[Federal Register Volume 78, Number 153 (Thursday, August 8, 2013)]
[Rules and Regulations]
[Pages 48331-48333]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2013-18960]

[[Page 48331]]



Defense Acquisition Regulations System

48 CFR Part 252

RIN 0750-AH92

Defense Federal Acquisition Regulation Supplement: Release of 
Fundamental Research Information (DFARS Case 2012-D054)

AGENCY: Defense Acquisition Regulations System, Department of Defense 

ACTION: Final rule.


SUMMARY: DoD is issuing a final rule amending the Defense Federal 
Acquisition Regulation Supplement (DFARS) to provide guidance relating 
to the release of fundamental research information. This rule was 
previously published as part of the proposed rule 2011-D039, 
Safeguarding Unclassified DoD Information.

DATES: Effective: August 8, 2013.

FOR FURTHER INFORMATION CONTACT: Mr. Dustin Pitsch, 571-372-6090.


I. Background

    DoD published a proposed rule, DFARS case 2011-D039, in the Federal 
Register at 76 FR 38089 on June 29, 2011, to address requirements for 
safeguarding unclassified information. The scope of this final rule is 
limited to only the modifications contained within the proposed rule to 
DFARS 252.204-7000, Disclosure of Information. This text was separated 
from the proposed rule, and is being published separately as a final 
rule, because the changes in this DFARS clause deal with the release of 
information on fundamental research projects and not safeguarding. This 
rule was initiated to implement guidance provided by the Under 
Secretary of Defense for Acquisition, Technology and Logistics (AT&L) 
in a memorandum on Fundamental Research dated May 24, 2010, and a 
memorandum on Contracted Fundamental Research dated June 26, 2008. The 
memoranda provided additional clarifying guidance to ensure that DoD 
does not restrict disclosure of the results of fundamental research, as 
defined by the National Security Decision Directive (NSDD) 189, 
National Policy on the Transfer of Scientific, Technical and 
Engineering Information, unless such research efforts are classified 
for reasons of national security or otherwise restricted by applicable 
Federal statutes, regulations, or executive orders.
    The comment period originally closed on August 29th, 2011, and was 
extended to December 16th, 2011. DoD received comments on the proposed 
rule from forty-nine respondents; however, only fourteen (14) of the 
respondents addressed the changes contained within this final rule.

II. Discussion and Analysis of the Public Comments

    DoD reviewed the public comments in the development of the final 
rule. A discussion of the comments and the changes made to the rule as 
a result of those comments are provided as follows:

A. Summary of Significant Changes From the Proposed Rule

    1. Subparagraph 252.204-7000(a)(1) is no longer being modified and 
will remain essentially intact.
    2. Paragraph 252.204-7000(a)(3) is revised to no longer require a 
certification by the contracting component. Instead, the fundamental 
research determination must be made in writing.
    3. Subparagraph 252.204-7000(b) is revised to modify the time 
period that requests for approval must be submitted to the contracting 
officer from 45 days to 10 business days. It also clarifies that the 
paragraph refers to the exception provided at subparagraph (a)(1).

