[Federal Register Volume 89, Number 218 (Tuesday, November 12, 2024)]
[Rules and Regulations]
[Pages 89464-89472]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2024-26061]
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DEPARTMENT OF DEFENSE
GENERAL SERVICES ADMINISTRATION
NATIONAL AERONAUTICS AND SPACE ADMINISTRATION
48 CFR Parts 4, 13, 39, 40, and 52
[FAC 2025-01, FAR Case 2024-002, Item I, Docket No. 2024-0002, Sequence
No. 1]
RIN 9000-AO70
Federal Acquisition Regulation: Prohibition on Unmanned Aircraft
Systems From Covered Foreign Entities
AGENCY: Department of Defense (DoD), General Services Administration
(GSA), and National Aeronautics and Space Administration (NASA).
[[Page 89465]]
ACTION: Interim rule.
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SUMMARY: DoD, GSA, and NASA are issuing an interim rule amending the
Federal Acquisition Regulation (FAR) to implement a prohibition on the
procurement and operation of unmanned aircraft systems manufactured or
assembled by an American Security Drone Act-covered foreign entity.
DATES:
Effective date: November 12, 2024.
Applicability date: Contracting officers shall include the clause
at FAR 52.240-1, Prohibition on Unmanned Aircraft Systems Manufactured
or Assembled by American Security Drone Act-Covered Foreign Entities,
in solicitations issued, and contracts awarded, on or after November
12, 2024, in accordance with FAR 1.108(d); see also section II of this
preamble.
Comment date: Interested parties should submit written comments to
the Regulatory Secretariat Division at the address shown below on or
before January 13, 2025, to be considered in the formation of the final
rule.
ADDRESSES: Submit comments in response to FAC 2025-01, FAR Case 2024-
002 to the Federal eRulemaking portal at https://www.regulations.gov by
searching for ``FAR Case 2024-002''. Select the link ``Comment Now''
that corresponds with ``FAR Case 2024-002''. Follow the instructions
provided on the ``Comment Now'' screen. Please include your name,
company name (if any), and ``FAR Case 2024-002'' on your attached
document. If your comment cannot be submitted using https://www.regulations.gov, call or email the points of contact in the FOR
FURTHER INFORMATION CONTACT section of this document for alternate
instructions.
Instructions: Please submit comments only and cite ``FAR Case 2024-
002'' in all correspondence related to this case. Comments received
generally will be posted without change to https://www.regulations.gov,
including any personal and/or business confidential information
provided. Public comments may be submitted as an individual, as an
organization, or anonymously (see frequently asked questions at https://www.regulations.gov/faq). To confirm receipt of your comment(s),
please check https://www.regulations.gov, approximately two-to-three
days after submission to verify posting.
FOR FURTHER INFORMATION CONTACT: For clarification of content, contact
Mr. Benjamin Collins, Procurement Analyst, at 850-826-0058 or by email
at [email protected]. For information pertaining to status,
publication schedules, or alternate instructions for submitting
comments if https://www.regulations.gov cannot be used, contact the
Regulatory Secretariat Division at 202-501-4755 or [email protected].
Please cite FAC 2025-01, FAR Case 2024-002.
SUPPLEMENTARY INFORMATION:
I. Background
This interim rule revises the FAR to implement the American
Security Drone Act of 2023 (subtitle B, title XVIII, National Defense
Authorization Act (NDAA) for Fiscal Year (FY) 2024, Public Law 118-31,
41 U.S.C. 3901 note prec.) enacted December 22, 2023.
The unmanned aircraft system (UAS), also referred to as a drone,
market has grown substantially in the last decade. Federal agencies use
UAS for land-use research, data collection, monitoring the border, and
various other tasks. Reliance on UAS, however, complicates the ability
of the Federal Government to protect the security of this data, in part
because the majority of UAS are manufactured and assembled by foreign-
owned entities with affiliations that have divergent interests from
those of the United States. Security is imperative when data is
collected, stored, and transmitted by UAS for sensitive missions. Use
of UAS, without adequate protection for security, increases
adversaries' capabilities to disrupt U.S. Government operations.
Compromises to cybersecurity and physical security controls may lead to
potential physical effects such as sabotage of Federal property and
assets.
This interim rule is intended to respond to these threats by
prohibiting the procurement, operation, or use of Federal funds on UAS
prohibited by the Federal Acquisition Security Council (FASC).
II. Applicability Dates
Contracting officers shall include the clause at FAR 52.240-1,
Prohibition on Unmanned Aircraft Systems Manufactured or Assembled by
American Security Drone Act-Covered Foreign Entities, in solicitations
issued, and contracts awarded, on or after November 12, 2024.
If exercising an option or modifying an existing contract to extend
the period of performance, contracting officers shall include the
clause at FAR 52.240-1. When exercising an option, agencies should
consider modifying the existing contract to add the clause in a
sufficient amount of time to both provide notice for exercising the
option and provide contractors with adequate time to comply with the
clause. Additionally, contracting officers shall modify existing
indefinite-delivery contracts to include the clause at FAR 52.240-1 in
sufficient amount of time to apply to future orders in accordance with
FAR 1.108(d)(3).
Note: Although FAR part 37, Service Contracting, is not
addressed explicitly, the FAR changes are applicable to supply and
service solicitations and contracts.
III. Discussion and Analysis
DoD, GSA, and NASA are amending the FAR consistent with the
American Security Drone Act of 2023 (the Act) to prohibit executive
agencies from procuring a FASC-prohibited UAS and, on or after December
22, 2025, operating FASC-prohibited UAS. Additionally, the FAR is
amended consistent with the Act to prohibit Federal contractors from
using Federal funds for the procurement or operation of a FASC-
prohibited UAS.
Terminology used throughout this rule is described here to aid in
readability. For the purposes of this rule, the term ``FASC-prohibited
unmanned aircraft system (UAS)'' means a UAS manufactured or assembled
by an American Security Drone Act-covered foreign entity. In accordance
with section 1822 of the Act, the list of American Security Drone Act-
covered foreign entities is to be developed and maintained by the FASC
and published in the System for Award Management (SAM) at https://www.sam.gov.
