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2019 08485 - PDF
2019 08485
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1 18156 / Vol. 84, No. 83 / Tuesday, April 30, 2019 / Rules and Regulations Federal Register capabilities to process rare earth metals Æ Regulations.gov: http:// Navy/Marine Corps—The Assistant www.regulations.gov . Search for into finished materials are limited General Counsel (Acquisition ‘‘DFARS Case 2018–D054’’. Select mostly to Chinese sources. DoD has Integrity) Air Force—Deputy General Counsel ‘‘Comment Now’’ and follow the been studying this issue and the General (Contractor Responsibility) instructions provided to submit a Accountability Office provided a Defense Advanced Research Projects comment. Please include ‘‘DFARS Case briefing in response to the National Agency—The Director 2018–D054’’ on any attached document. Defense Authorization Act for Fiscal Defense Information Systems Agency— Include Email: [email protected] Æ Year 2010 (Pub. L. 111–84) ( https:// The General Counsel DFARS Case 2018–D054 in the subject www.gao.gov/products/GAO-10-617R ). Defense Intelligence Agency—The line of the message. Section 871, which was effective in Senior Procurement Executive Æ Fax: 571–372–6094. August 2018, puts significant new Defense Logistics Agency—The Special Defense Acquisition Mail: Æ restrictions at 10 U.S.C. 2533c on the Assistant for Contracting Integrity Regulations System, Attn: Ms. Amy use of foreign magnets in the military National Geospatial—Intelligence Williams, OUSD(A&S)DPC/DARS, supply chain. Agency—The General Counsel Room 3B941, 3060 Defense Pentagon, The element of tungsten and various Defense Threat Reduction Agency—The Washington, DC 20301–3060. tungsten heavy alloys are widely used Director Comments received generally will be in military applications, because National Security Agency—The Senior http:// posted without change to tungsten heavy alloys can endure high Acquisition Executive including any www.regulations.gov, temperature without deformation and Missile Defense Agency—The General personal information provided. To are free from air erosion at room Counsel confirm receipt of your comment(s), temperature. In addition, tungsten United States Cyber Command—The please check www.regulations.gov, products are non-toxic and Staff Judge Advocate approximately two to three days after environmentally friendly. Some military Defense Health Agency—The General submission to verify posting (except uses include: Tungsten alloy bullets, Counsel allow 30 days for posting of comments shrapnel head; balance pinball in Overseas installations—as designated by submitted by mail). missiles and aircrafts; measuring core of the agency head : FOR FURTHER INFORMATION CONTACT Ms. armor-piercer; kinetic armor-piercer; * * * * * Amy Williams, telephone 571–372– armor and artillery shell; grenades; [FR Doc. 2019–08488 Filed 4–29–19; 8:45 am] 6106. bullet-proof vehicles, armored tanks, BILLING CODE 5001–06–P SUPPLEMENTARY INFORMATION : artillery parts, gun; rocket accessories, and so on. The most significant use of I. Background tungsten is for a variety of high-speed DEPARTMENT OF DEFENSE DoD is revising the DFARS to ammunition, especially armor-piercer. implement section 871 of the National Defense Acquisition Regulations Tungsten is almost an indispensable Defense Authorization Act for Fiscal System part of armor-piercer. The kinetic armor- Year 2019 (Pub. L. 115–232). Section piercer made from tungsten alloy can 871 adds section 10 U.S.C. 2533c, which 48 CFR Parts 212, 225, and 252 compete directly with the depleted prohibits acquisition of samarium-cobalt uranium bomb (depleted uranium has [Docket DARS–2019–0016] magnets, neodymium-iron-boron become an environmental problem). magnets, tungsten metal powder, and RIN 0750–AK15 Tungsten can also be used for nuclear tungsten heavy alloy or any finished or weapon material shell protection. As semi-finished component containing Defense Federal Acquisition well as offensive use, tungsten is used tungsten heavy alloy melted or Regulation Supplement: Restriction on for some missile defense systems. A produced in North Korea, China, Russia, the Acquisition of Certain Magnets and hypervelocity projectile, can be and Iran, because these materials play Tungsten (DFARS