80 FR 30119 - Defense Federal Acquisition Regulation Supplement: Photovoltaic Devices from the United States (DFARS Case 2015-D007)

DEPARTMENT OF DEFENSE
Defense Acquisition Regulations System

Federal Register Volume 80, Issue 100 (May 26, 2015)

Page Range		30119-30124
FR Document		2015-12343

DoD is proposing to amend the Defense Federal Acquisition Regulation Supplement (DFARS) to implement a section of the National Defense Authorization Act for Fiscal Year 2015 that revises the restrictions relating to utilization of domestic photovoltaic devices.

Federal Register, Volume 80 Issue 100 (Tuesday, May 26, 2015)

[Federal Register Volume 80, Number 100 (Tuesday, May 26, 2015)]
[Proposed Rules]
[Pages 30119-30124]
From the Federal Register Online [www.thefederalregister.org]
[FR Doc No: 2015-12343]

Federal Register / Vol. 80, No. 100 / Tuesday, May 26, 2015 /
Proposed Rules

[[Page 30119]]

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DEPARTMENT OF DEFENSE

Defense Acquisition Regulations System

48 CFR Parts 212, 225, and 252

RIN 0750-AI41

Defense Federal Acquisition Regulation Supplement: Photovoltaic
Devices from the United States (DFARS Case 2015-D007)

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 a section of the National
Defense Authorization Act for Fiscal Year 2015 that revises the
restrictions relating to utilization of domestic photovoltaic devices.

DATES: Comments on the proposed rule should be submitted in writing to
the address shown below on or before July 27, 2015, to be considered in
the formation of a final rule.

ADDRESSES: Submit comments identified by DFARS Case 2015-D007, 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-D007''
under the heading ``Enter keyword or ID'' and selecting ``Search.''
Select the link ``Submit a Comment'' that corresponds with ``DFARS Case
2015-D007.'' Follow the instructions provided at the ``Submit a
Comment'' screen. Please include your name, company name (if any), and
``DFARS Case 2015-D007'' on your attached document.
[cir] Email: osd.dfars@mail.mil. Include DFARS Case 2015-D007 in
the subject line of the message.
[cir] Fax: 571-372-6094.
[cir] Mail: Defense Acquisition Regulations System, Attn: 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, Defense
Acquisition Regulations System, OUSD(AT&L)DPAP/DARS, Room 3B941, 3060
Defense Pentagon, Washington, DC 20301-3060. Telephone 571-372-6106.

SUPPLEMENTARY INFORMATION:

I. Background

DoD is proposing to revise the DFARS to implement section 858 of
the National Defense Authorization Act (NDAA) for Fiscal Year (FY) 2015
(Pub. L. 113-291), which addresses utilization of domestic photovoltaic
devices.
DFARS currently addresses utilization of domestic photovoltaic
devices at DFARS 225.7017, Utilization of domestic photovoltaic
devices, and the associated clause at 252.225-7017, Photovoltaic
Devices, and provision at 252.225-7018, Photovoltaic Devices--
Certificate. The current regulations that implement section 846 of the
NDAA for FY 2011 (Pub. L. 111-383) were first published as an interim
rule under DFARS Case 2011-D046 on December 20, 2011 (76 FR 78858) and
finalized on May 22, 2012 (77 FR 30368). Some clarification of the
rules of origin for photovoltaic devices to be utilized under covered
contracts were published as an interim rule under FAR Case 2014-D006 on
December 18, 2013 (78 FR 76993) and finalized on April 21, 2014 (79 FR
22041). Those clarifications are not affected by this rule.

II. Discussion and Analysis

A. Analysis and Interpretation of Statutory Requirements

Although section 858 of the NDAA for FY 2015 does not contain
specific language to rescind or supersede section 846 of the NDAA for
FY 2011, DoD has determined through detailed comparison of the two
statutes that compliance with section 858 will meet or exceed the
requirements for compliance with section 846.
The most significant differences between the two statutes are as
follows:
1. Covered Contracts
Section 846 applied to contracts awarded by DoD, including energy
savings performance contracts, utility service contracts, land leases,
and private housing contracts, to the extent that such contracts result
in ownership of photovoltaic devices by DoD. Section 846 further
provides that DoD is deemed to own a photovoltaic device if the device
is--
Installed on DoD property or in a facility owned by DoD;
and
Reserved for the exclusive use of DOD for the full
economic life of the device.
Section 858 applies to any contract awarded by DoD that provides
for a photovoltaic device to be--
Installed inside the United States on DoD property or in a
facility owned by DoD; or
Reserved for the exclusive use of DoD in the United States
for the full economic life of the device.
These conditions are generally the same except--
(1) Section 858 explicitly restricts applicability to the U.S.,
which is still equivalent to the section 846 applicability, because the
Buy American Act invoked in section 846 does not apply overseas; and
(2) Section 858 substitutes ``or'' for ``and'' in connecting the
two conditions. Therefore, either one of the conditions is sufficient
to make the law applicable and compliance with section 858 will meet
and exceed compliance with section 846.
Land leases are not addressed in this rule. Although section 846
mentioned land leases as an example of the type of contract that might
be a covered contract, the current DFARS regulations do not address
land leases, because land leases are outside the scope of the FAR and
DFARS. As used in the FAR and DFARS, the term ``acquisition'' means the
``acquiring by contract with appropriated funds of supplies or service
(including construction). . . .'' Section 858 does not mention or
affect land leases.
2. Requirements
Section 846 required that, with some exceptions, photovoltaic
devices provided under covered contracts comply with the Buy American
Act. The Buy American Act requires, for use inside the United States,
that manufactured articles, materials and supplies be manufactured in
the U.S., substantially all from articles, materials, or supplies
mined, produced, or manufactured in the U.S.
Section 858 requires that any photovoltaic device installed under a
covered contract be manufactured in the U.S. substantially all from
articles, materials or supplies mined, produced, or manufactured in the
United States. This requirement is the same as the basic requirement of
the Buy American Act, but because this requirement is now separated
from the explicit application of the Buy American Act, the exceptions
and waivers that apply to the Buy American Act do not automatically
apply to section 858, unless provided for and authorized by section
858.
However, to the extent section 858 does not differ from the Buy
American

[[Page 30120]]

