83 FR 42822 - Defense Federal Acquisition Regulation Supplement: Sunset of Provision Relating to the Procurement of Certain Goods (DFARS Case 2018-D007)
DEPARTMENT OF DEFENSE
Defense Acquisition Regulations System Federal Register Volume 83, Issue 165 (August 24, 2018)
Defense Acquisition Regulations System
Federal Register Volume 83, Issue 165 (August 24, 2018)
| Page Range | 42822-42826 | |
| FR Document | 2018-18240 |
[Federal Register Volume 83, Number 165 (Friday, August 24, 2018)] [Proposed Rules] [Pages 42822-42826] From the Federal Register Online [www.thefederalregister.org] [FR Doc No: 2018-18240] ----------------------------------------------------------------------- DEPARTMENT OF DEFENSE Defense Acquisition Regulations System 48 CFR Parts 212, 225, and 252 [Docket DARS-2018-0028] RIN 0750-AJ71 Defense Federal Acquisition Regulation Supplement: Sunset of Provision Relating to the Procurement of Certain Goods (DFARS Case 2018-D007) AGENCY: Defense Acquisition Regulations System, Department of Defense (DoD). ACTION: Proposed rule. ----------------------------------------------------------------------- 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 2018 that repeals the Fiscal Year 2015 restrictions on the source of photovoltaic devices in contracts awarded by DoD that result in DoD ownership of photovoltaic devices by means other than DoD purchase of the photovoltaic devices as end products. DATES: Comments on the proposed rule should be submitted in writing to the address shown below on or before October 23, 2018, to be considered in the formation of a final rule. ADDRESSES: Submit comments identified by DFARS Case 2018-D007, using any of the following methods: [cir] Federal eRulemaking Portal: http://www.regulations.gov. Search for ``DFARS Case 2018-D007''. Select ``Comment Now'' and follow the instructions provided to submit a comment. Please include ``DFARS Case 2018-D007'' on any attached documents. [cir] Email: [email protected]. Include DFARS Case 2018-D007 in the subject line of the message. [cir] Fax: 571-372-6094. [cir] Mail: Defense Acquisition Regulations System, Attn: Amy G. Williams, OUSD(A&S)DPC/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 DoD is proposing to revise the DFARS to implement section 813(b) of the National Defense Authorization Act (NDAA) for Fiscal Year (FY) 2018. Section 813(b) repeals section 858 of the NDAA for FY 2015, effective October 1, 2018, but does not repeal section 846 of the NDAA for FY 2011. DoD published the final rule to implement section 858 under DFARS case 2015-D007 in the Federal Register on November 20, 2015 (80 FR 72599). Section 858 of the NDAA for FY 2015 did not contain specific language to rescind or supersede section 846 of the NDAA for FY 2011, which was first implemented in the DFARS by an interim rule under DFARS Case 2011-D046, published in the Federal Register on December 20, 2011 (76 FR 78858), and then finalized on May 22, 2012 (77 FR 30368). II. Discussion and Analysis A. Analysis of Statutory Requirements 1. Covered Contracts Section 846 applies to contracts awarded by DoD, including energy savings performance contracts, utility energy service contracts, 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 substituted ``or'' for ``and'' in connecting the two conditions. Therefore, either one of the conditions would be sufficient to make the law applicable. By repealing section 858, the law does not apply unless both of the conditions are met. Although section 858 explicitly restricted applicability to the United States, that restriction is still equivalent to the section 846 applicability, because the Buy American statute invoked in section 846 does not apply overseas. Land leases are not addressed in this rule because land leases are outside the scope of the FAR and DFARS. 2. Requirements Section 846 requires that, with some exceptions, photovoltaic devices provided under covered contracts comply with the Buy American statute. The Buy American statute requires, for use inside the United States, that manufactured articles, materials and supplies be manufactured in the United States, substantially all from articles, materials, or supplies mined, produced, or manufactured in the United States. When section 858 was enacted, it imposed basically the same requirement, requiring that any photovoltaic device installed under a covered contract be manufactured in the United States substantially all from articles, materials or supplies mined, produced, or manufactured in the United States, but no longer referenced the Buy American statute. 3. Exceptions Because the requirement under section 858 was separated from the explicit application of the Buy American statute, the exceptions and waivers that apply to the Buy American statute no longer automatically applied to the restrictions of section 858, unless provided for and authorized by section 858. Now that section 858 has been repealed, the following exceptions are again applicable: Exceptions for domestic nonavailability and acquisitions in which the values of the photovoltaic devices does not exceed the micro-purchase threshold. Public interest determination. The Buy American statute provides for individual or class determinations that application of the Buy American statute is inconsistent with the public interest. Through public interest class determinations, DoD does not apply the Buy American statute 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 $180,000 or more). In implementing section 846, this determination was applied to photovoltaic devices not acquired as end products. Section 858 only allowed, on a case-by-case basis, determinations [[Page 42823]] that application of the restriction in 858 are not in the public interest. Such case-by-case determinations are no longer required in order to allow a contractor to utilize a qualifying country photovoltaic device or a U.S.-made photovoltaic device. Determination of unreasonable cost. Both the Buy American statute and section 858 allow a determination not to utilize a domestic product if the cost of the domestic product is unreasonable. With regard to determining that the cost of a domestic item is unreasonable, Executive Order 10582, Prescribing Uniform Procedures for Certain Determinations under the Buy-American Act, 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 statute. 