1 Federal Register / Vol. 83, No. 116 / Friday, June 15, 2018 / Rules and Regulations 28141. DEPARTMENT OF DEFENSE searching for FAR Case 2018 010''. To implement section 1634, the Select the link Submit a Comment'' clause at 23 prohibits GENERAL SERVICES that corresponds with FAR Case 2018 contractors from providing any ADMINISTRATION 010.'' Follow the instructions provided hardware, software, or services at the Submit a Comment'' screen. developed or provided by Kaspersky NATIONAL AERONAUTICS AND Please include your name, company Lab or its related entities, or using any SPACE ADMINISTRATION name (if any), and FAR Case 2018 such hardware, software, or services in 010'' on your attached document. the development of data or deliverables 48 CFR Parts 1, 4, 13, 39, and 52 Mail: General Services first produced in the performance of the [FAC 2005 99; FAR Case 2018 010; Administration, Regulatory Secretariat contract. The contractor must also Item I; Docket 2018 0010, Sequence 1] (MVCB), ATTN: Lois Mandell, 1800 F report any such hardware, software, or Street NW, 2nd Floor, Washington, DC services discovered during contract RIN 9000 AN64 20405 0001.
2 Performance; this requirement flows Instructions: Please submit comments down to subcontractors. For clarity, the Federal Acquisition Regulation; Use of only and cite FAC 2005 99, FAR Case rule defines covered entity'' and Products and Services of Kaspersky 2018 010, in all correspondence related covered article.'' A covered entity Lab to this case. All comments received will includes the entities described in AGENCY: Department of Defense (DoD), be posted without change to http:// section 1634. A covered article includes General Services Administration (GSA), , including any hardware, software, or services that the and National Aeronautics and Space personal and/or business confidential Federal Government will use on or after Administration (NASA). information provided. October 1, 2018. ACTION: Interim rule. FOR FURTHER INFORMATION CONTACT: Ms. As the Government considers Camara Francis, Procurement Analyst, additional actions to implement section SUMMARY: DoD, GSA, and NASA are at 202 550 0935, for clarification of 1634, DoD, GSA, and NASA especially issuing an interim rule amending the content.
3 For information pertaining to welcome input on steps that the Federal Acquisition Regulation (FAR) to status or publication schedules, contact Government could take to better identify implement a section of the National the Regulatory Secretariat at 202 501 and reduce the burden on contractors Defense Authorization Act for Fiscal 4755. Please cite FAC 2005 99, FAR related to identifying covered articles. Year 2018. Case 2018 010. For example: DATES: SUPPLEMENTARY INFORMATION: Is the prohibition scoped Effective Date: July 16, 2018. appropriately to protect the Government Applicability Dates: I. Background by including situations in which Contracting officers shall include This interim rule revises the FAR to covered articles may be used in the the clause at FAR 23, implement section 1634 of Division A of development of data or deliverables first Prohibition on Contracting for the National Defense Authorization Act produced during contract performance, Hardware, Software, and Services (NDAA) for Fiscal Year (FY) 2018 (Pub.)
4 For example, under a systems Developed or Provided by Kaspersky L. 115 91). Section 1634 of this law development contract? Lab or Other Covered Entities prohibits the use of hardware, software, Are the Government's analysis and In solicitations issued on or after and services of Kaspersky Lab and its estimates in sections VI and VII, July 16, 2018, and resultant contracts; related entities by the Federal including the estimate that 5 percent of and Government on or after October 1, 2018. contractors would be required to submit In solicitations issued before July Implementation of this rule in the reports in accordance with the clause, 16, 2018, provided award of the FAR should not impact or impair any reasonable? How could these estimates resulting contract(s) occurs on or after other planned or ongoing efforts be improved? July 16, 2018. agencies may undertake to implement If the Government were to consider Contracting officers shall modify, in section 1634 of Division A of the NDAA establishing a list to publicly share accordance with FAR (d)(3), for FY 2018, including consideration by information regarding products existing indefinite-delivery contracts to agencies of the presence of hardware, identified as meeting the definition of a include the FAR clause for future software, or services developed or covered article ( , excluded products), orders, prior to placing any further provided by Kaspersky Lab as a including those offered by third parties: orders on or after July 16, 2018.
5 Technical evaluation factor in the source What protocols should the If modifying an existing contract to selection process. Government apply prior to placing a extend the period of performance by product on the excluded list ( , who more than 6 months, contracting officers II. Discussion and Analysis should be reaching out, and to whom)? should include the clause in accordance This rule amends FAR part 4, adding Should different protocols apply with (d). a new subpart , Prohibition on depending on whether the product is Comment Date: Interested parties Contracting for Hardware, Software, and made by the original equipment should submit written comments to the Services Developed or Provided by manufacturer, sold by a reseller, or Regulatory Secretariat on or before Kaspersky Lab, with a corresponding customized by a firm? August 14, 2018 to be considered in the new contract clause at 23, When is it appropriate to leave a formulation of a final rule. Prohibition on Contracting for product on the excluded list indefinitely sradovich on DSK3 GMQ082 PROD with RULES2.