Case 2018–D054) launched at 5,600 miles per hour, to an essential role in national defense. defend against incoming projectiles, : Defense Acquisition AGENCY Samarium-cobalt magnets and such as miniaturized nuclear warheads Regulations System, Department of neodymium-iron-boron magnets are rare fired by tanks. Defense (DoD). earth magnets with many military The new restriction in 10 U.S.C. Interim rule. : ACTION applications, particularly in aviation 2533c is similar to the domestic source and navigation, such as sonar, radar, : SUMMARY DoD is issuing an interim rule restrictions in the Specialty Metals and guidance systems. Rare earth amending the Defense Federal Amendment (10 U.S.C. 2533b), though magnets have unique properties, such as Acquisition Regulation Supplement it differs in a few important respects. very high magnetic force and the ability (DFARS) to implement a section of the The Specialty Metals Amendment to withstand demagnetization at very National Defense Authorization Act for maintains a healthy and competitive high temperatures. The electrical Fiscal Year 2019 that prohibits U.S. specialty metals industry, systems in aircrafts use samarium-cobalt acquisition of certain magnets and especially for aerospace materials such permanent magnets to generate power. tungsten from North Korea, China, as titanium and super alloys. 10 U.S.C. These magnets are also essential to Russia, and Iran. 2533c is meant to do the same for both many military weapons systems. DATES : Effective April 30, 2019. rare earth magnets and tungsten. Aircrafts use small high-powered rare Comments on the interim rule should be However, rather than limiting to earth magnet actuators that control their submitted in writing to the address domestic sources, 10 U.S.C. 2533c various surfaces during operation. Rare shown below on or before July 1, 2019, prohibits ‘‘covered material’’ that was earth magnets may also be used as to be considered in the formation of a ‘‘melted or produced’’ in China, Russia, fasteners. While substitutes can be used final rule. North Korea, or Iran. While samarium- in some applications; they are usually cobalt magnets have long been covered ADDRESSES : Submit comments not as effective. under the Specialty Metals Amendment While rare earth ore deposits are identified by DFARS Case 2018–D054, (because cobalt is a specialty metal), 10 geographically diverse, current using any of the following methods: VerDate Sep<11>2014 17:09 Apr 29, 2019 Jkt 247001 PO 00000 Frm 00024 Fmt 4700 Sfmt 4700 E:\FR\FM\30APR1.SGM 30APR1 amozie on DSK9F9SC42PROD with RULES
2 18157 Federal Register / Vol. 84, No. 83 / Tuesday, April 30, 2019 / Rules and Regulations required form, cannot be procured as alloy from North Korea, China, Russia, U.S.C. 2533c affects neodymium-iron- and when needed at a reasonable price boron magnets for the first time. or Iran. With the Specialty Metals This rule clarifies that, with regard to from any country other than a covered Amendment, the prohibition is tied to samarium-cobalt magnets and country. the place of first melt or equivalent neodymium iron-boron magnets, this III. Applicability to Contracts at or process. In the case of magnets, the restriction includes melting samarium Below the Simplified Acquisition prohibition is tied to where the alloy is with cobalt to produce the samarium- Threshold and for Commercial Items, melted and the subsequent sintering cobalt alloy or melting neodymium with Including Commercially Available Off- operation takes place. Based on the iron and boron to produce the the-Shelf Items statute, neodymiuim-iron-boron and neodymium-iron-boron alloy, and all This rule adds a new clause at DFARS samarium-cobalt magnets produced in subsequent phases of production of the 252.225–7052, Restriction on the China cannot be used by the U.S. magnets, such as powder formation, Acquisition of Certain Magnets and military. pressing, sintering or bonding, and Tungsten, which will not apply to This does not apply when covered magnetization. acquisitions below the SAT, in materials from non-covered countries However, the restriction on melting of accordance with 41 U.S.C. 1905, but cannot be acquired at a reasonable price the samarium-cobalt alloy is in addition applies to contracts for the acquisition within the required