Rule2024-21093
Defense Federal Acquisition Regulation Supplement: Assuring Integrity of Overseas Fuel Supplies (DFARS Case 2022-D013)
Primary source
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Published
September 26, 2024
Effective
October 1, 2024
Issuing agencies
Defense DepartmentDefense Acquisition Regulations System
Abstract
DoD is issuing a final rule amending the Defense Federal Acquisition Regulation Supplement (DFARS) to implement a section of the National Defense Authorization Act for Fiscal Year 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 187 (Thursday, September 26, 2024)</title>
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[Federal Register Volume 89, Number 187 (Thursday, September 26, 2024)]
[Rules and Regulations]
[Pages 78997-78999]
From the Federal Register Online via the Government Publishing Office [<a href="http://www.gpo.gov">www.gpo.gov</a>]
[FR Doc No: 2024-21093]
[[Page 78997]]
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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: Final rule.
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SUMMARY: DoD is issuing a final rule amending the Defense Federal
Acquisition Regulation Supplement (DFARS) to implement a section of the
National Defense Authorization Act for Fiscal Year 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: Effective October 1, 2024.
FOR FURTHER INFORMATION CONTACT: Mr. Jon Snyder, telephone 703-945-
5341.
SUPPLEMENTARY INFORMATION:
I. Background
DoD published a proposed rule in the Federal Register at 89 FR
11800 on February 15, 2024, 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. One respondent submitted public comments in
response to the proposed rule.
II. Discussion and Analysis
DoD reviewed the public comments in the development of the final
rule. A discussion of the comments and the changes made to the rule as
a result of those comments is provided, as follows:
A. Summary of Significant Changes From the Proposed Rule
There are no significant changes from the proposed rule.
B. Analysis of Public Comments
1. Support for the Rule
Comment: The respondent expressed support for the rule.
Response: DoD acknowledges the respondent's support for the rule.
2. Clarifications
Comment: The respondent recommended the rule include Russia as a
prohibited source and questioned how a contracting officer would know
if an offeror is proposing fuel from Russia or not. The respondent
suggested that the rule should better clarify the definition and
identification of prohibited sources of fuel and include Russia among
them.
Response: This rule implements section 843 of the NDAA for FY 2022,
which does not establish a specific list of prohibited countries,
entities, or individuals. This rule specifies, at DFARS 225.7024-2, a
prohibition on procuring fuel sourced from nations or regions that are
prohibited from selling petroleum to the United States (i.e.,
prohibited sources). These prohibited sources are identified in FAR
subpart 25.7 and at <a href="https://ofac.treasury.gov/sanctions-programs-and-country-information">https://ofac.treasury.gov/sanctions-programs-and-country-information</a>; therefore, it is not necessary to identify Russia
as a prohibited source in this rule. The website is added to the final
rule at DFARS 225.7024-2.
Comment: The respondent expressed concerns regarding the
fungibility of fuel and the possibility of laundering fuel from a
prohibited source through an allowable fuel storage system. The
respondent suggests that the rule require offerors to provide
documentation or evidence of the origin and quality of the fuel they
supply, such as bills of lading, certificates of origin, or laboratory
tests.
Response: The rule adds a new solicitation provision at DFARS
252.225-7065, Restriction on Acquisition of Fuel for Overseas
Contingency Operations, which requires offerors to 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. This rule implements section 843 of the NDAA for FY 2022, which
does not require offerors to provide documentation to support such
certifications.
Comment: The respondent suggested that the rule might leverage the
logistics information technologies to track and monitor the fuel supply
chain to identify any anomalies or discrepancies and enforce more
strictly the applicability of certain laws and regulations, such as the
Foreign Corrupt Practices Act and the Export Administration
Regulations, to deter and punish any violations or corruption in the
fuel acquisition process.
Response: Section 843 specifies that the contracting officer will
obtain certain certifications from offerors regarding their compliance
with certain preaward requirements prior to awarding a contract. As a
result of this rule, the offeror is required to certify the fuel to be
provided under the resulting contract is not sourced from nations or
regions prohibited from selling petroleum to the United States.
There are several mandatory solicitation provisions and contract
clauses that require contractors to comply with all applicable laws and
regulations regarding export-controlled items, e.g., International
Traffic in Arms Regulations and Export Administration Regulations. This
responsibility exists independent of, and is not established or limited
by, this rule.
C. Other Changes
At DFARS 225.7024-3 and 252.225-7065, editorial changes are made to
use the term ``prospective contractor'' in place of ``apparent
successful offeror'' to comply with drafting conventions. The terms
have the same meaning.
