[Federal Register Volume 88, Number 221 (Friday, November 17, 2023)]
[Proposed Rules]
[Pages 80472-80477]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2023-25161]


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DEPARTMENT OF DEFENSE

Defense Acquisition Regulations System

48 CFR Parts 212, 225, and 252

[Docket DARS-2023-0042; Req No. DARS-2024-00012-FR]
RIN 0750-AL40


Defense Federal Acquisition Regulation Supplement: Limitation on 
the Acquisition of Certain Goods Other Than United States Goods (DFARS 
Case 2021-D022)

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 implement two sections of the National 
Defense Authorization Act for Fiscal Year 2021, one section of the 
National Defense Authorization Act for Fiscal Year 2022, one section of 
the National Defense Authorization Act for Fiscal Year 2023, and one 
section of the Consolidated Appropriations Act, 2023. These statutes 
remove limitations and restrictions on certain components that are no 
longer required, add new limitations on other components, subject to 
exceptions.

DATES: Comments on the proposed rule should be submitted in writing to 
the address shown below on or before January 16, 2024, to be considered 
in the formation of a final rule.

ADDRESSES: Submit comments identified by DFARS Case 2021-D022, using 
any of the following methods:
    [cir] Federal eRulemaking Portal: https://www.regulations.gov. 
Search for DFARS Case 2021-D022. Select ``Comment'' and follow the 
instructions to submit a comment. Please include ``DFARS Case 2021-
D022'' on any attached documents.
    [cir] Email: [email protected]. Include DFARS Case 2021-D022 in 
the subject line of the message.
    Comments received generally will be posted without change to 
https://www.regulations.gov, including any personal information 
provided. To confirm receipt of your comment(s), please check https://www.regulations.gov, approximately two to three days after submission 
to verify posting.

FOR FURTHER INFORMATION CONTACT: Kimberly Bass, telephone 703-717-3446.

SUPPLEMENTARY INFORMATION: 

I. Background

    DoD is proposing to revise the DFARS to implement sections 845 and 
1603 of the National Defense Authorization Act (NDAA) for Fiscal Year 
(FY) 2021 (Pub. L. 116-283); section 816 of the NDAA for FY 2022 (Pub. 
L. 117-81); section 853 of the NDAA for FY 2023 (Pub. L. 117-263), and 
section 8016 of the Consolidated Appropriations Act of 2023 (Pub. L. 
117-328). These sections amend 10 U.S.C. 2534, now 10 U.S.C. 4864, to 
require acquisition of certain items and components from the national 
technology and industrial base. The national technology and industrial 
base is defined at 10 U.S.C. 4801 as the United States, Australia, 
Canada, New Zealand, or the United Kingdom.
    Section 845 of the NDAA for FY 2021 amends 10 U.S.C. 4864(a) to 
update the list of components for naval vessels at paragraphs (a)(2)(A) 
through (E). Subsequently, section 816 of the NDAA for FY 2022 added to 
the list of components for naval vessels welded shipboard anchor and 
mooring chain, without size restrictions, at 10 U.S.C. 4864(a)(2)(F). 
Section 845 also added components for T-AO 205 class vessels at 10 
U.S.C. 4864(a)(4). Section 853 of the NDAA for FY 2023 added T-ARC 
class vessels at 10 U.S.C. 4864(a)(4) along with the component list for 
T-AO 205 class vessels. Section 1603 of the NDAA for FY 2021 added 
limitations on procurement of satellite star trackers at 10 U.S.C. 
4864(a)(5). Section 8016 of the Consolidated Appropriations Act, 2023 
provided waiver authority to the Secretary of the Service responsible 
for the procurement of welded shipboard anchor and mooring chain.
    Section 845, in updating the list of components for naval vessels 
at 10 U.S.C. 4864, removed prior paragraphs (a)(2) through (5) and 
redesignated paragraph (a)(6), components for auxiliary ships (large 
medium-speed diesel engines), as paragraph (a)(3). The removed 
paragraphs were: (a)(2) chemical weapons antidote; (a)(3)(A) components 
for naval vessels consisting of air circuit breakers, welded shipboard 
anchor and mooring chain with a diameter of four inches or less, vessel 
propellers; and (a)(3)(B) components of vessel unique to marine 
applications of gyrocompasses, electronic navigation chart systems, 
steering controls, pumps, propulsion and machinery control systems, and 
totally enclosed lifeboats; (a)(4), valves and machine tools; and 
(a)(5), ball bearings and roller bearings. Additionally, section 845 
struck paragraph (j), Inapplicability to certain contracts to purchase 
ball bearings or roller bearings, and redesignated paragraph (k), 
Limitation on certain procurements application process, as paragraph 
(j).