timeframe. DoD to any applicable restriction on melting of commercial items, except as provided expects there will be some adjustment of certain cobalt alloys at DFARS in the statute at 10 U.S.C. 2533c(c)(3). period as U.S. and other non-prohibited 225.7003 and the clause at 252.225– sources come online. There are also 7009, Restriction on Acquisition of A. Applicability to Contracts at or Below important exceptions for some Certain Articles Containing Specialty the Simplified Acquisition Threshold commercially available off-the-shelf Metals, in accordance with 10 U.S.C. 41 U.S.C. 1905 governs the magnets incorporated into end items 2533b. applicability of laws to contracts or and for electronic devices. All of these B. Exceptions subcontracts in amounts not greater exceptions exist in similar forms within than the SAT. It is intended to limit the the Specialty Metals Amendment. In accordance with 10 U.S.C. 2533c, applicability of laws to such contracts or Finally, there is an exception for the rule does not apply to an subcontracts. 41 U.S.C. 1905 provides recycled neodymium magnets, where acquisition— that if a provision of law contains • Equal to or less than the simplified the ‘‘first melt’’ may have taken place in criminal or civil penalties, or if the FAR acquisition threshold (SAT) (see section a covered country but where subsequent Council makes a written determination III.A. of this preamble); milling and recycling to create a ‘‘new’’ that it is not in the best interest of the Outside the United States, of an • magnet takes place within the United Federal Government to exempt contracts item for use outside the United States; States. or subcontracts at or below the SAT, the • Of an end item that is— 10 U.S.C. 2533c does not incorporate law will apply to them. The Principal Æ A commercially available off-the- the ‘‘qualifying country’’ exception Director, Defense Pricing and shelf (COTS) item, other than a COTS found within the Specialty Metals Contracting (DPC), is the appropriate item that is 50 percent or more tungsten Amendment, when specialty metals are authority to make comparable by weight, or a tungsten or tungsten incorporated into an end product determinations for regulations to be heavy alloy mill product, such as bar, produced in a qualifying country. As a published in the DFARS, which is part billet, slab, wire, cube, sphere, block, result, the distributor/fabricator model of the FAR system of regulations. DoD blank, plate, or sheet, that had not been that involves taking magnets produced does not intend to make that incorporated into an end item, in China and conducting subsequent determination. Therefore, this rule will subsystem, assembly, or component; processes on them in a ‘‘qualifying Æ An electronic device, unless the not apply below the SAT. country’’ will not suffice under 10 Secretary of Defense, upon the U.S.C. 2533c to render a magnet B. Applicability to Contracts for the recommendation of the Strategic compliant for U.S. military needs. This Acquisition of Commercial Items, Materials Protection Board pursuant to will primarily be important for Including COTS Items 10 U.S.C. 187, determines that the samarium-cobalt magnet sellers who 10 U.S.C. 2375 governs the domestic availability of a particular will now have to comply with both applicability of laws to DoD contracts electronic device is critical to national laws. and subcontracts for the acquisition of security; or II. Discussion and Analysis commercial items, including COTS A neodymium-iron-boron magnet Æ items, and is intended to limit the manufactured from recycled material if This rule adds a new section at applicability of laws to contracts and the milling of the recycled material and DFARS 225.7018 and a clause at subcontracts for the acquisition of sintering of the final magnet takes place 252.225–7052, Restriction on the commercial items, including COTS in the United States; or Acquisition of Certain Magnets and items. 