Federal Register / Vol. 78, No. 245 / Friday, December 20, 2013 / Rules and Regulations 76993 

DEPARTMENT OF DEFENSE 

Defense Acquisition Regulations 

System 

48 CFR Part 252 

RIN 0750–AI18 

Defense Federal Acquisition 

Regulation Supplement: Photovoltaic 

Devices (DFARS Case 2014–D006) 

AGENCY: Defense Acquisition 

Regulations System, Department of 

Defense (DoD). 

ACTION: Interim rule with request for 

comments. 

SUMMARY: DoD is issuing an interim rule 

amending the Defense Federal 

Acquisition Regulation Supplement 

(DFARS) to clarify rules of origin under 

trade agreements for photovoltaic 

devices to be utilized under covered 

DoD contracts, as required by a section 

of the National Defense Authorization 

Act for Fiscal Year 2011. 

DATES: Effective December 20, 2013. 

Comment date: Comments on the 

interim rule should be submitted in 

writing to the address shown below on 

or before February 18, 2014, to be 

considered in the formation of a final 

rule.’’ 

ADDRESSES: Submit comments 

identified by DFARS Case 2014–D006, 

using any of the following methods: 

Æ Regulations.gov: http://

www.regulations.gov. Submit comments 

via the Federal eRulemaking portal by 

entering ‘‘DFARS Case 2014–D006’’ 

under the heading ‘‘Enter keyword or 

ID’’ and selecting ‘‘Search.’’ Select the 

link ‘‘Submit a Comment’’ that 

corresponds with ‘‘DFARS Case 2014– 

D006.’’ Follow the instructions provided 

at the ‘‘Submit a Comment’’ screen. 

Please include your name, company 

name (if any), and ‘‘DFARS Case 2014– 

D006’’ on your attached document. 

Æ Email: dfars@mail.mil. Include 

DFARS Case 2014–D006 in the subject 

line of the message. 

Æ Fax: 571–372–6094. 

Æ Mail: Defense Acquisition 

Regulations System, Attn: Ms. Amy G. 

Williams, OUSD(AT&L)DPAP/DARS, 

Room 3B855, 3060 Defense Pentagon, 

Washington, DC 20301–3060. 

Comments received generally will be 

posted without change to http://

www.regulations.gov, including any 

personal information provided. To 

confirm receipt of your comment(s), 

please check www.regulations.gov, 

approximately two to three days after 

submission to verify posting (except 

allow 30 days for posting of comments 

submitted by mail). 

FOR FURTHER INFORMATION CONTACT: Ms. 

Amy G. Williams, Defense Acquisition 

Regulations System, 

OUSD(AT&L)DPAP/DARS, Room 

3B855, 3060 Defense Pentagon, 

Washington, DC 20301–3060. 

Telephone 571–372–6106; facsimile 

571–372–6101. 

SUPPLEMENTARY INFORMATION: 

I. Background 

Section 846 of the National Defense 

Authorization Act for Fiscal Year 2011 

(Pub. L. 111–383) addresses the origin of 

photovoltaic devices purchased by a 

contractor under an energy savings 

performance contract, a utility service 

contract, or a private housing contract, 

if such contract will result in DoD 

ownership of photovoltaic devices, by 

means other than DoD purchase as end 

products. DoD is deemed to own a 

photovoltaic device if the device is— 

(1) Installed on DoD property or in a 

facility owned by DoD; and 

(2) Reserved for the exclusive use of 

DoD for the full economic life of the 

device. 

The statute requires that photovoltaic 

devices provided under covered 

contracts shall comply with the Buy 

American statute (41 U.S.C. chapter 83), 

subject to the exceptions to that statute 

provided in the Trade Agreements Act, 

or otherwise provided by law. 

• Under the Buy American statute, 

there is an exception for other foreign 

photovoltaic devices, if covered by the 

Buy American statute and the cost of a 

domestic photovoltaic device would be 

unreasonable (i.e., 50 percent more than 

the cost of the foreign photovoltaic 

device). 

