Source: http://tecowestinghouse.com/resources/dpas.aspx
Timestamp: 2017-11-23 05:38:46
Document Index: 296583427

Matched Legal Cases: ['arts 300', 'ART 700', 'art 700', 'art 700', 'art 700', 'art 700', 'art 216', 'art 700']

Current copies of this document are available from the US Government Printing Office.
The US Department of Commerce maintains a web site which provides additional information about this program at the Bureau of Exports Administration.
[Title 15, Volume 2, Parts 300 to 799]
[Revised as of January 1, 1999]
[CITE: 15CFR700]
[Page 69-94]
PART 700--DEFENSE PRIORITIES AND ALLOCATIONS SYSTEM
Subpart A--Purpose
700.1 Purpose of this regulation.
Subpart B--Overview
700.2 Introduction.
700.3 Priority ratings and rated orders.
700.4 Priorities and allocations in a national emergency.
700.5 Special priorities assistance.
700.6 Official actions.
700.7 Compliance.
700.8 Definitions.
Subpart D--Industrial Priorities
700.10 Delegation of authority.
700.11 Priority ratings.
700.12 Elements of a rated order.
700.13 Acceptance and rejection of rated orders.
700.14 Preferential scheduling.
700.15 Extension of priority ratings.
700.16 Changes or cancellations of priority ratings and rated orders.
700.17 Use of rated orders.
700.18 Limitations on placing rated orders.
Subpart E--Industrial Priorities for Energy Programs
700.20 Use of priority ratings.
700.21 Application for priority rating authority.
Subpart F--National emergency Preparedness and Critical Items
700.30 Priorities and allocations in a national emergency.
700.31 Metalworking machines.
Subpart H--Special Priorities Assistance
700.50 General provisions.
700.51 Requests for priority rating authority.
700.52 Examples of assistance.
700.53 Criteria for assistance.
700.54 Instances where assistance may not be provided.
700.55 Assistance programs with Canada and other nations.
Subpart I--Official Actions
700.60 General provisions.
700.61 Rating Authorizations.
700.62 Directives.
700.63 Letters of Understanding.
Subpart J--Compliance
700.70 General provisions.
700.71 Audits and investigations.
700.72 Compulsory process.
700.73 Notification of failure to comply.
700.74 Violations, penalties, and remedies.
700.75 Compliance conflicts.
Subpart K--Adjustments, Exceptions, and Appeals
700.80 Adjustments or exceptions.
700.81 Appeals.
Subpart L--Miscellaneous Provisions
700.90 Protection against claims.
700.91 Records and reports.
700.92 Applicability of this regulation and official actions.
700.93 Communications.
Schedule I to Part 700--Approved Programs and Delegate Agencies
Appendix I to Part 700--Form BXA-999-Request for Special Priorities Assistance
Authority: Titles I and VII of the Defense Production Act of 1950, as amended (50 U.S.C. app. 2061 et seq.), Title VI of the Robert T. Stafford Disaster Relief and Emergency Assistance Act (42 U.S.C. 5195 et seq.), and Executive Order 12919, 59 FR 29525, 3 CFR, 1994 Comp., p. 901; Section 18 of the Selective Service Act of 1948 (50 U.S.C. App. 468), 10 U.S.C. 2538, 50 U.S.C. 82, and Executive Order 12742, 56 FR 1079, 3 CFR, 1991 Comp., p. 309; and Executive Order 12656, 53 FR 226, 3 CFR, 1988 Comp., p. 585.
Sec. 700.1 Purpose of this regulation.
(a) Title I of the Defense Production Act of 1950, as amended (50 U.S.C. App. 2061, et seq.) (Defense Production Act),
authorizes the President: to require the priority performance of contracts and orders necessary or appropriate to promote the national defense over other contracts or orders; to allocate materials, services, and facilities as necessary or appropriate to promote the national defense; and to require the allocation of, or the priority performance under contracts or orders relating to, supplies of materials, equipment, and services in order to assure domestic energy supplies for national defense needs.
(b) Section 18 of the Selective Service Act of 1948 (50 U.S.C. app. 468) (Selective Service Act) authorizes the President to place an order with a supplier for any articles or materials required for the exclusive use of the U.S. armed forces whenever the President determines that in the interest of national security, prompt delivery of the articles and materials is required. The supplier must give precedence to the order so as to deliver the articles or materials in a required time period. 10 U.S.C. 2538, and 50 U.S.C. 82, provide similar authority specifically for Department of Defense procurement, but only in time of war or when war is imminent.
(c) Section 602(b) of the Robert T. Stafford Disaster Relief and Emergency Assistance Act (42 U.S.C. 5195a(b)) provides that the terms ``national defense'' and ``defense'' as used in the Defense Production Act includes ``emergency preparedness activities'' conducted pursuant to Title VI of the Stafford Act. The definition of ``national defense'' in Section 702(13) of the Defense Production Act provides that this term includes ``emergency preparedness activities'' conducted pursuant to Title VI of the Stafford Act.
