30368 Federal Register / Vol. 77, No. 99 / Tuesday, May 22, 2012 / Rules and Regulations 

There is no significant economic impact 

on small entities. 

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 Parts 204 and 

243 

Government procurement. 

Mary Overstreet, 

Editor, Defense Acquisition Regulations 

System. 

Therefore, 48 CFR parts 204 and 243 

are amended as follows: 

PART 204—ADMINISTRATIVE 

MATTERS 

■ 1. The authority citation for 48 CFR 

part 204 continues to read as follows: 

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

chapter 1. 

■ 2. Section 204.7007 is added to read 

as follows: 

204.7007 Order of application for 

modifications. 

(a) Circumstances may exist in which 

the numeric order of the modifications 

to a contract is not the order in which 

the changes to the contract actually take 

effect. 

(b) In order to determine the sequence 

of modifications to a contract or order, 

the modifications will be applied in the 

following order: 

(1) Modifications will be applied in 

order of the effective date on the 

modification; 

(2) In the event of two or more 

modifications with the same effective 

date, modifications will be applied in 

signature date order; 

(3) In the event of two or more 

modifications with the same effective 

date and the same signature date, 

procuring contracting office 

modifications will be applied in 

numeric order, followed by contract 

administration office modifications in 

numeric order. 

PART 243—CONTRACT 

MODIFICATIONS 

■ 3. The authority citation for 48 CFR 

part 243 is revised to read as follows: 

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

chapter 1. 

■ 4. Section 243.172 is added to read as 

follows: 

243.172 Application of modifications. 

Follow the procedures in 204.7007 for 

determining the sequence for 

application of modifications to a 

contract or order. 

[FR Doc. 2012–11563 Filed 5–21–12; 8:45 am] 

BILLING CODE 5001–06–P 

DEPARTMENT OF DEFENSE 

Defense Acquisition Regulations 

System 

48 CFR Parts 212, 225, and 252 

RIN 0750–AH43 

Defense Federal Acquisition 

Regulation Supplement; Utilization of 

Domestic Photovoltaic Devices 

(DFARS Case 2011–D046) 

AGENCY: Defense Acquisition 

Regulations System, Department of 

Defense (DoD). 

ACTION: Final rule. 

SUMMARY: DoD is adopting as final, with 

change, an interim rule amending the 

Defense Federal Acquisition Regulation 

Supplement (DFARS) to implement a 

section of the National Defense 

Authorization Act for Fiscal Year 2011. 

The section provides that photovoltaic 

devices to be utilized in performance of 

any covered contract shall comply with 

the Buy American statute, subject to the 

exceptions provided in the Trade 

Agreements Act of 1979 or otherwise 

provided by law. 

DATES: Effective date: May 22, 2012. 

FOR FURTHER INFORMATION CONTACT: 

Amy G. Williams, telephone 571–372– 

6106. 

SUPPLEMENTARY INFORMATION: 

I. Background 

DoD published an interim rule in the 

Federal Register at 76 FR 78858 on 

December 20, 2011 and also issued 

technical amendments to the interim 

rule in the Federal Register at 77 FR 

13013 on March 5, 2012. One 

respondent submitted a comment in 

response to the interim rule. 

II. Discussion and analysis 

Only one response was received. The 

respondent provided an editorial 

comment which has been incorporated 

in the final rule (see DFARS 225.7017– 

3(c)(1)). 

There have also been some baseline 

changes since the publication of the 

interim rule. 

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 expects that this interim rule 

may 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. 

Therefore, a final regulatory flexibility 

analysis has been prepared and is 

summarized as follows: 

This final rule implements section 

846 of the National Defense 

Authorization Act for Fiscal Year 2011 

(Pub. L. 111–383) by providing 

regulatory coverage on utilization of 

domestic photovoltaic devices under 

certain covered contracts. 

The objective of the rule is to promote 

utilization of domestic photovoltaic 

devices under energy savings contracts, 

utility service contracts, or private 

housing contracts awarded by DoD, if 

such contract does not include DoD 

purchase of photovoltaic devices as end 

products, but will nevertheless result in 

ownership of photovoltaic devices by 

DoD. According to the statute, DoD is 

deemed to own a photovoltaic device if 

the device is— 

(1) Installed on DoD property or in a 

facility owned by DoD; and 

(2) Reserved for the exclusive use of 

DoD for the full economic life of the 

device. 

The legal basis for the rule is section 

846 of the National Defense 

Authorization Act for Fiscal Year 2011. 

