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Barry McVay's FEDERAL CONTRACTS DISPATCH

DATE: July 3, 2000

FROM: Barry McVay, CPCM

SUBJECT: Defense Federal Acquisition Regulation Supplement (DFARS); Polyacrylonitrile (PAN) Carbon Fiber

SOURCE: Federal Register, July 3, 2000, Vol. 65, No. 128, page 41037

AGENCIES: Department of Defense (DOD)

ACTION: Proposed Rule

SYNOPSIS: DOD is proposing to amend DFARS 225.7103-1, Policy, and DFARS 225.7103-3, Contract Clause, to phase out, May 31, 2005, restrictions on the acquisition of polyacrylonitrile (PAN) carbon fiber from foreign sources.

DATES: Comments should be submitted on or before September 1, 2000.

ADDRESSES: Submit comments to Defense Acquisition Regulations Council, Attn: Ms. Amy Williams, OUSD (AT&L)DP(DAR), IMD 3D139, 3062 Defense Pentagon, Washington, DC 20301-3062; fax 703-602-0350; e-mail: dfars@acq.osd.mil. Cite DFARS Case 2000-D017 in all correspondence related to this proposed rule.

FOR FURTHER INFORMATION CONTACT: Ms. Amy Williams, 703-602-0288.

SUPPLEMENTAL INFORMATION: Currently, DFARS 225.7103-1 requires that "all new major systems must use U.S. or Canadian manufacturers or producers for all PAN carbon fiber requirements." DOD has conducted a review of this restriction by evaluating DOD applications for PAN carbon fiber, the existence of key domestic and foreign PAN fiber suppliers, supply and demand market information, and potential national security issues. As a result of the review, DOD has decided to phase out the restrictions over the five-year period ending May 31, 2005, to gradually introduce competition into the PAN carbon fiber market and encourage innovation and emphasize affordability.

To accomplish this, DFARS 225.7103-1 would be revised to state "DOD is phasing out the restrictions over the five-year period ending May 31, 2005. Contractors with contracts that contain the clause at 252.225-7022 [Restriction on Acquisition of Polyacrylonitrile (PAN) Carbon Fiber] must use U.S. or Canadian manufacturers or producers for all PAN carbon fiber requirements." In addition, the current prescription for DFARS 252.225-7022 in DFARS 225.7103-3 would be in effect until May 31, 2003 (that is, the system is not yet in production or the clause was used in prior program contracts), but between June 1, 2003, and May 31, 2005, the clause would be used in contracts and solicitations "if the system is not yet in engineering and manufacturing development".

FOR FURTHER INFORMATION CONTACT: Barry McVay at 703-451-5953 or by e-mail to BarryMcVay@FedGovContracts.com.

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