(d) The Defense Priorities and Allocations System (DPAS) regulation implements the priorities and allocations authority of the Defense Production Act and as this authority pertains to Title VI of the Stafford Act, and the priorities authority of the Selective Service Act and related statutes, all with respect to industrial resources. The DPAS ensures the timely availability of industrial resources for approved programs and provides an operating system to support rapid industrial response to a national emergency.
(e) To aid in understanding and using the DPAS, an overview of its major provisions is incorporated into this regulation as subpart B-- Overview. The full text of the DPAS is found in subparts D through L.
Sec. 700.2 Introduction.
(a) Certain national defense and energy programs (including emergency preparedness activities) are approved for priorities and allocations support. For example, military aircraft production, ammunition, and certain programs which maximize domestic energy supplies are ``approved programs.'' A complete list of currently approved programs is provided at Schedule 1 to this part.
(b) The Department of Commerce administers the DPAS to ensure the timely delivery of industrial items to meet approved program requirements.
(c) Commerce has delegated authority to place priority ratings on contracts or orders necessary or appropriate to promote the national defense to the government agencies that issue such contracts or orders. Schedule I includes a list of agencies delegated this authority. Copies of the Delegations of Authority are provided at Appendix II. They set forth the authorities delegated and those retained by Commerce.
Sec. 700.3 Priority ratings and rated orders.
(a) Rated orders are identified by a priority rating consisting of the rating--either DX or DO--and a program identification symbol. Rated orders take preference over all unrated orders as necessary to meet required delivery dates. Among rated orders, DX rated orders take preference over DO rated orders. Program identification symbols
indicate which approved program is involved with the rated order. For example, A1 identifies defense aircraft programs and A7 signifies defense electronic programs. The program identification symbols, in themselves, do not connote any priority.
(b) Persons receiving rated orders must give them preferential treatment as required by this regulation. This means a person must accept and fill a rated order for items that the person normally supplies. The existence of previously accepted unrated or lower rated orders is not sufficient reason for rejecting a rated order. Persons are required to reschedule unrated orders if they conflict with performance against a rated order. Similarly, persons must reschedule DO rated orders if they conflict with performance against a DX rated order.
(e) Persons may place a priority rating on orders only when they are in receipt of a rated order, have been explicitly authorized to do so by the Department of Commerce or a Delegate Agency, or are otherwise permitted to do so by this regulation.
Sec. 700.4 Priorities and allocations in a national emergency.
(a) In the event of a national emergency, special rules may be established as needed to supplement this part, thus ensuring rapid industrial response and the timely availability of critical industrial items and facilities to meet the urgent national defense requirements, including domestic emergency preparedness requirements, of approved programs.
(b) The special rules established in response to the emergency may include provisions for the taking of certain emergency official actions and the allocation of critical and scarce materials and facilities.
Sec. 700.5 Special priorities assistance.
(a) The DPAS is designed to be largely self-executing. However, from time-to-time production or delivery problems will arise. In this event, special priorities assistance is available from Commerce and from the Delegate Agencies.
(b) Special priorities assistance is available for any reason consistent with this regulation. Generally, special priorities assistance is provided to expedite deliveries, resolve delivery conflicts, place rated orders, locate suppliers, or to verify information supplied by customers and vendors. Special priorities assistance may also be used to request rating authority for items not automatically ratable.
Sec. 700.6 Official actions.
Sec. 700.7 Compliance.
(a) Compliance with the provisions of this regulation and official actions is required by the Defense Production Act and the Selective Service Act and related statutes. Violators are subject to criminal penalties.
Sec. 700.8 Definitions.
In addition to the definitions provided in Section 702 of the Defense Production Act (excepting the definition of ``industrial resources'') and Section 602(a) of the Stafford Act, the following definitions pertain to all sections of this part:
Approved program--a program determined as necessary or appropriate for priorities and allocations support to promote the national defense by the Secretary of Defense, the Secretary of Energy, or the Director, Federal Emergency Management Agency, under the authority of the Defense Production Act, the Stafford Act, and Executive Order 12919, or the Selective Service Act and related statutes and Executive Order 12742.
Industrial resources--all materials, services, and facilities, including construction materials, the authority for which has not been delegated to other agencies under Executive Order 12919. This term also includes the term ``item'' as defined and used in this part.
Maintenance and repair and operating supplies (MRO):
(a) Maintenance is the upkeep necessary to continue any plant, facility, or equipment in working condition.
(b) Repair is the restoration of any plant, facility, or equipment to working condition when it has been rendered unsafe or unfit for service by wear and tear, damage, or failure of parts.
(c) Operating supplies are any items carried as operating supplies according to a person's established accounting practice. Operating supplies may include hand tools and expendable tools, jigs, dies, fixtures used on production equipment, lubricants, cleaners, chemicals and other expendable items.
