[Federal Register Volume 59, Number 248 (Wednesday, December 28, 1994)]
[Unknown Section]
[Page ]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 94-30645]


[Federal Register: December 28, 1994]


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DEPARTMENT OF DEFENSE
DEPARTMENT OF DEFENSE

GENERAL SERVICES ADMINISTRATION

NATIONAL AERONAUTICS AND SPACE ADMINISTRATION

48 CFR Parts 34 and 52

[FAC 90-23; FAR Case 93-304; Item XXIV]
RIN 9000-AG11


Federal Acquisition Regulation; Defense Production Act Amendments

AGENCIES: Department of Defense (DOD), General Services Administration 
(GSA), and National Aeronautics and Space Administration (NASA).

ACTION: Interim rule with request for comment.

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SUMMARY: The Civilian Agency Acquisition Council and the Defense 
Acquisition Regulations Council have agreed to an interim rule amending 
the Federal Acquisition Regulation (FAR) to add policy and procedures 
for testing and qualification of industrial resources developed under 
Title III, Defense Production Act Amendments of 1992 (Public Law 102-
558). This regulatory action was not subject to Office of Management 
and Budget review under Executive Order 12866, dated September 30, 
1993.

DATES: Effective Date: December 28, 1994.

    Comment Date: Comments should be submitted to the FAR Secretariat 
at the address shown below on or before February 27, 1995, to be 
considered in the formulation of a final rule.

ADDRESSES: Interested parties should submit written comments to: 
General Services Administration, FAR Secretariat (VRS), 18th & F 
Streets, NW., Room 4035, Attn: Ms. Beverly Fayson, Washington, DC 
20405.
    Please cite FAC 90-23, FAR case 93-304 in all correspondence 
related to this case.

FOR FURTHER INFORMATION CONTACT: Mr. Jack O'Neill at (202) 501-3856 in 
reference to this FAR case. For general information, contact the FAR 
Secretariat, Room 4037, GS Building, Washington, DC 20405, (202) 501-
4755. Please cite FAC 90-23, FAR case 93-304.

SUPPLEMENTARY INFORMATION:

A. Background

    Title III of the Defense Production Act (DPA) of 1950 authorizes 
various forms of Government assistance to encourage expansion of 
production capacity and supply of industrial resources essential to 
national defense. The DPA Amendments of 1992 provide for the testing, 
qualification, and use of industrial resources manufactured or 
developed with assistance provided under Title III of the DPA. This 
interim rule expresses Government policy to pay for such testing, and 
provides definitions, procedures, and a contract clause to implement 
the policy.

B. Regulatory Flexibility Act

    The addition of FAR Subpart 34.1 may 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 small 
entities are sometimes asked to perform the qualification testing 
required under the rule.
    An Initial Regulatory Flexibility Analysis has been prepared and is 
summarized as follows:

    The change is required to implement amendments to the Defense 
Production Act of 1950 made by Public Law 102-558. This rule 
clarifies the Government policy to pay for testing of industrial 
resources manufactured or developed with assistance provided under 
Title III of the Defense Production Act. The rule will apply to any 
small entity that has Government contracts that require 
qualification testing under the Act. A reporting requirement is in 
the rule that requires contractors who perform this testing to 
provide the test results to the Government. The rule does not 
duplicate, overlap, or conflict with other existing Federal rules 
and there are no significant alternatives to it.

    A copy of the IRFA may be obtained from the FAR Secretariat. 
Comments from small entities concerning the affected FAR subpart will 
be considered in accordance with 5 U.S.C. 610. Such comments must be 
submitted separately and cite FAR case 93-610 in correspondence.

C. Paperwork Reduction Act

    The Paperwork Reduction Act (Pub. L. 96-511) is deemed to apply 
because the final rule contains information collection requirements. 
Accordingly, a request for approval of a new information collection 
requirement concerning 9000-0133, Defense Production Act Amendments, 
was submitted to the Office of Management and Budget under 44 U.S.C. 
3501, et seq and approved through September 30, 1997. Public comments 
concerning this request were invited through a subsequent Federal 
Register notice published at 59 FR 42823, August 19, 1994.

D. Determination to Issue an Interim Rule

    A determination has been made under the authority of the Secretary 
of Defense (DOD), the Administrator of General Services (GSA), and the 
Administrator of the National Aeronautics and Space Administration 
(NASA) that compelling reasons exist to promulgate this interim rule 
without prior opportunity for public comment. This action is necessary 
because the Defense Production Act Amendments of 1992 (Pub. L. 102-558) 
require implementation by July 26, 1993. However, pursuant to Public 
Law 98-577 and Federal Acquisition Regulation 1.501, public comments 
received in response to this interim rule will be considered in 
formulating the final rule.

List of Subjects in 48 CFR Parts 34 and 52

    Government procurement.

    Dated: December 7, 1994.
Albert A. Vicchiolla,
Director, Office of Federal Acquisition Policy.

