80_FR_15967 80 FR 15909 - Defense Federal Acquisition Regulation Supplement: Use of Military Construction Funds (DFARS Case 2015-D006)

80 FR 15909 - Defense Federal Acquisition Regulation Supplement: Use of Military Construction Funds (DFARS Case 2015-D006)

DEPARTMENT OF DEFENSE
Defense Acquisition Regulations System

Federal Register Volume 80, Issue 58 (March 26, 2015)

Page Range15909-15911
FR Document2015-06759

DoD is issuing an interim rule amending the Defense Federal Acquisition Regulation Supplement (DFARS) to implement sections of the Military Construction and Veterans Affairs and Related Agencies Appropriations Act, 2015, that require offerors bidding on DoD military construction contracts to provide opportunity for competition to American steel producers, fabricators, and manufacturers; and restrict use of military construction funds in certain foreign countries, including countries that border the Arabian Gulf.

Federal Register, Volume 80 Issue 58 (Thursday, March 26, 2015)
[Federal Register Volume 80, Number 58 (Thursday, March 26, 2015)]
[Rules and Regulations]
[Pages 15909-15911]
From the Federal Register Online  [www.thefederalregister.org]
[FR Doc No: 2015-06759]


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DEPARTMENT OF DEFENSE

Defense Acquisition Regulations System

48 CFR Parts 225 and 236

RIN 0750-AI52


Defense Federal Acquisition Regulation Supplement: Use of 
Military Construction Funds (DFARS Case 2015-D006)

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

ACTION: Interim rule.

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

SUMMARY: DoD is issuing an interim rule amending the Defense Federal 
Acquisition Regulation Supplement (DFARS) to implement sections of the 
Military Construction and Veterans Affairs and Related Agencies 
Appropriations Act, 2015, that require offerors bidding on DoD military 
construction contracts to provide opportunity for competition to 
American steel producers, fabricators, and manufacturers; and restrict 
use of military construction funds in certain foreign countries, 
including countries that border the Arabian Gulf.

DATES: Effective March 26, 2015.
    Comment Date: Comments on the interim rule should be submitted in 
writing to the address shown below on or before May 26, 2015, to be 
considered in the formation of a final rule.

ADDRESSES: Submit comments identified by DFARS Case 2015-D006, using 
any of the following methods:
    [cir] Regulations.gov: http://www.regulations.gov. Submit comments 
via the Federal eRulemaking portal by entering ``DFARS Case 2015-D006'' 
under the heading ``Enter keyword or ID'' and selecting ``Search.'' 
Select the link ``Submit a Comment'' that corresponds with ``DFARS Case 
2015-D006.'' Follow the instructions provided at the ``Submit a 
Comment'' screen. Please include your name, company name (if any), and 
``DFARS Case 2015-D006'' on your attached document.

[[Page 15910]]

    [cir] Email: osd.dfars@mail.mil. Include DFARS Case 2015-D006 in 
the subject line of the message.
    [cir] Fax: 571-372-6094.
    [cir] Mail: Defense Acquisition Regulations System, Attn: Ms. Amy 
G. Williams, OUSD(AT&L)DPAP/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. Amy G. Williams, telephone 571-
372-6106.

SUPPLEMENTARY INFORMATION:

