Federal Register / Vol. 79, No. 198 / Tuesday, October 14, 2014 / Rules and Regulations 61583 

252.232–7004 DoD Progress Payment 

Rates. 

As prescribed in 232.502–4–70(b), use 

the following clause: 

DOD PROGRESS PAYMENT RATES 

(OCT 2014) 

If the Contractor is a small business 

concern, the Progress Payments clause of this 

contract is modified to change each mention 

of the progress payment rate and liquidations 

rate (excepting paragraph (k), Limitations on 

Undefinitized Contract Actions) to 90 

percent. 

(End of clause) 

■ 25. Amend Appendix I to Chapter 2 

by: 

■ a. Revising section I–101.5(a.) 

■ b. Amending section I–112.1 by 

removing paragraph (c). 

The revision reads as follows: 

Appendix I to Chapter 2—Policy and 

Procedures for the DoD Pilot MentorProtege Program 

* * * * * 

I–101.5 * * * 

(a) An SDB concern as defined in 13 CFR 

124.1002; 

* * * * * 

[FR Doc. 2014–24225 Filed 10–10–14; 8:45 am] 

BILLING CODE 5001–06–P 

DEPARTMENT OF DEFENSE 

Defense Acquisition Regulation 

System 

48 CFR Part 247 

RIN 0750–AI38 

Defense Federal Acquisition 

Regulation: Ocean Transportation by 

U.S.-Flag Vessels (DFARS Case 2014– 

D012) 

AGENCY: Defense Acquisition 

Regulations System, Department of 

Defense (DoD). 

ACTION: Final rule. 

SUMMARY: DoD is issuing a final rule 

amending the Defense Federal 

Acquisition Regulation Supplement 

(DFARS) to remove text regarding 

contracting officer responsibilities, 

when purchasing ocean transportation 

services, that are procedural in nature. 

DATES: Effective October 14, 2014. 

FOR FURTHER INFORMATION CONTACT: Ms. 

Veronica Fallon, telephone 571–372– 

6098. 

SUPPLEMENTARY INFORMATION: 

I. Discussion 

DoD is revising DFARS 247.572 and 

247.573 to include a statement of 

delegated authority and to remove 

guidance that is internal to DoD 

concerning procedures contracting 

officers must follow when purchasing 

ocean transportation services. The 

internal DoD guidance removed from 

DFARS will be addressed in revised 

DFARS Procedures, Guidance and 

Information (PGI) 247.573. 

II. Publication of This Final Rule for 

Public Comment Is Not Required by 

Statute 

‘‘Publication of proposed 

regulations,’’ 41 U.S.C. 1707, is the 

statute which applies to the publication 

of the Federal Acquisition Regulation. 

Paragraph (a)(1) of the statute requires 

that a procurement policy, regulation, 

procedure or form (including an 

amendment or modification thereof) 

must be published for public comment 

if it relates to the expenditure of 

appropriated funds, and has either a 

significant effect beyond the internal 

operating procedures of the agency 

issuing the policy, regulation, procedure 

or form, or has a significant cost or 

administrative impact on contractors or 

offerors. This final rule is not required 

to be published for public comment, 

because the change is not substantive 

and only modifies the internal operating 

procedures of DoD. 

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). EO 13563 emphasizes the 

importance of quantifying both costs 

and benefits, of reducing costs, or 

harmonizing rules, and of promoting 

flexibility. This is not a significant 

regulatory action, and therefore, was not 

subject to review under section 6(b) of 

E.O. 12866, Regulatory Planning and 

Review, dated September 30, 1993. This 

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

804. 

IV. Regulatory Flexibility Act 

The Regulatory Flexibility Act does 

not apply to this rule because this final 

rule does not constitute a significant 

DFARS revision within the meaning of 

FAR 1.501–1, and 41 U.S.C. 1707 does 

not require publication for public 

comment. 

V. Paperwork Reduction Act 

This rule does not contain any 

information collection requirements that 

require the approval of the Office of 

Management and Budget under the 

Paperwork Reduction Act (44 U.S.C. 

chapter 35). 

List of Subjects in 48 CFR Part 247 

Government procurement. 

Manuel Quinones, 

Editor, Defense Acquisition Regulations 

System. 

