[Federal Register Volume 71, Number 188 (Thursday, September 28, 2006)]
[Rules and Regulations]
[Pages 57375-57378]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 06-8208]
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DEPARTMENT OF DEFENSE
GENERAL SERVICES ADMINISTRATION
NATIONAL AERONAUTICS AND SPACE ADMINISTRATION
48 CFR Parts 25 and 52
[FAC 2005-13; FAR Case 2005-034; Item VI; Docket 2006-0020, Sequence 9]
RIN 9000-AK52
Federal Acquisition Regulation; FAR Case 2005-034, Reporting of
Purchases from Overseas Sources
AGENCIES: Department of Defense (DoD), General Services Administration
(GSA), and National Aeronautics and Space Administration (NASA).
ACTION: Interim rule with request for comments.
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SUMMARY: The Civilian Agency Acquisition Council and the Defense
Acquisition Regulations Council (Councils) have agreed on an interim
rule amending the Federal Acquisition Regulation (FAR) to implement
Section 837 of Division A of the Transportation, Treasury, Housing and
Urban Development, the Judiciary, the District of Columbia, and
Independent Agencies Appropriations Act, 2006 (Pub. L. 109-115) and
similar sections in subsequent appropriations acts. Section 837
requires the head of each Federal agency to submit a report to Congress
relating to acquisitions of articles, materials, or supplies that are
manufactured outside the United States. This rule amends the FAR to
request from offerors necessary data regarding place of manufacture.
DATES: Effective Date: September 28, 2006.
Applicability Date: This amendment is mandatory for solicitations
issued and contracts awarded on or after October 1, 2006. To meet the
congressionally mandated reporting requirement, agencies may
incorporate the new FAR provision 52.225-18 or corresponding
requirement at 52.212-3 in solicitations issued or contracts awarded
prior to October 1, 2006.
Comment Date: Interested parties should submit written comments to
the FAR Secretariat on or before November 27, 2006 to be considered in
the formulation of a final rule.
ADDRESSES: Submit comments identified by FAC 2005-13, FAR case 2005-
034, by any of the following methods:
Federal eRulemaking Portal: http://www.regulations.gov.
Search for this document at the ``Federal Acquisition
[[Page 57376]]
Regulation'' agency and review the ``Document Title'' column; click on
the Document ID number. Click on ``Add Comments''.
You may also search for any document using the ``Advanced search/
document search'' tab, selecting from the agency field ``Federal
Acquisition Regulation'', and typing the FAR case number in the keyword
field.
Fax: 202-501-4067.
Mail: General Services Administration, Regulatory
Secretariat (VIR), 1800 F Street, NW, Room 4035, ATTN: Laurieann
Duarte, Washington, DC 20405.
Instructions: Please submit comments only and cite FAC 2005-13, FAR
case 2005-034, in all correspondence related to this case. All comments
received will be posted without change to http://www.regulations.gov,
including any personal and/or business confidential information
provided.
FOR FURTHER INFORMATION CONTACT: For clarification of content, contact
Mr. Jeremy Olson at (202) 501-3221. Please cite FAC 2005-13, FAR case
2005-034. For information pertaining to status or publication
schedules, contact the FAR Secretariat at (202) 501-4755. Please cite
FAR case 2005-034.
SUPPLEMENTARY INFORMATION:
A. Background
Section 837 of Division A of the Fiscal Year 2006 Consolidated
Appropriations Act (Pub. L. 109-115) requires the head of each Federal
agency to submit a report to Congress on the dollar value of
acquisitions made by the agency of articles, materials, or supplies
that are manufactured outside the United States. The law also requests
an itemized list of all waivers granted with respect to such articles,
materials, or supplies under the Buy American Act and a summary of the
total procurement funds spent on goods manufactured in the United
States. Similar requirements were contained in the Fiscal Year 2004 and
2005 Consolidated Appropriations Acts (Section 645 of Division F, Pub.
L. 108-199 and Section 641 of Division H, Pub. L. 108-447,
respectively), and the Councils anticipate that this requirement will
continue for at least several years into the future.
For purposes of this report, the criteria established in the law is
only whether an end product is manufactured in the United States or
outside the United States, without regard to the origin of the
components (see 25.001(c)). FAR Part 25 defines the ``United States''
to include the 50 States, the District of Columbia, and the outlying
areas. ``Outlying areas'' are defined in FAR Subpart 2.1 to include
commonwealths, territories, and minor outlying islands of the United
States.
Agency reporting will be geared to collection of data at the
acquisition level, rather than the line item level. All data in the
Federal Procurement Data System is currently collected at the
acquisition level. The Councils considered the possibility of requiring
the reporting to be on a line item basis, but rejected this approach
because the excessive reporting burden far outweighed any additional
accuracy of reporting that might be achieved. Since reporting is to be
provided at the level of each acquisition, over-reporting is avoided by
reporting only those acquisitions that are predominantly for the
acquisition of manufactured end products.
