[Federal Register Volume 71, Number 243 (Tuesday, December 19, 2006)]
[Rules and Regulations]
[Pages 75893-75894]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: E6-21511]
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DEPARTMENT OF DEFENSE
Defense Acquisition Regulations System
48 CFR Parts 225 and 252
RIN 0750-AF17
Defense Federal Acquisition Regulation Supplement; Restriction on
Carbon, Alloy, and Armor Steel Plate (DFARS Case 2005-D002)
AGENCY: Defense Acquisition Regulations System, Department of Defense
(DoD).
ACTION: Final rule.
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SUMMARY: DoD has issued a final rule amending the Defense Federal
Acquisition Regulation Supplement (DFARS) to clarify the restriction on
the acquisition of foreign carbon, alloy, or armor steel plate. The
restriction implements provisions of annual DoD appropriations acts.
DATES: Effective Date: December 19, 2006.
FOR FURTHER INFORMATION CONTACT: Ms. Amy Williams, Defense Acquisition
Regulations System, OUSD (AT&L) DPAP (DARS), IMD 3C132, 3062 Defense
Pentagon, Washington, DC 20301-3062. Telephone (703) 602-0328;
facsimile (703) 602-0350. Please cite DFARS Case 2005-D002.
SUPPLEMENTARY INFORMATION:
A. Background
Section 8111 of the Fiscal Year 1992 DoD Appropriations Act (Pub.
L. 102-172) and similar sections in subsequent DoD Appropriations Acts
(the most recent being Section 8024 of Pub. L. 109-289) contain a
restriction on the acquisition of carbon, alloy, or armor steel plate,
that is not melted and rolled in the United States or Canada, for use
in any Government-owned facility or property under the control of the
Department of Defense. This restriction is implemented in the DFARS at
225.7011-1 through 225.7011-3 and in the corresponding contract clause
at 252.225-7030.
DoD published a proposed rule at 70 FR 73189 on December 9, 2005,
to clarify the applicability of the restriction. Two respondents
provided comments on the proposed rule. One of the respondents
applauded DoD's initiative to clarify the restriction and recommended
adoption of the rule as proposed. The other respondent raised two
issues regarding the proposed rule. A discussion of these issues is
provided below.
1. Property under the control of DoD. The respondent interpreted
the statutory phrase ``property under the control of the Department of
Defense'' to mean personal property as well as real property, and
recommended amendment of the rule to reflect this interpretation.
DoD has not adopted this recommendation, as DoD believes that
limitation of the restriction to real property is consistent with the
statutory provisions; and that, if the statutory phrase ``for use in
any * * * property under the control of the Department of Defense''
were intended to include all personal property controlled by DoD, the
words of the statute ``for use in any Government-owned facility'' would
be without added meaning. The current interpretation of the statute has
been in use since 1992 without objection.
2. Use as a raw material. The respondent stated that the rule's
limitation of the restriction to plate used as a ``raw material'' sets
a limitation that does not appear in the statute. In addition, the
respondent stated that carbon, alloy, and armor steel plate is not a
``raw material''; it is a finished steel mill product that can be used
``as is'' in certain applications or as an intermediate material for
the fabrication of other products. Therefore, the respondent
recommended that the phrase ``as a raw material'' be removed from the
rule.
DoD notes that the phrase ``as a raw material'' has been in the
clause at 252.225-7030 since 1992 without objection. The phrase was
added to the clause as a result of a public comment submitted by an
industry association in response to the interim rule published
[[Page 75894]]
at 57 FR 14988 on April 23, 1992 (Defense Acquisition Circular 91-2,
Item XI). The industry association did not believe that the statute was
intended to apply to end items (hardware) delivered to the Government
and used in Government facilities. The association recommended revision
of the prescriptive language to require application of the clause to
only those contracts for the direct acquisition of carbon, alloy, or
armor steel plate. As a result, the final rule published at 57 FR 53596
on November 12, 1992 (Defense Acquisition Circular 91-4, Item XI),
required application of the clause to carbon, alloy, and armor steel
plate furnished as a deliverable under the contract or purchased by the
contractor as a raw material. The statutory language addressing use of
the plate in a Government-owned facility or property under the control
of DoD expresses an intent not to apply the restriction to the
manufacture of items in the plants of commercial contractors. For
example, the restriction should not apply if a contractor acquires a
machine tool for use in a Government-owned facility, if the machine
tool is manufactured by another contractor in a facility that is not
Government-owned. DoD has amended the rule to make this concept
clearer, without use of the term ``raw material''.
