80472 Federal Register / Vol. 88, No. 221 / Friday, November 17, 2023 / Proposed Rules 

using FAR part 12 procedures for the 

acquisition of commercial products and 

commercial services,’’. 

[FR Doc. 2023–25160 Filed 11–16–23; 8:45 am] 

BILLING CODE 6001–FR–P 

DEPARTMENT OF DEFENSE 

Defense Acquisition Regulations 

System 

48 CFR Parts 212, 225, and 252 

[Docket DARS–2023–0042; Req No. DARS– 

2024–00012–FR] 

RIN 0750–AL40 

Defense Federal Acquisition 

Regulation Supplement: Limitation on 

the Acquisition of Certain Goods Other 

Than United States Goods (DFARS 

Case 2021–D022) 

AGENCY: Defense Acquisition 

Regulations System, Department of 

Defense (DoD). 

ACTION: Proposed rule. 

SUMMARY: DoD is proposing to amend 

the Defense Federal Acquisition 

Regulation Supplement (DFARS) to 

implement two sections of the National 

Defense Authorization Act for Fiscal 

Year 2021, one section of the National 

Defense Authorization Act for Fiscal 

Year 2022, one section of the National 

Defense Authorization Act for Fiscal 

Year 2023, and one section of the 

Consolidated Appropriations Act, 2023. 

These statutes remove limitations and 

restrictions on certain components that 

are no longer required, add new 

limitations on other components, 

subject to exceptions. 

DATES: Comments on the proposed rule 

should be submitted in writing to the 

address shown below on or before 

January 16, 2024, to be considered in 

the formation of a final rule. 

ADDRESSES: Submit comments 

identified by DFARS Case 2021–D022, 

using any of the following methods: 

Æ Federal eRulemaking Portal: https:// 

www.regulations.gov. Search for DFARS 

Case 2021–D022. Select ‘‘Comment’’ 

and follow the instructions to submit a 

comment. Please include ‘‘DFARS Case 

2021–D022’’ on any attached 

documents. 

Æ Email: osd.dfars@mail.mil. Include 

DFARS Case 2021–D022 in the subject 

line of the message. 

Comments received generally will be 

posted without change to https://

www.regulations.gov, including any 

personal information provided. To 

confirm receipt of your comment(s), 

please check https://

www.regulations.gov, approximately 

two to three days after submission to 

verify posting. 

FOR FURTHER INFORMATION CONTACT: 

Kimberly Bass, telephone 703–717– 

3446. 

SUPPLEMENTARY INFORMATION: 

I. Background 

DoD is proposing to revise the DFARS 

to implement sections 845 and 1603 of 

the National Defense Authorization Act 

(NDAA) for Fiscal Year (FY) 2021 (Pub. 

L. 116–283); section 816 of the NDAA 

for FY 2022 (Pub. L. 117–81); section 

853 of the NDAA for FY 2023 (Pub. L. 

117–263), and section 8016 of the 

Consolidated Appropriations Act of 

2023 (Pub. L. 117–328). These sections 

amend 10 U.S.C. 2534, now 10 U.S.C. 

4864, to require acquisition of certain 

items and components from the national 

technology and industrial base. The 

national technology and industrial base 

is defined at 10 U.S.C. 4801 as the 

United States, Australia, Canada, New 

Zealand, or the United Kingdom. 

Section 845 of the NDAA for FY 2021 

amends 10 U.S.C. 4864(a) to update the 

list of components for naval vessels at 

paragraphs (a)(2)(A) through (E). 

Subsequently, section 816 of the NDAA 

for FY 2022 added to the list of 

components for naval vessels welded 

shipboard anchor and mooring chain, 

without size restrictions, at 10 U.S.C. 

4864(a)(2)(F). Section 845 also added 

components for T–AO 205 class vessels 

at 10 U.S.C. 4864(a)(4). Section 853 of 

the NDAA for FY 2023 added T–ARC 

class vessels at 10 U.S.C. 4864(a)(4) 

along with the component list for T–AO 

205 class vessels. Section 1603 of the 

NDAA for FY 2021 added limitations on 

procurement of satellite star trackers at 

10 U.S.C. 4864(a)(5). Section 8016 of the 

Consolidated Appropriations Act, 2023 

provided waiver authority to the 

Secretary of the Service responsible for 

the procurement of welded shipboard 

anchor and mooring chain. 

Section 845, in updating the list of 

components for naval vessels at 10 

U.S.C. 4864, removed prior paragraphs 

(a)(2) through (5) and redesignated 

paragraph (a)(6), components for 

auxiliary ships (large medium-speed 

diesel engines), as paragraph (a)(3). The 

removed paragraphs were: (a)(2) 

chemical weapons antidote; (a)(3)(A) 

components for naval vessels consisting 

of air circuit breakers, welded shipboard 

anchor and mooring chain with a 

diameter of four inches or less, vessel 

propellers; and (a)(3)(B) components of 

vessel unique to marine applications of 

gyrocompasses, electronic navigation 

chart systems, steering controls, pumps, 

propulsion and machinery control 

systems, and totally enclosed lifeboats; 

(a)(4), valves and machine tools; and 

(a)(5), ball bearings and roller bearings. 

