Federal Acquisition Regulation; Defense Production Act Amendments

DEPARTMENT OF DEFENSE

DEPARTMENT OF DEFENSE

GENERAL SERVICES ADMINISTRATION

NATIONAL AERONAUTICS AND SPACE ADMINISTRATION

48 CFR Parts 34 and 52

[FAC 90-23; FAR Case 93-304; Item XXIV]

RIN 9000-AG11

Federal Acquisition Regulation; Defense Production Act Amendments

AGENCIES: Department of Defense (DOD), General Services Administration

(GSA), and National Aeronautics and Space Administration (NASA).

ACTION: Interim rule with request for comment.

-----------------------------------------------------------------------

SUMMARY: The Civilian Agency Acquisition Council and the Defense

Acquisition Regulations Council have agreed to an interim rule amending

the Federal Acquisition Regulation (FAR) to add policy and procedures

for testing and qualification of industrial resources developed under

Title III, Defense Production Act Amendments of 1992 (Public Law 102-

558). This regulatory action was not subject to Office of Management

and Budget review under Executive Order 12866, dated September 30,

1993.

DATES: Effective Date: December 28, 1994.

Comment Date: Comments should be submitted to the FAR Secretariat

at the address shown below on or before February 27, 1995, to be

considered in the formulation of a final rule.

ADDRESSES: Interested parties should submit written comments to:

General Services Administration, FAR Secretariat (VRS), 18th & F

Streets, NW., Room 4035, Attn: Ms. Beverly Fayson, Washington, DC

20405.

Please cite FAC 90-23, FAR case 93-304 in all correspondence

related to this case.

FOR FURTHER INFORMATION CONTACT: Mr. Jack O'Neill at (202) 501-3856 in

reference to this FAR case. For general information, contact the FAR

Secretariat, Room 4037, GS Building, Washington, DC 20405, (202) 501-

4755. Please cite FAC 90-23, FAR case 93-304.

SUPPLEMENTARY INFORMATION:

A. Background

Title III of the Defense Production Act (DPA) of 1950 authorizes

various forms of Government assistance to encourage expansion of

production capacity and supply of industrial resources essential to

national defense. The DPA Amendments of 1992 provide for the testing,

qualification, and use of industrial resources manufactured or

developed with assistance provided under Title III of the DPA. This

interim rule expresses Government policy to pay for such testing, and

provides definitions, procedures, and a contract clause to implement

the policy.

B. Regulatory Flexibility Act

The addition of FAR Subpart 34.1 may have a significant economic

impact on a substantial number of small entities within the meaning of

the Regulatory Flexibility Act, 5 U.S.C. 601 et seq., because small

entities are sometimes asked to perform the qualification testing

required under the rule.

An Initial Regulatory Flexibility Analysis has been prepared and is

summarized as follows:

The change is required to implement amendments to the Defense

Production Act of 1950 made by Public Law 102-558. This rule

clarifies the Government policy to pay for testing of industrial

resources manufactured or developed with assistance provided under

Title III of the Defense Production Act. The rule will apply to any

small entity that has Government contracts that require

qualification testing under the Act. A reporting requirement is in

the rule that requires contractors who perform this testing to

provide the test results to the Government. The rule does not

duplicate, overlap, or conflict with other existing Federal rules

and there are no significant alternatives to it.

A copy of the IRFA may be obtained from the FAR Secretariat.

Comments from small entities concerning the affected FAR subpart will

be considered in accordance with 5 U.S.C. 610. Such comments must be

submitted separately and cite FAR case 93-610 in correspondence.

C. Paperwork Reduction Act

The Paperwork Reduction Act (Pub. L. 96-511) is deemed to apply

because the final rule contains information collection requirements.

Accordingly, a request for approval of a new information collection

requirement concerning 9000-0133, Defense Production Act Amendments,

was submitted to the Office of Management and Budget under 44 U.S.C.

3501, et seq and approved through September 30, 1997. Public comments

concerning this request were invited through a subsequent Federal

Register notice published at 59 FR 42823, August 19, 1994.

D. Determination to Issue an Interim Rule

A determination has been made under the authority of the Secretary

of Defense (DOD), the Administrator of General Services (GSA), and the

Administrator of the National Aeronautics and Space Administration

(NASA) that compelling reasons exist to promulgate this interim rule

without prior opportunity for public comment. This action is necessary

because the Defense Production Act Amendments of 1992 (Pub. L. 102-558)

require implementation by July 26, 1993. However, pursuant to Public

Law 98-577 and Federal Acquisition Regulation 1.501, public comments

received in response to this interim rule will be considered in

formulating the final rule.

List of Subjects in 48 CFR Parts 34 and 52

Government procurement.

Dated: December 7, 1994.