• For DoD, qualifying country 

photovoltaic devices may be utilized in 

any covered contract, because DFARS 

225.103(a)(i)(A) provides an exception 

to the Buy American statute for 

products of qualifying countries, as 

defined in 225.003. 

• Depending on the value of the 

photovoltaic devices to be utilized, 

various trade agreements may apply to 

photovoltaic devices that are the 

product of a designated country. These 

photovoltaic devices may be broadly 

identified as World Trade Organization 

Government Procurement Agreement 

photovoltaic devices, Free Trade 

Agreement photovoltaic devices, or by 

the specific country of origin. 

DoD initially implemented this statute 

through an interim rule (DFARS Case 

2011–D046), published in the Federal 

Register on December 20, 2011 (76 FR 

78858). The interim rule added a new 

DFARS section 225.7017, Utilization of 

domestic photovoltaic devices; a clause 

at 252.225–7017, Photovoltaic Devices; 

and a provision at 252.225–7018, 

Photovoltaic Devices—Certificate. DoD 

finalized the interim rule, with changes 

on May 22, 2012 (77 FR 30368). 

The final rule explains that for 

purposes of determining that a 

photovoltaic device is eligible for an 

exception to the Buy American statute 

due to applicability of a trade 

agreement, the origin of a photovoltaic 

device is the country in which the 

photovoltaic device was wholly 

manufactured (including all 

components), or the country in which 

the photovoltaic device was 

‘‘substantially transformed’’ into a new 

and different article with a name, 

character, or use distinct from that of 

the article or articles from which it was 

transformed. 

Since implementation in the DFARS, 

some questions have arisen as to where 

the substantial transformation of some 

solar panels occurs, when different 

phases of the production process occur 

in different countries. DOD has 

determined, after consultation with the 

United States Trade Representative, that 

clarification is needed to avoid 

confusion by offerors on how to 

determine the country of origin of a 

photovoltaic device, when trade 

agreements provide an exception to the 

Buy American statute. 

II. Discussion and Analysis 

This rule makes two clarifications to 

provide greater certainty and avoid 

confusion by offerors responding to 

solicitations that are governed by 

section 846 and the associated DFARS 

implementing provisions. Both 

clarifications are consistent with 

existing DoD practices. 

First, the rule clarifies that the 

country of origin is the country in 

which the final substantial 

transformation occurred. Each of the 

definitions for specific types of 

designated photovoltaic devices has 

been amended to specify that the 

photovoltaic device is not subsequently 

substantially transformed outside of the 

specified country. 

For example: 

‘‘Bahrainian photovoltaic device’’ 

means an article that— 

(i) Is wholly manufactured in Bahrain; 

or 

(ii) In the case of an article that 

consists in whole or in part of materials 

from another country, has been 

substantially transformed in Bahrain 

into a new and different article of 

commerce with a name, character, or 

use distinct from that of the article or 

articles from which it was transformed, 

provided that the photovoltaic device is 


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76994 Federal Register / Vol. 78, No. 245 / Friday, December 20, 2013 / Rules and Regulations 

not subsequently substantially 

transformed outside of Bahrain. 

Second, a new paragraph (c) has been 

added to the provision at 252.225–7018, 

which directs offerors to certify the 

origin of a designated country 

photovoltaic device consistent with 

country of origin determinations by U.S. 

Customs and Border Protection for the 

same or similar items. If the offeror is 

uncertain, the provision directs the 

offeror to request a determination from 

U.S. Customs and Border Protection. 

This guidance applies only to the origin 

of designated country photovoltaic 

devices (as defined in 252.225–7017(a)). 

The origin of domestic photovoltaic 

devices and qualifying country 

photovoltaic devices is not based on 

substantial transformation, but on place 

of manufacture (regardless of the origin 

of the components). FAR 52.225–18 

defines ‘‘place of manufacture’’ as the 

place where an end product is 

assembled out of components, or 

otherwise made or processed from raw 

materials into the finished product to be 

provided to the Government (in this 

case the photovoltaic device to be 

utilized under the contract). 

