Rule2023-01295
Defense Federal Acquisition Regulation Supplement: Restriction on Acquisition of Personal Protective Equipment and Certain Items From Non-Allied Foreign Nations (DFARS Case 2022-D009)
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Published
January 31, 2023
Effective
January 31, 2023
Issuing agencies
Defense DepartmentDefense Acquisition Regulations System
Abstract
DoD is issuing an interim rule amending the Defense Federal Acquisition Regulation Supplement (DFARS) to implement a section of the National Defense Authorization Act for Fiscal Year 2022 that restricts the acquisition of personal protective equipment and certain other items from the Democratic People's Republic of North Korea, the People's Republic of China, the Russian Federation, and the Islamic Republic of Iran.
Full Text
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<title>Federal Register, Volume 88 Issue 20 (Tuesday, January 31, 2023)</title>
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<body><pre>
[Federal Register Volume 88, Number 20 (Tuesday, January 31, 2023)]
[Rules and Regulations]
[Pages 6600-6604]
From the Federal Register Online via the Government Publishing Office [<a href="http://www.gpo.gov">www.gpo.gov</a>]
[FR Doc No: 2023-01295]
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DEPARTMENT OF DEFENSE
Defense Acquisition Regulations System
48 CFR Parts 212, 225, and 252
[Docket DARS-2023-0003]
RIN 0750-AL60
Defense Federal Acquisition Regulation Supplement: Restriction on
Acquisition of Personal Protective Equipment and Certain Items From
Non-Allied Foreign Nations (DFARS Case 2022-D009)
AGENCY: Defense Acquisition Regulations System, Department of Defense
(DoD).
ACTION: Interim rule.
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SUMMARY: DoD is issuing an interim rule amending the Defense Federal
Acquisition Regulation Supplement (DFARS) to implement a section of the
National Defense Authorization Act for Fiscal Year 2022 that restricts
the acquisition of personal protective equipment and certain other
items from the Democratic People's Republic of North Korea, the
People's Republic of China, the Russian Federation, and the Islamic
Republic of Iran.
DATES: Effective January 31, 2023.
Comments on the interim rule should be submitted in writing to the
address shown below on or before April 3, 2023, to be considered in the
formation of a final rule.
ADDRESSES: Submit comments identified by DFARS Case 2022-D009, using
any of the following methods:
[cir] Federal eRulemaking Portal: <a href="https://www.regulations.gov">https://www.regulations.gov</a>.
Search for ``DFARS Case 2022-D009.'' Select ``Comment'' and follow the
instructions to submit a comment. Please include your name, company
name (if any), and ``DFARS Case 2022-D009'' on any attached documents.
[cir] Email: <a href="/cdn-cgi/l/email-protection#b1dec2d59fd5d7d0c3c2f1dcd0d8dd9fdcd8dd"><span class="__cf_email__" data-cfemail="3f504c5b115b595e4d4c7f525e565311525653">[email protected]</span></a>. Include DFARS Case 2022-D009 in
the subject line of the message.
Comments received generally will be posted without change to
<a href="https://www.regulations.gov">https://www.regulations.gov</a>, including any personal information
provided. To confirm receipt of your comment(s), please check <a href="https://www.regulations.gov">https://www.regulations.gov</a>, approximately two to three days after submission
to verify posting.
FOR FURTHER INFORMATION CONTACT: Ms. Kimberly Bass, telephone 703-717-
3446.
SUPPLEMENTARY INFORMATION:
I. Background
This interim rule revises the DFARS to implement section 802 of the
National Defense Authorization Act (NDAA) for Fiscal Year (FY) 2022
(Pub. L. 117-81) (10 U.S.C. 2533e) and section 881 of the NDAA for FY
2023 (Pub. L. 117-263). Section 802 adds the restriction to 10 U.S.C.
2533e (transferred to 10 U.S.C. 4875) that limits the acquisition of
``covered items'' (personal protective equipment and certain other
items) from any of the following ``covered countries'': the Democratic
People's Republic of North Korea, the People's Republic of China, the
Russian Federation, and the Islamic Republic of Iran, subject to
exceptions. ``Covered item'' is defined as an article or item of--
[[Page 6601]]
(1) Personal protective equipment for use in preventing spread of
disease, such as by exposure to infected individuals or contamination
or infection by infectious material including--
<bullet> Nitrile and vinyl gloves;
<bullet> Surgical masks;
<bullet> Respirator masks and powered air purifying respirators and
required filters;
<bullet> Face shields and protective eyewear;
<bullet> Surgical and isolation gowns and head and foot coverings;
or
<bullet> Clothing; and
<bullet> The materials and components thereof, other than sensors,
electronics, or other items added to and not normally associated with,
such personal protective equipment or clothing; or
(2) Sanitizing and disinfecting wipes, testing swabs, gauze, and
bandages.
