[Federal Register Volume 62, Number 12 (Friday, January 17, 1997)]
[Rules and Regulations]
[Pages 2856-2857]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 97-1041]



[[Page 2855]]

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Part IV





Department of Defense





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48 CFR Parts 225, 236, and 252



Defense Federal Acquisition Regulation Supplement; Preference for U.S. 
Firms on MILCON Overseas Construction and Restriction on MILCON 
Overseas Architect-Engineer Contracts; Interim Rules

  Federal Register / Vol. 62, No. 12 / Friday, January 17, 1997 / Rules 
and Regulations  

[[Page 2856]]



DEPARTMENT OF DEFENSE

48 CFR Parts 225, 236, and 252

[DFARS Case 96-D328]


Defense Federal Acquisition Regulation Supplement; Preference for 
U.S. Firms on MILCON Overseas Construction

AGENCY: Department of Defense (D0D).

ACTION: Interim rule with request for comments.

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SUMMARY: The Director of Defense Procurement has issued an interim rule 
amending the Defense Federal Acquisition Regulation Supplement (DFARS) 
to implement Section 112 of the Fiscal Year 1997 Military Construction 
Appropriations Act (Public Law 104-196). Section 112 provides a 20 
percent preference for United States firms on all contracts estimated 
to exceed $1,000,000 for military construction projects in the United 
States territories and possessions in the Pacific and on Kwajalein 
Atoll, or in countries bordering the Arabian Gulf.

DATES: Effective date: January 17, 1997.

    Comment Date: Comments on the interim rule should be submitted in 
writing to the address shown below on or before March 18, 1997, to be 
considered 9n the formulation of the final rule.

ADDRESSES: Interested parties should submit written comments to: 
Defense Acquisition Regulations Council, Attn: Ms. Amy Williams, PDUSD 
(A&T) DP (DAR), IMD 3D139, 3062 Defense Pentagon, Washington, DC 20301-
3062. Telefax number (703) 602-0350. Please cite DFARS Case 96-D328 in 
all correspondence related to this issue.

FOR FURTHER INFORMATION CONTACT:
Ms. Amy Williams, (703) 602-0131.

SUPPLEMENTARY INFORMATION:

A. Background

    This interim rule amends the DFARS to implement Section 112 of the 
Fiscal Year 1997 Military Construction Appropriations Act (Public Law 
104-196). The rule contains, at 236.274(a), the statutory restriction 
on award of overseas military construction contracts; and adds a 
solicitation provision at 252.236-7010, Overseas Military Construction-
Preference for United States Firms.

B. Regulatory Flexibility Act

    This interim rule is not expected 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 
only applies to contracts estimated to exceed $1,000,000 for military 
construction projects in the United States territories and possessions 
in the Pacific and on Kwajalein Atoll, or in countries bordering the 
Arabian Gulf. It is estimated that only 12 such contracts are awarded 
per year. An Initial Regulatory Flexibility Analysis has, therefore, 
not been performed. Comments are invited from small businesses and 
other interested parties. Comments from small entities concerning the 
affected DFARS subparts also will be considered in accordance with 5 
U.S.C. 610. Such comments should be submitted separately and should 
cite DFARS Case 96-D328 in correspondence.

C. Paperwork Reduction Act

    The Paperwork Reduction Act applies. It is estimated that the new 
provision at DFARS 252.236-7010 will increase, by 5 hours, the annual 
paperwork burden associated with DFARS Part 236 and related provisions/
clauses. The Office of Management and Budget (OMB) has approved this 
increase under OMB Control Number 0704-0255.

D. Determination to Issue an Interim Rule

    A determination has been made under the authority of the Secretary 
of Defense that urgent and compelling reasons exist to publish this 
interim rule prior to affording the public an opportunity to comment. 
This interim rule implements Section 112 of the Fiscal Year 1997 
Military Construction Appropriations Act (Public Law 104-196). Section 
112 provides a 20 percent preference for United States firms on all 
contracts estimated to exceed $1,000,000 for military construction 
projects in the United States territories and possessions in the 
Pacific and on Kwajalein Atoll, or in countries bordering the Arabian 
Gulf. Immediate publication of an interim rule is necessary to promptly 
comply with Section 112. Comments received in response to the 
publication of this interim rule will be considered in formulating the 
final rule.

