42828 Federal Register / Vol. 83, No. 165 / Friday, August 24, 2018 / Proposed Rules 

List of Subjects in 48 CFR Parts 212, 

247, and 252 

Government procurement. 

Jennifer Lee Hawes, 

Regulatory Control Officer, Defense 

Acquisition Regulations System. 

Therefore, 48 CFR parts 212, 247, and 

252 are proposed to be amended as 

follows: 

■ 1. The authority citation for 48 CFR 

parts 212, 247, and 252 continues to 

read as follows: 

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

chapter 1. 

PART 212—ACQUISITION OF 

COMMERCIAL ITEMS 

212.301 [Amended] 

■ 2. Amend section 212.301 by: 

■ a. Removing paragraph (f)(xix)(D); 

■ b. Redesignating paragraphs (f)(xix)(E) 

through (H) as paragraphs (f)(xix)(D) 

through (G), respectively; 

■ c. In the newly redesignated 

paragraph (f)(xix)(D), removing 

‘‘247.574(d)’’ and adding ‘‘247.574(c)’’ 

in its place; 

■ d. In the newly redesignated 

paragraph (f)(xix)(E), removing 

‘‘247.574(e)’’ and adding ‘‘247.574(d)’’ 

in its place; 

■ e. In the newly redesignated 

paragraph (f)(xix)(F), removing 

‘‘247.574(f)’’ and adding ‘‘247.574(e)’’ in 

its place; and 

■ f. In the newly redesignated paragraph 

(f)(xix)(G), removing ‘‘U.S’’ and adding 

‘‘U.S.’’ in its place. 

PART 247—TRANSPORTATION 

247.574 [Amended] 

■ 3. Amend section 247.574 by: 

■ a. Removing paragraph (c); and 

■ b. Redesignating paragraphs (d) 

through (f) as paragraphs (c) through (e), 

respectively. 

PART 252—SOLICITATION 

PROVISIONS AND CONTRACT 

CLAUSES 

■ 4. Amend section 252.247–7023 by: 

■ a. In the clause heading, removing the 

date ‘‘(APR 2014)’’ and adding 

‘‘(DATE)’’ in its place; 

■ b. Redesignating paragraph (h) as 

paragraph (i); 

■ c. Adding a new paragraph (h); and 

■ d. In the newly redesignated 

paragraphs (i)(1) and (2), removing 

‘‘paragraph (h)’’ and adding ‘‘paragraph 

(i)’’ in both places; 

■ e. In Alternate I: 

■ i. In the clause heading, removing the 

date of ‘‘(APR 2014)’’ and adding 

‘‘(DATE)’’ in its place; 

■ ii. Redesignating paragraph (h) as 

paragraph (i); 

■ iii. Adding a new paragraph (h); and 

■ iv. In the newly redesignated 

paragraphs (i)(1) and (2), removing 

‘‘paragraph (h)’’ and adding ‘‘paragraph 

(i)’’ in both places; 

■ f. In Alternate II— 

■ i. In the clause heading, removing the 

date of ‘‘(APR 2014)’’ and adding 

‘‘(DATE)’’ in its place; 

■ ii. Redesignating paragraph (h) as 

paragraph (i); 

■ iii. Adding a new paragraph (h); and 

■ iv. In the newly redesignated 

paragraphs (i)(1) and (2), removing 

‘‘paragraph (h)’’ and adding ‘‘paragraph 

(i)’’ in both places. 

The additions read as follows: 

252.247–7023 Transportation of Supplies 

by Sea. 

* * * * * 

(h) If the Contractor has indicated by 

the response to the solicitation 

provision, Representation of Extent of 

Transportation by Sea, that it did not 

anticipate transporting by sea any 

supplies; however, after the award of 

this contract, the Contractor learns that 

supplies will be transported by sea, the 

Contractor— 

(1) Shall notify the Contracting Officer 

of that fact; and 

(2) Hereby agrees to comply with all 

the terms and conditions of this clause. 

