Rule2024-27456
Homeland Security Acquisition Regulation, Restrictions on Foreign Acquisition Update (HSAR Case 2024-002)
Primary source
Metadata and text below are from the Federal Register, a public-domain U.S. government work. Always verify the official published version before relying on it for any legal matter.
Published
November 25, 2024
Effective
December 26, 2024
Issuing agencies
Homeland Security Department
Abstract
DHS is issuing a final rule to amend the Homeland Security Acquisition Regulation (HSAR) provisions that relate to the Kissell Amendment, a section of the American Recovery and Reinvestment Act of 2009, that deals with the acquisition of certain clothing, canvas or textile products and natural and synthetic fabrics. These changes are intended to reduce confusion and provide clarity to the requirements under the Kissell Amendment.
Full Text
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<title>Federal Register, Volume 89 Issue 227 (Monday, November 25, 2024)</title>
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[Federal Register Volume 89, Number 227 (Monday, November 25, 2024)]
[Rules and Regulations]
[Pages 92849-92852]
From the Federal Register Online via the Government Publishing Office [<a href="http://www.gpo.gov">www.gpo.gov</a>]
[FR Doc No: 2024-27456]
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DEPARTMENT OF HOMELAND SECURITY
48 CFR Parts 3025 and 3052
[Docket No. DHS-2024-0022]
RIN 1601-AB13
Homeland Security Acquisition Regulation, Restrictions on Foreign
Acquisition Update (HSAR Case 2024-002)
AGENCY: Office of the Chief Procurement Officer, Department of Homeland
Security (DHS).
ACTION: Final rule.
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SUMMARY: DHS is issuing a final rule to amend the Homeland Security
Acquisition Regulation (HSAR) provisions that relate to the Kissell
Amendment, a section of the American Recovery and Reinvestment Act of
2009, that deals with the acquisition of certain clothing, canvas or
textile products and natural and synthetic fabrics. These changes are
intended to reduce confusion and provide clarity to the requirements
under the Kissell Amendment.
DATES: This final rule is effective December 26, 2024.
FOR FURTHER INFORMATION CONTACT: Nancy Harvey, Department of Homeland
Security, Office of the Chief Procurement Officer, Acquisition Policy
and Legislation, at (202) 282-8000 or email at <a href="/cdn-cgi/l/email-protection#e7afb4a6b5a78f96c9838f94c9808891"><span class="__cf_email__" data-cfemail="266e756774664e5708424e5508414950">[email protected]</span></a>. Include
HSAR Case 2024-002 in the subject line.
SUPPLEMENTARY INFORMATION:
Table of Contents for Preamble
I. Background
II. Discussion of Comments and the Final Rule
III. Regulatory Analyses
A. Executive Orders 12866, 13563, and 14094
B. Regulatory Flexibility Act
C. Paperwork Reduction Act
D. National Environmental Policy Act
I. Background
In a Notice of Proposed Rulemaking (NPRM), published in the Federal
Register on July 24, 2024, DHS proposed to amend the Homeland Security
Acquisition Regulation (HSAR) provisions that relate to the Kissell
Amendment, a section of the American Recovery and Reinvestment Act of
2009 (Recovery Act), that deals with the acquisition of certain
clothing, canvas or textile products and natural and synthetic
fabrics.\1\
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\1\ See 89 FR 59877, Homeland Security Acquisition Regulation,
Restrictions on Foreign Acquisition Update (HSAR Case 2024-002)
(Jul. 24, 2024).
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As explained in the NPRM, the Recovery Act was enacted in 2009.\2\
Section 604 of the Recovery Act is also known as the Kissell
Amendment.\3\ The Kissell Amendment requires, with limited exceptions,
that funds appropriated or otherwise available to DHS may not be used
for the procurement of certain textiles, clothing and footwear, if that
item is directly related to the national security interests of the
United States, unless the item is grown, reprocessed, reused, or
produced in the United States.\4\ One of the exceptions is a De Minimis
Exception, which allows the Secretary of Homeland Security to accept
delivery of the aforementioned textiles, clothing and footwear ``that
contain non-compliant fibers if the total value of non-compliant fibers
contained in the end item does not exceed 10 percent of the total
purchase price of the end item.'' \5\
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\2\ See Public Law 111-5, 123 Stat. 115,165-166 (Feb. 17, 2009).
