[Federal Register Volume 79, Number 238 (Thursday, December 11, 2014)]
[Rules and Regulations]
[Pages 73488-73490]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2014-28819]
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DEPARTMENT OF DEFENSE
Defense Acquisition Regulations System
48 CFR Parts 204, 209, 212, 225, and 252
RIN 0750-AI34
Defense Federal Acquisition Regulation Supplement: State Sponsors
of Terrorism (DFARS Case 2014-D014)
AGENCY: Defense Acquisition Regulations System, Department of Defense
(DoD).
ACTION: Final rule.
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SUMMARY: DoD is issuing a final rule amending the Defense Federal
Acquisition Regulation Supplement (DFARS) to clarify and relocate text
relating to state sponsors of terrorism (as identified by the
Department of State), add an explicit representation, and conform the
terminology.
DATES: Effective December 11, 2014.
FOR FURTHER INFORMATION CONTACT: Ms. Amy G. Williams, telephone 571-
372-6106.
SUPPLEMENTARY INFORMATION:
I. Background
DoD published a proposed rule in the Federal Register at 79 FR
45666 on August 5, 2014, to clarify and relocate coverage relating to
state sponsors of terrorism (as identified by the Department of State),
add an explicit representation, and conform the terminology. No
respondents submitted public comments in response to the proposed rule.
This rule is part of DoD's retrospective plan, completed in August
2011, under Executive Order 13563, ``Improving Regulation and
Regulatory Review.'' DoD's full plan and updates can be accessed at:
http://www.regulations.gov/#!docketDetail;dct=FR+PR+N+O+SR;rpp=10;po=0;D=DOD-2011-OS-0036.
II. Discussion and Analysis
No public comments were received. The final rule is the same as the
proposed rule, except for minor edits.
III. Executive Orders 12866 and 13563
Executive Orders (E.O.s) 12866 and 13563 direct agencies to assess
all costs and benefits of available regulatory alternatives and, if
regulation is necessary, to select regulatory approaches that maximize
net benefits (including potential economic, environmental, public
health and safety effects, distributive impacts, and equity). E.O.
13563 emphasizes the importance of quantifying both costs and benefits,
of reducing costs, of harmonizing rules, and of promoting flexibility.
This is not a significant regulatory action and, therefore, was not
subject to review under section 6(b) of E.O. 12866, Regulatory Planning
and Review, dated September 30, 1993. This rule is not a major rule
under 5 U.S.C. 804.
IV. Regulatory Flexibility Act
DoD certifies that this rule will not have a significant economic
impact on a substantial number of small entities within the meaning of
the Regulatory Flexibility Act, 5 U.S.C. 601, et seq., because this
rule will only have an impact on a firm, or a subsidiary of a firm, in
which the government of a country that is a state sponsor of terrorism
has a significant interest.
The number of domestic entities significantly impacted by this rule
will be minimal, if any. For the definition of ``small business,'' the
Regulatory Flexibility Act refers to the Small Business Act, which in
turn allows the U.S. Small Business Administration (SBA) Administrator
to specify detailed definitions or standards (5 U.S.C. 601(3) and 15
U.S.C. 632(a)). The SBA regulations at 13 CFR 121.105 discuss who is a
small business: ``(a)(1) Except for small agricultural cooperatives, a
business concern eligible for assistance from SBA as a small business
is a business entity organized for profit, with a place of business
located in the United States, and which operates primarily within the
United States or which makes a significant contribution to the U.S.
economy through payment of taxes or use of American products, materials
or labor.''
