[Federal Register Volume 68, Number 61 (Monday, March 31, 2003)]
[Rules and Regulations]
[Pages 15616-15641]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 03-7531]
[[Page 15615]]
-----------------------------------------------------------------------
Part IV
Department of Defense
-----------------------------------------------------------------------
48 CFR Parts 206, et al.
Defense Federal Acquisition Regulation Supplement; Foreign Acquisition;
Final Rule
Federal Register / Vol. 68, No. 61 / Monday, March 31, 2003 / Rules
and Regulations
[[Page 15616]]
-----------------------------------------------------------------------
DEPARTMENT OF DEFENSE
48 CFR Parts 206, 208, 212, 225, 242, and 252
[DFARS Case 2002-D009]
Defense Federal Acquisition Regulation Supplement; Foreign
Acquisition
AGENCY: Department of Defense (DoD).
ACTION: Final rule.
-----------------------------------------------------------------------
SUMMARY: DoD has issued a final rule amending the Defense Federal
Acquisition Regulation Supplement (DFARS) to simplify and clarify
policy pertaining to the acquisition of supplies and services from
foreign sources.
EFFECTIVE DATE: April 30, 2003.
FOR FURTHER INFORMATION CONTACT: Ms. Amy Williams, Defense Acquisition
Regulations Council, OUSD(AT&L)DPAP(DAR), IMD 3C132, 3062 Defense
Pentagon, Washington, DC 20301-3062. Telephone (703) 602-0328;
facsimile (703) 602-0350. Please cite DFARS Case 2002-D009.
SUPPLEMENTARY INFORMATION:
A. Background
This rule revises DFARS Part 225, Foreign Acquisition, and
associated provisions and clauses. The rule--
[sbull] Provides streamlined procedures for evaluating foreign
offers when acquiring supplies, and adds procedures for evaluating
foreign offers in acquisitions in which price is not the determining
factor.
[sbull] Changes the definition of ``qualifying country end
product'' to permit the qualifying country manufacturing the product to
use components from any other qualifying country.
[sbull] Lowers the required approval levels for determinations of
nonavailability under the Buy American Act.
[sbull] Lowers the required approval levels for individual public
interest determinations for acquisition of end products from qualifying
countries.
[sbull] Provides that the Government will evaluate duty only if it
is to be paid. Except for qualifying country supplies or eligible end
products, the contractor will request duty-free entry only on foreign
supplies for which the contractor estimates that duty will exceed $200
per shipment into the customs territory of the United States. One duty-
free entry clause replaces five existing clauses.
[sbull] Eliminates the requirement for a contractor to represent
that it will comply with all laws, decrees, labor standards, and
regulations of the foreign country in which the contract will be
performed.
[sbull] Deletes obsolete text and clauses relating to outdated
appropriations act restrictions, resulting in the elimination of four
clauses.
DoD published a proposed rule in the Federal Register at 67 FR
62590 on October 7, 2002. Five sources submitted comments on the
proposed rule. Most respondents generally favored the rule, with minor
technical suggestions. Differences between the proposed and final rules
are addressed below in the discussion of comments 8, 9, 10, 13, 14, 16,
and 17.
1. Comment: One respondent supported the change in the definition
of ``qualifying country end product'' which permits the qualifying
country manufacturing the product to use components of another
qualifying country, stating that ``This change recognizes the multi-
national realities of many manufacturing and assembly operations * *
*''.
DoD Response: Concur.
2. Comment: One respondent suggested that 225.003, Definitions,
also incorporate by reference the definitions found at 252.225-7021(a),
particularly the definitions for ``designated country,'' ``designated
country end product,'' and ``U.S.-made end product.''
DoD Response: Do not concur. These definitions are in the FAR at
25.003. The DFARS supplements the FAR, must be read in conjunction with
the FAR, and does not repeat FAR text.
3. Comment: One respondent objected to ``the expanded'' definition
of ``domestic end product'' (252.225-7001 and 252.225-7036) and the
two-part test at 225.101, which flows from this definition. The
respondent stated that the rule has the potential to allow a
manufactured end product that is 100 percent manufactured in a
qualifying country to be determined a domestic end product.
DoD Response: Do not concur. This rule makes no substantive change
to the definition of ``domestic end product.'' As required by the Buy
American Act, a domestic end product must be mined, produced, or
manufactured in the United States. With regard to components, the rule
requires that the cost of the qualifying country components and the
components that are mined, produced, or manufactured in the United
States exceed 50 percent of the cost of all components. This rule
implements long-standing DoD policy, based on Memoranda of
Understanding with DoD's allies, and does not represent a change from
the current regulations.
4. Comment: One respondent recommended keeping the definition of
``nondesignated country end product'' in 225.003.
DoD Response: Do not concur. This definition is unnecessary,
because the term is no longer used in Part 225.
5. Comment: One respondent supported lowering of the approval
levels for domestic nonavailability and public interest determinations,
because this takes into account the increasingly global nature of
manufacturing operations and addresses the short-supply or
nonavailability situations that can result when production moves
offshore.
DoD Response: Concur.
6. Comment: One respondent objected to the change at
225.103(a)(ii)(A)(3)(i) from ``American good'' to ``domestic end
product.''
DoD Response: Do not concur. The rule replaces the term ``American
good'' with ``domestic end product'' for consistency with the
terminology used elsewhere in Part 225 and associated clauses. The
change in terminology does not substantially change the meaning of the
DFARS text.
7. Comment: One respondent objected to the replacement of
``original manufacturer'' with ``original foreign manufacturer'' at
225.103(b)(iii)(B), as it changes the focus.
DoD Response: Do not concur. DFARS 225.103(b)(iii)(B) relates to a
DoD determination that certain articles are not reasonably available
from domestic sources because they are spare or replacement parts that
must be acquired from the original manufacturer. If the original
manufacturer were domestic, the spare or replacement parts could be
obtained from a domestic source and no exception would be required.
8. Comment: One respondent recommended clarifying that a
determination and findings is not required for the items listed in
225.103(b)(iii)(A)-(C).
DoD Response: Concur. DoD has changed DFARS 225.103(b)(iii) to
clarify that no separate determination is required for these items.
9. Comment: One respondent asked whether the references to
``$100K'' in 225.103 should be changed to the ``simplified acquisition
threshold.''
DoD Response: Concur. Approval thresholds of $100,000 that appeared
in the proposed rule have been changed to the ``simplified acquisition
threshold'' at 225.103(a)(ii)(B), 225.103(b)(ii), and 225.872-4(b). The
circumstances in which the simplified acquisition threshold is greater
than $100,000 would also justify an increased
[[Page 15617]]
threshold for approval for these determinations.
10. Comment: One respondent suggested reinstating the text at
225.170 to apply the Part 225 evaluation procedures to foreign items on
Federal Supply Schedules.
DoD Response: Concur. DoD has reinstated this text in the final
rule.
11. Comment: One respondent noted that DFARS specifically
identifies the inapplicability of qualifying country offers on small
business set-asides (225.872-3). The respondent recommended addition of
similar coverage regarding designated country offers or NAFTA offers in
Subpart 225.4, Trade Agreements.
DoD Response: Do not concur. The FAR addresses this issue at
25.401(a)(1).
12. Comment: One respondent objected that the evaluation
procedures--
a. Are still convoluted and confusing;
b. Summarily perpetuate the notion that qualifying country end
products are exempt from application of the Buy American Act or Balance
of Payments Program;
c. Eliminate the requirement for ``two tests that must be met to
determine whether a manufactured item is a domestic end product''; and
d. May result in a regulatory pre-determination that a foreign
offer that is lower than the lowest domestic offer may be exempt from
the Buy American Act and the Balance of Payments Program simply because
the regulation says so.
DoD Response: a. Do not concur. Due to the complexity of the laws
involved, the evaluation procedures cannot be simplified further. The
rule lays out step-by-step procedures, parallel to the FAR, which will
lead to the correct conclusion. The rule eliminates many confusing
aspects of the current regulation: It no longer requires treatment of
offers of eligible end products as if they were qualifying country
offers; no longer requires evaluation of duty unless duty is to be
paid; and no longer requires application of an evaluation factor to
offers that are already known to be unacceptable. In addition, DoD is
preparing an on-line training module to provide additional explanatory
material and practical examples to clarify the main issues.
b. Concur. The rule does exempt qualifying country end products
from application of the Buy American Act or the Balance of Payments
Program. This exemption represents long-standing DoD policy
implementing Memoranda of Understanding with qualifying countries,
whereby DoD has reciprocal procurement agreements of non-
discrimination.
c. Do not concur. The ``two tests'' previously at 225.502(c)(v)(A)
have been moved to 225.101.
d. Do not concur. The determination that a foreign product may be
exempt from the Buy American Act and the Balance of Payments Program is
not simply because the regulations say so, but because following these
evaluation procedures results in correct implementation of the
exceptions to the Buy American Act provided in the Buy American Act
itself, and further amplified in Executive Order 10582, and
determinations of the Secretary of Defense that are in accordance with
the Act and the Executive order.
13. Comment: One respondent indicated that the phrase ``products of
the following qualifying countries'' at 225.872-1(b) is not
sufficiently precise and should take into consideration whether the end
product is manufactured in the originating country.
DoD Response: Partially concur. DoD has clarified the text at
225.872-1(a) and (b) by using the term ``qualifying country end
products.''
14. Comment: One respondent did not find the $200 ``per unit''
reference with regard to duty to be clear.
DoD Response: Concur. DoD has revised DFARS 225.901(3) and the
associated clause at 252.225-7013, to change ``$200 per unit (end
product or component)'' to ``$200 per shipment into the customs
territory of the United States.'' Duty-free entry certificates are
issued on a per shipment basis. Therefore, the determination of the
threshold at which it is economically worthwhile to issue such
certificates should be on a per shipment basis.
Furthermore, DoD has changed the prescription at 225.1101(4) for
use of the Duty-Free Entry clause at 252.225-7013, to base its use on
whether the supplies will enter the customs territory of the United
States, rather than whether the supplies are for exclusive use outside
the United States.
15. Comment: One respondent was concerned that there are no
specific criteria at 225.7003 for determining if a foreign country
discriminates against defense items produced in the United States to a
greater degree than the United States discriminates against items
produced in that country. The respondent stated that ``semantics and
unsubstantiated allegations of discrimination could be used as a basis
for waiving compliance with the Buy American Act * * *''
DoD Response: Do not concur. This rule makes no substantive change
to the DFARS text on this subject. This waiver condition comes directly
from 10 U.S.C. 2534(d)(2). Since the Under Secretary of Defense
(Acquisition, Technology, and Logistics) exercises this authority
without power of delegation, it is not necessary to include the
determination criteria in the DFARS.
16. Comment: One respondent supported the changes proposed under
DFARS Case 2002-D008, Trade Agreements Act--Exception for U.S.-Made End
Product, that were also included in this rule. Another respondent
objected to the changes on the basis that they could create a de facto
blanket exception to the Buy American Act for all end products that are
substantially transformed in the United States.
DoD Response: These comments are outside the scope of this case.
Comments on this issue were requested under DFARS Case 2002-D008, for
which a final rule was issued on December 20, 2002. However, DoD notes
that the exception for U.S.-made end products was based on a
determination by the Under Secretary of Defense (Acquisition,
Technology, and Logistics) that it was not in the public interest to
continue to apply the Buy American Act only to U.S.-made end products
in acquisitions subject to the Trade Agreements Act, because the Buy
American Act has already been waived for the competing eligible
products from countries other than the United States.
This final rule deletes DFARS 225.502(c)(i)(C) to conform to the
changes made under DFARS Case 2002-D008.
17. Comment: DoD received internal Government comments recommending
that the text at 209.104-1, 209.104-70, 209.405-2, 209.409, and the
associated clauses at 252.209, not be moved to Part 225 and associated
clauses.
DoD Response: Concur. This text has been retained at its present
location.
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 certifies that this final rule will not 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 most of the changes in the rule merely simplify and clarify
existing policy and procedures. Other changes, such as the revised
definition of ``qualifying country end product'' primarily affect
foreign firms, which, by definition, do not qualify as small entities
within the meaning of the
[[Page 15618]]
Regulatory Flexibility Act. The changes in procedures for evaluation of
duty will result in a paperwork burden reduction for both large and
small businesses, but the economic impact will not be significant.
C. Paperwork Reduction Act
This rule does not impose any new information collection
requirements that require the approval of the Office of Management and
Budget under 44 U.S.C. 3501, et seq. The information collection
requirements in the rule are currently approved by the Office of
Management and Budget under Control Number 0704-0187. Elimination of
the provision at 252.225-7003, Information for Duty-Free Entry
Evaluation, will result in a reduction of 21,451 hours in estimated
annual burden.
List of Subjects in 48 CFR Parts 206, 208, 212, 225, 242, and 252
Government procurement.
Michele P. Peterson,
Executive Editor, Defense Acquisition Regulations Council.
0
Therefore, 48 CFR Parts 206, 208, 212, 225, 242, and 252 are amended as
follows:
0
1. The authority citation for 48 CFR Parts 206, 208, 212, 225, 242, and
252 continues to read as follows:
Authority: 41 U.S.C. 421 and 48 CFR Chapter 1.
PART 206--COMPETITION REQUIREMENTS
0
2. Section 206.303-1 is amended by adding paragraph (d) to read as
follows:
206.303-1 Requirements.
* * * * *
(d) The Director of Defense Procurement and Acquisition Policy,
Office of the Under Secretary of Defense (Acquisition, Technology, and
Logistics), is the agency point of contact for submission of
justifications to the Office of the United States Trade Representative.
PART 208--REQUIRED SOURCES OF SUPPLIES AND SERVICES
3. Section 208.7203 is amended by revising paragraph (c) to read as
follows:
208.7203 Authority.
* * * * *
(c) Acquisition of items restricted under 225.7005 and Subpart
225.71.
* * * * *
PART 212--ACQUISITION OF COMMERCIAL ITEMS 212.301 [Amended]
0
4. Section 212.301 is amended by removing paragraph (f)(vi) and
redesignating paragraph (f)(vii) as paragraph (f)(vi).
PART 225--FOREIGN ACQUISITION
0
5. Sections 225.000, 225.001, and 225.003 are revised to read as
follows:
225.000 Scope of part.
This part also provides policy and procedures for--
(1) Purchasing foreign defense supplies, services, and construction
materials with special procedures for--
(i) Contracting with Canadian and other qualifying country sources;
and
(ii) Cooperative projects;
(2) Implementing statutory and policy restrictions on foreign
acquisition;
(3) Reporting contract performance outside the United States;
(4) Foreign military sales acquisitions; and
(5) Antiterrorism/force protection for defense contractors outside
the United States.
225.001 General.
When evaluating offers of foreign end products, consider the
following:
(1) Statutory or policy restrictions.
(i) Determine whether the product is restricted by--
(A) Statute (see Subpart 225.70); or
(B) DoD policy (see Subpart 225.71 and FAR 6.302-3).
(ii) If an exception to or waiver of a restriction in Subpart
225.70 or 225.71 would result in award of a foreign end product, apply
the policies and procedures of the Buy American Act or the Balance of
Payments Program, and, if applicable, the trade agreements.
(2) Memoranda of understanding or other international agreements.
Determine whether the offered product is the product of one of the
qualifying countries listed in 225.872-1.
(3) Trade agreements. If the product is not an eligible product, a
qualifying country end product, or a U.S.-made end product, purchase of
the foreign end product may be prohibited (see FAR 25.403(c) and
225.403(c)).
(4) Other trade sanctions and prohibited sources.
(i) Determine whether the offeror complies with the secondary Arab
boycott of Israel. Award to such offerors may be prohibited (see
225.670).
(ii) Determine whether the offeror is a prohibited source (see
Subpart 225.7).
(5) Buy American Act and Balance of Payments Program. See the
evaluation procedures in Subpart 225.5.
225.003 Definitions.
As used in this part--
(1) Caribbean Basin country end product includes petroleum or any
product derived from petroleum.
(2) Defense equipment means any equipment, item of supply,
component, or end product purchased by DoD.
(3) Domestic concern means--
(i) A concern incorporated in the United States (including a
subsidiary that is incorporated in the United States, even if the
parent corporation is a foreign concern; or
(ii) An unincorporated concern having its principal place of
business in the United States.
(4) Domestic end product has the meaning given in the clauses at
252.225-7001, Buy American Act and Balance of Payments Program; and
252.225-7036, Buy American Act--North American Free Trade Agreement
Implementation Act--Balance of Payments Program, instead of the meaning
in FAR 25.003.
(5) Eligible product means, instead of the definition in FAR
25.003, a designated, NAFTA, or Caribbean Basin country end product in
the categories listed in 225.401-70.
(6) Foreign concern means any concern other than a domestic
concern.
(7) Nonqualifying country means a country other than the United
States or a qualifying country.
(8) Nonqualifying country component means a component mined,
produced, or manufactured in a nonqualifying country.
(9) Qualifying country means a country with a memorandum of
understanding or international agreement with the United States.
Qualifying countries are listed in 225.872-1.
(10) Qualifying country component and qualifying country end
product are defined in the clauses at 252.225-7001, Buy American Act
and Balance of Payments Program; and 252.225-7036, Buy American Act--
North American Free Trade Agreement Implementation Act--Balance of
Payments Program. Qualifying country end product is also defined in the
clause at 252.225-7021, Trade Agreements.
(11) Qualifying country offer means an offer of a qualifying
country end product, including the price of transportation to
destination.
(12) Source, when restricted by words such as foreign, domestic, or
qualifying country, means the actual manufacturer or producer of the
end product or component.
0
6. Subpart 225.1 is revised to read as follows:
[[Page 15619]]
Subpart 225.1--Buy American Act--Supplies
Sec.
225.101 General.
225.103 Exceptions.
225.104 Nonavailable articles.
225.105 Determining reasonableness of cost.
225.170 Acquisition from or through other Government agencies.
225.171 Solicitations.
225.101 General.
(a) For DoD, the following two-part test determines whether a
manufactured end product is a domestic end product:
(i) The end product is manufactured in the United States; and
(ii) The cost of its U.S. and qualifying country components exceeds
50 percent of the cost of all its components. This test is applied to
end products only and not to individual components.
(c) Additional exceptions that allow the purchase of foreign end
products are listed at 225.103.
225.103 Exceptions.
(a)(i)(A) Public interest exceptions for certain countries are in
225.872.
(B) For procurements subject to the Trade Agreements Act, the Under
Secretary of Defense (Acquisition, Technology, and Logistics) has
determined that it is inconsistent with the public interest to apply
the Buy American Act to end products that are substantially transformed
in the United States.
(ii)(A) Normally, use the evaluation procedures in Subpart 225.5,
but consider recommending a public interest exception if the purposes
of the Buy American Act are not served, or in order to meet a need set
forth in 10 U.S.C. 2533. For example, a public interest exception may
be appropriate--
(1) If accepting the low domestic offer will involve substantial
foreign expenditures, or accepting the low foreign offer will involve
substantial domestic expenditures;
(2) To ensure access to advanced state-of-the-art commercial
technology; or
(3) To maintain the same source of supply for spare and replacement
parts (also see paragraph (b)(iii)(B) of this section)--
(i) For an end item that qualifies as a domestic end product; or
(ii) In order not to impair integration of the military and
commercial industrial base.