II. Discussion and Analysis

    Updates to 10 U.S.C. 2534, now 10 U.S.C. 4864, have been 
incrementally implemented over time in various DFARS sections under 
subpart 225.70 as follows: 225.7004, Restriction on acquisition of 
foreign buses; 225.7006, Restrictions on air circuit breakers for naval 
vessels; 225.7007, Restrictions on anchor and mooring chain; 225.7008, 
Waiver of restrictions of 10 U.S.C. 4864; and 225.7010, Restrictions on 
certain naval vessel and auxiliary ship components. This proposed rule 
aggregates the requirements subject to 10 U.S.C. 4864 under one 
comprehensive DFARS section at 225.7004 to facilitate comprehension of 
and compliance with the limitations, exceptions, and waivers applicable 
to acquisition of certain goods other than U.S. goods. As a result, 
DFARS sections 225.7006 through 225.7008 and section 225.7010 are 
proposed to be incorporated, as appropriate and in alignment with the 
statutory requirements being implemented, into a single DFARS section 
225.7004 titled, ``Restrictions on the procurement of goods other than 
U.S. goods.'' Accordingly, sections 225.7006 through 225.7008 and 
225.7010 would be removed and reserved. DFARS section 225.7009, 
Restriction on ball and roller bearings, remains as a standalone 
section as the authority for this section is derived from 
Appropriations Acts, and not from 10 U.S.C. 4864.
    DFARS section 225.7004, Restrictions on the procurement of goods 
other than U.S. goods, is established as the framework for all coverage 
related to implementing 10 U.S.C. 4864. The current DFARS section 
225.7004, Restriction on acquisition of foreign buses, is incorporated 
into this new redesignated section along with relevant coverage to 
implement the statutes addressed in section I, Background, of this 
preamble. The new DFARS section 225.7004 addresses the following:
     225.7004-0, Scope; added to state that the section 
implements 10 U.S.C. 4864.
     225.7004-1, Definitions; adds new definitions for 
``national technology and industrial base'' and ``star tracker.''

[[Page 80473]]

     225.7004-2, Restrictions; addresses end items and 
components that must be acquired from the national technology and 
industrial base.
     225.7004-3, Exceptions; provides the exceptions that apply 
to the end items and components described in 225.7004-1.
     225.7004-4, Implementation of restriction on certain naval 
vessel components; implements 10 U.S.C. 4864(h) that prohibits the use 
of contract clauses or certifications to implement the restriction at 
225.7004-1(b) for naval vessel components. Agencies must use management 
and oversight techniques that achieve the objectives of this section 
without imposing a significant management burden on the Government or 
the contractor involved.
     225.7004-5, Additional restrictions on anchor and mooring 
chain; addresses additional requirements imposed by DoD Appropriations 
Acts, most recently by section 8016, Consolidated Appropriations Act, 
2023 (Pub. L. 117.328). While 10 U.S.C. 4864 also restricts acquisition 
of welded shipboard anchor and mooring chain, when used as a component 
of a naval vessel, the Appropriations Act restriction takes precedence 
over the restriction of 10 U.S.C. 4864.
     225.7004-6, Waiver of restrictions; addresses waivers that 
apply to the end items and components described in 225.7004-1.
     225.7004-7, Contract clauses; provides clause 
prescriptions for DFARS 252.225-7019, Restriction on Acquisition of 
Anchor and Mooring Chain; DFARS 252.225-7062, Restriction on 
Acquisition of Large Medium-Speed Diesel Engines; new DFARS clause 
252.225-70XX, Restriction on Acquisition of Components of T-AO 205 and 
T-ARC Class Vessels; and new DFARS clause 252.225-70YY, Restriction on 
Acquisition of Certain Satellite Components.
    Additional changes are proposed to DFARS 212.301, Solicitation 
provisions and contract clauses for the acquisition of commercial 
products and commercial services. The removal of solicitation provision 
252.225-7037, Evaluation of Offers for Air Circuit Breakers, and 
contract clause 252.225-7038, Restriction on Acquisition of Air Circuit 
Breakers, is proposed because section 845 of the NDAA for FY 2021 
removed this component from 10 U.S.C. 4864. The addition of the 
following three clauses is proposed: 252.225-7019, Restriction on 
Acquisition of Anchor and Mooring Chain; 252.225-70XX, Restriction on 
Acquisition of Components of T-AO 205 and T-ARC Class Vessels; and 
252.225-70YY, Restriction on Acquisition of Certain Satellite 
Components.
    DoD proposes to remove and reserve sections 225.7006 through 
225.7008 and 225.7010 due to the new consolidated framework at DFARS 
227.7004 for implementing 10 U.S.C. 4864. DFARS 225.7006, Restriction 
on air circuit breakers for naval vessels, is not incorporated into the 
new section 225.7004, because section 845 of the NDAA for FY 2021 
removed this component from 10 U.S.C. 4864. Section 8100 of the 
Consolidated Appropriations Act, 2023, only addresses air circuit 
breakers in conjunction with a single Department of Navy program. 
Therefore, the section on air circuit breakers will not be retained in 
the DFARS in consonance with DFARS drafting conventions.
    DFARS section 225.7009, Restriction on ball and roller bearings, is 
retained, notwithstanding its removal from 10 U.S.C. 4864 by section 
845 in the NDAA for FY 2021, since it is needed to implement DoD 
Appropriations Act restrictions. See, for example, section 8033 of the 
Consolidated Appropriations Act, 2023.
    Revisions to DFARS clause 252.225-7019, Restriction on Acquisition 
of Anchor and Mooring Chain, are proposed to update the prescription 
cross-reference in the introductory text to read ``225.7004-7(a)'' and 
remove from paragraphs (b) and (d) the phrase ``four inches or less in 
diameter''. This language is not included in section 816 of the NDAA 
for FY 2022 that added this component to 10 U.S.C. 4864(a)(2)(F). This 
phrase is also not included in section 8016 of the Consolidated 
Appropriations Act, 2023 on this subject.
    DFARS provision 252.225-7037, Evaluation of Offers for Air Circuit 
Breakers, and DFARS clause 252.225-7038, Restriction on Acquisition of 
Air Circuit Breakers, are proposed to be removed and reserved. Section 
845 deleted this component from 10 U.S.C. 4864, and the Consolidated 
Appropriations Act, 2023, section 8100 only addresses air circuit 
breakers in conjunction with a single Department of Navy program.
    Two new clauses are proposed to be added: 252.225-70XX, Restriction 
on Acquisition of Components of T-AO 205 and T-ARC Class Vessels; and 
252.225-70YY, Restriction on Acquisition of Certain Satellite 
Components. In addition, the cross reference in the introductory text 
of DFARS 252.225-7062 is proposed to be revised to reflect the new 
location of the clause prescription in 225.7004-7.

