73488 Federal Register / Vol. 79, No. 238 / Thursday, December 11, 2014 / Rules and Regulations 

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 

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 Part 203 

Government procurement. 

Manuel Quinones, 

Editor, Defense Acquisition Regulations 

System. 

Therefore, 48 CFR part 203 is 

amended as follows: 

PART 203—IMPROPER BUSINESS 

PRACTICES AND PERSONAL 

CONFLICTS OF INTEREST 

■ 1. The authority citation for 48 CFR 

part 203 continues to read as follows: 

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

chapter 1. 

■ 2. In section 203.170, revise paragraph 

(a) to read as follows: 

203.170 Business practices. 

* * * * * 

(a) Senior leaders shall not perform 

multiple roles in source selection for a 

major weapon system or major service 

acquisition. 

* * * * * 

[FR Doc. 2014–28817 Filed 12–10–14; 8:45 am] 

BILLING CODE 5001–06–P 

DEPARTMENT OF DEFENSE 

Defense Acquisition Regulations 

System 

48 CFR Parts 204, 209, 212, 225, and 

252 

RIN 0750–AI34 

Defense Federal Acquisition 

Regulation Supplement: State 

Sponsors of Terrorism (DFARS Case 

2014–D014) 

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 and relocate text 

relating to state sponsors of terrorism (as 

identified by the Department of State), 

add an explicit representation, and 

conform the terminology. 

DATES: Effective December 11, 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 45666 on 

August 5, 2014, to clarify and relocate 

coverage relating to state sponsors of 

terrorism (as identified by the 

Department of State), add an explicit 

representation, and conform the 

terminology. No respondents submitted 

public comments in response to the 

proposed rule. 

This rule is part of DoD’s 

retrospective plan, completed in August 

2011, under Executive Order 13563, 

‘‘Improving Regulation and Regulatory 

Review.’’ DoD’s full plan and updates 

can be accessed at: http://

www.regulations.gov/#!docketDetail;

dct=FR+PR+N+O+SR;rpp=10;po=0;D=

DOD-2011-OS-0036. 

II. Discussion and Analysis 

No public comments were received. 

The final rule is the same as the 

proposed rule, except for minor edits. 

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 

DoD certifies that this rule will not 

have a significant economic impact on 

a substantial number of small entities 

within the meaning of the Regulatory 

Flexibility Act, 5 U.S.C. 601, et seq., 

because this rule will only have an 

impact on a firm, or a subsidiary of a 

firm, in which the government of a 

country that is a state sponsor of 

terrorism has a significant interest. 

The number of domestic entities 

significantly impacted by this rule will 

be minimal, if any. 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.’’ 

V. 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 0704–0187, 

entitled ‘‘Information Collection in 

Support of the DoD Acquisition Process 

(Various Miscellaneous Requirements).’’ 

This final rule removes provision 

252.209–7001, Disclosure of Ownership 

or Control by the Government of a 

Terrorist Country, and replaces it with 

provision 252.225–7050, Disclosure of 

Ownership or Control by the 

Government of a Country that is a State 

Sponsor of Terrorism. The burden in 

clearance 0704–0187 previously 

associated with the provision 252.209– 

7001, which is now associated with 

provision 252.225–7050, remains 

unchanged and is estimated at 1 hour, 

because such disclosure occurs rarely, if 

ever. 10 U.S.C. prohibits award to a firm 

or a subsidiary of a firm if the 

government of country that is a state 

sponsor of terrorism has a significant 

interest in the firm or subsidiary, unless 

the Secretary of Defense grants a waiver. 


tkelley on DSK3SPTVN1PROD with RULES
Federal Register / Vol. 79, No. 238 / Thursday, December 11, 2014 / Rules and Regulations 73489 

List of Subjects in 48 CFR Parts 204, 

209, 212, 225, and 252 

Government procurement. 

Manuel Quinones, 

Editor, Defense Acquisition Regulations 

System. 

Therefore, 48 CFR parts 204, 209, 212, 

225, and 252 are proposed to be 

amended as follows: 

■ 1. The authority citation for parts 204, 

209, 212, 225, and 252 continues to read 

as follows: 

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

chapter 1. 

PART 204—ADMINISTRATIVE 

MATTERS 

■ 2. Amend section 204.1202 by— 

■ a. Removing paragraph (2)(i); 

■ b. Redesignating paragraphs (2)(ii) 

through (x) as (2)(i) though (ix), 

respectively; and 

■ c. Adding new paragraph (2)(x) to read 

as follows: 

204.1202 Solicitation provision. 

* * * * * 

(2) * * * 

(x) 252.225–7050, Disclosure of 

Ownership or Control by the 

Government of a Country that is a State 

Sponsor of Terrorism. 