Likewise, the offeror will report manufacture inside or outside the
United States and its outlying areas based on the predominance of the
manufactured goods offered, and the contracting officer will select the
predominant reason for acquiring the foreign manufactured end products,
if more than one reason applies.
Using this total acquisition approach, the Councils therefore adopt
the following minimum requirements for the report:
1. Provide dollar value of acquisitions of predominantly
manufactured end products, broken down into--
a. Place of manufacture is outside the United States and its
outlying areas;
b. Place of manufacture is inside the United States or its outlying
areas; and
c. Total of a. and b.
2. For acquisitions in paragraph 1.a., provide the number of
acquisitions in each exception category, and the total number of such
acquisitions. The exception categories are--
Use outside the United States;
Resale;
Commercial information technology;
Public interest determination;
Trade agreements;
Domestic nonavailability;
Unreasonable cost; and
Qualifying country - For DoD only, the foreign
manufactured end products are predominantly qualifying country end
products (DFARS 225.003 and 225.872-1).
In order to fulfill these minimum reporting requirements, the
agencies will need additional data--
From offerors, as to whether manufactured end products are
predominantly manufactured in the United States or its outlying areas,
or outside the United States and its outlying areas; and
From contracting officers, as to the predominant reason
for acquisition of foreign manufactured end products.
This interim rule adds a FAR provision 52.225-18, Place of
Manufacture, in order to collect the necessary data on place of
manufacture. A corresponding requirement has been added to FAR 52.212-
3, Offeror Representations and Certifications--Commercial Items. The
contracting officer determines the use of 52.225-18 based on estimation
of whether the solicitation is predominantly for the acquisition of
manufactured end products (i.e., the estimated value of the
manufactured end products equals or exceeds the estimated value of
other items to be acquired as a result of the solicitation.) The
provision defines a ``manufactured end product'' to include any product
code purchased by the Government except for certain Federal Supply
Groups or Classes that are excluded from the definition. The provision
also defines ``place of manufacture'' to mean the place where an end
product is assembled out of components, or otherwise made or processed
from raw materials into the finished product that is to be provided to
the Government. If a product is disassembled and reassembled, the place
of reassembly is not the place of manufacture.
The Councils will coordinate with Federal Procurement Data System
(FPDS) personnel, so that the data system can accommodate the data set
forth in this notice as necessary to meet the statutory reporting
requirement. FPDS will provide a standardized report of purchases from
sources outside the United States based on the required fields. It is
anticipated that a standardized report will facilitate the ability of
agencies to meet the reporting requirement.
This is not a significant regulatory action and, therefore, was not
subject to review under Section 6(b) of Executive Order 12866,
Regulatory Planning and Review, dated September 30, 1993. This rule is
not a major rule under 5 U.S.C. 804.
B. Regulatory Flexibility Act
The interim rule is not expected to have a significant economic
impact on a substantial number of small entities within the meaning of
the Regulatory Flexibility Act, 5 U.S.C. 601, et seq., because this
interim rule does not change the rules for buying, it only adds an
information collection requirement. It will not have a significant
economic impact to ask offerors of manufactured end products to check
off a box to indicate whether products offered to the
[[Page 57377]]
Government are predominantly manufactured in the United States or
outside the United States. The offeror is not even required to identify
the country of manufacture if the product is manufactured outside the
United States. Therefore, an Initial Regulatory Flexibility Analysis
has not been performed. The Councils will consider comments from small
entities concerning the affected FAR Parts 25 and 52 in accordance with
5 U.S.C. 610. Interested parties must submit such comments separately
and should cite 5 U.S.C 601, et seq. (FAC 2005-13, FAR case 2005-034),
in correspondence.
C. Paperwork Reduction Act
The Paperwork Reduction Act (Pub. L. 104-13) applies because the
interim rule contains information collection requirements. Accordingly,
a request for approval of a new information collection requirement
concerning FAR 52.225-18 was forwarded to the Office of Management and
Budget under 44 U.S.C. 3501, et seq. Public comments concerning this
request will be invited through a subsequent Federal Register notice.
There will be an estimated 38,146 burden hours for the new
provision 52.225-18, Place of Manufacture. Accordingly, in accordance
with 5 CFR 1320.13, the FAR Secretariat has obtained an emergency
approval of a new information collection requirement concerning OMB
Control Number 9000-0161, FAR Case 2005-034, Reporting of Purchases
from Overseas Sources, from the Office of Management and Budget under
44 U.S.C. 3501, et seq.
Annual Reporting Burden:
We estimate the annual total burden hours as follows:
Based on the FPDS data for Fiscal Year 2004 on number of contract
actions for Federal supplies and equipment (summary by PSC group), we
estimate the number of solicitations predominantly for manufactured
supplies and equipment equals 762,920 and the number of responses to
the solicitations equals 3,814,600 (average of 5 responses per
solicitation). We further estimate the number of respondents at 95,365,
based on an estimate of 40 responses per respondent. The total response
burden hours equals 38,146 hours (3,814,600 responses x average of .01
hours per response).
