significant economic impact on 

a substantial number of small entities. 

C. Review Under the Paperwork 

Reduction Act 

This rule contains a collection-ofinformation requirement subject to the 

Paperwork Reduction Act (PRA) and 

which has been approved by OMB 

under control number 1910–5159. This 

requirement has been submitted to OMB 

for approval. Public reporting burden 

for submission of Form DOE F 544 (05– 

11) is estimated to average 30 minutes 

per response, including the time for 

reviewing instructions, searching 

existing data sources, gathering and 

maintaining the data needed, and 

completing and reviewing the collection 

of information. 

Send comments on this burden 

estimate or any other aspects of the 

collection of information to Dr. Kenneth 

Friedman (see ADDRESSES), and by 

e-mail to 

Christine_J._Kymn@omb.eop.gov. 

Notwithstanding any other provision 

of the law, no person is required to 

respond to, nor shall any person be 

subject to a penalty for failure to comply 

with, a collection of information subject 

to the requirements of the PRA, unless 

that collection of information displays a 

currently valid OMB Control Number. 

D. Review Under Executive Order 13211 

Executive Order 13211, ‘‘Actions 

Concerning Regulations That 

Significantly Affect Energy Supply, 

Distribution, or Use,’’ 66 FR 28355 (May 

22, 2001) requires Federal agencies to 

prepare and submit to the Office of 

Information and Regulatory Affairs 

(OIRA) a Statement of Energy Effects for 

any proposed significant energy action. 

DOE determined that today’s rule, 

which sets forth procedures for 

compliance with the Defense 

Production Act (separate from the 

procedures set forth at 10 CFR part 216), 

is not a ‘‘significant energy action’’ 

within the meaning of Executive Order 

13211. The Administrator of the Office 

of Information and Regulatory Affairs at 

OMB also did not designate this action 

as a significant energy action. Therefore, 

DOE concludes that today’s rule is not 

a significant energy action within the 

meaning of Executive Order 13211 and 

has not prepared a Statement of Energy 

Effects. 

E. Review Under Executive Order 13132 

DOE reviewed this rule pursuant to 

Executive Order 13132, ‘‘Federalism,’’ 64 

FR 43255 (August 4, 1999), which 

imposes certain requirements on 

agencies formulating and implementing 

policies or regulations that preempt 

State law or that have federalism 

implications. DOE also reviewed this 

rule pursuant to DOE’s statement of 

policy describing the intergovernmental 

consultation process it will follow in the 

development of regulations that have 

federalism implications, 65 FR 13735 

(March 14, 2000). DOE determined that 

the rule would not have a substantial 

direct effect on the States, on the 

relationship between the National 

Government and the States, or on the 

distribution of power and 

responsibilities among the various 

levels of Government. 

F. Congressional Notification 

As required by 5 U.S.C. 801, DOE will 

submit to Congress a report regarding 

the issuance of today’s final rule prior 

to the effective date set forth at the 

outset of this rulemaking. The report 

will state that it has been determined 

that the rule is a ‘‘major rule’’ as defined 

by 5 U.S.C. 804(2). DOE also will submit 

the supporting analyses to the 

Comptroller General in the U.S. 

Government Accountability Office 

(GAO) and make them available to each 

House of Congress. 

G. Approval of the Office of the 

Secretary 

The Secretary of Energy has approved 

publication of this notice of final 

rulemaking. 

List of Subjects in 10 CFR Part 217 

Administrative practice and 

procedure, Business and industry, 

Government contracts, National defense, 

Reporting and recordkeeping 

requirements, Strategic and critical 

materials. 

Issued in Washington, DC on June 3, 2011. 

Patricia Hoffman, 

Assistant Secretary, Electricity Delivery and 

Energy Reliability. 

For the reasons stated in the 

preamble, DOE amends chapter II of 

title 10 of the Code of Federal 

Regulations, by adding a new part 217 

to read as set forth below: 

PART 217—ENERGY PRIORITIES AND 

ALLOCATIONS SYSTEM 

Subpart A—General 

Sec. 

217.1 Purpose of this part. 

217.2 Priorities and allocations authority. 

217.3 Program eligibility. 

Subpart B—Definitions 

217.20 Definitions. 

Subpart C—Placement of Rated Orders 

217.30 Delegation of authority. 

217.31 Priority ratings. 

217.32 Elements of a rated order. 

217.33 Acceptance and rejection of rated 

orders. 

217.34 Preferential scheduling. 

217.35 Extension of priority ratings. 

217.36 Changes or cancellations of priority 

ratings and rated orders. 

217.37 Use of rated orders. 

217.38 Limitations on placing rated orders. 

Subpart D—Special Priorities Assistance 

217.40 General provisions. 

217.41 Requests for priority rating 

authority. 

217.42 Examples of assistance. 

217.43 Criteria for assistance. 

217.44 Instances where assistance may not 

be provided. 

Subpart E—Allocation Actions 

217.50 Policy. 

217.51 General procedures. 

217.52 Controlling the general distribution 

of a material in the civilian market. 

217.53 Types of allocation orders. 

217.54 Elements of an allocation order. 

217.55 Mandatory acceptance of an 

allocation order. 

217.56 Changes or cancellations of an 

allocation order. 

Subpart F—Official Actions 

217.60 General provisions. 

217.61 Rating Authorizations. 

217.62 Directives. 

217.63 Letters and Memoranda of 

Understanding. 

Subpart G—Compliance 

217.70 General provisions. 

217.71 Audits and investigations. 

217.72 Compulsory process. 

217.73 Notification of failure to comply. 

217.74 Violations, penalties, and remedies. 

217.75 Compliance conflicts. 

Subpart H—Adjustments, Exceptions, and 

Appeals 

217.80 Adjustments or exceptions. 

217.81 Appeals. 

Subpart I—Miscellaneous Provisions 

217.90 Protection against claims. 

217.91 Records and reports. 

217.92 Applicability of this part and official 

actions. 

217.93 Communications. 

Appendix I to Part 217—Sample Form DOE 

F 544 (05–11) 

Authority: Defense Production Act of 1950, 

as amended, 50 U.S.C. App. 2061–2171; E.O. 

12919, as amended, (59 FR 29525, June 7, 

1994). 

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33620 Federal Register / Vol. 76, No. 111 / Thursday, June 9, 2011 / Rules and Regulations 

Subpart A—General 

§ 217.1 Purpose of this part. 

This part provides guidance and 

procedures for use of the Defense 

Production Act section 101(a) priorities 

and allocations authority with respect to 

all forms of energy necessary or 

appropriate to promote the national 

defense. (The guidance and procedures 

in this part are consistent with the 

guidance and procedures provided in 

other regulations that, as a whole, form 

the Federal Priorities and Allocations 

System. Guidance and procedures for 

use of the Defense Production Act 

priorities and allocations authority with 

respect to other types of resources are 

provided for: Food resources, food 

resource facilities, and the domestic 

distribution of farm equipment and 

commercial fertilizer; health resources; 

all forms of civil transportation (49 CFR 

Part 33); water resources; and all other 

materials, services, and facilities, 

including construction materials in the 

Defense Priorities and Allocations 

System (DPAS) regulation (15 CFR Part 

700).) Department of Energy (DOE) 

regulations at 10 CFR Part 216 describe 

and establish the procedures to be used 

by DOE in considering and making 

certain findings required by section 

101(c)(2)(A) of the Defense Production 

Act of 1950, as amended. 

§ 217.2 Priorities and allocations authority. 

(a) Section 201 of E.O. 12919 (59 FR 

29525) delegates the President’s 

authority under section 101 of the 

Defense Production Act to require 

acceptance and priority performance of 

contracts and orders (other than 

contracts of employment) to promote 

the national defense over performance 

of any other contracts or orders, and to 

allocate materials, services, and 

facilities as deemed necessary or 

appropriate to promote the national 

defense to: 

(1) The Secretary of Agriculture with 

respect to food resources, food resource 

facilities, and the domestic distribution 

of farm equipment and commercial 

fertilizer; 

(2) The Secretary of Energy with 

respect to all forms of energy; 

(3) The Secretary of Health and 

Human Services with respect to health 

resources; 

(4) The Secretary of Transportation 

with respect to all forms of civil 

transportation; 

(5) The Secretary of Defense with 

respect to water resources; and 

(6) The Secretary of Commerce for all 

other materials, services, and facilities, 

including construction materials. 

(b) Section 202 of E.O. 12919 states 

that the priorities and allocations 

authority delegated in section 201 of 

this order may be used only to support 

programs that have been determined in 

writing as necessary or appropriate to 

promote the national defense: 

(1) By the Secretary of Defense with 

respect to military production and 

construction, military assistance to 

foreign nations, stockpiling, outer space, 

and directly related activities; 

(2) By the Secretary of Energy with 

respect to energy production and 

construction, distribution and use, and 

directly related activities; and 

(3) By the Secretary of Homeland 

Security with respect to essential 

civilian needs supporting national 

defense, including civil defense and 

continuity of government and directly 

related activities. 

§ 217.3 Program eligibility. 

Certain programs to promote the 

national defense are eligible for 

priorities and allocations support. These 

include programs for military and 

energy production or construction, 

military or critical infrastructure 

assistance to any foreign nation, 

deploying and sustaining military 

forces, homeland security, stockpiling, 

space, and any directly related activity. 

