[Federal Register Volume 69, Number 35 (Monday, February 23, 2004)]
[Proposed Rules]
[Pages 8151-8152]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 04-3706]
-----------------------------------------------------------------------
DEPARTMENT OF DEFENSE
48 CFR Part 212
[DFARS Case 2003-D018]
Defense Federal Acquisition Regulation Supplement; Laws
Inapplicable to Commercial Subcontracts
AGENCY: Department of Defense (DoD).
ACTION: Proposed rule with request for comments.
-----------------------------------------------------------------------
SUMMARY: DoD is proposing to amend the Defense Federal Acquisition
Regulation Supplement (DFARS) to remove the Trade Agreements Act and
the Buy American Act from the list of laws inapplicable to subcontracts
for commercial items. This proposed rule is a result of a
transformation initiative undertaken by DoD to dramatically change the
purpose and content of the DFARS.
DATES: Comments on the proposed rule should be submitted in writing to
the address shown below on or before April 23, 2004, to be considered
in the formation of the final rule.
ADDRESSES: Respondents may submit comments via the Internet at http://emissary.acq.osd.mil/dar/dfars.nsf/pubcomm. As an alternative,
respondents may e-mail comments to: [email protected]. Please cite DFARS
Case 2003-D018 in the subject line of e-mailed comments.
Respondents that cannot submit comments using either of the above
methods may submit comments to: Defense Acquisition Regulations
Council, Attn: Ms. Amy Williams, OUSD(AT&L)DPAP(DAR), IMD 3C132, 3062
Defense Pentagon, Washington, DC 20301-3062; facsimile (703) 602-0350.
Please cite DFARS Case 2003-D018.
At the end of the comment period, interested parties may view
public comments on the Internet at http://emissary.acq.osd.mil/dar/dfars.nsf.
FOR FURTHER INFORMATION CONTACT: Ms. Amy Williams, (703) 602-0328.
SUPPLEMENTARY INFORMATION:
A. Background
DFARS Transformation is a major DoD initiative to dramatically
change the purpose and content of the DFARS. The objective is to
improve the efficiency and effectiveness of the acquisition process,
while allowing the acquisition workforce the flexibility to innovate.
The transformed DFARS will contain only requirements of law, DoD-wide
policies, delegations of FAR authorities, deviations from FAR
requirements, and policies/procedures that have a significant effect
beyond the internal operating procedures of DoD or a significant cost
or administrative impact on contractors or offerors. Additional
information on the DFARS Transformation initiative is available at
http://www.acq.osd.mil/dp/dars/transf.htm.
This proposed rule is a result of the DFARS Transformation
initiative. The proposed changes amend DFARS 212.504 to remove the
Trade Agreements Act (19 U.S.C. 2512) and the Buy American Act (41
U.S.C. 10) from the list of laws inapplicable to subcontracts for the
acquisition of commercial items. Inclusion of these laws on the list is
unnecessary, because the Government does not apply the restrictions of
the Buy American Act or the Trade Agreements Act at the subcontract
level. The prime contractor is responsible for providing an end product
that meets the requirements of the Acts. The Trade Agreements Act
imposes no requirements as to the origin of components. Although the
Buy American Act requires that the cost of domestic components exceed
50 percent of the cost of all components, the subcontracts for the
components themselves need not comply with the Buy American Act. The
domestic components need only to have been manufactured in the United
States, without themselves satisfying a component test.
In some cases, inclusion of the Buy American Act on the list of
laws inapplicable to subcontracts for commercial items has been
misinterpreted to mean that commercial components do not count in the
calculation of whether domestic components exceed 50 percent of the
value of the components of an end item. This is an erroneous
interpretation, because the prime contractor must still comply with the
Buy American Act when using commercial components. In addition,
inclusion of the Buy American Act and the Trade Agreements Act on the
list has been misinterpreted to mean that the prime contractor need not
comply with the Acts for subcontracted end items. This is also
erroneous because, in accordance with FAR 12.501, waiver of the Buy
American Act or the Trade Agreements Act is not applicable if the prime
contractor is reselling or distributing commercial items of another
contractor without adding value.
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 does not expect this rule to have a significant economic impact
on a substantial number of small entities within the meaning of the
Regulatory Flexibility Act, 5 U.S.C. 601, et seq., because the rule is
a clarification of the Government's existing policy of not applying the
Buy American Act or the Trade Agreements Act at the subcontract level.
Therefore, DoD has not performed an initial regulatory flexibility
analysis. DoD invites comments from small businesses and other
interested parties. DoD also will consider comments from small entities
concerning the affected DFARS subpart in accordance with 5 U.S.C. 610.
Such comments should be submitted separately and should cite DFARS Case
2003-D018.
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 Part 212
Government procurement.
Michele P. Peterson,
Executive Editor, Defense Acquisition Regulations Council.
Therefore, DoD proposes to amend 48 CFR Part 212 as follows:
1. The authority citation for 48 CFR Part 212 continues to read as
follows:
[[Page 8152]]
Authority: 41 U.S.C. 421 and 48 CFR Chapter 1.
PART 212--ACQUISITION OF COMMERCIAL ITEMS
212.504 [Amended]
2. Section 212.504 is amended by removing paragraphs (a)(xxiii) and
(a)(xxiv) and redesignating paragraph (a)(xxv) as paragraph (a)(xxiii).
[FR Doc. 04-3706 Filed 2-20-04; 8:45 am]
BILLING CODE 5001-08-P