[Federal Register Volume 89, Number 158 (Thursday, August 15, 2024)]
[Proposed Rules]
[Pages 66338-66341]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2024-18111]


-----------------------------------------------------------------------

DEPARTMENT OF DEFENSE

Defense Acquisition Regulations System

48 CFR Parts 209 and 252

[Docket DARS-2024-0025]
RIN 0750-AM20


Defense Federal Acquisition Regulation Supplement: Limitation on 
Certain Institutes of Higher Education (DFARS Case 2024-D023)

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

ACTION: Proposed rule.

-----------------------------------------------------------------------

[[Page 66339]]

SUMMARY: DoD is proposing to amend the Defense Federal Acquisition 
Regulation Supplement (DFARS) to implement sections of the National 
Defense Authorization Act for Fiscal Year 2024, which amend a section 
of the National Defense Authorization Act for Fiscal Year 2021 that 
provides for the limitation of funds, authorized to be appropriated or 
otherwise made available for any fiscal year for DoD, to be provided to 
an institution of higher education that hosts a Confucius Institute.

DATES: Comments on the proposed rule should be submitted in writing to 
the address shown below on or before October 15, 2024, to be considered 
in the formation of a final rule.

ADDRESSES: Submit comments identified by DFARS Case 2024-D023, using 
either of the following methods:
    [cir] Federal eRulemaking Portal: https://www.regulations.gov. 
Search for DFARS Case 2024-D023. Select ``Comment'' and follow the 
instructions to submit a comment. Please include ``DFARS Case 2024-
D023'' on any attached documents.
    [cir] Email: [email protected]. Include DFARS Case 2024-D023 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 1044 and 
1045 of the National Defense Authorization Act (NDAA) for Fiscal Year 
(FY) 2024 (Pub. L. 118-31), which amend section 1062 of the NDAA for FY 
2021 (Pub. L. 116-283). DoD published an interim rule in the Federal 
Register at 88 FR 67607 on September 29, 2023, under DFARS Case 2021-
D023 to implement section 1062 of the NDAA for FY 2021. Section 1062 
provides that none of the funds authorized to be appropriated or 
otherwise made available for any fiscal year for DoD may be provided to 
an institution of higher education that hosts a Confucius Institute, 
defined as a cultural institute directly or indirectly funded by the 
government of the People's Republic of China. In addition, section 1062 
provided the authority to waive the funds limitation. There were no 
public comments submitted in response to the interim rule.
    Section 1044 of the NDAA for FY 2024 amends section 1062(d) of the 
NDAA for FY 2021 by revising the definition of ``Confucius Institute'' 
as any program that receives funding or support from the Chinese 
International Education Foundation, the Center for Language Exchange 
Cooperation of the Ministry of Education of the People's Republic of 
China, or any cultural institute funded by the government of the 
People's Republic of China.
    Section 1045 of the NDAA for FY 2024 amends section 1062(b) of the 
NDAA for FY 2021 to add a termination date of October 1, 2026, for the 
authority to issue a waiver.

II. Discussion and Analysis

    No respondents submitted public comments in response to the interim 
rule published at 88 FR 67607 on September 29, 2023.

A. New Definition

    This proposed rule under DFARS Case 2024-D023 includes revisions to 
the definition of ``Confucius Institute'' at DFARS 209.170-1. 
``Confucius Institute'' means any program that receives funding or 
support from the Chinese International Education Foundation, the Center 
for Language Exchange Cooperation of the Ministry of Education of the 
People's Republic of China, or any cultural institute funded by the 
government of the People's Republic of China.

B. Waiver of Funds Limitation

    This proposed rule at DFARS 209.170-3 adds a termination date of 
October 1, 2026, for the authority to issue a waiver. Currently, the 
funds limitation with respect to an institution of higher education can 
be waived by the Office of the Under Secretary of Defense for Research 
and Engineering (OUSD(R&E)). DFARS 209.170-3 addresses the OUSD(R&E), 
Confucius Institute Waiver Program procedures.

C. Solicitation Provision

    The solicitation provision at DFARS 252.209-7011, Representation 
for Restriction on the Use of Certain Institutions of Higher Education, 
is proposed to be amended to include conforming changes.