I. Background

    This interim rule implements sections 108, 111, and 112 of the 
Military Construction and Veterans Affairs and Related Agencies 
Appropriations Act, 2015 (Division I of the Consolidated and Further 
Continuing Resolution Appropriations Act, 2015, Pub. L. 113-235), 
enacted December 16, 2014.
     Section 108 provides that none of the funds made available 
in Title I may be used for the procurement of steel for any 
construction activity for which the requirement for competition 
opportunity has been denied to American steel producers, fabricators, 
and manufacturers who bid on DoD construction contracts.
     Section 111 provides that none of the funds made available 
in Title I may be obligated for architect and engineer contracts 
estimated by the Government to exceed $500,000 for projects to be 
accomplished in certain foreign countries, including countries 
bordering the Arabian Gulf, unless such contracts are awarded to U.S. 
firms or U.S. firms in a joint venture with a host nation firm.
     Section 112 provides, with some exceptions, that none of 
the funds made available in Title I for military construction in 
certain foreign countries, including countries bordering the Arabian 
Gulf, may be used to award any military construction contract estimated 
by the Government to exceed $1,000,000 to a foreign contractor.
    The restrictions in section 108 were first enacted in the annual 
military construction appropriations act in FY 2009 (Title I of the 
Military Construction and Veterans Affairs Appropriations Act, 2009, 
Pub. L. 110-329, Division E). This interim rule revises DFARS 236.274 
and 236.570(d)(1) to implement the same provision in subsequent 
military appropriations acts, including section 108 of Title I of the 
Military Construction and Veterans Affairs Appropriations Act, 2015, 
Pub. L. 113-235, Division I.
    This interim rule also implements section 111 by amending DFARS 
225.7015, 236.602-70, and 236.609-70(b)(3) to reflect that the current 
law now applies to the award of architect and engineering contracts 
that are estimated to exceed the $500,000 threshold for projects to be 
performed in certain foreign countries, including countries bordering 
the Arabian Gulf. The term ``Arabian Sea'' has been replaced with 
``Arabian Gulf'' in the clause prescription for DFARS 252.236-7011, 
Overseas Architect-Engineering Services--Restrictions to the United 
States.
    This interim rule likewise implements section 112 by amending DFARS 
225.7014, 236.273, and 236.570(c)(1) to reflect that the current law 
applies to military construction contracts estimated to exceed 
$1,000,000 that are performed in certain foreign countries, including 
countries bordering the Arabian Gulf. The term ``Arabian Sea'' has been 
replaced with ``Arabian Gulf'' in the clause prescription for DFARS 
252.236-7010, Overseas Military Construction--Preference for United 
States Firms.
    As further background on sections 111 and 112, these restrictions 
have also been in place since 1997, except that recently the military 
construction appropriations act restrictions have applied to countries 
bordering the Arabian Sea, rather than countries bordering the Arabian 
Gulf. The final rule under DFARS Case 2014-D016 was published in the 
Federal Register on December 11, 2014, finalizing the change from 
``Arabian Gulf'' to ``Arabian Sea.'' In the current statute, enacted on 
December 16, 2014, sections 111 and 112 have been corrected to refer to 
the Arabian Gulf again.

II. Discussion and Analysis

    In order to avoid any possible ambiguity as to the applicability of 
the rule, because there is not uniform agreement as to the correct name 
for the body of water located between Iran and the Arabian Peninsula 
(often referred to as the ``Persian Gulf''), the interim rule lists the 
countries bordering the Gulf in clockwise order (Iran, Oman, United 
Arab Emirates, Saudi Arabia, Qatar, Bahrain, Kuwait, and Iraq).

III. Executive Orders 12866 and 13563

    Executive Orders (E.O.s) 12866 and 13563 direct agencies to assess 
all costs and benefits of available regulatory alternatives and, if 
regulation is necessary, to select regulatory approaches that maximize 
net benefits (including potential economic, environmental, public 
health and safety effects, distributive impacts, and equity). E.O. 
13563 emphasizes the importance of quantifying both costs and benefits, 
of reducing costs, of harmonizing rules, and of promoting flexibility. 
This is not a significant regulatory action and, therefore, was not 
subject to review under section 6(b) of E.O. 12866, Regulatory Planning 
and Review, dated September 30, 1993. This rule is not a major rule 
under 5 U.S.C. 804.

IV. Regulatory Flexibility Act

    DoD does not expect this 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. However, an initial 
regulatory flexibility analysis has been performed, and is summarized 
as follows:
    This rule is necessary to require offerors bidding on DoD military 
construction contracts to provide opportunity for competition to 
American steel producers, fabricators, and manufacturers; and implement 
the preference for award only to U.S. firms when awarding certain 
military construction and architect-engineer contracts to be performed 
in countries bordering the Arabian Gulf.
    The objective of this rule is to implement sections 108, 111, and 
112 of the Military Construction and Veterans Affairs, and Related 
Agencies Appropriations Act, 2015 (Division I of Pub. L. 113-235). This 
rule extends the applicability of the requirement to provide 
opportunity for competition to American steel producers, fabricators, 
and manufacturers, and revises the preference for award to U.S. firms 
of military construction contracts that have an estimated value greater 
than $1,000,000 and the restriction requiring award only to U.S. firms 
for architect-engineer contracts that have an estimated value greater 
than $500,000, to make it applicable to contracts to be performed in a 
country bordering the Arabian Gulf, rather than a country bordering the 
Arabian Sea (as required in earlier statutes).
    Section 108 will benefit any small business entities involved in 
producing, fabricating, or manufacturing steel products to be used in 
military

[[Page 15911]]

construction. Sections 111 and 112 will only apply to a very limited 
number of small entities--those entities that submit offers in response 
to solicitations for military construction contracts that have an 
estimated value greater than $1,000,000 and architect-engineer 
contracts that have an estimated value greater than $500,000, when the 
contracts are to be performed in countries bordering the Arabian Gulf.
    This rule does not add any reporting or recordkeeping requirements. 
The rule does not duplicate, overlap, or conflict with any other 
Federal rules. This rule does not impose any significant economic 
burden on small firms. The rule primarily benefits U.S. firms (both 
small and large), by requiring offerors bidding on DoD military 
construction contracts to provide opportunity for competition to 
American steel producers, fabricators, and manufacturers; and providing 
a preference for U.S. firms competing for construction and architect-
engineer contracts in certain foreign countries, including countries 
bordering the Arabian Gulf. DoD did not identify any alternatives that 
could reduce the burden and still meet the objectives of the rule.
    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 2015-D006), in 
correspondence.

