Federal Register, Volume 76 Issue 87 (Thursday, May 5, 2011)

[Federal Register Volume 76, Number 87 (Thursday, May 5, 2011)]
[Rules and Regulations]
[Pages 25569-25576]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2011-10882]

[[Page 25569]]

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DEPARTMENT OF DEFENSE

Defense Acquisition Regulations System

48 CFR Parts 223 and 252

RIN 0750-AG35

Defense Federal Acquisition Regulation Supplement; Minimizing the
Use of Materials Containing Hexavalent Chromium (DFARS Case 2009-D004)

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

ACTION: Final rule.

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SUMMARY: DoD is issuing a final rule amending the Defense Federal
Acquisition Regulation Supplement (DFARS) to implement the requirements
for minimizing the use of materials containing hexavalent chromium in
items acquired by DoD (deliverables and construction materials
hereafter referred to as deliverables). Hexavalent chromium is a
chemical that has been used in numerous DoD weapons systems and
platforms due to its corrosion protection properties. However,
hexavalent chromium is a known carcinogen. This rule codifies a DoD
policy for addressing the serious human health and environmental risks
related to the use of hexavalent chromium. The rule prohibits the
delivery of items containing more than 0.1 percent by weight hexavalent
chromium in any homogeneous material under DoD contracts unless there
is no acceptable alternative to the use of hexavalent chromium.

DATES: Effective Date: May 5, 2011.

FOR FURTHER INFORMATION CONTACT: Ms. Amy Williams, 703-602-0328.

SUPPLEMENTARY INFORMATION:

I. Background

DoD published a proposed rule on hexavalent chromium in the Federal
Register at 75 FR 18041 on April 8, 2010. This final rule amends the
DFARS to implement requirements to minimize the delivery of materials
containing hexavalent chromium in DoD acquisitions. The DFARS governs
only DoD procurements, therefore, this action establishes requirements
that DoD personnel must follow when making acquisitions for new
systems.
Hexavalent chromium is a chemical that has been used in numerous
DoD weapons systems and platforms due to its corrosion protection
properties. However, hexavalent chromium is recognized as an inhalation
carcinogen. The National Toxicology Program's Report on Carcinogens,
Eleventh Edition, lists hexavalent chromium compounds as known human
carcinogens. (See http://ntp.niehs.nih.gov/ntp/roc/eleventh/known.pdf.)
The Environmental Protection Agency (EPA) classifies hexavalent
chromium as a known human carcinogen by the inhalation route of
exposure. (See http://www.epa.gov/iris/subst/0144.htm.)
In response to the serious human health and environmental risks
associated with the use of hexavalent chromium, there has been an
increase in national and international restrictions and controls. For
example, in 2006, the Occupational Safety and Health Administration
(OSHA) lowered the permissible exposure limit (PEL) ten-fold from 52 to
5 micrograms-per-cubic-meter, making it among the most stringently
regulated materials used in manufacturing and maintenance operations.
Similarly, the European Union Restriction of Hazardous Substances
Directive restricts the use of hexavalent chromium in the manufacturing
of certain types of electronic and electrical equipment. Finally, a
number of defense-related industries are minimizing or eliminating the
use of hexavalent chromium where proven substitutes are available.
Such restrictions and industry practices have decreased the
availability of materials containing hexavalent chromium and have
increased the regulatory burden and life cycle costs for DoD. Indeed,
DoD and the industry have made substantial investments in finding
suitable replacements for hexavalent chromium. To protect future access
for critical applications and to implement its commitments pursuant to
Executive Orders 13514 and 13423, on April 8, 2009, the Under Secretary
of Defense (Acquisition, Technology and Logistics) issued a policy
memorandum to minimize the use of materials containing hexavalent
chromium in the acquisition of new systems throughout DoD. Among other
things, the policy memorandum directed DoD personnel (specifically the
Program Executive Offices in conjunction with the Military Department's
Corrosion Control and Prevention Executive) to certify that ``no
acceptable alternative'' exists before using any material containing
hexavalent chromium on a new system and directed the Defense
Acquisition Regulation Council to develop a clause for defense
contracts that prohibits the use of materials containing hexavalent
chromium in all future procurements unless specifically approved by the
Government. This final rule implements those aspects of the policy
memorandum. The final rule adds a new DFARS subpart and a corresponding
contract clause to minimize hexavalent chromium in deliverables
acquired under DoD contracts.

II. Analysis of Public Comments

Eleven respondents submitted comments on the proposed rule. A
discussion of those comments and the revisions made to the rule as a
result of those comments is provided below. The comments are organized
and presented in ten overall categories. Some comments did not pertain
to the DFARS rule itself; however, they are addressed to assist in
further clarifying the rule. Six of the eleven respondents supported
the objective of minimizing the use of hexavalent chromium or indicated
that they were already compliant. The remaining five respondents did
not express support or object to the rule, but provided implications
and examples of actions that will be required to minimize hexavalent
chromium in deliverables. Three respondents questioned the need for the
rule since DoD and industry have been working for years to develop
substitutes. Despite reservations about the need for the rule, these
respondents provided recommendations for improving the rule. A number
of the most significant recommendations have been incorporated in the
revised rule as discussed in more detail below.