Additionally, the FAR and other agency acquisition regulations
include instances of similar terms to those used in the Act (``covered
foreign country,'' ``covered entity,'' etc.) with definitions
corresponding to other statutes (e.g., section 889 of the NDAA for FY
2019, section 848 of the NDAA for FY 2020, section 1634 of the NDAA for
FY 2018). These terms may be inadvertently confused with the specific
prohibited sources addressed by the Act implemented in this rule. Thus,
while this rule uses the term ``covered foreign entity'' in titles of
sections and clauses for brevity and parallelism to the Act, it more
specifically refers to ``American Security Drone Act-covered foreign
entity'' in this preamble and FAR text for clarity.
Finally, while the Act refers to ``covered'' UAS, the definition
provided in the Act does not differentiate from that of a UAS.
Accordingly, to aid in readability and clarity there is no reference to
``covered'' UAS, but simply UAS.
A. Policy
This rule amends FAR part 40, Information Security and Supply Chain
[[Page 89466]]
Security, by establishing subpart 40.2, currently reserved, as Security
Prohibitions and Exclusions. In subpart 40.2, the rule adds new
sections 40.200, Scope of subpart, 40.201, Definitions, and 40.202,
Prohibition on the Procurement and Operation of Unmanned Aircraft
Systems Manufactured or Assembled by American Security Drone Act-
Covered Foreign Entities, with a corresponding new contract clause at
52.240-1, Prohibition on Unmanned Aircraft Systems Manufactured or
Assembled by American Security Drone Act-Covered Foreign Entities. In
accordance with section 1833 of Public Law 118-31, 41 U.S.C. 3901 note
prec., the requirements of section 40.202 expire on December 22, 2028.
The rule adds a cross-reference in part 39, Acquisition of
Information Technology, to call the attention of contracting officers
potentially utilizing UAS in broader information technology
procurements to the new prohibition. This rule also adds a cross-
reference in part 13, Simplified Acquisition Procedures, for awareness
of applicability to actions at or below the micro-purchase threshold.
Finally, while this prohibition is established in subpart 40.2 as this
is the intended primary location for security prohibitions and
exclusions going forward, other security prohibitions and exclusions
still reside in other areas of the FAR. Accordingly, a cross-reference
is added in FAR part 4, Information and Information Matters, where many
of the existing security prohibitions and exclusions reside.
B. Prohibition
The prohibition at FAR 40.202-4 includes a phased implementation.
Effective immediately, agencies are prohibited from procuring a FASC-
prohibited UAS, as published in SAM at https://www.sam.gov. Effective
on or after December 22, 2025, agencies are also prohibited from
procuring services for the operation of a FASC-prohibited UAS, and
Federal contractors are prohibited from using Federal funds on FASC-
prohibited UAS (see 40.202-3). The prohibitions are implemented through
contract clause 52.240-1, Prohibition on Unmanned Aircraft Systems
Manufactured or Assembled by American Security Drone Act-Covered
Foreign Entities.
In the near-term, the phased prohibition permits the continued use
of previously-acquired UAS that were subsequently identified as FASC-
prohibited, as well as contractor operation of UAS in services where
the UAS is not a deliverable (e.g., a contractor flies a UAS for aerial
surveillance on a security contract or a contractor uses a UAS for
analyzing crop and soil conditions as part of services performed under
an agriculture-related contract). This is consistent with the
effectivity of the prohibition in sections 1823 and 1826 of Public Law
118-31 (41 U.S.C. 3901 note prec.), with the enactment of the NDAA of
FY 2024 (December 22, 2023) and the effectivity of sections 1824 and
1825 deferred until two years later (December 22, 2025).
C. Statute Implementation Considerations
The Act includes numerous sections pertaining to Federal
acquisition. The sections include differing scope, timelines, and
audiences. For example, both sections 1823 and 1826 immediately
prohibit agencies from procuring FASC-prohibited UAS, whereas section
1824 goes into effect in December 2025 and prohibits agencies from
operating (or contracting for the operation of) FASC-prohibited UAS.
Section 1825 also goes into effect December 2025 and prohibits the use
of Federal funds for the procurement or operation of FASC-prohibited
UAS.
While piecemeal implementation of the various sections could be
accommodated through numerous rulemaking undertakings, a consolidated
and integrated rule for the implementation of the Act, as a whole, more
efficiently fulfills the FAR's purpose of establishing uniform policies
and procedures for acquisition by all executive agencies in accordance
with FAR 1.101 (see 41 U.S.C. 1121(b)). For example, while the
prohibition on operation of a FASC-prohibited UAS is not effective
until December 2025, publishing and incorporating the rule into the FAR
now better prepares agencies and contractors to more efficiently plan
for, and comply with, the Act's prohibitions given typical acquisition
and rulemaking timelines.
This rule seeks to harmonize and simplify the disparate, but
interrelated, sections of the Act pertinent to Federal contracting.
Thus, while precise references are provided where appropriate, the rule
often speaks more broadly to the Act versus a specific section of the
Act. Additionally, a few conservative adjustments between statute and
regulation were made where needed for more efficient administration.
For example, the statute's frequently used ``in the connection with the
operation of'' a FASC-prohibited UAS was implemented more simply as
``operation of.'' While ``in connection with'' could conceivably
capture an activity ancillary to operation (e.g., a contractor
servicing the airfield where a FASC-prohibited UAS may fly out of), it
is unclear how far that may extend. DoD, GSA, and NASA perceived the
principal aim of this terminology to be the operation of a FASC-
prohibited UAS. This perception was based upon a plain reading of the
statute as well as supporting documentation, such as the Committee on
Homeland Security and Governmental Affairs United States Senate Report
118-87 to accompany Senate bill 473, which more simply focused on the
prohibition on the ``operation of'' the UAS versus the less defined
``in connection with the operation of'' a UAS. This implementation was
viewed as not only a readability improvement but also a streamlining of
an otherwise unwieldy and open-ended phrase that may inhibit
understanding and compliance by the acquisition community.
