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Rule2024-15370

Clarifications and Updates to Defense Priorities and Allocations System Regulation

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Published

July 22, 2024

Effective

August 21, 2024

Issuing agencies

Commerce DepartmentIndustry and Security Bureau

Abstract

The Bureau of Industry and Security (BIS) is finalizing amendments to its Defense Priorities and Allocations System (DPAS) regulation as originally proposed on February 7, 2024 with minor technical amendments. This final rule clarifies existing standards and procedures by which BIS may provide Special Priorities Assistance (SPA); revises Schedule I to provide transparency and differentiation between other departments' priorities jurisdiction and the Department of Commerce's jurisdiction; and provides technical edits to reflect certain non-substantive updates since the DPAS regulation was last amended in 2014, including updated contact information, legal citations, and definitions. The two technical amendments are made to accurately reflect updated information sourced from other Federal agencies.

Full Text

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<title>Federal Register, Volume 89 Issue 140 (Monday, July 22, 2024)</title>
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[Federal Register Volume 89, Number 140 (Monday, July 22, 2024)]
[Rules and Regulations]
[Pages 58965-58978]
From the Federal Register Online via the Government Publishing Office [<a href="http://www.gpo.gov">www.gpo.gov</a>]
[FR Doc No: 2024-15370]

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DEPARTMENT OF COMMERCE

Bureau of Industry and Security

15 CFR Part 700

[Docket No240628-0180]
RIN 0694-AJ15

Clarifications and Updates to Defense Priorities and Allocations
System Regulation

AGENCY: Bureau of Industry and Security, Department of Commerce.

ACTION: Final rule.

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SUMMARY: The Bureau of Industry and Security (BIS) is finalizing
amendments to its Defense Priorities and Allocations System (DPAS)
regulation as originally proposed on February 7, 2024 with minor
technical amendments. This final rule clarifies existing standards and
procedures by which BIS may provide Special Priorities Assistance
(SPA); revises Schedule I to provide transparency and differentiation
between other departments' priorities jurisdiction and the Department
of Commerce's jurisdiction; and provides technical edits to reflect
certain non-substantive updates since the DPAS regulation was last
amended in 2014, including updated contact information, legal
citations, and definitions. The two technical amendments are made to
accurately reflect updated information sourced from other Federal
agencies.

DATES: This final rule is effective August 21, 2024.

FOR FURTHER INFORMATION CONTACT: Katie Reid at (202) 482-3634,
<a href="/cdn-cgi/l/email-protection#d29682938192b0bba1fcb6bdb1fcb5bda4">[email&#160;protected]</a>.

[[Page 58966]]

SUPPLEMENTARY INFORMATION:

Background

On February 7, 2024 in 89 FR 8363, the Bureau of Industry and
Security (BIS) proposed to update the priorities and allocations
provisions set forth in the Defense Priorities and Allocations System
(DPAS) regulation (15 CFR part 700) and implemented by the Department
of Commerce (DOC), BIS, consistent with its authorities under Title I
of the Defense Production Act of 1950, as amended (50 U.S.C. 4501 et
seq.) (DPA), as delegated by Executive Order 13603 (March 16, 2012).
The DPAS has two principal components, priorities and allocations.
Under the priorities component, certain contracts between the
government and private parties or between private parties for the
production or delivery of industrial resources are required to be given
priority over other contracts to facilitate expedited delivery in
promotion of the U.S. national defense. Under the allocations
component, materials, services, and facilities may be allocated to
promote the national defense. For both components, the term ``national
defense'' means programs for military and energy production or
construction, homeland security, stockpiling, space, emergency
preparedness, critical infrastructure protection and restoration, and
any directly related activity. The term also includes military and
critical infrastructure assistance to any foreign nation.

Section-by-Section Analysis of the Clarifications and Updates That This
Final Rule Makes to the Existing DPAS Regulation

The following discussion explains the changes that this final rule
makes to the existing DPAS regulation.

Subpart A--Purpose

Section 700.1--Purpose of this part. This section adds the legal
citation for the DPA and updates the legal citation for the Robert T.
Stafford Disaster Relief Emergency Assistance Act. This rule also makes
minor changes to the language to be consistent with the DPA and
Executive Order (E.O.) 13603.

Subpart B--Overview

Section 700.2--Introduction. This section changes the reference to
``industrial items'' to ``industrial resources'' in paragraph (b) in
order to use the term ``industrial resources'' defined in Sec. 700.8.
It also revises paragraph (c) to highlight that the DOC is also listed
as an agency in Schedule I and the reason why. BIS believes that the
additional information provides a more complete description of Schedule
I.
Section 700.3--Priority ratings and rated orders. This section adds
in paragraph (a) references to the rating symbol to conform with the
current definition of priority rating in section 700.8 as well as a
description of a rating symbol. BIS makes these changes so that
paragraph (a) will give a more complete description of a priority
rating. It also revises paragraph (d) of this section by changing
``items'' to ``industrial resources'' in order to use the term
``industrial resources'' defined in section 700.8.

Subpart C--Definitions

Section 700.8--Definitions. This section updates the legal citation
for the DPA found in the definition of ``Defense Production Act.'' It
updates the legal citation for the Stafford Act found in the
definitions of ``national defense'' and ``Stafford Act,'' and it
updates the legal citation for the Selective Service Act found in the
definition of ``Selective Service Act.'' This section updates both the
definition of ``approved program'' and ``priorities authority,'' which
is consistent with the language of the DPA and E.O. 13603. It also
updates the definition of ``priority rating'' to clarify that the DOC
may assign the priority rating, which is consistent with 15 CFR part
700. It removes the definition of ``item'' and updates the definition
of ``industrial resources'' to clarify and be consistent with the use
of both terms in 15 CFR part 700. This section includes the definitions
of ``facilities,'' ``materials,'' and ``services'' to provide clarity
and consistency with the DPA. It also provides a definition for
``determination department'' and ``resources department'' to provide
clarity and consistency with sections 201 and 202 of E.O. 13603 and
other priorities and allocations regulations. It also makes non-
substantive changes by adding a comma after ``administrative
subpoenas'' in the definition of official action and a comma after
``chemicals'' in the definition of ``maintenance and repair and/or
operating supplies (MRO).''

Subpart D--Industrial Priorities

Section 700.10--Authority. This section revises the last sentence
of paragraph (c)(1), to clarify what the provisions of 15 CFR part 700
are inapplicable to by removing ``those other items which include.''
This change is consistent with the use of ``item'' in 15 CFR part 700.
Section 700.11--Priority ratings. This section makes a non-
substantive change in paragraph (a)(1) by moving the period inside the
quotation. It also capitalizes the word ``schedule'' in paragraph (b)
as this word references Schedule I, a specific part of 15 CFR part 700,
which is capitalized throughout 15 CFR part 700. It also clarifies the
explanation of what ``A7'' signifies consistent with Schedule I. This
section updates paragraph (c) by replacing reference to the ``C2''
program identification symbol with ``A7'' in order to refer to the
program identification symbol later referenced as an example of a
priority rating in this paragraph.
Section 700.12--Elements of a rated order. This section replaces
the example that refers to a ``DX-A4'' priority rating, which is not
currently in use, with a reference to a ``DX-A2'' priority rating,
which is more commonly used, in paragraph (a)(1). It also revises
paragraph (a)(4) by changing the word ``regulations'' to
``regulation,'' which is consistent with the use of the word when
referencing 15 CFR part 700.
Section 700.13--Acceptance and rejection of rated orders. This
section replaces the brackets with parentheses in paragraph (c)(5)
consistent with other sections of 15 CFR part 700. It adds ``(1)'' in
between ``one'' and ``working day'' in paragraph (d)(3), which is
consistent with other parts of this section.
Section 700.14--Preferential scheduling. This section revises the
``Examples'' by changing ``June 2'' to ``June 3'' so that the fact
pattern makes sense.
Section 700.15--Extension of priority ratings. This section revises
paragraphs (a), (b), and (c) by changing ``items'' to ``industrial
resources,'' which clarifies the type of resource covered by the
extension of priority ratings provision. It also revises paragraph (a)
by adding a pinpoint citation to section 700.17, adding clarity as to
which section of 15 CFR part 700 is referenced. This section inserts
language in paragraphs (a) and (b) that clarifies that all four
required elements of a rated order outlined in section 700.12 must be
included on each successive order placed to fulfill a rated order. It
also inserts language in the ``Example'' that clarifies that a ``DO-
A3'' is a priority rating on a rated order.
Section 700.16--Changes or cancellations of priority ratings and
rated orders. This section makes one non-substantive change to
paragraph (b) by removing the comma after ``DO''.
Section 700.17--Use of rated orders. This section clarifies in
paragraph (a)(4) that a ``DO-A3'' and ``DO-H7'' are a priority rating
on a rated order. This section updates paragraph (b)(1) by adding the
spelling of ``90'' and

[[Page 58967]]

parentheses around ``90,'' which is consistent with other sections of
15 CFR part 700. This section revises paragraph (d)(1)(ii) by changing
the word ``regulations'' to ``regulation,'' which is consistent with
the use of the word when referencing 15 CFR part 700. This section
changes the value of $75,000 listed in paragraph (f) to $125,000. This
change is made to conform with the changes to the Simplified
Acquisition Threshold (SAT) value made under the National Defense
Authorization Act for Fiscal Year 2018 (Public Law 115-91), which
raised the SAT from $150,000 to $250,000. As a result of the SAT
increase, U.S. firms are not required to place a priority rating on an
order less than $125,000 (one-half of the revised SAT of $250,000), as
this amount is greater than $75,000. BIS posted a notice to its website
notifying the public of the change in the SAT after it was raised by
statute but is making the change in the regulation itself with this
update.
Section 700.18--Limitations on placing rated orders. This section
changes the cross reference of section 700.41 found in paragraph
(a)(2)(iii) and paragraph (a)(2)(iv)(B) to section 700.51, which is the
correct cross reference. It also makes a non-substantive change by
adding a comma after ``expansion'' in paragraph (a)(2)(iv)(A).

