37470 Federal Register / Vol. 87, No. 120 / Thursday, June 23, 2022 / Proposed Rules 

Flexibility Analysis, to the Chief 

Counsel for Advocacy of the Small 

Business Administration. 

List of Subjects in 47 CFR Part 54 

Internet telecommunications, 

Reporting and recordkeeping 

requirement, Telephone. 

Federal Communications Commission. 

Marlene Dortch, 

Secretary. 

Proposed Rules 

For the reasons discussed in the 

preamble, the Federal Communications 

Commission proposes to amend 47 CFR 

part 54 as follows: 

PART 54—UNIVERSAL SERVICE 

■ 1. The authority citation for part 54 

continues to read as follows: 

Authority: 47 U.S.C. 151, 154(i), 155, 201, 

205, 214, 219, 220, 229, 254, 303(r), 403, 

1004, 1302, 1601–1609, and 1752, unless 

otherwise noted. 

■ 2. Amend § 54.1801 by revising 

paragraph (e)(2)(ii)(A) to read as follows: 

§ 54.1801 Participating providers. 

* * * * * 

(e) * * * 

(2) * * * 

(ii) * * * 

(A) Violations of the rules or 

requirements of the Affordable 

Connectivity Program, including rules 

and requirements related to the 

Affordable Connectivity Program 

transparency data collection, the 

Emergency Broadband Benefit Program, 

the Lifeline program, the Emergency 

Connectivity Fund or successor 

programs, or any of the Commission’s 

Universal Service Fund program. 

* * * * * 

■ 3. Add § 54.1813 to read as follows: 

§ 54.1813 Affordable Connectivity Program 

transparency data collection. 

Participating providers shall transmit 

to the National Lifeline Accountability 

Database in a format prescribed by the 

Administrator each new and existing 

Affordable Connectivity Program (ACP) 

subscriber’s full name; contact 

information; total monthly charge for 

internet service prior to any discounts 

(including bundled components, 

associated equipment, taxes, and fees); 

itemized breakdown of monthly charge 

including cost of ACP-supported 

service, associated equipment, 

discounts, taxes, and fees; plan 

characteristics, including upload and 

download speeds, average latency and 

packet loss, data caps, associated 

equipment requirements, for bundles, 

voice and video characteristics (e.g., 

number of minutes, number of channels 

offered); and plan coverage by 

geographic level as to be determined by 

the Commission. 

[FR Doc. 2022–13438 Filed 6–22–22; 8:45 am] 

BILLING CODE 6712–01–P 

DEPARTMENT OF DEFENSE 

Defense Acquisition Regulations 

System 

48 CFR Parts 203 and 212 

[Docket DARS–2022–0013] 

RIN 0750–AL36 

Defense Federal Acquisition 

Regulation Supplement: Prohibition on 

Award to Contractors That Require 

Certain Nondisclosure Agreements 

(DFARS Case 2021–D018) 

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 

implement a section of the National 

Defense Authorization Act for Fiscal 

Year 2021 that prohibits the award of 

any DoD contracts to an entity that 

requires its employees to sign internal 

confidentiality agreements or statements 

that would prohibit or otherwise restrict 

its employees from lawfully reporting 

waste, fraud, or abuse related to the 

performance of a DoD contract to a 

designated investigative or law 

enforcement representative of DoD 

authorized to receive such information. 

DATES: Comments on the proposed rule 

should be submitted in writing to the 

address shown below on or before 

August 22, 2022, to be considered in the 

formation of the final rule. 

ADDRESSES: Submit comments 

identified by DFARS Case 2021–D018, 

using any of the following methods: 

Æ Federal eRulemaking Portal: 

https://www.regulations.gov. Search for 

‘‘DFARS Case 2021–D018.’’ Select 

‘‘Comment’’ and follow the instructions 

to submit a comment. Please include 

your name, company name (if any), and 

‘‘DFARS Case 2021–D018’’ on any 

attached document. 

Æ Email: osd.dfars@mail.mil. Include 

DFARS Case 2021–D018 in the subject 

line of the message. 

Comments received generally will be 

posted without change to https://

www.regulations.gov, including any 

personal information provided. To 

confirm receipt of your comment(s), 

please check https://

www.regulations.gov, approximately 

two to three days after submission to 

verify posting. 

