83 FR 4447 - Defense Federal Acquisition Regulation Supplement: State Sponsor of Terrorism-North Korea (DFARS Case 2018-D004)

DEPARTMENT OF DEFENSE
Defense Acquisition Regulations System

Federal Register Volume 83, Issue 21 (January 31, 2018)

Page Range		4447-4449
FR Document		2018-01780

DoD is issuing a final rule amending the Defense Federal Acquisition Regulation Supplement (DFARS) to implement the designation by the Department of State of North Korea as a state sponsor of terrorism.

Federal Register, Volume 83 Issue 21 (Wednesday, January 31, 2018)

[Federal Register Volume 83, Number 21 (Wednesday, January 31, 2018)]
[Rules and Regulations]
[Pages 4447-4449]
From the Federal Register Online  [www.thefederalregister.org]
[FR Doc No: 2018-01780]


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DEPARTMENT OF DEFENSE

Defense Acquisition Regulations System

48 CFR Part 252

[Docket DARS-2017-0019]
RIN 0750-AJ68


Defense Federal Acquisition Regulation Supplement: State Sponsor 
of Terrorism--North Korea (DFARS Case 2018-D004)

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

ACTION: Final rule.

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

SUMMARY: DoD is issuing a final rule amending the Defense Federal

[[Page 4448]]

Acquisition Regulation Supplement (DFARS) to implement the designation 
by the Department of State of North Korea as a state sponsor of 
terrorism.

DATES: Effective January 31, 2018.

FOR FURTHER INFORMATION CONTACT: Ms. Amy Williams, telephone 571-372-
6106.

SUPPLEMENTARY INFORMATION: 

I. Background

    This final rule implements the November 20, 2017, designation by 
the Department of State of North Korea as a state sponsor of terrorism, 
in accordance with section 6(j)(1)(A) of the Export Administration Act 
of 1979. A state sponsor of terrorism is a country, the government of 
which has repeatedly provided support for acts of international 
terrorism. The Department of State previously designated North Korea as 
a state sponsor of terrorism in January 1988, but rescinded the 
designation in October 2008. Consistent with the November 20, 2017, 
action, North Korea is added to the list of countries that are state 
sponsors of terrorism in the definition of ``state sponsor of 
terrorism'' in paragraph (a) of the provisions at DFARS 252.225-7049, 
Prohibition on Acquisition of Commercial Satellite Services from 
Certain Foreign Entities--Representation; and DFARS 252.225-7050, 
Disclosure of Ownership or Control by the Government of a Country that 
is a State Sponsor of Terrorism. The provision at DFARS 252.225-7050 
implements 10 U.S.C. 2327, which prohibits DoD from entering into a 
contract with a firm that is owned or controlled by the government of a 
country that is a state sponsor of terrorism. The provision at 252.225-
7049 implements 10 U.S.C. 2279, which restricts acquisitions of 
commercial satellite services from any entity--
     Owned by the government of a covered foreign country 
(China, North Korea, or any state sponsor of terrorism); or
     Planning or expected to provide or use launch or other 
satellite services under the contract from a covered foreign country.

II. Applicability to Contracts at or Below the Simplified Acquisition 
Threshold and for Commercial Items, Including Commercially Available 
Off-the-Shelf Items

    This rule only updates the list of countries that are state 
sponsors of terrorism in the definition of ``state sponsors of 
terrorism'' in paragraph (a) of the DFARS provisions 252.225-7049, 
Prohibition on Acquisition of Commercial Satellite Services from 
Certain Foreign Entities--Representation; and DFARS 252.225-7050, 
Disclosure of Ownership or Control by the Government of a Country that 
is a State Sponsor of Terrorism. This revision does not impact use of 
clauses, their applicability to contracts or subcontracts valued at or 
below the simplified acquisition threshold, or their applicability to 
contracts or subcontracts for the acquisition of commercial items.

III. Executive Orders 12866 and 13563

    Executive Orders (E.O.) 12866, Regulatory Planning and Review, and 
E.O. 13563, Improving Regulation and Regulatory Review, 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 a significant regulatory action and, therefore, 
was 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. Executive Order 13771

    This rule is not subject to the requirements of E.O. 13771, because 
the rule is issued with respect to a national security function of the 
United States.

