Homeland Security Acquisition Regulation, Restrictions on Foreign Acquisition Update (HSAR Case 2024-002)

DEPARTMENT OF HOMELAND SECURITY <CFR>48 CFR Parts 3025 and 3052</CFR> <DEPDOC>[Docket No. DHS-2024-0022]</DEPDOC> <RIN>RIN 1601-AB13</RIN> <SUBJECT>Homeland Security Acquisition Regulation, Restrictions on Foreign Acquisition Update (HSAR Case 2024-002)</SUBJECT> <HD SOURCE="HED">AGENCY:</HD> Office of the Chief Procurement Officer, Department of Homeland Security (DHS). <HD SOURCE="HED">ACTION:</HD> Proposed rule. <SUM> <HD SOURCE="HED">SUMMARY:</HD> DHS is proposing 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. DHS believes these proposed changes would help reduce confusion and provide clarity to the requirements under the Kissell Amendment. </SUM> <EFFDATE> <HD SOURCE="HED">DATES:</HD> Comments on the proposed rule should be submitted in writing to one of the addresses shown below on or before September 23, 2024, to be considered in the formation of the final rule. </EFFDATE> <HD SOURCE="HED">ADDRESSES:</HD> Submit comments identified by HSAR Case 2024-002, Restrictions on Foreign Acquisition Update, using any of the following methods: • <E T="03">Regulations.gov: http://www.regulations.gov</E> . Submit comments via the Federal eRulemaking portal by entering “HSAR Case 2024-002” under the heading “Enter Keyword or ID” and select “Search.” Select the link “Submit a Comment” that corresponds with “HSAR Case 2024-002.” Follow the instructions provided at the “Submit a Comment” screen. Please include your name, company name (if any), and “HSAR Case 2024-002” on your attached document. • <E T="03">Fax:</E> (202) 447-0520. • <E T="03">Mail:</E> Department of Homeland Security, Office of the Chief Procurement Officer, MS 0080, ATTN: Ms. Nancy Harvey, 6595 Springfield Center Dr., Springfield, VA 20598-0080. Comments received generally will be posted without change to <E T="03">http://www.regulations.gov,</E> including any personal information provided. To confirm receipt of your comment(s), please check <E T="03">www.regulations.gov,</E> approximately two to three days after submission to verify posting (except allow 30 days for posting of comments submitted by mail). <FURINF> <HD SOURCE="HED">FOR FURTHER INFORMATION CONTACT:</HD> Nancy Harvey, Department of Homeland Security, Office of the Chief Procurement Officer, Acquisition Policy and Legislation, at (202) 282-8000 or email at <E T="03">HSAR@hq.dhs.gov</E> . Include HSAR Case 2024-002 in the subject line. </FURINF> <SUPLINF> <HD SOURCE="HED">SUPPLEMENTARY INFORMATION:</HD> <HD SOURCE="HD1">I. Background</HD> The Buy American Act of 1933, as amended (BAA), addresses preferences in Federal procurement. <SU>1</SU> <FTREF/> The BAA provides a preference for the purchase of domestic supplies (or domestic end products) and domestic construction materials. <SU>2</SU> <FTREF/> <FTNT> <SU>1</SU>   <E T="03">See</E> 41 U.S.C. 8301-8305. </FTNT> <FTNT> <SU>2</SU>   <E T="03">See e.g.,</E> 41 U.S.C. 8302. </FTNT> In 2009, the American Recovery and Reinvestment Act of 2009 (Recovery Act), was enacted. <SU>3</SU> <FTREF/> Section 604 of the Recovery Act is also, known as the Kissell Amendment. <SU>4</SU> <FTREF/> 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. <SU>5</SU> <FTREF/> 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.”  <SU>6</SU> <FTREF/> <FTNT> <SU>3</SU>   <E T="03">See</E> Public Law 111-5, 123 Stat. 115, 165-166 (Feb. 17, 2009). </FTNT> <FTNT> <SU>4</SU>  Section 604 of the Recovery Act is codified at 6 U.S.C. 453b. </FTNT> <FTNT> <SU>5</SU>   <E T="03">See</E> 6 U.S.C. 453b(a)-(g). </FTNT> <FTNT> <SU>6</SU>   <E T="03">See</E> 6 U.S.C. 453b(d). </FTNT> The Kissel Amendment further requires DHS to apply it in a manner consistent with United States obligations under international agreements. <SU>7</SU> <FTREF/> As DHS has explained in prior notices, this includes free trade agreements and the World Trade Organization Agreement on Government Procurement. <SU>8</SU> <FTREF/> These requirements apply with respect to contracts entered into by DHS on or after August 16, 2009. <SU>9</SU> <FTREF/> <FTNT> <SU>7</SU>   <E T="03">See</E> 6 U.S.C. 453b(k). </FTNT> <FTNT> <SU>8</SU>   <E T="03">See, e.g.,</E> 75 FR 32676, (June 9, 2010). </FTNT> <FTNT> <SU>9</SU>   <E T="03">See</E> 