Section 802 amends section 1870(d) of the NDAA for FY 2021 (Pub. L.
116-283) by providing for the future transfer of 10 U.S.C. 2533e to 10
U.S.C. 4875. However, the chapter that would have included 10 U.S.C.
2533e had already been repealed as part of the reorganization of the
defense acquisition statutes (Title XVIII of the NDAA for FY 2021). As
a result, section 2533e could not be added to title 10 of the U.S.
Code. Section 881 of the NDAA for FY 2023 adjusts the effective date of
section 802(b) of the NDAA for FY 2022 to allow for the addition of
section 2533e to title 10 and the subsequent transfer to 10 U.S.C.
4875.
II. Discussion and Analysis
A. Definitions
The interim rule adds a definition at DFARS 225.7023-1,
Definitions, for ``covered item'' and adds the definition of ``covered
country'' at 225.7001, Definitions. The restriction limits the
acquisition of a covered item from a covered country, subject to
exceptions.
The definition of ``covered country'' applies to this rule and
continues to apply to the restriction at DFARS 225.7018 on the
acquisition of certain magnets, tantalum, and tungsten. Accordingly,
the definition of ``covered country'' is moved from DFARS section
225.7018-1 to 225.7001 to apply at the subpart level.
B. Restriction
The restriction on the acquisition of a covered item from a covered
country is added at DFARS 225.7023-2 in accordance with the
requirements of section 802 of the NDAA for FY 2022.
C. Exceptions
The exceptions to the restriction at DFARS 225.7023-2 are added at
DFARS 225.7023-3. The restriction does not apply to an acquisition for:
(1) a covered item for use outside of the United States; (2)
acquisitions at or below $150,000; or (3) if the head of the
contracting activity determines that a covered item of satisfactory
quality and quantity, in the required form, cannot be procured as and
when needed from nations other than a covered country to meet
requirements at a reasonable price.
D. Contract Clause
A new clause is added at DFARS 252.225-7061, Restriction on the
Acquisition of Personal Protective Equipment and Certain Other Items
from Non-Allied Foreign Nations, for use in solicitations and
contracts, including solicitations and contracts using Federal
Acquisition Regulation (FAR) part 12 procedures for the acquisition of
commercial items, with an estimated value above $150,000 that are for
the acquisition of covered items and are for use within the United
States.
This rule also adds the new clause 252.225-7061, Restriction on the
Acquisition of Personal Protective Equipment and Certain Other Items
from Non-Allied Foreign Nations, to the list of solicitation provisions
and contract clauses for the acquisition of commercial items at DFARS
212.301(f).
III. Applicability to Contracts at or Below the Simplified Acquisition
Threshold (SAT) and for Commercial Products, Including Commercially
Available Off-the-Shelf (COTS) Items, and Commercial Services
This rule creates a new contract clause at 252.225-7061,
Restriction on the Acquisition of Personal Protective Equipment and
Certain Other Items from Non-Allied Foreign Nations. The clause at
DFARS 252.225-7061 is prescribed at DFARS 225.7023-4 for use in
solicitations and contracts, including solicitations and contracts
using FAR part 12 procedures for the acquisition of commercial items,
with an estimated value above $150,000 that are for the acquisition of
covered items for use within the United States. DoD is applying the
rule to contracts valued above $150,000 but at or below the SAT. DoD is
applying the rule to contracts for the acquisition of commercial items,
including COTS items.
A. Applicability to Contracts at or Below the Simplified Acquisition
Threshold
41 U.S.C. 1905 governs the applicability of laws to contracts or
subcontracts in amounts not greater than the simplified acquisition
threshold. It is intended to limit the applicability of laws to such
contracts or subcontracts. 41 U.S.C. 1905 provides that if a provision
of law contains criminal or civil penalties, or if the Federal
Acquisition Regulatory Council makes a written determination that it is
not in the best interest of the Federal Government to exempt contracts
or subcontracts at or below the SAT, the law will apply to them. The
Principal Director, Defense Pricing and Contracting (DPC), is the
appropriate authority to make comparable determinations for regulations
to be published in the DFARS, which is part of the FAR system of
regulations. DoD has made that determination. Therefore, this rule
applies to contracts valued above $150,000 but at or below the SAT.
