Federal Register / Vol. 80, No. 100 / Tuesday, May 26, 2015 / Proposed Rules 30119 

DEPARTMENT OF DEFENSE 

Defense Acquisition Regulations 

System 

48 CFR Parts 212, 225, and 252 

RIN 0750–AI41 

Defense Federal Acquisition 

Regulation Supplement: Photovoltaic 

Devices from the United States 

(DFARS Case 2015–D007) 

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 a section of the National 

Defense Authorization Act for Fiscal 

Year 2015 that revises the restrictions 

relating to utilization of domestic 

photovoltaic devices. 

DATES: Comments on the proposed rule 

should be submitted in writing to the 

address shown below on or before July 

27, 2015, to be considered in the 

formation of a final rule. 

ADDRESSES: Submit comments 

identified by DFARS Case 2015–D007, 

using any of the following methods: 

Æ Regulations.gov: http://

www.regulations.gov. Submit comments 

via the Federal eRulemaking portal by 

entering ‘‘DFARS Case 2015–D007’’ 

under the heading ‘‘Enter keyword or 

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

link ‘‘Submit a Comment’’ that 

corresponds with ‘‘DFARS Case 2015– 

D007.’’ Follow the instructions provided 

at the ‘‘Submit a Comment’’ screen. 

Please include your name, company 

name (if any), and ‘‘DFARS Case 2015– 

D007’’ on your attached document. 

Æ Email: osd.dfars@mail.mil. Include 

DFARS Case 2015–D007 in the subject 

line of the message. 

Æ Fax: 571–372–6094. 

Æ Mail: Defense Acquisition 

Regulations System, Attn: Amy G. 

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

Room 3B941, 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 

3B941, 3060 Defense Pentagon, 

Washington, DC 20301–3060. 

Telephone 571–372–6106. 

SUPPLEMENTARY INFORMATION: 

I. Background 

DoD is proposing to revise the DFARS 

to implement section 858 of the 

National Defense Authorization Act 

(NDAA) for Fiscal Year (FY) 2015 (Pub. 

L. 113–291), which addresses utilization 

of domestic photovoltaic devices. 

DFARS currently addresses utilization 

of domestic photovoltaic devices at 

DFARS 225.7017, Utilization of 

domestic photovoltaic devices, and the 

associated clause at 252.225–7017, 

Photovoltaic Devices, and provision at 

252.225–7018, Photovoltaic Devices— 

Certificate. The current regulations that 

implement section 846 of the NDAA for 

FY 2011 (Pub. L. 111–383) were first 

published as an interim rule under 

DFARS Case 2011–D046 on December 

20, 2011 (76 FR 78858) and finalized on 

May 22, 2012 (77 FR 30368). Some 

clarification of the rules of origin for 

photovoltaic devices to be utilized 

under covered contracts were published 

as an interim rule under FAR Case 

2014–D006 on December 18, 2013 (78 

FR 76993) and finalized on April 21, 

2014 (79 FR 22041). Those clarifications 

are not affected by this rule. 

II. Discussion and Analysis 

A. Analysis and Interpretation of 

Statutory Requirements 

Although section 858 of the NDAA for 

FY 2015 does not contain specific 

language to rescind or supersede section 

846 of the NDAA for FY 2011, DoD has 

determined through detailed 

comparison of the two statutes that 

compliance with section 858 will meet 

or exceed the requirements for 

compliance with section 846. 

The most significant differences 

between the two statutes are as follows: 

1. Covered Contracts 

Section 846 applied to contracts 

awarded by DoD, including energy 

savings performance contracts, utility 

service contracts, land leases, and 

private housing contracts, to the extent 

that such contracts result in ownership 

of photovoltaic devices by DoD. Section 

846 further provides that DoD is deemed 

to own a photovoltaic device if the 

device is— 

• Installed on DoD property or in a 

facility owned by DoD; and 

• Reserved for the exclusive use of 

DOD for the full economic life of the 

device. 

Section 858 applies to any contract 

awarded by DoD that provides for a 

photovoltaic device to be— 

• Installed inside the United States 

on DoD property or in a facility owned 

by DoD; or 

• Reserved for the exclusive use of 

DoD in the United States for the full 

economic life of the device. 

These conditions are generally the 

same except— 

(1) Section 858 explicitly restricts 

applicability to the U.S., which is still 

equivalent to the section 846 

applicability, because the Buy American 

Act invoked in section 846 does not 

apply overseas; and 

(2) Section 858 substitutes ‘‘or’’ for 

‘‘and’’ in connecting the two conditions. 

Therefore, either one of the conditions 

is sufficient to make the law applicable 

and compliance with section 858 will 

meet and exceed compliance with 

section 846. 