List of Subjects in 48 CFR Parts 225, 236, and 252

    Government procurement.
Michele P. Peterson,
Executive Editor, Defense Acquisition Regulations Council.

    Therefore, 48 CFR Parts 225, 236, and 252 are amended as follows:
    1. The authority citation for 48 CFR Parts 225, 236, and 252 
continues to read as follows:

    Authority: 41 U.S.C. 421 and 48 CFR Chapter 1.

PART 225--FOREIGN ACQUISITION

    2. Section 225.7000 is amended by revising paragraph (a) to read as 
follows:


225.7000  Scope of subpart.

    (a) This subpart contains restrictions on the acquisition of 
foreign products and services, imposed by Defense appropriations and 
authorization acts and other statutes. Refer to the acts to verify 
current applicability of the restrictions.
* * * * *
    3. Section 225.7003 is added to read as follows:


225.7003  Restriction on overseas military construction.

    For restriction on award of military construction contracts to be 
performed in the United States territories and possessions in the 
Pacific and on Kwajalein Atoll, or in countries bordering the Arabian 
Gulf, see 236.274(a).

PART 236--CONSTRUCTION AND ARCHITECT-ENGINEER CONTRACTS

    4. Section 236.274 is amended by redesignating the introductory 
text as paragraph (b); by redesignating paragraphs (a) and (b) as 
paragraphs (b)(1) and (b)(2), respectively; by redesignating paragraphs 
(b)(1) through (b)(8) as paragraphs (b)(2)(i) through (b)(2)(viii); and 
by adding a new paragraph (a) to read as follows:


236.274  Construction in foreign countries.

    (a) In accordance with Section 112 of Public Law 104-32 and similar 
sections in subsequent military construction appropriations acts, 
military construction contracts that are estimated to exceed $1,000,000 
and are to be performed in the United States territories and 
possessions in the Pacific and on Kwajalein Atoll, or in countries 
bordering the Arabian Gulf, shall be awarded only to United States 
firms, unless the lowest responsive and responsible offer of a United 
States firm exceeds the lowest responsive and responsible offer of a 
foreign firm by more than 20 percent.
* * * * *
    5. Section 236.570 is amended by adding paragraph (c) to read as 
follows:


236.570  Additional provisions and clauses.

* * * * *
    (c) Use the provision at 252.236-7010, Overseas Military 
Construction-Preference for United States Firms, in solicitations for 
military construction

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contracts that are estimated to exceed $1,000,000 and are to be 
performed in the United States territories and possessions in the 
Pacific and on Kwajalein Atoll, or in countries bordering the Arabian 
Gulf.

PART 252--SOLICITATION PROVISIONS AND CONTRACT CLAUSES

    6. Section 252.236-7010 is added to read as follows:


252.236-7010  Overseas Military Construction--Preference for United 
States Firms.

    As prescribed in 236.570(c), use the following provision:

Overseas Military Construction--Preference for United States Firms (Jan 
1997)

    (a) Definition.
    ``United States firm,'' as used in this provision, means a firm 
incorporated in the United States that complies with the following:
    (1) The corporate headquarters are in the United States;
    (2) The firm has filed corporate and employment tax returns in 
the United States for a minimum of 2 years (if required), has filed 
State and Federal income tax returns (if required) for 2 years, and 
has paid any taxes due as a result of these filings; and
    (3) The firm employs United States citizens in key management 
positions.
    (b) Evaluation. Offers from firms that do not qualify as United 
States firms will be evaluated by adding 20 percent to the offer.
    (c) Status. The offeror ______ is, ______ is not a United States 
firm.

(End of provision)

[FR Doc. 97-1041 Filed 1-16-97; 8:45 am]
BILLING CODE 5000-04-M