B. Applicability to Contracts for the Acquisition of Commercial
Products, Including COTS Items, and Commercial Services
10 U.S.C. 3452 exempts contracts and subcontracts for the
acquisition of commercial products, including COTS items, and
commercial services from provisions of law enacted after October 13,
1994, unless the Under Secretary of Defense (Acquisition and
Sustainment) (USD(A&S)) makes a written determination that it would not
be in the best interest of DoD to exempt contracts for the procurement
of commercial products and commercial services from the applicability
of the provision or contract requirement, except for a provision of law
that--
<bullet> Provides for criminal or civil penalties;
<bullet> Requires that certain articles be bought from American
sources pursuant to 10 U.S.C. 4862, or that strategic materials
critical to national security be bought from American sources pursuant
to 10 U.S.C. 4863; or
<bullet> Specifically refers to 10 U.S.C. 3452 and states that it
shall apply to contracts and subcontracts for the acquisition of
commercial products (including COTS items) and commercial services.
The statute implemented in this rule does not impose criminal or
civil penalties, does not require purchase pursuant to 10 U.S.C. 4862
or 4863, and does not refer to 10 U.S.C. 3452. Therefore, section 802
of the NDAA for FY 2022 will not apply to the acquisition of commercial
services or commercial products including COTS items unless a written
determination is made. Due to delegations of authority, the Principal
Director, DPC is the appropriate authority to make this determination.
DoD has made that determination. Therefore, this rule
[[Page 6602]]
applies to the acquisition of commercial products, including COTS
items.
C. Determination
Although section 802 of the NDAA for FY 2022 does not refer to 10
U.S.C. 3452 and state that it shall apply to contracts and subcontracts
for the acquisition of commercial products (including COTS items) and
commercial services, it is the clear intent of the statute to cover
commercial products and commercial services other than those
specifically excepted. Personal protective equipment is mainly
commercial. Therefore, section 802 should apply to contracts for the
acquisition of commercial products including COTS items and commercial
services for acquisitions above $150,000.
Decreasing DoD's dependence on personal protective equipment and
other items identified in section 802 that originate in the covered
countries is a matter of public health and national security. As a
matter of national security, the domestic supply chain for personal
protective equipment and certain other items identified in section 802
is critical, and adequate continued supply of personal protective
equipment and certain other items is vital to ensure domestic control
with minimal disruption in production. Eradicating counterfeit items
within the domestic supply chain is required to accommodate the demand
for both DoD military use and nonmilitary Government requirements that
DoD supports.
A shortage of supply of personal protective equipment and certain
other items would put at risk public health and the safety and well-
being of the general public and would hinder DoD's mission readiness.
Restricting acquisition from the covered countries will promote growth
in domestic capability and reduce dependence on foreign sources that
are not our allies. An exception for contracts for the acquisition of
commercial products, including COTS items, would exclude the contracts
intended to be covered by the law, thereby undermining the overarching
public policy purpose of the law.
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.
V. Congressional Review Act
As required by the Congressional Review Act (5 U.S.C. 801-808)
before an interim or final rule takes effect, DoD will submit a copy of
the interim or final rule with the form, Submission of Federal Rules
under the Congressional Review Act, to the U.S. Senate, the U.S. House
of Representatives, and the Comptroller General of the United States. A
major rule under the Congressional Review Act cannot take effect until
60 days after it is published in the Federal Register. The Office of
Information and Regulatory Affairs has determined that this rule is not
a major rule as defined by 5 U.S.C. 804.
VI. Regulatory Flexibility Act
DoD does not expect this interim 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, there may be minor compliance costs to validate the origin of
covered items, materials, and components. An initial regulatory
flexibility analysis has been performed and is summarized as follows:
This rule is required to implement section 802 of the National
Defense Authorization Act (NDAA) for Fiscal Year (FY) 2022 (Pub. L.
117-81) (10 U.S.C. 2533e, transferred to 10 U.S.C. 4875).
The objective of the rule is to implement the restriction provided
by section 802 on the acquisition of a covered item, defined as an
article or item of personal protective equipment for use in preventing
the spread of disease, such as by exposure to infected individuals or
contamination or infection by infectious material, or other items for
sanitizing and disinfecting, testing, gauze, and bandages, from the
Democratic People's Republic of North Korea, the People's Republic of
China, the Russian Federation, or the Islamic Republic of Iran.
