[Federal Register Volume 71, Number 192 (Wednesday, October 4, 2006)]
[Rules and Regulations]
[Pages 58541-58544]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: E6-16418]
-----------------------------------------------------------------------
DEPARTMENT OF DEFENSE
Defense Acquisition Regulations System
48 CFR Part 252
RIN 0750-AF49
Defense Federal Acquisition Regulation Supplement; Free Trade
Agreements--Guatemala and Bahrain (DFARS Case 2006-D028)
AGENCY: Defense Acquisition Regulations System, Department of Defense
(DoD).
ACTION: Interim rule with request for comments.
-----------------------------------------------------------------------
SUMMARY: DoD has issued an interim rule amending the Defense Federal
Acquisition Regulation Supplement (DFARS) to implement the United
States-Bahrain Free Trade Agreement and the Dominican Republic-Central
America-United States Free Trade Agreement with respect to Guatemala.
The Free Trade Agreements waive the applicability of the Buy American
Act for some foreign supplies and construction materials and specify
procurement procedures designed to ensure fairness.
DATES: Effective date: October 4, 2006.
Comment date: Comments on the interim rule should be submitted in
writing to the address shown below on or before December 4, 2006, to be
considered in the formation of the final rule.
ADDRESSES: You may submit comments, identified by DFARS Case 2006-D028,
using any of the following methods:
[cir] Federal eRulemaking Portal: http://www.regulations.gov.
Follow the instructions for submitting comments.
[cir] E-mail: [email protected]. Include DFARS Case 2006-D028 in the
subject line of the message.
[cir] Fax: (703) 602-0350.
[cir] Mail: Defense Acquisition Regulations System, Attn: Ms. Amy
Williams, OUSD(AT&L)DPAP(DARS), IMD 3C132, 3062 Defense Pentagon,
Washington, DC 20301-3062.
[cir] Hand Delivery/Courier: Defense Acquisition Regulations
System, Crystal Square 4, Suite 200A, 241 18th Street, Arlington, VA
22202-3402.
Comments received generally will be posted without change to http://www.regulations.gov, including any personal information provided.
FOR FURTHER INFORMATION CONTACT: Ms. Amy Williams, (703) 602-0328.
SUPPLEMENTARY INFORMATION:
A. Background
This interim rule amends DFARS provisions and clauses to implement
the Dominican Republic-Central America-United States Free Trade
Agreement, with respect to Guatemala, and the United States-Bahrain
Free Trade Agreement. Congress approved these trade agreements in the
Dominican Republic-Central America-United States Free Trade Agreement
Implementation Act (Public Law 109-53) and the United States-Bahrain
Free Trade Agreement Implementation Act (Public Law 109-169).
The rule adds Bahrain and Guatemala to the definition of ``Free
Trade Agreement country.'' In addition, the rule removes Guatemala from
the definition of ``Caribbean Basin country'' because, in accordance
with Section 201(a)(3) of Public Law 109-53, when the Dominican
Republic-Central America-United States Free Trade Agreement enters into
force with respect to a country, that country is no longer designated
as a beneficiary country for purposes of the Caribbean Basin Economic
Recovery Act.
The dollar thresholds for applicability of the Dominican Republic-
Central America-United States Free Trade
[[Page 58542]]
Agreement to Guatemala are the same as those for the other countries
subject to the agreement. The dollar thresholds for applicability of
the Bahrain Free Trade Agreement are $193,000 for supply and service
contracts, and $8,422,165 for construction contracts.
Like the Morocco Free Trade Agreement, the Bahrain Free Trade
Agreement threshold for supplies and services is higher than the
thresholds for the other Free Trade Agreements. Therefore, Bahrainian
end products are not covered by the Buy American Act-Free Trade
Agreements-Balance of Payments Program provision and clause at DFARS
252.225-7035 and 252.225-7036, respectively.
Like the North American Free Trade Agreement, the Bahrain Free
Trade Agreement threshold for construction is higher than the
thresholds of the other Free Trade Agreements. Therefore, Bahrainian
construction material is excluded from coverage under the Balance of
Payments Program--Construction Materials Under Trade Agreements clause
at DFARS 252.225-7045 for acquisitions less than $8,422,165.
In addition, this interim rule makes the following editorial
changes:
[cir] Removal of the word ``instrumentality'' from the definitions
of ``Caribbean Basin country end product,'' ``Free Trade Agreement
country end product,'' ``least developed country end product,''
``Moroccan end product,'' and ``Canadian end product,'' for consistency
with the FAR definitions of ``end product.'' The term
``instrumentality,'' as used in trade agreements, applies to the
European Union. The FAR and DFARS have separately listed each member
country of the European Union, so it is unnecessary to continue to
refer to instrumentalities in the end product definitions.
[cir] Amendment of the Trade Agreements clause at DFARS 252.225-
7021 to add a definition of ``WTO GPA country end product'' and to
update the Internet address for location of the Harmonized Tariff
Schedule of the United States.
This rule was not subject to Office of Management and Budget review
under Executive Order 12866, dated September 30, 1993.
B. Regulatory Flexibility Act
DoD does not expect this rule to have a significant economic impact
on a substantial number of small entities within the meaning of the
Regulatory Flexibility Act, 5 U.S.C. 601, et seq. Although the rule
opens up DoD procurement to the products of Guatemala and Bahrain, DoD
does not believe there will be a significant economic impact on U.S.
small businesses. DoD applies the trade agreements to only those non-
defense items listed at DFARS 225.401-70, and procurements that are set
aside for small businesses are exempt from application of the trade
agreements. Therefore, DoD has not performed an initial regulatory
flexibility analysis. DoD invites comments from small businesses and
other interested parties. DoD also will consider comments from small
entities concerning the affected DFARS subparts in accordance with 5
U.S.C. 610. Such comments should be submitted separately and should
cite DFARS Case 2006-D028.