Therefore, 48 CFR part 247 is 

amended as follows: 

PART 247—TRANSPORTATION 

■ 1. The authority citation for 48 CFR 

part 247 continues to read as follows: 

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

chapter 1. 

■ 2. Section 247.572 paragraph (a) is 

revised to read as follows: 

247.572 Policy. 

(a) In accordance with 10 U.S.C. 

2631(a), DoD contractors shall transport 

supplies, as defined in the clause at 

252.247–7023, Transportation of 

Supplies by Sea, exclusively on U.S.- 

flag vessels unless— 

(1) Those vessels are not available; 

(2) The proposed charges to the 

Government are higher than charges to 

private persons for the transportation of 

like goods; or 

(3) The proposed freight charges are 

excessive or unreasonable. 

* * * * * 

■ 3. Section 247.573 heading is revised 

and new text added to read as follows: 

247.573 General. 

(a) Delegated authority. Pursuant to 

10 U.S.C. 2631(a) and Secretary of 

Defense Memorandum dated February 

7, 2012, (see PGI 245.573) the authority 

to make determinations of excessive 

ocean liner rates and excessive charter 

rates is delegated to— 

(1) The Commander, United States 

Transportation Command, for excessive 

ocean liner rate determinations; and 

(2) The Secretary of the Navy for 

excessive charter rate determinations. 

(b) Procedures. (1) Contracting officers 

shall follow the procedures at PGI 

247.573(b)(1) when purchase of ocean 

transportation services is incidental to a 

contract for supplies, services, or 

construction. 

(2) Contracting officers shall follow 

the procedures at PGI 247.573(b)(2) 

when direct purchase of ocean 

transportation services is the principal 

purpose of the contract. 

(3) Agency and department 

procedures relating to annual reporting 

requirements of information received 

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61584 Federal Register / Vol. 79, No. 198 / Tuesday, October 14, 2014 / Rules and Regulations 

from offerors in response to solicitation 

provision 252.247–7026, Evaluation 

Preference for Use of Domestic 

Shipyards—Applicable to Acquisition 

of Carriage by Vessel for DoD Cargo in 

the Coastwise of Noncontiguous Trade, 

are found at PGI 247.573(b)(3). 

(4) Procedures are provided at PGI 

247.573(b)(4) to accomplish security 

background checks pursuant to clause 

252.247–7027, Riding Gang Member 

Requirements. 

247.573–1, 247.573–2 and 247.573–3 

[Removed] 

■ 4. Remove sections 247.573–1, 

247.573–2, and 247.573–3. 

247.574 [Amended] 

■ 5. Section 247.574 is amended by— 

■ a. In paragraph (e), removing the last 

two sentences; and 

■ b. In paragraph (f), removing the last 

sentence. 

[FR Doc. 2014–24401 Filed 10–10–14; 8:45 am] 

BILLING CODE 5001–06–P 

DEPARTMENT OF DEFENSE 

Defense Acquisition Regulations 

System 

48 CFR Part 252 

RIN 0750–AI30 

Defense Federal Acquisition 

Regulation Supplement: Flowdown of 

Specialty Metals Restrictions (DFARS 

Case 2014–D011) 

AGENCY: Defense Acquisition 

Regulations System, Department of 

Defense (DoD). 

ACTION: Final rule. 

SUMMARY: DoD is issuing a final rule 

amending the Defense Federal 

Acquisition Regulation Supplement 

(DFARS) to clarify the flowdown 

requirements for the DFARS clause 

entitled ‘‘Restriction on Acquisition of 

Certain Articles Containing Specialty 

Metals.’’ 

DATES: Effective October 14, 2014. 

FOR FURTHER INFORMATION CONTACT: Ms. 

Amy G. Williams, telephone 571–372– 

6106. 

SUPPLEMENTARY INFORMATION: 

I. Background 

DoD published a proposed rule in the 

Federal Register at 79 FR 35507 on June 

23, 2014, to clarify the flowdown 

requirements for the DFARS clause 

entitled ‘‘Restriction on Acquisition of 

Certain Articles Containing Specialty 

Metals.’’ In order to prevent 

misinterpretation of the current 

flowdown requirement to insert the 

‘‘substance of the clause’’ in 

subcontracts, the flowdown requirement 

has been rewritten to specify that the 

only modifications allowed when 

flowing down the clause are as follows: 

• Exclude and reserve paragraph (d) 

of the clause. 