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
The provision at DFARS 252.225-7065 is prescribed at DFARS
225.7024-4 for use in solicitations, including solicitations using FAR
part 12 procedures for the acquisition of commercial products and
commercial services, that are for the acquisition of fuel for overseas
contingency operations and are expected to exceed the simplified
acquisition threshold. Consistent with the analysis that DoD provided
in the proposed rule with regard to the application of the requirements
of section 843 of the
[[Page 78998]]
NDAA for FY 2022, DoD has made the determination to apply the statute,
as implemented in the provision at DFARS 252.225-7065, to contracts for
the acquisition of commercial products including COTS items and to the
acquisition of commercial services, as defined at Federal Acquisition
Regulation 2.101.
IV. Expected Impact of the Rule
As a result of this final rule, offerors responding to a
solicitation for fuel, that is for an overseas contingency operation
and that is expected to exceed the SAT, are now required 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 prospective contractor may be requested to provide
records to verify such compliance upon contracting officer request.
This final rule also imposes new requirements on 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.
V. Executive Orders 12866 and 13563
Executive Orders (E.O.s) 12866 and 13563 direct agencies to assess
all costs and benefits of available regulatory alternatives and, if
regulation is necessary, to select regulatory approaches that maximize
net benefits (including potential economic, environmental, public
health and safety effects, distributive impacts, and equity). E.O.
13563 emphasizes the importance of quantifying both costs and benefits,
of reducing costs, of harmonizing rules, and of promoting flexibility.
This is not a significant regulatory action and, therefore, was not
subject to review under section 6(b) of E.O. 12866, Regulatory Planning
and Review, as amended.
VI. Congressional Review Act
As required by the Congressional Review Act (5 U.S.C. 801-808)
before an interim or final rule takes effect, DoD will submit a copy of
the interim or final rule with the form, Submission of Federal Rules
under the Congressional Review Act, to the U.S. Senate, the U.S. House
of Representatives, and the Comptroller General of the United States. A
major rule under the Congressional Review Act cannot take effect until
60 days after it is published in the Federal Register. The Office of
Information and Regulatory Affairs has determined that this rule is not
a major rule as defined by 5 U.S.C. 804.
VII. Regulatory Flexibility Act
A final regulatory flexibility analysis has been prepared
consistent with the Regulatory Flexibility Act, 5 U.S.C. 601, et seq.
and is summarized as follows:
This 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 rule is to implement section 843
of the NDAA for FY 2022.
There were no significant issues raised by the public in response
to the initial regulatory flexibility analysis.
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 final rule will impact any small entities.
The rule does not impose any new reporting, recordkeeping, or other
compliance requirements for small entities.
There are no known alternatives that would accomplish the stated
objectives of the applicable statute. The rule is not expected to have
a significant economic impact on small entities.
VIII. Paperwork Reduction Act
This final 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, the Defense Acquisition Regulations System amends 48 CFR
parts 212, 215, 225, and 252 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 225.7024 for the acquisition of fuel for
overseas contingency operations.
0
3. Amend section 212.301 by adding paragraph (f)(x)(PP) to read as
follows:
212.301 Solicitation provisions and contract clauses for the
acquisition of commercial products and commercial services.
* * * * *
(f) * * *
(x) * * *
(PP) Use the provision at 252.225-7065, Restriction on Acquisition
of Fuel for Overseas Contingency Operations, as prescribed in 225.7024-
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 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
[[Page 78999]]
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.
PART 225--FOREIGN ACQUISITION
0
5. Add sections 225.7024, 225.7024-1, 225.7024-2, 225.7024-3, and
225.7024-4 to read as follows:
* * * * *
Sec.
225.7024 Restriction on acquisition of fuel for overseas contingency
operations.
225.7024-1 Scope.
225.7024-2 Prohibition.
225.7024-3 Procedures.
225.7024-4 Solicitation provision.
* * * * *
225.7024 Restriction on acquisition of fuel for overseas contingency
operations.
225.7024-1 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.
225.7024-2 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 and the
Office of Foreign Assets Control website at <a href="https://ofac.treasury.gov/sanctions-programs-and-country-information">https://ofac.treasury.gov/sanctions-programs-and-country-information</a> for prohibited sources.
225.7024-3 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 prospective contractor 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 parts 120
through 130 (see PGI 225.7901-2).
(iii) Export Administration Regulations at 15 CFR parts 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 252.225-7065, 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.
225.7024-4 Solicitation provision.
Use the provision at 252.225-7065, 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 252.225-7065 to read as follows:
252.225-7065 Restriction on Acquisition of Fuel for Overseas
Contingency Operations.
As prescribed in 225.7024-4, use the following provision:
Restriction on Acquisition of Fuel for Overseas Contingency Operations
(Oct 2024)
(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 and the Office of Foreign Assets Control website at
<a href="https://ofac.treasury.gov/sanctions-programs-and-country-information">https://ofac.treasury.gov/sanctions-programs-and-country-information</a>
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 prospective
Contractor 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
parts 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 parts
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. 2024-21093 Filed 9-25-24; 8:45 am]
BILLING CODE 6001-FR-P
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</html>Indexed from Federal Register on September 26, 2024.
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