DEPARTMENT OF DEFENSE

Statement of Regulatory Priorities

Background

The Department of Defense (DoD) is the largest Federal department, consisting of three Military departments (Army, Navy, and Air Force), nine Unified Combatant Commands, 17 Defense Agencies, and ten DoD Field Activities. It has 1,357,218 military personnel and 853,102 civilians assigned as of June 30, 2014, and over 200 large and medium installations in the continental United States, U. S. territories, and foreign countries. The overall size, composition, and dispersion of DoD, coupled with an innovative regulatory program, presents a challenge to the management of the Defense regulatory efforts under Executive Order 12866 "Regulatory Planning and Review" of September 30, 1993.

Because of its diversified nature, DoD is affected by the regulations issued by regulatory agencies such as the Departments of Commerce, Energy, Health and Human Services, Housing and Urban Development, Labor, State, Transportation, and the Environmental Protection Agency. In order to develop the best possible regulations that embody the principles and objectives embedded in E.O. 12866, there must be coordination of proposed regulations among the regulatory agencies and the affected DoD components. Coordinating the proposed regulations in advance throughout an organization as large as DoD is a straightforward, yet formidable, undertaking.

DoD issues regulations that have an effect on the public and can be significant as defined in E.O. 12866. In addition, some of DoD's regulations may affect other agencies. DoD, as an integral part of its program, not only receives coordinating actions from other agencies, but coordinates with the agencies that are affected by its regulations as well.

Overall Priorities

The Department needs to function at a reasonable cost, while ensuring that it does not impose ineffective and unnecessarily burdensome regulations on the public. The rulemaking process should be responsive, efficient, cost-effective, and both fair and perceived as fair. This is being done in DoD while reacting to the contradictory pressures of providing more services with fewer resources. The Department of Defense, as a matter of overall priority for its regulatory program, fully incorporates the provisions of the President's priorities and objectives under Executive Order (E.O.) 12866.

International Regulatory Cooperation

As the President noted in Executive Order 13609, "international regulatory cooperation, consistent with domestic law and prerogatives and U.S. trade policy, can be an important means of promoting" public health, welfare, safety, and our environment as well as economic growth, innovation, competitiveness, and job creation. Accordingly, in Executive Order 13609, the President requires each executive agency to include in its Regulatory Plan a summary of its international regulatory cooperation activities that are reasonably anticipated to lead to significant regulations.

The Department of Defense, along with the Department of State and the Department of Commerce, engages with other countries in the Wassenaar Arrangement, through which the international community develops a common list of items that should be subject to export controls.

Retrospective Review of Existing Regulations

Pursuant to section 6 of Executive Order 13563 "Improving Regulation and Regulatory Review (January 18, 2011), the following Regulatory Identifier Numbers (RINs) have been identified as associated with retrospective review and analysis in the Department's final retrospective review of regulations plan. All are of particular interest to small businesses. Some of these entries on this list may be completed actions, which do not appear in The Regulatory Plan. However, more information can be found about these completed rulemakings in past publications of the Unified Agenda on Reginfo.gov in the Completed Actions section for that agency. These rulemakings can also be found on Regulations.gov. The final agency plan and all updates to the plan can be found at: http://www.regulations.gov/#!docketDetail;D=DOD-2011-OS-0036

RIN

Rule Title (*expected to significantly reduce burdens on small businesses)

0701-AA76

Air Force Freedom of Information Act Program

0701-AA77

Air Force Privacy Act Program

0703-AA87

United States Navy Regulations and Official Records

0703-AA90

Guidelines for Archaeological Investigation Permits and Other Research on Sunken Military Craft and Terrestrial Military Craft Under the Jurisdiction of the Department of the Navy

0703-AA91

Unofficial Use of the Seal, Emblem, Names, or Initials of the Marine Corps

0703-AA92

Professional Conduct of Attorneys Practicing Under the Cognizance and Supervision of the Judge Advocate General

0710-AA66

Civil Monetary Penalty Inflation Adjustment Rule

0710-AA60

Nationwide Permit Program Regulations*

0750-AG47

Safeguarding Unclassified Controlled Technical Information (DFARS Case 2011-D039)

0750-AG62

Patents, Data, and Copyrights (DFARS Case 2010-D001)

0750-AH11

Only One Offer (DFARS Case 2011-D013)

0750-AH19

Accelerated Payments to Small Business (DFARS Case 2011-D008)

0750-AH54

Performance-Based Payments (DFARS Case 2011-D045)