FOR FURTHER INFORMATION CONTACT: Ms. 

Kimberly R. Ziegler, telephone 703– 

901–3176. 

SUPPLEMENTARY INFORMATION: 

I. Background 

DoD is proposing to amend DFARS 

subpart 203.9 to implement section 883 

of the National Defense Authorization 

Act (NDAA) for Fiscal Year (FY) 2021 

(Pub. L. 116–283). Section 883 prohibits 

the award of a DoD contract to an entity 

that requires its employees to sign 

internal confidentiality agreements or 

statements that would prohibit or 

otherwise restrict such employees from 

lawfully reporting waste, fraud, or abuse 

related to the performance of a DoD 

contract to a designated investigative or 

law enforcement representative within 

DoD authorized to receive such 

information. The statute also requires 

entities to inform their employees of the 

limitations on confidentiality 

agreements or other statements. Offerors 

are required to represent compliance 

with the statutory restrictions prior to 

submitting an offer or quote. 

The requirements of section 883 

closely resemble those provided in 

section 743 of Division E, Title VII, of 

the Consolidated and Further 

Continuing Appropriations Act, 2015 

(Pub. L. 113–235), which was 

implemented at Federal Acquisition 

Regulation (FAR) 3.909, Prohibition on 

providing funds to an entity that 

requires certain internal confidentiality 

agreements or statements (82 FR 4717, 

dated January 13, 2017). 

Differences between the statutory 

requirements are negligible; the most 

notable is that section 743 applies the 

prohibition to entities who require their 

employees or contractors to sign the 

internal confidentiality agreements or 

statements. Section 883, however, 

applies the prohibition to entities who 

require their employees to sign them. 

Since the prohibition at section 743 

applies Governmentwide, DoD is 

currently complying with section 883 

based on the FAR application of section 

743 to employees and contractors. 

II. Discussion and Analysis 

The proposed rule implements 

section 883 of the NDAA for FY 2021 by 

utilizing the existing Governmentwide 

prohibition at FAR subpart 3.9 and 

clarifies the applicability of 

Governmentwide statutory guidance at 

DFARS 203.900. Section 883 provides 


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Federal Register / Vol. 87, No. 120 / Thursday, June 23, 2022 / Proposed Rules 37471 

DoD-specific statutory guidance that is 

almost identical to section 743, as 

implemented Governmentwide in FAR 

3.909. Both statutes prohibit the award 

of a contract using appropriated funds 

to an entity that requires certain 

confidentiality agreements or 

statements. Given that the differences in 

the prohibitions are negligible and the 

FAR prohibition already applies to DoD 

contracts, a separate implementation of 

section 883 in the DFARS is 

unnecessary. As a result, the proposed 

rule will add the statutory citation for 

section 883 in DFARS 203.900 and 

update the language needed to ensure 

contracting officers comply with the 

applicable sections in FAR subpart 3.9. 

FAR 3.909–2(a) provides the 

representation in the System for Award 

Management required by section 

883(a)(1). The representation refers to 

Government contracts and Federal 

departments or agencies, which 

includes DoD. FAR 3.909–2(b) provides 

direction to the contracting officer 

regarding reliance on an offeror’s 

representation, as required in section 

883(b). 

FAR 3.909–3 prescribes the use of the 

solicitation provision at 52.203–18, 

Prohibition on Contracting with Entities 

That Require Certain Internal 

Confidentiality Agreements or 

Statements–Representation, and the 

contract clause at 52.203–19, 

Prohibition on Requiring Certain 

Internal Confidentiality Agreements or 

Statements, in all solicitations and 

contracts except those for a personal 

services contract with an individual. 

The contract clause at 52.203–19 

requires the contractor to notify its 

current employees and subcontractors of 

these prohibitions and restrictions, 

fulfilling the requirement at section 

883(a)(2). 