* * * * * 

PART 209—CONTRACTOR 

QUALIFICATIONS 

■ 3. Amend section 209.104–1, by 

revising paragraph (g)(i) to read as 

follows: 

209.104–1 General standards. 

* * * * * 

(g)(i) Ownership or control by the 

government of a country that is a state 

sponsor of terrorism. (See 225.771.) 

* * * * * 

■ 4. Revise section 209.104–70 to read 

as follows: 

209.104–70 Solicitation provision. 

Use the provision at 252.209–7002, 

Disclosure of Ownership or Control by 

a Foreign Government, in all 

solicitations, including those subject to 

the procedures in FAR part 13, when 

access to proscribed information is 

necessary for contract performance. If 

the solicitation includes the provision at 

FAR 52.204–7, do not separately list the 

provision 252.209–7002 in the 

solicitation. 

■ 5. Amend section 209.405, by revising 

paragraph (b)(i) to read as follows: 

209.405 Effect of listing. 

* * * * * 

(b)(i) The Procurement Cause and 

Treatment Code ‘‘H’’ annotation in the 

Exclusions section of the System for 

Award Management (SAM Exclusions) 

identifies contractor facilities where no 

part of a contract or subcontract may be 

performed because of a violation of the 

Clean Air Act (42 U.S.C. 7606) or the 

Clean Water Act (33 U.S.C. 1368). 

* * * * * 

■ 6. Revise section 209.405–2 to read as 

follows: 

209.405–2 Restrictions on subcontracting. 

(a) The contracting officer shall not 

consent to any subcontract with a firm, 

or a subsidiary of a firm, that is 

identified by the Secretary of Defense in 

SAM Exclusions as being owned or 

controlled by the government of a 

country that is a state sponsor of 

terrorism unless the agency head states 

in writing the compelling reasons for 

the subcontract. (See also 225.771.) 

■ 7. Revise section 209.409 to read as 

follows: 

209.409 Solicitation provision and 

contract clause. 

Use the clause at 252.209–7004, 

Subcontracting with Firms that are 

Owned or Controlled by the 

Government of a Country that is a State 

Sponsor of Terrorism, in solicitations 

and contracts with a value of $150,000 

or more. 

PART 212—ACQUISITION OF 

COMMERCIAL ITEMS 

■ 8. Amend section 212.301 by— 

■ a. Removing paragraph (f)(xi); 

■ b. Redesignating paragraphs (f)(xii) 

through (xlviii) as (xi) through (xlvii); 

and 

■ b. Adding a new paragraph (f)(xlviii) 

to read as follows: 

212.301 Solicitation provisions and 

contract clauses for the acquisition of 

commercial items. 

(f) * * * * * 

(xlviii) Use the provision at 252.225– 

7050, Disclosure of Ownership or 

Control by the Government of a Country 

that is a State Sponsor of Terrorism, as 

prescribed in 225.771–5, to comply with 

10 U.S.C. 2327(b). 

* * * * * 

PART 225—FOREIGN ACQUISITION 

225.701 [Amended] 

■ 9. In section 225.701, remove the 

section text. 

■ 10. Add sections 225.771, 225.771–0, 

225.771–1, 225.771–2, 225.771–3, 

225.771–4, and 225.771–5 to subpart 

225.7 to read as follows: 

225.771 Prohibition on contracting or 

subcontracting with a firm that is owned or 

controlled by the government of a country 

that is a state sponsor of terrorism. 

225.771–0 Scope. 

This section implements 10 U.S.C. 

2327(b). 

225.771–1 Definition. 

‘‘State sponsor of terrorism,’’ as used 

in this section, is defined in the 

provision at 252.225–7050, Disclosure 

of Ownership or Control by the 

Government of a Country that is a State 

Sponsor of Terrorism. 

225.771–2 Prohibition. 

(a) The contracting officer shall not 

award a contract of $150,000 or more to 

a firm when a foreign government that 

is a state sponsor of terrorism owns or 

controls, either directly or indirectly, a 

significant interest in— 

(i) The firm; 

(ii) A subsidiary of the firm; or 

(iii) Any other firm that owns or 

controls the firm. 