Act, it is reasonable and within the regulatory authority of DoD to
apply a similar interpretation to that which has developed with regard
to the Buy American Act over the years. Consequently, it is not
necessary, nor would it be desirable, to reinterpret elements of the
Buy American Act that appear unchanged in section 858.
Executive Order (E.O.) 10582, Prescribing Uniform Procedures for
Certain Determinations under the Buy-American Act, signed December 17,
1954, has interpreted ``substantially all'' in the Buy American Act to
mean that the cost of domestic components is at least 50 percent of the
value of all components. It is reasonable to interpret the same
language regarding ``substantially all'' in section 858 to have the
same meaning established by the E.O. for interpretation of the Buy
American Act.
3. Exceptions for Domestic Nonavailability and Micro-Purchase
Threshold
The Buy American Act provides exceptions for domestic
nonavailability and acquisitions below the micro-purchase threshold.
These exceptions are not provided in section 858.
4. Public Interest Determination
The Buy American Act provides for individual or class
determinations that application of the Buy American Act is inconsistent
with the public interest. Through public interest class determinations,
DoD does not apply the Buy American Act to (1) qualifying country end
products; or (2) U.S.-made end products, if the World Trade
Organization Government Procurement Agreement applies (i.e., the
aggregate value of the photovoltaic devices to be utilized is $204,000
or more). Section 858 allows determinations that application of the
restriction in 858 is not in the public interest, but only on a case-
by-case basis. Therefore, in order to allow a contractor to utilize a
qualifying country photovoltaic device or a U.S.-made photovoltaic
device, an individual public interest determination would be necessary.
5. Determination of Unreasonable Cost
Both the Buy American Act and section 858 allow a determination not
to utilize a domestic product if the cost of the domestic product is
unreasonable. The section 858 determination must be on a case-by-case
basis. With regard to determining that the cost of a domestic item is
unreasonable, E.O. 10582 provides a methodology to determine
unreasonable cost, using a minimum differential of 6 percent, but also
provides that the head of an executive agency may determine that the
use of a higher differential between the cost of materials of domestic
origin and the cost of materials of foreign origin ``is not
unreasonable.'' The then Secretary of Defense, Cyrus Vance, signed a
memorandum on May 7, 1964, providing for application of a 50 percent
differential under the Buy American Act. Therefore, DoD proposes to
continue application of a 50 percent evaluation factor when determining
whether the price of domestic photovoltaic devices is unreasonable when
the estimated aggregate value of the photovoltaic devices to be
utilized is less than $204,000 (the World Trade Organization Government
Procurement Agreement threshold). DoD considers it reasonable and
within its regulatory discretion to use 50 percent as the evaluation
factor for determination that the cost of a domestic photovoltaic
device is unreasonable. By continuing an established and familiar
practice, there will be less confusion in implementation.
The application of an evaluation factor to foreign products to
determine whether the price of domestic products is reasonable is not
applicable when the World Trade Organization Government Procurement
Agreement applies, because there is a prohibition under that agreement
to buying any products that are not designated, domestic, U.S.-made, or
qualifying country products. DoD has waived the application of the Buy
American Act to U.S.-made products, so no evaluation factor is
applicable. Likewise, if applicability of section 858 to U.S.-made
photovoltaic devices is waived, then no evaluation factor is
applicable.
6. Exemption for Commercially Available Off-the-Shelf (COTS) Items
Pursuant to 41 U.S.C. 1907 and determinations by the Administrator
of Federal Procurement Policy, the component test of the Buy American
Act does not apply to the acquisition of COTS items. This exemption
does not apply to photovoltaic devices utilized under section 858,
because section 858 no longer invokes the restrictions of the Buy
American Act.
7. Trade Agreements or Otherwise Provided by Law
Both section 846 and section 858 state that the restrictions are
subject to the exceptions provided in the Trade Agreements Act or
otherwise provided by law. The Trade Agreements Act (19 U.S.C. 2501 et
seq.) provides authority for the President to waive the Buy American
Act and other discriminatory provisions (e.g., sections 846 and 858)
for eligible products from designated countries. This authority has
been delegated to the United States Trade Representative (USTR). The
USTR has confirmed that the trade agreements provide an exception to
the domestic source restrictions of section 858.

B. Regulatory Implementation

DoD is proposing changes to the DFARS as follows:
1. Definitions (DFARS 225.7017-1). Amend the definition of
``covered contract'' to conform to the wording of section 858,
specifically adding ``inside the United States'' and changing ``and''
to ``or'' for the two conditions.
2. Restriction (DFARS 225.7017-3). Amend the restriction to cite
section 858 and replace the reference to the Buy American Act with the
specific requirements of section 858 for utilization of domestic
photovoltaic devices, including ``substantially all'' domestic
components.
3. Exceptions (225.7017-3). Delete the automatic exceptions for
qualifying countries and Buy American unreasonable cost.
4. Waiver (DFARS 225.7017-4). Add a new section on waivers on a
case-by case basis. This section provides examples of circumstances in
which it may be appropriate to waive the restrictions of section 858,
based on ``Inconsistent with the public interest,'' in order to allow--
Utilization of U.S.-made photovoltaic if the aggregate
value of photovoltaic devices to be utilized on the contract is
$204,000 or more, the threshold for the World Trade Organization
Government Procurement Agreement;
Utilization of photovoltaic devices from a qualifying
country; or
Unreasonable cost, applicable only when the aggregate
value of the photovoltaic devices to be installed under the contract is
less than $204,000 (the World Trade Organization Government Procurement
Agreement threshold) and utilizing the evaluation factor of 50 percent,
consistent with DoD implementation of other domestic source
restrictions such as the Buy American Act and Balance of Payments
Program.
5. Solicitation provision and contract clause (DFARS 225.7017-5).
Amend the clause prescription to conform to the revised definition of
``covered contract.''
6. Provision and clause (DFARS 252.225-7017 and 252.225-7018).
Amend the definition of ``domestic photovoltaic device''
in the clause to include the requirement that the cost of components
mined, produced, or

[[Page 30121]]

manufactured in the United States must exceed 50 percent of the cost of
all components.
Amend the restrictions in the clause to remove qualifying
country photovoltaic devices and U.S.-made photovoltaic devices from
being automatically acceptable unless the contractor specified their
use in its offer.
Update the statutory references in the clause.
Remove the $3,000 micro-purchase threshold from paragraph
(c)(1) of the clause and from paragraph (b)(1) of the provision,
because these thresholds were associated only with the Buy American
Act, not section 858.
Amend the certificate to accommodate the requirement for
case-by-case determinations in order to allow contractors to utilize
qualifying country or U.S.-made photovoltaic devices or to determine
that the price of a domestic photovoltaic device is unreasonable.

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. Determination of Applicability

Consistent with the determinations that DoD made with regard to
application of the requirements of section 846 of NDAA for FY 2011, DoD
does not intend to apply the requirements of section 858 of the NDAA
for FY 2015 to contracts at or below the simplified acquisition
threshold (SAT), but does intend to apply the rule to contracts for the
acquisition of commercial items, including COTS items.

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 FAR 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 Director, DPAP, 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 not intend to make that determination. Therefore,
this rule will not apply below the simplified acquisition threshold.

B. Applicability to Contracts for the Acquisition of Commercial Items,
Including COTS items

41 U.S.C. 1906 governs the applicability of laws to contracts for
the acquisition of commercial items, and is intended to limit the
applicability of laws to contracts for the acquisition of commercial
items. 41 U.S.C. 1906 provides that if a provision of law contains
criminal or civil penalties, or if the FAR Council makes a written
determination that it is not in the best interest of the Federal
Government to exempt commercial item contracts, the provision of law
will apply to contracts for the acquisition of commercial items.
Likewise, 41 U.S.C. 1907 governs the applicability of laws to COTS
items, with the Administrator for Federal Procurement Policy being the
decision authority to determine that it is in the best interest of the
Government to apply a provision of law to acquisitions of COTS items in
the FAR. The Director, DPAP, 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.
Therefore, given that the requirements of section 858 of the NDAA
for FY 2015 were enacted to promote utilization of domestic
photovoltaic devices, and since photovoltaic devices are generally COTS
items, DoD has determined that it is in the best interest of the
Federal Government to apply the rule to contracts for the acquisition
of commercial items, including COTS items, as defined at FAR 2.101. An
exception for contracts for the acquisition of commercial items,
including COTS items, would exclude the contracts intended to be
covered by the law, thereby undermining the overarching public policy
purpose of the law.

