[Federal Register Volume 83, Number 233 (Tuesday, December 4, 2018)]
[Rules and Regulations]
[Pages 62498-62501]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2018-26305]
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DEPARTMENT OF DEFENSE
Defense Acquisition Regulations System
48 CFR Parts 212, 225, and 252
[Docket DARS-2018-0028]
RIN 0750-AJ71
Defense Federal Acquisition Regulation Supplement: Sunset of
Provision Relating to the Procurement of Certain Goods (DFARS Case
2018-D007)
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 a section of the
National Defense Authorization Act for Fiscal Year 2018 that repeals
the Fiscal Year 2015 restrictions on the source of photovoltaic devices
in contracts awarded by DoD that result in DoD ownership of
photovoltaic devices by means other than DoD purchase of the
photovoltaic devices as end products.
DATES: Effective December 5, 2018.
FOR FURTHER INFORMATION CONTACT: Ms. Amy G. Williams, telephone 571-
372-6106.
SUPPLEMENTARY INFORMATION:
I. Background
DoD published a proposed rule in the Federal Register at 83 FR
42822 on August 24, 2018, to implement section 813(b) of the National
Defense Authorization Act (NDAA) for Fiscal Year (FY) 2018 (Pub. L.
115-91). Section 813(b) repeals section 858 of the NDAA for FY 2015
(Pub. L. 113-291), but does not repeal section 846 of the NDAA for FY
2011 (Pub. L. 111-383), with regard to sources of photovoltaic devises
purchased by contractors that become property of DoD. There were no
public comments submitted in response to the proposed rule. There are
no changes from the proposed rule in the final rule.
II. 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 affect the applicability of DFARS clause
252.225-7017, Photovoltaic Devices, and DFARS provision 252.225-7018,
Photovoltaic Devices--Certification. A determination was signed by the
Director, Defense Procurement and Acquisition Policy, on October 13,
2011, to not apply the requirements of section 846 of the NDAA for FY
2011 to contracts at or below the simplified acquisition threshold, but
to apply the rule to contracts for the acquisition of commercial items,
including commercially available off-the-shelf items.
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,
[[Page 62499]]
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. Executive Order 13771
This rule is not an E.O. 13771 regulatory action, because this
final rule is not significant under E.O. 12866.
V. Regulatory Flexibility Act
A final regulatory flexibility analysis (FRFA) has been prepared
consistent with the Regulatory Flexibility Act, 5 U.S.C. 601, et seq.
The FRFA is summarized as follows:
This rule implements section 813(b) of the National Defense
Authorization Act (NDAA) for Fiscal Year (FY) 2018 (Pub. L. 115-91),
which repealed of section 858 of the National Defense Authorization Act
(NDAA) for FY 2015 (Pub. L. 113-291), while retaining the requirements
of section 846 of the NDAA for FY 2011 (Pub. L. 111-383), with regard
to sources of photovoltaic devices purchased by contractors that become
the property of DoD.
The objective of this rule is to revert to the regulations on
photovoltaic devices that were in effect prior to superimposing the
additional regulations required by section 858 on November 20, 2015 (80
FR 72599). By restoring the tie to the Buy American statute, this rule
reinstates the Buy American exceptions for acquisitions of photovoltaic
devices below the micro-purchase threshold, nonavailability,
unreasonable cost, and public interest, including the DoD class
determinations that exempt U.S.-made and qualifying country
photovoltaic devices from the requirements of the Buy American statute,
as well as the Governmentwide determination that removes the component
test for commercially available off-the-shelf items.
No significant issues were raised by the public comments in
response to the initial regulatory flexibility analysis. No public
comments were received.