D. Exemptions, Exceptions, and Waivers
The Act includes exemptions, exceptions, and waivers. As shown at
FAR 40.202-4(a), exemptions apply to the Department of Homeland
Security, the Department of Defense, the Department of State, and the
Department of Justice if the procurement or operation is determined to
be in the national interest of the United States and meets specific
criteria outlined in the statute.
Exemptions also apply to the Department of Transportation for UAS
in support of the safe, secure, or efficient operation of the National
Airspace System and maintenance of public safety, among other
activities. These exemptions are summarized in FAR 40.202-4(b).
Similarly, an exemption applies to the National Transportation
Safety Board (NTSB) for the purposes of conducting safety
investigations. This exemption is summarized in FAR 40.204-4(c). It
should be noted that while Congress authorized this NTSB safety
investigation exemption for agency procurement and operation (sections
1823 and 1824 of the Act), it did not provide a parallel NTSB safety
investigation exemption for use of Federal funds (section 1825). Thus,
for purposes of consistency in implementation, and to carry out the
intent of Congress, the FAR Council has conformed the NTSB safety
investigation exemption for not only agency procurement and operation,
but also contractor use of Federal funds.
Finally, an exemption is afforded to the National Oceanic and
Atmospheric Administration for meeting science or
[[Page 89467]]
management objectives or operational mission. This exemption is
summarized in FAR 40.202-4(d).
In accordance with section 1832 of the Act, FAR 40.202-5 outlines
exceptions for wildfire management operations, search and rescue
operations, intelligence activities, and Tribal law enforcement.
Additionally, FAR 40.202-6 authorizes heads of executive agencies
waiver authority, on a case-by-case basis, with approval from the
Director of the Office of Management and Budget, after consultation
with the FASC, and upon notification to appropriate congressional
committees.
E. Definitions
Section 40.201 is created to define the terms ``American Security
Drone Act-covered foreign entity,'' ``unmanned aircraft,'' and
``unmanned aircraft system,'' which are derived from statute. A UAS is
comprised of both an unmanned aircraft and the associated elements
required for the operator to operate safely and efficiently in the
national airspace system. Also of note, while the term ``drone'' is
used in the title of the statute being implemented, it is not a defined
term in the Act or this rule. Nevertheless, ``drone'' is referenced for
plain language purposes in several instances and is considered roughly
equivalent to ``unmanned aircraft'' (i.e., the air vehicle itself
versus the more comprehensive system required to operate the drone).
While the term ``unmanned aircraft'' is defined in statute and provided
in section 40.201, the term ``associated elements'' is not.
Section 1823 of the Act tasks the FASC, in coordination with the
Secretary of Transportation, with developing and updating a list of
associated elements. The FASC definition of associated elements was not
available in time for the publication of this rule. However, the FAR
Council does intend to incorporate the FASC's definition of associated
elements in the final rule. Additionally, although the tasking to the
FASC for defining associated elements is only referenced in section
1823, the FAR Council anticipates it applying to the broader
implementation of the Act (e.g., pertinent to sections 1824, 1825,
1826, etc.).
The term ``FASC-prohibited unmanned aircraft system'' is created to
aid in the readability of the FAR text, provide better linkage to FASC-
maintained list on SAM.gov, and provide for more specificity than
simply ``prohibited'' given other prohibitions that may be involved in
a specific acquisition (e.g., debarred contractor, contractor with
delinquent tax liabilities or felony convictions). This new term is
defined as a UAS manufactured or assembled by an American Security
Drone Act-covered foreign entity.
It should also be noted that while the prohibition clearly applies
to an American Security Drone Act-covered foreign entity that
manufactures or assembles a UAS (i.e., an unmanned aircraft or
associated element), it does not necessarily prevent an American
Security Drone Act-covered foreign entity from supplying a part, for
example, that may be used by another entity to assemble or manufacture
the unmanned aircraft or associated element. Agencies are encouraged to
consult agency-specific guidelines or procedures, as well as emerging
Governmentwide policies for the procurement of UAS (see section 1829 of
the Act), for more detail on security considerations at levels of
assembly below that of a UAS (i.e., an unmanned aircraft or associated
element).
F. Applicability to Actions at or Below the Micro-Purchase Threshold
The rule also adds text in subpart 13.2, Actions at or Below the
Micro-Purchase Threshold, to address the prohibition with regard to
micro-purchases.
IV. Specific Questions for Comment
DoD, GSA, and NASA considered implementation of various compliance
elements when drafting this rule. Specifically, DoD, GSA, and NASA are
considering adding requirements for offerors and contractors to
disclose and report certain information to contracting officers.
A contemplated disclosure requirement would provide offerors a
mechanism for identifying the proposed or contemplated delivery or use
of a FASC-prohibited UAS to the contracting officer, and why it may be
appropriate (e.g., how a FASC-prohibited UAS is proposed to be modified
to preclude transfer to, or download data from, an American Security
Drone Act-covered foreign entity or otherwise pose no national security
or cybersecurity risk).
Finally, a contemplated reporting requirement would compel
contractors in procurements with no exemption, exception, or waiver to
maintain awareness of changes to the FASC-maintained list of American
Security Drone Act-covered foreign entities and inform the contracting
officer if a utilized UAS which was not prohibited at the time of
solicitation or award was subsequently prohibited. Additionally,
contemplated reporting requirements could compel contractors to report
specific information to agency officials if a UAS (FASC-prohibited or
otherwise) was compromised and information or operations made
vulnerable.
DOD, GSA, and NASA welcome input on the following considerations:
What challenges do you anticipate regarding compliance
with the contemplated disclosure requirement?
What challenges do you anticipate regarding compliance
with the contemplated reporting requirement?
Would more detail regarding ``Federal funds'' (e.g., text
similar to FAR 52.203-12(b)) be helpful in complying with the
prohibition on the use of Federal funds in the procurement or operation
of FASC-prohibited UAS?
