[Federal Register Volume 83, Number 165 (Friday, August 24, 2018)]
[Proposed Rules]
[Pages 42826-42828]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2018-18246]


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DEPARTMENT OF DEFENSE

Defense Acquisition Regulations System

48 CFR Parts 212, 247, and 252

[Docket DARS-2018-0040]
RIN 0750-AJ94


Defense Federal Acquisition Regulation Supplement: Modification 
of DFARS Clause ``Transportation of Supplies by Sea'' (DFARS Case 2018-
D028)

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

ACTION: Proposed rule.

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SUMMARY: DoD is proposing to amend the Defense Federal Acquisition 
Regulation Supplement (DFARS) to modify the text of an existing DFARS 
clause to include the text of another DFARS clause, in order to 
streamline instructions to contractors regarding notifications of 
transportation of supplies by sea.

DATES: Comments on the proposed rule should be submitted in writing to 
the address shown below on or before October 23, 2018, to be considered 
in the formation of a final rule.

ADDRESSES: Submit comments identified by DFARS Case 2018-D028, using 
any of the following methods:
    [cir] Federal eRulemaking Portal: http://www.regulations.gov. 
Search for ``DFARS Case 2018-D028''. Select ``Submit a Comment Now'' 
and follow the instructions provided to submit a comment. Please 
include ``DFARS Case 2018-D028'' on any attached document. O Email: 
[email protected]. Include DFARS Case 2018-D028 in the subject line of 
the message.
    [cir] Fax: 571-372-6094.
    [cir] Mail: Defense Acquisition Regulations System, Attn: Carrie 
Moore, OUSD(A&S)DPC/DARS, Room 3B941, 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: Ms. Carrie Moore, telephone 571-372-
6093.

SUPPLEMENTARY INFORMATION: 

I. Background

    This rule proposes to modify DFARS clause 252.247-7023, 
Transportation of Supplies By Sea, to include the instructions 
currently specified in DFARS clause 252.247-7024, Notification of 
Supplies By Sea. Combining these clauses will result in DFARS clause 
252.247-7024 being removed.

II. Discussion and Analysis

    DFARS provision 252.247-7022, Representation of Extent of 
Transportation By Sea, is included in solicitations and requires an 
offeror to represent with its offer whether it anticipates that 
supplies will or will not be transported by sea in the performance of 
the contract.
    DFARS clause 252.247-7023 is included in all contracts, except for 
those that directly purchase ocean transportation services, and 
provides contractors with terms and conditions that apply when 
transporting supplies by sea under the contract.
    DFARS clause 252.247-7024, Notification of Transportation of

[[Page 42827]]

Supplies By Sea, is included in contracts when the contractor indicated 
in DFARS provision 252.247-7022 that it did not anticipate transporting 
supplies by sea. The clause requires the contractor to notify the 
Government in the event that, during performance of the contract, the 
contractor learns that supplies will be transported by sea, and 
requires the contractor to comply with the terms and conditions in 
DFARS clause 252.247-7023.
    Since DFARS clause 252.247-7023 is included in all contracts, and 
DFARS clause 252.247-7024 is associated with the requirements of 
252.247-7023, the text of the two clauses can be combined to help 
minimize the number of clauses contained in the contract, while still 
maintaining the intent of both clauses.
    The modification of this DFARS text supports a recommendation from 
the DoD Regulatory Reform Task Force. On February 24, 2017, the 
President signed Executive Order (E.O.) 13777, Enforcing the Regulatory 
Reform Agenda, which established a Federal policy ``to alleviate 
unnecessary regulatory burdens'' on the American people. In accordance 
with E.O. 13777, DoD established a Regulatory Reform Task Force to 
review and validate DoD regulations, including the DFARS. The DoD Task 
Force reviewed the requirements of DFARS clause 252.247-7023 and 
252.247-7024 and determined that the clauses could be combined.
    A public notice of the establishment of the DFARS Subgroup to the 
DoD Regulatory Reform Task Force, for the purpose of reviewing DFARS 
provisions and clauses, was published in the Federal Register at 82 FR 
35741 on August 1, 2017, and requested public input. Two respondents 
submitted a public comment on these clauses summarized as follows:
    Comment: Both respondents recommended DoD remove these clauses, as 
they are based on the requirements of the Cargo Preference Act of 1904 
(10 U.S.C. 2631), which was written at a time before many modern forms 
of cargo transportation were invented and overly burdens the DoD supply 
chain to use US-flag ships. The respondents also suggested that DoD 
follow the less burdensome Cargo Preference Act of 1954 (46 U.S.C. 
1241(b)).
    Response: DoD must comply with the requirements of 10 U.S.C. 2631. 
Currently, 10 U.S.C. 2631 requires 100 percent of all items for or 
owned by DoD that require transportation by sea be carried exclusively 
on U.S. flag vessels. This cargo policy helps retain and encourage a 
privately owned and operated U.S.-flag merchant marine, which benefits 
the U.S. in terms of trade and in times of emergency. It is not in the 
Government's best interests to rescind 10 U.S.C. 2631. In the event 
that a U.S.-flag vessel is not available for timely shipment or the 
freight charges are excessive or unreasonable, the clause permits the 
contractor to submit a request to use a foreign-flag vessel to the 
contracting officer. For this reason, DoD does not concur that the DoD 
supply chain is necessarily overburdened by this Act.