This rule generally applies at the prime contract level to other
than small entities. When purchasing renewable power generated via
onsite photovoltaic devices, DoD can either purchase the photovoltaic
devices and thereby own, operate, and maintain the devices for their
full economic life (already covered in DFARS part 225 under standard
Buy American statute/Trade Agreements regulations) or, for example, may
do some variation of the following:
a. Enter into an energy savings performance contract, which is a
contracting method in which the contractor provides capital to
facilitate energy conservation measures and maintains them in exchange
for a portion of the energy savings generated. Under this arrangement,
the Government would take title to the devices during contract
performance or at the conclusion of the contract. For example, DoD uses
either the master indefinite delivery-indefinite quantity contract of
the Department of Energy or the Army Corps of Engineers and awards task
orders off one of those contracts. Generally, the same approved
contractors are on each contract. Of the approved contractors, all but
one are large businesses. There are subcontracting goals that each
contractor has to meet, but the ultimate task order award is most often
made to a large business.
b. Enter into a power purchase agreement, also referred to as a
utility service contract, for the purchase of the power output of
photovoltaic devices that are installed on DoD land or buildings, but
owned, operated, and maintained by the contractor. At the conclusion of
the contract, DoD would either require the contractor to dismantle and
remove the photovoltaic equipment or abandon the equipment in place.
Prime contractors for this type of contract would generally be large
businesses, based on the capital costs involved in these projects.
However, many developers tend to subcontract out the majority of the
work to smaller companies.
There are approximately 80 manufacturers of photovoltaic devices.
We do not currently have data available on whether any of the
manufacturers of photovoltaic devices are small entities, because the
Federal Procurement Data System does not collect such data on
subcontractors.
There are no new reporting burdens under this rule. In fact, there
is a de minimis reduction in burden, because no certification will be
required if the value of the photovoltaic devices does not exceed the
micro-purchase threshold, and identification of country of origin will
no longer be required if the photovoltaic devices are domestic or U.S.-
made. Furthermore, since the prime contractors subject to this rule are
other than small businesses, the existing reporting requirements do not
impact small entities.
DoD did not identify any significant alternatives that meet the
requirements of the statute and would have less impact on small
entities. The overall effect of this rule is deregulatory and it does
not have significant impact on small entities.
VI. Paperwork Reduction Act
The rule contains 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); however, these changes to the
DFARS do not impose additional information collection requirements to
the paperwork burden previously approved under OMB Control Number 0704-
0229, entitled ``Defense Federal Acquisition Regulation Supplement
(DFARS) Part 225, Foreign Acquisition, and related clauses at DFARS
252.225.''
List of Subjects in 48 CFR Parts 212, 225, and 252
Government procurement.
Jennifer Lee Hawes,
Regulatory Control Officer, Defense Acquisition Regulations System.
Therefore, 48 CFR parts 212, 225, and 252 are amended as follows:
0
1. The authority citation for 48 CFR parts 212, 225, and 252 continues
to read as follows:
Authority: 41 U.S.C. 1303 and 48 chapter 1.
PART 212--ACQUISITION OF COMMERCIAL ITEMS
0
2. Amend section 212.301 by revising paragraphs (f)(ix)(J) and (K) to
read as follows:
212.301 Solicitation provisions and contract clauses for the
acquisition of commercial items.
* * * * *
(f) * * *
(ix) * * *
(J) Use the clause at 252.225-7017, Photovoltaic Devices, as
prescribed in 225.7017-4(a), to comply with section 846 of Public Law
111-383.
(K) Use the provision at 252.225-7018, Photovoltaic Devices--
Certificate, as prescribed in 225.7017-4(b), to comply with section 846
of Public Law 111-383.
* * * * *
PART 225--FOREIGN ACQUISITION
0
3. Amend section 225.7017-1 by revising the definitions of ``covered
contract'' and ``domestic photovoltaic device'' to read as follows:
[[Page 62500]]
225.7017-1 Definitions.