0750-AH70

Defense Trade Cooperation Treaty With Australia and the United Kingdom (DFARS Case 2012-D034)

0750-AH86

Forward Pricing Rate Proposal Adequacy Checklist (DFARS Case 2012-D035)

0750-AH87

System for Award Management Name Changes, Phase 1 Implementation (DFARS Case 2012-D053)

0750-AH90

0750-AH94

0750-AH95

0750-AI02

0750-AI10

0750-AI19

0750-AI27

Clauses With Alternates

0750-AI03

Approval of Rental Waiver Requests (DFARS Case 2013-D006)

0750-AI07

Storage, Treatment, and Disposal of Toxic or Hazardous Materials-Statutory Update (DFARS Case 2013-D013)

0750-AI18

Photovoltaic Devices (DFARS Case 2014-D006)

0750-AI34

State Sponsors of Terrorism (DFARS Case 2014-D014)

0790-AI24

DoD Freedom of Information Act (FOIA) Program Regulation

0790-AI30

Defense Contract Management Agency (DCMA) Privacy Program

0790-AI42

Personnel Security Program

0790-AI51

DoD Freedom of Information Act (FOIA) Program; Amendment

0790-AI54

Defense Support of Civilian Law Enforcement Agencies

0790-AI63

Alternative Dispute Resolution

0790-AI71

National Industrial Security Program (NISP): Procedures for Government Activities Relating to Foreign Ownership, Control or Influence (FOCI)

0790-AI73

Withholding of Unclassified Technical Data From Public Disclosure

0790-AI75

Presentation of DoD-Related Scientific and Technical Papers at Meetings

0790-AI77

Provision of Early Intervention and Special Education Services to Eligible DoD Dependents

0790-AI84

National Defense Science and Engineering Graduate (NDSEG) Fellowships

0790-AI86

Defense Logistics Agency Privacy Program

0790-AI87

Defense Logistics Agency Freedom of Information Act Program

0790-AI88

Shelter for the Homeless

0790-AI90

DoD Assistance to Non-Government, Entertainment-Oriented Media Productions

0790-AI92

Inspector General; Privacy Act; Implementation

0790-AJ00

Civilian Employment and Reemployment Rights of Applicants for, and Service Members and Former Service Members, of the Uniformed Services

0790-AJ03

DoD Privacy Program

0790-AJ04

Unlawful Discrimination (On the Basis of Race, Color, National Origin, or Age in Programs or Activities Receiving Federal Financial Assistance From the DoD)

0790-AJ05

End Use Certificates (EUCs)

0790-AJ06

Voluntary Education Programs

0790-AJ07

Historical Research in the Files of the Office of the Secretary of Defense (OSD)

0790-AJ10

Enhancement of Protections on Consumer Credit for Members of the Armed Forces and Their Dependents

0790-AJ20

DoD Privacy Program

Pursuant to Executive Order 13563, DoD also removed 32 CFR part 513, "Indebtedness of Military Personnel," because the part is obsolete and the governing policy is now codified at 32 CFR part 112.

Administration Priorities:

1. Rulemakings that are expected to have high net benefits well in excess of costs.

The Department plans to-

  • Finalize the DFARS rule to implement section 806 of the National Defense Authorization Act (NDAA) for Fiscal Year (FY) 2011, as amended by section 806 of the NDAA for FY 2013. Section 806 requires the evaluation of offerors' supply chain risks for information technology purchases relating to national security systems. This rule enables agencies to exclude sources that are identified as having a supply chain risk in order to minimize the potential risk for purchased supplies and services to maliciously introduce unwanted functions and degrade the integrity and operation of sensitive information technology systems.

  • Finalize the DFARS rule to provide guidance to contractors for the submittal of forward pricing rate proposals to ensure the adequacy of forward pricing rate proposals submitted to the Government. The rule provides guidance to contractors to ensure that forward pricing rate proposals are thorough, accurate, and complete.

  • Finalize the DFARS rule to implement section 1602 of the NDAA for FY 2014. Section 1602 prohibits award of a contract for commercial satellite services from certain foreign entities if the Secretary of Defense reasonably believes that the foreign entity is one in which the government of a foreign country has an ownership interest that enables the government to affect satellite operations. There is a potential risk to national security if DoD uses commercial satellite services for DoD communications and the government of a covered foreign country has an ownership interest that enables the government to affect satellite operations. Likewise, if launch or other satellite services under the contract are occurring in a covered country, the government of that country could impact the ability of the foreign entity to adequately provide those services.

