[Federal Register Volume 88, Number 205 (Wednesday, October 25, 2023)]
[Rules and Regulations]
[Pages 73238-73240]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2023-23433]


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DEPARTMENT OF DEFENSE

Defense Acquisition Regulations System

48 CFR Parts 212, 225, and 252

[Docket DARS-2023-0022]
RIN 0750-AL88


Defense Federal Acquisition Regulation Supplement: Prohibition on 
Certain Procurements From the Xinjiang Uyghur Autonomous Region (DFARS 
Case 2023-D015)

AGENCY: Defense Acquisition Regulations System, Department of Defense 
(DoD).

ACTION: Final rule.

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SUMMARY: DoD is adopting as final, without change, an interim rule 
amending the Defense Federal Acquisition Regulation Supplement (DFARS) 
to implement a section of the National Defense Authorization Act for 
Fiscal Year 2023 that prohibits the use of funds to knowingly procure 
any products mined, produced, or manufactured wholly or in part by 
forced labor from the Xinjiang Uyghur Autonomous Region of the People's 
Republic of China.

DATES: Effective October 30, 2023.

FOR FURTHER INFORMATION CONTACT: Kimberly Bass, telephone 703-717-3446.

SUPPLEMENTARY INFORMATION:

I. Background

    DoD published an interim rule in the Federal Register at 87 FR 
76980 on December 16, 2022, to implement section 848 of the National 
Defense Authorization Act (NDAA) for Fiscal Year (FY) FY 2022 (Pub. L. 
117-81). DoD subsequently published an interim rule in the Federal 
Register at 88 FR 37794 on June 9, 2023, to implement section 855 of 
the NDAA for FY 2023 (Pub. L. 117-263). Section 855 repealed section 
848 of the NDAA for FY 2022, including the requirement for a 
certification from offerors for contracts with DoD stating the offeror 
has made a good faith effort to determine that forced labor from the 
Xinjiang Uyghur Autonomous Region of the People's Republic of China 
(XUAR) was not or will not be used in the performance of a contract. 
Section 855 requires offerors or awardees of a DoD contract to make a 
good faith effort to determine that forced labor from XUAR will not be 
used in performance of a DoD contract. The interim rule required 
offerors to represent, by submission of an offer, that they have made a 
good faith effort to determine that forced labor from XUAR will not be 
used in performance of a contract resulting from the solicitation.
    One respondent submitted public comments in response to the interim 
rule. The interim rule has been converted to a final rule, without 
change.

II. Discussion and Analysis

    DoD reviewed the public comments in the development of the final 
rule. A discussion of the comments is provided, as follows:

1. Strong Support for the Rule

    Comment: The respondent strongly supported the interim rule. The 
respondent noted that the rule helps to preserve the United States' 
global leadership on human rights and protects national security.
    Response: DoD acknowledges the support for the rule.

2. Supply Chain

    Comment: The respondent relayed concerns regarding implementation 
of the interim rule that requires offerors to make a good faith effort 
to gain full knowledge of their entire supply chain, including the 
procurement of commercial items and components. The respondent noted 
the Chinese economy can be opaque and further conveyed it can be 
difficult for prime contractors to obtain accurate supplier 
information, especially if responses were required within an 
accelerated timeframe. Additionally, further down the supply chain 
(i.e., subcontractors, vendors, and other suppliers at all tiers), 
including for the procurement of commercial items and components, it 
can be exceedingly difficult for prime contractors to obtain accurate 
information.
    Response: There are no exceptions to the requirements that offerors 
or DoD contractors make a good faith effort to determine that forced 
labor from XUAR will not be used in the performance of the DoD 
contract. DoD has determined to make this law applicable to contracts 
for the acquisition of commercial services and commercial products, 
including commercially available off-the-shelf (COTS) items, in order 
to promote the overarching public policy, except products or services 
purchased using the Governmentwide commercial purchase card or the 
Standard Form (SF) 44, Purchase Order-Invoice Voucher.

3. Additional Definition

    Comment: A respondent stated that in the background information of 
the rule, DoD should also define the term

[[Page 73239]]

``knowingly procure'' consistent with what DoD officials must do to 
comply with that requirement.
    Response: The final rule as implemented is in accordance with 
section 855 of the NDAA for FY 2023, 10 U.S.C. 2496(b), and 10 U.S.C. 
4661. Consequently, there is no definition in the rule for the term 
``knowingly procure''. The rule as implemented complies with all 
definitions as outlined in the applicable statutes.