Respondents: 95,365
Responses per respondent: 40
Total annual responses: 3,814,600
Preparation hours per response: .01
Total response burden hours: 38,146
D. Request for Comments Regarding Paperwork Burden
Submit comments, including suggestions for reducing this burden,
not later than November 27, 2006 to: FAR Desk Officer, OMB, Room 10102,
NEOB, Washington, DC 20503, and a copy to the General Services
Administration, FAR Secretariat (VIR), 1800 F Street, NW, Room 4035,
Washington, DC 20405.
Public comments are particularly invited on: whether this
collection of information is necessary for the proper performance of
functions of the FAR, and will have practical utility; whether our
estimate of the public burden of this collection of information is
accurate, and based on valid assumptions and methodology; ways to
enhance the quality, utility, and clarity of the information to be
collected; and ways in which we can minimize the burden of the
collection of information on those who are to respond, through the use
of appropriate technological collection techniques or other forms of
information technology.
Requester may obtain a copy of the justification from the General
Services Administration, FAR Secretariat (VIR), Room 4035, Washington,
DC 20405, telephone (202) 501-4755. Please cite OMB Control Number
9000-0161, FAR Case 2005-034, Reporting of Purchases from Overseas
Sources, in all correspondence.
D. Determination to Issue an Interim Rule
A determination has been made under the authority of the Secretary
of Defense (DoD), the Administrator of General Services (GSA), and the
Administrator of the National Aeronautics and Space Administration
(NASA) that urgent and compelling reasons exist to promulgate this
interim rule without prior opportunity for public comment. This action
is necessary because the report for Fiscal Year 2006 is due within 180
days after the end of the fiscal year and it is particularly important
that this rule be implemented before the beginning of the next fiscal
year in order to start collecting data in this fiscal year and to have
data covering the entire Fiscal Year 2007. However, pursuant to Public
Law 98-577 and FAR 1.501, the Councils will consider public comments
received in response to this interim rule in the formation of the final
rule.
List of Subjects in 48 CFR Parts 25 and 52
Government procurement.
Dated: September 19, 2006
Ralph De Stefano,
Director, Contract Policy Division.
0
Therefore, DoD, GSA, and NASA amend 48 CFR parts 25 and 52 as set forth
below:
0
1. The authority citation for 48 CFR parts 25 and 52 continues to read
as follows:
Authority: 40 U.S.C. 121(c); 10 U.S.C. chapter 137; and 42
U.S.C. 2473(c).
PART 25--FOREIGN CONTRACTING
0
2. Revise section 25.001(c) to read as follows:
25.001 General.
* * * * *
(c) The test to determine the country of origin for an end product
under the Buy American Act (see the various country ``end product''
definitions in 25.003) is different from the test to determine the
country of origin for an end product under the trade agreements, or the
criteria for the report on end products manufactured outside the United
States (see 25.004).
(1) The Buy American Act uses a two-part test to define a
``domestic end product'' (manufacture in the United States and a
formula based on cost of domestic components).
(2) Under the trade agreements, the test to determine country of
origin is ``substantial transformation'' (i.e., transforming an article
into a new and different article of commerce, with a name, character,
or use distinct from the original article).
(3) For the reporting requirement at 25.004, the only criterion is
whether the place of manufacture of an end product is in the United
States or outside the United States, without regard to the origin of
the components.
0
3. Add section 25.004 to read as follows:
25.004 Reporting of acquisition of end products manufactured outside
the United States.
(a) In accordance with the requirements of Section 837 of Division
A of the Transportation, Treasury, Housing and Urban Development, the
Judiciary, the District of Columbia, and Independent Agencies
Appropriations Act, 2006 (Pub. L. 109-115) and similar sections in
subsequent appropriations acts, the head of each Federal agency must
submit a report to Congress on the amount of the acquisitions made by
the agency from entities that manufacture end products outside the
United States in that fiscal year.
(b) This report will be partially based on information collected
from offerors
[[Page 57378]]
using solicitation provision 52.225-18, Place of Manufacture (and its
commercial item equivalent in 52.212-3, Offeror Representations and
Certifications-Commercial Items). For purposes of this report, the
criteria established in the law is only whether the place of
manufacture of an end product is in the United States or outside the
United States, without regard to the origin of the components (see
25.001(c)).