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 $180,000 (the World Trade Organization Government Procurement Agreement threshold). 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 statute to U.S.-made products so no evaluation factor is applicable. 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 statute does not apply to the acquisition of COTS items. This exemption no longer applied to photovoltaic devices utilized under section 858, but is now re-instated under section 846. Trade agreements or otherwise provided by law. The restrictions of both section 846 and section 858 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 statute 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). B. Regulatory Implementation This proposed rule essentially reinstates the DFARS regulations as they existed prior to publication of the final rule under DFARS Case 2015-D007 on November 20, 2015, except for-- Baseline changes such as increased trade agreement thresholds and addition of new qualifying countries); Use of the term ``micro-purchase threshold'' rather than a specific dollar value, to provide more flexibility when the micro- purchase threshold increases; Retaining the explicit statement that these restrictions only apply in the United States; and Restructuring of the certifications in DFARS provision 252.225-7018. In each dollar range, the first paragraph is limited to a certification that the photovoltaic devices are domestic (or U.S.-made for paragraph (6)). This avoids the necessity of identifying the country of origin for such domestic or U.S.-made products. III. Applicability to Contracts at or Below the Simplified Acquisition Threshold and for Commercial Items, Including Commercially Available Off-the-Shelf Items This rule does not affect the applicability of DFARS clause 252.225-7017, Photovoltaic Devices, and DFARS provision 252.225-7018, Photovoltaic Devices--Certification. A determination was signed by the Director, Defense Procurement and Acquisition Policy, on October 13, 2011, to not apply the requirements of section 846 of the NDAA for FY 2011 to contracts at or below the simplified acquisition threshold, but to apply the rule to contracts for the acquisition of commercial items, including COTS items. IV. 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. V. Executive Order 13771 This proposed rule is not expected to be an E.O. 13771, Reducing Regulation and Controlling Regulatory Costs, regulatory action, because this proposed rule is not significant under E.O. 12866. VI. 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 the repeal of section 858 of the Carl Levin and Howard P. ``Buck'' McKeon National Defense Authorization Act (NDAA) for FY 2015 (Pub. L. 113-291), while retaining the requirements of section 846 of the NDAA for FY 2011, with regard to sources of contractor-purchased photovoltaic devices that become the property of DoD. The objective of this rule is to revert to the regulations on photovoltaic devices that were in effect prior to superimposing the additional regulations required by section 858 on November 20, 2015 (80 FR 72599). By restoring the tie to the Buy American statute, this rule reinstates the Buy American exceptions for acquisitions below the micro-purchase threshold, nonavailabilty, unreasonable cost, and public interest, including the DoD class determinations that exempt U.S.-made and qualifying country photovoltaic devices from the requirement of the Buy American statute, as well as the Governmentwide determination that removes the component test for commercially-available off-the-shelf items. 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 statute/Trade Agreements regulations) or, for example, may do some variation of the following: [[Page 42824]] Enter into an energy savings performance contract, which is a contracting method in which the contractor provides capital to facilitate energy conservation measures and maintains them in exchange for a portion of the energy savings generated. Under this arrangement, the Government would take title to the devices during contract performance or at the conclusion of the contract. For example, DoD uses either the master indefinite delivery-indefinite quantity contract of the Department of Energy or the Army Corps of Engineers and awards task orders off one of those contracts. Generally, the same approved contractors are on each contract. Of the approved contractors, all except one are large businesses. There are subcontracting goals that each contractor has to meet, but the ultimate task order award is most often made to a large business. Enter into a power purchase agreement, also referred to as a utility service contract, for the purchase of the power output of photovoltaic devices that are installed on DoD land or buildings, but owned, operated, and maintained by the contractor. At the conclusion of the contract, DoD would either require the contractor to dismantle and remove the photovoltaic equipment or abandon the equipment in place. Prime contractors for this type of contract would generally be large businesses, based on the capital costs involved in these projects. However, many developers tend to subcontract out the majority of work to smaller companies. There are approximately 80 manufacturers of photovoltaic devices. DoD does not currently have data available on whether any of the manufacturers of photovoltaic devices are small entities, because the Federal Procurement Data System does not collect such data on subcontractors. There are no new reporting burdens under this rule. In fact, there is a de minimis reduction in burden, because no certification will be required if the value of the photovoltaic devices does not exceed the micro-purchase threshold, and identification of country of origin will no longer be required if the photovoltaic devices are domestic or U.S.- made. Contracting officers will no longer be required to do a determination and findings in order to allow utilization of qualifying country or U.S.