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

    This rule proposes to amend the solicitation provision at DFARS 
252.209-7011, Representation for Restriction on the Use of Certain 
Institutions of Higher Education. The provision at DFARS 252.209-7011 
is prescribed at DFARS 209.170-4 for use in solicitations for 
acquisitions to an institution of higher education, including 
solicitations using Federal Acquisition Regulation (FAR) part 12 
procedures for the acquisition of commercial products, including COTS 
items, and commercial services. DoD does intend to apply the proposed 
rule to contracts at or below the SAT, to contracts for the acquisition 
of commercial products including COTS items, and for the acquisition of 
commercial services.

A. Applicability to Contracts at or Below the Simplified Acquisition 
Threshold

    41 U.S.C. 1905 governs the applicability of laws to contracts or 
subcontracts in amounts not greater than the simplified acquisition 
threshold. It is intended to limit the applicability of laws to such 
contracts or subcontracts. 41 U.S.C. 1905 provides that if a provision 
of law contains criminal or civil penalties, or if the Federal 
Acquisition Regulatory Council makes a written determination that it is 
not in the best interest of the Federal Government to exempt contracts 
or subcontracts at or below the SAT, the law will apply to them. The 
Principal Director, Defense Pricing, Contracting, and Acquisition 
Policy (DPCAP), is the appropriate authority to make comparable 
determinations for regulations to be published in the DFARS, which is 
part of the FAR system of regulations. DoD does intend to make that 
determination. Therefore, this proposed rule will apply at or below the 
simplified acquisition threshold.

B. 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

[[Page 66340]]

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--
     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.
    Sections 1044 and 1045 of the NDAA for FY 2024 do not impose 
criminal or civil penalties, do not require purchase pursuant to 10 
U.S.C. 4862 or 4863, and do not refer to 10 U.S.C. 3452. Therefore, 
sections 1044 and 1045 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, DPCAP 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. Therefore, this proposed rule will 
apply to the acquisition of commercial products including COTS items 
and to the acquisition of commercial services.

C. Determinations

    To ensure compliance with the limitation on the use of funds, the 
proposed rule must apply to all contracts with institutions of higher 
education. An exception for acquisitions at or below the SAT, for the 
acquisition of commercial products including COTS items, or for the 
acquisition of commercial services would exclude the contracts intended 
to be covered by the law, thereby undermining the overarching public 
policy purpose of the law and the associated statutory funds 
limitation.

IV. Expected Impact of the Rule

    Although section 1044 of the NDAA for FY 2024 broadened the 
definition of Confucius Institute, DoD expects there will be no change 
to the number of offerors impacted by the representation requirement. 
Research and data analysis by DoD subject matter experts has not 
revealed any activity that would constitute a Confucius Institute as 
defined in section 1044. However, DoD's process of outreach to 
institutions is ongoing, in an effort to identify any institutes 
meeting the new definition being hosted by any U.S. institution of 
higher education. If it is determined an institution of higher 
education is hosting an institute meeting the new definition of 
Confucius Institute, and if the institute intends to continue 
operating, the prohibition will be applied accordingly. Consequently, 
de minimis associated burden exists since the proposed rule still only 
requires the prospective offeror, when submitting an offer in response 
to a solicitation, to represent compliance with the requirements of 
section 1062 of the NDAA for FY 2021 as amended by sections 1044 and 
1045 of the NDAA for FY 2024. Data from the Federal Procurement Data 
System indicate that less than 10 unique entities awarded DoD contracts 
in fiscal years 2021 through 2023 met the definition of an institution 
of higher education; none of those entities hosted a Confucius 
Institute as newly defined.
    This proposed rule also includes the addition of the termination 
date for the authority to waive the funds limitation. As provided in 
section 1045 of the NDAA for FY 2024, the waiver authority will end on 
October 1, 2026, and any waivers issued prior to that date will no 
longer be effective as of October 1, 2026. To date, DoD has not issued 
any waivers to the funds limitation, and DoD does not anticipate 
issuing any waivers on or before October 1, 2026.