0
4. Amend section 25.1101 by adding paragraph (f) to read as follows:
25.1101 Acquisition of supplies.
* * * * *
(f) Insert the provision at 52.225-18, Place of Manufacture, in
solicitations that are predominantly for the acquisition of
manufactured end products, as defined in the provision at 52.225-18
(i.e., the estimated value of the manufactured end products exceeds the
estimated value of other items to be acquired as a result of the
solicitation).
PART 52--SOLICITATION PROVISIONS AND CONTRACT CLAUSES
0
5. Amend section 52.212-3 by--
0
a. Revising the date of the provision;
0
b. Amending the introductory paragraph of the provision by removing
from the first sentence ``paragraph (j)'' and adding ``paragraph (k)''
in its place; and by removing from the second sentence ``paragraphs (b)
through (i)'' and adding ``paragraphs (b) through (j)'' in its place;
0
c. Amending paragraph (a) by removing from the end of the introductory
paragraph the colon and adding an em dash in its place; and by adding
in alphabetical order, the definitions ``Manufactured end product'' and
``Place of manufacture'';
0
d. Redesignating paragraph ``j'' as paragraph ``k''; and adding new
paragraph ``j'';
0
e. In the newly designated paragraph (k)(1), removing ``paragraph (j)''
and adding ``paragraph (k)(2)'' in its place; and
0
f. In the newly designated paragraph (k)(2), in the bracketed
paragraph, removing ``(b) through (i)'' and adding ``(b) through (j)''
in its place.
The revised text reads as follows:
52.212-3 Offeror Representations and Certifications--Commercial Items.
* * * * *
OFFEROR REPRESENTATIONS AND CERTIFICATIONS-COMMERCIAL ITEMS (SEP
2006)
* * * * *
(a) * * *
Manufactured end product means any end product in Federal Supply
Classes (FSC) 1000-9999, except--
(1) FSC 5510, Lumber and Related Basic Wood Materials;
(2) Federal Supply Group (FSG) 87, Agricultural Supplies;
(3) FSG 88, Live Animals;
(4) FSG 89, Food and Related Consumables;
(5) FSC 9410, Crude Grades of Plant Materials;
(6) FSC 9430, Miscellaneous Crude Animal Products, Inedible;
(7) FSC 9440, Miscellaneous Crude Agricultural and Forestry
Products;
(8) FSC 9610, Ores;
(9) FSC 9620, Minerals, Natural and Synthetic; and
(10) FSC 9630, Additive Metal Materials.
Place of manufacture means the place where an end product is
assembled out of components, or otherwise made or processed from raw
materials into the finished product that is to be provided to the
Government. If a product is disassembled and reassembled, the place of
reassembly is not the place of manufacture.
* * * * *
(j) Place of manufacture. (Does not apply unless the solicitation
is predominantly for the acquisition of manufactured end products.) For
statistical purposes only, the offeror shall indicate whether the place
of manufacture of the end products it expects to provide in response to
this solicitation is predominantly--
(1) [square] In the United States (Check this box if the total
anticipated price of offered end products manufactured in the United
States exceeds the total anticipated price of offered end products
manufactured outside the United States); or
(2) [square] Outside the United States.
* * * * *
(End of provision)
0
6. Add section 52.225-18 to read as follows:
52.225-18 Place of Manufacture.
0
As prescribed in 25.1101(f), insert the following solicitation
provision:
PLACE OF MANUFACTURE (SEP 2006)
(a) Definitions. As used in this clause--
Manufactured end product means any end product in Federal Supply
Classes (FSC) 1000-9999, except--
(1) FSC 5510, Lumber and Related Basic Wood Materials;
(2) Federal Supply Group (FSG) 87, Agricultural Supplies;
(3) FSG 88, Live Animals;
(4) FSG 89, Food and Related Consumables;
(5) FSC 9410, Crude Grades of Plant Materials;
(6) FSC 9430, Miscellaneous Crude Animal Products, Inedible;
(7) FSC 9440, Miscellaneous Crude Agricultural and Forestry
Products;
(8) FSC 9610, Ores;
(9) FSC 9620, Minerals, Natural and Synthetic; and
(10) FSC 9630, Additive Metal Materials.
Place of manufacture means the place where an end product is
assembled out of components, or otherwise made or processed from raw
materials into the finished product that is to be provided to the
Government. If a product is disassembled and reassembled, the place of
reassembly is not the place of manufacture.
(b) For statistical purposes only, the offeror shall indicate
whether the place of manufacture of the end products it expects to
provide in response to this solicitation is predominantly--
(1) [square] In the United States (Check this box if the total
anticipated price of offered end products manufactured in the United
States exceeds the total anticipated price of offered end products
manufactured outside the United States); or
(2) [square] Outside the United States.
(End of provision)
[FR Doc. 06-8208 Filed 9-27-06; 8:45 am]
BILLING CODE 6820-EP-S