6 ADDRESSES: Submit comments Hardware, Software, and Services ( , to provide notice for those who identified by FAC 2005 99, FAR Case Developed or Provided by Kaspersky have previously acquired the product)? 2018 010, by any of the following Lab and Other Covered Entities. The Are there steps that the methods: rule also adds text in subpart , Government can take to avoid : http:// Actions at or Below the Micro-Purchase inappropriately affecting the producer's Submit comments Threshold, to address section 1634 with interests ( , allowing the firm to via the Federal eRulemaking portal by regard to micro-purchases. demonstrate that there is a new version VerDate Sep<11>2014 18:39 Jun 14, 2018 Jkt 244001 PO 00000 Frm 00003 Fmt 4701 Sfmt 4700 E:\FR\FM\ 15 JNR2. 28142 Federal Register / Vol. 83, No. 116 / Friday, June 15, 2018 / Rules and Regulations of the product that is free from concern applies to acquisitions of COTS items; rule. This rule is not a major rule under and annotating the list accordingly)?
7 (iii) concerns authorities or 5 804. responsibilities under the Small III. Applicability to Contracts at or V. Executive Order 13771. Business Act (15 644) or bid Below the Simplified Acquisition This rule is not subject to the protest procedures developed under the Threshold and for Commercial Items, requirements of 13771 because the Including Commercially Available Off- authority of 31 3551 et seq., 10. 2305(e) and (f), or 41 3706 rule is issued with respect to a national the-Shelf Items security function of the United States. and 3707; or (iv) the Administrator for This rule adds a new contract clause Federal Procurement Policy makes a VI. Regulatory Flexibility Act at 23, Prohibition on Contracting written determination and finding that for Hardware, Software, and Services it would not be in the best interest of the The change may have a significant Developed or Provided by Kaspersky Federal Government to exempt contracts economic impact on a substantial Lab and Other Covered Entities, in order for the procurement of COTS items from number of small entities within the to implement section 1634 of the NDAA the provision of law.
8 Meaning of the Regulatory Flexibility for FY 2018. Section 1634 of this law Act 5 601 et seq. The Initial prohibits the use of hardware, software, C. Determinations Regulatory Flexibility Analysis (IRFA) is and services developed or provided by The FAR Council has determined that summarized as follows: Kaspersky Lab and related entities by it is in the best interest of the The objective of the rule is to prescribe the Federal Government on or after Government to apply the rule to appropriate policies and procedures to October 1, 2018. contracts at or below the SAT and for enable agencies to determine and ensure that they are not purchasing products and A. Applicability to Contracts at or Below the acquisition of commercial items. services of Kaspersky Lab and its related the Simplified Acquisition Threshold The Administrator for Federal entities for use by the Government on or after 41 1905 governs the Procurement Policy has determined that October 1, 2018. The legal basis for the rule applicability of laws to acquisitions at it is in the best interest of the is section 1634 of the NDAA for FY 2018, or below the simplified acquisition Government to apply this rule to which prohibits Government use of such threshold (SAT).
9 Section 1905 generally contracts for the acquisition of COTS products on or after that date. items. Data from the Federal Procurement Data limits the applicability of new laws System (FPDS) for FY 2017 has been used as when agencies are making acquisitions While the law does not specifically the basis for estimating the number of at or below the SAT, but provides that address acquisitions of commercial contractors that may be affected by this rule. such acquisitions will not be exempt items, including COTS items, there is an Approximately 97,632 unique entities from a provision of law if: (i) The law unacceptable level of risk for the received new awards in Fiscal Year (FY). contains criminal or civil penalties; (ii) Government in buying hardware, 2017. Of these entities, 72,447 (74 percent). the law specifically refers to 41 software, or services developed or unique small entities received awards during provided in whole or in part by 2017. It is estimated that the reports required 1905 and states that the law applies to Kaspersky Lab.
10 This level of risk is not by this rule will be submitted by 5 percent contracts and subcontracts in amounts of contractors, or 3,623 small entities. not greater than the SAT; or (iii) the alleviated by the fact that the item being The rule requires contractors and FAR Council makes a written acquired has been sold or offered for subcontractors that are subject to the clause determination and finding that it would sale to the general public, either in the to report to the contracting officer, or for not be in the best interest of the Federal same form or a modified form as sold to DoD, to the website listed in the clause, any Government to exempt contracts and the Government ( , that it is a discovery of a covered article during the subcontracts in amounts not greater commercial item or COTS item), nor by course of contract performance. than the SAT from the provision of law. the small size of the purchase ( , at or The rule does not duplicate, overlap, or below the SAT).