(B) Except as provided in 225.872-4(b), process a determination for
a public interest exception after consideration of the factors in 10
U.S.C. 2533--
(1) At a level above the contracting officer for acquisitions
valued at or below the simplified acquisition threshold;
(2) By the head of the contracting activity for acquisitions with a
value greater than the simplified acquisition threshold but less than
$1,000,000; or
(3) By the agency head for acquisitions valued at $1,000,000 or
more.
(b)(i) A determination that an article, material, or supply is not
reasonably available is required when domestic offers are insufficient
to meet the requirement and award is to be made on other than a
qualifying country or eligible end product.
(ii) Except as provided in FAR 25.103(b)(3), the determination
shall be approved--
(A) At a level above the contracting officer for acquisitions
valued at or below the simplified acquisition threshold;
(B) By the chief of the contracting office for acquisitions with a
value greater than the simplified acquisition threshold but less than
$1,000,000; or
(C) By the head of the contracting activity or immediate deputy for
acquisitions valued at $1,000,000 or more.
(iii) A separate determination as to whether an article is
reasonably available is not required for the following articles. DoD
has already determined that these articles are not reasonably available
from domestic sources:
(A) End products or components listed in 225.104(a).
(B) Spare or replacement parts that must be acquired from the
original foreign manufacturer or supplier.
(C) Foreign drugs acquired by the Defense Supply Center,
Philadelphia, when the Director, Pharmaceuticals Group, Directorate of
Medical Materiel, determines that only the requested foreign drug will
fulfill the requirements.
(iv) Under coordinated acquisition (see Subpart 208.70), the
determination is the responsibility of the requiring department when
the requiring department specifies acquisition of a foreign end
product.
(c) The cost of a domestic end product is unreasonable if it is not
the low evaluated offer when evaluated under Subpart 225.5.
225.104 Nonavailable articles.
(a) DoD has determined that the following articles also are
nonavailable in accordance with FAR 25.103(b):
(i) Aluminum clad steel wire.
(ii) Sperm oil.
225.105 Determining reasonableness of cost.
(b) Use an evaluation factor of 50 percent instead of the factors
specified in FAR 25.105(b).
225.170 Acquisition from or through other Government agencies.
Contracting activities must apply the evaluation procedures in
Subpart 225.5 when using Federal supply schedules.
225.171 Solicitations.
For oral solicitations, inform prospective quoters that only
domestic and qualifying country end products are acceptable unless--
(1) Other foreign end products are excepted either on a blanket or
an individual basis; or
(2) The price of another foreign end product is the low offer under
the evaluation procedures in Subpart 225.5.
225.202 [Amended]
0
7. Section 225.202 is amended in paragraph (a)(2) as follows:
0
a. In the first sentence, by removing the parenthetical ``(iii)''; and
0
b. In the second sentence, by removing ``must'' and adding in its place
``shall''.
0
8. Section 225.401 is revised to read as follows:
225.401 Exceptions.
(a)(2) If a department or agency considers an individual
acquisition of a product to be indispensable for national security or
national defense purposes and appropriate for exclusion from the
provisions of FAR Subpart 25.4, it may submit a request with supporting
rationale to the Director of Defense Procurement and Acquisition Policy
(OUSD(AT&L)DPAP). Approval by OUSD(AT&L)DPAP is not required if--
(A) Purchase from foreign sources is restricted by statute (see
Subpart 225.70);
(B) Another exception in FAR 25.401 applies to the acquisition; or
(C) Competition from foreign sources is restricted under Subpart
225.71.
0
9. Section 225.401-70 is amended in the introductory text by revising
the last sentence to read as follows:
225.401-70 Products subject to trade agreement acts.
* * * The following list indicates those products that are eligible
for designated and NAFTA countries, but are not eligible for Caribbean
Basin countries.
* * * * *
0
10. Section 225.403 is revised to read as follows:
[[Page 15620]]
225.403 Trade Agreements Act.
(c) For acquisitions subject to the Trade Agreements Act, acquire
only U.S.-made, qualifying country, or eligible end products unless--
(i) The contracting officer determines that offers of U.S.-made,
qualifying country, or eligible products from responsive, responsible
offerors are either--
(A) Not received; or
(B) Insufficient to fill the Government's requirements. In this
case, accept all responsive, responsible offers of U.S.-made,
qualifying country, and eligible products before accepting any other
offers; or
(ii) A national interest waiver under 19 U.S.C. 2512(b)(2) is
granted on a case-by-case basis. Except as delegated in paragraphs
(c)(i)(A) and (B) of this section, submit any request for a national
interest waiver to the Director of Defense Procurement and Acquisition
Policy in accordance with department or agency procedures. Include
supporting rationale with the request.
(A) The head of the contracting activity may approve a national
interest waiver for a purchase by an overseas purchasing activity, if
the waiver is supported by a written statement from the requiring
activity that the products being acquired are critical for the support
of U.S. forces stationed abroad.
(B) The Commander or Director, Defense Energy Support Center, may
approve national interest waivers for purchases of fuel for use by U.S.
forces overseas.
0
11. Subpart 225.5 is revised to read as follows:
Subpart 225.5--Evaluating Foreign Offers--Supply Contracts
Sec.
225.502 Application.
225.503 Group offers.
225.504 Evaluation examples.
225.502 Application.
(b) Use the following procedures instead of the procedures in FAR
25.502(b) for acquisitions subject to the Trade Agreements Act:
(i) Consider only offers of U.S.-made, qualifying country, or
eligible end products, except as permitted by 225.403.
(ii) If price is the determining factor, award on the low offer.
(c) Use the following procedures instead of those in FAR 25.502(c)
for acquisitions subject to the Buy American Act or the Balance of
Payments Program:
(i)(A) If the acquisition is subject only to the Buy American Act
or the Balance of Payments Program, then only qualifying country end
products are exempt from application of the Buy American Act or Balance
of Payments Program evaluation factor.
(B) If the acquisition is also subject to NAFTA, then NAFTA country
end products are also exempt from application of the Buy American Act
or Balance of Payments Program evaluation factor.
(ii) If price is the determining factor, use the following
procedures:
(A) If the low offer is a domestic offer, award on that offer.
(B) If there are no domestic offers, award on the low offer (see
example in 225.504(1)).
(C) If the low offer is a foreign offer that is exempt from
application of the Buy American Act or Balance of Payments Program
evaluation factor, award on that offer. (If the low offer is a
qualifying country offer from a country listed at 225.872-1(b) and the
Trade Agreements Act does not apply, execute a determination in
accordance with 225.872-4).
(D) If the low offer is a foreign offer that is not exempt from
application of the Buy American Act or Balance of Payments Program
evaluation factor, and there is another foreign offer that is exempt
and is lower than the lowest domestic offer, award on the low foreign
offer (see example in 225.504(2)).
(E) Otherwise, apply the 50 percent evaluation factor to the low
foreign offer.
(1) If the price of the low domestic offer is less than the
evaluated price of the low foreign offer, award on the low domestic
offer (see example in 225.504(3)).
(2) If the evaluated price of the low foreign offer remains less
than the low domestic offer, award on the low foreign offer (see
example in 225.504(4)).
(iii) If price is not the determining factor, use the following
procedures:
(A) If there are domestic offers, apply the 50 percent Buy American
Act or Balance of Payments Program evaluation factor to all foreign
offers unless an exemption applies.
(B) Evaluate in accordance with the criteria of the solicitation.
(C) If these procedures will not result in award on a domestic
offer, reevaluate offers without the 50 percent factor. If this will
result in award on an offer to which the Buy American Act or Balance of
Payments Program applies, but evaluation in accordance with paragraph
(c)(ii) of this section would result in award on a domestic offer,
proceed with award only after execution of a determination in
accordance with 225.103(a)(ii)(B), that domestic preference would be
inconsistent with the public interest.
225.503 Group offers.
Evaluate group offers in accordance with FAR 25.503, but apply the
evaluation procedures of 225.502.
225.504 Evaluation examples.
The following examples illustrate the evaluation procedures in
225.502(c)(ii). The examples assume that the contracting officer has
eliminated all offers that are unacceptable for reasons other than
price or a trade agreement and that price is the determining factor in
contract award. The same evaluation procedures and the 50 percent
evaluation factor apply regardless of whether the acquisition is
subject to the Buy American Act (BAA) or the Balance of Payments
Program (BOPP).
(1) Example 1.
Offer A $945,000--Foreign offer subject to BAA/BOPP
Offer B $950,000--Foreign offer exempt from BAA/BOPP
Since no domestic offers are received, do not apply the evaluation
factor. Award on Offer A.
(2) Example 2.
Offer A $950,000--Domestic offer
Offer B $890,000--Foreign offer exempt from BAA/BOPP
Offer C $880,000--Foreign offer subject to BAA/BOPP
Since the exempt foreign offer is lower than the domestic offer, do
not apply the evaluation factor. Award on Offer C.
(3) Example 3.
Offer A $9,100--Foreign offer exempt from BAA/BOPP
Offer B $8,900--Domestic offer
Offer C $6,000--Foreign offer subject to BAA/BOPP
Since the domestic offer is lower than the exempt foreign offer,
apply the 50 percent evaluation factor to Offer C. This results in
an evaluated price of $9,000 for Offer C. Award on Offer B.
(4) Example 4.
Offer A $910,000--Foreign offer exempt from BAA/BOPP
Offer B $890,000--Domestic offer
Offer C $590,000--Foreign offer subject to BAA/BOPP
Since the domestic offer is lower than the exempt foreign offer,
apply the 50 percent evaluation factor to Offer C. This results in
an evaluated price of $885,000 for Offer C. Award on Offer C.
0
12. Subpart 225.6 is added to read as follows:
Subpart 225.6--Trade Sanctions
Sec.
225.670 Secondary Arab boycott of Israel.
225.670-1 Restriction.
225.670-2 Procedures.
225.670-3 Exceptions.
225.670-4 Waivers.
[[Page 15621]]
225.670 Secondary Arab boycott of Israel.
225.670-1 Restriction.
In accordance with 10 U.S.C. 2410i, do not enter into a contract
with a foreign entity unless it has certified that it does not comply
with the secondary Arab boycott of Israel.
225.670-2 Procedures.
For contracts awarded to the Canadian Commercial Corporation (CCC),
the CCC will submit a certification from its proposed subcontractor
with the other required precontractual information (see 225.870).
225.670-3 Exceptions.
This restriction does not apply to--
(a) Purchases at or below the simplified acquisition threshold;
(b) Contracts for consumable supplies, provisions, or services for
the support of United States forces or of allied forces in a foreign
country; or
(c) Contracts pertaining to the use of any equipment, technology,
data, or services for intelligence or classified purposes, or to the
acquisition or lease thereof, in the interest of national security.
225.670-4 Waivers.
The Secretary of Defense may waive this restriction on the basis of
national security interests. Forward waiver requests to the Director,
Defense Procurement and Acquisition Policy, Attn: OUSD(AT&L)DPAP(PAIC),
3060 Defense Pentagon, Washington, DC 20301-3060.
225.701 [Amended]
0
13. Section 225.701 is amended by removing the second sentence.
225.770 through 225.771-5 [Removed]
0
14. Sections 225.770 through 225.771-5 are removed.
0
15. Subpart 225.8 is revised to read as follows:
Subpart 225.8--Other International Agreements and Coordination
Sec.
225.802 Procedures.
225.802-70 Contracts for performance outside the United States and
Canada.
225.802-71 End use certificates.
225.870 Contracting with Canadian contractors.
225.870-1 General.
225.870-2 Solicitation of Canadian contractors.
225.870-3 Submission of offers.
225.870-4 Contracting procedures.
225.870-5 Contract administration.
225.870-6 Termination procedures.
225.870-7 Acceptance of Canadian supplies.
225.870-8 Industrial security.
225.871 North Atlantic Treaty Organization cooperative projects.
225.871-1 Scope.
225.871-2 Definitions.
225.871-3 General.
225.871-4 Statutory waivers.
225.871-5 Directed subcontracting.
225.871-6 Disposal of property.
225.871-7 Congressional notification.
225.872 Contracting with qualifying country sources.
225.872-1 General.
225.872-2 Applicability.
225.872-3 Solicitation procedures.
225.872-4 Individual determinations.
225.872-5 Contract administration.
225.872-6 Audit.
225.872-7 Industrial security for qualifying countries.
225.872-8 Subcontracting with qualifying country sources.
225.873 Waiver of United Kingdom commercial exploitation levies.
225.873-1 Policy.
225.873-2 Procedures.
225.802 Procedures.
(b) Information on specific agreements is available as follows:
(i) Memoranda of understanding and other international agreements
between the United States and the countries listed in 225.872-1 are
maintained in the Office of the Director of Defense Procurement and
Acquisition Policy (Program Acquisition and International Contracting)
((703) 697-9351, DSN 227-9351).
(ii) Military Assistance Advisory Groups, Naval Missions, and Joint
U.S. Military Aid Groups normally have copies of the agreements
applicable to the countries concerned.
(iii) Copies of international agreements covering the United
Kingdom of Great Britain and Northern Ireland, Western European
countries, North Africa, and the Middle East are filed with the U.S.
European Command.
(iv) Agreements with countries in the Pacific and Far East are
filed with the U.S. Pacific Command.
225.802-70 Contracts for performance outside the United States and
Canada.
(a) When a contracting office anticipates placement of a contract
for performance outside the United States and Canada, and the
contracting office is not under the jurisdiction of a command for the
country involved, the contracting office shall maintain liaison with
the cognizant contract administration office (CAO) during preaward
negotiations and postaward administration. The CAO will provide
pertinent information for contract negotiations, effect appropriate
coordination, and obtain required approvals for the performance of the
contract.
(b) If the acquisition requires the performance of work in the
foreign country by U.S. personnel or a third country contractor, or if
the acquisition requires logistics support for contract employees,
source inspection, or additional Government employees--
(1) The contracting officer shall coordinate with the CAO before
contract award;
(2) The contracting officer shall request the following information
from the CAO:
(i) The applicability of any international agreements to the
acquisition.
(ii) Security requirements applicable to the area.
(iii) The standards of conduct for the prospective contractor and
its employees and any consequences for violation of the standards of
conduct.
(iv) Requirements for use of foreign currencies, including
applicability of U.S. holdings of excess foreign currencies.
(v) Availability of logistical support for contractor employees.
(vi) Information on taxes and duties from which the Government may
be exempt; and
(3) The contracting officer shall furnish the following information
to the CAO:
(i) A synopsis of the work to be performed and, if practical, a
copy of the solicitation.
(ii) Any contractor logistical support desired in support of U.S.
or foreign military sale requirements.
(iii) Contract performance period and estimated contract value.
(iv) Number and nationality of contractor employees and date of
planned arrival of contractor personnel.
(v) Contract security requirements.
(vi) Other pertinent information to effect complete coordination
and cooperation.
225.802-71 End use certificates.
Contracting officers considering the purchase of an item from a
foreign source may encounter a request for the signing of a certificate
to indicate that the Armed Forces of the United States is the end user
of the item, and that the U.S. Government will not transfer the item to
third parties without authorization from the Government of the country
selling the item. When encountering this situation, refer to DoD
Directive 2040.3, End Use Certificates, for guidance.
[[Page 15622]]
225.870 Contracting with Canadian contractors.
225.870-1 General.
(a) The Canadian Government guarantees to the U.S. Government all
commitments, obligations, and covenants of the Canadian Commercial
Corporation under any contract or order issued to the Corporation by
any contracting office of the U.S. Government. The Canadian Government
has waived notice of any change or modification that may be made, from
time to time, in these commitments, obligations, or covenants.
(b) For production planning purposes, Canada is part of the defense
industrial base (see 225.870-2(b)).
(c) The Canadian Commercial Corporation will award and administer
contracts with contractors located in Canada, except for--
(1) Negotiated acquisitions for experimental, developmental, or
research work under projects other than the Defense Development Sharing
Program;
(2) Acquisitions of unusual or compelling urgency;
(3) Acquisitions at or below the simplified acquisition threshold;
or
(4) Acquisitions made by DoD activities located in Canada.
(d) The Canadian Commercial Corporation uses provisions in
contracts with Canadian or U.S. concerns that give DoD the same
production rights, data, and information that DoD would obtain in
contracts with U.S. concerns.
(e) The Government of Canada will provide the following services
under contracts with the Canadian Commercial Corporation without charge
to DoD:
(1) Contract administration services, including--
(i) Cost and price analysis;
(ii) Industrial security;
(iii) Accountability and disposal of Government property;
(iv) Production expediting;
(v) Compliance with Canadian labor laws;
(vi) Processing of termination claims and disposal of termination
inventory;
(vii) Customs documentation;
(viii) Processing of disputes and appeals; and
(ix) Such other related contract administration functions as may be
required with respect to the Canadian Commercial Corporation contract
with the Canadian supplier.
(2) Audits. The Public Works and Government Services Canada
performs audits when needed. Route requests for audit on non-Canadian
Commercial Corporation contracts through the cognizant contract
management office of the Defense Contract Management Agency.
(3) Inspection. The Department of National Defence (Canada)
provides inspection personnel, services, and facilities at no charge to
DoD departments and agencies (see 225.870-7).
225.870-2 Solicitation of Canadian contractors.
(a) Except for acquisitions described in 225.870-1(c)(1) through
(4), include Canadian firms on solicitation mailing lists and
comparable source lists only at the request of the Canadian Commercial
Corporation.
(b) Include Canadian planned producers under the Industrial
Preparedness Production Planning Program on solicitation mailing lists
for their planned items (see FAR 14.205-1).
(c) Send solicitations directly to Canadian firms appearing on the
appropriate solicitation mailing lists. Send a complete copy of the
solicitation and a listing of Canadian firms solicited to the Canadian
Commercial Corporation, 11th Floor, 50 O'Connor Street, Ottawa,
Ontario, K1A-0S6, Canada.
(d) If requested, furnish a solicitation to the Canadian Commercial
Corporation even if no Canadian firm is solicited.
(e) Handle acquisitions at or below the simplified acquisition
threshold directly with Canadian firms and not through the Canadian
Commercial Corporation.
225.870-3 Submission of offers.
(a) As indicated in 225.870-4, the Canadian Commercial Corporation
is the prime contractor. To indicate acceptance of offers by individual
Canadian companies, the Canadian Commercial Corporation issues a letter
supporting the Canadian offer and containing the following information:
(1) Name of the Canadian offeror.
(2) Confirmation and endorsement of the offer in the name of the
Canadian Commercial Corporation.
(3) A statement that the Corporation shall subcontract 100 percent
with the offeror.
(b) When a Canadian offer cannot be processed through the Canadian
Commercial Corporation in time to meet the date for receipt of offers,
the Corporation may permit Canadian firms to submit offers directly.
However, the contracting officer shall receive the Canadian Commercial
Corporation's endorsement before contract award.
(c) The Canadian Commercial Corporation will submit all sealed bids
in terms of U.S. currency. Do not adjust contracts awarded under sealed
bidding for losses or gains from fluctuation in exchange rates.
(d) Except for sealed bids, the Canadian Commercial Corporation
normally will submit offers and quotations in terms of Canadian
currency. The Corporation may, at the time of submitting an offer,
elect to quote and receive payment in terms of U.S. currency, in which
case the contract--
(1) Shall provide for payment in U.S. currency; and
(2) Shall not be adjusted for losses or gains from fluctuation in
exchange rates.