V. Regulatory Flexibility Act

DoD does not expect this proposed rule to have a significant
economic impact on a substantial number of small entities within the
meaning of the Regulatory Flexibility Act, 5 U.S.C. 601, et seq.
However, an initial regulatory flexibility analysis has been performed
and is summarized as follows:
This rule proposes to implement section 858 of the National Defense
Authorization Act (NDAA) for Fiscal Year (FY) 2015 (Pub. L. 113-291),
by proposing changes to the regulatory coverage on utilization of
domestic photovoltaic devices under certain covered contracts.
The objectives of this rule are to further promote utilization of
domestic photovoltaic devices under DoD contracts, if such contract
does not include DoD purchase of photovoltaic devices as end products,
but will nevertheless provide for a photovoltaic device to be (1)
installed inside the United States on DoD property or in a facility
owned by DoD; or (2) reserved for the exclusive use of DoD in the
United States for the full economic life of the device. The legal basis
for the rule is section 858 of the NDAA for FY 2015.
This rule generally applies at the prime contract level to other
than small entities. When purchasing renewable power generated via on-
site photovoltaic devices, DoD can either purchase the photovoltaic
devices and thereby own, operate, and maintain the devices for their
full economic life (already covered in DFARS part 225 under standard
Buy American Act/Trade Agreements regulations) or, for example, may do
some variation of the following:
a. Enter into an energy savings performance contract, which is a
contracting method in which the contractor provides capital to
facilitate energy savings projects and maintains them in exchange for a
portion of the energy savings generated. Under this arrangement, the
Government would take title to the devices during contract performance
or at the conclusion of the contract. For example, the Defense
Logistics Agency--Energy uses the master Department of Energy
indefinite delivery-indefinite quantity contract and awards task orders
off that contract. Of the 16 contractors, all are large businesses.
There are subcontracting goals that each contractor has to meet, but
the ultimate task order award is made to a large business.
b. Enter into a power purchase agreement, also referred to as a
utility service contract, for the purchase of the power output of
photovoltaic devices that are installed on DoD land or buildings, but
owned, operated, and maintained by the contractor. At the conclusion of
the contract, DoD would

[[Page 30122]]

either require the contractor to dismantle and remove the photovoltaic
equipment or abandon the equipment in place. Prime contractors for this
type of contract would generally be large businesses, based on the
capital costs involved in these projects. However, many developers tend
to subcontract out the majority of work to smaller companies.
There are approximately 80 manufacturers of photovoltaic devices.
We do not currently have data available on whether any of the
manufacturers of photovoltaic devices are small entities, because FPDS
does not collect such data on subcontractors.
There are no new reporting burdens under this rule. There are some
negligible variations to the existing reporting burdens. Furthermore,
since the prime contractors subject to this rule are other than small
businesses, the reporting requirements will not impact small entities.
However, under section 858, if the aggregate value of the
photovoltaic devices to be utilized under a contract is less than
$204,000, or unless a waiver is obtained for the utilization of U.S.-
made products when the aggregate value of the photovoltaic devices is
$204,000 or more, there will be a requirement to track the origin of
the components of the domestic photovoltaic devices. However, DoD
estimates that most covered contracts will involve utilization of
photovoltaic devices with an aggregate value in excess of $204,000 and
expects to grant waivers as appropriate.
The rule does not duplicate, overlap, or conflict with any other
Federal rules.
DoD did not identify any significant alternatives that meet the
requirements of the statute and would have less impact on small
entities. The ability for the Government to grant a waiver of section
858 if it is inconsistent with the public interest to preclude
utilization of U.S.-made photovoltaic devices when the World Trade
Organization Government Procurement Agreement is applicable (i.e., the
aggregate value of the photovoltaic devices to be utilized is $204,000
or more) will greatly reduce the burden on manufacturers of
photovoltaic devices, regardless of size of the entity.
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-D017), in
correspondence.

VI. Paperwork Reduction Act

The rule contains information collection requirements that require
the approval of the Office of Management and Budget under the Paperwork
Reduction Act (44 U.S.C. chapter 35); however, these changes to the
DFARS do not impose additional information collection requirements to
the paperwork burden previously approved under OMB Control Number 0704-
0229, entitled ``Defense Federal Acquisition Regulation Supplement
(DFARS) Part 225, Foreign Acquisition, and related clauses at DFARS
252.225.''

List of Subjects in 48 CFR Parts 212, 225, and 252

Government procurement.

Amy G. Williams,
Editor, 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 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 ITEMS

0
2. In section 212.301, revise paragraphs (f)(x)(I) and (f)(x)(J) to
read as follows:

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

(f) * * *
(x) * * *
(I) Use the clause at 252.225-7017, Photovoltaic Devices, as
prescribed in 225.7017-5(a), to comply with section 858 of Public Law
113-291).
(J) Use the provision at 252.225-7018, Photovoltaic Devices--
Certificate, as prescribed in 225.7017-5(b), to comply with section 959
of Public Law 113-291.
* * * * *

PART 225--FOREIGN ACQUISITION

0
3. Revise sections 225.7017-1 through 225.7017-4 to read as follows:

225.7017-1 Definitions.

As used in this section--
Covered contract means a contract awarded by DoD that, by means
other than DoD purchase as end products, provides for a photovoltaic
device to be--
(1) Installed inside the United States on DoD property or in a
facility owned by DoD; or
(2) Reserved for the exclusive use of DoD in the United States for
the full economic life of the device.
Designated country photovoltaic device, domestic photovoltaic
device, foreign photovoltaic device, Free Trade Agreement country
photovoltaic device, photovoltaic device, qualifying country
photovoltaic device, and U.S.-made photovoltaic device are defined in
the clause at 252.225-7017, Photovoltaic Devices.

225.7017-2 Restriction.

In accordance with section 858 of the National Defense
Authorization Act for Fiscal Year 2015, photovoltaic devices provided
under any covered contract shall be manufactured in the United States
substantially all from articles, materials, or supplies mined,
produced, or manufactured in the United States, except as provided in
225.7017-3 and 225-7017-4.

225.7017-3 Exceptions.

(a) Free Trade Agreements. For a covered contract that utilizes
photovoltaic devices valued at $25,000 or more, photovoltaic devices
may be utilized from a country covered under the acquisition by a Free
Trade Agreement, depending upon dollar threshold (see FAR subpart
25.4).
(b) World Trade Organization--Government Procurement Agreement. For
covered contracts that utilize photovoltaic devices that are valued at
$204,000 or more, only domestic photovoltaic devices or designated
country photovoltaic devices may be utilized, unless acquisition of
U.S.-made or qualifying country photovoltaic devices is allowed
pursuant to a waiver in accordance with 225.7017-4(a).

225.7017-4 Waivers.

The head of the contracting activity is authorized to waive, on a
case-by-case basis, the application of the restriction in 225.7017-2
upon determination that one of the following circumstances applies (see
PGI 225.7017-4 for sample determinations and findings):
(a) Inconsistent with the public interest. For example, a public
interest waiver may be appropriate to allow--
(1) Utilization of U.S.-made photovoltaic devices if the aggregate
value of the photovoltaic devices to be utilized under the contract
exceeds $204,000; or
(2) Utilization of photovoltaic devices from a qualifying country,
regardless of dollar value.
(b) Unreasonable cost. A determination that the cost of a

[[Page 30123]]

domestic photovoltaic device is unreasonable may be appropriate if--
(1) The aggregate value of the photovoltaic devices to be utilized
under the contract does not exceed $204,000; and
(2) The offeror documents to the satisfaction of the contracting
officer that the price of the foreign photovoltaic devices plus 50
percent is less than the price of comparable domestic photovoltaic
devices.
0
4. Add section 225.7017-5 to read as follows:

225.7017-5 Solicitation provision and contract clause.