V. Paperwork Reduction Act

    The rule does not contain any information collection requirements 
that require the approval of the Office of Management and Budget under 
the Paperwork Reduction Act (44 U.S.C. chapter 35).

VI. Determination To Issue an Interim Rule

    A determination has been made under the authority of the Secretary 
of Defense that urgent and compelling reasons exist to promulgate this 
interim rule without prior opportunity for public comment. This action 
is necessary because sections 108, 111, and 112 of Title I, Department 
of Defense, the Military Construction and Veterans Affairs, and Related 
Agencies Appropriations Act, 2015, Division I of Pub. L. 113-235, 
enacted December 16, 2014, became effective upon enactment. This 
interim rule is necessary so that contracting officers will not risk 
possible misuse of funds. The interim rule provides contracting 
officers with the appropriate clause and provision prescriptions for 
correct use of provisions and clauses that implement the statutory 
restrictions on use of military construction funds. However, pursuant 
to 41 U.S.C. 1707 and FAR 1.501-3(b), DoD will consider public comments 
received in response to this interim rule in the formation of the final 
rule.

List of Subjects in 48 CFR Parts 225 and 236

    Government procurement.

Manuel Quinones,
Editor, Defense Acquisition Regulations System.

    Therefore, 48 CFR parts 225 and 236 are amended as follows:

PART 225--FOREIGN ACQUISITION

0
1. The authority citation for 48 CFR part 225 continues to read as 
follows:

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


225.7014  [Amended]

0
2. In section 225.7014, amend paragraph (a) by removing ``Arabian Sea'' 
and adding ``Arabian Gulf'' in its place.


225.7015  [Amended]

0
3. Amend section 225.7015 by removing ``Arabian Sea'' and adding 
``Arabian Gulf'' in its place.

PART 236--CONSTRUCTION AND ARCHITECT-ENGINEER CONTRACTS

0
4. The authority citation for 48 CFR part 236 is revised to read as 
follows:

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

0
5. In section 236.273, revise paragraph (a) introductory text to read 
as follows:


236.273  Construction in foreign countries.

    (a) In accordance with section 112 of the Military Construction and 
Veterans Affairs and Related Agencies Appropriations Act, 2015 
(Division I of Pub. L. 113-235) and the same provision in subsequent 
military construction appropriations acts, military construction 
contracts funded with military construction appropriations, that are 
estimated to exceed $1,000,000 and are to be performed in the United 
States outlying areas in the Pacific and on Kwajalein Atoll, or in 
countries bordering the Arabian Gulf (i.e., Iran, Oman, United Arab 
Emirates, Saudi Arabia, Qatar, Bahrain, Kuwait, and Iraq), shall be 
awarded only to United States firms, unless--
* * * * *


236.274  [Amended]

0
6. Amend section 236.274 by removing ``(Pub. L. 110-329, Division E)'' 
and adding ``(Pub. L. 110-329, Division E) and the same provision in 
subsequent military construction appropriations acts'' in its place.


236.570  [Amended]

0
7. Amend section 236.570 by--
0
a. In paragraph (c)(1), removing ``Arabian Sea'' and adding ``Arabian 
Gulf'' in its place; and
0
b. In paragraph (d)(1), by removing ``by Title I of the Military 
Construction and Veterans Affairs Appropriations Act, 2009 (Pub. L. 
110-329, Division E)'' and adding ``for military construction'' in its 
place.

0
8. Revise section 236.602-70 to read as follows:


236.602-70  Restriction on award of overseas architect-engineer 
contracts to foreign firms.

    In accordance with section 111 of the Military Construction and 
Veterans Affairs and Related Agencies Appropriations Act, 2015 
(Division I of Pub. L. 113-235) and the same provision in subsequent 
military construction appropriations acts, architect-engineer contracts 
funded by military construction appropriations that are estimated to 
exceed $500,000 and are to be performed in Japan, in any North Atlantic 
Treaty Organization member country, or in countries bordering the 
Arabian Gulf (i.e., Iran, Oman, United Arab Emirates, Saudi Arabia, 
Qatar, Bahrain, Kuwait, and Iraq), shall be awarded only to United 
States firms or to joint ventures of United States and host nation 
firms.


236.609-70  [Amended]

0
9. In section 236.609-70, amend paragraph (b)(3) by removing ``Arabian 
Sea'' and adding ``Arabian Gulf'' in its place.