Additionally, section 845 struck 

paragraph (j), Inapplicability to certain 

contracts to purchase ball bearings or 

roller bearings, and redesignated 

paragraph (k), Limitation on certain 

procurements application process, as 

paragraph (j). 

II. Discussion and Analysis 

Updates to 10 U.S.C. 2534, now 10 

U.S.C. 4864, have been incrementally 

implemented over time in various 

DFARS sections under subpart 225.70 as 

follows: 225.7004, Restriction on 

acquisition of foreign buses; 225.7006, 

Restrictions on air circuit breakers for 

naval vessels; 225.7007, Restrictions on 

anchor and mooring chain; 225.7008, 

Waiver of restrictions of 10 U.S.C. 4864; 

and 225.7010, Restrictions on certain 

naval vessel and auxiliary ship 

components. This proposed rule 

aggregates the requirements subject to 

10 U.S.C. 4864 under one 

comprehensive DFARS section at 

225.7004 to facilitate comprehension of 

and compliance with the limitations, 

exceptions, and waivers applicable to 

acquisition of certain goods other than 

U.S. goods. As a result, DFARS sections 

225.7006 through 225.7008 and section 

225.7010 are proposed to be 

incorporated, as appropriate and in 

alignment with the statutory 

requirements being implemented, into a 

single DFARS section 225.7004 titled, 

‘‘Restrictions on the procurement of 

goods other than U.S. goods.’’ 

Accordingly, sections 225.7006 through 

225.7008 and 225.7010 would be 

removed and reserved. DFARS section 

225.7009, Restriction on ball and roller 

bearings, remains as a standalone 

section as the authority for this section 

is derived from Appropriations Acts, 

and not from 10 U.S.C. 4864. 

DFARS section 225.7004, Restrictions 

on the procurement of goods other than 

U.S. goods, is established as the 

framework for all coverage related to 

implementing 10 U.S.C. 4864. The 

current DFARS section 225.7004, 

Restriction on acquisition of foreign 

buses, is incorporated into this new 

redesignated section along with relevant 

coverage to implement the statutes 

addressed in section I, Background, of 

this preamble. The new DFARS section 

225.7004 addresses the following: 

• 225.7004–0, Scope; added to state 

that the section implements 10 U.S.C. 

4864. 

• 225.7004–1, Definitions; adds new 

definitions for ‘‘national technology and 

industrial base’’ and ‘‘star tracker.’’ 


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• 225.7004–2, Restrictions; addresses 

end items and components that must be 

acquired from the national technology 

and industrial base. 

• 225.7004–3, Exceptions; provides 

the exceptions that apply to the end 

items and components described in 

225.7004–1. 

• 225.7004–4, Implementation of 

restriction on certain naval vessel 

components; implements 10 U.S.C. 

4864(h) that prohibits the use of 

contract clauses or certifications to 

implement the restriction at 225.7004– 

1(b) for naval vessel components. 

Agencies must use management and 

oversight techniques that achieve the 

objectives of this section without 

imposing a significant management 

burden on the Government or the 

contractor involved. 

• 225.7004–5, Additional restrictions 

on anchor and mooring chain; addresses 

additional requirements imposed by 

DoD Appropriations Acts, most recently 

by section 8016, Consolidated 

Appropriations Act, 2023 (Pub. L. 

117.328). While 10 U.S.C. 4864 also 

restricts acquisition of welded 

shipboard anchor and mooring chain, 

when used as a component of a naval 

vessel, the Appropriations Act 

restriction takes precedence over the 

restriction of 10 U.S.C. 4864. 

• 225.7004–6, Waiver of restrictions; 

addresses waivers that apply to the end 

items and components described in 

225.7004–1. 

• 225.7004–7, Contract clauses; 

provides clause prescriptions for 

DFARS 252.225–7019, Restriction on 

Acquisition of Anchor and Mooring 

Chain; DFARS 252.225–7062, 

Restriction on Acquisition of Large 

Medium-Speed Diesel Engines; new 

DFARS clause 252.225–70XX, 

Restriction on Acquisition of 

Components of T–AO 205 and T–ARC 

Class Vessels; and new DFARS clause 

252.225–70YY, Restriction on 

Acquisition of Certain Satellite 

Components. 

Additional changes are proposed to 

DFARS 212.301, Solicitation provisions 

and contract clauses for the acquisition 

of commercial products and commercial 

services. The removal of solicitation 

provision 252.225–7037, Evaluation of 

Offers for Air Circuit Breakers, and 

contract clause 252.225–7038, 

Restriction on Acquisition of Air Circuit 

Breakers, is proposed because section 

845 of the NDAA for FY 2021 removed 

this component from 10 U.S.C. 4864. 

The addition of the following three 

clauses is proposed: 252.225–7019, 

Restriction on Acquisition of Anchor 

and Mooring Chain; 252.225–70XX, 

Restriction on Acquisition of 

Components of T–AO 205 and T–ARC 

Class Vessels; and 252.225–70YY, 

Restriction on Acquisition of Certain 

Satellite Components. 

