BIS Publishes Final Rule to Amend National Defense Contract, Allocation Priorities
The Commerce Department’s Bureau of Industry and Security (BIS) revised its rules related to national defense priorities given to government procurement contracts, private contract approvals and resource allocations to industry. The final rule, effective Sept. 12, makes no changes to the most recent BIS proposal to this final rule because industry provided no comments, said BIS.
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Through this final rule, the agency is implementing provisions in the Defense Production Act Reauthorization of 2009 (here), which requires the heads of all federal agencies to establish standards and procedures for national defense priorities and allocations. Those contracts may involve U.S. imports and exports. The final rule spells out procedures for international organizations to obtain priority orders and provides guidelines for U.S. individuals and entities to obtain defense items from Canada, Australia, Finland, Italy, the Netherlands, Sweden and the United Kingdom.
BIS does not expect the regulatory changes to significantly impact small businesses or the volume of priority, also known as “rated,” orders. Due to a number of reasons, including BIS has not allocated resources in this context “in decades,” the agency anticipates allocations will be rare in the future. The U.S. government has the authority to allocate resources when a sufficient supply of materials isn’t available to safeguard the national defense through the priority contracts awarded by agencies such as BIS, said the final rule.
The term “national defense” in this circumstance means military and energy production or construction, homeland security, stockpiling, space, emergency preparedness, critical infrastructure protection and restoration, foreign military and critical infrastructure assistance, the final rule says. The scope of reasons to justify rated orders is expanded in this final rule, and acceptance or rejection of rated orders may be expedited in emergency scenarios to a six to twelve hour response time.
(Federal Register 08/14/14)