Subpart E--Industrial Priorities for Energy Programs

Section 700.21--Application for priority rating authority. This
section updates the contact information for the Department of Energy.

Subpart F--Allocations Actions

Section 700.31--General Procedures. This section makes one non-
substantive change in paragraph (f). ``Allocations'' is made singular
to instead state ``allocation,'' which is consistent with the
definition of ``allocation order'' in section 700.8.
Section 700.33--Types of allocation orders. This section makes one
non-substantive change in the heading of this section and the first
paragraph. ``Allocations'' is made singular to instead state
``allocation,'' which is consistent with the definition of ``allocation
order'' in section 700.8.
Section 700.34--Elements of an allocation order. This section makes
four non-substantive changes. In paragraph (a)(1), a comma is added
after ``DO rated orders.'' In paragraph (b)(1), the word
``regulations'' is changed to ``regulation,'' which is consistent with
the use of the word when referencing 15 CFR part 700. In paragraph (c),
``that gives'' is changed to ``issued by.'' In paragraph (c)(1), the
word ``regulations'' is changed to ``regulation,'' which is consistent
with the use of the word when referencing 15 CFR part 700.

Subpart H--Special Priorities Assistance

Section 700.50--General Provisions. This section re-organizes
paragraph (a) to include two paragraphs to clarify when special
priorities assistance should be sought from the DOC or the Delegate
Agency. This section changes the word ``can'' to ``may'' in the first
sentence of paragraph (b), which is consistent with the use of the word
``may'' in other sections of 15 CFR part 700. It also changes paragraph
(c) to clarify that special priorities assistance can be sought from
the DOC, which is consistent with other sections of 15 CFR part 700.
This section also includes a website reference to FORM BIS-999 in
paragraph (c).
Section 700.51--Requests for priority rating authority. This
section adds a new paragraph as paragraph (b) that clarifies what a
person should do if they do not have priority rating authority under
this part and would like to request priority rating authority. This
change is consistent with current practice and requirements under E.O.
13603. As a result of this additional paragraph, this section changes
paragraph (b) to paragraph (c) and paragraph (c) to paragraph (d). This
section clarifies how to request priority rating authority for
production and construction equipment from Delegate Agencies and the
DOC in paragraph (c)(1), which is consistent with the delegations
issued to the Delegate Agencies. This section includes the phrase ``or
those authorized by the DOC to priority rate the prime contract'' in
paragraph (d)(1) and removes reference to the ``Delegate Agency'' in
paragraph (d)(2) to take into account that sponsorship may be obtained
from sources other than just the Delegate Agencies. This section
clarifies in paragraph (d)(4) that ``Commerce'' is referencing the
``Department of Commerce.''
Section 700.52--Examples of assistance. This section emphasizes in
paragraph (a) that special priorities assistance is in support of an
approved program and inserts cross references on how to request a
determination from the appropriate Determination Department that a
request is necessary or appropriate to promote the national defense,
consistent with the DPA and E.O. 13603. This section also adds
paragraph (3) to paragraph (a) to list another situation in which
special priorities assistance is usually provided.
Section 700.53--Criteria for assistance. This section adds
``Determination Department'' to the list of agencies that require
timely requests, consistent with E.O. 13603.
Section 700.54--Instances where assistance will not be provided.
This section adds ``Determination Departments'' in the list of agencies
that have input on special priorities assistance requests, consistent
with E.O. 13603.
Section 700.55--Homeland security, emergency preparedness, and
critical infrastructure protection and restoration assistance programs
within the United States. This section changes the title of this
section to ``Requests for determination that program within the United
States is necessary or appropriate to promote the national defense''.
The information originally in this section is made into a new paragraph
(a). This section clarifies what types of requests should be submitted
to the Federal Emergency Management Agency (FEMA), consistent with E.O.
13603. This section updates the contact information for FEMA's Office
of Policy and Program Analysis in paragraph (a). This section creates
paragraph (b) to provide information on requesting a determination from
the Department of Defense (DOD), consistent with E.O. 13603. Paragraph
(c) is created to provide information on requesting a determination
from the Department of Energy (DOE), consistent with E.O. 13603.
Section 700.56--Military assistance programs with Canada. This
section updates the contact information, including the name of the
agency, for the Government of Canada. It clarifies in paragraph (g)
that requests for assistance in obtaining items in Canada must submit a
request to the Office of Strategic Industries and Economic Security.
This change clarifies that while these requests may go through the
Delegate Agency, it is not required.
Section 700.57--Military assistance programs with other nations and
international organizations. This section revises information regarding
the list of countries that are signatory to a bilateral security of
supply arrangement with the DOD in paragraphs (a) and (c). The revision
adds Denmark, Estonia, Israel, Japan, Latvia, Lithuania, Norway,
Republic of Korea, and Singapore to the list of countries that are
signatory to a bilateral security of supply arrangement with the DOD.
It also provides the DOD website for up-to-date information on the
security of supply arrangements, including the current list of foreign

[[Page 58968]]

nations that are signatories to the bilateral security of supply
arrangements with the DOD. This change is needed as the list of foreign
nations that are signatories to bilateral security of supply
arrangements with the DOD was updated to include Denmark, Estonia,
Israel, Japan, Latvia, Lithuania, Norway, Republic of Korea, and
Singapore, and it is expected that this list will continually be
updated. This section also updates the DOD contact information in
paragraph (b) and paragraph (c). This section moves the last sentence
of paragraph (2) to a new paragraph (3) so that the information
provided in this sentence is not lost as it is different from the
information provided in paragraph (2).
Section 700.58--Critical infrastructure assistance programs to
foreign nations and international organizations. This section makes a
non-substantive change in paragraph (a) by adding a comma after ``for
example.'' It updates paragraph (b) by re-organizing the information
into two paragraphs. This section clarifies in the new paragraph (b)(1)
that requests for assistance should be submitted on Form BIS-999, which
is consistent with other types of special priorities assistance
requests. This section clarifies in the new paragraph (b)(2) what the
request to FEMA is for, which is consistent with E.O. 13603. It also
updates the contact information for FEMA's Office of Policy and Program
Analysis.

Subpart I--Official Actions

Section 700.61--Rating authorizations. This section clarifies in
paragraph (a)(1) that a rating authorization permits a person to place
a priority rating on an order for an item which, for example, can
include an item not normally ratable under this regulation. This
clarification is consistent with the clarifications made in section
700.51 and section 700.52.
Section 700.63--Letters of Understanding. This section changes
``which'' to ``that'' in paragraph (a) as well as revises information
in the parentheses to add ``e.g.,'' and remove ``and'' which clarifies
this is an example list of parties. It also adds ``Determination
Department'' to the example list of parties.

Subpart J--Compliance

Section 700.70--General provisions. This section removes specific
penalties information for violating the DPA, and instead directly
references the penalties' sections within the DPA.
Section 700.71--Audits and investigations. This section makes one
non-substantive change to paragraph (a). A comma after ``other
writings'' is added.
Section 700.74--Violations, penalties, and remedies. This section
removes specific penalties information for violating the DPA in
paragraph (a), and instead directly references the penalties sections
of the DPA. It also changes the word ``Sections'' in paragraph (a) to
``sections'' as this word references sections of the DPA, which begins
with a lower case ``s'' throughout 15 CFR part 700. This section
changes ``also, for example'' to ``e.g.,'' in paragraph (c), which is
consistent with how 15 CFR part 700 refers to examples.

Subpart K--Adjustments, Exceptions, and Appeals

Section 700.80--Adjustments or exceptions. This section makes one
non-substantive change to paragraph (c). The number ``25'' is moved
behind the word ``twenty-five'' and put in parentheses, and the
parentheses are removed around the word ``twenty-five''. This change is
consistent with other sections of 15 CFR part 700.
Section 700.81--Appeals. This section makes one non-substantive
change to paragraph (b). In both sentences, the number ``45'' is placed
in parentheses and the word ``forty-five'' is added. This change is
consistent with other sections of 15 CFR part 700.

Subpart L--Miscellaneous Provisions

Section 700.93--Communications. This section makes one non-
substantive change by moving ``and'' to after ``explanatory
information,''. It adds the address of the Office of Strategic
Industries and Economic Security. It also adds ``special'' in front of
``priorities assistance'' in the last paragraph, consistent with this
part.