DoD proposes to remove and reserve 

sections 225.7006 through 225.7008 and 

225.7010 due to the new consolidated 

framework at DFARS 227.7004 for 

implementing 10 U.S.C. 4864. DFARS 

225.7006, Restriction on air circuit 

breakers for naval vessels, is not 

incorporated into the new section 

225.7004, because section 845 of the 

NDAA for FY 2021 removed this 

component from 10 U.S.C. 4864. Section 

8100 of the Consolidated 

Appropriations Act, 2023, only 

addresses air circuit breakers in 

conjunction with a single Department of 

Navy program. Therefore, the section on 

air circuit breakers will not be retained 

in the DFARS in consonance with 

DFARS drafting conventions. 

DFARS section 225.7009, Restriction 

on ball and roller bearings, is retained, 

notwithstanding its removal from 10 

U.S.C. 4864 by section 845 in the NDAA 

for FY 2021, since it is needed to 

implement DoD Appropriations Act 

restrictions. See, for example, section 

8033 of the Consolidated 

Appropriations Act, 2023. 

Revisions to DFARS clause 252.225– 

7019, Restriction on Acquisition of 

Anchor and Mooring Chain, are 

proposed to update the prescription 

cross-reference in the introductory text 

to read ‘‘225.7004–7(a)’’ and remove 

from paragraphs (b) and (d) the phrase 

‘‘four inches or less in diameter’’. This 

language is not included in section 816 

of the NDAA for FY 2022 that added 

this component to 10 U.S.C. 

4864(a)(2)(F). This phrase is also not 

included in section 8016 of the 

Consolidated Appropriations Act, 2023 

on this subject. 

DFARS provision 252.225–7037, 

Evaluation of Offers for Air Circuit 

Breakers, and DFARS clause 252.225– 

7038, Restriction on Acquisition of Air 

Circuit Breakers, are proposed to be 

removed and reserved. Section 845 

deleted this component from 10 U.S.C. 

4864, and the Consolidated 

Appropriations Act, 2023, section 8100 

only addresses air circuit breakers in 

conjunction with a single Department of 

Navy program. 

Two new clauses are proposed to be 

added: 252.225–70XX, Restriction on 

Acquisition of Components of T–AO 

205 and T–ARC Class Vessels; and 

252.225–70YY, Restriction on 

Acquisition of Certain Satellite 

Components. In addition, the cross 

reference in the introductory text of 

DFARS 252.225–7062 is proposed to be 

revised to reflect the new location of the 

clause prescription in 225.7004–7. 

III. Applicability to Contracts at or 

Below the Simplified Acquisition 

Threshold (SAT), for Commercial 

Products, Including Commercially 

Available Off-the-Shelf (COTS) Items, 

and for Commercial Services 

This rule proposes to create two new 

contract clauses: 

(1) DFARS clause 252.225–70XX, 

Restriction on Acquisition of 

Components of T–AO 205 Class Vessels, 

for use in solicitations and contracts 

requiring the acquisition of components 

of T–AO 205 and T–ARC class vessels, 

including solicitations and contracts 

that exceed the SAT and that use FAR 

part 12 procedures for the acquisition of 

commercial products, including COTS 

items, and for the acquisition of 

commercial services; and 

(2) DFARS clause at 252.225–70YY, 

Restriction on Acquisition of Satellite 

Star Trackers, for use in solicitations 

and contracts requiring the acquisition 

of satellite star trackers, including 

solicitations and contracts that exceed 

the SAT and that use FAR part 12 

procedures for the acquisition of 

commercial products, including COTS 

items, and for the acquisition of 

commercial services. 

Sections 845 and 1603 of the NDAA 

for FY 2021 (Pub. L. 116–283) and 

section 852 of the NDAA for FY 2023 

(Pub. L. 117–263), which amend 10 

U.S.C. 4864, are implemented in this 

proposed rule. 10 U.S.C. 4864 does not 

apply to a contract or subcontract for an 

amount that does not exceed the SAT. 

Therefore, the clauses will not apply to 

acquisitions at or below the SAT. 

However, DoD intends to apply the 

clauses to contracts for the acquisition 

of commercial products including COTS 

items and for the acquisition of 

commercial services. 

A. Applicability to Contracts for the 

Acquisition of Commercial Products 

Including COTS Items and for the 

Acquisition of Commercial Services 

10 U.S.C. 3452 exempts contracts and 

subcontracts for the acquisition of 

commercial products, including COTS 

items, and commercial services from 

provisions of law enacted after October 

13, 1994, unless the Under Secretary of 

Defense (Acquisition and Sustainment) 

(USD(A&S)) makes a written 

determination that it would not be in 

the best interest of DoD to exempt 

contracts for the procurement of 

commercial products and commercial 

services from the applicability of the 

provision or contract requirement, 

except for a provision of law that— 


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80474 Federal Register / Vol. 88, No. 221 / Friday, November 17, 2023 / Proposed Rules 

• Provides for criminal or civil 

penalties; 

• Requires that certain articles be 

bought from American sources pursuant 

to 10 U.S.C. 4862 or that strategic 

materials critical to national security be 

bought from American sources pursuant 

to 10 U.S.C. 4863; or 

• Specifically refers to 10 U.S.C. 3452 

and states that it shall apply to contracts 

and subcontracts for the acquisition of 

commercial products (including COTS 

items) and commercial services. 