A. Clarification of Definitions, Terms, or Language

Comment: Two respondents requested clarification of contractor
responsibility for identifying alternatives or obtaining approvals for
hexavalent chromium use.
DoD Response: A DoD solicitation for a new deliverable may contain
specifications for approved hexavalent chromium substitutes. In other
solicitations, or for other components in the same solicitation, DoD
may provide specifications that require hexavalent chromium where its
use is deemed necessary to meet performance requirements and/or where
proven substitutes are not available. Consideration of substitutes will
include evaluation of the factors described in the DoD policy memo
including--
Cost effectiveness of alternative materials or processes;
Technical feasibility of alternative materials or
processes;
Environment, safety, and occupational health risks
associated with the use of the hexavalent

[[Page 25570]]

chromium or substitute materials in each specific application;
Achieving a DoD Manufacturing Readiness Level of at least
eight (8) for any qualified alternative;
Materiel availability of hexavalent chromium and the
proposed alternatives over the projected life span of the system; and
Corrosion performance difference of alternative materials
or processes as determined by agency corrosion subject matter experts.
A performance-based solicitation may not provide specifications for
a substitute or pre-approval for hexavalent chromium. In such cases,
the contractor is responsible for either providing a substitute that
meets performance requirements or providing a request to the
contracting officer for providing a deliverable containing hexavalent
chromium. The contracting officer will forward the request to the
authorized approving official (DFARS 223.7305(a)) for decision.
The Advanced Surface Engineering Technologies for a Sustainable
Defense (ASETSDefense) Web site at http://www.assetsdefense.org has
been established to provide information about hexavalent chromium
substitutes. The site has a database that can be searched by type of
process for substitute information. The site also contains briefings
and summary reports from DoD-industry workshops on sustainable coatings
and processes. The site helps reduce duplication in testing for the
same or similar applications.
Comment: Two respondents requested that ``legacy system'' be
defined, with one respondent stating that it should be any system that
is past Material Development Decision, as the milestone defined in DoD
Instruction 5000.02.
DoD Response: A ``legacy system'' means any program that has passed
Milestone A, as defined in DoD Instruction 5000.02. At the Material
Development Decision (MDD) stage in the acquisition process, far too
little is known about a system. The MDD simply indicates that an
acquisition of a system, equipment, or item will be required to satisfy
a military capability. Milestone A occurs after the MDD. At Milestone
A, the system concept has been refined and technology development can
begin. Milestone A represents a very early stage in the acquisition
process. Thus, by defining a legacy system as one that has already
passed Milestone A, it provides a phase-in period for the rule to take
effect. In other words, the rule affects only new systems that are pre-
Milestone A. This provides a sufficient period, typically two years or
more, for companies that contract with DoD to make any necessary
adjustments.
Comment: Two respondents requested clarification of the term
``homogeneous material.'' One respondent stated that the definition
proposed is overly broad and appears to be taken verbatim from the
European Union Restriction of Hazardous Substances Directive. Another
respondent suggested that the definition be abandoned as unusable or be
clarified by naming common types of materials to be considered
homogeneous and those which should be excluded from the definition.
DoD Response: The definition of ``homogeneous material'' was
adopted from the European Union Restriction of Hazardous Substances
Directive because it is widely understood by industry given the global
nature of supply chains. The definition was supplemented by providing
examples to assist the contracting activity and the offeror. The intent
of the examples is not to be extensive or all inclusive. ``Homogeneous
material'' means a material that cannot be mechanically disjointed into
different materials and is of uniform composition throughout. This
definition can be applied to any material or article in order to
determine the percent by weight of hexavalent chromium in the material.
Surface coatings are considered to be a separate homogeneous material
from the underlying material such as aluminum. The painted aluminum
article as a whole is not a homogenous material because the paint can
be mechanically disjointed (sanded or grinded) from the underlying
aluminum. Also, the paint and aluminum are each of separate, uniform
compositions. Conversion coatings are not considered homogeneous
materials because they bond with and chemically modify the underlying
material and cannot be mechanically disjointed.
Comment: Two respondents requested that the prohibition of
hexavalent chromium not apply to ``use'' but only to products that
``contain'' hexavalent chromium. Two respondents requested that the
phrase ``or use materials [that contain hexavalent chromium] in
performance of this contract'' in 252.223-7XXXX (b) be deleted, so that
the restriction would only apply to deliverables that contain
hexavalent chromium.
DoD Response: DFARS 223.7303 was revised to provide clarity that
hexavalent chromium may be used in manufacturing or testing of an
article, as long as it will not appear as hexavalent chromium in the
final product. As an example, in chrome plating, only the metallic form
of chromium remains. Thus, articles plated with the metal chromium are
acceptable and the rule will have minimum affect on businesses that
plate chromium. Based on an industry comment, DoD modified the rule to
indicate that the ``prohibition does not apply to hexavalent chromium
produced as a by-product of manufacturing processes'' such as hard
chrome plating. This was a primary concern of one of the industry
associations. The phrase ``or use materials in performance of this
contract'' in paragraph (b) of the clause at 252.223-7XXX has been
deleted.
Comment: Two respondents requested clarification of the definitions
of ``unapproved'' and ``damages'' in paragraph (c) of the clause
252.223-7XXX.
DoD Response: Paragraph (c) of the clause 252.223-7XXX was deleted
in its entirety (see section II.I. of this preamble addressing
contractor liability).
Comment: One respondent expressed an opinion that the title of
proposed DFARS Subpart 223.73 is at variance with other parts of the
rule. Specifically: ``The proposed subpart 223.73 is entitled
`Minimizing the use of hexavalent chromium', but paragraphs 223.7302,
223-7303, and the proposed clause 252.223-7XXX use the term
`prohibition.' ''
DoD Response: Review of the rule as a whole does not support a
finding of a conflict and edits have been made to clarify this. While
proposed DFARS 223.7302 and the proposed clause at DFARS 252.223-7XXX
use the term ``prohibition,'' the prohibition exists only where proven
substitutes are available that provide acceptable performance for the
application. Consideration of cost effectiveness, technical
feasibility, corrosion control performance, and other factors described
in the DoD policy memo must be taken into account. Read in its
entirety, proposed DFARS Subpart 223.73 and the clause at proposed
DFARS 252.223-7XXX do not impose an absolute ban on the use of
hexavalent chromium. Rather, DFARS Subpart 223.73 minimizes the
incorporation of hexavalent chromium into deliverables to the extent
practicable, considering all the factors described in the DoD policy
memo.