No significant issues were raised by 

the public comments. 

No comments were filed by the Chief 

Counsel for Advocacy of the Small 

Business Administration. 

This rule generally applies to other 

than small entities. When purchasing 

renewable power generated via on-site 

photovoltaic devices, DoD can either 

purchase the photovoltaic devices and 

thereby own, operate, and maintain the 

devices for their full economic life 

(already covered in DFARS part 225) or 

can do variations of the following: 


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Federal Register / Vol. 77, No. 99 / Tuesday, May 22, 2012 / Rules and Regulations 30369 

a. Enter into an energy savings 

performance contract, which is a 

contracting method in which the 

contractor provides capital to facilitate 

energy savings projects and maintains 

them in exchange for a portion of the 

energy savings generated. Under this 

arrangement, the Government would 

take title to the devices during contract 

performance or at the conclusion of the 

contract. 

DLA Energy uses the master 

Department of Energy IDIQ contract and 

awards task orders off those contracts. 

Of the 16 contractors, all are large 

businesses. There are subcontracting 

goals that each contractor has to meet, 

but the ultimate task order award is 

made to a large business. 

b. Enter into a power purchase 

agreement, also referred to as a utility 

service contract, for the purchase of the 

power output of photovoltaic devices 

that are installed on DoD land or 

buildings, but owned, operated, and 

maintained by the contractor. At the 

conclusion of the contract, DoD would 

either require the contractor to 

dismantle and remove the photovoltaic 

equipment, abandon the equipment in 

place, or would recompete the 

requirement and if the incumbent 

contractor is the successful offeror, the 

follow-on contract would allow for 

continued power purchase from the 

existing devices. If the incumbent 

contractor is not the successful offeror, 

the contractor would be required to 

dismantle and remove the devices. 

While DLA has issued and received 

offers, none have been awarded, due to 

lack of economical feasibility. All offers 

received have been from large 

businesses, based on the capital costs 

involved in these projects. However, 

they tend to subcontract out the 

majority of work to smaller companies. 

We do not currently have data 

available on whether any of the 

manufacturers of photovoltaic devices 

are small entities. This rule will 

promote utilization of domestic 

photovoltaic devices, even when the 

Government does not take title to the 

devices. 

The requirements of the rule will not 

apply below the simplified acquisition 

threshold. 

Since the prime contractors subject to 

this rule are large businesses, the 

reporting requirements will not impact 

small entities. Since the photovoltaic 

devices are commercially available offthe-shelf items, there will be no 

requirement to track to the origin of the 

components, but just to inform the 

prime contractor of the place of 

manufacture. 

DoD did not identify any significant 

alternatives that would accomplish the 

objectives of the statute. There is no 

anticipated significant impact on small 

entities. 

V. Paperwork Reduction Act 

The rule imposes an information 

collection requirement that requires the 

approval of the Office of Management 

and Budget under the Paperwork 

Reduction Act, 44 U.S.C. chapter 35, et 

seq. However, the new DFARS 

provision at 252.225–7018, Photovoltaic 

Devices—Certificate, does not impose 

additional information collection 

requirements to the paperwork burden 

previously approved under OMB 

Control Number 0704–0229, entitled 

‘‘Defense Federal Acquisition 

Regulation Supplement part 225, 

Foreign Acquisition, and related 

clauses,’’ currently approved through 

November 30, 2013, in the amount of 

147,944 hours. The proposed provision 

is a variant of the Buy American-trade 

agreements provisions that are already 

cleared. 

List of Subjects in 48 CFR Parts 212, 

225, and 252 

Government procurement. 

Ynette R. Shelkin, 

Editor, Defense Acquisition Regulations 

System. 

Accordingly, the interim rule 

amending 48 CFR parts 212, 225, and 

252, which was published at 76 FR 

78858 on December 20, 2011, and 

amended by technical amendment 

published in the Federal Register at 77 

FR 13013 on March 5, 2012, is adopted 

as a final rule with the following 

change: 

■ 1. The authority citation for 48 CFR 

part 225 continues to read as follows: 

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

chapter 1. 

PART 225—FOREIGN ACQUISITION 

225.7017–3 [Amended] 

■ 2. Section 225.7017–3 is amended in 

paragraph (c)(1) by removing ‘‘see FAR 

25.4’’ and adding ‘‘see FAR subpart 

25.4’’ in its place. 

[FR Doc. 2012–11564 Filed 5–21–12; 8:45 am] 

BILLING CODE 5001–06–P 


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