-made photovoltaic devices or other foreign photovoltaic devices on the bases of unreasonable cost. Furthermore, since the prime contractors subject to this rule are other than small businesses, the existing reporting requirements do not impact small entities. 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 overall effect of this rule is deregulatory and it does not have significant impact on small entities. 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 2018-D007), in correspondence. VII. Paperwork Reduction Act The rule contains information collection requirements that require the approval of the Office of Management and Budget under the Paperwork Reduction Act (44 U.S.C chapter 35); however, these changes to the DFARS do not impose additional information collection requirements to the paperwork burden previously approved under OMB Control Number 0704- 0229, entitled ``Defense Federal Acquisition Regulation Supplement (DFARS) Part 225, Foreign Acquisition, and related clauses at DFARS 252.225.'' List of Subjects in 48 CFR Parts 212, 225, and 252 Government procurement. Jennifer Lee Hawes, Regulatory Control Officer, Defense Acquisition Regulations System. Therefore, 48 CFR parts 212, 225, and 252 are proposed to be amended as follows: 0 1. The authority citation for 48 CFR parts 212, 225, and 252 continues to read as follows: Authority: 41 U.S.C. 1303 and 48 CFR chapter 1. PART 212--ACQUISITION OF COMMERCIAL ITEMS 0 2. Amend section 212.301 by revising paragraphs (f)(ix)(J) and (K) to read as follows: 212.301 Solicitation provisions and contract clauses for the acquisition of commercial items. (f) * * * * * * * * (ix) * * * (J) Use the clause at 252.225-7017, Photovoltaic Devices, as prescribed in 225.7017-4(a), to comply with section 846 of Public Law 111-383. (K) Use the provision at 252.225-7018, Photovoltaic Devices-- Certificate, as prescribed in 225.7017-4(b), to comply with section 846 of Public Law 111-383. * * * * * PART 225--FOREIGN ACQUISITION 0 3. Amend section 225.7017-1 by revising the definitions of ``Covered contract'' and ``Domestic photovoltaic device'' to read as follows: 225.7017-1 Definitions. * * * * * Covered contract means an energy savings performance contract, a utility services contract, or a private housing contract awarded by DoD to be performed in the United States, if such contract results in DoD ownership of photovoltaic devices, by means other than DoD purchase as end products. DoD is deemed to own a photovoltaic device if the device is-- (1) Installed in the United States on DoD property or in a facility owned by DoD; and (2) Reserved for the exclusive use of DoD in the United States for the full economic life of the device. * * * * * Domestic photovoltaic device means a photovoltaic device that is manufactured in the United States. * * * * * 0 4. Revise section 225.7017-2 to read as follows: 225.7017-2 Restriction. In accordance with section 846 of the National Defense Authorization Act for Fiscal Year 2011, photovoltaic devices provided under any covered contract shall comply with 41 U.S.C. chapter 83, Buy American, subject to the exceptions to that statute provided in the Trade Agreements Act of 1979 (19 U.S.C. 2501 et seq.). 0 5. Revise section 225.7017-3 to read as follows: 225.7017-3 Exceptions. DoD requires the contractor to utilize domestic photovoltaic devices in covered contracts that exceed the simplified acquisition threshold, with the following exceptions: (a) Qualifying country. Qualifying country photovoltaic devices may be utilized in any covered contract, because 225.103(a)(i)(A) provides an exception to the Buy American statute for products of qualifying countries, as defined in 225.003. [[Page 42825]] (b) Buy American--unreasonable cost. For a covered contract that utilizes photovoltaic devices valued at less than $180,000, the exception for unreasonable cost may apply (see FAR 25.103(c). If the cost of a foreign photovoltaic device plus 50 percent is less than the cost of a domestic photovoltaic device, then the foreign photovoltaic device may be utilized. (c) Trade agreements. (1) Free Trade Agreements. For a covered contract that utilizes photovoltaic devices valued at $25,000 or more, photovoltaic devices may be utilized from a country covered under the acquisition by a Free Trade Agreement, depending upon dollar threshold (see FAR subpart 25.4). (2) World Trade Organization--Government Procurement Agreement. For covered contracts that utilize photovoltaic devices that are valued at $180,000 or more, only U.S.-made photovoltaic devices, designated country photovoltaic devices, or qualifying country photovoltaic devices may be utilized. 225.7017-4 [Removed] 0 6. Remove section 225.7017-4. 225.7017-5 [Redesignated as 225.7017-4] 0 7. Redesignate section 225.7017-5 as 225.7017-4 and in the newly redesignated section 225.7017-4, revise paragraph (a)(1) to read as follows: 225.7017-4 Solicitation provision and contract clause. (a)(1) Use the clause at 252.225-7017, Photovoltaic Devices, in solicitations, including solicitations using FAR part 12 procedures for the acquisition of commercial items, for a contract expected to exceed the simplified acquisition threshold that may be a covered contract, i.e., an energy savings performance contract, a utility service contract, or a private housing contract awarded by DoD, if such contract will result in DoD ownership of photovoltaic devices, by means other than DoD purchase as end products. * * * * * PART 252--SOLICITATION PROVISIONS AND CONTRACT CLAUSES 0 8. Amend section 252.225-7017 by-- 0 a. In the introductory text, removing ``225.7017-5(a)'' and adding ``225.7017-4(a)'' in its place; 0 b. Removing clause date ``(JAN 2018)'' and adding ``(DATE)'' in its place; 0 c. In paragraph (a)-- 0 i. Removing subparagraph designations ``(i)'' and ``(ii)'' and adding ``(1)'' and ``(2)'' in its place wherever it appears; 0 ii. Removing subparagraph designations ``(iii)'' and ``(iv)'' and adding ``(3)'' and ``(4)'' in its place; 0 iii. Revising the definition of ``Domestic photovoltaic device''; 0 d. In paragraph (b), removing ``858 of the National Defense Authorization Act for Fiscal Year 2015 (Pub. L. 113-291)'' and adding ``846 