V. Publication of This Final Rule for Public Comment Is Not Required by 
Statute

    The statute that applies to the publication of the Federal 
Acquisition Regulation (FAR) is codified at Title 41 of the United 
States Code (formerly known as the Office of Federal Procurement Policy 
Act). Specifically, 41 U.S.C 1707(a)(1) requires that a procurement 
policy, regulation, procedure, or form (including an amendment or 
modification thereof) must be published for public comment if it 
relates to the expenditure of appropriated funds, and has either a 
significant effect beyond the internal operating procedures of the 
agency issuing the policy, regulation, procedure or form, or has a 
significant cost or administrative impact on contractors or offerors. 
This final rule is not required to be published for public comment, 
because it only adds North Korea to the list of countries that fall 
within the DFARS definition of ``state sponsors of terrorism,'' 
consistent with the November 20, 2017, designation of the country by 
the Secretary of State. These requirements affect only the internal 
operating procedures of the Government.

VI. Regulatory Flexibility Act

    Because a notice of proposed rulemaking and an opportunity for 
public comment are not required to be given for this rule under 41 
U.S.C. 1707(a)(1) (see section V. of this preamble), the analytical 
requirements of the Regulatory Flexibility Act (5 U.S.C. 601 et seq.) 
are not applicable. Accordingly, no regulatory flexibility analysis is 
required and none has been prepared.

VII. Paperwork Reduction Act

    The Paperwork Reduction Act (44 U.S.C. chapter 35) does apply. 
However, the changes to these DFARS provisions, do not impose 
additional information collection requirements or change the burden 
under two currently approved collections--OMB Control Number 0704-0525, 
entitled ``Foreign Commercial Satellite Services,'' and OMB Control 
Number 0704-0187, entitled ``Information Collection in Support of the 
DoD Acquisition Process (Various Miscellaneous Requirements).''

List of Subjects in 48 CFR Part 252

    Government procurement.

Jennifer L. Hawes,
Regulatory Control Officer, Defense Acquisition Regulations System.

    Therefore, 48 CFR part 252 is amended as follows:

PART 252--SOLICITATION PROVISIONS AND CONTRACT CLAUSES

0
1. The authority citation for 48 CFR part 252 continues to read as 
follows:

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


252.225-7049   [Amended]

0
2. Section 252.225-7049 is amended by--
0
a. In the clause heading, removing the date ``(OCT 2015)'' and adding 
``(JAN 2018)'' in its place; and
0
b. In paragraph (a), the definition of ``State sponsor of terrorism''--
0
i. Removing ``2405(j)(i)(A))'' and adding ``2405(j)(1)(A))'' in its 
place; and
0
ii. Adding, after ``Iran,'', the country of ``North Korea''.


252.225-7050   [Amended]

0
3. Section 252.225-7050 is amended by--

[[Page 4449]]

0
a. In the clause heading, removing the date ``(OCT 2015)'' and adding 
``(JAN 2018)'' in its place; and
0
b. In paragraph (a), the definition of ``State sponsor of terrorism'', 
adding after ``Iran,'', the country of ``North Korea''.

[FR Doc. 2018-01780 Filed 1-30-18; 8:45 am]
 BILLING CODE 5001-06-P

Federal Register / Vol. 83, No. 21 / Wednesday, January 31, 2018 / Rules and Regulations 4447