    2. Rulemakings of particular interest to small businesses.

    The Department plans to-

  • Finalize the DFARS rule to delete text in DFARS part 219 that implemented 10 U.S.C. 2323 because 10 U.S.C. 2323 has expired. Removal of the obsolete implementing coverage for 10 U.S.C. 2323 will bring DFARS up to date and provide accurate and indisputable regulations affecting the small business and vendor communities. 10 U.S.C. 2323 had provided the underlying statutory authority for DoD's Small Disadvantaged Business (SDB) Program and served as the basis for DoD's use of certain solicitation techniques to further its SDB participation rate. Notwithstanding removal of this statutory authority from the DFARS, DoD's fundamental procurement policies continue to provide strong support for SDB participation as evidenced by DoD meeting or exceeding the annual Governmentwide statutory SDB prime contracting goals since 2001.

  • Through "Policy for Domestic, Municipal, and Industrial Water Supply Uses of Reservoir Projects Operated by the Department of the Army, U.S. Army Corps of Engineers," (RIN 0710-AA72), update and clarify the policies governing the use of storage in U.S. Army Corps of Engineers reservoir projects for domestic, municipal, and industrial water supply.

    3. Rulemakings that streamline regulations, reduce unjustified burdens, and minimize burdens on small businesses.

    The Department plans to-

  • Finalize the DFARS rule to implement section 802 of the NDAA for FY 2012 to allow a covered litigation support contractor access to technical, proprietary, or confidential data for the sole purpose of providing litigation support. DFARS Case 2012-D029, Disclosure to Litigation Support to Contractors, pertains.

  • Finalize the DFARS rule to require scientific and technical reports be submitted in electronic format. This rule, DFARS Case 2014-D0001, will streamline the submission process by no longer requiring the electronically initiated report to be printed for submission.

    4. Rules to be modified, streamlined, expanded, or repealed to make the agency's regulatory program more effective or less burdensome in achieving the regulatory objectives.

  • DFARS Cases 2013-D005, Clauses with Alternates - Foreign Acquisition, 2013-D025, Clauses with Alternates - Taxes, and 2014-D004, Clauses with Alternates - Special Contracting Methods, Major System Acquisition, and Service Contract - Propose a new convention for prescribing clauses with alternates to provide alternate clauses in full text. This will facilitate selection of alternate clauses using automated contract writing systems. The inclusion of the full text of the alternate clauses in the regulation for use in solicitations and contracts should make the terms of the alternate clauses clearer to offerors and contractors by clarifying paragraph substitutions. As a result, inapplicable paragraphs from the basic clause that are superseded by the alternate will not be included in solicitations or contracts, reducing the potential for confusion.

  • Finalize the rule for DFARS, DFARS Case 2014-D014, State Sponsors of Terrorism, to clarify and relocate coverage relating to state sponsors of terrorism, add an explicit representation, and conform the terminology to replace the term "terrorist country" with the more accurate term "country that is a state sponsor of terrorism." DFARS subpart 209.1 text is being relocated to subpart 225.7. Subpart 225.7 is a better location because the prohibition is based on ownership or control of an offeror by the government of specified countries, rather than the responsibility of the individual offeror. Correspondingly, the provision at 252.209-7001 is being removed and replaced by a newly proposed provision 252.225-70XX.

    5. Rulemakings that have a significant international impact.

  • Finalize the rule to revise the DFARS to improve awareness, compliance, and enforcement of DoD policies on combating trafficking in persons. The rule will further improve stability, productivity, and certainty in the contingency operations that DoD supports and ensure that DoD contractors do not benefit from the use of coerced labor.

    • Specific DoD Priorities:

    For this regulatory plan, there are six specific DoD priorities, all of which reflect the established regulatory principles. DoD has focused its regulatory resources on the most serious environmental, health, and safety risks. Perhaps most significant is that each of the priorities described below promulgates regulations to offset the resource impacts of Federal decisions on the public or to improve the quality of public life, such as those regulations concerning acquisition, health affairs, education, and cyber security.

    1. Defense Procurement and Acquisition Policy

    The Department of Defense continuously reviews the DFARS and continues to lead Government efforts to-

  • Revise the DFARS to improve presentation and clarity of the regulations by (1) initiating a new convention to construct clauses with alternates in a manner whereby the alternate clauses are included in full text making the terms of the alternates clearer by clarifying paragraph substitutions and (2) streamline the DFARS by screening the text to identify any DoD procedural guidance that does not have a significant effect beyond the internal operating procedures of DoD or have a significant cost or administrative impact on contractors or offerors, which should be more correctly relocated from the DFARS to the DFARS Procedures, Guidance, and Information (PGI).