The proposed rule revises the scope of 

DFARS subpart 203.9 to reconcile with 

FAR 3.900. The clause prescription at 

203.970 is revised to clarify that DFARS 

252.203–7002, Requirement to Inform 

Employees of Whistleblower Rights, 

which implements 10 U.S.C. 2409 

(redesignated as 10 U.S.C. 4701), is 

applicable to solicitations and contracts 

using FAR part 12 procedures for the 

acquisition of commercial items. The 

rule makes a conforming change to 

DFARS 212.301, Solicitation provisions 

and contract clauses for the acquisition 

of commercial items. While the clause 

was always applicable to all 

solicitations and contracts, the proposed 

revision is intended to reduce the risk 

of noncompliance. 

III. Applicability to Contracts at or 

Below the Simplified Acquisition 

Threshold (SAT) and for Commercial 

Services and Commercial Products, 

Including Commercially Available Offthe-Shelf (COTS) Items 

This proposed rule implements 

section 883 of the NDAA for FY 2021 

(Pub. L. 116–283) but does not create 

any new solicitation provisions or 

contract clauses. The rule revises the 

prescription for DFARS clause 252.203– 

7002, Requirement to Inform Employees 

of Whistleblower Rights, which 

implements 10 U.S.C. 2409, to require 

use of the clause in contracts valued at 

or below the simplified acquisition 

threshold and to acquisitions of 

commercial services and commercial 

products, including COTS items. 

Therefore, DoD intends to apply the rule 

to contracts at or below the SAT, and 

DoD intends to apply the rule to 

contracts for the acquisition of 

commercial products including COTS 

items and for the acquisition of 

commercial services. 

The proposed rule, at DFARS 

203.909–3, also prescribes use of FAR 

solicitation provision 52.203–18, 

Prohibition on Contracting with Entities 

that Require Certain Internal 

Confidentiality Agreements or 

Statements-Representation, and FAR 

contract clause 52.203–19, Prohibition 

on Requiring Certain Internal 

Confidentiality Agreements or 

Statements. The FAR clause and 

provision, except for personal services 

contracts, are already prescribed for use 

in acquisitions valued at or below the 

SAT; and the FAR clause 52.203–19 is 

also prescribed for use in commercial 

acquisitions. 

A. Applicability to Contracts at or Below 

the SAT 

41 U.S.C 1905 governs the 

applicability of laws to contracts or 

subcontracts in amounts not greater 

than the SAT. It is intended to limit the 

applicability of laws to such contracts or 

subcontracts. 41 U.S.C. 1905 provides 

that if a provision of law contains 

criminal or civil penalties, or if the 

Federal Acquisition Regulatory Council 

makes a determination that it is not in 

the best interest of the Federal 

Government to exempt contracts or 

subcontracts at or below the SAT, the 

law will apply to them. The Principal 

Director, Defense Pricing and 

Contracting (DPC), is the appropriate 

authority to make comparable 

determinations for regulations to be 

published in the DFARS, which is part 

of the FAR system of regulations. DoD 

does intend to make that determination. 

Therefore, this rule will apply at or 

below the SAT. 

B. Applicability to Contracts for the 

Acquisition of Commercial Services and 

Commercial Products, Including COTS 

Items 

10 U.S.C. 3452 (previously 10 U.S.C. 

2375) exempts contracts and 

subcontracts for the acquisition of 

commercial products, including COTS 

items, and commercial services from 

provisions of law enacted after October 

13, 1994, unless the Under Secretary of 

Defense for Acquisition and 

Sustainment (USD (A&S)) makes a 

written determination that it would not 

be in the best interest of DoD to exempt 

contracts for the procurement of 

commercial products and commercial 

services from the applicability of the 

provision or contract requirement, 

except for a provision of law that— 

• Provides for criminal or civil 

penalties; 

• Requires that certain articles be 

bought from American sources pursuant 

to 10 U.S.C. 4862 (previously 10 U.S.C. 

2533c), or that strategic materials 

critical to national security be bought 

from American sources pursuant to 10 

U.S.C. 4863 (previously 10 U.S.C. 

2533b); or 

• Specifically refers to 10 U.S.C. 3452 

and states that it shall apply to contracts 

and subcontracts for the acquisition of 

commercial products (including COTS 

items) and commercial services; or 

• USD (A&S) determines in writing 

that it would not be in the best interest 

of the Government to exempt contracts 

or subcontracts for the acquisition of 

commercial products or commercial 

services from the applicability of the 

provision or contract clause 

requirement. 