III. Applicability to Contracts at or Below the Simplified Acquisition 
Threshold (SAT), for Commercial Products, Including Commercially 
Available Off-the-Shelf (COTS) Items, and for Commercial Services

    This rule proposes to create two new contract clauses:
    (1) DFARS clause 252.225-70XX, Restriction on Acquisition of 
Components of T-AO 205 Class Vessels, for use in solicitations and 
contracts requiring the acquisition of components of T-AO 205 and T-ARC 
class vessels, including solicitations and contracts that exceed the 
SAT and that use FAR part 12 procedures for the acquisition of 
commercial products, including COTS items, and for the acquisition of 
commercial services; and
    (2) DFARS clause at 252.225-70YY, Restriction on Acquisition of 
Satellite Star Trackers, for use in solicitations and contracts 
requiring the acquisition of satellite star trackers, including 
solicitations and contracts that exceed the SAT and that use FAR part 
12 procedures for the acquisition of commercial products, including 
COTS items, and for the acquisition of commercial services.
    Sections 845 and 1603 of the NDAA for FY 2021 (Pub. L. 116-283) and 
section 852 of the NDAA for FY 2023 (Pub. L. 117-263), which amend 10 
U.S.C. 4864, are implemented in this proposed rule. 10 U.S.C. 4864 does 
not apply to a contract or subcontract for an amount that does not 
exceed the SAT. Therefore, the clauses will not apply to acquisitions 
at or below the SAT. However, DoD intends to apply the clauses to 
contracts for the acquisition of commercial products including COTS 
items and for the acquisition of commercial services.

A. Applicability to Contracts for the Acquisition of Commercial 
Products Including COTS Items and for the Acquisition of Commercial 
Services

    10 U.S.C. 3452 exempts contracts and subcontracts for the 
acquisition of commercial products, including COTS items, and 
commercial services from provisions of law enacted after October 13, 
1994, unless the Under Secretary of Defense (Acquisition and 
Sustainment) (USD(A&S)) makes a written determination that it would not 
be in the best interest of DoD to exempt contracts for the procurement 
of commercial products and commercial services from the applicability 
of the provision or contract requirement, except for a provision of law 
that--

[[Page 80474]]

     Provides for criminal or civil penalties;
     Requires that certain articles be bought from American 
sources pursuant to 10 U.S.C. 4862 or that strategic materials critical 
to national security be bought from American sources pursuant to 10 
U.S.C. 4863; or
     Specifically refers to 10 U.S.C. 3452 and states that it 
shall apply to contracts and subcontracts for the acquisition of 
commercial products (including COTS items) and commercial services.
    The statute implemented in this proposed rule does not impose 
criminal or civil penalties, does not require purchase pursuant to 10 
U.S.C. 4862 or 4863, and does not refer to 10 U.S.C. 3452. Therefore, 
sections 845 and 1603 of the NDAA for FY 2021 and section 853 of the 
NDAA for FY 2023 will not apply to the acquisition of commercial 
services or commercial products including COTS items unless a written 
determination is made. Due to delegations of authority, the Principal 
Director, Defense Pricing and Contracting, is the appropriate authority 
to make this determination. DoD intends to make that determination to 
apply this statute to the acquisition of commercial products, including 
COTS items, and to the acquisition of commercial services.

