Federal Register / Vol. 78, No. 153 / Thursday, August 8, 2013 / Rules and Regulations 48331 

DEPARTMENT OF DEFENSE 

Defense Acquisition Regulations 

System 

48 CFR Part 252 

RIN 0750–AH92 

Defense Federal Acquisition 

Regulation Supplement: Release of 

Fundamental Research Information 

(DFARS Case 2012–D054) 

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 provide guidance relating to 

the release of fundamental research 

information. This rule was previously 

published as part of the proposed rule 

2011–D039, Safeguarding Unclassified 

DoD Information. 

DATES: Effective: August 8, 2013. 

FOR FURTHER INFORMATION CONTACT: Mr. 

Dustin Pitsch, 571–372–6090. 

SUPPLEMENTARY INFORMATION: 

I. Background 

DoD published a proposed rule, 

DFARS case 2011–D039, in the Federal 

Register at 76 FR 38089 on June 29, 

2011, to address requirements for 

safeguarding unclassified information. 

The scope of this final rule is limited to 

only the modifications contained within 

the proposed rule to DFARS 252.204– 

7000, Disclosure of Information. This 

text was separated from the proposed 

rule, and is being published separately 

as a final rule, because the changes in 

this DFARS clause deal with the release 

of information on fundamental research 

projects and not safeguarding. This rule 

was initiated to implement guidance 

provided by the Under Secretary of 

Defense for Acquisition, Technology 

and Logistics (AT&L) in a memorandum 

on Fundamental Research dated May 

24, 2010, and a memorandum on 

Contracted Fundamental Research dated 

June 26, 2008. The memoranda 

provided additional clarifying guidance 

to ensure that DoD does not restrict 

disclosure of the results of fundamental 

research, as defined by the National 

Security Decision Directive (NSDD) 189, 

National Policy on the Transfer of 

Scientific, Technical and Engineering 

Information, unless such research efforts 

are classified for reasons of national 

security or otherwise restricted by 

applicable Federal statutes, regulations, 

or executive orders. 

The comment period originally closed 

on August 29th, 2011, and was extended 

to December 16th, 2011. DoD received 

comments on the proposed rule from 

forty-nine respondents; however, only 

fourteen (14) of the respondents 

addressed the changes contained within 

this final rule. 

II. Discussion and Analysis of the 

Public Comments 

DoD reviewed the public comments in 

the development of the final rule. A 

discussion of the comments and the 

changes made to the rule as a result of 

those comments are provided as 

follows: 

A. Summary of Significant Changes 

From the Proposed Rule 

1. Subparagraph 252.204–7000(a)(1) is 

no longer being modified and will 

remain essentially intact. 

2. Paragraph 252.204–7000(a)(3) is 

revised to no longer require a 

certification by the contracting 

component. Instead, the fundamental 

research determination must be made in 

writing. 

3. Subparagraph 252.204–7000(b) is 

revised to modify the time period that 

requests for approval must be submitted 

to the contracting officer from 45 days 

to 10 business days. It also clarifies that 

the paragraph refers to the exception 

provided at subparagraph (a)(1). 

B. Analysis of Public Comments 

1. Clarification of Certification Process 

Comment: Two respondents stated 

that the negotiation and determination 

of whether fundamental research is 

being performed should occur at the 

proposal stage whenever universities 

will be performing research services. 

Response: Consistent with the text 

added at 252.204–7000(a)(3), 

fundamental research projects should be 

scoped and negotiated during the 

proposal stage and the written 

determination of fundamental research 

should be prepared prior to the research 

performer commencing work on the 

project. 

Comment: Two respondents requested 

that definitions be provided for the 

following terms: ‘‘prime contractor,’’ 

‘‘research performer,’’ and ‘‘contracting 

component.’’ An additional respondent 

requested that DoD define the terms 

‘‘project’’ and ‘‘certified.’’ 

Response: The term ‘‘contracting 

component’’ was used in the proposed 

rule but was changed to ‘‘contracting 

activity,’’ which is defined in the FAR 

and supplemented within the DFARS. 

The meanings of the other terms in this 

rule do not vary from their usage in the 

commercial marketplace; therefore, 

explicit definitions will not be 

provided. 

Comment: One respondent stated that 

the proposed rule does not allow for all 

circumstances in which contractors may 

be required to release unclassified 

information, e.g., compelled discovery 

during litigation. The respondent 

recommended that paragraph 252.204– 

7000(a)(1) of the DFARS text remain 

unchanged to allow the contracting 

officer to approve requests for 

disclosure in instances not outlined in 

the proposed rule. 