10 U.S.C. 2375 provides that if a If the authorized agency official • Tungsten, to implement the new provision of law contains criminal or concerned, without power of restriction at 10 U.S.C. 2533c on civil penalties, or if the Under Secretary redelegation, determines that covered acquisition of certain magnets and of Defense for Acquisition and materials of satisfactory quality and tungsten. Sustainment ((USD)(A&S)) makes a quantity, in the required form, cannot be A. Restriction written determination that it is not in purchased as and when needed. Note the best interest of the Federal that, unlike the domestic source With some exceptions, 10 U.S.C. Government to exempt commercial item restrictions of the Berry Amendment (10 2533c prohibits acquisition of contracts, the provision of law will U.S.C. 2533a) and specialty metals (10 samarium-cobalt magnets, neodymium- apply to contracts for the acquisition of U.S.C. 2533b), this is not a domestic iron-boron magnets, tungsten metal commercial items. Due to delegations of nonavailability determination, but a powder, and tungsten heavy alloy or authority from USD(A&S), the Principal determination that covered materials of any finished or semi-finished Director, DPC, is the appropriate satisfactory quality and quantity, in the component containing tungsten heavy VerDate Sep<11>2014 17:09 Apr 29, 2019 Jkt 247001 PO 00000 Frm 00025 Fmt 4700 Sfmt 4700 E:\FR\FM\30APR1.SGM 30APR1 amozie on DSK9F9SC42PROD with RULES
3 18158 Federal Register / Vol. 84, No. 83 / Tuesday, April 30, 2019 / Rules and Regulations VIII. Determination To Issue an Interim samarium-cobalt magnets, neodymium- authority to make this determination. iron-boron magnets, tungsten metal Rule DoD has made that determination to powder, and tungsten heavy alloy or apply this rule to the acquisition of A determination has been made under any finished or semi-finished commercial items, including COTS the authority of the Secretary of Defense components containing tungsten heavy items, if otherwise applicable. that urgent and compelling reasons exist 10 U.S.C. 2533c specifically exempts alloy) from North Korea, China, Russia, to promulgate this interim rule without the acquisition of an end item that is a or Iran. prior opportunity for public comment. Based on Federal Procurement Data COTS item, other than a COTS item that The law was effective upon enactment System data for FY 2017, DoD awarded is 50 percent or more tungsten by in August 2018 as a way to decrease in the United States 13,400 contracts weight, or a mill product that has not DoD dependence—and thus improve that exceeded $250,000 and were for the been incorporated into an end item, national security—on these materials acquisition of manufactured end subsystem, assembly, or component. that originate in certain countries. As products, excluding those categories Although 10 U.S.C. 2533c does not refer discussed in Section I, Background, due that could not include samarium-cobalt to 10 U.S.C. 2375 and provide that, to the use of these materials in the magnets, neodymium-iron-boron notwithstanding those statutes it shall supply chain for DoD military systems, magnets, or a covered form of tungsten be applicable to contracts for the nonmilitary systems of importance to (such as clothing and fabrics, books, or procurement of commercial items, it is DoD, and national defense applications, lumber products). These contracts were the clear intent of the statute to cover immediate application of this provision awarded to 5,073 unique entities, of commercial items, other than those is necessary. The intent of 10 U.S.C. which 3,074 were small entities. It is not specifically exempted. Therefore, DoD 2533c is to promote growth in domestic known what percentage of these awards has signed a determination of capability for these materials and reduce involved samarium-cobalt magnets, applicability to acquisitions of dependence on foreign sources as a neodymium-iron-boron magnets, or a commercial items, except as exempted shortage would impact many DOD covered form of tungsten, or what lesser in the statute. applications as well as a negatively percentage might involve such materials IV. Executive Orders 12866 and 13563 impact on the broader industrial base. from China, North Korea, Russia, or Pursuant to 41 U.S.C. 1707 and FAR Executive Orders (E.O.s) 12866 and Iran. 1.501–3(b), DoD will consider public There are no projected reporting or 13563 direct agencies to assess all costs comments received in response to this recordkeeping requirements, as a result and benefits of available regulatory interim rule in the formation of the