Schedule I to Part 700--Approved Programs and Delegate Agencies

This section revises the first paragraph to clarify that Schedule I
is a list of approved programs, which is a defined term in section
700.8. A sentence is added that also clarifies that use of the
authority under 15 CFR part 700 requires written authorization by the
DOC, consistent with other sections of 15 CFR part 700. It also moves
footnote 2 to the end of the first paragraph and adds a cross reference
to section 700.50 for additional information.
This section updates the description of the ``A2'' program
identification symbol from ``Missile'' to ``Missile and Space'' in
Schedule I, which is consistent with DOD's program determination that
the approved program that uses the ``A2'' program identification symbol
includes both Missile and Space programs.
This section removes the ``C1'' program identification symbol for
food resources in Schedule I as ``food resources (combat rations)'' now
falls under the jurisdiction of the Department of Agriculture's (USDA)
Agriculture Priorities and Allocation System (APAS) regulation (7 CFR
part 789). Although items that fell under this program identification
symbol were always food resources, the authority for which has always
been delegated to USDA under E.O. 13603 and its predecessors, USDA did
not have a published regulation to enact that delegated authority.
Therefore, under an agreement between USDA and the DOC, DOD was
permitted to place ratings using the ``C1'' symbol for combat rations
using the DPAS. However, in 2015, USDA published the APAS regulation
and DOD now uses that authority to place priority ratings on combat
rations, and no longer uses the previous agreement to rate them under
the DPAS.
This section updates the description of the ``J1'' program
identification symbol to ``Co-Production Programs'' in Schedule I to
reflect DOD's update to the approved program. DOD made a program
determination under E.O. 13603 to expand the approved program that uses
the ``J1'' program identification symbol from ``F-16 Co-Production
Program'' to ``Co-Production Programs.'' This change expands DOD's use
of this program identification symbol to other programs outside of the
F-16 program.
This section also makes a non-substantive change to the description
of the ``H1'' program identification symbol to change ``section'' to
the symbol.
This section updates the description of the ``N8'' program
identification symbol in Schedule I from ``Miscellaneous'' to
``Continuity of Government'' to clarify DHS's program determination is
for Continuity of Government-related programs.
This section also adds an ``Other Programs'' section to Schedule I,
which includes the program identification symbols for national defense
programs administered by other departments but that might, in some
instances, need industrial resources that are under the jurisdiction of
the DPAS. BIS makes these revisions to Schedule I to help provide
transparency and ease between other departments' priorities authority
and the DOC's priorities authority when a Delegate Agency needs
industrial resources to implement any approved program related to other
resources (i.e., food resources, energy resources, health resources,
civil transportation, or water resources) subject to other departments'

[[Page 58969]]

priorities authority and authorized for priorities support by the
appropriate department.
Four U.S. government agencies are administering priorities and
allocations regulations similar to the DPAS for resources under their
jurisdictions as outlined in E.O. 13603. Those departments and the
resources under their jurisdiction are: USDA, food resources; DOE,
energy resources; the Department of Health and Human Services (HHS),
health resources; and the Department of Transportation (DOT), civil
transportation. Persons placing priority ratings on contracts and
orders pursuant to those systems may need industrial resources that are
subject to DPAS in support of those contracts or orders. For example,
spare tires or engine parts (industrial resources under DPAS
jurisdiction) might be needed to support a contract to provide civil
transportation resources.
In administering the DPAS, BIS has noted that the Departments of
Defense, Energy, Homeland Security, and Health and Human Services and
the General Services Administration are the U.S. Government agencies
that most frequently procure industrial resources needed to implement
approved national defense programs. Accordingly, BIS has delegated to
those five agencies certain DPAS authority to place priority ratings on
contracts and orders for industrial resources in support of approved
national defense programs (Delegate Agencies). BIS expects that those
five agencies are also likely to be the agencies that most frequently
procure any industrial resources that may be needed to implement any
future approved programs related to food resources, energy resources,
health resources, civil transportation, and water resources.
Considering these facts and to assist in developing ``a consistent
and unified Federal priorities and allocations system'' as called for
by Section 101(d)(2) of the DPA, BIS, as part of those delegations, has
authorized these Delegate Agencies to place priority ratings on
contracts and orders for industrial resources needed to implement any
program related to food resources, energy resources, health resources,
civil transportation, or water resources determined as necessary or
appropriate to promote the national defense and authorized for
priorities support by the appropriate resource agency (i.e.,
Departments of Agriculture, Energy, Health and Human Services, and
Transportation). Therefore, Delegate Agencies are authorized to use the
same program identification symbol on such contracts and orders for
industrial resources as authorized by the appropriate resource agency
to support the approved program. However, any priority rated contract
or order for industrial resources placed to implement an approved
program related to food resources, energy resources, health resources,
civil transportation, or water resources remains subject to the DPAS.
The addition of the second paragraph before the Schedule I and the
``Other Programs'' section within Schedule I reflects this delegated
authority.
BIS invited written comments on the February 7, 2024 (89 FR 8363),
proposed rule, stating that any such comments must be received by March
8, 2024. BIS received no comments, and thus adopts the rule as
originally proposed with two minor technical amendments made to the
proposed rule. They have been made to accurately reflect updated
information sourced from other Federal agencies. The first technical
amendment is to section 700.57, reflected earlier in the Preamble.
Specifically, paragraphs (a) and (c) of section 700.57 are amended to
accurately reflect the most current list of countries that are
signatory to a bilateral security of supply arrangement with the DOD.
DOD updated this list of counties on its website (<a href="https://www.businessdefense.gov/security-of-supply.html">https://www.businessdefense.gov/security-of-supply.html</a>) after the proposed
rule was published. The revision adds Denmark, Estonia, Israel, Japan,
Latvia, Lithuania, Norway, Republic of Korea, and Singapore to the list
of countries that are signatory to a bilateral security of supply
arrangement with the DOD. The second minor technical amendment, also
reflected earlier in the Preamble, is to information provided under the
``Health Resources/Health Resources Priorities and Allocations System
(HRPAS)'' subsection of the ``Other Programs'' section of Schedule I,
which refers to information in HHS's HRPAS regulation (45 CFR part
101). BIS amends this section of Schedule I for consistency with
updates to the HRPAS regulation reflected in the HRPAS final rule
published on February 9, 2024 (89 FR 9020). The revisions to this
section of Schedule I remove the M5 through M9 program identification
symbols; revise the descriptions of the M1 through M4 program
identification symbols; and update the Federal Register citation to the
HRPAS from the HRPAS proposed rule to the HRPAS final rule published on
February 9, 2024.

Defense Production Act of 1950, as Amended

On September 8, 1950, the President signed the Defense Production
Act of 1950 (DPA), as amended into law. Title VII of the DPA includes a
sunset clause for the majority of the DPA authorities which require
periodic reauthorization. On August 13, 2018, the President signed the
John S. McCain National Defense Authorization Act for Fiscal Year 2019
into law, which reauthorized the DPA, 50 U.S.C. 4501 et seq., through
September 30, 2025. The DPA provides the legal basis for BIS's
principal authorities and serves as the authority under which BIS
issues this final rule.

Expected Impact of the Rule

BIS believes this final rule merely provides clarifications and
transparency to Federal, State, local, Tribal, and territorial
government agencies, foreign governments, and the public to ensure ease
of understanding and implementation of established procedures and will
not have a significant economic impact on government agencies or the
public. No comments were received and BIS is finalizing this section
with no changes.
These changes improve the ease, clarity, and transparency of the
existing standards and procedures used to authorize and require
priority performance of certain contracts or orders that promote the
national defense over other contracts and orders. The changes to ensure
consistency with the Defense Production Act of 1950 (DPA) and E.O.
13603; provide clarity on procedures for the placement, acceptance, and
performance of the Defense Priorities and Allocations System (DPAS)
priority rated orders; and provide transparency to the process for
parties to request SPA.
The standards and process under which a rated order is authorized,
placed, or performed on are not changed with this final rule. There are
no modifications to the procedures for the placement, acceptance, and
performance of rated orders or for the allocation of materials,
services, and facilities. Firms are not required to reduce the total
volume of orders or require the recipient of a rated order to reduce
prices or provide rated orders with more favorable terms than
comparable unrated orders. Nor do the changes amend the requirements or
procedures for requesting Special Priorities Assistance (SPA).

