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Panoptic Enterprises' FEDERAL CONTRACTS DISPATCH

DATE: February 7, 2005

SUBJECT: Defense Federal Acquisition Regulation Supplement (DFARS); Restriction to Domestic Sources for Polyacrylonitrile Carbon Fiber

SOURCE: Federal Register, February 7, 2005, Vol. 70, No. 24, page 6374

AGENCIES: Department of Defense (DOD)

ACTION: Final Rule

SYNOPSIS: DOD is amending DFARS 225.7103, Polyacrylonitrile (PAN) Carbon Fiber, to extend the phase-out date for domestic source restrictions on the acquisition of PAN carbon fiber from May 31, 2005, to May 31, 2006.

EDITOR’S NOTE: For more on the proposed rule, see the June 25, 2004, FEDERAL CONTRACTS DISPATCHDefense Federal Acquisition Regulation Supplement (DFARS); Polyacrylonitrile Carbon Fiber -- Restriction to Domestic Sources.”

EFFECTIVE DATE: February 7, 2005.

FOR FURTHER INFORMATION CONTACT: Amy Williams, Defense Acquisition Regulations Council, OUSD(AT&L)DPAP (DAR), IMD 3C132, 3062 Defense Pentagon, Washington, DC 20301-3062; 703-602-0328; fax: 703-602-0350.

SUPPLEMENTARY INFORMATION: DFARS 225.7103 imposed restrictions on the acquisition of PAN carbon fiber from foreign sources, and this is implemented in contracts by the inclusion of DFARS 252.225-7022, Restriction on Acquisition of Polyacrylonitrile (PAN) Carbon Fiber.

On December 13, 2000, DFARS 225.7103 was amended to phase out the PAN carbon fiber restrictions by May 31, 2005 (see the December 13, 2000, FEDERAL CONTRACTS DISPATCH "Defense Federal Acquisition Regulation Supplement (DFARS); Polyacrylonitrile (PAN) Carbon Fiber"). However, the aerospace industry requested an extension of the phase-out to provide U.S. companies sufficient time to maintain the industrial and technological capability to support a critical material used in advanced aerospace weapons programs. In addition, an extension would be consistent with Section 832 of the National Defense Authorization Act for Fiscal Year 2005 (Public Law 108-375), which requires a delay in phase-out of the restriction until DOD performs an assessment of the PAN carbon fiber industry and submits the resulting report to Congress (for more on other acquisition-related provisions of Public Law 108-375, see the October 29, 2004, FEDERAL CONTRACTS DISPATCHEnactment of the National Defense Authorization Act for Fiscal Year 2005”).

On June 24, 2004, DOD published a proposed rule that would provide a one-year extension to the program. The proposed rule would amend the second sentence of DFARS 225.7103-1, Policy, to change the ending date of the restrictions from "May 1, 2005" to "May 1, 2006," and amend DFARS 225.7103-3, Contract Clause, to require that DFARS 252.225-7022 be included "in solicitations and contracts for major systems issued on or before May 31, 2006, if the system is not yet in engineering and manufacturing development (milestone B as defined in DODI [DOD Instruction] 5000.2 [Operation of the Defense Acquisition System])." Because no comments were received on the proposed rule, it is adopted as final without changes.

FOR FURTHER INFORMATION CONTACT: Panoptic Enterprises at 703-451-5953.

Copyright 2005 by Panoptic Enterprises. All Rights Reserved.

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