final of this rule. However, there may be alternatives and, if regulation is rule. compliance costs to track the origin of necessary, to select regulatory covered materials. approaches that maximize net benefits List of Subjects in 48 CFR Parts 212, The rule does not duplicate, overlap, (including potential economic, 225, and 252 or conflict with any other Federal rules. environmental, public health and safety DoD is exempting acquisitions equal Government procurement. effects, distributive impacts, and to or less than the simplified acquisition equity). E.O. 13563 emphasizes the Jennifer L. Hawes, threshold in accordance with 41 U.S.C. importance of quantifying both costs Regulatory Control Officer, Defense 1905. DoD was unable to identify any and benefits, of reducing costs, of Acquisition Regulations System. other alternatives that would reduce harmonizing rules, and of promoting Therefore, 48 CFR parts 212, 225, and burden on small businesses and still flexibility. This is a significant 252 are amended as follows: meet the objectives of the statute. regulatory action and, therefore, was DoD invites comments from small ■ 1. The authority citation for 48 CFR subject to review under section 6(b) of business concerns and other interested parts 212, 225, and 252 continues to E.O. 12866, Regulatory Planning and parties on the expected impact of this read as follows: Review, dated September 30, 1993. This rule on small entities. rule is not a major rule under 5 U.S.C. 41 U.S.C. 1303 and 48 CFR Authority: DoD will also consider comments 804. chapter 1. from small entities concerning the V. Executive Order 13771 existing regulations in subparts affected PART 212—ACQUISITION OF by this rule in accordance with 5 U.S.C. This rule is not subject to the COMMERCIAL ITEMS 610. Interested parties must submit such requirements of E.O. 13771, because this comments separately and should cite 5 rule is issued with respect to a national 2. Amend section 212.301 by adding ■ U.S.C. 610 (DFARS Case 2018–D054), in security function of the United States. paragraph (f)(ix)(FF) to read as follows: correspondence. VI. Regulatory Flexibility Act 212.301 Solicitation provisions and VII. Paperwork Reduction Act contract clauses for the acquisition of DoD does not expect this interim rule commercial items. The rule does not contain any to have a significant economic impact * * * * * information collection requirements that on a substantial number of small entities require the approval of the Office of (f) * * * within the meaning of the Regulatory Management and Budget under the (ix) * * * et seq. Flexibility Act, 5 U.S.C. 601, Paperwork Reduction Act (44 U.S.C. (FF) Use the clause at 252.225–7052, However, an initial regulatory flexibility chapter 35). Although this rule does not Restriction on the Acquisition of Certain analysis has been performed and is impose any reporting requirements, DoD Magnets and Tungsten, as prescribed in summarized as follows: notes that tungsten (as a derivative of This rule is required to implement 225.7018–5. wolframite) is considered a conflict section 871 of the National Defense * * * * * mineral under section 1502 of the Dodd- Authorization act (NDAA) for Fiscal Frank Wall Street Reform and Consumer Year (FY) 2019, which adds 10 U.S.C. PART 225—FOREIGN ACQUISITION Protection Act (Pub. L. 111–203) and is 2533c. thus subject to associated reporting The objective of the rule is to prohibit ■ 3. Add sections 225.7018, 225.7018–1, requirements reflected therein. i.e. acquisition of sensitive materials ( 225.7018–2, 225.7018–3, 225.7018–4, VerDate Sep<11>2014 17:09 Apr 29, 2019 Jkt 247001 PO 00000 Frm 00026 Fmt 4700 Sfmt 4700 E:\FR\FM\30APR1.SGM 30APR1 amozie on DSK9F9SC42PROD with RULES