225.870-4 Contracting procedures.
(a) Except for contracts described in 225.870-1(c)(1) through (4),
award individual contracts covering purchases from suppliers located in
Canada to the Canadian Commercial Corporation, 11th Floor, 50 O'Connor
Street, Ottawa, Ontario, Canada, K1A-0S6.
(b) Direct communication with the Canadian supplier is authorized
and encouraged in connection with all technical aspects of the
contract, provided the Corporation's approval is obtained on any
matters involving changes to the contract.
(c) Identify in the contract, the type of currency, i.e., U.S. or
Canadian. Contracts that provide for payment in Canadian currency
shall--
(1) Quote the contract price in terms of Canadian dollars and
identify the amount by the initials ``CN'', e.g., $1,647.23CN; and
(2) Clearly indicate on the face of the contract the U.S./Canadian
conversion rate at the time of award and the U.S. dollar equivalent of
the Canadian dollar contract amount.
225.870-5 Contract administration.
(a) Assign contract administration in accordance with Part 242.
When the Defense Contract Management Agency will perform contract
administration in Canada, name in the contract the following payment
office for disbursement of DoD funds (DoD Department Code: 17-Navy; 21-
Army; 57-Air Force; 97-all other DoD components), whether payment is in
Canadian or U.S. dollars: DFAS-Columbus Center, DFAS-CO/New Dominion
Division, P.O. Box 182041, Columbus, OH 43218-2041.
(b) The following procedures apply to cost-reimbursement type
contracts:
(1) The Public Works and Government Services Canada (PWGSC)
automatically arranges audits on contracts with the Canadian Commercial
Corporation.
[[Page 15623]]
(i) Consulting and Audit Canada (CAC) furnishes audit reports to
PWGSC.
(ii) Upon advice from PWGSC, the Canadian Commercial Corporation
certifies the invoice and forwards it with Standard Form (SF) 1034,
Public Voucher, to the administrative contracting officer for further
processing and transmittal to the disbursing office.
(2) For contracts placed directly with Canadian firms, the
administrative contracting officer requests audits from the CAC,
Ottawa, Ontario, Canada. The CAC/PWGSC--
(i) Approves invoices on a provisional basis pending completion of
the contract and final audit;
(ii) Forwards these invoices, accompanied by SF 1034, Public
Voucher, to the administrative contracting officer for further
processing and transmittal to the disbursing officer; and
(iii) Furnishes periodic advisory audit reports directly to the
administrative contracting officer.
225.870-6 Termination procedures.
(a) The Canadian Commercial Corporation will continue administering
contracts that the U.S. contracting officer terminates.
(b) The Corporation will settle all Canadian subcontracts in
accordance with the policies, practices, and procedures of the Canadian
Government.
(c) The U.S. agency administering the contract with the Canadian
Commercial Corporation shall provide any services required by the
Canadian Commercial Corporation, including disposal of inventory, for
settlement of any subcontracts placed in the United States. Settlement
of such U.S. subcontracts will be in accordance with this regulation.
225.870-7 Acceptance of Canadian supplies.
(a) For contracts placed in Canada, either with the Canadian
Commercial Corporation or directly with Canadian suppliers, the
Department of National Defence (Canada) will perform any necessary
contract quality assurance and/or acceptance, as applicable.
(b) Signature by the Department of National Defence (Canada)
quality assurance representative on the DoD inspection and acceptance
form is satisfactory evidence of acceptance for payment purposes.
225.870-8 Industrial security.
Industrial security for Canada shall be in accordance with the
U.S.-Canada Industrial Security Agreement of March 31, 1952, as
amended.
225.871 North Atlantic Treaty Organization cooperative projects.
225.871-1 Scope.
This section--
(a) Implements 22 U.S.C. 2767 and 10 U.S.C. 2350b; and
(b) Provides guidance on awarding contracts for North Atlantic
Treaty Organization (NATO) cooperative projects.
225.871-2 Definitions.
As used in this section--
(a) Cooperative project means a jointly managed arrangement--
(1) Described in a written agreement between the parties;
(2) Undertaken to further the objectives of standardization,
rationalization, and interoperability of the armed forces of NATO
member countries; and
(3) Providing for--
(i) One or more of the other participants to share with the United
States the cost of research and development, testing, evaluation, or
joint production (including follow-on support) of certain defense
articles;
(ii) Concurrent production in the United States and in another
member country of a defense article jointly developed; or
(iii) Acquisition by the United States of a defense article or
defense service from another member country.
(b) Other participant means a cooperative project participant other
than the United States.
225.871-3 General.
(a) Cooperative project authority.
(1) Departments and agencies, that have authority to do so, may
enter into cooperative project agreements with NATO or with one or more
member countries of NATO under DoDD 5530.3, International Agreements.
(2) Under laws and regulations governing the negotiation and
implementation of cooperative project agreements, departments and
agencies may enter into contracts, or incur other obligations, on
behalf of other participants without charge to any appropriation or
contract authorization.
(3) Agency heads are authorized to solicit and award contracts to
implement cooperative projects.
(b) Contracts implementing cooperative projects shall comply with
all applicable laws relating to Government acquisition, unless a waiver
is granted under 225.871-4. A waiver of certain laws and regulations
may be obtained if the waiver--
(1) Is required by the terms of a written cooperative project
agreement;
(2) Will significantly further NATO standardization,
rationalization, and interoperability; and
(3) Is approved by the appropriate DoD official.
225.871-4 Statutory waivers.
(a) For contracts or subcontracts placed outside the United States,
the Deputy Secretary of Defense may waive any provision of law that
specifically prescribes--
(1) Procedures for the formation of contracts;
(2) Terms and conditions for inclusion in contracts;
(3) Requirements or preferences for--
(i) Goods grown, produced, or manufactured in the United States or
in U.S. Government-owned facilities; or
(ii) Services to be performed in the United States; or
(4) Requirements regulating the performance of contracts.
(b) There is no authority for waiver of--
(1) Any provision of the Arms Export Control Act (22 U.S.C. 2751);
(2) Any provision of 10 U.S.C. 2304;
(3) The cargo preference laws of the United States, including the
Military Cargo Preference Act of 1904 (10 U.S.C. 2631) and the Cargo
Preference Act of 1954 (46 U.S.C. 1241(b)); or
(4) Any of the financial management responsibilities administered
by the Secretary of the Treasury.
(c) Forward any request for waiver under a cooperative project to
the Deputy Secretary of Defense, through the Director of Defense
Procurement and Acquisition Policy, Office of the Under Secretary of
Defense (Acquisition, Technology, and Logistics). The waiver request
shall include a draft Determination and Findings for signature by the
Deputy Secretary of Defense establishing that the waiver is necessary
to significantly further NATO standardization, rationalization, and
interoperability.
(d) Obtain the approval of the Deputy Secretary of Defense before
committing to make a waiver in an agreement or a contract.
225.871-5 Directed Subcontracting.
(a) The Director of Defense Procurement and Acquisition Policy may
authorize the direct placement of subcontracts with particular
subcontractors. Directed subcontracting is not authorized unless
specifically addressed in the cooperative project agreement.
(b) In some instances, it may not be feasible to name specific
subcontractors at the time the agreement is concluded. However, the
agreement shall clearly
[[Page 15624]]
state the general provisions for work sharing at the prime and
subcontract level.
(c) The agreement is the authority for a contractual provision
requiring the contractor to place certain subcontracts with particular
subcontractors. No separate justification and approval during the
acquisition process is required.
225.871-6 Disposal of property.
Dispose of property that is jointly acquired by the members of a
cooperative project under the procedures established in the agreement
or in a manner consistent with the terms of the agreement.
225.871-7 Congressional notification.
(a) Congressional notification is required when DoD makes a
determination to award a contract or subcontract to a particular
entity, if the determination was not part of the certification made
under 22 U.S.C. 2767(f) before finalizing the cooperative agreement.
(1) Departments and agencies shall provide a proposed Congressional
notice to the Director of Defense Procurement and Acquisition Policy in
sufficient time to forward to Congress before the time of contract
award.
(2) The proposed notice shall include the reason it is necessary to
use the authority to designate a particular contractor or
subcontractor.
(b) Congressional notification is also required each time a
statutory waiver under 225.871-4 is incorporated in a contract or a
contract modification, if such information was not provided in the
certification to Congress before finalizing the cooperative agreement.
225.872 Contracting with qualifying country sources.
225.872-1 General.
(a) As a result of memoranda of understanding and other
international agreements, DoD has determined it inconsistent with the
public interest to apply restrictions of the Buy American Act or the
Balance of Payments Program to the acquisition of qualifying country
end products from the following qualifying countries:
Australia
Belgium
Canada
Denmark
Egypt
Federal Republic of Germany
France
Greece
Israel
Italy
Luxembourg
Netherlands
Norway
Portugal
Spain
Switzerland
Turkey
United Kingdom of Great Britain and Northern Ireland
(b) Individual acquisitions of qualifying country end products from
the following qualifying countries may, on a purchase-by-purchase basis
(see 225.872-4), be exempted from application of the Buy American Act
and the Balance of Payments Program as inconsistent with the public
interest:
Austria
Finland
Sweden
(c) The determination in paragraph (a) of this subsection does not
limit the authority of the Secretary concerned to restrict acquisitions
to domestic sources or reject an otherwise acceptable offer from a
qualifying country source when considered necessary for national
defense reasons.
225.872-2 Applicability.
(a) This section applies to all acquisitions of supplies except
those restricted by--
(1) U.S. National Disclosure Policy, DoDD 5230.11, Disclosure of
Classified Military Information to Foreign Governments and
International Organizations;
(2) U.S. defense mobilization base requirements purchased under the
authority of FAR 6.302-3(a)(2)(i), except for quantities in excess of
that required to maintain the defense mobilization base. This
restriction does not apply to Canadian planned producers.
(i) Review individual solicitations to determine whether this
restriction applies.
(ii) Information concerning restricted items may be obtained from
the Deputy Under Secretary of Defense (Industrial Affairs);
(3) Other U.S. laws or regulations (e.g., the annual DoD
appropriations act); and
(4) U.S. industrial security requirements.
(b) This section does not apply to construction contracts.
225.872-3 Solicitation procedures.
(a) Include qualifying country sources on solicitation mailing
lists upon their request (see FAR 14.205).
(b) Except for items developed under the U.S./Canadian Development
Sharing Program, use the criteria for soliciting and awarding contracts
to small business concerns under FAR Part 19 without regard to whether
there are potential qualifying country sources for the end product. Do
not consider an offer of a qualifying country end product if the
solicitation is identified for the exclusive participation of small
business concerns.
(c) Send solicitations directly to qualifying country sources.
Solicit Canadian sources through the Canadian Commercial Corporation in
accordance with 225.870.
(d) Use international air mail if solicitation destinations are
outside the United States and security classification permits such use.
(e) If unusual technical or security requirements preclude the
acquisition of otherwise acceptable defense equipment from qualifying
country sources, review the need for such requirements. Do not impose
unusual technical or security requirements solely for the purpose of
precluding the acquisition of defense equipment from qualifying
countries.
(f) Do not automatically exclude qualifying country sources from
submitting offers because their supplies have not been tested and
evaluated by the department or agency.
(1) Consider the adequacy of qualifying country service testing on
a case-by-case basis. Departments or agencies that must limit
solicitations to sources whose items have been tested and evaluated by
the department or agency shall consider supplies from qualifying
country sources that have been tested and accepted by the qualifying
country for service use.
(2) The department or agency may perform a confirmatory test, if
necessary.
(3) Apply U.S. test and evaluation standards, policies, and
procedures when the department or agency decides that confirmatory
tests of qualifying country end products are necessary.
(4) If it appears that these provisions might adversely delay
service programs, obtain the concurrence of the Under Secretary of
Defense (Acquisition, Technology, and Logistics), before excluding the
qualifying country source from consideration.
(g) Permit industry representatives from a qualifying country to
attend symposia, program briefings, prebid conferences (see FAR 14.207
and 15.201(c)), and similar meetings that address U.S. defense
equipment needs and requirements. When practical, structure these
meetings to allow attendance by representatives of qualifying country
concerns.
225.872-4 Individual determinations.
(a) If the offer of an end product from a qualifying country source
listed in 225.872-1(b), as evaluated, is low or
[[Page 15625]]
otherwise eligible for award, prepare a determination and findings
exempting the acquisition from the Buy American Act and the Balance of
Payments Program as inconsistent with the public interest, unless
another exception such as the Trade Agreements Act applies.
(b) Obtain signature of the determination and findings--
(1) At a level above the contracting officer, for acquisitions
valued at or below the simplified acquisition threshold; or
(2) By the chief of the contracting office, for acquisitions with a
value greater than the simplified acquisition threshold.
(c) Prepare the determination and findings substantially as
follows:
Service or Agency
Exemption of the Buy American Act and Balance of Payments Program
Determination and Findings
Upon the basis of the following findings and determination which
I hereby make in accordance with the provisions of FAR 25.103(a),
the acquisition of a qualifying country end product may be made as
follows:
Findings
1. The (contracting office) proposes to purchase under contract
number ----, (describe item) mined, produced, or manufactured in
(qualifying country of origin). The total estimated cost of this
acquisition is ----.
2. The United States Government and the Government of ------
have agreed to remove barriers to procurement at the prime and
subcontract level for defense equipment produced in each other's
countries insofar as laws and regulations permit.
3. The agreement provides that the Department of Defense will
evaluate competitive offers of qualifying country end products
mined, produced, or manufactured in (qualifying country) without
imposing any price differential under the Buy American Act or the
Balance of Payments Program and without taking applicable U.S.
customs and duties into consideration so that such items may better
compete for sales of defense equipment to the Department of Defense.
In addition, the Agreement stipulates that acquisitions of such
items shall fully satisfy Department of Defense requirements for
performance, quality, and delivery and shall cost the Department of
Defense no more than would comparable U.S. source or other foreign
source defense equipment eligible for award.
4. To achieve the foregoing objectives, the solicitation
contained the clause (title and number of the Buy American Act
clause contained in the contract). Offers were solicited from other
sources and the offer received from (offeror) is found to be
otherwise eligible for award.
Determination
I hereby determine that it is inconsistent with the public
interest to apply the restrictions of the Buy American Act or the
Balance of Payments Program to the offer described in this
determination and findings.
-----------------------------------------------------------------------
(Date)
225.872-5 Contract administration.
(a) Arrangements exist with some qualifying countries to provide
reciprocal contract administration services. Some arrangements are at
no cost to either government. To determine whether such an arrangement
has been negotiated and what contract administration functions are
covered, contact the Deputy Director of Defense Procurement and
Acquisition Policy (Program Acquisition and International Contracting),
((703) 697-9351, DSN 227-9351).
(b) When contract administration services are required on contracts
to be performed in qualifying countries, direct the request to the
cognizant activity listed in the Federal Directory of Contract
Administration Services. The cognizant activity also will arrange
contract administration services for DoD subcontracts that qualifying
country sources place in the United States.
(c) The contract administration activity receiving a delegation
shall determine whether any portions of the delegation are covered by
memoranda of understanding annexes and, if so, shall delegate those
functions to the appropriate organization in the qualifying country's
government.
(d) Information on quality assurance delegations to foreign
governments is in Subpart 246.4, Government Contract Quality Assurance.
225.872-6 Audit.
(a) Memoranda of understanding with some qualifying countries
contain annexes that provide for reciprocal ``no-cost'' audits of
contracts and subcontracts (pre- and post-award).
(b) To determine if such an annex is applicable to a particular
qualifying country, contact the Deputy Director of Defense Procurement
and Acquisition Policy (Program Acquisition and International
Contracting), ((703) 697-9351, DSN 227-9351).
(c) Handle requests for audits in qualifying countries in
accordance with 215.404-2(c).
(1) Except for the United Kingdom, send the request to the
administrative contracting officer at the cognizant activity listed in
Section 2B of the Federal Directory of Contract Administration
Services. Send the request for audit from the United Kingdom directly
to their Ministry of Defence.
(2) Send an advance copy of the request to the focal point
identified by the Deputy Director of Defense Procurement and
Acquisition Policy (Program Acquisition and International Contracting).
225.872-7 Industrial security for qualifying countries.
The required procedures for safeguarding classified defense
information necessary for the performance of contracts awarded to
qualifying country sources are in the DoD Industrial Security
Regulation DoD 5220.22-R (implemented for the Army by AR 380-49; for
the Navy by SECNAV Instruction 5510.1H; for the Air Force by AFI 31-
601; for the Defense Information Systems Agency by DCA Instruction 240-
110-8; and for the National Imagery and Mapping Agency by NIMA
Instruction 5220.22).
225.872-8 Subcontracting with qualifying country sources.
In reviewing contractor subcontracting procedures, the contracting
officer shall ensure that the contract does not preclude qualifying
country sources from competing for subcontracts, except when restricted
by national security interest reasons, mobilization base
considerations, or applicable U.S. laws or regulations (see the clause
at 252.225-7002, Qualifying Country Sources as Subcontractors).
225.873 Waiver of United Kingdom commercial exploitation levies.
225.873-1 Policy.
DoD and the Government of the United Kingdom (U.K.) have agreed to
waive U.K. commercial exploitation levies and U.S. nonrecurring cost
recoupment charges on a reciprocal basis. For U.K. levies to be waived,
the offeror or contractor shall identify the levies and the contracting
officer shall request a waiver before award of the contract or
subcontract under which the levies are charged.
225.873-2 Procedures.
(a) The Government of the U.K. shall approve waiver of U.K. levies.
When an offeror or contractor identifies a levy included in an offered
or contract price, the contracting officer shall provide written
notification to the Defense Security Cooperation Agency, ATTN: PSD-PMD,
1111 Jefferson Davis Highway, Arlington, VA 22202-4306, telephone (703)
601-3864. The Defense Security Cooperation Agency will request a waiver
of the levy from the Government of the U.K. The notification shall
include--
(1) Name of the U.K. firm;
(2) Prime contract number;
[[Page 15626]]
(3) Description of item for which waiver is being sought;
(4) Quantity being acquired; and
(5) Amount of levy.
(b) Waiver may occur after contract award. If levies are waived
before contract award, evaluate the offer without the levy. If levies
are identified but not waived before contract award, evaluate the offer
inclusive of the levies.
0
16. Subpart 225.9 is revised to read as follows:
Subpart 225.9--Customs and Duties
Sec.
225.901 Policy.
225.902 Procedures.
225.903 Exempted supplies.
225.901 Policy.
Unless the supplies are entitled to duty-free treatment under a
special category in the Harmonized Tariff Schedule of the United States
(e.g., the Caribbean Basin Economic Recovery Act or NAFTA), or unless
the supplies already have entered into the customs territory of the
United States and the contractor already has paid the duty, DoD will
issue duty-free entry certificates for--
(1) Qualifying country supplies (end products and components);
(2) Eligible products (end products but not components) under
contracts subject to the Trade Agreements Act or NAFTA; and
(3) Other foreign supplies for which the contractor estimates that
duty will exceed $200 per shipment into the customs territory of the
United States.
225.902 Procedures.
(1) Formal entry and release.
(i) The administrative contracting officer shall--
(A) Ensure that contractors are aware of and understand any Duty-
Free Entry clause requirements. Contractors should understand that
failure by them or their subcontractors to provide the data required by
the clause will result in treatment of the shipment as without benefit
of free entry under Section XXII, Chapter 98, Subchapter VIII, Item
9808.00.30 of the Harmonized Tariff Schedule of the United States.