Land leases are not addressed in this 

rule. Although section 846 mentioned 

land leases as an example of the type of 

contract that might be a covered 

contract, the current DFARS regulations 

do not address land leases, because land 

leases are outside the scope of the FAR 

and DFARS. As used in the FAR and 

DFARS, the term ‘‘acquisition’’ means 

the ‘‘acquiring by contract with 

appropriated funds of supplies or 

service (including construction). . . .’’ 

Section 858 does not mention or affect 

land leases. 

2. Requirements 

Section 846 required that, with some 

exceptions, photovoltaic devices 

provided under covered contracts 

comply with the Buy American Act. The 

Buy American Act requires, for use 

inside the United States, that 

manufactured articles, materials and 

supplies be manufactured in the U.S., 

substantially all from articles, materials, 

or supplies mined, produced, or 

manufactured in the U.S. 

Section 858 requires that any 

photovoltaic device installed under a 

covered contract be manufactured in the 

U.S. substantially all from articles, 

materials or supplies mined, produced, 

or manufactured in the United States. 

This requirement is the same as the 

basic requirement of the Buy American 

Act, but because this requirement is 

now separated from the explicit 

application of the Buy American Act, 

the exceptions and waivers that apply to 

the Buy American Act do not 

automatically apply to section 858, 

unless provided for and authorized by 

section 858. 

However, to the extent section 858 

does not differ from the Buy American 

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30120 Federal Register / Vol. 80, No. 100 / Tuesday, May 26, 2015 / Proposed Rules 

Act, it is reasonable and within the 

regulatory authority of DoD to apply a 

similar interpretation to that which has 

developed with regard to the Buy 

American Act over the years. 

Consequently, it is not necessary, nor 

would it be desirable, to reinterpret 

elements of the Buy American Act that 

appear unchanged in section 858. 

Executive Order (E.O.) 10582, 

Prescribing Uniform Procedures for 

Certain Determinations under the BuyAmerican Act, signed December 17, 

1954, has interpreted ‘‘substantially all’’ 

in the Buy American Act to mean that 

the cost of domestic components is at 

least 50 percent of the value of all 

components. It is reasonable to interpret 

the same language regarding 

‘‘substantially all’’ in section 858 to 

have the same meaning established by 

the E.O. for interpretation of the Buy 

American Act. 

3. Exceptions for Domestic 

Nonavailability and Micro-Purchase 

Threshold 

The Buy American Act provides 

exceptions for domestic nonavailability 

and acquisitions below the micropurchase threshold. These exceptions 

are not provided in section 858. 

4. Public Interest Determination 

The Buy American Act provides for 

individual or class determinations that 

application of the Buy American Act is 

inconsistent with the public interest. 

Through public interest class 

determinations, DoD does not apply the 

Buy American Act to (1) qualifying 

country end products; or (2) U.S.-made 

end products, if the World Trade 

Organization Government Procurement 

Agreement applies (i.e., the aggregate 

value of the photovoltaic devices to be 

utilized is $204,000 or more). Section 

858 allows determinations that 

application of the restriction in 858 is 

not in the public interest, but only on 

a case-by-case basis. Therefore, in order 

to allow a contractor to utilize a 

qualifying country photovoltaic device 

or a U.S.-made photovoltaic device, an 

individual public interest determination 

would be necessary. 

5. Determination of Unreasonable Cost 

Both the Buy American Act and 

section 858 allow a determination not to 

utilize a domestic product if the cost of 

the domestic product is unreasonable. 

The section 858 determination must be 

on a case-by-case basis. With regard to 

determining that the cost of a domestic 

item is unreasonable, E.O. 10582 

provides a methodology to determine 

unreasonable cost, using a minimum 

differential of 6 percent, but also 

provides that the head of an executive 

agency may determine that the use of a 

higher differential between the cost of 

materials of domestic origin and the cost 

of materials of foreign origin ‘‘is not 

unreasonable.’’ The then Secretary of 

Defense, Cyrus Vance, signed a 

memorandum on May 7, 1964, 

providing for application of a 50 percent 

differential under the Buy American 

Act. Therefore, DoD proposes to 

continue application of a 50 percent 

evaluation factor when determining 

whether the price of domestic 

photovoltaic devices is unreasonable 

when the estimated aggregate value of 

the photovoltaic devices to be utilized is 

less than $204,000 (the World Trade 

Organization Government Procurement 

Agreement threshold). DoD considers it 

reasonable and within its regulatory 

discretion to use 50 percent as the 

evaluation factor for determination that 

the cost of a domestic photovoltaic 

device is unreasonable. By continuing 

an established and familiar practice, 

there will be less confusion in 

implementation. 

The application of an evaluation 

factor to foreign products to determine 

whether the price of domestic products 

is reasonable is not applicable when the 

World Trade Organization Government 

Procurement Agreement applies, 

because there is a prohibition under that 

agreement to buying any products that 

are not designated, domestic, U.S.- 

made, or qualifying country products. 