B. Limitation to Not More Than 0.1 Percent Hexavalent Chromium

Comment: One respondent indicated that their products are already
compliant with the prohibition on hexavalent chromium in the European
Union Restriction of Hazardous Substances Directive. The respondent

[[Page 25571]]

further noted that trace amounts of hexavalent chromium remain in the
products but are well below the 0.1% threshold noted in the rule.
DoD Response: No change in the rule is necessary to address this
comment. The decision to allow trace amounts of hexavalent chromium of
less than 0.1 percent is consistent with worldwide standards, including
Europe's Restriction of Hazardous Substances; thus these products will
also be compliant with the this rule.
Comment: One respondent noted that the proposal does not reference
any background or guidance document for testing for hexavalent chromium
percent by weight.
DoD Response: There are a number of test procedures that could be
used for testing for hexavalent chromium and the choice is dependent on
the material being tested. Listing test methods is beyond the scope of
the rule. Providers will have flexibility to choose the test method
best suited to their application. International standard IEC 62321
``Determination of levels of six regulated substances (lead, mercury,
cadmium, hexavalent chromium, polybrominated biphenyls, polybrominated
diphenyl ethers) is the most widely used and was finalized in May 2009.
ISO Standard 3613 for metallic and organic coatings was updated in
November 2010 and is also widely used.

C. Need for the Rule and Adequacy of Current Regulations

Comment: Three respondents questioned the need for the rule. One
respondent stated that existing environmental, safety, and health
regulations provide adequate safeguards. Another stated that it
considered the rule to be premature without additional study, testing,
and proof of performance and since it is limited to one federal
department, it should be withdrawn. Another respondent suggested that
DoD should consider a phased-in approach.
DoD Response: The rule will help to facilitate DoD's compliance
with the requirements established in Executive Orders 13514 and 13423
to reduce the use of toxic and hazardous substances. In addition, it
allows for the codification of the policy outlined in the DoD policy
memo for the acquisition community to effectively implement the
guidance in contract requirements. This rule is intended for DoD
program managers and contracting officers by prohibiting the use of a
DoD specification or solicitation that will result in a deliverable
containing hexavalent chromium unless authorized by a senior level DoD
official. This addresses a key complaint from industry that DoD
specifications are preventing them from eliminating hexavalent chromium
despite their desire to do so.
The rule also provides incentive for industry to adopt substitutes
for hexavalent chromium. The rule has been modified to provide that a
``legacy system'' means a program that has passed Milestone A in the
defense acquisition management system, as defined in DoD Instruction
5000.02, prior to the effective date of the rule. This is an early
entry point into the defense acquisition system and, as noted in
section II.A. of this preamble, provides a phasing in of the mandatory
requirements of the rule for new acquisitions still only in the
development phases. In regard to the need for further testing, DoD and
industry have spent years testing substitutes and will continue to do
so. The DoD policy does not require use of substitutes unless they can
meet a DoD Manufacturing Readiness Level (MRL) of at least eight.
Essentially, this means that the substitute has been proven to meet
performance requirements. An item at MRL eight must have detailed
designs and/or specifications, proven manufacturing and quality
processes, and an established and stable supply chain.

D. Cost to Industry and Mission Readiness

Comment: Seven respondents stated that this rule will increase
costs but did not provide substantiation. In one case, the respondent
indicated that ``elimination of hexavalent chromium compounds * * *
might result in increased level of performance risk and increased
procurement costs.'' Another respondent referred to an increase in life
cycle costs but did not appear to account for savings in using safer
chemicals or the fact that substitutes must perform as well.
DoD Response: It should be noted that cost-related comments were
made before revisions in the rule that address the most significant
concerns such as plating, conversion coatings, and hexavalent chromium
as a by-product of manufacturing. The final rule will not affect these
activities. Only one respondent provided an estimate. That estimate is
instructive and is discussed further below.
Based on numerous conversations with industry and small businesses,
DoD believes that the rule will have a positive impact on industry and
small business profits and, at worst, be revenue neutral over time. Web
sites maintained under DoD's Strategic Environmental Research and
Development Program (SERDP) contain briefings describing DoD and
industry efforts to develop hexavalent chromium substitutes. For
example, the 2010 SERDP conference had a special session on hexavalent
chromium minimization. One of the presentations by the Aerospace
Industries Association described the aerospace industry's minimization
strategy. (Reference: http://symposium.serdp-estcp.org/Technical-Sessions/2B). The Web site at asetsdefense.org also contains briefings
and summaries of DoD-industry conferences.
A number of small businesses have developed non-chromate processes
but have been hindered in their ability to market these processes to
DoD by existing DoD specifications. In one example, a small
manufacturer of fasteners told DoD that they can provide non-chromate
fasteners that can meet DoD performance requirements but the DoD
specification calls for chromate and the requiring military office sees
no reason to change it. The rule will help to remedy this problem.
Subpart 223.7203 of the rule provides direction for DoD contracting
officers. It prohibits contracts that include a specification or
standard that results in a deliverable or construction material
containing more than 0.1% hexavalent chromium by weight. In another
example, a small family-run business has developed a non-chromate
coating for aircraft. While the company has had success with marketing
the process to commercial airlines and the Air Force, it has had
limited success DoD-wide. Apparently, further motivation is needed for
DoD program managers to change existing requirements for use of
materials containing hexavalent chromium. The rule implements the DoD
policy memo in the procurement world and will thus increase the
adoption of this non-chromate coating and similar paints and coatings
by small businesses DoD-wide. The rule will also help make businesses
more competitive in the world market. Many large companies are
requiring suppliers to provide products with a smaller ``environmental
footprint'' by using lifecycle assessment of human health and
environmental impacts. For example, over 1800 organizations are now
reporting their sustainability status under the Global Reporting
Initiative. (See http://www.globalreporting.org/Home.)
Non-hexavalent chromium processes should be less costly over the
lifecycle of the process due to the use of less hazardous materials and
related control and disposal cost. (See examples of documented cost
savings in Section III.) The rule was modified so that plating