[FR Doc. 2015-06759 Filed 3-25-15; 8:45 am]
 BILLING CODE 5001-06-P



                                                                  Federal Register / Vol. 80, No. 58 / Thursday, March 26, 2015 / Rules and Regulations                                               15909

                                                impact on a substantial number of small                 Information Center, shall send a copy of              period because the Rate-of-Return
                                                entities.’’ The RFA generally defines                   the Order, including the Final                        Carrier has a negative Eligible Recovery
                                                ‘‘small entity’’ as having the same                     Regulatory Flexibility Certification, to              in the true-up tariff period (before
                                                meaning as the terms ‘‘small business,’’                the Chief Counsel for Advocacy of the                 calculating the true-up amount in the
                                                ‘‘small organization,’’ and ‘‘small                     Small Business Administration.                        Eligible Recovery calculation), the Rate-
                                                governmental jurisdiction.’’ In addition,                                                                     of-Return Carrier shall treat the
                                                the term ‘‘small business’’ has the same                List of Subjects in 47 CFR Part 51                    unrecoverable true-up amount as its
                                                meaning as the term ‘‘small business                      Communications common carriers,                     Eligible Recovery for the true-up tariff
                                                concern’’ under the Small Business Act.                 Telecommunications.                                   period.
                                                A small business concern is one which:                  Federal Communications Commission.                    *     *     *     *     *
                                                (1) Is independently owned and                          Deena M. Shetler,                                     [FR Doc. 2015–06642 Filed 3–25–15; 8:45 am]
                                                operated; (2) is not dominant in its field                                                                    BILLING CODE 6712–01–P
                                                                                                        Associate Chief, Wireline Competition
                                                of operation; and (3) satisfies any                     Bureau.
                                                additional criteria established by the
                                                Small Business Administration (SBA).                      For the reasons discussed in the
                                                                                                                                                              DEPARTMENT OF DEFENSE
                                                   14. We hereby certify that the rule                  preamble, the Federal Communications
                                                revisions adopted in the Order will not                 Commission amends 47 CFR part 51 as                   Defense Acquisition Regulations
                                                have a significant economic impact on                   follows:                                              System
                                                a substantial number of small entities.
                                                The Order amends rules adopted in the                   PART 51—INTERCONNECTION                               48 CFR Parts 225 and 236
                                                USF/ICC Transformation Order by
                                                                                                        ■ 1. The authority citation for part 51               RIN 0750–AI52
                                                correcting conflicts between the new or
                                                                                                        continues to read as follows:
                                                revised rules and existing rules, as well                                                                     Defense Federal Acquisition
                                                as addressing omissions or oversights.                    Authority: Sections 1–5, 7, 201–05, 207–
                                                                                                        09, 218, 220, 225–27, 251–54, 256, 271,               Regulation Supplement: Use of Military
                                                These revisions do not create any                                                                             Construction Funds (DFARS Case
                                                burdens, benefits, or requirements that                 303(r), 332, 706 of the Telecommunication
                                                                                                        Act of 1996, 48 Stat. 1070, as amended, 1077;         2015–D006)
                                                were not addressed by the Final                         47 U.S.C. 151–55, 157, 201–05, 207–09, 218,
                                                Regulatory Flexibility Analysis attached                                                                      AGENCY:  Defense Acquisition
                                                                                                        220, 225–27, 251–54, 256, 271, 303(r), 332,
                                                to the USF/ICC Transformation Order.                    1302, 47 U.S.C. 157 note, unless otherwise            Regulations System, Department of
                                                The Commission will send a copy of the                  noted.                                                Defense (DoD).
                                                Order, including a copy of this final                                                                         ACTION: Interim rule.
                                                certification, to the Chief Counsel for                 Subpart J—Transitional Access
                                                Advocacy of the SBA. In addition, the                   Service Pricing                                       SUMMARY:   DoD is issuing an interim rule
                                                Order (or a summary thereof) and                                                                              amending the Defense Federal
                                                certification will be published in the                  ■ 2. Section 51.917 is amended by                     Acquisition Regulation Supplement
                                                Federal Register.                                       adding paragraphs (d)(1)(viii)(A) and (B)             (DFARS) to implement sections of the
                                                                                                        to read as follows:                                   Military Construction and Veterans
                                                C. Congressional Review Act                                                                                   Affairs and Related Agencies
                                                                                                        § 51.917 Revenue recovery for rate-of-                Appropriations Act, 2015, that require
                                                  15. The Commission will send a copy                   return carriers.
                                                of the Order to Congress and the                                                                              offerors bidding on DoD military
                                                Government Accountability Office                        *      *     *     *     *                            construction contracts to provide
                                                pursuant to the Congressional Review                       (d) * * *                                          opportunity for competition to
                                                Act.                                                       (1) * * *                                          American steel producers, fabricators,
                                                                                                           (viii) * * *                                       and manufacturers; and restrict use of
                                                V. Ordering Clauses                                        (A) If a Rate-of-Return Carrier in any             military construction funds in certain
                                                  16. Accordingly, it is ordered, that                  tariff period underestimates its                      foreign countries, including countries
                                                pursuant to the authority contained in                  projected demand for services covered                 that border the Arabian Gulf.
                                                sections 1, 2, 4(i), 201–203, 220, 251,                 by § 51.917(b)(6) or 51.915(b)(13), and               DATES: Effective March 26, 2015.
                                                252, 254, 303(r) and 403 of the                         thus has too much Eligible Recovery in                   Comment Date: Comments on the
                                                Communications Act of 1934, as                          that tariff period, it shall refund the               interim rule should be submitted in
                                                amended, 47 U.S.C. 151, 152, 154(i),                    amount of any such True-up Revenues                   writing to the address shown below on
                                                201–203, 220, 251, 252, 254, 303(r) and                 or True-up Revenues for Access                        or before May 26, 2015, to be considered
                                                403, and pursuant to §§ 0.91, 0.201(d),                 Recovery Charge that are not offset by                in the formation of a final rule.
                                                0.291, 1.3, and 1.427 of the                            the Rate-of-Return Carrier’s Eligible                 ADDRESSES: Submit comments
                                                Commission’s rules, 47 CFR 0.91,                        Recovery (calculated before including                 identified by DFARS Case 2015–D006,
                                                0.201(d), 0.291, 1.3 and 1.427, and                     the true-up amounts in the Eligible                   using any of the following methods:
                                                pursuant to the delegation of authority                 Recovery calculation) in the true-up                     Æ Regulations.gov: http://
                                                in paragraph 1404 of 26 FCC Rcd 17663                   tariff period to the Administrator by                 www.regulations.gov. Submit comments
                                                (2011), the Order and the rules revising                August 1 following the date of the Rate-              via the Federal eRulemaking portal by
                                                part 51 of the Commission’s rules are                   of-Return Carrier’s annual access tariff              entering ‘‘DFARS Case 2015–D006’’
                                                adopted, effective April 27, 2015.                      filing.                                               under the heading ‘‘Enter keyword or
                                                  17. It is further ordered that the                       (B) If a Rate-of-Return Carrier in any             ID’’ and selecting ‘‘Search.’’ Select the
mstockstill on DSK4VPTVN1PROD with RULES