of the National Defense Authorization Act for Fiscal Year 2011 (Pub. L. 111-383)'' in its place; and 0 e. In paragraph (c)-- 0 i. Revising paragraph (c)(1); 0 ii. In paragraph (c)(2), removing ``photovoltaic device as specified, or,'' and adding ``photovoltaic device, or,'' in its place; and 0 iii. Revising paragraphs (c)(3), (4), and (5). The revisions read as follows: 252.225-7017 Photovoltaic Devices. (a) * * * Domestic photovoltaic device means a photovoltaic device that is manufactured in the United States. * * * * * (c) * * * (1) More than the micro-purchase threshold but less than $25,000, then the Contractor shall utilize only domestic photovoltaic devices unless, in its offer, it specified utilization of qualifying country or other foreign photovoltaic devices in paragraph (d)(2) of the Photovoltaic Devices--Certificate provision of the solicitation; * * * * * (3) $80,317 or more but less than $100,000, then the Contractor shall utilize under this contract only domestic photovoltaic devices, unless, in its offer, it specified utilization of Free Trade Agreement country photovoltaic devices (other than Bahrainian, Korean, Moroccan, Panamanian, or Peruvian photovoltaic devices), qualifying country photovoltaic devices, or other foreign photovoltaic devices in paragraph (d)(4) of the Photovoltaic Devices--Certificate provision of the solicitation. If the Contractor certified in its offer that it will utilize a Free Trade Agreement country photovoltaic device (other than a Bahrainian, Korean, Moroccan, Panamanian, or Peruvian photovoltaic device) or a qualifying country photovoltaic device, then the Contractor shall utilize a Free Trade Agreement country photovoltaic device (other than a Bahrainian, Korean, Moroccan, Panamanian, or Peruvian photovoltaic device) or a qualifying country photovoltaic device; or, at the Contractor's option, a domestic photovoltaic device; (4) $100,000 or more but less than $180,000, then the Contractor shall utilize under this contract only domestic photovoltaic devices, unless, in its offer, it specified utilization of Free Trade Agreement country photovoltaic devices (other than Bahrainian, Moroccan, Panamanian, or Peruvian photovoltaic devices), qualifying country photovoltaic devices, or other foreign photovoltaic devices in paragraph (d)(5) of the Photovoltaic Devices--Certificate provision of the solicitation. If the Contractor certified in its offer that it will utilize a Free Trade Agreement country photovoltaic device (other than a Bahrainian, Moroccan, Panamanian, or Peruvian photovoltaic device) or a qualifying country photovoltaic device, then the Contractor shall utilize a Free Trade Agreement country photovoltaic device (other than a Bahrainian, Moroccan, Panamanian, or Peruvian photovoltaic device) or a qualifying country photovoltaic device; or, at the Contractor's option, a domestic photovoltaic device; or (5) $180,000 or more, then the Contractor shall utilize under this contract only U.S.-made, designated country, or qualifying country photovoltaic devices. (End of clause) 0 9. Amend section 252.225-7018 by-- 0 a. In the introductory text, removing ``225.7017-5(b)'' and adding ``225.7017-4(b)'' in its place; 0 b. Removing clause date ``(JAN 2018)'' and adding ``(DATE)'' in its place; 0 c. Revising paragraphs (b)(1) and (2); and 0 d. Revising paragraphs (d)(1), (d)(2) introductory text, and (d)(3) through (6). The revisions read as follows: 252.225-7018 Photovoltaic devices--certificate. * * * * * (b) * * * (1) If more than micro-purchase threshold but less than $180,000, then the Government will not accept an offer specifying the use of other foreign photovoltaic devices in paragraph (d)(2)(ii), (d)(3)(ii), (d)(4)(ii), or (d)(5)(ii) of this provision, unless the offeror documents to the satisfaction of the Contracting Officer that the price of the foreign photovoltaic device plus 50 percent is less than the price of a comparable domestic photovoltaic device. (2) If $180,000 or more, then the Government will consider only offers that utilize photovoltaic devices that are U.S.-made, qualifying country, or designated country photovoltaic devices. * * * * * [[Page 42826]] (d) * * * (1) No photovoltaic devices will be utilized in performance of the contract, or such photovoltaic devices have an estimated value that does not exceed the micro-purchase threshold. (2) If more than the micro-purchase threshold but less than $25,000-- * * * * * (3) If $25,000 or more but less than $80,317-- (i) The offeror certifies that each photovoltaic device to be utilized in performance of the contract is a domestic photovoltaic device; (ii) The offeror certifies that each photovoltaic device to be utilized in performance of the contract is a Canadian photovoltaic device or a qualifying country photovoltaic device [Offeror to specify country of origin _____]; or (iii) The foreign (other than Canadian or qualifying country) photovoltaic devices to be utilized in performance of the contract are the product of _____. [Offeror to specify country of origin, if known, and provide documentation that the cost of a domestic photovoltaic device would be unreasonable in comparison to the cost of the proposed foreign photovoltaic device, i.e. that the price of the foreign photovoltaic device plus 50 percent is less than the price of a comparable domestic photovoltaic device.] (4) If $80,317 or more but less than $100,000-- (i) The offeror certifies that each photovoltaic device to be utilized in performance of the contract is a domestic photovoltaic device; (ii) The offeror certifies that each photovoltaic device to be utilized in performance of the contract is a Free Trade Agreement country photovoltaic device (other than a Bahrainian, Korean, Moroccan, Panamanian, or Peruvian photovoltaic device) or a qualifying country photovoltaic device [Offeror to specify country of origin _____]; or (iii) The offered foreign photovoltaic devices (other than those from countries listed in paragraph (d)(4)(ii) of this provision) are the product of _____. [Offeror to specify country of origin, if known, and provide documentation that the cost of a domestic photovoltaic device would be unreasonable in