`[Federal Register Volume 83, Number 123 (Tuesday, June 26, 2018)]
[Proposed Rules]
[Pages 29736-29740]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2018-13730]


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DEPARTMENT OF DEFENSE

GENERAL SERVICES ADMINISTRATION

NATIONAL AERONAUTICS AND SPACE ADMINISTRATION

48 CFR Parts 2, 10, 12, 13, 18, and 26

[FAR Case 2017-009; Docket No. 2017-0009, Sequence No. 1]
RIN 9000-AN45


Federal Acquisition Regulation: Special Emergency Procurement 
Authority

AGENCY: Department of Defense (DoD), General Services Administration 
(GSA), and National Aeronautics and Space Administration (NASA).

ACTION: Proposed rule.

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SUMMARY: DoD, GSA, and NASA are proposing to amend the Federal 
Acquisition Regulation (FAR) to implement sections of the National 
Defense Authorization Act for Fiscal Year 2017 to expand special 
emergency procurement authorities for acquisitions of supplies or 
services that facilitate defense against or recovery from cyber attack, 
provide international disaster assistance under the Foreign Assistance 
Act of 1961, or support response to an emergency or major disaster 
under the

[[Page 29737]]

Robert T. Stafford Disaster Relief and Emergency Assistance Act.

DATES: Interested parties should submit written comments to the 
Regulatory Secretariat Division at one of the addresses shown below on 
or before August 27, 2018 to be considered in the formation of the 
final rule.

ADDRESSES: Submit comments in response to FAR Case 2017-009 by any of 
the following methods:
    Regulations.gov: http://www.regulations.gov. Submit 
comments via the Federal eRulemaking portal by entering ``FAR Case 
2017-009'' under the heading ``Enter Keyword or ID'' and selecting 
``Search''. Select the link ``Comment Now'' that corresponds with ``FAR 
Case 2017-009''. Follow the instructions provided on the screen. Please 
include your name, company name (if any), and ``FAR Case 2017-009'' on 
your attached document.
     Mail: General Services Administration, Regulatory 
Secretariat Division (MVCB), ATTN: Lois Mandell, 1800 F Street NW, 2nd 
Floor, Washington, DC 20405-0001.
    Instructions: Please submit comments only and cite ``FAR Case 2017-
009'' in all correspondence related to this case. Comments received 
generally will be posted without change to http://www.regulations.gov, 
including any personal and/or business confidential 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. Camara Francis, Procurement 
Analyst, at 202-550-0935 for clarification of content. For information 
pertaining to status or publication schedules, contact the Regulatory 
Secretariat Division at 202-501-4755. Please cite ``FAR Case 2017-
009''.

SUPPLEMENTARY INFORMATION: 

I. Background

    The purpose of this proposed rule is to implement sections 816 and 
1641 of the National Defense Authorization Act (NDAA) for Fiscal Year 
(FY) 2017 (Pub. L. 114-328). Sections 816 and 1641 modify 41 U.S.C. 
1903, Special Emergency Procurement Authority. The revisions to 41 
U.S.C. 1903 establish special emergency procurement authorities to 
allow for higher micro-purchase and simplified acquisition thresholds 
for acquisitions of supplies or services that facilitate defense 
against or recovery from cyber attack; support a request from the 
Secretary of State or the Administrator of the United States Agency for 
International Development to facilitate provision of international 
disaster assistance pursuant to 22 U.S.C. 2292 et seq.; or support 
responses to an emergency or major disaster (42 U.S.C. 5122), except 
that this new authority allows treatment of acquisitions, for property 
or a service, as a commercial item only for acquisitions to facilitate 
the defense against or recovery from a cyber attack against the United 
States.