DoD has waived the application of the 

Buy American Act to U.S.-made 

products, so no evaluation factor is 

applicable. Likewise, if applicability of 

section 858 to U.S.-made photovoltaic 

devices is waived, then no evaluation 

factor is applicable. 

6. Exemption for Commercially 

Available Off-the-Shelf (COTS) Items 

Pursuant to 41 U.S.C. 1907 and 

determinations by the Administrator of 

Federal Procurement Policy, the 

component test of the Buy American 

Act does not apply to the acquisition of 

COTS items. This exemption does not 

apply to photovoltaic devices utilized 

under section 858, because section 858 

no longer invokes the restrictions of the 

Buy American Act. 

7. Trade Agreements or Otherwise 

Provided by Law 

Both section 846 and section 858 state 

that the restrictions are subject to the 

exceptions provided in the Trade 

Agreements Act or otherwise provided 

by law. The Trade Agreements Act (19 

U.S.C. 2501 et seq.) provides authority 

for the President to waive the Buy 

American Act and other discriminatory 

provisions (e.g., sections 846 and 858) 

for eligible products from designated 

countries. This authority has been 

delegated to the United States Trade 

Representative (USTR). The USTR has 

confirmed that the trade agreements 

provide an exception to the domestic 

source restrictions of section 858. 

B. Regulatory Implementation 

DoD is proposing changes to the 

DFARS as follows: 

1. Definitions (DFARS 225.7017–1). 

Amend the definition of ‘‘covered 

contract’’ to conform to the wording of 

section 858, specifically adding ‘‘inside 

the United States’’ and changing ‘‘and’’ 

to ‘‘or’’ for the two conditions. 

2. Restriction (DFARS 225.7017–3). 

Amend the restriction to cite section 

858 and replace the reference to the Buy 

American Act with the specific 

requirements of section 858 for 

utilization of domestic photovoltaic 

devices, including ‘‘substantially all’’ 

domestic components. 

3. Exceptions (225.7017–3). Delete the 

automatic exceptions for qualifying 

countries and Buy American 

unreasonable cost. 

4. Waiver (DFARS 225.7017–4). Add 

a new section on waivers on a case-by 

case basis. This section provides 

examples of circumstances in which it 

may be appropriate to waive the 

restrictions of section 858, based on 

‘‘Inconsistent with the public interest,’’ 

in order to allow— 

• Utilization of U.S.-made 

photovoltaic if the aggregate value of 

photovoltaic devices to be utilized on 

the contract is $204,000 or more, the 

threshold for the World Trade 

Organization Government Procurement 

Agreement; 

• Utilization of photovoltaic devices 

from a qualifying country; or 

• Unreasonable cost, applicable only 

when the aggregate value of the 

photovoltaic devices to be installed 

under the contract is less than $204,000 

(the World Trade Organization 

Government Procurement Agreement 

threshold) and utilizing the evaluation 

factor of 50 percent, consistent with 

DoD implementation of other domestic 

source restrictions such as the Buy 

American Act and Balance of Payments 

Program. 

5. Solicitation provision and contract 

clause (DFARS 225.7017–5). Amend the 

clause prescription to conform to the 

revised definition of ‘‘covered contract.’’ 

6. Provision and clause (DFARS 

252.225–7017 and 252.225–7018). 

• Amend the definition of ‘‘domestic 

photovoltaic device’’ in the clause to 

include the requirement that the cost of 

components mined, produced, or 

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manufactured in the United States must 

exceed 50 percent of the cost of all 

components. 

• Amend the restrictions in the clause 

to remove qualifying country 

photovoltaic devices and U.S.-made 

photovoltaic devices from being 

automatically acceptable unless the 

contractor specified their use in its offer. 

• Update the statutory references in 

the clause. 

• Remove the $3,000 micro-purchase 

threshold from paragraph (c)(1) of the 

clause and from paragraph (b)(1) of the 

provision, because these thresholds 

were associated only with the Buy 

American Act, not section 858. 

• Amend the certificate to 

accommodate the requirement for caseby-case determinations in order to allow 

contractors to utilize qualifying country 

or U.S.-made photovoltaic devices or to 

determine that the price of a domestic 

photovoltaic device is unreasonable. 

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. Determination of Applicability 

Consistent with the determinations 

that DoD made with regard to 

application of the requirements of 

section 846 of NDAA for FY 2011, DoD 

does not intend to apply the 

requirements of section 858 of the 

NDAA for FY 2015 to contracts at or 

below the simplified acquisition 

threshold (SAT), but does intend to 

apply the rule to contracts for the 

acquisition of commercial items, 

including COTS items. 