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 certifies that this final rule will not 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 clarifies existing policy regarding the statutory
restriction on the acquisition of foreign carbon, alloy, or armor steel
plate.
C. Paperwork Reduction Act
The Paperwork Reduction Act does not apply, because the rule does
not impose any information collection requirements that require the
approval of the Office of Management and Budget under 44 U.S.C. 3501,
et seq.
List of Subjects in 48 CFR Parts 225 and 252
Government procurement.
Michele P. Peterson,
Editor, Defense Acquisition Regulations System.
0
Therefore, 48 CFR parts 225 and 252 are amended as follows:
0
1. The authority citation for 48 CFR parts 225 and 252 continues to
read as follows:
Authority: 41 U.S.C. 421 and 48 CFR Chapter 1.
PART 225--FOREIGN ACQUISITION
0
2. Section 225.7011-1 is revised to read as follows:
225.7011-1 Restriction.
(a) In accordance with Section 8111 of the Fiscal Year 1992 DoD
Appropriations Act (Pub. L. 102-172) and similar sections in subsequent
DoD appropriations acts, do not acquire any of the following types of
carbon, alloy, or armor steel plate for use in a Government-owned
facility or a facility under the control of (e.g., leased by) DoD,
unless it is melted and rolled in the United States or Canada:
(1) Carbon, alloy, or armor steel plate in Federal Supply Class
9515.
(2) Carbon, alloy, or armor steel plate described by specifications
of the American Society for Testing Materials or the American Iron and
Steel Institute.
(b) This restriction--
(1) Applies to the acquisition of carbon, alloy, or armor steel
plate as a finished steel mill product that may be used ``as is'' or
may be used as an intermediate material for the fabrication of an end
product; and
(2) Does not apply to the acquisition of an end product (e.g., a
machine tool), to be used in the facility, that contains carbon, alloy,
or armor steel plate as a component.
0
3. Section 225.7011-3 is amended by revising paragraph (a) to read as
follows:
225.7011-3 Contract clause.
* * * * *
(a) Require the delivery to the Government of carbon, alloy, or
armor steel plate that will be used in a Government-owned facility or a
facility under the control of DoD; or
* * * * *
PART 252--SOLICITATION PROVISIONS AND CONTRACT CLAUSES
0
4. Section 252.225-7030 is revised to read as follows:
252.225-7030 Restriction on Acquisition of Carbon, Alloy, and Armor
Steel Plate.
As prescribed in 225.7011-3, use the following clause:
Restriction on Acquisition of Carbon, Alloy, and Armor Steel Plate (DEC
2006)
(a) Carbon, alloy, and armor steel plate shall be melted and rolled
in the United States or Canada if the carbon, alloy, or armor steel
plate--
(1) Is in Federal Supply Class 9515 or is described by
specifications of the American Society for Testing Materials or the
American Iron and Steel Institute; and
(2)(i) Will be delivered to the Government for use in a Government-
owned facility or a facility under the control of the Department of
Defense; or
(ii) Will be purchased by the Contractor for use in a Government-
owned facility or a facility under the control of the Department of
Defense.
(b) This restriction--
(1) Applies to the acquisition of carbon, alloy, or armor steel
plate as a finished steel mill product that may be used ``as is'' or
may be used as an intermediate material for the fabrication of an end
product; and
(2) Does not apply to the acquisition of an end product (e.g., a
machine tool), to be used in the facility, that contains carbon, alloy,
or armor steel plate as a component.
(End of clause)
[FR Doc. E6-21511 Filed 12-18-06; 8:45 am]
BILLING CODE 5001-08-P