\3\ Section 604 of the Recovery Act is codified at 6 U.S.C.
453b.
\4\ See 6 U.S.C. 453b.
\5\ See 6 U.S.C. 453b(d).
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The Kissel Amendment further requires DHS to apply it in a manner
consistent with United States obligations under international
agreements.\6\ As DHS has explained in prior notices, this includes
free trade agreements and the World Trade Organization Agreement on
Government Procurement.\7\ These requirements apply with respect to
contracts entered into by DHS on or after August 16, 2009.\8\
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\6\ See 6 U.S.C. 453b(k).
\7\ See, e.g., 75 FR 32676, (June 9, 2010).
\8\ See 6 U.S.C. 453b(l).
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As discussed in the NPRM, in 2009, DHS published an interim rule
(``2009 Interim Rule'') amending the Homeland Security Acquisition
Regulation (HSAR) at 48 CFR part 3025, Foreign Acquisitions, and part
3052, Solicitation Provisions and Contract Clauses, incorporating the
Kissell Amendment requirements.\9\ In 2010, DHS published a final rule
(``2010 Final Rule'') adopting the 2009 Interim Rule as final without
change.\10\ The 2009 Interim Rule made amendments to the HSAR ``to add
solicitation provisions, contract clauses and related policy statements
implementing these requirements and
[[Page 92850]]
exceptions for certain DHS contracts, option exercises and orders.''
\11\
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\9\ See Revision of Department of Homeland Security Acquisition
Regulation; Restrictions on Foreign Acquisition (HSAR Case 2009-
004), 74 FR 41346 (Aug. 17, 2009).
\10\ See Revision of Department of Homeland Security Acquisition
Regulation; Restrictions on Foreign Acquisition (HSAR Case 2009-
004), 75 FR 32676 (June 9, 2010).
\11\ See 74 FR 41346 (Aug. 17, 2009).
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The regulations also provided an exception for ``incidental amounts
of cotton, other natural fibers, or wool incorporated in an end
product, for which the estimated value of the cotton, other natural
fibers, or wool is not more than 10 percent of the total price of the
end product.'' \12\
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\12\ See 48 CFR 3052.225-70(d)(2).
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On March 5, 2013, DHS issued a deviation regarding the
applicability of the Kissell Amendment (Deviation 13-01).\13\ Under
Deviation 13-01, DHS deviates from the language of 48 CFR 3025.7000
that restricted application of certain Kissell provisions to those
actions with funds appropriated or otherwise provided on or before
February 17, 2009.\14\
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\13\ See HSAR class deviation, 13-01, Applicability of the
``Kissell Amendment'' to Department of Homeland Security
Acquisitions (Mar. 5, 2013) (``Deviation 13-01'') available at:
<a href="https://www.dhs.gov/sites/default/files/publications/cpo-HSARclassdeviation13-01_0_0_0_0_0.pdf">https://www.dhs.gov/sites/default/files/publications/cpo-HSARclassdeviation13-01_0_0_0_0_0.pdf</a> (last accessed May 31, 2024).
\14\ ``Effective immediately, the scope of the subpart 3025.70
shall apply as follows . . . This subpart contains restrictions on
the acquisition of certain foreign textile products imposed by the
American Recovery and Reinvestment Act of 2009 on contracts,
exercising of an option and orders entered into on or after August
16, 2009.''
See Deviation 13-01, available at: <a href="https://www.dhs.gov/sites/default/files/publications/cpo-HSARclassdeviation13-01_0_0_0_0_0.pdf">https://www.dhs.gov/sites/default/files/publications/cpo-HSARclassdeviation13-01_0_0_0_0_0.pdf</a>
(last accessed May 31, 2024).