* * * * *
Covered contract means an energy savings performance contract, a
utility services contract, or a private housing contract awarded by
DoD, to be performed in the United States, if such contract results in
DoD ownership of photovoltaic devices, by means other than DoD purchase
as end products. DoD is deemed to own a photovoltaic device if the
device is--
(1) Installed in the United States on DoD property or in a facility
owned by DoD; and
(2) Reserved for the exclusive use of DoD in the United States for
the full economic life of the device.
* * * * *
Domestic photovoltaic device means a photovoltaic device that is
manufactured in the United States.
* * * * *
0
4. Revise section 225.7017-2 to read as follows:
225.7017-2 Restriction.
In accordance with section 846 of the National Defense
Authorization Act for Fiscal Year 2011 (Pub. L. 111-383), photovoltaic
devices provided under any covered contract shall comply with 41 U.S.C.
chapter 83, Buy American, subject to the exceptions to that statute
provided in the Trade Agreements Act of 1979 (19 U.S.C. 2501 et seq.).
0
5. Revise section 225.7017-3 to read as follows:
225.7017-3 Exceptions.
DoD requires the contractor to utilize domestic photovoltaic
devices in covered contracts that exceed the simplified acquisition
threshold, with the following exceptions:
(a) Qualifying country. Qualifying country photovoltaic devices may
be utilized in any covered contract, because 225.103(a)(i)(A) provides
an exception to the Buy American statute for products of qualifying
countries, as defined in 225.003.
(b) Buy American--unreasonable cost. For a covered contract that
utilizes photovoltaic devices valued at less than $180,000, the
exception for unreasonable cost may apply (see FAR 25.103(c). If the
cost of a foreign photovoltaic device plus 50 percent is less than the
cost of a domestic photovoltaic device, then the foreign photovoltaic
device may be utilized.
(c) Trade agreements--(1) Free Trade Agreements. For a covered
contract that utilizes photovoltaic devices valued at $25,000 or more,
photovoltaic devices may be utilized from a country covered under the
acquisition by a Free Trade Agreement, depending upon dollar threshold
(see FAR subpart 25.4).
(2) World Trade Organization--Government Procurement Agreement. For
covered contracts that utilize photovoltaic devices that are valued at
$180,000 or more, only U.S.-made photovoltaic devices, designated
country photovoltaic devices, or qualifying country photovoltaic
devices may be utilized.
225.7017-4. [Removed]
0
6. Remove section 225.7017-4.
225.7017-5 [Redesignated as 225.7017-4]
0
7. Redesignate section 225.7017-5 as 225.7017-4 and in the newly
redesignated section 225.7017-4, revise paragraph (a)(1) to read as
follows:
225.7017-4 Solicitation provision and contract clause.
(a)(1) Use the clause at 252.225-7017, Photovoltaic Devices, in
solicitations, including solicitations using FAR part 12 procedures for
the acquisition of commercial items, for a contract expected to exceed
the simplified acquisition threshold that may be a covered contract,
i.e., an energy savings performance contract, a utility service
contract, or a private housing contract awarded by DoD, if such
contract will result in DoD ownership of photovoltaic devices, by means
other than DoD purchase as end products.
* * * * *
PART 252--SOLICITATION PROVISIONS AND CONTRACT CLAUSES
0
8. Amend section 252.225-7017 by--
0
a. In the introductory text, removing ``225.7017-5(a)'' and adding
``225.7017-4(a)'' in its place;
0
b. Removing the clause date ``(JAN 2018)'' and adding ``(DEC 2018)'' in
its place;
0
c. In paragraph (a)--
0
i. Removing subparagraph designations ``(i)'' and ``(ii)'' and adding
``(1)'' and (2)'' in their places wherever they appear;
0
ii. Removing subparagraph designations ``(iii)'' and ``(iv)'' and
adding ``(3)'' and ``(4)'' in their places wherever they appear;
0
iii. Revising the definition of ``domestic photovoltaic device'';
0
d. In paragraph (b), removing ``858 of the National Defense
Authorization Act for Fiscal Year 2015 (Pub. L. 113-291)'' and adding
``846 of the National Defense Authorization Act for Fiscal Year 2011
(Pub. L. 111-383)'' in its place; and
0
e. In paragraph (c)--
0
i. Revising paragraph (c)(1);
0
ii. In paragraph (c)(2), removing ``photovoltaic device as specified,
or,'' and adding ``photovoltaic device, or,'' in its place; and
0
iii. Revising paragraphs (c)(3), (4), and (5).