comparison to the cost of the proposed foreign photovoltaic device, i.e. that the price of the foreign photovoltaic device plus 50 percent is less than the price of a comparable domestic photovoltaic device.] (5) If $100,000 or more but less than $180,000-- (i) The offeror certifies that each photovoltaic device to be utilized in performance of the contract is a domestic photovoltaic device; (ii) The offeror certifies that each photovoltaic device to be utilized in performance of the contract is a Free Trade Agreement country photovoltaic device (other than a Bahrainian, Moroccan, Panamanian, or Peruvian photovoltaic device) or a qualifying country photovoltaic device [Offeror to specify country of origin _____]; or (iii) The offered foreign photovoltaic devices (other than those from countries listed in paragraph (d)(5)(ii) of this provision) are the product of _____. [Offeror to specify country of origin, if known, and provide documentation that the cost of a domestic photovoltaic device would be unreasonable in comparison to the cost of the proposed foreign photovoltaic device, i.e. that the price of the foreign photovoltaic device plus 50 percent is less than the price of a comparable domestic photovoltaic device.] (6) If $180,000 or more, the Offeror certifies that each photovoltaic device to be used in performance of the contract is-- (i) A U.S.-made photovoltaic device; or (ii) A designated country photovoltaic device or a qualifying country photovoltaic device. [Offeror to specify country of origin _____.] (End of provision) [FR Doc. 2018-18240 Filed 8-23-18; 8:45 am] BILLING CODE 5001-06-P
![42822 Federal Register / Vol. 83, No. 165 / Friday, August 24, 2018 / Proposed Rules
available at http://jko.jfcom.mil/ or as Williams, OUSD(A&S)DPC/DARS, 858 explicitly restricted applicability to
otherwise identified in the performance work Room 3B941, 3060 Defense Pentagon, the United States, that restriction is still
statement. Washington, DC 20301–3060. equivalent to the section 846
(d) The Contractor shall include the Comments received generally will be applicability, because the Buy American
substance of this clause, including this
paragraph (d), in subcontracts, including posted without change to http:// statute invoked in section 846 does not
subcontracts for commercial items, when www.regulations.gov, including any apply overseas. Land leases are not
subcontractor performance requires routine personal information provided. To addressed in this rule because land
physical access to a Federally-controlled confirm receipt of your comment(s), leases are outside the scope of the FAR
facility or military installation. please check www.regulations.gov, and DFARS.
approximately two to three days after 2. Requirements
(End of clause)
submission to verify posting (except
[FR Doc. 2018–18250 Filed 8–23–18; 8:45 am] allow 30 days for posting of comments Section 846 requires that, with some
BILLING CODE 5001–06–P submitted by mail). exceptions, photovoltaic devices
FOR FURTHER INFORMATION CONTACT: Ms.
provided under covered contracts
comply with the Buy American statute.
DEPARTMENT OF DEFENSE Amy G. Williams, telephone 571–372–
The Buy American statute requires, for
6106.
use inside the United States, that
Defense Acquisition Regulations SUPPLEMENTARY INFORMATION: manufactured articles, materials and
System supplies be manufactured in the United
I. Background
States, substantially all from articles,
48 CFR Parts 212, 225, and 252 DoD is proposing to revise the DFARS materials, or supplies mined, produced,
[Docket DARS–2018–0028] to implement section 813(b) of the or manufactured in the United States.
National Defense Authorization Act When section 858 was enacted, it
RIN 0750–AJ71 (NDAA) for Fiscal Year (FY) 2018. imposed basically the same
Section 813(b) repeals section 858 of the requirement, requiring that any
Defense Federal Acquisition NDAA for FY 2015, effective October 1,
Regulation Supplement: Sunset of photovoltaic device installed under a
2018, but does not repeal section 846 of covered contract be manufactured in the
Provision Relating to the Procurement the NDAA for FY 2011. DoD published
of Certain Goods (DFARS Case 2018– United States substantially all from
the final rule to implement section 858 articles, materials or supplies mined,
D007) under DFARS case 2015–D007 in the produced, or manufactured in the
AGENCY: Defense Acquisition Federal Register on November 20, 2015 United States, but no longer referenced
Regulations System, Department of (80 FR 72599). the Buy American statute.
Defense (DoD). Section 858 of the NDAA for FY 2015
did not contain specific language to 3. Exceptions
ACTION: Proposed rule.
rescind or supersede section 846 of the Because the requirement under
SUMMARY: DoD is proposing to amend NDAA for FY 2011, which was first section 858 was separated from the
the Defense Federal Acquisition implemented in the DFARS by an explicit application of the Buy
Regulation Supplement (DFARS) to interim rule under DFARS Case 2011– American statute, the exceptions and
implement a section of the National D046, published in the Federal Register waivers that apply to the Buy American
Defense Authorization Act for Fiscal on December 20, 2011 (76 FR 78858), statute no longer automatically applied
Year 2018 that repeals the Fiscal Year and then finalized on May 22, 2012 (77 to the restrictions of section 858, unless
2015 restrictions on the source of FR 30368). provided for and authorized by section
photovoltaic devices in contracts 858. Now that section 858 has been
awarded by DoD that result in DoD II. Discussion and Analysis
repealed, the following exceptions are
ownership of photovoltaic devices by A. Analysis of Statutory Requirements again applicable:
means other than DoD purchase of the • Exceptions for domestic
photovoltaic devices as end products. 1. Covered Contracts nonavailability and acquisitions in
DATES: Comments on the proposed rule Section 846 applies to contracts which the values of the photovoltaic
should be submitted in writing to the awarded by DoD, including energy devices does not exceed the micro-
address shown below on or before savings performance contracts, utility purchase threshold.
