Federal Register / Vol. 75, No. 109 / Tuesday, June 8, 2010 / Rules and Regulations 32641 

determination of the inapplicability of 

the Buy American Act to the acquisition 

of end products from that country. 

There is only one effect of a country 

being listed in paragraph (b). Although 

the evaluation procedures are the same, 

regardless of which paragraph a country 

is listed in, if an end product is from a 

country listed in paragraph (b), when 

purchasing the end product, the 

contracting officer has to prepare an 

individual determination and finding 

that the end product is exempt from 

application of the Buy American Act. 

Over time, the qualifying countries in 

paragraph (b) are moved to paragraph (a) 

when all the conditions for arriving at 

a blanket determination are met. 

This final rule implements the recent 

blanket determination by USD(AT&L) at 

DFARS 225.872–1 by removing Finland 

from the list of qualifying countries in 

paragraph (b) and adding Finland to the 

list of qualifying countries in paragraph 

(a). This means that the contracting 

officer no longer needs to prepare an 

individual determination and findings 

when making an award to an offeror of 

an end product from Finland. However, 

since Finland is a qualifying country, 

this was a routine paperwork 

requirement, and the removal of this 

requirement only impacts the internal 

operating procedures of the 

Government. 

This rule was subject to Office of 

Management and Budget review under 

Executive Order 12866, dated 

September 30, 1993. 

B. Regulatory Flexibility Act 

The Regulatory Flexibility Act does 

not apply to this rule. This final rule 

does not constitute a significant DFARS 

revision within the meaning of FAR 

1.501 and public comment is not 

required in accordance with 41 U.S.C. 

418b(a). 

C. Paperwork Reduction Act 

This rule does not impose any new 

information collection requirements that 

require the approval of the Office of 

Management and Budget under 44 

U.S.C. 3501, et seq. 

List of Subjects in 48 CFR Part 225 

Government procurement. 

Ynette R. Shelkin, 

Editor, Defense Acquisition Regulations 

System. 

■ Therefore, 48 CFR part 225 is 

amended as follows: 

PART 225—FOREIGN ACQUISITION 

■ 1. The authority citation for 48 CFR 

part 225 continues to read as follows: 

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

chapter 1. 

■ 2. Section 225.872–1 is amended by 

revising paragraphs (a) and (b) to read 

as follows: 

225.872–1 General. 

(a) As a result of memoranda of 

understanding and other international 

agreements, DoD has determined it 

inconsistent with the public interest to 

apply restrictions of the Buy American 

Act or the Balance of Payments Program 

to the acquisition of qualifying country 

end products from the following 

qualifying countries: 

Australia 

Belgium 

Canada 

Denmark 

Egypt 

Federal Republic of Germany 

Finland 

France 

Greece 

Israel 

Italy 

Luxembourg 

Netherlands 

Norway 

Portugal 

Spain 

Sweden 

Switzerland 

Turkey 

United Kingdom of Great Britain and 

Northern Ireland. 

(b) Individual acquisitions of 

qualifying country end products from 

the following qualifying country may, 

on a purchase-by-purchase basis (see 

225.872–4), be exempted from 

application of the Buy American Act 

and the Balance of Payments Program as 

inconsistent with the public interest: 

Austria 

* * * * * 

[FR Doc. 2010–13526 Filed 6–7–10; 8:45 am] 

BILLING CODE 5001–08–P 

DEPARTMENT OF DEFENSE 

Defense Acquisition Regulations 

System 

48 CFR Part 216 

Defense Federal Acquisition 

Regulation Supplement; Letter 

Contract Definitization Schedule 

(DFARS Case 2007–D011) 

AGENCY: Defense Acquisition 

Regulations System, Department of 

Defense (DoD). 

ACTION: Final rule. 

SUMMARY: DoD is adopting as final, 

without change, a proposed rule 

amending the Defense Federal 

Acquisition Regulation Supplement 

(DFARS) to clarify requirements 

regarding definitization of letter 

contracts. The rule specifies that DoD 

letter contracts will be definitized using 

the DFARS procedures applicable to all 

other undefinitized contract actions. 

DATES: Effective Date: June 8, 2010. 

FOR FURTHER INFORMATION CONTACT: Ms. 