* * * * * 

Alternate I. * * * 

* * * * * 

(h) If the Contractor has indicated by 

the response to the solicitation 

provision, Representation of Extent of 

Transportation by Sea, that it did not 

anticipate transporting by sea any 

supplies; however, after the award of 

this contract, the Contractor learns that 

supplies will be transported by sea, the 

Contractor— 

(1) Shall notify the Contracting Officer 

of that fact; and 

(2) Hereby agrees to comply with all 

the terms and conditions of this clause. 

* * * * * 

Alternate II. * * * 

* * * * * 

(h) If the Contractor has indicated by 

the response to the solicitation 

provision, Representation of Extent of 

Transportation by Sea, that it did not 

anticipate transporting by sea any 

supplies, but the contractor learns after 

the award of the contract that supplies 

will be transported by sea, the 

Contractor shall notify the Contracting 

Officer of that fact. 

* * * * * 

252.247–7024 [Removed and Reserved] 

■ 4. Remove and reserve section 

252.247–7024. 

252.247–7025 [Amended] 

■ 5. Amend section 252.247–7025, in 

the introductory text, by removing 

‘‘247.574(d)’’ and adding ‘‘247.574(c)’’ 

in its place. 

252.247–7026 [Amended] 

■ 6. Amend section 252.247–7026, in 

the introductory text, by removing 

‘‘247.574(e)’’ and adding ‘‘247.574(d)’’ 

in its place. 

252.247–7027 [Amended] 

■ 7. Amend section 252.247–7027, in 

the introductory text, by removing 

‘‘247.574(f)’’ and adding ‘‘247.574(e)’’ in 

its place. 

[FR Doc. 2018–18246 Filed 8–23–18; 8:45 am] 

BILLING CODE 5001–06–P 

DEPARTMENT OF DEFENSE 

Defense Acquisition Regulations 

System 

48 CFR Parts 225 and 252 

[Docket DARS–2018–0004] 

RIN 0750–AJ22 

Defense Federal Acquisition 

Regulation Supplement: Restrictions 

on Acquisitions From Foreign Sources 

(DFARS Case 2017–D011) 

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 sections of the National 

Defense Authorization Act for Fiscal 

Year 2017 to apply domestic source 

requirements to acquisitions at or below 

the simplified acquisition threshold 

when acquiring athletic footwear to be 

furnished to enlisted members of the 

Armed Forces upon their initial entry 

into the Armed Forces, and add 

Australia and the United Kingdom to 

the definition of the ‘‘National 

Technology and Industrial Base.’’ 

DATES: Comments on the proposed rule 

should be submitted in writing to the 

address shown below on or before 

October 23, 2018, to be considered in 

the formation of a final rule. 

ADDRESSES: Submit comments 

identified by DFARS Case 2017–D011, 

using any of the following methods: 

Æ Federal eRulemaking Portal: http:// 

www.regulations.gov. Search for 


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Federal Register / Vol. 83, No. 165 / Friday, August 24, 2018 / Proposed Rules 42829 

‘‘DFARS Case 2017–D011.’’ Select 

‘‘Comment Now’’ and follow the 

instructions provided to submit a 

comment. Please include ‘‘DFARS Case 

2017–D011’’ on any attached 

documents. 

Æ Email: osd.dfars@mail.mil. Include 

DFARS Case 2017–D011 in the subject 

line of the message. 

Æ Fax: 571–372–6094. 

Æ Mail: Defense Acquisition 

Regulations System, Attn: Ms. Amy G. 

Williams, OUSD(A&S)DPC/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, telephone 571–372– 

6106. 

SUPPLEMENTARY INFORMATION: 

I. Background 

DoD is proposing to amend the 

DFARS to implement the following two 

sections of the National Defense 

Authorization Act (NDAA) for Fiscal 

Year (FY) 2017 (Pub. L. 114–328): 

A. Section 817 of the NDAA for FY 2017 

Section 817 extends the domestic 

source requirements of 10 U.S.C. 2533a 

(the Berry Amendment) below the 

simplified acquisition threshold, when 

acquiring athletic footwear to be 

furnished to the members of the Army, 

Navy, Air Force, or Marine Corps upon 

their initial entry into the Armed 

Forces. 