Other eligible programs include 

emergency preparedness activities 

conducted pursuant to title VI of the 

Robert T. Stafford Disaster Relief and 

Emergency Assistance Act (42 U.S.C. 

5195 et seq.) and critical infrastructure 

protection and restoration. 

Subpart B—Definitions 

§ 217.20 Definitions. 

The following definitions pertain to 

all sections of this part: 

Allocation order means an official 

action to control the distribution of 

materials, services, or facilities for a 

purpose deemed necessary or 

appropriate to promote the national 

defense. 

Allotment means an official action 

that specifies the maximum quantity or 

use of a material, service, or facility 

authorized for a specific use to promote 

the national defense. 

Approved program means a program 

determined by the Secretary of Defense, 

the Secretary of Energy, or the Secretary 

of Homeland Security to be necessary or 

appropriate to promote the national 

defense, in accordance with section 202 

of E.O. 12919. 

Civil transportation includes 

movement of persons and property by 

all modes of transportation in interstate, 

intrastate, or foreign commerce within 

the United States, its territories and 

possessions, and the District of 

Columbia, and, without limitation, 

related public storage and warehousing, 

ports, services, equipment and facilities, 

such as transportation carrier shop and 

repair facilities. However, ‘‘civil 

transportation’’ shall not include 

transportation owned or controlled by 

the Department of Defense, use of 

petroleum and gas pipelines, and coal 

slurry pipelines used only to supply 

energy production facilities directly. As 

applied herein, ‘‘civil transportation’’ 

shall include direction, control, and 

coordination of civil transportation 

capacity regardless of ownership. 

Construction means the erection, 

addition, extension, or alteration of any 

building, structure, or project, using 

materials or products which are to be an 

integral and permanent part of the 

building, structure, or project. 

Construction does not include 

maintenance and repair. 

Critical infrastructure means any 

systems and assets, whether physical or 

cyber-based, so vital to the United States 

that the degradation or destruction of 

such systems and assets would have a 

debilitating impact on national security, 

including, but not limited to, national 

economic security and national public 

health or safety. 

Defense Production Act means the 

Defense Production Act of 1950, as 

amended (50 U.S.C. App. 2061 et seq.). 

Delegate Agency means a Federal 

government agency authorized by 

delegation from the Department of 

Energy to place priority ratings on 

contracts or orders needed to support 

approved programs. 

Directive means an official action that 

requires a person to take or refrain from 

taking certain actions in accordance 

with its provisions. 

Emergency preparedness means all 

those activities and measures designed 

or undertaken to prepare for or 

minimize the effects of a hazard upon 

the civilian population, to deal with the 

immediate emergency conditions which 

would be created by the hazard, and to 

effectuate emergency repairs to, or the 

emergency restoration of, vital utilities 

and facilities destroyed or damaged by 

the hazard. Such term includes the 

following: 

(1) Measures to be undertaken in 

preparation for anticipated hazards 

(including the establishment of 

appropriate organizations, operational 

plans, and supporting agreements, the 

recruitment and training of personnel, 

the conduct of research, the 

procurement and stockpiling of 

necessary materials and supplies, the 

provision of suitable warning systems, 

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Federal Register / Vol. 76, No. 111 / Thursday, June 9, 2011 / Rules and Regulations 33621 

the construction or preparation of 

shelters, shelter areas, and control 

centers, and, when appropriate, the 

nonmilitary evacuation of the civilian 

population). 

(2) Measures to be undertaken during 

a hazard (including the enforcement of 

passive defense regulations prescribed 

by duly established military or civil 

authorities, the evacuation of personnel 

to shelter areas, the control of traffic and 

panic, and the control and use of 

lighting and civil communications). 

(3) Measures to be undertaken 

following a hazard (including activities 

for fire fighting, rescue, emergency 

medical, health and sanitation services, 

monitoring for specific dangers of 

special weapons, unexploded bomb 

reconnaissance, essential debris 

clearance, emergency welfare measures, 

and immediately essential emergency 

repair or restoration of damaged vital 

facilities). 

Energy means all forms of energy 

including petroleum, gas (both natural 

and manufactured), electricity, solid 

fuels (including all forms of coal, coke, 

coal chemicals, coal liquification, and 

coal gasification), and atomic energy, 

and the production, conservation, use, 

control, and distribution (including 

pipelines) of all of these forms of 

energy. 

Facilities includes all types of 

buildings, structures, or other 

improvements to real property (but 

excluding farms, churches or other 

places of worship, and private dwelling 

houses), and services relating to the use 

of any such building, structure, or other 

improvement. 

Farm equipment means equipment, 

machinery, and repair parts 

manufactured for use on farms in 

connection with the production or 

preparation for market use of food 

resources. 

Fertilizer means any product or 

combination of products that contain 

one or more of the elements—nitrogen, 

phosphorus, and potassium—for use as 

a plant nutrient. 

Food resources means all 

commodities and products, simple, 

mixed, or compound, or complements 

to such commodities or products, that 

are capable of being ingested by either 

human beings or animals, irrespective of 

other uses to which such commodities 

or products may be put, at all stages of 

processing from the raw commodity to 

the products thereof in vendible form 

for human or animal consumption. 

‘‘Food resources’’ also means all 

starches, sugars, vegetable and animal or 

marine fats and oils, cotton, tobacco, 

wool, mohair, hemp, flax fiber, and 

naval stores, but does not mean any 

such material after it loses its identity as 

an agricultural commodity or 

agricultural product. 

Food resource facilities means plants, 

machinery, vehicles (including onfarm), and other facilities required for 

the production, processing, distribution, 

and storage (including cold storage) of 

food resources, livestock and poultry 

feed and seed, and for the domestic 

distribution of farm equipment and 

fertilizer (excluding transportation 

thereof). 

Hazard means an emergency or 

disaster resulting from: 

(1) A natural disaster; or 

(2) An accidental or human-caused 

event. 

Health resources means drugs, 

biological products, medical devices, 

diagnostics, materials, facilities, health 

supplies, services and equipment 

required to diagnose, prevent the 

impairment of, improve, or restore the 

physical or mental health conditions of 

the population. 

Homeland security includes efforts— 

(1) To prevent terrorist attacks within 

the United States; 

(2) To reduce the vulnerability of the 

United States to terrorism; 

(3) To minimize damage from a 

terrorist attack in the United States; and 

(4) To recover from a terrorist attack 

in the United States. 

Industrial resources means all 

materials, services, and facilities, 

including construction materials, but 

not including: food resources, food 

resource facilities, and the domestic 

distribution of farm equipment and 

commercial fertilizer; all forms of 

energy; health resources; all forms of 

civil transportation; and water 

resources. 

Item means any raw, in process, or 

manufactured material, article, 

commodity, supply, equipment, 

component, accessory, part, assembly, 

or product of any kind, technical 

information, process, or service. 

Maintenance and repair and 

operating supplies or MRO— 

(1) ‘‘Maintenance’’ is the upkeep 

necessary to continue any plant, facility, 

or equipment in working condition. 

(2) ‘‘Repair’’ is the restoration of any 

plant, facility, or equipment to working 

condition when it has been rendered 

unsafe or unfit for service by wear and 

tear, damage, or failure of parts. 

(3) ‘‘Operating supplies’’ are any 

resources carried as operating supplies 

according to a person’s established 

accounting practice. Operating supplies 

may include hand tools and expendable 

tools, jigs, dies, fixtures used on 

production equipment, lubricants, 

cleaners, chemicals and other 

expendable items. 

(4) MRO does not include items 

produced or obtained for sale to other 

persons or for installation upon or 

attachment to the property of another 

person, or items required for the 

production of such items; items needed 

for the replacement of any plant, 

facility, or equipment; or items for the 

improvement of any plant, facility, or 

equipment by replacing items which are 

still in working condition with items of 

a new or different kind, quality, or 

design. 

Materials includes— 

(1) Any raw materials (including 

minerals, metals, and advanced 

processed materials), commodities, 

articles, components (including critical 

components), products, and items of 

supply; and 

(2) Any technical information or 

services ancillary to the use of any such 

materials, commodities, articles, 

components, products, or items. 

(3) Natural resources such as oil and 

gas. 

National defense means programs for 

military and energy production or 

construction, military or critical 

infrastructure assistance to any foreign 

nation, homeland security, stockpiling, 

space, and any directly related activity. 

Such term includes emergency 

preparedness activities conducted 

pursuant to title VI of the Robert T. 

Stafford Disaster Relief and Emergency 

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

and critical infrastructure protection 

and restoration. 

Official action means an action taken 

by the Department of Energy or another 

resource agency under the authority of 

the Defense Production Act, E.O. 12919, 

and this part or another regulation 

under the Federal Priorities and 

Allocations System. Such actions 

include the issuance of Rating 

Authorizations, Directives, Set Asides, 

Allotments, Letters of Understanding, 

Memoranda of Understanding, Demands 

for Information, Inspection 

Authorizations, and Administrative 

Subpoenas. 

Person includes an individual, 

corporation, partnership, association, or 

any other organized group of persons, or 

legal successor or representative thereof, 

or any State or local government or 

agency thereof. 

Rated order means a prime contract, 

a subcontract, or a purchase order in 

support of an approved program issued 

in accordance with the provisions of 

this part. 

