73240 Federal Register / Vol. 88, No. 205 / Wednesday, October 25, 2023 / Rules and Regulations 

List of Subjects in 48 CFR Parts 212, 

225, and 252 

Government procurement. 

Jennifer D. Johnson, 

Editor/Publisher, Defense Acquisition 

Regulations System. 

■ Accordingly, the interim rule 

amending 48 CFR parts 212, 225, and 

252, which was published at 88 FR 

37794 on June 9, 2023, is adopted as 

final without change. 

[FR Doc. 2023–23433 Filed 10–24–23; 8:45 am] 

BILLING CODE 6001–FR–P 

DEPARTMENT OF DEFENSE 

Defense Acquisition Regulations 

System 

48 CFR Part 225 

[Docket DARS–2023–0006] 

RIN 0750–AL39 

Defense Federal Acquisition 

Regulation Supplement: Restrictions 

on Overhaul and Repair of Naval 

Vessels in Foreign Shipyards (DFARS 

Case 2021–D021) 

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 implement a section of the 

National Defense Authorization Act for 

Fiscal Year 2021 that restricts overhaul 

and repair of a naval vessel in a 

shipyard outside the United States or 

Guam. 

DATES: Effective October 30, 2023. 

FOR FURTHER INFORMATION CONTACT: 

Kimberly Bass, telephone 703–717– 

3446. 

SUPPLEMENTARY INFORMATION: 

I. Background 

DoD is issuing a final rule amending 

the DFARS to implement section 1025 

of the National Defense Authorization 

Act (NDAA) for Fiscal Year (FY) 2021 

(Pub. L. 116–283), which amends 10 

U.S.C. 8680(a) to restrict the overhaul or 

repair of a naval vessel in a shipyard 

outside the United States or Guam. The 

restriction does not apply to voyage 

repairs or to repairs required for damage 

sustained due to hostile actions or 

interventions. In addition, the 

restriction does not apply to a naval 

vessel classified as a littoral combat ship 

operating on deployment for corrective 

and preventive maintenance or repair 

and facilities maintenance. The rule also 

establishes the criteria under which 

foreign workers or foreign contractors 

may be used to perform corrective and 

preventive maintenance or repair or 

facilities maintenance on a naval vessel. 

DoD published a proposed rule in the 

Federal Register at 88 FR 17360 on 

March 22, 2023, to revise the DFARS to 

implement section 1025 of the NDAA 

for FY 2021. One respondent submitted 

a public comment in response to the 

proposed rule. 

II. Discussion and Analysis 

DoD reviewed the public comment in 

the development of the final rule. A 

discussion of the comment is provided, 

as follows: 

A. Summary of Significant Changes 

No changes are made to the final rule 

as a result of public comments. 

B. Analysis of Public Comment 

Comment: A respondent provided 

comments with overall support of the 

rule and stated it would save money and 

reduce the need for supplies and 

preventative maintenance on ships in 

foreign shipyards. 

Response: DoD acknowledges the 

respondent’s support for the rule. 

C. Other Changes 

Minor editorial changes are made in 

paragraph (b) of DFARS 225.7013–2 to 

comply with drafting conventions. 

III. Applicability to Contracts at or 

Below the Simplified Acquisition 

Threshold and for Commercial 

Products, Including Commercially 

Available Off-the-Shelf Items, and 

Commercial Services 

This rule does not create any new 

solicitation provisions or contract 

clauses. It does not impact any existing 

solicitation provisions or contract 

clauses or prescriptions for their use. 

IV. Expected Impact of the Rule 

Currently, DFARS 225.7013 includes 

the restrictions on the construction or 

repair of vessels in foreign shipyards. 

This rule adds the exception for repairs 

necessary to correct damage sustained 

due to hostile actions or interventions 

and for corrective and preventive 

maintenance or repair and facilities 

maintenance on naval vessels classified 

as littoral combat ships operating on 

deployment. Under these exceptions, 

the repairs or maintenance described 

above may be performed in a shipyard 

outside the United States or Guam in 

accordance with 10 U.S.C. 8680(a). The 

rule also specifies the authorized use of 

foreign workers under certain 

conditions when a determination is 

made by the Secretary of the Navy, who 

cannot further delegate the authority to 

make such a determination. 