• Modify paragraph (c)(6) of the 

clause only as necessary to facilitate 

management of the allowance for up to 

2 percent otherwise noncompliant 

specialty metal content in the end 

product, while recognizing that the 

minimal content exception does not 

apply to specialty metals contained in 

high-performance magnets. 

• Not further alter the clause, other 

than to identify the appropriate parties. 

One respondent submitted public 

comments in response to the proposed 

rule. 

II. Discussion and Analysis 

DoD reviewed the public comments in 

the development of the final rule. No 

changes were made to the rule as a 

result of those comments. 

Comment: The respondent noted that 

the proposed clarification may well be 

necessary and welcomed DoD’s 

willingness to minimize 

misinterpretations of laws and 

regulations. 

Response: Noted. 

Comment: The respondent expressed 

concern about the number of national 

security waivers issued to accept 

noncompliant specialty metals from 

China and other noncompliant sources. 

Response: The granting of national 

security waivers is outside the scope of 

this case. 

III. Executive Orders 12866 and 13563 

Executive Orders (E.O.s) 12866 and 

13563 direct agencies to assess all costs 

and benefits of available regulatory 

alternatives and, if regulation is 

necessary, to select regulatory 

approaches that maximize net benefits 

(including potential economic, 

environmental, public health and safety 

effects, distributive impacts, and 

equity). E.O. 13563 emphasizes the 

importance of quantifying both costs 

and benefits, of reducing costs, of 

harmonizing rules, and of promoting 

flexibility. This is not a significant 

regulatory action and, therefore, was not 

subject to review under section 6(b) of 

E.O. 12866, Regulatory Planning and 

Review, dated September 30, 1993. This 

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

804. 

IV. Regulatory Flexibility Act 

A final regulatory flexibility analysis 

has been prepared consistent with the 

Regulatory Flexibility Act, 5 U.S.C. 604, 

and is summarized as follows: 

The reason for issuance of this rule is 

to clarify the flowdown requirements for 

DFARS clause 252.225–7009, 

Restriction on Acquisition of Certain 

Articles Containing Specialty Metals. 

The objective of the rule is to more fully 

implement the requirements of 10 

U.S.C. 2533b, which restricts the 

acquisition of specialty metals not 

melted in the United States, its outlying 

areas, or a qualifying country, in order 

to strengthen the United States 

industrial base. 

There were no significant issues 

raised by the public comments in 

response to the initial regulatory 

flexibility analysis. 

This rule applies to DoD contractors 

and subcontractors that are providing 

aircraft, missile or space systems, ships, 

tank or automotive items, weapon 

systems, ammunition, or components 

thereof that contain specialty metals. 

Based on Fiscal Year 2013 data in the 

Federal Procurement Data System 

(FPDS), DoD awarded 1,566 contracts 

that exceeded the simplified acquisition 

threshold for aircraft, missile or space 

systems, ships, tank or automotive 

items, weapon systems, ammunition, or 

components thereof. Of those awards, 

642 were to 533 unique small business 

entities (83%). FPDS does not contain 

data on subcontracts. If we estimate an 

average of 20 subcontracts per contract 

for items containing specialty metals, 

and that 35 percent of those 

subcontracts are awarded to small 

businesses, 2 second-tier subcontracts 

with small business entities per 

subcontract with a small business 

entity, then this rule may apply to 

approximately 27,828 small business 

entities subject to DFARS 52.225–7009. 

(1,566 contracts × 2031,320 subcontracts 

× .3510,962 1st tier subcontracts with 

small entities × 2 = 21,924 second-tier 

subcontracts with small entities. Total 

small business entities = .83(642 + 

10,962 + 21,924) = 27,828) 

There are no reporting or 

recordkeeping requirements associated 

with this rule. With some exceptions, 

the rule requires contractors to provide 

certain end products containing 

specialty metals melted or produced in 

the United States, its outlying areas, or 

a qualifying country. However, end 

items may contain a minimal amount of 

otherwise noncompliant specialty 

metals, if the total weight of such 

noncompliant metals does not exceed 2 

percent of the total of all specialty 

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