Resource agency means any agency 

delegated priorities and allocations 

authority as specified in § 217.2. 

Secretary means the Secretary of 

Energy. 

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33622 Federal Register / Vol. 76, No. 111 / Thursday, June 9, 2011 / Rules and Regulations 

Services includes any effort that is 

needed for or incidental to— 

(1) The development, production, 

processing, distribution, delivery, or use 

of an industrial resource or a critical 

technology item; 

(2) The construction of facilities; 

(3) The movement of individuals and 

property by all modes of civil 

transportation; or 

(4) Other national defense programs 

and activities. 

Set-aside means an official action that 

requires a person to reserve materials, 

services, or facilities capacity in 

anticipation of the receipt of rated 

orders. 

Stafford Act means title VI 

(Emergency Preparedness) of the Robert 

T. Stafford Disaster Relief and 

Emergency Assistance Act, as amended 

(42 U.S.C. 5195–5197g). 

Water resources means all usable 

water, from all sources, within the 

jurisdiction of the United States, which 

can be managed, controlled, and 

allocated to meet emergency 

requirements. 

Subpart C—Placement of Rated Orders 

§ 217.30 Delegations of authority. 

(a) The priorities and allocations 

authorities of the President under Title 

I of the Defense Production Act with 

respect to all forms of energy have been 

delegated to the Secretary of Energy 

under E.O. 12919 of June 3, 1994 (59 FR 

29525). 

(b) The Department of Commerce has 

delegated authority to the Department of 

Energy to provide for extension of 

priority ratings for ‘‘industrial 

resources,’’ as provided in § 261.35 of 

this part, to support rated orders for all 

forms of energy. 

§ 217.31 Priority ratings. 

(a) Levels of priority. 

(1) There are two levels of priority 

established by the Energy Priorities and 

Allocations System regulations, 

identified by the rating symbols ‘‘DO’’ 

and ‘‘DX’’. 

(2) All DO-rated orders have equal 

priority with each other and take 

precedence over unrated orders. All DXrated orders have equal priority with 

each other and take precedence over 

DO-rated orders and unrated orders. 

(For resolution of conflicts among rated 

orders of equal priority, see § 217.34(c).) 

(3) In addition, a Directive regarding 

priority treatment for a given item 

issued by the Department of Energy for 

that item takes precedence over any DXrated order, DO-rated order, or unrated 

order, as stipulated in the Directive. (For 

a full discussion of Directives, see 

§ 217.62.) 

(b) Program identification symbols. 

Program identification symbols indicate 

which approved program is being 

supported by a rated order. The list of 

currently approved programs and their 

identification symbols are listed in 

Schedule 1, set forth as an Appendix to 

15 CFR part 700. For example, DO–F3 

identifies a domestic energy 

construction program. Additional 

programs may be approved under the 

procedures of E.O. 12919 at any time. 

Program identification symbols do not 

connote any priority. 

(c) Priority ratings. A priority rating 

consists of the rating symbol—DO or 

DX—and the program identification 

symbol, such as F1, F2, or F3. Thus, a 

contract for a domestic energy 

construction program will contain a 

DO–F3 or DX–F3 priority rating. 

§ 217.32 Elements of a rated order. 

Each rated order must include: 

(a) The appropriate priority rating 

(e.g. DO–F1 or DX–F1) 

(b) A required delivery date or dates. 

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

possible’’ do not constitute a delivery 

date. A ‘‘requirements contract’’, ‘‘basic 

ordering agreement’’, ‘‘prime vendor 

contract’’, or similar procurement 

document bearing a priority rating may 

contain no specific delivery date or 

dates and may provide for the 

furnishing of items or service from time 

to time or within a stated period against 

specific purchase orders, such as ‘‘calls’’, 

‘‘requisitions’’, and ‘‘delivery orders’’. 

These purchase orders must specify a 

required delivery date or dates and are 

to be considered as rated as of the date 

of their receipt by the supplier and not 

as of the date of the original 

procurement document; 

(c) The written signature on a 

manually placed order, or the digital 

signature or name on an electronically 

placed order, of an individual 

authorized to sign rated orders for the 

person placing the order. The signature 

or use of the name certifies that the 

rated order is authorized under this part 

and that the requirements of this part 

are being followed; and 

(d)(1) A statement that reads in 

substance: 

This is a rated order certified for 

national defense use, and you are 

required to follow all the provisions of 

the Energy Priorities and Allocations 

System regulation at 10 CFR part 217. 

(2) If the rated order is placed in 

support of emergency preparedness 

requirements and expedited action is 

necessary and appropriate to meet these 

requirements, the following sentences 

should be added following the 

statement set forth in paragraph (d)(1) of 

this section: 

This rated order is placed for the 

purpose of emergency preparedness. It 

must be accepted or rejected within 2 

days after receipt of the order if (1) The 

order is issued in response to a hazard 

that has occurred; or 

(2) If the order is issued to prepare for 

an imminent hazard, as specified in 

EPAS Section 217.33(e), 10 CFR 

217.33(e). 

§ 217.33 Acceptance and rejection of rated 

orders. 

(a) Mandatory acceptance. (1) Except 

as otherwise specified in this section, a 

person shall accept every rated order 

received and must fill such orders 

regardless of any other rated or unrated 

orders that have been accepted. 

(2) A person shall not discriminate 

against rated orders in any manner such 

as by charging higher prices or by 

imposing different terms and conditions 

than for comparable unrated orders. 

(b) Mandatory rejection. Unless 

otherwise directed by the Department of 

Energy for a rated order involving all 

forms of energy: 

(1) A person shall not accept a rated 

order for delivery on a specific date if 

unable to fill the order by that date. 

However, the person must inform the 

customer of the earliest date on which 

delivery can be made and offer to accept 

the order on the basis of that date. 

Scheduling conflicts with previously 

accepted lower rated or unrated orders 

are not sufficient reason for rejection 

under this section. 

(2) A person shall not accept a DOrated order for delivery on a date which 

would interfere with delivery of any 

previously accepted DO- or DX-rated 

orders. However, the person must offer 

to accept the order based on the earliest 

delivery date otherwise possible. 

(3) A person shall not accept a DXrated order for delivery on a date which 

would interfere with delivery of any 

previously accepted DX-rated orders, 

but must offer to accept the order based 

on the earliest delivery date otherwise 

possible. 

(4) If a person is unable to fill all of 

the rated orders of equal priority status 

received on the same day, the person 

must accept, based upon the earliest 

delivery dates, only those orders which 

can be filled, and reject the other orders. 

For example, a person must accept order 

A requiring delivery on December 15 

before accepting order B requiring 

delivery on December 31. However, the 

person must offer to accept the rejected 

orders based on the earliest delivery 

dates otherwise possible. 

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Federal Register / Vol. 76, No. 111 / Thursday, June 9, 2011 / Rules and Regulations 33623 

(c) Optional rejection. Unless 

otherwise directed by the Department of 

Energy for a rated order involving all 

forms of energy, rated orders may be 

rejected in any of the following cases as 

long as a supplier does not discriminate 

among customers: 

(1) If the person placing the order is 

unwilling or unable to meet regularly 

established terms of sale or payment; 

(2) If the order is for an item not 

supplied or for a service not capable of 

being performed; 

(3) If the order is for an item or service 

produced, acquired, or provided only 

for the supplier’s own use for which no 

orders have been filled for two years 

prior to the date of receipt of the rated 

order. If, however, a supplier has sold 

some of these items or provided similar 

services, the supplier is obligated to 

accept rated orders up to that quantity 

or portion of production or service, 

whichever is greater, sold or provided 

within the past two years; 

(4) If the person placing the rated 

order, other than the U.S. Government, 

makes the item or performs the service 

being ordered; 

(5) If acceptance of a rated order or 

performance against a rated order would 

violate any other regulation, official 

action, or order of the Department of 

Energy, issued under the authority of 

the Defense Production Act or another 

relevant statute. 

(d) Customer notification 

requirements. (1) Except as provided in 

this paragraph, a person must accept or 

reject a rated order in writing or 

electronically within fifteen (15) 

working days after receipt of a DO rated 

order and within ten (10) working days 

after receipt of a DX rated order. If the 

order is rejected, the person must give 

reasons in writing or electronically for 

the rejection. 

(2) If a person has accepted a rated 

order and subsequently finds that 

shipment or performance will be 

delayed, the person must notify the 

customer immediately, give the reasons 

for the delay, and advise of a new 

shipment or performance date. If 

notification is given verbally, written or 

electronic confirmation must be 

provided within five (5) working days. 

(e) Exception for emergency 

preparedness conditions. If the rated 

order is placed for the purpose of 

emergency preparedness, a person must 

accept or reject a rated order and 

transmit the acceptance or rejection in 

writing or in an electronic format within 

2 days after receipt of the order if: 

(1) The order is issued in response to 

a hazard that has occurred; or 

(2) The order is issued to prepare for 

an imminent hazard. 

§ 217.34 Preferential scheduling. 

(a) A person must schedule 

operations, including the acquisition of 

all needed production items or services, 

in a timely manner to satisfy the 

delivery requirements of each rated 

order. Modifying production or delivery 

schedules is necessary only when 

required delivery dates for rated orders 

cannot otherwise be met. 

