[Federal Register Volume 63, Number 158 (Monday, August 17, 1998)]
[Rules and Regulations]
[Pages 43887-43889]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 98-21906]


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DEPARTMENT OF DEFENSE

48 CFR Parts 225 and 252

[DFARS Case 98-D016]


Defense Federal Acquisition Regulation Supplement; Waiver of 10 
U.S.C. 2534--United Kingdom

AGENCY: Department of Defense (DoD).

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 a waiver of domestic source restrictions for certain 
defense items produced in the United Kingdom. The waiver was executed 
by the Under Secretary of Defense (Acquisition and Technology) and 
became effective on August 4, 1998.

DATES: Effective date: August 17, 1998.
    Comment date: Comments on the interim rule should be submitted in 
writing to the address shown below on or before October 16, 1998, to be 
considered in 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 (703) 602-0350.
    E-mail comments submitted over the Internet should be addressed to: 
[email protected]
    Please cite DFARS Case 98-D016 in all correspondence related to 
this issue. E-mail comments should cite DFARS Case 98-D016 in the 
subject line.

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

SUPPLEMENTARY INFORMATION: 

A. Background

    This interim rule amends DFARS Subpart 225.70 and the clauses at 
DFARS 252.225-7016 and 252.225-7029 to implement a waiver of the 
domestic source restrictions of 10 U.S.C. 2534(a) for certain defense 
items produced in the United Kingdom. A notice of the waiver was 
published in the Federal Register on July 20, 1998 (63 FR 38815). This 
rule amends DFARS guidance pertaining to the acquisition of air circuit 
breakers for naval vessels, ball and roller bearings, and totally 
enclosed lifeboats. Anchor and mooring chain, which is covered by the 
waiver, is not addressed in this rule, as the more stringent defense 
appropriations act restrictions on the acquisition of anchor and 
mooring chain presently take precedence over the restrictions of 10 
U.S.C. 2534. The other items listed in the July 20, 1998, notice of 
waiver are not covered in the DFARS and, therefore, are not addressed 
in this rule.

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 there 
are no known small business manufacturers of the restricted air circuit 
breakers; defense appropriations acts presently impose domestic source 
restrictions on the acquisition of totally enclosed lifeboats

[[Page 43888]]

and noncommercial ball and roller bearings; and the restrictions of 10 
U.S.C. 2534(a) do not apply to acquisitions of commercial items 
incorporating ball or roller bearings. 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 subpart also will be 
considered in accordance with 5 U.S.C. 610. Such comments should be 
submitted separately and should cite DFARS Case 98-D016 in 
correspondence.

C. 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.

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 a waiver of the domestic source 
restrictions of 10 U.S.C. 2534(a) for certain items manufactured in the 
United Kingdom. The Under Secretary of Defense (Acquisition and 
Technology) has determined that application of the limitation at 10 
U.S.C. 2534(a) impedes the reciprocal procurement of defense items 
under DoD's memorandum of understanding with the United Kingdom. The 
waiver became effective on August 4, 1998. 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 and 252

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

    Therefore, 48 CFR Parts 225 and 252 are amended as follows:
    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 redesignating the paragraphs as 
follows:

------------------------------------------------------------------------
                 Paragraph                         Redesignated as      
------------------------------------------------------------------------
Introductory text.........................  (a) introductory text.      
(a)(1) Introductory text..................  (a)(1)(i) introductory text.
(a)(1)(i).................................  (a)(1)(i)(A).               
(a)(1)(ii)................................  (a)(1)(i)(B).               
(a)(2)....................................  (a)(1)(ii).                 
(a)(3)....................................  (a)(1)(iii).                
(a)(4) introductory text..................  (a)(1)(iv) introductory     
                                             text.                      
(a)(4)(i).................................  (a)(1)(iv)(A).              
(a)(4)(ii)................................  (a)(1)(iv)(B).              
(b) introductory text.....................  (a)(2) introductory text.   
(b)(1)....................................  (a)(2)(i).                  
(b)(2)....................................  (a)(2)(ii).                 
(b)(3)....................................  (a)(2)(iii).                
(b)(4)....................................  (a)(2)(iv).                 
(b)(5)....................................  (a)(2)(v).                  
(c).......................................  (a)(3).                     
------------------------------------------------------------------------

    In addition, section 225.7005 is amended by adding a new paragraph 
(b) to read as follows:


225.7005  Waiver of certain restrictions.

* * * * *
    (b) In accordance with the provisions of paragraphs (a)(1)(i) 
through (a)(1)(iii) of this section, the Under Secretary of Defense 
(Acquisition and Technology) has waived the restrictions of 10 U.S.C. 
2534(a) for certain items manufactured in the United Kingdom, including 
air circuit breakers for naval vessels and totally enclosed lifeboats 
(see 225.7016 and 225.7022). This waiver applies to--
    (1) Procurements under solicitations issued on or after August 4, 
1998; and
    (2) Subcontracts and options under contracts entered into prior to 
August 4, 1998, under the conditions described in paragraphs (a)(1)(iv) 
of this section.
    3. Section 225.7007-4 is revised to read as follows:


225.7007-4  Waiver.