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In addition, on March 14, 2013, DHS issued an amendment to
Deviation 13-01 (``Deviation Amendment 1'').\15\ Under Deviation
Amendment 1, the De Minimis Exception described above was to be read as
applying to ``incidental amounts of non-compliant fibers if the total
value of non-compliant fibers contained in the end item does not exceed
10 percent of the total purchase price of the end item . . .''.\16\
Deviation 13-01 and Deviation Amendment 1 were both effective
immediately at the time of their publication in 2013 and are still in
effect.\17\
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\15\ See HSAR class deviation, 13-01, Amendment 1, Homeland
Security Acquisition Regulation 3052.225-70, Requirement for Use of
Certain Domestic Commodities, (March 14, 2013) (``Deviation
Amendment 1''), available at: <a href="https://www.dhs.gov/sites/default/files/publications/cpo-HSARclassdeviation13-01%E2%80%93amendment1_0_0_0_0_0_0.pdf">https://www.dhs.gov/sites/default/files/publications/cpo-HSARclassdeviation13-01%E2%80%93amendment1_0_0_0_0_0_0.pdf</a> (last accessed May 31, 2024).
\16\ The clause would not apply to ``incidental amounts of
cotton, other natural fibers, or wool incorporated in an end
product, for which the estimated value of the cotton, other natural
fibers, or wool is not more than 10 percent of the total price of
the end product.''
\17\ See Deviation 13-01, available at: <a href="https://www.dhs.gov/sites/default/files/publications/cpo-HSARclassdeviation13-01_0_0_0_0_0.pdf">https://www.dhs.gov/sites/default/files/publications/cpo-HSARclassdeviation13-01_0_0_0_0_0.pdf</a> (last accessed Apr. 23, 2024); see also Deviation
Amendment available at: <a href="https://www.dhs.gov/sites/default/files/publications/cpo-HSARclassdeviation13-01%E2%80%93amendment1_0_0_0_0_0_0.pdf">https://www.dhs.gov/sites/default/files/publications/cpo-HSARclassdeviation13-01%E2%80%93amendment1_0_0_0_0_0_0.pdf</a> (last accessed May 31, 2024).
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II. Discussion of Comments and the Final Rule
Interested parties were given until September 23, 2024, to comment
on the NPRM. DHS received two public comments, neither of which were
substantive. DHS received one comment that was outside the scope of the
rule, and another comment that supported the rule. This final rule
amends the HSAR to better clarify how DHS complies with the Kissell
Amendment including codifying certain requirements from Deviation 13-01
and Deviation Amendment 1.
Consistent with Deviation 13-01 this final rule, defines the term
``end item'' to mean ``supplies delivered under a line item of a
contract.'' See 48 CFR 3025.7001(c). As ``end item'' is the term used
in the Kissell Amendment, DHS believes that defining and using the
statutory term ``end item'' in the HSAR provisions applicable to the
Kissell Amendment will also provide clarity.
This final rule also amends 48 CFR 3025.7000 to explain that this
provision applies to the Kissell Amendment, the subject of this
subpart; as well as the description of the type of funds to which the
Kissell Amendment applies consistent with current practice and
Deviation 13-01. As explained in the NPRM, DHS issued Deviation 13-01
on March 5, 2013, and since then the Kissell Amendment has applied to
``contracts, exercising of an option and orders entered into on or
after August 16, 2009.'' \18\
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\18\ See Deviation 13-01, available at: <a href="https://www.dhs.gov/sites/default/files/publications/cpo-HSARclassdeviation13-01_0_0_0_0_0.pdf">https://www.dhs.gov/sites/default/files/publications/cpo-HSARclassdeviation13-01_0_0_0_0_0.pdf</a> (last accessed May 31, 2024).
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Consistent with Deviation 13-01 and current practice this final
rule clarifies that the Kissell restrictions apply to all contracts,
options and orders entered into on or after August 16, 2009. See 48 CFR
3025.7002-1. In addition, this final rule updates the provisions
impacting the De Minimis Exception consistent with Deviation Amendment
1 to use the statutory term `end item' where appropriate. See, e.g., 48
CFR 3025.7002-2 and 3052.225-70(d)(2).
Further, this final rule includes the Kissell amendment under the
applicable legal authorities. It also fixes a typographical error to
correctly reference 48 CFR 3025.7002-3 when mentioning the regulatory
provision for specific application of trade agreements. See 48 CFR
3025.7002-2(h).