(d) MRO does not include items produced or obtained for sale to other persons or for installation upon or attachment to the property of another person, or items required for the production of such items; items needed for the replacement of any plant, facility, or equipment; or items for the improvement of any plant, facility, or equipment by replacing items which are still in working condition with items of a new or different kind, quality, or design.
Official action. An action taken by Commerce under the authority of the Defense Production Act, the Selective Service Act and related statutes, and this regulation. Such actions include the issuance of Set- asides, Rating Authorizations, Directives, Letters of Understanding, Demands for Information, Inspection Authorizations, and Administrative Subpoenas.
Person--any individual, corporation, partnership, association, or any other organized group of persons, or legal successor or representative thereof; or any authorized State or local government or agency thereof; and for purposes of administration of this part, includes the United States Government and any authorized foreign government or agency thereof, delegated authority as provided in this part.
Rated order. A prime contract, a subcontract, or a purchase order in support of an approved program issued in accordance with the provisions of this regulation.
Selective Service Act and related statutes--Section 18 of the Selective Service Act of 1948 (50 U.S.C. app. 468), 10 U.S.C. 2538, and 50 U.S.C. 82.
Set-aside. The amount of an item for which a supplier must reserve order book space in anticipation of the receipt of rated orders.
Stafford Act--Title VI (Emergency Preparedness) of the Robert T. Stafford Disaster Relief and Emergency Assistance Act, as amended (42 U.S.C. 5195 et seq.).
[49 FR 30414, July 30, 1984; 49 FR 50172, Dec. 27, 1984. Redesignated at 54 FR 601, Jan. 9, 1989, as amended at 63 FR 31921, June 11, 1998]
Sec. 700.10 Delegation of authority.
(a) The priorities and allocations authorities of the President under Title I of the Defense Production Act with respect to industrial resources have been delegated to the Secretary of Commerce under Executive Order 12919 of June 3, 1994 (59 FR 29525). The priorities authorities of the President under the Selective Service Act and related statutes with respect to industrial resources have also been delegated to the Secretary of Commerce under Executive Order 12742 of January 8, 1991 (56 FR 1079).
(b) Within the Department of Commerce, these responsibilities have been assigned to the Office of Strategic Industries and Economic Security. The Department of Commerce has authorized the Delegate Agencies to assign priority ratings to orders for items needed for approved programs. Copies of these Delegations of Authority are provided at Appendix II. They set forth the authorities delegated and those retained by Commerce.
Sec. 700.11 Priority ratings.
(1) There are two levels of priority established by this regulation, identified by the rating symbols ``DO'' and ``DX''.
(2) All DO rated orders have equal priority with each other and take preference over unrated orders. All DX rated orders have equal priority with each other and take preference over DO rated orders and unrated orders. (For resolution of conflicts among rated orders of equal priority, see Sec. 700.14(c).)
(3) In addition, a Directive issued by Commerce takes preference over any DX rated order, DO rated order, or unrated order, as stipulated in the Directive. (For a full discussion of Directives, see Sec. 700.62.)
(b) Program identification symbols. Program identification symbols indicate which approved program is being supported by a rated order. The list of approved programs and their identification symbols are listed in Schedule I. For example, A1 identifies defense aircraft programs and A7 signifies defense electronic programs. Program identification symbols, in themselves, do not connote any priority.
(c) Priority ratings. A priority rating consists of the rating symbol--DO and DX--and the program identification symbol, such as A1, B2, or H6. Thus, a contract for the production of an aircraft will contain a DO-A1 or DX-A1 priority rating. A contract for a radar set will contain a DO-A7 or DX-A7 priority rating.
Sec. 700.12 Elements of a rated order.
(b) A required delivery date or dates. The words ``immediately'' or ``as soon as possible'' do not constitute a delivery date. A ``requirements contract'', ``basic ordering agreement'', ``prime vendor contract'', or similar procurement document bearing a priority rating may contain no specific delivery date or dates and may provide for the furnishing of items from time-to-time or within a stated period against specific purchase orders, such as ``calls'', ``requisitions'', and ``delivery orders''. These purchase orders must specify a required delivery date or dates and are to be considered as rated as of the date of their receipt by the supplier and not as of the date of the original procurement document;
[[Page 74]]
Sec. 700.13 Acceptance and rejection of rated orders.
(5) If acceptance of a rated order or performance against a rated order would violate any other regulation, official action, or order of the Department of Commerce issued under the authority of the Defense Production Act or the Selective Service Act and related statutes [See Sec. 700.75].
(1) A person must accept or reject a rated order in writing or electronically within fifteen (15) working days after receipt of a DO rated order and within ten (10) working days after receipt of a DX rated order. If the order is rejected, the person must give reasons in writing (not electronically) for the rejection.
(The information collection requirements in paragraphs (d)(1) and (d)(2) are approved by the Office of Management and Budget under OMB control number 0694-0053.)