What other suggestions do you have to ensure Government
customers are aware of, and can mitigate, risks posed by FASC-
prohibited UAS?
V. Applicability to Contracts at or Below the Simplified Acquisition
Threshold (SAT) and for Commercial Products (Including Commercially
Available Off-the-Shelf (COTS) Items), or for Commercial Services
This rule adds a new contract clause at FAR 52.240-1, Prohibition
on Unmanned Aircraft Systems Manufactured or Assembled by American
Security Drone Act-Covered Foreign Entities, to implement the
requirements of the Act.
A. Applicability to Contracts at or Below the Simplified Acquisition
Threshold
The statute at 41 U.S.C. 1905 governs the applicability of laws to
acquisitions at or below the SAT. Section 1905 generally limits the
applicability of new laws when agencies are making acquisitions at or
below the SAT, but provides that such acquisitions will not be exempt
from a provision of law under certain circumstances, including when the
FAR Council makes a written determination and finding that it would not
be in the best interest of the Federal Government to exempt contracts
and subcontracts in amounts not greater than the SAT from the provision
of law. The FAR Council made a determination to apply this statute to
acquisitions at or below the SAT.
B. Applicability to Contracts for the Acquisition of Commercial
Products (Including Commercially Available Off-The-Shelf (COTS) Items),
or for Commercial Services
The statute at 41 U.S.C. 1906 governs the applicability of laws to
contracts for the acquisition of commercial products and commercial
services and is intended to limit the applicability of
[[Page 89468]]
laws to contracts for the acquisition of commercial products and
commercial services. Section 1906 provides that if the FAR Council
makes a written determination that it is not in the best interest of
the Federal Government to exempt commercial contracts, the provision of
law will apply to contracts for the acquisition of commercial products
and commercial services.
The statute at 41 U.S.C. 1907 states that acquisitions of COTS
items will be exempt from certain provisions of law unless the
Administrator for Federal Procurement Policy makes a written
determination and finds that it would not be in the best interest of
the Federal Government to exempt contracts for the procurement of COTS
items.
The FAR Council made a determination to apply this statute to
acquisitions for commercial products and commercial services. The
Administrator for Federal Procurement Policy made a determination to
apply this statute to acquisitions for COTS items.
C. Determinations
The FAR Council has determined that it is in the best interest of
the Government to apply the rule to contracts at or below the SAT and
for the acquisition of commercial products and commercial services. The
Administrator for Federal Procurement Policy has determined that it is
in the best interest of the Government to apply this rule to contracts
for the acquisition of COTS items.
While the law does not specifically address acquisitions of
commercial products and commercial services, including COTS items,
there is an unacceptable level of risk for the Government in allowing
the procurement, provision, or utilization of UAS manufactured or
assembled by an American Security Drone Act-covered foreign entity, or
products or services in connection with the operation of such UAS. This
level of risk is not alleviated by the fact that the service or product
being acquired has been sold or offered for sale to the general public,
either in the same form or a modified form as sold to the Government
(i.e., that it is a commercial product or COTS item), nor by the small
size of the purchase (i.e., at or below the SAT). In fact, Senate
Report 118-87 specifically highlights the commercial UAS market as an
area of concern given market share dominance and potential
cybersecurity risks posed by many of these COTS UAS. As a result,
agencies may face increased risk of exposure if use of such UAS is
allowed on a contract for commercial services or commercial products
(including COTS items). The prohibitions on procuring, providing, or
using such UAS in the performance of a Federal contract is a national
security measure to protect sensitive Government information and
operations.
VI. Severability
While this rule is intended to be implemented in full, reasoned
consideration has been given for potential partial implementation
scenarios. If any portion (e.g., section, clause, sentence) of this
rule is held to be invalid or unenforceable facially, or as applied to
any entity or circumstance, it shall be severable from the remainder of
this rule, and shall not affect the remainder thereof, or its
application to entities not similarly situated or to other dissimilar
circumstances. The various portions of this rule are independent and
serve distinct purposes. Even if one aspect were rendered invalid, the
other benefits of the rule would still be applicable. As an
illustrative but not exhaustive example, were a court to stay or
invalidate the prohibition on the operation of a FASC-prohibited UAS
effective December 22, 2025, the agencies would intend the prohibition
on the procurement of a FASC-prohibited UAS would remain effective.
VII. Expected Impact of the Rule
This rule is not expected to have a significant economic impact on
businesses. Federal expenditure in the sector is expected to remain
largely unchanged. The Congressional Budget Office cost estimate for
the Act estimated any net changes in spending would be less than
$500,000 over the 2024 to 2033 period. While the prohibitions on
procurement, operation, and use of funds may drive further change to
the UAS supplier base for the Federal Government, that change is
already underway across numerous agencies. Alternative suppliers exist
and continue to emerge.
Additionally, while the changes require Federal agencies and prime
contractors engaged in the use of UAS to further scrutinize their
sources of supply, the fundamental tools for supply chain awareness and
security should be in place and largely unchanged.
The overall benefit of this rule is to protect Government
information and operations from vulnerabilities associated with FASC-
prohibited UAS.
VIII. Executive Orders 12866 and 13563
Executive Orders (E.O.s) 12866 (as amended by E.O. 14094) and 13563
direct agencies to assess all costs and benefits of available
regulatory alternatives and, if regulation is necessary, to select
regulatory approaches that maximize net benefits (including potential
economic, environmental, public health and safety effects, distributive
impacts, and equity). E.O. 13563 emphasizes the importance of
quantifying both costs and benefits, of reducing costs, of harmonizing
rules, and of promoting flexibility. This is a significant regulatory
action and, therefore, was subject to review under Section 6(b) of E.O.
12866, Regulatory Planning and Review, dated September 30, 1993.