Meredith Murphy, Defense Acquisition 

Regulations System, OUSD(AT&L) 

DPAP(DARS), 3060 Defense Pentagon, 

Room 3B855, Washington, DC 20301– 

3060. Telephone 703–602–8383; 

facsimile 703–602–0350. Please cite 

DFARS Case 2007–D011. 

SUPPLEMENTARY INFORMATION: 

A. Background 

DoD published a proposed rule at 74 

FR 34292 on July 15, 2009, to clarify 

requirements regarding definitization of 

letter contracts. The period for public 

comment closed on September 14, 2009. 

The differences between section 16.603 

of the Federal Acquisition Regulation 

(FAR) and DFARS subpart 217.74 

definitization requirements confused 

the acquisition community. This final 

rule clarifies at DFARS 216.603–2(c)(3) 

that the definitization requirements at 

DFARS 217.7404–3(a) apply to DoD 

letter contracts instead of the 

requirements at FAR 16.603–2(c)(3). 

This approach provides consistency in 

the manner in which DoD manages its 

undefinitized contract actions, and is in 

line with the specific provisions of 10 

U.S.C. 2326 relating to DoD use of 

undefinitized contract actions. 

DoD received no comments on the 

proposed rule. Therefore, DoD is 

finalizing the proposed rule without 

change. 

This rule was not subject to Office of 

Management and Budget review under 

Executive Order 12866, dated 

September 30, 1993. This is not a major 

rule. 

B. Regulatory Flexibility Act 

This rule will not have a significant 

economic impact on a substantial 

number of small entities within the 

meaning of the Regulatory Flexibility 

Act, 5 U.S.C. 601, et seq., because it 

clarifies existing requirements 

pertaining to undefinitized contract 

actions. 

C. Paperwork Reduction Act 

The Paperwork Reduction Act does 

not apply because the rule does not 

impose any information collection 

requirements that require the approval 

of the Office of Management and Budget 

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


emcdonald on DSK2BSOYB1PROD with RULES2
32642 Federal Register / Vol. 75, No. 109 / Tuesday, June 8, 2010 / Rules and Regulations 

List of Subjects in 48 CFR Part 216 

Government procurement. 

Ynette R. Shelkin, 

Editor, Defense Acquisition Regulations 

System. 

■ Therefore, 48 CFR part 216 is 

amended as follows: 

PART 216—TYPES OF CONTRACTS 

■ 1. The authority citation for 48 CFR 

part 216 continues to read as follows: 

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

chapter 1. 

■ 2. Section 216.603–2 is added to read 

as follows: 

216.603–2 Application. 

(c)(3) In accordance with 10 U.S.C. 

2326, establish definitization schedules 

for letter contracts following the 

requirements at 217.7404–3(a) instead of 

the requirements at FAR 16.603–2(c)(3). 

[FR Doc. 2010–13527 Filed 6–7–10; 8:45 am] 

BILLING CODE 5001–08–P 

DEPARTMENT OF DEFENSE 

Defense Acquisition Regulations 

System 

48 CFR Parts 228, 231, and 252 

RIN 0750–AF72 

Defense Federal Acquisition 

Regulation Supplement; Ground and 

Flight Risk Clause (DFARS Case 2007– 

D009) 

AGENCY: Defense Acquisition 

Regulations System, Department of 

Defense (DoD). 

ACTION: Final rule. 

SUMMARY: DoD is issuing a final rule 

amending the Defense Federal 

Acquisition Regulation Supplement 

(DFARS) to revise and combine contract 

clauses addressing assumption of risk of 

loss under contracts that furnish aircraft 

to the Government. The final rule 

establishes requirements that apply 

consistently to all contract types. 

DATES: Effective Date: June 8, 2010. 

FOR FURTHER INFORMATION CONTACT: 

Julian Thrash, 703–602–0310. 

SUPPLEMENTARY INFORMATION: 

A. Background 

The DFARS clauses at 252.228–7001, 

Ground and Flight Risk, and 252.228– 

7002, Aircraft Flight Risk, are presently 

used in contracts that involve the 

furnishing of aircraft to the Government. 

The clause at 252.228–7001 is used in 

negotiated fixed-price contracts, and the 

clause at 252.228–7002 is used in costreimbursement contracts. A proposed 

rule was published in the Federal 

Register at 72 FR 69177 on December 7, 

2007. This final rule revises and 

combines the two clauses into a single 

ground and flight risk clause, applying 

requirements consistently to all contract 

types. In addition, a new subsection is 

added at DFARS 231.205–19 to explain 

the treatment of insurance costs under 

the new clause and all similar clauses. 