Sec. 700.14 Preferential scheduling.
Examples: If a person receives a DO rated order with a delivery date of June 3 and if meeting that date would mean delaying production or delivery of an item for an unrated order, the unrated order must be delayed. If a DX rated order is received calling for delivery on July 15 and a person has a DO rated order requiring delivery on June 2 and operations can be scheduled to meet both deliveries, there is no need to alter production schedules to give any additional preference to the DX rated order.
(2) If a person is unable to resolve rated order delivery or performance conflicts under this section, the person should promptly seek special priorities assistance as provided in Secs. 700.50 through 700.54. If the person's customer objects to the rescheduling of delivery or performance of a rated order, the customer should promptly seek special priorities assistance as provided in Secs. 700.50 through 700.54. For any rated order against which delivery or performance will be delayed, the person must notify the customer as provided in Sec. 700.13(d)(2).
(d) If a person is unable to purchase needed production items in time to fill a rated order by its required delivery date, the person must fill the rated order by using inventoried production items. A person who uses inventoried items to fill a rated order may replace those items with the use of a rated order as provided in Sec. 700.17(b).
Sec. 700.15 Extension of priority ratings.
(a) A person must use rated orders with suppliers to obtain items needed to fill a rated order. The person must use the priority rating indicated on the customer's rated order, except as otherwise provided in this regulation or as directed by the Department of Commerce.
(b) The priority rating must be included on each successive order placed to obtain items needed to fill a customer's rated order. This continues from contractor to subcontractor to supplier throughout the entire procurement chain.
Sec. 700.16 Changes or cancellations of priority ratings and rated orders.
(c) An amendment to a rated order that significantly alters a supplier's original production or delivery schedule shall constitute a new rated order as of the date of its receipt. The supplier must accept or reject the amended order according to the provisions of Sec. 700.13.
(f) When a priority rating is added to an unrated order, or is changed or cancelled, all suppliers must be promptly notified in writing.
Sec. 700.17 Use of rated orders.
(c) A person may combine DX and DO rated orders from one customer or several customers if the items covered by each level of priority are identified separately and clearly. If different program identification symbols are indicated on those rated orders of equal priority, the person must use the program identification symbol H1 (i.e., DO-H1 or DX- H1).
(ii) The four elements of a rated order, as required by Sec. 700.12, are included on the order with the statement required in Sec. 700.12(d) modified to read in substance:
(2) A supplier must accept or reject the rated portion of the purchase order as provided in Sec. 700.13 and give preferential treatment only to the rated quantities as required by this part.
This part may not be used to give preferential treatment to the unrated portion of the order.
(3) Any supplier who believes that rated and unrated orders are being combined in a manner contrary to the intent of this regulation or in a fashion that causes undue or exceptional hardship may submit a request for adjustment or exception under Sec. 700.80.
(f) A person is not required to place a priority rating on an order for less than $50,000, or one half of the Federal Acquisition Regulation (FAR) Simplified Acquisition Threshold (see FAR 2.101), whichever amount is larger, provided that delivery can be obtained in a timely fashion without the use of the priority rating.
Sec. 700.18 Limitations on placing rated orders.
(iii) Items in advance of the receipt of a rated order, except as specifically authorized by Commerce (see Sec. 700.51(c) for information on obtaining authorization for a priority rating in advance of a rated order); or
(B) Production or construction equipment or items to be used for the manufacture of production equipment. [For information on requesting priority rating authority, see Sec. 700.53.]
(1) The priorities and allocations authority for certain items has been delegated under Executive Orders 12919 and 12742, other executive order, or Interagency Memoranda of Understanding to other agencies. Unless otherwise agreed to by the concerned agencies, the provisions of this part are not applicable to these items which include:
(i) Food resources, food resource facilities, and the domestic distribution of farm equipment and commercial fertilizer (Department of Agriculture--see Attachment A to DPAS Delegation 1 in Appendix II to part 700 concerning combat rations);
(ii) All forms of energy, including radioisotopes, stable isotopes, source material, and special nuclear material produced in Government- owned plants or facilities operated by or for the Department of Energy (Department of Energy);
(v) Water resources (Department of Defense/U.S. Army Corps of Engineers);
(vi) Communications services (National Communications System under Executive Order 12472 of April 3, 1984); and
(vii) Mineral resources and mineral processing facilities (Department of the Interior/U.S. Geological Survey--see Memorandum of Understanding Between Interior and Commerce in DPAS Appendix III to part 700).
(2) The jurisdiction of the Department of Commerce and the Departments of Energy, Agriculture, and the Interior over certain specific items included in the categories listed above has been clarified by Interagency Memoranda of Understanding. Copies of these Memoranda are provided for information at appendix III.
(3) The following items under the jurisdiction of Commerce are currently excluded from the rating provisions of this regulation; however, these items are subject to Commerce Directives. These excluded items are:
Sec. 700.20 Use of priority ratings.