IX. Congressional Review Act
Pursuant to the Congressional Review Act, DoD, GSA, and NASA will
send this rule to each House of the Congress and to the Comptroller
General of the United States. The Office of Information and Regulatory
Affairs (OIRA) in the Office of Management and Budget has determined
that this rule does not meet the definition in 5 U.S.C. 804(2).
X. Regulatory Flexibility Act
DoD, GSA, and NASA do not expect this interim rule to have a
significant economic impact on a substantial number of small entities
within the meaning of the Regulatory Flexibility Act, 5 U.S.C. 601-612.
Nevertheless, an Initial Regulatory Flexibility Analysis (IRFA) has
been performed and is summarized as follows:
DoD, GSA, and NASA are amending the FAR to implement the
prohibition on procuring, operating, or using Federal funds on, UAS
that are manufactured or assembled by an American Security Drone
Act-covered foreign entity.
This interim rule is being implemented as a national security
measure to protect sensitive Government information and operations.
The legal basis for the rule is the American Security Drone Act of
2023 (subtitle B, title XVIII of the NDAA for FY 2024, Pub. L. 118-
31, 41 U.S.C. 3901 note prec.), which prohibits procurement and
operation of UAS manufactured or assembled by American Security
Drone Act-covered foreign entities, as well as contractor use of
Federal funds on such UAS. Promulgation of the FAR is authorized by
40 U.S.C. 121(c); 10 U.S.C. chapter 4 and 10 U.S.C. chapter 137
legacy provisions (see 10 U.S.C. 3016); and 51 U.S.C. 20113.
This rule applies to entities, small and other than small
entities, that provide to Government agencies UAS and on or after
December 22, 2025, operation of a UAS. While drones may be used in
many types of contracts, a specific Product and Service Code (PSC),
1550--Unmanned Aircraft, is available for contracting officers to
explicitly identify procurements for unmanned aircraft. PSC 1550
applies to complete unmanned aircraft systems and subordinate air
vehicles and includes unmanned aircraft systems and
[[Page 89469]]
drones specifically designed for uses such as targeting, training,
surveillance, photographic reconnaissance, weapons delivery,
communications relay/network gateway, electronic warfare, search and
rescue, and various other operations. According to Federal
Procurement Data System (FPDS) data for FY 2023, 100 unique entities
were awarded Federal contracts under PSC 1550, with a total contract
value of $2,411,790,985. Small entities accounted for less than 10
percent of the contracted dollar value ($218 million of the $2.4
billion) but constituted 68 percent of the unique entities. Based on
this dataset, approximately 68 small entities would be impacted by
this rule.
The rule does not include any reporting or recordkeeping
requirements. Other compliance requirements are not expected to
carry significant burden. Small entities that do business with the
Federal Government should be familiar with other similar
prohibitions, including the Federal Acquisition Supply Chain
Security Act Orders, which function in a comparable manner. Based
upon FPDS data for PSC 1550 in FY 2023, all 68 small entities
awarded contracts were incorporated in the United States and 65 of
the 68 indicated the United States as the country of product or
service origin and 64 of the 68 indicated the United States as the
place of manufacture. While place of manufacture is not the sole
factor in the FASC's determination of American Security Drone Act-
covered foreign entities, it is a significant factor. Accordingly,
while small entities conducting drone-related business with the
Federal Government will need to familiarize themselves with the new
clause at 52.240-1, Prohibition on Unmanned Aircraft Systems
Manufactured or Assembled by American Security Drone Act-Covered
Foreign Entities, relatively limited impact is anticipated to the
Federal contract small entity industrial base.
The rule does not duplicate, overlap, or conflict with any other
Federal rules.
There are no available alternatives to the interim rule to
accomplish the desired objective of the statute. Because of the
nature of the prohibition enacted by the American Security Drone Act
of 2023, it is not possible to exempt small entities from coverage
of the rule.
The Regulatory Secretariat Division has submitted a copy of the
IRFA to the Chief Counsel for Advocacy of the Small Business
Administration. A copy of the IRFA may be obtained from the Regulatory
Secretariat Division. DoD, GSA, and NASA invite comments from small
business concerns and other interested parties on the expected impact
of this interim rule on small entities.
DoD, GSA, and NASA will also consider comments from small entities
concerning the existing regulations in subparts affected by the rule in
accordance with 5 U.S.C. 610. Interested parties must submit such
comments separately and should cite 5 U.S.C. 610 (FAR Case 2024-002),
in correspondence.
XI. Paperwork Reduction Act
This rule does not contain any information collection requirements
that require the approval of the Office of Management and Budget under
the Paperwork Reduction Act (44 U.S.C. 3501-3521).
XII. Determination To Issue an Immediately Effective Interim Rule
A determination has been made under the authority of the Secretary
of Defense, the Administrator of General Services, and the
Administrator of the National Aeronautics and Space Administration that
urgent and compelling reasons exist to promulgate this interim rule
effective immediately without prior opportunity for public comment, see
41 U.S.C. 1707(d). This action is necessary to implement the
prohibition in the American Security Drone Act of 2023 (the Act) on the
procurement of unmanned aircraft systems (UAS) prohibited by the
Federal Acquisition Security Council (FASC) that was effective with the
enactment of the National Defense Authorization Act (NDAA) for Fiscal
Year (FY) 2024 (Pub. L. 118-31, 41 U.S.C. 3901 note prec.) on December
22, 2023, in accordance with sections 1823 and 1826.
Sections 1824 and 1825 of the Act also require implementation
through the FAR, although the associated prohibitions are not effective
until two years after the enactment of the NDAA for FY 2024, or
December 22, 2025. Section 1824 prohibits the operation of FASC-
prohibited UAS, and section 1825 prohibits the use of Federal funds on
FASC-prohibited UAS. Despite the deferred effectivity, the Act requires
the Federal Acquisition Regulatory Council to prescribe regulations or
guidance necessary for implementation of section 1825 within 180 days
of the enactment of the NDAA for FY 2024.
This interim rule is being implemented as a national security
measure to protect sensitive Government information and operations.