(a)(1) Use the clause at 252.225-7017, Photovoltaic Devices, in
solicitations, including solicitations using FAR part 12 procedures for
the acquisition of commercial items, for a contract that--
(i) Is expected to exceed the simplified acquisition threshold; and
(ii) May be a covered contract, i.e., a contract that provides for
a photovoltaic device to be--
(A) Installed inside the United States on DoD property or in a
facility owned by DoD; or
(B) Reserved for the exclusive use of DoD in the United States for
the full economic life of the device.
(2) Use the clause in the resultant contract, including contracts
using FAR part 12 procedures for the acquisition of commercial items,
if it is a covered contract.
(b) Use the provision at 252.225-7018, Photovoltaic Devices--
Certificate, in solicitations, including solicitations using FAR part
12 procedures for the acquisition of commercial items, that contain the
clause at 252.225-7017.

PART 252--SOLICITATION PROVISIONS AND CONTRACT CLAUSES

0
5. Section 252.225-7017 is amended by--
0
a. In the introductory text, removing ``225.7017-4(a)'' and adding
``225.7017-5(a)'' in its place;
0
b. Removing the clause date ``(JAN 2014)'' and adding ``(DATE)'' in its
place;
0
c. In paragraph (a), revising the definition of ``Domestic photovoltaic
device''; and
0
d. Revising paragraphs (b) and (c).
The revisions read as follows:

252.225-7017 Photovoltaic Devices.

* * * * *
(a) * * *
Domestic photovoltaic device means a photovoltaic device--
(i) Manufactured in the United States; and
(ii) The cost of its components that are mined, produced, or
manufactured in the United States exceeds 50 percent of the cost of all
components. The cost of components includes transportation costs to the
place of incorporation into the end product and U.S. duty (whether or
not a duty-free entry certificate is issued). Scrap generated,
collected, and prepared for processing in the United States is
considered domestic.
* * * * *
(b) This clause implements section 858 of the National Defense
Authorization Act for Fiscal Year 2015 (Pub. L. 113-291).
(c) Restriction. If the Contractor specified in its offer in the
Photovoltaic Devices-Certificate provision of the solicitation that the
estimated value of the photovoltaic devices to be utilized in
performance of this contract would be--
(1) Less than $25,000, then the Contractor shall utilize only
domestic photovoltaic devices unless, in its offer, it specified
utilization of qualifying country or other foreign photovoltaic devices
in paragraph (c)(2) of the Photovoltaic Devices-Certificate provision
of the solicitation. If the Contractor certified in its offer that it
will utilize a qualifying country photovoltaic device, the Contractor
shall utilize a qualifying country photovoltaic device as specified,
or, at the Contractor's option, a domestic photovoltaic device;
(2) $25,000 or more but less than $79,507, then the Contractor
shall utilize in the performance of this contract only domestic
photovoltaic devices unless, in its offer, it specified utilization of
Canadian, qualifying country, or other foreign photovoltaic devices in
paragraph (c)(3) of the Photovoltaic Devices-Certificate provision of
the solicitation. If the Contractor certified in its offer that it will
utilize a qualifying country photovoltaic device or a Canadian
photovoltaic device, the Contractor shall utilize a qualifying country
photovoltaic device or a Canadian photovoltaic device as specified, or,
at the Contractor's option, a domestic photovoltaic device;
(3) $79,507 or more but less than $100,000, then the Contractor
shall utilize under this contract only domestic photovoltaic devices,
or Free Trade Agreement country photovoltaic devices (other than
Bahrainian, Korean, Moroccan, Panamanian, or Peruvian photovoltaic
devices), unless, in its offer, it specified utilization of qualifying
country or other foreign photovoltaic devices in paragraph (c)(4) of
the Photovoltaic Devices-Certificate provision of the solicitation. If
the Contractor certified in its offer that it will utilize a qualifying
country photovoltaic device or a Free Trade Agreement country
photovoltaic device (other than a Bahrainian, Korean, Moroccan,
Panamanian, or Peruvian photovoltaic device), the Contractor shall
utilize a qualifying country photovoltaic device; a Free Trade
Agreement country photovoltaic device (other than a Bahrainian, Korean,
Moroccan, Panamanian, or Peruvian photovoltaic device) as specified,
or, at the Contractor's option, a domestic photovoltaic device;
(4) $100,000 or more but less than $204,000, then the Contractor
shall utilize under this contract only domestic photovoltaic devices,
or Free Trade Agreement country photovoltaic devices (other than
Bahrainian, Moroccan, Panamanian, or Peruvian photovoltaic devices),
unless, in its offer, it specified utilization of qualifying country or
other foreign photovoltaic devices in paragraph (c)(4) of the
Photovoltaic Devices-Certificate provision of the solicitation. If the
Contractor certified in its offer that it will utilize a qualifying
country photovoltaic device or a Free Trade Agreement country
photovoltaic device (other than a Bahrainian, Moroccan, Panamanian, or
Peruvian photovoltaic device), the Contractor shall utilize a
qualifying country photovoltaic device; a Free Trade Agreement country
photovoltaic device (other than a Bahrainian, Moroccan, Panamanian, or
Peruvian photovoltaic device) as specified, or, at the Contractor's
option, a domestic photovoltaic device; or
(5) $204,000 or more, then the Contractor shall utilize under this
contract only domestic or designated country photovoltaic devices
unless, in its offer, it specified utilization of U.S.-made or
qualifying country photovoltaic devices in paragraph (c)(5) of the
Photovoltaic Devices-Certificate provision of the solicitation. If the
Contractor certified in its offer that it will utilize a designated
country, U.S.-made, or qualifying country photovoltaic device, the
Contractor shall utilize a designated country, U.S.-made, or qualifying
country photovoltaic device as specified, or, at the Contractor's
option, a domestic photovoltaic device.
* * * * *
0
6. Section 252.225-7018 is amended by--
0
a. In the introductory text, removing ``225.7017-4(b)'' and adding
``225.7017-5(b)'' in its place;

[[Page 30124]]

0
b. Removing the clause date ``(JAN 2014)'' and adding ``(DATE)'' in its
place;
0
c. Revising paragraph (b);
0
d. In paragraph (c), removing ``(See http://www.cbp.gov/xp/cgov/trade/legal/rulings/.)'' and adding ``(See http://www.cbp.gov/trade/rulings.)'' in its place; and
0
e. Revising paragraph (d).
The revisions read as follows:

252.225-7018 Photovoltaic Devices--Certificate.