V. Executive Orders 12866 and 13563 

Executive Orders (E.O.s) 12866 and 

13563 direct agencies to assess all costs 

and benefits of available regulatory 

alternatives and, if regulation is 

necessary, to select regulatory 

approaches that maximize net benefits 

(including potential economic, 

environmental, public health and safety 

effects, distributive impacts, and 

equity). E.O. 13563 emphasizes the 

importance of quantifying both costs 

and benefits, of reducing costs, of 

harmonizing rules, and of promoting 

flexibility. This is not a significant 

regulatory action and, therefore, was not 

subject to review under section 6(b) of 

E.O. 12866, Regulatory Planning and 

Review, as amended. 

VI. Congressional Review Act 

As required by the Congressional 

Review Act (5 U.S.C. 801–808) before an 

interim or final rule takes effect, DoD 

will submit a copy of the interim or 

final rule with the form, Submission of 

Federal Rules under the Congressional 

Review Act, to the U.S. Senate, the U.S. 

House of Representatives, and the 

Comptroller General of the United 

States. A major rule under the 

Congressional Review Act cannot take 

effect until 60 days after it is published 

in the Federal Register. The Office of 

Information and Regulatory Affairs has 

determined that this rule is not a major 

rule as defined by 5 U.S.C. 804. 

VII. Regulatory Flexibility Act 

A final regulatory flexibility analysis 

has been prepared consistent with the 

Regulatory Flexibility Act, 5 U.S.C. 601, 

et seq. and is summarized as follows: 

DoD is issuing a final rule amending 

the DFARS to implement section 1025 

of the National Defense Authorization 

Act (NDAA) for Fiscal Year (FY) 2021 

(Pub. L. 116–283). Section 1025 amends 

10 U.S.C. 8680(a) to restrict the overhaul 

or repair of a naval vessel in a shipyard 

outside the United States or Guam, 

unless the repairs are: (1) voyage repairs 

or repairs necessary to correct damage 

sustained due to hostile actions or 

interventions; or (2) to a naval vessel 

classified as a littoral combat ship 

operating on deployment for corrective 

and preventive maintenance or repair 

and facilities maintenance. The final 

rule also establishes that: (1) foreign 

workers may not be used to perform 

corrective and preventive maintenance 

or repair on a naval vessel unless the 


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Federal Register / Vol. 88, No. 205 / Wednesday, October 25, 2023 / Rules and Regulations 73241 

Secretary of the Navy (without further 

delegation) makes a determination; and 

(2) foreign contractors may not be used 

to perform facilities maintenance unless 

approved by the Secretary of the Navy. 

The objective of the rule is to implement 

the restrictions of section 1025 of the 

NDAA for FY 2021 on the overhaul or 

repair of a naval vessel in a shipyard 

outside the United States or Guam, with 

exceptions as described in this 

paragraph. 

No public comments were received in 

response to the initial regulatory 

flexibility analysis. 

DoD reviewed data from the Federal 

Procurement Data System for fiscal 

years 2020, 2021, and 2022 for contracts 

for the repair or overhaul of naval 

vessels outside the United States or 

Guam that exceeded the simplified 

acquisition threshold. DoD awarded a 

total of 383 contracts to an average of 76 

unique small entities. 

It is expected that this rule will 

continue to provide small businesses 

the opportunity to participate in 

acquisitions for the overhaul or repair of 

a naval vessel in a shipyard outside the 

United States or Guam, since naval 

vessel overhaul restrictions currently 

exist, and this rule provides exceptions 

that allow for U.S. contractor personnel 

to perform certain repairs and 

maintenance in accordance with 10 

U.S.C. 8680(a). 

This rule does not include any new 

reporting, recordkeeping, or other 

compliance requirements for small 

entities. 

There are no known significant 

alternative approaches to the rule that 

would meet the requirements of the 

statute. 

VIII. Paperwork Reduction Act 

This rule does not contain any 

information collection requirements that 

require the approval of the Office of 

Management and Budget under the 

Paperwork Reduction Act (44 U.S.C. 

chapter 35). 