 B. Analysis of Public Comments

1. Clarification of Certification Process
    Comment: Two respondents stated that the negotiation and 
determination of whether fundamental research is being performed should 
occur at the proposal stage whenever universities will be performing 
research services.
    Response: Consistent with the text added at 252.204-7000(a)(3), 
fundamental research projects should be scoped and negotiated during 
the proposal stage and the written determination of fundamental 
research should be prepared prior to the research performer commencing 
work on the project.
    Comment: Two respondents requested that definitions be provided for 
the following terms: ``prime contractor,'' ``research performer,'' and 
``contracting component.'' An additional respondent requested that DoD 
define the terms ``project'' and ``certified.''
    Response: The term ``contracting component'' was used in the 
proposed rule but was changed to ``contracting activity,'' which is 
defined in the FAR and supplemented within the DFARS. The meanings of 
the other terms in this rule do not vary from their usage in the 
commercial marketplace; therefore, explicit definitions will not be 
    Comment: One respondent stated that the proposed rule does not 
allow for all circumstances in which contractors may be required to 
release unclassified information, e.g., compelled discovery during 
litigation. The respondent recommended that paragraph 252.204-
7000(a)(1) of the DFARS text remain unchanged to allow the contracting 
officer to approve requests for disclosure in instances not outlined in 
the proposed rule.
    Response: DoD has revised the final rule to keep the current text 
at DFARS 252.204-7000(a)(1) intact.
    Comment: Two respondents expressed concern with the requirement 
that the contractor submit its request for approval at least 45 days 
before the proposed date for release of unclassified information. One 
respondent stated that there is no requirement in the NISPOM requiring 
the contractor to submit a request for information release to the 
contracting officer at least 45 days before the proposed date of the 
release. The respondent requested that DoD ensure that the requirements 
in the rule do not impact existing documents in an unintended way. 
Another respondent stated that when proposals are being prepared for 
new efforts, there is often insufficient time to provide a 45-day 
advance notice.
    Response: The National Industrial Security Program Operating Manual 
(NISPOM) provides baseline standards for the protection of classified 
information in connection with classified contracts. The scope of DFARS 
252.204-7000 is limited to the release of unclassified information; 
therefore, the requirements of this rule and NISPOM are mutually 
exclusive. However, due to advances in communication technology, since 
the clause was first added to the DFARS, DoD has revised the final rule 
to reduce the requirement to 10 business days, to alleviate burden on 
    Comment: One respondent stated that a presumption should exist that 
all funded research projects are fundamental research and that the 
information may be published without prior restriction unless an 
affirmative determination has been made by DoD that it is not 
fundamental research.
    Response: The fundamental research presumption may be appropriate 
in instances when the research is funded through use of grants. 
However, the research performed in support of DoD contracts often falls 
in the categories of applied or advanced research and has the 
possibility of producing the seed for