(B) Upon receipt of the required notice of purchase of foreign
supplies from the contractor or any tier subcontractor--
(1) Verify the duty-free entitlement of supplies entering under the
contract; and
(2) Review the prime contract to ensure that performance of the
contract requires the foreign supplies (quantity and price) identified
in the notice.
(C) Within 20 days after receiving the notification of purchase of
foreign supplies, forward the following information in the format
indicated to the Commander, DCMA New York, ATTN: Customs Team, DCMAE-
GNTF, 207 New York Avenue, Building 120, Staten Island, NY 10305-5013:
We have received a contractor notification of the purchase of
foreign supplies. I have verified that foreign supplies are required
for the performance of the contract.
Prime Contractor Name and Address:
Prime Contractor CAGE Code:
Prime Contract Number plus Delivery Order Number, if applicable:
Total Dollar Value of the Prime Contract or Delivery Order:
Expiration Date of the Prime Contract or Delivery Order:
Foreign Supplier Name and Address:
Number of Subcontract/Purchase Order for Foreign Supplies:
Total Dollar Value of the Subcontract for Foreign Supplies:
Expiration Date of the Subcontract for Foreign Supplies:
CAO Activity Address Number:
ACO Name and Telephone Number:
ACO Code:
Signature:
Title:
(D) If a contract modification results in a change to any data
verifying duty-free entitlement previously furnished, forward a revised
notification including the changed data to DCMA New York.
(ii) The Customs Team, DCMAE-GNTF, DCMA New York--
(A) Is responsible for issuing duty-free entry certificates for
foreign supplies purchased under a DoD contract or subcontract; and
(B) Upon receipt of import documentation for incoming shipments
from the contractor, its agent, or the U.S. Customs Service, will
verify the duty-free entitlement and execute the duty-free entry
certificate.
(iii) Upon arrival of foreign supplies at ports of entry, the
consignee, generally the contractor or its agent (import broker) for
shipments to other than a military installation, will file U.S. Customs
Form 7501, 7501A, or 7506, with the District Director of Customs.
(2) Immediate entry and release. Importations made in the name of a
DoD military facility or shipped directly to a military facility are
entitled to release under the immediate delivery procedure.
(i) A DoD immediate delivery application has been approved and is
on file at Customs Headquarters.
(ii) The application is for an indefinite period and is good for
all Customs districts, areas, and ports.
225.903 Exempted supplies.
(b)(i) The term ``supplies''--
(A) Includes--
(1) Articles known as ``stores,'' such as food, medicines, and
toiletries; and
(2) All consumable articles necessary and appropriate for the
propulsion, operation, and maintenance of the vessel or aircraft, such
as fuel, oil, gasoline, grease, paint, cleansing compounds, solvents,
wiping rags, and polishes; and
(B) Does not include portable articles necessary and appropriate
for the navigation, operation, or maintenance of the vessel or aircraft
and for the comfort and safety of the persons on board, such as rope,
bolts and nuts, bedding, china and cutlery, which are included in the
term ``equipment.''
(ii) The duty-free certificate shall be printed, stamped, or typed
on the face of, or attached to, Customs Form 7501. A duly designated
officer or civilian official of the appropriate department or agency
shall execute the certificate in the following form:
(Date)-----------------------------------------------------------------
I certify that the acquisition of this material constituted a
purchase of supplies by the United States for vessels or aircraft
operated by the United States, and is admissible free of duty
pursuant to 19 U.S.C. 1309.
(Name)-----------------------------------------------------------------
(Title)----------------------------------------------------------------
(Organization)---------------------------------------------------------
0
17. Subpart 225.11 is revised to read as follows:
Subpart 225.11--Solicitation Provisions and Contract Clauses
Sec.
225.1100 Scope of subpart.
225.1101 Acquisition of supplies.
225.1103 Other provisions and clauses.
225.1100 Scope of subpart.
This subpart prescribes the clauses that implement Subparts 225.1
through 225.10. The clauses that implement Subparts 225.70 through
225.75 are prescribed within those subparts.
225.1101 Acquisition of supplies.
(1) Use the provision at 252.225-7000, Buy American Act--Balance of
Payments Program Certificate, instead of the provision at FAR 52.225-2,
Buy American Act Certificate. Use the provision in any solicitation
that includes the clause at 252.225-7001, Buy American Act and Balance
of Payments Program.
(2) Use the clause at 252.225-7001, Buy American Act and Balance of
Payments Program, instead of the clause at FAR 52.225-1, Buy American
Act--Supplies, in solicitations and contracts unless'
(i) All line items will be acquired from a particular source or
sources under the authority of FAR 6.302-3;
[[Page 15627]]
(ii) All line items must be domestic or qualifying country end
products in accordance with Subpart 225.70. (However, the clause may
still be required if Subpart 225.70 requires manufacture of the end
product in the United States or in the United States or Canada, without
a corresponding requirement for use of domestic components);
(iii) An exception to the Buy American Act or Balance of Payments
Program applies; or
(iv) One or both of the following clauses will apply to all line
items in the contract:
(A) 252.225-7021, Trade Agreements.
(B) 252.225-7036, Buy American Act--North American Free Trade
Agreement Implementation Act--Balance of Payments Program.
(3) Use the clause at 252.225-7002, Qualifying Country Sources as
Subcontractors, in solicitations and contracts that include one of the
following clauses:
(i) 252.225-7001, Buy American Act and Balance of Payments Program.
(ii) 252.225-7021, Trade Agreements.
(iii) 252.225-7036, Buy American Act--North American Free Trade
Agreement Implementation Act--Balance of Payments Program.
(4) Use the clause at 252.225-7013, Duty-Free Entry, instead of the
clause at FAR 52.225-8. Do not use the clause for acquisitions of
supplies that will not enter the customs territory of the United
States.
(5) Use the provision at 252.225-7020, Trade Agreements
Certificate, instead of the provision at FAR 52.225-6, Trade Agreements
Certificate, in solicitations that include the clause at 252.225-7021,
Trade Agreements.
(6)(i) Use the clause at 252.225-7021, Trade Agreements, instead of
the clause at FAR 52.225-5, Trade Agreements, if the Trade Agreements
Act applies.
(ii) Do not use the clause if purchase from foreign sources is
restricted, unless the contracting officer anticipates a waiver of the
restriction.
(iii) The acquisition of eligible and noneligible products under
the same contract may result in the application of trade agreements to
only some of the items acquired. In such case, indicate in the Schedule
those items covered by the Trade Agreements clause.
(7) Use the provision at 252.225-7032, Waiver of United Kingdom
Levies-Evaluation of Offers, in solicitations if a U.K. firm is
expected to--
(i) Submit an offer; or
(ii) Receive a subcontract exceeding $1 million.
(8) Use the clause at 252.225-7033, Waiver of United Kingdom
Levies, in solicitations and contracts if a U.K. firm is expected to--
(i) Submit an offer; or
(ii) Receive a subcontract exceeding $1 million.
(9) Use the provision at 252.225-7035, Buy American Act--North
American Free Trade Agreement Implementation Act--Balance of Payments
Program Certificate, instead of the provision at FAR 52.225-4, Buy
American Act--North American Free Trade Agreement--Israeli Trade Act,
in solicitations that include the clause at 252.225-7036, Buy American
Act--North American Free Trade Agreement Implementation Act--Balance of
Payments Program. Use the provision with its Alternate I when the
clause at 252.225-7036 is used with its Alternate I.
(10)(i) Use the clause at 252.225-7036, Buy American Act--North
American Free Trade Agreement Implementation Act--Balance of Payments
Program, instead of the clause at FAR 52.225-3, Buy American Act--North
American Free Trade Agreement--Israeli Trade Act, in solicitations and
contracts for the items listed at 225.401-70, when the estimated value
equals or exceeds $25,000, but is less than $169,000, and NAFTA applies
to the acquisition.
(A) Use the basic clause when the estimated value equals or exceeds
$56,190.
(B) Use the clause with its Alternate I when the estimated value
equals or exceeds $25,000 but is less than $56,190.
(ii) Do not use the clause if purchase from foreign sources is
restricted (see 225.401(a)(2)), unless the contracting officer
anticipates a waiver of the restriction.
(iii) The acquisition of eligible and noneligible products under
the same contract may result in the application of the North American
Free Trade Agreement Implementation Act to only some of the items
acquired. In such case, indicate in the Schedule those items covered by
the Buy American Act-North American Free Trade Agreement Implementation
Act-Balance of Payments Program clause.
225.1103 Other provisions and clauses.
(1) Unless the contracting officer knows that the prospective
contractor is not a domestic concern, use the clause at 252.225-7005,
Identification of Expenditures in the United States, in solicitations
and contracts that--
(i) Exceed the simplified acquisition threshold; and
(ii) Are for the acquisition of--
(A) Supplies for use outside the United States;
(B) Construction to be performed outside the United States; or
(C) Services to be performed primarily outside the United States.
(2) Unless an exception applies or a waiver has been granted in
accordance with Subpart 225.6, use the provision at 252.225-7031,
Secondary Arab Boycott of Israel, in all solicitations.
(3) Use the clause at 252.225-7041, Correspondence in English, in
solicitations and contracts when contract performance will be wholly or
in part in a foreign country.
(4) Use the provision at 252.225-7042, Authorization to Perform, in
solicitations when contract performance will be wholly or in part in a
foreign country.
225.7000 [Amended]
0
18. Section 225.7000 is amended as follows:
0
a. In paragraph (a), in the first sentence, by removing ``Defense'' and
adding in its place ``DoD''; and
0
b. In paragraph (b), by adding ``the'' before ``Balance of Payments
Program''.
0
19. Section 225.7002-3 is amended by revising paragraph (c) to read as
follows:
225.7002-3 Contract clauses.
* * * * *
(c) Use the clause at 252.225-7015, Restriction on Acquisition of
Hand or Measuring Tools, in solicitations and contracts exceeding the
simplified acquisition threshold that require delivery of hand or
measuring tools.
225.7003 through 225.7023-3 [Removed]
0
20. Sections 225.7003 through 225.7023-3 are removed.
0
21. New sections 225.7003 through 225.7017-4 are added to read as
follows:
225.7003 Waiver of restrictions of 10 U.S.C. 2534.
(a) Where provided for elsewhere in this subpart, the restrictions
on certain foreign purchases under 10 U.S.C. 2534(a) may be waived as
follows:
(1)(i) The Under Secretary of Defense (Acquisition, Technology, and
Logistics), without power of delegation, may waive a restriction for a
particular item for a particular foreign country upon determination
that--
(A) United States producers of the item would not be jeopardized by
competition from a foreign country, and that country does not
discriminate against defense items produced in the United States to a
greater degree than the United States discriminates against defense
items produced in that country; or
[[Page 15628]]
(B) Application of the restriction would impede cooperative
programs entered into between DoD and a foreign country, or would
impede the reciprocal procurement of defense items under a memorandum
of understanding providing for reciprocal procurement of defense items
under 225.872, and that country does not discriminate against defense
items produced in the United States to a greater degree than the United
States discriminates against defense items produced in that country.
(ii) A notice of the determination to exercise the waiver authority
shall be published in the Federal Register and submitted to the
congressional defense committees at least 15 days before the effective
date of the waiver.
(iii) The effective period of the waiver shall not exceed 1 year.
(iv) For contracts entered into prior to the effective date of a
waiver, provided adequate consideration is received to modify the
contract, the waiver shall be applied as directed or authorized in the
waiver to--
(A) Subcontracts entered into on or after the effective date of the
waiver; and
(B) Options for the procurement of items that are exercised after
the effective date of the waiver, if the option prices are adjusted for
any reason other than the application of the waiver.
(2) The head of the contracting activity may waive a restriction on
a case-by-case basis upon execution of a determination and findings
that any of the following applies:
(i) The restriction would cause unreasonable delays.
(ii) Satisfactory quality items manufactured in the United States
or Canada are not available.
(iii) Application of the restriction would result in the existence
of only one source for the item in the United States or Canada.
(iv) Application of the restriction is not in the national security
interests of the United States.
(v) Application of the restriction would adversely affect a U.S.
company.
(3) A restriction is waived when it would cause unreasonable costs.
The cost of an item of U.S. or Canadian origin is unreasonable if it
exceeds 150 percent of the offered price, inclusive of duty, of items
that are not of U.S. or Canadian origin.
(b) In accordance with the provisions of paragraphs (a)(1)(i)
through (iii) of this section, the Under Secretary of Defense
(Acquisition, Technology, and Logistics) has waived the restrictions of
10 U.S.C. 2534(a) for certain items manufactured in the United Kingdom,
including air circuit breakers for naval vessels, totally enclosed
lifeboats, and ball and roller bearings (see 225.7006, 225.7008, and
225.7009). This waiver applies to--
(1) Procurements under solicitations issued on or after August 4,
1998; and
(2) Subcontracts and options under contracts entered into prior to
August 4, 1998, under the conditions described in paragraph (a)(1)(iv)
of this section.
225.7004 Restriction on acquisition of foreign buses.
225.7004-1 Restriction.
In accordance with 10 U.S.C. 2534, do not acquire a multipassenger
motor vehicle (bus) unless it is manufactured in the United States or
Canada.
225.7004-2 Applicability.
Apply this restriction if the buses are purchased, leased, rented,
or made available under contracts for transportation services.
225.7004-3 Exceptions.
This restriction does not apply in any of the following
circumstances:
(a) Buses manufactured outside the United States and Canada are
needed for temporary use because buses manufactured in the United
States or Canada are not available to satisfy requirements that cannot
be postponed. Such use may not, however, exceed the lead time required
for acquisition and delivery of buses manufactured in the United States
or Canada.
(b) The requirement for buses is temporary in nature. For example,
to meet a special, nonrecurring requirement or a sporadic and
infrequent recurring requirement, buses manufactured outside the United
States and Canada may be used for temporary periods of time. Such use
may not, however, exceed the period of time needed to meet the special
requirement.
(c) Buses manufactured outside the United States and Canada are
available at no cost to the U.S. Government.
(d) The acquisition is for an amount at or below the simplified
acquisition threshold.
225.7004-4 Waiver.
The waiver criteria at 225.7003(a) apply to this restriction.
225.7005 Restriction on certain chemical weapons antidote.
225.7005-1 Restriction.
In accordance with 10 U.S.C. 2534 and defense industrial
mobilization requirements (see Subpart 208.72), do not acquire chemical
weapons antidote contained in automatic injectors, or the components
for such injectors, unless the chemical weapons antidote or component
is manufactured in the United States or Canada by a company that--
(a) Is a producer under the industrial preparedness program at the
time of contract award;
(b) Has received all required regulatory approvals; and
(c) Has the plant, equipment, and personnel to perform the contract
in the United States or Canada at the time of contract award.
225.7005-2 Exception.
This restriction does not apply if the acquisition is for an amount
at or below the simplified acquisition threshold.
225.7005-3 Waiver.
The waiver criteria at 225.7003(a) apply to this restriction.
225.7006 Restriction on air circuit breakers for naval vessels.
225.7006-1 Restriction.
In accordance with 10 U.S.C. 2534, do not acquire air circuit
breakers for naval vessels unless they are manufactured in the United
States or Canada.
225.7006-2 Exceptions.
This restriction does not apply if the acquisition is--
(a) For an amount at or below the simplified acquisition threshold;
or
(b) For spare or repair parts needed to support air circuit
breakers manufactured outside the United States. Support includes the
purchase of spare air circuit breakers when those from alternate
sources are not interchangeable.
225.7006-3 Waiver.
(a) The waiver criteria at 225.7003(a) apply to this restriction.
(b) The Under Secretary of Defense (Acquisition, Technology, and
Logistics) has waived the restriction for air circuit breakers
manufactured in the United Kingdom. See 225.7003(b) for applicability.
225.7006-4 Solicitation provision and contract clause.
(a) Use the provision at 252.225-7037, Evaluation of Offers for Air
Circuit Breakers, in solicitations requiring air circuit breakers for
naval vessels unless--
(1) An exception applies; or
(2) A waiver has been granted, other than the waiver for the United
Kingdom, which has been incorporated into the provision.
(b) Use the clause at 252.225-7038, Restriction on Acquisition of
Air Circuit Breakers, in solicitations and contracts requiring air
circuit breakers for naval vessels unless--
[[Page 15629]]
(1) An exception applies; or
(2) A waiver has been granted, other than the waiver for the United
Kingdom, which has been incorporated into the clause.
225.7007 Restrictions on anchor and mooring chain.
225.7007-1 Restrictions.
(a) In accordance with Section 8041 of the Fiscal Year 1991 DoD
Appropriations Act (Public Law 101-511) and similar sections in
subsequent DoD appropriations acts, do not acquire welded shipboard
anchor and mooring chain, four inches or less in diameter, unless--
(1) It is manufactured in the United States, including cutting,
heat treating, quality control, testing, and welding (both forging and
shot blasting process); and
(2) The cost of the components manufactured in the United States
exceeds 50 percent of the total cost of components.
(b) 10 U.S.C. 2534 also restricts acquisition of welded shipboard
anchor and mooring chain, four inches or less in diameter, when used as
a component of a naval vessel. However, the Appropriations Act
restriction described in paragraph (a) of this subsection takes
precedence over the restriction of 10 U.S.C. 2534.
225.7007-2 Waiver.
(a) The Secretary of the department responsible for acquisition may
waive the restriction in 225.7007-1(a), on a case-by-case basis, if--
(1) Sufficient domestic suppliers are not available to meet DoD
requirements on a timely basis; and
(2) The acquisition is necessary to acquire capability for national
security purposes.
(b) Document the waiver in a written determination and findings
containing--
(1) The factors supporting the waiver; and
(2) A certification that the acquisition must be made in order to
acquire capability for national security purposes.
(c) Provide a copy of the determination and findings to the House
and Senate Committees on Appropriations.
225.7007-3 Contract clause.
Unless a waiver has been granted, use the clause at 252.225-7019,
Restriction on Acquisition of Anchor and Mooring Chain, in
solicitations and contracts requiring welded shipboard anchor or
mooring chain four inches or less in diameter.
225.7008 Restrictions on totally enclosed lifeboat survival systems.
225.7008-1 Restrictions.
(a) In accordance with Section 8124 of the Fiscal Year 1994 DoD
Appropriations Act (Pub. L. 103-139) and Section 8093 of the Fiscal
Year 1995 DoD Appropriations Act (Pub. L. 103-335), do not purchase a
totally enclosed lifeboat survival system, which consists of the
lifeboat and associated davits and winches, unless--
(1) 50 percent or more of the components are manufactured in the
United States; and
(2) 50 percent or more of the labor in the final manufacture and
assembly of the entire system is performed in the United States.
(b) In accordance with 10 U.S.C. 2534(a), do not purchase a totally
enclosed lifeboat that is a component of a naval vessel unless it is
manufactured in the United States or Canada.
(1) 10 U.S.C. 2534(h) prohibits the use of a contract clause or
certification to implement this restriction.
(2) Implement this restriction through management and oversight
techniques that achieve the objective of the restriction without
imposing a significant management burden on the Government or the
contractor.
225.7008-2 Exceptions.