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and anodizing are not covered by the rule. Thus, capital costs for
conversions are de minimis. For the most part, compliance with the rule
will only require switching to non-chromate paints and primers.
The one respondent that provided an estimate indicated a cost of
$384,000 to convert to non-hexavalent processes. The company produces
lightweight shelters for the military and customers that are primarily
Government agencies. The company's main processes are metal surface
``cleaning and chemical conversion.'' The rule, as revised, will not
affect cleaning and chemical conversion (conversion coatings) and thus
there will be no cost to convert related to these processes. However,
the respondent's main concern was not the conversion cost but the
concern that one branch of the military will require a hexavalent
chromium conversion coating and other branches will require non-
hexavalent conversion coatings. The DoD policy and this rule are
designed to reduce this problem of maintaining dual systems because
they will cause DoD-wide changes in specifications to non-hexavalent
processes. While this rule does not affect the respondent's conversion
coating process, DoD has other initiatives underway to eliminate
inconsistent requirements by DoD program managers by modifying DoD-wide
specifications where hexavalent chromium has been required and suitable
substitutes are available. As an example, DoD has qualified a non-
hexavalent conversion coating for wide federal use (Reference Military
Standard MIL-DTL-81706).
Comment: Four respondents stated that the rule will increase
lifecycle cost due to less corrosion protection.
DoD Response: The rule does not necessarily require the use of
substitutes for hexavalent chromium if lifecycle costs are higher.
Lifecycle costs must be considered when deciding if proven substitutes
exist (see factors listed in Section II A. above).
Many often overlooked costs (e.g., costs associated with the use of
restrictive protective equipment and related productivity losses, air
monitoring, reporting, medical surveillance programs, collection and
treatment systems, and hazardous waste disposal) can be avoided with
the use of less toxic chemicals.
Comment: Three respondents stated that the rule will decrease
corrosion protection thereby adversely impacting mission readiness.
DoD Response: This rule does not decrease mission readiness as this
factor must be considered when determining if proven substitutes exist.
To eliminate any confusion, the factors to be considered have been
added to DFARS 223.7305.
Comment: One respondent inquired about the funding strategy for
research and development.
DoD Response: This comment is outside of the scope of this case.
DoD has a robust program for developing and testing substitutes. (See
the program area ``Weapons Systems and Platforms'' at http://www.serdp.org.)
Comment: Two respondents recommended that DoD limit review time of
the waiver to not more than 30 days.
DoD Response: DoD assumes the respondent meant ``authorization''
for the use of hexavalent chromium vice ``waiver.'' DoD program
managers are establishing efficient procedures for reviewing and
granting authorizations for programs they manage. Timing for reviews
and authorizations will depend on the complexity of the system but
program managers have an incentive to ensure that schedules are not
adversely affected by the review process.

E. Legacy Systems

Comment: Three respondents requested clarification of the
exceptions at DFARS 223.7303 (now 223.7304), regarding the repair or
replacement of legacy systems.
DoD Response: The exception for legacy systems has been clarified.
Legacy system is now defined and an exception has been added for
sustainment related contracts (e.g., parts and services) for existing
systems with hexavalent chromium. However, Section 223.7304(a) of the
rule requires program managers to consider alternatives during system
modifications, follow-on procurements of legacy systems, or maintenance
procedure updates if it is deemed feasible and needed to achieve the
objectives of the DoD policy. Consideration of alternatives will
require analysis of the factors described in the DoD policy memo.
Comment: One respondent requested that DoD clarify that there is no
expectation to sample and analyze legacy systems and their related
parts, subsystems, and components for the sole purpose of identifying
hexavalent chromium.
DoD Response: DFARS does not have a requirement that legacy systems
and their related parts, subsystems, and components be sampled or
analyzed for the purpose of identifying hexavalent chromium. Legacy
systems are clearly excepted from the rule.