II. Discussion and Analysis

    This proposed rule provides for the following:
    1. Definitions.
    At FAR 2.101, definitions of ``emergency'' and ``major'' disaster'' 
were added to explain two of the new circumstances that can trigger the 
new emergency procurement authorities. The Defense Acquisition 
Regulations Council and the Civilian Agency Acquisition Council (the 
Councils) did not add a definition of ``cyber attack'' because there 
was no statutory definition, and the Councils did not want to limit the 
authority of the head of the agency to determine what constituted a 
cyber attack that should trigger the new authorities. There was also no 
statutory definition of ``international disaster assistance''; however, 
the reference to 22 U.S.C. 2292 et seq. provides additional guidance.
    Under the micro-purchase threshold, paragraph (3), and simplified 
acquisition threshold, paragraph (1), new language was added to include 
the expanded special emergency procurement authorities.
    2. The new circumstances that allow exercise of the special 
emergency procurement authorities were added to the relevant provisions 
that govern the micro-purchase threshold at FAR 13.201(g)(1) and the 
simplified acquisition procedures for certain commercial items at FAR 
13.500(c). However, only the new circumstance of acquiring supplies or 
services to facilitate defense against or recovery from a cyber attack 
was added at FAR 12.102(f)(1), because acquisitions of supplies or 
services under the other new circumstances are not to be treated as an 
acquisition of commercial items.
    3. FAR part 18 provides a summary of emergency acquisition 
flexibilities throughout the FAR, so the changes in parts 2, 12, and 13 
are reflected in conforming changes to part 18.
    4. Other conforming changes.
     Cyber attack was added to the policy on market research at 
FAR 10.001. This section already addresses market research in 
furtherance of disaster or emergency relief activities.
     At FAR subpart 26.2, Disaster or Emergency Assistance 
Activities, a new paragraph (b) was added at FAR 26.202 to clarify the 
link between the Stafford Act and the increased micro-purchase and 
simplified acquisition thresholds.

III. Expected Impact of the Proposed Rule and Proposed Cost Savings

    Prior to enactment of the NDAA for FY 2017, for acquisitions of 
supplies or services that are to be used to support a contingency 
operation, or to facilitate defense against or recovery from nuclear, 
biological, chemical, or radiological attack, agencies had the 
authority, as provided in FAR part 13, to utilize the higher micro-
purchase threshold (MPT) of $20,000 in lieu of $3,500 in the case of 
any contract to be awarded and performed, or purchase to be made, 
inside the United States; and $30,000 in the case of any contract to be 
awarded and performed, or purchase to be made, outside the United 
States (except for acquisitions of construction subject to 40 U.S.C. 
chapter 31, subchapter IV, Wage Rate requirements (Construction)). 
Additionally, prior to the enactment of the NDAA for FY 2017, agencies 
had the authority, as provided in FAR part 13, to utilize the higher 
simplified acquisition threshold (SAT) of $750,000 in lieu of $150,000 
for any contract to be awarded and performed, or purchase to be made, 
inside the United States; and $1.5 million for any contract to be 
awarded and performed, or purchase to be made, outside the United 
States; and utilize the higher threshold of $13 million in lieu of $7 
million for use of simplified acquisition procedures (SAP) for the 
acquisition of commercial items (including acquisitions treated as 
acquisitions of commercial items to facilitate defense against or 
recovery from nuclear, biological, chemical or radiological attack).
    This proposed rule expands the use of the special emergency 
procurement authorities to apply to acquisitions of supplies or 
services that facilitate defense against or recovery from a cyber 
attack; support a request from the Secretary of State or the 
Administrator of the United States Agency for International Development 
to facilitate provision of international disaster assistance pursuant 
to 22 U.S.C. 2292 et seq.; or support a response to an emergency or 
major disaster (42 U.S.C. 5122).
    DoD, GSA, and NASA have performed a regulatory cost analysis on 
this proposed rule. The following is a summary of the estimated public 
and Government cost savings, which are

[[Page 29738]]

calculated in 2016 dollars at a 7 percent discount rate.

Public Cost Savings

    This rule will impact all businesses that submit offers in response 
to Federal solicitations issued for acquisitions below the MPT and SAT, 
if the solicitation is for an estimated value that falls within the 
range between the basic MPT or SAT and the higher threshold now 
authorized, thereby reducing the requirements imposed on the offerors 
when responding to the solicitation.
    The estimated annualized public savings, using a discount rate of 7 
percent is $1,327,836 (approximately $677,506 to other than small 
businesses and $650,330 to small business), with a present value 
savings of $18,969,086.
    To access the full Regulatory Cost Analysis for this rule, go to 
the Federal eRulemaking Portal at www.regulations.gov, search for ``FAR 
Case 2017-009,'' click ``Open Docket,'' and view ``Supporting 
Documents.''
    DoD, GSA, and NASA welcome comments on both the methodology and the 
analysis during the public comment period for this rule.