V. 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-
0187, entitled ``Information Collection in Support of the DoD
Acquisition Process (Various Miscellaneous Requirements).'' This final
rule removes provision 252.209-7001, Disclosure of Ownership or Control
by the Government of a Terrorist Country, and replaces it with
provision 252.225-7050, Disclosure of Ownership or Control by the
Government of a Country that is a State Sponsor of Terrorism. The
burden in clearance 0704-0187 previously associated with the provision
252.209-7001, which is now associated with provision 252.225-7050,
remains unchanged and is estimated at 1 hour, because such disclosure
occurs rarely, if ever. 10 U.S.C. prohibits award to a firm or a
subsidiary of a firm if the government of country that is a state
sponsor of terrorism has a significant interest in the firm or
subsidiary, unless the Secretary of Defense grants a waiver.
[[Page 73489]]
List of Subjects in 48 CFR Parts 204, 209, 212, 225, and 252
Government procurement.
Manuel Quinones,
Editor, Defense Acquisition Regulations System.
Therefore, 48 CFR parts 204, 209, 212, 225, and 252 are proposed to
be amended as follows:
0
1. The authority citation for parts 204, 209, 212, 225, and 252
continues to read as follows:
Authority: 41 U.S.C. 1303 and 48 CFR chapter 1.
PART 204--ADMINISTRATIVE MATTERS
0
2. Amend section 204.1202 by--
0
a. Removing paragraph (2)(i);
0
b. Redesignating paragraphs (2)(ii) through (x) as (2)(i) though (ix),
respectively; and
0
c. Adding new paragraph (2)(x) to read as follows:
204.1202 Solicitation provision.
* * * * *
(2) * * *
(x) 252.225-7050, Disclosure of Ownership or Control by the
Government of a Country that is a State Sponsor of Terrorism.
* * * * *
PART 209--CONTRACTOR QUALIFICATIONS
0
3. Amend section 209.104-1, by revising paragraph (g)(i) to read as
follows:
209.104-1 General standards.
* * * * *
(g)(i) Ownership or control by the government of a country that is
a state sponsor of terrorism. (See 225.771.)
* * * * *
0
4. Revise section 209.104-70 to read as follows:
209.104-70 Solicitation provision.
Use the provision at 252.209-7002, Disclosure of Ownership or
Control by a Foreign Government, in all solicitations, including those
subject to the procedures in FAR part 13, when access to proscribed
information is necessary for contract performance. If the solicitation
includes the provision at FAR 52.204-7, do not separately list the
provision 252.209-7002 in the solicitation.
0
5. Amend section 209.405, by revising paragraph (b)(i) to read as
follows:
209.405 Effect of listing.
* * * * *
(b)(i) The Procurement Cause and Treatment Code ``H'' annotation in
the Exclusions section of the System for Award Management (SAM
Exclusions) identifies contractor facilities where no part of a
contract or subcontract may be performed because of a violation of the
Clean Air Act (42 U.S.C. 7606) or the Clean Water Act (33 U.S.C. 1368).
* * * * *
0
6. Revise section 209.405-2 to read as follows:
209.405-2 Restrictions on subcontracting.
(a) The contracting officer shall not consent to any subcontract
with a firm, or a subsidiary of a firm, that is identified by the
Secretary of Defense in SAM Exclusions as being owned or controlled by
the government of a country that is a state sponsor of terrorism unless
the agency head states in writing the compelling reasons for the
subcontract. (See also 225.771.)
0
7. Revise section 209.409 to read as follows:
209.409 Solicitation provision and contract clause.
Use the clause at 252.209-7004, Subcontracting with Firms that are
Owned or Controlled by the Government of a Country that is a State
Sponsor of Terrorism, in solicitations and contracts with a value of
$150,000 or more.
PART 212--ACQUISITION OF COMMERCIAL ITEMS
0
8. Amend section 212.301 by--
0
a. Removing paragraph (f)(xi);
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b. Redesignating paragraphs (f)(xii) through (xlviii) as (xi) through
(xlvii); and
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b. Adding a new paragraph (f)(xlviii) to read as follows:
212.301 Solicitation provisions and contract clauses for the
acquisition of commercial items.
