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
Federal Register / Vol. 79, No. 238 / Thursday, December 11, 2014 / Rules and Regulations 73491 

• Plans to, or is expected to, provide 

or use launch or other satellite services 

under the contract from a covered 

foreign country. 

A covered foreign country means the 

People’s Republic of China, North 

Korea, or any country that is a state 

sponsor of terrorism, as described in 

section 1261(c)(2) of the NDAA for FY 

2013 (Pub. L. 112–239). State sponsors 

of terrorism, as determined by the 

Secretary of State, currently include 

Cuba, Iran, Sudan, and Syria. 

No public comments were received in 

response to the proposed rule. 

II. Discussion and Analysis 

This rule converts the interim rule, 

with only minor editorial changes, to a 

final rule. 

III. Applicability to Acquisitions Not 

Greater Than the Simplified 

Acquisition Threshold (SAT) and 

Commercial Items 

10 U.S.C. 2279 is silent on 

applicability to contracts and 

subcontracts in amounts not greater 

than the SAT or for the acquisition of 

commercial items. Also, the statute does 

not provide for criminal or civil 

penalties. Therefore, it does not apply to 

the acquisition of contracts and 

subcontracts in amounts not greater 

than the SAT or the acquisition of 

commercial items unless the Director, 

DPAP, makes a written determination as 

provided in 41 U.S.C. 1905. 

There is a potential risk to national 

security if DoD uses commercial 

satellite services for DoD 

communications and the government of 

a covered foreign country has an 

ownership interest that enables the 

government to affect satellite operations, 

regardless of the dollar value of the 

contract or order. Likewise, if launch or 

other satellite services under the 

contract are occurring in a covered 

country, the government of that country 

could impact the ability of the foreign 

entity to adequately provide those 

services. Furthermore, although 10 

U.S.C. 2279 does not specifically 

reference 41 U.S.C. 1906, the statute 

only applies to the acquisition of 

commercial satellite services, so 

exempting commercial items from 

application of the statute would negate 

the intended effect of the statute. 

Therefore, consistent with 41 U.S.C. 

1905 and 1906, the Director, Defense 

Procurement and Acquisition Policy, 

determined that it would not be in the 

best interest of the United States to 

exempt acquisitions not greater than the 

SAT and acquisitions of commercial 

items from the applicability of 10 U.S.C. 

2279. 

IV. 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. 

V. Regulatory Flexibility Act 

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. 

However, a final regulatory flexibility 

analysis has been performed and is 

summarized as follows: 

DoD is converting to a final rule, 

without change, an interim rule that 

amended the Defense Federal 

Acquisition Regulation Supplement 

(DFARS) to implement section 1602 of 

the National Defense Authorization Act 

(NDAA) for FY 2014. Section 1602 

added 10 U.S.C. 2279, which prohibits 

acquisition of commercial satellite 

services from certain foreign entities. 

The objective of the rule is to 

implement 10 U.S.C. 2279, which is the 

legal basis for the rule. The statute 

prohibits award of contracts for 

commercial satellite services to a foreign 

entity that— 

• Is an entity in which the 

government of a covered foreign country 

(i.e., the People’s Republic of China, 

North Korea, Cuba, Iran, Sudan, or 

Syria) has an ownership interest that 

enables the government to affect 

satellite operations; or 

• Plans to, or is expected to, provide 

or use launch or other satellite services 

under the contract from a covered 

foreign country. 

There were no public comments in 

response to the initial regulatory 

flexibility analysis. 

DoD estimates that this rule will 

apply to less than 111 small entities. 

According to Federal Procurement Data 

System data for FY 2013, 111 small 

entities were awarded contracts or 

orders for services in PSC D304 (ADP 

Telecommunications and Transmission 

Services), of which commercial satellite 

services are a subset. Although the focus 

of the Regulatory Flexibility Act is 

protection of domestic small business 

entities that are eligible for assistance 

from the Small Business 

Administration, there may be domestic 

small business entities in the United 

States that offer the satellite services of 

a foreign entity that would be restricted 

by this rule. 

This rule requires an annual 

representation as to whether the offeror 

is, or is not, a foreign entity subject to 

the prohibitions of the statute or is, or 

is not, offering commercial satellite 

services provided by such a foreign 

entity. Further information is required if 

the offeror provides an affirmative 

response to any of the representations, 

but such affirmative response and 

further submission is expected to be 

extremely rare. 

This rule will not have a significant 

economic impact on any small entities, 

unless they are offering commercial 

satellite services provided by a foreign 

entity that is subject to the restrictions 

of this rule. DoD was not able to identify 

any alternatives that would reduce the 

burden on small entities and meet the 

objectives of the rule. 

VI. Paperwork Reduction Act 

The rule contains information 

collection requirements that have been 

approved by the Office of Management 

and Budget under the Paperwork 

Reduction Act (44 U.S.C. chapter 35). 

This information collection requirement 

has been assigned OMB Control Number 

0704–0525, titled: Foreign Commercial 

Satellite Services. 

List of Subjects in 48 CFR Parts 204, 

212, 225, and 252 

Government procurement. 

Manuel Quinones, 

Editor, Defense Acquisition Regulations 

System. 

Accordingly, the interim rule 

amending 48 CFR parts 204, 212, 225, 

and 252, which was published at 79 FR 

45662 on August 5, 2014, is adopted as 

a final rule with the following changes: 

■ 1. The authority citation for 48 CFR 

parts 212 and 252 continues to read as 

follows: 

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

chapter 1. 