                                                Commission shall send a copy of this                    tariff period receives too little Eligible            link ‘‘Submit a Comment’’ that
                                                Order to Congress and the Government                    Recovery because it overestimates its                 corresponds with ‘‘DFARS Case 2015–
                                                Accountability Office pursuant to the                   projected demand for services covered                 D006.’’ Follow the instructions provided
                                                Congressional Review Act.                               by § 51.917(b)(6) or 51.915(b)(13), which             at the ‘‘Submit a Comment’’ screen.
                                                  18. It is further ordered that the                    True-up Revenues and True-up                          Please include your name, company
                                                Commission’s Consumer and                               Revenues for Access Recovery Charge it                name (if any), and ‘‘DFARS Case 2015–
                                                Governmental Affairs Bureau, Reference                  cannot recover in the true-up tariff                  D006’’ on your attached document.


                                           VerDate Sep<11>2014   17:09 Mar 25, 2015   Jkt 235001   PO 00000   Frm 00025   Fmt 4700   Sfmt 4700   E:\FR\FM\26MRR1.SGM   26MRR1


                                                15910             Federal Register / Vol. 80, No. 58 / Thursday, March 26, 2015 / Rules and Regulations

                                                   Æ Email: osd.dfars@mail.mil. Include                 329, Division E). This interim rule                   III. Executive Orders 12866 and 13563
                                                DFARS Case 2015–D006 in the subject                     revises DFARS 236.274 and                                Executive Orders (E.O.s) 12866 and
                                                line of the message.                                    236.570(d)(1) to implement the same                   13563 direct agencies to assess all costs
                                                   Æ Fax: 571–372–6094.                                 provision in subsequent military                      and benefits of available regulatory
                                                   Æ Mail: Defense Acquisition                          appropriations acts, including section                alternatives and, if regulation is
                                                Regulations System, Attn: Ms. Amy G.                    108 of Title I of the Military                        necessary, to select regulatory
                                                Williams, OUSD(AT&L)DPAP/DARS,                          Construction and Veterans Affairs                     approaches that maximize net benefits
                                                Room 3B941, 3060 Defense Pentagon,                      Appropriations Act, 2015, Pub. L. 113–                (including potential economic,
                                                Washington, DC 20301–3060.                              235, Division I.                                      environmental, public health and safety
                                                   Comments received generally will be                    This interim rule also implements                   effects, distributive impacts, and
                                                posted without change to http://                        section 111 by amending DFARS                         equity). E.O. 13563 emphasizes the
                                                www.regulations.gov, including any                      225.7015, 236.602–70, and 236.609–                    importance of quantifying both costs
                                                personal information provided. To                       70(b)(3) to reflect that the current law              and benefits, of reducing costs, of
                                                confirm receipt of your comment(s),                     now applies to the award of architect                 harmonizing rules, and of promoting
                                                please check www.regulations.gov,                       and engineering contracts that are                    flexibility. This is not a significant
                                                approximately two to three days after                   estimated to exceed the $500,000                      regulatory action and, therefore, was not
                                                submission to verify posting (except                    threshold for projects to be performed in             subject to review under section 6(b) of
                                                allow 30 days for posting of comments                   certain foreign countries, including                  E.O. 12866, Regulatory Planning and
                                                submitted by mail).                                     countries bordering the Arabian Gulf.                 Review, dated September 30, 1993. This
                                                FOR FURTHER INFORMATION CONTACT: Ms.                    The term ‘‘Arabian Sea’’ has been                     rule is not a major rule under 5 U.S.C.
                                                Amy G. Williams, telephone 571–372–                     replaced with ‘‘Arabian Gulf’’ in the                 804.
                                                6106.                                                   clause prescription for DFARS 252.236–
                                                                                                        7011, Overseas Architect-Engineering                  IV. Regulatory Flexibility Act
                                                SUPPLEMENTARY INFORMATION:
                                                                                                        Services—Restrictions to the United                      DoD does not expect this rule to have
                                                I. Background                                           States.                                               a significant economic impact on a
                                                   This interim rule implements sections                  This interim rule likewise implements               substantial number of small entities
                                                108, 111, and 112 of the Military                       section 112 by amending DFARS                         within the meaning of the Regulatory
                                                Construction and Veterans Affairs and                   225.7014, 236.273, and 236.570(c)(1) to               Flexibility Act, 5 U.S.C. 601, et seq.
                                                Related Agencies Appropriations Act,                    reflect that the current law applies to               However, an initial regulatory flexibility
                                                2015 (Division I of the Consolidated and                military construction contracts                       analysis has been performed, and is