  • Employ methods to facilitate and improve efficiency of the contracting process such as (1) employing a checklist to assist contractors in providing initial submission of FPRA proposals that are thorough, accurate, and complete and (2) requiring scientific and technical reports to be submitted electronically.

    2. Health Affairs, Department of Defense

    The Department of Defense is able to meet its dual mission of wartime readiness and peacetime health care by operating an extensive network of medical treatment facilities. This network includes DoD's own military treatment facilities supplemented by civilian health care providers, facilities, and services under contract to DoD through the TRICARE program. TRICARE is a major health care program designed to improve the management and integration of DoD's health care delivery system. The program's goal is to increase access to health care services, improve health care quality, and control health care costs.

    The Defense Health Agency plans to publish the following rule:

  • Final Rule: CHAMPUS/TRICARE: Pilot Program for Refills of Maintenance Medications for TRICARE Life Beneficiaries through the TRICARE Mail Order Program. This final rule implements section 716 of the National Defense Authorization Act for Fiscal Year 2013 (Pub. L. 112-239), which establishes a 5-year pilot program that would generally require TRICARE for Life beneficiaries to obtain all refill prescriptions for covered maintenance medications from the TRICARE mail order program or military treatment facility pharmacies. Covered maintenance medications are those that involve recurring prescriptions for chronic conditions, but do not include medications to treat acute conditions. Beneficiaries may opt out of the pilot program after one year of participation. This rule includes procedures to assist beneficiaries in transferring covered prescriptions to the mail order pharmacy program. The interim final rule was published December 11, 2013 (78 FR 75245) with an effective date of February 14, 2014. DoD anticipates publishing a final rule in the first quarter of FY 2015.

    3. Personnel and Readiness, Department of Defense

    The Department of Defense plans to publish a rule regarding Service Academies:

  • Final Rule: Service Academies. This rule establishes policy, assigns responsibilities, and prescribes procedures for Department of Defense oversight of the Service Academies. Administrative costs are negligible, and benefits are clear, concise rules that enable the Secretary of Defense to ensure that the Service Academies are efficiently operated and meet the needs of the armed forces. The proposed rule was published October 18, 2007 (72 FR 59053), and included policy that has since changed. The final rule, particularly the explanation of separation policy, will reflect recent changes in the "Don't Ask, Don't Tell" policy. It will also incorporate changes resulting from interagency coordination. DoD anticipates publishing the final rule in the first or second quarter of FY 2015.

    4. Military Community and Family Policy, Department of Defense

    The Department of Defense has proposed a revision to the regulation implementing the Military Lending Act, which prescribes limitations on the terms of consumer credit extended to Service members and dependents:

  • Proposed Rule: Limitations on Terms of Consumer Credit Extended to Service Members and Dependents. In this proposed rule, the Department of Defense (Department) proposes to amend its regulation that implements the Military Lending Act, herein referred to as the "MLA". Among other protections for Service members, the MLA limits the amount of interest that a creditor may charge on "consumer credit" to a maximum annual percentage rate of 36 percent. The Department proposed to amend its existing regulation primarily for the purpose of extending the protections of the MLA to a broader range of closed-end and open-end credit products, rather than the limited credit products currently defined as consumer credit. In addition, the Department proposed to amend its existing regulation to amend the provisions governing a tool a creditor may use in assessing whether a consumer is a "covered borrower," modify the disclosures that a creditor must provide to a covered borrower implement the enforcement provisions of the MLA, as amended, among other purposes. The revisions to this rule are part of DoD's retrospective plan under Executive Order 13563 completed in August 2011.

    5. Chief Information Officer, Department of Defense

    The Department of Defense plans to amend the voluntary cyber security information sharing program between DoD and eligible cleared defense contractors:

  • Proposed Rule: Defense Industrial Base (DIB) Voluntary Cyber Security/Information Assurance (CS/IA) Activities. The Department proposes to amend the DoD-DIB CS/IA Voluntary Activities regulation (32 CFR part 236) in response to section 941 National Defense Authorization Act (NDAA) for Fiscal Year (FY) 2013, which requires the Secretary of Defense to establish procedures that require each cleared defense contractor (CDC) to report to DoD when a network or information system has a cyber-intrusion. The revised rule also expands eligibility to participate in the DIB CS/IA voluntary cyber threat information sharing program to all CDCs. DoD anticipates publishing a proposed rule in the first or second quarter of FY 2015.