Rulemaking Requirements

1. This final rule is not a significant regulatory action for
purposes of Executive Order (E.O.) 12866.

[[Page 58970]]

2. Notwithstanding any other provision of law, no person is
required to respond to, nor shall any person be subject to a penalty
for failure to comply with, a collection of information subject to the
requirements of the Paperwork Reduction Act of 1995 (44 U.S.C. 3501 et
seq.) (PRA), unless that collection of information displays a currently
valid Office of Management and Budget (OMB) Control Number. With the
proposed rule published in February 2024, BIS also requested comments
on changes to an existing information collection, Request for Special
Priorities Assistance (OMB Control Number 0694-0057). No public
comments were received and BIS has submitted for OMB approval a revised
information collection which reflect the changes discussed in the
proposed rule.
3. These changes do not contain policies with federalism
implications as that term is defined in E.O. 13132.
4. The Regulatory Flexibility Act (RFA), as amended by the Small
Business Regulatory Enforcement Fairness Act of 1996 (SBREFA), 5 U.S.C.
601 et seq., generally requires an agency to prepare a regulatory
flexibility analysis of any rule subject to the notice and comment
rulemaking requirements under the Administrative Procedure Act (5
U.S.C. 553) or any other statute. Under section 605(b) of the RFA,
however, if the head of an agency certifies that a rule will not have a
significant impact on a substantial number of small entities, the
statute does not require the agency to prepare a regulatory flexibility
analysis. Pursuant to section 605(b), the Chief Counsel for Regulation,
Department of Commerce, certified to the Chief Counsel for Regulation,
Small Business Administration that this final rule will not have a
significant impact on a substantial number of small entities for the
reasons explained below. No other law requires such an analysis and no
comments were received on the certification. Consequently, no
regulatory flexibility analysis is required, and none has been
prepared.

List of Subjects in 15 CFR Part 700

Administrative practice and procedure, Business and industry,
Government contracts, National defense, Reporting and recordkeeping
requirements, Strategic and critical materials.

Accordingly, 15 CFR part 700 of the DPAS regulation, is amended as
follows:

PART 700--DEFENSE PRIORITIES AND ALLOCATIONS SYSTEM

0
1. The authority citation for 15 CFR part 700 continues to read as
follows:

Authority: 50 U.S.C. 4501 et seq.; 42 U.S.C. 5195, et seq.; 50
U.S.C. 3816; 10 U.S.C. 2538; 50 U.S.C. 82; E.O. 12656, 53 FR 226, 3
CFR, 1988 Comp., p. 585; E.O. 12742, 56 FR 1079, 3 CFR, 1991 Comp.,
p. 309; E.O. 13603, 77 FR 16651, 3 CFR, 2012 Comp., p. 225.

0
2. Section 700.1 is amended by revising the second and third sentences
to read as follows:

Sec. 700.1 Purpose of this part.

* * * The DPAS implements the priorities and allocations authority
of the Defense Production Act (50 U.S.C. 4501 et seq.), delegated to
the Department of Commerce under Executive Order 13603, including use
of that authority to support emergency preparedness activities pursuant
to Title VI of the Robert T. Stafford Disaster Relief and Emergency
Assistance Act (42 U.S.C. 5121 et seq.), and the priorities authority
of the Selective Service Act and related statutes, all with respect to
industrial resources. The DPAS establishes procedures for the
placement, acceptance, and performance of priority rated contracts and
orders (other than contracts of employment) and for the allocation of
materials, services, and facilities for approved programs. * * *

0
3. Revise section 700.2 to read as follows:

Sec. 700.2 Introduction.

(a) Certain national defense and energy programs (including
military, emergency preparedness, homeland security, and critical
infrastructure protection and restoration activities) may be eligible
for priorities and allocations support as determined by a Determination
Department.
(b) The Department of Commerce administers the DPAS and may
exercise priorities and allocations authority to ensure the timely
delivery of industrial resources to meet approved program requirements.
(c) The Department of Commerce has delegated authority to place
priority ratings on contracts or orders necessary or appropriate to
promote the national defense to certain government agencies that issue
such contracts or orders. Such delegations include authority to
authorize recipients of rated orders to place ratings on contracts or
orders to contractors, subcontractors, and suppliers. Schedule I to
this part includes a list of agencies to which the Department of
Commerce has delegated authority. The Department of Commerce is also
listed as an agency for programs where its authorization is necessary
to place rated orders.

0
4. Section 700.3 is amended by revising paragraphs (a) and (d) to read
as follows:

Sec. 700.3 Priority ratings and rated orders.

(a) Rated orders are identified by a priority rating, which
consists of a rating symbol (DO or DX), and a program identification
symbol. Rated orders take precedence over all unrated orders as
necessary to meet required delivery dates. Rating symbols indicate the
level of priority. Among rated orders, DX rated orders take precedence
over DO rated orders. Program identification symbols indicate which
approved program is attributed to the rated order.
* * * * *
(d) Persons who receive rated orders must in turn place rated
orders with their suppliers for the industrial resources they need to
fill the orders. This provision ensures that suppliers will give
priority treatment to rated orders from contractor to subcontractor to
suppliers throughout the procurement chain.
* * * * *

0
5. Section 700.8 is amended by:
0
a. Revising the definitions of ``Approved program'' and ``Defense
Production Act'';
0
b. Adding in alphabetical order the definitions of ``Determination
Department'' and ``Facilities'';
0
c. Revising the definition of ``Industrial resources'';
0
d. Removing the definition of ``Item'';
0
e. Adding in alphabetical order a definition for ``Materials'';
0
f. Revising the definitions of ``National defense'', ``Official
action'', ``Priorities authority'', and ``Priority rating'';
0
g. Adding in alphabetical order a definition for ``Resource
Department'';
0
h. Revising the definition of ``Selective Service Act'';
0
i. Adding in alphabetical order a definition for ``Services''; and
0
j. Revising the definition of ``Stafford Act'';
The revisions and additions read as follows:

Sec. 700.8 Definitions.

* * * * *
Approved program. A program determined in writing as necessary or
appropriate for priorities and allocations support to promote the
national defense by the Secretary of Defense, the Secretary of Energy,
or the Secretary of Homeland Security, under the authority

[[Page 58971]]

of the Defense Production Act and Executive Order 13603, or the
Selective Service Act and Executive Order 12742.
* * * * *
Defense Production Act. The Defense Production Act of 1950, as
amended (50 U.S.C. 4501 et seq.).
* * * * *
Determination Department. Any of the three Federal departments
whose head is delegated authority by the President under section 202 of
Executive Order 13603 to determine in writing that a program is
necessary or appropriate to promote the national defense (referred to
as ``approved program''):
(1) The Secretary of Defense with respect to military production
and construction, military assistance to foreign nations, military use
of civil transportation, stockpiles managed by the Department of
Defense, space, and directly related activities;
(2) The Secretary of Energy with respect to energy production and
construction, distribution and use, and directly related activities;
and
(3) The Secretary of Homeland Security with respect to all other
national defense programs, including civil defense and continuity of
Government.
* * * * *
Facilities. The term includes all types of buildings, structures,
or other improvements to real property (but excluding farms, churches
or other houses of worship, and private dwelling houses), and services
relating to the use of any such building, structure, or other
improvement.
* * * * *
Industrial resources. All materials, services, and facilities,
including construction materials, the authority for which has not been
delegated to other agencies under Executive Order 13603. This term may
also be referred to as ``item'' in this part.
* * * * *
Materials. Includes:
(1) Any raw materials (including minerals, metals, and advanced
processed materials), commodities, articles, components (including
critical components), products, and items of supply; and
(2) Any technical information or services ancillary to the use of
any such materials, commodities, articles, components, products, or
items.
National defense. Programs for military and energy production or
construction, military or critical infrastructure assistance to any
foreign nation, homeland security, stockpiling, space, and any directly
related activity. Such term includes emergency preparedness activities
conducted pursuant to Title VI of The Robert T. Stafford Disaster
Relief and Emergency Assistance Act (42 U.S.C. 5121 et seq.) and
critical infrastructure protection and restoration.
Official action. An action taken by the Department of Commerce
under the authority of the Defense Production Act, the Selective
Service Act and related statutes, and this part. Such actions include
the issuance of rating authorizations, directives, letters of
understanding, demands for information, inspection authorizations,
administrative subpoenas, and allocation orders.
* * * * *
Priorities authority. The authority of the Department of Commerce,
pursuant to section 101 of the Defense Production Act, to require
priority performance of contracts and orders (other than contracts of
employment) for industrial resources for use in approved programs.
Priority rating. An identifying code, consisting of the rating
symbol and the program identification symbol, assigned by the
Department of Commerce, a Delegate Agency, or authorized person and
placed on all rated orders.
* * * * *
Resource Department. Any of the six Federal departments whose head
is delegated authority by the President under section 201 of Executive
Order 13603 to require acceptance and priority performance of contracts
or orders (other than contracts of employment) to promote the national
defense over performance of any other contracts or orders, and to
allocate materials, services, and facilities as deemed necessary or
appropriate to promote the national defense (referred to as ``approved
program''):
(1) The Secretary of Agriculture with respect to food resources,
food resource facilities, livestock resources, veterinary resources,
plant health resources, and the domestic distribution of farm equipment
and commercial fertilizer;
(2) The Secretary of Energy with respect to all forms of energy;
(3) The Secretary of Health and Human Services with respect to
health resources;
(4) The Secretary of Transportation with respect to all forms of
civil transportation;
(5) The Secretary of Defense with respect to water resources; and
(6) The Secretary of Commerce with respect to all other materials,
services, and facilities, including construction materials (referred to
as ``industrial resources'').
* * * * *
Selective Service Act. Section 18 of the Selective Service Act of
1948 (50 U.S.C. 3816).
Services. Includes any effort that is needed for or incidental to:
(1) The development, production, processing, distribution,
delivery, or use of an industrial resource or a critical technology
item;
(2) The construction of facilities; or
(3) Other national defense programs and activities.
* * * * *
Stafford Act. Title VI (Emergency Preparedness) of the Robert T.
Stafford Disaster Relief and Emergency Assistance Act, as amended (42
U.S.C. 5121 et seq.).
* * * * *

0
6. Section 700.10 is amended by revising the last sentence in paragraph
(c)(1) introductory text to read as follows:

Sec. 700.10 Authority.