(b) DO-rated orders must be given 

production preference over unrated 

orders, if necessary to meet required 

delivery dates, even if this requires the 

diversion of items being processed or 

ready for delivery or services being 

performed against unrated orders. 

Similarly, DX-rated orders must be 

given preference over DO-rated orders 

and unrated orders. (Examples: If a 

person receives a DO-rated order with a 

delivery date of June 3 and if meeting 

that date would mean delaying 

production or delivery of an item for an 

unrated order, the unrated order must 

be delayed. If a DX-rated order is 

received calling for delivery on July 15 

and a person has a DO-rated order 

requiring delivery on June 2 and 

operations can be scheduled to meet 

both deliveries, there is no need to alter 

production schedules to give any 

additional preference to the DX-rated 

order.) 

(c) Conflicting rated orders. 

(1) If a person finds that delivery or 

performance against any accepted rated 

orders conflicts with the delivery or 

performance against other accepted 

rated orders of equal priority status, the 

person shall give precedence to the 

conflicting orders in the sequence in 

which they are to be delivered or 

performed (not to the receipt dates). If 

the conflicting orders are scheduled to 

be delivered or performed on the same 

day, the person shall give precedence to 

those orders that have the earliest 

receipt dates. 

(2) If a person is unable to resolve 

rated order delivery or performance 

conflicts under this section, the person 

should promptly seek special priorities 

assistance as provided in §§ 217.40 

through 217.44. If the person’s customer 

objects to the rescheduling of delivery 

or performance of a rated order, the 

customer should promptly seek special 

priorities assistance as provided in 

§§ 217.40 through 217.44. For any rated 

order against which delivery or 

performance will be delayed, the person 

must notify the customer as provided in 

§ 217.33. 

(d) If a person is unable to purchase 

needed production items in time to fill 

a rated order by its required delivery 

date, the person must fill the rated order 

by using inventoried production items. 

A person who uses inventoried items to 

fill a rated order may replace those 

items with the use of a rated order as 

provided in § 217.37(b). 

§ 217.35 Extension of priority ratings. 

(a) A person must use rated orders 

with suppliers to obtain items or 

services needed to fill a rated order. The 

person must use the priority rating 

indicated on the customer’s rated order, 

except as otherwise provided in this 

part or as directed by the Department of 

Energy. For example, if a person is in 

receipt of a DO–F1 rated order for an 

electric power sub-station, and needs to 

purchase a transformer for its 

manufacture, that person must use a 

DO–F1 rated order to obtain the needed 

transformer. 

(b) The priority rating must be 

included on each successive order 

placed to obtain items or services 

needed to fill a customer’s rated order. 

This continues from contractor to 

subcontractor to supplier throughout the 

entire procurement chain. 

§ 217.36 Changes or cancellations of 

priority ratings and rated orders. 

(a) The priority rating on a rated order 

may be changed or canceled by: 

(1) An official action of the 

Department of Energy; or 

(2) Written notification from the 

person who placed the rated order. 

(b) If an unrated order is amended so 

as to make it a rated order, or a DO 

rating is changed to a DX rating, the 

supplier must give the appropriate 

preferential treatment to the order as of 

the date the change is received by the 

supplier. 

(c) An amendment to a rated order 

that significantly alters a supplier’s 

original production or delivery schedule 

shall constitute a new rated order as of 

the date of its receipt. The supplier must 

accept or reject the amended order 

according to the provisions of § 217.33. 

(d) The following amendments do not 

constitute a new rated order: a change 

in shipping destination; a reduction in 

the total amount of the order; an 

increase in the total amount of the order 

which has negligible impact upon 

deliveries; a minor variation in size or 

design; or a change which is agreed 

upon between the supplier and the 

customer. 

(e) If a person no longer needs items 

or services to fill a rated order, any rated 

orders placed with suppliers for the 

items or services, or the priority rating 

on those orders, must be canceled. 

(f) When a priority rating is added to 

an unrated order, or is changed or 

canceled, all suppliers must be 

promptly notified in writing. 

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§ 217.37 Use of rated orders. 

(a) A person must use rated orders to 

obtain: 

(1) Items which will be physically 

incorporated into other items to fill 

rated orders, including that portion of 

such items normally consumed or 

converted into scrap or by-products in 

the course of processing; 

(2) Containers or other packaging 

materials required to make delivery of 

the finished items against rated orders; 

(3) Services, other than contracts of 

employment, needed to fill rated orders; 

and 

(4) MRO needed to produce the 

finished items to fill rated orders. 

(b) A person may use a rated order to 

replace inventoried items (including 

finished items) if such items were used 

to fill rated orders, as follows: 

(1) The order must be placed within 

90 days of the date of use of the 

inventory. 

(2) A DO rating and the program 

identification symbol indicated on the 

customer’s rated order must be used on 

the order. A DX rating may not be used 

even if the inventory was used to fill a 

DX-rated order. 

(3) If the priority ratings on rated 

orders from one customer or several 

customers contain different program 

identification symbols, the rated orders 

may be combined. In this case, the 

program identification symbol ‘‘H1’’ 

must be used (i.e., DO–H1). 

(c) A person may combine DX- and 

DO-rated orders from one customer or 

several customers if the items or 

services covered by each level of 

priority are identified separately and 

clearly. If different program 

identification symbols are indicated on 

those rated orders of equal priority, the 

person must use the program 

identification symbol ‘‘H1’’ (i.e., DO–H1 

or DX–H1). 

(d) Combining rated and unrated 

orders. 

(1) A person may combine rated and 

unrated order quantities on one 

purchase order provided that: 

(i) The rated quantities are separately 

and clearly identified; and 

(ii) The four elements of a rated order, 

as required by § 217.32, are included on 

the order with the statement required in 

§ 217.32(d) modified to read in 

substance: 

This purchase order contains rated 

order quantities certified for national 

defense use, and you are required to 

follow all applicable provisions of the 

Energy Priorities and Allocations 

System regulations at 10 CFR part 217 

only as it pertains to the rated 

quantities. 

(2) A supplier must accept or reject 

the rated portion of the purchase order 

as provided in § 217.33 and give 

preferential treatment only to the rated 

quantities as required by this part. This 

part may not be used to require 

preferential treatment for the unrated 

portion of the order. 

(3) Any supplier who believes that 

rated and unrated orders are being 

combined in a manner contrary to the 

intent of this part or in a fashion that 

causes undue or exceptional hardship 

may submit a request for adjustment or 

exception under § 217.80. 

(e) A person may place a rated order 

for the minimum commercially 

procurable quantity even if the quantity 

needed to fill a rated order is less than 

that minimum. However, a person must 

combine rated orders as provided in 

paragraph (c) of this section, if possible, 

to obtain minimum procurable 

quantities. 

(f) A person is not required to place 

a priority rating on an order for less than 

$50,000, or one-half of the Simplified 

Acquisition Threshold (as established in 

the Federal Acquisition Regulation 

(FAR) (see FAR section 2.101) or in 

other authorized acquisition regulatory 

or management systems) whichever 

amount is greater, provided that 

delivery can be obtained in a timely 

fashion without the use of the priority 

rating. 

§ 217.38 Limitations on placing rated 

orders. 

(a) General limitations. 

(1) A person may not place a DO- or 

DX-rated order unless entitled to do so 

under this part. 

(2) Rated orders may not be used to 

obtain: 

(i) Delivery on a date earlier than 

needed; 

(ii) A greater quantity of the item or 

services than needed, except to obtain a 

minimum procurable quantity. Separate 

rated orders may not be placed solely 

for the purpose of obtaining minimum 

procurable quantities on each order; 

(iii) Items or services in advance of 

the receipt of a rated order, except as 

specifically authorized by the 

Department of Energy (see § 217.41(c) 

for information on obtaining 

authorization for a priority rating in 

advance of a rated order); 

(iv) Items that are not needed to fill 

a rated order, except as specifically 

authorized by the Department of Energy, 

or as otherwise permitted by this part; 

or 

(v) Any of the following items unless 

specific priority rating authority has 

been obtained from the Department of 

Energy, a Delegate Agency, or the 

Department of Commerce, as 

appropriate: 

(A) Items for plant improvement, 

expansion, or construction, unless they 

will be physically incorporated into a 

construction project covered by a rated 

order; and 

(B) Production or construction 

equipment or items to be used for the 

manufacture of production equipment. 

[For information on requesting priority 

rating authority, see § 217.21.] 

(vi) Any items related to the 

development of chemical or biological 

warfare capabilities or the production of 

chemical or biological weapons, unless 

such development or production has 

been authorized by the President or the 

Secretary of Defense. 

(b) Jurisdictional limitations. 

(1) Unless authorized by the resource 

agency with jurisdiction, the provisions 

of this part are not applicable to the 

following resources: 

(i) Food resources, food resource 

facilities, and the domestic distribution 

of farm equipment and commercial 

fertilizer (Resource agency with 

jurisdiction—Department of 

Agriculture); 

(ii) Health resources (Resource agency 

with jurisdiction—Department of Health 

and Human Services); 

(iii) All forms of civil transportation 

(Resource agency with jurisdiction— 

Department of Transportation); 

(iv) Water resources (Resource agency 

with jurisdiction—Department of 

Defense/U.S. Army Corps of Engineers); 

and 

(v) Communications services 

(Resource agency with jurisdiction— 

National Communications System under 

E. O. 12472 of April 3, 1984). 

Subpart D—Special Priorities 

Assistance 

§ 217.40 General provisions. 