Response: DoD has revised the final 

rule to keep the current text at DFARS 

252.204–7000(a)(1) intact. 

Comment: Two respondents 

expressed concern with the requirement 

that the contractor submit its request for 

approval at least 45 days before the 

proposed date for release of unclassified 

information. One respondent stated that 

there is no requirement in the NISPOM 

requiring the contractor to submit a 

request for information release to the 

contracting officer at least 45 days 

before the proposed date of the release. 

The respondent requested that DoD 

ensure that the requirements in the rule 

do not impact existing documents in an 

unintended way. Another respondent 

stated that when proposals are being 

prepared for new efforts, there is often 

insufficient time to provide a 45-day 

advance notice. 

Response: The National Industrial 

Security Program Operating Manual 

(NISPOM) provides baseline standards 

for the protection of classified 

information in connection with 

classified contracts. The scope of 

DFARS 252.204–7000 is limited to the 

release of unclassified information; 

therefore, the requirements of this rule 

and NISPOM are mutually exclusive. 

However, due to advances in 

communication technology, since the 

clause was first added to the DFARS, 

DoD has revised the final rule to reduce 

the requirement to 10 business days, to 

alleviate burden on contractors. 

Comment: One respondent stated that 

a presumption should exist that all 

funded research projects are 

fundamental research and that the 

information may be published without 

prior restriction unless an affirmative 

determination has been made by DoD 

that it is not fundamental research. 

Response: The fundamental research 

presumption may be appropriate in 

instances when the research is funded 

through use of grants. However, the 

research performed in support of DoD 

contracts often falls in the categories of 

applied or advanced research and has 

the possibility of producing the seed for 

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48332 Federal Register / Vol. 78, No. 153 / Thursday, August 8, 2013 / Rules and Regulations 

future defense technologies and 

therefore needs restrictions in place. 

Comment: Several respondents stated 

that the prime contractor should not be 

involved in the determination and/or 

certification that a project is 

fundamental research. Some stated that 

the determination should be limited to 

the research performer and the 

contracting component. Others stated 

that the prime contractor should be 

required to submit any subcontractor’s 

request for fundamental research 

certification to the contracting officer. 

Response: There was no certification 

requirement in the proposed rule. The 

final rule allows for the contracting 

activity to coordinate with both the 

prime contractor and the research 

performer when making a fundamental 

research determination. It is not 

appropriate for subcontractors to 

circumvent the prime contractor, 

because there is no privity of contract 

between the Government and the 

subcontractor. 

2. National Security Decision Directive 

189 (NSDD 189) 

Comment: One respondent stated that 

the rule contradicts with NSDD 189, 

which requires that agencies determine 

classification requirements prior to 

award, while the proposed rule allows 

the determination to be made after 

award. 

Response: The purpose of DFARS 

252.204–7000 is to provide direction to 

contractors regarding when it is 

permissible for them to release 

unclassified information relating to DoD 

contracts. Instructions to the contracting 

activity concerning when classification 

determinations should be made fall 

under the National Industrial Security 

Program (NISP), which is outside of the 

scope of the clause and this rule. 

3. Clarify/Expand Release Categories 

Comment: One respondent stated that 

further clarification was needed to 

expressly permit release of unclassified 

information without the contracting 

officer’s approval for reporting 

obligations included elsewhere in the 

contract and/or required by applicable 

law. 

Response: DoD has revised the 

proposed rule to revert to the current 

DFARS text at 252.204–7000(a)(1) 

which contemplates all circumstances 

in which contractors may be required to 

release unclassified information. 

However, the contracting officer must be 

involved in the decision to release 

information pertaining to DoD contracts 

because of the potential security risks. 

Comment: One respondent stated that 

the proposed rule should provide 

guidance on whether the restriction of 

unclassified information ‘‘to anyone 

outside the contractor’s organization’’ 

applies to outsourced IT. 

Response: Contractors should have 

controls in place that prevent the release 

of information by their subcontractors or 

outsourced IT through either flow-down 

of the clause at DFARS 252.204–7000 or 

obtaining nondisclosure agreements. 

4. DoD Contact 

Comment: One respondent stated that 

a post-contract DoD-wide point of 

contact should be contained in the rule 

to account for instances when the need 

for the release of information occurs 

after contract completion and the 

contracting officer is not reachable. 

