Federal Register / Vol. 76, No. 108 / Monday, June 6, 2011 / Proposed Rules 32845 

DEPARTMENT OF DEFENSE 

Defense Acquisition Regulations 

System 

48 CFR Part 252 

RIN 0750–AH21 

Defense Federal Acquisition 

Regulation Supplement; Definition of 

‘‘Qualifying Country End Product’’ 

(DFARS Case 2011–D028) 

AGENCY: Defense Acquisition 

Regulations System, Department of 

Defense (DoD). 

ACTION: Proposed rule. 

SUMMARY: DoD is issuing a proposed 

rule to amend the definition of 

‘‘qualifying country end product’’ by 

eliminating the component test for 

qualifying country end products that are 

commercially available off-the-shelf 

items. 

DATES: Comments on the proposed rule 

should be submitted in writing to the 

address shown below on or before 

August 5, 2011, to be considered in the 

formation of the final rule. 

ADDRESSES: Submit comments 

identified by DFARS Case 2011–D028, 

using any of the following methods: 

Æ Regulations.gov: http:// 

www.regulations.gov. 

Submit comments via the Federal 

eRulemaking portal by inputting 

‘‘DFARS Case 2011–D028’’ under the 

heading ‘‘Enter keyword or ID’’ and 

selecting ‘‘Search.’’ Select the link 

‘‘Submit a Comment’’ that corresponds 

with ‘‘DFARS Case 2011–D028.’’ Follow 

the instructions provided at the ‘‘Submit 

a Comment’’ screen. Please include your 

name, company name (if any), and 

‘‘DFARS Case 2011–D028’’ on your 

attached document. 

Æ E-mail: dfars@osd.mil. Include 

DFARS Case 2011–D028 in the subject 

line of the message. 

Æ Fax: 703–602–0350. 

Æ Mail: Defense Acquisition 

Regulations System, Attn: Amy G. 

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

Room 3B855, 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 http://www.regulations.gov 

approximately two to three days after 

submission to verify posting (except 

allow 30 days for posting of comments 

submitted by mail). 

SUPPLEMENTARY INFORMATION: 

I. Background 

This rule proposes to amend the 

definition of ‘‘qualifying country end 

product’’ to remove the component test 

for qualifying country end products that 

are commercially available off-the-shelf 

items. 

Under the Buy American Act, there is 

a two-part test to define a domestic end 

product. The product must be 

manufactured in the United States and 

there is a formula based on the cost of 

foreign components compared to the 

cost of all components. Under FAR Case 

2000–305, the component test was 

waived for the acquisition of 

commercially available off-the-shelf 

(COTS) items (see FAR 25.001(c)(1)). 

Likewise, the component test for the 

DFARS definition of ‘‘domestic end 

product’’ was waived by the interim rule 

of DFARS Case 2008–D009 (74 FR 2422, 

January 15, 2009) and final rule 

published December 24, 2009 (74 FR 

68384). These changes were based on a 

determination signed by the 

Administrator for Federal Procurement 

Policy on February 14, 2008, regarding 

laws applicable to the acquisition of 

COTS items. According to the 

determination, the component test of 

the Buy American Act (41 U.S.C. 

chapter 83) does not apply to COTS 

items. 

The definition of ‘‘qualifying country 

end product’’ is not statutory, but it was 

modeled after the definition of 

‘‘domestic end product’’ as a matter of 

policy. Therefore, it is within the 

authority of DoD to change this 

definition as a matter of policy, to waive 

the component test for qualifying 

country end products that are COTS 

items, so that it will not be necessary to 

try to track the origin of components of 

COTS items that are manufactured in a 

qualifying country, in order to 

determine that an end product is a 

qualifying country end product. 