Issuing an immediately effective interim rule facilitates uniformity
and consistency across Government, limits the chance of incorrect
implementation, prevents the need for contracting officers to relearn
or change procedures if agency-specific guidance differs from the FAR
implementation, and aids industry with compliance. However, pursuant to
41 U.S.C. 1707 and FAR 1.501-3(b), the Department of Defense, General
Services Administration, and National Aeronautics and Space
Administration will consider public comments received in response to
this interim rule in the formation of the final rule.
List of Subjects in 48 CFR Parts 4, 13, 39, 40, and 52
Government procurement.
William F. Clark,
Director, Office of Government-wide Acquisition Policy, Office of
Acquisition Policy, Office of Government-wide Policy.
Therefore, DoD, GSA, and NASA amend 48 CFR parts 4, 13, 39, 40, and
52 as set forth below:
0
1. The authority citation for 48 CFR parts 4, 13, 39, 40, and 52
continues to read as follows:
Authority: 40 U.S.C. 121(c); 10 U.S.C. chapter 4 and 10 U.S.C.
chapter 137 legacy provisions (see 10 U.S.C. 3016); and 51 U.S.C.
20113.
PART 4--ADMINISTRATIVE AND INFORMATION MATTERS
0
2. Revise section 4.000 to read as follows:
4.000 Scope of part.
(a) This part prescribes policies and procedures relating to the
administrative aspects of contract execution, contractor-submitted
paper documents, distribution, reporting, retention, and files.
(b) Additionally, this part includes policies and procedures to
implement security prohibitions and exclusions that restrict Federal
agencies from procuring, obtaining, or using certain products,
services, or sources. Additional security prohibitions and exclusions
are found at subparts 25.7 and 40.2.
PART 13--SIMPLIFIED ACQUISITION PROCEDURES
0
3. Amend section 13.201 by adding paragraph (m) to read as follows:
13.201 General.
* * * * *
(m) The prohibitions on unmanned aircraft systems (e.g., drones) in
40.202 apply to purchases at or below the micro-purchase threshold.
PART 39--ACQUISITION OF INFORMATION TECHNOLOGY
0
4. Amend section 39.101 by adding paragraph (i) to read as follows:
39.101 Policy.
* * * * *
(i) Executive agencies must comply with the prohibitions on
unmanned aircraft systems (e.g., drones) in accordance with 40.202.
[[Page 89470]]
PART 40--INFORMATION SECURITY AND SUPPLY CHAIN SECURITY
0
5. Add subpart 40.2 to read as follows:
Subpart 40.2--Security Prohibitions and Exclusions
Sec.
40.200 Scope of subpart.
40.201 Definitions.
40.202 Prohibition on the procurement and operation of unmanned
aircraft systems manufactured or assembled by American Security
Drone Act-covered foreign entities.
40.202-1 Scope.
40.202-2 Applicability.
40.202-3 Prohibition.
40.202-4 Exemptions.
40.202-5 Exceptions.
40.202-6 Waivers.
40.202-7 Procedures.
40.202-8 Contract clause.
Subpart 40.2--Security Prohibitions and Exclusions
40.200 Scope of subpart.
(a) This subpart provides policies and procedures to implement
security prohibitions and exclusions that restrict Federal agencies
from procuring, obtaining, or using certain products, services, or
sources.
(b) The following prohibitions and exclusions are implemented in
this subpart:
(1) The American Security Drone Act of 2023, of the National
Defense Authorization Act for Fiscal Year 2024 (Pub. L. 118-31, 41
U.S.C. 3901 note prec.), which provides a prohibition on the
procurement and operation of unmanned aircraft systems.
(2) [Reserved]
(c) Additional security prohibitions and exclusions are found at
subparts 4.20 through 4.23 and 25.7.
40.201 Definitions.
As used in this subpart--
American Security Drone Act-covered foreign entity means an entity
included on a list developed and maintained by the Federal Acquisition
Security Council (FASC) and published in the System for Award
Management (SAM) at https://www.sam.gov (section 1822 of Pub. L. 118-
31, 41 U.S.C. 3901 note prec.).
FASC-prohibited unmanned aircraft system means an unmanned aircraft
system manufactured or assembled by an American Security Drone Act-
covered foreign entity.
Unmanned aircraft means an aircraft that is operated without the
possibility of direct human intervention from within or on the aircraft
(49 U.S.C. 44801(11)).
Unmanned aircraft system means an unmanned aircraft and associated
elements (including communication links and the components that control
the unmanned aircraft) that are required for the operator to operate
safely and efficiently in the national airspace system (49 U.S.C.
44801(12)).
40.202 Prohibition on the procurement and operation of unmanned
aircraft systems manufactured or assembled by American Security Drone
Act-covered foreign entities.
40.202-1 Scope.
(a) Section 40.202 prescribes policies and procedures regarding the
procurement and operation of unmanned aircraft systems, which includes
unmanned aircraft (i.e., drones) and associated elements.
(b) The authorities in 40.202 expire on December 22, 2028 (section
1833 of Pub. L. 118-31, 41 U.S.C. 3901 note prec.).
40.202-2 Applicability.
Section 40.202 applies to all acquisitions, including contracts at
or below the micro-purchase threshold and to contracts for commercial
products or for commercial services.
40.202-3 Prohibition.
Unless an exemption, exception, or waiver applies (see 40.202-4,
40.202-5, and 40.202-6, respectively), executive agencies are
prohibited from--
(a) Procuring a FASC-prohibited unmanned aircraft system (section
1823 and 1826 of Pub. L. 118-31, 41 U.S.C. 3901 note prec.). The
prohibition includes extending or renewing a contract (e.g., exercising
an option);
(b) On or after December 22, 2025, procuring services for the
operation of a FASC-prohibited unmanned aircraft system (section 1824
of Pub. L. 118-31, 41 U.S.C. 3901 note prec.). The prohibition includes
extending or renewing a contract (e.g., exercising an option); and
(c) On or after December 22, 2025, using Federal funds for the
procurement or operation of a FASC-prohibited unmanned aircraft system
(section 1825 of Pub. L. 118-31, 41 U.S.C. 3901 note prec.).
