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###### Department of Defense

###### Defense Acquisition Regulations System

          - 48 CFR Part 225
          - RIN 0750-AI36

# 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 implement the statutory domestic source restrictions on acquisition of certain naval vessel components.

# DATES:

Effective February 26, 2015.

# 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 56333 on September 19, 2014, to implement the domestic source restrictions in 10 U.S.C. 2534 on gyrocompasses, electronic navigation chart systems, steering controls, pumps, propulsion and machinery control systems, and totally enclosed lifeboats, to the extent they are unique to marine applications.                

One respondent submitted a public comment in response to the proposed rule.

## II. Discussion and Analysis

DoD reviewed the public comment in the development of the final rule. A discussion of the comment is provided, as follows:

### A. Significant Changes From the Proposed Rule

There is no change from the proposed rule to the final rule.

### B. Analysis of Public Comment

*Comment:*                     The respondent stated that the rule should require manufacture of the naval vessel components in the United States.                

*Response:*                     In accordance with 10 U.S.C. 2534, the rule requires manufacture of the naval vessel components in the United States or Canada. 10 U.S.C. 2534(b) requires the manufacturer of the items to be a part of the national technology and industrial base. The term “national technology and industrial base” is defined at 10 U.S.C. 2500 to mean “the persons and organizations that are engaged in research, development, production, integration, services, or information technology activities conducted within the United States and Canada.” Therefore, it is necessary to allow manufacture in Canada, as well as the United States.                

## 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 final 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 law has been implemented in the Defense Logistics Agency and Department of Navy regulations for many years, and moving the regulations to the DFARS will have no impact on the public.                

## 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 225

      - Government procurement

Manuel Quinones,

Editor, Defense Acquisition Regulations System.

Therefore, 48 CFR part 225 is amended as follows:

# PART 225—FOREIGN ACQUISITION

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.

2. Amend section 225.7008 by revising paragraph (b) to read as follows: 

225.7008 

10 U.S.C. 2534

* * * * *

(b) In accordance with the provisions of paragraphs (a)(1)(i) through (iii) of this section, the USD(AT&L) has waived the restrictions of 10 U.S.C. 2534(a) for certain items manufactured in the United Kingdom, including air circuit breakers for naval vessels (see 225.7006) and the naval vessel components listed at 225.7010-1.

3. Add sections 225.7010, 225.7010-1, 225.7010-2, 225.7010-3, and 225.7010-4 to read as follows: 

225.7010 

225.7010-1 

In accordance with 10 U.S.C. 2534, do not acquire the following components of naval vessels, to the extent they are unique to marine applications, unless manufactured in the United States or Canada:

(a) Gyrocompasses.

(b) Electronic navigation chart systems.

(c) Steering controls.

(d) Pumps.

(e) Propulsion and machinery control systems.

(f) Totally enclosed lifeboats.

225.7010-2 

This restriction does not apply to—

(a) Contracts or subcontracts that do not exceed the simplified acquisition threshold; or

(b) Acquisition of spare or repair parts needed to support components for naval vessels manufactured outside the United States. Support includes the purchase of spare gyrocompasses, electronic navigation chart systems, steering controls, pumps, propulsion and machinery control systems, or totally enclosed lifeboats, when those from alternate sources are not interchangeable.

225.7010-3 

(a) The waiver criteria at 225.7008(a) apply to this restriction.

(b) The Under Secretary of Defense (Acquisition, Technology, and Logistics) has waived the restriction of 10 U.S.C. 2534 for certain items manufactured in the United Kingdom, including the items listed in section 225.7010-1. See 225.7008.

      ( print page 10392)    
225.7010-4 

(a) 10 U.S.C. 2534(h) prohibits the use of contract clauses or certifications to implement this restriction.

(b) Agencies shall accomplish implementation of this restriction through use of management and oversight techniques that achieve the objectives of this section without imposing a significant management burden on the Government or the contractor involved.

[FR Doc. 2015-03855 Filed 2-25-15; 8:45 am]

BILLING CODE 5001-06-P