[Federal Register Volume 73, Number 140 (Monday, July 21, 2008)]
[Rules and Regulations]
[Pages 42274-42279]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: E8-16673]


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DEPARTMENT OF DEFENSE

Defense Acquisition Regulations System

48 CFR Parts 204, 235, and 252

RIN 0750-AF13


Defense Federal Acquisition Regulation Supplement; Export-
Controlled Items (DFARS Case 2004-D010)

AGENCY: Defense Acquisition Regulations System, Department of Defense 
(DoD).

ACTION: Interim rule with request for comments.

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SUMMARY: DoD has issued an interim rule amending the Defense Federal 
Acquisition Regulation Supplement (DFARS) to address requirements for 
complying with export control laws and regulations when performing DoD 
contracts. The rule recognizes contractor responsibilities to comply 
with existing Department of Commerce and Department of State 
regulations. The rule adds two new clauses to be used when export-
controlled items, including information or technology, are expected to 
be involved in the performance of a contract, or when there is a 
possibility that export-controlled items, including information or 
technology, may come to be involved during the period of performance of 
the contract.

DATES: Effective date: July 21, 2008.
    Comment date: Comments on the interim rule should be submitted in 
writing to the address shown below on or before September 19, 2008, to 
be considered in the formation of the final rule.

ADDRESSES: You may submit comments, identified by DFARS Case 2004-D010, 
using any of the following methods:
     Federal eRulemaking Portal: http://www.regulations.gov. 
Follow the instructions for submitting comments.
     E-mail: [email protected]. Include DFARS Case 2004-D010 in the 
subject line of the message.
     Fax: 703-602-7887.
     Mail: Defense Acquisition Regulations System, Attn: Ms. 
Felisha Hitt, OUSD (AT&L) DPAP (DARS), IMD 3D139, 3062 Defense 
Pentagon, Washington, DC 20301-3062.
     Hand Delivery/Courier: Defense Acquisition Regulations 
System, Crystal Square 4, Suite 200A, 241 18th Street, Arlington, VA 
22202-3402.
    Comments received generally will be posted without change to http://www.regulations.gov, including any personal information provided.

FOR FURTHER INFORMATION CONTACT: Ms. Felisha Hitt, 703-602-0310.

SUPPLEMENTARY INFORMATION:

A. Background

    DoD published a proposed rule at 70 FR 39976 on July 12, 2005, to 
address requirements for preventing unauthorized disclosure of export-
controlled information and technology under DoD contracts. In 
consideration of the public comments received, DoD published a second 
proposed rule at 71 FR 46434 on August 14, 2006. The second proposed 
rule simplified the policy framework in recognition of existing policy 
found in the International Traffic in Arms Regulations (ITAR) and the 
Export Administration Regulations (EAR).

[[Page 42275]]