The restriction in 225.7008-1(b) does not apply if the acquisition
is--
(a) For an amount at or below the simplified acquisition threshold;
or
(b) For spare or repair parts needed to support totally enclosed
lifeboats manufactured outside the United States.
225.7008-3 Waiver.
(a) The waiver criteria at 225.7003(a) apply to the restriction of
225.7008-1(b).
(b) The Under Secretary of Defense (Acquisition, Technology, and
Logistics) has waived the restriction of 225.7008-1(b) for totally
enclosed lifeboats manufactured in the United Kingdom. See 225.7003(b)
for applicability.
225.7008-4 Contract clause.
Use the clause at 252.225-7039, Restriction on Acquisition of
Totally Enclosed Lifeboat Survival Systems, in solicitations and
contracts that require delivery of totally enclosed lifeboat survival
systems.
225.7009 Restrictions on ball and roller bearings.
225.7009-1 Restrictions.
(a) In accordance with 10 U.S.C. 2534, through fiscal year 2005, do
not acquire ball and roller bearings or bearing components unless they
are manufactured in the United States or Canada.
(b) In accordance with Section 8099 of the Fiscal Year 1996 DoD
Appropriations Act (Pub. L. 104-61) and similar sections in subsequent
DoD appropriations acts, do not acquire ball and roller bearings unless
the bearings and bearing components are manufactured in the United
States or Canada.
225.7009-2 Exceptions.
(a) The restriction in 225.7009-1(a) does not apply to--
(1) Acquisitions using simplified acquisition procedures, unless
ball or roller bearings or bearing components are the end items being
purchased;
(2) Commercial items incorporating ball or roller bearings;
(3) Miniature and instrument ball bearings needed to meet urgent
military requirements;
(4) Items acquired overseas for use overseas; or
(5) Ball and roller bearings or bearing components, or items
containing bearings, for use in a cooperative or co-production project
under an international agreement. This exception does not apply to
miniature and instrument ball bearings.
(b) The restriction in 225.7009-1(b) does not apply to contracts or
subcontracts for the acquisition of commercial items, except for
commercial ball and roller bearings acquired as end items.
225.7009-3 Waiver.
(a)(1) The waiver criteria at 225.7003(a)(1) apply to the
restriction of 225.7009-1(a).
(2) The Under Secretary of Defense (Acquisition, Technology, and
Logistics) has waived the restriction of 225.7009-1(a) for ball and
roller bearings manufactured in the United Kingdom. See 225.7003(b) for
applicability.
(b) The head of the contracting activity may waive the restriction
in 225.7009-1(a)--
(1) Upon execution of a determination and findings that--
(i) No domestic (U.S. or Canadian) bearing manufacturer meets the
requirement;
(ii) It is not in the best interests of the United States to
qualify a domestic bearing to replace a qualified nondomestic bearing.
(A) This determination shall be based on a finding that the
qualification of a domestically manufactured bearing would cause
unreasonable costs or delay.
(B) A finding that a cost is unreasonable should take into
[[Page 15630]]
consideration DoD policy to assist the domestic industrial mobilization
base.
(C) Contracts should be awarded to domestic bearing manufacturers
to increase their capability to reinvest and become more competitive;
(iii) Application of the restriction would result in the existence
of only one source for the item in the United States or Canada;
(iv) Application of the restriction is not in the national security
interests of the United States; or
(v) Application of the restriction would adversely affect a U.S.
company.
(2) If the acquisition is for an amount less than the simplified
acquisition threshold and simplified acquisition procedures are being
used.
(3) For multiyear contracts or contracts exceeding 12 months,
except those for miniature and instrument ball bearings, if--
(i) The head of the contracting activity executes a determination
and findings in accordance with paragraph (b)(1) of this subsection;
(ii) The contractor submits a written plan for transitioning from
the use of nondomestic to domestically manufactured bearings;
(iii) The contractor's written plan--
(A) States whether a domestically manufactured bearing can be
qualified, at a reasonable cost, for use during the course of the
contract period;
(B) Identifies any bearings that are not domestically manufactured,
their application, and source of supply; and
(C) Describes, including cost and timetable, the transition to a
domestically manufactured bearing (the timetable for the transition
should normally take no longer than 24 months from the date the waiver
is granted); and
(iv) The contracting officer accepts the contractor's plan and
incorporates it into the contract.
(4) For miniature and instrument ball bearings, only if the
contractor agrees to acquire a like quantity and type of domestic
manufacture for nongovernmental use.
(c) The Secretary of the department responsible for acquisition may
waive the restriction in 225.7009-1(b), on a case-by-case basis, by
certifying to the House and Senate Committees on Appropriations that--
(1) Adequate domestic supplies are not available to meet DoD
requirements on a timely basis; and
(2) The acquisition must be made in order to acquire capability for
national security purposes.
225.7009-4 Contract clause.
(a) Use the clause at 252.225-7016, Restriction on Acquisition of
Ball and Roller Bearings, in solicitations and contracts, unless--
(1) The items being acquired do not contain ball and roller
bearings; or
(2) An exception applies or a waiver has been granted, other than
the waiver for the United Kingdom, which has been incorporated into the
clause.
(b) Use the clause with its Alternate I in solicitations and
contracts that use simplified acquisition procedures.
225.7010 Restriction on vessel propellers.
225.7010-1 Restriction.
In accordance with Section 8064 of the Fiscal Year 2001 DoD
Appropriations Act (Public Law 106-259), do not use fiscal year 2000 or
2001 funds to acquire vessel propellers other than those produced by a
domestic source and of domestic origin, i.e., vessel propellers--
(a) Manufactured in the United States or Canada; and
(b) For which all component castings were poured and finished in
the United States or Canada.
225.7010-2 Exceptions.
This restriction does not apply to contracts or subcontracts for
acquisition of commercial items.
225.7010-3 Waiver.
The Secretary of the department responsible for acquisition may
waive this restriction on a case-by-case basis, by certifying to the
House and Senate Committees on Appropriations that--
(a) Adequate domestic supplies are not available to meet DoD
requirements on a timely basis; and
(b) The acquisition must be made in order to acquire capability for
national security purposes.
225.7010-4 Contract clause.
Use the clause at 252.225-7023, Restriction on Acquisition of
Vessel Propellers, in solicitations and contracts that use fiscal year
2000 or 2001 funds for the acquisition of vessels or vessel propellers,
unless--
(a) An exception applies or a waiver has been granted; or
(b) The vessels being acquired do not contain vessel propellers.
225.7011 Restriction on carbon, alloy, and armor steel plate.
225.7011-1 Restriction.
In accordance with Section 8111 of the Fiscal Year 1992 DoD
Appropriations Act (Public Law 102-172) and similar sections in
subsequent DoD appropriations acts, do not acquire any of the following
types of carbon, alloy, or armor steel plate unless it is melted and
rolled in the United States or Canada:
(a) Carbon, alloy, or armor steel plate in Federal Supply Class
9515.
(b) Carbon, alloy, or armor steel plate described by specifications
of the American Society for Testing Materials or the American Iron and
Steel Institute.
225.7011-2 Waiver.
The Secretary of the department responsible for acquisition may
waive this restriction, on a case-by-case basis, by certifying to the
House and Senate Committees on Appropriations that--
(a) Adequate U.S. or Canadian supplies are not available to meet
DoD requirements on a timely basis; and
(b) The acquisition must be made in order to acquire capability for
national security purposes.
225.7011-3 Contract clause.
Unless a waiver has been granted, use the clause at 252.225-7030,
Restriction on Acquisition of Carbon, Alloy, and Armor Steel Plate, in
solicitations and contracts that'
(a) Require the delivery to the Government of carbon, alloy, or
armor steel plate that will be used in a facility owned by the
Government or under the control of DoD; or
(b) Require contractors operating in a Government-owned facility or
a facility under the control of DoD to purchase carbon, alloy, or armor
steel plate.
225.7012 Restriction on supercomputers.
225.7012-1 Restriction.
In accordance with Section 8112 of Public Law 100-202, and similar
sections in subsequent DoD appropriations acts, do not purchase a
supercomputer unless it is manufactured in the United States.
225.7012-2 Waiver.
The Secretary of Defense may waive this restriction, on a case-by-
case basis, after certifying to the Armed Services and Appropriations
Committees of Congress that--
(a) Adequate U.S. supplies are not available to meet requirements
on a timely basis; and
(b) The acquisition must be made in order to acquire capability for
national security purposes.
225.7012-3 Contract clause.
Unless a waiver has been granted, use the clause at 252.225-7011,
Restriction on Acquisition of Supercomputers, in solicitations and
contracts for the acquisition of supercomputers.
225.7013 Restrictions on construction or repair of vessels in foreign
shipyards.
In accordance with 10 U.S.C. 7309--
[[Page 15631]]
(a) Do not award a contract to construct in a foreign shipyard--
(1) A vessel for any of the armed forces; or
(2) A major component of the hull or superstructure of a vessel for
any of the armed forces; and
(b) Do not overhaul, repair, or maintain in a foreign shipyard, a
naval vessel (or any other vessel under the jurisdiction of the
Secretary of the Navy) homeported in the United States. This
restriction does not apply to voyage repairs.
225.7014 Restriction on overseas military construction.
For restriction on award of military construction contracts to be
performed in the United States territories and possessions in the
Pacific and on Kwajalein Atoll, or in countries bordering the Arabian
Gulf, see 236.274(a).
225.7015 Restriction on overseas architect-engineer services.
For restriction on award of architect-engineer contracts to be
performed in Japan, in any North Atlantic Treaty Organization member
country, or in countries bordering the Arabian Gulf, see 236.602-70.
225.7016 Restriction on research and development.
(a) In accordance with Public Law 92-570, do not use DoD
appropriations to make an award to any foreign corporation,
organization, person, or entity, for research and development in
connection with any weapon system or other military equipment, if there
is a U.S. corporation, organization, person, or entity--
(1) Equally competent; and
(2) Willing to perform at a lower cost.
(b) This restriction does not affect the requirements of FAR Part
35 for selection of research and development contractors. However, when
a U.S. source and a foreign source are equally competent, award to the
source that will provide the services at the lower cost.
225.7017 Restriction on Ballistic Missile Defense research,
development, test, and evaluation.
225.7017-1 Definitions.
Competent, foreign firm, and U.S. firm are defined in the provision
at 252.225-7018, Notice of Prohibition of Certain Contracts with
Foreign Entities for the Conduct of Ballistic Missile Defense Research,
Development, Test, and Evaluation.
225.7017-2 Restriction.
In accordance with Section 222 of the DoD Authorization Act for
Fiscal Years 1988 and 1989 (Pub. L. 100-180), do not use any funds
appropriated to or for the use of DoD to enter into or carry out a
contract with a foreign government or firm, including any contract
awarded as a result of a broad agency announcement, if the contract
provides for the conduct of research, development, test, and evaluation
(RDT&E) in connection with the Ballistic Missile Defense Program.
225.7017-3 Exceptions.
This restriction does not apply--
(a) To contracts awarded to a foreign government or firm if the
contracting officer determines that--
(1) The contract will be performed within the United States;
(2) The contract is exclusively for RDT&E in connection with
antitactical ballistic missile systems; or
(3) The foreign government or firm agrees to share a substantial
portion of the total contract cost. Consider the foreign share as
substantial if it is equitable with respect to the relative benefits
that the United States and the foreign parties will derive from the
contract. For example, if the contract is more beneficial to the
foreign party, its share of the cost should be correspondingly higher;
or
(b) If the head of the contracting activity certifies in writing,
before contract award, that a U.S. firm cannot competently perform a
contract for RDT&E at a price equal to or less than the price at which
a foreign government or firm would perform the RDT&E. The contracting
officer or source selection authority, as applicable, shall make a
determination that will be the basis for the certification.
(1) The determination shall--
(i) Describe the contract effort;
(ii) State the number of proposals solicited and received from both
U.S. and foreign firms;
(iii) Identify the proposed awardee and the amount of the contract;
(iv) State that selection of the contractor was based on the
evaluation factors contained in the solicitation, or the criteria
contained in the broad agency announcement; and
(v) State that a U.S. firm cannot competently perform the effort at
a price equal to, or less than, the price at which the foreign awardee
would perform it.
(2) When either a broad agency announcement or program research and
development announcement is used, or when the determination is
otherwise not based on direct competition between foreign and domestic
proposals, the determination shall not be merely conclusory.
(i) The determination shall specifically explain its basis, include
a description of the method used to determine the competency of U.S.
firms, and describe the cost or price analysis performed.
(ii) Alternately, the determination may contain--
(A) A finding, including the basis for such finding, that the
proposal was submitted solely in response to the terms of a broad
agency announcement, program research and development announcement, or
other solicitation document without any technical guidance from the
program office; and
(B) A finding, including the basis for such finding, that
disclosure of the information in the proposal for the purpose of
conducting a competitive acquisition is prohibited.
(3) Within 30 days after contract award, forward a copy of the
certification and supporting documentation to the Missile Defense
Agency, Attn: MDA/DRI, 7100 Defense Pentagon, Washington, DC 20301-
7100.
225.7017-4 Solicitation provision.
Unless foreign participation is otherwise excluded, use the
provision at 252.225-7018, Notice of Prohibition of Certain Contracts
With Foreign Entities for the Conduct of Ballistic Missile Defense
Research, Development, Test, and Evaluation, in competitively
negotiated solicitations for RDT&E in connection with the Ballistic
Missile Defense Program.
0
22. Sections 225.7100 through 225.7103-3 are revised to read as
follows:
225.7100 Scope of subpart.
This subpart contains foreign product restrictions that are based
on policies designed to protect the defense industrial base.
225.7101 Definitions.
Domestic manufacture is defined in the clause at 252.225-7025,
Restriction on Acquisition of Forgings.
225.7102 Forgings.
225.7102-1 Policy.
When acquiring the following forging items, whether as end items or
components, acquire items that are of domestic manufacture to the
maximum extent practicable:
------------------------------------------------------------------------
Items Categories
------------------------------------------------------------------------
Ship propulsion shafts.................... Excludes service and landing
craft shafts.
Periscope tubes........................... All.
Ring forgings for bull gears.............. All greater than 120 inches
in diameter.
------------------------------------------------------------------------
[[Page 15632]]
225.7102-2 Exceptions.
The policy in 225.7102-1 does not apply to acquisitions--
(a) Using simplified acquisition procedures, unless the restricted
item is the end item being purchased;
(b) Overseas for overseas use; or
(c) When the quantity acquired exceeds the amount needed to
maintain the U.S. defense mobilization base (provided the excess
quantity is an economical purchase quantity). The requirement for
domestic manufacture does not apply to the quantity above that required
to maintain the base, in which case, qualifying country sources may
compete.
225.7102-3 Waiver.
Upon request from a contractor, the contracting officer may waive
the requirement for domestic manufacture of the items listed in
225.7102-1.
225.7102-4 Contract clause.
Use the clause at 252.225-7025, Restriction on Acquisition of
Forgings, in solicitations and contracts, unless--
(a) The supplies being acquired do not contain any of the items
listed in 225.7102-1; or
(b) An exception in 225.7102-2 applies. If an exception applies to
only a portion of the acquisition, specify the excepted portion in the
solicitation and contract.
225.7103 Polyacrylonitrile (PAN) carbon fiber.
225.7103-1 Policy.
DoD has imposed restrictions on the acquisition of PAN carbon fiber
from foreign sources. DoD is phasing out the restrictions over the 5-
year period ending May 31, 2005. Contractors with contracts that
contain the clause at 252.225-7022 shall use U.S. or Canadian
manufacturers or producers for all PAN carbon fiber requirements.
225.7103-2 Waivers.
With the approval of the chief of the contracting office, the
contracting officer may waive, in whole or in part, the requirement of
the clause at 252.225-7022. For example, a waiver may be justified if a
qualified U.S. or Canadian source cannot meet scheduling requirements.
225.7103-3 Contract clause.
Use the clause at 252.225-7022, Restriction on Acquisition of
Polyacrylonitrile (PAN) Carbon Fiber, in solicitations and contracts
for major systems as follows:
(a) In solicitations and contracts issued on or before May 31,
2003, if--
(1) The system is not yet in production (milestone C as defined in
DoDI 5000.2, Operation of the Defense Acquisition System); or
(2) The clause was used in prior program contracts.
(b) In solicitations and contracts issued during the period
beginning June 1, 2003, and ending May 31, 2005, if the system is not
yet in development and demonstration (milestone B as defined in DoDI
5000.2).
0
23. Section 225.7200 is revised to read as follows:
225.7200 Scope of subpart.
This subpart--
(a) Prescribes procedures for contractor reporting and DoD
monitoring of the volume, type, and nature of contract performance
outside the United States; and
(b) Implements 10 U.S.C. 2410g, which requires offerors and
contractors to notify DoD of any intention to perform a DoD contract
outside the United States and Canada when the contract could be
performed inside the United States or Canada.
0
24. Sections 225.7202 and 225.7203 are revised to read as follows:
225.7202 Distribution of reports.
Forward a copy of reports submitted in accordance with the clause
at 252.225-7004, Reporting of Contract Performance Outside the United
States, to the Deputy Director of Defense Procurement and Acquisition
Policy (Program Acquisition and International Contracting),
OUSD(AT&L)DPAP(PAIC), Washington, DC 20301-3060. This is necessary to
satisfy the requirement of 10 U.S.C. 2410g that the notifications (or
copies) be maintained in compiled form for 5 years after the date of
submission.
225.7203 Solicitation provision and contract clause.
Except for acquisitions described in 225.7201--
(a) Use the provision at 252.225-7003, Report of Intended
Performance Outside the United States, in solicitations with a value
exceeding $500,000; and
(b) Use the clause at 252.225-7004, Reporting of Contract
Performance Outside the United States, in solicitations and contracts
with a value exceeding $500,000.
0
25. Section 225.7301 is amended by revising paragraphs (b) through (d)
to read as follows:
225.7301 General.
* * * * *
(b) Conduct FMS acquisitions under the same acquisition and
contract management procedures used for other defense acquisitions.
(c) Separately identify known FMS requirements and the FMS customer
in solicitations.
(d) Clearly identify contracts for known FMS requirements by
marking ``FMS requirement'' on the face of the contract along with the
FMS customer and the case identifier code.
0
26. Section 225.7302 is amended as follows:
a. By revising the introductory text;
0
b. In paragraph (a)(1) by removing the period and adding a semicolon in
its place; and
0
c. By revising paragraph (a)(4). The revised text reads as follows:
225.7302 Procedures.
For FMS programs that will require an acquisition, the contracting
officer will assist the departmental/agency activity responsible for
preparing the LOA by--
(a) * * *
(4) For noncompetitive acquisitions over $10,000, ask the
prospective contractor for information on price, delivery, and other
relevant factors. The request for information shall identify the fact
that the information is for a potential foreign military sale and shall
identify the foreign customer; and
* * * * *
225.7303 [Amended]
0
27. Section 225.7303 is amended as follows:
0
a. In paragraph (a), in the first sentence, by removing the phrase ``as
are'';
0
b. In paragraph (a), in the second sentence, by removing
``Application'' and adding in its place ``However, application''; and
0
c. In paragraph (b), in the first sentence, by removing ``must'' and
adding in its place ``shall''.