October 23, 2018, to be considered in energy service contracts, and private • Public interest determination. The
the formation of a final rule. housing contracts, to the extent that Buy American statute provides for
ADDRESSES: Submit comments such contracts result in ownership of individual or class determinations that
identified by DFARS Case 2018–D007, photovoltaic devices by DoD. Section application of the Buy American statute
using any of the following methods: 846 further provides that DoD is deemed is inconsistent with the public interest.
Æ Federal eRulemaking Portal: http:// to own a photovoltaic device if the Through public interest class
www.regulations.gov. Search for device is— determinations, DoD does not apply the
‘‘DFARS Case 2018–D007’’. Select • Installed on DoD property or in a Buy American statute to (1) qualifying
‘‘Comment Now’’ and follow the facility owned by DoD; and country end products; or (2) U.S.-made
instructions provided to submit a • Reserved for the exclusive use of end products, if the World Trade
DOD for the full economic life of the Organization Government Procurement
sradovich on DSK3GMQ082PROD with PROPOSALS
comment. Please include ‘‘DFARS Case
2018–D007’’ on any attached device. Agreement applies (i.e., the aggregate
documents. Section 858 substituted ‘‘or’’ for value of the photovoltaic devices to be
Æ Email: osd.dfars@mail.mil. Include ‘‘and’’ in connecting the two conditions. utilized is $180,000 or more). In
DFARS Case 2018–D007 in the subject Therefore, either one of the conditions implementing section 846, this
line of the message. would be sufficient to make the law determination was applied to
Æ Fax: 571–372–6094. applicable. By repealing section 858, the photovoltaic devices not acquired as
Æ Mail: Defense Acquisition law does not apply unless both of the end products. Section 858 only allowed,
Regulations System, Attn: Amy G. conditions are met. Although section on a case-by-case basis, determinations
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![Federal Register / Vol. 83, No. 165 / Friday, August 24, 2018 / Proposed Rules 42825
(b) Buy American—unreasonable cost. ‘‘(1)’’ and ‘‘(2)’’ in its place wherever it (4) $100,000 or more but less than
For a covered contract that utilizes appears; $180,000, then the Contractor shall
photovoltaic devices valued at less than ■ ii. Removing subparagraph utilize under this contract only
$180,000, the exception for designations ‘‘(iii)’’ and ‘‘(iv)’’ and domestic photovoltaic devices, unless,
unreasonable cost may apply (see FAR adding ‘‘(3)’’ and ‘‘(4)’’ in its place; in its offer, it specified utilization of
25.103(c). If the cost of a foreign ■ iii. Revising the definition of Free Trade Agreement country
photovoltaic device plus 50 percent is ‘‘Domestic photovoltaic device’’; photovoltaic devices (other than
less than the cost of a domestic ■ d. In paragraph (b), removing ‘‘858 of Bahrainian, Moroccan, Panamanian, or
photovoltaic device, then the foreign the National Defense Authorization Act Peruvian photovoltaic devices),
photovoltaic device may be utilized. for Fiscal Year 2015 (Pub. L. 113–291)’’ qualifying country photovoltaic devices,
(c) Trade agreements. and adding ‘‘846 of the National Defense or other foreign photovoltaic devices in
(1) Free Trade Agreements. For a Authorization Act for Fiscal Year 2011 paragraph (d)(5) of the Photovoltaic
covered contract that utilizes (Pub. L. 111–383)’’ in its place; and Devices—Certificate provision of the
■ e. In paragraph (c)— solicitation. If the Contractor certified in
photovoltaic devices valued at $25,000
■ i. Revising paragraph (c)(1);
or more, photovoltaic devices may be its offer that it will utilize a Free Trade
■ ii. In paragraph (c)(2), removing
utilized from a country covered under Agreement country photovoltaic device
‘‘photovoltaic device as specified, or,’’
the acquisition by a Free Trade (other than a Bahrainian, Moroccan,
and adding ‘‘photovoltaic device, or,’’ in
Agreement, depending upon dollar Panamanian, or Peruvian photovoltaic
its place; and
threshold (see FAR subpart 25.4). ■ iii. Revising paragraphs (c)(3), (4), and
device) or a qualifying country
(2) World Trade Organization— (5). photovoltaic device, then the Contractor
Government Procurement Agreement. The revisions read as follows: shall utilize a Free Trade Agreement
For covered contracts that utilize country photovoltaic device (other than
photovoltaic devices that are valued at 252.225–7017 Photovoltaic Devices. a Bahrainian, Moroccan, Panamanian, or
$180,000 or more, only U.S.-made (a) * * * Peruvian photovoltaic device) or a
photovoltaic devices, designated Domestic photovoltaic device means a qualifying country photovoltaic device;
country photovoltaic devices, or photovoltaic device that is or, at the Contractor’s option, a domestic
qualifying country photovoltaic devices manufactured in the United States. photovoltaic device; or
may be utilized. * * * * * (5) $180,000 or more, then the
(c) * * * Contractor shall utilize under this
225.7017–4 [Removed] (1) More than the micro-purchase contract only U.S.-made, designated
■ 6. Remove section 225.7017–4. threshold but less than $25,000, then country, or qualifying country
the Contractor shall utilize only photovoltaic devices.