40.202-4 Exemptions.
The prohibitions in 40.202 do not apply to the following (see
sections 1823, 1824, and 1825 of Pub. L. 118-31, 41 U.S.C. 3901 note
prec.):
(a) Department of Homeland Security, Department of Defense,
Department of State, and the Department of Justice exemptions. The
Secretary of Homeland Security, the Secretary of Defense, the Secretary
of State, and the Attorney General are exempt from the prohibitions in
40.202 if the procurement or operation is required in the national
interest of the United States and--
(1) Is for the sole purposes of research, evaluation, training,
testing, or analysis for electronic warfare, information warfare
operations, cybersecurity, or development of unmanned aircraft system
or counter-unmanned aircraft system technology;
(2) Is for the sole purposes of conducting counterterrorism or
counterintelligence activities, protective missions, or Federal
criminal or national security investigations, including forensic
examinations, or for electronic warfare, information warfare
operations, cybersecurity, or development of an unmanned aircraft
system or counter-unmanned aircraft system technology; or
(3) Is an unmanned aircraft system that, as procured or as modified
after procurement but before operational use, can no longer transfer
to, or download data from, an American Security Drone Act-covered
foreign entity and otherwise poses no national security cybersecurity
risks as determined by the exempting official, as described in agency
procedures.
(b) Department of Transportation exemption. The Secretary of
Transportation is exempt from the prohibitions in 40.202 if the
operation or procurement is deemed to support the safe, secure, or
efficient operation of the National Air Space System or maintenance of
public safety.
(c) National Transportation Safety Board exemption. The National
Transportation Safety Board, in consultation with the Secretary of
Homeland Security, is exempt from the prohibitions in 40.202 if the
operation or procurement is necessary for the sole purpose of
conducting safety investigations.
(d) National Oceanic and Atmospheric Administration (NOAA)
exemption. The Administrator of NOAA, in consultation with the
Secretary of Homeland Security, is exempt from the prohibitions of
40.202 if the operation or procurement for the purposes of meeting
NOAA's science or management objectives or operational mission.
40.202-5 Exceptions.
The prohibitions in this section do not apply to the following
(section 1832 of Pub. L. 118-31, 41 U.S.C. 3901 note prec.):
(a) Wildfire management operations and search and rescue operations
exception. The prohibitions in 40.202
[[Page 89471]]
do not apply to an appropriate Federal agency to the extent that an
authorized official at the agency, in consultation with the Secretary
of Homeland Security, determines that the procurement or operation is
necessary for the purposes of supporting the full range of wildfire
management operations or search and rescue operations.
(b) Intelligence activities exception. The prohibitions of 40.202
do not apply to any activity subject to the reporting requirements
under title V of the National Security Act of 1947 (50 U.S.C. 3091 et
seq.), any authorized intelligence activities of the United States, or
any activity or procurement that supports an authorized intelligence
activity.
(c) Tribal law enforcement or emergency service agency exception.
The prohibitions in 40.202 do not apply to Tribal law enforcement or
Tribal emergency service agencies to the extent that an authorized
official at the agency, in consultation with the Secretary of Homeland
Security, determines that the procurement or operation is necessary for
the purposes of supporting the full range of law enforcement operations
or search and rescue operations on Indian lands.
40.202-6 Waivers.
The head of the agency may waive the prohibitions under 40.202 on a
case-by-case basis in accordance with agency procedures and based on
the statutory waiver provisions (sections 1823, 1824, and 1825 of Pub.
L. 118-31, 41 U.S.C. 3901 note prec.)--
(a) With the approval of the Director of the Office of Management
and Budget, after consultation with the FASC; and
(b) Upon notification to--
(1) The Committee on Homeland Security and Governmental Affairs of
the Senate;
(2) The Committee on Oversight and Accountability in the House of
Representatives; and
(3) Other appropriate congressional committees of jurisdiction.
40.202-7 Procedures.
(a) Documenting exemptions, exceptions, or waivers. The contracting
officer shall document the file with any exemption, exception, or
waiver provided by the program office or requiring activity.
Additionally, the contracting officer shall work with the program
office or requiring activity to ensure the presence and scoping of any
such exemptions, exceptions, or waivers are identified in the
solicitation and resultant contract.
(b) Assessment of unmanned aircraft systems. Except where an
exemption, exception, or waiver applies, the contracting officer shall
work with the program office or requiring activity to review proposals
to ensure they are not proposing delivery of a FASC-prohibited unmanned
aircraft system. On or after December 22, 2025, this assessment shall
expand to include review for not only proposed delivery, but also
operation, of a FASC-prohibited unmanned aircraft system.
40.202-8 Contract clause.
Insert the clause at 52.240-1, Prohibition on Unmanned Aircraft
Systems Manufactured or Assembled by American Security Drone Act--
Covered Foreign Entities, in all solicitations and contracts.
PART 52--SOLICITATION PROVISIONS AND CONTRACT CLAUSES
0
6. Amend section 52.212-5 by--
0
a. Revising the date of the clause;
0
b. Redesignating paragraphs (b)(63) and (64) as paragraphs (b)(64) and
(65) and adding a new paragraph (b)(63);
0
c. Redesignating paragraph (e)(1)(xxvi) as paragraph (e)(1)(xxvii) and
adding a new paragraph (e)(1)(xxvi); and
0
d. In alternate II:
0
i. Revising the date of the alternate; and
0
ii. Redesignating paragraph (e)(1)(ii)(Y) as paragraph (e)(1)(ii)(Z)
and adding a new paragraph (e)(1)(ii)(Y).
The additions and revisions read as follows:
52.212-5 Contract Terms and Conditions Required To Implement Statutes
or Executive Orders--Commercial Products and Commercial Services.