Accordingly, DHS adopts the NPRM as final, amending 48 CFR part
3025, Foreign Acquisitions, and 48 CFR part 3052, Solicitation
Provisions and Contract Clauses.
III. Regulatory Analyses
A. Executive Orders 12866, 13563, and 14094
Executive Order 12866 (Regulatory Planning and Review), as amended
by Executive Order 14094 (Modernizing Regulatory Review), and Executive
Order 13563 (Improving Regulation and Regulatory Review) direct
agencies to assess the 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). Executive Order 13563 emphasizes the importance of
quantifying both costs and benefits, of reducing costs, of harmonizing
rules, and of promoting flexibility.
The Office of Management and Budget (OMB) has not designated this
rule a significant regulatory action under section 3(f) of Executive
Order 12866, as amended by Executive Order 14094. Accordingly, OMB has
not reviewed this regulatory action.
Need for the Rule
This final rule codifies the requirements as set forth in the
Deviation 13-01 and Deviation Amendment 1, to provide clarity and
consistency, and align the HSAR with existing DHS practice. DHS is not
newly implementing the Kissell Amendment, but is, as described above,
amending the existing regulation to clarify the type of funds to which
the Kissell Amendment, including the De Minimis Exception, applies.
Benefits and Costs of the Final Rule
The benefits and costs of a regulation are generally measured
against a no-action baseline, which is a reasonable forecast of the way
the world would look absent the regulatory action being assessed.\19\
This final rule will not result in new costs since DHS has implemented
the changes through Deviation 13-01 and Deviation Amendment 1, both
issued in 2013. The changes to the HSAR will promote clarity and fuller
understanding of the Kissell Amendment regulatory requirements by
agency contracting officers as well as potential DHS vendors. This
additional clarity will be a benefit to industry as improved
[[Page 92851]]
contracting officer understanding of the regulatory requirements helps
ensure that DHS applies standards similarly across contracting actions,
making it easier for industry to comply with DHS requirements. A
summary of the costs and benefits of the rule is shown below in Exhibit
1.
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\19\ See OMB Circular A-4, p, 11 (Nov. 9, 2023) (accessible at
<a href="https://www.whitehouse.gov/wp-content/uploads/2023/11/CircularA-4.pdf">https://www.whitehouse.gov/wp-content/uploads/2023/11/CircularA-4.pdf</a>).
Exhibit 1--Summary of Final Rule Changes and Economic Impacts of the Final Rule
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Description of the
Final CFR provision change Costs Benefits
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48 CFR 3025.7000 Scope of Subpart; Corrects language to No new costs since DHS Provides clarification
and CFR 3025.7002-1 Restrictions. clarify that Kissell has already on applicability and
Amendment applies to implemented the ensures consistency
all contracts, options changes via Deviation between the HSAR and
and orders entered 13-01 issued in March existing DHS practice.
into on or after 2013.
August 16, 2009, and
removes appropriation
date from the scope
criteria.
48 CFR 3025.7001 Definitions; 48 CFR Changes terminology No new costs since DHS Provides clarity on
3025.7002-1 Restrictions; 48 CFR from ``end product'' has already terminology and
3025.7002-2 Exceptions; 48 CFR to ``end item'' to incorporated the ``end ensures consistency
3052.225-70 Requirement for Use of consistently reflect item'' definition between the HSAR and
Certain Domestic Commodities. Kissell Amendment through Deviation existing DHS practice.
applicability of 10% Amendment 1 issued in
De Minimis Exception. March 2013.
48 CFR 3025.7002-2 Exceptions........ Editorial correction to No cost................ Provides clarification.
CFR reference relating
to application of
trade agreements.
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B. Regulatory Flexibility Act
The Regulatory Flexibility Act of 1980 (RFA), 5 U.S.C. 601-612, as
amended by the Small Business Regulatory Enforcement Fairness Act of
1996, Public Law 104-121, (Mar. 29, 1996), requires Federal agencies to
consider the potential impact of regulations on small businesses, small
governmental jurisdictions, and small organizations during the
development of their rules. The term ``small entities'' comprises small
businesses, not-for-profit organizations that are independently owned
and operated and are not dominant in their fields, or governmental
jurisdictions with populations of less than 50,000. This final rule
will provide clarity and consistency between the HSAR and existing DHS
practice as set forth in Deviation 13-01 and Deviation Amendment 1; and
does not directly mandate any actions or requirements that will result
in burdens for small entities. Therefore, DHS certifies this final rule
will not have a significant economic impact on a substantial number of
small entities within the meaning of the Regulatory Flexibility Act, 5
U.S.C. 601, et seq.
