Proposed Rule2024-02742
Defense Federal Acquisition Regulation Supplement: Assuring Integrity of Overseas Fuel Supplies (DFARS Case 2022-D013)
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Published
February 15, 2024
Issuing agencies
Defense DepartmentDefense Acquisition Regulations System
Abstract
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 2022 that requires offerors to certify that they will not provide fuel from a prohibited source and that they will comply with certain export control and anticorruption regulations and statutes for contracts awarded for the acquisition of fuel in support of overseas contingency operations.
Full Text
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<title>Federal Register, Volume 89 Issue 32 (Thursday, February 15, 2024)</title>
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[Federal Register Volume 89, Number 32 (Thursday, February 15, 2024)]
[Proposed Rules]
[Pages 11800-11803]
From the Federal Register Online via the Government Publishing Office [<a href="http://www.gpo.gov">www.gpo.gov</a>]
[FR Doc No: 2024-02742]
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DEPARTMENT OF DEFENSE
Defense Acquisition Regulations System
48 CFR Parts 212, 215, 225, and 252
[Docket DARS-2024-0002]
RIN 0750-AL64
Defense Federal Acquisition Regulation Supplement: Assuring
Integrity of Overseas Fuel Supplies (DFARS Case 2022-D013)
AGENCY: Defense Acquisition Regulations System, Department of Defense
(DoD).
ACTION: Proposed rule.
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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 2022 that requires offerors
to certify that they will not provide fuel from a prohibited source and
that they will comply with certain export control and anticorruption
regulations and statutes for contracts awarded for the acquisition of
fuel in support of overseas contingency operations.
DATES: Comments on the proposed rule should be submitted in writing to
the address shown below on or before April 15, 2024, to be considered
in the formation of a final rule.
ADDRESSES: Submit comments identified by DFARS Case 2022-D013, using
either of the following methods:
[cir] Federal eRulemaking Portal: <a href="https://www.regulations.gov">https://www.regulations.gov</a>.
Search for DFARS Case 2022-D013. Select ``Comment'' and follow the
instructions to submit a comment. Please include ``DFARS Case 2022-
D013'' on any attached documents.
[cir] Email: <a href="/cdn-cgi/l/email-protection#ddb2aeb9f3b9bbbcafae9db0bcb4b1f3b0b4b1"><span class="__cf_email__" data-cfemail="f9968a9dd79d9f988b8ab994989095d7949095">[email protected]</span></a>. Include DFARS Case 2022-D013 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: Mr. Jon Snyder, telephone 703-945-
5341.
SUPPLEMENTARY INFORMATION:
I. Background
DoD is proposing to revise the DFARS to implement section 843 of
the National Defense Authorization Act (NDAA) for Fiscal Year (FY) 2022
(Pub. L. 117-81). Section 843 requires offerors to certify that fuel to
be provided for a contract in support of an overseas contingency
operation is not sourced from a prohibited nation or region and to
furnish such records as are necessary to verify their compliance with
applicable export control and anticorruption regulations and statutes.
Section 843 requires contracting officers, when conducting a source
selection for such contracts, to consider using tradeoff processes and
certain evaluation factors. If the contracting officer does not
consider a tradeoff process prior to issuing the solicitation, the
contracting officer is required to justify in writing why a tradeoff
process was not considered. Section 843 also requires the contracting
officer to ensure, prior to contract award, that the offeror is not
disqualified based upon an unsupported denial of access to a facility
or equipment by the host nation.
II. Discussion and Analysis
DoD proposes to add to the DFARS a new section 225.70WW,
Restriction on acquisition of fuel for overseas contingency operations.
Section 225.70WW provides the scope, prohibition, and procedures for
contracting officers to use for the acquisition of fuel that is for
overseas contingency operations and is expected to exceed the
simplified acquisition threshold. This proposed rule requires that fuel
is not sourced from a nation or region prohibited from selling
petroleum to the United States. The proposed rule allows contracting
officers to request records from the apparent successful offeror to
verify compliance with certain regulations and statutes when the head
of the contracting activity determines in writing that it is necessary.
In addition, the proposed rule precludes contracting officers from
disqualifying an offeror based on an unsupported denial of access to a
facility or equipment by a host-nation government.
This proposed rule includes a new section 215.101-71, Tradeoff
process when acquiring fuel for overseas contingency operations, which
requires contracting officers to consider using a tradeoff process
during a source selection. When using a tradeoff process, contracting
officers are required to consider the use of certain evaluation
factors. This proposed rule also provides procedures for a contracting
officer to justify when a tradeoff process is not considered.