225.7017–5 [Redesignated as 225.7017–4]
domestic photovoltaic devices unless, in (End of clause)
■ 7. Redesignate section 225.7017–5 as its offer, it specified utilization of ■ 9. Amend section 252.225–7018 by—
225.7017–4 and in the newly qualifying country or other foreign ■ a. In the introductory text, removing
redesignated section 225.7017–4, revise photovoltaic devices in paragraph (d)(2) ‘‘225.7017–5(b)’’ and adding ‘‘225.7017–
paragraph (a)(1) to read as follows: of the Photovoltaic Devices—Certificate 4(b)’’ in its place;
provision of the solicitation; ■ b. Removing clause date ‘‘(JAN 2018)’’
225.7017–4 Solicitation provision and
and adding ‘‘(DATE)’’ in its place;
contract clause. * * * * *
■ c. Revising paragraphs (b)(1) and (2);
(a)(1) Use the clause at 252.225–7017, (3) $80,317 or more but less than
and
Photovoltaic Devices, in solicitations, $100,000, then the Contractor shall ■ d. Revising paragraphs (d)(1), (d)(2)
including solicitations using FAR part utilize under this contract only introductory text, and (d)(3) through (6).
12 procedures for the acquisition of domestic photovoltaic devices, unless, The revisions read as follows:
commercial items, for a contract in its offer, it specified utilization of
expected to exceed the simplified Free Trade Agreement country 252.225–7018 Photovoltaic devices—
photovoltaic devices (other than certificate.
acquisition threshold that may be a
covered contract, i.e., an energy savings Bahrainian, Korean, Moroccan, * * * * *
performance contract, a utility service Panamanian, or Peruvian photovoltaic (b) * * *
contract, or a private housing contract devices), qualifying country (1) If more than micro-purchase
awarded by DoD, if such contract will photovoltaic devices, or other foreign threshold but less than $180,000, then
result in DoD ownership of photovoltaic photovoltaic devices in paragraph (d)(4) the Government will not accept an offer
devices, by means other than DoD of the Photovoltaic Devices—Certificate specifying the use of other foreign
purchase as end products. provision of the solicitation. If the photovoltaic devices in paragraph
Contractor certified in its offer that it (d)(2)(ii), (d)(3)(ii), (d)(4)(ii), or (d)(5)(ii)
* * * * * of this provision, unless the offeror
will utilize a Free Trade Agreement
PART 252—SOLICITATION country photovoltaic device (other than documents to the satisfaction of the
PROVISIONS AND CONTRACT a Bahrainian, Korean, Moroccan, Contracting Officer that the price of the
CLAUSES Panamanian, or Peruvian photovoltaic foreign photovoltaic device plus 50
device) or a qualifying country percent is less than the price of a
■ 8. Amend section 252.225–7017 by— photovoltaic device, then the Contractor comparable domestic photovoltaic
sradovich on DSK3GMQ082PROD with PROPOSALS
■ a. In the introductory text, removing shall utilize a Free Trade Agreement device.
‘‘225.7017–5(a)’’ and adding ‘‘225.7017– country photovoltaic device (other than (2) If $180,000 or more, then the
4(a)’’ in its place; a Bahrainian, Korean, Moroccan, Government will consider only offers
■ b. Removing clause date ‘‘(JAN 2018)’’ Panamanian, or Peruvian photovoltaic that utilize photovoltaic devices that are
and adding ‘‘(DATE)’’ in its place; device) or a qualifying country U.S.-made, qualifying country, or
■ c. In paragraph (a)— photovoltaic device; or, at the designated country photovoltaic
■ i. Removing subparagraph Contractor’s option, a domestic devices.
designations ‘‘(i)’’ and ‘‘(ii)’’ and adding photovoltaic device; * * * * *
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![42826 Federal Register / Vol. 83, No. 165 / Friday, August 24, 2018 / Proposed Rules
(d) * * * performance of the contract is a notifications of transportation of
(1) No photovoltaic devices will be domestic photovoltaic device; supplies by sea.
utilized in performance of the contract, (ii) The offeror certifies that each DATES: Comments on the proposed rule
or such photovoltaic devices have an photovoltaic device to be utilized in should be submitted in writing to the
estimated value that does not exceed the performance of the contract is a Free address shown below on or before
micro-purchase threshold. Trade Agreement country photovoltaic October 23, 2018, to be considered in
(2) If more than the micro-purchase device (other than a Bahrainian, the formation of a final rule.
threshold but less than $25,000— Moroccan, Panamanian, or Peruvian ADDRESSES: Submit comments
* * * * * photovoltaic device) or a qualifying identified by DFARS Case 2018–D028,
(3) If $25,000 or more but less than country photovoltaic device [Offeror to using any of the following methods:
$80,317— specify country of origin lllll]; or Æ Federal eRulemaking Portal:
(i) The offeror certifies that each (iii) The offered foreign photovoltaic http://www.regulations.gov. Search for
photovoltaic device to be utilized in devices (other than those from countries ‘‘DFARS Case 2018–D028’’. Select
performance of the contract is a listed in paragraph (d)(5)(ii) of this ‘‘Submit a Comment Now’’ and follow
domestic photovoltaic device; provision) are the product of the instructions provided to submit a
(ii) The offeror certifies that each lllll. [Offeror to specify country comment. Please include ‘‘DFARS Case
photovoltaic device to be utilized in of origin, if known, and provide 2018–D028’’ on any attached document.
performance of the contract is a documentation that the cost of a O Email: osd.dfars@mail.mil. Include
Canadian photovoltaic device or a domestic photovoltaic device would be DFARS Case 2018–D028 in the subject
qualifying country photovoltaic device unreasonable in comparison to the cost line of the message.