C. Paperwork Reduction Act
The 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. 3501-35210).
D. National Environmental Policy Act
Section 102 of the National Environmental Policy Act of 1969
(NEPA), Public Law 91-190, 83 Stat. 852 (Jan. 1, 1970) (42 U.S.C. 4321
et seq.), as amended, requires Federal agencies to evaluate the impacts
of major Federal actions that may significantly affect the human
environment, consider alternatives actions provide public notice and
opportunity to comment, and properly document its analysis. DHS and its
agency components analyzed the actions in this rule to determine
whether NEPA applies to them and, if so, what level of documentation
and analysis is required.
DHS Directive 023-01, Rev. 01 and DHS Instruction Manual 023-01-
001-01, Rev. 01 (Instruction Manual) establish the policies and
procedures DHS and its component agencies use to comply with NEPA and
the Council on Environmental Quality regulations for implementing NEPA
codified in 40 CFR parts 1500-1508. The CEQ regulations allow Federal
agencies to establish, in their implementing procedures, with CEQ
review and concurrence, categories of actions (``categorical
exclusions'') that experience has shown do not, individually or in the
aggregate, have a significant effect on the human environment and,
therefore, do not require preparation of an environmental assessment or
environmental impact statement. 40 CFR 1501.4, 1507.3(e)(2)(ii).
Appendix A of the Instruction Manual lists the DHS categorical
exclusions.
Under DHS NEPA implementing procedures, for an action to be
categorically excluded, it must satisfy each of the following three
conditions: (1) the entire action clearly fits within one or more
categorical exclusions; (2) the action is not a piece of a larger
action; and (3) no extraordinary circumstances exist that create the
potential for a significant environmental effect.
This final rule amends the HSAR to better clarify how DHS complies
with the Kissell Amendment. This includes codifying requirements as set
forth in Deviation 13-01 and Deviation Amendment 1 that are currently
in effect.
DHS is not aware of any significant impact on the environment, or
any change in environmental effect that will result from this final
rule. DHS finds promulgation of the rule clearly fits within
categorical exclusion A3, established in the Department's NEPA
implementing procedures.
This final rule is a standalone rule and is not part of any larger
action, and will not result in any major Federal action that will
significantly affect the quality of the human environment. Furthermore,
DHS has determined that no extraordinary circumstances exist that will
create the potential for significant environmental effects. Therefore,
this final rule is categorically excluded from further NEPA review and
documentation.
List of Subjects in 48 CFR Parts 3025 and 3052
Government procurement.
Accordingly, for the reasons set forth in the preamble, DHS amends
48 CFR parts 3025 and 3052 as follows:
PART 3025--FOREIGN ACQUISITION
0
1. The authority citation for part 3025 is revised to read as follows:
Authority: 5 U.S.C. 301-302, 6 U.S.C. 453b, 41 U.S.C. 1303, 41
U.S.C. 1707, 41 U.S.C. 1702, and 48 CFR subpart 1.3.
0
2. Revise section 3025.7000 to read as follows:
3025.7000 Scope of subpart.
This subpart implements section 604 of the American Recovery and
Reinvestment Act of 2009, Public Law 111-5.
0
3. In section 3025.7001, revise paragraphs (a) through (d) to read as
follows:
[[Page 92852]]
3025.7001 Definitions.
* * * * *
(a) ``Commercial,'' as applied to an item described in (HSAR) 48
CFR 3025.7002-1, means an item of supply, whether an end item or
component, that meets the definition of ``commercial item'' set forth
in (FAR) 48 CFR 2.101.
(b) ``Component'' means any item supplied to the Government as part
of an end item or of another component.
(c) ``End item'' means supplies delivered under a line item of a
contract.