F. Exceptions

Comment: Four respondents requested clarification of the process
for approval of exemptions.
DoD Response: Exemption is not a term used in the rule. The
respondent evidently means the process for obtaining authorizations to
provide a deliverable or construction material with hexavalent chromium
as described at DFARS 223.7305. Military departments have established
or are establishing internal procedures for processing authorizations
for use of hexavalent chromium. These procedures are necessitated by
the individual needs of the Service and/or each program office. The
approval process will be provided as part of the solicitation. It is in
the best interest of DoD and individual program managers to have
speedy, efficient processes for handling hexavalent chromium
authorizations.
Comment: One respondent noted that it would be difficult to achieve
the specification requirement under MIL-DTL-38999 for circular
connectors if hexavalent chromium is removed from the sealer used in
manufacturing circular connectors, noting that current test data
suggests that replacing hexavalent chromium with trivalent chromium is
not effective for circular connectors with cadmium-free plating.
DoD Response: Given the wide range of applications and the
longstanding use of hexavalent chromium, DoD recognizes that the
transition to proven substitutes will take time and recognizes that it
will need to make exceptions to this rule while adequate alternatives
continue to be developed. This amendment to the DFARS is one component
of DoD's overall strategy to minimizing the use of materials containing
hexavalent chromium in Defense acquisitions. As stated in the DoD
policy memo, to adequately address the environmental and health
concerns associated with the use of materials containing hexavalent
chromium, DoD is going beyond its established hazardous materials
management processes. In fact, this change to the DFARS specifically
acknowledges that there may be particular specifications, such as MIL-
DTL-38999, that require case-by-case authorizations for materials that
contain hexavalent chromium. Section 223.7305 allows the appropriate
DoD official to authorize the use of materials that contain hexavalent
chromium when necessary, and if consistent with DoD policy. Any one
that seeks such an authorization should follow the procedures in the
DFARS Procedures,

[[Page 25573]]

Guidance, and Information (PGI) at 223.7305.
Furthermore, DoD appreciates the information regarding the
performance of circular connectors using trivalent chromium. DoD
continues to make major investments to minimize the use of hexavalent
chromium in defense acquisitions. DoD has sponsored efforts that range
from fundamental research through advanced development to testing and
evaluation for proven substitutes. As discussed earlier, the Strategic
Environmental Research and Development Program (SERDP) and the
Environmental Security Technology Certification Program (ESTCP) sponsor
the Advanced Surface Engineering Technologies for a Sustainable Defense
(ASETSDefense), which is a database that facilitates the implementation
of new, environmentally friendly technologies for surface engineering
(coatings and surface treatments) by providing ready access to
background information and technical data from research, development,
test, and evaluation efforts as well as the status of approvals and
implementations. This database is continually growing as more documents
are added, concentrating on coatings that avoid the use of hexavalent
chromium. DoD will continue these efforts to provide proven substitutes
for an ever increasing range of applications and materials to foster
the widespread implementation of alternatives to hexavalent chromium.
ASETSDefense's relational database is designed with a search capability
to provide access to the available information needed to make informed
decisions on the use of alternatives to materials and technologies for
surface engineering that pose environmental or health hazards. This
information includes detailed engineering data, background documents,
and information on processes and products that have been validated,
authorized, or implemented. For more information and to access the
database go to: http://www.assetsdefense.org/databasedescription.aspx.
Comment: One respondent requested an exception for all commercial
items.
DoD Response: To provide an exception for all commercial items will
jeopardize the intent of the rule and be contrary to DoD policy. It is
the responsibility of the prime contractor to require suppliers to
provide content information. There is currently a requirement to
provide content information for articles that contain hazardous
substances such as hexavalent chromium in Material Safety Data Sheets
(see FAR 52.223-3, Hazardous Material Identification and Material
Safety Data).
Comment: One respondent stated that paragraph (d) of the clause
requires that the prohibition will always flow down to the
subcontractor and does not provide for a situation where the
subcontractor's items qualify for an exemption.
DoD Response: Similar to change order requests and other types of
approvals, subcontractors may submit proposals for approvals of
necessary hexavalent chromium use through the prime contractor for
approval. Since the clause flows down, the same approval process for
exemptions applies to the subcontractor as well.
Comment: One respondent asked if the liability language exempts
legacy systems/or components.
DoD Response: The paragraph on liability was deleted from the final
text of the clause because existing law is sufficient.
Comment: One respondent stated that data such as cost effectiveness
and corrosion protection be considered in rendering exemptions.
DoD Response: The respondent is correct. The DoD policy of April 8,
2009, contains requirements for weighing hexavalent chromium versus
substitutes. The following factors, at a minimum, must be considered--
Cost effectiveness of alternative materials or processes;
Technical feasibility of alternative materials or
processes;
Environment, safety, and occupational health risks
associated with the use of the hexavalent chromium or substitute
materials in each specific application;
Achieving a DoD Manufacturing Readiness Level of at least
eight (8) for any qualified alternative;
Materiel availability of hexavalent chromium and the
proposed alternatives over the projected life span of the system; and
Corrosion performance difference of alternative materials
or processes as determined by agency corrosion subject matter experts.
Section 223.7305 has been revised to include the above factors from
the DoD policy memo.
Comment: One respondent inquired if another exception is required
if an exception has been allowed under the original contract. Another
respondent asked about exemptions for follow-on procurements, or
maintenance procedures.
DoD Response: The rule has an exception for legacy systems, which
are now defined. An exception has been added for sustainment related
contracts (e.g., parts, services) for existing systems with hexavalent
chromium approved.

G. Dollar Threshold

Comment: One respondent requested that a dollar threshold be
established for waiver of the rule.
DoD Response: Cost effectiveness will be considered in deciding
whether to prohibit hexavalent chromium or authorize a deliverable
containing hexavalent chromium.