B. Determination

    Consistent with 10 U.S.C. 3452, and based on the findings above, 
not applying these clauses to contracts and subcontracts for the 
acquisition of commercial products including COTS items and for the 
acquisition of commercial services would exclude contracts intended to 
be covered by the statute and undermine the overarching purpose of the 
statute. Accordingly, DoD plans to apply the statute to contracts and 
subcontracts for the acquisition of commercial products including COTS 
items and for the acquisition of commercial services.

IV. Expected Impact of the Rule

    The proposed rule adds procurement limitations on the acquisition 
of star trackers for certain national security satellites and certain 
components for T-AO 205 and T-ARC class vessels, requiring they are 
manufactured in the national technology and industrial base: the United 
States, Australia, Canada, New Zealand, or the United Kingdom in 
accordance with 10 U.S.C. 4864.
    The proposed rule is not expected to have a significant impact on 
the Government, offerors, or contractors. The satellite star trackers 
and components for the T-AO 205 and T-ARC class of vessels are the 
types of items that are readily available in the marketplace, so 
limitation to national technology and industrial base sources is not 
viewed as having a significant impact on the availability of sources. 
Further, the proposed rule provides waiver procedures to the 
limitation.
    The domestic source restriction does not apply to--
    (1) Contracts or subcontracts that do not exceed the simplified 
acquisition threshold;
    (2) The acquisition of spare or repair parts needed to support 
components for naval vessels manufactured outside the United States; 
and
    (3) Large medium-speed diesel engines for icebreakers or special 
mission ships.

V. 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, as amended.

VI. Regulatory Flexibility Act

    DoD does not expect this proposed rule, when finalized, 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 will continue to provide small businesses the 
opportunity to participate in the manufacture of star trackers for 
certain national security satellites and certain components for T-AO 
205 and T-ARC class vessels in support of the national technology and 
industrial base. However, an initial regulatory flexibility analysis 
has been performed and is summarized as follows:
    DoD is proposing to amend the Defense Federal Acquisition 
Regulation Supplement (DFARS) to implement statutes that remove 
limitations and restrictions no longer required, and that require the 
procurement of star trackers for certain national security satellites, 
as well as certain components for T-AO 205 and T-ARC class vessels, 
from the national technology and industrial base: the United States, 
Australia, Canada, New Zealand, or the United Kingdom.
    The objective of the proposed rule is to implement sections 845 and 
1603 of the National Defense Authorization Act (NDAA) for Fiscal Year 
(FY) 2021 (Pub. L. 116-283); section 816 of the NDAA for FY 2022 (Pub. 
L. 117-81); and section 853 of the NDAA for FY 2023 (Pub. L. 117-263). 
These NDAA sections are the legal basis for the proposed rule. Section 
845 of the NDAA for FY 2021 amends 10 U.S.C. 4864(a) to update the list 
of components for naval vessels at paragraphs (a)(2)(A) through (E). 
Subsequently, section 816 of the NDAA for FY 2022 added to the list of 
components for naval vessels welded shipboard anchor and mooring chain, 
without size restrictions, at 10 U.S.C. 4864(a)(2)(F). Section 845 also 
added components for T-AO 205 class vessels at 10 U.S.C. 4864(a)(4). 
Section 853 of the NDAA for FY 2023 added T-ARC class vessels at 10 
U.S.C. 4864(a)(4) along with the component list for T-AO 205 class 
vessels. Section 1603 of the NDAA for FY 2021 added limitations on 
procurement of satellite star trackers at 10 U.S.C. 4864(a)(5). DoD 
reviewed data from the Federal Procurement Data System for FY 2018, 
2019, and 2020, excluding contracts that do not exceed the simplified 
acquisition threshold, for the following product service codes: 7G22, 
2835, 2010, 3815, 1040, 5925, 2040, 2010, beginning with 70 (for 
example, information technology hardware and software), and 7435. DoD 
made an average of 651 awards per year, of which 385 were made to small 
entities, an average of 59 percent awarded to small entities over the 
three fiscal years.
    It is expected that this proposed rule, when finalized, will 
benefit small businesses. The proposed rule will continue to provide 
small businesses the opportunity to participate in the manufacture of 
star trackers for certain national security satellites and certain 
components for T-AO 205 and T-ARC class vessels in support of the 
national technology and industrial base.
    This proposed rule does not include any new reporting, 
recordkeeping, or other compliance requirements for small businesses.
    The proposed rule does not duplicate, overlap, or conflict with any 
other Federal rules.
    The proposed rule exempts acquisitions equal to or less than the 
simplified acquisition threshold. There are no other known significant 
alternative approaches to the proposed rule that would meet the 
requirements of the statute.
    DoD invites comments from small business concerns and other 
interested