The revisions read as follows:
252.225-7017 Photovoltaic Devices.
(a) * * *
Domestic photovoltaic device means a photovoltaic device that is
manufactured in the United States.
* * * * *
(c) * * *
(1) More than the micro-purchase threshold but less than $25,000,
then the Contractor shall utilize only domestic photovoltaic devices
unless, in its offer, it specified utilization of qualifying country or
other foreign photovoltaic devices in paragraph (d)(2) of the
Photovoltaic Devices--Certificate provision of the solicitation.
* * * * *
(3) $80,317 or more but less than $100,000, then the Contractor
shall utilize under this contract only domestic photovoltaic devices,
unless, in its offer, it specified utilization of Free Trade Agreement
country photovoltaic devices (other than Bahrainian, Korean, Moroccan,
Panamanian, or Peruvian photovoltaic devices), qualifying country
photovoltaic devices, or other foreign photovoltaic devices in
paragraph (d)(4) of the Photovoltaic Devices--Certificate provision of
the solicitation. If the Contractor certified in its offer that it will
utilize a Free Trade Agreement country photovoltaic device (other than
a Bahrainian, Korean, Moroccan, Panamanian, or Peruvian photovoltaic
device) or a qualifying country photovoltaic device, then the
Contractor shall utilize a Free Trade Agreement country photovoltaic
device (other than a Bahrainian, Korean, Moroccan, Panamanian, or
Peruvian photovoltaic device) or a qualifying country photovoltaic
device; or, at the Contractor's option, a domestic photovoltaic device;
(4) $100,000 or more but less than $180,000, then the Contractor
shall utilize under this contract only domestic photovoltaic devices,
unless, in its offer it specified utilization of Free Trade Agreement
country photovoltaic devices (other than Bahrainian, Moroccan,
Panamanian, or Peruvian photovoltaic devices), qualifying country
photovoltaic devices, or other foreign photovoltaic devices in
paragraph (d)(5) of the Photovoltaic Devices--Certificate provision of
the solicitation. If the Contractor certified in
[[Page 62501]]
its offer that it will utilize a Free Trade Agreement country
photovoltaic device (other than a Bahrainian, Moroccan, Panamanian, or
Peruvian photovoltaic device) or a qualifying country photovoltaic
device, then the Contractor shall utilize a Free Trade Agreement
country photovoltaic device (other than a Bahrainian, Moroccan,
Panamanian, or Peruvian photovoltaic device) or a qualifying country
photovoltaic device; or, at the Contractor's option, a domestic
photovoltaic device; or
(5) $180,000 or more, then the Contractor shall utilize under this
contract only U.S.-made, designated country, or qualifying country
photovoltaic devices.
* * * * *
0
9. Amend section 252.225-7018 by--
0
a. In the introductory text, removing ``225.7017-5(b)'' and adding
``225.7017-4(b)'' in its place;
0
b. Removing clause date ``(JAN 2018)'' and adding ``(DEC 2018)'' in its
place;
0
c. Revising paragraphs (b)(1) and (2); and
0
d. Revising paragraphs (d)(1), (d)(2) introductory text, and (d)(3)
through (6).
The revisions read as follows:
252.225-7018 Photovoltaic Devices--Certificate.