H. Statutes, Regulations, and Government-Wide Application

Comment: One respondent stated that the rule is contrary to
existing statutes such as the Resource Conservation and Recovery Act
(RCRA), which sets strict requirements for manifesting and disposing of
hazardous waste but does not prohibit use of materials such as
hexavalent chromium.
DoD Response: The rule is not contrary to existing statutes. The
rule is consistent with the 1984 Federal Hazardous and Solid Waste
Amendments to RCRA that focused on waste minimization. RCRA prescribes
``that the manifest required by subsection (a)(5) shall contain a
certification by the generator that the generator of the hazardous
waste has a program in place to reduce the volume or quantity and
toxicity of such waste to the degree determined by the generator to be
economically practicable.''
Comment: Two respondents stated that the rule is not consistent
with national and international regulations because laws such as the
Clean Water Act and the Clean Air Act, and regulations such as OSHA and
the European Union's Restriction on Hazardous Substances control the
release of hexavalent chromium but do not prohibit its use.
DoD Response: As with the referenced statutes and regulations, the
objective of this rule is the protection of human health and the
environment while balancing other considerations. Protection of human
health and the environment has historically been accomplished through
the reduction of releases and/or managing exposure. This rule reduces
releases and exposure by minimizing the incorporation of hexavalent
chromium into products acquired by DoD. The DoD approach to minimizing
hexavalent chromium does consider factors such as cost effectiveness
and technical feasibility as described at 223.7305. Since this rule
does not address the use of hexavalent chromium in the manufacturing
process or completely ban the use of hexavalent chromium in end items
delivered to DoD, other statutes and regulations

[[Page 25574]]

addressing releases and managing human exposure will complement this
rule when hexavalent chromium is used in or is a byproduct of the
manufacturing process or is incorporated into the end item.
Comment: One respondent stated that the rule should be applicable
Governmentwide.
DoD Response: The rule is only applicable to DoD. It is based on
the April 8, 2009, policy memorandum, issued by the Under Secretary of
Defense (AT&L).

I. Contractor Liability

Comment: Two respondents requested the removal of the liability
provisions of the clause because existing law is sufficient. These
respondents stated that the proposed paragraph (c) of 252.223-7XXX
poses an unreasonable legal and financial risk.
DoD Response: DoD agrees with the respondents. Existing law is
sufficient to address any issues regarding deliverables with hexavalent
chromium. Paragraph (c) of the clause was removed from the final rule.

J. Alternatives, List of Preapproved Products, and Government or Third-
Party Furnished Components

Comment: One respondent stated that where there are ``viable and
effective alternatives available,'' the respondent encourages the use
of such alternatives. The respondent provided trivalent chromium
processes as an example. Another respondent stated that the prohibition
clause will ``inadvertently prohibit the use of hexavalent chromium
solutions that convert to trivalent chromium or other environmentally
friendly compounds.''
DoD Response: The rule does not prohibit the use of trivalent
chromium. The rule is designed to encourage the use of environmentally
friendly alternatives as authorization is required to use hexavalent
chromium.
Comment: Two respondents requested a list or matrix of preapproved
hexavalent chromium products. One respondent recommended that the
Government and the contractor manage a list of classes of exemptions
based on the current state of the art.
DoD Response: A comprehensive list of applications that are
approved for the use of hexavalent chromium is not feasible for the
rule. Such a list will be outdated immediately. However, individual
solicitations will contain pre-approved uses of hexavalent chromium for
specific applications where its use is deemed necessary to meet
performance requirements and/or proven substitutes, considering
relevant factors, do not exist. DoD program managers will maintain
lists of pre-approved applications based on the criteria for approving
substitutes pursuant to the April 8, 2009, memorandum, while taking
into consideration the current state of art.
Comment: One respondent stated that contractors may be required to
incorporate Government-furnished components or equipment in the final
products assembled. Therefore, the contractor should not be held liable
or responsible for screening such items if the finished product
contains hexavalent chromium content in the supplied items from a third
party or Government.
DoD Response: If any Government-furnished component contains
hexavalent chromium, the use will be authorized by the Government. With
regard to components supplied by a third party to a prime contractor,
it is the responsibility of the prime contractor to know what
subcontractors and suppliers provide and comply with the rule. The
prime contractor should require subcontractors and suppliers to provide
information regarding the content of hazardous and toxic materials. In
most cases, Material Safety Data Sheets can be used to provide such
information.

K. Regulatory Flexibility Analysis

Comment: Two respondents stated that the rule will have significant
impact on small entities.
DoD Response: As mentioned above, since the rule was modified such
that plating and anodizing are not covered by the rule, capital costs
for conversions are de minimis. For the most part, compliance with the
rule will only require switching to non-chromate paints and primers. As
noted and described more thoroughly in section II.C. of this preamble,
based on conversations with industry and small businesses, DoD believes
that the rule will have a positive impact on industry and small
business profits and at worst, be revenue neutral over time. A number
of small businesses have developed non-chromate processes but have been
hindered in their ability to market these processes to DoD by existing
DoD specifications. The rule will also help make businesses more
competitive in the world market. Non-hexavalent chromium processes
should be less costly over the lifecycle of the process due to the use
of less hazardous materials and related control and disposal costs.
Comment: Four respondents stated that the rule will increase
lifecycle cost due to less corrosion protection.
DoD Response: The rule does not necessarily require the use of
substitutes for hexavalent chromium if lifecycle costs are higher or if
performance requirements for corrosion control are not met. As
described in Section II.E of this preamble, the DoD policy of April 8,
2009, contains factors for considering substitutes. These factors
include lifecycle costs.

L. Meeting With Industry and Stakeholders

Comment: Two respondents recommended that DoD should meet with
industry and stakeholders prior to proceeding with proposed rule.
DoD Response: The DoD Strategic Environmental Research and
Development Program (SERDP) has held and participated in several
workshops with industry related to the use of hexavalent chromium and
substitutes. The results of these workshops and related research are
available on the SERDP Web site at http://www.serdp.org and
asetsdefense.org). In addition, DoD representatives briefed attendees
at the 2010 meeting of the National Association for Surface Finishing
(NASF). DoD also provided a worldwide briefing concerning the rule on a
Web-cast hosted by the NASF. During the Webcast, no negative comments
were received (A transcript of the Webcast is available at a cost at
http://www.nasf.org/staticcontent/Dec14Recording.pdf).