Response: The scope of DFARS 

252.204–7000 is limited to the 

permissibility of the release of 

unclassified information relating to DoD 

contracts. In circumstances where the 

contracting officer cannot be reached, 

the applicable contracting activity 

should be contacted. 

5. Prescription 

Comment: One respondent stated that 

the proposed rule should make clear 

that it is not authorized for use in 

university-based Budget Activity 1 or 2 

contracts, absent exceptional 

circumstances justifying extremely rare 

exceptions made only with the approval 

of high-level component management. 

Another respondent stated that the 

proposed clause should not be adopted 

without emphasizing the inapplicability 

of the rule to contracts for fundamental 

research. 

Response: The prescription requires 

that the clause be used when the 

contractor will have access to or 

generate unclassified information that 

may be sensitive and inappropriate for 

release to the public. The contracting 

officer has the discretion to not include 

the clause in any solicitation or contract 

when a judgment has been reached that 

the information may be freely released 

to the public. 

6. Grants/Cooperative Agreements 

Comment: One respondent stated that 

the proposed rule does not give any 

indication of its applicability to grants 

and/or cooperative agreements. 

Response: The DFARS applies to 

purchases and contracts by DoD 

contracting activities. The Department 

of Defense Grant and Agreement 

Regulatory System (DODGARS) is the 

system of regulatory policies and 

procedures for the award and 

administration of grants and cooperative 

agreements. 

7. Scope of Fundamental Research 

Exemption 

Comment: One respondent stated that 

the scope of the fundamental research 

exemption is not clear since it is not 

explicit in the DoD information 

definition. 

Response: According to the NSDD 

189, ‘‘fundamental research’’ means 

basic and applied research in science 

and engineering, the results of which 

ordinarily are published and shared 

broadly within the scientific 

community, as distinguished from 

proprietary research and from industrial 

development, design, production, and 

product utilization, the results of which 

ordinarily are restricted for proprietary 

or national security reasons.’’ The 

exemption will apply when the nature 

of the research has been determined to 

meet this definition. 

8. Flowdown 

Comment: One respondent stated that 

the proposed rule contradicts 

USD(AT&L) memorandum dated May 

24, 2010, stating that ‘‘Provisions shall 

be made to accommodate such 

subcontracts for fundamental research 

and to ensure DoD restrictions on the 

prime contract do not flow down to the 

performer(s) of such research,’’ by 

requiring the contractor to include a 

similar requirement in each subcontract. 

The respondent recommended that the 

paragraph be revised to state that the 

similar requirement is not required in 

subcontracts if any of the exemptions 

apply. 

Response: In circumstances where a 

project is determined to be fundamental 

research in accordance with the final 

rule, the prime contractor will not be 

restricted on the release of information 

resulting from or arising during that 

project. Therefore, the determination 

will flow down to subcontractors for 

portions of the work determined to be 

fundamental research. 

Comment: One respondent stated that 

significant outreach is needed to DoD 

firms to ensure they understand what 

constitutes fundamental research and 

that specific contracting terms are 

available that should be used in those 

instances. 

Response: This rule aims to clarify 

issues surrounding restrictions currently 

being placed on the release of 

unclassified information arising from 

fundamental research projects. 

Developing a formal outreach program 

is outside of the scope of this rule, 

however the publication of this final 

rule serves as outreach for rulemaking 

action. 

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Federal Register / Vol. 78, No. 153 / Thursday, August 8, 2013 / Rules and Regulations 48333 

C. Other Changes 

1. Subparagraph 252.204–7000(b)(1) 

of the proposed rule, which provided 

exceptions for information required as 

part of an official Defense Contract 

Audit Agency audit or DoD Inspector 

General investigation, or by a 

Congressional or Federal subpoena, is 

removed, because the clause did not 

previously protect the information from 

release under these circumstances. 

2. Subparagraph 252.204–7000(b)(3) 

of the proposed rule is revised to delete 

‘‘except as otherwise provided by 

applicable Federal statutes regulations, 

or Executive orders.’’ Subparagraph 

252.204–7000(d) of the proposed rule is 

revised to clarify that the paragraph 

requiring the flowdown of the contract 

clause should also be included in any 

subcontracts, in order to provide 

flowdown to lower tier subcontracts. 

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 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. 