IV. Applicability to Contracts at or Below the Simplified Acquisition 
Threshold and for Commercial Items, Including Commercially Available 
Off-the-Shelf Items

    This rule does not add any new solicitation provisions or clauses, 
or impact any existing provisions or clauses.

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 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 a significant regulatory action and, therefore, was 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.

VI. Executive Order 13771

    This rule is considered to be an E.O. 13771 deregulatory action. 
Details on the estimated cost savings can be found in Section III of 
this preamble.

VII. Regulatory Flexibility Act

    DoD, GSA, and NASA do 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 codified at 5 U.S.C. 601 et 
seq. because the rule reduces compliance burdens on small entities. 
However, an Initial Regulatory Flexibility Analysis (IRFA) has been 
performed and it is summarized as follows:

    This rule implements sections 816 and 1641 of the National 
Defense Authorization Act for Fiscal Year 2017 (Pub. L. 114-328), 
which amend 41 U.S.C. 1903.
    This rule expands special emergency procurement authorities for 
acquisitions of supplies or services that--
     Facilitate defense against or recovery from a cyber 
attack;
     Provide international disaster assistance under the 
Foreign Assistance Act of 1961; or
     Support response to an emergency or major disaster 
under the Robert T. Stafford Disaster Relief and Emergency 
Assistance Act.
    The legal authority for this rule is sections 816 and 1641 of 
the National Defense Authorization Act for Fiscal Year 2017 (Pub. L. 
114-328), which amend 41 U.S.C. 1903.
    Based on an average of contract actions reported in the Federal 
Procurement Data System for fiscal years 2014-2016, this rule 
applies to less than 100 small entities that submit offers in 
response to solicitations for the acquisition of supplies or 
services--
     Between $3,500 and $20,000 or between $150,000 and 
$750,000, to support response to emergencies or major disasters in 
the U.S.;
     Between $3,500 and $30,000 or between $150,000 and $1.5 
million, to provide international disaster assistance under the 
Foreign Assistance Act of 1961; and
     Between $150,000 and $750,000 to facilitate defense 
against or recovery from cyber attacks.
    This rule reduces compliance requirements on small entities, 
resulting in estimated savings to affected small entities of 
approximately $650,330 in the first year. The professional skill-
sets previously required before these threshold increases were mid-
level journeyman.
    This rule reduces burdens on small entities, based on 
statutorily increased special emergency procurement authority. There 
are no alternatives consistent with the statute that would further 
reduce burdens on small entities.

    The Regulatory Secretariat Division has submitted a copy of the 
IRFA to the Chief Counsel for Advocacy of the Small Business 
Administration. A copy of the IRFA may be obtained from the Regulatory 
Secretariat Division. DoD, GSA, and NASA invite comments from small 
business concerns and other interested parties on the expected impact 
of this rule on small entities.
    DoD, GSA, and NASA will also consider comments from small entities 
concerning the existing regulations affected by this rule consistent 
with 5 U.S.C. 610. Interested parties must submit such comments 
separately and should cite 5 U.S.C. 610 (FAR Case 2017-009) in 
correspondence.

VIII. Paperwork Reduction Act

    This proposed rule does not contain any information collection 
requirements that would 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 2, 10, 12, 13, 18, and 26

    Government procurement.


    Dated: June 21, 2018.
William F. Clark,
Director, Office of Government-wide, Acquisition Policy, Office of 
Acquisition Policy, Office of Government-wide Policy.
    Therefore, DoD, GSA, and NASA are proposing to amend 48 CFR parts 
2, 10, 12, 13, 18, and 26 as set forth below:

0
1. The authority citation for 48 CFR parts 2, 10, 12, 13, 18, and 26 
continues to read as follows:

    Authority:  40 U.S.C. 121(c); 10 U.S.C. chapter 137; and 51 
U.S.C. 20113.

