Rule2023-23432
Defense Federal Acquisition Regulation Supplement: Restrictions on Overhaul and Repair of Naval Vessels in Foreign Shipyards (DFARS Case 2021-D021)
Primary source
Metadata and text below are from the Federal Register, a public-domain U.S. government work. Always verify the official published version before relying on it for any legal matter.
Published
October 25, 2023
Effective
October 30, 2023
Issuing agencies
Defense DepartmentDefense Acquisition Regulations System
Abstract
DoD is issuing a final rule amending the Defense Federal Acquisition Regulation Supplement (DFARS) to implement a section of the National Defense Authorization Act for Fiscal Year 2021 that restricts overhaul and repair of a naval vessel in a shipyard outside the United States or Guam.
Full Text
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<title>Federal Register, Volume 88 Issue 205 (Wednesday, October 25, 2023)</title>
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[Federal Register Volume 88, Number 205 (Wednesday, October 25, 2023)]
[Rules and Regulations]
[Pages 73240-73241]
From the Federal Register Online via the Government Publishing Office [<a href="http://www.gpo.gov">www.gpo.gov</a>]
[FR Doc No: 2023-23432]
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DEPARTMENT OF DEFENSE
Defense Acquisition Regulations System
48 CFR Part 225
[Docket DARS-2023-0006]
RIN 0750-AL39
Defense Federal Acquisition Regulation Supplement: Restrictions
on Overhaul and Repair of Naval Vessels in Foreign Shipyards (DFARS
Case 2021-D021)
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 implement a section of the
National Defense Authorization Act for Fiscal Year 2021 that restricts
overhaul and repair of a naval vessel in a shipyard outside the United
States or Guam.
DATES: Effective October 30, 2023.
FOR FURTHER INFORMATION CONTACT: Kimberly Bass, telephone 703-717-3446.
SUPPLEMENTARY INFORMATION:
I. Background
DoD is issuing a final rule amending the DFARS to implement section
1025 of the National Defense Authorization Act (NDAA) for Fiscal Year
(FY) 2021 (Pub. L. 116-283), which amends 10 U.S.C. 8680(a) to restrict
the overhaul or repair of a naval vessel in a shipyard outside the
United States or Guam. The restriction does not apply to voyage repairs
or to repairs required for damage sustained due to hostile actions or
interventions. In addition, the restriction does not apply to a naval
vessel classified as a littoral combat ship operating on deployment for
corrective and preventive maintenance or repair and facilities
maintenance. The rule also establishes the criteria under which foreign
workers or foreign contractors may be used to perform corrective and
preventive maintenance or repair or facilities maintenance on a naval
vessel.
DoD published a proposed rule in the Federal Register at 88 FR
17360 on March 22, 2023, to revise the DFARS to implement section 1025
of the NDAA for FY 2021. One respondent submitted a public comment in
response to the proposed rule.
II. Discussion and Analysis
DoD reviewed the public comment in the development of the final
rule. A discussion of the comment is provided, as follows:
A. Summary of Significant Changes
No changes are made to the final rule as a result of public
comments.
B. Analysis of Public Comment
Comment: A respondent provided comments with overall support of the
rule and stated it would save money and reduce the need for supplies
and preventative maintenance on ships in foreign shipyards.
Response: DoD acknowledges the respondent's support for the rule.
C. Other Changes
Minor editorial changes are made in paragraph (b) of DFARS
225.7013-2 to comply with drafting conventions.
III. Applicability to Contracts at or Below the Simplified Acquisition
Threshold and for Commercial Products, Including Commercially Available
Off-the-Shelf Items, and Commercial Services
This rule does not create any new solicitation provisions or
contract clauses. It does not impact any existing solicitation
provisions or contract clauses or prescriptions for their use.
IV. Expected Impact of the Rule
Currently, DFARS 225.7013 includes the restrictions on the
construction or repair of vessels in foreign shipyards. This rule adds
the exception for repairs necessary to correct damage sustained due to
hostile actions or interventions and for corrective and preventive
maintenance or repair and facilities maintenance on naval vessels
classified as littoral combat ships operating on deployment. Under
these exceptions, the repairs or maintenance described above may be
performed in a shipyard outside the United States or Guam in accordance
with 10 U.S.C. 8680(a). The rule also specifies the authorized use of
foreign workers under certain conditions when a determination is made
by the Secretary of the Navy, who cannot further delegate the authority
to make such a determination.