The statute implemented in this 

proposed rule does not impose criminal 

or civil penalties, does not require 

purchase pursuant to 10 U.S.C. 4862 or 

4863, and does not refer to 10 U.S.C. 

3452. Therefore, sections 845 and 1603 

of the NDAA for FY 2021 and section 

853 of the NDAA for FY 2023 will not 

apply to the acquisition of commercial 

services or commercial products 

including COTS items unless a written 

determination is made. Due to 

delegations of authority, the Principal 

Director, Defense Pricing and 

Contracting, is the appropriate authority 

to make this determination. DoD intends 

to make that determination to apply this 

statute to the acquisition of commercial 

products, including COTS items, and to 

the acquisition of commercial services. 

B. Determination 

Consistent with 10 U.S.C. 3452, and 

based on the findings above, not 

applying these clauses to contracts and 

subcontracts for the acquisition of 

commercial products including COTS 

items and for the acquisition of 

commercial services would exclude 

contracts intended to be covered by the 

statute and undermine the overarching 

purpose of the statute. Accordingly, 

DoD plans to apply the statute to 

contracts and subcontracts for the 

acquisition of commercial products 

including COTS items and for the 

acquisition of commercial services. 

IV. Expected Impact of the Rule 

The proposed rule adds procurement 

limitations on the acquisition of star 

trackers for certain national security 

satellites and certain components for T– 

AO 205 and T–ARC class vessels, 

requiring they are manufactured in the 

national technology and industrial base: 

the United States, Australia, Canada, 

New Zealand, or the United Kingdom in 

accordance with 10 U.S.C. 4864. 

The proposed rule is not expected to 

have a significant impact on the 

Government, offerors, or contractors. 

The satellite star trackers and 

components for the T–AO 205 and T– 

ARC class of vessels are the types of 

items that are readily available in the 

marketplace, so limitation to national 

technology and industrial base sources 

is not viewed as having a significant 

impact on the availability of sources. 

Further, the proposed rule provides 

waiver procedures to the limitation. 

The domestic source restriction does 

not apply to— 

(1) Contracts or subcontracts that do 

not exceed the simplified acquisition 

threshold; 

(2) The acquisition of spare or repair 

parts needed to support components for 

naval vessels manufactured outside the 

United States; and 

(3) Large medium-speed diesel 

engines for icebreakers or special 

mission ships. 

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. Regulatory Flexibility Act 

DoD does not expect this proposed 

rule, when finalized, 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 the rule will continue to 

provide small businesses the 

opportunity to participate in the 

manufacture of star trackers for certain 

national security satellites and certain 

components for T–AO 205 and T–ARC 

class vessels in support of the national 

technology and industrial base. 

However, an initial regulatory flexibility 

analysis has been performed and is 

summarized as follows: 

DoD is proposing to amend the 

Defense Federal Acquisition Regulation 

Supplement (DFARS) to implement 

statutes that remove limitations and 

restrictions no longer required, and that 

require the procurement of star trackers 

for certain national security satellites, as 

well as certain components for T–AO 

205 and T–ARC class vessels, from the 

national technology and industrial base: 

the United States, Australia, Canada, 

New Zealand, or the United Kingdom. 

The objective of the proposed rule is 

to implement sections 845 and 1603 of 

the National Defense Authorization Act 

(NDAA) for Fiscal Year (FY) 2021 (Pub. 

L. 116–283); section 816 of the NDAA 

for FY 2022 (Pub. L. 117–81); and 

section 853 of the NDAA for FY 2023 

(Pub. L. 117–263). These NDAA sections 

are the legal basis for the proposed rule. 

Section 845 of the NDAA for FY 2021 

amends 10 U.S.C. 4864(a) to update the 

list of components for naval vessels at 

paragraphs (a)(2)(A) through (E). 

Subsequently, section 816 of the NDAA 

for FY 2022 added to the list of 

components for naval vessels welded 

shipboard anchor and mooring chain, 

without size restrictions, at 10 U.S.C. 

4864(a)(2)(F). Section 845 also added 

components for T–AO 205 class vessels 

at 10 U.S.C. 4864(a)(4). Section 853 of 

the NDAA for FY 2023 added T–ARC 

class vessels at 10 U.S.C. 4864(a)(4) 

along with the component list for T–AO 

205 class vessels. Section 1603 of the 

NDAA for FY 2021 added limitations on 

procurement of satellite star trackers at 

10 U.S.C. 4864(a)(5). DoD reviewed data 

from the Federal Procurement Data 

System for FY 2018, 2019, and 2020, 

excluding contracts that do not exceed 

the simplified acquisition threshold, for 

the following product service codes: 

7G22, 2835, 2010, 3815, 1040, 5925, 

2040, 2010, beginning with 70 (for 

example, information technology 

hardware and software), and 7435. DoD 

made an average of 651 awards per year, 

of which 385 were made to small 

entities, an average of 59 percent 

awarded to small entities over the three 

fiscal years. 