II. 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 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. 

III. Regulatory Flexibility Act 

DoD does not expect this rule to have 

a significant impact on a substantial 

number of small entities within the 

meaning of the Regulatory Flexibility 

Act, 5 U.S.C. 601, et seq., because the 

rule only affects manufacturers of COTS 

items in qualifying countries, removing 

an administrative burden for the 

qualifying country manufacturer and the 

Government personnel acquiring the 

items. The Regulatory Flexibility Act is 

intended to protect small entities in the 

United States, not foreign entities, 

regardless of size. For the definition of 

‘‘small business’’, the Regulatory 

Flexibility Act refers to the Small 

Business Act, which in turn allows the 

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.’’ The comparable 

change has already been enacted for the 

benefit of U.S. manufacturers of COTS 

items in the DFARS which aligns with 

the FAR. Therefore, an initial regulatory 

flexibility analysis has not been 

performed. 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 2011–D029) in 

correspondence. 

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). 

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32846 Federal Register / Vol. 76, No. 108 / Monday, June 6, 2011 / Proposed Rules 

List of Subjects in 48 CFR Part 252 

Government procurement. 

Ynette R. Shelkin, 

Editor, Defense Acquisition Regulations 

System. 

Therefore, 48 CFR part 252 is 

proposed to be amended as follows: 

PART 252—SOLICITATION 

PROVISIONS AND CONTRACT 

CLAUSES 

1. The authority citation for 48 CFR 

part 252 continues to read as follows: 

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

chapter 1. 

2. Amend section 252.212–7001 by 

revising the clause date, and paragraphs 

(b)(5)(i), (b)(11)(i), (b)(14)(i), (b)(20), and 

(b)(21) to read as as follows: 

252.212–7001 Contract terms and 

conditions required to implement statutes 

or executive orders applicable to defense 

acquisitions of commercial items. 

* * * * * 

CONTRACT TERMS AND 

CONDITIONS REQUIRED TO 

IMPLEMENT STATUTES OR 

EXECUTIVE ORDERS APPLICABLE TO 

DEFENSE ACQUISITIONS OF 

COMMERCIAL ITEMS (DATE) 

* * * * * 

(b) * * * 

(5)(i)____252.225–7001, Buy American Act 

and Balance of Payments Program (DATE) 

(41 U.S.C. chapter 83, E.O. 10582). 

* * * * * 

(11)(i)____252.225–7021, Trade 

Agreements (DATE) (19 U.S.C. 2501–2518 

and 19 U.S.C. 3301 note) 

* * * * * 

(14)(i)____ 252.225–7036, Buy American 

Act—Free Trade Agreements—Balance of 

Payments Program (DATE) (41 U.S.C. chapter 

83 and 19 U.S.C. 3301 note) 

* * * * * 

(20)____252.237–7010, Prohibition on 

Interrogation of Detainees by Contractor 

Personnel (NOV 2010) (Section 1038 of Pub. 

L. 111–84). 

(21)____252.237–7019, Training for 

Contractor Personnel Interacting with 

Detainees (SEP 2006) (Section 1092 of Public 

Law 108–375). 

* * * * * 

3. Amend section 252.225–7001 by 

revising the clause date, paragraph 

(a)(8), and paragraph (b) to read as 

follows: 

252.225–7001 Buy American Act and 

Balance of Payments Program. 

* * * * * 

BUY AMERICAN ACT AND BALANCE 

OF PAYMENTS PROGRAM (DATE) 

(a) * * * 

(8) Qualifying country end product 

means— 

(i) An unmanufactured end product mined 

or produced in a qualifying country; or 

(ii) An end product manufactured in a 

qualifying country if— 

(A) The cost of the following types of 

components exceeds 50 percent of the cost of 

all its components: 

(1) Components mined, produced, or 

manufactured in a qualifying country. 

(2) Components mined, produced, or 

manufactured in the United States. 

(3) Components of foreign origin of a class 

or kind for which the Government has 

determined that sufficient and reasonably 

available commercial quantities of a 

satisfactory quality are not mined, produced, 

or manufactured in the United States; or 

(B) The end product is a COTS item. 