IV. Regulatory Flexibility Act 

A final regulatory flexibility analysis 

has been prepared consistent with the 

Regulatory Flexibility Act, 5 U.S.C. 601, 

et seq., and is summarized as follows: 

This final rule implements guidance 

provided by the Undersecretary of 

Defense for Acquisition, Technology 

and Logistics (AT&L) in a memorandum 

dated May 24, 2010, by providing a 

fundamental research exception to the 

general rule against disclosure of 

unclassified information. The subject 

matter of this final rule was previously 

included in proposed rule 2011–D039, 

which was published in the Federal 

Register on June 29, 2011 (76 FR 38089); 

however, the text was deemed more 

appropriate for a stand-alone case 

because this subject matter deals with 

the release of information and not the 

safeguarding of information. An initial 

regulatory flexibility analysis was 

prepared, and no public comments were 

received. Also, DoD received no 

comments by the Chief Counsel for 

Advocacy of the Small Business 

Administration in response to the 

proposed rule. 

This final rule applies to all Federal 

contractors, regardless of size or 

business ownership, when responding 

to solicitations or being awarded 

contracts that include requirements that 

meet the definition of fundamental 

research as contained within NSDD 189. 

The final rule is not expected to have a 

significant impact on small entities, 

because the rule aims to implement 

policy guidance that is already being 

followed within DoD regarding 

restrictions on the disclosure of 

fundamental research. 

The rule does not contain any 

reporting or recordkeeping requirements 

and does not require contractors to 

expend significant cost or effort. There 

are no known significant alternatives to 

the rule that would further minimize 

any economic impact of the rule on 

small entities. 

V. Paperwork Reduction Act 

The rule does not add any new 

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 252 

Government procurement. 

Manuel Quinones, 

Editor, Defense Acquisition Regulations 

System. 

Therefore, 48 CFR part 252 is 

amended as follows: 

PART 252—SOLICITATION 

PROVISIONS AND CONTRACT 

CLAUSES 

■ 1. The authority citation for part 252 

continue to read as follows: 

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

Chapter 1. 

■ 2. Revise section 252.204–7000 to 

read as follows: 

252.204–7000 Disclosure of information. 

As prescribed in 204.404–70(a), use 

the following clause: 

DISCLOSURE OF INFORMATION (AUG 

2013) 

(a) The Contractor shall not release to 

anyone outside the Contractor’s organization 

any unclassified information, regardless of 

medium (e.g., film, tape, document), 

pertaining to any part of this contract or any 

program related to this contract, unless— 

(1) The Contracting Officer has given prior 

written approval; 

(2) The information is otherwise in the 

public domain before the date of release; or 

(3) The information results from or arises 

during the performance of a project that has 

been scoped and negotiated by the 

contracting activity with the Contractor and 

research performer and determined in 

writing by the Contracting Officer to be 

fundamental research in accordance with 

National Security Decision Directive 189, 

National Policy on the Transfer of Scientific, 

Technical and Engineering Information, in 

effect on the date of contract award and the 

USD (AT&L) memoranda on Fundamental 

Research, dated May 24, 2010, and on 

Contracted Fundamental Research, dated 

June 26, 2008, (available at DFARS PGI 

204.4). 

(b) Requests for approval under paragraph 

(a)(1) shall identify the specific information 

to be released, the medium to be used, and 

the purpose for the release. The Contractor 

shall submit its request to the Contracting 

Officer at least 10 business days before the 

proposed date for release. 

(c) The Contractor agrees to include a 

similar requirement, including this paragraph 

(c), in each subcontract under this contract. 

Subcontractors shall submit requests for 

authorization to release through the prime 

contractor to the Contracting Officer. 

(End of clause) 

[FR Doc. 2013–18960 Filed 8–7–13; 8:45 am] 

BILLING CODE 5001–06–P 

DEPARTMENT OF DEFENSE 

Defense Acquisition Regulations 

System 

48 CFR Part 252 

RIN 0750–AI00 

Defense Federal Acquisition 

Regulation Supplement: Least 

Developed Countries That Are 

Designated Countries (DFARS Case 

2013–D019) 

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 a revision by the 

United States Trade Representative 

(USTR) to the list of least developed 

countries that are designated countries 

under the Trade Agreements Act of 

1979. 

DATES: Effective: August 8, 2013. 

FOR FURTHER INFORMATION CONTACT: 

Amy G. Williams, telephone 571–372– 

6106. 

SUPPLEMENTARY INFORMATION: 

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