Sec. 700.21 Application for priority rating authority.
(a) For projects believed to maximize domestic energy supplies, a person may request priority rating authority for scarce, critical, and essential supplies of materials, equipment, and services (related to the production of materials or equipment, or the installation, repair, or maintenance of equipment) by submitting DOE Form PR 437 to the Department of Energy. Blank applications and further information may be obtained from the U.S. Department of Energy, Office of Clearance and Support, Field/Headquarters Support Division, Forrestal Building, 1000 Independence Avenue, S.W., Washington, D.C. 20585; Attn.: PR-132.
(b) On receipt of the application, the Department of Energy will:
(1) Determine if the project maximizes domestic energy supplies; and
(2) Find whether the materials, equipment, or services involved in the application are critical and essential to the project.
(c) If the Department of Energy notifies Commerce that the project maximizes domestic energy supplies and that the materials, equipment, or services are critical and essential, Commerce must find whether the items in question are scarce and whether there is a need to use the priorities and allocations authorities.
(2) In finding whether there is a need to use the priorities and allocations authorities, Commerce will consider alternative supply solutions and other measures.
(d) If Commerce does not find that the items of materials, equipment, or services are scarce, it will not proceed to analyze the need to use the priorities and allocations authorities.
(e) Commerce will inform the Department of Energy of the results of its analysis. If Commerce has made the two required findings, it will authorize the Department of Energy to grant the use of a priority rating to the applicant.
(f) Schedule I includes a list of approved programs to support the maximization of domestic energy supplies. A Department of Energy regulation setting forth the procedures and criteria used by the Department of Energy in making its determination and findings is published in 10 CFR part 216.
Sec. 700.30 Priorities and allocations in a national emergency.
(1) Emergency official actions.
(i) As needed, this part may be supplemented to include additional definitions to cover civilian emergency preparedness industrial items, support for essential civilian programs, and provisions for the taking of certain emergency official actions under sections Secs. 700.60 through 700.63.
(ii) Emergency official actions may include:
(A) Controlling inventories of critical and scarce defense and/or emergency preparedness items;
(B) Restricting the purchase, use, or distribution of critical and scarce defense and/or emergency preparedness items, or the use of production or distribution facilities, for non-essential purposes; and
(C) Converting the production or distribution of non-essential items to the production or distribution of critical and scarce defense and/or emergency preparedness items.
(2) Allocation of critical and scarce items and facilities.
(i) As needed, this part may be supplemented to establish special rules for the allocation of scarce and critical items and facilities to ensure the timely availability of these items and facilities for approved programs, and to provide for an equitable and orderly distribution of requirements for such items among all suppliers of the items. These rules may provide for the allocation of individual items or they may be broad enough to direct general industrial activity as required in support of emergency requirements.
(ii) Allocation rules (i.e., controlled materials programs) were established in response to previous periods of national security emergency such as World War II and the Korean Conflict. The basic elements of the controlled materials programs were the set-aside (the amount of an item for which a producer or supplier must reserve order book space in anticipation of the receipt of rated orders), the production directive (requires a producer to supply a specific quantity, size, shape, and type of an item within a specific time period), and the allotment (the maximum quantity of an item authorized for use in a specific program or application). These elements can be used to assure the availability of any scarce and critical item for approved programs. Currently, a set-aside applies only to metalworking machines (see Sec. 700.31).
(3) In the event that certain critical items become scarce, and approved program requirements for these items cannot be met without creating a significant dislocation in the civilian market place so as to create appreciable hardship, Commerce may establish special rules under section 101(b) of the Defense Production Act to control the general distribution of such items in the civilian market.
(b) Regional Emergency Coordinators. (1) If due to a catastrophic national security emergency event, communications with Commerce headquarters in Washington, D.C. are severed, DPAS Emergency Delegation 1 will provide authority to the Regional Emergency Coordinators (REC) located in the Standard Federal Region Council cities (Boston, New York, Philadelphia, Atlanta, Dallas, Kansas City, Chicago, Denver, San Francisco, and Seattle) to represent the Secretary of Commerce,
and as necessary, act for the Secretary to carry out the emergency industrial production and distribution control functions of Commerce as set forth in this part, in any supplement thereto, or other applicable authority. See DPAS Emergency Delegation 1 for further information about the authority and duties of the RECs, and the effective date of the Delegation.
(2) If DPAS Emergency Delegation 1 is implemented due to a catastrophic national security emergency event, requests for special priorities assistance under Secs. 700.50 through 700.55 should be filed with the nearest Regional Emergency Coordinator located in one of the Standard Federal Region Council cities as provided in DPAS Delegation 1.
Sec. 700.31 Metalworking machines.
(a) ``Metalworking machines'' include power driven, manual or automatic, metal cutting and metal forming machines and complete machines not supported in the hands of an operator when in use. Basic machines with a list price of $2,500 or less are not covered by this section.