It is expected that this proposed rule, 

when finalized, will benefit small 

businesses. The proposed rule will 

continue to provide small businesses 

the opportunity to participate in the 

manufacture of star trackers for certain 

national security satellites and certain 

components for T–AO 205 and T–ARC 

class vessels in support of the national 

technology and industrial base. 

This proposed rule does not include 

any new reporting, recordkeeping, or 

other compliance requirements for small 

businesses. 

The proposed rule does not duplicate, 

overlap, or conflict with any other 

Federal rules. 

The proposed rule exempts 

acquisitions equal to or less than the 

simplified acquisition threshold. There 

are no other known significant 

alternative approaches to the proposed 

rule that would meet the requirements 

of the statute. 

DoD invites comments from small 

business concerns and other interested 


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parties on the expected impact of this 

proposed rule on small entities. 

DoD will also consider comments 

from small entities concerning the 

existing regulations in subparts affected 

by this proposed 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 2021–D022), in correspondence. 

VII. Paperwork Reduction Act 

This proposed 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 Parts 212, 

225, and 252 Government procurement. 

Jennifer D. Johnson, 

Editor/Publisher, Defense Acquisition 

Regulations System. 

Therefore, 48 CFR parts 212, 225, and 

252 are proposed to be amended as 

follows: 

■ 1. The authority citation for 48 CFR 

parts 212, 225, and 252 continues to 

read as follows: 

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

chapter 1. 

PART 212—ACQUISITION OF 

COMMERCIAL PRODUCTS AND 

COMMERCIAL SERVICES 

■ 2. Amend section 212.301 by— 

■ a. Removing paragraphs (f)(x)(X) and 

(Y); 

■ b. Redesignating paragraphs (f)(x)(M) 

through (W) as (f)(x)(N) through (X); 

■ c. Adding a new paragraph (f)(x)(M); 

■ d. Redesignating paragraphs (f)(x)(Z) 

through (NN) as paragraphs (f)(x)(Y) 

through (MM); 

■ e. In the newly redesignated 

paragraph (f)(x)(Y), removing ‘‘Pub. L.’’ 

and adding ‘‘Public Law’’ in its place; 

■ f. In the newly redesignated paragraph 

(f)(x)(MM), removing ‘‘225.7010–5’’ and 

adding ‘‘225.7004–7(b)’’ in its place; and 

■ g. Adding paragraphs (f)(x)(NN) 

through (OO). 

The additions read as follows: 

212.301 Solicitation provisions and 

contract clauses for the acquisition of 

commercial products and commercial 

services. 

* * * * * 

(f) * * * 

(x) * * * 

(M) Use the clause at 252.225–7019, 

Restriction on Acquisition of Anchor 

and Mooring Chain, as prescribed in 

225.7004–7(a), to comply with 10 U.S.C. 

4864 and section 8041 of the Fiscal Year 

1991 DoD Appropriations Act (Pub. L. 

101–511) and similar sections in 

subsequent DoD appropriations acts. 

* * * * * 

(NN) Use the clause at 252.225–70XX, 

Restriction on Acquisition of 

Components of T–AO 205 and T–ARC 

Class Vessels, as prescribed in 

225.7004–7(c), to comply with 10 U.S.C. 

4864. 

(OO) Use the clause at 252.225–70YY, 

Restriction on Acquisition of Certain 

Satellite Components, as prescribed in 

225.7004–7(d), to comply with 10 U.S.C. 

4864. 

* * * * * 

PART 225—FOREIGN ACQUISITION 

225.7001 [Amended] 

■ 3. Amend section 225.7001 in the 

definition of ‘‘Component’’ by removing 

‘‘225.7007’’ and adding ‘‘225.7004– 

2(b)(6)’’ in its place. 

■ 4. Revise section 225.7004 to read as 

follows: 

225.7004 Restrictions on the procurement 

of goods other than U.S. goods. 

■ 5. Add section 225.7004–0 to read as 

follows: 

225.7004–0 Scope. 

This section implements 10 U.S.C. 

4864. 

■ 6. Revise sections 225.7004–1 through 

225.7004–4 to read as follows: 

Sec. 

* * * * * 

225.7004–1 Definitions. 

225.7004–2 Restrictions. 

225.7004–3 Exceptions. 

225.7004–4 Implementation of restriction 

on certain naval vessel components. 

* * * * * 

225.7004–1 Definitions. 

As used in this section— 

National technology and industrial 

base means the persons and 

organizations that are engaged in 

production activities conducted within 

the United States, Australia, Canada, 

New Zealand, and the United Kingdom 

of Great Britain and Northern Ireland 

(United Kingdom). (10 U.S.C. 4801) 

Star tracker means a navigational tool 

used in a satellite weighing more than 

400 pounds whose principal purpose is 

to support the national security, 

defense, or intelligence needs of the 

U.S. Government. 

225.7004–2 Restrictions. 

Except as provided in 225.7004–3, do 

not acquire any of the following items, 

either as end products or components, 

unless the manufacturer of the items is 

part of the national technology and 

industrial base: 

(a) Buses, if multipassenger motor 

vehicles are purchased, leased, rented, 

or made available under contracts for 

transportation services. 

(b) Components for naval vessels, to 

the extent they are unique to marine 

applications (see also 225.7004–4 for 

implementation of the restriction for 

naval vessels): 

(1) Gyrocompasses. 

