[Federal Register: March 27, 2007 (Volume 72, Number 58)]
[Rules and Regulations]               
[Page 14239-14240]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr27mr07-4]                         

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DEPARTMENT OF DEFENSE

Defense Acquisition Regulations System

48 CFR Parts 225 and 252

RIN 0750-AF34

 
Defense Federal Acquisition Regulation Supplement; Prohibition on 
Acquisition from Communist Chinese Military Companies (DFARS Case 2006-
D007)

AGENCY: Defense Acquisition Regulations System, Department of Defense 
(DoD).

ACTION: Final rule.

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SUMMARY: DoD has adopted as final, without change, an interim rule 
amending the Defense Federal Acquisition Regulation Supplement (DFARS) 
to implement Section 1211 of the National Defense Authorization Act for 
Fiscal Year 2006. Section 1211 prohibits DoD from acquiring United 
States Munitions List items from Communist Chinese military companies.

EFFECTIVE DATE: March 27, 2007.

FOR FURTHER INFORMATION CONTACT: Ms. Amy Williams, Defense Acquisition 
Regulations System, OUSD(AT&L)DPAP(DARS), IMD 3C132, 3062 Defense 
Pentagon, Washington, DC 20301-3062. Telephone (703) 602-0328; 
facsimile (703) 602-0350. Please cite DFARS Case 2006-D007.

SUPPLEMENTARY INFORMATION:

A. Background

    DoD published an interim rule at 71 FR 53045 on September 8, 2006, 
to implement Section 1211 of the National Defense Authorization Act for 
Fiscal Year 2006 (Public Law 109-163). Section 1211 prohibits DoD from 
acquiring goods or services, through a contract or a subcontract with a 
Communist Chinese military company, if the goods or services being 
acquired are on the munitions list of the International Trafficking in 
Arms Regulations (the United States Munitions List (USML) at 22 CFR 
Part 121).
    One source submitted comments on the interim rule. That source 
recommended addition of an exception to the policy that, before 
issuance of a solicitation, the requirements activity must notify the 
contracting officer whether the items to be acquired are on the USML. 
The exception would apply to items that include critical military 
technology, since those items are already subject to controls that 
limit

[[Page 14240]]

issuance of the solicitation and the associated technical data package 
to United States and Canadian firms.
    DoD does not agree with the recommended change. A company located 
in the United States or Canada could fall within the definition of a 
Communist Chinese military company if it is owned or controlled by, or 
affiliated with, an element of the Government or armed forces of the 
People's Republic of China. Also, the prohibition applies to 
subcontracts as well as contracts. An item of critical military 
technology could contain a subcontracted component that is not subject 
to the same controls as the end item, but is on the USML. Therefore, 
the contracting officer needs the specified notification from the 
requirements activity to identify all USML items and to ensure that the 
clause at DFARS 252.225-7007 is included in solicitations and contracts 
for those items.
    This rule was not subject to Office of Management and Budget review 
under Executive Order 12866, dated September 30, 1993.

B. Regulatory Flexibility Act

    DoD certifies that 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., 
because the rule affects only those entities that are a part of the 
industrial base of the People's Republic of China or that are owned or 
controlled by, or affiliated with, an element of the Government or 
armed forces of the People's Republic of China.

C. Paperwork Reduction Act

    The Paperwork Reduction Act does not apply, because the rule does 
not impose any information collection requirements that require the 
approval of the Office of Management and Budget under 44 U.S.C. 3501, 
et seq.

List of Subjects in 48 CFR Parts 225 and 252

    Government procurement.

Michele P. Peterson,
Editor, Defense Acquisition Regulations System.

Interim Rule Adopted as Final Without Change

0
Accordingly, the interim rule amending 48 CFR Parts 225 and 252, which 
was published at 71 FR 53045 on September 8, 2006, is adopted as a 
final rule without change.
 [FR Doc. E7-5480 Filed 3-26-07; 8:45 am]

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