Based on data from the Federal Procurement Data System for FY 2019,
2020, and 2021, DoD awarded an average of 1,677 contracts in the United
States that equaled or exceeded $150,000 in value and were for the
acquisition of medical, dental, veterinary equipment and supplies
(excluding covered items for use outside the United States). These
contracts were awarded to 192 unique entities, of which 105 were small
entities. It is not known what percentage of these awards might involve
personal protective equipment and other materials and components from
the Democratic People's Republic of North Korea, the People's Republic
of China, the Russian Federation, or the Islamic Republic of Iran.
There are no projected reporting or recordkeeping requirements.
However, there may be minor compliance costs to validate with suppliers
the origin of covered items, materials, and components.
The rule does not duplicate, overlap, or conflict with any other
Federal rules.
In accordance with section 802, DoD is excepting acquisitions--
<bullet> Equal to or less than $150,000;
<bullet> For covered items for use outside the United States; and
<bullet> If a covered item of satisfactory quality and quantity is
not available in the required form from nations other than the
Democratic People's Republic of North Korea, the People's Republic of
China, the Russian Federation, or the Islamic Republic of Iran.
DoD was unable to identify any other alternatives that would reduce
burden on small businesses and still meet the objectives of the
statute.
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 2022-D009), in
correspondence.
VII. Paperwork Reduction Act
This rule does not contain any information collection requirements
that require the approval of the Office of Management and Budget under
the Paperwork Reduction Act (44 U.S.C. chapter 35).
VIII. Determination To Issue an Interim Rule
A determination has been made under the authority of the Secretary
of Defense that urgent and compelling reasons exist to promulgate this
interim rule without prior opportunity for public comment. This action
is necessary because section 802 adds the restriction in 10 U.S.C.
2533e (transferred to 10 U.S.C. 4875), with certain exceptions, that
DoD may not acquire covered items of personal protective equipment
(PPE) and certain
[[Page 6603]]
other items from any of the following covered countries: the Democratic
People's Republic of North Korea; the People's Republic of China; the
Russian Federation; and the Islamic Republic of Iran.
Implementation of this restriction is urgent, because the law was
effective upon enactment. Decreasing DoD's dependence on PPE and other
items as identified in section 802 that originate in the covered
countries is a matter of public health and national security. PPE is
mainly commercial. It is a matter of national security to reduce U.S.
dependence on the covered countries, because the domestic supply chain
for PPE and certain other items is critical, and adequate continued
supply of PPE and certain other items is vital to ensure domestic
control with minimal disruption in production. Eradication of
counterfeit items within the domestic supply chain is required to
accommodate the demand for both DoD military use and nonmilitary
Government requirements that DoD supports and to ensure DoD's mission
readiness.
A shortage of supply of PPE and certain other items would put at
risk public health and the safety and well-being of the general public
and would hinder DoD's mission readiness. Restricting acquisition of
these items from covered countries will promote growth in domestic
capability and reduce dependence on foreign sources that are not our
allies.
However, pursuant to 41 U.S.C. 1707 and FAR 1.501-3(b), DoD will
consider public comments received in response to this interim rule in
the formation of the final rule.
List of Subjects in 48 CFR Parts 212, 225, and 252
Government procurement.
Jennifer D. Johnson,
Editor/Publisher, Defense Acquisition Regulations System.
Therefore, 48 CFR parts 212, 225, and 252 are 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 PRODUCTS AND COMMERCIAL
SERVICES
0
2. Amend section 212.301 by adding paragraph (f)(x)(MM) to read as
follows:
212.301 Solicitation provisions and contract clauses for the
acquisition of commercial products and commercial services.
* * * * *
(f) * * *
(x) * * *
(MM) Use the clause at 252.225-7061, Restriction on the Acquisition
of Personal Protective Equipment and Certain Other Items from Non-
Allied Foreign Nations, as prescribed in 225.7023-4, to comply with
section 802 of the National Defense Authorization Act for Fiscal Year
2022 (Pub. L. 117-81) (10 U.S.C. 4875).
* * * * *
PART 225--FOREIGN ACQUISITION
0
3. Amend section 225.7001 by adding a definition of ``Covered
country'', in alphabetical order, to read as follows:
225.7001 Definitions.
* * * * *
Covered country means--
(1) The Democratic People's Republic of North Korea;
(2) The People's Republic of China;
(3) The Russian Federation; and
(4) The Islamic Republic of Iran (10 U.S.C. 4872 and 4875).