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future defense technologies and therefore needs restrictions in place.
    Comment: Several respondents stated that the prime contractor 
should not be involved in the determination and/or certification that a 
project is fundamental research. Some stated that the determination 
should be limited to the research performer and the contracting 
component. Others stated that the prime contractor should be required 
to submit any subcontractor's request for fundamental research 
certification to the contracting officer.
    Response: There was no certification requirement in the proposed 
rule. The final rule allows for the contracting activity to coordinate 
with both the prime contractor and the research performer when making a 
fundamental research determination. It is not appropriate for 
subcontractors to circumvent the prime contractor, because there is no 
privity of contract between the Government and the subcontractor.
2. National Security Decision Directive 189 (NSDD 189)
    Comment: One respondent stated that the rule contradicts with NSDD 
189, which requires that agencies determine classification requirements 
prior to award, while the proposed rule allows the determination to be 
made after award.
    Response: The purpose of DFARS 252.204-7000 is to provide direction 
to contractors regarding when it is permissible for them to release 
unclassified information relating to DoD contracts. Instructions to the 
contracting activity concerning when classification determinations 
should be made fall under the National Industrial Security Program 
(NISP), which is outside of the scope of the clause and this rule.
3. Clarify/Expand Release Categories
    Comment: One respondent stated that further clarification was 
needed to expressly permit release of unclassified information without 
the contracting officer's approval for reporting obligations included 
elsewhere in the contract and/or required by applicable law.
    Response: DoD has revised the proposed rule to revert to the 
current DFARS text at 252.204-7000(a)(1) which contemplates all 
circumstances in which contractors may be required to release 
unclassified information. However, the contracting officer must be 
involved in the decision to release information pertaining to DoD 
contracts because of the potential security risks.
    Comment: One respondent stated that the proposed rule should 
provide guidance on whether the restriction of unclassified information 
``to anyone outside the contractor's organization'' applies to 
outsourced IT.
    Response: Contractors should have controls in place that prevent 
the release of information by their subcontractors or outsourced IT 
through either flow-down of the clause at DFARS 252.204-7000 or 
obtaining nondisclosure agreements.
 4. DoD Contact
    Comment: One respondent stated that a post-contract DoD-wide point 
of contact should be contained in the rule to account for instances 
when the need for the release of information occurs after contract 
completion and the contracting officer is not reachable.
    Response: The scope of DFARS 252.204-7000 is limited to the 
permissibility of the release of unclassified information relating to 
DoD contracts. In circumstances where the contracting officer cannot be 
reached, the applicable contracting activity should be contacted.
5. Prescription
    Comment: One respondent stated that the proposed rule should make 
clear that it is not authorized for use in university-based Budget 
Activity 1 or 2 contracts, absent exceptional circumstances justifying 
extremely rare exceptions made only with the approval of high-level 
component management. Another respondent stated that the proposed 
clause should not be adopted without emphasizing the inapplicability of 
the rule to contracts for fundamental research.
    Response: The prescription requires that the clause be used when 
the contractor will have access to or generate unclassified information 
that may be sensitive and inappropriate for release to the public. The 
contracting officer has the discretion to not include the clause in any 
solicitation or contract when a judgment has been reached that the 
information may be freely released to the public.
6. Grants/Cooperative Agreements
    Comment: One respondent stated that the proposed rule does not give 
any indication of its applicability to grants and/or cooperative 
    Response: The DFARS applies to purchases and contracts by DoD 
contracting activities. The Department of Defense Grant and Agreement 
Regulatory System (DODGARS) is the system of regulatory policies and 
procedures for the award and administration of grants and cooperative 
 7. Scope of Fundamental Research Exemption
    Comment: One respondent stated that the scope of the fundamental 
research exemption is not clear since it is not explicit in the DoD 
information definition.
    Response: According to the NSDD 189, ``fundamental research'' means 
basic and applied research in science and engineering, the results of 
which ordinarily are published and shared broadly within the scientific 
community, as 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.'' The exemption will apply when the nature 
of the research has been determined to meet this definition.
8. Flowdown
    Comment: One respondent stated that the proposed rule contradicts 
USD(AT&L) memorandum dated May 24, 2010, stating that ``Provisions 
shall be made to accommodate such subcontracts for fundamental research 
and to ensure DoD restrictions on the prime contract do not flow down 
to the performer(s) of such research,'' by requiring the contractor to 
include a similar requirement in each subcontract. The respondent 
recommended that the paragraph be revised to state that the similar 
requirement is not required in subcontracts if any of the exemptions 
    Response: In circumstances where a project is determined to be 
fundamental research in accordance with the final rule, the prime 
contractor will not be restricted on the release of information 
resulting from or arising during that project. Therefore, the 
determination will flow down to subcontractors for portions of the work 
determined to be fundamental research.
    Comment: One respondent stated that significant outreach is needed 
to DoD firms to ensure they understand what constitutes fundamental 
research and that specific contracting terms are available that should 
be used in those instances.
    Response: This rule aims to clarify issues surrounding restrictions 
currently being placed on the release of unclassified information 
arising from fundamental research projects. Developing a formal 
outreach program is outside of the scope of this rule, however the 
publication of this final rule serves as outreach for rulemaking 

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C. Other Changes

    1. Subparagraph 252.204-7000(b)(1) of the proposed rule, which 
provided exceptions for information required as part of an official 
Defense Contract Audit Agency audit or DoD Inspector General 
investigation, or by a Congressional or Federal subpoena, is removed, 
because the clause did not previously protect the information from 
release under these circumstances.
    2. Subparagraph 252.204-7000(b)(3) of the proposed rule is revised 
to delete ``except as otherwise provided by applicable Federal statutes 
regulations, or Executive orders.'' Subparagraph 252.204-7000(d) of the 
proposed rule is revised to clarify that the paragraph requiring the 
flowdown of the contract clause should also be included in any 
subcontracts, in order to provide flowdown to lower tier subcontracts.

