[Federal Register Volume 75, Number 118 (Monday, June 21, 2010)]
[Rules and Regulations]
[Pages 34943-34946]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2010-14937]
-----------------------------------------------------------------------
DEPARTMENT OF DEFENSE
Defense Acquisition Regulations System
48 CFR Parts 225 and 252
[DFARS Case 2008-D024]
RIN 0750-AG13
Defense Federal Acquisition Regulation Supplement; Para-Aramid
Fibers and Yarns Manufactured in a Qualifying Country
AGENCY: Defense Acquisition Regulations System, Department of Defense
(DoD).
ACTION: Final rule.
-----------------------------------------------------------------------
SUMMARY: DoD is adopting as final, with changes, the interim rule
amending the Defense Federal Acquisition Regulation Supplement (DFARS)
to implement determinations made by the Under Secretary of Defense for
Acquisition, Technology, and Logistics with regard to the acquisition
of items containing para-aramid fibers and yarns manufactured in
foreign countries that have entered into a reciprocal defense
procurement memorandum of understanding with the United States.
DATES: Effective Date: June 21, 2010.
FOR FURTHER INFORMATION CONTACT: Ms. Amy Williams, 703-602-0310.
SUPPLEMENTARY INFORMATION:
A. Background
DoD published an interim rule in the Federal Register on December
18, 2008 (73 FR 76970). The comment period closed on February 17, 2009.
10 U.S.C. 2533a restricts DoD procurement of foreign synthetic
fabric or coated synthetic fabric, including textiles, fibers, and
yarns for use in such fabrics. Section 807 of the National Defense
Authorization Act for Fiscal Year 1999 (Pub. L. 105-261) provides
authority for DoD to waive the restriction at 10 U.S.C. 2533a with
regard to para-aramid fibers and yarns. On February 12, 1999, the Under
Secretary of Defense for Acquisition and Technology (USD(AT&L)) waived
the restriction at 10 U.S.C. 2533a for para-aramid fibers and yarns
manufactured in the Netherlands. On August 15, 2008, the USD(AT&L)
expanded the existing waiver to permit the acquisition of para-aramid
fibers and yarns manufactured in any qualifying country listed in DFARS
225.003(10).
The interim rule also clarified the definition of ``qualifying
countries'' at DFARS 225.003 and 252.225-7012 by including a list of
the qualifying countries within the definition instead of referring to
the list at DFARS 225.872-1.
DoD received comments on the interim rule from nine respondents.
Based on public comments, changes were made to the interim rule. The
differences between the interim rule and this final rule include--
Restricting the authority to acquire para-aramid fibers
and yarns manufactured in a qualifying country to apply to para-aramid
fibers (both staple and continuous) and continuous filament para-aramid
yarns, based on a new USD(AT&L) determination and findings, dated
November 9, 2009, which contains a five year review requirement.
Amplifying the definition of ``qualifying country'' to
make clear that these are countries with which DoD has negotiated
reciprocal defense procurement memoranda of understanding.
B. Public Comments
The following is a discussion of the comments and the changes
included in this final rule as a result of those comments:
[[Page 34944]]
1. Limit the Rule to Staple Para-Aramid Fibers and Continuous Filament
Para-Aramid Yarns
Two respondents opposed the interim rule acceptance of para-aramid
yarns other than continuous filament yarns from any qualifying country
(not just the Netherlands) because they believe it will increase
competition from yarn producers outside the United States. They do not
want the interim rule to apply to ``yarns spun from staple para-aramid
fibers.'' They believe the rule should only apply to staple para-aramid
fibers and continuous filament para-aramid yarns.
Response: The respondents' rationale is that section 807 says that
DoD may only procure articles containing para-aramid fibers and yarns
manufactured in a qualifying country if--
Procuring articles containing para-aramid fibers and yarns
manufactured from suppliers in the national technology industrial base
(U.S. & Canada) would result in sole source contracts or subcontracts;
and
To do so would not be in the best interests of the
Government.
DoD's 1999 Findings of Fact stated that DuPont is the sole
manufacturer of para-aramid (continuous and staple) fiber in the United
States and Canada. This is a correct statement. Therefore, the request
by the respondents to limit this rule to staple para-aramid fiber is
unfounded.
However, the Findings also stated that DuPont is the sole producer
of para-aramid yarn. DuPont is the sole producer of continuous filament
para-aramid yarn, but it does not produce within the U.S. yarns made
from staple para-aramid fiber. DoD has now identified 72 yarn producers
in the U.S. and Canada, and three of these advertise that they produce
yarn products made from DuPont Kevlar. DuPont supplies its Kevlar
staple fiber to four major and six minor yarn producers in the U.S. and
Canada, and it believes that there are several dozen more companies in
Europe who produce yarn of this type.
Therefore, the Under Secretary of Defense (AT&L) issued on November
9, 2009, a revised determination and findings that limits the findings
to staple and continuous para-aramid fibers and continuous filament
para-aramid yarn. The final rule has been revised accordingly.