A. Applicability to Contracts at or Below 

the Simplified Acquisition Threshold 

41 U.S.C. 1905 governs the 

applicability of laws to contracts or 

subcontracts in amounts not greater 

than the simplified acquisition 

threshold. It is intended to limit the 

applicability of laws to such contracts or 

subcontracts. 41 U.S.C. 1905 provides 

that if a provision of law contains 

criminal or civil penalties, or if the FAR 

Council makes a written determination 

that it is not in the best interest of the 

Federal Government to exempt contracts 

or subcontracts at or below the SAT, the 

law will apply to them. The Director, 

DPAP, is the appropriate authority to 

make comparable determinations for 

regulations to be published in the 

DFARS, which is part of the FAR system 

of regulations. DoD does not intend to 

make that determination. Therefore, this 

rule will not apply below the simplified 

acquisition threshold. 

B. Applicability to Contracts for the 

Acquisition of Commercial Items, 

Including COTS items 

41 U.S.C. 1906 governs the 

applicability of laws to contracts for the 

acquisition of commercial items, and is 

intended to limit the applicability of 

laws to contracts for the acquisition of 

commercial items. 41 U.S.C. 1906 

provides that if a provision of law 

contains criminal or civil penalties, or if 

the FAR Council makes a written 

determination that it is not in the best 

interest of the Federal Government to 

exempt commercial item contracts, the 

provision of law will apply to contracts 

for the acquisition of commercial items. 

Likewise, 41 U.S.C. 1907 governs the 

applicability of laws to COTS items, 

with the Administrator for Federal 

Procurement Policy being the decision 

authority to determine that it is in the 

best interest of the Government to apply 

a provision of law to acquisitions of 

COTS items in the FAR. The Director, 

DPAP, is the appropriate authority to 

make comparable determinations for 

regulations to be published in the 

DFARS, which is part of the FAR system 

of regulations. 

Therefore, given that the requirements 

of section 858 of the NDAA for FY 2015 

were enacted to promote utilization of 

domestic photovoltaic devices, and 

since photovoltaic devices are generally 

COTS items, DoD has determined that it 

is in the best interest of the Federal 

Government to apply the rule to 

contracts for the acquisition of 

commercial items, including COTS 

items, as defined at FAR 2.101. An 

exception for contracts for the 

acquisition of commercial items, 

including COTS items, would exclude 

the contracts intended to be covered by 

the law, thereby undermining the 

overarching public policy purpose of 

the law. 

V. Regulatory Flexibility Act 

DoD does not expect this proposed 

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. However, an initial regulatory 

flexibility analysis has been performed 

and is summarized as follows: 

This rule proposes to implement 

section 858 of the National Defense 

Authorization Act (NDAA) for Fiscal 

Year (FY) 2015 (Pub. L. 113–291), by 

proposing changes to the regulatory 

coverage on utilization of domestic 

photovoltaic devices under certain 

covered contracts. 

The objectives of this rule are to 

further promote utilization of domestic 

photovoltaic devices under DoD 

contracts, if such contract does not 

include DoD purchase of photovoltaic 

devices as end products, but will 

nevertheless provide for a photovoltaic 

device to be (1) installed inside the 

United States on DoD property or in a 

facility owned by DoD; or (2) reserved 

for the exclusive use of DoD in the 

United States for the full economic life 

of the device. The legal basis for the rule 

is section 858 of the NDAA for FY 2015. 

This rule generally applies at the 

prime contract level to other than small 

entities. When purchasing renewable 

power generated via on-site 

photovoltaic devices, DoD can either 

purchase the photovoltaic devices and 

thereby own, operate, and maintain the 

devices for their full economic life 

(already covered in DFARS part 225 

under standard Buy American Act/

Trade Agreements regulations) or, for 

example, may do some variation of the 

following: 

a. Enter into an energy savings 

performance contract, which is a 

contracting method in which the 

contractor provides capital to facilitate 

energy savings projects and maintains 

them in exchange for a portion of the 

energy savings generated. Under this 

arrangement, the Government would 

take title to the devices during contract 

performance or at the conclusion of the 

contract. For example, the Defense 

Logistics Agency—Energy uses the 

master Department of Energy indefinite 

delivery-indefinite quantity contract 

and awards task orders off that contract. 

Of the 16 contractors, all are large 

businesses. There are subcontracting 

goals that each contractor has to meet, 

but the ultimate task order award is 

made to a large business. 

b. Enter into a power purchase 

agreement, also referred to as a utility 

service contract, for the purchase of the 

power output of photovoltaic devices 

that are installed on DoD land or 

buildings, but owned, operated, and 

maintained by the contractor. At the 

conclusion of the contract, DoD would 

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either require the contractor to 

dismantle and remove the photovoltaic 

equipment or abandon the equipment in 

place. Prime contractors for this type of 

contract would generally be large 

businesses, based on the capital costs 

involved in these projects. However, 

many developers tend to subcontract 

out the majority of work to smaller 

companies. 

There are approximately 80 

manufacturers of photovoltaic devices. 

We do not currently have data available 

on whether any of the manufacturers of 

photovoltaic devices are small entities, 

because FPDS does not collect such data 

on subcontractors. 