[[Page 80475]]

parties on the expected impact of this proposed rule on small entities.
    DoD will also consider comments from small entities concerning the 
existing regulations in subparts affected by this proposed 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 2021-
D022), in correspondence.

VII. Paperwork Reduction Act

    This proposed 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 212, 225, and 252 Government 
procurement.

Jennifer D. Johnson,
Editor/Publisher, Defense Acquisition Regulations System.

    Therefore, 48 CFR parts 212, 225, and 252 are proposed to be 
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 CFR chapter 1.

PART 212--ACQUISITION OF COMMERCIAL PRODUCTS AND COMMERCIAL 
SERVICES

0
2. Amend section 212.301 by--
0
a. Removing paragraphs (f)(x)(X) and (Y);
0
b. Redesignating paragraphs (f)(x)(M) through (W) as (f)(x)(N) through 
(X);
0
c. Adding a new paragraph (f)(x)(M);
0
d. Redesignating paragraphs (f)(x)(Z) through (NN) as paragraphs 
(f)(x)(Y) through (MM);
0
e. In the newly redesignated paragraph (f)(x)(Y), removing ``Pub. L.'' 
and adding ``Public Law'' in its place;
0
f. In the newly redesignated paragraph (f)(x)(MM), removing ``225.7010-
5'' and adding ``225.7004-7(b)'' in its place; and
0
g. Adding paragraphs (f)(x)(NN) through (OO).
    The additions read as follows:


212.301  Solicitation provisions and contract clauses for the 
acquisition of commercial products and commercial services.

* * * * *
    (f) * * *
    (x) * * *
    (M) Use the clause at 252.225-7019, Restriction on Acquisition of 
Anchor and Mooring Chain, as prescribed in 225.7004-7(a), to comply 
with 10 U.S.C. 4864 and section 8041 of the Fiscal Year 1991 DoD 
Appropriations Act (Pub. L. 101-511) and similar sections in subsequent 
DoD appropriations acts.
* * * * *
    (NN) Use the clause at 252.225-70XX, Restriction on Acquisition of 
Components of T-AO 205 and T-ARC Class Vessels, as prescribed in 
225.7004-7(c), to comply with 10 U.S.C. 4864.
    (OO) Use the clause at 252.225-70YY, Restriction on Acquisition of 
Certain Satellite Components, as prescribed in 225.7004-7(d), to comply 
with 10 U.S.C. 4864.
* * * * *

PART 225--FOREIGN ACQUISITION


225.7001  [Amended]

0
3. Amend section 225.7001 in the definition of ``Component'' by 
removing ``225.7007'' and adding ``225.7004-2(b)(6)'' in its place.
0
4. Revise section 225.7004 to read as follows:


225.7004  Restrictions on the procurement of goods other than U.S. 
goods.

0
5. Add section 225.7004-0 to read as follows:


225.7004-0  Scope.

    This section implements 10 U.S.C. 4864.
0
6. Revise sections 225.7004-1 through 225.7004-4 to read as follows:

Sec.
* * * * *
225.7004-1 Definitions.
225.7004-2 Restrictions.
225.7004-3 Exceptions.
225.7004-4 Implementation of restriction on certain naval vessel 
components.
* * * * *


225.7004-1  Definitions.

    As used in this section--
    National technology and industrial base means the persons and 
organizations that are engaged in production activities conducted 
within the United States, Australia, Canada, New Zealand, and the 
United Kingdom of Great Britain and Northern Ireland (United Kingdom). 
(10 U.S.C. 4801)
    Star tracker means a navigational tool used in a satellite weighing 
more than 400 pounds whose principal purpose is to support the national 
security, defense, or intelligence needs of the U.S. Government.


225.7004-2  Restrictions.