(f) * * * * *
(xlviii) Use the provision at 252.225-7050, Disclosure of Ownership
or Control by the Government of a Country that is a State Sponsor of
Terrorism, as prescribed in 225.771-5, to comply with 10 U.S.C.
2327(b).
* * * * *
PART 225--FOREIGN ACQUISITION
225.701 [Amended]
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9. In section 225.701, remove the section text.
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10. Add sections 225.771, 225.771-0, 225.771-1, 225.771-2, 225.771-3,
225.771-4, and 225.771-5 to subpart 225.7 to read as follows:
225.771 Prohibition on contracting or subcontracting with a firm that
is owned or controlled by the government of a country that is a state
sponsor of terrorism.
225.771-0 Scope.
This section implements 10 U.S.C. 2327(b).
225.771-1 Definition.
``State sponsor of terrorism,'' as used in this section, is defined
in the provision at 252.225-7050, Disclosure of Ownership or Control by
the Government of a Country that is a State Sponsor of Terrorism.
225.771-2 Prohibition.
(a) The contracting officer shall not award a contract of $150,000
or more to a firm when a foreign government that is a state sponsor of
terrorism owns or controls, either directly or indirectly, a
significant interest in--
(i) The firm;
(ii) A subsidiary of the firm; or
(iii) Any other firm that owns or controls the firm.
(b) For restrictions on subcontracting with a firm, or a subsidiary
of a firm, that is identified by the Secretary of Defense as being
owned or controlled by the government of a country that is a state
sponsor of terrorism, see 209.405-2.
225.771-3 Notification.
Any disclosure that the government of a country that is a state
sponsor of terrorism has a significant interest in an offeror, a
subsidiary of an offeror, or any other firm that owns or controls an
offeror shall be forwarded through agency channels to the address at
PGI 225.771-3.
225.771-4 Waiver of prohibition.
The prohibition in 225.771-2 may be waived if the Secretary of
Defense determines that a waiver is not inconsistent with the national
security objectives of the United States in accordance with 10 U.S.C.
2327(c).
225.771-5 Solicitation provision.
Use the provision at 252.225-7050, Disclosure of Ownership or
Control by the Government of a Country that is a State Sponsor of
Terrorism, in solicitations, including solicitations using FAR part 12
procedures for the acquisition of commercial items (other than
commercial satellite services), that are expected to result in
contracts of $150,000 or more. If the solicitation includes the
provision at FAR 52.204-7, do not separately list the provision
252.225-7050 in the solicitation.
[[Page 73490]]
PART 252--SOLICITATION PROVISIONS AND CONTRACT CLAUSES
0
11. Amend section 252.204-7007 by--
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a. Removing the clause date ``(AUG 2014)'' and adding ``(DEC 2014)'' in
its place;
0
b. Removing paragraph (d)(1)(i);
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c. Redesignating paragraphs (d)(1)(ii) through (v) as (d)(1)(i) through
(iv); and
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d. Adding a new paragraph (d)(1)(v).
The addition reads as follows:
252.204-7007 Alternate A, Annual Representations and Certifications.
* * * * *
(d)(1) * * *
(v) 252.225-7050, Disclosure of Ownership or Control by the
Government of a Country that is a State Sponsor of Terrorism. Applies
to all solicitations expected to result in contracts of $150,000 or
more.
* * * * *
252.209-7001 [Removed and Reserved]
0
12. Remove and reserve section 252.209-7001.
252.209-7002 [Amended]
0
13. Amend section 252.209-7002 introductory text by removing ``209.104-
70(b)'' and adding ``209.104-70'' in its place.
0
14. Revise section 252.209-7004 to read as follows:
252.209-7004 Subcontracting with Firms that are Owned or Controlled by
the Government of a Country that is a State Sponsor of Terrorism.
