Federal Acquisition Regulation: Prohibition on Unmanned Aircraft Systems From Covered Foreign Entities

<RULE> DEPARTMENT OF DEFENSE GENERAL SERVICES ADMINISTRATION NATIONAL AERONAUTICS AND SPACE ADMINISTRATION <CFR>48 CFR Parts 4, 13, 39, 40, and 52</CFR> <DEPDOC>[FAC 2025-01, FAR Case 2024-002, Item I, Docket No. 2024-0002, Sequence No. 1]</DEPDOC> <RIN>RIN 9000-AO70</RIN> <SUBJECT>Federal Acquisition Regulation: Prohibition on Unmanned Aircraft Systems From Covered Foreign Entities</SUBJECT> <HD SOURCE="HED">AGENCY:</HD> Department of Defense (DoD), General Services Administration (GSA), and National Aeronautics and Space Administration (NASA). <HD SOURCE="HED">ACTION:</HD> Interim rule. <SUM> <HD SOURCE="HED">SUMMARY:</HD> DoD, GSA, and NASA are issuing an interim rule amending the Federal Acquisition Regulation (FAR) to implement a prohibition on the procurement and operation of unmanned aircraft systems manufactured or assembled by an American Security Drone Act-covered foreign entity. </SUM> <EFFDATE> <HD SOURCE="HED">DATES:</HD> <E T="03">Effective date:</E> November 12, 2024. <E T="03">Applicability date:</E> Contracting officers shall include the clause at FAR 52.240-1, Prohibition on Unmanned Aircraft Systems Manufactured or Assembled by American Security Drone Act-Covered Foreign Entities, in solicitations issued, and contracts awarded, on or after November 12, 2024, in accordance with FAR 1.108(d); see also section II of this preamble. <E T="03">Comment date:</E> Interested parties should submit written comments to the Regulatory Secretariat Division at the address shown below on or before January 13, 2025, to be considered in the formation of the final rule. </EFFDATE> <HD SOURCE="HED">ADDRESSES:</HD> Submit comments in response to FAC 2025-01, FAR Case 2024-002 to the Federal eRulemaking portal at <E T="03">https://www.regulations.gov</E> by searching for “FAR Case 2024-002”. Select the link “Comment Now” that corresponds with “FAR Case 2024-002”. Follow the instructions provided on the “Comment Now” screen. Please include your name, company name (if any), and “FAR Case 2024-002” on your attached document. If your comment cannot be submitted using <E T="03">https://www.regulations.gov,</E> call or email the points of contact in the <E T="02">FOR FURTHER INFORMATION CONTACT</E> section of this document for alternate instructions. <E T="03">Instructions:</E> Please submit comments only and cite “FAR Case 2024-002” in all correspondence related to this case. Comments received generally will be posted without change to <E T="03">https://www.regulations.gov,</E> including any personal and/or business confidential information provided. Public comments may be submitted as an individual, as an organization, or anonymously (see frequently asked questions at <E T="03">https://www.regulations.gov/faq</E> ). To confirm receipt of your comment(s), please check <E T="03">https://www.regulations.gov,</E> approximately two-to-three days after submission to verify posting. <FURINF> <HD SOURCE="HED">FOR FURTHER INFORMATION CONTACT:</HD> For clarification of content, contact Mr. Benjamin Collins, Procurement Analyst, at 850-826-0058 or by email at <E T="03">benjamin.collins@gsa.gov.</E> For information pertaining to status, publication schedules, or alternate instructions for submitting comments if <E T="03">https://www.regulations.gov</E> cannot be used, contact the Regulatory Secretariat Division at 202-501-4755 or <E T="03">GSARegSec@gsa.gov.</E> Please cite FAC 2025-01, FAR Case 2024-002. </FURINF> <SUPLINF> <HD SOURCE="HED">SUPPLEMENTARY INFORMATION:</HD> <HD SOURCE="HD1">I. Background</HD> This interim rule revises the FAR to implement the American Security Drone Act of 2023 (subtitle B, title XVIII, National Defense Authorization Act (NDAA) for Fiscal Year (FY) 2024, Public Law 118-31, 41 U.S.C. 3901 note prec.) enacted December 22, 2023. The unmanned aircraft system (UAS), also referred to as a drone, market has grown substantially in the last decade. Federal agencies use UAS for land-use research, data collection, monitoring the border, and various other tasks. Reliance on UAS, however, complicates the ability of the Federal Government to protect the security of this data, in part because the majority of UAS are manufactured and assembled by foreign-owned entities with affiliations that have divergent interests from those of the United States. Security is imperative when data is collected, stored, and transmitted by UAS for sensitive missions. Use of UAS, without adequate protection for security, increases adversaries' capabilities to disrupt U.S. Government operations. Compromises to cybersecurity and physical security controls may lead to potential physical effects such as sabotage of Federal property and assets. This interim rule is intended to respond to these threats by prohibiting the procurement, operation, or use of Federal funds on UAS prohibited by the Federal Acquisition Security Council (FASC). <HD SOURCE="HD1">II. Applicability Dates</HD> Contracting officers shall