(a) The EPAS is designed to be largely 

self-executing. However, from time-totime production or delivery problems 

will arise. In this event, a person should 

immediately contact the Office of 

Infrastructure Security and Energy 

Restoration, for guidance or assistance 

(Contact the Senior Policy Advisor for 

the Office of Electricity Delivery and 

Energy Reliability, as listed in § 217.93). 

If the problem(s) cannot otherwise be 

resolved, special priorities assistance 

should be sought from the Department 

of Energy through the Office of 

Infrastructure Security and Energy 

Restoration (Contact the Senior Policy 

Advisor for the Office of Electricity 

Delivery and Energy Reliability, as 

listed in § 217.93). If the Department of 

Energy is unable to resolve the problem 

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or to authorize the use of a priority 

rating and believes additional assistance 

is warranted, the Department of Energy 

may forward the request to another 

agency with resource jurisdiction, as 

appropriate, for action. Special 

priorities assistance is provided to 

alleviate problems that do arise. 

(b) Special priorities assistance is 

available for any reason consistent with 

this part. Generally, special priorities 

assistance is provided to expedite 

deliveries, resolve delivery conflicts, 

place rated orders, locate suppliers, or 

to verify information supplied by 

customers and vendors. Special 

priorities assistance may also be used to 

request rating authority for items that 

are not normally eligible for priority 

treatment. 

(c) A request for special priorities 

assistance or priority rating authority 

must be submitted on Form DOE F 544 

(05–11) (OMB control number 1910– 

5159) to the Senior Policy Advisor for 

the Office of Electricity Delivery and 

Energy Reliability, as listed in § 217.93. 

Form DOE F 544 (05–11) may be 

obtained from the Department of Energy 

or a Delegate Agency. A sample Form 

DOE F 544 (05–11) is attached at 

Appendix I to this part. 

§ 217.41 Requests for priority rating 

authority. 

(a) If a rated order is likely to be 

delayed because a person is unable to 

obtain items or services not normally 

rated under this part, the person may 

request the authority to use a priority 

rating in ordering the needed items or 

services. 

(b) Rating authority for production or 

construction equipment. 

(1) A request for priority rating 

authority for production or construction 

equipment must be submitted to the 

U.S. Department of Commerce on Form 

BIS–999. 

(2) When the use of a priority rating 

is authorized for the procurement of 

production or construction equipment, a 

rated order may be used either to 

purchase or to lease such equipment. 

However, in the latter case, the 

equipment may be leased only from a 

person engaged in the business of 

leasing such equipment or from a 

person willing to lease rather than sell. 

(c) Rating authority in advance of a 

rated prime contract. (1) In certain cases 

and upon specific request, the 

Department of Energy, in order to 

promote the national defense, may 

authorize or request the Department of 

Commerce to authorize, as appropriate, 

a person to place a priority rating on an 

order to a supplier in advance of the 

issuance of a rated prime contract. In 

these instances, the person requesting 

advance rating authority must obtain 

sponsorship of the request from the 

Department of Energy or the appropriate 

Delegate Agency. The person shall also 

assume any business risk associated 

with the placing of rated orders in the 

event the rated prime contract is not 

issued. 

(2) The person must state the 

following in the request: 

It is understood that the authorization 

of a priority rating in advance of our 

receiving a rated prime contract from 

the Department of Energy and our use 

of that priority rating with our suppliers 

in no way commits the Department of 

Energy, the Department of Commerce, or 

any other government agency to enter 

into a contract or order or to expend 

funds. Further, we understand that the 

Federal Government shall not be liable 

for any cancellation charges, 

termination costs, or other damages that 

may accrue if a rated prime contract is 

not eventually placed and, as a result, 

we must subsequently cancel orders 

placed with the use of the priority rating 

authorized as a result of this request. 

(3) In reviewing requests for rating 

authority in advance of a rated prime 

contract, the Department of Energy or 

the Department of Commerce, as 

appropriate, will consider, among other 

things, the following criteria: 

(i) The probability that the prime 

contract will be awarded; 

(ii) The impact of the resulting rated 

orders on suppliers and on other 

authorized programs; 

(iii) Whether the contractor is the sole 

source; 

(iv) Whether the item being produced 

has a long lead time; 

(v) The time period for which the 

rating is being requested. 

(4) The Department of Energy or the 

Department of Commerce, as 

appropriate, may require periodic 

reports on the use of the rating authority 

granted under paragraph (c) of this 

section. 

(5) If a rated prime contract is not 

issued, the person shall promptly notify 

all suppliers who have received rated 

orders pursuant to the advanced rating 

authority that the priority rating on 

those orders is cancelled. 

§ 217.42 Examples of assistance. 

(a) While special priorities assistance 

may be provided for any reason in 

support of this part, it is usually 

provided in situations where: 

(1) A person is experiencing difficulty 

in obtaining delivery against a rated 

order by the required delivery date; or 

(2) A person cannot locate a supplier 

for an item or service needed to fill a 

rated order. 

(b) Other examples of special 

priorities assistance include: 

(1) Ensuring that rated orders receive 

preferential treatment by suppliers; 

(2) Resolving production or delivery 

conflicts between various rated orders; 

(3) Assisting in placing rated orders 

with suppliers; 

(4) Verifying the urgency of rated 

orders; and 

(5) Determining the validity of rated 

orders. 

§ 217.43 Criteria for assistance. 

Requests for special priorities 

assistance should be timely, i.e., the 

request has been submitted promptly 

and enough time exists for the 

Department of Energy, the Delegate 

Agency, or the Department of Commerce 

for industrial resources to effect a 

meaningful resolution to the problem, 

and must establish that: 

(a) There is an urgent need for the 

item; and 

(b) The applicant has made a 

reasonable effort to resolve the problem. 

§ 217.44 Instances where assistance may 

not be provided. 

Special priorities assistance is 

provided at the discretion of the 

Department of Energy, the Delegate 

Agencies, or the Department of 

Commerce when it is determined that 

such assistance is warranted to meet the 

objectives of this part. Examples where 

assistance may not be provided include 

situations when a person is attempting 

to: 

(a) Secure a price advantage; 

(b) Obtain delivery prior to the time 

required to fill a rated order; 

(c) Gain competitive advantage; 

(d) Disrupt an industry apportionment 

program in a manner designed to 

provide a person with an unwarranted 

share of scarce items; or 

(e) Overcome a supplier’s regularly 

established terms of sale or conditions 

of doing business. 

Subpart—Allocation Actions 

§ 217.50 Policy. 

(a) It is the policy of the Federal 

Government that the allocations 

authority under title I of the Defense 

Production Act may: 

(1) Only be used when there is 

insufficient supply of a material, 

service, or facility to satisfy national 

defense supply requirements through 

the use of the priorities authority or 

when the use of the priorities authority 

would cause a severe and prolonged 

disruption in the supply of materials, 

services, or facilities available to 

support normal U.S. economic 

activities; and 

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(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. 

§ 217.51 General procedures. 

When the Department of Energy plans 

to execute its allocations authority to 

address a supply problem within its 

resource jurisdiction, the Department 

shall develop a plan that includes the 

following information: 

(a) A copy of the written 

determination made, in accordance with 

section 202 of E.O. 12919, that the 

program or programs that would be 

supported by the allocation action are 

necessary or appropriate to promote the 

national defense; 

(b) A detailed description of the 

situation to include any unusual events 

or circumstances that have created the 

requirement for an allocation action; 

(c) A statement of the specific 

objective(s) of the allocation action; 

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

facilities to be allocated; 

(e) A list of the sources of the 

materials, services, or facilities that will 

be subject to the allocation action; 

(f) A detailed description of the 

provisions that will be included in the 

allocation orders, including the type(s) 

of allocation orders, the percentages or 

quantity of capacity or output to be 

allocated for each purpose, and the 

duration of the allocation action (i.e., 

anticipated start and end dates); 

(g) An evaluation of the impact of the 

proposed allocation action on the 

civilian market; and 

(h) Proposed actions, if any, to 

mitigate disruptions to civilian market 

operations. 

§ 217.52 Controlling the general 

distribution of a material in the civilian 

market. 

No allocation action by the 

Department of Energy may be used to 

control the general distribution of a 

material in the civilian market, unless 

the Secretary of the Department of 

Energy has: 

(a) Made a written finding that: 

(1) Such material is a scarce and 

critical material essential to the national 

defense, and 

(2) The requirements of the national 

defense for such material cannot 

otherwise be met without creating a 

significant dislocation of the normal 

distribution of such material in the 

civilian market to such a degree as to 

create appreciable hardship; 

(b) Submitted the finding for the 

President’s approval through the 

Assistant to the President for National 

Security Affairs; and 

(c) The President has approved the 

finding. 

§ 217.53 Types of allocation orders. 