* * * * *
(c) * * *
(1) * * * Unless otherwise agreed to by the concerned agencies, the
provisions of this part are not applicable to:
* * * * *

0
7. Section 700.11 is amended by revising paragraph (a)(1), the second
and third sentences of paragraph (b), and the first sentence of
paragraph (c) to read as follows:

Sec. 700.11 Priority ratings.

(a) * * *
(1) There are two levels of priority established by this
regulation, identified by the rating symbols ``DO'' and ``DX.''
* * * * *
(b) * * * The list of approved programs and their identification
symbols is found in schedule I to this part. For example, A1 identifies
defense aircraft programs and A7 signifies defense electronic and
communications equipment programs. * * *
(c) Priority ratings. A priority rating consists of the rating
symbol--DO and DX--and the program identification symbol, such as A1,
A7, or N1. * * *

0
8. Section 700.12 is amended by revising paragraphs (a)(1) and (a)(4)
to read as follows:

Sec. 700.12 Elements of a rated order.

(a) * * *
(1) The appropriate priority rating and program identification
symbol (e.g., DO-A1, DX-A2, DO-N1).
* * * * *
(4) A statement that reads in substance: ``This is a rated order
certified for national defense use and

[[Page 58972]]

you are required to follow all the provisions of the Defense Priorities
and Allocations System regulation (15 CFR part 700).''
* * * * *

0
9. Section 700.13 is amended by revising paragraphs (c)(5) and (d)(3)
to read as follows:

Sec. 700.13 Acceptance and rejection of rated orders.

* * * * *
(c) * * *
(5) If acceptance of a rated order or performance against a rated
order would violate any other regulation, official action, or order of
the Department of Commerce issued under the authority of the Defense
Production Act or the Selective Service Act and related statutes (see
Sec. 700.75).
(d) * * *
(3) If a person has accepted a rated order and subsequently finds
that shipment or performance will be delayed, the person must notify
the customer immediately, give the reasons for the delay, and advise of
a new shipment or performance date. If notification is given verbally,
written (hard copy) or electronic confirmation must be provided within
one (1) working day of the verbal notice.

0
10. Section 700.14 is amended by revising the second sentence in
``Examples'' to paragraph (b) to read as follows:

Sec. 700.14 Preferential Scheduling.

* * * * *
(b) * * *
Examples:
* * * If a DX rated order is received calling for delivery on July
15 and a person has a DO rated order requiring delivery on June 3 and
operations can be scheduled to meet both deliveries, there is no need
to alter production schedules to give any additional preference to the
DX rated order. * * *
* * * * *

0
11. Revise Section 700.15 to read as follows:

Sec. 700.15 Extension of priority ratings.

(a) A person must use rated orders with suppliers to obtain
industrial resources needed to fill a rated order. All elements of a
rated order outlined in section 700.12 must be included on the rated
order. The person must use the priority rating indicated on the
customer's rated order, except as otherwise provided in this part (see
Sec. 700.17) or as directed by the Department of Commerce.
Example:
If a person is in receipt of a rated order with a priority rating
of DO-A3 for a navigation system and needs to purchase semiconductors
for its manufacture, that person must use a DO-A3 priority rating to
obtain the needed semiconductors.
(b) The required elements of a rated order outlined in Sec. 700.12
must be included on each successive order placed to obtain industrial
resources needed to fill a customer's rated order. Therefore, the
inclusion of the rating will continue from contractor to subcontractor
to supplier throughout the entire supply chain.
(c) A person must use rated orders with suppliers to obtain
industrial resources needed to fill an emergency preparedness rated
order. That person must require acceptance or rejection, and
transmission of that acceptance or rejection by the supplier within the
time limit stated in the rated order that is being filled.

0
12. Section 700.16 is amended by revising paragraph (b) to read as
follows:

Sec. 700.16 Changes or cancellations of priority ratings and rated
orders.

* * * * *
(b) If an unrated order is amended so as to make it a rated order,
or a DO rating is changed to a DX rating, the supplier must give the
appropriate preferential treatment to the order as of the date the
change is received by the supplier.
* * * * *

0
13. Section 700.17 is amended by revising paragraphs (a)(4), (b)(1),
(d)(1)(ii), and (f) to read as follows:

Sec. 700.17 Use of rated orders.

(a) * * *
(4) MRO needed to produce the finished items to fill rated orders.
However, for MRO, the priority rating used must contain the program
identification symbol H7 along with the rating symbol contained on the
customer's rated order. For example, a person in receipt of a rated
order with a priority rating of DO-A3 rated order, who needs MRO, would
place a rated order with a priority rating of DO-H7 rated order with
the person's supplier.
(b) * * *
(1) The order must be placed within ninety (90) days of the date of
use of the inventory.
* * * * *
(d) * * *
(1) * * *
(ii) The elements of a rated order, as required by Sec. 700.12,
are included on the order with the statement required in Sec.
700.12(a)(4) modified to read in substance: ``This purchase order
contains rated order quantities certified for national defense use, and
you are required to follow all the provisions of the Defense Priorities
and Allocations System regulation (15 CFR part 700) as it pertains to
the rated quantities.''
* * * * *
(f) A person is not required to place a priority rating on an order
for less than $125,000, or one half of the Simplified Acquisition
Threshold (as established in the Federal Acquisition Regulation (FAR))
(see FAR section 2.101), whichever amount is greater, provided that
delivery can be obtained in a timely fashion without the use of the
priority rating.

0
14. Section 700.18 is amended by revising paragraphs (a)(2)(iii),
(a)(2)(iv)(A), and (a)(2)(iv)(B) to read as follows:

Sec. 700.18 Limitations on placing rated orders.

(a) * * *
(2) * * *
(iii) Items in advance of the receipt of a rated order, except as
specifically authorized by the Department of Commerce (see Sec.
700.51(c) for information on obtaining authorization for a priority
rating in advance of a rated order); or
(iv) * * *
(A) Items for plant improvement, expansion, or construction, unless
they will be physically incorporated into a construction project
covered by a rated order; or
(B) Production or construction equipment or items to be used for
the manufacture of production equipment (for information on requesting
priority rating authority, see Sec. 700.51).
* * * * *

0
15. Section 700.21 is amended by revising the last sentence of
paragraph (a) to read as follows:

Sec. 700.21 Application for priority rating authority.

(a) * * * Further information may be obtained from the Department
of Energy, Office of Cybersecurity, Energy Security, and Emergency
Response, 1000 Independence Avenue SW, Washington, DC 20585; Telephone:
(202) 586-8100; Email: <a href="/cdn-cgi/l/email-protection#f796849c9485b79f86d9939892d9909881">[email&#160;protected]</a>.
* * * * *

0
16. Section 700.31 is amended by revising paragraph (f) to read as
follows:

Sec. 700.31 General procedures.

* * * * *
(f) A detailed description of the provisions that will be included
in the allocation orders, including the type(s) of allocation orders,
the percentages or

[[Page 58973]]

quantity of capacity or output to be allocated for each purpose, the
relationship with previously or subsequently received priority rated
and unrated contracts and orders, and the duration of the allocation
action (e.g., anticipated start and end dates);
* * * * *

0
17. Section 700.33 is amended by revising the section heading and
introductory text to read as follows:

Sec. 700.33 Types of allocation orders.

There are three types of allocation orders available for
communicating allocation actions.
* * * * *

0
18. Section 700.34 is amended by revising paragraphs (a)(1), (b)(1),
(c) introductory text, and (c)(1) to read as follows:

Sec. 700.34 Elements of an allocation order.

* * * * *
(a) * * *
(1) A detailed description of the required allocation action(s),
including its relationship to previously or subsequently received DX
rated orders, DO rated orders, and unrated orders.
* * * * *
(b) * * *
(1) A statement that reads in substance: ``This is an allocation
order certified for national defense use. [Insert the name of the
person receiving the order] is required to comply with this order, in
accordance with the provisions of the Defense Priorities and
Allocations System regulation (15 CFR part 700).''
* * * * *
(c) Elements to be included in an allocation order issued by
constructive notice through publication in the Federal Register. (1) A
statement that reads in substance: ``This is an allocation order
certified for national defense use. [Insert the name(s) of the
person(s) to whom the order applies or a description of the class of
persons to whom the order applies] is (are) required to comply with
this order, in accordance with the provisions of the Defense Priorities
and Allocations System regulation (15 CFR part 700).''
* * * * *

0
19. Revise section 700.50 to read as follows:

Sec. 700.50 General provisions.