* * * * * 

(b) This clause implements the Buy 

American Act (41 U.S.C. chapter 83). In 

accordance with 41 U.S.C. 1907, the 

component test of the Buy American Act is 

waived for an end product that is a COTS 

item (see section 12.505(a)(1) of the Federal 

Acquisition Regulation). Unless otherwise 

specified, this clause applies to all line items 

in the contract. 

* * * * * 

4. Amend section 252.225–7021 by 

revising the clause date and paragraph 

(a)(10) to read as follows: 

252.225–7021 Trade agreements. 

* * * * * 

TRADE AGREEMENTS (DATE) 

(a) * * * 

(10) Qualifying country end product 

means— 

(i) An unmanufactured end product mined 

or produced in a qualifying country; or 

(ii) An end product manufactured in a 

qualifying country if— 

(A) The cost of the following types of 

components exceeds 50 percent of the cost of 

all its components: 

(1) Components mined, produced, or 

manufactured in a qualifying country. 

(2) Components mined, produced, or 

manufactured in the United States. 

(3) Components of foreign origin of a class 

or kind for which the Government has 

determined that sufficient and reasonably 

available commercial quantities of a 

satisfactory quality are not mined, produced, 

or manufactured in the United States; or 

(B) The end product is a COTS item. 

* * * * * 

5. Amend section 252.225–7036 by 

revising the clause date and paragraph 

(a)(13) to read as follows: 

252.225–7036 Buy American Act—Free 

Trade Agreements—Balance of Payments 

Program. 

* * * * * 

BUY AMERICAN ACT—FREE TRADE 

AGREEMENTS—BALANCE OF 

PAYMENTS PROGRAM (DATE) 

(a) * * * 

(13) Qualifying country end product 

means— 

(i) An unmanufactured end product mined 

or produced in a qualifying country; or 

(ii) An end product manufactured in a 

qualifying country if— 

(A) The cost of the following types of 

components exceeds 50 percent of the cost of 

all its components: 

(1) Components mined, produced, or 

manufactured in a qualifying country. 

(2) Components mined, produced, or 

manufactured in the United States. 

(3) Components of foreign origin of a class 

or kind for which the Government has 

determined that sufficient and reasonably 

available commercial quantities of a 

satisfactory quality are not mined, produced, 

or manufactured in the United States; or 

(B) The end product is a COTS item. 

* * * * * 

[FR Doc. 2011–13367 Filed 6–3–11; 8:45 am] 

BILLING CODE 5001–08–P 

DEPARTMENT OF DEFENSE 

Defense Acquisition Regulations 

System 

48 CFR Parts 203, 204, and 252 

RIN 0750–AG99 

Defense Federal Acquisition 

Regulation Supplement; 

Representation Relating to 

Compensation of Former DoD Officials 

(DFARS Case 2010–D020) 

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 

require that offerors represent whether 

former DoD officials employed by the 

offeror are in compliance with postemployment restrictions. 

DATES: Comments on the proposed rule 

should be submitted in writing to the 

address shown below on or before 

August 5, 2011, to be considered in the 

formation of the final rule. 

ADDRESSES: Submit comments 

identified by DFARS Case 2010–D020, 

using any of the following methods: 

Æ Regulations.gov: http:// 

www.regulations.gov. 

Submit comments via the Federal 

eRulemaking portal by inputting 

‘‘DFARS Case 2010–D020’’ under the 

heading ‘‘Enter keyword or ID’’ and 

selecting ‘‘Search.’’ Select the link 

‘‘Submit a Comment’’ that corresponds 

with ‘‘DFARS Case 2010–D020.’’ Follow 

the instructions provided at the ‘‘Submit 

a Comment’’ screen. Please include your 

name, company name (if any), and 

mstockstill on DSK4VPTVN1PROD with PROPOSALS3