As prescribed in 209.409, use the following clause:
SUBCONTRACTING WITH FIRMS THAT ARE OWNED OR CONTROLLED BY THE
GOVERNMENT OF A COUNTRY THAT IS A STATE SPONSOR OF TERRORISM (DEC 2014)
(a) Unless the Government determines that there is a compelling
reason to do so, the Contractor shall not enter into any subcontract
in excess of $30,000 with a firm, or a subsidiary of a firm, that is
identified in the Exclusions section of the System for Award
Management System (SAM Exclusions) as being ineligible for the award
of Defense contracts or subcontracts because it is owned or
controlled by the government of a country that is a state sponsor of
terrorism.
(b) A corporate officer or a designee of the Contractor shall
notify the Contracting Officer, in writing, before entering into a
subcontract with a party that is identified, in SAM Exclusions, as
being ineligible for the award of Defense contracts or subcontracts
because it is owned or controlled by the government of a country
that is a state sponsor of terrorism. The notice must include the
name of the proposed subcontractor and the compelling reason(s) for
doing business with the subcontractor notwithstanding its inclusion
in SAM Exclusions.
(End of clause)
0
15. Add section 252.225-7050 to read as follows:
252.225-7050 Disclosure of Ownership or Control by the Government of a
Country that is a State Sponsor of Terrorism.
As prescribed in 225.771-5, use the following provision:
DISCLOSURE OF OWNERSHIP OR CONTROL BY THE GOVERNMENT OF A COUNTRY THAT
IS A STATE SPONSOR OF TERRORISM (DEC 2014)
(a) Definitions. As used in this provision--
Government of a country that is a state sponsor of terrorism
includes the state and the government of a country that is a state
sponsor of terrorism, as well as any political subdivision, agency,
or instrumentality thereof.
Significant interest means--
(i) Ownership of or beneficial interest in 5 percent or more of
the firm's or subsidiary's securities. Beneficial interest includes
holding 5 percent or more of any class of the firm's securities in
``nominee shares,'' ``street names,'' or some other method of
holding securities that does not disclose the beneficial owner;
(ii) Holding a management position in the firm, such as a
director or officer;
(iii) Ability to control or influence the election, appointment,
or tenure of directors or officers in the firm;
(iv) Ownership of 10 percent or more of the assets of a firm
such as equipment, buildings, real estate, or other tangible assets
of the firm; or
(v) Holding 50 percent or more of the indebtedness of a firm.
State sponsor of terrorism means a country determined by the
Secretary of State, under section 6(j)(1)(A) of the Export
Administration Act of 1979 (50 U.S.C. App. 2405(j)(1)(A)), to be a
country the government of which has repeatedly provided support for
acts of international terrorism. As of the date of this provision,
state sponsors of terrorism include: Cuba, Iran, Sudan, and Syria.
(b) Prohibition on award. In accordance with 10 U.S.C. 2327,
unless a waiver is granted by the Secretary of Defense, no contract
may be awarded to a firm if the government of a country that is a
state sponsor of terrorism owns or controls a significant interest
in--
(1) The firm;
(2) A subsidiary of the firm; or
(3) Any other firm that owns or controls the firm.
(c) Representation. Unless the Offeror submits with its offer
the disclosure required in paragraph (d) of this provision, the
Offeror represents, by submission of its offer, that the government
of a country that is a state sponsor of terrorism does not own or
control a significant interest in--
(1) The Offeror;
(2) A subsidiary of the Offeror; or
(3) Any other firm that owns or controls the Offeror.
(d) Disclosure. (1) The Offeror shall disclose in an attachment
to its offer if the government of a country that is a state sponsor
of terrorism owns or controls a significant interest in the Offeror;
a subsidiary of the Offeror; or any other firm that owns or controls
the Offeror.
(2) The disclosure shall include--
(i) Identification of each government holding a significant
interest; and
(ii) A description of the significant interest held by each
government.
(End of provision)
[FR Doc. 2014-28819 Filed 12-10-14; 8:45 am]
BILLING CODE 5001-06-P