U.S.-made photovoltaic devices are 

not designated country photovoltaic 

devices, but their utilization is allowed, 

consistent with FAR 25.403(c), when 

the value of the photovoltaic devices 

utilized exceeds $202,000, so that U.S.- 

made photovoltaic devices that do not 

qualify as domestic photovoltaic devices 

are not disadvantaged in favor of 

designated country photovoltaic 

devices. U.S.-made photovoltaic devices 

may be manufactured or substantially 

transformed in the United States. 

Therefore, a U.S.-made photovoltaic 

device may qualify on the basis of 

manufacture in the U.S., even if it does 

not meet the more stringent 

requirements of substantial 

transformation in the United States. 

III. 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, dated September 30, 1993. This 

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

804. 

IV. Regulatory Flexibility Act 

DoD does not expect this rule to 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 this rule only impacts the 

determination of whether photovoltaic 

devices are substantially transformed in 

a designated country. No domestic 

entities will be impacted because the 

United States is not a designated 

country. For the definition of ‘‘small 

business,’’ the Regulatory Flexibility Act 

refers to the Small Business Act, which 

in turn allows the U.S. Small Business 

Administration (SBA) Administrator to 

specify detailed definitions or standards 

(5 U.S.C. 601(3) and 15 U.S.C. 632(a)). 

The SBA regulations at 13 CFR 121.105 

discuss who is a small business: ‘‘(a)(1) 

Except for small agricultural 

cooperatives, a business concern eligible 

for assistance from SBA as a small 

business is a business entity organized 

for profit, with a place of business 

located in the United States, and which 

operates primarily within the United 

States or which makes a significant 

contribution to the U.S. economy 

through payment of taxes or use of 

American products, materials or labor. 

Therefore, an initial regulatory 

flexibility analysis has not been 

performed. DoD invites comments from 

small business concerns and other 

interested parties on the expected 

impact of this rule on small entities. 

DoD will also consider comments 

from small entities concerning the 

existing regulations in subparts affected 

by this rule in accordance with 5 U.S.C. 

610. Interested parties must submit such 

comments separately and should cite 5 

U.S.C. 610 (DFARS Case 2014–D006), in 

correspondence. 

V. Paperwork Reduction Act 

The rule contains 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; 

however, these changes to the DFARS 

do not impose additional information 

collection requirements to the 

paperwork burden previously approved 

under OMB Control Number 0704–0229, 

entitled Defense Federal Acquisition 

Regulation Supplement (DFARS); Part 

225, Foreign Acquisition. 

VI. Determination To Issue an Interim 

Rule 

A determination has been made under 

the authority of the Secretary of Defense 

that urgent and compelling reasons exist 

to promulgate this interim rule without 

prior opportunity for public comment. 

This action is necessary to ensure that 

section 846 of the National Defense 

Authorization Act for Fiscal Year 2011 

is being appropriately implemented in 

accordance with DoD practices for 

achieving consistent adherence with 

international trade rules. Section 846 

addresses the origin of photovoltaic 

devices acquired by DoD. The statute 

requires that photovoltaic devices 

comply with the Buy American statute, 

subject to the exceptions to that statute 

provided in the Trade Agreements Act 

(TAA), or otherwise provided by law. 

When an acquisition is subject to the 

TAA, the substantial transformation test 

is used to establish the origin of 

products. Questions have arisen 

regarding interpretation of the 

substantial transformation test for 

photovoltaic devices, in light of varying 

interpretations that have been issued by 

U.S. Customs and Border Protection 

(CBP) and the Department of Commerce 

in carrying out their respective 

missions. These opinions were issued 

after DOD published its final rule 

implementing section 846 in May 2012. 

DoD has determined, after 

consultation with the United States 

Trade Representative, that clarification 

is necessary to avoid unintended 

confusion in the marketplace and 

potential non-compliance with section 

846 and to ensure the proper and 

appropriate application of international 

trade rules. This rule makes explicit 

DOD’s practice of generally following 

determinations made by CBP regarding 

when an end product is considered to 

have been substantially transformed. 