PART 2--DEFINITIONS OF WORDS AND TERMS

0
2. Amend section 2.101 in paragraph (b)(2) by--
0
a. Adding in alphabetical order the definitions ``Emergency'' and 
``Major disaster'';
0
b. Revising paragraph (3) of the definition ``Micro-purchase 
threshold''; and
0
c. Revising paragraph (1) of the definition ``Simplified acquisition 
threshold''.
    The additions and revisions read as follows:


2.101   Definitions.

* * * * *
    (b) * * *
    (2) * * *
    Emergency, as used in 6.208, 13.201, 13.500, 18.001, 18.202, 
18.203, and subpart 26.2, means any occasion or instance for which, in 
the determination of the President, Federal assistance is needed to 
supplement State and local efforts and capabilities to save lives and 
to protect property and public health and safety, or to lessen or avert 
the threat of a catastrophe in any part of the United States (42 U.S.C. 
5122).
* * * * *
    Major disaster, as used in 6.208, 13.201, 13.500, 18.001, 18.202, 
18.203, and subpart 26.2, means any natural

[[Page 29739]]

catastrophe (including any hurricane, tornado, storm, high water, 
winddriven water, tidal wave, tsunami, earthquake, volcanic eruption, 
landslide, mudslide, snowstorm, or drought), or regardless of cause, 
any fire, flood, or explosion, in any part of the United States, which, 
in the determination of the President, causes damage of sufficient 
severity and magnitude to warrant major disaster assistance under the 
Stafford Act to supplement the efforts and available resources of 
States, local governments, and disaster relief organizations in 
alleviating the damage, loss, hardship, or suffering caused thereby (42 
U.S.C. 5122).
* * * * *
    Micro-purchase threshold * * *
* * * * *
    (3) For acquisitions of supplies or services that, as determined by 
the head of the agency, are to be used to support a contingency 
operation; to facilitate defense against or recovery from cyber, 
nuclear, biological, chemical or radiological attack; to support a 
request from the Secretary of State or the Administrator of the United 
States Agency for International Development to facilitate provision of 
international disaster assistance pursuant to 22 U.S.C. 2292 et seq.; 
or to support response to an emergency or major disaster (42 U.S.C. 
5122), as described in 13.201(g)(1), except for construction subject to 
40 U.S.C. chapter 31, subchapter IV, Wage Rate Requirements 
(Construction) (41 U.S.C. 1903)--
    (i) $20,000 in the case of any contract to be awarded and 
performed, or purchase to be made, inside the United States; and
    (ii) $30,000 in the case of any contract to be awarded and 
performed, or purchase to be made, outside the United States.
* * * * *
    Simplified acquisition threshold means $150,000 (41 U.S.C. 134), 
except for--
    (1) Acquisitions of supplies or services that, as determined by the 
head of the agency, are to be used to support a contingency operation; 
to facilitate defense against or recovery from cyber, nuclear, 
biological, chemical, or radiological attack; to support a request from 
the Secretary of State or the Administrator of the United States Agency 
for International Development to facilitate provision of international 
disaster assistance pursuant to 22 U.S.C. 2292 et seq.; or to support 
response to an emergency or major disaster (42 U.S.C. 5122), (41 U.S.C. 
1903), the term means--
    (i) $750,000 for any contract to be awarded and performed, or 
purchase to be made, inside the United States; and
    (ii) $1.5 million for any contract to be awarded and performed, or 
purchase to be made, outside the United States; and
* * * * *

PART 10--MARKET RESEARCH


10.001  [Amended]

0
3. Amend section 10.001 by removing from paragraph (a)(2)(vi)(A) 
``recovery from'' and adding ``recovery from cyber,'' in its place.

PART 12--ACQUISITION OF COMMERCIAL ITEMS


12.102   [Amended]

0
4. Amend section 12.102 by removing from paragraph (f)(1) ``recovery 
from'' and adding ``recovery from cyber,'' in its place.