    Except as provided in 225.7004-3, do not acquire any of the 
following items, either as end products or components, unless the 
manufacturer of the items is part of the national technology and 
industrial base:
    (a) Buses, if multipassenger motor vehicles are purchased, leased, 
rented, or made available under contracts for transportation services.
    (b) Components for naval vessels, to the extent they are unique to 
marine applications (see also 225.7004-4 for implementation of the 
restriction for naval vessels):
    (1) Gyrocompasses.
    (2) Electronic navigation chart systems.
    (3) Steering controls.
    (4) Propulsion and machinery control systems.
    (5) Totally enclosed lifeboats.
    (6) Welded shipboard anchor and mooring chain. See also 225.7004-5.
    (c) Large medium-speed diesel engines for new construction of 
auxiliary ships using funds available for National Defense Sealift Fund 
programs or Shipbuilding and Conversion, Navy.
    (d) For T-AO 205 and T-ARC class vessels:
    (1) Auxiliary equipment, including pumps, for all shipboard 
services.
    (2) Propulsion system components, including engines, reduction 
gears, and propellers.
    (3) Shipboard cranes.
    (4) Spreaders for shipboard cranes.
    (e) Star trackers.


225.7004-3  Exceptions.

    (a) Contracts under the simplified acquisition threshold. The 
restrictions at 225.7004-2 do not apply to a contract or subcontract 
that does not exceed the simplified acquisition threshold.
    (b) Buses. The restriction at 225.7004-2(a) does not apply in the 
following circumstances:
    (1) Buses manufactured outside the national technology and 
industrial base are needed for temporary use because buses manufactured 
in the national technology and industrial base are not available to 
satisfy requirements that cannot be postponed. Such use may not, 
however, exceed the lead time required for acquisition and delivery of 
buses manufactured in the national technology and industrial base.
    (2) The requirement for buses is temporary in nature. For example, 
to meet a special, nonrecurring requirement or a sporadic and 
infrequent recurring requirement, buses manufactured outside the 
national technology and industrial base may be used for temporary 
periods of time. Such use may not however, exceed the period of time 
needed to meet the special requirement.
    (3) Buses manufactured outside the national technology and 
industrial base are available at no cost to the U.S. Government.

[[Page 80476]]

    (c) Components for naval vessels. The restriction at 225.7004-2(b) 
does not apply to 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, propulsion and 
machinery control systems, totally enclosed lifeboats, and welded 
shipboard anchor and mooring chain.
    (d) Components for auxiliary ships. The restriction at 225.7004-
2(c) does not apply to large medium-speed engines for icebreakers or 
special mission ships.
    (e) Star trackers. The restriction at 225.7004-2(e) does not apply 
to acquisition programs that have received Milestone A approval as 
defined in 10 U.S.C. 4211 before October 1, 2021, as documented by the 
requiring activity official performing program management 
responsibilities. The contracting officer shall include the Milestone A 
approval documentation in the contract file.


225.7004-4  Implementation of restriction on certain naval vessel 
components.

    (a) The statute at 10 U.S.C. 4864(h) prohibits the use of contract 
clauses or certifications to implement the restriction at 225.7004-2(b) 
for naval vessel components.
    (b) Agencies shall accomplish implementation of the restriction at 
225.7004-2(b) 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.
0
7. Add sections 225.7004-5 through 225.7004-7 to read as follows:

Sec.
* * * * *
225.7004-5 Additional restrictions on anchor and mooring chain.
225.7004-6 Waiver of restrictions.
225.7004-7 Contract clauses.
* * * * *


225.7004-5  Additional restrictions on anchor and mooring chain.

    (a) In accordance with section 8041 of the Fiscal Year 1991 DoD 
Appropriations Act (Pub. L. 101-511) and similar sections in subsequent 
DoD appropriations acts, do not acquire welded shipboard anchor and 
mooring chain, unless--
    (1) It is manufactured in the United States, including cutting, 
heat treating, quality control, testing, and welding (both forging and 
shot blasting process); and
    (2) The cost of the components manufactured in the United States 
exceeds 50 percent of the total cost of components.
    (b) The statute at 10 U.S.C. 4864 also restricts acquisition of 
welded shipboard anchor and mooring chain, when used as a component of 
a naval vessel; however, the Appropriations Act restriction described 
in paragraph (a) of this section takes precedence over the restriction 
of 10 U.S.C. 4864 cited in 225.7004-2(b)(6).


225.7004-6  Waiver of restrictions.