(a) Once a priority rating has been authorized pursuant to this
part, further action by the Department of Commerce generally is not
needed. However, it is anticipated that from time-to-time problems will
occur. In this event, a person should immediately contact the
appropriate contract administration officer or the Department of
Commerce for guidance or assistance. Special priorities assistance is a
service provided to alleviate problems that do arise.
(1) If additional formal aid is needed for a rated order placed by
a Delegate Agency, special priorities assistance should be sought from
the Delegate Agency through the contract administration officer. If the
Delegate Agency is unable to resolve the problem or to authorize the
use of a priority rating and believes additional assistance is
warranted, the Delegate Agency may forward the request to the
Department of Commerce for action.
(2) If additional formal aid is needed for a rated order placed by
other authorized persons, special priorities assistance should be
sought from the Department of Commerce.
(b) Special priorities assistance may be provided for any reason
consistent with this part, such as assisting in obtaining timely
deliveries of items needed to satisfy rated orders or authorizing the
use of priority ratings on orders to obtain items not otherwise ratable
under this part. If the Department of Commerce is unable to resolve the
problem or to authorize the use of a priority rating and believes
additional assistance is warranted, the Department of Commerce may
forward the request to another agency, identified in Sec. 700.10(c),
as appropriate, for action.
(c) A request for special priorities assistance must be submitted
on Form BIS-999 (OMB control number 0694-0057) to the local contract
administration representative or to the Department of Commerce. Form
BIS-999 may be obtained from the Delegate Agency representative or from
the Department of Commerce. A sample Form BIS-999 is attached at
appendix I. A fillable Form BIS-999 may be obtained on the following
website: <a href="https://www.bis.doc.gov/">https://www.bis.doc.gov/</a>.

0
20. Revise 700.51 to read as follows:

Sec. 700.51 Requests for priority rating authority.

(a) If a rated order is likely to be delayed because a person is
unable to obtain items not normally rated under this part, the person
may request the authority to use a priority rating in ordering the
needed items. Examples of items for which priority ratings may be
authorized include:
(1) Production or construction equipment;
(2) Computers when not used as production items; and
(3) Expansion, rebuilding or replacing plant facilities.
(b) If a person does not have priority rating authority under this
part from a Delegate Agency or the Department of Commerce and is unable
to ensure the timely delivery of industrial resources, the person may
request the authority to use a priority rating in ordering the needed
items.
(1) A request for priority rating authority under this part must be
submitted on Form BIS-999 to the Department of Commerce (see Sec.
700.50(c) for information on Form BIS-999).
(2) A request for priority rating authority under this part may be
used only to support approved programs (see Sec. 700.55, Sec. 700.57,
and Sec. 700.58 for information on requesting a determination by the
appropriate Determination Department that the request supports a
program that is necessary or appropriate to promote the national
defense).
(c) Rating authority for production or construction equipment. (1)
A request for priority rating authority for production or construction
equipment must be submitted to the appropriate Delegate Agency or the
Department of Commerce. Requests in support of Department of Defense
approved programs should be submitted to the Department of Defense on
Department of Defense Form DD 691. All other requests should be
submitted on Form BIS-999. If the Delegate Agency is unable to resolve
the problem or authorize the use of a priority rating, the Delegate
Agency may forward the request to the Department of Commerce for
action.
(2) When the use of a priority rating is authorized for the
procurement of production or construction equipment, a rated order may
be used either to purchase or to lease such equipment. However, in the
latter case, the equipment may be leased only from a person engaged in
the business of leasing such equipment or from a person willing to
lease rather than sell.
(d) Rating authority in advance of a rated prime contract. (1) In
certain cases and upon specific request, the Department of Commerce, in
order to promote the national defense, may authorize a person to place
a priority rating on an order to a supplier in advance of the issuance
of a rated prime contract. In these instances, the person requesting
advance rating authority must obtain sponsorship of the request from
the appropriate Delegate Agency or those authorized by the Department
of Commerce to priority rate the prime contract. The person shall also
assume any business risk associated with the placing of rated orders if
these orders

[[Page 58974]]

have to be cancelled in the event the rated prime contract is not
issued.
(2) The person must state the following in the request: ``It is
understood that the authorization of a priority rating in advance of
our receiving a rated prime contract and our use of that priority
rating with our suppliers in no way commits the Department of Commerce
or any other government agency to enter into a contract or order or to
expend funds. Further, we understand that the Federal Government shall
not be liable for any cancellation charges, termination costs, or other
damages that may accrue if a rated prime contract is not eventually
placed and, as a result, we must subsequently cancel orders placed with
the use of the priority rating authorized as a result of this
request.''
(3) In reviewing requests for rating authority in advance of a
rated prime contract, the Department of Commerce will consider, among
other things, the following criteria:
(i) The probability that the prime contract will be awarded;
(ii) The impact of the resulting rated orders on suppliers and on
other authorized programs;
(iii) Whether the contractor is the sole source;
(iv) Whether the item being produced has a long lead time; and
(v) The time period for which the rating is being requested.
(4) The Department of Commerce may require periodic reports on the
use of the rating authority granted under paragraph (c) of this
section.
(5) If a rated prime contract is not issued, the person shall
promptly notify all suppliers who have received rated orders pursuant
to the advanced rating authority that the priority rating on those
orders is cancelled.

0
21. Section 700.52 is amended by revising paragraph (a) to read as
follows:

Sec. 700.52 Examples of assistance.

(a) While special priorities assistance may be provided for any
reason in support of this regulation and an approved program (see Sec.
700.55, Sec. 700.57, Sec. 700.58, and Schedule I of this part), it is
usually provided in situations where:
(1) A person is experiencing difficulty in obtaining delivery
against a rated order by the required delivery date;
(2) A person cannot locate a supplier for an item needed to fill a
rated order; or
(3) A person is experiencing difficulty in obtaining delivery for
an unrated order by the required delivery date.
* * * * *

0
22. Amend section 700.53 by revising the introductory text to read as
follows:

Sec. 700.53 Criteria for assistance.

Requests for special priorities assistance should be timely, i.e.,
the request has been submitted promptly and enough time exists for the
Determination Department, Delegate Agency, or the Department of
Commerce to effect a meaningful resolution to the problem, and must
establish that:
* * * * *

0
23. Amend section 700.54 by revising the first sentence of the
introductory text to read as follows:

Sec. 700.54 Instances where assistance will not be provided.

Special priorities assistance is provided at the discretion of the
Determination Departments, Delegate Agencies, and the Department of
Commerce when it is determined that such assistance is warranted to
meet the objectives of this regulation. * * *
* * * * *

0
24. Revise section 700.55 to read as follows:

Sec. 700.55 Requests for determination that program within the United
States is necessary or appropriate to promote the national defense.

(a) Homeland security, emergency response, and critical
infrastructure protection and restoration assistance programs within
the United States. Any person requesting priority rating authority or
requiring assistance in obtaining rated items under this part
supporting homeland security, emergency preparedness, and critical
infrastructure protection and restoration related activities should
submit a request for a determination in writing that the request
supports a program that is necessary or appropriate to promote the
national defense (referred to as ``approved program'') to the Office of
Policy and Program Analysis, Federal Emergency Management Agency,
Department of Homeland Security, 500 C Street SW, Washington, DC 20472;
Telephone: (202) 212-2900; Fax: (202) 646-4601; Email: <a href="/cdn-cgi/l/email-protection#74323139355930243534121119155a101c075a131b02">[email&#160;protected]</a>, website: <a href="https://www.fema.gov/disaster/defense-production-act">https://www.fema.gov/disaster/defense-production-act</a>.
(b) Military production and construction, military use of civil
transportation, stockpiles managed by the Department of Defense, space,
and directly related activities within the United States. Any person
requesting priority rating authority or requiring assistance under this
part in obtaining rated items supporting military production and
construction, military use of civil transportation, stockpiles managed
by the Department of Defense, space, and directly related activities
should submit a request for a determination in writing that the request
supports a program that is necessary or appropriate to promote the
national defense (referred to as ``approved program'') to the
Department of Defense DPA Title I Lead in the Office of the Assistant
Secretary of Defense for Industrial Base Policy, 3330 Defense Pentagon,
Room 3B854, Washington, DC 20301; Telephone: (703) 697-0051; Fax: (703)
695-4885; Email: <a href="/cdn-cgi/l/email-protection#f49b8790da84919a8095939b9ada9b818790d995d987da99968cda9d9a90849b98d9908495d9809d809891d99db499959d98da999d98">[email&#160;protected]</a>;
website: <a href="https://www.businessdefense.gov/">https://www.businessdefense.gov/</a>.
(c) Energy production and construction, distribution and use, and
directly related activities within the United States. Any person
requesting priority rating authority or requiring assistance under this
part in obtaining rated items supporting energy production and
construction, distribution and use, and directly related activities
should submit a request for a determination in writing that the request
supports a program that is necessary or appropriate to promote the
national defense (referred to as ``approved program'') to the
Department of Energy, Office of Cybersecurity, Energy Security, and
Emergency Response, 1000 Independence Avenue SW, Washington, DC 20585;
Telephone: (202) 586-8100; Email: <a href="/cdn-cgi/l/email-protection#bbdac8d0d8c9fbd3ca95dfd4de95dcd4cd">[email&#160;protected]</a>.