2. Review in Five Years To Establish Continued National Defense Need
One respondent commented that this exception should be reviewed in
five years and extended only if needed for national defense purposes.
Another respondent notes that DuPont is in the process of building a
new plant in South Carolina and that this would boost the availability
of these products in the U.S.
Response: DoD concurs. The request from industry that precipitated
the USD (AT&L)'s determination to waive the restriction for all
qualifying countries was based on DoD's immediate and increasing need
for ballistic strength fiber in support of MRAP, ballistic armor, and
other defense requirements in support of the Global War on Terror. It
is reasonable to assume that this need will continue for at least five
years, but a review at that time is a good idea. This requirement has
been included in the new determination and findings.
3. Detrimental to U.S. Manufacturing Base
Several respondents opposed this rule on the basis that it would be
detrimental to the U.S. textile manufacturing base.
One respondent was concerned about negative impact on spinners,
knitters, weavers, finishers, and garment makers in the supply chain.
Another respondent expressed concern over more foreign imports, when
the jobs are so desperately needed in our own country (see also
discussion of Regulatory Flexibility at paragraph 6). A third
respondent referred to detrimental impact on the textile manufacturing
base. He cited the exodus of textile manufacturing from the United
States for decades and stated that the textile manufacturing that
remains has moved into high performance and niche specialty areas. This
respondent stated that by allowing items containing these fibers and
the importation of yarns to move forward will continue to erode the
U.S. textile manufacturing base.
Response: There are only two companies in the United States or a
qualifying country that make para-aramid fibers and continuous filament
para-aramid yarns: DuPontTM which makes Kevlar[supreg], and
the Teijin Group which makes Twaron. DuPontTM is the sole
producer of these items in the United States. Therefore, this rule,
when amended to exclude yarn produced from staple para-aramid fibers,
will not deprive any U.S. companies of business.
The concern for the well-being of the textile industry, including
knitters, weavers, finishers, and garment makers, is misplaced. This
rule does not allow acquisition of items containing para-aramid fibers
and continuous filament yarns from qualifying countries, but only the
fibers and yarns (see DFARS 225.7002-2(m)).
4. Domestic Para-Aramid Sewing Thread May Be of Lower Quality
One respondent fully supported the interim rule and recommended
that it should be made permanent. The respondent cited an experience
with the specification to use para-aramid thread that was heavier and
weaker than the commercial thread that was used in the commercial
marketplace, in order to comply with the domestic source restriction.
Response: The Berry Amendment does not require the use of domestic
fibers at the expense of satisfactory quality. There is an exception
that can be applied if domestic products of a satisfactory quality are
not available.
5. Need To Expand the Nations From Which Fiber Can Be Procured
One respondent proposed we add other friendly nations of quality
ballistic fiber, such as Japan and India, to the list of nations from
which these fibers can be procured.
Response: The authority provided to DoD in section 807 of the
National Defense Authorization Act for Fiscal Year 1999 (Pub. L. 105-
261) specifically applies only to foreign countries that are a party to
a reciprocal defense procurement memorandum of understanding (MOU)
entered into under section 2531 of title 10 of the United States Code
and that permits United States firms that manufacture para-aramid
fibers and yarns to compete with foreign firms for the sale of para-
aramid fibers and yarns in that country, as determined by the Secretary
of Defense. Section 2531 begins as follows:
(a) Considerations in Making and Implementing MOUs and Related
Agreements. In the negotiation, renegotiation, and implementation of
any existing or proposed memorandum of understanding, or any existing
or proposed agreement related to a memorandum of understanding, between
the Secretary of Defense, acting on behalf of the United States, and
one or more foreign countries (or any instrumentality of a foreign
country) relating to research, development, or production of defense
equipment, or to the reciprocal procurement of defense items, the
Secretary of Defense shall--
(1) Consider the effects of such existing or proposed memorandum of
understanding or related agreement on the defense technology and
industrial base of the United States; and
(2) Regularly solicit and consider comments and recommendations
from the Secretary of Commerce with respect to the commercial
implications of such memorandum of understanding or
[[Page 34945]]
related agreement and the potential effects of such memorandum of
understanding or related agreement on the international competitive
position of United States industry.
Under the authority of 10 U.S.C. 2531, DoD has negotiated
reciprocal defense procurement (RDP) MOUs with ``qualifying''
countries. These RDP MOU partners have committed to remove barriers to
purchases of supplies produced in the other country or services
performed by sources in the other country. The qualifying countries
listed at DFARS 225.003(10) are the countries with which DoD has
reciprocal defense procurement MOUs. DoD has not negotiated reciprocal
defense procurement MOUs with Japan or India.
6. Regulatory Flexibility Analysis
One respondent commented on the statement with regard to regulatory
flexibility analysis that small entities normally are not involved in
the production of para-aramid fibers and yarns. The respondent stated
that there are many small entities involved in the weaving and
production of para-aramid fabrics and that it would be devastating to
the textile industry to expand the rule to cover the import of woven
fabric or finished products.