0
28. Section 225.7303-2 is amended as follows:
0
a. In paragraph (a) introductory text, by revising the last sentence;
0
b. By revising paragraph (a)(1);
0
c. In paragraph (a)(2)(ii), by adding ``or'' before ``operations/
tactics'';
0
d. By revising paragraph (c) introductory text; and
0
e. In paragraph (c)(1) by removing the period and adding in its place
``; and''. The revised text reads as follows:
225.7303-2 Cost of doing business with a foreign government or an
international organization.
(a) * * * Examples of such costs include, but are not limited to,
the following:
(1) Selling expenses (not otherwise limited by FAR Part 31), such
as--
(i) Maintaining international sales and service organizations;
(ii) Sales commissions and fees in accordance with FAR Subpart 3.4;
[[Page 15633]]
(iii) Sales promotions, demonstrations, and related travel for
sales to foreign governments. Section 126.8 of the International
Traffic in Arms Regulations (22 CFR 126.8) may require Government
approval for these costs to be allowable, in which case the appropriate
Government approval shall be obtained; and
(iv) Configuration studies and related technical services
undertaken as a direct selling effort to a foreign country.
* * * * *
(c) The limitations for major contractors on independent research
and development and bid and proposal (IR&D/B&P) costs for projects that
are of potential interest to DoD, in 231.205-18(c)(iii), do not apply
to FMS contracts, except as provided in 225.7303-5. The allowability of
IR&D/B&P costs on contracts for FMS not wholly paid for from funds made
available on a nonrepayable basis is limited to the contract's
allocable share of the contractor's total IR&D/B&P expenditures. In
pricing contracts for such FMS--
* * * * *
0
29. Section 225.7303-4 is revised to read as follows:
225.7303-4 Contingent fees.
(a) Except as provided in paragraph (b) of this subsection,
contingent fees are generally allowable under DoD contracts, provided--
(1) The fees are paid to a bona fide employee or a bona fide
established commercial or selling agency maintained by the prospective
contractor for the purpose of securing business (see FAR Part 31 and
FAR Subpart 3.4); and
(2) The contracting officer determines that the fees are fair and
reasonable.
(b)(1) Under DoD 5105.38-M, LOAs for requirements for the
governments of Australia, Taiwan, Egypt, Greece, Israel, Japan, Jordan,
Republic of Korea, Kuwait, Pakistan, Philippines, Saudi Arabia, Turkey,
Thailand, or Venezuela (Air Force) shall provide that all U.S.
Government contracts resulting from the LOAs prohibit the reimbursement
of contingent fees as an allowable cost under the contract, unless the
contractor identifies the payments and the foreign customer approves
the payments in writing before contract award (see 225.7308(a)).
(2) For FMS to countries not listed in paragraph (b)(1) of this
subsection, contingent fees exceeding $50,000 per FMS case are
unallowable under DoD contracts, unless the contractor identifies the
payment and the foreign customer approves the payment in writing before
contract award.
0
30. Section 225.7303-5 is amended by revising paragraphs (a) and (b) to
read as follows:
225.7303-5 Acquisitions wholly paid for from nonrepayable funds.
(a) In accordance with 22 U.S.C. 2762(d), price FMS wholly paid for
from funds made available on a nonrepayable basis on the same costing
basis with regard to profit, overhead, IR&D/B&P, and other costing
elements as is applicable to acquisitions of like items purchased by
DoD for its own use.
(b) Direct costs associated with meeting a foreign customer's
additional or unique requirements are allowable under such contracts.
Indirect burden rates applicable to such direct costs are permitted at
the same rates applicable to acquisitions of like items purchased by
DoD for its own use.
* * * * *
0
31. Section 225.7305 is amended by revising the first sentence to read
as follows:
225.7305 Limitation of liability.
Advise the contractor when the foreign customer will assume the
risk for loss or damage under the appropriate limitation of liability
clause(s) (see FAR Subpart 46.8). * * *
0
32. Section 225.7308 is revised to read as follows:
225.7308 Contract clauses.
(a) Use the clause at 252.225-7027, Restriction on Contingent Fees
for Foreign Military Sales, in solicitations and contracts for FMS.
Insert in paragraph (b)(1) of the clause the name(s) of any foreign
country customer(s) listed in 225.7303-4(b).
(b) Use the clause at 252.225-7028, Exclusionary Policies and
Practices of Foreign Governments, in solicitations and contracts for
the purchase of supplies and services for international military
education training and FMS.
0
33. Section 225.7401 is amended by revising paragraph (d) to read as
follows:
225.7401 General.
* * * * *
(d) For Air Force contracts: HQ AFSFC/SFPA; telephone, DSN 945-
7035/36 or commercial (210) 925-7035/36.
* * * * *
PART 242--CONTRACT ADMINISTRATION
242.302 [Amended]
0
34. Section 242.302 is amended by removing paragraph (a)(19).
PART 252--SOLICITATION PROVISIONS AND CONTRACT CLAUSES
0
35. Section 252.212-7001 is amended as follows:
0
a. By revising the clause date and paragraph (b); and
0
b. In paragraph (c), in entry ``252.225-7014'', by removing ``(MAR
1998)'' and adding in its place ``(APR 2003)''. The revised text reads
as follows:
252.212-7001 Contract Terms and Conditions Required to Implement
Statutes or Executive Orders Applicable to Defense Acquisitions of
Commercial Items.
* * * * *
Contract Terms and Conditions Required To Implement Statutes or
Executive Orders Applicable to Defense Acquisitions of Commercial Items
(Apr 2003)
* * * * *
(b) The Contractor agrees to comply with any clause that is
checked on the following list of Defense FAR Supplement clauses
which, if checked, is included in this contract by reference to
implement provisions of law or Executive orders applicable to
acquisitions of commercial items or components.
---- 252.205-7000 Provision of Information to Cooperative Agreement
Holders (DEC 1991) (10 U.S.C. 2416).
---- 252.219-7003 Small, Small Disadvantaged and Women-Owned Small
Business Subcontracting Plan (DoD Contracts) (APR 1996) (15 U.S.C.
637).
---- 252.219-7004 Small, Small Disadvantaged and Women-Owned Small
Business Subcontracting Plan (Test Program) (JUN 1997) (15 U.S.C.
637 note).
---- 252.225-7001 Buy American Act and Balance of Payments Program
(APR 2003) (41 U.S.C. 10a-10d, E.O. 10582).
---- 252.225-7012 Preference for Certain Domestic Commodities (FEB
2003) (10 U.S.C. 2533a).
---- 252.225-7014 Preference for Domestic Specialty Metals (APR
2003) (10 U.S.C. 2533a).
---- 252.225-7015 Restriction on Acquisition of Hand or Measuring
Tools (APR 2003) (10 U.S.C. 2533a).
---- 252.225-7016 Restriction on Acquisition of Ball and Roller
Bearings (APR 2003) (---- Alternate I) (APR 2003) (10 U.S.C. 2534
and Section 8099 of Public Law 104-61 and similar sections in
subsequent DoD appropriations acts).
---- 252.225-7021 Trade Agreements (APR 2003) (19 U.S.C. 2501-2518
and 19 U.S.C. 3301 note).
---- 252.225-7027 Restriction on Contingent Fees for Foreign
Military Sales (APR 2003) (22 U.S.C. 2779).
---- 252.225-7028 Exclusionary Policies and Practices of Foreign
Governments (APR 2003) (22 U.S.C. 2755).
---- 252.225-7036 Buy American Act--North American Free Trade
Agreement Implementation Act--Balance of Payments Program (APR 2003)
(---- Alternate I) (APR 2003) (41 U.S.C. 10a-10d and 19 U.S.C. 3301
note).
[[Page 15634]]
---- 252.225-7038 Restriction on Acquisition of Air Circuit Breakers
(APR 2003) (10 U.S.C. 2534(a)(3)).
---- 252.227-7015 Technical Data--Commercial Items (NOV 1995) (10
U.S.C. 2320).
---- 252.227-7037 Validation of Restrictive Markings on Technical
Data (SEP 1999) (10 U.S.C. 2321).
---- 252.232-7003 Electronic Submission of Payment Requests (MAR
2003) (10 U.S.C. 2227).
---- 252.243-7002 Requests for Equitable Adjustment (MAR 1998) (10
U.S.C. 2410).
---- 252.247-7023 Transportation of Supplies by Sea (MAY 2002) (----
Alternate I) (MAR 2000) (----Alternate II) (MAR 2000) (10 U.S.C.
2631).
---- 252.247-7024 Notification of Transportation of Supplies by Sea
(MAR 2000) (10 U.S.C. 2631).
* * * * *
0
36. Sections 252.225-7000 through 252.225-7003 are revised to read as
follows:
252.225-7000 Buy American Act--Balance of Payments Program
Certificate.
As prescribed in 225.1101(1), use the following provision:
Buy American Act--Balance of Payments Program Certificate (Apr 2003)
(a) Definitions. Domestic end product, foreign end product,
qualifying country, and qualifying country end product have the
meanings given in the Buy American Act and Balance of Payments
Program clause of this solicitation.
(b) Evaluation. The Government--
(1) Will evaluate offers in accordance with the policies and
procedures of Part 225 of the Defense Federal Acquisition Regulation
Supplement; and
(2) Will evaluate offers of qualifying country end products
without regard to the restrictions of the Buy American Act or the
Balance of Payments Program.
(c) Certifications and identification of country of origin.
(1) For all line items subject to the Buy American Act and
Balance of Payments Program clause of this solicitation, the offeror
certifies that--
(i) Each end product, except those listed in paragraph (c)(2) or
(3) of this provision, is a domestic end product; and
(ii) Components of unknown origin are considered to have been
mined, produced, or manufactured outside the United States or a
qualifying country.
(2) The offeror certifies that the following end products are
qualifying country end products:
-----------------------------------------------------------------------
(Line Item Number Country of Origin)
-----------------------------------------------------------------------
(Country of Origin)
(3) The following end products are other foreign end products:
-----------------------------------------------------------------------
(Line Item Number)
-----------------------------------------------------------------------
(Country of Origin) (If known)
(End of provision)
252.225-7001 Buy American Act and Balance of Payments Program.
As prescribed in 225.1101(2), use the following clause:
Buy American Act and Balance of Payments Program (Apr 2003)
(a) Definitions. As used in this clause--
(1) Component means an article, material, or supply incorporated
directly into an end product.
(2) Domestic end product means--
(i) An unmanufactured end product that has been mined or
produced in the United States; or
(ii) An end product manufactured in the United States if the
cost of its qualifying country components and its components that
are mined, produced, or manufactured in the United States exceeds 50
percent of the cost of all its components. The cost of components
includes transportation costs to the place of incorporation into the
end product and U.S. duty (whether or not a duty-free entry
certificate is issued). Scrap generated, collected, and prepared for
processing in the United States is considered domestic. A component
is considered to have been mined, produced, or manufactured in the
United States (regardless of its source in fact) if the end product
in which it is incorporated is manufactured in the United States and
the component is of a class or kind for which the Government has
determined that--
(A) Sufficient and reasonably available commercial quantities of
a satisfactory quality are not mined, produced, or manufactured in
the United States; or
(B) It is inconsistent with the public interest to apply the
restrictions of the Buy American Act.
(3) End product means those articles, materials, and supplies to
be acquired under this contract for public use.
(4) Foreign end product means an end product other than a
domestic end product.
(5) Qualifying country means any country set forth in subsection
225.872-1 of the Defense Federal Acquisition Regulation Supplement.
(6) Qualifying country component means a component mined,
produced, or manufactured in a qualifying country.
(7) Qualifying country end product means--
(i) An unmanufactured end product mined or produced in a
qualifying country; or
(ii) An end product manufactured in a qualifying country if the
cost of the following types of components exceeds 50 percent of the
cost of all its components:
(A) Components mined, produced, or manufactured in a qualifying
country.
(B) Components mined, produced, or manufactured in the United
States.
(C) Components of foreign origin of a class or kind for which
the Government has determined that sufficient and reasonably
available commercial quantities of a satisfactory quality are not
mined, produced, or manufactured in the United States.
(b) This clause implements the Buy American Act (41 U.S.C.
Section 10a-d). Unless otherwise specified, this clause applies to
all line items in the contract.
(c) The Contractor shall deliver only domestic end products
unless, in its offer, it specified delivery of other end products in
the Buy American Act--Balance of Payments Program Certificate
provision of the solicitation. If the Contractor certified in its
offer that it will deliver a qualifying country end product, the
Contractor shall deliver a qualifying country end product or, at the
Contractor's option, a domestic end product.
(d) The contract price does not include duty for end products or
components for which the Contractor will claim duty-free entry.
(End of clause)
252.225-7002 Qualifying Country Sources as Subcontractors.
As prescribed in 225.1101(3), use the following clause:
Qualifying Country Sources as Subcontractors (Apr 2003)
(a) Definition. Qualifying country, as used in this clause,
means any country set forth in subsection 225.872-1 of the Defense
Federal Acquisition Regulation (FAR) Supplement.
(b) Subject to the restrictions in section 225.872 of the
Defense FAR Supplement, the Contractor shall not preclude qualifying
country sources or U.S. sources from competing for subcontracts
under this contract.
(End of clause)
252.225-7003 Report of Intended Performance Outside the United States.
As prescribed in 225.7203(a), use the following provision:
Report of Intended Performance Outside the United States (Apr 2003)
(a) The offeror shall submit a Report of Contract Performance
Outside the United States, with its offer, if--
(1) The offer exceeds $10 million in value; and
(2) The offeror is aware that the offeror or a first-tier
subcontractor intends to perform any part of the contract outside
the United States and Canada that--
(i) Exceeds $500,000 in value; and
(ii) Could be performed inside the United States or Canada.
(b) Information to be reported includes that for--
(1) Subcontracts;
(2) Purchases; and
(3) Intracompany transfers when transfers originate in a foreign
location.
(c) The offeror shall submit the report using--
(1) DD Form 2139, Report of Contract Performance Outside the
United States; or
(2) A computer-generated report that contains all information
required by DD Form 2139.
(d) The offeror may obtain a copy of DD Form 2139 from the
Contracting Officer.
(End of provision)
0
37. Section 252.225-7004 is added to read as follows:
[[Page 15635]]
252.225-7004 Reporting of Contract Performance Outside the United
States.
As prescribed in 225.7203(b), use the following clause:
Reporting of Contract Performance Outside the United States (Apr 2003)
(a) Reporting criteria. Reporting under this clause is required
for--
(1) Contracts exceeding $10 million in value, when any part that
exceeds $500,000 in value could be performed inside the United
States or Canada, but will be performed outside the United States
and Canada. If the Contractor submitted the information with its
offer, the Contractor need not resubmit the information unless it
changes; and
(2) Contracts exceeding $500,000 in value, when any part that
exceeds the simplified acquisition threshold in Part 2 of the
Federal Acquisition Regulation will be performed outside the United
States, unless--
(i) A foreign place of performance is the principal place of
performance; and
(ii) The Contractor indicated the foreign place of performance
in the Place of Performance provision of its offer.
(b) Information required. Information to be reported includes
that for--
(1) Subcontracts;
(2) Purchases; and
(3) Intracompany transfers when transfers originate in a foreign
location.
(c) Submission of reports. The Contractor--
(1) Shall submit reports required by paragraph (a)(1) of this
clause to the Contracting Officer as soon as the information is
known, with a copy to the addressee in paragraph (c)(2) of this
clause. To the maximum extent practicable, the Contractor shall
report information regarding a first-tier subcontractor at least 30
days before award of the subcontract;
(2) Shall submit reports required by paragraph (a)(2) of this
clause within 10 days after the end of each Government quarter to:
Deputy Director of Defense Procurement and Acquisition Policy
(Program Acquisition and International Contracting),
OUSD(AT&L)DPAP(PAIC), Washington, DC 20301-3060;
(3) Shall submit reports using--
(i) DD Form 2139, Report of Contract Performance Outside the
United States; or
(ii) A computer-generated report that contains all information
required by DD Form 2139; and
(4) May obtain copies of DD Form 2139 from the Contracting
Officer.
(d) Flowdown requirements.
(1) The Contractor shall include the substance of this clause in
all first-tier subcontracts exceeding $500,000, except those for
commercial items, construction, ores, natural gases, utilities,
petroleum products and crudes, timber (logs), or subsistence.
(2) The Contractor shall provide the number of this contract to
its subcontractors for reporting purposes.
(End of clause)
252.225-7008 through 252.225-7010 [Removed and Reserved]
0
38. Sections 252.225-7008 through 252.225-7010 are removed and
reserved.
0
39. Section 252.225-7011 is revised to read as follows:
252.225-7011 Restriction on Acquisition of Supercomputers.
As prescribed in 225.7012-3, use the following clause:
Restriction on Acquisition of Supercomputers (Apr 2003)
Supercomputers delivered under this contract shall be
manufactured in the United States.
(End of clause)
0
40. Section 252.225-7013 is added to read as follows:
252.225-7013 Duty-Free Entry.
As prescribed in 225.1101(4), use the following clause:
Duty-Free Entry (Apr 2003)
(a) Definitions. As used in this clause--
(1) Customs territory of the United States means the States, the
District of Columbia, and Puerto Rico.
(2) Eligible product means--
(i) Designated country end product or Caribbean Basin country
end product as defined in the Trade Agreements clause of this
contract;
(ii) NAFTA country end product as defined in the Trade
Agreements clause or the Buy American Act--North American Free Trade
Agreement Implementation Act--Balance of Payments Program clause of
this contract; or
(iii) Canadian end product as defined in Alternate I of the Buy
American Act--North American Free Trade Agreement Implementation
Act--Balance of Payments Program clause of this contract.
(3) Qualifying country and qualifying country end product have
the meanings given in the Trade Agreements clause, the Buy American
Act and Balance of Payments Program clause, or the Buy American
Act--North American Free Trade Agreement Implementation Act--Balance
of Payments Program clause of this contract.
(b) Except as provided in paragraph (i) of this clause, or
unless supplies were imported into the United States before the date
of this contract or the applicable subcontract, the price of this
contract shall not include any amount for duty on--
(1) End items that are eligible products or qualifying country
end products;
(2) Components (including, without limitation, raw materials and
intermediate assemblies) produced or made in qualifying countries,
that are to be incorporated in U.S.-made end products to be
delivered under this contract; or
(3) Other supplies for which the Contractor estimates that duty
will exceed $200 per shipment into the customs territory of the
United States.
(c) The Contractor shall--
(1) Claim duty-free entry only for supplies that the Contractor
intends to deliver to the Government under this contract, either as
end items or components of end items; and
(2) Pay duty on supplies, or any portion thereof, that are
diverted to nongovernmental use, other than--
(i) Scrap or salvage; or
(ii) Competitive sale made, directed, or authorized by the
Contracting Officer.
(d) Except as the Contractor may otherwise agree, the Government
will execute duty-free entry certificates and will afford such
assistance as appropriate to obtain the duty-free entry of
supplies--
(1) For which no duty is included in the contract price in
accordance with paragraph (b) of this clause; and
(2) For which shipping documents bear the notation specified in
paragraph (e) of this clause.
(e) For foreign supplies for which the Government will issue
duty-free entry certificates in accordance with this clause,
shipping documents submitted to Customs shall--
(1) Consign the shipments to the appropriate--
(i) Military department in care of the Contractor, including the
Contractor's delivery address; or
(ii) Military installation; and
(2) Include the following information:
(i) Prime contract number and, if applicable, delivery order
number.