The statutes implemented in this rule 

do not impose criminal or civil 

penalties, do not require purchase 

pursuant to 10 U.S.C. 4862 or 4863, and 

do not refer to 10 U.S.C. 3452. 

Therefore, 10 U.S.C. 2409 will not apply 

to the acquisition of commercial 

services or commercial products 

including COTS items unless a written 

determination is made. Due to 

delegations of authority, the Principal 

Director, DPC is the appropriate 

authority to make this determination. 

DoD intends to make a determination to 

apply this rule and the corresponding 

statutes (10 U.S.C. 2409 and section 883 

of the NDAA for FY 2021) to 

acquisitions at or below the SAT and for 

commercial services and commercial 

products, including COTS items. 


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37472 Federal Register / Vol. 87, No. 120 / Thursday, June 23, 2022 / Proposed Rules 

C. Determination 

DoD is proposing to apply the 

requirements of 10 U.S.C. 2409 and 

section 883 of the NDAA for FY 2021 to 

contracts at or below the SAT and to the 

acquisition of commercial services and 

commercial products, including COTS 

items, because the statutory protections 

are intended to apply to any employee 

of a contractor or subcontractor who 

discloses or may be restricted from 

disclosing evidence of waste, fraud, or 

abuse. The statutes only exempt the 

application to elements of the 

intelligence community. 

10 U.S.C. 2409 provides contractor 

employees protection from reprisal for 

disclosure of waste, fraud, and abuse to 

designated persons and bodies 

identified in the statute. An employee of 

a contractor or subcontractor may not be 

discharged, demoted, or otherwise 

discriminated against as a reprisal for 

such a disclosure. The statute does not 

apply to elements of the intelligence 

committee. 

Section 883 prohibits the award of 

any DoD contract to an entity that 

requires its employees to sign internal 

confidentiality agreements or statements 

that would prohibit or otherwise restrict 

its employees from lawfully reporting 

waste, fraud, or abuse related to the 

performance of a DoD contract to a 

designated investigative or law 

enforcement representative of DoD 

authorized to receive such information. 

It is not in the best interest of the 

Federal Government to exempt 

application of this rule to actions below 

the SAT or to commercial services and 

commercial products, including COTS 

items. An exception for contracts below 

the SAT and those for commercial 

services and commercial products, 

including COTS items, would exclude 

the majority of the contracts and 

individuals intended to be protected 

under the laws, thereby undermining 

the overarching public policy purpose 

of the laws. 

IV. Expected Impact of the Rule 

This proposed rule is not expected to 

have a significant impact on the public 

or Government agencies, because the 

requirements of section 883 have 

already been implemented 

Governmentwide at FAR 3.909. DoDspecific implementation of section 883 

would duplicate the previous 

implementation of section 743 of 

Division E, Title VII, of the Consolidated 

and Further Continuing Appropriations 

Act, 2015 (Pub. L. 113–235) as 

implemented Governmentwide in the 

FAR. 

V. 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. 

VI. Congressional Review Act 

As required by the Congressional 

Review Act (5 U.S.C. 801–808) before an 

interim or final rule takes effect, DoD 

will submit a copy of the interim or 

final rule with the form, Submission of 

Federal Rules Under the Congressional 

Review Act, to the U.S. Senate, the U.S. 

House of Representatives, and the 

Comptroller General of the United 

States. A major rule under the 

Congressional Review Act cannot take 

effect until 60 days after it is published 

in the Federal Register. This rule is not 

anticipated to be a major rule under 5 

U.S.C. 804. 

VII. Regulatory Flexibility Act 

DoD does not expect this rule to 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 rule does not implement 

new requirements on any entities 

beyond those already published in the 

FAR. However, an initial regulatory 

flexibility analysis has been performed 

and is summarized as follows: 

This rule proposes to amend the 

DFARS to implement section 883 of the 

National Defense Authorization Act 

(NDAA) for Fiscal Year (FY) 2021 (Pub. 

L. 116–283). Section 883 prohibits the 

award of a DoD contract to an entity that 

requires its employees to sign internal 

confidentiality agreements or statements 

that would prohibit or otherwise restrict 

such employees from lawfully reporting 

waste, fraud, or abuse related to the 

performance of a DoD contract to a 

designated investigative or law 

enforcement representative within DoD 

authorized to receive such information. 