B. Section 881(b) of the NDAA for FY 

2017 

Section 881(b) amends 10 U.S.C. 

2500(1) by adding Australia and the 

United Kingdom of Great Britain and 

Northern Ireland to the United States 

and Canada as the countries within 

which the activities of the national 

technology and industrial base are 

conducted. 10 U.S.C. 2534, 

Miscellaneous Limitations on the 

Procurement of Goods Other Than 

United States Goods, requires that DoD 

only procure certain items if the 

manufacturer of the items is part of the 

national technology and industrial base. 

II. Discussion and Analysis 

This rule proposes to amend the 

DFARS as follows— 

A. Section 817 of the NDAA for FY 2017 

Amends DFARS 225.7002(a) to ensure 

that purchases of athletic footwear 

valued at or below the SAT are not 

exempt from the Berry Amendment (i.e. 

shall be procured from domestic 

sources). A conforming change is made 

at DFARS 225.7002–3(a) to remove the 

phrase ‘‘that exceed the simplified 

acquisition threshold’’ in order to rely 

on the introductory text of the section, 

which qualifies all of the prescription in 

the section as inapplicable if an 

exception at DFARS 225.7002–2 

applies. 

B. Section 881(b) of the NDAA for FY 

2017 

Modifies the following DFARS 

sections, which implement the 

restrictions of 10 U.S.C. 2534, to allow 

acquisition of certain items from 

Australia and the United Kingdom: 

• DFARS 225.7004, Restriction on 

acquisition of foreign buses. 

• DFARS 225.7005, Restriction on 

certain chemical weapons antidote. 

• DFARS 225.7006, Restriction on air 

circuit breakers for naval vessels. 

• DFARS 252.225–7037, Evaluation 

of Offers for Air Circuit Breakers. 

• DFARS 252.225–7038, Restriction 

on Acquisition of Air Circuit Breakers. 

Purchases from the United Kingdom 

were already authorized in the 

provision and clause through annual 

waivers, which cover air circuit breakers 

and certain other naval vessel 

components. 

In addition, this rule proposes to 

remove coverage at DFARS 225.7006– 

3(b) and 225.7006–4(a)(2) of the annual 

waiver for air circuit breakers for naval 

vessels from the United Kingdom, 

because waiver is no longer required. 

III. Applicability to Contracts at or 

Below the Simplified Acquisition 

Threshold and for Commercial Items, 

Including Commercially Available Offthe-Shelf Items 

This rule proposes to amend the 

applicability of existing DFARS 

solicitation provisions and contract 

clauses as follows: 

• To implement section 817 of the 

NDAA for FY 2017, this rule proposes 

to extend use of DFARS clause 252.225– 

7012, Preference for Certain Domestic 

Commodities, to acquisitions at or 

below the simplified acquisition 

threshold (SAT) when buying athletic 

footwear to be furnished to enlisted 

members of the Armed Forces upon 

their initial entry into the Armed 

Forces. This clause is already prescribed 

for use in solicitations and contracts 

using FAR part 12 procedures for the 

acquisition of commercial items, 

including commercially available offthe-shelf (COTS) items. 

• To implement section 881(b) of the 

NDAA for FY 2017, this rule proposes 

to modify the provision at DFARS 

252.225–7037, Evaluation of Offers for 

Air Circuit Breakers, and the clause at 

DFARS 252.225–7038, Restriction on 

Acquisition of Air Circuit Breakers, to 

add Australia as a country from which 

items restricted by 10 U.S.C. 2534 may 

be purchased. This rule does not change 

the prescriptions for the use of this 

provision or clause, which are already 

required for use in solicitations and 

contracts for commercial items, 

including COTS items. The clause does 

not apply below the SAT. 

• A. Applicability to Contracts at or 

Below the SAT 

41 U.S.C. 1905 governs the 

applicability of laws to contracts or 

subcontracts in amounts not greater 

than the SAT. 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 

Federal Acquisition Regulation (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, 

Defense Pricing and Contracting (DPC), 

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. 