(d) ``Non-commercial,'' as applied to an item described in (HSAR)
48 CFR 3025.7002-1, means an item of supply, whether an end item or
component, that does not meet the definition of ``commercial item'' set
forth in (FAR) 48 CFR 2.101.
* * * * *
0
4. In section 3025.7002-1, revise the introductory text to read as
follows:
3025.7002-1 Restrictions.
The following restrictions implement section 604 of the American
Recovery and Reinvestment Act of 2009, Public Law 111-5, and they apply
to all contracts, options and orders entered into on or after August
16, 2009. Except as provided in (HSAR) 48 CFR 3025.7002-2, do not
acquire, either as end items or components, any item listed in
paragraph (a) or (b) of this section, if the item is directly related
to the national security interests of the United States and the item
has not been grown, reprocessed, reused, or produced in the United
States:
* * * * *
0
5. In section 3025.7002-2, revise paragraphs (d), (g), and (h) to read
as follows:
3025.7002-2 Exceptions.
* * * * *
(d) Acquisitions of items listed in (FAR) 48 CFR 25.104.
* * * * *
(g) The acquisition of covered items in 3052.7002-1(a) and (b)
containing non-compliant fibers when the total value of the non-
compliant fibers contained in the end item does not exceed 10 percent
of the total purchase price of the end item.
(h) Acquisitions of items otherwise covered by (HSAR) 48 CFR
3025.7002-1(a) and (b) for which restricting a procurement of the items
to those that have been grown, reprocessed, reused, or produced in the
United States would be inconsistent with United States obligations
under international agreements. Acquisitions of products that are
eligible products per (FAR) 48 CFR subpart 25.4 are not covered by
these restrictions; see (HSAR) 48 CFR 3025.7002-3 for specific
application of trade agreements.
PART 3052--SOLICITATION PROVISIONS AND CONTRACT CLAUSES
0
6. The authority citation for part 3052 is revised to read as follows:
Authority: 5 U.S.C. 301-302, 6 U.S.C. 453b, 41 U.S.C. 1707, 41
U.S.C. 1702, 41 U.S.C. 1303(a)(2), 48 CFR part 1, subpart 1.3. and
DHS Delegation Number 0702.
0
7. In section 3052.225-70, revise the clause date and paragraphs (a)(1)
through (4), (b) introductory text, (c) introductory text, and (d)(2)
to read as follows:
3052.225-70 Requirement for Use of Certain Domestic Commodities.
* * * * *
Requirement for Use of Certain Domestic Commodities NOV 2024
(a) * * *
(1) ``Commercial,'' as applied to an item described in paragraph(b)
of this clause, means an item of supply, whether an end item or
component, that meets the definition of ``commercial item'' set forth
in (FAR) 48 CFR 2.101.
(2) ``Component'' means any item supplied to the Government as part
of an end item or of another component.
(3) ``End item'' means supplies delivered under a line item of this
contract.
(4) ``Non-commercial,'' as applied to an item described in
paragraph (b) or (c) of this clause, means an item of supply, whether
an end item or component, that does not meet the definition of
``commercial item'' set forth in (FAR) 48 CFR 2.101.
* * * * *
(b) The Contractor shall deliver under this contract only such of
the following commercial or non-commercial items, either as end items
or components, that have been grown, reprocessed, reused, or produced
in the United States:
* * * * *
(c) The Contractor shall deliver under this contract only such of
the following non-commercial items, either as end items or components,
that have been grown, reprocessed, reused, or produced in the United
States:
* * * * *
(d) * * *
(2) To the covered items in paragraphs (b) and (c) of this clause
containing non-compliant fibers when the total value of the non-
compliant fibers contained in the end item does not exceed 10 percent
of the total purchase price of the end item; or
* * * * *
Paul Courtney,
Chief Procurement Officer, U.S. Department of Homeland Security.
[FR Doc. 2024-27456 Filed 11-22-24; 8:45 am]
BILLING CODE 9112-FE-P
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This is legal information, not legal advice. Laws vary by jurisdiction and change frequently. Always verify current law with official sources and consult a licensed attorney in your jurisdiction for advice on your specific situation.