(b) For restrictions on subcontracting 

with a firm, or a subsidiary of a firm, 

that is identified by the Secretary of 

Defense as being owned or controlled by 

the government of a country that is a 

state sponsor of terrorism, see 209.405– 

2. 

225.771–3 Notification. 

Any disclosure that the government of 

a country that is a state sponsor of 

terrorism has a significant interest in an 

offeror, a subsidiary of an offeror, or any 

other firm that owns or controls an 

offeror shall be forwarded through 

agency channels to the address at PGI 

225.771–3. 

225.771–4 Waiver of prohibition. 

The prohibition in 225.771–2 may be 

waived if the Secretary of Defense 

determines that a waiver is not 

inconsistent with the national security 

objectives of the United States in 

accordance with 10 U.S.C. 2327(c). 

225.771–5 Solicitation provision. 

Use the provision at 252.225–7050, 

Disclosure of Ownership or Control by 

the Government of a Country that is a 

State Sponsor of Terrorism, in 

solicitations, including solicitations 

using FAR part 12 procedures for the 

acquisition of commercial items (other 

than commercial satellite services), that 

are expected to result in contracts of 

$150,000 or more. If the solicitation 

includes the provision at FAR 52.204– 

7, do not separately list the provision 

252.225–7050 in the solicitation. 


tkelley on DSK3SPTVN1PROD with RULES
73490 Federal Register / Vol. 79, No. 238 / Thursday, December 11, 2014 / Rules and Regulations 

PART 252—SOLICITATION 

PROVISIONS AND CONTRACT 

CLAUSES 

■ 11. Amend section 252.204–7007 by— 

■ a. Removing the clause date ‘‘(AUG 

2014)’’ and adding ‘‘(DEC 2014)’’ in its 

place; 

■ b. Removing paragraph (d)(1)(i); 

■ c. Redesignating paragraphs (d)(1)(ii) 

through (v) as (d)(1)(i) through (iv); and 

■ d. Adding a new paragraph (d)(1)(v). 

The addition reads as follows: 

252.204–7007 Alternate A, Annual 

Representations and Certifications. 

* * * * * 

(d)(1) * * * 

(v) 252.225–7050, Disclosure of 

Ownership or Control by the 

Government of a Country that is a State 

Sponsor of Terrorism. Applies to all 

solicitations expected to result in 

contracts of $150,000 or more. 

* * * * * 

252.209–7001 [Removed and Reserved] 

■ 12. Remove and reserve section 

252.209–7001. 

252.209–7002 [Amended] 

■ 13. Amend section 252.209–7002 

introductory text by removing 

‘‘209.104–70(b)’’ and adding ‘‘209.104– 

70’’ in its place. 

■ 14. Revise section 252.209–7004 to 

read as follows: 

252.209–7004 Subcontracting with Firms 

that are Owned or Controlled by the 

Government of a Country that is a State 

Sponsor of Terrorism. 

As prescribed in 209.409, use the 

following clause: 

SUBCONTRACTING WITH FIRMS 

THAT ARE OWNED OR CONTROLLED 

BY THE GOVERNMENT OF A 

COUNTRY THAT IS A STATE 

SPONSOR OF TERRORISM (DEC 2014) 

(a) Unless the Government determines that 

there is a compelling reason to do so, the 

Contractor shall not enter into any 

subcontract in excess of $30,000 with a firm, 

or a subsidiary of a firm, that is identified in 

the Exclusions section of the System for 

Award Management System (SAM 

Exclusions) as being ineligible for the award 

of Defense contracts or subcontracts because 

it is owned or controlled by the government 

of a country that is a state sponsor of 

terrorism. 

(b) A corporate officer or a designee of the 

Contractor shall notify the Contracting 

Officer, in writing, before entering into a 

subcontract with a party that is identified, in 

SAM Exclusions, as being ineligible for the 

award of Defense contracts or subcontracts 

because it is owned or controlled by the 

government of a country that is a state 

sponsor of terrorism. The notice must 

include the name of the proposed 

subcontractor and the compelling reason(s) 

for doing business with the subcontractor 

notwithstanding its inclusion in SAM 

Exclusions. 

(End of clause) 

■ 15. Add section 252.225–7050 to read 

as follows: 

252.225–7050 Disclosure of Ownership or 

Control by the Government of a Country 

that is a State Sponsor of Terrorism. 