A new solicitation provision is proposed at DFARS 252.225-70XX,
Restriction on Acquisition of Fuel for Overseas Contingency Operations,
for
[[Page 11801]]
use in solicitations expected to exceed the simplified acquisition
threshold, including solicitations using FAR part 12 procedures for the
acquisition of commercial products, including commercially available
off-the-shelf (COTS) items, and commercial services, for the
procurement of fuel for overseas contingency operations. DFARS 252.225-
70XX requires an offeror to certify that the fuel, in whole or in part,
or derivatives of such fuel, to be provided under the resulting
contract will not be sourced from a nation or region prohibited from
selling petroleum to the United States. This proposed provision
requires the apparent successful offeror to furnish records verifying
compliance upon contracting officer request. The provision also
requires an offeror, prior to award, to promptly report to the
contracting officer any instance of unsupported denial of access to a
facility or equipment by a host nation government that may prevent it
from complying with the terms and conditions of the solicitation.
Since DoD plans to apply the requirements of this proposed rule to
acquisitions using FAR part 12 procedures, cross references to the new
subpart are added at new paragraphs 212.203(5) and 212.301(f)(ix)(OO).
III. Applicability to Contracts at or Below the Simplified Acquisition
Threshold (SAT), for Commercial Products (Including Commercially
Available Off-the-Shelf (COTS) Items), and for Commercial Services
This proposed rule includes a new provision at DFARS 252.225-70XX,
Restriction on Acquisition of Fuel for Overseas Contingency Operations,
to implement the requirements of section 843 of the NDAA for FY 2022.
The provision at DFARS 252.225-70XX is prescribed at DFARS 225.70WW-4
for use in solicitations, including solicitations using FAR part 12
procedures for the acquisition of commercial products and commercial
services, that are for the procurement of fuel for overseas contingency
operations and are expected to exceed the simplified acquisition
threshold. DoD does not intend to apply the proposed rule to contracts
at or below the SAT. DoD does intend to apply the proposed rule to
contracts for the acquisition of commercial products including COTS
items and for the acquisition of commercial services.
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 Federal Acquisition
Regulation system of regulations. DoD does not intend to make that
determination. Therefore, this proposed rule will not apply at or below
the simplified acquisition threshold.
B. Applicability to Contracts for the Acquisition of Commercial
Products Including COTS Items and for the Acquisition of 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 (previously 10 U.S.C. 2533c), or
that strategic materials critical to national security be bought from
American sources pursuant to 10 U.S.C. 4863 (previously 10 U.S.C.
2533b); 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 proposed 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 843 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 intends to make that determination to
apply this statute to the acquisition of commercial products including
COTS items and to the acquisition of commercial services. Therefore,
this proposed rule will apply to the acquisition of commercial products
including COTS items and to the acquisition of commercial services.
C. Determination
Given that the requirements of section 843 of the NDAA for FY 2022
were enacted to ensure that fuel for overseas contingency operations is
not procured from prohibited sources, and since fuel is generally a
commercial product or COTS item, it is in the best interest of the
Federal Government to apply the rule to contracts for the acquisition
of commercial services and commercial products, including COTS items,
as defined at Federal Acquisition Regulation 2.101. An exception for
contracts for the acquisition of commercial services and 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. Expected Impact of the Rule
This proposed rule includes a requirement for offerors for a
contract for the procurement of fuel that is for an overseas
contingency operation and is expected to exceed the SAT, to certify
that the proposed fuel, in whole or in part, or derivatives of such
fuel, will not be sourced from a nation or region prohibited from
selling petroleum to the United States. Offerors will also be required
to comply with certain export control and anticorruption statutes and
regulations. The apparent successful offeror may be requested to
provide records to verify such compliance upon contracting officer
request.
This proposed rule also includes new requirements for contracting
officers. Contracting officers must not disqualify an offeror based on
an unsupported denial of access to a facility or equipment by a host
nation government. When conducting a source selection for such
acquisitions, contracting officers will be required to consider the use
of a tradeoff process and the use of certain evaluation factors. If the
contracting officer does not consider a tradeoff process, the
contracting officer must justify and obtain approval of the rationale
for not considering a tradeoff process.
[[Page 11802]]
Analysis of data from the Federal Procurement Data System for
fiscal years 2021, 2022, and 2023, for DoD contracts awarded to procure
fuel for overseas operations revealed there was an average of five
awards per fiscal year. These five awards were made to three
contractors. Across the three fiscal years, a total of three companies
received awards for the procurement of liquid fuels supporting overseas
operations. During this period, no awards were made to small entities.