(2) Electronic navigation chart 

systems. 

(3) Steering controls. 

(4) Propulsion and machinery control 

systems. 

(5) Totally enclosed lifeboats. 

(6) Welded shipboard anchor and 

mooring chain. See also 225.7004–5. 

(c) Large medium-speed diesel 

engines for new construction of 

auxiliary ships using funds available for 

National Defense Sealift Fund programs 

or Shipbuilding and Conversion, Navy. 

(d) For T–AO 205 and T–ARC class 

vessels: 

(1) Auxiliary equipment, including 

pumps, for all shipboard services. 

(2) Propulsion system components, 

including engines, reduction gears, and 

propellers. 

(3) Shipboard cranes. 

(4) Spreaders for shipboard cranes. 

(e) Star trackers. 

225.7004–3 Exceptions. 

(a) Contracts under the simplified 

acquisition threshold. The restrictions at 

225.7004–2 do not apply to a contract or 

subcontract that does not exceed the 

simplified acquisition threshold. 

(b) Buses. The restriction at 225.7004– 

2(a) does not apply in the following 

circumstances: 

(1) Buses manufactured outside the 

national technology and industrial base 

are needed for temporary use because 

buses manufactured in the national 

technology and industrial base are not 

available to satisfy requirements that 

cannot be postponed. Such use may not, 

however, exceed the lead time required 

for acquisition and delivery of buses 

manufactured in the national 

technology and industrial base. 

(2) The requirement for buses is 

temporary in nature. For example, to 

meet a special, nonrecurring 

requirement or a sporadic and 

infrequent recurring requirement, buses 

manufactured outside the national 

technology and industrial base may be 

used for temporary periods of time. 

Such use may not however, exceed the 

period of time needed to meet the 

special requirement. 

(3) Buses manufactured outside the 

national technology and industrial base 

are available at no cost to the U.S. 

Government. 


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80476 Federal Register / Vol. 88, No. 221 / Friday, November 17, 2023 / Proposed Rules 

(c) Components for naval vessels. The 

restriction at 225.7004–2(b) does not 

apply to acquisition of spare or repair 

parts needed to support components for 

naval vessels manufactured outside the 

United States. Support includes the 

purchase of spare gyrocompasses, 

electronic navigation chart systems, 

steering controls, propulsion and 

machinery control systems, totally 

enclosed lifeboats, and welded 

shipboard anchor and mooring chain. 

(d) Components for auxiliary ships. 

The restriction at 225.7004–2(c) does 

not apply to large medium-speed 

engines for icebreakers or special 

mission ships. 

(e) Star trackers. The restriction at 

225.7004–2(e) does not apply to 

acquisition programs that have received 

Milestone A approval as defined in 10 

U.S.C. 4211 before October 1, 2021, as 

documented by the requiring activity 

official performing program 

management responsibilities. The 

contracting officer shall include the 

Milestone A approval documentation in 

the contract file. 

225.7004–4 Implementation of restriction 

on certain naval vessel components. 

(a) The statute at 10 U.S.C. 4864(h) 

prohibits the use of contract clauses or 

certifications to implement the 

restriction at 225.7004–2(b) for naval 

vessel components. 

(b) Agencies shall accomplish 

implementation of the restriction at 

225.7004–2(b) through use of 

management and oversight techniques 

that achieve the objectives of this 

section without imposing a significant 

management burden on the Government 

or the contractor involved. 

■ 7. Add sections 225.7004–5 through 

225.7004–7 to read as follows: 

Sec. 

* * * * * 

225.7004–5 Additional restrictions on 

anchor and mooring chain. 

225.7004–6 Waiver of restrictions. 

225.7004–7 Contract clauses. 

* * * * * 

225.7004–5 Additional restrictions on 

anchor and mooring chain. 

(a) In accordance with section 8041 of 

the Fiscal Year 1991 DoD 

Appropriations Act (Pub. L. 101–511) 

and similar sections in subsequent DoD 

appropriations acts, do not acquire 

welded shipboard anchor and mooring 

chain, unless— 

(1) It is manufactured in the United 

States, including cutting, heat treating, 

quality control, testing, and welding 

(both forging and shot blasting process); 

and 

(2) The cost of the components 

manufactured in the United States 

exceeds 50 percent of the total cost of 

components. 

(b) The statute at 10 U.S.C. 4864 also 

restricts acquisition of welded 

shipboard anchor and mooring chain, 

when used as a component of a naval 

vessel; however, the Appropriations Act 

restriction described in paragraph (a) of 

this section takes precedence over the 

restriction of 10 U.S.C. 4864 cited in 

225.7004–2(b)(6). 

225.7004–6 Waiver of restrictions. 

(a) Welded shipboard anchor and 

mooring chain. (1) In accordance with 

section 8016 of the Consolidated 

Appropriations Act, 2023 (Pub. L. 117– 

328), the secretary of the department 

responsible for acquisition may waive 

the restrictions in 225.7004–2(b)(6) and 

225.7004–5, on a case-by-case basis, if— 

(i) Sufficient domestic suppliers are 

not available to meet DoD requirements 

on a timely basis; and 

(ii) The acquisition is necessary to 

acquire capability for national security 

purposes. 