* * * * *
225.7018-1 [Amended]
0
4. Amend section 225.7018-1 by removing the definition of ``Covered
country''.
0
5. Add sections 225.7023, 225.7023-1, 225.7023-2, 225.7023-3, and
225.7023-4 to read as follows:
* * * * *
Sec.
225.7023 Restriction on acquisition of personal protective equipment
and certain other items from non-allied foreign nations.
225.7023-1 Definitions.
225.7023-2 Restriction.
225.7023-3 Exceptions.
225.7023-4 Contract clause.
* * * * *
225.7023 Restriction on acquisition of personal protective equipment
and certain other items from non-allied foreign nations.
225.7023-1 Definitions.
As used in this section--
Covered item means an article or item of--
(1) Personal protective equipment for use in preventing spread of
disease, such as by exposure to infected individuals or contamination
or infection by infectious material, including--
(i) Nitrile and vinyl gloves;
(ii) Surgical masks;
(iii) Respirator masks and powered air purifying respirators and
required filters;
(iv) Face shields and protective eyewear;
(v) Surgical and isolation gowns and head and foot coverings; or
(vi) Clothing; and
(vii) The materials and components thereof, other than sensors,
electronics, or other items added to and not normally associated with
such personal protective equipment or clothing; or
(2) Sanitizing and disinfecting wipes, testing swabs, gauze, and
bandages.
225.7023-2 Restriction.
Except as provided in 225.7023-3, do not acquire a covered item
from a covered country in accordance with section 802 of the National
Defense Authorization Act for Fiscal Year 2022 (Pub. L. 117-81) (10
U.S.C. 4875).
225.7023-3 Exceptions.
The restriction in section 225.7023-2 does not apply to
acquisitions--
(a) Of covered items for use outside of the United States;
(b) At or below $150,000; or
(c)(1) If the head of the contracting activity determines that a
covered item of satisfactory quality and quantity, in the required
form, cannot be procured as and when needed from nations other than a
covered country to meet requirements at a reasonable price.
(2) The contracting officer shall include a copy of any such
determination in the contract file.
225.7023-4 Contract clause.
Unless an exception applies, use the clause at 252.225-7061,
Restriction on the Acquisition of Personal Protective Equipment and
Certain Other Items from Non-Allied Foreign Nations, in solicitations
and contracts, including solicitations and contracts using FAR part 12
procedures for the acquisition of commercial products, including COTS
items, and commercial services, and that--
(a) Are for the acquisition of covered items;
(b) Are for use within the United States; and
(c) Have an estimated value greater than $150,000.
PART 252--SOLICITATION PROVISIONS AND CONTRACT CLAUSES
0
6. Add section 252.225-7061 to read as follows:
[[Page 6604]]
252.225-7061 Restriction on the Acquisition of Personal Protective
Equipment and Certain Other Items from Non-Allied Foreign Nations.
As prescribed in 225.7023-4, use the following clause:
Restriction on the Acquisition of Personal Protective Equipment and
Certain Other Items From Non-Allied Foreign Nations (Jan 2023)
(a) Definitions. As used in this clause--
Covered country means--
(1) The Democratic People's Republic of North Korea;
(2) The People's Republic of China;
(3) The Russian Federation; and
(4) The Islamic Republic of Iran.
Covered item means an article or item of--
(1) Personal protective equipment for use in preventing spread
of disease, such as by exposure to infected individuals or
contamination or infection by infectious material, including--
(i) Nitrile and vinyl gloves;
(ii) Surgical masks;
(iii) Respirator masks and powered air purifying respirators and
required filters;
(iv) Face shields and protective eyewear;
(v) Surgical and isolation gowns and head and foot coverings; or
(vi) Clothing; and
(vii) The materials and components thereof, other than sensors,
electronics, or other items added to and not normally associated
with such personal protective equipment or clothing; or
(2) Sanitizing and disinfecting wipes, testing swabs, gauze, and
bandages.
(b) Restriction. The Contractor shall not deliver under this
contract a covered item from a covered country (10 U.S.C. 4875).
(c) Subcontracts. The Contractor shall insert this clause,
including this paragraph (c), without alteration other than to
identify the appropriate parties, in subcontracts valued above
$150,000 that are for the acquisition of covered items, including
subcontracts for commercial products, including commercially
available off-the-shelf items, and commercial services.
(End of clause)
[FR Doc. 2023-01295 Filed 1-30-23; 8:45 am]
BILLING CODE 5001-06-P
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