* * * * *
(b) Restrictions. The following restrictions apply, depending on
the estimated aggregate value of photovoltaic devices to be utilized
under a resultant contract:
(1) If less than $204,000, then--
(i) The Government will not accept an offer specifying the use of
other foreign photovoltaic devices in paragraphs (d)(2)(iii),
(d)(3)(iii), (d)(4)(iii), or (d)(5)(iii) of this provision, unless the
Offeror documents to the satisfaction of the Contracting Officer that
the price of the foreign photovoltaic device plus 50 percent is less
than the price of a comparable domestic photovoltaic device and the
Government determines in accordance with DFARS 225.217-4 that the price
of a comparable domestic photovoltaic device would be unreasonable; and
(ii) The Government will not accept an offer specifying the use of
a qualifying country photovoltaic device unless the Government
determines in accordance with 225.217-4 that it is in the public
interest to allow use of a qualifying country photovoltaic device.
(2) If $204,000 or more, then the Government will consider only
offers that utilize photovoltaic devices that are domestic or
designated country photovoltaic devices, unless the Government
determines in accordance with DFARS 225.7017-4, that it is in the
public interest to allow use of a qualifying country photovoltaic
device or a U.S.-made photovoltaic device.
* * * * *
(d) Certification and identification of country of origin. [The
Offeror shall check the block and fill in the blank for one of the
following paragraphs, based on the estimated value and the country of
origin of photovoltaic devices to be utilized in performance of the
contract:
___(1) No photovoltaic devices will be utilized in performance of
the contract.
(2) If less than $25,000--
_ (i) The Offeror certifies that each photovoltaic device to be
utilized in performance of the contract is a domestic photovoltaic
device;
_ (ii) The Offeror certifies that each photovoltaic device to be
utilized in performance of the contract is a qualifying country
photovoltaic device [Offeror to specify country of origin____]; or
_ (iii) The foreign (other than qualifying country) photovoltaic
devices to be utilized in performance of the contract are the product
of ____. [Offeror to specify country of origin, if known, and provide
documentation that the cost of a domestic photovoltaic device would be
unreasonable in comparison to the cost of the proposed foreign
photovoltaic device, i.e., that the price of the foreign photovoltaic
device plus 50 percent is less than the price of a comparable domestic
photovoltaic device.
(3) If $25,000 or more but less than $79,507--
_ (i) The Offeror certifies that each photovoltaic device to be
utilized in performance of the contract is a domestic photovoltaic
device or a Canadian photovoltaic device [Offeror to specify country of
origin____];
_ (ii) The Offeror certifies that each photovoltaic device to be
utilized in performance of the contract is a qualifying country
photovoltaic device [Offeror to specify country of orgin____]; or
_ (iii) The foreign (other than qualifying country or Canadian)
photovoltaic devices to be utilized in performance of the contract are
the product of ____. [Offeror to specify country of origin, if known,
and provide documentation that the cost of a domestic photovoltaic
device would be unreasonable in comparison to the cost of the proposed
foreign photovoltaic device, i.e., that the price of the foreign
photovoltaic device plus 50 percent is less than the price of a
comparable domestic photovoltaic device.]
(4) If $79,507 or more but less than $100,000--
_ (i) The Offeror certifies that each photovoltaic device to be
utilized in performance of the contract is a domestic photovoltaic
device; a Free Trade Agreement country photovoltaic device (other than
a Bahrainian, Korean, Moroccan, Panamanian, or Peruvian photovoltaic
device) [Offeror to specify country of origin ____];
_ (ii) The Offeror certifies that each photovoltaic device to be
utilized in performance of the contract is a qualifying country (except
Australian or Canadian) photovoltaic device; [Offeror to specify
country of origin ____ ]; or
_ (iii) The offered foreign photovoltaic devices (other than those
from countries listed in paragraph (d)(4)(i) or (d)(4)(ii) of this
provision) are the product of ____. [Offeror to specify country of
origin, if known, and provide documentation that the cost of a domestic
photovoltaic device would be unreasonable in comparison to the cost of
the proposed foreign photovoltaic device, i.e., that the price of the
foreign photovoltaic device plus 50 percent is less than the price of a
comparable domestic photovoltaic device.]
(5) If $100,000 or more but less than $204,000--
_ (i) The Offeror certifies that each photovoltaic device to be
utilized in performance of the contract is a domestic photovoltaic
device; a Free Trade Agreement country photovoltaic device (other than
a Bahrainian, Moroccan, Panamanian, or Peruvian photovoltaic device)
[Offeror to specify country of origin ____];
_ (ii) The Offeror certifies that each photovoltaic device to be
utilized in performance of the contract is a qualifying country (except
Australian or Canadian) photovoltaic device [Offeror to specify country
of origin ____]; or
_ (iii) The offered foreign photovoltaic devices (other than those
from countries listed in paragraph (d)(4)(i) or (d)(4)(ii) of this
provision) are the product of ____. [Offeror to specify country of
origin, if known, and provide documentation that the cost of a domestic
photovoltaic device would be unreasonable in comparison to the cost of
the proposed foreign photovoltaic device, i.e., that the price of the
foreign photovoltaic device plus 50 percent is less than the price of a
comparable domestic photovoltaic device.]
(6) If $204,000 or more, the Offeror certifies that each
photovoltaic device to be used in performance of the contract is--
_ (i) A domestic or designated country photovoltaic device [Offeror
to specify country of origin ____];
_ (ii) A U.S.-made photovoltaic device; or
_ (iii) A qualifying country photovoltaic device. [Offeror to
specify country of origin ____].
* * * * *

[FR Doc. 2015-12343 Filed 5-22-15; 8:45 am]
BILLING CODE 5001-06-P

30120 Federal Register / Vol. 80, No. 100 / Tuesday, May 26, 2015 / Proposed Rules

Act, it is reasonable and within the provides that the head of an executive provisions (e.g., sections 846 and 858)
regulatory authority of DoD to apply a agency may determine that the use of a for eligible products from designated
similar interpretation to that which has higher differential between the cost of countries. This authority has been
developed with regard to the Buy materials of domestic origin and the cost delegated to the United States Trade
American Act over the years. of materials of foreign origin ‘‘is not Representative (USTR). The USTR has
Consequently, it is not necessary, nor unreasonable.’’ The then Secretary of confirmed that the trade agreements
would it be desirable, to reinterpret Defense, Cyrus Vance, signed a provide an exception to the domestic
elements of the Buy American Act that memorandum on May 7, 1964, source restrictions of section 858.
appear unchanged in section 858. providing for application of a 50 percent
Executive Order (E.O.) 10582, differential under the Buy American B. Regulatory Implementation
Prescribing Uniform Procedures for Act. Therefore, DoD proposes to DoD is proposing changes to the
Certain Determinations under the Buy- continue application of a 50 percent DFARS as follows:
American Act, signed December 17, evaluation factor when determining 1. Definitions (DFARS 225.7017–1).
1954, has interpreted ‘‘substantially all’’ whether the price of domestic Amend the definition of ‘‘covered
in the Buy American Act to mean that photovoltaic devices is unreasonable contract’’ to conform to the wording of
the cost of domestic components is at when the estimated aggregate value of section 858, specifically adding ‘‘inside
least 50 percent of the value of all the photovoltaic devices to be utilized is the United States’’ and changing ‘‘and’’
components. It is reasonable to interpret less than $204,000 (the World Trade to ‘‘or’’ for the two conditions.
the same language regarding Organization Government Procurement 2. Restriction (DFARS 225.7017–3).
‘‘substantially all’’ in section 858 to Agreement threshold). DoD considers it Amend the restriction to cite section
have the same meaning established by reasonable and within its regulatory 858 and replace the reference to the Buy
the E.O. for interpretation of the Buy discretion to use 50 percent as the American Act with the specific
American Act. evaluation factor for determination that requirements of section 858 for
the cost of a domestic photovoltaic utilization of domestic photovoltaic
3. Exceptions for Domestic devices, including ‘‘substantially all’’
device is unreasonable. By continuing
Nonavailability and Micro-Purchase domestic components.
an established and familiar practice,
Threshold 3. Exceptions (225.7017–3). Delete the
there will be less confusion in
The Buy American Act provides implementation. automatic exceptions for qualifying
exceptions for domestic nonavailability The application of an evaluation countries and Buy American
and acquisitions below the micro- factor to foreign products to determine unreasonable cost.
purchase threshold. These exceptions whether the price of domestic products 4. Waiver (DFARS 225.7017–4). Add
are not provided in section 858. is reasonable is not applicable when the a new section on waivers on a case-by
World Trade Organization Government case basis. This section provides
4. Public Interest Determination
Procurement Agreement applies, examples of circumstances in which it
The Buy American Act provides for because there is a prohibition under that may be appropriate to waive the
individual or class determinations that agreement to buying any products that restrictions of section 858, based on
application of the Buy American Act is are not designated, domestic, U.S.- ‘‘Inconsistent with the public interest,’’
inconsistent with the public interest. made, or qualifying country products. in order to allow—
Through public interest class DoD has waived the application of the • Utilization of U.S.-made
determinations, DoD does not apply the Buy American Act to U.S.-made photovoltaic if the aggregate value of
Buy American Act to (1) qualifying products, so no evaluation factor is photovoltaic devices to be utilized on
country end products; or (2) U.S.-made applicable. Likewise, if applicability of the contract is $204,000 or more, the
end products, if the World Trade section 858 to U.S.-made photovoltaic threshold for the World Trade
Organization Government Procurement devices is waived, then no evaluation Organization Government Procurement
Agreement applies (i.e., the aggregate factor is applicable. Agreement;
value of the photovoltaic devices to be • Utilization of photovoltaic devices
utilized is $204,000 or more). Section 6. Exemption for Commercially from a qualifying country; or
858 allows determinations that Available Off-the-Shelf (COTS) Items • Unreasonable cost, applicable only
application of the restriction in 858 is Pursuant to 41 U.S.C. 1907 and when the aggregate value of the
not in the public interest, but only on determinations by the Administrator of photovoltaic devices to be installed
a case-by-case basis. Therefore, in order Federal Procurement Policy, the under the contract is less than $204,000
to allow a contractor to utilize a component test of the Buy American (the World Trade Organization
qualifying country photovoltaic device Act does not apply to the acquisition of Government Procurement Agreement
or a U.S.-made photovoltaic device, an COTS items. This exemption does not threshold) and utilizing the evaluation
individual public interest determination apply to photovoltaic devices utilized factor of 50 percent, consistent with
would be necessary. under section 858, because section 858 DoD implementation of other domestic
no longer invokes the restrictions of the source restrictions such as the Buy
5. Determination of Unreasonable Cost
Buy American Act. American Act and Balance of Payments
Both the Buy American Act and Program.
section 858 allow a determination not to 7. Trade Agreements or Otherwise 5. Solicitation provision and contract
Provided by Law
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utilize a domestic product if the cost of clause (DFARS 225.7017–5). Amend the
the domestic product is unreasonable. Both section 846 and section 858 state clause prescription to conform to the
The section 858 determination must be that the restrictions are subject to the revised definition of ‘‘covered contract.’’
on a case-by-case basis. With regard to exceptions provided in the Trade 6. Provision and clause (DFARS
determining that the cost of a domestic Agreements Act or otherwise provided 252.225–7017 and 252.225–7018).
item is unreasonable, E.O. 10582 by law. The Trade Agreements Act (19 • Amend the definition of ‘‘domestic
provides a methodology to determine U.S.C. 2501 et seq.) provides authority photovoltaic device’’ in the clause to
unreasonable cost, using a minimum for the President to waive the Buy include the requirement that the cost of
differential of 6 percent, but also American Act and other discriminatory components mined, produced, or