III. Applicability to Contracts at or Below the Simplified Acquisition 
Threshold and for Commercial Items, including Commercially Available 
Off-the-Shelf Items

    This rule does not create any new provisions or clauses. This rule 
merely consolidates existing instructions regarding notifications of 
transportation of supplies by sea in a single DFARS clause.

IV. Executive Orders 12866 and 13563

    E.O. 12866, Regulatory Planning and Review, and E.O. 13563, 
Improving Regulation and Regulatory Review, 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. 
The Office of Management and Budget, Office of Information and 
Regulatory Affairs (OIRA), has determined that this is not a 
significant regulatory action as defined under section 3(f) of E.O. 
12866 and, therefore, was not subject to review under section 6(b). 
This rule is not a major rule as defined at 5 U.S.C. 804(2).

V. Executive Order 13771

    This proposed rule is not expected to be an E.O. 13771, Reducing 
Regulation and Controlling Regulatory Costs, regulatory action, because 
this proposed rule is not significant under E.O. 12866.

VI. 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 the rule is not creating any new requirements or changing any 
existing requirements for contractors. However, an initial regulatory 
flexibility analysis has been performed and is summarized as follows:
    The Department of Defense (DoD) is proposing to modify DFARS clause 
252.247-7023, Transportation of Supplies By Sea, to include the 
instructions currently specified in DFARS clause 252.247-7024, 
Notification of Supplies By Sea. Combining these clauses will result in 
DFARS clause 252.247-7024 being removed.
    The objective of this proposed rule is to streamline the 
instructions to contractors pertaining to the transportation of 
supplies by sea. The combination of these DFARS clauses supports a 
recommendation from the DoD Regulatory Reform Task Force under 
Executive Order 13771, Reducing Regulation and Controlling Regulatory 
Costs.
    Based on data available in the Federal Procurement Data System for 
fiscal year 2016, DoD awarded approximately 83,000 contract actions 
that included DFARS clause 252.247-7023 to 22,000 unique entities, of 
which approximately 39,000 awards (47 percent) were made to 15,000 
unique small businesses entities (68 percent).
    This proposed rule does not include any new reporting, 
recordkeeping, or other compliance requirements for small businesses.
    This rule does not duplicate, overlap, or conflict with any other 
Federal rules.
    There are no known significant alternative approaches to the 
proposed rule that would meet the proposed objectives.
    DoD invites comments from small business concerns and other 
interested parties on the expected impact of this rule on small 
entities. 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 2018-D028) 
in correspondence.

VI. Paperwork Reduction Act

    The Paperwork Reduction Act (44 U.S.C. chapter 35) does apply; 
however, these changes to the DFARS do not impose additional 
information collection requirements to the paperwork burden previously 
approved under OMB Control Number 0704-0245, titled: Defense Federal 
Acquisition Regulation Supplement (DFARS) Part 247, Transportation and 
Related Clauses.

[[Page 42828]]

List of Subjects in 48 CFR Parts 212, 247, and 252

    Government procurement.

Jennifer Lee Hawes,
Regulatory Control Officer, Defense Acquisition Regulations System.

