[Federal Register Volume 63, Number 99 (Friday, May 22, 1998)]
[Rules and Regulations]
[Pages 28284-28285]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 98-13741]


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DEPARTMENT OF DEFENSE

48 CFR Parts 225 and 252

[DFARS Case 97-D321]


Defense Federal Acquisition Regulation Supplement; Waiver of 
Domestic Source Restrictions

AGENCY: Department of Defense (DoD).

ACTION: Final rule.

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SUMMARY: The Director of Defense Procurement has adopted as final, with 
changes, an interim rule that was published in the Federal Register on 
February 4, 1998. The rule amends the Defense Federal Acquisition 
Regulation Supplement (DFARS) to implement Section 811 of the National 
Defense Authorization Act for Fiscal Year 1998. Section 811 limits the 
authority for waiver of the domestic source restrictions of 10 U.S.C. 
2534(a).

EFFECTIVE DATE: May 22, 1998.

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

SUPPLEMENTARY INFORMATION: 

A. Background

    An interim rule with request for comments was published at 63 FR 
5744 on February 4, 1998. The rule amended DFARS Parts 225 and 252 to 
implement Section 811 of the National Defense Authorization Act for 
Fiscal Year 1998 (Pub. L. 105-85). Section 811 provides that DoD may 
exercise the authority of 10 U.S.C. 2534(d), to waive the domestic 
source restrictions of 10 U.S.C. 2534(a), only if the waiver is made 
for a particular item and for a particular foreign country. 10 U.S.C. 
2534(a) contains domestic source restrictions applicable to procurement 
of the following items: Buses, chemical weapons antidote, components 
for naval vessels (including air circuit breakers, anchor and mooring 
chain, and totally enclosed lifeboats), and ball and roller bearings.
    One source submitted comments in response to the interim rule. The 
comments were considered in the formation of the final rule. The final 
rule adds guidance to clarify that, for contracts entered into prior to 
the effective date of a waiver, provided adequate consideration is 
received to modify the contract, such waiver shall be applied as 
directed or authorized in the waiver to (1) subcontracts entered into 
on or after the effective date of the waiver; and (2) options for the 
procurement of items that are exercised after the effective date of the 
waiver, if the option prices are adjusted for any reason other than the 
application of the waiver.

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 there are no known small business manufacturers of buses, air 
circuit breakers, or the restricted chemical weapons antidote; the 
acquisition of anchor and mooring chain, totally enclosed lifeboat 
survival systems, and noncommercial ball and roller bearings is 
presently restricted to domestic sources by defense appropriations 
acts; and the restrictions of 10 U.S.C. 2534(a) do not apply to 
purchases of commercial items incorporating ball or roller bearings.

C. Paperwork Reduction Act

    The Paperwork Reduction Act does not apply, because this final 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,
Executive Editor, Defense Acquisition Regulations Council.

Interim Rule Adopted as Final With Changes

    Accordingly, the interim rule amending 48 CFR Parts 225 and 252, 
which was published at 63 FR 5744 on February 4, 1998, is adopted as 
final with the following changes:
    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

    2. Section 225.7005 is amended by adding paragraph (a)(4) to read 
as follows:


225.7005  Waiver of certain restrictions.

* * * * *
    (a) * * *
    (4) For contracts entered into prior to the effective date of a 
waiver, provided adequate consideration is received to modify the 
contract, such waiver shall be applied as directed or authorized in the 
waiver to--
    (i) Subcontracts entered into on or after the effective date of the 
waiver; and
    (ii) Options for the procurement of items that are exercised after 
the effective date of the waiver, if the option

[[Page 28285]]

prices are adjusted for any reason other than the application of the 
waiver.
* * * * *
    3. Section 225.7019-3 is amended by adding paragraph (b)(4) to read 
as follows:


225.7019-3  Waiver.

* * * * *
    (b) * * *
    (4) For contracts entered into prior to the effective date of a 
waiver, provided adequate consideration is received to modify the 
contract, such waiver shall be applied as directed or authorized in the 
waiver to--
    (1) Subcontracts entered into on or after the effective date of the 
waiver; and
    (ii) Options for the procurement of items that are exercised after 
the effective date of the waiver, if the option prices are adjusted for 
any reason other than the application of the waiver.
* * * * *
[FR Doc. 98-13741 Filed 5-21-98; 8:45 am]
BILLING CODE 5000-04-M