Albert A. Vicchiolla,

Director, Office of Federal Acquisition Policy.

Therefore, 48 CFR parts 34 and 52 are amended as set forth below:

1. The authority citation for 48 CFR parts 34 and 52 continues to

read as follows:

Authority: 40 U.S.C. 486(c); 10 U.S.C. chapter 137; and 42

U.S.C. 2473(c).

PART 34--MAJOR SYSTEM ACQUISITION

2. The subpart heading ``34.0--General'' is added immediately above

section 34.000.

3. Part 34 is amended by adding Subpart 34.1 to read as follows:

Subpart 34.1--Testing, Qualification and Use of Industrial Resources

Developed Under Title III, Defense Production Act

Sec.

34.100 Scope of subpart.

34.101 Definitions.

34.102 Policy.

34.103 Testing and qualification.

34.104 Contract clause.

Subpart 34.1--Testing, Qualification and Use of Industrial Resources

Developed Under Title III, Defense Production Act

Sec. 34.100 Scope of subpart.

This subpart prescribes policies and procedures for the testing,

qualification, and use of industrial resources manufactured or

developed with assistance provided under section 301, 302, or 303 of

the Defense Production Act (50 U.S.C. App. 2091-2093). Title III of the

Defense Production Act authorizes various forms of Government

assistance to encourage expansion of production capacity and supply of

industrial resources essential to national defense.

Sec. 34.101 Definitions.

Item of supply, for the purpose of this subpart, means any

individual part, component, subassembly, assembly, or subsystem

integral to a major system, and other property which may be replaced

during the service life of the system. The term includes spare parts

and replenishment parts, but does not include packaging or labeling

associated with shipment or identification of an ``item.''

Sec. 34.102 Policy.

It is the policy of the Government, as required by section 126 of

Public Law 102-558, to pay for any testing and qualification required

for the use or incorporation of the industrial resources manufactured

or developed with assistance provided under Title III of the Defense

Production Act of 1950.

Sec. 34.103 Testing and qualification.

(a) Contractors receiving requests from a Title III project

contractor for testing and qualification of a Title III industrial

resource shall refer such requests to the contracting officer. The

contracting officer shall evaluate the request in accordance with

agency procedures to determine whether: (1) the Title III industrial

resource is being or potentially may be used in the development or

manufacture of a major system or item of supply; and (2) for major

systems in production, remaining quantities to be acquired are

sufficient to justify incurring the cost of testing and qualification.

In evaluating this request, the contracting officer shall consult with

the Defense Production Act Office, Title III Program, located at Wright

Patterson Air Force Base, Ohio 45433-7739.

(b) If the determination at 34.103(a) is affirmative, the

contracting officer shall modify the contract to require the contractor

to test the Title III industrial resource for qualification.

(c) The Defense Production Act Office, Title III Program, shall

provide to the contractor the industrial resource produced by the Title

III project contractor in sufficient amounts to meet testing needs.

Sec. 34.104 Contract clause.

Insert the clause at 52.234-1, Industrial Resources Developed under

Defense Production Act, Title III, in all contracts for major systems

and items of supply.

PART 52--SOLICITATION PROVISIONS AND CONTRACT CLAUSES

4. Section 52.234-1 is added to read as follows:

52.234-1 Industrial Resources Developed Under Defense Production Act

Title III.

As prescribed at 34.104, insert the following clause:

Industrial Resources Developed Under Defense Production Act Title III

(Feb. 1995)

(a) Definitions.

Title III industrial resource means materials, services,

processes, or manufacturing equipment (including the processes,

technologies, and ancillary services for the use of such equipment)

established or maintained under the authority of Title III, Defense

Production Act (50 U.S.C. App. 2091-2093).

Title III project contractor means a Contractor that has

received assistance for the development or manufacture of an

industrial resource under 50 U.S.C. App. 2091-2093, Defense

Production Act.

(b) The Contractor shall refer any request from a Title III

project contractor for testing and qualification of a Title III

industrial resource to the Contracting Officer.

(c) Upon the direction of the Contracting Officer, the

Contractor shall test Title III industrial resources for

qualification. The Contractor shall provide the test results to the

Defense Production Act Office, Title III Program, located at Wright

Patterson Air Force Base, Ohio 45433-7739.

(d) When the Contracting Officer modifies the contract to direct

testing pursuant to this clause, the Government will provide the

Title III industrial resource to be tested and will make an

equitable adjustment in the contract for the costs of testing and

qualification of the Title III industrial resource.

(e) The Contractor agrees to insert the substance of this

clause, including paragraph (e), in every subcontract issued in

performance of this contract.

(End of clause)

[FR Doc. 94-30645 Filed 12-27-94; 8:45 am]

BILLING CODE 6820-34-P