[Federal Register Volume 60, Number 56 (Thursday, March 23, 1995)]
[Proposed Rules]
[Pages 15276-15277]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 95-7014]



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DEPARTMENT OF DEFENSE

48 CFR Parts 245 and 252


Defense Federal Acquisition Regulation Supplement; 
Demilitarization

AGENCY: Department of Defense (DoD).

ACTION: Supplementary notice of proposed rulemaking with request for 
public comments.

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SUMMARY: The Defense Acquisition Regulations Council is proposing 
changes to the Defense FAR Supplement (DFARS) to cover control of 
Munitions List items (MLI) and Strategic List items (SLI) and 
demilitarization of excess property.

DATES: Comments on the proposed rule should be submitted to the address 
shown below on or before May 22, 1995 to be considered in the 
formulation of a final rule.

ADDRESSES: Interested parties should submit written comments to: 
Defense Acquisition Regulations Directorate, ATTN: IMD 3D139, PDUSD 
(A&T), 3062 Defense Pentagon, Washington, D.C. 20301-3062. FAX (703) 
602-0350. Please cite DFARS Case 92-D024 in all correspondence related 
to this case.

FOR FURTHER INFORMATION CONTACT: LTC Ed King; (703) 602-0131.

SUPPLEMENTARY INFORMATION: 

A. Background

    A proposed rule was published in the Federal Register on March 16, 
1994 (59 FR 12223). The rule proposed amendments to the DFARS by adding 
a subsection at 245.604-70 and a clause at 252.245-7XXX, and by 
revising 245.601, 245.604, 245,610-4, and 245.7310-1 to improve control 
of Munitions List items (MLI) and Strategic List items (SLI) and 
demilitarization of excess contractor inventory. Twenty comments from 
four respondents were received during the public comment period. After 
evaluating the public comments, the DAR Council agreed to publish 
another proposed rule incorporating the following changes:

--The term ``Security Trade Controls'' is changed to read ``Trade 
Security Controls.''
--DFARS 245.604-70(a) and 252.245-7XXX(b) are rewritten for clarity.
--Subparagraph (b)(4) to DFARS 252.245-7XXX is added to cover those 
situations where contractor acquired property is transferred to another 
Government contract and is treated as Government-Furnished Property.

B. Regulatory Flexibility Act

    The Regulatory Flexibility Act applies, but the proposed rule is 
not expected 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 the vast majority of 
property to be demilitarized, including MLI and SLI, is in the custody 
of large contractors. An initial Regulatory Flexibility Analysis (IRFA) 
has therefore not been performed. Comments are invited from small 
businesses and other interested parties. Comments from small entities 
concerning the affected DFARS subparts will be considered in accordance 
with Section 610 of the Act. Such comments must be submitted separately 
and should cite DAR Case 92-D024 in all correspondence.

C. Paperwork Reduction Act

    The Paperwork Reduction Act applies because the proposed rule 
imposes additional reporting requirements which require the approval of 
OMB under 44 U.S.C. 3501, et seq. On May 10, 1994, OMB approved OMB 
Clearance 0704-0363 for 17,500 hours. That clearance covered the 
reporting requirements associated with the proposed rule published on 
March 16, 1994 (59 FR 12223). This supplemental proposed rule imposes 
an additional reporting requirement at 252.245-7XXX(b)(4). As a result, 
a request for revision to the previously approved clearance has been 
submitted to OMB reflecting an increase of 2500 hours.

List of Subjects in 48 CFR Parts 245 and 252

    Government procurement.
Claudia L. Naugle,
Executive Editor, Defense Acquisition Regulations Directorate.