There are no new reporting burdens 

under this rule. There are some 

negligible variations to the existing 

reporting burdens. Furthermore, since 

the prime contractors subject to this rule 

are other than small businesses, the 

reporting requirements will not impact 

small entities. 

However, under section 858, if the 

aggregate value of the photovoltaic 

devices to be utilized under a contract 

is less than $204,000, or unless a waiver 

is obtained for the utilization of U.S.- 

made products when the aggregate value 

of the photovoltaic devices is $204,000 

or more, there will be a requirement to 

track the origin of the components of the 

domestic photovoltaic devices. 

However, DoD estimates that most 

covered contracts will involve 

utilization of photovoltaic devices with 

an aggregate value in excess of $204,000 

and expects to grant waivers as 

appropriate. 

The rule does not duplicate, overlap, 

or conflict with any other Federal rules. 

DoD did not identify any significant 

alternatives that meet the requirements 

of the statute and would have less 

impact on small entities. The ability for 

the Government to grant a waiver of 

section 858 if it is inconsistent with the 

public interest to preclude utilization of 

U.S.-made photovoltaic devices when 

the World Trade Organization 

Government Procurement Agreement is 

applicable (i.e., the aggregate value of 

the photovoltaic devices to be utilized is 

$204,000 or more) will greatly reduce 

the burden on manufacturers of 

photovoltaic devices, regardless of size 

of the entity. 

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 2015–D017), in 

correspondence. 

VI. 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, and related 

clauses at DFARS 252.225.’’ 

List of Subjects in 48 CFR Parts 212, 

225, and 252 

Government procurement. 

Amy G. Williams, 

Editor, Defense Acquisition Regulations 

System. 

Therefore, 48 CFR parts 212, 225, and 

252 are proposed to be amended as 

follows: 

■ 1. The authority citation for 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 ITEMS 

■ 2. In section 212.301, revise 

paragraphs (f)(x)(I) and (f)(x)(J) to read 

as follows: 

212.301 Solicitation provisions and 

contract clauses for the acquisition of 

commercial items. 

(f) * * * 

(x) * * * 

(I) Use the clause at 252.225–7017, 

Photovoltaic Devices, as prescribed in 

225.7017–5(a), to comply with section 

858 of Public Law 113–291). 

(J) Use the provision at 252.225–7018, 

Photovoltaic Devices—Certificate, as 

prescribed in 225.7017–5(b), to comply 

with section 959 of Public Law 113–291. 

* * * * * 

PART 225—FOREIGN ACQUISITION 

■ 3. Revise sections 225.7017–1 through 

225.7017–4 to read as follows: 

225.7017–1 Definitions. 

As used in this section— 

Covered contract means a contract 

awarded by DoD that, by means other 

than DoD purchase as end products, 

provides for a photovoltaic device to 

be— 

(1) Installed inside the United States 

on DoD property or in a facility owned 

by DoD; or 

(2) Reserved for the exclusive use of 

DoD in the United States for the full 

economic life of the device. 

Designated country photovoltaic 

device, domestic photovoltaic device, 

foreign photovoltaic device, Free Trade 

Agreement country photovoltaic device, 

photovoltaic device, qualifying country 

photovoltaic device, and U.S.-made 

photovoltaic device are defined in the 

clause at 252.225–7017, Photovoltaic 

Devices. 

225.7017–2 Restriction. 

In accordance with section 858 of the 

National Defense Authorization Act for 

Fiscal Year 2015, photovoltaic devices 

provided under any covered contract 

shall be manufactured in the United 

States substantially all from articles, 

materials, or supplies mined, produced, 

or manufactured in the United States, 

except as provided in 225.7017–3 and 

225–7017–4. 

225.7017–3 Exceptions. 

(a) Free Trade Agreements. For a 

covered contract that utilizes 

photovoltaic devices valued at $25,000 

or more, photovoltaic devices may be 

utilized from a country covered under 

the acquisition by a Free Trade 

Agreement, depending upon dollar 

threshold (see FAR subpart 25.4). 

(b) World Trade Organization— 

Government Procurement Agreement. 

For covered contracts that utilize 

photovoltaic devices that are valued at 

$204,000 or more, only domestic 

photovoltaic devices or designated 

country photovoltaic devices may be 

utilized, unless acquisition of U.S.-made 

or qualifying country photovoltaic 

devices is allowed pursuant to a waiver 

in accordance with 225.7017–4(a). 

225.7017–4 Waivers. 

The head of the contracting activity is 

authorized to waive, on a case-by-case 

basis, the application of the restriction 

in 225.7017–2 upon determination that 

one of the following circumstances 

applies (see PGI 225.7017–4 for sample 

determinations and findings): 

(a) Inconsistent with the public 

interest. For example, a public interest 

waiver may be appropriate to allow— 

(1) Utilization of U.S.-made 

photovoltaic devices if the aggregate 

value of the photovoltaic devices to be 

utilized under the contract exceeds 

$204,000; or 

(2) Utilization of photovoltaic devices 

from a qualifying country, regardless of 

dollar value. 