4 18159 Federal Register / Vol. 84, No. 83 / Tuesday, April 30, 2019 / Rules and Regulations (b) Class nonavailability and 225.7018–5 to subpart 225.70 to (i) A commercially available off-the- shelf item that is 50 percent or more determinations. A class nonavailability read as follows: tungsten by weight; or i.e., a nonavailability determination ( * * * * * (ii) A tungsten heavy alloy mill determinations that applies to more Sec. product, such as bar, billet, slab, wire, than one contract) requires the approval 225.7018 Restriction on acquisition of cube, sphere, block, blank, plate, or certain magnets and tungsten. of the USD(A&S). Follow the procedures 225.7018–1 Definitions. sheet, that had not been incorporated at PGI 225.7018–4(b) when submitting a 225.7018–2 Restriction. into an end item, subsystem, assembly, request for a class nonavailability 225.7018–3 Exceptions. or component; determination. 225.7018–4 Nonavailability determination. (2) An electronic device, unless the (1) At least 30 days before making a 225.7018–5 Contract clause. Secretary of Defense, upon the nonavailability determination that recommendation of the Strategic 225.7018 Restriction on acquisition of would apply to more than one contract, Materials Protection Board pursuant to certain magnets and tungsten. the USD(A&S) will, to the maximum 10 U.S.C. 187 determines that the extent practicable, and in a manner 225.7018–1 Definitions. domestic availability of a particular consistent with the protection of As used in this section— electronic device is critical to national national security and confidential means— Covered material security; or business information— (1) Samarium-cobalt magnets; (3) A neodymium-iron-boron magnet (2) Neodymium-iron-boron magnets; manufactured from recycled material if (i) Publish a notice on the Federal (3) Tungsten metal powder; and the milling of the recycled material and Business Opportunities website (4) Tungsten heavy alloy or any sintering of the final magnet takes place ( www.FedBizOpps.gov ) of the intent to finished or semi-finished component in the United States. make the nonavailability determination; containing tungsten heavy alloy. (d) If the authorized agency official and means— Covered country concerned, without power of (ii) Solicit information relevant to (1) The Democratic People’s Republic redelegation, determines that covered such notice from interested parties, of North Korea; materials of satisfactory quality and including producers of mill products (2) The People’s Republic of China; quantity, in the required form, cannot be from covered materials. (3) The Russian Federation; and procured as and when needed at a (4) The Islamic Republic of Iran. (2) The USD(A&S)— reasonable price from a source other than a covered country (see 225.7018– (i) Will take into consideration all 225.7018–2 Restriction. 4). information submitted in response to (a) Except as provided in 225.7018–3 the notice in making a class and 225.7018–4, do not acquire any 225.7018–4 Nonavailability determination. nonavailability determination; covered material melted or produced in Individual nonavailability (a) any covered country, or any end item, (ii) May consider other relevant (1) The following determinations. manufactured in any covered country, information that cannot be made part of officials are authorized, without power that contains a covered material (10 the public record consistent with the of redelegation, to make a U.S.C. 2533c). protection of national security nonavailability determination described (b) For samarium-cobalt magnets and information and confidential business in 225.7018–3(d) on an individual basis neodymium iron-boron magnets, this information; and ( i.e., applies to only one contract): restriction includes— (i) The Under Secretary of Defense (iii) Will ensure that any such (1) Melting samarium with cobalt to (Acquisition and Sustainment). nonavailability determination and the produce the samarium-cobalt alloy or (ii) The Secretary of the Army. rationale for the determination are made melting neodymium with iron and (iii) The Secretary of the Navy. publicly available to the maximum boron to produce the neodymium-iron- (iv) The Secretary of the Air Force. extent consistent with the protection of boron alloy; and (v) The Director of the Defense national security and confidential (2) All subsequent phases of Logistics Agency. business information. (2) The supporting documentation for production of the magnets, such as the determination shall include— powder formation, pressing, sintering or 225.7018–5 Contract clause. (i) An analysis of alternatives that bonding, and magnetization. Unless acquiring items outside the would not require a nonavailability (c) The restriction on melting and United States for use outside the United determination; and producing of samarium-cobalt magnets States or a nonavailability (ii) A written certification by the is in addition to any applicable determination has been made in requiring activity that describes, with restrictions on melting of specialty accordance with 225.7018–4, use the specificity, why such alternatives are metals at 225.7003 and the clause at clause at 252.225–7052, Restriction on unacceptable. 