(2) Document the waiver in a written 

determination and findings 

containing— 

(i) The factors supporting the waiver; 

and 

(ii) A certification that the acquisition 

must be made in order to acquire 

capability for national security 

purposes. 

(3) Provide a copy of the 

determination and findings to the House 

and Senate Committees on 

Appropriations. 

(b) Star trackers. The waiver criteria 

at paragraph (c) of this section apply, 

except that the USD(A&S) may delegate 

the authority to waive a restriction for 

a star tracker for a particular foreign 

country to the service acquisition 

executive, without power of 

redelegation (section 1603, National 

Defense Authorization Act for Fiscal 

Year 2021 (Pub. L. 116–283)). 

(c) Waiver of restrictions of 10 U.S.C. 

4864(a). The restrictions on certain 

foreign purchases at 225.7004–2 may be 

waived, except as provided in 

paragraphs (a) and (b) of this section, as 

follows: 

(1)(i) USD(A&S), without power of 

delegation, may waive a restriction for 

a particular item for a particular foreign 

country upon determination that— 

(A) U.S. producers of the item would 

not be jeopardized by competition from 

a foreign country, and that country does 

not discriminate against defense items 

produced in the United States to a 

greater degree than the United States 

discriminates against defense items 

produced in that country; or 

(B) Application of the restriction 

would impede cooperative programs 

entered into between DoD and a foreign 

country, or would impede the reciprocal 

procurement of defense items under a 

memorandum of understanding 

providing for reciprocal procurement of 

defense items under 225.872, and that 

country does not discriminate against 

defense items produced in the United 

States to a greater degree than the 

United States discriminates against 

defense items produced in that country. 

(ii) A notice of the determination to 

exercise the waiver authority shall be 

published in the Federal Register and 

submitted to the congressional defense 

committees at least 15 days before the 

effective date of the waiver. 

(iii) The effective period of the waiver 

shall not exceed 1 year. 

(iv) For contracts entered into prior to 

the effective date of a waiver, provided 

adequate consideration is received to 

modify the contract, the waiver shall be 

applied as directed or authorized in the 

waiver to— 

(A) Subcontracts entered into on or 

after the effective date of the waiver; 

and 

(B) Options for the procurement of 

items that are exercised after the 

effective date of the waiver, if the option 

prices are adjusted for any reason other 

than the application of the waiver. 

(2) The head of the contracting 

activity may waive a restriction on a 

case-by-case basis upon execution of a 

determination and findings that any of 

the following applies: 

(i) The restriction would cause 

unreasonable delays. 

(ii) Satisfactory quality items 

manufactured in the national 

technology and industrial base are not 

available. 

(iii) Application of the restriction 

would result in the existence of only 

one source for the item in the national 

technology and industrial base. 

(iv) Application of the restriction is 

not in the national security interests of 

the United States. 

(v) Application of the restriction 

would adversely affect a U.S. company. 

(3) A restriction is waived when it 

would cause unreasonable costs. The 

cost of an item of national technology 

and industrial base origin is 

unreasonable if it exceeds 150 percent 

of the offered price, inclusive of duty, of 

items that are not of national technology 

and industrial base origin. 

225.7004–7 Contract clauses. 

(a) Unless a waiver has been granted, 

use the clause at 252.225–7019, 


khammond on DSKJM1Z7X2PROD with PROPOSALS2
Federal Register / Vol. 88, No. 221 / Friday, November 17, 2023 / Proposed Rules 80477 

Restriction on Acquisition of Anchor 

and Mooring Chain, in solicitations and 

contracts, including solicitations and 

contracts using FAR part 12 procedures 

for the acquisition of commercial 

products and commercial services, that 

exceed the simplified acquisition 

threshold and that require welded 

shipboard anchor or mooring chain. 

(b) Use the clause at 252.225–7062, 

Restriction on Acquisition of Large 

Medium-Speed Diesel Engines, in 

solicitations and contracts, including 

solicitations and contracts using FAR 

part 12 procedures for the acquisition of 

commercial products and commercial 

services, that exceed the simplified 

acquisition threshold and that require 

large medium-speed diesel engines for 

new construction of auxiliary ships 

using funds available for National 

Defense Sealift Fund programs or 

Shipbuilding and Conversion, Navy 

unless— 

(1) An exception at 225.7004–3(d) 

applies; or 

(2) A waiver has been granted. 

(c) Unless a waiver has been granted, 

use the clause at 252.225–70XX, 

Restriction on Acquisition of 

Components of T–AO 205 and T–ARC 

Class Vessels, in solicitations and 

contracts, including solicitations and 

contracts using FAR part 12 procedures 

for the acquisition of commercial 

products and commercial services, that 

exceed the simplified acquisition 

threshold and that require components 

of T–AO 205 and T–ARC class vessels. 

(d) Use the clause at 252.225–70YY, 

Restriction on Acquisition of Certain 

Satellite Components, in solicitations 

and contracts, including solicitations 

and contracts using FAR part 12 

procedures for the acquisition of 

commercial products and commercial 

services, that exceed the simplified 

acquisition threshold unless— 

(1) An exception at 225.7004–3(e) 

applies; or 

(2) A waiver has been granted. 

