Daily Rules, Proposed Rules, and Notices of the Federal Government


48 CFR Part 229

[DFARS Case 2003-D031]

Defense Federal Acquisition Regulation Supplement; Tax Procedures for Overseas Contracts

AGENCY: Department of Defense (DoD).
ACTION: Proposed rule with request for comments.
SUMMARY: DoD is proposing to amend the Defense Federal Acquisition Regulation Supplement (DFARS) to update text pertaining to tax relief for acquisitions conducted in certain foreign countries. This proposed rule is a result of a transformation initiative undertaken by DoD to dramatically change the purpose and content of the DFARS.
DATES: Comments on the proposed rule should be submitted in writing to the address shown below on or before October 1, 2004, to be considered in the formation of the final rule.
ADDRESSES: * Federal eRulemaking Portal: the instructions for submitting comments.

* Defense Acquisition Regulations Web Site: the instructions for submitting comments.

* DFARS Case 2003-D031 in the subject line of the message.

* Fax: Primary: (703) 602-7887; Alternate: (703) 602-0350.

* Mail: Defense Acquisition Regulations Council, Attn: Mr. Euclides Barrera, OUSD(ATL)DPAP(DAR), IMD 3C132, 3062 Defense Pentagon, Washington, DC 20301-3062.

* Hand Delivery/Courier: Defense Acquisition Regulations Council, Crystal Square 4, Suite 200A, 241 18th Street, Arlington, VA 22202-3402.

All comments received will be posted to

FOR FURTHER INFORMATION CONTACT: Mr. Euclides Barrera, (703) 602-0296.

DFARS Transformation is a major DoD initiative to dramatically change the purpose and content of the DFARS. The objective is to improve the efficiency and effectiveness of the acquisition process, while allowing the acquisition workforce the flexibility to innovate. The transformed DFARS will contain only requirements of law, DoD-wide policies, delegations of FAR authorities, deviations from FAR requirements, and policies/procedures that have a significant effect beyond the internal operating procedures of DoD or a significant cost or administrative impact on contractors or offerors. Additional information on the DFARS Transformation initiative is available at

This proposed rule is a result of the DFARS Transformation initiative. The proposed changes revise DFARS Subpart 229.70 to remove proceduresthat DoD contracting officers use in obtaining tax relief and duty-free import privileges for acquisitions conducted in Spain and the United Kingdom. This text will be relocated to the new DFARS companion resource, Procedures, Guidance, and Information (PGI). A proposed rule describing the purpose and structure of PGI was published at 69 FR 8145 on February 23, 2004. The draft PGI text related to this proposed rule is available at

This rule was not subject to Office of Management and Budget review under Executive Order 12866, dated September 30, 1993.

B. Regulatory Flexibility Act

DoD does not expect this 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,et seq.,because the rule relocates DoD procedural information related to tax relief, with no change to policy. Therefore, DoD has not performed an initial regulatory flexibility analysis. DoD invites comments from small businesses and other interested parties. DoD also will consider comments from small entities concerning the affected DFARS subpart in accordance with 5 U.S.C. 610. Such comments should be submitted separately and should cite DFARS Case 2003-D031.

C. Paperwork Reduction Act

The Paperwork Reduction Act does not apply because the rule does not impose any information collection requirements that require the approval of the Office of Management and Budget under 44 U.S.C. 3501,et seq.

List of Subjects in 48 CFR Part 229

Government procurement.

Michele P. Peterson, Executive Editor, Defense Acquisition Regulations Council.

Therefore, DoD proposes to amend 48 CFR Part 229 as follows:

1. The authority citation for 48 CFR Part 229 continues to read as follows:


41 U.S.C. 421 and 48 CFR Chapter 1.


2. Subpart 229.70 is revised to read as follows:

Subpart 229.70—Special Procedures for Overseas Contracts

To obtain tax relief for overseas contracts, follow the procedures at PGI 229.70.