                                                Further Continuing Resolution                           estimated to exceed $1,000,000 that are               summarized as follows:
                                                Appropriations Act, 2015, Pub. L. 113–                  performed in certain foreign countries,                  This rule is necessary to require
                                                235), enacted December 16, 2014.                        including countries bordering the                     offerors bidding on DoD military
                                                   • Section 108 provides that none of                  Arabian Gulf. The term ‘‘Arabian Sea’’                construction contracts to provide
                                                the funds made available in Title I may                 has been replaced with ‘‘Arabian Gulf’’               opportunity for competition to
                                                be used for the procurement of steel for                in the clause prescription for DFARS                  American steel producers, fabricators,
                                                any construction activity for which the                 252.236–7010, Overseas Military                       and manufacturers; and implement the
                                                requirement for competition                             Construction—Preference for United                    preference for award only to U.S. firms
                                                opportunity has been denied to                          States Firms.                                         when awarding certain military
                                                American steel producers, fabricators,                    As further background on sections                   construction and architect-engineer
                                                and manufacturers who bid on DoD                        111 and 112, these restrictions have also             contracts to be performed in countries
                                                construction contracts.                                 been in place since 1997, except that                 bordering the Arabian Gulf.
                                                   • Section 111 provides that none of                  recently the military construction                       The objective of this rule is to
                                                the funds made available in Title I may                 appropriations act restrictions have                  implement sections 108, 111, and 112 of
                                                be obligated for architect and engineer                 applied to countries bordering the                    the Military Construction and Veterans
                                                contracts estimated by the Government                   Arabian Sea, rather than countries                    Affairs, and Related Agencies
                                                to exceed $500,000 for projects to be                   bordering the Arabian Gulf. The final                 Appropriations Act, 2015 (Division I of
                                                accomplished in certain foreign                         rule under DFARS Case 2014–D016 was                   Pub. L. 113–235). This rule extends the
                                                countries, including countries bordering                published in the Federal Register on                  applicability of the requirement to
                                                the Arabian Gulf, unless such contracts                 December 11, 2014, finalizing the                     provide opportunity for competition to
                                                are awarded to U.S. firms or U.S. firms                 change from ‘‘Arabian Gulf’’ to ‘‘Arabian             American steel producers, fabricators,
                                                in a joint venture with a host nation                   Sea.’’ In the current statute, enacted on             and manufacturers, and revises the
                                                firm.                                                   December 16, 2014, sections 111 and                   preference for award to U.S. firms of
                                                   • Section 112 provides, with some                    112 have been corrected to refer to the               military construction contracts that have
                                                exceptions, that none of the funds made                 Arabian Gulf again.                                   an estimated value greater than
                                                available in Title I for military                                                                             $1,000,000 and the restriction requiring
                                                                                                        II. Discussion and Analysis
                                                construction in certain foreign                                                                               award only to U.S. firms for architect-
                                                countries, including countries bordering                   In order to avoid any possible                     engineer contracts that have an
                                                the Arabian Gulf, may be used to award                  ambiguity as to the applicability of the              estimated value greater than $500,000,
                                                any military construction contract                      rule, because there is not uniform                    to make it applicable to contracts to be
                                                estimated by the Government to exceed                   agreement as to the correct name for the              performed in a country bordering the
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                                                $1,000,000 to a foreign contractor.                     body of water located between Iran and                Arabian Gulf, rather than a country
                                                   The restrictions in section 108 were                 the Arabian Peninsula (often referred to              bordering the Arabian Sea (as required
                                                first enacted in the annual military                    as the ‘‘Persian Gulf’’), the interim rule            in earlier statutes).
                                                construction appropriations act in FY                   lists the countries bordering the Gulf in                Section 108 will benefit any small
                                                2009 (Title I of the Military                           clockwise order (Iran, Oman, United                   business entities involved in producing,
                                                Construction and Veterans Affairs                       Arab Emirates, Saudi Arabia, Qatar,                   fabricating, or manufacturing steel
                                                Appropriations Act, 2009, Pub. L. 110–                  Bahrain, Kuwait, and Iraq).                           products to be used in military