    Section 890(a) of the National Defense Authorization Act for Fiscal 
Year 2008 (Pub. L. 110-181), enacted on January 28, 2008, requires DoD 
to prescribe regulations, not later than July 26, 2008, to address 
requirements for DoD contractors to comply with laws and regulations 
applicable to goods or technology subject to export controls. In view 
of this new statutory requirement, and in consideration of the public 
comments received in response to the second proposed rule, DoD has 
developed an interim rule to address export controls. The differences 
between the second proposed rule and this interim rule include--
     Definition and use of the term ``export-controlled items'' 
instead of ``export-controlled information and technology,'' to more 
appropriately describe what is controlled by the ITAR and EAR and 
addressed by this rule.
     Information in the definition of ``items'' with respect to 
the EAR to clarify that access to an ``export-controlled item'' is not 
necessarily subject to the EAR. Only technology and software source 
code (and not commodities) are subject to the EAR when released to a 
foreign national inside the United States.
     Relocation of the definition of ``fundamental research'' 
to DFARS 204.7301, because the proposed clause containing the 
definition has been excluded from the interim rule.
     Addition of a definition of ``applied research'' in DFARS 
204.7301, since the term is used within the definition of ``fundamental 
research'' in that section. The definition of ``applied research'' is 
consistent with the one found at FAR 35.001. Although the term ``basic 
research'' is also used within the definition of ``fundamental 
research,'' a definition of that term is not included in 204.7301, 
since the term is defined in FAR 2.101 for general use throughout the 
FAR system.
     Addition of references to the ITAR and the EAR in 204.7302 
for clarity.
     Relocation of procedural requirements, formerly in 
204.7303, Policy, to a new Procedures section at 204.7304.
     Clarification of the clause prescription at 204.7305(a) 
(formerly 204.7304(a)).
     Reduction of the number of contract clauses from three to 
two by eliminating the separate clause for fundamental research 
contracts.
     Addition of text in the clause at 252.204-7009, 
Requirements Regarding Potential Access to Export-Controlled Items, to 
specify that, if during performance of the contract, the contractor 
becomes aware and notifies the contracting officer that the contractor 
will generate or need access to export-controlled items, the 
contracting officer may, as one of three possible courses of action, 
terminate the contract in whole or in part for the convenience of the 
Government.
    DoD received comments from 167 persons or organizations in response 
to the second proposed rule. The comments are grouped into the 
following seven categories:
    1. National policy concerns.
    2. Concerns with the scope or text of the rule.
    3. Requirement that the contract clause include a list of specific 
information and/or technology subject to export controls.
    4. Ability of DoD to identify export-controlled information and 
technology.
    5. Flow-down of export control clauses to subcontracts.
    6. Termination for convenience.
    7. Reasonable limits on identifying foreign persons.
    The following is a discussion of the comments and the changes 
included in this interim rule as a result of those comments:

1. National Policy Concerns

    a. Comment: Many individual citizens were concerned about foreign 
access to classified information.
    DoD Response: It is important to understand that this DFARS rule is 
intended to reinforce the statutory and regulatory requirements that 
must be in place prior to foreign national access to any export-
controlled items, including information or technology, whether 
classified or not. Access to classified information or technology is 
subject to additional requirements. The second proposed rule and this 
interim rule do not permit foreign students or workers access to 
classified information. To the contrary, this interim rule reminds 
universities and companies of their responsibility to comply with 
export control laws and regulations. It also directs contracting 
officers to include clauses in solicitations and contracts, as 
appropriate, to clearly inform contractors of their responsibilities 
when export-controlled items are expected to be or may be involved in 
the performance of the contract.
    b. Comment: Thirty-eight respondents voiced concern regarding the 
loss of jobs for U.S. citizens to foreign workers and graduate 
students.
    DoD Response: The DFARS rule neither encourages nor endorses the 
use of foreign workers or students. One purpose of the rule is to 
ensure that appropriate contracts include a clause that informs 
contractors that export-controlled items are expected to be involved in 
the performance of their contracts and to remind them of their separate 
responsibility to comply with export control laws and regulations.
    c. Comment: Eleven respondents expressed concern regarding the 
security risks of outsourcing jobs or using foreign students for DoD 
research.
    DoD Response: This DFARS rule should have the effect of reducing 
the risk of unauthorized access to export-controlled information or 
technology under DoD contracts. The rule requires DoD to inform 
contractors if export-controlled items are expected to be involved in 
contract performance, and to remind contractors of their responsibility 
to comply with export control laws and regulations.
    d. Comment: Comments received from universities and their 
associations stated that the rule conflicts with National Security 
Decision Directive (NSDD) 189, because fundamental research is shielded 
from export control laws. Twenty-one respondents wanted DoD to ensure 
that no restrictions would apply to fundamental research.
    DoD Response: This DFARS rule is consistent with existing laws, 
Executive orders, and regulations. NSDD 189 provides an exception to 
its own applicability when the directive conflicts with applicable 
statutes. NSDD 189 states, ``No restrictions may be placed upon the 
conduct or reporting of federally-funded fundamental research that has 
not received national security classification, except as provided in 
applicable U.S. Statutes.'' Export control laws are applicable 
statutes. It should also be noted that fundamental research, as defined 
by NSDD 189, does not involve ``proprietary research * * *, industrial 
development, design, production, and product utilization, the results 
of which ordinarily are restricted for proprietary or national security 
reasons.'' Most DoD contracts awarded for conducting fundamental 
research do not involve export-controlled information or technology. 
However, there are rare instances in which export-controlled 
information or technology may be used to conduct fundamental research. 
In such cases, the entity must be in compliance with the applicable 
export control laws and regulations. Also, there is a borderline where 
fundamental research meets more advanced applied research and 
development. One purpose of the DFARS rule is to remind universities 
that they must notify the contracting officer when they have reason to 
believe this line may be crossed.