0
25. Section 700.56 is amended by revising paragraphs (c), (d), (e),
(f), and (g) to read as follows:

Sec. 700.56 Military assistance programs with Canada.

* * * * *
(c) The Department of Commerce coordinates with Public Works and
Government Services Canada on all matters of mutual concern relating to
the administration of this part.
(d) Any person in the United States ordering defense items in
Canada in support of an approved program should inform the Canadian
supplier that the items being ordered are to be used to fill a rated
order. The Canadian supplier should be informed that if production
materials are needed from the United States by the Canadian supplier or
the Canadian supplier's vendor to fill the order, the Canadian supplier
or vendor should contact Public Works and Government Services Canada
for authority to place rated orders in the United States: Public Works
and Government Services Canada, Acquisitions Branch, Business

[[Page 58975]]

Management Directorate, Phase 3, Place du Portage, 0B2-103, 11 Laurier
Street, Gatineau, Quebec, K1A 0S5, Canada; Telephone: (819) 420-7200;
Fax: (819) 997-9776, or electronically at <a href="/cdn-cgi/l/email-protection#bde9edeefafe93edfcedcfd4d2cfd4c9d8ced9d8d9d8dbd8d3ced890fcedf9d8dbd8d3ded8edcfd4d2cfd4c9d4d8ce93edeafaeefefdc9cdcedade9081dc9dd5cfd8db80" http: pwgsc.gc.ca">pwgsc.gc.ca</a>">TPSGC.PAPrioritesdedefense-APDefencePriorities.PWGSC@tpsgc-<a href="http://pwgsc.gc.ca">pwgsc.gc.ca</a></a>.
(e) Any person in Canada producing defense items for the Canadian
government may also obtain priority rating authority for items to be
purchased in the United States by applying to Public Works and
Government Services Canada, Acquisitions Branch, Business Management
Directorate, in accordance with its procedures.
(f) Persons in Canada needing special priorities assistance in
obtaining defense items in the United States may apply to Public Works
and Government Services Canada, Acquisitions Branch, Business
Management Directorate, for such assistance. Public Works and
Government Services Canada will forward appropriate requests to the
Department of Commerce.
(g) Any person in the United States requiring assistance in
obtaining items in Canada must submit a request to the Office of
Strategic Industries and Economic Security, U.S. Department of Commerce
on Form BIS-999. The Department of Commerce will forward appropriate
requests to Public Works and Government Services Canada.

0
26. Section 700.57 is amended by revising paragraphs (a), (b)(1), and
(c) to read as follows:

Sec. 700.57 Military assistance programs with other nations and
international organizations.

(a) Scope. To promote military assistance to foreign nations and
international organizations (for example, the North Atlantic Treaty
Organization or the United Nations), this section provides for
authorizing priority ratings to persons in foreign nations or
international organizations to obtain items in the United States in
support of approved programs. Although priority ratings have no legal
authority outside of the United States, this section also provides
information on how persons in the United States may obtain informal
assistance in foreign nations that are signatories to bilateral
security of supply arrangements with the Department of Defense. These
foreign nations include Australia, Estonia, Denmark, Finland, Israel,
Italy, Japan, Latvia, Lithuania, The Netherlands, Norway, Republic of
Korea, Singapore, Spain, Sweden, and the United Kingdom. The most
current security of supply arrangement information, including an up-to-
date list of countries, may be found on the following website: <a href="https://www.businessdefense.gov/security-of-supply.html">https://www.businessdefense.gov/security-of-supply.html</a>.
(b) * * *
(1) Any person in a foreign nation other than Canada, or any person
in an international organization, requiring assistance in obtaining
items in the United States or priority rating authority for items to be
purchased in the United States, should submit a request for such
assistance or priority rating authority to: the Department of Defense
DPA Title I Lead in the Office of the Assistant Secretary of Defense
for Industrial Base Policy, 3330 Defense Pentagon, Room 3B854,
Washington, DC 20301; Telephone: (703) 697-0051; Fax: (703) 695-4885;
Email: <a href="/cdn-cgi/l/email-protection#99f6eafdb7e9fcf7edf8fef6f7b7f6eceafdb4f8b4eab7f4fbe1b7f0f7fde9f6f5b4fde9f8b4edf0edf5fcb4f0d9f4f8f0f5b7f4f0f5">[email&#160;protected]</a>, website:
<a href="https://www.businessdefense.gov/">https://www.businessdefense.gov/</a>.
(i) If the end product is being acquired by a U.S. Government
agency, the request should be submitted to the Department of Defense
DPA Title I Lead through the U.S. contract administration
representative.
(ii) If the end product is being acquired by a foreign nation or
international organization, the request must be sponsored prior to its
submission to the Department of Defense DPA Title I Lead by the
government of the foreign nation or the international organization that
will use the end product.
* * * * *
(c) Requesting assistance in foreign nations that are signatories
to bilateral security of supply arrangements. (1) The Department of
Defense has entered into bilateral security of supply arrangements with
several foreign nations that allow the Department of Defense to request
the priority delivery for Department of Defense contracts,
subcontracts, and orders from companies in these countries. These
countries include Australia, Denmark, Estonia, Finland, Israel, Italy,
Japan, Latvia, Lithuania, The Netherlands, Norway, Republic of Korea,
Singapore, Spain, Sweden, and the United Kingdom. The most current
security of supply arrangement information, including an up-to-date
list of countries, may be found on the following website: <a href="https://www.businessdefense.gov/security-of-supply.html">https://www.businessdefense.gov/security-of-supply.html</a>.
(2) Any person in the United States requiring assistance in
obtaining the priority delivery of a contract, subcontract, or order in
foreign nations that are signatories to bilateral security of supply
arrangements with the Department of Defense should contact the
Department of Defense DPA Title I Lead in the Office of the Assistant
Secretary of Defense for Industrial Base Policy for assistance.
(3) Persons in foreign nations that are signatories to bilateral
security of supply arrangements with the Department of Defense should
request assistance in accordance with paragraph (b)(1) of this section.

0
27. Revise section 700.58 to read as follows:

Sec. 700.58 Critical infrastructure assistance programs to foreign
nations and international organizations.

(a) Scope. To promote critical infrastructure assistance to foreign
nations, this section provides for authorizing priority ratings to
persons in foreign nations or international organizations (for example,
the North Atlantic Treaty Organization or the United Nations) to obtain
items in the United States in support of approved programs.
(b) Foreign nations or international organizations. (1) Any person
in a foreign nation or representing an international organization
requiring assistance in obtaining items under this part to be purchased
in the United States for support of critical infrastructure protection
and restoration should submit a request for priority rating authority
on Form BIS-999 to the Department of Commerce (see Sec. 700.50(c) for
information on Form BIS-999).
(2) Any person in a foreign nation or representing an international
organization requesting priority rating authority or requiring
assistance in obtaining rated items under this part in support of
critical infrastructure protection and restoration related activities
should submit a request for a determination in writing that the request
supports a program that is necessary or appropriate to promote the
national defense to the Office of Policy and Program Analysis, Federal
Emergency Management Agency, Department of Homeland Security, 500 C
Street SW, Washington, DC 20472; Telephone: (202) 212-2900; Fax: (202)
646-4601; Email: <a href="/cdn-cgi/l/email-protection#682e2d2529452c3829280e0d0509460c001b460f071e">[email&#160;protected]</a>, website: <a href="https://www.fema.gov/disaster/defense-production-act">https://www.fema.gov/disaster/defense-production-act</a>.

0
28. Section 700.61 is amended by revising paragraph (a)(1) to read as
follows:

Sec. 700.61 Rating authorization.

(a) * * *
(1) Permits a person to place a priority rating on an order for an
item, such as

[[Page 58976]]

an item not normally ratable under this regulation; or
* * * * *

0
29. Section 700.63 is amended by revising paragraph (a) to read as
follows:

Sec. 700.63 Letters of understanding.

(a) A letter of understanding is an official action that may be
issued in resolving special priorities assistance cases to reflect an
agreement reached by all parties (e.g., the Department of Commerce, the
Determination Department, the Delegate Agency, the supplier, the
customer).
* * * * *

0
30. Section 700.70 is amended by revising paragraph (b) to read as
follows:

Sec. 700.70 General provisions.

* * * * *
(b) Willful violation of any of the provisions of Title I or
section 705 of the Defense Production Act, this part, or an official
action of the Department of Commerce, is a criminal act, punishable as
provided in sections 103 and 705 of the Defense Production Act.

0
31. Section 700.71 is amended by revising the first sentence of
paragraph (a) to read as follows:

Sec. 700.71 Audits and investigations.

(a) Audits and investigations are official actions involving the
examination of books, records, documents, other writings, and
information to ensure that the provisions of the Defense Production
Act, the Selective Service Act and related statutes, and this part have
been properly followed. * * *
* * * * *

0
32. Section 700.74 is amended by revising paragraph (a) and paragraph
(c) introductory text to read as follows:

Sec. 700.74 Violations, penalties, and remedies.