252.225–7009, Restriction on Acquisition of Certain Magnets and (3) Defense agencies other than the Acquisition of Certain Articles Tungsten, in solicitations and contracts, Defense Logistics Agency shall follow Containing Specialty Metals. including solicitations and contracts the procedures at PGI 225.7018–4(a)(3) 225.7018–3 Exceptions. using FAR part 12 procedures for the when submitting a request for a acquisition of commercial items, that The restriction in section 225.7018–2 nonavailability determination. exceed the simplified acquisition (4) Provide to USD(A&S) DASD does not apply to an acquisition— threshold. (a) At or below the simplified (Industrial Policy), in accordance with acquisition threshold; the procedures at PGI 225.7018– PART 252—SOLICITATION (b) Outside the United States of an 4(a)(4)— PROVISIONS AND CONTRACT (i) A copy of individual item for use outside the United States; CLAUSES nonavailability determinations with or (c) Of an end item that is— supporting documentation; and (ii) Notification when individual ■ 4. Add section 252.225–7052 to read (1) A commercially available off-the- waivers are requested, but denied. as follows: shelf item, other than— VerDate Sep<11>2014 17:09 Apr 29, 2019 Jkt 247001 PO 00000 Frm 00027 Fmt 4700 Sfmt 4700 E:\FR\FM\30APR1.SGM 30APR1 amozie on DSK9F9SC42PROD with RULES
5 18160 / Vol. 84, No. 83 / Tuesday, April 30, 2019 / Rules and Regulations Federal Register price from a source other than a covered 252.225–7052 Restriction on the final rule, except to add a reference to country. Acquisition of Certain Magnets and 10 U.S.C. 2855. Tungsten. (End of clause) II. Applicability to Contracts at or As prescribed in 225.7018–5, use the Below the Simplified Acquisition following clause: [FR Doc. 2019–08485 Filed 4–29–19; 8:45 am] Threshold and for Commercial Items, BILLING CODE 5001–06–P Restriction on the Acquisition of Certain Including Commercially Available Off- Magnets and Tungsten (APR 2019) the-Shelf Items Definitions. (a) As used in this clause— This rule does not create any new DEPARTMENT OF DEFENSE Covered material means— provisions or clauses or impact any (1) Samarium-cobalt magnets; Defense Acquisition Regulations existing provisions or clauses. (2) Neodymium-iron-boron magnets; System (3) Tungsten metal powder; and III. Executive Orders 12866 and 13563 (4) Tungsten heavy alloy or any finished or semi-finished component containing Executive Orders (E.O.s) 12866 and 48 CFR Part 219 tungsten heavy alloy. 13563 direct agencies to assess all costs [Docket DARS–2018–0056] Covered country means— and benefits of available regulatory (1) The Democratic People’s Republic of RIN 0750–AK18 alternatives and, if regulation is North Korea; necessary, to select regulatory (2) The People’s Republic of China; Defense Federal Acquisition approaches that maximize net benefits (3) The Russian Federation; and Regulation Supplement: Small (including potential economic, (4) The Islamic Republic of Iran. Business Set-Asides for Architect- environmental, public health and safety (1) Except as provided in Restriction. (b) Engineer and Construction Design paragraph (c) of this clause, the Contractor effects, distributive impacts, and Contracts (DFARS Case 2018–D057) shall not deliver under this contract any equity). E.O. 13563 emphasizes the covered material melted or produced in any importance of quantifying both costs Defense Acquisition : AGENCY covered country, or any end item, and benefits, of reducing costs, of Regulations System, Department of manufactured in any covered country, that harmonizing rules, and of promoting Defense (DoD). contains a covered material (10 U.S.C. flexibility. This is not a significant 2533c). Final rule. : ACTION regulatory action and, therefore, was not (2) For samarium-cobalt magnets and subject to review under section 6(b) of neodymium iron-boron magnets, this DoD is issuing a final rule : SUMMARY restriction includes— E.O. 