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                                                                  Federal Register / Vol. 80, No. 58 / Thursday, March 26, 2015 / Rules and Regulations                                               15911

                                                construction. Sections 111 and 112 will                 officers will not risk possible misuse of             awarded only to United States firms,
                                                only apply to a very limited number of                  funds. The interim rule provides                      unless—
                                                small entities—those entities that                      contracting officers with the appropriate             *    *   *      *    *
                                                submit offers in response to solicitations              clause and provision prescriptions for
                                                for military construction contracts that                correct use of provisions and clauses                 236.274    [Amended]
                                                have an estimated value greater than                    that implement the statutory restrictions
                                                $1,000,000 and architect-engineer                       on use of military construction funds.                ■ 6. Amend section 236.274 by
                                                contracts that have an estimated value                  However, pursuant to 41 U.S.C. 1707                   removing ‘‘(Pub. L. 110–329, Division
                                                greater than $500,000, when the                         and FAR 1.501–3(b), DoD will consider                 E)’’ and adding ‘‘(Pub. L. 110–329,
                                                contracts are to be performed in                        public comments received in response                  Division E) and the same provision in
                                                countries bordering the Arabian Gulf.                   to this interim rule in the formation of              subsequent military construction
                                                   This rule does not add any reporting                 the final rule.                                       appropriations acts’’ in its place.
                                                or recordkeeping requirements. The rule
                                                does not duplicate, overlap, or conflict                List of Subjects in 48 CFR Parts 225 and              236.570    [Amended]
                                                with any other Federal rules. This rule                 236
                                                                                                                                                              ■  7. Amend section 236.570 by—
                                                does not impose any significant                             Government procurement.
                                                economic burden on small firms. The                                                                           ■  a. In paragraph (c)(1), removing
                                                rule primarily benefits U.S. firms (both                Manuel Quinones,                                      ‘‘Arabian Sea’’ and adding ‘‘Arabian
                                                small and large), by requiring offerors                 Editor, Defense Acquisition Regulations               Gulf’’ in its place; and
                                                bidding on DoD military construction                    System.
                                                                                                                                                              ■ b. In paragraph (d)(1), by removing
                                                contracts to provide opportunity for                      Therefore, 48 CFR parts 225 and 236                 ‘‘by Title I of the Military Construction
                                                competition to American steel                           are amended as follows:                               and Veterans Affairs Appropriations
                                                producers, fabricators, and                                                                                   Act, 2009 (Pub. L. 110–329, Division E)’’
                                                manufacturers; and providing a                          PART 225—FOREIGN ACQUISITION
                                                                                                                                                              and adding ‘‘for military construction’’
                                                preference for U.S. firms competing for
                                                                                                        ■ 1. The authority citation for 48 CFR                in its place.
                                                construction and architect-engineer
                                                contracts in certain foreign countries,                 part 225 continues to read as follows:                ■ 8. Revise section 236.602–70 to read
                                                including countries bordering the                         Authority: 41 U.S.C. 1303 and 48 CFR                as follows:
                                                Arabian Gulf. DoD did not identify any                  chapter 1.
                                                alternatives that could reduce the                                                                            236.602–70 Restriction on award of
                                                                                                        225.7014     [Amended]                                overseas architect-engineer contracts to
                                                burden and still meet the objectives of
                                                the rule.                                               ■ 2. In section 225.7014, amend                       foreign firms.
                                                   DoD invites comments from small                      paragraph (a) by removing ‘‘Arabian                      In accordance with section 111 of the
                                                business concerns and other interested                  Sea’’ and adding ‘‘Arabian Gulf’’ in its              Military Construction and Veterans
                                                parties on the expected impact of this                  place.                                                Affairs and Related Agencies