[[Page 42276]]

    e. Comment: Twenty-six respondents stated that hiring competent 
U.S. workers reduces security risk.
    DoD Response: The DFARS rule does not address the impact of 
workforce competency on security. Therefore, this comment does not 
affect the content of the rule.
    f. Comment: Many respondents commented on issues associated with 
foreign workers. These included concerns about the H-1b visa process; 
willingness of foreign workers to accept lower wages; increasing 
dependence on foreign researchers undermining the future U.S. science 
and engineering base; the need for immigration law reform; relaxing 
security requirements for foreign students; minority citizen 
unemployment; and weak academic credentials of some foreign students.
    DoD Response: These comments are not applicable to this DFARS rule. 
The DFARS rule directs contracting officers to inform contractors when 
they know, based on input from the requiring activity, that export-
controlled items are expected to be involved in the performance of a 
DoD contract, and to remind DoD contractors of their responsibility to 
comply with export control laws and regulations.
    g. Comment: Several respondents commented on the administrative 
cost or cost-effectiveness of complying with export control laws and 
regulations. Twenty of these comments dealt with specific steps 
associated with compliance. Seven responses contained reminders that 
key technologies and/or national security data must be safeguarded 
regardless of the cost.
    DoD Response: These comments are not applicable to this DFARS rule. 
While the cost of compliance with export control laws and regulations 
may be relatively small or large, this DFARS rule does not add to or 
subtract from that cost. All U.S. persons are responsible for complying 
with export control laws and regulations (which were not created or 
augmented by this rule), and this rule does not exempt anyone from that 
responsibility.

2. Concerns With the Scope or Text of the Rule

    a. Comment: Twenty-five respondents from the university community 
expressed concern that the second proposed rule was still too broad or 
that it went beyond reminding contractors of their separate EAR and 
ITAR responsibilities. Seemingly related comments from some of the same 
respondents added that DoD should leave the subject to the Department 
of State and the Department of Commerce.
    DoD Response: DoD does not believe that the DFARS rule goes beyond 
reminding contractors of their responsibilities. The rule requires 
contracting officers to include an appropriate clause in solicitations 
and contracts if export-controlled items are expected to be involved in 
contract performance, as determined by the requiring activity. This is 
the method for ``reminding'' contractors, i.e., getting the required 
information into solicitations and contracts. The clause language 
clearly directs contractors to the ITAR and the EAR, and to the 
Department of State and the Department of Commerce for answers to 
questions about ITAR and EAR requirements. DoD relies on the 
Departments of State and Commerce to administer their export control 
programs.
    b. Comment: Twenty-six respondents stated that fundamental research 
cannot generate controlled information or technology.
    DoD Response: DoD disagrees with this comment, because there are 
situations in which export controls may affect the conduct of 
fundamental research:
    (1) Although fundamental research cannot by definition result in 
export-controlled information, fundamental research can evolve into 
more advanced applied research. At this transition point, the research 
may involve export-controlled information or technology. The instances 
when this happens midway through a research contract may be rare. 
However, almost all applied research is an outgrowth of work that began 
as fundamental research. There is a point at which certain research 
projects become specific enough to involve export-controlled 
information or technology. To maintain national security, DoD and its 
contractors must be mindful of their responsibility to identify that 
crossover point.
    (2) When export-controlled information or technology is used to 
conduct fundamental research.
    (3) When the distribution of the results of fundamental research is 
restricted due to proprietary reasons or if the research has received 
national security classification (see EAR section 734.8).
    c. Comment: Nineteen respondents requested clarification of the 
proposed clause at 252.204-70XX, Requirements for Contracts Involving 
Export-Controlled Information or Technology. Some respondents 
questioned if all technology must be identified, even if applicable 
licensing permitted its use. Other respondents requested guidance for 
situations where exclusions for other than fundamental research exist, 
such as those for published materials or bona fide employees.
    DoD Response: Export-controlled items, including information and 
technology, remain controlled under applicable statutes even if an 
exemption applies in a particular situation. Neither the prescriptive 
language of the DFARS rule, nor the clauses prescribed for use, are the 
appropriate place for guidance or information regarding exemptions. 
Note that the DFARS rule does not include the requirement that specific 
export-controlled information or technology be identified in the 
contract clause. (See the DoD Response to the Comment in section 3 of 
this discussion.)
    d. Comment: Several respondents stated that the structure of the 
clauses is more complex than necessary. They recommended two clauses 
instead of three.
    DoD Response: The interim rule reduces the number of clauses from 
three to two.

