[Federal Register: March 3, 2008 (Volume 73, Number 42)]
[Rules and Regulations]
[Page 11354-11356]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr03mr08-11]
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DEPARTMENT OF DEFENSE
Defense Acquisition Regulations System
48 CFR Parts 225 and 252
RIN 0750-AD76
Defense Federal Acquisition Regulation Supplement; Codification
and Modification of Berry Amendment (DFARS Case 2002-D002)
AGENCY: Defense Acquisition Regulations System, Department of Defense
(DoD).
ACTION: Final rule.
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SUMMARY: DoD has adopted as final, with changes, an interim rule
amending the Defense Federal Acquisition Regulation Supplement (DFARS)
to implement Section 832 of the National Defense Authorization Act for
Fiscal Year 2002. Section 832 codified and made modifications to the
provision of law known as the ``Berry Amendment,'' which requires the
acquisition of certain items from domestic sources.
DATES: Effective Date: March 3, 2008.
FOR FURTHER INFORMATION CONTACT: Ms. Amy Williams, Defense Acquisition
Regulations System, OUSD (AT&L) DPAP (DARS), IMD 3D139, 3062 Defense
Pentagon, Washington, DC 20301-3062. Telephone 703-602-0328; facsimile
703-602-7887. Please cite DFARS Case 2002-D002.
SUPPLEMENTARY INFORMATION:
A. Background
DoD published an interim rule at 67 FR 20697 on April 26, 2002. The
rule amended the DFARS to implement Section 832 of the National Defense
Authorization Act for Fiscal Year 2002 (Pub. L. 107-107). Section 832
codified and made minor modifications to the provision of law known as
the Berry Amendment (formerly 10 U.S.C. 2241 note, Limitations on
Procurement of Food, Clothing, and Specialty Metals Not Produced in the
United States; now codified at 10 U.S.C. 2533a).
Twenty-two sources submitted comments on the interim rule. A
discussion of the comments is provided below:
1. Clothing, Fabrics, and Fibers
a. De minimis exception for cotton, other natural fibers, or wool.
(1) Applicability of exception.
Comment: One respondent commented on the applicability of the
exception in the interim rule at 225.7002-2(i) (now 225.7002-2(j)) for
incidental amounts of cotton, other natural fibers, or wool. The
respondent stated that the exception should apply only to the
incidental amount of cotton, other natural fibers, or wool, not to the
end item itself, if the end item is otherwise subject to the Berry
Amendment. For example, a jacket of synthetic fibers with cotton lining
in the pockets would still be subject to the Berry Amendment with
regard to origin of the jacket as a whole. Only the cotton lining of
the pockets would be exempt.
DoD Response: DoD concurs and has clarified this point in the final
rule.
(2) Simplified acquisition threshold.
Comment: One respondent requested that DoD revise the exception in
the interim rule at 225.7002-2(i) (now 225.7002-2(j)) to clarify that
cotton, other natural fibers, or wool must be sourced domestically if
the simplified acquisition threshold is met, regardless of their worth
as a percentage of the total price of the end product.
DoD Response: DoD agrees with the intent of the comment, but does
not believe a DFARS change is necessary. DFARS 225.7002-2(j) already
states that the exception applies only if the value of the fibers is
not more than 10 percent of the total price of the end product and does
not exceed the simplified acquisition threshold.
b. Para-aramid fibers.
Comment: One respondent recommended that the exception for para-
aramid fibers at 225.7002-2(m)(2) (now 225.7002-2(o)(2)) be extended to
include all fabrics produced in compliance with the North American Free
Trade Agreement (NAFTA), and to allow for fabrics made with Kermel
aramid fiber produced in France and spun into yarn that is woven and
finished in Canada.
DoD Response: The comment is outside the scope of this DFARS case.
Section 807 of Public Law 105-261 only provides authority for DoD to
waive the Berry Amendment restrictions for procurement of para-aramid
fibers from countries that are party to a defense memorandum of
understanding (qualifying countries). Mexico is not a qualifying
country. Canada and France are qualifying countries, and can request a
waiver from the Under Secretary of Defense (Acquisition, Technology,
and Logistics), as did the Netherlands.
c. Examples of textile products.