The final rule changes include— 

Æ Applying the clause to all contracts 

for the purchase, development, 

production, maintenance, repair, flight, 

or overhaul of aircraft, with exceptions 

for contracts for activities incidental to 

the normal operations of aircraft, FAR 

Part 12 contracts, and contracts where a 

non-DoD customer has declined to 

accept the risk of loss for its aircraft 

asset; 

Æ Adding a requirement for inclusion 

of the clause in subcontracts at all tiers; 

Æ Adding a statement that the 

Government property clause is not 

applicable if the Government withdraws 

its self-insurance coverage; 

Æ Adding a statement that 

commercial insurance costs or selfinsurance charges that duplicate the 

Government’s self- insurance are 

unallowable; and 

Æ Establishing a share of loss for the 

contractor that is the lesser of $100,000 

or twenty percent of the estimated 

contract cost or price. This is consistent 

with the contractor’s share of loss 

presently specified in the clause at 

252.228–7002. The clause at 252.228– 

7001 presently prescribes a share of loss 

of $25,000 for the contractor. 

B. Public Comments 

Three respondents submitted 

comments on the proposed rule. 

Specific comments received are 

addressed in paragraphs 1 through 8 of 

this section. 

1. Applicability 

Comment: The respondent 

recommended adding an additional 

exception to the requirement for 

inclusion of the Ground and Flight Risk 

clause by inserting a new paragraph 

(b)(1)(iv) in DFARS 228.370 to read: 

‘‘For Commercial Derivative Aircraft that 

continue to be maintained to FAA 

Airworthiness Standards and the work 

will be conducted at a licensed FAA 

Repair Station.’’ 

Response: Commercial Derivative 

Aircraft are militarized versions of 

commercial aircraft platforms. Their 

repair at FAA repair stations most often 

denotes a commercial services contract. 

Normal commercial terms and 

conditions would apply and, thus, 

payment for insurance and acceptance 

of FAA standards is appropriate. In 

addition to adding the recommended 

new exception, DoD is changing DFARS 

228.370(b)(1)(ii) to read: ‘‘Awarded 

under FAR Part 12 for the acquisition, 

development, production, modification, 

maintenance, repair, flight, or overhaul 

of aircraft, or otherwise involving the 

furnishing of aircraft.’’ 

2. Compliance 

Comment: Two comments addressed 

potentially confusing language on 

compliance and the cost of compliance. 

One respondent indicated that 

paragraph (b)(2)(iii) of DFARS 228.370 

was confusing as to intent and purpose. 

The respondent was concerned that, 

when a contracting officer expressly 

defines ‘‘contractor premises,’’ the 

contractor might be able to avoid 

compliance with DCMAI 8210.1 (the 

Joint Instruction) by moving 

performance to a different location. 

Another respondent commented that 

DFARS 228.370 appears to require the 

Ground and Flight Risk clause for all 

aircraft, including unmanned aerial 

vehicles, without taking into account 

significant variations in size, cost, or 

vehicle ceiling. The respondent 

expressed concern that use of the clause 

constitutes costly overkill in cases of 

small/micro unmanned aerial vehicles 

(UAVs). 

Response: DoD believes the language 

is clear and unambiguous as is, and it 

presents no meaningful basis for a 

contractor to avoid compliance with the 

DCMAI 8210.1. The definition of 

‘‘contractor premises’’ is applicable 

solely to the determination of the 

Government’s acceptance of the risk of 

loss. DFARS 252.228–7001(b) requires 

the contractor to assure compliance 

with DCMAI 8210.1 regardless of the 

location of the aircraft. 

With regard to the cost of compliance, 

DFARS 228.370(b)(2)(i) allows tailoring 

of the definition of ‘‘aircraft’’ to 

appropriately cover atypical and 

‘‘nonconventional’’ aircraft. If 

contracting officers wish to omit small/ 

micro UAVs, the clause allows that 

flexibility. The contracting officer is 

required to make this determination on 

a case-by-case basis in coordination 

with the program office. While the 

respondent’s concerns could be 

legitimate in some cases, these concerns 

should be addressed during the 

preaward phase on an individual 

contract basis. There is sufficient 

flexibility in the approval process for 

the clause to recognize unique 

requirements or the absence of standard 


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