 3. Requirement That the Contract Clause Include a List of Specific 
Information and/or Technology Subject to Export Controls

    Comment: One respondent objected to the requirement in the proposed 
clause at 252.204-70XX, for a list of the specific export-controlled 
information and/or technology, which the parties are to keep current 
during the period of contract performance. The respondent recommended 
elimination of this requirement, because it is unnecessary and would 
create the possibility of a contractor being in breach of the clause 
due to inadvertent errors in the list, even if the contractor has an 
adequate export control system.
    DoD Response: DoD considered the requirement and concluded that a 
different approach would better achieve the intended purpose while 
being less burdensome. A DoD Inspector General report on this subject 
(D-2004-061) stressed the importance of identifying export-controlled 
information and technology in DoD contracts to ensure the awareness 
necessary to prevent unauthorized disclosure. A key message in the DoD 
Inspector General report was that there is an inadequate understanding 
of export control requirements among some in the contractor community, 
and inadequate attention paid to the effect export controls have on the 
performance of DoD contracts. Identifying the export-controlled 
information and technology involved in the performance of the contract 
was intended to ensure that inexperienced contractors understand what 
must be controlled, and that

[[Page 42277]]

experienced contractors and their Government counterparts share a 
common understanding of the export-controlled information and 
technology involved in the contractor's proposed approach to satisfying 
contract requirements. Mindful of this underlying intent, and 
considering the merits of the public comments, DoD considered an 
alternative that would achieve the intended result. That alternative 
was to require the clause to identify the category(ies) of export-
controlled information and/or technology (rather than the specific 
export-controlled information and/or technology) expected to be 
involved in performance of the contract. This alternative proved 
unacceptable, however, to the agencies of the Federal Government 
responsible for enforcing export control laws and regulations. From 
their point of view, it is important that any contract clause be free 
of information that could possibly create ambiguity about the 
contractor's responsibility to comply with export control laws and 
regulations. As a result, the DFARS rule will cause requiring 
activities, contracting officers, offerors, and contractors to be aware 
that export-controlled items, including information and technology, are 
expected to be involved in performance of the contract, but it will not 
require identification of the export-controlled items. The contractor's 
responsibility to comply with all applicable laws and regulations 
regarding export-controlled items exists independent of, and is not 
established or limited by, the information provided in the rule or the 
prescribed contract clauses.

4. Ability of DoD To Identify Export-Controlled Information and 
Technology

     Comment: Several respondents stated that DoD contracting officers 
are not qualified to identify controlled information and technology, 
nor do they know when exclusions and exemptions from licensing 
requirements apply.
    DoD Response: DoD agrees that this is not an area in which DoD 
contracting officers are expected to have expertise. The DFARS rule 
does not require contracting officers to identify specific export 
control classifications or categories for the information or technology 
involved. Moreover, the DFARS rule notes that the agencies responsible 
for the ITAR and EAR have responsibility for providing authoritative 
guidance on such matters. The DFARS rule assigns to the requiring 
activity the responsibility for determining whether export-controlled 
items are expected to be involved in performance of a contemplated 
contract. Requiring activity personnel are responsible for determining 
if a research proposal merits funding and whether the Government 
receives adequate value for services performed. Training for such 
requiring activity personnel (and contracting officers) is presently 
available through the Defense Acquisition University. This training is 
being supplemented to make it more suitable for personnel responsible 
for implementing this DFARS rule and to keep the information current 
and share lessons learned.