PART 212—ACQUISITION OF 

COMMERCIAL ITEMS 

212.301 [Amended] 

■ 2. Amend section 212.301 in 

paragraph (f)(xlviii) by removing 

‘‘225.772–5’’ and adding ‘‘225.772–5, to 


tkelley on DSK3SPTVN1PROD with RULES
73492 Federal Register / Vol. 79, No. 238 / Thursday, December 11, 2014 / Rules and Regulations 

comply with 10 U.S.C. 2279’’ in its 

place. 

PART 252—SOLICITATION 

PROVISIONS AND CONTRACT 

CLAUSES 

252.225–7049 [Amended] 

■ 3. Amending section 252.225–7049 

by— 

■ a. Removing the clause date of ‘‘(AUG 

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

place; and 

■ b. In paragraph (b) introductory text, 

removing ‘‘DFARS 225.71–4’’ and 

adding ‘‘DFARS 225.772–4’’ in its place. 

[FR Doc. 2014–28813 Filed 12–10–14; 8:45 am] 

BILLING CODE 5001–06–P 

DEPARTMENT OF DEFENSE 

Defense Acquisition Regulations 

System 

48 CFR Parts 204 and 252 

RIN 0750–AI44 

Defense Federal Acquisition 

Regulation Supplement: Update 

Contractor and Government Entity 

(CAGE) Code Information (DFARS 

Case 2014–D013) 

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 remove duplicative 

Commercial and Government Entity 

(CAGE) code instructions and an 

associated clause. 

DATES: Effective December 11, 2014. 

FOR FURTHER INFORMATION CONTACT: Mr. 

Dustin Pitsch, telephone 571–372–6090. 

SUPPLEMENTARY INFORMATION: 

I. Background 

DoD is amending the DFARS to 

remove text that is duplicative as a 

result of Federal Acquisition Regulation 

(FAR) final rule 2012–024, ‘‘Commercial 

and Government Entity Code’’. The FAR 

rule, which was published in the 

Federal Register at 79 FR 31187 on May 

30, 2014, requires all offerors to obtain 

a CAGE code, which was previously 

only required for the DoD. The new FAR 

CAGE code requirement took effect on 

November 1, 2014, which made the 

DFARS language at subpart 204.72 and 

the clause at 252.204–7001 no longer 

necessary. 

The following changes are made by 

this rule: 

• Add a reference at DFARS 204.18 to 

DFARS Procedures, Guidance, and 

Information text. 

• Delete DFARS subpart 204.72. 

• Delete the clause at DFARS 

252.204–7001, Commercial and 

Government Entity (CAGE) Code 

Reporting. 

II. Publication of This Final Rule for 

Public Comment Is Not Required by 

Statute 

‘‘Publication of proposed 

regulations’’, 41 U.S.C. 1707, is the 

statute which applies to the publication 

of the Federal Acquisition Regulation. 

Paragraph (a)(1) of the statute requires 

that a procurement policy, regulation, 

procedure or form (including an 

amendment or modification thereof) 

must be published for public comment 

if it relates to the expenditure of 

appropriated funds, and has either a 

significant effect beyond the internal 

operating procedures of the agency 

issuing the policy, regulation, procedure 

or form, or has a significant cost or 

administrative impact on contractors or 

offerors. This final rule is not required 

to be published for public comment, 

because the rule is removing 

unnecessary text that is now covered in 

the FAR. These requirements affect only 

the internal operating procedures of the 

Government. 

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 

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 

This rule affects the information 

collection requirements in the provision 

at DFARS 252.204–7001, currently 

approved under OMB Control Number 

0704–0225, titled Defense Federal 

Acquisition Regulation Supplement Part 

204, Administrative Matters, and related 

clauses at 252.204, in accordance with 

the Paperwork Reduction Act (44 U.S.C. 

chapter 35). The impact is that the 

burden related to DFARS clause 

252.204–7001 will be decreased by 

2,297 hours. OMB Form 83–C, 

Paperwork Reduction Act Change 

Worksheet, requesting removal of the 

2,297 hours from the OMB Control 

Number 0704–0225 information 

collection has been approved by OMB. 

List of Subjects in 48 CFR Parts 204 and 

252 

Government procurement. 

Manuel Quinones, 

Editor, Defense Acquisition Regulations 

System. 

Therefore, 48 CFR parts 204 and 252 

continues to read as follows: 

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

chapter 1. 

PART 204—ADMINISTRATIVE 

MATTERS 

■ 2. Add subpart 204.18 to read as 

follows: 

SUBPART 204.18—COMMERCIAL AND 

GOVERNMENT ENTITY CODE 

Sec. 

204.1870 Procedures. 

SUBPART 204.18—COMMERCIAL AND 

GOVERNMENT ENTITY CODE 

204.1870 Procedures. 

Follow the procedures and guidance 

at PGI 204–1870 concerning 

Commercial and Government Entity 

(CAGE) codes and CAGE file 

maintenance. 

Subpart 204.72 [Removed] 

■ 3. Remove subpart 204.72, consisting 

of sections 204.7200, 204.7201, 

204.7202, 204.7202–1, 204.7202–2, 

204.7202–3, 204.7203, 204.7204, 

204.7205, 204.7206, and 204.7207. 

PART 252—SOLICITATION 

PROVISIONS AND CONTRACT 

CLAUSES 

252.204–7001 [Removed and Reserved] 

■ 4. Remove and reserve 252.204–7001. 

[FR Doc. 2014–28814 Filed 12–10–14; 8:45 am] 

BILLING CODE 5001–06–P 


tkelley on DSK3SPTVN1PROD with RULES