    The waiver criteria at 225.7005(a) apply to this restriction.
    4. Section 225.7010-3 is revised to read as follows:


225.7010-3  Waiver.

    The waiver criteria at 225.7005(a) apply to this restriction.
    5. Section 225.7016-1 is revised to read as follows:


225.7016-1  Restriction.

    In accordance with 10 U.S.C. 2534 and 225.7005(b), do not acquire 
air circuit breakers for naval vessels unless they are manufactured in 
the United States, Canada, or the United Kingdom.


225.7016-2  [Amended]

    6. Section 225.7016-2 is amended in paragraph (b) in the first 
sentence by removing at the end ``and Canada''.
    7. Section 225.7016-3 is revised to read as follows:


225.7016-3  Waiver.

    The waiver criteria at 225.7005(a) apply to this restriction.
    8. Section 225.7019-1 is amended by revising paragraph (a) to read 
as follows:


225.7019-1  Restrictions.

    (a) In accordance with 10 U.S.C. 2534 and 225.7019-3(b)(5), through 
fiscal year 2000, do not acquire ball and roller bearings or bearing 
components that are not manufactured in the United States, Canada, or 
the United Kingdom.
* * * * *
    9. Section 225.7019-3 is amended by paragraph (b)(5) to read as 
follows:


225.7019-3  Waiver.

* * * * *
    (b) * * *
    (5) In accordance with the provisions of paragraphs (b)(1) through 
(b)(3) of this subsection, the Under Secretary of Defense (Acquisition 
and Technology) has waived the restrictions of 10 U.S.C. 2534(a)(5) for 
ball and roller bearings manufactured in the United Kingdom. This 
waiver applies to--
    (i) Procurements under solicitations issued on or after August 4, 
1998; and
    (ii) Subcontracts and options under contracts entered into prior to 
August 4, 1998, under the conditions described in paragraph (b)(4) of 
this subsection.
* * * * *
    10. Section 225.7022-1 is amended in paragraph (b) by revising the 
first sentence to read as follows:


225.7022-1  Restrictions.

* * * * *
    (b) In accordance with 10 U.S.C. 2534(a)(3)(B) and 225.7005(b), do 
not purchase a totally enclosed lifeboat that is a component of a naval 
vessel, unless it is manufactured in the United States, Canada, or the 
United Kingdom. * * *


225.7022-2  [Amended]

    11. Section 225.7022-2 is amended in paragraph (b) by removing at 
the end ``and Canada''.
    12. Section 225.7022-3 is revised to read as follows:


225.7022-3  Waiver.

    The waiver criteria at 225.7005(a) apply only to the restriction of 
225.7022-1(b).

PART 252--SOLICITATION PROVISIONS AND CONTRACT CLAUSES

    13. Section 252.225-7016 is amended by revising the clause date and 
paragraph (c)(1) to read as follows:


252.225-7016  Restriction of Acquisition of Ball and Roller Bearings.

* * * * *

[[Page 43889]]

RESTRICTION ON ACQUISITION OF BALL AND ROLLER BEARINGS (AUG 1998)

* * * * *
    (c)(1) The restriction in paragraph (b) of this clause does not 
apply to the extent that--
    (i) The end items or components containing ball or roller 
bearings are commercial items; or
    (ii) The ball or roller bearings are commercial items 
manufactured in the United Kingdom.
* * * * *
    14. Section 252.225-7029 is revised to read as follows:


252.225-7029  Preference for United States or Canadian Air Circuit 
Breakers.

    As prescribed in 225.7016-4, use the following clause:

PREFERENCE FOR UNITED STATES OR CANADIAN AIR CIRCUIT BREAKERS (AUG 
1998)

    (a) Unless otherwise specified in its offer, the Contractor 
agrees that air circuit breakers for naval vessels provided under 
this contract shall be manufactured in the United States, Canada, or 
the United Kingdom.
    (b) Unless an exception applies under Defense Federal 
Acquisition Regulation Supplement (DFARS) 225.7016-2 or a waiver is 
granted under DFARS 225.7005(a) (1) or (2), preference will be given 
to air circuit breakers manufactured in the United States or Canada 
by adding 50 percent for evaluation purposes to the offered price of 
all other air circuit breakers, except those manufactured in the 
United Kingdom.

(End of clause)

[FR Doc. 98-21906 Filed 8-14-98; 8:45 am]
BILLING CODE 5000-04-M