Sec. 700.50 General provisions.
(a) The DPAS is designed to be largely self-executing. However, it is anticipated that from time-to-time problems will occur. In this event, a person should immediately contact the appropriate contract administration officer for guidance or assistance. If additional formal aid is needed, special priorities assistance should be sought from the Delegate Agency through the contract administration officer. If the Delegate Agency is unable to resolve the problem or to authorize the use of a priority rating and believes additional assistance is warranted, the Delegate Agency may forward the request to the Department of Commerce for action. Special priorities assistance is a service provided to alleviate problems that do arise.
(b) Special priorities assistance can be provided for any reason in support of this regulation, such as assisting in obtaining timely deliveries of items needed to satisfy rated orders or authorizing the use of priority ratings on orders to obtain items not automatically ratable under this regulation.
(c) A request for special priorities assistance or priority rating authority must be submitted on Form BXA-999 (OMB control number 0694- 0057) to the local contract administration representative. Form BXA-999 may be obtained from the Delegate Agency representative or from the Department of
Commerce. A sample Form BXA-999 is attached at Appendix I.
Sec. 700.51 Requests for priority rating authority.
(a) If a rated order is likely to be delayed because a person is unable to obtain items not normally rated under this regulation, the person may request the authority to use a priority rating in ordering the needed items. Examples of items for which priority ratings can be authorized include:
(1) In certain cases and upon specific request, Commerce, in order to promote the national defense, may authorize a person to place a priority rating on an order to a supplier in advance of the issuance of a rated prime contract. In these instances, the person requesting advance rating authority must obtain sponsorship of the request from the appropriate Delegate Agency. The person shall also assume any business risk associated with the placing of rated orders if these orders have to be cancelled in the event the rated prime contract is not issued.
(3) In reviewing requests for rating authority in advance of a rated prime contract, Commerce will consider, among other things, the following criteria:
(v) The political sensitivity of the project; and
(vi) The time period for which the rating is being requested.
Sec. 700.52 Examples of assistance.
Sec. 700.53 Criteria for assistance.
Requests for special priorities assistance should be timely, i.e., the request has been submitted promptly and enough time exists for the Delegate Agency or Commerce to effect a meaningful resolution to the problem, and must establish that:
Sec. 700.54 Instances where assistance will not be provided.
Sec. 700.55 Assistance programs with Canada and other nations.
(a) To promote military assistance to foreign nations, this section provides for authorizing priority ratings to persons in Canada and in other foreign nations to obtain items in the United States in support of approved programs. Although priority ratings have no legal authority outside of the United States, this section also provides information on how persons in the United States may obtain informal assistance in Canada.
(1) The joint U.S.-Canadian military arrangements for the defense of North America and the integrated nature of their defense industries as set forth in the U.S.-Canadian Statement of Principles for Economic Cooperation (October 26, 1950) require close coordination and the establishment of a means to provide mutual assistance to the defense industries located in both countries.
(2) The Department of Commerce coordinates with the Canadian Public Works and Government Services Canada on all matters of mutual concern relating to the administration of this regulation. A copy of the Memorandum of Understanding between the two departments is provided at appendix IV.
(3) Any person in the United States ordering defense items in Canada should inform the Canadian supplier that the items being ordered are to be used to fill a rated order. The Canadian supplier should be informed that if production materials are needed from the United States by the supplier or the supplier's vendor to fill the order, they should contact the Canadian Public Works and Government Services Canada for authority to place rated orders in the United States.
(4) Any person in Canada producing defense items for the Canadian government may also obtain priority rating authority for items to be purchased in the United States by applying to the Canadian Public Works and Government Services Canada in accordance with procedures specified by that Department.
(5) Persons in Canada needing special priorities assistance in obtaining defense items in the United States may apply for such assistance to the Canadian Public Works and Government Services Canada. Public Works and Government Services Canada will forward appropriate requests to Commerce.
(6) Any person in the United States requiring assistance in obtaining items in Canada must submit a request through the Delegate Agency to Commerce on Form BXA-999. Commerce
will forward appropriate requests to the Canadian Public Works and Government Services Canada.
(1) Any person in a foreign nation other than Canada requiring assistance in obtaining defense items in the United States or priority rating authority for defense items to be purchased in the United States, should apply for such assistance or rating authority to the U.S. Department of Defense. The request must be sponsored by the government of the foreign nation prior to its submission.
(2) If the Department of Defense endorses the request, it will be forwarded to Commerce for appropriate action.
Sec. 700.60 General provisions.
(a) Commerce may, from time-to-time, take specific official actions to implement or enforce the provisions of this regulation.
(b) Several of these official actions (Rating Authorizations, Directives, and Letters of Understanding) are discussed in this subpart. Other official actions which pertain to compliance (Administrative Subpoenas, Demands for Information, and Inspection Authorizations) are discussed in Sec. 700.71(b).