    Therefore it is proposed that 48 CFR Parts 245 and 252 be amended 
as follows:
    1. The authority citation for 48 CFR Parts 245 and 252 continues to 
read as follows:

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

    2. Section 245.601 is amended by revising paragraph (2) to read as 
follows:


Sec. 245.601  Definitions

* * * * *
    (2) Demilitarization is defined in the clause at 252.245-7XXX, 
Demilitarization and Trade Security Controls.
* * * * *


Sec. 245.604  [Amended]

    3. Section 245.604 is amended by removing paragraph (3) and 
redesignating paragraphs (4) and (5) as paragraphs (3) and (4).
    4. Section 245.604-70 is added to read as follows:


Sec. 245.604-70  Demilitarization and security trade controls.

    (a) Contracting officers shall ensure that solicitations and 
contracts include a demilitarization code for each item of Government-
furnished property in accordance with DoD 4160.21-M-1, Defense 
Demilitarization Manual.
    (b) Contract clause.
    Use the clause at 252.245-7XXX, Demilitarization and Trade Security 
Controls, in solicitations and contracts whenever Government property 
is either furnished to contractors, or whenever the contractor is 
authorized to acquire/manufacture items for the Government's 
[[Page 15277]] account for use in performance of the contract.
    5. Section 245.7310-1 is amended by revising paragraph (a) to read 
as follows:


Sec. 245.7310-1  Demilitarization.

* * * * *
    (a) Demilitarization.
    Item(s) ________ require demilitarization by the Purchaser in 
the manner and to the degree set forth in the Defense 
Demilitarization Manual, DoD 4160.21-M-1.
* * * * *
    6. Section 252.245-7XXX is added to read as follows:


Sec. 252.245-7XXX  Demilitarization and Trade Security Controls.

    As prescribed in 245.604-70(b), use the following clause:

Demilitarization and Trade Security Controls (XXX 1995)

    (a) Definitions.
    Demilitarization means the act of destroying the military 
offensive or defensive advantage inherent in certain types of 
equipment or material. The term includes mutilation, dumping at sea, 
cutting, crushing, scrapping, melting, burning or alteration 
designed to prevent the further use of this equipment and material 
for its originally intended military or lethal purpose and applies 
equally to material in unserviceable or serviceable condition, that 
has been screened through the Inventory Control Point (ICP) and 
declared surplus or foreign excess.
    Munititions List item means any item contained in the U.S. 
Munitions list (22 CFR Part 121).
    Trade Security Controls means control procedures designed to 
preclude the sale or shipment of Munitions List of Strategic List 
property to any entity whose interests are inimical to those of the 
United States. These controls are also applicable to such other 
selected property as may be designated by the Deputy Under Secretary 
of Defense (Trade Security Policy).
    Strategic List item means an item assigned a code letter ``A'' 
or ``B'' following the export control classification number (ECCN) 
on the Commerce Control List, Supplement No. 1 to Section 799.1 of 
the Export Administration Regulations Department of Commerce.
    (b) When Government property becomes excess to the needs of the 
Contractor in performing this contract, the Contractor shall--
    (1) Ensure the appropriate demilitarization code is included in 
the item description on inventory schedules generated to report the 
excess Government property, utilizing the guidelines provided in the 
Defense Demilitarization Manual, DoD 4160.21-M-1;
    (2) Ensure demilitarization of the items, if required; and
    (3) Apply trade security controls as required by the Arms Export 
Control Act and 22 CFR Parts 120-130, the International Traffic in 
Arms Regulations; the Export Administration Act of 1979 and 15 CFR 
parts 700-799, the Export Administration Regulations; and DoD 
4160.21-M-1, Defense Demilitarization Manual.
    (4) Ensure a demilitarization code is included in the item 
description on all transfer documents when Contractor-acquired 
property is transferred to a follow on contract, utilizing the 
guidelines provided in the Defense Demilitarization Manual, DoD 
4160.21-M-1.
    (c) The Contractor also shall include this clause, including 
this paragraph (c) in any subcontract issued under this contract.

(End of clause)

[FR Doc. 95-7014 Filed 3-22-95; 8:45 am]
BILLING CODE 3810-01-M