4. Good Faith Effort

    Comment: The respondent identified the policy implementation of 
section 889 of the NDAA for FY 2019 and urged adoption of the language 
similar to the provision as implemented at Federal Acquisition 
Regulation 52.204-26, Covered Telecommunications Equipment or Services-
Representation, that required offerors to provide representation 
utilizing a standard of ``reasonable inquiry'' (although section 889 is 
outside the scope of the statutory requirements of this rule). The 
respondent recommended that DoD should use the standard of ``reasonable 
inquiry'' in the place of the standard of a good faith effort as it 
specifically pertains to a contractor's representation that no products 
associated with forced labor from XUAR are present in its offer or 
during performance under a contract.
    Response: The rule implements section 855 of the NDAA for FY 2023, 
which requires DoD to issue policy to require that an offeror or 
awardee of a DoD contract make a good faith effort to determine that 
forced labor from XUAR will not be used. Section 855 specifically 
requires use of the standard of a good faith effort. The final rule as 
written is consistent with the requirements of section 855.

III. Applicability to Contracts at or Below the Simplified Acquisition 
Threshold, for Commercial Services, and for Commercial Products, 
Including COTS Items

    The interim rule amended the solicitation provision at DFARS 
252.225-7059, Prohibition on Certain Procurements from the Xinjiang 
Uyghur Autonomous Region-Representation, and the contract clause at 
DFARS 252.225-7060, Prohibition on Certain Procurements from the 
Xinjiang Uyghur Autonomous Region. The clause at DFARS 252.225-7060 is 
prescribed for use in solicitations and contracts utilizing funds 
appropriated or otherwise made available for any fiscal year, including 
solicitations using FAR part 12 procedures for the acquisition of 
commercial services and commercial products including COTS items. 
Consistent with the determination that DoD made with regard to the 
application of the requirements of section 855 of the NDAA for FY 2023, 
the provision at DFARS 252.225-7059 and the clause at DFARS 252.225-
7060 apply to contracts valued at or below the simplified acquisition 
threshold (SAT) and to the acquisition of commercial services and 
commercial products, including COTS items, as defined at FAR 2.101. For 
an explanation of the rationale for DoD's determination, see the 
interim rule published in the Federal Register at 88 FR 37794 on June 
9, 2023.

IV. 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.

V. 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.

VI. 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:
    This rule is necessary to finalize an interim rule that amended the 
DFARS to implement section 855 of the National Defense Authorization 
act (NDAA) for Fiscal Year (FY) 2023 (Pub. L. 117-263). Section 855 
prohibits the use of DoD funds for any fiscal year to knowingly procure 
any products mined, produced, or manufactured wholly or in part by 
forced labor from the Xinjiang Uyghur Autonomous Region of the People's 
Republic of China (XUAR). Section 855 requires offerors or awardees of 
a DoD contract to make a good faith effort to determine that forced 
labor from XUAR will not be used in the performance of a DoD contract. 
In addition, section 855 repeals section 848 of the NDAA for FY 2022 
(Pub. L. 117-81), which required a certification from offerors that 
they had made a good faith effort to determine that forced labor from 
XUAR was not or will not be used in the performance of a DoD contract.
    The objective of the rule is to implement the prohibition and the 
requirement for offerors or contractors to make a good faith effort to 
determine that forced labor from XUAR will not be used in the 
performance of a DoD contract.
    No public comments were received in response to the initial 
regulatory flexibility analysis.
    DoD reviewed data obtained from the Federal Procurement Data System 
for FY 2020, 2021, and 2022 for DoD purchases of supplies or end 
products valued above the micro-purchase threshold, including 
commercial products and commercially available off-the-shelf items. DoD 
made an average of 374,735 awards to 16,122 unique entities, of which 
154,515 awards were made to 12,187 unique small entities. In addition 
to the small entities that received awards, DoD estimates there were 
approximately 621,718 unsuccessful offerors. Note that the unsuccessful 
offerors are not unique entities; in other words, a single entity may 
have been counted more than once as an unsuccessful offeror. The rule 
applies to successful offerors that receive awards and unsuccessful 
offerors.
    The rule does not require any new reporting or recordkeeping.
    There are no known significant alternative approaches to the rule 
that would meet the requirements of the statute.

VII. 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).

[[Page 73240]]

List of Subjects in 48 CFR Parts 212, 225, and 252

    Government procurement.

Jennifer D. Johnson,
Editor/Publisher, Defense Acquisition Regulations System.

0
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]
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