The objective of the rule is to 

implement the DoD-specific statute that 

removes restrictions on the ability of 

employees to report waste, fraud, or 

abuse to the appropriate DoD 

authorities. The legal basis of the rule is 

section 883 of the NDAA for FY 2021. 

This rule will apply to all small 

entities that are eligible to receive DoD 

contracts; however, the requirements of 

section 883 are already met through the 

Governmentwide implementation of a 

previously published prohibition at 

FAR 3.909 and in the System for Award 

Management (SAM) representations and 

certifications. As a result, the 361,000 

unique small entities registered in SAM 

as of January 12, 2021, are already 

compliant with these requirements and 

will not be required to take any 

additional action to comply with the 

DoD-specific prohibition in section 883. 

The rule does not impose any new 

reporting, recordkeeping, or compliance 

requirements. 

The rule does not duplicate, overlap, 

or conflict with any other Federal rules. 

There are no practical alternatives 

that will accomplish the objectives of 

the statute. 

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 the 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 2021–D018), in 

correspondence. 

VIII. Paperwork Reduction Act 

This rule does not contain any 

information collection requirements that 

require the approval of the Office of 

Management and Budget (OMB) under 

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

chapter 35). 

List of Subjects in 48 CFR Parts 203 and 

212 

Government Procurement. 

Jennifer D. Johnson, 

Editor/Publisher, Defense Acquisition 

Regulations System. 

Therefore, 48 CFR parts 203 and 212 

are proposed to be amended as follows: 

PART 203—IMPROPER BUSINESS 

PRACTICES AND PERSONAL 

CONFLICTS OF INTEREST 

■ 1. The authority citation for part 203 

is revised to read as follows: 

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

chapter 1. 

■ 2. Revise section 203.900 to read as 

follows: 


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Federal Register / Vol. 87, No. 120 / Thursday, June 23, 2022 / Proposed Rules 37473 

203.900 Scope of subpart. 

This subpart implements 10 U.S.C. 

2409 and section 883 of the National 

Defense Authorization Act for Fiscal 

Year 2021 (Pub. L. 116–283). 

(a)(i) 10 U.S.C. 2409 provides DoD 

whistleblower protection policies and 

procedures for contractor employees. 

Use sections 203.901 through 203.906 of 

this subpart in lieu of FAR sections 

3.901 through 3.906 to implement 10 

U.S.C. 2409. 

(ii) 10 U.S.C. 2409 does not apply to 

any element of the intelligence 

community, as defined in 50 U.S.C. 

3003(4). Sections 203.901 through 

203.906 do not apply to any disclosure 

made by an employee of a contractor or 

subcontractor of an element of the 

intelligence community if such 

disclosure— 

(A) Relates to an activity or an 

element of the intelligence community; 

or 

(B) Was discovered during contract or 

subcontract services provided to an 

element of the intelligence community. 

(c) Section 883 of the National 

Defense Authorization Act for Fiscal 

Year 2021 (Pub. L. 116–283) prohibits 

the award of a DoD contract to 

contractors that require their employees 

to sign internal confidentiality 

agreements or statements that would 

prohibit or otherwise restrict such 

employees from lawfully reporting 

waste, fraud, or abuse related to the 

performance of a DoD contract to a 

designated investigative or law 

enforcement representative within DoD 

authorized to receive such information. 

■ 3. Add sections 203.909 and 203.909– 

3 to read as follows: 

203.909 Prohibition on providing funds to 

an entity that requires certain internal 

confidentiality agreements or statements. 

203.909–3 Solicitation provision and 

contract clause. 

Use the provision at FAR 52.203–18, 

Prohibition on Contracting with Entities 

That Require Certain Internal 

Confidentiality Agreements or 

Statements—Representation, and the 

clause at FAR 52.203–19, Prohibition on 

Requiring Certain Internal 

Confidentiality Agreements or 

Statements, prescribed at FAR 3.909–3 

to implement section 883 of the 

National Defense Authorization Act for 

Fiscal Year 2021. 

■ 4. Revise section 203.970 to read as 

follows: 

203.970 Contract clause. 

Use the clause at 252.203–7002, 

Requirement to Inform Employees of 

Whistleblower Rights, in all 

solicitations and contracts, including 

solicitations and contracts using FAR 

part 12 procedures for the acquisition of 

commercial items. 