6 U.S.C. 453b(l). </FTNT> The implementing regulations for the BAA are in the Federal Acquisition Regulation (FAR). <SU>10</SU> <FTREF/> Chapter 30 of 48 CFR, known as the Homeland Security Acquisition Regulation (HSAR), applies specifically to DHS. <SU>11</SU> <FTREF/> <FTNT> <SU>10</SU>   <E T="03">See</E> Title 48, Chapter 1 of the CFR. </FTNT> <FTNT> <SU>11</SU>   <E T="03">See</E> 48 CFR Chapter 30. </FTNT> In 2009, DHS published an interim rule with request for comments (“2009 Interim Rule”) amending the HSAR at 48 CFR part 3025, Foreign Acquisitions, and part 3052, Solicitation Provisions and Contract Clauses, incorporating the Kissell Amendment requirements. <SU>12</SU> <FTREF/> In 2010, DHS published a final rule (“2010 Final Rule”) adopting the 2009 Interim Rule as final without change. <SU>13</SU> <FTREF/> The 2009 Interim Rule made amendments to the HSAR “to add solicitation provisions, contract clauses and related policy statements implementing these requirements and exceptions for certain DHS contracts, option exercises and orders.”  <SU>14</SU> <FTREF/> The provisions of 48 CFR 3025.70 were limited to “exercising of an option and orders entered into on or after August 16, 2009 with funds appropriated or otherwise provided on or before February 17, 2009.”  See Revision of Department of Homeland Security Acquisition Regulation; Restrictions on Foreign Acquisition </E> (HSAR Case 2009-004), 74 FR 41346 (Aug. 17, 2009). </FTNT> <FTNT> <SU>13</SU>   <E T="03">See Revision of Department of Homeland Security Acquisition Regulation; Restrictions on Foreign Acquisition</E> (HSAR Case 2009-004), 75 FR 32676 (June 9, 2010). </FTNT> <FTNT> <SU>14</SU>   <E T="03">See</E> 74 FR 41346 (Aug. 17, 2009). </FTNT> <FTNT> <SU>15</SU>   <E T="03">See</E> 48 CFR 3025.7000. </FTNT> The 2009 Interim Rule, among other changes, also created regulatory definitions, such as the term “end product” which, for purposes of 48 CFR 3025.70, and under 48 3052.225-70 “means supplies delivered under a line item of a contract.”  <SU>16</SU> <FTREF/> The term `end product' was further referenced throughout these parts. <SU>17</SU> <FTREF/> <FTNT> <SU>16</SU>   <E T="03">See</E> 48 CFR 3025.7001(c) and 3052.225-70(a)(3). </FTNT> <FTNT> <SU>17</SU>   <E T="03">See e.g.</E> 48 CFR 3025.7001(a)-(b), (d), 3025.7002-2(g); <E T="03">see also</E> 48 CFR 3052.225-70(a)(1)-(2). </FTNT> The regulations also provide a list of the types of textile items included in the restriction (such as certain yarn, wool, and cotton), explain the specific application of trade agreements, and require, with some exceptions, the use of domestic goods for procurement of Kissell-covered items. <SU>18</SU> <FTREF/> One such exception is 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.”  <SU>19</SU> <FTREF/> <FTNT> <SU>18</SU>   <E T="03">See, e.g.,</E> 48 CFR 3052.225-70. </FTNT> <FTNT> <SU>19</SU>   <E T="03">See</E> 48 CFR 3052.225-70(d)(2). </FTNT> DHS notes that the DHS Chief Procurement Officer can issue HSAR deviations when necessary to allow components to deviate from the HSAR. <SU>20</SU> <FTREF/> On March 5, 2013, DHS issued a deviation regarding the applicability of the Kissell Amendment (Deviation 13-01). <SU>21</SU> <FTREF/> As discussed above, the provisions of 48 CFR 3025.70 were limited to “exercising of an option and orders entered into on or after August 16, 2009 with funds appropriated or otherwise provided on or before February 17, 2009.”  <SU>22</SU> <FTREF/> 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. <SU>23</SU> <FTREF/> <FTNT> <SU>20</SU>   <E T="03">See</E> HSAR Deviations, available at: <E T="03">https://www.dhs.gov/publication/current-hsar-deviations</E> (last accessed May 31, 2024). </FTNT> <FTNT> <SU>21</SU>   <E T="03">See HSAR class deviation, 13-01, Applicability of the “Kissell Amendment” to Department of Homeland Security Acquisitions</E> (Mar. 5, 2013) (“Deviation 13-01”) available at: <E T="03">https://www.dhs.gov/sites/default/files/publications/cpo-HSARclassdeviation13-01_0_0_0_0_0.pdf</E> (last accessed May 31, 2024). </FTNT> <FTNT> <SU>22</SU>   <E T="03">See</E> 48 CFR 3025.7000. </FTNT> <FTNT> ━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━ Preview showing 10k of 32k characters. 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