(b) Unreasonable cost. A 

determination that the cost of a 

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domestic photovoltaic device is 

unreasonable may be appropriate if— 

(1) The aggregate value of the 

photovoltaic devices to be utilized 

under the contract does not exceed 

$204,000; and 

(2) The offeror documents to the 

satisfaction of the contracting officer 

that the price of the foreign photovoltaic 

devices plus 50 percent is less than the 

price of comparable domestic 

photovoltaic devices. 

■ 4. Add section 225.7017–5 to read as 

follows: 

225.7017–5 Solicitation provision and 

contract clause. 

(a)(1) Use the clause at 252.225–7017, 

Photovoltaic Devices, in solicitations, 

including solicitations using FAR part 

12 procedures for the acquisition of 

commercial items, for a contract that— 

(i) Is expected to exceed the 

simplified acquisition threshold; and 

(ii) May be a covered contract, i.e., a 

contract that provides for a photovoltaic 

device to be— 

(A) Installed inside the United States 

on DoD property or in a facility owned 

by DoD; or 

(B) Reserved for the exclusive use of 

DoD in the United States for the full 

economic life of the device. 

(2) Use the clause in the resultant 

contract, including contracts using FAR 

part 12 procedures for the acquisition of 

commercial items, if it is a covered 

contract. 

(b) Use the provision at 252.225–7018, 

Photovoltaic Devices—Certificate, in 

solicitations, including solicitations 

using FAR part 12 procedures for the 

acquisition of commercial items, that 

contain the clause at 252.225–7017. 

PART 252—SOLICITATION 

PROVISIONS AND CONTRACT 

CLAUSES 

■ 5. Section 252.225–7017 is amended 

by— 

■ a. In the introductory text, removing 

‘‘225.7017–4(a)’’ and adding ‘‘225.7017– 

5(a)’’ in its place; 

■ b. Removing the clause date ‘‘(JAN 

2014)’’ and adding ‘‘(DATE)’’ in its 

place; 

■ c. In paragraph (a), revising the 

definition of ‘‘Domestic photovoltaic 

device’’; and 

■ d. Revising paragraphs (b) and (c). 

The revisions read as follows: 

252.225–7017 Photovoltaic Devices. 

* * * * * 

(a) * * * 

Domestic photovoltaic device means a 

photovoltaic device— 

(i) Manufactured in the United States; 

and 

(ii) The cost of its components that are 

mined, produced, or manufactured in 

the United States exceeds 50 percent of 

the cost of all components. The cost of 

components includes transportation 

costs to the place of incorporation into 

the end product and U.S. duty (whether 

or not a duty-free entry certificate is 

issued). Scrap generated, collected, and 

prepared for processing in the United 

States is considered domestic. 

* * * * * 

(b) This clause implements section 

858 of the National Defense 

Authorization Act for Fiscal Year 2015 

(Pub. L. 113–291). 

(c) Restriction. If the Contractor 

specified in its offer in the Photovoltaic 

Devices–Certificate provision of the 

solicitation that the estimated value of 

the photovoltaic devices to be utilized 

in performance of this contract would 

be— 

(1) Less than $25,000, then the 

Contractor shall utilize only domestic 

photovoltaic devices unless, in its offer, 

it specified utilization of qualifying 

country or other foreign photovoltaic 

devices in paragraph (c)(2) of the 

Photovoltaic Devices–Certificate 

provision of the solicitation. If the 

Contractor certified in its offer that it 

will utilize a qualifying country 

photovoltaic device, the Contractor shall 

utilize a qualifying country photovoltaic 

device as specified, or, at the 

Contractor’s option, a domestic 

photovoltaic device; 

(2) $25,000 or more but less than 

$79,507, then the Contractor shall 

utilize in the performance of this 

contract only domestic photovoltaic 

devices unless, in its offer, it specified 

utilization of Canadian, qualifying 

country, or other foreign photovoltaic 

devices in paragraph (c)(3) of the 

Photovoltaic Devices–Certificate 

provision of the solicitation. If the 

Contractor certified in its offer that it 

will utilize a qualifying country 

photovoltaic device or a Canadian 

photovoltaic device, the Contractor shall 

utilize a qualifying country photovoltaic 

device or a Canadian photovoltaic 

device as specified, or, at the 

Contractor’s option, a domestic 

photovoltaic device; 