                                                rule on small entities.                                 225.7015     [Amended]                                Appropriations Act, 2015 (Division I of
                                                   DoD will also consider comments                                                                            Pub. L. 113–235) and the same
                                                from small entities concerning the                      ■ 3. Amend section 225.7015 by
                                                                                                        removing ‘‘Arabian Sea’’ and adding                   provision in subsequent military
                                                existing regulations in subparts affected
                                                                                                        ‘‘Arabian Gulf’’ in its place.                        construction appropriations acts,
                                                by this rule in accordance with 5 U.S.C.
                                                610. Interested parties must submit such                                                                      architect-engineer contracts funded by
                                                                                                        PART 236—CONSTRUCTION AND                             military construction appropriations
                                                comments separately and should cite 5
                                                                                                        ARCHITECT-ENGINEER CONTRACTS                          that are estimated to exceed $500,000
                                                U.S.C. 610 (DFARS Case 2015–D006), in
                                                correspondence.                                                                                               and are to be performed in Japan, in any
                                                                                                        ■ 4. The authority citation for 48 CFR                North Atlantic Treaty Organization
                                                V. Paperwork Reduction Act                              part 236 is revised to read as follows:               member country, or in countries
                                                  The rule does not contain any                           Authority: 41 U.S.C. 1303 and 48 CFR                bordering the Arabian Gulf (i.e., Iran,
                                                information collection requirements that                chapter 1.                                            Oman, United Arab Emirates, Saudi
                                                require the approval of the Office of                   ■ 5. In section 236.273, revise paragraph             Arabia, Qatar, Bahrain, Kuwait, and
                                                Management and Budget under the                         (a) introductory text to read as follows:             Iraq), shall be awarded only to United
                                                Paperwork Reduction Act (44 U.S.C.                                                                            States firms or to joint ventures of
                                                                                                        236.273    Construction in foreign countries.
                                                chapter 35).                                                                                                  United States and host nation firms.
                                                                                                          (a) In accordance with section 112 of
                                                VI. Determination To Issue an Interim                   the Military Construction and Veterans                236.609–70    [Amended]
                                                Rule                                                    Affairs and Related Agencies
                                                   A determination has been made under                  Appropriations Act, 2015 (Division I of               ■ 9. In section 236.609–70, amend
                                                the authority of the Secretary of Defense               Pub. L. 113–235) and the same                         paragraph (b)(3) by removing ‘‘Arabian
                                                that urgent and compelling reasons exist                provision in subsequent military                      Sea’’ and adding ‘‘Arabian Gulf’’ in its
                                                to promulgate this interim rule without                 construction appropriations acts,                     place.
                                                prior opportunity for public comment.                   military construction contracts funded                [FR Doc. 2015–06759 Filed 3–25–15; 8:45 am]
                                                This action is necessary because                        with military construction                            BILLING CODE 5001–06–P
                                                sections 108, 111, and 112 of Title I,                  appropriations, that are estimated to
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                                                Department of Defense, the Military                     exceed $1,000,000 and are to be
                                                Construction and Veterans Affairs, and                  performed in the United States outlying
                                                Related Agencies Appropriations Act,                    areas in the Pacific and on Kwajalein
                                                2015, Division I of Pub. L. 113–235,                    Atoll, or in countries bordering the
                                                enacted December 16, 2014, became                       Arabian Gulf (i.e., Iran, Oman, United
                                                effective upon enactment. This interim                  Arab Emirates, Saudi Arabia, Qatar,
                                                rule is necessary so that contracting                   Bahrain, Kuwait, and Iraq), shall be


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Document Created: 2015-12-18 11:46:35
Document Modified: 2015-12-18 11:46:35
CategoryRegulatory Information
CollectionFederal Register
sudoc ClassAE 2.7:
GS 4.107:
AE 2.106:
PublisherOffice of the Federal Register, National Archives and Records Administration
SectionRules and Regulations
ActionInterim rule.
DatesEffective March 26, 2015.
ContactMs. Amy G. Williams, telephone 571- 372-6106.
FR Citation80 FR 15909 
RIN Number0750-AI52
CFR Citation48 CFR 225
48 CFR 236

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