    Therefore, 48 CFR parts 212, 247, and 252 are proposed to be 
amended as follows:

0
1. The authority citation for 48 CFR parts 212, 247, and 252 continues 
to read as follows:

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

PART 212--ACQUISITION OF COMMERCIAL ITEMS


212.301  [Amended]

0
2. Amend section 212.301 by:
0
a. Removing paragraph (f)(xix)(D);
0
b. Redesignating paragraphs (f)(xix)(E) through (H) as paragraphs 
(f)(xix)(D) through (G), respectively;
0
c. In the newly redesignated paragraph (f)(xix)(D), removing 
``247.574(d)'' and adding ``247.574(c)'' in its place;
0
d. In the newly redesignated paragraph (f)(xix)(E), removing 
``247.574(e)'' and adding ``247.574(d)'' in its place;
0
e. In the newly redesignated paragraph (f)(xix)(F), removing 
``247.574(f)'' and adding ``247.574(e)'' in its place; and
0
f. In the newly redesignated paragraph (f)(xix)(G), removing ``U.S'' 
and adding ``U.S.'' in its place.

PART 247--TRANSPORTATION


247.574  [Amended]

0
3. Amend section 247.574 by:
0
a. Removing paragraph (c); and
0
b. Redesignating paragraphs (d) through (f) as paragraphs (c) through 
(e), respectively.

PART 252--SOLICITATION PROVISIONS AND CONTRACT CLAUSES

0
4. Amend section 252.247-7023 by:
0
a. In the clause heading, removing the date ``(APR 2014)'' and adding 
``(DATE)'' in its place;
0
b. Redesignating paragraph (h) as paragraph (i);
0
c. Adding a new paragraph (h); and
0
d. In the newly redesignated paragraphs (i)(1) and (2), removing 
``paragraph (h)'' and adding ``paragraph (i)'' in both places;
0
e. In Alternate I:
0
i. In the clause heading, removing the date of ``(APR 2014)'' and 
adding ``(DATE)'' in its place;
0
ii. Redesignating paragraph (h) as paragraph (i);
0
iii. Adding a new paragraph (h); and
0
iv. In the newly redesignated paragraphs (i)(1) and (2), removing 
``paragraph (h)'' and adding ``paragraph (i)'' in both places;
0
f. In Alternate II--
0
i. In the clause heading, removing the date of ``(APR 2014)'' and 
adding ``(DATE)'' in its place;
0
ii. Redesignating paragraph (h) as paragraph (i);
0
iii. Adding a new paragraph (h); and
0
iv. In the newly redesignated paragraphs (i)(1) and (2), removing 
``paragraph (h)'' and adding ``paragraph (i)'' in both places.
    The additions read as follows:


252.247-7023  Transportation of Supplies by Sea.

* * * * *
    (h) If the Contractor has indicated by the response to the 
solicitation provision, Representation of Extent of Transportation by 
Sea, that it did not anticipate transporting by sea any supplies; 
however, after the award of this contract, the Contractor learns that 
supplies will be transported by sea, the Contractor--
    (1) Shall notify the Contracting Officer of that fact; and
    (2) Hereby agrees to comply with all the terms and conditions of 
this clause.
* * * * *
    Alternate I. * * *
* * * * *
    (h) If the Contractor has indicated by the response to the 
solicitation provision, Representation of Extent of Transportation by 
Sea, that it did not anticipate transporting by sea any supplies; 
however, after the award of this contract, the Contractor learns that 
supplies will be transported by sea, the Contractor--
    (1) Shall notify the Contracting Officer of that fact; and
    (2) Hereby agrees to comply with all the terms and conditions of 
this clause.
* * * * *
    Alternate II. * * *
* * * * *
    (h) If the Contractor has indicated by the response to the 
solicitation provision, Representation of Extent of Transportation by 
Sea, that it did not anticipate transporting by sea any supplies, but 
the contractor learns after the award of the contract that supplies 
will be transported by sea, the Contractor shall notify the Contracting 
Officer of that fact.
* * * * *


252.247-7024  [Removed and Reserved]

0
4. Remove and reserve section 252.247-7024.


252.247-7025  [Amended]

0
5. Amend section 252.247-7025, in the introductory text, by removing 
``247.574(d)'' and adding ``247.574(c)'' in its place.


252.247-7026  [Amended]

0
6. Amend section 252.247-7026, in the introductory text, by removing 
``247.574(e)'' and adding ``247.574(d)'' in its place.


252.247-7027  [Amended]

0
7. Amend section 252.247-7027, in the introductory text, by removing 
``247.574(f)'' and adding ``247.574(e)'' in its place.

[FR Doc. 2018-18246 Filed 8-23-18; 8:45 am]
 BILLING CODE 5001-06-P