5. Flow-Down of Export Control Clauses to Subcontracts

    Comment: Several respondents stated that the flow-down of any 
export-control related clauses is problematic for universities. 
Commercial entities may not be aware of NSDD 189 and fundamental 
research. Overuse of the clause when unnecessary could harm the 
university-industry-government research partnership.
    DoD Response: The clause in the interim rule at DFARS 252.204-7008, 
Requirements for Contracts Involving Export-Controlled Items, requires 
flow-down only to subcontracts that are expected to involve access to 
or generation of export-controlled items. The clause in the interim 
rule at 252.204-7009, Requirements Regarding Potential Access to 
Export-Controlled Items, must be used when the parties do not 
anticipate that the contractor will generate or need access to export-
controlled items and does not include a flow-down requirement.

6. Termination for Convenience

    Comment: One respondent requested that termination for convenience 
be allowed for those projects that begin as fundamental research but 
later develop export control issues.
    DoD Response: The clause in the interim rule at 252.204-7009, 
Requirements Regarding Potential Access to Export-Controlled Items, 
addresses this issue. Paragraph (c) of the clause states that if, 
during performance of the contract, the contractor notifies the 
contracting officer that the contractor will generate or need access to 
export-controlled items, the contracting officer may, as one of three 
possible courses of action, terminate the contract in whole or in part 
for the convenience of the Government in accordance with the 
Termination clause of the contract.

7. Reasonable Limits on Identifying Foreign Persons

    Comment: One respondent commented that DoD should place limits on 
identifying foreign persons and should avoid unnecessarily broad 
reviews of individuals working on subcontracted research efforts at 
universities.
    DoD Response: The comment is not relevant to this DFARS rule. The 
rule does not address requirements for identification of foreign 
persons.
    This rule was not subject to Office of Management and Budget review 
under Executive Order 12866, dated September 30, 1993.

B. Regulatory Flexibility Act

    DoD does not expect this rule 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 all 
contractors, including small entities, are already subject to export-
control laws and regulations. The requirements of this rule reinforce 
existing responsibilities. Therefore, DoD has not performed an initial 
regulatory flexibility analysis. DoD invites comments from small 
businesses and other interested parties. DoD also will consider 
comments from small entities concerning the affected DFARS subparts in 
accordance with 5 U.S.C. 610. Such comments should be submitted 
separately and should cite DFARS Case 2004-D010.

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 an 
interim rule prior to affording the public an opportunity to comment. 
This interim rule implements Section 890(a) of the National Defense 
Authorization Act for Fiscal Year 2008 (Pub. L. 110-181). Section 
890(a) requires DoD to prescribe regulations, not later than July 26, 
2008, requiring DoD contractors providing goods or technology subject 
to export controls under the Arms Export Control Act or the Export 
Administration Act of 1979 to comply with those Acts and applicable 
regulations, including the International Traffic in Arms Regulations 
and the Export Administration Regulations. Comments received in 
response to this interim rule will be considered in the formation of 
the final rule.

[[Page 42278]]

List of Subjects in 48 CFR Parts 204, 235, and 252

    Government procurement.

Michele P. Peterson,
Editor, Defense Acquisition Regulations System.

0
Therefore, 48 CFR parts 204, 235, and 252 are amended as follows:
0
1. The authority citation for 48 CFR parts 204, 235, and 252 continues 
to read as follows:


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

PART 204--ADMINISTRATIVE MATTERS

0
2. Subpart 204.73 is added to read as follows:
Subpart 204.73--Export-Controlled Items
Sec.
204.7300 Scope of subpart.
204.7301 Definitions.
204.7302 General.
204.7303 Policy.
204.7304 Procedures.
204.7305 Contract clauses.