(ii) Number of the subcontract for foreign supplies, if
applicable.
(iii) Identification of the carrier.
(iv) (A) For direct shipments to a U.S. military installation,
the notation: ``UNITED STATES GOVERNMENT, DEPARTMENT OF DEFENSE
Duty-Free Entry to be claimed pursuant to Section XXII, Chapter 98,
Subchapter VIII, Item 9808.00.30 of the Harmonized Tariff Schedule
of the United States. Upon arrival of shipment at the appropriate
port of entry, District Director of Customs, please release shipment
under 19 CFR part 142 and notify Commander, Defense Contract
Management Agency (DCMA) New York, ATTN: Customs Team, DCMAE-GNTF,
207 New York Avenue, Staten Island, New York, 10305-5013, for
execution of Customs Form 7501, 7501A, or 7506 and any required
duty-free entry certificates.''
(B) If the shipment will be consigned to other than a military
installation, e.g., a domestic contractor's plant, the shipping
document notation shall be altered to include the name and address
of the contractor, agent, or broker who will notify Commander, DCMA
New York, for execution of the duty-free entry certificate. (If the
shipment will be consigned to a contractor's plant and no duty-free
entry certificate is required due to NAFTA or another trade
agreement, the Contractor shall claim duty-free entry under NAFTA or
the applicable trade agreement and shall comply with the U.S.
Customs Service requirements. No notification to Commander, DCMA New
York, is required.)
(v) Gross weight in pounds (if freight is based on space
tonnage, state cubic feet in addition to gross shipping weight).
(vi) Estimated value in U.S. dollars.
(vii) Activity address number of the contract administration
office administering the prime contract, e.g., for DCMA Dayton,
S3605A.
[[Page 15636]]
(f) Preparation of customs forms.
(1)(i) Except for shipments consigned to a military
installation, the Contractor shall--
(A) Prepare any customs forms required for the entry of foreign
supplies into the United States in connection with this contract;
and
(B) Submit the completed customs forms to the District Director
of Customs, with a copy to DCMA NY for execution of any required
duty-free entry certificates.
(ii) Shipments consigned directly to a military installation
will be released in accordance with sections 10.101 and 10.102 of
the U.S. Customs regulations.
(2) For shipments containing both supplies that are to be
accorded duty-free entry and supplies that are not, the Contractor
shall identify on the customs forms those items that are eligible
for duty-free entry.
(g) The Contractor shall--
(1) Prepare (if the Contractor is a foreign supplier), or shall
instruct the foreign supplier to prepare, a sufficient number of
copies of the bill of lading (or other shipping document) so that at
least two of the copies accompanying the shipment will be available
for use by the District Director of Customs at the port of entry;
(2) Consign the shipment as specified in paragraph (e) of this
clause; and
(3) Mark on the exterior of all packages--
(i) ``UNITED STATES GOVERNMENT, DEPARTMENT OF DEFENSE''; and
(ii) The activity address number of the contract administration
office administering the prime contract.
(h) The Contractor shall notify the Administrative Contracting
Officer (ACO) in writing of any purchase of qualifying country
supplies to be accorded duty-free entry, that are to be imported
into the United States for delivery to the Government or for
incorporation in end items to be delivered to the Government. The
Contractor shall furnish the notice to the ACO immediately upon
award to the qualifying country supplier and shall include in the
notice--
(1) The Contractor's name, address, and Commercial and
Government Entity (CAGE) code;
(2) Prime contract number and, if applicable, delivery order
number;
(3) Total dollar value of the prime contract or delivery order;
(4) Date of the last scheduled delivery under the prime contract
or delivery order;
(5) Foreign supplier's name and address;
(6) Number of the subcontract for foreign supplies;
(7) Total dollar value of the subcontract for foreign supplies;
(8) Date of the last scheduled delivery under the subcontract
for foreign supplies;
(9) List of items purchased;
(10) An agreement that the Contractor will pay duty on supplies,
or any portion thereof, that are diverted to nongovernmental use
other than--
(i) Scrap or salvage; or
(ii) Competitive sale made, directed, or authorized by the
Contracting Officer;
(11) Qualifying country of origin; and
(12) Scheduled delivery date(s).
(i) This clause does not apply to purchases of qualifying
country supplies in connection with this contract if--
(1) The supplies are identical in nature to supplies purchased
by the Contractor or any subcontractor in connection with its
commercial business; and
(2) It is not economical or feasible to account for such
supplies so as to ensure that the amount of the supplies for which
duty-free entry is claimed does not exceed the amount purchased in
connection with this contract.
(j) The Contractor shall--
(1) Insert the substance of this clause, including this
paragraph (j), in all subcontracts for--
(i) Qualifying country components; or
(ii) Nonqualifying country components for which the Contractor
estimates that duty will exceed $200 per unit;
(2) Require subcontractors to include the number of this
contract on all shipping documents submitted to Customs for supplies
for which duty-free entry is claimed pursuant to this clause; and
(3) Include in applicable subcontracts--
(i) The name and address of the ACO for this contract;
(ii) The name, address, and activity address number of the
contract administration office specified in this contract; and
(iii) The information required by paragraphs (h)(1), (2), and
(3) of this clause.
(End of clause)
0
41. Sections 252.225-7014 through 252.225-7016 are revised to read as
follows:
252.225-7014 Preference for Domestic Specialty Metals.
As prescribed in 225.7002-3(b)(1), use the following clause:
Preference for Domestic Specialty Metals (Apr 2003)
(a) Definitions. As used in this clause--
(1) Qualifying country means any country listed in subsection
225.872-1 of the Defense Federal Acquisition Regulation Supplement.
(2) Specialty metals means--
(i) Steel--
(A) With a maximum alloy content exceeding one or more of the
following limits: manganese, 1.65 percent; silicon, 0.60 percent; or
copper, 0.60 percent; or
(B) Containing more than 0.25 percent of any of the following
elements: aluminum, chromium, cobalt, columbium, molybdenum, nickel,
titanium, tungsten, or vanadium;
(ii) Metal alloys consisting of nickel, iron-nickel, and cobalt
base alloys containing a total of other alloying metals (except
iron) in excess of 10 percent;
(iii) Titanium and titanium alloys; or
(iv) Zirconium and zirconium base alloys.
(b) Any specialty metals incorporated in articles delivered
under this contract shall be melted in the United States, its
possessions, or Puerto Rico.
(c) This clause does not apply to specialty metals--
(1) Melted in a qualifying country or incorporated in an article
manufactured in a qualifying country; or
(2) Purchased by a subcontractor at any tier.
(End of clause)
Alternate I (Apr 2003)
As prescribed in 225.7002-3(b)(2), substitute the following
paragraph (c) for paragraph (c) of the basic clause, and add the
following paragraph (d) to the basic clause:
(c) This clause does not apply to specialty metals melted in a
qualifying country or incorporated in an article manufactured in a
qualifying country.
(d) The Contractor shall insert the substance of this clause,
including this paragraph (d), in all subcontracts for items
containing specialty metals.
252.225-7015 Restriction on Acquisition of Hand or Measuring Tools.
As prescribed in 225.7002-3(c), use the following clause:
Restriction on Acquisition of Hand or Measuring Tools (Apr 2003)
Hand or measuring tools delivered under this contract shall be
produced in the United States or its possessions.
(End of clause)
252.225-7016 Restriction on Acquisition of Ball and Roller Bearings.
As prescribed in 225.7009-4(a), use the following clause:
Restriction on Acquisition of Ball and Roller Bearings (Apr 2003)
(a) Definitions. As used in this clause--
(1) Bearing components means the bearing element, retainer,
inner race, or outer race.
(2) Miniature and instrument ball bearings means all rolling
contact ball bearings with a basic outside diameter (exclusive of
flange diameters) of 30 millimeters or less, regardless of material,
tolerance, performance, or quality characteristics.
(b) Except as provided in paragraph (c) of this clause, all ball
and roller bearings and ball and roller bearing components
(including miniature and instrument ball bearings) delivered under
this contract, either as end items or components of end items, shall
be wholly manufactured in the United States or Canada. Unless
otherwise specified, raw materials, such as preformed bar, tube, or
rod stock and lubricants, need not be mined or produced in the
United States or Canada.
(c)(1) The restriction in paragraph (b) of this clause does not
apply to ball or roller bearings that are acquired as components
if--
(i) The end items or components containing ball or roller
bearings are commercial items; or
(ii) The ball or roller bearings are commercial components
manufactured in the United Kingdom.
(2) The commercial item exception in paragraph (c)(1) of this
clause does not include items designed or developed under a
Government contract if the end item is bearings or bearing
components.
(d) The restriction in paragraph (b) of this clause may be
waived upon request from the Contractor in accordance with
subsection 225.7019-3 of the Defense Federal Acquisition Regulation
Supplement. If the restriction is waived for miniature and
instrument ball bearings, the Contractor shall
[[Page 15637]]
acquire a like quantity and type of domestic manufacture for
nongovernmental use.
(e) The Contractor shall retain records showing compliance with
the restriction in paragraph (b) of this clause until 3 years after
final payment and shall make the records available upon request of
the Contracting Officer.
(f) The Contractor shall insert the substance of this clause,
including this paragraph (f), in all subcontracts, except those
for--
(1) Commercial items other than ball or roller bearings; or
(2) Items that do not contain ball or roller bearings.
(End of clause)
Alternate I (Apr 2003)
As prescribed in 225.7009-4(b), substitute the following
paragraph (c)(1)(ii) for paragraph (c)(1)(ii) of the basic clause:
(c)(1)(ii) The ball or roller bearings are commercial components.
252.225-7017 [Removed and Reserved]
0
42. Section 252.225-7017 is removed and reserved.
0
43. Sections 252.225-7018 through 252.225-7021 are revised to read as
follows:
252.225-7018 Notice of Prohibition of Certain Contracts with Foreign
Entities for the Conduct of Ballistic Missile Defense Research,
Development, Test, and Evaluation.
As prescribed in 225.7017-4, use the following provision:
Notice of Prohibition of Certain Contracts With Foreign Entities for
the Conduct of Ballistic Missile Defense Research, Development, Test,
and Evaluation (Apr 2003)
(a) Definitions.
(1) Competent means the ability of an offeror to satisfy the
requirements of the solicitation. This determination is based on a
comprehensive assessment of each offeror's proposal including
consideration of the specific areas of evaluation criteria in the
relative order of importance described in the solicitation.
(2) Foreign firm means a business entity owned or controlled by
one or more foreign nationals or a business entity in which more
than 50 percent of the stock is owned or controlled by one or more
foreign nationals.
(3) U.S. firm means a business entity other than a foreign firm.
(b) Except as provided in paragraph (c) of this provision, the
Department of Defense will not enter into or carry out any contract,
including any contract awarded as a result of a broad agency
announcement, with a foreign government or firm if the contract
provides for the conduct of research, development, test, or
evaluation in connection with the Ballistic Missile Defense Program.
However, foreign governments and firms are encouraged to submit
offers, since this provision is not intended to restrict access to
unique foreign expertise if the contract will require a level of
competency unavailable in the United States.
(c) This prohibition does not apply to a foreign government or
firm if--
(1) The contract will be performed within the United States;
(2) The contract is exclusively for research, development, test,
or evaluation in connection with antitactical ballistic missile
systems;
(3) The foreign government or firm agrees to share a substantial
portion of the total contract cost. The foreign share is considered
substantial if it is equitable with respect to the relative benefits
that the United States and the foreign parties will derive from the
contract. For example, if the contract is more beneficial to the
foreign party, its share of the costs should be correspondingly
higher; or
(4) The U.S. Government determines that a U.S. firm cannot
competently perform the contract at a price equal to or less than
the price at which a foreign government or firm can perform the
contract.
(d) The offeror (----) is (----) is not a U.S. firm.
(End of provision)
252.225-7019 Restriction on Acquisition of Anchor and Mooring Chain.
As prescribed in 225.7007-3, use the following clause:
Restriction on Acquisition of Anchor and Mooring Chain (Apr 2003)
(a) Welded shipboard anchor and mooring chain, four inches or
less in diameter, delivered under this contract--
(1) Shall be manufactured in the United States, including
cutting, heat treating, quality control, testing, and welding (both
forging and shot blasting process); and
(2) The cost of the components manufactured in the United States
shall exceed 50 percent of the total cost of components.
(b) The Contractor may request a waiver of this restriction if
adequate domestic supplies meeting the requirements in paragraph (a)
of this clause are not available to meet the contract delivery
schedule.
(c) The Contractor shall insert the substance of this clause,
including this paragraph (c), in all subcontracts for items
containing welded shipboard anchor and mooring chain, four inches or
less in diameter.
(End of clause)
252.225-7020 Trade Agreements Certificate.
As prescribed in 225.1101(5), use the following provision:
Trade Agreements Certificate (Apr 2003)
(a) Definitions. Caribbean Basin country end product, designated
country end product, NAFTA country end product, nondesignated
country end product, qualifying country end product, and U.S. -made
end product have the meanings given in the Trade Agreements clause
of this solicitation.
(b) Evaluation. The Government--
(1) Will evaluate offers in accordance with the policies and
procedures of Part 225 of the Defense Federal Acquisition Regulation
Supplement; and
(2) Will consider only offers of end products that are U.S.-
made, qualifying country, designated country, Caribbean Basin
country, or NAFTA country end products, unless the Government
determines that--
(i) There are no offers of such end products;
(ii) The offers of such end products are insufficient to fulfill
the Government's requirements; or
(iii) A national interest exception to the Trade Agreements Act
applies.
(c) Certification and identification of country of origin.
(1) For all line items subject to the Trade Agreements clause of
this solicitation, the offeror certifies that each end product to be
delivered under this contract, except those listed in paragraph
(c)(2) of this provision, is a U.S.-made, qualifying country,
designated country, Caribbean Basin country, or NAFTA country end
product.
(2) The following supplies are other nondesignated country end
products:
-----------------------------------------------------------------------
(Line Item Number)
-----------------------------------------------------------------------
(Country of Origin)
(End of provision)
252.225-7021 Trade Agreements.
As prescribed in 225.1101(6), use the following clause:
Trade Agreements (Apr 2003)
(a) Definitions. As used in this clause--
(1) Caribbean Basin country means--
Antigua and El Salvador Nicaragua
Barbuda Grenada St. Kitts-Nevis
Aruba Guatemala St. Lucia
Bahamas Guyana St. Vincent and
Barbados Haiti the Grenadines
Belize Honduras Trinidad and
British Virgin Jamaica Tobago
Islands Montserrat ....................................
Costa Rica Netherlands ....................................
Dominica Antilles ....................................
[[Page 15638]]
(2) Caribbean Basin country end product--
(i) Means an article that--
(A) Is wholly the growth, product, or manufacture of a Caribbean
Basin country; or
(B) In the case of an article that consists in whole or in part
of materials from another country or instrumentality, has been
substantially transformed in a Caribbean Basin country into a new
and different article of commerce with a name, character, or use
distinct from that of the article or articles from which it was
transformed. The term refers to a product offered for purchase under
a supply contract, but for purposes of calculating the value of the
end product includes services (except transportation services)
incidental to its supply, provided that the value of those
incidental services does not exceed the value of the product itself;
and
(ii) Excludes products, other than petroleum and any product
derived from petroleum, that are not granted duty-free treatment
under the Caribbean Basin Economic Recovery Act (19 U.S.C. 2703(b)).
These exclusions presently consist of--
(A) Textiles, apparel articles, footwear, handbags, luggage,
flat goods, work gloves, leather wearing apparel, and handloomed,
handmade, or folklore articles that are not granted duty-free status
in the Harmonized Tariff Schedule of the United States (HTSUS);
(B) Tuna, prepared or preserved in any manner in airtight
containers; and
(C) Watches and watch parts (including cases, bracelets, and
straps) of whatever type, including, but not limited to, mechanical,
quartz digital, or quartz analog, if such watches or watch parts
contain any material that is the product of any country to which the
HTSUS column 2 rates of duty (HTSUS General Note 3(b)) apply.
(3) Component means an article, material, or supply incorporated
directly into an end product.
(4) Designated country means--
Aruba Germany Niger
Austria Greece Norway
Bangladesh Guinea Portugal
Belgium Guinea-Bissau Republic of Korea
Benin Haiti Rwanda
Bhutan Hong Kong Sao Tome and
Botswana Iceland Principe
Burkina Faso Ireland Sierra Leone
Burundi Israel Singapore
Canada Italy Somalia
Cape Verde Japan Spain
Central African Kiribati Sweden
Republic Lesotho Switzerland
Chad Liechtenstein Tanzania U.R.
Comoros Luxembourg Togo
Denmark Malawi Tuvalu
Djibouti Maldives Uganda
Equatorial Guinea Mali United Kingdom
Finland Mozambique Vanuatu
France Nepal Western Samoa
Gambia Netherlands Yemen
(5) Designated country end product means an article that--
(i) Is wholly the growth, product, or manufacture of the
designated country; or
(ii) In the case of an article that consists in whole or in part
of materials from another country or instrumentality, has been
substantially transformed in a designated country into a new and
different article of commerce with a name, character, or use
distinct from that of the article or articles from which it was
transformed. The term refers to a product offered for purchase under
a supply contract, but for purposes of calculating the value of the
end product includes services (except transportation services)
incidental to its supply, provided that the value of those
incidental services does not exceed the value of the product itself.
(6) End product means those articles, materials, and supplies to
be acquired under this contract for public use.
(7) NAFTA country end product means an article that--
(i) Is wholly the growth, product, or manufacture of a NAFTA
country; or
(ii) In the case of an article that consists in whole or in part
of materials from another country or instrumentality, has been
substantially transformed in a NAFTA country into a new and
different article of commerce with a name, character, or use
distinct from that of the article or articles from which it was
transformed. The term refers to a product offered for purchase under
a supply contract, but for purposes of calculating the value of the
end product includes services (except transportation services)
incidental to its supply, provided that the value of those
incidental services does not exceed the value of the product itself.
(8) Nondesignated country end product means any end product that
is not a U.S.-made end product or a designated country end product.
(9) North American Free Trade Agreement (NAFTA) country means
Canada or Mexico.
(10) Qualifying country means any country set forth in
subsection 225.872-1 of the Defense Federal Acquisition Regulation
Supplement.
(11) Qualifying country end product means--
(i) An unmanufactured end product mined or produced in a
qualifying country; or
(ii) An end product manufactured in a qualifying country if the
cost of the following types of components exceeds 50 percent of the
cost of all its components:
(A) Components mined, produced, or manufactured in a qualifying
country.
(B) Components mined, produced, or manufactured in the United
States.
(C) Components of foreign origin of a class or kind for which
the Government has determined that sufficient and reasonably
available commercial quantities of a satisfactory quality are not
mined, produced, or manufactured in the United States.
(12) United States means the United States, its possessions,
Puerto Rico, and any other place subject to its jurisdiction, but
does not include leased bases or trust territories.
(13) U.S.-made end product means an article that--
(i) Is mined, produced, or manufactured in the United States; or
(ii) Is substantially transformed in the United States into a
new and different article of commerce with a name, character, or use
distinct from that of the article or articles from which it was
transformed.
(b) This clause implements the Trade Agreements Act of 1979 (19
U.S.C. 2501, et seq.), the North American Free Trade Agreement
Implementation Act of 1993 (19 U.S.C. 3301 note), and the Caribbean
Basin Initiative. Unless otherwise specified, this clause applies to
all items in the Schedule.
