Defense Federal Acquisition Regulation Supplement: Preference for United States Vessels in Transporting Supplies By Sea (DFARS Case 2021-D020)

<RULE> DEPARTMENT OF DEFENSE <SUBAGY>Defense Acquisition Regulations System</SUBAGY> <CFR>48 CFR Parts 242, 247, and 252</CFR> <DEPDOC>[Docket DARS-2024-0013]</DEPDOC> <RIN>RIN 0750-AL38</RIN> <SUBJECT>Defense Federal Acquisition Regulation Supplement: Preference for United States Vessels in Transporting Supplies By Sea (DFARS Case 2021-D020)</SUBJECT> <HD SOURCE="HED">AGENCY:</HD> Defense Acquisition Regulations System, Department of Defense (DoD). <HD SOURCE="HED">ACTION:</HD> Final rule. <SUM> <HD SOURCE="HED">SUMMARY:</HD> DoD is issuing a final rule amending the Defense Federal Acquisition Regulation Supplement (DFARS) to implement a section of the William M. (Mac) Thornberry National Defense Authorization Act for Fiscal Year 2021 intended to increase compliance with military cargo preference requirements. </SUM> <EFFDATE> <HD SOURCE="HED">DATES:</HD> Effective October 1, 2024. </EFFDATE> <FURINF> <HD SOURCE="HED">FOR FURTHER INFORMATION CONTACT:</HD> David Johnson, telephone 202-913-5764. </FURINF> <SUPLINF> <HD SOURCE="HED">SUPPLEMENTARY INFORMATION:</HD> <HD SOURCE="HD1">I. Background</HD> DoD published a proposed rule in the <E T="04">Federal Register</E> at 89 FR 31681 on April 25, 2024, to implement section 1024 of the William M. (Mac) Thornberry National Defense Authorization Act (NDAA) for Fiscal Year (FY) 2021 (Pub. L. 116-283). Section 1024 amends 10 U.S.C. 2631 to, among other things, clarify circumstances in which DoD may seek a waiver from the basic requirement for DoD supplies to be transported by seas in either vessels belonging to the United States or vessels of the United States. One respondent submitted a public comment in response to the proposed rule. <HD SOURCE="HD1">II. Discussion and Analysis</HD> DoD reviewed the public comment in the development of the final rule. A discussion of the comment is provided, as follows: <HD SOURCE="HD2">A. Summary of Significant Changes From the Proposed Rule</HD> There are no changes from the proposed rule resulting from the public comment. <HD SOURCE="HD2">B. Analysis of Public Comments</HD> <E T="03">Comment:</E> The respondent suggested the rule should be changed to include a certification requirement in paragraph (f) of the clause at DFARS 252.242-7023, including alternates, in place of a representation. The respondent further suggested the clause at DFARS 252.247-7025 should similarly include a certification requirement. The respondent expressed that these changes would help ensure full compliance with U.S.-flag vessel preference requirements. <E T="03">Response:</E> As expressed at DFARS 201.107, 41 U.S.C. 1304 prohibits new certification requirements in the DFARS unless either the certification is specifically imposed by statute or an approved justification exists for the certification. Neither condition is met in this case. Therefore, DoD declines the respondent's suggestion to add certification requirements to the clauses at DFARS 252.242-7023 and 252.247-7025. <HD SOURCE="HD2">C. Other Changes</HD> Two changes are made to the final rule. First, the final rule removes the definition of “foreign shipyard” from DFARS 247.501, because that definition is not used in subpart 247.5. Secondly, the final rule removes the change included in the proposed rule to the definition of “foreign shipyard” in the solicitation provision at DFARS 252.247-7026, because this change created incongruity with the existing definition of “U.S. shipyard” in the provision. <HD SOURCE="HD1">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</HD> This final rule amends the clauses at DFARS 252.247-7023, including alternates, 252.247-7025, and the provision at 252.247-7026. However, this final rule does not impose any new requirements on contracts at or below the SAT, for commercial products including COTS items, or for commercial services. The clauses and the provision will continue to apply to acquisitions at or below the SAT, to acquisitions of commercial products including COTS items, and to acquisitions of commercial services. <HD SOURCE="HD1">IV. Expected Impact of the Rule</HD> This rule is intended to increase compliance with military cargo preference requirements, as amended under this rule in accordance with section 1024 of the NDAA for FY 2021. These changes are largely clarifying in nature, including clarification of operational requirements internal to DoD. Therefore, this rule is not expected to have a significant impact on the public. <HD SOURCE="HD1">V. Executive Orders 12866 and 13563</HD> 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. <HD SOURCE="HD1">VI. Congressional Review Act</HD> 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 <E T="04">Federal Register</E> . 