* * * * *
(b) * * *
(1) If more than the micro-purchase threshold but less than
$180,000, then the Government will not accept an offer specifying the
use of other foreign photovoltaic devices in paragraph (d)(2)(ii),
(d)(3)(ii), (d)(4)(ii), or (d)(5)(ii) of this provision, unless the
offeror documents to the satisfaction of the Contracting Officer that
the price of the foreign photovoltaic device plus 50 percent is less
than the price of a comparable domestic photovoltaic device.
(2) If $180,000 or more, then the Government will consider only
offers that utilize photovoltaic devices that are U.S.-made, qualifying
country, or designated country photovoltaic devices.
* * * * *
(d) * * *
__ (1) No photovoltaic devices will be utilized in performance of
the contract, or such photovoltaic devices have an estimated value that
does not exceed the micro-purchase threshold.
(2) If more than the micro-purchase threshold but less than
$25,000--
* * * * *
(3) If $25,000 or more but less than $80,317--
__ (i) The offeror certifies that each photovoltaic device to be
utilized in performance of the contract is a domestic photovoltaic
device;
__ (ii) The offeror certifies that each photovoltaic device to be
utilized in performance of the contract is a Canadian photovoltaic
device or a qualifying country photovoltaic device [Offeror to specify
country of origin___]; or
__ (iii) The foreign (other than Canadian or qualifying country)
photovoltaic devices to be utilized in performance of the contract are
the product of ___. [Offeror to specify country of origin, if known,
and provide documentation that the cost of a domestic photovoltaic
device would be unreasonable in comparison to the cost of the proposed
foreign photovoltaic device, i.e. that the price of the foreign
photovoltaic device plus 50 percent is less than the price of a
comparable domestic photovoltaic device.]
(4) If $80,317 or more but less than $100,000--
__ (i) The offeror certifies that each photovoltaic device to be
utilized in performance of the contract is a domestic photovoltaic
device;
__ (ii) The offeror certifies that each photovoltaic device to be
utilized in performance of the contract is a Free Trade Agreement
country photovoltaic device (other than a Bahrainian, Korean, Moroccan,
Panamanian, or Peruvian photovoltaic device) or a qualifying country
photovoltaic device [Offeror to specify country of origin___]; or
__ (iii) The offered foreign photovoltaic devices (other than those
from countries listed in paragraph (d)(4)(ii) of this provision) are
the product of ___. [Offeror to specify country of origin, if known,
and provide documentation that the cost of a domestic photovoltaic
device would be unreasonable in comparison to the cost of the proposed
foreign photovoltaic device, i.e. that the price of the foreign
photovoltaic device plus 50 percent is less than the price of a
comparable domestic photovoltaic device.]
(5) If $100,000 or more but less than $180,000--
__ (i) The offeror certifies that each photovoltaic device to be
utilized in performance of the contract is a domestic photovoltaic
device;
__ (ii) The offeror certifies that each photovoltaic device to be
utilized in performance of the contract is a Free Trade Agreement
country photovoltaic device (other than a Bahrainian, Moroccan,
Panamanian, or Peruvian photovoltaic device) or a qualifying country
photovoltaic device [Offeror to specify country of origin___]; or
__ (iii) The offered foreign photovoltaic devices (other than those
from countries listed in paragraph (d)(5)(ii) of this provision) are
the product of ___. [Offeror to specify country of origin, if known,
and provide documentation that the cost of a domestic photovoltaic
device would be unreasonable in comparison to the cost of the proposed
foreign photovoltaic device, i.e. that the price of the foreign
photovoltaic device plus 50 percent is less than the price of a
comparable domestic photovoltaic device.]
(6) If $180,000 or more, the Offeror certifies that each
photovoltaic device to be used in performance of the contract is--
__ (i) A U.S.-made photovoltaic device; or
__ (ii) A designated country photovoltaic device or a qualifying
country photovoltaic device. [Offeror to specify country of origin___.]
* * * * *
[FR Doc. 2018-26305 Filed 12-3-18; 8:45 am]
BILLING CODE 5001-06-P