Subpart 204.73--Export-Controlled Items


204.7300  Scope of subpart.

    This subpart implements Section 890(a) of the National Defense 
Authorization Act for Fiscal Year 2008 (Pub. L. 110-181).


204.7301  Definitions.

    As used in this subpart--
    Applied research means the effort that--
    (1) Normally follows basic research, but may not be severable from 
the related basic research;
    (2) Attempts to determine and exploit the potential of scientific 
discoveries or improvements in technology, materials, processes, 
methods, devices, or techniques; and
    (3) Attempts to advance the state of the art.
    Export-controlled items is defined in the clauses at 252.204-7008 
and 252.204-7009.
    Fundamental research, as defined by National Security Decision 
Directive (NSDD) 189, means basic and applied research in science and 
engineering, the results of which ordinarily are published and shared 
broadly within the scientific community. This is distinguished from 
proprietary research and from industrial development, design, 
production, and product utilization, the results of which ordinarily 
are restricted for proprietary or national security reasons.


204.7302  General.

    Export control laws and regulations restrict the transfer, by any 
means, of certain types of items to unauthorized persons. The 
International Traffic in Arms Regulations (ITAR) and the Export 
Administration Regulations (EAR) establish these restrictions. See PGI 
204.7302 for additional information.


204.7303  Policy.

    (a) It is in the interest of both the Government and the contractor 
to have a common understanding of export-controlled items expected to 
be involved in contract performance.
    (b) The requiring activity shall review each acquisition to 
determine if, during performance of the contemplated contract, the 
contractor is expected to generate or require access to export-
controlled items.


204.7304  Procedures.

    (a) Prior to issuance of a solicitation for research and 
development, the requiring activity shall notify the contracting 
officer in writing when--
    (1) Export-controlled items are expected to be involved; or
    (2) The work is fundamental research only, and export-controlled 
items are not expected to be involved.
    (b) Prior to issuance of a solicitation for supplies or services, 
the requiring activity shall notify the contracting officer in writing 
when--
    (1) Export-controlled items are expected to be involved; or
    (2) The requiring activity is unable to determine that export-
controlled items will not be involved. See PGI 204.7304 for guidance 
regarding this notification requirement.


204.7305  Contract clauses.

    (a) Use the clause at 252.204-7008, Requirements for Contracts 
Involving Export-Controlled Items, in solicitations and contracts when 
the requiring activity provides the notification at 204.7304(a)(1) or 
(b)(1), indicating that export-controlled items are expected to be 
involved in the performance of the contract.
    (b) Use the clause at 252.204-7009, Requirements Regarding 
Potential Access to Export-Controlled Items, in solicitations and 
contracts--
    (1) For research and development, except when the clause at 
252.204-7008 will be included; or
    (2) For supplies and services, when the requiring activity provides 
the notification at 204.7304(b)(2).

PART 235--RESEARCH AND DEVELOPMENT CONTRACTING


235.071  [Redesignated]

0
3. Section 235.071 is redesignated as section 235.072.

0
4. A new section 235.071 is added to read as follows:


235.071  Export-controlled items.

    For requirements regarding access to export-controlled items, see 
Subpart 204.73.

PART 252--SOLICITATION PROVISIONS AND CONTRACT CLAUSES

0
5. Sections 252.204-7008 and 252.204-7009 are added to read as follows:


252.204-7008  Requirements for contracts involving export-controlled 
items.

    As prescribed in 204.7305(a), use the following clause:

Requirements for Contracts Involving Export-Controlled Items (Jul 2008)