military department, defense agency, or other determination that the proposed price is fair (b) The Contract Auditor.
DoD component that rendered such and reasonable, to include the requirements (End of provision)
determination, and if available, a in DFARS 215.402(a)(i) and 215.404–1(b).
Government point of contact; (2) In cases in which uncertified cost data ■ 17. Add section 252.215–7012 to read
(B) For items priced based on a catalog— is required, the information shall be provided as follows:
(1) A copy of or identification of the in the form in which it is regularly
Offeror’s current catalog showing the price maintained by the Offeror or prospective 252.215–7012 Requirements for
for that item; and subcontractor in its business operations. Submission of Proposals via Electronic
(2) If the catalog pricing provided with this (3) The Offeror shall provide information Media.
proposal is not consistent with all relevant described as follows: [Insert description of
As prescribed in 215.408(6)(iii), use
sales data, a detailed description of the data and the format that are required,
differences or inconsistencies between or including access to records necessary to the following provision:
among the relevant sales data, the proposed permit an adequate evaluation of the Requirements for Submission of
price, and the catalog price (including any proposed price in accordance with FAR Proposals Via Electronic Media (Jan
related discounts, refunds, rebates, offsets, or 15.403–3.]
(4) Within 10 days of a written request
2018)
other adjustments);
(C) For items priced based on market from the Contracting Officer for additional
The Offeror shall submit the cost portion
pricing, a description of the nature of the information to support proposal analysis, the
of the proposal via the following electronic
commercial market, the methodology used to Offeror shall provide either the requested
media: [Insert media format, e.g., electronic
establish a market price, and all relevant information, or a written explanation for the
spreadsheet format, electronic mail, etc.]
sales data. The description shall be adequate inability to fully comply.
to permit the DoD to verify the accuracy of (5) Subcontract price evaluation. (i) (End of provision)
the description; Offerors shall obtain from subcontractors the
(D) For items included on an active Federal information necessary to support a ■ 18. Add section 252.215–7013 to read
Supply Service Multiple Award Schedule determination of price reasonableness, as as follows:
contract, proof that an exception has been described in FAR part 15 and DFARS part
215. 252.215–7013 Supplies and Services
granted for the schedule item; or
(ii) No cost information may be required Provided by Nontraditional Defense
(E) For items provided by nontraditional
from a prospective subcontractor in any case Contractors.
defense contractors, a statement that the
entity is not currently performing and has not in which there are sufficient non- As prescribed in 215.408(7), use the
performed, for at least the 1-year period Government sales of the same item to following provision:
preceding the solicitation of sources by the establish reasonableness of price.
DoD for the procurement or transaction, any (iii) If the Offeror relies on relevant sales Supples and Services Provided by
contract or subcontract for the DoD that is data for similar items to determine the price Nontraditional Defense Contractors
subject to full coverage under the cost is reasonable, the Offeror shall obtain only (Jan 2018)
accounting standards prescribed pursuant to that technical information necessary—
41 U.S.C. 1502 and the regulations (A) To support the conclusion that items Offerors are advised that in accordance
implementing such section. are technically similar; and with 10 U.S.C. 2380a, supplies and services
(2) The Offeror grants the Contracting (B) To explain any technical differences provided by a nontraditional defense
Officer or an authorized representative the that account for variances between the contractor, as defined in DFARS 212.001,
right to examine, at any time before award, proposed prices and the sales data presented. may be treated as commercial items. The
books, records, documents, or other directly (e) Subcontracts. The Offeror shall insert decision to apply commercial item
pertinent records to verify any request for an the substance of this provision, including procedures to the procurement of supplies
exception under this provision, and to this paragraph (e), in all subcontracts and services from a nontraditional defense
determine the reasonableness of price. exceeding the simplified acquisition contractor does not require a commercial
(c) Requirements for certified cost or threshold defined in FAR part 2. The Offeror item determination and does not mean the
pricing data. If the Offeror is not granted an shall require prospective subcontractors to supplies or services are commercial.
exception from the requirement to submit adhere to the requirements of— (End of provision)
certified cost or pricing data, the following (1) Paragraph (c) and (d) of this provision
applies: for subcontracts above the threshold for [FR Doc. 2018–01781 Filed 1–30–18; 8:45 am]
(1) The Offeror shall submit certified cost submission of certified cost or pricing data in BILLING CODE 5001–06–P
or pricing data and supporting attachments FAR 15.403–4; and
in the following format: [Insert description of (2) Paragraph (d) of this provision for
the data and format that are required, and subcontracts exceeding the simplified
acquisition threshold defined in FAR part 2.
DEPARTMENT OF DEFENSE
include access to records necessary to permit
an adequate evaluation of the proposed price (End of provision) Defense Acquisition Regulations
in accordance with FAR 15.408, Table 15–2, System
Note 2. The Contracting Officer shall insert ■ 16. Add section 252.215–7011 to read
the description at the time of issuing the as follows: 48 CFR Part 252
solicitation or specify that the format
regularly maintained by the offeror or 252.215–7011 Requirements for [Docket DARS–2017–0019]
prospective subcontractor in its business Submission of Proposals to the
operations will be acceptable. The Administrative Contracting Officer and RIN 0750–AJ68
Contracting Officer may amend the Contract Auditor.
description as the result of negotiations.] As prescribed in 215.408(6)(ii), use Defense Federal Acquisition
(2) As soon as practicable after agreement the following provision: Regulation Supplement: State Sponsor
on price, but before contract award (except of Terrorism—North Korea (DFARS
for unpriced actions such as letter contracts), Requirements for Submission of Case 2018–D004)
Proposals to the Administrative
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the Offeror shall submit a Certificate of
Current Cost or Pricing Data, as prescribed by Contracting Officer and Contract AGENCY: Defense Acquisition
FAR 15.406–2. Auditor (Jan 2018) Regulations System, Department of
(d) Requirements for data other than Defense (DoD).
certified cost or pricing data. (1) Data other When the proposal is submitted, the ACTION: Final rule.
than certified cost or pricing data submitted Offeror shall also submit one copy each to—
in accordance with this provision shall (a) The Administrative Contracting Officer; SUMMARY: DoD is issuing a final rule
include all data necessary to permit a and amending the Defense Federal