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Federal Register / Vol. 80, No. 100 / Tuesday, May 26, 2015 / Proposed Rules 30121

manufactured in the United States must subcontracts. 41 U.S.C. 1905 provides impact on a substantial number of small
exceed 50 percent of the cost of all that if a provision of law contains entities within the meaning of the
components. criminal or civil penalties, or if the FAR Regulatory Flexibility Act, 5 U.S.C. 601,
• Amend the restrictions in the clause Council makes a written determination et seq. However, an initial regulatory
to remove qualifying country that it is not in the best interest of the flexibility analysis has been performed
photovoltaic devices and U.S.-made Federal Government to exempt contracts and is summarized as follows:
photovoltaic devices from being or subcontracts at or below the SAT, the This rule proposes to implement
automatically acceptable unless the law will apply to them. The Director, section 858 of the National Defense
contractor specified their use in its offer. DPAP, is the appropriate authority to Authorization Act (NDAA) for Fiscal
• Update the statutory references in make comparable determinations for Year (FY) 2015 (Pub. L. 113–291), by
the clause. regulations to be published in the proposing changes to the regulatory
• Remove the $3,000 micro-purchase DFARS, which is part of the FAR system coverage on utilization of domestic
threshold from paragraph (c)(1) of the of regulations. DoD does not intend to photovoltaic devices under certain
clause and from paragraph (b)(1) of the make that determination. Therefore, this covered contracts.
provision, because these thresholds rule will not apply below the simplified The objectives of this rule are to
were associated only with the Buy acquisition threshold. further promote utilization of domestic
American Act, not section 858. photovoltaic devices under DoD
• Amend the certificate to B. Applicability to Contracts for the contracts, if such contract does not
accommodate the requirement for case- Acquisition of Commercial Items, include DoD purchase of photovoltaic
by-case determinations in order to allow Including COTS items devices as end products, but will
contractors to utilize qualifying country 41 U.S.C. 1906 governs the nevertheless provide for a photovoltaic
or U.S.-made photovoltaic devices or to applicability of laws to contracts for the device to be (1) installed inside the
determine that the price of a domestic acquisition of commercial items, and is United States on DoD property or in a
photovoltaic device is unreasonable. intended to limit the applicability of facility owned by DoD; or (2) reserved
laws to contracts for the acquisition of for the exclusive use of DoD in the
III. Executive Orders 12866 and 13563 commercial items. 41 U.S.C. 1906 United States for the full economic life
Executive Orders (E.O.s) 12866 and provides that if a provision of law of the device. The legal basis for the rule
13563 direct agencies to assess all costs contains criminal or civil penalties, or if is section 858 of the NDAA for FY 2015.
and benefits of available regulatory the FAR Council makes a written This rule generally applies at the
alternatives and, if regulation is determination that it is not in the best prime contract level to other than small
necessary, to select regulatory interest of the Federal Government to entities. When purchasing renewable
approaches that maximize net benefits exempt commercial item contracts, the power generated via on-site
(including potential economic, provision of law will apply to contracts photovoltaic devices, DoD can either
environmental, public health and safety for the acquisition of commercial items. purchase the photovoltaic devices and
effects, distributive impacts, and Likewise, 41 U.S.C. 1907 governs the thereby own, operate, and maintain the
equity). E.O. 13563 emphasizes the applicability of laws to COTS items, devices for their full economic life
importance of quantifying both costs with the Administrator for Federal (already covered in DFARS part 225
and benefits, of reducing costs, of Procurement Policy being the decision under standard Buy American Act/
harmonizing rules, and of promoting authority to determine that it is in the Trade Agreements regulations) or, for
flexibility. This is not a significant best interest of the Government to apply example, may do some variation of the
regulatory action and, therefore, was not a provision of law to acquisitions of following:
subject to review under section 6(b) of COTS items in the FAR. The Director, a. Enter into an energy savings
E.O. 12866, Regulatory Planning and DPAP, is the appropriate authority to performance contract, which is a
Review, dated September 30, 1993. This make comparable determinations for contracting method in which the
rule is not a major rule under 5 U.S.C. regulations to be published in the contractor provides capital to facilitate
804. DFARS, which is part of the FAR system energy savings projects and maintains
of regulations. them in exchange for a portion of the
IV. Determination of Applicability Therefore, given that the requirements energy savings generated. Under this
Consistent with the determinations of section 858 of the NDAA for FY 2015 arrangement, the Government would
that DoD made with regard to were enacted to promote utilization of take title to the devices during contract
application of the requirements of domestic photovoltaic devices, and performance or at the conclusion of the
section 846 of NDAA for FY 2011, DoD since photovoltaic devices are generally contract. For example, the Defense
does not intend to apply the COTS items, DoD has determined that it Logistics Agency—Energy uses the
requirements of section 858 of the is in the best interest of the Federal master Department of Energy indefinite
NDAA for FY 2015 to contracts at or Government to apply the rule to delivery-indefinite quantity contract
below the simplified acquisition contracts for the acquisition of and awards task orders off that contract.
threshold (SAT), but does intend to commercial items, including COTS Of the 16 contractors, all are large
apply the rule to contracts for the items, as defined at FAR 2.101. An businesses. There are subcontracting
acquisition of commercial items, exception for contracts for the goals that each contractor has to meet,
including COTS items. acquisition of commercial items, but the ultimate task order award is
mstockstill on DSK4VPTVN1PROD with PROPOSALS2