Response: Since the rule does not cover the import of woven fabric
or finished products, but addresses only fibers and yarns, this
statement does not affect the requirement for a regulatory flexibility
analysis. The reinstated requirement for domestic manufacture of yarn
from staple para-aramid fiber removes any possible impact on domestic
small entities.
7. Clarify the Definition of ``Qualifying Country''
One respondent stated that the interim rule insufficiently defined
``qualifying country.'' Alternate language was provided to expand this
definition:
``Qualifying country'' means a country with a memorandum of
understanding or international agreement with the United States in
which both agree to remove barriers to purchases of supplies produced
in the other country or services performed by sources of the other
country, and the memorandum or agreement complies, where applicable,
with the requirements of section 36 of the Arms Export Control Act (22
U.S.C. 2776) and with 10 U.S.C. 2457.
Response: DoD has adopted the expanded definition.
8. Outside Scope of Case
a. One respondent recommends that DoD should also exempt meta-
aramid fibers from qualifying countries.
Response: This comment is outside the scope of this case. The law
which DoD is implementing only authorizes the exceptions for para-
aramid fibers.
b. One respondent has comments regarding other changes to the
clause at DFARS 252.212-7001.
Response: These comments relate to DFARS Case 2008-D002 and have
been considered under that case.
This rule was subject to Office of Management and Budget review
under Executive Order 12866, dated September 30, 1993. This rule is not
a major rule under 5 U.S.C. 804.
C. Regulatory Flexibility Act
DoD certifies that this 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 there
are no small entities in the United States that can produce para-aramid
fibers or continuous filament para-aramid yarns. The impact on spinners
of para-aramid yarn other than continuous filament yarn has been
removed by the change to the final rule.
D. 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
Ynette R. Shelkin,
Editor, Defense Acquisition Regulations System.
0
Accordingly, the interim rule amending 48 CFR parts 225 and 252, which
was published at 73 FR 76970 on December 18, 2008, is adopted as a
final rule with the following changes:
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 225.003 is amended by revising the introductory text of
paragraph (10) to read as follows:
225.003 Definitions.
* * * * *
(10) Qualifying country means a country with a reciprocal defense
procurement memorandum of understanding or international agreement with
the United States in which both countries agree to remove barriers to
purchases of supplies produced in the other country or services
performed by sources of the other country, and the memorandum or
agreement complies, where applicable, with the requirements of section
36 of the Arms Export Control Act (22 U.S.C. 2776) and with 10 U.S.C.
2457. Accordingly, the following are qualifying countries:
* * * * *
0
3. Section 225.7002-2 is amended by revising paragraph (m)(2) to read
as follows:
225.7002-2 Exceptions.
* * * * *
(m) * * *
(2) The fibers and yarns are para-aramid fibers and continuous
filament para-aramid yarns manufactured in a qualifying country.
* * * * *
PART 252--SOLICITATION PROVISIONS AND CONTRACT CLAUSES
0
4. Section 252.212-7001 is amended by revising the clause date and
revising paragraph (b)(8) to read as follows:
252.212-7001 Contract terms and conditions required to implement
statutes or Executive orders applicable to Defense acquisitions of
commercial items.
* * * * *
CONTRACT TERMS AND CONDITIONS REQUIRED TO IMPLEMENT STATUTES OR
EXECUTIVE ORDERS APPLICABLE TO DEFENSE ACQUISITIONS OF COMMERCIAL ITEMS
(JUN 2010)
* * * * *
(b) * * *
(8) ------------ 252.225-7012, Preference for Certain Domestic
Commodities (JUN 2010) (10 U.S.C. 2533a).
* * * * *
0
5. Section 252.225-7012 is amended by revising the clause date;
revising the introductory text of paragraph (a)(3); and revising
paragraph (c)(6)(ii) to read as follows:
252.225-7012 Preference for certain domestic commodities.
* * * * *
PREFERENCE FOR CERTAIN DOMESTIC COMMODITIES (JUN 2010)
(a) * * *
[[Page 34946]]
(3) Qualifying country means a country with a reciprocal defense
procurement memorandum of understanding or international agreement with
the United States in which both countries agree to remove barriers to
purchases of supplies produced in the other country or services
performed by sources of the other country, and the memorandum or
agreement complies, where applicable, with the requirements of section
36 of the Arms Export Control Act (22 U.S.C. 2776) and with 10 U.S.C.
2457. Accordingly, the following are qualifying countries:
* * * * *
(c) * * *
(6) * * *
(ii) The fibers and yarns are para-aramid fibers and continuous
filament para-aramid yarns manufactured in a qualifying country.
* * * * *
[FR Doc. 2010-14937 Filed 6-18-10; 8:45 am]
BILLING CODE 5001-08-P