(a) Willful violation of the provisions of Title I or sections 705
or 707 of the Defense Production Act, the priorities provisions of the
Selective Service Act and related statutes or this part is a crime and
upon conviction, a person may be punished by fine or imprisonment, or
both as provided in sections 103 and 705 of the Defense Production Act
and in section 468(f) of the Selective Service Act.
* * * * *
(c) In order to secure the effective enforcement of the Defense
Production Act, this part, and official actions, the following are
prohibited (see section 704 of the Defense Production Act; see e.g.,
sections 2 and 371 of Title 18 United States Code):
* * * * *

0
33. Section 700.80 is amended by revising the last sentence in
paragraph (c) to read as follows:

Sec. 700.80 Adjustments or exceptions.

* * * * *
(c) * * * The Office of Strategic Industries and Economic Security
shall respond to requests for adjustment of or exceptions to compliance
with the provisions of this part or an official action within twenty-
five (25) days, not including Saturdays, Sundays or Government
holidays, of the date of receipt.
* * * * *

0
34. Section 700.81 is amended by revising paragraph (b) to read as
follows:

Sec. 700.81 Appeals.

* * * * *
(b) Appeals of denied requests for exceptions from or adjustments
to compliance with the provisions of this part or an official action
must be received by the Assistant Secretary for Export Administration
no later than forty-five (45) days after receipt of a written notice of
denial from the Office of Strategic Industries and Economic Security.
After this forty-five (45) day period, an appeal may be accepted at the
discretion of the Assistant Secretary for Export Administration.
* * * * *

0
35. Revise section 700.93 to read as follows:

Sec. 700.93 Communications.

General communications concerning this part, including how to
obtain copies of this part, explanatory information, and requests for
guidance or clarification, may be addressed to the Office of Strategic
Industries and Economic Security, Room 3876, Department of Commerce,
1401 Constitution Ave. NW, Washington, DC 20230, Ref: DPAS; Telephone
(202) 482-3634, email <a href="/cdn-cgi/l/email-protection#b1f5e1f0e2f1d3d8c29fd5ded29fd6dec7">[email&#160;protected]</a>. Request for special priorities
assistance under Sec. 700.50, adjustments or exceptions under Sec.
700.80, or appeals under Sec. 700.81, must be submitted in the manner
specified in those sections.

0
36. Revise Schedule I to Part 700 to read as follows:

Schedule I to Part 700--Approved Programs and Delegate Agencies

Schedule I provides a list of approved programs. They have equal
preferential status. Use of this part in support of an approved program
requires written authorization by the Department of Commerce. The
Department of Commerce has authorized the delegate agencies listed in
the third column to use this part in support of those programs assigned
to them, as indicated below. The Department of Commerce is also listed
as an agency in the third column for programs where its authorization
in writing is necessary to place rated orders (see Sec. 700.51 for
information on how to request priority rating authority).
The Department of Commerce has authorized Delegate Agencies to
place priority ratings on contracts and orders for industrial resources
needed to implement any approved program that has been authorized for
priorities support by the appropriate Resource Department. The program
identification symbol used on priority rated contracts and orders
authorized by the appropriate Resource Department to support the
approved program must also be used on rated orders for industrial
resources needed to implement the approved program. However, any rated
order for industrial resources placed to implement an approved program
that has been authorized for priorities support by a Resource
Department remains subject to the provisions of this part. The program
identification symbols for these approved programs are found under the
``Other Programs'' section of Schedule I.

----------------------------------------------------------------------------------------------------------------
Program identification
symbol Approved program Agency(ies)
----------------------------------------------------------------------------------------------------------------
Defense Programs
----------------------------------------------------------------------------------------------------------------
A1.......................... Aircraft...................... Department of Defense.
A2.......................... Missiles and Space............ Department of Defense.
A3.......................... Ships......................... Department of Defense.
A4.......................... Tank--Automotive.............. Department of Defense.
A5.......................... Weapons....................... Department of Defense.
A6.......................... Ammunition.................... Department of Defense.

[[Page 58977]]

A7.......................... Electronic and communications Department of Defense.
equipment.
B1.......................... Military building supplies.... Department of Defense.
B8.......................... Production equipment (for Department of Defense.
defense contractor's account).
B9.......................... Production equipment Department of Defense.
(Government owned).
C2.......................... Department of Defense Department of Defense.
construction.
C3.......................... Maintenance, repair, and Department of Defense.
operating supplies (MRO) for
Department of Defense
facilities.
C9.......................... Miscellaneous................. Department of Defense.
----------------------------------------------------------------------------------------------------------------
Military Assistance to Canada
----------------------------------------------------------------------------------------------------------------
D1.......................... Canadian military programs.... Department of Commerce.
D2.......................... Canadian production and Department of Commerce.
construction.
D3.......................... Canadian atomic energy program Department of Commerce.
----------------------------------------------------------------------------------------------------------------
Military Assistance to Other Foreign Nations
----------------------------------------------------------------------------------------------------------------
G1.......................... Certain munitions items Department of Commerce.
purchased by foreign
governments through domestic
commercial channels for
export.
G2.......................... Certain direct defense needs Department of Commerce.
of foreign governments other
than Canada.
G3.......................... Foreign nations (other than Department of Commerce.
Canada) production and
construction.
----------------------------------------------------------------------------------------------------------------
Critical Infrastructure Assistance to Foreign Nations
----------------------------------------------------------------------------------------------------------------
G4.......................... Foreign critical Department of Commerce.
infrastructure programs.
----------------------------------------------------------------------------------------------------------------
Co-Production
----------------------------------------------------------------------------------------------------------------
J1.......................... Co-Production Program......... Departments of Commerce and Defense.
----------------------------------------------------------------------------------------------------------------
Atomic Energy Programs
----------------------------------------------------------------------------------------------------------------
E1.......................... Construction.................. Department of Energy.
E2.......................... Operations--including Department of Energy.
maintenance, repair, and
operating supplies (MRO).
E3.......................... Privately owned facilities.... Department of Energy.
----------------------------------------------------------------------------------------------------------------
Domestic Energy Programs
----------------------------------------------------------------------------------------------------------------
F1.......................... Exploration, production, Department of Energy.
refining, and transportation.
F2.......................... Conservation.................. Department of Energy.
F3.......................... Construction, repair, and Department of Energy.
maintenance.
----------------------------------------------------------------------------------------------------------------
Other Defense, Energy, and Related Programs
----------------------------------------------------------------------------------------------------------------
H1.......................... Certain combined orders (see Department of Commerce.
Sec. 700.17(c)).
H5.......................... Private domestic production... Department of Commerce.
H6.......................... Private domestic construction. Department of Commerce.
H7.......................... Maintenance, repair, and Department of Commerce.
operating supplies (MRO).
H8.......................... Designated Programs........... Department of Commerce.
K1.......................... Federal supply items.......... General Services Administration.
----------------------------------------------------------------------------------------------------------------
Homeland Security Programs
----------------------------------------------------------------------------------------------------------------
N1.......................... Federal emergency Department of Homeland Security.
preparedness, mitigation,
response, and recovery.
N2.......................... State, local, Tribal, and Department of Homeland Security.
territorial government
emergency preparedness,
mitigation, response, and
recovery.
N3.......................... Intelligence and warning Department of Homeland Security.
systems.
N4.......................... Border and transportation Department of Homeland Security.
security.
N5.......................... Domestic counter-terrorism, Department of Homeland Security.
including law enforcement.
N6.......................... Chemical, biological, Department of Homeland Security.
radiological, and nuclear
countermeasures.
N7.......................... Critical infrastructure Department of Homeland Security.
protection and restoration.
N8.......................... Continuity of Government...... Department of Homeland Security.
----------------------------------------------------------------------------------------------------------------
Other Programs
Health Resources/Health Resources Priorities and Allocations System (HRPAS)
----------------------------------------------------------------------------------------------------------------
M1.......................... Emergency Support Function 8
Public Health and Medical
Services.
M2.......................... Strategic National Stockpile..
M3.......................... Biodefense and Related Medical
Countermeasures.
M4 [89 FR 9020; February 9, ASPR Critical Infrastructure
2024]. Protection Program.
----------------------------------------------------------------------------------------------------------------

[[Page 58978]]

Food Resources/Agriculture Priorities and Allocations System (APAS)
----------------------------------------------------------------------------------------------------------------
P1.......................... Food and food resources
(civilian).
P2.......................... Agriculture and food critical
infrastructure protection and
restoration.
P3.......................... Food resources (combat
rations).
P4 [80 FR 63890; Dec. 21, Certain combined orders.......
2015].
----------------------------------------------------------------------------------------------------------------
Transportation Resources/Transportation Priorities and Allocations System (TPAS)
----------------------------------------------------------------------------------------------------------------
T1.......................... Federal emergency
preparedness, mitigation,
response, and recovery.
----------------------------------------------------------------------------------------------------------------

Eric Longnecker,
Deputy Assistant Secretary for Technology Security.
[FR Doc. 2024-15370 Filed 7-19-24; 8:45 am]
BILLING CODE 3510-JT-P

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