[Federal Register Volume 79, Number 40 (Friday, February 28, 2014)]
[Proposed Rules]
[Pages 11381-11382]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2014-04157]



Defense Acquisition Regulations System

48 CFR Parts 229 and 252

RIN 0750-AI19

Defense Federal Acquisition Regulation Supplement: Clauses With 
Alternates--Taxes (DFARS Case 2013-D025)

AGENCY: Defense Acquisition Regulations System, Department of Defense 

ACTION: Proposed rule.


SUMMARY: DoD is proposing to amend the Defense Federal Acquisition 
Regulation Supplement (DFARS) to create an overarching prescription for 
a tax-related clause with an alternate and adds a separate prescription 
for the basic clause. The rule also proposes to include in the 
regulation the full text of the alternate clause.

DATES: Comments on the proposed rule should be submitted in writing to 
the address shown below on or before April 29, 2014, to be considered 
in the formation of a final rule.

ADDRESSES: Submit comments identified by DFARS Case 2013-D025, using 
any of the following methods:
    [cir] Regulations.gov: http://www.regulations.gov. Submit comments 
via the Federal eRulemaking portal by entering ``DFARS Case 2013-D025'' 
under the heading ``Enter keyword or ID'' and selecting ``Search.'' 
Select the link ``Submit a Comment'' that corresponds with ``DFARS Case 
2013-D025.'' Follow the instructions provided at the ``Submit a 
Comment'' screen. Please include your name, company name (if any), and 
``DFARS Case 2013-D025'' on your attached document.
    [cir] Email: [email protected]. Include DFARS Case 2013-D025 in the 
subject line of the message.
    [cir] Fax: 571-372-6094.
    [cir] Mail: Defense Acquisition Regulations System, Attn: Ms. 
Annette Gray, OUSD(AT&L)DPAP/DARS, Room 3B855, 3060 Defense Pentagon, 
Washington, DC 20301-3060.
    Comments received generally will be posted without change to http://www.regulations.gov, including any personal information provided. To 
confirm receipt of your comment(s), please check www.regulations.gov, 
approximately two to three days after submission to verify posting 
(except allow 30 days for posting of comments submitted by mail).

FOR FURTHER INFORMATION CONTACT: Annette Gray, Defense Acquisition 
Regulations System, OUSD(AT&L)DPAP/DARS, Room 3B855, 3060 Defense 
Pentagon, Washington, DC 20301-3060. Telephone 571-372-6093.


I. Background

    DoD is undertaking a revision of provisions and clauses with 
alternates and the associated prescriptions, in order to clarify usage 
and facilitate the use of automated contract writing systems. These 
changes do not affect the meaning or applicability of the provisions or 

II. Discussion

    This proposed rule addresses the single DFARS part 229 clause that 
has an alternate, 252.229-7001, Tax Relief. The naming convention 
results in proposed new clause titles, i.e., Tax Relief--Basic and Tax 
Relief--Alternate I.
    An umbrella prescription is proposed for the elements common to the 
basic clause and the alternate. The specific prescriptions for the 
basic clause and the alternate address only the requirements for their 
use that enable the selection of the basic or the alternate. The 
planned changes will increase the clarity and ease of use but will not 
revise the applicability in any way. The presentation of the text of 
the clause alternate in the regulations would no longer consist solely 
of paragraph (d) with a reference to the basic clause, but would 
include the entire text of paragraphs (a) through (c)

[[Page 11382]]

along with paragraph (d). Further, this proposed rule also revises the 
applicable clause preface, i.e., the language in part 252 that precedes 
the clause, but still identifies the difference from the basic clause.