There are three types of allocation 

orders available for communicating 

allocation actions. These are: 

(a) Set-aside: an official action that 

requires a person to reserve materials, 

services, or facilities capacity in 

anticipation of the receipt of rated 

orders; 

(b) Directive: an official action that 

requires a person to take or refrain from 

taking certain actions in accordance 

with its provisions. For example, a 

directive can require a person to: stop or 

reduce production of an item; prohibit 

the use of selected materials, services, or 

facilities; or divert the use of materials, 

services, or facilities from one purpose 

to another; and 

(c) Allotment: an official action that 

specifies the maximum quantity of a 

material, service, or facility authorized 

for a specific use. 

§ 217.54 Elements of an allocation order. 

Each allocation order must include: 

(a) A detailed description of the 

required allocation action(s); 

(b) Specific start and end calendar 

dates for each required allocation 

action; 

(c) The written signature on a 

manually placed order, or the digital 

signature or name on an electronically 

placed order, of the Secretary of Energy. 

The signature or use of the name 

certifies that the order is authorized 

under this part and that the 

requirements of this part are being 

followed; 

(d) A statement that reads in 

substance: ‘‘This is an allocation order 

certified for national defense use. [Insert 

the legal name of the person receiving 

the order] is required to comply with 

this order, in accordance with the 

provisions of the Energy Priorities and 

Allocations System regulation (10 CFR 

part 217), which is part of the Federal 

Priorities and Allocations System’’; and 

(e) A current copy of the Energy 

Priorities and Allocations System 

regulation (10 CFR part 217). 

§ 217.55 Mandatory acceptance of an 

allocation order. 

(a) Except as otherwise specified in 

this section, a person shall accept and 

comply with every allocation order 

received. 

(b) A person shall not discriminate 

against an allocation order in any 

manner such as by charging higher 

prices for materials, services, or 

facilities covered by the order or by 

imposing terms and conditions for 

contracts and orders involving allocated 

materials, services, or facilities that 

differ from the person’s terms and 

conditions for contracts and orders for 

the materials, services, or facilities prior 

to receiving the allocation order. 

(c) If a person is unable to comply 

fully with the required action(s) 

specified in an allocation order, the 

person must notify the Department of 

Energy immediately, explain the extent 

to which compliance is possible, and 

give the reasons why full compliance is 

not possible. If notification is given 

verbally, written or electronic 

confirmation must be provided within 

five (5) working days. Such notification 

does not release the person from 

complying with the order to the fullest 

extent possible, until the person is 

notified by the Department of Energy 

that the order has been changed or 

cancelled. 

§ 217.56 Changes or cancellations of an 

allocation order. 

An allocation order may be changed 

or canceled by an official action of the 

Department of Energy. 

Subpart F—Official Actions 

§ 217.60 General provisions. 

(a) The Department of Energy may 

take specific official actions to 

implement the provisions of this part. 

(b) These official actions include 

Rating Authorizations, Directives, and 

Memoranda of Understanding. 

§ 217.61 Rating Authorizations. 

(a) A Rating Authorization is an 

official action granting specific priority 

rating authority that: 

(1) Permits a person to place a priority 

rating on an order for an item or service 

not normally ratable under this part; or 

(2) Authorizes a person to modify a 

priority rating on a specific order or 

series of contracts or orders. 

(b) To request priority rating 

authority, see § 217.41. 

§ 217.62 Directives. 

(a) A Directive is an official action 

that requires a person to take or refrain 

from taking certain actions in 

accordance with its provisions. 

(b) A person must comply with each 

Directive issued. However, a person 

may not use or extend a Directive to 

obtain any items from a supplier, unless 

expressly authorized to do so in the 

Directive. 

(c) A Priorities Directive takes 

precedence over all DX-rated orders, 

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DO-rated orders, and unrated orders 

previously or subsequently received, 

unless a contrary instruction appears in 

the Directive. 

(d) An Allocations Directive takes 

precedence over all Priorities Directives, 

DX-rated orders, DO-rated orders, and 

unrated orders previously or 

subsequently received, unless a contrary 

instruction appears in the Directive. 

§ 217.63 Letters and Memoranda of 

Understanding. 

(a) A Letter or Memorandum of 

Understanding is an official action that 

may be issued in resolving special 

priorities assistance cases to reflect an 

agreement reached by all parties (the 

Department of Energy, the Department 

of Commerce (if applicable), a Delegate 

Agency (if applicable), the supplier, and 

the customer). 

(b) A Letter or Memorandum of 

Understanding is not used to alter 

scheduling between rated orders, to 

authorize the use of priority ratings, to 

impose restrictions under this part. 

Rather, Letters or Memoranda of 

Understanding are used to confirm 

production or shipping schedules that 

do not require modifications to other 

rated orders. 

Subpart G—Compliance 

§ 217.70 General provisions. 

(a) The Department of Energy may 

take specific official actions for any 

reason necessary or appropriate to the 

enforcement or the administration of the 

Defense Production Act and other 

applicable statutes, this part, or an 

official action. Such actions include 

Administrative Subpoenas, Demands for 

Information, and Inspection 

Authorizations. 

(b) Any person who places or receives 

a rated order or an allocation order must 

comply with the provisions of this part. 

(c) Willful violation of the provisions 

of title I or section 705 of the Defense 

Production Act and other applicable 

statutes, this part, or an official action 

of the Department of Energy is a 

criminal act, punishable as provided in 

the Defense Production Act and other 

applicable statutes, and as set forth in 

§ 217.74 of this part. 

§ 217.71 Audits and investigations. 

(a) Audits and investigations are 

official examinations of books, records, 

documents, other writings and 

information to ensure that the 

provisions of the Defense Production 

Act and other applicable statutes, this 

part, and official actions have been 

properly followed. An audit or 

investigation may also include 

interviews and a systems evaluation to 

detect problems or failures in the 

implementation of this part. 

(b) When undertaking an audit or 

investigation, the Department of Energy 

shall: 

(1) Define the scope and purpose in 

the official action given to the person 

under investigation, and 

(2) Have ascertained that the 

information sought or other adequate 

and authoritative data are not available 

from any Federal or other responsible 

agency. 

(c) In administering this part, the 

Department of Energy may issue the 

following documents that constitute 

official actions: 

(1) Administrative Subpoenas. An 

Administrative Subpoena requires a 

person to appear as a witness before an 

official designated by the Department of 

Energy to testify under oath on matters 

of which that person has knowledge 

relating to the enforcement or the 

administration of the Defense 

Production Act and other applicable 

statutes, this part, or official actions. An 

Administrative Subpoena may also 

require the production of books, papers, 

records, documents and physical objects 

or property. 

(2) Demands for Information. A 

Demand for Information requires a 

person to furnish to a duly authorized 

representative of the Department of 

Energy any information necessary or 

appropriate to the enforcement or the 

administration of the Defense 

Production Act and other applicable 

statutes, this part, or official actions. 

(3) Inspection Authorizations. An 

Inspection Authorization requires a 

person to permit a duly authorized 

representative of the Department of 

Energy to interview the person’s 

employees or agents, to inspect books, 

records, documents, other writings, and 

information, including electronicallystored information, in the person’s 

possession or control at the place where 

that person usually keeps them or 

otherwise, and to inspect a person’s 

property when such interviews and 

inspections are necessary or appropriate 

to the enforcement or the administration 

of the Defense Production Act and 

related statutes, this part, or official 

actions. 

(d) The production of books, records, 

documents, other writings, and 

information will not be required at any 

place other than where they are usually 

kept if, prior to the return date specified 

in the Administrative Subpoena or 

Demand for Information, a duly 

authorized official of the Department of 

Energy is furnished with copies of such 

material that are certified under oath to 

be true copies. As an alternative, a 

person may enter into a stipulation with 

a duly authorized official of Department 

of Energy as to the content of the 

material. 

(e) An Administrative Subpoena, 

Demand for Information, or Inspection 

Authorization, shall include the name, 

title, or official position of the person to 

be served, the evidence sought to be 

adduced, and its general relevance to 

the scope and purpose of the audit, 

investigation, or other inquiry. If 

employees or agents are to be 

interviewed; if books, records, 

documents, other writings, or 

information are to be produced; or if 

property is to be inspected; the 

Administrative Subpoena, Demand for 

Information, or Inspection 

Authorization will describe them with 

particularity. 

(f) Service of documents shall be 

made in the following manner: 

(1) Service of a Demand for 

Information or Inspection Authorization 

shall be made personally, or by Certified 

Mail-Return Receipt Requested at the 

person’s last known address. Service of 

an Administrative Subpoena shall be 

made personally. Personal service may 

also be made by leaving a copy of the 

document with someone at least 18 

years old at the person’s last known 

dwelling or place of business. 

(2) Service upon other than an 

individual may be made by serving a 

partner, corporate officer, or a managing 

or general agent authorized by 

appointment or by law to accept service 

of process. If an agent is served, a copy 

of the document shall be mailed to the 

person named in the document. 

(3) Any individual 18 years of age or 

over may serve an Administrative 

Subpoena, Demand for Information, or 

Inspection Authorization. When 

personal service is made, the individual 

making the service shall prepare an 

affidavit as to the manner in which 

service was made and the identity of the 

person served, and return the affidavit, 

and in the case of subpoenas, the 

original document, to the issuing officer. 

In case of failure to make service, the 

reasons for the failure shall be stated on 

the original document. 

§ 217.72 Compulsory process. 