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. Regulatory Flexibility Act
DoD does not expect this proposed rule, when finalized, 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., because during recent fiscal years there were no contracts
awarded to small entities for supplying fuel for overseas contingency
operations. However, an initial regulatory flexibility analysis has
been performed and is summarized as follows:
This proposed rule is necessary to implement section 843 of the
National Defense Authorization Act (NDAA) for Fiscal Year (FY) 2022
(Pub. L. 117-81). Section 843 requires offerors to certify that the
fuel procured for an overseas contingency operation is not sourced from
a prohibited nation or region and to furnish such records as are
necessary to verify their compliance with certain export control and
anticorruption statutes and regulations. Section 843 requires
contracting officers to consider a tradeoff process and the use of
certain evaluation factors when procuring fuel for an overseas
contingency operation. If the contracting officer does not consider a
tradeoff process, section 843 requires the contracting officer to
justify, before issuing the solicitation, why a tradeoff process was
not considered.
The objective of the proposed rule is to implement section 843 of
the NDAA for FY 2022, which is the legal basis for the rule.
Data from the Federal Procurement Data System was analyzed for
fiscal years 2021, 2022, and 2023 for DoD contracts awarded to procure
fuel for overseas operations. The data revealed there was an average of
five awards per fiscal year for the procurement of fuel supporting
overseas operations. These awards were made to three unique entities,
of which none were small entities. Therefore, DoD does not anticipate
that this proposed rule will have an impact on small entities.
The proposed rule does not impose any new reporting, recordkeeping,
or other compliance requirements for small entities.
The proposed rule does not duplicate, overlap, or conflict with any
other Federal rules.
There are no known alternatives to the proposed rule that would
accomplish the stated objectives of the applicable statute.
DoD invites comments from small business concerns and other
interested parties on the expected impact of this proposed rule on
small entities.
DoD will also consider comments from small entities concerning the
existing regulations in subparts affected by this proposed 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-
D013), in correspondence.
VII. Paperwork Reduction Act
This proposed 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 Parts 212, 215, 225, and 252
Government procurement.
Jennifer D. Johnson,
Editor/Publisher, Defense Acquisition Regulations System.
Therefore, 48 CFR parts 212, 215, 225, and 252 are proposed to be
amended as follows:
0
1. The authority citation for parts 212, 215, 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 212.203 by adding paragraph (5) to read as follows:
212.203 Procedures for solicitation, evaluation, and award.
* * * * *
(5) See 215.101-71 and 225.70WW for the acquisition of fuel for
overseas contingency operations.
0
3. Amend section 212.301 by adding paragraph (f)(x)(OO) to read as
follows:
212.301 Solicitation provisions and contract clauses for the
acquisition of commercial products and commercial services.
* * * * *
(f) * * *
(x) * * *
(OO) Use the provision at 252.225-70XX, Restriction on Acquisition
of Fuel for Overseas Contingency Operations, as prescribed in 225.70WW-
4, to comply with section 843 of the National Defense Authorization Act
for Fiscal Year 2022 (Pub. L. 117-81).
PART 215--CONTRACTING BY NEGOTIATION
0
4. Add section 215.101-71 to subpart 215.1 to read as follows:
215.101-71 Tradeoff process when acquiring fuel for overseas
contingency operations.
(a) When conducting a source selection for the acquisition of fuel
that is for an overseas contingency operation and is expected to exceed
the simplified acquisition threshold, the contracting officer shall
consider using a tradeoff process in accordance with FAR 15.101-1
(section 843 of the National Defense Authorization Act for Fiscal Year
2022 (Pub. L. 117-81)). The contracting officer should consider using
the following evaluation factors in any such tradeoff process:
(1) Past performance.
(2) Cost.
(3) Anticorruption training.
(4) Anticorruption compliance.
(b) If a tradeoff process was not considered, prior to the issuance
of the solicitation, the contracting officer shall justify in writing
why a tradeoff process was not considered and obtain approval by an
official one level above the contracting officer. This authority is not
delegable. The contracting officer shall include the justification in
the contract file.
[[Page 11803]]
PART 225--FOREIGN ACQUISITION
0
5. Add sections 225.70WW, 225.70WW-1, 225.70WW-2, 225.70WW-3, and
225.70WW-4 to subpart 225.70 to read as follows:
* * * * *
Sec.
225.70WW Restriction on acquisition of fuel for overseas contingency
operations.
225.70WW-1 Scope.
225.70WW-2 Prohibition.
225.70WW-3 Procedures.
225.70WW-4 Solicitation provision.
* * * * *
225.70WW Restriction on acquisition of fuel for overseas contingency
operations.
225.70WW-1 Scope.
This section implements section 843 of the National Defense
Authorization Act for Fiscal Year 2022 (Pub. L. 117-81), for the
acquisition of fuel for overseas contingency operations.
225.70WW-2 Prohibition.