Comment: One respondent suggested that DoD modify the rule at
225.7002-2(m)(1) (now 225.7002-2(o)(1)) to state that ``Examples of
textile products, made in whole or in part of fabric, include [but are
not limited to]--''.
DoD Response: DoD does not believe the suggested change is
necessary, since the term ``examples'' means that the list is not
exhaustive. Similar language is common throughout the DFARS.
d. Footwear.
Comment: One respondent requested that DoD clarify in the
regulations that footwear is indeed included under the Berry Amendment
restriction on clothing.
DoD Response: This issue has since been clarified at DFARS
225.7002-1(a)(2), which now lists footwear as an item of clothing.
e. Parachutes.
Comment: Several respondents requested that DoD include parachutes
as a listed item under the Berry Amendment. In the past several years,
some parachutes have been manufactured in Mexico, although the
synthetic fibers and fabric were manufactured in the United States.
DoD Response: DoD has implemented the law as written and cannot add
items to the list of restricted items without a change to the law.
2. Food Items--Exception for Products Manufactured or Processed in the
United States
a. Raw products.
Comment: There was mixed response as to whether procurement of food
items that are manufactured or processed in
[[Page 11355]]
the United States, but are from raw products of foreign origin, should
be allowed. Some respondents favored the clarification of the exception
in the Berry Amendment relating to foods manufactured or processed in
the United States. Other respondents objected on the basis of harm to
small businesses and possible contamination of foreign food ingredients
(particularly fish). Another respondent suggested that foreign
suppliers of seafood raw materials should be held to the same third-
party verification requirements for sanitation as domestic processors.
DoD Response: The issue relating to the requirement for seafood
products manufactured or processed in the United States to be made from
domestic fish or seafood was resolved by Section 8118 of the Defense
Appropriations Act for Fiscal Year 2005 (Pub. L. 108-287), which made
this requirement permanent. This requirement is implemented at DFARS
225.7002-2(l). The other comments are outside the scope of this DFARS
case.
b. Definition of ``manufactured'' and ``processed.''
Comment: There was mixed response regarding definition of the terms
``manufactured'' and ``processed.'' One respondent was concerned that
suppliers may mistakenly consider packaging, repackaging, or blending
sufficient processing to change the foreign raw materials into a
product that could be procured by the U.S. military. The respondent
cited the definition of ``processed food'' in the Federal Food, Drug
and Cosmetic Act (21 U.S.C. 321(gg)).
Another respondent strongly urged that DoD take a ``common-sense''
approach and not attempt to impose a highly technical and potentially
overly restrictive definition of what constitutes a product
manufactured or processed in the United States. This respondent stated
that widely accepted and robust definitions and standards already exist
for such matters under U.S. Customs Law.
DoD Response: DoD agrees that the definition of these terms would
be extremely complex and would probably vary depending on the food
being manufactured or processed. The ``definition'' in the Federal
Food, Drug and Cosmetic Act is not really definitive, because it only
cites examples of processing ``such as canning, cooking, freezing,
dehydration, or milling.'' This is not an exhaustive list of the ways
in which food might be processed, and does not present criteria by
which to determine whether the actions carried out constitute
``processing.''
c. Packaging for meals-ready-to-eat (MRE).
Comment: One respondent stated that the rule should explicitly
require domestic sourcing for MRE packaging. The respondent
acknowledged that packaging has never been explicitly included in the
Berry Amendment, but believed that it has been strongly implied. The
respondent expressed concern that the MRE pouches may be contaminated,
and thus may contaminate the food.
DoD Response: The comment is outside the scope of this DFARS case,
since food packaging is not covered by the Berry Amendment.
3. Items of Individual Equipment
Comment: One respondent objected to the parenthetical explanation
of items of individual equipment at DFARS 225.7002-1(a)(10), ``(Federal
Supply Class 8465).'' The respondent was concerned that, because of
this insertion, items that normally may be considered under the Berry
Amendment may inadvertently be excluded.
DoD Response: The comment is outside the scope of this DFARS case.
The reference to Federal Supply Class 8465 has been in the DFARS since
1997, and was not changed by this DFARS rule. However, DoD recognizes
the concerns of the respondent and is willing to further consider the
issue under a separate DFARS case, if adequate supporting rationale is
received.