12866, Regulatory Planning and amending the Defense Federal (i) Melting samarium with cobalt to Review, dated September 30, 1993. This Acquisition Regulation Supplement produce the samarium-cobalt alloy or melting rule is not a major rule under 5 U.S.C. (DFARS) to implement a section of the neodymium with iron and boron to produce 804. National Defense Authorization Act for the neodymium-iron-boron alloy; and Fiscal Year 2019 regarding set-asides for (ii) All subsequent phases of production of IV. Executive Order 13771 architect-engineer and construction the magnets, such as powder formation, This rule is not subject to E.O. 13771, design contracts. pressing, sintering or bonding, and because this rule is not a significant magnetization. DATES : Effective April 30, 2019. regulatory action under E.O. 12866. (3) The restriction on melting and : Ms. FOR FURTHER INFORMATION CONTACT producing of samarium-cobalt magnets is in V. Regulatory Flexibility Act Jennifer D. Johnson, telephone 571– addition to any applicable restrictions on 372–6100. melting of specialty metals if the clause at A final regulatory flexibility analysis 252.225–7009, Restriction on Acquisition of has been prepared consistent with the SUPPLEMENTARY INFORMATION : Certain Articles Containing Specialty Metals, Regulatory Flexibility Act, 5 U.S.C. 601, I. Background is included in the contract. et seq. The FRFA is summarized as This clause does not (c) Exceptions. DoD published a proposed rule in the follows: apply— at 83 FR 62554 on Federal Register DoD is issuing a final rule to amend (1) To an end item that is— December 4, 2018, to implement section the DFARS to implement section 2804 (i) A commercially available off-the-shelf 2804 of the National Defense of the NDAA for FY 2019. Section 2804 item, other than— Authorization Act (NDAA) for Fiscal increases to $1 million the threshold at (A) A commercially available off-the-shelf Year (FY) 2019 (Pub. L. 115–232). item that is 50 percent or more tungsten by 10 U.S.C. 2855 for small business set- weight; or Section 2804 increases to $1 million the asides of acquisitions for architect- (B) A tungsten heavy alloy mill product, threshold at 10 U.S.C. 2855 for small engineer services, including such as bar, billet, slab, wire, cube, sphere, business set-asides of acquisitions for construction design, in connection with block, blank, plate, or sheet, that had not architect-engineer services, including military construction projects or been incorporated into an end item, construction design, in connection with military family housing projects. In subsystem, assembly, or component; military construction projects or addition, section 2804 removes the (ii) An electronic device, unless otherwise military family housing projects. In prohibition on setting aside these specified in the contract; or addition, section 2804 removes the acquisitions valued above the threshold. (iii) A neodymium-iron-boron magnet prohibition on setting aside these manufactured from recycled material if the As a result of these statutory changes, milling of the recycled material and sintering acquisitions valued above the threshold. these acquisitions must be set aside for of the final magnet takes place in the United As a result of these statutory changes, small business, if valued below $1 States. these acquisitions must be set aside for million, and may be set aside for small (2) If the authorized agency official small business, if valued below $1 business, if valued at $1 million or concerned has made a nonavailability million, and may be set aside for small more. determination, in accordance with section business, if valued at $1 million or No public comments were received in 225.7018–4 of the Defense Federal more. response to the initial regulatory Acquisition Regulation Supplement, that There were no public comments flexibility analysis. covered materials of satisfactory quality and The rule applies to contract awards submitted in response to the proposed quantity, in the required form, cannot be procured as and when needed at a reasonable for architect-engineer services, rule. There are no changes made to the VerDate Sep<11>2014 17:09 Apr 29, 2019 Jkt 247001 PO 00000 Frm 00028 Fmt 4700 Sfmt 4700 E:\FR\FM\30APR1.SGM 30APR1 amozie on DSK9F9SC42PROD with RULES