[Federal Register Volume 70, Number 189 (Friday, September 30, 2005)]
[Rules and Regulations]
[Pages 57188-57190]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 05-19462]


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DEPARTMENT OF DEFENSE

48 CFR Parts 209, 217, and 246

[DFARS Case 2003-D101]


Defense Federal Acquisition Regulation Supplement; Quality 
Control of Aviation Critical Safety Items and Related Services

AGENCY: Department of Defense (DoD).

ACTION: Final rule.

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SUMMARY: DoD has adopted as final, with changes, an interim rule 
amending the Defense Federal Acquisition Regulation Supplement (DFARS) 
to implement Section 802 of the National Defense Authorization Act for 
Fiscal Year 2004. Section 802 requires DoD to establish a quality 
control policy for the procurement of aviation critical safety items 
and the modification, repair, and overhaul of those items.

EFFECTIVE DATE: September 30, 2005.

FOR FURTHER INFORMATION CONTACT: Ms. Robin Schulze, Defense Acquisition 
Regulations Council, OUSD (AT&L) DPAP (DAR), IMD 3C132, 3062 Defense 
Pentagon, Washington, DC 20301-3062. Telephone (703) 602-0326; 
facsimile (703) 602-0350. Please cite DFARS Case 2003-D101.

[[Page 57189]]


SUPPLEMENTARY INFORMATION:

A. Background

    DoD published an interim rule at 69 FR 55987 on September 17, 2004, 
to implement Section 802 of the National Defense Authorization Act for 
Fiscal Year 2004 (Pub. L. 108-136). Section 802 requires DoD to 
prescribe in regulations a quality control policy for the procurement 
of aviation critical safety items and the modification, repair, and 
overhaul of those items. The interim rule identified the 
responsibilities of the head of the design control activity with regard 
to quality control of aviation critical safety items and related 
services.
    Six respondents submitted comments on the interim rule. A 
discussion of the comments is provided below.
    1. Comment: One respondent suggested there might be confusion 
between the head of the contracting activity for the procuring activity 
of an aviation critical safety item and the head of the contracting 
activity for the design control activity. A proposed change was 
suggested to clarify this issue.
    DoD Response: The final rule amends DFARS 209.270-3(a) to clarify 
that the policy in that paragraph applies to the head of the 
contracting activity responsible for procuring an aviation critical 
safety item.
    2. Comment: Two respondents recommended clarification as to who has 
responsibility for identifying and determining aviation critical safety 
items.
    DoD Response: The final rule adds a paragraph at DFARS 209.270-
4(a)(1) to clarify that the head of the design control activity is 
responsible for identifying items that meet the criteria for 
designation as aviation critical safety items.
    3. Comment: Six respondents requested clarification as to whether 
the authority to disposition minor nonconformances in aviation critical 
safety items can be delegated, and recommended that the DFARS state 
that delegation can be authorized.
    DoD Response: The final rule amends DFARS 246.407(S-70) to state 
that acceptance of minor nonconformances in aviation critical safety 
items may be delegated as determined appropriate by the design control 
activity.
    4. Comment: Two respondents requested clarification as to whether 
the rule applies only to Government contract awards or if prime 
contractors must obtain design control activity approval of 
subcontracts for aviation critical safety items.
    DoD Response: Clarification of this issue in the DFARS rule is 
considered unnecessary. Unless otherwise stated, DFARS policy applies 
to contracts awarded by the Government.
    5. Comment: One respondent recommended clarification of the 
connection between the DFARS rule and qualified products list policies.
    DoD Response: Clarification of this issue in the DFARS rule is 
considered unnecessary. However, DoD is presently drafting a joint 
service/agency instruction that will address this issue.
    6. Comment: One respondent asked whether the rule would apply to 
commercial items acquired under FAR Part 12 or commercial aviation 
systems and components governed by Federal Aviation Administration 
(FAA) regulations.
    DoD Response: The draft joint service/agency instruction will make 
it clear that aviation critical safety item policies do not apply to 
commercial aircraft or subsystems purchased and maintained in 
accordance with FAA regulations unless specifically required by the 
military department.
    7. Comment: Three respondents questioned whether there would be 
drawing changes and new reporting requirements as a result of the rule 
and how the costs associated with these changes would be reimbursed.
    DoD Response: The rule contains no requirements for drawing changes 
or new reporting. Such changes would be determined on a case-by-case 
basis or would be addressed in policy issued by the requirements 
community.
    8. Comment: Two respondents expressed concern that the rule would 
result in changes to approved quality systems, additional requirements 
for disposal of critical safety items, and additional acceptance 
testing.
    DoD Response: The rule does not address these issues. Such changes 
would be determined on a case-by-case basis or would be addressed in 
policy issued by the requirements community.
    9. Comment: One respondent recommended that DoD look for synergy 
between the unique item identification policy and aviation critical 
safety item policy.
    DoD Response: DoD is looking at unique item identification as a 
facilitator for product identification, serialization, and tracking.
    10. Comment: Two respondents expressed concern that the rule could 
have a significant economic impact on small businesses due to (1) new 
qualification standards established by the heads of the design control 
activities, and (2) significant differences that exist between 
contractor/original equipment manufacturer critical component 
designations and DoD critical safety item designations.
    DoD Response: These issues are addressed in the final regulatory 
flexibility analysis.
    This rule was not subject to Office of Management and Budget review 
under Executive Order 12866, dated September 30, 1993.