(a) If a person refuses to permit a duly 

authorized representative of the 

Department of Energy to have access to 

any premises or source of information 

necessary to the administration or the 

enforcement of the Defense Production 

Act and other applicable statutes, this 

part, or official actions, the Department 

of Energy representative may seek 

compulsory process. Compulsory 

process means the institution of 

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33628 Federal Register / Vol. 76, No. 111 / Thursday, June 9, 2011 / Rules and Regulations 

appropriate legal action, including ex 

parte application for an inspection 

warrant or its equivalent, in any forum 

of appropriate jurisdiction. 

(b) Compulsory process may be 

sought in advance of an audit, 

investigation, or other inquiry, if, in the 

judgment of the Senior Policy Advisor 

for the Office of Electricity Delivery and 

Energy Reliability, as listed in § 217.93, 

there is reason to believe that a person 

will refuse to permit an audit, 

investigation, or other inquiry, or that 

other circumstances exist which make 

such process desirable or necessary. 

§ 217.73 Notification of failure to comply. 

(a) At the conclusion of an audit, 

investigation, or other inquiry, or at any 

other time, the Department of Energy 

may inform the person in writing where 

compliance with the requirements of the 

Defense Production Act and other 

applicable statutes, this part, or an 

official action were not met. 

(b) In cases where the Department of 

Energy determines that failure to 

comply with the provisions of the 

Defense Production Act and other 

applicable statutes, this part, or an 

official action was inadvertent, the 

person may be informed in writing of 

the particulars involved and the 

corrective action to be taken. Failure to 

take corrective action may then be 

construed as a willful violation of the 

Defense Production Act and other 

applicable statutes, this part, or an 

official action. 

§ 217.74 Violations, penalties, and 

remedies. 

(a) Willful violation of the provisions 

of title I or sections 705 or 707 of the 

Defense Production Act, the priorities 

provisions of the Selective Service Act 

and related statutes (when applicable), 

this part, or an official action, is a crime 

and upon conviction, a person may be 

punished by fine or imprisonment, or 

both. The maximum penalties provided 

by the Defense Production Act are a 

$10,000 fine, or one year in prison, or 

both. The maximum penalties provided 

by the Selective Service Act and related 

statutes are a $50,000 fine, or three years 

in prison, or both. 

(b) The Government may also seek an 

injunction from a court of appropriate 

jurisdiction to prohibit the continuance 

of any violation of, or to enforce 

compliance with, the Defense 

Production Act, this part, or an official 

action. 

(c) In order to secure the effective 

enforcement of the Defense Production 

Act and other applicable statutes, this 

part, and official actions, the following 

are prohibited: 

(1) No person may solicit, influence or 

permit another person to perform any 

act prohibited by, or to omit any act 

required by, the Defense Production Act 

and other applicable statutes, this part, 

or an official action. 

(2) No person may conspire or act in 

concert with any other person to 

perform any act prohibited by, or to 

omit any act required by, the Defense 

Production Act and other applicable 

statutes, this part, or an official action. 

(3) No person shall deliver any item 

if the person knows or has reason to 

believe that the item will be accepted, 

redelivered, held, or used in violation of 

the Defense Production Act and other 

applicable statutes, this part, or an 

official action. In such instances, the 

person must immediately notify the 

Department of Energy that, in 

accordance with this provision, delivery 

has not been made. 

§ 217.75 Compliance conflicts. 

If compliance with any provision of 

the Defense Production Act and other 

applicable statutes, this part, or an 

official action would prevent a person 

from filling a rated order or from 

complying with another provision of the 

Defense Production Act and other 

applicable statutes, this part, or an 

official action, the person must 

immediately notify the Department of 

Energy for resolution of the conflict. 

Subpart H—Adjustments, Exceptions, 

and Appeals 

§ 217.80 Adjustments or exceptions. 

(a) A person may submit a request to 

the Senior Policy Advisor for the Office 

of Electricity Delivery and Energy 

Reliability, as listed in § 217.93, for an 

adjustment or exception on the ground 

that: 

(1) A provision of this part or an 

official action results in an undue or 

exceptional hardship on that person not 

suffered generally by others in similar 

situations and circumstances; or 

(2) The consequences of following a 

provision of this part or an official 

action is contrary to the intent of the 

Defense Production Act and other 

applicable statutes, or this part. 

(b) Each request for adjustment or 

exception must be in writing and 

contain a complete statement of all the 

facts and circumstances related to the 

provision of this part or official action 

from which adjustment is sought and a 

full and precise statement of the reasons 

why relief should be provided. 

(c) The submission of a request for 

adjustment or exception shall not 

relieve any person from the obligation of 

complying with the provision of this 

part or official action in question while 

the request is being considered unless 

such interim relief is granted in writing 

by the Senior Policy Advisor for the 

Office of Electricity Delivery and Energy 

Reliability, as listed in § 217.93. 

(d) A decision of the Senior Policy 

Advisor for the Office of Electricity 

Delivery and Energy Reliability, as 

listed in § 217.93, under this section 

may be appealed to the Office of 

Infrastructure Security and Energy 

Restoration (For information on the 

appeal procedure, see § 217.81.) 

§ 217.81 Appeals. 

(a) Any person who has had a request 

for adjustment or exception denied by 

the Senior Policy Advisor for the Office 

of Electricity Delivery and Energy 

Reliability, as listed in section 217.93, 

under § 217.80, may appeal to the Office 

of Infrastructure Security and Energy 

Restoration who shall review and 

reconsider the denial. 

(b)(1) Except as provided in this 

paragraph (b)(2), an appeal must be 

received by the Office of Infrastructure 

Security and Energy Restoration no later 

than 45 days after receipt of a written 

notice of denial from the Senior Policy 

Advisor for the Office of Electricity 

Delivery and Energy Reliability, as 

listed in § 217.93. After this 45-day 

period, an appeal may be accepted at 

the discretion of the Office of 

Infrastructure Security and Energy 

Restoration for good cause shown. 

(2) For requests for adjustment or 

exception involving rated orders placed 

for the purpose of emergency 

preparedness (see 217.14(d)), an appeal 

must be received by the Office of 

Infrastructure Security and Energy 

Restoration, no later than 15 days after 

receipt of a written notice of denial from 

the Senior Policy Advisor for the Office 

of Electricity Delivery and Energy 

Reliability, as listed in § 217.93. 

Contract performance under the order 

shall not be stayed pending resolution 

of the appeal. 

(c) Each appeal must be in writing 

and contain a complete statement of all 

the facts and circumstances related to 

the action appealed from and a full and 

precise statement of the reasons the 

decision should be modified or 

reversed. 

(d) In addition to the written materials 

submitted in support of an appeal, an 

appellant may request, in writing, an 

opportunity for an informal hearing. 

This request may be granted or denied 

at the discretion of the Office of 

Infrastructure Security and Energy 

Restoration. 

(e) When a hearing is granted, the 

Office of Infrastructure Security and 

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Federal Register / Vol. 76, No. 111 / Thursday, June 9, 2011 / Rules and Regulations 33629 

Energy Restoration may designate an 

employee to conduct the hearing and to 

prepare a report. The hearing officer 

shall determine all procedural questions 

and impose such time or other 

limitations deemed reasonable. In the 

event that the hearing officer decides 

that a printed transcript is necessary, all 

expenses shall be borne by the 

appellant. 

(f) When determining an appeal, the 

Office of Infrastructure Security and 

Energy Restoration may consider all 

information submitted during the 

appeal as well as any recommendations, 

reports, or other relevant information 

and documents available to the 

Department of Energy or consult with 

any other persons or groups. 

(g) The submission of an appeal under 

this section shall not relieve any person 

from the obligation of complying with 

the provision of this part or official 

action in question while the appeal is 

being considered unless such relief is 

granted in writing by the Office of 

Infrastructure Security and Energy 

Restoration. 

(h) The decision of the Office of 

Infrastructure Security and Energy 

Restoration shall be made within five (5) 

days after receipt of the appeal, or 

within one (1) day for appeals 

pertaining to emergency preparedness 

and shall be the final administrative 

action. It shall be issued to the appellant 

in writing with a statement of the 

reasons for the decision. 

Subpart I—Miscellaneous Provisions 

§ 217.90 Protection against claims. 

A person shall not be held liable for 

damages or penalties for any act or 

failure to act resulting directly or 

indirectly from compliance with any 

provision of this part, or an official 

action, notwithstanding that such 

provision or action shall subsequently 

be declared invalid by judicial or other 

competent authority. 

§ 217.91 Records and reports. 

(a) Persons are required to make and 

preserve for at least three years, accurate 

and complete records of any transaction 

covered by this part or an official action. 

(b) Records must be maintained in 

sufficient detail to permit the 

determination, upon examination, of 

whether each transaction complies with 

the provisions of this part or any official 

action. However, this part does not 

specify any particular method or system 

to be used. 

(c) Records required to be maintained 

by this part must be made available for 

examination on demand by duly 

authorized representatives of the 

Department of Energy as provided in 

§ 217.71. 

(d) In addition, persons must develop, 

maintain, and submit any other records 

and reports to the Department of Energy 

that may be required for the 

administration of the Defense 

Production Act and other applicable 

statutes, and this part. 

(e) Section 705(d) of the Defense 

Production Act, as implemented by E.O. 