include the clause at FAR 52.240-1, Prohibition on Unmanned Aircraft Systems Manufactured or Assembled by American Security Drone Act-Covered Foreign Entities, in solicitations issued, and contracts awarded, on or after November 12, 2024. If exercising an option or modifying an existing contract to extend the period of performance, contracting officers shall include the clause at FAR 52.240-1. When exercising an option, agencies should consider modifying the existing contract to add the clause in a sufficient amount of time to both provide notice for exercising the option and provide contractors with adequate time to comply with the clause. Additionally, contracting officers shall modify existing indefinite-delivery contracts to include the clause at FAR 52.240-1 in sufficient amount of time to apply to future orders in accordance with FAR 1.108(d)(3). <NOTE> <HD SOURCE="HED">Note:</HD> Although FAR part 37, Service Contracting, is not addressed explicitly, the FAR changes are applicable to supply and service solicitations and contracts. </NOTE> <HD SOURCE="HD1">III. Discussion and Analysis</HD> DoD, GSA, and NASA are amending the FAR consistent with the American Security Drone Act of 2023 (the Act) to prohibit executive agencies from procuring a FASC-prohibited UAS and, on or after December 22, 2025, operating FASC-prohibited UAS. Additionally, the FAR is amended consistent with the Act to prohibit Federal contractors from using Federal funds for the procurement or operation of a FASC-prohibited UAS. Terminology used throughout this rule is described here to aid in readability. For the purposes of this rule, the term “FASC-prohibited unmanned aircraft system (UAS)” means a UAS manufactured or assembled by an American Security Drone Act-covered foreign entity. In accordance with section 1822 of the Act, the list of American Security Drone Act-covered foreign entities is to be developed and maintained by the FASC and published in the System for Award Management (SAM) at <E T="03">https://www.sam.gov.</E> Additionally, the FAR and other agency acquisition regulations include instances of similar terms to those used in the Act (“covered foreign country,” “covered entity,” etc.) with definitions corresponding to other statutes ( <E T="03">e.g.,</E> section 889 of the NDAA for FY 2019, section 848 of the NDAA for FY 2020, section 1634 of the NDAA for FY 2018). These terms may be inadvertently confused with the specific prohibited sources addressed by the Act implemented in this rule. Thus, while this rule uses the term “covered foreign entity” in titles of sections and clauses for brevity and parallelism to the Act, it more specifically refers to “American Security Drone Act-covered foreign entity” in this preamble and FAR text for clarity. Finally, while the Act refers to “covered” UAS, the definition provided in the Act does not differentiate from that of a UAS. Accordingly, to aid in readability and clarity there is no reference to “covered” UAS, but simply UAS. <HD SOURCE="HD2">A. Policy</HD> This rule amends FAR part 40, Information Security and Supply Chain Security, by establishing subpart 40.2, currently reserved, as Security Prohibitions and Exclusions. In subpart 40.2, the rule adds new sections 40.200, Scope of subpart, 40.201, Definitions, and 40.202, Prohibition on the Procurement and Operation of Unmanned Aircraft Systems Manufactured or Assembled by American Security Drone Act-Covered Foreign Entities, with a corresponding new contract clause at 52.240-1, Prohibition on Unmanned Aircraft Systems Manufactured or Assembled by American Security Drone Act-Covered Foreign Entities. In accordance with section 1833 of Public Law 118-31, 41 U.S.C. 3901 note prec., the requirements of section 40.202 expire on December 22, 2028. The rule adds a cross-reference in part 39, Acquisition of Information Technology, to call the attention of contracting officers potentially utilizing UAS in broader information technology procurements to the new prohibition. This rule also adds a cross-reference in part 13, Simplified Acquisition Procedures, for awareness of applicability to actions at or below the micro-purchase threshold. Finally, while this prohibition is established in subpart 40.2 as this is the intended primary location for security prohibitions and exclusions going forward, other security prohibitions and exclusions still reside in other areas of the FAR. Accordingly, a cross-reference is added in FAR part 4, Information and Information Matters, where many of the existing security prohibitions and exclusions reside. <HD SOURCE="HD2">B. Prohibition</HD> The prohibition at FAR 40.202-4 includes a phased implementation. Effective immediately, agencies are prohibited from procuring a FASC-prohibited UAS, as published in SAM at <E T="03">https://www.sam.gov.</E> Effective on ━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━ Preview showing 10k of 57k characters. Full document text is stored and available for version comparison. ━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━