Contracting officers shall not award, for an overseas contingency
operation, a contract for fuel, in whole or in part, or derivatives of
such fuel, that is sourced from nations or regions prohibited from
selling petroleum to the United States. See FAR subpart 25.7 for
prohibited sources.
225.70WW-3 Procedures.
(a) For contracts for the acquisition of fuel for overseas
contingency operations, including contracts using FAR part 12
procedures, expected to exceed the simplified acquisition threshold,
the contracting officer--
(1) May request records from the apparent successful offeror to
verify compliance with the following statutes and regulations only when
the head of the contracting activity determines in writing that it is
necessary:
(i) The Foreign Corrupt Practices Act (15 U.S.C. 78dd-1 et seq.).
(ii) International Traffic in Arms Regulations at 22 CFR 120
through 130 (see PGI 225.7901-2).
(iii) Export Administration Regulations at 15 CFR 730 through 774
(see PGI 225.7901-2).
(iv) Relevant regulations promulgated by the Office of Foreign
Assets Control of the Department of the Treasury. Sanction information
for specific countries and programs is available at <a href="https://ofac.treasury.gov/sanctions-programs-and-country-information">https://ofac.treasury.gov/sanctions-programs-and-country-information</a>.
(2) To the maximum extent practicable, shall not disqualify an
otherwise responsible offeror on the basis of an unsupported denial of
access to a facility or equipment by a host-nation government. The
provision at 252.225-70XX, Restriction on Acquisition of Fuel for
Overseas Contingency Operations, requires offerors to report promptly
to the contracting officer, prior to award, any instance of unsupported
denial of access to a facility or equipment by a host-nation government
that may prevent it from complying with the terms and conditions of the
solicitation.
(b) See 215.101-71 for the requirement to consider using a tradeoff
process.
225.70WW-4 Solicitation provision.
Use the provision at 252.225-70XX, Restriction on Acquisition of
Fuel for Overseas Contingency Operations, in solicitations, including
solicitations using FAR part 12 procedures for the acquisition of
commercial products and commercial services, that are for the
acquisition of fuel for overseas contingency operations and are
expected to exceed the simplified acquisition threshold.
PART 252--SOLICITATION PROVISIONS AND CONTRACT CLAUSES
0
6. Add section 252.225-70XX to read as follows:
252.225-70XX Restriction on Acquisition of Fuel for Overseas
Contingency Operations.
As prescribed in 225.70WW-4, use the following provision:
Restriction on Acquisition of Fuel for Overseas Contingency Operations
(Date)
(a) Prohibition. For an overseas contingency operation, DoD may
not procure fuel in whole or in part, or derivatives of such fuel,
that is sourced from nations or regions prohibited from selling
petroleum to the United States. See Federal Acquisition Regulation
subpart 25.7 for prohibited sources.
(b) Certification. Offerors shall complete the certification in
paragraph (b)(1) of this provision and submit the certification with
their offer.
(1) The Offeror does [ ] does not [ ] certify that the fuel, in
whole or in part, or derivatives of such fuel, to be provided under
any contract resulting from this solicitation is not sourced from a
nation or region prohibited from selling petroleum to the United
States.
(2) Only Offerors who certify that the fuel to be provided is
not sourced from a prohibited nation or region will be eligible for
award.
(c) Compliance.
(1) When requested by the Contracting Officer, the apparent
successful Offeror shall submit records necessary to demonstrate
compliance with applicable laws and regulations regarding export-
controlled items and anticorruption statutes and regulations
including--
(i) The Foreign Corrupt Practices Act (15 U.S.C. 78dd-1 et
seq.);
(ii) International Traffic in Arms Regulations (ITAR) at 22 CFR
120 through 130 (also see Defense Federal Acquisition Regulation
Supplement (DFARS) clause 252.225-7048, Export-Controlled Items);
(iii) Export Administration Regulations (EAR) at 15 CFR 730
through 774 (also see DFARS clause 252.225-7048); and
(iv) Relevant regulations promulgated by the Office of Foreign
Assets Control of the Department of the Treasury. Sanction
information for specific countries and programs is available at
<a href="https://ofac.treasury.gov/sanctions-programs-and-country-information">https://ofac.treasury.gov/sanctions-programs-and-country-information</a>.
(2) The Offeror shall contact the Department of State regarding
ITAR compliance and the Department of Commerce regarding EAR
compliance.
(d) Reporting requirement. The Offeror shall, prior to contract
award, promptly report to the Contracting Officer any instance of
unsupported denial of access to a facility or equipment by a host-
nation government that may prevent it from complying with the terms
and conditions of the solicitation.
(End of provision)
[FR Doc. 2024-02742 Filed 2-14-24; 8:45 am]
BILLING CODE 6001-FR-P
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