Sec. 700.61 Rating Authorizations.
(b) To request priority rating authority, see Sec. 700.51.
Sec. 700.62 Directives.
Sec. 700.63 Letters of Understanding.
(a) A Letter of Understanding is an official action which may be issued in resolving special priorities assistance cases to reflect an agreement reached by all parties (Commerce, the Delegate Agency, the supplier, and the customer).
Sec. 700.70 General provisions.
(c) Willful violation of any of the provisions of Title I or section 705 of the Defense Production Act, this regulation, or an official action of the Department of Commerce, is a criminal act, punishable as provided in the Defense Production Act and as set forth in Sec. 700.74 of this regulation.
Sec. 700.71 Audits and investigations.
(3) Inspection Authorizations. An Inspection Authorization requires a person to permit a duly authorized representative of Commerce to interview the person's employees or agents, to inspect books, records, documents, other writings and information in the person's possession or control at the place where that person usually keeps them, and to inspect a person's property when such interviews and inspections are necessary or appropriate to the enforcement or the administration of the Defense Production Act, the Selective Service Act and related statutes, this regulation, or official actions.
(1) Service of a Demand for Information or Inspection Authorization shall be made personally, or by Certified Mail--Return Receipt Requested at the person's last known address. Service of an Administrative Subpoena shall be made personally. Personal service may also be made by leaving a copy of the document with someone of suitable age and discretion at the person's last known dwelling or place of business.
(2) Service upon other than an individual may be made by serving a partner, corporate officer, or a managing or general agent authorized by appointment or by law to accept service of process. If an agent is served, a copy of
the document shall be mailed to the person named in the document.
Sec. 700.72 Compulsory process.
(b) Compulsory process may be sought in advance of an audit, investigation, or other inquiry, if, in the judgment of the Director of the Office of Industrial Resource Administration, U.S. Department of Commerce, in consultation with the Chief Counsel for Export Administration, U.S. Department of Commerce, there is reason to believe that a person will refuse to permit an audit, investigation, or other inquiry, or that other circumstances exist which make such process desirable or necessary.
Sec. 700.73 Notification of failure to comply.
Sec. 700.74 Violations, penalties, and remedies.
[[Page 86]]
Sec. 700.75 Compliance conflicts.
Sec. 700.80 Adjustments or exceptions.
(1) A provision of this regulation or an official action results in an undue or exceptional hardship on that person not suffered generally by others in similar situations and circumstances; or
(2) The consequence of following a provision of this regulation or an official action is contrary to the intent of the Defense Production Act, the Selective Service Act and related statutes, or this regulation.
(b) Each request for adjustment or exception must be in writing and contain a complete statement of all the facts and circumstances related to the provision of this regulation or official action from which adjustment is sought and a full and precise statement of the reasons why relief should be provided.
(c) The submission of a request for adjustment or exception shall not relieve any person from the obligation of complying with the provision of this regulation or official action in question while the request is being considered unless such interim relief is granted in writing by the Office of Strategic Industries and Economic Security.
(d) A decision of the Office of Strategic Industries and Economic Security under this section may be appealed to the Assistant Secretary for Export Administration, U.S. Department of Commerce. (For information on the appeal procedure, see Sec. 700.81.)
Sec. 700.81 Appeals.
(a) Any person who has had a request for adjustment or exception denied by the Office of Strategic Industries and Economic Security under Sec. 700.80, may appeal to the Assistant Secretary for Export Administration, U.S. Department of Commerce, who shall review and reconsider the denial.
(b) An appeal must be received by the Office of the Assistant Secretary for Export Administration, Bureau of Export Administration, U.S. Department of Commerce, Washington, D. C. 20230, Ref: DPAS, no later than 45 days after receipt of a written notice of denial from the Office of Strategic Industries and Economic Security. After this 45-day period, an appeal may be accepted at the discretion of the Assistant Secretary for Trade Administration for good cause shown.
(g) The submission of an appeal under this section shall not relieve any person from the obligation of complying with the provision of this regulation or official action in question while the appeal is being considered unless such relief is granted in writing by the Assistant Secretary for Export Administration.
[49 FR 30414, July 30, 1984. Redesignated at 54 FR 601, Jan. 9, 1989, as amended at 63 FR 31925, June 11, 1998]
Sec. 700.90 Protection against claims.
Sec. 700.91 Records and reports.
(a) Persons are required to make and preserve for at least three years, accurate and complete records of any transaction covered by this regulation (OMB control number 0694-0053) or an official action.
(b) Records must be maintained in sufficient detail to permit the determination, upon examination, of whether each transaction complies with the provisions of this regulation or any official action. However, this regulation does not specify any particular method or system to be used.
(c) Records required to be maintained by this regulation must be made available for examination on demand by duly authorized representatives of Commerce as provided in Sec. 700.71.