12919, provides that information 

obtained under this section which the 

Secretary deems confidential, or with 

reference to which a request for 

confidential treatment is made by the 

person furnishing such information, 

shall not be published or disclosed 

unless the Secretary determines that the 

withholding of this information is 

contrary to the interest of the national 

defense. Information required to be 

submitted to the Department of Energy 

in connection with the enforcement or 

administration of the Defense 

Production Act, this part, or an official 

action, is deemed to be confidential 

under section 705(d) of the Defense 

Production Act and shall be handled in 

accordance with applicable Federal law. 

§ 217.92 Applicability of this part and 

official actions. 

(a) This part and all official actions, 

unless specifically stated otherwise, 

apply to transactions in any state, 

territory, or possession of the United 

States and the District of Columbia. 

(b) This part and all official actions 

apply not only to deliveries to other 

persons but also include deliveries to 

affiliates and subsidiaries of a person 

and deliveries from one branch, 

division, or section of a single entity to 

another branch, division, or section 

under common ownership or control. 

(c) This part and its schedules shall 

not be construed to affect any 

administrative actions taken by the 

Department of Energy, or any 

outstanding contracts or orders placed 

pursuant to any of the regulations, 

orders, schedules or delegations of 

authority previously issued by the 

Department of Energy pursuant to 

authority granted to the President in the 

Defense Production Act. Such actions, 

contracts, or orders shall continue in 

full force and effect under this part 

unless modified or terminated by proper 

authority. 

§ 217.93 Communications. 

All communications concerning this 

part, including requests for copies of the 

regulation and explanatory information, 

requests for guidance or clarification, 

and requests for adjustment or 

exception shall be addressed to the 

Senior Policy Advisor for the Office of 

Electricity Delivery and Energy 

Reliability, Office of Infrastructure 

Security and Energy Restoration, U.S. 

Department of Energy, 1000 

Independence Ave., SW., Washington, 

DC 20585; (202) 536–0379 (GC– 

76EPAS@hq.doe.gov). 

Appendix I to Part 217—Sample Form 

DOE F 544 (05–11) 

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Federal Register / Vol. 76, No. 111 / Thursday, June 9, 2011 / Rules and Regulations 33631 

[FR Doc. 2011–14282 Filed 6–8–11; 8:45 am] 

BILLING CODE 6450–01–P 

DEPARTMENT OF ENERGY 

10 CFR Part 431 

[Docket No. EERE–2008–BT–TP–0014] 

RIN 1904–AB85 

Energy Conservation Program: Test 

Procedures for Walk-In Coolers and 

Walk-In Freezers 

Correction 

In rule document 2011–8690 

appearing on pages 21579–21612 in the 

issue of Friday, April 15, 2011, the 

regulatory text is being republished 

below in its entirety due to errors in the 

equations. 

PART 431—[CORRECTED] 

On page 21604, in the third column, 

in the third paragraph from the top, the 

regulatory text should read as set forth 

below: 

PART 431—ENERGY EFFICIENCY 

PROGRAM FOR CERTAIN 

COMMERCIAL AND INDUSTRIAL 

EQUIPMENT 

■ 1. The authority citation for part 431 

continues to read as follows: 

Authority: 42 U.S.C. 6291–6317. 

■ 2. Section 431.302 is amended by 

adding, in alphabetical order, new 

definitions for ‘‘Display door,’’ ‘‘Display 

panel,’’ ‘‘Door’’, ‘‘Envelope,’’ ‘‘K-factor,’’ 

‘‘Panel,’’ ‘‘Refrigerated,’’ ‘‘Refrigeration 

system,’’ and ‘‘U-factor’’ to read as 

follows: 

§ 431.302 Definitions concerning walk-in 

coolers and walk-in freezers. 

* * * * * 

Display door means a door designed 

for product movement, display, or both, 

rather than the passage of persons. 

Display panel means a panel that is 

entirely or partially comprised of glass, 

a transparent material, or both and is 

used for display purposes. 

Door means an assembly installed in 

an opening on an interior or exterior 

wall that is used to allow access or close 

off the opening and that is movable in 

a sliding, pivoting, hinged, or revolving 

manner of movement. For walk-in 

coolers and walk-in freezers, a door 

includes the door panel, glass, framing 

materials, door plug, mullion, and any 

other elements that form the door or 

part of its connection to the wall. 

Envelope means— 

(1) The portion of a walk-in cooler or 

walk-in freezer that isolates the interior, 

refrigerated environment from the 

ambient, external environment; and 

(2) All energy-consuming components 

of the walk-in cooler or walk-in freezer 

that are not part of its refrigeration 

system. 

K-factor means the thermal 

conductivity of a material. 

* * * * * 

Panel means a construction 

component that is not a door and is 

used to construct the envelope of the 

walk-in, i.e., elements that separate the 

interior refrigerated environment of the 

walk-in from the exterior. 

Refrigerated means held at a 

temperature at or below 55 degrees 

Fahrenheit using a refrigeration system. 

Refrigeration system means the 

mechanism (including all controls and 

other components integral to the 

system’s operation) used to create the 

refrigerated environment in the interior 

of a walk-in cooler or freezer, consisting 

of: 

(1) A packaged dedicated system 

where the unit cooler and condensing 

unit are integrated into a single piece of 

equipment; or 

(2) A split dedicated system with 

separate unit cooler and condensing 

unit sections; or 

(3) A unit cooler that is connected to 

a multiplex condensing system. 

U-factor means the heat transmission 

in a unit time through a unit area of a 

specimen or product and its boundary 

air films, induced by a unit temperature 

difference between the environments on 

each side. 

* * * * * 

■ 3. Section 431.303 is amended by: 

■ a. Redesignating paragraph (b) as 

paragraph (c); 

■ b. Adding at the end of the sentence 

in redesignated paragraph (c)(1), ‘‘and 

Appendix A to Subpart R of Part 431’’. 

■ c. Adding new paragraphs (b), (c)(2), 

(d), and (e) to read as follows. 

§ 431.303 Materials incorporated by 

reference. 

* * * * * 

(b) AHRI. Air-Conditioning, Heating, 

and Refrigeration Institute, 2111 Wilson 

Boulevard, Suite 500, Arlington, VA 

22201, (703) 600–0366, or http:// 

www.ahrinet.org. 

(1) AHRI 1250 (I–P)–2009, (‘‘AHRI 

1250’’), 2009 Standard for Performance 

Rating of Walk-In Coolers and Freezers, 

approved 2009, IBR approved for 

§ 431.304. 

(2) [Reserved] 

(c) * * * 

(2) ASTM C1363–05, (‘‘ASTM 

C1363’’), Standard Test Method for 

Thermal Performance of Building 

Materials and Envelope Assemblies by 

Means of a Hot Box Apparatus, 

approved May 1, 2005, IBR approved for 

Appendix A to Subpart R of part 431. 

(d) CEN. European Committee for 

Standardization (French: Norme or 

German: Norm), Avenue Marnix 17, B– 

1000 Brussels, Belgium, Tel: + 32 2 550 

08 11, Fax: + 32 2 550 08 19 or http:// 

www.cen.eu/. 

(1) DIN EN 13164:2009–02, (‘‘DIN EN 

13164’’), Thermal insulation products 

for buildings—Factory made products of 

extruded polystyrene foam (XPS)— 

Specification, approved February 2009, 

IBR approved for Appendix A to 

Subpart R of part 431. 

(2) DIN EN 13165:2009–02, (‘‘DIN EN 

13165’’), Thermal insulation products 

for buildings—Factory made rigid 

polyurethane foam (PUR) products— 

Specification, approved February 2009, 

IBR approved for Appendix A to 

Subpart R of part 431. 

(e) NFRC. National Fenestration 

Rating Council, 6305 Ivy Lane, Ste. 140, 

Greenbelt, MD 20770, (301) 589–1776, 

or http://www.nfrc.org/. 

(1) NFRC 100–2010[E0A1], (‘‘NFRC 

100’’), Procedure for Determining 

Fenestration Product U-factors, 

approved June 2010, IBR approved for 

Appendix A to Subpart R of part 431. 

(2) [Reserved] 

■ 4. Section 431.304 is amended by 

redesignating paragraphs (b)(2), (b)(3), 

(b)(4), and (b)(5) as (b)(1), (b)(2), (b)(3), 

and (b)(4), respectively, and by adding 

new paragraphs (b)(5), (b)(6), (b)(7), and 

(b)(8) to read as follows. 

§ 431.304 Uniform test method for the 

measurement of energy consumption of 

walk-in coolers and walk-in freezers. 

* * * * * 

(b) * * * 

(5) Determine the U-factor, 

conduction load, and energy use of 

walk-in cooler and walk-in freezer 

display panels, floor panels, and nonfloor panels by conducting the test 

procedure set forth in Appendix A to 

this subpart, sections 4.1, 4.2, and 4.3, 

respectively. 

(6) Determine the energy use of walkin cooler and walk-in freezer display 

doors and non-display doors by 

conducting the test procedure set forth 

in Appendix A to this subpart, sections 

4.4 and 4.5, respectively. 

(7) Determine the Annual Walk-in 

Energy Factor of walk-in cooler and 

walk-in freezer refrigeration systems by 

conducting the test procedure set forth 

in AHRI 1250 (incorporated by 

reference; see § 431.303). 

(8) Determine the annual energy 

consumption of walk-in cooler and 

walk-in freezer refrigeration systems: 

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