(c) The Contractor shall deliver under this contract only U.S.-
made, qualifying country, designated country, Caribbean Basin
country, or NAFTA country end products unless--
(1) In its offer, the Contractor specified delivery of other
nondesignated country end products in the Trade Agreements
Certificate provision of the solicitation; and
(2) The Government determines that--
(i) Offers of U.S.-made end products or qualifying, designated,
Caribbean Basin, or NAFTA country end products from responsive,
responsible offerors are either not received or are insufficient to
fill the Government's requirements; or
[[Page 15639]]
(ii) A national interest exception to the Trade Agreements Act
applies.
(d) The contract price does not include duty for end products or
components for which the Contractor will claim duty-free entry.
(e) The HTSUS is available on the Internet at http://www.customs.ustreas.gov/impoexpo/impoexpo.htm. The following
sections of the HTSUS provide information regarding duty-free status
of articles specified in paragraph (a)(2)(ii)(A) of this clause:
(1) General Note 3(c), Products Eligible for Special Tariff
Treatment.
(2) General Note 17, Products of Countries Designated as
Beneficiary Countries Under the United States--Caribbean Basin Trade
Partnership Act of 2000.
(3) Section XXII, Chapter 98, Subchapter II, Articles Exported
and Returned, Advanced or Improved Abroad, U.S. Note 7(b).
(4) Section XXII, Chapter 98, Subchapter XX, Goods Eligible for
Special Tariff Benefits Under the United States--Caribbean Basin
Trade Partnership Act.
(End of clause)
252.225-7022 [Amended]
0
44. Section 252.225-7022 is amended by revising the clause date to read
``(APR 2003)''; and in paragraph (a) by removing ``only''.
252.225-7023 [Amended]
0
45. Section 252.225-7023 is amended in the introductory text by
removing ``225.7020-4'' and adding in its place ``225.7010-4''.
252.225-7024 [Removed and Reserved]
0
46. Section 252.225-7024 is removed and reserved.
0
47. Section 252.225-7025 is revised to read as follows:
252.225-7025 Restriction on Acquisition of Forgings.
As prescribed in 225.7102-4, use the following clause:
Restriction on Acquisition of Forgings (Apr 2003)
(a) Definitions. As used in this clause--
(1) Domestic manufacture means manufactured in the United States
or Canada if the Canadian firm--
(i) Normally produces similar items or is currently producing
the item in support of DoD contracts (as a contractor or a
subcontractor); and
(ii) Agrees to become (upon receiving a contract/order) a
planned producer under DoD's Industrial Preparedness Production
Planning Program, if it is not already a planned producer for the
item.
(2) Forging items means--
------------------------------------------------------------------------
Items Categories
------------------------------------------------------------------------
Ship propulsion shafts.................... Excludes service and landing
craft shafts.
Periscope tubes........................... All.
Ring forgings for bull gears.............. All greater than 120 inches
in diameter.
------------------------------------------------------------------------
(b) End items and their components delivered under this contract
shall contain forging items that are of domestic manufacture only.
(c) The restriction in paragraph (b) of this clause may be
waived upon request from the Contractor in accordance with
subsection 225.7102-3 of the Defense Federal Acquisition Regulation
Supplement.
(d) The Contractor shall retain records showing compliance with
the restriction in paragraph (b) of this clause until 3 years after
final payment and shall make the records available upon request of
the Contracting Officer.
(e) The Contractor shall insert the substance of this clause,
including this paragraph (e), in subcontracts for forging items or
for other items that contain forging items.
(End of clause)
252.225-7026 [Removed and Reserved]
0
48. Section 252.225-7026 is removed and reserved.
0
49. Sections 252.225-7027 and 252.225-7028 are revised to read as
follows:
252.225-7027 Restriction on Contingent Fees for Foreign Military
Sales.
As prescribed in 225.7308(a), use the following clause.
Restriction on Contingent Fees for Foreign Military Sales (Apr 2003)
(a) Except as provided in paragraph (b) of this clause,
contingent fees, as defined in the Covenant Against Contingent Fees
clause of this contract, are generally an allowable cost, provided
the fees are paid to--
(1) A bona fide employee of the Contractor; or
(2) A bona fide established commercial or selling agency
maintained by the Contractor for the purpose of securing business.
(b) For foreign military sales, unless the contingent fees have
been identified and payment approved in writing by the foreign
customer before contract award, the following contingent fees are
unallowable under this contract:
(1) For sales to the Government(s) of ------, contingent fees in
any amount.
(2) For sales to Governments not listed in paragraph (b)(1) of
this clause, contingent fees exceeding $50,000 per foreign military
sale case.
(End of clause)
252.225-7028 Exclusionary Policies and Practices of Foreign
Governments.
As prescribed in 225.7308(b), use the following clause:
Exclusionary Policies and Practices of Foreign Governments (Apr 2003)
The Contractor and its subcontractors shall not take into
account the exclusionary policies or practices of any foreign
government in employing or assigning personnel, if--
(a) The personnel will perform functions required by this
contract, either in the United States or abroad; and
(b) The exclusionary policies or practices of the foreign
government are based on race, religion, national origin, or sex.
(End of clause)
252.225-7029 [Removed and Reserved]
0
50. Section 252.225-7029 is removed and reserved.
0
51. Sections 252.225-7030 through 252.225-7033 are revised to read as
follows:
252.225-7030 Restriction on Acquisition of Carbon, Alloy, and Armor
Steel Plate.
As prescribed in 225.7011-3, use the following clause:
Restriction on Acquisition of Carbon, Alloy, and Armor Steel Plate (Apr
2003)
Carbon, alloy, and armor steel plate shall be melted and rolled
in the United States or Canada if the carbon, alloy, or armor steel
plate--
(a) Is in Federal Supply Class 9515 or is described by
specifications of the American Society for Testing Materials or the
American Iron and Steel Institute; and
(b) Will be delivered to the Government or will be purchased by
the Contractor as a raw material for use in a Government-owned
facility or a facility under the control of the Department of
Defense.
(End of clause)
252.225-7031 Secondary Arab Boycott of Israel.
As prescribed in 225.1103(2), use the following provision:
Secondary Arab Boycott of Israel (Apr 2003)
(a) Definitions. As used in this provision--
(1) Foreign person means any person (including any individual,
partnership, corporation, or other form of association) other than a
United States person.
(2) United States person is defined in 50 U.S.C. App. 2415(2)
and means--
(i) Any United States resident or national (other than an
individual resident outside the United States who is employed by
other than a United States person);
(ii) Any domestic concern (including any permanent domestic
establishment of any foreign concern); and
(iii) Any foreign subsidiary or affiliate (including any
permanent foreign establishment) of any domestic concern that is
controlled in fact by such domestic concern.
(b) Certification. If the offeror is a foreign person, the
offeror certifies, by submission of an offer, that it--
(1) Does not comply with the Secondary Arab Boycott of Israel;
and
(2) Is not taking or knowingly agreeing to take any action, with
respect to the Secondary Boycott of Israel by Arab countries, which
50 U.S.C. App. 2407(a) prohibits a United States person from taking.
(End of provision)
252.225-7032 Waiver of United Kingdom Levies--Evaluation of Offers.
As prescribed in 225.1101(7), use the following provision:
[[Page 15640]]
Waiver of United Kingdom Levies--Evaluation of Offers (Apr 2003)
(a) Offered prices for contracts or subcontracts with United
Kingdom (U.K.) firms may contain commercial exploitation levies
assessed by the Government of the U.K. The offeror shall identify to
the Contracting Officer all levies included in the offered price by
describing--
(1) The name of the U.K. firm;
(2) The item to which the levy applies and the item quantity;
and
(3) The amount of levy plus any associated indirect costs and
profit or fee.
(b) In the event of difficulty in identifying levies included in
a price from a prospective subcontractor, the offeror may seek
advice through the Director of Procurement, United Kingdom Defence
Procurement Office, British Embassy, 3100 Massachusetts Avenue NW.,
Washington, DC 20006.
(c) The U.S. Government may attempt to obtain a waiver of levies
pursuant to the U.S./U.K. reciprocal waiver agreement of July 1987.
(1) If the U.K. waives levies before award of a contract, the
Contracting Officer will evaluate the offer without the levy.
(2) If levies are identified but not waived before award of a
contract, the Contracting Officer will evaluate the offer inclusive
of the levies.
(3) If the U.K. grants a waiver of levies after award of a
contract, the U.S. Government reserves the right to reduce the
contract price by the amount of the levy waived plus associated
indirect costs and profit or fee.
(End of provision)
252.225-7033 Waiver of United Kingdom Levies.
As prescribed in 225.1101(8), use the following clause:
Waiver of United Kingdom Levies (Apr 2003)
(a) The U.S. Government may attempt to obtain a waiver of any
commercial exploitation levies included in the price of this
contract, pursuant to the U.S./United Kingdom (U.K.) reciprocal
waiver agreement of July 1987. If the U.K. grants a waiver of levies
included in the price of this contract, the U.S. Government reserves
the right to reduce the contract price by the amount of the levy
waived plus associated indirect costs and profit or fee.
(b) If the Contractor contemplates award of a subcontract
exceeding $1 million to a U.K. firm, the Contractor shall provide
the following information to the Contracting Officer before award of
the subcontract:
(1) Name of the U.K. firm.
(2) Prime contract number.
(3) Description of item to which the levy applies.
(4) Quantity being acquired.
(5) Amount of levy plus any associated indirect costs and profit
or fee.
(c) In the event of difficulty in identifying levies included in
a price from a prospective subcontractor, the Contractor may seek
advice through the Director of Procurement, United Kingdom Defence
Procurement Office, British Embassy, 3100 Massachusetts Avenue NW.,
Washington, DC 20006.
(d) The Contractor shall insert the substance of this clause,
including this paragraph (d), in any subcontract for supplies where
a lower-tier subcontract exceeding $1 million with a U.K. firm is
anticipated.
(End of clause)
0
52. Sections 252.225-7035 through 252.225-7039 are revised to read as
follows:
252.225-7035 Buy American Act--North American Free Trade Agreement
Implementation Act--Balance of Payments Program Certificate.
As prescribed in 225.1101(9), use the following provision:
Buy American Act--North American Free Trade Agreement Implementation
Act--Balance of Payments Program Certificate (Apr 2003)
(a) Definitions. Domestic end product, foreign end product,
NAFTA country end product, qualifying country end product, and
United States have the meanings given in the Buy American Act--North
American Free Trade Agreement Implementation Act--Balance of
Payments Program clause of this solicitation.
(b) Evaluation. The Government--
(1) Will evaluate offers in accordance with the policies and
procedures of Part 225 of the Defense Federal Acquisition Regulation
Supplement; and
(2) For line items subject to the North American Free Trade
Agreement Implementation Act, will evaluate offers of qualifying
country end products or NAFTA country end products without regard to
the restrictions of the Buy American Act or the Balance of Payments
Program.
(c) Certifications and identification of country of origin.
(1) For all line items subject to the Buy American Act-North
American Free Trade Agreement Implementation Act-Balance of Payments
Program clause of this solicitation, the offeror certifies that--
(i) Each end product, except the end products listed in
paragraph (c)(2) of this provision, is a domestic end product; and
(ii) Components of unknown origin are considered to have been
mined, produced, or manufactured outside the United States or a
qualifying country.
(2) The offeror shall identify all end products that are not
domestic end products.
(i) The offeror certifies that the following supplies are
qualifying country (except Canadian) end products:
-----------------------------------------------------------------------
(Line Item Number)
-----------------------------------------------------------------------
(Country of Origin)
(ii) The offeror certifies that the following supplies are NAFTA
country end products:
-----------------------------------------------------------------------
(Line Item Number)
-----------------------------------------------------------------------
(Country of Origin)
(iii) The following supplies are other foreign end products,
including end products manufactured in the United States that do not
qualify as domestic end products.
-----------------------------------------------------------------------
(Line Item Number)
-----------------------------------------------------------------------
(Country of Origin (If known))
(End of provision)
Alternate I (Apr 2003)
As prescribed in 225.1101(9), substitute the phrase ``Canadian
end product'' for the phrase ``NAFTA country end product'' in
paragraph (a) of the basic provision; and substitute the phrase
``Canadian end products'' for the phrase ``NAFTA country end
products'' in paragraphs (b) and (c)(2)(ii) of the basic provision.
252.225-7036 Buy American Act--North American Free Trade Agreement
Implementation Act--Balance of Payments Program.
As prescribed in 225.1101(10)(i), use the following clause:
Buy American Act--North American Free Trade Agreement Implementation
Act--Balance of Payments Program (Apr 2003)
(a) Definitions. As used in this clause--
(1) Component means an article, material, or supply incorporated
directly into an end product.
(2) Domestic end product means--
(i) An unmanufactured end product that has been mined or
produced in the United States; or
(ii) An end product manufactured in the United States if the
cost of its qualifying country components and its components that
are mined, produced, or manufactured in the United States exceeds 50
percent of the cost of all its components. The cost of components
includes transportation costs to the place of incorporation into the
end product and U.S. duty (whether or not a duty-free entry
certificate is issued). Scrap generated, collected, and prepared for
processing in the United States is considered domestic. A component
is considered to have been mined, produced, or manufactured in the
United States (regardless of its source in fact) if the end product
in which it is incorporated is manufactured in the United States and
the component is of a class or kind for which the Government has
determined that--
(A) Sufficient and reasonably available commercial quantities of
a satisfactory quality are not mined, produced, or manufactured in
the United States; or
(B) It is inconsistent with the public interest to apply the
restrictions of the Buy American Act.
(3) End product means those articles, materials, and supplies to
be acquired under this contract for public use.
(4) Foreign end product means an end product other than a
domestic end product.
(5) North American Free Trade Agreement (NAFTA) country means
Canada or Mexico.
(6) NAFTA country end product means an article that--
(i) Is wholly the growth, product, or manufacture of a NAFTA
country; or
(ii) In the case of an article that consists in whole or in part
of materials from another country or instrumentality, has been
substantially transformed in a NAFTA country into a new and
different article of commerce with a name, character, or use
[[Page 15641]]
distinct from that of the article or articles from which it was
transformed. The term refers to a product offered for purchase under
a supply contract, but for purposes of calculating the value of the
end product includes services (except transportation services)
incidental to its supply, provided that the value of those
incidental services does not exceed the value of the product itself.
(7) Qualifying country means any country set forth in subsection
225.872-1 of the Defense Federal Acquisition Regulation Supplement.
(8) Qualifying country component means a component mined,
produced, or manufactured in a qualifying country.
(9) Qualifying country end product means--
(i) An unmanufactured end product mined or produced in a
qualifying country; or
(ii) An end product manufactured in a qualifying country if the
cost of the following types of components exceeds 50 percent of the
cost of all its components:
(A) Components mined, produced, or manufactured in a qualifying
country.
(B) Components mined, produced, or manufactured in the United
States.
(C) Components of foreign origin of a class or kind for which
the Government has determined that sufficient and reasonably
available commercial quantities of a satisfactory quality are not
mined, produced, or manufactured in the United States.
(10) United States means the United States, its possessions,
Puerto Rico, and any other place subject to its jurisdiction, but
does not include leased bases or trust territories.
(b) This clause implements the Buy American Act (41 U.S.C.
Section 10a-d), the Balance of Payments Program, and the North
American Free Trade Agreement Implementation Act of 1993 (19 U.S.C.
3301 note). Unless otherwise specified, this clause applies to all
items in the Schedule.
(c) The Contractor shall deliver under this contract only
domestic end products unless, in its offer, it specified delivery of
qualifying country, NAFTA country, or other foreign end products in
the Buy American Act--North American Free Trade Agreement
Implementation Act--Balance of Payments Program Certificate
provision of the solicitation. If the Contractor certified in its
offer that it will deliver a qualifying country end product or a
NAFTA country end product, the Contractor shall deliver a qualifying
country end product, a NAFTA country end product, or, at the
Contractor's option, a domestic end product.
(d) The contract price does not include duty for end products or
components for which the Contractor will claim duty-free entry.
(End of clause)
Alternate I (Apr 2003)
As prescribed in 225.1101(10)(i)(B), substitute the following
paragraphs (a)(6) and (c) for paragraphs (a)(6) and (c) of the basic
clause:
(a)(6) Canadian end product means an article that--
(i) Is wholly the growth, product, or manufacture of Canada; or
(ii) In the case of an article that consists in whole or in part
of materials from another country or instrumentality, has been
substantially transformed in Canada into a new and different article
of commerce with a name, character, or use distinct from that of the
article or articles from which it was transformed. The term refers
to a product offered for purchase under a supply contract, but for
purposes of calculating the value of the end product includes
services (except transportation services) incidental to its supply,
provided that the value of those incidental services does not exceed
the value of the product itself.
(c) The Contractor shall deliver under this contract only
domestic end products unless, in its offer, it specified delivery of
qualifying country, Canadian, or other foreign end products in the
Buy American Act--North American Free Trade Agreement Implementation
Act--Balance of Payments Program Certificate provision of the
solicitation. If the Contractor certified in its offer that it will
deliver a qualifying country end product or a Canadian end product,
the Contractor shall deliver a qualifying country end product, a
Canadian end product, or, at the Contractor's option, a domestic end
product.
252.225-7037 Evaluation of Offers for Air Circuit Breakers.
As prescribed in 225.7006-4(a), use the following provision:
Evaluation of Offers for Air Circuit Breakers (Apr 2003)
(a) The offeror shall specify, in its offer, any intent to
furnish air circuit breakers that are not manufactured in the United
States, Canada, or the United Kingdom.
(b) The Contracting Officer will evaluate offers by adding a
factor of 50 percent to the offered price of air circuit breakers
that are not manufactured in the United States, Canada, or the
United Kingdom.
(End of provision)
252.225-7038 Restriction on Acquisition of Air Circuit Breakers.
As prescribed in 225.7006-4(b), use the following clause:
Restriction on Acquisition of Air Circuit Breakers (Apr 2003)
Unless otherwise specified in its offer, the Contractor shall
deliver under this contract air circuit breakers manufactured in the
United States, Canada, or the United Kingdom.
(End of clause)
252.225-7039 Restriction on Acquisition of Totally Enclosed Lifeboat
Survival Systems.
As prescribed in 225.7008-4, use the following clause:
Restriction on Acquisition of Totally Enclosed Lifeboat Survival
Systems (Apr 2003)
The Contractor shall deliver under this contract totally
enclosed lifeboat survival systems (consisting of the lifeboat and
associated davits and winches), for which--
(a) 50 percent or more of the components have been manufactured
in the United States; and
(b) 50 percent or more of the labor in the manufacture and
assembly of the entire system has been performed in the United
States.
(End of clause)
252.225-7041 [Amended]
0
53. Section 252.225-7041 is amended in the introductory text by
removing ``225.1103(2)'' and adding in its place ``225.1103(3)''.
0
54. Section 252.225-7042 is revised to read as follows:
252.225-7042 Authorization to Perform.
As prescribed in 225.1103(4), use the following provision:
Authorization to Perform (Apr 2003)
The offeror represents that it has been duly authorized to
operate and to do business in the country or countries in which the
contract is to be performed.
(End of provision)
[FR Doc. 03-7531 Filed 3-28-03; 8:45 am]
BILLING CODE 5001-08-P