Government Contracts Rule Adds Restriction on Procurement of Magnets and Tungsten
Friday, January 31, 2020

Rule Adds Restriction on Procurement of Magnets and Tungsten

By Government Contracts Editorial Staff

The Department of Defense has adopted as final, with changes, the interim rule (¶70,016.984) in DFARS Case 2018-D054. The rule amended the Defense Federal Acquisition Regulation Supplement to implement section 871 of the National Defense Authorization Act for Fiscal Year 2019 (PL 115-232), which prohibits the acquisition of certain magnets and tungsten from North Korea, China, Russia, and Iran. The rule prohibits the acquisition of sensitive materials, which include samarium-cobalt magnets, neodymiumiron-boron magnets, tungsten metal powder, and tungsten heavy alloy or any finished or semi-finished components containing tungsten heavy alloy melted or produced in North Korea, China, Russia, or Iran.

Amendments. The final rule makes a number of changes to the interim rule. In particular, the rule adds definitions of “electronic device” and “tungsten heavy alloy” at DFARS 225.7018-1 and the associated contract clause at DFARS 252.225-7052, Restriction on the Acquisition of Certain Magnets and Tungsten. The rule also moves definitions of “assembly,” “end item,” and “subsystem,” which apply to both specialty metals (DFARS 225.7003) and certain magnets and tungsten (DFARS 225.7018) from DFARS 225.7003 to DFARS 225.7001, and includes them in DFARS 252.225-7052. With regard to production of tungsten, the final rule adds a description of the production of tungsten at DFARS 225.7018-2(c) to explain the applicability of the restrictions on the production of tungsten. Also, the rule provides the statutory cite to 10 USC 2533b(m)(4) and adds the explanation of “required form” at DFARS 225.7003-3 and DFARS 252.225-7009(c)(5), in lieu of the definitions of “required form” at DFARS 225.7003-1 and DFARS 252.225-7009(a). Similarly, the rule adds a tailored explanation of “required form” to the nonavailability exception for tungsten heavy alloy and certain magnets at DFARS 225.7018-3(d) and DFARS 252.225-7052(c)(2). Finally, the rule lowers the approval level for a nonavailability determination to head of the contracting activity for individual nonavailability determinations at DFARS 225.7018-4. For the text of the rule, which went into effect on December 31, 2019, see ¶70,017.25.

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