[Federal Register Volume 80, Number 38 (Thursday, February 26, 2015)]
[Rules and Regulations]
[Pages 10391-10392]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2015-03855]

[[Page 10391]]



Defense Acquisition Regulations System

48 CFR Part 225

RIN 0750-AI36

Defense Federal Acquisition Regulation Supplement: Domestic 
Source Restrictions on Certain Naval Vessel Components (DFARS Case 

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 implement the statutory 
domestic source restrictions on acquisition of certain naval vessel 

DATES: Effective February 26, 2015.

FOR FURTHER INFORMATION CONTACT: Ms. Amy G. Williams, telephone 571-


I. Background

    DoD published a proposed rule in the Federal Register at 79 FR 
56333 on September 19, 2014, to implement the domestic source 
restrictions in 10 U.S.C. 2534 on gyrocompasses, electronic navigation 
chart systems, steering controls, pumps, propulsion and machinery 
control systems, and totally enclosed lifeboats, to the extent they are 
unique to marine applications.
    One respondent submitted a public comment in response to the 
proposed rule.

II. Discussion and Analysis

    DoD reviewed the public comment in the development of the final 
rule. A discussion of the comment is provided, as follows:

A. Significant Changes From the Proposed Rule

    There is no change from the proposed rule to the final rule.

B. Analysis of Public Comment

    Comment: The respondent stated that the rule should require 
manufacture of the naval vessel components in the United States.
    Response: In accordance with 10 U.S.C. 2534, the rule requires 
manufacture of the naval vessel components in the United States or 
Canada. 10 U.S.C. 2534(b) requires the manufacturer of the items to be 
a part of the national technology and industrial base. The term 
``national technology and industrial base'' is defined at 10 U.S.C. 
2500 to mean ``the persons and organizations that are engaged in 
research, development, production, integration, services, or 
information technology activities conducted within the United States 
and Canada.'' Therefore, it is necessary to allow manufacture in 
Canada, as well as the United States.

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 certifies that this final rule will not 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 this law has been implemented in the Defense Logistics Agency 
and Department of Navy regulations for many years, and moving the 
regulations to the DFARS will have no impact on the public.

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 Part 225

    Government procurement.

Manuel Quinones,
Editor, Defense Acquisition Regulations System.

    Therefore, 48 CFR part 225 is amended as follows:


1. The authority citation for 48 CFR part 225 continues to read as 

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

2. Amend section 225.7008 by revising paragraph (b) to read as follows:

225.7008  Waiver of restrictions of 10 U.S.C. 2534.

* * * * *
    (b) In accordance with the provisions of paragraphs (a)(1)(i) 
through (iii) of this section, the USD(AT&L) has waived the 
restrictions of 10 U.S.C. 2534(a) for certain items manufactured in the 
United Kingdom, including air circuit breakers for naval vessels (see 
225.7006) and the naval vessel components listed at 225.7010-1.

3. Add sections 225.7010, 225.7010-1, 225.7010-2, 225.7010-3, and 
225.7010-4 to read as follows:

225.7010  Restriction on certain naval vessel components.

225.7010-1  Restriction.

    In accordance with 10 U.S.C. 2534, do not acquire the following 
components of naval vessels, to the extent they are unique to marine 
applications, unless manufactured in the United States or Canada:
    (a) Gyrocompasses.
    (b) Electronic navigation chart systems.
    (c) Steering controls.
    (d) Pumps.
    (e) Propulsion and machinery control systems.
    (f) Totally enclosed lifeboats.

225.7010-2  Exceptions.

    This restriction does not apply to--
    (a) Contracts or subcontracts that do not exceed the simplified 
acquisition threshold; or
    (b) Acquisition of spare or repair parts needed to support 
components for naval vessels manufactured outside the United States. 
Support includes the purchase of spare gyrocompasses, electronic 
navigation chart systems, steering controls, pumps, propulsion and 
machinery control systems, or totally enclosed lifeboats, when those 
from alternate sources are not interchangeable.

225.7010-3  Waiver.

    (a) The waiver criteria at 225.7008(a) apply to this restriction.
    (b) The Under Secretary of Defense (Acquisition, Technology, and 
Logistics) has waived the restriction of 10 U.S.C. 2534 for certain 
items manufactured in the United Kingdom, including the items listed in 
section 225.7010-1. See 225.7008.

[[Page 10392]]

225.7010-4  Implementation.

    (a) 10 U.S.C. 2534(h) prohibits the use of contract clauses or 
certifications to implement this restriction.
    (b) Agencies shall accomplish implementation of this restriction 
through use of management and oversight techniques that achieve the 
objectives of this section without imposing a significant management 
burden on the Government or the contractor involved.

[FR Doc. 2015-03855 Filed 2-25-15; 8:45 am]