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4448 Federal Register / Vol. 83, No. 21 / Wednesday, January 31, 2018 / Rules and Regulations

Acquisition Regulation Supplement Commercial Satellite Services from DFARS definition of ‘‘state sponsors of
(DFARS) to implement the designation Certain Foreign Entities— terrorism,’’ consistent with the
by the Department of State of North Representation; and DFARS 252.225– November 20, 2017, designation of the
Korea as a state sponsor of terrorism. 7050, Disclosure of Ownership or country by the Secretary of State. These
DATES: Effective January 31, 2018. Control by the Government of a Country requirements affect only the internal
FOR FURTHER INFORMATION CONTACT: Ms. that is a State Sponsor of Terrorism. operating procedures of the
Amy Williams, telephone 571–372– This revision does not impact use of Government.
6106. clauses, their applicability to contracts
VI. Regulatory Flexibility Act
or subcontracts valued at or below the
SUPPLEMENTARY INFORMATION: simplified acquisition threshold, or Because a notice of proposed
I. Background their applicability to contracts or rulemaking and an opportunity for
subcontracts for the acquisition of public comment are not required to be
This final rule implements the commercial items. given for this rule under 41 U.S.C.
November 20, 2017, designation by the 1707(a)(1) (see section V. of this
Department of State of North Korea as III. Executive Orders 12866 and 13563 preamble), the analytical requirements
a state sponsor of terrorism, in Executive Orders (E.O.) 12866, of the Regulatory Flexibility Act (5
accordance with section 6(j)(1)(A) of the Regulatory Planning and Review, and U.S.C. 601 et seq.) are not applicable.
Export Administration Act of 1979. A E.O. 13563, Improving Regulation and Accordingly, no regulatory flexibility
state sponsor of terrorism is a country, Regulatory Review, direct agencies to analysis is required and none has been
the government of which has repeatedly assess all costs and benefits of available prepared.
provided support for acts of regulatory alternatives and, if regulation
international terrorism. The Department VII. Paperwork Reduction Act
is necessary, to select regulatory
of State previously designated North approaches that maximize net benefits The Paperwork Reduction Act (44
Korea as a state sponsor of terrorism in (including potential economic, U.S.C. chapter 35) does apply. However,
January 1988, but rescinded the environmental, public health and safety the changes to these DFARS provisions,
designation in October 2008. Consistent effects, distributive impacts, and do not impose additional information
with the November 20, 2017, action, equity). E.O. 13563 emphasizes the collection requirements or change the
North Korea is added to the list of importance of quantifying both costs burden under two currently approved
countries that are state sponsors of and benefits, of reducing costs, of collections—OMB Control Number
terrorism in the definition of ‘‘state harmonizing rules, and of promoting 0704–0525, entitled ‘‘Foreign
sponsor of terrorism’’ in paragraph (a) of flexibility. This is a significant Commercial Satellite Services,’’ and
the provisions at DFARS 252.225–7049, regulatory action and, therefore, was OMB Control Number 0704–0187,
Prohibition on Acquisition of subject to review under section 6(b) of entitled ‘‘Information Collection in
Commercial Satellite Services from E.O. 12866, Regulatory Planning and Support of the DoD Acquisition Process
Certain Foreign Entities— Review, dated September 30, 1993. This (Various Miscellaneous Requirements).’’
Representation; and DFARS 252.225– rule is not a major rule under 5 U.S.C. List of Subjects in 48 CFR Part 252
7050, Disclosure of Ownership or 804.
Control by the Government of a Country Government procurement.
that is a State Sponsor of Terrorism. The IV. Executive Order 13771
Jennifer L. Hawes,
provision at DFARS 252.225–7050 This rule is not subject to the Regulatory Control Officer, Defense
implements 10 U.S.C. 2327, which requirements of E.O. 13771, because the Acquisition Regulations System.
prohibits DoD from entering into a rule is issued with respect to a national
contract with a firm that is owned or security function of the United States. Therefore, 48 CFR part 252 is
controlled by the government of a amended as follows:
V. Publication of This Final Rule for
country that is a state sponsor of Public Comment Is Not Required by PART 252—SOLICITATION
terrorism. The provision at 252.225– Statute PROVISIONS AND CONTRACT
7049 implements 10 U.S.C. 2279, which CLAUSES
restricts acquisitions of commercial The statute that applies to the
satellite services from any entity— publication of the Federal Acquisition ■ 1. The authority citation for 48 CFR
• Owned by the government of a Regulation (FAR) is codified at Title 41 part 252 continues to read as follows:
covered foreign country (China, North of the United States Code (formerly
known as the Office of Federal Authority: 41 U.S.C. 1303 and 48 CFR
Korea, or any state sponsor of terrorism); chapter 1.
or Procurement Policy Act). Specifically,
• Planning or expected to provide or 41 U.S.C 1707(a)(1) requires that a 252.225–7049 [Amended]
use launch or other satellite services procurement policy, regulation, ■ 2. Section 252.225–7049 is amended
under the contract from a covered procedure, or form (including an by—
foreign country. amendment or modification thereof) ■ a. In the clause heading, removing the
must be published for public comment date ‘‘(OCT 2015)’’ and adding ‘‘(JAN
II. Applicability to Contracts at or if it relates to the expenditure of
Below the Simplified Acquisition 2018)’’ in its place; and
appropriated funds, and has either a ■ b. In paragraph (a), the definition of
Threshold and for Commercial Items, significant effect beyond the internal
Including Commercially Available Off- ‘‘State sponsor of terrorism’’—
operating procedures of the agency ■ i. Removing ‘‘2405(j)(i)(A))’’ and
sradovich on DSK3GMQ082PROD with RULES