Because this rule addresses 

‘‘photovoltaic devices’’ rather than ‘‘end 

products,’’ it also clarifies that the 

country of origin is the country in 

which the final substantial 

transformation occurred. These 

immediate clarifications will ensure that 

offerors are properly certifying their 

compliance with existing law and 

regulation addressing the acquisition of 

photovoltaic devices and provide 

greater certainty to the marketplace 

when offering these products to DoD at 

a time when the U.S. Government is 

working aggressively to take greater 

advantage of green energy industries as 

part of its comprehensive energy and 

environmental policies. The rule 

provides guidance to offerors that will 

facilitate offeror certifications that are 

consistent with existing DoD policy and 

practice when DoD directly acquires 

end products. Failure to implement this 

requirement promptly can also have 


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Federal Register / Vol. 78, No. 245 / Friday, December 20, 2013 / Rules and Regulations 76995 

adverse effects on the U.S. photovoltaic 

industry, which this statute was 

designed to protect. 

DOD will consider, pursuant to 41 

U.S.C. 1707 and FAR 1.501–3(b), public 

comments received in response to this 

interim rule in the formation of the final 

rule. 

List of Subjects in 48 CFR Part 252 

Government procurement. 

Manuel Quinones, 

Editor, Defense Acquisition Regulations 

System. 

Therefore 48 CFR part 252 is amended 

as follows: 

PART 252—SOLICITATION 

PROVISIONS AND CONTRACT 

CLAUSES 

■ 1. The authority citation for 48 CFR 

part 252 continues to read as follows: 

Authority: 41 U.S.C. 1303 and 48 CFR 

chapter 1. 

■ 2. Section 252.225–7017 is amended 

by— 

■ a. Removing the clause date ‘‘(OCT 

2013)’’ and adding ‘‘(DEC 2013)’’ in its 

place; and 

■ b. In paragraph (a)— 

■ i. In the definition of ‘‘Bahrainian 

photovoltaic device’’ in paragraph (ii), 

removing ‘‘transformed.’’ and adding 

‘‘transformed, provided that the 

photovoltaic device is not subsequently 

substantially transformed outside of 

Bahrain.’’ in its place. 

■ ii. In the definition of ‘‘Canadian 

photovoltaic device’’, removing 

‘‘transformed.’’ and adding 

‘‘transformed, provided that the 

photovoltaic device is not subsequently 

substantially transformed outside of 

Canada.’’ in its place. 

■ iii. In the definition of ‘‘Caribbean 

Basin country photovoltaic device’’ in 

paragraph (ii), removing ‘‘transformed.’’ 

and adding ‘‘transformed, provided that 

the photovoltaic device is not 

subsequently substantially transformed 

outside of a Caribbean Basin country.’’ 

in its place. 

■ iv. In the definition of ‘‘Free Trade 

Agreement country photovoltaic device’’ 

in paragraph (ii), removing 

‘‘transformed.’’ and adding 

‘‘transformed, provided that the 

photovoltaic device is not subsequently 

substantially transformed outside of a 

Free Trade Agreement country.’’ in its 

place. 

■ v. In the definition of ‘‘Korean 

photovoltaic device’’ in paragraph (i), 

removing ‘‘Korea’’ and adding ‘‘Korea 

(Republic of)’’ in its place, and in 

paragraph (ii) removing ‘‘transformed.’’ 

and adding ‘‘transformed, provided that 

the photovoltaic device is not 

subsequently substantially transformed 

outside of Korea (Republic of).’’ in its 

place. 

■ vi. In the definition of ‘‘Least 

developed country photovoltaic device’’ 

in paragraph (ii), removing 

‘‘transformed.’’ and adding 

‘‘transformed, provided that the 

photovoltaic device is not subsequently 

substantially transformed outside of a 

least developed country.’’ in its place. 

■ vii. In the definition of ‘‘Moroccan 

photovoltaic device’’ in paragraph (ii), 

removing ‘‘transformed.’’ and adding 

‘‘transformed, provided that the 

photovoltaic device is not subsequently 

substantially transformed outside of 

Morocco.’’ in its place. 

■ viii. In the definition of ‘‘Panamanian 

photovoltaic device’’ in paragraph (ii), 

removing ‘‘transformed.’’ and adding 

‘‘transformed, provided that the 

photovoltaic device is not subsequently 

substantially transformed outside of 

Panama.’’ in its place. 