(3) $79,507 or more but less than 

$100,000, then the Contractor shall 

utilize under this contract only 

domestic photovoltaic devices, or Free 

Trade Agreement country photovoltaic 

devices (other than Bahrainian, Korean, 

Moroccan, Panamanian, or Peruvian 

photovoltaic devices), unless, in its 

offer, it specified utilization of 

qualifying country or other foreign 

photovoltaic devices in paragraph (c)(4) 

of the Photovoltaic Devices–Certificate 

provision of the solicitation. If the 

Contractor certified in its offer that it 

will utilize a qualifying country 

photovoltaic device or a Free Trade 

Agreement country photovoltaic device 

(other than a Bahrainian, Korean, 

Moroccan, Panamanian, or Peruvian 

photovoltaic device), the Contractor 

shall utilize a qualifying country 

photovoltaic device; a Free Trade 

Agreement country photovoltaic device 

(other than a Bahrainian, Korean, 

Moroccan, Panamanian, or Peruvian 

photovoltaic device) as specified, or, at 

the Contractor’s option, a domestic 

photovoltaic device; 

(4) $100,000 or more but less than 

$204,000, then the Contractor shall 

utilize under this contract only 

domestic photovoltaic devices, or Free 

Trade Agreement country photovoltaic 

devices (other than Bahrainian, 

Moroccan, Panamanian, or Peruvian 

photovoltaic devices), unless, in its 

offer, it specified utilization of 

qualifying country or other foreign 

photovoltaic devices in paragraph (c)(4) 

of the Photovoltaic Devices–Certificate 

provision of the solicitation. If the 

Contractor certified in its offer that it 

will utilize a qualifying country 

photovoltaic device or a Free Trade 

Agreement country photovoltaic device 

(other than a Bahrainian, Moroccan, 

Panamanian, or Peruvian photovoltaic 

device), the Contractor shall utilize a 

qualifying country photovoltaic device; 

a Free Trade Agreement country 

photovoltaic device (other than a 

Bahrainian, Moroccan, Panamanian, or 

Peruvian photovoltaic device) as 

specified, or, at the Contractor’s option, 

a domestic photovoltaic device; or 

(5) $204,000 or more, then the 

Contractor shall utilize under this 

contract only domestic or designated 

country photovoltaic devices unless, in 

its offer, it specified utilization of U.S.- 

made or qualifying country photovoltaic 

devices in paragraph (c)(5) of the 

Photovoltaic Devices–Certificate 

provision of the solicitation. If the 

Contractor certified in its offer that it 

will utilize a designated country, U.S.- 

made, or qualifying country 

photovoltaic device, the Contractor shall 

utilize a designated country, U.S.-made, 

or qualifying country photovoltaic 

device as specified, or, at the 

Contractor’s option, a domestic 

photovoltaic device. 

* * * * * 

■ 6. Section 252.225–7018 is amended 

by— 

■ a. In the introductory text, removing 

‘‘225.7017–4(b)’’ and adding ‘‘225.7017– 

5(b)’’ in its place; 

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30124 Federal Register / Vol. 80, No. 100 / Tuesday, May 26, 2015 / Proposed Rules 

■ b. Removing the clause date ‘‘(JAN 

2014)’’ and adding ‘‘(DATE)’’ in its 

place; 

■ c. Revising paragraph (b); 

■ d. In paragraph (c), removing ‘‘(See 

http://www.cbp.gov/xp/cgov/trade/

legal/rulings/.)’’ and adding ‘‘(See 

http://www.cbp.gov/trade/rulings.)’’ in 

its place; and 

■ e. Revising paragraph (d). 

The revisions read as follows: 

252.225–7018 Photovoltaic Devices— 

Certificate. 

* * * * * 

(b) Restrictions. The following 

restrictions apply, depending on the 

estimated aggregate value of 

photovoltaic devices to be utilized 

under a resultant contract: 

(1) If less than $204,000, then— 

(i) The Government will not accept an 

offer specifying the use of other foreign 

photovoltaic devices in paragraphs 

(d)(2)(iii), (d)(3)(iii), (d)(4)(iii), or 

(d)(5)(iii) of this provision, unless the 

Offeror documents to the satisfaction of 

the Contracting Officer that the price of 

the foreign photovoltaic device plus 50 

percent is less than the price of a 

comparable domestic photovoltaic 

device and the Government determines 

in accordance with DFARS 225.217–4 

that the price of a comparable domestic 

photovoltaic device would be 

unreasonable; and 

(ii) The Government will not accept 

an offer specifying the use of a 

qualifying country photovoltaic device 

unless the Government determines in 

accordance with 225.217–4 that it is in 

the public interest to allow use of a 

qualifying country photovoltaic device. 

(2) If $204,000 or more, then the 

Government will consider only offers 

that utilize photovoltaic devices that are 

domestic or designated country 

photovoltaic devices, unless the 

Government determines in accordance 

with DFARS 225.7017–4, that it is in the 

public interest to allow use of a 

qualifying country photovoltaic device 

or a U.S.-made photovoltaic device. 