    Therefore, 48 CFR parts 34 and 52 are amended as set forth below:
    1. The authority citation for 48 CFR parts 34 and 52 continues to 
read as follows:

    Authority: 40 U.S.C. 486(c); 10 U.S.C. chapter 137; and 42 
U.S.C. 2473(c).

PART 34--MAJOR SYSTEM ACQUISITION

    2. The subpart heading ``34.0--General'' is added immediately above 
section 34.000.
    3. Part 34 is amended by adding Subpart 34.1 to read as follows:
Subpart 34.1--Testing, Qualification and Use of Industrial Resources 
Developed Under Title III, Defense Production Act
Sec.
34.100  Scope of subpart.
34.101  Definitions.
34.102  Policy.
34.103  Testing and qualification.
34.104  Contract clause.
Subpart 34.1--Testing, Qualification and Use of Industrial Resources 
Developed Under Title III, Defense Production Act


Sec. 34.100  Scope of subpart.

    This subpart prescribes policies and procedures for the testing, 
qualification, and use of industrial resources manufactured or 
developed with assistance provided under section 301, 302, or 303 of 
the Defense Production Act (50 U.S.C. App. 2091-2093). Title III of the 
Defense Production Act authorizes various forms of Government 
assistance to encourage expansion of production capacity and supply of 
industrial resources essential to national defense.


Sec. 34.101  Definitions.

    Item of supply, for the purpose of this subpart, means any 
individual part, component, subassembly, assembly, or subsystem 
integral to a major system, and other property which may be replaced 
during the service life of the system. The term includes spare parts 
and replenishment parts, but does not include packaging or labeling 
associated with shipment or identification of an ``item.''


Sec. 34.102  Policy.

    It is the policy of the Government, as required by section 126 of 
Public Law 102-558, to pay for any testing and qualification required 
for the use or incorporation of the industrial resources manufactured 
or developed with assistance provided under Title III of the Defense 
Production Act of 1950.


Sec. 34.103  Testing and qualification.

    (a) Contractors receiving requests from a Title III project 
contractor for testing and qualification of a Title III industrial 
resource shall refer such requests to the contracting officer. The 
contracting officer shall evaluate the request in accordance with 
agency procedures to determine whether: (1) the Title III industrial 
resource is being or potentially may be used in the development or 
manufacture of a major system or item of supply; and (2) for major 
systems in production, remaining quantities to be acquired are 
sufficient to justify incurring the cost of testing and qualification. 
In evaluating this request, the contracting officer shall consult with 
the Defense Production Act Office, Title III Program, located at Wright 
Patterson Air Force Base, Ohio 45433-7739.
    (b) If the determination at 34.103(a) is affirmative, the 
contracting officer shall modify the contract to require the contractor 
to test the Title III industrial resource for qualification.
    (c) The Defense Production Act Office, Title III Program, shall 
provide to the contractor the industrial resource produced by the Title 
III project contractor in sufficient amounts to meet testing needs.


Sec. 34.104  Contract clause.

    Insert the clause at 52.234-1, Industrial Resources Developed under 
Defense Production Act, Title III, in all contracts for major systems 
and items of supply.

PART 52--SOLICITATION PROVISIONS AND CONTRACT CLAUSES

    4. Section 52.234-1 is added to read as follows:


52.234-1  Industrial Resources Developed Under Defense Production Act 
Title III.

    As prescribed at 34.104, insert the following clause:
Industrial Resources Developed Under Defense Production Act Title III 
(Feb. 1995)
    (a) Definitions.
    Title III industrial resource means materials, services, 
processes, or manufacturing equipment (including the processes, 
technologies, and ancillary services for the use of such equipment) 
established or maintained under the authority of Title III, Defense 
Production Act (50 U.S.C. App. 2091-2093).
    Title III project contractor means a Contractor that has 
received assistance for the development or manufacture of an 
industrial resource under 50 U.S.C. App. 2091-2093, Defense 
Production Act.
    (b) The Contractor shall refer any request from a Title III 
project contractor for testing and qualification of a Title III 
industrial resource to the Contracting Officer.
    (c) Upon the direction of the Contracting Officer, the 
Contractor shall test Title III industrial resources for 
qualification. The Contractor shall provide the test results to the 
Defense Production Act Office, Title III Program, located at Wright 
Patterson Air Force Base, Ohio 45433-7739.
    (d) When the Contracting Officer modifies the contract to direct 
testing pursuant to this clause, the Government will provide the 
Title III industrial resource to be tested and will make an 
equitable adjustment in the contract for the costs of testing and 
qualification of the Title III industrial resource.
    (e) The Contractor agrees to insert the substance of this 
clause, including paragraph (e), in every subcontract issued in 
performance of this contract.

(End of clause)

[FR Doc. 94-30645 Filed 12-27-94; 8:45 am]
BILLING CODE 6820-34-P