III. Executive Orders 12866 and 13563

    Executive Orders (E.O.s) 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). E.O. 
13563 emphasizes the importance of quantifying both costs and benefits, 
of reducing costs, of harmonizing rules, and of promoting flexibility. 
This is a significant regulatory action and, therefore, was subject to 
review under section 6(b) of E.O. 12866, Regulatory Planning and 
Review, dated September 30, 1993. This rule is not a major rule under 5 
U.S.C. 804.

IV. Regulatory Flexibility Act

    A final regulatory flexibility analysis has been prepared 
consistent with the Regulatory Flexibility Act, 5 U.S.C. 601, et seq., 
and is summarized as follows:
    This final rule implements guidance provided by the Undersecretary 
of Defense for Acquisition, Technology and Logistics (AT&L) in a 
memorandum dated May 24, 2010, by providing a fundamental research 
exception to the general rule against disclosure of unclassified 
information. The subject matter of this final rule was previously 
included in proposed rule 2011-D039, which was published in the Federal 
Register on June 29, 2011 (76 FR 38089); however, the text was deemed 
more appropriate for a stand-alone case because this subject matter 
deals with the release of information and not the safeguarding of 
information. An initial regulatory flexibility analysis was prepared, 
and no public comments were received. Also, DoD received no comments by 
the Chief Counsel for Advocacy of the Small Business Administration in 
response to the proposed rule.
    This final rule applies to all Federal contractors, regardless of 
size or business ownership, when responding to solicitations or being 
awarded contracts that include requirements that meet the definition of 
fundamental research as contained within NSDD 189. The final rule is 
not expected to have a significant impact on small entities, because 
the rule aims to implement policy guidance that is already being 
followed within DoD regarding restrictions on the disclosure of 
fundamental research.
    The rule does not contain any reporting or recordkeeping 
requirements and does not require contractors to expend significant 
cost or effort. There are no known significant alternatives to the rule 
that would further minimize any economic impact of the rule on small 

V. Paperwork Reduction Act

    The rule does not add any new 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 Part 252

    Government procurement.

Manuel Quinones,
Editor, Defense Acquisition Regulations System.
    Therefore, 48 CFR part 252 is amended as follows:


1. The authority citation for part 252 continue to read as follows:

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

2. Revise section 252.204-7000 to read as follows:

252.204-7000  Disclosure of information.

    As prescribed in 204.404-70(a), use the following clause:

    (a) The Contractor shall not release to anyone outside the 
Contractor's organization any unclassified information, regardless 
of medium (e.g., film, tape, document), pertaining to any part of 
this contract or any program related to this contract, unless--
    (1) The Contracting Officer has given prior written approval;
    (2) The information is otherwise in the public domain before the 
date of release; or
    (3) The information results from or arises during the 
performance of a project that has been scoped and negotiated by the 
contracting activity with the Contractor and research performer and 
determined in writing by the Contracting Officer to be fundamental 
research in accordance with National Security Decision Directive 
189, National Policy on the Transfer of Scientific, Technical and 
Engineering Information, in effect on the date of contract award and 
the USD (AT&L) memoranda on Fundamental Research, dated May 24, 
2010, and on Contracted Fundamental Research, dated June 26, 2008, 
(available at DFARS PGI 204.4).
    (b) Requests for approval under paragraph (a)(1) shall identify 
the specific information to be released, the medium to be used, and 
the purpose for the release. The Contractor shall submit its request 
to the Contracting Officer at least 10 business days before the 
proposed date for release.
    (c) The Contractor agrees to include a similar requirement, 
including this paragraph (c), in each subcontract under this 
contract. Subcontractors shall submit requests for authorization to 
release through the prime contractor to the Contracting Officer.

    (End of clause)

[FR Doc. 2013-18960 Filed 8-7-13; 8:45 am]