    (a) Welded shipboard anchor and mooring chain. (1) In accordance 
with section 8016 of the Consolidated Appropriations Act, 2023 (Pub. L. 
117-328), the secretary of the department responsible for acquisition 
may waive the restrictions in 225.7004-2(b)(6) and 225.7004-5, on a 
case-by-case basis, if--
    (i) Sufficient domestic suppliers are not available to meet DoD 
requirements on a timely basis; and
    (ii) The acquisition is necessary to acquire capability for 
national security purposes.
    (2) Document the waiver in a written determination and findings 
containing--
    (i) The factors supporting the waiver; and
    (ii) A certification that the acquisition must be made in order to 
acquire capability for national security purposes.
    (3) Provide a copy of the determination and findings to the House 
and Senate Committees on Appropriations.
    (b) Star trackers. The waiver criteria at paragraph (c) of this 
section apply, except that the USD(A&S) may delegate the authority to 
waive a restriction for a star tracker for a particular foreign country 
to the service acquisition executive, without power of redelegation 
(section 1603, National Defense Authorization Act for Fiscal Year 2021 
(Pub. L. 116-283)).
    (c) Waiver of restrictions of 10 U.S.C. 4864(a). The restrictions 
on certain foreign purchases at 225.7004-2 may be waived, except as 
provided in paragraphs (a) and (b) of this section, as follows:
    (1)(i) USD(A&S), without power of delegation, may waive a 
restriction for a particular item for a particular foreign country upon 
determination that--
    (A) U.S. producers of the item would not be jeopardized by 
competition from a foreign country, and that country does not 
discriminate against defense items produced in the United States to a 
greater degree than the United States discriminates against defense 
items produced in that country; or
    (B) Application of the restriction would impede cooperative 
programs entered into between DoD and a foreign country, or would 
impede the reciprocal procurement of defense items under a memorandum 
of understanding providing for reciprocal procurement of defense items 
under 225.872, and that country does not discriminate against defense 
items produced in the United States to a greater degree than the United 
States discriminates against defense items produced in that country.
    (ii) A notice of the determination to exercise the waiver authority 
shall be published in the Federal Register and submitted to the 
congressional defense committees at least 15 days before the effective 
date of the waiver.
    (iii) The effective period of the waiver shall not exceed 1 year.
    (iv) For contracts entered into prior to the effective date of a 
waiver, provided adequate consideration is received to modify the 
contract, the waiver shall be applied as directed or authorized in the 
waiver to--
    (A) Subcontracts entered into on or after the effective date of the 
waiver; and
    (B) Options for the procurement of items that are exercised after 
the effective date of the waiver, if the option prices are adjusted for 
any reason other than the application of the waiver.
    (2) The head of the contracting activity may waive a restriction on 
a case-by-case basis upon execution of a determination and findings 
that any of the following applies:
    (i) The restriction would cause unreasonable delays.
    (ii) Satisfactory quality items manufactured in the national 
technology and industrial base are not available.
    (iii) Application of the restriction would result in the existence 
of only one source for the item in the national technology and 
industrial base.
    (iv) Application of the restriction is not in the national security 
interests of the United States.
    (v) Application of the restriction would adversely affect a U.S. 
company.
    (3) A restriction is waived when it would cause unreasonable costs. 
The cost of an item of national technology and industrial base origin 
is unreasonable if it exceeds 150 percent of the offered price, 
inclusive of duty, of items that are not of national technology and 
industrial base origin.


225.7004-7  Contract clauses.

    (a) Unless a waiver has been granted, use the clause at 252.225-
7019,

[[Page 80477]]

Restriction on Acquisition of Anchor and Mooring Chain, in 
solicitations and contracts, including solicitations and contracts 
using FAR part 12 procedures for the acquisition of commercial products 
and commercial services, that exceed the simplified acquisition 
threshold and that require welded shipboard anchor or mooring chain.
    (b) Use the clause at 252.225-7062, Restriction on Acquisition of 
Large Medium-Speed Diesel Engines, in solicitations and contracts, 
including solicitations and contracts using FAR part 12 procedures for 
the acquisition of commercial products and commercial services, that 
exceed the simplified acquisition threshold and that require large 
medium-speed diesel engines for new construction of auxiliary ships 
using funds available for National Defense Sealift Fund programs or 
Shipbuilding and Conversion, Navy unless--
    (1) An exception at 225.7004-3(d) applies; or
    (2) A waiver has been granted.
    (c) Unless a waiver has been granted, use the clause at 252.225-
70XX, Restriction on Acquisition of Components of T-AO 205 and T-ARC 
Class Vessels, in solicitations and contracts, including solicitations 
and contracts using FAR part 12 procedures for the acquisition of 
commercial products and commercial services, that exceed the simplified 
acquisition threshold and that require components of T-AO 205 and T-ARC 
class vessels.
    (d) Use the clause at 252.225-70YY, Restriction on Acquisition of 
Certain Satellite Components, in solicitations and contracts, including 
solicitations and contracts using FAR part 12 procedures for the 
acquisition of commercial products and commercial services, that exceed 
the simplified acquisition threshold unless--
    (1) An exception at 225.7004-3(e) applies; or
    (2) A waiver has been granted.