4. Specialty Metals
One respondent had three objections to the DFARS implementation of
the Berry Amendment with regard to specialty metals (none of which were
changed by the interim rule). These objections are no longer pertinent,
as the result of Section 842 of the National Defense Authorization Act
for Fiscal Year 2007 (Pub. L. 109-364), which established separate
restrictions on specialty metals under 10 U.S.C. 2533b; and Sections
804 and 884 of the National Defense Authorization Act for Fiscal Year
2008, which further amended the restrictions. DoD is implementing these
statutory changes under a separate DFARS case.
5. Other Exceptions
a. Activities located outside the United States.
Comment: One respondent stated that the exceptions in the interim
rule at 225.7002-2(e) and (f) (now 225.7002-2(e) and (g)) refer to
``activities located outside the United States'' instead of using the
statutory language of ``establishment located outside the United
States'' (10 U.S.C. 2533a(d)(3)).
DoD Response: The interim rule made no change to the cited DFARS
language. DoD refers to its overseas establishments as ``activities''
and considers this term to accurately reflect the intent of the law.
b. NAFTA.
Comment: One respondent recommended that the Berry Amendment be
expanded to include the partners of NAFTA, allowing Canadian and
Mexican firms to participate in the U.S. purchasing process.
DoD Response: The comment is outside the scope of this DFARS case.
To allow purchases of restricted items from Canada and Mexico would
require a change to the Berry Amendment.
6. Protectionism
Comment: One respondent objected to the ``protectionism'' of the
Berry Amendment because of increased costs.
DoD Response: The comment relates to the merits of the Berry
Amendment itself, not the DFARS rule, and, therefore, is outside the
scope of this DFARS case.
7. Training
Comment: One respondent commented on the need for training on the
Berry Amendment for procurement officers and other personnel to make
the procurement process as seamless as possible. The respondent also
recommended publication of ``Frequently Asked Questions'' on the
Defense Procurement and Acquisition Policy website to benefit the general public, as well as
Congressional, Administration, and DoD staffs.
DoD Response: DoD recognizes the need for more information and
training on the Berry Amendment. A Continuous Learning Module on the
Berry Amendment (CLC 125) is now available at https://learn.dau.mil. In
addition, answers to frequently asked questions are available at http:/
/www.acq.osd.mil/dpap/cpic/ic/berry_amendment_faq.html. The Berry
Amendment is a very complex issue that frequently requires case-by-case
determination of applicability. However, DoD promotes a broader
understanding of the basic concepts, so that procurement personnel will
recognize the situations in which they need to seek additional
guidance.
This rule was not subject to Office of Management and Budget review
under Executive Order 12866, dated September 30, 1993.
[[Page 11356]]
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 primarily clarifies existing policy pertaining to the
acquisition of certain items from domestic sources.
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.
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Accordingly, the interim rule amending 48 CFR parts 225 and 252, which
was published at 67 FR 20697 on April 26, 2002, is adopted as a final
rule with the following changes:
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1. The authority citation for 48 CFR parts 225 and 252 continues to
read as follows:
Authority: 41 U.S.C. 421 and 48 CFR Chapter 1.
PART 225--FOREIGN ACQUISITION
0
2. Section 225.7002-2 is amended by revising paragraph (j) introductory
text to read as follows:
225.7002-2 Exceptions.
(j) Acquisitions of 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--
PART 252--SOLICITATION PROVISIONS AND CONTRACT CLAUSES
252.212-7001 [Amended]
0
3. Section 252.212-7001 is amended as follows:
0
a. By revising the clause date to read ``(MAR 2008)''; and
0
b. In paragraph (b)(5), by removing ``(JAN 2007)'' and adding in its
place ``(MAR 2008)''.
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4. Section 252.225-7012 is amended by revising the clause date and
paragraph (c)(2) introductory text to read as follows:
252.225-7012 Preference for Certain Domestic Commodities.
* * * * *
PREFERENCE FOR CERTAIN DOMESTIC COMMODITIES (MAR 2008)
* * * * *
(c) * * *
(2) To 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--
* * * * *
[FR Doc. E8-3946 Filed 2-29-08; 8:45 am]
BILLING CODE 5001-08-P