■ ix. In the definition of ‘‘Peruvian 

photovoltaic device’’ in paragraph (ii), 

removing ‘‘transformed.’’ and adding 

‘‘transformed, provided that the 

photovoltaic device is not subsequently 

substantially transformed outside of 

Peru.’’ in its place. 

■ x. In the definition of ‘‘U.S.-made 

photovoltaic device’’ in paragraph (ii), 

removing ‘‘transformed.’’ and adding 

‘‘transformed, provided that the 

photovoltaic device is not subsequently 

substantially transformed outside of the 

United States.’’ in its place. 

■ xi. In the definition of ‘‘WTO GPA 

country photovoltaic device’’ in 

paragraph (ii), removing ‘‘transformed.’’ 

and adding ‘‘transformed, provided that 

the photovoltaic device is not 

subsequently substantially transformed 

outside of a WTO GPA country.’’ in its 

place. 

■ 3. Amend section 252.225–7018 by— 

■ a. Removing the clause date ‘‘(NOV 

2012)’’ and adding ‘‘(DEC 2013)’’ in its 

place; and 

■ b. Adding to paragraph (a) the phrase 

‘‘designated country photovoltaic 

device’’ after the phrase ‘‘designated 

country’’; 

■ c. Removing, in paragraph (b)(1), 

‘‘(c)(2)(ii), (c)(3)(ii) or (c)(4)(ii)’’ and 

adding ‘‘(d)(2)(ii), (d)(3)(ii) or (d)(4)(ii)’’ 

in its place; and 

■ d. Redesignating paragraph (c) as 

paragraph (d) and adding a new 

paragraph (c) to read as follows: 

252.225–7018 Photovoltaic Devices— 

Certificate. 

* * * * * 

(c) Country in which a designated 

country photovoltaic device was wholly 

manufactured or was substantially 

transformed. If the estimated value of 

the photovoltaic devices to be utilized 

under a resultant contract exceeds 

$25,000, the Offeror’s certification that 

such photovoltaic device (e.g., solar 

panel) is a designated country 

photovoltaic device shall be consistent 

with country of origin determinations 

by the U.S. Customs and Border 

Protection with regard to importation of 

the same or similar photovoltaic devices 

into the United States. If the Offeror is 

uncertain as to what the country of 

origin would be determined to be by the 

U.S. Customs and Border Protection, the 

Offeror shall request a determination 

from U.S. Customs and Border 

Protection. (See http://www.cbp.gov/xp/ 

cgov/trade/legal/rulings/.) 

* * * * * 

[FR Doc. 2013–30496 Filed 12–19–13; 8:45 am] 

BILLING CODE 5001–06–P 

DEPARTMENT OF THE INTERIOR 

Fish and Wildlife Service 

50 CFR Part 17 

[Docket Nos. FWS–R1–ES–2012–0017; 

FWS–R1–ES–2013–0012; 4500030113] 

RIN 1018–AX72; 1018–AZ54 

Endangered and Threatened Wildlife 

and Plants; Threatened Status for 

Eriogonum codium (Umtanum Desert 

Buckwheat) and Physaria douglasii 

subsp. tuplashensis (White Bluffs 

Bladderpod) and Designation of 

Critical Habitat 

AGENCY: Fish and Wildlife Service, 

Interior. 

ACTION: Final rule; revision. 

SUMMARY: We, the U.S. Fish and 

Wildlife Service, affirm our 

determination to list Eriogonum codium 

(Umtanum desert buckwheat) and 

Physaria douglasii subsp. tuplashensis 

(White Bluffs bladderpod) as threatened 

under the Endangered Species Act of 

1973, as amended (Act). This 

affirmation of a previously published 

final rule implements the Federal 

protections provided by the Act for 

these species. We also affirm our 

designation of critical habitat for 

Umtanum desert buckwheat and revise 

our designation of critical habitat for 

White Bluffs bladderpod under the Act. 

In total, approximately 344 acres (139 

hectares) are designated as critical 

habitat for Umtanum desert buckwheat 

in Benton County, Washington, and 


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