B. Regulatory Flexibility Act

    DoD has prepared a final regulatory flexibility analysis consistent 
with 5 U.S.C. 604. The analysis is summarized below. A copy of the 
analysis may be obtained from the point of contact specified herein.
    The objective of the rule is to give the head of the design control 
activity responsibility for the quality control of aviation critical 
safety items, including identifying and designating these items, and 
approval of sources, products, and offerors prior to contract award. 
Two respondents expressed concern that there could be significant 
economic impact on small businesses or original equipment manufacturers 
(OEMs) due to (1) new qualification standards established by the heads 
of design control activities, and (2) significant differences that 
exist between contractor/OEM critical component designations and DoD 
critical safety item designations. If a small business has previously 
been approved to furnish an aviation critical safety item, has 
furnished the item within the past 3 years, and has a good quality 
track record, there should be no impact on that business. Many small 
businesses fall into this category. If a small business did not go 
through the approval process but furnished the aviation critical safety 
item within the past 3 years, the Government will check the company's 
quality track record and test samples from DoD inventory to ensure 
conformity. When the company next receives a contract for the aviation 
critical safety item, the Government will request commonly generated 
manufacturing, quality, and inspection information. The 3-year 
timeframe is consistent with established Government and nongovernment 
qualification requirements, particularly those relating to the 
aerospace sector. DoD Qualified Products List and Qualified 
Manufacturers List procedures require revalidation every 2 years. The 
Society of Automotive Engineers standard AS9102 on Aerospace First 
Article Inspection requires reinspection of an aerospace part if there 
has been a lapse in production for 2 years or as specified by the 
customer. The Federal Aviation Administration's Advisory Circular 00-

[[Page 57190]]

56A, Voluntary Industry Distributor Accreditation Program, establishes 
that civil aerospace parts distributors may not exceed the 24-month 
requirement if they were accredited prior to revision of the circular 
and that accredited distributors shall be audited at least once every 
36 months. The Aviation Suppliers Association Quality System Standard 
ASA-100 requires an accreditation audit every 36 months and a 
surveillance audit during the 36-month period. The National Aerospace 
and Defense Contractors Accreditation Program (NADCAP)--Performance 
Review Institute (PRI) establishes product qualification to be 
generally valid for 3 years or as determined by the specific Qualified 
Products Group.
    In calendar year 2003, the year before the interim rule took 
effect, 62.8% of Defense Logistics Agency (DLA) contracts for currently 
identified aviation critical safety items were awarded to small 
businesses. During the first 8 months of calendar year 2005 (the year 
after the interim rule became effective), 62.9% of DLA contracts for 
critical safety items were awarded to small businesses. There has been 
no significant impact on contract awards to small businesses as a 
result of the DFARS rule.
    Regardless of whether the contractor or DoD designates an item as a 
critical safety item, the contractor is required to deliver conforming 
products. This is especially important when the consequences of item 
failure could be catastrophic. Small businesses that understand the 
design intent of a critical safety item, and the item's application in 
the weapon system, its critical attributes, and its failure 
implications, should have high-performing manufacturing, supplier 
management, and quality control processes. While the contractor/OEM and 
DoD may have different methods of categorizing parts, the critical 
safety item designation is not expected to have a significant cost 
impact on small businesses with approved quality systems.

C. Paperwork Reduction Act

    The Paperwork Reduction Act does not apply because the rule does 
not impose any information collection requirements that require the 
approval of the Office of Management and Budget under 44 U.S.C. 3501, 
et seq.

List of Subjects in 48 CFR Parts 209, 217, and 246

    Government procurement.

Michele P. Peterson,
Editor, Defense Acquisition Regulations System.

0
Accordingly, the interim rule amending 48 CFR parts 209, 217, and 246, 
which was published at 69 FR 55987 on September 17, 2004, is adopted as 
a final rule with the following changes:

PART 209--CONTRACTOR QUALIFICATIONS

0
1. The authority citation for 48 CFR parts 209 and 246 continues to 
read as follows:

    Authority: 41 U.S.C. 421 and 48 CFR Chapter 1.


0
2. Section 209.270-3 is amended by revising paragraph (a) to read as 
follows:


209.270-3  Policy.

    (a) The head of the contracting activity responsible for procuring 
an aviation critical safety item may enter into a contract for the 
procurement, modification, repair, or overhaul of such an item only 
with a source approved by the head of the design control activity.
* * * * *


0
3. Section 209.270-4 is amended by removing the introductory text and 
revising paragraph (a) to read as follows:


209.270-4  Procedures.

    (a) The head of the design control activity shall--
    (1) Identify items that meet the criteria for designation as 
aviation critical safety items. See additional information at PGI 
209.270-4;
    (2) Approve qualification requirements in accordance with 
procedures established by the design control activity; and
    (3) Qualify and identify aviation critical safety item suppliers 
and products.
* * * * *

PART 246--QUALITY ASSURANCE

0
4. Section 246.407 is amended by revising paragraph (S-70) to read as 
follows:


246.407  Nonconforming supplies or services.

* * * * *
    (S-70) The head of the design control activity is the approval 
authority for acceptance of any nonconforming aviation critical safety 
items or nonconforming modification, repair, or overhaul of such items 
(see 209.270). Authority for acceptance of minor nonconformances in 
aviation critical safety items may be delegated as determined 
appropriate by the design control activity. See additional information 
at PGI 246.407.

[FR Doc. 05-19462 Filed 9-29-05; 8:45 am]
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