[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.


0
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:
0
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)''.
0
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]

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