225.7006, 225.7006-1, 225.7006-2, 225.7006-3, and 225.7006-4  [Removed 
and Reserved]

0
8. Remove and reserve sections 225.7006, 225.7006-1, 225.7006-2, 
225.7006-3, and 225.7006-4.


225.7007, 225.7007-1, 225.7007-2, and 225.7007-3  [Removed and 
Reserved]

0
9. Remove and reserve sections 225.7007, 225.7007-1, 225.7007-2, and 
225.7007-3.


225.7008  [Removed and Reserved]

0
10. Remove and reserve section 225.7008.


225.7009-1  [Amended]

0
11. Amend section 225.7009-1 by removing ``Section'' and adding 
``section'' in its place.


225.7010, 225.7010-1, 225.7010-2, 225.7010-3, 225.7010-4, and 225.7010-
5  [Removed and Reserved]

0
12. Remove and reserve sections 225.7010, 225.7010-1, 225.7010-2, 
225.7010-3, 225.7010-4, and 225.7010-5.

PART 252--SOLICITATION PROVISIONS AND CONTRACT CLAUSES

0
13. Amend section 252.225-7019--
0
a. By revising the section heading, introductory text, clause date, and 
paragraph (a);
0
b. In paragraph (b) by removing ``, four inches or less in diameter,''; 
and
0
c. In paragraph (d) by removing ``, four inches or less in diameter''.
    The revisions read as follows:


252.225-7019  Restriction on Acquisition of Anchor and Mooring Chain.

    As prescribed in 225.7004-7(a), use the following clause:

Restriction on Acquisition of Anchor and Mooring Chain (DATE)

    (a) Definition. As used in this clause--
    Component means an article, material, or supply incorporated 
directly into an end product.
* * * * *


252.225-7037  [Removed and Reserved]

0
14. Remove and reserve section 252.225-7037.


252.225-7038  [Removed and Reserved]

0
15. Remove and reserve section 252.225-7038.


252.225-7062  [Amended]

0
16. Amend section 252.225-7062 introductory text by removing 
``225.7010-5'' and adding ``225.7004-7(b)'' in its place.
0
17. Add section 252.225-70XX to read as follows:


252.225-70XX  Restriction on Acquisition of Components of T-AO 205 and 
T-ARC Class Vessels.

    As prescribed in 225.7004-7(c), use the following clause:

Restriction on Acquisition of Components of T-AO 205 and T-ARC Class 
Vessels (DATE)

    (a) Restriction.
    (1) In accordance with 10 U.S.C. 4864, the following components 
of T-AO 205 and T-ARC class vessels must be manufactured in the 
United States, Australia, Canada, New Zealand, or the United Kingdom 
of Great Britain and Northern Ireland (United Kingdom):
    (i) Auxiliary equipment, including pumps, for all shipboard 
services.
    (ii) Propulsion system components, including engines, reduction 
gears, and propellers.
    (iii) Shipboard cranes.
    (iv) Spreaders for shipboard cranes.
    (2) The Contractor shall deliver under this contract only T-AO 
205 and T-ARC class vessel components, as described in paragraph 
(a)(1) of this clause, manufactured in the United States, Australia, 
Canada, New Zealand, or the United Kingdom (10 U.S.C. 4864).
    (b) Subcontracts. The Contractor shall insert the substance of 
this clause, including this paragraph (b), in subcontracts for the 
components described in paragraph (a)(1) of this clause that exceed 
the simplified acquisition threshold, including subcontracts for 
commercial products and commercial services.
    (End of clause)
0
18. Add section 252.225-70YY to read as follows:


252.225-70YY  Restriction on Acquisition of Certain Satellite 
Components.

    As prescribed in 225.7004-7(d), use the following clause:

Restriction on Acquisition of Certain Satellite Components (DATE)

    (a) Definition. As used in this clause--
    Star tracker means a navigational tool used in a satellite 
weighing more than 400 pounds whose principal purpose is to support 
the national security, defense, or intelligence needs of the U.S. 
Government.
    (b) Restriction. In accordance with 10 U.S.C. 4864, a star 
tracker must be manufactured in the United States, Australia, 
Canada, New Zealand, or the United Kingdom of Great Britain and 
Northern Ireland (United Kingdom). The Contractor shall deliver 
under this contract only star trackers manufactured in the United 
States, Australia, Canada, New Zealand, or the United Kingdom.
    (c) Subcontracts. The Contractor shall insert the substance of 
this clause, including this paragraph (c), in subcontracts for star 
trackers that exceed the simplified acquisition threshold, including 
subcontracts for commercial products and commercial services.
(End of clause)
[FR Doc. 2023-25161 Filed 11-16-23; 8:45 am]
BILLING CODE 6820-ep-P