PART 13--SIMPLIFIED ACQUISITION PROCEDURES

0
5. Amend section 13.201 by revising paragraph (g) to read as follows:


13.201   General.

* * * * *
    (g)(1) For acquisitions of supplies or services that, as determined 
by the head of the agency, are to be used to support a contingency 
operation; to facilitate defense against or recovery from cyber, 
nuclear, biological, chemical, or radiological attack; to support a 
request from the Secretary of State or the Administrator of the United 
States Agency for International Development to facilitate provision of 
international disaster assistance pursuant to 22 U.S.C. 2292 et seq.; 
or to support response to an emergency or major disaster (42 U.S.C. 
5122), the micro-purchase threshold is--
    (i) $20,000 in the case of any contract to be awarded and 
performed, or purchase to be made, inside the United States; and
    (ii) $30,000 in the case of any contract to be awarded and 
performed, or purchase to be made, outside the United States.
    (2) Purchases using this authority must have a clear and direct 
relationship to the support of a contingency operation; or the defense 
against or recovery from cyber, nuclear, biological, chemical, or 
radiological attack; international disaster assistance; or an emergency 
or major disaster.
* * * * *
0
6. Amend section 13.500 by revising paragraph (c)(1) to read as 
follows:


13.500   General.

* * * * *
    (c) * * *
    (1) The acquisition is for commercial items that, as determined by 
the head of the agency, are to be used in support of a contingency 
operation; to facilitate the defense against or recovery from cyber, 
nuclear, biological, chemical, or radiological attack; to support a 
request from the Secretary of State or the Administrator of the United 
States Agency for International Development to facilitate provision of 
international disaster assistance; or to support response to an 
emergency or major disaster; or
* * * * *

PART 18--EMERGENCY ACQUISITIONS

0
7. Amend section 18.001 by--
0
a. Revising paragraph (b);
0
b. Redesignating paragraph (c) as paragraph (d); and
0
c. Adding a new paragraph (c).
    The revision and addition read as follows:


18.001   Definition.

* * * * *
    (b) To facilitate the defense against or recovery from cyber, 
nuclear, biological, chemical, or radiological attack against the 
United States;
    (c) In support of a request from the Secretary of State or the 
Administrator of the United States Agency for International Development 
to facilitate the provision of international disaster assistance; or
* * * * *
0
8. Revise section 18.202 to read as follows:


18.202  Defense or recovery from certain events.

    (a) Micro-purchase threshold. The threshold increases when the head 
of the agency determines the supplies or services are to be used to 
facilitate defense against or recovery from cyber, nuclear, biological, 
chemical, or radiological attack; to facilitate provision of 
international disaster assistance; or to support response to an 
emergency or major disaster. (See 2.101.)
    (b) Simplified acquisition threshold. The threshold increases when 
the head of the agency determines the supplies or services are to be 
used to facilitate defense against or recovery from cyber, nuclear, 
biological, chemical, or radiological attack; to facilitate provision 
of international disaster assistance; or to support response to an 
emergency or major disaster. (See 2.101.)

[[Page 29740]]

    (c) Treating certain items as commercial. Contracting officers may 
treat any acquisition of supplies or services as an acquisition of 
commercial items if the head of the agency determines the acquisition 
is to be used to facilitate the defense against or recovery from cyber, 
nuclear, biological, chemical, or radiological attack. (See 
12.102(f)(1) and 13.500(c)(2).)
    (d) Simplified procedures for certain commercial items. The 
threshold limits authorized for use of this authority may be increased 
when it is determined the acquisition is to facilitate defense against 
or recovery from cyber, nuclear, biological, chemical, or radiological 
attack; to facilitate provision of international disaster assistance; 
or to support response to an emergency or major disaster. (See 
13.500(c).)

PART 26--OTHER SOCIOECONOMIC PROGRAMS

0
9. Revise the heading for subpart 26.2 to read as follows:

Subpart 26.2--Major Disaster or Emergency Assistance Activities

* * * * *
0
10. Amend section 26.202 by designating the undesignated paragraph as 
paragraph (a) and adding paragraph (b) to read as follows:


26.202   Local area preference.

* * * * *
    (b) When using the authority under the Stafford Act, see the 
definitions of ``micro-purchase threshold'' and ``simplified 
acquisition threshold'' in 2.101 for the authority to use an increased 
micro-purchase threshold and simplified acquisition threshold.

[FR Doc. 2018-13730 Filed 6-25-18; 8:45 am]
 BILLING CODE 6820-EP-P`