As prescribed in 225.771–5, use the 

following provision: 

DISCLOSURE OF OWNERSHIP OR 

CONTROL BY THE GOVERNMENT OF 

A COUNTRY THAT IS A STATE 

SPONSOR OF TERRORISM (DEC 2014) 

(a) Definitions. As used in this provision— 

Government of a country that is a state 

sponsor of terrorism includes the state and 

the government of a country that is a state 

sponsor of terrorism, as well as any political 

subdivision, agency, or instrumentality 

thereof. 

Significant interest means— 

(i) Ownership of or beneficial interest in 5 

percent or more of the firm’s or subsidiary’s 

securities. Beneficial interest includes 

holding 5 percent or more of any class of the 

firm’s securities in ‘‘nominee shares,’’ ‘‘street 

names,’’ or some other method of holding 

securities that does not disclose the 

beneficial owner; 

(ii) Holding a management position in the 

firm, such as a director or officer; 

(iii) Ability to control or influence the 

election, appointment, or tenure of directors 

or officers in the firm; 

(iv) Ownership of 10 percent or more of the 

assets of a firm such as equipment, buildings, 

real estate, or other tangible assets of the 

firm; or 

(v) Holding 50 percent or more of the 

indebtedness of a firm. 

State sponsor of terrorism means a country 

determined by the Secretary of State, under 

section 6(j)(1)(A) of the Export 

Administration Act of 1979 (50 U.S.C. App. 

2405(j)(1)(A)), to be a country the government 

of which has repeatedly provided support for 

acts of international terrorism. As of the date 

of this provision, state sponsors of terrorism 

include: Cuba, Iran, Sudan, and Syria. 

(b) Prohibition on award. In accordance 

with 10 U.S.C. 2327, unless a waiver is 

granted by the Secretary of Defense, no 

contract may be awarded to a firm if the 

government of a country that is a state 

sponsor of terrorism owns or controls a 

significant interest in— 

(1) The firm; 

(2) A subsidiary of the firm; or 

(3) Any other firm that owns or controls 

the firm. 

(c) Representation. Unless the Offeror 

submits with its offer the disclosure required 

in paragraph (d) of this provision, the Offeror 

represents, by submission of its offer, that the 

government of a country that is a state 

sponsor of terrorism does not own or control 

a significant interest in— 

(1) The Offeror; 

(2) A subsidiary of the Offeror; or 

(3) Any other firm that owns or controls 

the Offeror. 

(d) Disclosure. (1) The Offeror shall 

disclose in an attachment to its offer if the 

government of a country that is a state 

sponsor of terrorism owns or controls a 

significant interest in the Offeror; a 

subsidiary of the Offeror; or any other firm 

that owns or controls the Offeror. 

(2) The disclosure shall include— 

(i) Identification of each government 

holding a significant interest; and 

(ii) A description of the significant interest 

held by each government. 

(End of provision) 

[FR Doc. 2014–28819 Filed 12–10–14; 8:45 am] 

BILLING CODE 5001–06–P 

DEPARTMENT OF DEFENSE 

Defense Acquisition Regulations 

System 

48 CFR Parts 204, 212, 225, and 252 

RIN 0750–AI32 

Defense Federal Acquisition 

Regulation Supplement: Foreign 

Commercial Satellite Services (DFARS 

Case 2014–D010) 

AGENCY: Defense Acquisition 

Regulations System, Department of 

Defense (DoD). 

ACTION: Final rule. 

SUMMARY: DoD has adopted as final, 

with minor editorial changes, an interim 

rule that amended the Defense Federal 

Acquisition Regulation Supplement 

(DFARS) to implement a section of the 

National Defense Authorization Act 

(NDAA) for Fiscal Year (FY) 2014 that 

prohibits acquisition of commercial 

satellite services from certain foreign 

entities. 

DATES: Effective December 11, 2014. 

FOR FURTHER INFORMATION CONTACT: Ms. 

Amy G. Williams, telephone 571–372– 

6106. 

SUPPLEMENTARY INFORMATION: 

I. Background 

DoD published an interim rule in the 

Federal Register at 79 FR 45662 on 

August 5, 2014, to implement section 

1602 of the NDAA for FY 2014 (Pub. L. 

113–66). Section 1602 prohibits award 

of a contract for commercial satellite 

services to a foreign entity if the 

Secretary of Defense reasonably believes 

that the foreign entity— 

• Is an entity in which the 

government of a covered foreign country 

has an ownership interest that enables 

the government to affect satellite 

operations; or 


tkelley on DSK3SPTVN1PROD with RULES