including COTS items, would exclude made to a large business.
A. Applicability to Contracts at or Below b. Enter into a power purchase
the contracts intended to be covered by
the Simplified Acquisition Threshold agreement, also referred to as a utility
the law, thereby undermining the
41 U.S.C. 1905 governs the overarching public policy purpose of service contract, for the purchase of the
applicability of laws to contracts or the law. power output of photovoltaic devices
subcontracts in amounts not greater that are installed on DoD land or
than the simplified acquisition V. Regulatory Flexibility Act buildings, but owned, operated, and
threshold. It is intended to limit the DoD does not expect this proposed maintained by the contractor. At the
applicability of laws to such contracts or rule to have a significant economic conclusion of the contract, DoD would

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30122 Federal Register / Vol. 80, No. 100 / Tuesday, May 26, 2015 / Proposed Rules

either require the contractor to U.S.C. 610 (DFARS Case 2015–D017), in (1) Installed inside the United States
dismantle and remove the photovoltaic correspondence. on DoD property or in a facility owned
equipment or abandon the equipment in by DoD; or
VI. Paperwork Reduction Act (2) Reserved for the exclusive use of
place. Prime contractors for this type of
contract would generally be large The rule contains information DoD in the United States for the full
businesses, based on the capital costs collection requirements that require the economic life of the device.
involved in these projects. However, approval of the Office of Management Designated country photovoltaic
many developers tend to subcontract and Budget under the Paperwork device, domestic photovoltaic device,
out the majority of work to smaller Reduction Act (44 U.S.C. chapter 35); foreign photovoltaic device, Free Trade
companies. however, these changes to the DFARS Agreement country photovoltaic device,
There are approximately 80 do not impose additional information photovoltaic device, qualifying country
manufacturers of photovoltaic devices. collection requirements to the photovoltaic device, and U.S.-made
We do not currently have data available paperwork burden previously approved photovoltaic device are defined in the
on whether any of the manufacturers of under OMB Control Number 0704–0229, clause at 252.225–7017, Photovoltaic
photovoltaic devices are small entities, entitled ‘‘Defense Federal Acquisition Devices.
because FPDS does not collect such data Regulation Supplement (DFARS) Part 225.7017–2 Restriction.
on subcontractors. 225, Foreign Acquisition, and related
There are no new reporting burdens In accordance with section 858 of the
clauses at DFARS 252.225.’’ National Defense Authorization Act for
under this rule. There are some
negligible variations to the existing List of Subjects in 48 CFR Parts 212, Fiscal Year 2015, photovoltaic devices
reporting burdens. Furthermore, since 225, and 252 provided under any covered contract
the prime contractors subject to this rule shall be manufactured in the United
Government procurement. States substantially all from articles,
are other than small businesses, the
reporting requirements will not impact Amy G. Williams, materials, or supplies mined, produced,
small entities. Editor, Defense Acquisition Regulations or manufactured in the United States,
However, under section 858, if the System. except as provided in 225.7017–3 and
aggregate value of the photovoltaic 225–7017–4.
Therefore, 48 CFR parts 212, 225, and
devices to be utilized under a contract 252 are proposed to be amended as 225.7017–3 Exceptions.
is less than $204,000, or unless a waiver follows: (a) Free Trade Agreements. For a
is obtained for the utilization of U.S.-
■ 1. The authority citation for parts 212, covered contract that utilizes
made products when the aggregate value
225, and 252 continues to read as photovoltaic devices valued at $25,000
of the photovoltaic devices is $204,000
follows: or more, photovoltaic devices may be
or more, there will be a requirement to
Authority: 41 U.S.C. 1303 and 48 CFR utilized from a country covered under
track the origin of the components of the
chapter 1. the acquisition by a Free Trade
domestic photovoltaic devices.
Agreement, depending upon dollar
However, DoD estimates that most threshold (see FAR subpart 25.4).
covered contracts will involve PART 212—ACQUISITION OF
COMMERCIAL ITEMS (b) World Trade Organization—
utilization of photovoltaic devices with Government Procurement Agreement.
an aggregate value in excess of $204,000 ■ 2. In section 212.301, revise For covered contracts that utilize
and expects to grant waivers as paragraphs (f)(x)(I) and (f)(x)(J) to read photovoltaic devices that are valued at
appropriate. as follows: $204,000 or more, only domestic
The rule does not duplicate, overlap, photovoltaic devices or designated
or conflict with any other Federal rules. 212.301 Solicitation provisions and
country photovoltaic devices may be
DoD did not identify any significant contract clauses for the acquisition of
commercial items. utilized, unless acquisition of U.S.-made
alternatives that meet the requirements
or qualifying country photovoltaic
of the statute and would have less (f) * * * devices is allowed pursuant to a waiver
impact on small entities. The ability for (x) * * * in accordance with 225.7017–4(a).
the Government to grant a waiver of (I) Use the clause at 252.225–7017,
section 858 if it is inconsistent with the Photovoltaic Devices, as prescribed in 225.7017–4 Waivers.
public interest to preclude utilization of 225.7017–5(a), to comply with section The head of the contracting activity is
U.S.-made photovoltaic devices when 858 of Public Law 113–291). authorized to waive, on a case-by-case
the World Trade Organization (J) Use the provision at 252.225–7018, basis, the application of the restriction
Government Procurement Agreement is Photovoltaic Devices—Certificate, as in 225.7017–2 upon determination that
applicable (i.e., the aggregate value of prescribed in 225.7017–5(b), to comply one of the following circumstances
the photovoltaic devices to be utilized is with section 959 of Public Law 113–291. applies (see PGI 225.7017–4 for sample
$204,000 or more) will greatly reduce determinations and findings):
* * * * *
the burden on manufacturers of (a) Inconsistent with the public
photovoltaic devices, regardless of size PART 225—FOREIGN ACQUISITION interest. For example, a public interest
of the entity. waiver may be appropriate to allow—
DoD invites comments from small ■ 3. Revise sections 225.7017–1 through (1) Utilization of U.S.-made
mstockstill on DSK4VPTVN1PROD with PROPOSALS2

business concerns and other interested 225.7017–4 to read as follows: photovoltaic devices if the aggregate
parties on the expected impact of this value of the photovoltaic devices to be
rule on small entities. 225.7017–1 Definitions.
utilized under the contract exceeds
DoD will also consider comments As used in this section— $204,000; or
from small entities concerning the Covered contract means a contract (2) Utilization of photovoltaic devices
existing regulations in subparts affected awarded by DoD that, by means other from a qualifying country, regardless of
by this rule in accordance with 5 U.S.C. than DoD purchase as end products, dollar value.
610. Interested parties must submit such provides for a photovoltaic device to (b) Unreasonable cost. A
comments separately and should cite 5 be— determination that the cost of a