    (a) Definition. Export-controlled items, as used in this clause, 
means items subject to the Export Administration Regulations (EAR) 
(15 CFR Parts 730-774) or the International Traffic in Arms 
Regulations (22 CFR Parts 120-130). The term includes:
    (1) Defense items, defined in the Arms Export Control Act, 22 
U.S.C. 2778(j)(4)(A), as defense articles, defense services, and 
related technical data. The term ``defense items'' includes 
information and technology.
    (2) Items, defined in the EAR as ``commodities, software, and 
technology,'' terms that are also defined in the EAR, 15 CFR 772.1. 
Regarding the release of items subject to the EAR to foreign 
nationals within the United States, ``items'' only include 
technology and software source code (and not commodities) subject to 
the EAR.
    (b) The parties anticipate that, in the performance of this 
contract, the Contractor will generate or need access to export-
controlled items.
    (c) The Contractor shall comply with all applicable laws and 
regulations regarding export-controlled items, including the 
requirement for contractors to register with the Department of State 
in accordance with the ITAR. The Contractor shall consult with the 
Department of State regarding any questions relating to the ITAR and 
with the Department of Commerce regarding any questions relating to 
the EAR.
    (d) The Contractor's responsibility to comply with all 
applicable laws and regulations regarding export-controlled items 
exists independent of, and is not established or limited by, the 
information provided by this clause.
    (e) Nothing in the terms of this contract is intended to change, 
supersede, or waive any of the requirements of applicable Federal 
laws, Executive orders, and regulations, including but not limited 
to--
    (1) The Export Administration Act of 1979, as amended (50 U.S.C. 
App. 2401-2420);

[[Page 42279]]

    (2) The Arms Export Control Act of 1976 (22 U.S.C. 2751 et 
seq.);
    (3) The International Emergency Economic Powers Act (50 U.S.C. 
1701-1707);
    (4) The Export Administration Regulations (15 CFR Parts 730-
774);
    (5) The International Traffic in Arms Regulations (22 CFR Parts 
120-130);
    (6) Executive Order 13222, as extended;
    (7) DoD Directive 2040.2, International Transfers of Technology, 
Goods, Services, and Munitions; and
    (8) DoD Industrial Security Regulation (DoD 5220.22-R).
    (f) The Contractor shall include the substance of this clause, 
including this paragraph (f), in all subcontracts that are expected 
to involve access to or generation of export-controlled items.

(End of clause)


252.204-7009  Requirements regarding potential access to export-
controlled items.

    As prescribed in 204.7305(b), use the following clause:

Requirements Regarding Potential Access to Export-Controlled Items (Jul 
2008)

    (a) Definition. Export-controlled items, as used in this clause, 
means items subject to the Export Administration Regulations (EAR) 
(15 CFR Parts 730-774) or the International Traffic in Arms 
Regulations (22 CFR Parts 120-130). The term includes:
    (1) Defense items, defined in the Arms Export Control Act, 22 
U.S.C. 2778(j)(4)(A), as defense articles, defense services, and 
related technical data. The term ``defense items'' includes 
information and technology.
    (2) Items, defined in the EAR as ``commodities, software, and 
technology,'' terms that are also defined in the EAR, 15 CFR 772.1. 
Regarding the release of items subject to the EAR to foreign 
nationals within the United States, ``items'' only include 
technology and software source code (and not commodities) subject to 
the EAR.
    (b) The parties do not anticipate that, in the performance of 
this contract, the Contractor will generate or need access to 
export-controlled items.
    (c) If, during the performance of this contract, the Contractor 
becomes aware that the Contractor will generate or need access to 
export-controlled items--
    (1) The Contractor shall notify the Contracting Officer in 
writing; and
    (2) The Contracting Officer will expeditiously--
    (i) Modify the contract to include the Defense Federal 
Acquisition Regulation Supplement clause 252.204-7008, Requirements 
for Contracts Involving Export-Controlled Items;
    (ii) Negotiate a contract modification that eliminates the 
requirement for performance of work that would involve export-
controlled items; or
    (iii) Terminate the contract, in whole or in part, as may be 
appropriate, for the convenience of the Government, in accordance 
with the Termination clause of the contract.

(End of clause)


252.235-7002,  252.235-7003, 252.235-7010, and 252.235-7011 [Amended]

0
6. Sections 252.235-7002, 252.235-7003, 252.235-7010, and 252.235-7011 
are amended in the introductory text by removing ``235.071'' and adding 
in its place ``235.072''.

[FR Doc. E8-16673 Filed 7-18-08; 8:45 am]
BILLING CODE 5001-08-P