[Offeror to specify country of origin of the proposed foreign photovoltaic Æ Fax: 571–372–6094.
lllll]; or device, i.e. that the price of the foreign Æ Mail: Defense Acquisition
(iii) The foreign (other than Canadian photovoltaic device plus 50 percent is Regulations System, Attn: Carrie Moore,
or qualifying country) photovoltaic less than the price of a comparable OUSD(A&S)DPC/DARS, Room 3B941,
devices to be utilized in performance of domestic photovoltaic device.] 3060 Defense Pentagon, Washington, DC
the contract are the product of (6) If $180,000 or more, the Offeror 20301–3060.
lllll. [Offeror to specify country certifies that each photovoltaic device to Comments received generally will be
of origin, if known, and provide be used in performance of the contract posted without change to http://
documentation that the cost of a is— www.regulations.gov, including any
domestic photovoltaic device would be (i) A U.S.-made photovoltaic device; personal information provided. To
unreasonable in comparison to the cost or confirm receipt of your comment(s),
of the proposed foreign photovoltaic (ii) A designated country photovoltaic please check www.regulations.gov,
device, i.e. that the price of the foreign device or a qualifying country approximately two to three days after
photovoltaic device plus 50 percent is photovoltaic device. [Offeror to specify submission to verify posting (except
less than the price of a comparable country of origin lllll.] allow 30 days for posting of comments
domestic photovoltaic device.] submitted by mail).
(4) If $80,317 or more but less than (End of provision) FOR FURTHER INFORMATION CONTACT: Ms.
$100,000— [FR Doc. 2018–18240 Filed 8–23–18; 8:45 am] Carrie Moore, telephone 571–372–6093.
(i) The offeror certifies that each BILLING CODE 5001–06–P SUPPLEMENTARY INFORMATION:
photovoltaic device to be utilized in
performance of the contract is a I. Background
domestic photovoltaic device; DEPARTMENT OF DEFENSE This rule proposes to modify DFARS
(ii) The offeror certifies that each clause 252.247–7023, Transportation of
photovoltaic device to be utilized in Defense Acquisition Regulations Supplies By Sea, to include the
performance of the contract is a Free System instructions currently specified in
Trade Agreement country photovoltaic DFARS clause 252.247–7024,
device (other than a Bahrainian, Korean, 48 CFR Parts 212, 247, and 252 Notification of Supplies By Sea.
Moroccan, Panamanian, or Peruvian Combining these clauses will result in
photovoltaic device) or a qualifying [Docket DARS–2018–0040]
DFARS clause 252.247–7024 being
country photovoltaic device [Offeror to RIN 0750–AJ94 removed.
specify country of origin lllll]; or
(iii) The offered foreign photovoltaic II. Discussion and Analysis
Defense Federal Acquisition
devices (other than those from countries Regulation Supplement: Modification DFARS provision 252.247–7022,
listed in paragraph (d)(4)(ii) of this of DFARS Clause ‘‘Transportation of Representation of Extent of
provision) are the product of Supplies by Sea’’ (DFARS Case 2018– Transportation By Sea, is included in
lllll. [Offeror to specify country D028) solicitations and requires an offeror to
of origin, if known, and provide represent with its offer whether it
documentation that the cost of a AGENCY: Defense Acquisition anticipates that supplies will or will not
domestic photovoltaic device would be Regulations System, Department of be transported by sea in the
unreasonable in comparison to the cost Defense (DoD). performance of the contract.
of the proposed foreign photovoltaic DFARS clause 252.247–7023 is
sradovich on DSK3GMQ082PROD with PROPOSALS
ACTION: Proposed rule.
device, i.e. that the price of the foreign included in all contracts, except for
photovoltaic device plus 50 percent is SUMMARY: DoD is proposing to amend those that directly purchase ocean
less than the price of a comparable the Defense Federal Acquisition transportation services, and provides
domestic photovoltaic device.] Regulation Supplement (DFARS) to contractors with terms and conditions
(5) If $100,000 or more but less than modify the text of an existing DFARS that apply when transporting supplies
$180,000— clause to include the text of another by sea under the contract.
(i) The offeror certifies that each DFARS clause, in order to streamline DFARS clause 252.247–7024,
photovoltaic device to be utilized in instructions to contractors regarding Notification of Transportation of
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Document Created: 2018-08-24 04:14:51
Document Modified: 2018-08-24 04:14:51
| 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, telephone 571- 372-6106. | |
| FR Citation | 83 FR 42822 | |
| RIN Number | 0750-AJ71 | |
| CFR Citation | 48
CFR
212 48 CFR 225 48 CFR 252 |
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