225.7006, 225.7006–1, 225.7006–2, 

225.7006–3, and 225.7006–4 [Removed 

and Reserved] 

■ 8. Remove and reserve sections 

225.7006, 225.7006–1, 225.7006–2, 

225.7006–3, and 225.7006–4. 

225.7007, 225.7007–1, 225.7007–2, and 

225.7007–3 [Removed and Reserved] 

■ 9. Remove and reserve sections 

225.7007, 225.7007–1, 225.7007–2, and 

225.7007–3. 

225.7008 [Removed and Reserved] 

■ 10. Remove and reserve section 

225.7008. 

225.7009–1 [Amended] 

■ 11. Amend section 225.7009–1 by 

removing ‘‘Section’’ and adding 

‘‘section’’ in its place. 

225.7010, 225.7010–1, 225.7010–2, 

225.7010–3, 225.7010–4, and 225.7010–5 

[Removed and Reserved] 

■ 12. Remove and reserve sections 

225.7010, 225.7010–1, 225.7010–2, 

225.7010–3, 225.7010–4, and 225.7010– 

5. 

PART 252—SOLICITATION 

PROVISIONS AND CONTRACT 

CLAUSES 

■ 13. Amend section 252.225–7019— 

■ a. By revising the section heading, 

introductory text, clause date, and 

paragraph (a); 

■ b. In paragraph (b) by removing ‘‘, four 

inches or less in diameter,’’; and 

■ c. In paragraph (d) by removing ‘‘, four 

inches or less in diameter’’. 

The revisions read as follows: 

252.225–7019 Restriction on Acquisition 

of Anchor and Mooring Chain. 

As prescribed in 225.7004–7(a), use 

the following clause: 

Restriction on Acquisition of Anchor 

and Mooring Chain (DATE) 

(a) Definition. As used in this clause— 

Component means an article, material, or 

supply incorporated directly into an end 

product. 

* * * * * 

252.225–7037 [Removed and Reserved] 

■ 14. Remove and reserve section 

252.225–7037. 

252.225–7038 [Removed and Reserved] 

■ 15. Remove and reserve section 

252.225–7038. 

252.225–7062 [Amended] 

■ 16. Amend section 252.225–7062 

introductory text by removing 

‘‘225.7010–5’’ and adding ‘‘225.7004– 

7(b)’’ in its place. 

■ 17. Add section 252.225–70XX to read 

as follows: 

252.225–70XX Restriction on Acquisition 

of Components of T–AO 205 and T–ARC 

Class Vessels. 

As prescribed in 225.7004–7(c), use 

the following clause: 

Restriction on Acquisition of 

Components of T–AO 205 and T–ARC 

Class Vessels (DATE) 

(a) Restriction. 

(1) In accordance with 10 U.S.C. 4864, the 

following components of T–AO 205 and T– 

ARC class vessels must be manufactured in 

the United States, Australia, Canada, New 

Zealand, or the United Kingdom of Great 

Britain and Northern Ireland (United 

Kingdom): 

(i) Auxiliary equipment, including pumps, 

for all shipboard services. 

(ii) Propulsion system components, 

including engines, reduction gears, and 

propellers. 

(iii) Shipboard cranes. 

(iv) Spreaders for shipboard cranes. 

(2) The Contractor shall deliver under this 

contract only T–AO 205 and T–ARC class 

vessel components, as described in paragraph 

(a)(1) of this clause, manufactured in the 

United States, Australia, Canada, New 

Zealand, or the United Kingdom (10 U.S.C. 

4864). 

(b) Subcontracts. The Contractor shall 

insert the substance of this clause, including 

this paragraph (b), in subcontracts for the 

components described in paragraph (a)(1) of 

this clause that exceed the simplified 

acquisition threshold, including subcontracts 

for commercial products and commercial 

services. 

(End of clause) 

■ 18. Add section 252.225–70YY to read 

as follows: 

252.225–70YY Restriction on Acquisition 

of Certain Satellite Components. 

As prescribed in 225.7004–7(d), use 

the following clause: 

Restriction on Acquisition of Certain 

Satellite Components (DATE) 

(a) Definition. As used in this clause— 

Star tracker means a navigational tool used 

in a satellite weighing more than 400 pounds 

whose principal purpose is to support the 

national security, defense, or intelligence 

needs of the U.S. Government. 

(b) Restriction. In accordance with 10 

U.S.C. 4864, a star tracker must be 

manufactured in the United States, Australia, 

Canada, New Zealand, or the United 

Kingdom of Great Britain and Northern 

Ireland (United Kingdom). The Contractor 

shall deliver under this contract only star 

trackers manufactured in the United States, 

Australia, Canada, New Zealand, or the 

United Kingdom. 

(c) Subcontracts. The Contractor shall 

insert the substance of this clause, including 

this paragraph (c), in subcontracts for star 

trackers that exceed the simplified 

acquisition threshold, including subcontracts 

for commercial products and commercial 

services. 

(End of clause) 

[FR Doc. 2023–25161 Filed 11–16–23; 8:45 am] 

BILLING CODE 6820–ep–P 


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