B. Applicability to Contracts for the 

Acquisition of Commercial Items, 

Including Commercially Available Offthe-Shelf (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 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, 


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42830 Federal Register / Vol. 83, No. 165 / Friday, August 24, 2018 / Proposed Rules 

DPC, 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. 

C. Determinations 

A determination under 41 U.S.C. 1905 

is not required to prescribe DFARS 

252.225–7012 for use in solicitations 

and contracts valued at or below the 

SAT, because section 817 of the NDAA 

for FY 2017 specifically states that DoD 

shall acquire athletic footwear that 

complies with the requirements of 10 

U.S.C. 2533a ‘‘without regard to the 

applicability of any simplified 

acquisition threshold under chapter 137 

of title 10 (or any other provision of 

law).’’ 

A determination under 41 U.S.C. 1906 

and 1907 is not required to apply the 

requirements of DFARS 252.225–7037 

and 252.225–7038 to acquisitions for 

commercial items, including COTS 

items, because the statute that this 

provision and clause implements is not 

a covered statute subject to 41 U.S.C. 

1905–1907. At the time of the Federal 

Acquisition Streamlining Act of 1994 

(FASA) (Pub. L. 103–355), now codified 

in part at 41 U.S.C. 1905–1907, this 

provision and clause were a single 

clause, DFARS 252.225–7029, 

Restriction on Acquisition of Air Circuit 

Breakers, which implemented 10 U.S.C. 

2534. Because 10 U.S.C. 2534 predated 

FASA, it was not subject to 41 U.S.C. 

1905–1907. The DFARS clause 252.225– 

7029 was included on the initial list of 

statutes applicable to the acquisition of 

commercial items at DFARS 252.212– 

7001, incorporated in the DFARS by 

DFARS Case 95–D712 on November 30, 

1995 (Defense Acquisition Circular 91– 

9). 

IV. 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. 

V. Executive Order 13771 

This proposed rule is not expected to 

be an E.O. 13771, Reducing Regulation 

and Controlling Regulatory Costs, 

regulatory action, because this proposed 

rule is not significant under E.O. 12866. 

VI. 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: 

The reason for this rule is to 

implement sections 817 and 881(b) of 

the National Defense Authorization Act 

(NDAA) for Fiscal Year (FY) 2017 (Pub. 

L. 114–328). 

The objectives of the rule are as 

follows: 

• To remove the exception to 

domestic source restriction of the Berry 

Amendment (10 U.S.C. 2533a) for 

acquisitions at or below the simplified 

acquisition threshold when buying 

athletic footwear to be furnished to 

enlisted members of the Armed Forces 

upon their initial entry into the Armed 

Forces, as required by section 817 of the 

NDAA for FY 2017. 

• To allow acquisition of certain 

items from Australia and the United 

Kingdom, for which purchase is 

currently restricted to items from the 

United States or Canada, in accordance 

with 10 U.S.C. 2534, as amended by 

section 881(b) of the NDAA for FY 2017. 

A. Section 817 of the NDAA for FY 2017 

This rule may apply to only a few 

small entities, because there are few 

sources that meet the domestic source 

requirements of the Berry Amendment 

with regard to athletic footwear. The 

Defense Logistics Agency (DLA) 

estimates a potential annual demand for 

approximately 200,000 to 250,000 pairs 

of athletic shoes to be delivered at the 

rate of approximately 27,500 pairs per 

month. In response to a request for 

information issued by DLA in December 

2016, there were 5 responses from 

athletic footwear manufacturers, one of 

which was a small business. Small 

entities who are athletic shoe 

manufacturers could likely support 

portions of DoD’s total requirements for 

athletic footwear. In addition, there are 

likely a number of domestic component 

suppliers who are small entities who 

would benefit from this new 

requirement as well. On the other hand, 

small entities that cannot provide 

athletic shoes that meet the domestic 

source requirements of the Berry 

Amendment, will no longer be able to 

compete for acquisition of athletic 

footwear at or below the simplified 

acquisition threshold that are for the 

purpose of providing athletic footwear 

to enlisted members of the Armed 

Forces upon their initial entry into the 

Armed Forces. 