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 not a significant regulatory action and, therefore, was not 
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

    DoD does not expect this proposed 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 it merely revises the prescriptions for a basic clause with 
alternate, and includes the full text of the clause in the alternate. 
However, an initial regulatory flexibility analysis has been performed 
and is summarized as follows:
    The purpose of this rule is to amend the Defense Federal 
Acquisition Regulation Supplement (DFARS) to create an overarching 
prescription for use of the basic and alternate of DFARS clause 
252.229-7001, Tax Relief, a separate prescription for the basic clause, 
and to include the full text of the clause alternate.
    Employing a prescription for the basic version and alternate of 
DFARS clause 252.229-7001 will facilitate the use of automated contract 
writing systems. The current convention requires the prescription for 
the basic provision or clause to address all the possibilities covered 
by the alternates, and then the prescription for each alternate 
addresses only what is different for the use of that particular 
alternate. Instead of the current convention for alternates to show 
only paragraphs changed from the basic version of the provision or 
clause, this rule proposes to include the full text of the clause 
    There will be no impact on small business entities since DFARS 
clause 252.229-7001 is used only in solicitations and contracts when 
award is made to a foreign concern and performance is in a foreign 
    This rule does not add any new information collection requirements. 
The rule does not duplicate, overlap, or conflict with any other 
Federal rules. No alternatives were identified that will accomplish the 
objectives of the rule.
    DoD invites comments from small business concerns and other 
interested parties on the expected impact of this rule on small 
    DoD will also consider comments from small entities concerning the 
existing regulations in subparts affected by this rule in accordance 
with 5 U.S.C. 610. Interested parties must submit such comments 
separately and should cite 5 U.S.C. 610 (DFARS Case 2013-D025), in 

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 229 and 252

    Government procurement.

Manuel Quinones,
Editor, Defense Acquisition Regulations System.

    Therefore, 48 CFR parts 229 and 252 are proposed to be amended as 

1. The authority citation for parts 229 and 252 continues to read as 

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


2. Revise section 229.402-70 to read as follows:

229.402-70  Additional clauses.

    (a) Use the basic or the alternate of the clause at 252.229-7001, 
Tax Relief, in solicitations and contracts when a contract will be 
awarded to a foreign concern for performance in a foreign country.
    (1) Use the clause Tax Relief--Basic in solicitations and contracts 
when the contract will be performed in a foreign country other than 
    (2) Use the clause Tax Relief--Alternate I in solicitations and 
contracts when the contract will be performed in Germany.


3. Amend section 252.229-7001 by--
a. Revising the introductory text, clause title and date; and
b. Revising Alternate I.

252.229-7001  Tax Relief.

    As prescribed in 229.402-70(a), use one of the following clauses:

    Basic. As prescribed at 229.402-70(a)(1), use the following 

Tax Relief--Basic (Date)

* * * * *
    Alternate I. As prescribed at 229.402-70(a)(2), use the 
following clause, which adds a paragraph (d) not included in the 
basic clause.

Tax Relief--Alternate (Date)

    (a) Prices set forth in this contract are exclusive of all taxes 
and duties from which the United States Government is exempt by 
virtue of tax agreements between the United States Government and 
the Contractor's government. The following taxes or duties have been 
excluded from the contract price:
    NAME OF TAX: (Offeror insert) RATE (PERCENTAGE): (Offeror 
    (b) The Contractor's invoice shall list separately the gross 
price, amount of tax deducted, and net price charged.
    (c) When items manufactured to United States Government 
specifications are being acquired, the Contractor shall identify the 
materials or components intended to be imported in order to ensure 
that relief from import duties is obtained. If the Contractor 
intends to use imported products from inventories on hand, the price 
of which includes a factor for import duties, the Contractor shall 
ensure the United States Government's exemption from these taxes. 
The Contractor may obtain a refund of the import duties from its 
government or request the duty-free import of an amount of supplies 
or components corresponding to that used from inventory for this 
    (d) Tax relief will be claimed in Germany pursuant to the 
provisions of the Agreement Between the United States of America and 
Germany Concerning Tax Relief to be Accorded by Germany to United 
States Expenditures in the Interest of Common Defense. The 
Contractor shall use Abwicklungsschein fuer abgabenbeguenstigte 
Lieferungen/Leistungen nach dem Offshore Steuerabkommen (Performance 
Certificate for Tax-Free Deliveries/Performance according to the 
Offshore Tax Relief Agreement) or other documentary evidence 
acceptable to the German tax authorities. All purchases made and 
paid for on a tax-free basis during a 30-day period may be 
accumulated, totaled, and reported as tax-free.

(End of clause)

[FR Doc. 2014-04157 Filed 2-27-14; 8:45 am]