III. Executive Order 12866 and Executive Order 13563

Executive Orders 12866 and 13563 direct agencies to assess all
costs and benefits of available regulatory alternatives and, if
regulation is necessary, to select regulatory approaches that maximize
net benefits (including potential economic, environmental, public
health and safety effects, distributive impacts, and equity). Executive
Order 13563 emphasizes the importance of quantifying both costs and
benefits, of reducing costs, of harmonizing rules, and of promoting
flexibility. This rule has been designated a ``significant regulatory
action'' although not economically significant under section 3(f) of
Executive Order 12866. Accordingly, the rule has been reviewed by the
Office of Management and Budget. This rule is not a major rule under 5
U.S.C. 804.

IV. Regulatory Flexibility Act

DoD certifies that this rule will not have a significant economic
impact on a substantial number of small entities

[[Page 25575]]

within the meaning of the Regulatory Flexibility Act, 5 U.S.C. 601, et
seq.
The rule has been revised to minimize effects on small businesses
in particular. The rule only affects deliverables that contain greater
than 0.1% hexavalent chromium, not in-plant hexavalent chromium
processes or deliverables containing the metal chromium. The rule is
primarily aimed at coatings. Consequently, the rule has no effect on--
Conversion coatings;
Hard chrome plating;
Chromic acid anodizing;
Most chromated metallic ceramics; and
Chromate washes, etches, pickling, etc.
The primary coatings used by DoD affected by the rule are--
Chromated primers (for aircraft skins);
Chromated primers (for components);
Aircraft fuel tank internal coatings;
Wet install fastener sealants (used on Naval aircraft);
Other chromated sealants (used to seal panels, covers,
electronics, etc.); and
Chromated metallic-ceramic paints used in turbine engines.
With respect to deliverables provided to DoD, the above materials
are used primarily by the large aerospace companies such as--
Airframe manufacturers;
Engine manufacturers; and
Missile and spacecraft manufacturers.
The suppliers to these large manufacturers will be affected
primarily by the requirement to supply components painted with non-
chrome primers and chrome-free sealants. Some of these suppliers are
large corporations but many are small businesses. However, the
substitution of non-chromated products does not require a capital
investment but rather a substitution of one coating formulation for
another. For the most part, the same coating application equipment can
be used and, as stated earlier, the rule will be positive for many of
the small businesses that have developed non-hexavalent products.
Some commercial aerospace companies have already adopted chromate-
free finish systems. This is being accomplished to meet commercial
client desires for more sustainable products, but it also results in a
reduction in operating costs. A Boeing press release on the initial
testing of non-chromate primers on commercial aircraft states:

``In addition to simplified health and safety monitoring
requirements, a chrome-free primer reduces the environmental impact
of the paint and stripping process. Removing chrome from the paint
and primer eliminates the need for special handling of paint waste,
clean up and designated offsite disposal areas.''

(Reference http://www.boeing.com/apachenews/2009/issue_01/news_s7_p2.html).

In one military example, significant cost avoidance was achieved by
eliminating the extensive chromate control requirements involved in
bonding attach points for wiring on the production line. Meeting the
federal Permissible Exposure Level (PEL) requirements when using
chromated primers requires blocking off the area during sanding
operations, which interferes with all other work and reduces the
efficiency of the production process.
The examples below provide evidence that in most cases, companies
will achieve savings when replacing hexavalent chromium with an
alternative.
At one maintenance facility, a side-by-side cost comparison was
developed for a hexavalent chromium process and a non-hexavalent
chromium process developed by a small business. The report shows that--
The non-chromate process replaced three steps which
dramatically reduced labor costs and also eliminated the need to
purchase three other chemicals;
The non-chromate process used \2/3\ less rinse water
resulting in water and wastewater cost savings and environmental
benefit;
There was a significant reduction in hazardous waste
disposal costs;
The equipment used for the non-chromate product was the
same as the standard process (with hexavalent chromium); therefore
there were no capital costs for the conversion; and
Less personal protection equipment (PPE) was required when
converting to the non-chromate process (e.g., full mask, hazardous
materials suit, respirator cartridges, etc.).
At another facility, there was a savings of $6,000 per aircraft
with $1.3 million in documented operational savings at the time of the
report due to switching to a non-chromate process. The process also
eliminated 500,000 gallons of wastewater per year.
A large maintenance facility in Ohio switched to a non-chromate
process and significantly reduced pollutant discharges, improved worker
safety, cut process time, and reported savings in excess of $200,000
just due to reduction in state and federal compliance requirements.
Another facility reported a savings of approximately $120,000 per
year in water consumption and treatment costs alone and reduced
production times by 4,400 man-hours per year.
Fact sheets and detailed cost and performance reports for numerous
non-hexavalent chromium processes can be found by searching for
``hexavalent chromium'' at http://www.serdp-estcp.org.

V. Paperwork Reduction Act

The rule does not contain any information collection requirements
that require the approval of the Office of Management and Budget under
the Paperwork Reduction Act (44 U.S.C. chapter 35).

List of Subjects in 48 CFR Parts 223 and 252

Government procurement.

Mary Overstreet,
Editor, Defense Acquisition Regulations System.

Therefore, 48 CFR parts 223 and 252 are amended as follows:

0
1. The authority citation for 48 CFR parts 223 and 252 continues to
read as follows:

Authority: 41 U.S.C. 1303 and 48 CFR chapter 1.

