[Federal Register Volume 62, Number 84 (Thursday, May 1, 1997)] [Proposed Rules] [Pages 23741-23742] From the Federal Register Online via the Government Publishing Office [www.gpo.gov] [FR Doc No: 97-11297] ----------------------------------------------------------------------- DEPARTMENT OF DEFENSE 48 CFR Part 252 [DFARS Case 97-D007] Specialty Metals; Agreements with Qualifying Countries AGENCY: Department of Defense (DoD). ACTION: Proposed rule with request for comments. ----------------------------------------------------------------------- SUMMARY: The Director of Defense Procurement is proposing to amend the Defense Federal Acquisition Regulation Supplement (DFARS) to revise the Preference for Domestic Speciality Metals clause for consistency with the provisions of the Berry Amendment. DATES: Comments on the proposed rule should be submitted in writing to the address shown below on or before June 30, 1997. ADDRESSES: Interested parties should submit written comments to: Defense Acquisition Regulations Council, ATTN: Ms. Amy Williams, PDUSD(A&T)DP(DAR), 3062 Defense Pentagon, Washington, DC 20301-3062. Telefax number (703) 602-0305. Please cite DFARS Case 97-D007 in all correspondence related to this issue. FOR FURTHER INFORMATION CONTACT: Ms. Amy Williams, (703) 602-0131. SUPPLEMENTARY INFORMATION: A. Background This proposed rule amends the contract clause at DFARS 252.225- 7014, Preference for Domestic Specialty Metals. The clause requires that, with certain exceptions, any specialty metals incorporated in articles delivered under the contract will be melted in the United States, its possessions, or Puerto Rico. Paragraph(c)(2) of the clause presently provides for an exception to this requirement when the acquisition is for an end product of a qualifying country listed in DFARS 225.872-1. This proposed rule revises paragraph (c)(2) of the clause to provide an exception for speciality metals melted in a qualifying country or incorporated in an article manufactured in a qualifying country, rather than only providing an exception for the acquisition of end products of a qualifying country. This proposed revision is consistent with the Berry Amendment (10 U.S.C. 2241 note) (as implemented at DFARS 225.7002-2(i)), which provides an exception from domestic source restrictions for the procurement of specialty metals where such procurement is necessary in furtherance of agreements with foreign governments in which both governments agree to remove barriers to purchase of supplies produced in the other country. B. Regulatory Flexibility Act The proposed rule 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 the rule increases the opportunity for foreign competition by firms providing speciality metals melted in qualifying countries or qualifying country components containing specialty metals. An Initial Regulatory Flexibility Analysis (IRFA) has, therefore, been performed, and is summarized as follows: This proposed rule amends the clause at DFARS 252.225-7014 to make the exception in the clause consistent with the Berry Amendment (10 U.S.C. 2241 note) and with the existing DFARS text at 225.7002-2(i). The clause at DFARS 252.225-7014 is prescribed for use in all solicitations and contracts over the simplified acquisition threshold that require delivery of an article containing specialty metals. The clause is prescribed for use with its Alternate I if the article containing specialty metals is for one of certain major programs. The basic clause only restricts the direct acquisition of specialty metals by the prime contractor, whereas Alternate I flows down the restriction to subcontractors at any tier. The proposed rule does not affect the already unrestricted sources of speciality metals when acquiring qualifying country end products or when acquiring components including speciality metals for use in an end product for other than a major program. The proposed rule does loosen the restriction on domestic specialty metals for prime contractors providing domestic nonqualifying country end products, permitting them to incorporate speciality metals melted in a qualifying country (for both major and non-major programs), or qualifying country components containing specialty metals of unrestricted source for use in end products for major programs. Because the components subject to increased foreign competition are at a subcontract level, it is not possible to more specifically identify the items or whether they are produced by small business firms. The proposed rule does not require any new reporting or recordkeeping, and does not duplicate, overlap, or conflict with other relevant Federal rules. An alternative approach would be to require that the specialty metals incorporated in articles manufactured in a qualifying country also be melted in a qualifying country. [[Page 23742]] This approach could slightly reduce the extent of foreign competition facing domestic entities. However, this approach appeared to go beyond the requirements of the statute being implemented. A copy of the IRFA has been submitted to the Chief Counsel for Advocacy of the Small Business Administration. Interested parties may obtain a copy of the IRFA from the address specified herein. Comments are invited. Comments from small entities concerning the affected DFARS subpart also will be considered in accordance with 5 U.S.C. 610. Such comments should be submitted separately and should cite DFARS Case 97- D007 in correspondence. C. Paperwork Reduction Act The Paperwork Reduction Act does not apply because the proposed rule contains no 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 252 Government procurement. Michele P. Peterson Executive Editor, Defense Acquisition Regulations Council. Therefore, 48 CFR Part 252 is proposed to be amended as follows: 1. The authority citation for 48 CFR part 252 continues to read as follows: Authority: 41 U.S.C. 421 and 48 CFR Chapter 1. PART 252--SOLICITATION PROVISIONS AND CONTRACT CLAUSES 2. Section 252.225-7014 is amended by revising the date of the clause, paragraph (c)(2) of Alternate I to read as follows: 252.225-7014 Preference for domestic specialty metals. * * * * * Preference for Domestic Specialty Metals (Date) * * * * * (c) * * * (2) The specialty metal is melted in a qualifying country, or is incorporated in an article manufactured in a qualifying country. (Qualifying countries are those countries listed in subsection 225-872- 1 of the Defense Federal Acquisition Regulation Supplement); * * * * * Alternate I (Date) * * * * * (c) * * * (2) The specialty metal is melted in a qualifying country, or is incorporated in an article manufactured in a qualifying country. (Qualifying countries are those countries listed in subsection 225.872- 1 of the Defense Federal Acquisition Regulation Supplement); or * * * * * [FR Doc. 97-11297 Filed 4-30-97; 8:45 am] BILLING CODE 5000-04-M