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. <HD SOURCE="HD1">VII. Regulatory Flexibility Act</HD> A final regulatory flexibility analysis has been prepared consistent with the Regulatory Flexibility Act, 5 U.S.C. 601, <E T="03">et seq.</E> and is summarized as follows: DoD is amending the Defense Federal Acquisition Regulation Supplement (DFARS) to implement section 1024 of the William M. (Mac) Thornberry National Defense Authorization Act (NDAA) for Fiscal Year (FY) 2021. Section 1024 modifies 10 U.S.C. 2631 to add a requirement to ensure contractor compliance with 10 U.S.C. 2631 and otherwise updates the listed circumstances in which DoD may waive the requirement that DoD supplies be transported by sea in vessels belonging to the United States or vessels of the United States. It also modifies the requirement for reflagging or repair work in the United States for vessels used under time-charter contracts. The public comment raised no issue in response to the initial regulatory flexibility analysis. This rule will apply to small entities that have contracts that include DFARS clauses 252.247-7023, Transportation of Supplies by Sea, and 252.247-7025, Reflagging or Repair Work. DoD obtained data from the Procurement Business Intelligence Service for all contracts and modifications that include DFARS clauses 252.247-7023 and 252.247-7025 for fiscal years 2020 through 2022. DoD awarded on average 649,016 contract actions per year that included either DFARS clause 252.247-7023 or 252.247-7025, or both, to 31,665 unique entities, of which approximately 363,260 contract awards (56 percent) were made to 21,737 unique small entities (69 percent). This rule does not impose any new reporting, recordkeeping, or other compliance requirements. There are no known alternatives that would accomplish the stated objectives of the applicable statute. <HD SOURCE="HD1">VIII. Paperwork Reduction Act</HD> The Paperwork Reduction Act (44 U.S.C. chapter 35) applies to this final rule. However, these changes to the DFARS do not impose additional information collection requirements to the paperwork burden previously approved by the Office of Management and Budget (OMB) under OMB Control Number 0704-0245, titled: Defense Federal Acquisition Regulation Supplement (DFARS) Part 247, Transportation and Related Clauses. <LSTSUB> <HD SOURCE="HED">List of Subjects in 48 CFR Parts 242, 247, and 252</HD> Government procurement. </LSTSUB> <SIG> <NAME>Jennifer D. Johnson,</NAME> Editor/Publisher, Defense Acquisition Regulations System. </SIG> Therefore, the Defense Acquisition Regulations System amends 48 CFR parts 242, 247, and 252 as follows: <REGTEXT TITLE="48" PART="242"> 1. The authority citation for parts 242, 247, and 252 continues to read as follows: <HD SOURCE="HED">Authority:</HD> 41 U.S.C. 1303 and 48 CFR chapter 1. </REGTEXT> <HD SOURCE="HED">PART 242—CONTRACT ADMINISTRATION AND AUDIT SERVICES</HD> <REGTEXT TITLE="48" PART="242"> 2. Amend section 242.1502— a. In paragraph (g)(i) by removing the word “and” at the end of the paragraph; b. In paragraph (g)(ii) by removing the period at the end of the paragraph and adding “; and” in its place; and c. By adding paragraph (g)(iii). The addition reads as follows: <SECTION> <SECTNO>242.1502</SECTNO> <SUBJECT>Policy.</SUBJECT> (g) * * * (iii) In accordance with 10 U.S.C. 2631(d), shall include information on contractor compliance with requirements of the clause at 252.247-7023, Transportation of Supplies by Sea (see 10 U.S.C. 2631(a), (b), and (c)). </SECTION> </REGTEXT> <HD SOURCE="HED">PART 247—TRANSPORTATION</HD> <REGTEXT TITLE="48" PART="247"> 3. Amend section 247.570— a. By revising paragraph (a)(1); b. In paragraph (a)(2): i. By removing “(Pub. L. 109-364)” and adding “(Pub. L. 109-364) (10 U.S.C. 2631 note)” in its place; and ii. By removing the word “and” at the end of the ━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━ Preview showing 10k of 30k characters. 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