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 funds limitation affects a very limited number of 
offerors and, therefore, has a limited impact. 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 revise the definition of Confucius 
Institute and to implement an end date for the associated waiver 
authority. The DFARS currently requires that none of the funds 
authorized to be appropriated or otherwise made available for any 
fiscal year for DoD may be provided to an institution of higher 
education that hosts a Confucius Institute. Currently, this prohibition 
may be waived.
    The objective of the rule is to implement sections 1044 and 1045 of 
the National Defense Authorization Act (NDAA) for Fiscal Year (FY) 2024 
(Pub. L. 118-31), which is the legal basis for the rule. Section 1044 
amends section 1062(d) of the NDAA for FY 2021 by revising the 
definition of ``Confucius Institute'' to mean any program that receives 
funding or support from the Chinese International Education Foundation 
or the Center for Language Exchange Cooperation of the Ministry of 
Education of the People's Republic of China, or any cultural institute 
funded by the Government of the People's Republic of China. Section 
1045 of the NDAA for FY 2024 amends section 1062(b) of the NDAA for FY 
2021 to add a termination date of October 1, 2026, for the authority to 
issue a waiver.
    To assess the potential impact, the Federal Procurement Data System 
(FPDS) was queried for FY 2021, FY 2022, and FY 2023 for DoD contracts 
and purchase orders, including those for commercial products and 
commercial services, awarded to institutions of higher education that 
meet the definition in 20 U.S.C. 1002. The FPDS data reflect a total of 
104 contract awards to 9 unique entities over the entire three fiscal 
years. All awards were made to other than small entities. Entities in 
FPDS categorized as higher-level institutions of education are 
designated only as other than small entities.
    This rule does not include any new reporting, recordkeeping, or 
other compliance requirements for small entities, unless they are 
associated with an institution of higher education that hosts a 
Confucius Institute.
    The rule does not duplicate, overlap, or conflict with any other 
Federal rules.
    There are no known significant alternative approaches to the rule 
that would meet the requirements of the statute.
    DoD invites comments from small business concerns and other 
interested

[[Page 66341]]

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 2024-D023), 
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 209 and 252

    Government procurement.

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

    Therefore, the Defense Acquisition Regulations System proposes to 
amend 48 CFR parts 209 and 252 as follows:

0
1. The authority citation for part 209 and 252 continues to read as 
follows:

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

PART 209--CONTRACTOR QUALIFICATIONS

0
2. Amend section 209.170-1 by revising the definition of ``Confucius 
Institute'' to read as follows:


209.170-1  Definitions.

* * * * *
    Confucius Institute means--
    (1) Any program that receives funding or support from--
    (i) The Chinese International Education Foundation; or
    (ii) The Center for Language Exchange Cooperation of the Ministry 
of Education of the People's Republic of China; or
    (2) Any cultural institute directly or indirectly funded by the 
government of the People's Republic of China.
* * * * *
0
3. Revise section 209.170-3 to read as follows:


209.170-3  Waiver of restriction.

    The restriction in 209.170-2 can be waived by the Office of the 
Under Secretary of Defense (Research and Engineering), without power of 
delegation, in accordance with the Confucius Institute Waiver Program 
guidance. The waiver authority terminates on October 1, 2026. Any 
waiver issued shall not apply on or after that date. See PGI 209.170-3.

PART 252--SOLICITATION PROVISIONS AND CONTRACT CLAUSES

0
4. Amend section 252.209-7011--
0
a. By revising the provision date;
0
b. In paragraph (a) by revising the definition of ``Confucius 
Institute''; and
0
c. By revising paragraph (b).
    The revisions read as follows:


252.209-7011  Representation for Restriction on the Use of Certain 
Institutions of Higher Education.

* * * * *

Representation for Restriction on the Use of Certain Institutions of 
Higher Education (Date)

    (a) * * *
    Confucius Institute means--
    (1) Any program that receives funding or support from--
    (i) The Chinese International Education Foundation; or
    (ii) The Center for Language Exchange Cooperation of the 
Ministry of Education of the People's Republic of China; or
    (2) Any cultural institute directly or indirectly funded by the 
government of the People's Republic of China.
* * * * *
    (b) Restriction. As required by section 1062 of the National 
Defense Authorization Act for Fiscal Year 2021 (Pub. L. 116-283), 
DoD may not award a contract with any institution of higher 
education that hosts a Confucius Institute. Section 1062 prohibits 
DoD from providing funding to any U.S. institution of higher 
education hosting a Confucius Institute unless that institution 
receives a waiver from the Department of Defense Office of the Under 
Secretary of Defense for Research and Engineering (OUSD(R&E)). The 
waiver authority terminates on October 1, 2026. Any waiver issued 
shall not apply on or after that date. See the OUSD(R&E) Confucius 
Institute Waiver Program Guidance to U.S. Institutions of Higher 
Education at https://rt.cto.mil/wp-content/uploads/Confucius-Institute-Waiver-Program-Guidance-28Mar2023.pdf.
* * * * *
[FR Doc. 2024-18111 Filed 8-14-24; 8:45 am]
BILLING CODE 6001-FR-P