List of Subjects in 48 CFR Part 225 

Government procurement. 

Jennifer D. Johnson, 

Editor/Publisher, 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. 1303 and 48 CFR 

chapter 1. 

225.7013 [Amended] 

■ 2. Amend section 225.7013 by 

removing the introductory text and 

paragraphs (a) and (b). 

■ 3. Add sections 225.7013–0, 

225.7013–1, and 225.7013–2 to read as 

follows: 

225.7013–0 Scope. 

This section implements 10 U.S.C. 

8679 and 10 U.S.C. 8680. 

225.7013–1 Definitions. 

As used in this section— 

Corrective and preventive 

maintenance or repair means— 

(1) Maintenance or repair actions 

performed as a result of a failure in 

order to return or restore equipment to 

acceptable performance levels; and 

(2) Scheduled maintenance or repair 

actions to prevent or discover functional 

failures. 

Facilities maintenance means the 

effort required to— 

(1) Provide housekeeping services 

throughout the ship; 

(2) Perform coating maintenance and 

repair to exterior and interior surfaces 

due to normal environmental 

conditions; and 

(3) Clean mechanical spaces, mission 

zones, and topside spaces. 

225.7013–2 Restrictions. 

(a) Contract award (10 U.S.C. 8679). 

Do not award a contract to construct in 

a foreign shipyard— 

(1) A vessel for any of the armed 

forces; or 

(2) A major component of the hull or 

superstructure of a vessel for any of the 

armed forces. 

(b) Overhaul, repair, or maintenance 

(10 U.S.C. 8680). (1) Do not overhaul, 

repair, or maintain, in a shipyard 

outside the United States or Guam, a 

naval vessel (or any other vessel under 

the jurisdiction of the Secretary of the 

Navy) homeported in the United States 

or Guam. 

(2) This restriction on overhaul, 

repair, or maintenance does not apply 

to— 

(i) Voyage repairs; or 

(ii) Repairs necessary to correct 

damage sustained due to hostile actions 

or interventions. 

(3) For a naval vessel classified as a 

littoral combat ship and operating on 

deployment— 

(i) Corrective and preventive 

maintenance or repair, whether 

intermediate or depot level, and 

facilities maintenance may be 

performed if the work is performed by 

U.S. Government personnel or U.S. 

contractor personnel— 

(A) In a foreign shipyard; 

(B) At a facility outside of a foreign 

shipyard; or 

(C) At any other facility convenient to 

the vessel; 

(ii) Foreign workers may be used to 

perform corrective and preventive 

maintenance or repair, only if the 

Secretary of the Navy, without power of 

delegation, determines that travel by 

U.S. Government or contractor 

personnel to perform the maintenance 

or repair is not advisable for health or 

safety reasons; and 

(iii) Foreign contractors may perform 

facilities maintenance only as approved 

by the Secretary of Navy. 

[FR Doc. 2023–23432 Filed 10–24–23; 8:45 am] 

BILLING CODE 6001–FR–P 

DEPARTMENT OF DEFENSE 

Defense Acquisition Regulations 

System 

48 CFR Part 252 

[Docket DARS–2023–0038] 

RIN 0750–AL98 

Defense Federal Acquisition 

Regulation Supplement: New 

Designated Country—North Macedonia 

(DFARS Case 2024–D001) 

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 add North Macedonia as a 

new designated country under the 

World Trade Organization Government 

Procurement Agreement. 

DATES: Effective October 30, 2023. 

FOR FURTHER INFORMATION CONTACT: Ms. 

Kimberly Bass, 703–717–3446. 

SUPPLEMENTARY INFORMATION: 

I. Background 

On June 7, 2023, the World Trade 

Organization (WTO) Committee on 

Government Procurement approved the 

accession of North Macedonia to the 

WTO Government Procurement 

Agreement (GPA). This final rule 

amends the DFARS to add North 

Macedonia to the list of World Trade 

Organization (WTO) Government 

Procurement Agreement (GPA) 

countries wherever it appears in the 

DFARS, as part of the definition of 

‘‘designated country’’. 

The Trade Agreements Act (19 U.S.C. 

2501 et seq.) provides the authority for 

the President to waive the Buy 


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