* * * * *
Contract Terms and Conditions Required To Implement Statutes or
Executive Orders--Commercial Products and Commercial Services (Nov
2024)
* * * * *
(b) * * *
__(63) 52.240-1, Prohibition on Unmanned Aircraft Systems
Manufactured or Assembled by American Security Drone Act--Covered
Foreign Entities (Nov 2024) (Sections 1821-1826, Pub. L. 118-31, 41
U.S.C. 3901 note prec.).
* * * * *
(e)(1) * * *
(xxvi) 52.240-1, Prohibition on Unmanned Aircraft Systems
Manufactured or Assembled by American Security Drone Act--Covered
Foreign Entities (Nov 2024) (Sections 1821-1826, Pub. L. 118-31, 41
U.S.C. 3901 note prec.).
* * * * *
Alternate II (Nov 2024).* * *
(e)(1) * * *
(ii) * * *
(Y) 52.240-1, Prohibition on Unmanned Aircraft Systems Manufactured
or Assembled by American Security Drone Act--Covered Foreign Entities
(Nov 2024) (Sections 1821-1826, Pub. L. 118-31, 41 U.S.C. 3901 note
prec.).
* * * * *
0
7. Amend section 52.213-4 by--
0
a. Revising the date of the clause and paragraph (a)(2)(vii); and
0
b. Redesignating paragraph (b)(1)(xxii) as paragraph (b)(1)(xxiii) and
adding a new paragraph (b)(1)(xxii).
The revisions and addition read as follows:
52.213-4 Terms and Conditions--Simplified Acquisitions (Other Than
Commercial Products and Commercial Services).
* * * * *
Terms and Conditions--Simplified Acquisitions (Other Than Commercial
Products and Commercial Services) (Nov 2024)
(a) * * *
(2) * * *
(vii) 52.244-6, Subcontracts for Commercial Products and Commercial
Services (Nov 2024).
* * * * *
(b) * * *
(1) * * *
(xxii) 52.240-1, Prohibition on Unmanned Aircraft Systems
Manufactured or Assembled by American Security Drone Act--Covered
Foreign Entities (Nov 2024). (Sections 1821-1826, Pub. L. 118-31, 41
U.S.C. 3901 note prec.).
* * * * *
0
8. Add section 52.240-1 to read as follows:
52.240-1 Prohibition on Unmanned Aircraft Systems Manufactured or
Assembled by American Security Drone Act--Covered Foreign Entities.
As prescribed in 40.202-8, insert the following clause:
Prohibition on Unmanned Aircraft Systems Manufactured or Assembled by
American Security Drone Act--Covered Foreign Entities (Nov 2024)
(a) Definitions. As used in this clause--
American Security Drone Act--covered foreign entity means an entity
included on a list developed and maintained by the Federal Acquisition
[[Page 89472]]
Security Council (FASC) and published in the System for Award
Management (SAM) at https://www.sam.gov (section 1822 of the National
Defense Authorization Act for Fiscal Year 2024, Pub. L. 118-31, 41
U.S.C. 3901 note prec.).
FASC-prohibited unmanned aircraft system means an unmanned aircraft
system manufactured or assembled by an American Security Drone Act--
covered foreign entity.
Unmanned aircraft means an aircraft that is operated without the
possibility of direct human intervention from within or on the aircraft
(49 U.S.C. 44801(11)).
Unmanned aircraft system means an unmanned aircraft and associated
elements (including communication links and the components that control
the unmanned aircraft) that are required for the operator to operate
safely and efficiently in the national airspace system (49 U.S.C.
44801(12)).
(b) Prohibition. The Contractor is prohibited from--
(1) Delivering any FASC-prohibited unmanned aircraft system, which
includes unmanned aircraft (i.e., drones) and associated elements
(sections 1823 and 1826 of Pub. L. 118-31, 41 U.S.C. 3901 note prec.);
(2) On or after December 22, 2025, operating a FASC-prohibited
unmanned aircraft system in the performance of the contract (section
1824 of Pub. L. 118-31, 41 U.S.C. 3901 note prec.); and
(3) On or after December 22, 2025, using Federal funds for the
procurement or operation of a FASC-prohibited unmanned aircraft system
(section 1825 of Pub. L. 118-31, 41 U.S.C. 3901 note prec.).
(c) Procedures. The Contractor shall search SAM at https://www.sam.gov for the FASC-maintained list of American Security Drone
Act--covered foreign entities prior to proposing, or using in
performance of the contract, any unmanned aircraft system.
Additionally, the Contractor shall ensure any effort or expenditure
associated with a FASC-prohibited unmanned aircraft system is
consistent with a corresponding exemption, exception, or waiver
determination expressly stated in the contract.
(d) Exemptions, exceptions, and waivers. The prohibitions in this
clause do not apply where the agency has determined an exemption,
exception, or waiver applies and the contract indicates that such a
determination has been made. See sections 1823 through 1825 and 1832 of
Public Law 118-31 (41 U.S.C. 3901 note prec.) for statutory
requirements pertaining to exemptions, exceptions, and waivers.
(e) Subcontracts. The Contractor shall insert the substance of this
clause, including this paragraph (e), in all subcontracts and other
contractual instruments, including subcontracts for the acquisition of
commercial products or commercial services.
(End of clause)
0
9. Amend section 52.244-6 by--
0
a. Revising the date of the clause; and
0
b. Redesignating paragraph (c)(1)(xxiii) as paragraph (c)(1)(xxiv) and
adding a new paragraph (c)(1)(xxiii).
The revision and addition read as follows:
52.244-6 Subcontracts for Commercial Products and Commercial
Services.
* * * * *
Subcontracts for Commercial Products and Commercial Services (Nov
2024)
* * * * *
(c)(1) * * *
(xxiii) 52.240-1, Prohibition on Unmanned Aircraft Systems
Manufactured or Assembled by American Security Drone Act--Covered
Foreign Entities (Nov 2024) (Sections 1821-1826, Pub. L. 118-31, 41
U.S.C. 3901 note prec.).
* * * * *
[FR Doc. 2024-26061 Filed 11-8-24; 8:45 am]
BILLING CODE 6820-EP-P