B. Section 881(b) of the NDAA for FY 

2017 

This rule will not apply to any small 

entities at the prime contract level, as 

there are only a few prime contractors 

for the restricted items, which are all 

U.S. firms that are other than small 

businesses. For the definition of ‘‘small 

business,’’ the Regulatory Flexibility Act 

refers to the Small Business Act, which 

in turn allows the U.S. Small Business 

Administration (SBA) Administrator to 

specify detailed definitions or standards 

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

The SBA regulations at 13 CFR 121.105 

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

Except for small agricultural 

cooperatives, a business concern eligible 

for assistance from SBA as a small 

business is a business entity organized 

for profit, with a place of business 

located in the United States, and which 

operates primarily within the United 

States or which makes a significant 

contribution to the U.S. economy 

through payment of taxes or use of 

American products, materials or labor.’’ 

Therefore, if an item currently 

purchased from a U.S. entity that is 

other than a small business were to be 

purchased from an entity in the 

Australia or the United Kingdom, there 

could be an impact on a few small 

entities that are currently subcontractors 

to a U.S. prime contractor. 

There are no projected reporting or 

recordkeeping requirements of this rule. 

The only compliance requirements are 

to furnish athletic footwear that 

complies with the Berry Amendment. 

The rule does not duplicate, overlap, 

or conflict with any other Federal rules. 

By extending the restriction of the 

Berry Amendment to acquisitions that 

do not exceed the simplified acquisition 

threshold, this rule may benefit small 

entities that can provide athletic 

footwear that is compliant with the 

Berry Amendment, because they may be 

more able to compete for smaller 

acquisitions. 

DoD was unable to identify any 

alternatives that would meet the 

requirements of the statutes. 

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 


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Federal Register / Vol. 83, No. 165 / Friday, August 24, 2018 / Proposed Rules 42831 

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 2017–D011), in 

correspondence. 

VII. Paperwork Reduction Act 

The 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 225 and 

252 

Government procurement. 

Jennifer Lee Hawes, 

Regulatory Control Officer, Defense 

Acquisition Regulations System. 

Therefore, 48 CFR parts 225 and 252 

are proposed to be amended as follows: 

■ 1. The authority citation for 48 CFR 

parts 225 and 252 continues to read as 

follows: 

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

chapter 1. 

PART 225—FOREIGN ACQUISITION 

■ 2. Amend section 225.7002–2 by 

revising paragraph (a) to read as follows: 

225.7002–2 Exceptions. 

* * * * * 

(a) Acquisitions at or below the 

simplified acquisition threshold, except 

for athletic footwear purchased by DoD 

for use by members of the Army, Navy, 

Air Force, or Marine Corps upon their 

initial entry into the Armed Forces 

(section 817 of the National Defense 

Authorization Act for Fiscal Year 2017 

(Pub. L. 114–328)). 

* * * * * 

225.7002–3 [Amended] 

■ 3. Amend section 225.7002–3, in 

paragraph (a) by removing ‘‘commercial 

items, that exceed the simplified 

acquisition threshold’’ and adding 

‘‘commercial items’’ in its place. 

225.7004–1 [Amended] 

■ 4. Amend section 225.7004–1 by 

removing ‘‘United States or Canada’’ 

and adding ‘‘United States, Australia, 

Canada, or the United Kingdom’’ in its 

place. 

225.7004–3 [Amended] 

■ 5. Amend section 225.7004–3 by: 

■ a. In paragraph (a) by removing 

‘‘United States or Canada’’ and adding 

‘‘United States, Australia, Canada, or the 

United Kingdom’’ in its place wherever 

it appears. 

■ b. In paragraphs (a), (b), and (c) by 

removing ‘‘United States and Canada’’ 

and adding ‘‘United States, Australia, 

Canada, or the United Kingdom’’ in its 

place wherever it appears. 

225.7005–1 [Amended] 

■ 6. Amend section 225.7005–1, in the 

introductory text and paragraph (b), by 

removing ‘‘United States or Canada’’ 

and adding ‘‘United States, Australia, 

Canada, or the United Kingdom’’ in its 

place in both places. 