the-Shelf Items issuing the policy, regulation, procedure adding ‘‘2405(j)(1)(A))’’ in its place; and
This rule only updates the list of or form, or has a significant cost or ■ ii. Adding, after ‘‘Iran,’’, the country of
countries that are state sponsors of administrative impact on contractors or ‘‘North Korea’’.
terrorism in the definition of ‘‘state offerors. This final rule is not required
sponsors of terrorism’’ in paragraph (a) to be published for public comment, 252.225–7050 [Amended]
of the DFARS provisions 252.225–7049, because it only adds North Korea to the ■ 3. Section 252.225–7050 is amended
Prohibition on Acquisition of list of countries that fall within the by—

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$Federal Register / Vol. 83, No. 21 / Wednesday, January 31, 2018 / Rules and Regulations 4449 ■ a. In the clause heading, removing the ■ b. In paragraph (a), the definition of after ‘‘Iran,’’, the country of ‘‘North date ‘‘(OCT 2015)’’ and adding ‘‘(JAN ‘‘State sponsor of terrorism’’, adding Korea’’. 2018)’’ in its place; and [FR Doc. 2018–01780 Filed 1–30–18; 8:45 am] BILLING CODE 5001–06–P sradovich on DSK3GMQ082PROD with RULES VerDate Sep<11>2014 16:53 Jan 30, 2018 Jkt 244001 PO 00000 Frm 00037 Fmt 4700 Sfmt 9990 E:\FR\FM\31JAR1.SGM 31JAR1$

Document Created: 2018-01-31 00:57:44
Document Modified: 2018-01-31 00:57:44

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		Rules and Regulations
Action		Final rule.
Dates		Effective January 31, 2018.
Contact		Ms. Amy Williams, telephone 571-372- 6106.
FR Citation		83 FR 4447
RIN Number		0750-AJ68

83 FR 4447 - Defense Federal Acquisition Regulation Supplement: State Sponsor of Terrorism-North Korea (DFARS Case 2018-D004)

DEPARTMENT OF DEFENSEDefense Acquisition Regulations System

Federal Register Volume 83, Issue 21 (January 31, 2018)

DEPARTMENT OF DEFENSE
Defense Acquisition Regulations System