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Federal Register / Vol. 80, No. 100 / Tuesday, May 26, 2015 / Proposed Rules 30123

domestic photovoltaic device is (ii) The cost of its components that are of the Photovoltaic Devices–Certificate
unreasonable may be appropriate if— mined, produced, or manufactured in provision of the solicitation. If the
(1) The aggregate value of the the United States exceeds 50 percent of Contractor certified in its offer that it
photovoltaic devices to be utilized the cost of all components. The cost of will utilize a qualifying country
under the contract does not exceed components includes transportation photovoltaic device or a Free Trade
$204,000; and costs to the place of incorporation into Agreement country photovoltaic device
(2) The offeror documents to the the end product and U.S. duty (whether (other than a Bahrainian, Korean,
satisfaction of the contracting officer or not a duty-free entry certificate is Moroccan, Panamanian, or Peruvian
that the price of the foreign photovoltaic issued). Scrap generated, collected, and photovoltaic device), the Contractor
devices plus 50 percent is less than the prepared for processing in the United shall utilize a qualifying country
price of comparable domestic States is considered domestic. photovoltaic device; a Free Trade
photovoltaic devices. * * * * * Agreement country photovoltaic device
■ 4. Add section 225.7017–5 to read as (b) This clause implements section (other than a Bahrainian, Korean,
follows: 858 of the National Defense Moroccan, Panamanian, or Peruvian
Authorization Act for Fiscal Year 2015 photovoltaic device) as specified, or, at
225.7017–5 Solicitation provision and
contract clause. (Pub. L. 113–291). the Contractor’s option, a domestic
(c) Restriction. If the Contractor photovoltaic device;
(a)(1) Use the clause at 252.225–7017,
specified in its offer in the Photovoltaic (4) $100,000 or more but less than
Photovoltaic Devices, in solicitations,
Devices–Certificate provision of the $204,000, then the Contractor shall
including solicitations using FAR part
solicitation that the estimated value of utilize under this contract only
12 procedures for the acquisition of
the photovoltaic devices to be utilized domestic photovoltaic devices, or Free
commercial items, for a contract that—
in performance of this contract would Trade Agreement country photovoltaic
(i) Is expected to exceed the
be— devices (other than Bahrainian,
simplified acquisition threshold; and
(1) Less than $25,000, then the Moroccan, Panamanian, or Peruvian
(ii) May be a covered contract, i.e., a
Contractor shall utilize only domestic photovoltaic devices), unless, in its
contract that provides for a photovoltaic
photovoltaic devices unless, in its offer, offer, it specified utilization of
device to be—
(A) Installed inside the United States it specified utilization of qualifying qualifying country or other foreign
on DoD property or in a facility owned country or other foreign photovoltaic photovoltaic devices in paragraph (c)(4)
by DoD; or devices in paragraph (c)(2) of the of the Photovoltaic Devices–Certificate
(B) Reserved for the exclusive use of Photovoltaic Devices–Certificate provision of the solicitation. If the
DoD in the United States for the full provision of the solicitation. If the Contractor certified in its offer that it
economic life of the device. Contractor certified in its offer that it will utilize a qualifying country
(2) Use the clause in the resultant will utilize a qualifying country photovoltaic device or a Free Trade
contract, including contracts using FAR photovoltaic device, the Contractor shall Agreement country photovoltaic device
part 12 procedures for the acquisition of utilize a qualifying country photovoltaic (other than a Bahrainian, Moroccan,
commercial items, if it is a covered device as specified, or, at the Panamanian, or Peruvian photovoltaic
contract. Contractor’s option, a domestic device), the Contractor shall utilize a
(b) Use the provision at 252.225–7018, photovoltaic device; qualifying country photovoltaic device;
Photovoltaic Devices—Certificate, in (2) $25,000 or more but less than a Free Trade Agreement country
solicitations, including solicitations $79,507, then the Contractor shall photovoltaic device (other than a
using FAR part 12 procedures for the utilize in the performance of this Bahrainian, Moroccan, Panamanian, or
acquisition of commercial items, that contract only domestic photovoltaic Peruvian photovoltaic device) as
contain the clause at 252.225–7017. devices unless, in its offer, it specified specified, or, at the Contractor’s option,
utilization of Canadian, qualifying a domestic photovoltaic device; or
PART 252—SOLICITATION country, or other foreign photovoltaic (5) $204,000 or more, then the
PROVISIONS AND CONTRACT devices in paragraph (c)(3) of the Contractor shall utilize under this
CLAUSES Photovoltaic Devices–Certificate contract only domestic or designated
provision of the solicitation. If the country photovoltaic devices unless, in
■ 5. Section 252.225–7017 is amended its offer, it specified utilization of U.S.-
Contractor certified in its offer that it
by— made or qualifying country photovoltaic
■ a. In the introductory text, removing
will utilize a qualifying country
photovoltaic device or a Canadian devices in paragraph (c)(5) of the
‘‘225.7017–4(a)’’ and adding ‘‘225.7017– Photovoltaic Devices–Certificate
5(a)’’ in its place; photovoltaic device, the Contractor shall
utilize a qualifying country photovoltaic provision of the solicitation. If the
■ b. Removing the clause date ‘‘(JAN
device or a Canadian photovoltaic Contractor certified in its offer that it
2014)’’ and adding ‘‘(DATE)’’ in its will utilize a designated country, U.S.-
place; device as specified, or, at the
Contractor’s option, a domestic made, or qualifying country
■ c. In paragraph (a), revising the
photovoltaic device; photovoltaic device, the Contractor shall
definition of ‘‘Domestic photovoltaic utilize a designated country, U.S.-made,
device’’; and (3) $79,507 or more but less than
$100,000, then the Contractor shall or qualifying country photovoltaic
■ d. Revising paragraphs (b) and (c).
device as specified, or, at the
mstockstill on DSK4VPTVN1PROD with PROPOSALS2

The revisions read as follows: utilize under this contract only
domestic photovoltaic devices, or Free Contractor’s option, a domestic
252.225–7017 Photovoltaic Devices. Trade Agreement country photovoltaic photovoltaic device.
* * * * * devices (other than Bahrainian, Korean, * * * * *
(a) * * * Moroccan, Panamanian, or Peruvian ■ 6. Section 252.225–7018 is amended
Domestic photovoltaic device means a photovoltaic devices), unless, in its by—
photovoltaic device— offer, it specified utilization of ■ a. In the introductory text, removing
(i) Manufactured in the United States; qualifying country or other foreign ‘‘225.7017–4(b)’’ and adding ‘‘225.7017–
and photovoltaic devices in paragraph (c)(4) 5(b)’’ in its place;

VerDate Sep<11>2014 18:46 May 22, 2015 Jkt 235001 PO 00000 Frm 00005 Fmt 4701 Sfmt 4702 E:\FR\FM\26MYP2.SGM 26MYP2

Document Created: 2018-02-21 10:31:27
Document Modified: 2018-02-21 10:31:27

Category		Regulatory Information
Collection		Federal Register
sudoc Class		AE 2.7: GS 4.107: AE 2.106:
Publisher		Office of the Federal Register, National Archives and Records Administration
Section		Proposed Rules
Action		Proposed rule.
Dates		Comments on the proposed rule should be submitted in writing to
Contact		Ms. Amy G. Williams, Defense Acquisition Regulations System, OUSD(AT&L)DPAP/DARS, Room 3B941, 3060 Defense Pentagon, Washington, DC 20301-3060. Telephone 571-372-6106.
FR Citation		80 FR 30119
RIN Number		0750-AI41
CFR Citation		48 CFR 212 48 CFR 225 48 CFR 252

80 FR 30119 - Defense Federal Acquisition Regulation Supplement: Photovoltaic Devices from the United States (DFARS Case 2015-D007)

DEPARTMENT OF DEFENSEDefense Acquisition Regulations System

Federal Register Volume 80, Issue 100 (May 26, 2015)

DEPARTMENT OF DEFENSE
Defense Acquisition Regulations System