225.7006–1 [Amended] 

■ 7. Amend section 225.7006–1 by 

removing ‘‘United States or Canada’’ 

and adding ‘‘United States, Australia, 

Canada, or the United Kingdom’’ in its 

place. 

■ 8. Revise section 225.7006–3 to read 

as follows: 

225.7006–3 Waiver. 

The waiver criteria at 225.7008(a) 

apply to this restriction. 

225.7006–4 [Amended] 

■ 9. Amend section 225.7006–4 by: 

■ a. In paragraph (a)(2), removing ‘‘A 

waiver has been granted, other than the 

waiver for the United Kingdom, which 

has been incorporated into the 

provision’’ and adding ‘‘A waiver has 

been granted’’ in its place; and 

■ b. In paragraph (b)(2), removing ‘‘A 

waiver has been granted, other than the 

waiver for the United Kingdom, which 

has been incorporated into the clause’’ 

and adding ‘‘A waiver has been 

granted’’ in its place. 

PART 252—SOLICITATION 

PROVISIONS AND CONTRACT 

CLAUSES 

252.225–7037 [Amended] 

■ 10. Amend section 252.225–7037 by: 

■ a. Removing the provision date of 

‘‘(JUN 2012)’’ and adding ‘‘(DATE)’’ in 

its place; and 

■ b. In paragraphs (a) and (b), removing 

‘‘outlying areas, Canada,’’ and adding 

‘‘outlying areas, Australia, Canada,’’ in 

its place in both places. 

252.225–7038 [Amended] 

■ 11. Amend section 252.225–7038 by: 

■ a. Removing the provision date of 

‘‘(JUN 2005)’’ and adding ‘‘(DATE)’’ in 

its place; and 

■ b. Removing ‘‘outlying areas, 

Canada,’’ and adding ‘‘outlying areas, 

Australia, Canada,’’ in its place. 

[FR Doc. 2018–18245 Filed 8–23–18; 8:45 am] 

BILLING CODE 6820–ep–P 

DEPARTMENT OF DEFENSE 

Defense Acquisition Regulations 

System 

48 CFR Parts 232, 242, and 252 

[Docket DARS–2018–0042] 

RIN 0750–AJ28 

Performance-Based Payments and 

Progress Payments (DFARS Case 

2017–D019) 

AGENCY: Defense Acquisition 

Regulations System, Department of 

Defense (DoD). 

ACTION: Proposed rule; notice of 

meeting. 

SUMMARY: DoD is proposing to 

implement a section of the National 

Defense Authorization Act for Fiscal 

Year 2017, which addresses the 

preference for performance-based 

payments, and to streamline the 

performance-based payment process. 

DoD is also proposing to amend the 

Defense Federal Acquisition Regulation 

Supplement (DFARS) to revise progress 

payments and performance-based 

payments policies for DoD contracts in 

order to increase its business 

effectiveness and efficiency as well as to 

provide an opportunity for both small 

and other than small entities to qualify 

for increased customary progress 

payment rates and maximum 

performance-based payment rates based 

on whether the offeror/contractor has 

met certain performance criteria. 

DOD believes the proposed rule will 

eliminate the unintended consequences 

of not updating its contract financing 

policies (which, in turn will save 

hundreds of millions of dollars for the 

taxpayers), will improve contractor 

performance, and will distinguish and 

meaningfully recognize high performing 

companies and divisions of companies, 

as the case may be. 

This rule proposes to relieve the 

administrative burden on contractors by 

deleting the current regulations relating 

to performance-based payments at 

DFARS subpart 232.10 and the 

associated clauses at DFARS 252.232– 

7012, Performance-Based Payments— 

Whole Contract Basis, and 252.232– 

7013, Performance-Based Payments— 

Deliverable Item Basis. This rule also 

removes the requirement to negotiate 

consideration due the Government for 

providing the contractor with the 

improved cash flow when utilizing 

performance-based payments. 

In addition to the request for written 

comments on this proposed rule, DoD 

will hold a public meeting to hear the 

views of interested parties. 


sradovich on DSK3GMQ082PROD with PROPOSALS