* * * * * 

(d) Certification and identification of 

country of origin. [The Offeror shall 

check the block and fill in the blank for 

one of the following paragraphs, based 

on the estimated value and the country 

of origin of photovoltaic devices to be 

utilized in performance of the contract: 

___(1) No photovoltaic devices will be 

utilized in performance of the contract. 

(2) If less than $25,000— 

l (i) The Offeror certifies that each 

photovoltaic device to be utilized in 

performance of the contract is a 

domestic photovoltaic device; 

l (ii) The Offeror certifies that each 

photovoltaic device to be utilized in 

performance of the contract is a 

qualifying country photovoltaic device 

[Offeror to specify country of 

originllll]; or 

l (iii) The foreign (other than 

qualifying country) photovoltaic devices 

to be utilized in performance of the 

contract are the product of llll. 

[Offeror to specify country of origin, if 

known, and provide documentation that 

the cost of a domestic photovoltaic 

device would be unreasonable in 

comparison to the cost of the proposed 

foreign photovoltaic device, i.e., that the 

price of the foreign photovoltaic device 

plus 50 percent is less than the price of 

a comparable domestic photovoltaic 

device. 

(3) If $25,000 or more but less than 

$79,507— 

l (i) The Offeror certifies that each 

photovoltaic device to be utilized in 

performance of the contract is a 

domestic photovoltaic device or a 

Canadian photovoltaic device [Offeror 

to specify country of originllll]; 

l (ii) The Offeror certifies that each 

photovoltaic device to be utilized in 

performance of the contract is a 

qualifying country photovoltaic device 

[Offeror to specify country of 

orginllll]; or 

l (iii) The foreign (other than 

qualifying country or Canadian) 

photovoltaic devices to be utilized in 

performance of the contract are the 

product of llll. [Offeror to specify 

country of origin, if known, and provide 

documentation that the cost of a 

domestic photovoltaic device would be 

unreasonable in comparison to the cost 

of the proposed foreign photovoltaic 

device, i.e., that the price of the foreign 

photovoltaic device plus 50 percent is 

less than the price of a comparable 

domestic photovoltaic device.] 

(4) If $79,507 or more but less than 

$100,000— 

l (i) The Offeror certifies that each 

photovoltaic device to be utilized in 

performance of the contract is a 

domestic photovoltaic device; a Free 

Trade Agreement country photovoltaic 

device (other than a Bahrainian, Korean, 

Moroccan, Panamanian, or Peruvian 

photovoltaic device) [Offeror to specify 

country of origin llll]; 

l (ii) The Offeror certifies that each 

photovoltaic device to be utilized in 

performance of the contract is a 

qualifying country (except Australian or 

Canadian) photovoltaic device; [Offeror 

to specify country of origin llll ]; 

or 

l (iii) The offered foreign 

photovoltaic devices (other than those 

from countries listed in paragraph 

(d)(4)(i) or (d)(4)(ii) of this provision) are 

the product of llll. [Offeror to 

specify country of origin, if known, and 

provide documentation that the cost of 

a domestic photovoltaic device would 

be unreasonable in comparison to the 

cost of the proposed foreign 

photovoltaic device, i.e., that the price 

of the foreign photovoltaic device plus 

50 percent is less than the price of a 

comparable domestic photovoltaic 

device.] 

(5) If $100,000 or more but less than 

$204,000— 

l (i) The Offeror certifies that each 

photovoltaic device to be utilized in 

performance of the contract is a 

domestic photovoltaic device; a Free 

Trade Agreement country photovoltaic 

device (other than a Bahrainian, 

Moroccan, Panamanian, or Peruvian 

photovoltaic device) [Offeror to specify 

country of origin llll]; 

l (ii) The Offeror certifies that each 

photovoltaic device to be utilized in 

performance of the contract is a 

qualifying country (except Australian or 

Canadian) photovoltaic device [Offeror 

to specify country of origin llll]; or 

l (iii) The offered foreign 

photovoltaic devices (other than those 

from countries listed in paragraph 

(d)(4)(i) or (d)(4)(ii) of this provision) are 

the product of llll. [Offeror to 

specify country of origin, if known, and 

provide documentation that the cost of 

a domestic photovoltaic device would 

be unreasonable in comparison to the 

cost of the proposed foreign 

photovoltaic device, i.e., that the price 

of the foreign photovoltaic device plus 

50 percent is less than the price of a 

comparable domestic photovoltaic 

device.] 

(6) If $204,000 or more, the Offeror 

certifies that each photovoltaic device to 

be used in performance of the contract 

is— 

l (i) A domestic or designated 

country photovoltaic device [Offeror to 

specify country of origin llll]; 

l (ii) A U.S.-made photovoltaic 

device; or 

l (iii) A qualifying country 

photovoltaic device. [Offeror to specify 

country of origin llll]. 

* * * * * 

[FR Doc. 2015–12343 Filed 5–22–15; 8:45 am] 

BILLING CODE 5001–06–P 

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