(d) In addition, persons must develop, maintain, and submit any other records and reports to Commerce that may be required for the administration of the Defense Production Act, the Selective Service Act and related statutes, and this regulation.
(e) Section 705(e) of the Defense Production Act provides that information obtained under this section which the President deems confidential, or with reference to which a request for confidential treatment is made by the person furnishing such information, shall not be published or disclosed unless the President determines that the withholding of this information is contrary to the interest of the national defense. Information required to be submitted to Commerce in connection with the enforcement or administration of the Act, this regulation, or an official action, is deemed to be confidential under section 705(e) of the Act and shall not be published or disclosed except as required by law.
Sec. 700.92 Applicability of this regulation and official actions.
(a) This regulation and all official actions, unless specifically stated otherwise, apply to transactions in any
state, territory, or possession of the United States and the District of Columbia.
(b) This regulation and all official actions apply not only to deliveries to other persons but also include deliveries to affiliates and subsidiaries of a person and deliveries from one branch, division, or section of a single entity to another branch, division, or section under common ownership or control.
(c) This regulation and its schedules shall not be construed to affect any administrative actions taken by Commerce, or any outstanding contracts or orders placed pursuant to any of the regulations, orders, schedules or delegations of authority under the Defense Materials System and Defense Priorities System previously issued by Commerce. Such actions, contracts, or orders shall continue in full force and effect under this regulation unless modified or terminated by proper authority.
(d) The repeal of the regulations, orders, schedules and delegations of authority of the Defense Materials System (DMS) and Defense Priorities System (DPS) shall not have the effect to release or extinguish any penalty or liability incurred under the DMS/DPS. The DMS/ DPS shall be treated as still remaining in force for the purpose of sustaining any action for the enforcement of such penalty or liability.
Sec. 700.93 Communications.
All communications concerning this regulation, including requests for copies of the regulation and explanatory information, requests for guidance or clarification, and requests for adjustment or exception shall be addressed to the Office of Industrial Resource Administration, Room 3876, U.S. Department of Commerce, Washington, DC 20230, Ref: DPAS; telephone: (202) 482-3634 or FAX: (202) 482-5650.
Program identification symbol Approved program Delegate agency
A1............. Aircraft.................. Department of Defense.\1\
A2............. Missiles................. Do.
A3............. Ships..................... Do.
A4............. Tank__Automotive... Do.
A5............. Weapons................ Do.
A6............. Ammunition............ Do.
A7............. Electronic and communications equipment. Do.
B1............. Military building supplies. Do.
B8............. Production equipment (for defense contractor's account). Do.
B9............. Production equipment (Government owned). Do.
C1............. Food resources (combat rations). Do.
C2............. Department of Defense construction. Do.
C3............. Maintenance, repair, and operating supplies (MRO) for Department of Defense facilities. Do.
C9............. Miscellaneous......... Do.
D1............. Canadian military programs. Department of Commerce.
D2............. Canadian production and construction. Do.
D3............. Canadian atomic energy program Do.
G1............. Certain munitions items purchased by foreign governments through domestic commercial channels for export. Department of Commerce.
G2............. Certain direct defense needs of foreign governments other than Canada. Do.
G3............. Foreign nations (other than Canada) production and construction. Do.
J1............. F-16 Co-Production Program. Departments of Commerce and Defense.
E1............. Construction........... Department of Energy.
E2............. Operations--including maintenance, repair, and operating supplies (MRO). Do.
E3............. Privately owned facilities Do.
F1............. Exploration, production, refining, and transportation. Department of Energy.
F2............. Conservation.......... Do.
F3............. Construction, repair, and maintenance. Do.
H1............. Certain combined orders (see section 700.17(c)). Department of Commerce.
H5............. Private domestic production. Do.
H6............. Private domestic construction. Do.
H7............. Maintenance, repair, and operating supplies (MRO). Do.
H8............. Designated Programs Do.
K1............. Federal supply items General Services Administration.
N1............. Emergency preparedness activities. Federal Emergency Management Agency.
\1\ Department of Defense includes: Armed Services--Army, Navy (including Marines and Coast Guard), and Air Force; Component Agencies, including Defense Logistics Agency, National Security Agency, Defense Advanced Research Projects Agency, Defense Information Systems Agency, Defense Nuclear Agency, Defense Mapping Agency, and On-Site Inspection Agency; and Associated Agencies, including Central Intelligence Agency and National Aeronautics and Space Administration.
[63 FR 31925, June 11, 1998]
Appendix I to Part 700--Form BXA-999--Request for Special Priorities Assistance
[GRAPHIC] [TIFF OMITTED] TR11JN98.008
[GRAPHIC] [TIFF OMITTED] TR11JN98.009
[GRAPHIC] [TIFF OMITTED] TR11JN98.010
[GRAPHIC] [TIFF OMITTED] TR11JN98.011
[63 FR 31926, June 11, 1998]