PART 223--ENVIRONMENT, ENERGY AND WATER EFFICIENCY, RENEWABLE
ENERGY TECHNOLOGIES, OCCUPATIONAL SAFETY, AND DRUG-FREE WORKPLACE

0
2. Add subpart 223.73 to read as follows:
Subpart 223.73--Minimizing the Use of Materials Containing Hexavalent
Chromium
Sec.
223.7300 Definition.
223.7301 Policy.
223.7302 Authorities.
223.7303 Prohibition.
223.7304 Exceptions.
223.7305 Authorization and approval.
223.7306 Contract clause.

Subpart 223.73--Minimizing the Use of Materials Containing
Hexavalent Chromium

223.7300 Definition.

Legacy system, as used in this subpart, means any program that has
passed Milestone A in the defense acquisition management system, as
defined in DoD Instruction 5000.02.

223.7301 Policy.

It is DoD policy to minimize hexavalent chromium (an anti-
corrosive) in items acquired by DoD

[[Page 25576]]

(deliverables and construction material), due to the serious human
health and environmental risks related to its use. Executive Order
13423, section 3, paragraph (a) requires that the heads of agencies
reduce or eliminate the acquisition and use of toxic or hazardous
chemicals. Executive Order 13514 requires that the heads of agencies
are responsible for ``reducing and minimizing the quantity of toxic and
hazardous chemicals and materials acquired, used, or disposed of.''

223.7302 Authorities.

(a) Executive Order 13423 of January 24, 2007, Strengthening
Federal Environmental, Energy, and Transportation Management.
(b) Executive Order 13514 of October 5, 2009, Federal Leadership in
Environmental, Energy, and Economic Performance.

223.7303 Prohibition.

(a) Except as provided in 223.7304 and 223.7305, no contract may
include a specification or standard that results in a deliverable or
construction material containing more than 0.1 percent hexavalent
chromium by weight in any homogeneous material in the deliverable or
construction material where proven substitutes are available that
provide acceptable performance for the application.
(b) This prohibition is in addition to any imposed by the Clean Air
Act regardless of the place of performance.

223.7304 Exceptions.

The prohibition in 223.7303 does not apply to--
(a) Legacy systems and their related parts, subsystems, and
components that already contain hexavalent chromium. However,
alternatives to hexavalent chromium shall be considered by the
appropriate official during system modifications, follow-on
procurements of legacy systems, or maintenance procedure updates; and
(b) Additional sustainment related contracts (e.g., parts,
services) for a system in which use of hexavalent chromium was
previously approved.

223.7305 Authorization and approval.

(a) The prohibition in 223.7303 does not apply to critical defense
applications if no substitute can meet performance requirements. The
DoD policy of April 8, 2009, ``Minimizing the Use of Hexavalent
Chromium,'' contains requirements for weighing hexavalent chromium
versus substitutes. DoD Program Managers must consider the following
factors--
(1) Cost effectiveness of alternative materials or processes;
(2) Technical feasibility of alternative materials or processes;
(3) Environment, safety, and occupational health risks associated
with the use of the hexavalent chromium or substitute materials in each
specific application;
(4) Achieving a DoD Manufacturing Readiness Level of at least eight
for any qualified alternative;
(5) Materiel availability of hexavalent chromium and the proposed
alternatives over the projected life span of the system; and
(6) Corrosion performance difference of alternative materials or
processes as determined by agency corrosion subject matter experts.
(b) However, unless an exception in 223.7304 applies, the
incorporation of hexavalent chromium in items acquired by DoD shall be
specifically authorized at a level no lower than a general or flag
officer or a member of the Senior Executive Service from the Program
Executive Office or equivalent level, in coordination with the
component Corrosion Control and Prevention Executive. Follow the
procedures in PGI 223.7305.

223.7306 Contract clause.

Unless an exception in 223.7304 applies, or use has been authorized
in accordance with 223.7305, use the clause at 252.223-7008,
Prohibition of Hexavalent Chromium, in solicitations and contracts for
supplies, maintenance and repair services, or construction.

PART 252--SOLICITATION PROVISIONS AND CONTRACT CLAUSES

0
3. Add section 252.223-7008 as follows:

252.223-7008 Prohibition of Hexavalent Chromium.

As prescribed in 223.7306, use the following clause:

Prohibition of Hexavalent Chromium (MAY 2011)

(a) Definitions. As used in this clause--
Homogeneous material means a material that cannot be
mechanically disjointed into different materials and is of uniform
composition throughout.
(1) Examples of homogeneous materials include individual types
of plastics, ceramics, glass, metals, alloys, paper, board, resins,
and surface coatings.
(2) Homogeneous material does not include conversion coatings
that chemically modify the substrate. Mechanically disjointed means
that the materials can, in principle, be separated by mechanical
actions such as unscrewing, cutting, crushing, grinding, and
abrasive processes.
(b) Prohibition. (1) Unless otherwise specified by the
Contracting Officer, the Contractor shall not provide any
deliverable or construction material under this contract that--
(i) Contains hexavalent chromium in a concentration greater than
0.1 percent by weight in any homogenous material; or
(ii) Requires the removal or reapplication of hexavalent
chromium materials during subsequent sustainment phases of the
deliverable or construction material.
(2) This prohibition does not apply to hexavalent chromium
produced as a by-product of manufacturing processes.
(c) If authorization for incorporation of hexavalent chromium in
a deliverable or construction material is required, the Contractor
shall submit a request to the Contracting Officer.
(d) Subcontracts. The Contractor shall include the substance of
this clause, including this paragraph (d), in all subcontracts for
supplies, maintenance and repair services, or construction
materials.
(End of clause)

[FR Doc. 2011-10882 Filed 5-4-11; 8:45 am]
BILLING CODE 5001-08-P