PART 212—ACQUISITION OF 

COMMERCIAL ITEMS 

■ 5. The authority citation for part 212 

continues to read as follows: 

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

chapter 1. 

■ 6. Amend section 212.301 by— 

■ a. Redesignating paragraphs (f)(i)(C) 

and (D) as paragraphs (f)(i)(D) and (E); 

and 

■ b. Adding a new paragraph (f)(i)(C) to 

read as follows: 

212.301 Solicitation provisions and 

contract clauses for the acquisition of 

commercial items. 

* * * * * 

(f) * * * 

(i) * * * 

(C) Use the clause at 252.203–7002, 

Requirement to Inform Employees of 

Whistleblower Rights, as prescribed in 

203.970, to comply with 10 U.S.C. 2409. 

* * * * * 

[FR Doc. 2022–13369 Filed 6–22–22; 8:45 am] 

BILLING CODE 5001–06–P 

DEPARTMENT OF DEFENSE 

Defense Acquisition Regulations 

System 

48 CFR Parts 213, 229, 232, and 252 

[Docket DARS–2022–0014] 

RIN 0750–AL51 

Defense Federal Acquisition 

Regulation Supplement: Reporting Tax 

Information on Certain Foreign 

Procurements (DFARS Case 2021– 

D029) 

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 

allow for the efficient and accurate 

identification of contracts subject to 

excise tax withholding. DoD is also 

proposing to prohibit use of the 

Governmentwide commercial purchase 

card as a method of payment when the 

tax on certain foreign procurements 

applies. These changes will promote the 

efficient administration of the excise 

tax. 

DATES: Comments on the proposed rule 

should be submitted in writing to the 

address shown below on or before 

August 22, 2022, to be considered in the 

formation of a final rule. 

ADDRESSES: Submit comments 

identified by DFARS Case 2021–D029, 

using any of the following methods: 

Æ Federal eRulemaking Portal: 

https://www.regulations.gov. Search for 

‘‘DFARS Case 2021–D029’’ in the search 

box and select ‘‘Search.’’ Select 

‘‘Comment’’ and follow the instructions 

to submit a comment. Please include 

your name, company name (if any), and 

‘‘DFARS Case 2021–D029’’ on any 

attached document. 

Æ Email: osd.dfars@mail.mil. Include 

DFARS Case 2021–D029 in the subject 

line of the message. 

Comments received generally will be 

posted without change to https://

www.regulations.gov, including any 

personal information provided. To 

confirm receipt of your comment(s), 

please check https://

www.regulations.gov, approximately 

two to three days after submission to 

verify posting. 

FOR FURTHER INFORMATION CONTACT: 

David E. Johnson, telephone 202–913– 

5764. 

SUPPLEMENTARY INFORMATION: 

I. Background 

DoD is proposing to revise the DFARS 

to allow for the accurate identification 

of contracts subject to excise tax 

withholding, as well as the proper 

identification of those contracts for 

which the contractor claimed a full 

exemption from the tax. Section 301 of 

the James Zadroga 9/11 Health and 

Compensation Act of 2010 (Pub. L. 111– 

347), codified at 26 U.S.C. 5000C, 

imposes a two-percent excise tax on 

specified Federal procurement 

payments to certain foreign persons; it 

does not apply to payments to United 

States persons. With certain exceptions, 

to administer this tax DoD must 

withhold an amount equal to two 

percent of the amount of specified 

Federal procurement payments. 

Federal Acquisition Regulation (FAR) 

solicitation provision 52.229–11, Tax on 

Certain Foreign Procurements—Notice 

and Representation, provides offerors an 

opportunity to claim a full exemption 

from the tax at the time of their offer. 

The proposed DFARS contract clause 

252.229–70XX, Full Exemption from 

Two-Percent Excise Tax on Certain 

Foreign Procurements, is needed 

because presently no guidance, 

requirement, or mechanism exists to 

document an offeror’s claim of full 

exemption from the tax. 

Currently, the contract clause at FAR 

52.229–12, Tax on Certain Foreign 


lotter on DSK11XQN23PROD with PROPOSALS1