V. 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, as amended.
VI. 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.
VII. Regulatory Flexibility Act
A final regulatory flexibility analysis has been prepared
consistent with the Regulatory Flexibility Act, 5 U.S.C. 601, et seq.
and is summarized as follows:
DoD is issuing a final rule amending the DFARS to implement section
1025 of the National Defense Authorization Act (NDAA) for Fiscal Year
(FY) 2021 (Pub. L. 116-283). Section 1025 amends 10 U.S.C. 8680(a) to
restrict the overhaul or repair of a naval vessel in a shipyard outside
the United States or Guam, unless the repairs are: (1) voyage repairs
or repairs necessary to correct damage sustained due to hostile actions
or interventions; or (2) to a naval vessel classified as a littoral
combat ship operating on deployment for corrective and preventive
maintenance or repair and facilities maintenance. The final rule also
establishes that: (1) foreign workers may not be used to perform
corrective and preventive maintenance or repair on a naval vessel
unless the
[[Page 73241]]
Secretary of the Navy (without further delegation) makes a
determination; and (2) foreign contractors may not be used to perform
facilities maintenance unless approved by the Secretary of the Navy.
The objective of the rule is to implement the restrictions of section
1025 of the NDAA for FY 2021 on the overhaul or repair of a naval
vessel in a shipyard outside the United States or Guam, with exceptions
as described in this paragraph.
No public comments were received in response to the initial
regulatory flexibility analysis.
DoD reviewed data from the Federal Procurement Data System for
fiscal years 2020, 2021, and 2022 for contracts for the repair or
overhaul of naval vessels outside the United States or Guam that
exceeded the simplified acquisition threshold. DoD awarded a total of
383 contracts to an average of 76 unique small entities.
It is expected that this rule will continue to provide small
businesses the opportunity to participate in acquisitions for the
overhaul or repair of a naval vessel in a shipyard outside the United
States or Guam, since naval vessel overhaul restrictions currently
exist, and this rule provides exceptions that allow for U.S. contractor
personnel to perform certain repairs and maintenance in accordance with
10 U.S.C. 8680(a).
This rule does not include any new reporting, recordkeeping, or
other compliance requirements for small entities.
There are no known significant alternative approaches to the rule
that would meet the requirements of the statute.
VIII. 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).
List of Subjects in 48 CFR Part 225
Government procurement.
Jennifer D. Johnson,
Editor/Publisher, Defense Acquisition Regulations System.
Therefore, 48 CFR part 225 is amended as follows:
PART 225--FOREIGN ACQUISITION
0
1. The authority citation for 48 CFR part 225 continues to read as
follows:
Authority: 41 U.S.C. 1303 and 48 CFR chapter 1.
225.7013 [Amended]
0
2. Amend section 225.7013 by removing the introductory text and
paragraphs (a) and (b).
0
3. Add sections 225.7013-0, 225.7013-1, and 225.7013-2 to read as
follows:
225.7013-0 Scope.
This section implements 10 U.S.C. 8679 and 10 U.S.C. 8680.
225.7013-1 Definitions.
As used in this section--
Corrective and preventive maintenance or repair means--
(1) Maintenance or repair actions performed as a result of a
failure in order to return or restore equipment to acceptable
performance levels; and
(2) Scheduled maintenance or repair actions to prevent or discover
functional failures.
Facilities maintenance means the effort required to--
(1) Provide housekeeping services throughout the ship;
(2) Perform coating maintenance and repair to exterior and interior
surfaces due to normal environmental conditions; and
(3) Clean mechanical spaces, mission zones, and topside spaces.
225.7013-2 Restrictions.
(a) Contract award (10 U.S.C. 8679). Do not award a contract to
construct in a foreign shipyard--
(1) A vessel for any of the armed forces; or
(2) A major component of the hull or superstructure of a vessel for
any of the armed forces.
(b) Overhaul, repair, or maintenance (10 U.S.C. 8680). (1) Do not
overhaul, repair, or maintain, in a shipyard outside the United States
or Guam, a naval vessel (or any other vessel under the jurisdiction of
the Secretary of the Navy) homeported in the United States or Guam.
(2) This restriction on overhaul, repair, or maintenance does not
apply to--
(i) Voyage repairs; or
(ii) Repairs necessary to correct damage sustained due to hostile
actions or interventions.
(3) For a naval vessel classified as a littoral combat ship and
operating on deployment--
(i) Corrective and preventive maintenance or repair, whether
intermediate or depot level, and facilities maintenance may be
performed if the work is performed by U.S. Government personnel or U.S.
contractor personnel--
(A) In a foreign shipyard;
(B) At a facility outside of a foreign shipyard; or
(C) At any other facility convenient to the vessel;
(ii) Foreign workers may be used to perform corrective and
preventive maintenance or repair, only if the Secretary of the Navy,
without power of delegation, determines that travel by U.S. Government
or contractor personnel to perform the maintenance or repair is not
advisable for health or safety reasons; and
(iii) Foreign contractors may perform facilities maintenance only
as approved by the Secretary of Navy.
[FR Doc. 2023-23432 Filed 10-24-23; 8:45 am]
BILLING CODE 6001-FR-P
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</html>Indexed from Federal Register on October 25, 2023.
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