C. Paperwork Reduction Act
This interim rule affects the certification and information
collection requirements in the provisions at DFARS 252.225-7020 and
252.225-7035, currently approved under Office of Management and Budget
Control Number 0704-0229 for use through May 31, 2007. The impact,
however, is negligible.
D. Determination To Issue an Interim Rule
A determination has been made under the authority of the Secretary
of Defense that urgent and compelling reasons exist to publish an
interim rule prior to affording the public an opportunity to comment.
This interim rule implements the Dominican Republic-Central America-
United States Free Trade Agreement with respect to Guatemala, and the
United States-Bahrain Free Trade Agreement, as approved by Congress in
Public Laws 109-53 and 109-169. The agreement with Guatemala took
effect on July 1, 2006, and the agreement with Bahrain took effect on
August 1, 2006. Comments received in response to this interim rule will
be considered in the formation of the final rule.
List of Subjects in 48 CFR Part 252
Government procurement.
Michele P. Peterson,
Editor, Defense Acquisition Regulations System.
0
Therefore, 48 CFR Part 252 is amended as follows:
PART 252--SOLICITATION PROVISIONS AND CONTRACT CLAUSES
0
1. The authority citation for 48 CFR Part 252 continues to read as
follows:
Authority: 41 U.S.C. 421 and 48 CFR Chapter 1.
Sec. 252.212-7001 [Amended]
0
2. Section 252.212-7001 is amended as follows:
0
a. By revising the clause date to read ``(Oct 2006)'';
0
b. In paragraphs (b)(9) and (b)(12)(i) by removing ``(Jun 2006)'' and
adding in its place ``(Oct 2006)''; and
0
c. In paragraph (b)(12)(ii) by removing ``(Jan 2005)'' and adding in
its place ``(Oct 2006)''.
0
3. Section 252.225-7013 is amended by revising the clause date and
paragraph (a)(2)(ii) to read as follows:
Sec. 252.225-7013 Duty-Free Entry
* * * * *
Duty-Free Entry (Oct 2006)
(a) * * *
(2) * * *
(ii) Free Trade Agreement country end product, other than a
Bahrainian end product or a Moroccan end product, as defined in the Buy
American Act-Free Trade Agreements-Balance of Payments Program clause
of this contract; or
* * * * *
0
4. Section 252.225-7021 is amended as follows:
0
a. By revising the clause date;
0
b. In paragraph (a)(1)(i)(B), in the first sentence, by removing ``or
instrumentality'';
0
c. By revising paragraph (a)(3)(ii);
0
d. In paragraph (a)(3)(iv) by removing ``Guatemala,'';
0
e. In paragraph (a)(6)(ii) in the first sentence, and in paragraph
(a)(7)(ii) in the first sentence, by removing ``or instrumentality'';
0
f. By adding paragraph (a)(13); and
0
g. In paragraph (e) introductory text by revising the first sentence.
The revised and added text reads as follows:
Sec. 252.225-7021 Trade Agreements
* * * * *
Trade Agreements (Oct 2006)
(a) * * *
(3) * * *
* * * * *
(ii) A Free Trade Agreement country (Australia, Bahrain, Canada,
Chile, El Salvador, Guatemala, Honduras, Mexico, Morocco, Nicaragua, or
Singapore);
* * * * *
(13) WTO GPA country end product means an article that--
(i) Is wholly the growth, product, or manufacture of a WTO GPA
country; or
(ii) In the case of an article that consists in whole or in part of
materials from another country, has been substantially transformed in a
WTO GPA country into a new and different
[[Page 58543]]
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.
* * * * *
(e) The HTSUS is available on the Internet at http://www.usitc.gov/tata/hts/bychapter/index.htm. * * *
* * * * *
0
5. Section 252.225-7035 is amended by revising the clause date and
paragraphs (a), (b)(2), (c)(2)(ii), and Alternate I to read as follows:
Sec. 252.225-7035 Buy American Act--Free Trade Agreements--Balance of
Payments Program Certificate
* * * * *
Buy American Act--Free Trade Agreements--Balance of Payments Program
Certificate (Oct 2006)
(a) Definitions. Bahrainian end product, domestic end product, Free
Trade Agreement country, Free Trade Agreement country end product,
foreign end product, Moroccan end product, qualifying country end
product, and United States have the meanings given in the Buy American
Act--Free Trade Agreements--Balance of Payments Program clause of this
solicitation.
(b) * * *
(2) For line items subject to Free Trade Agreements, will evaluate
offers of qualifying country end products or Free Trade Agreement
country end products other than Bahrainian end products or Moroccan end
products without regard to the restrictions of the Buy American Act or
the Balance of Payments Program.
(c) * * *
(2) * * *
(ii) The offeror certifies that the following supplies are Free
Trade Agreement country end products other than Bahrainian end products
or Moroccan end products:
(Line Item Number) (Country of Origin)
* * * * *
Alternate I (Oct 2006)
As prescribed in 225.1101(9), substitute the phrase Canadian end
product for the phrases Bahrainian end product, Free Trade Agreement
country, Free Trade Agreement country end product, and Moroccan end
product in paragraph (a) of the basic provision; and substitute the
phrase Canadian end products for the phrase Free Trade Agreement
country end products other than Bahrainian end products or Moroccan end
products in paragraphs (b) and (c)(2)(ii) of the basic provision.
0
6. Section 252.225-7036 is amended as follows:
0
a. By revising the clause date;
0
b. By redesignating paragraphs (a)(1) through (11) as paragraphs (a)(2)
through (12) respectively;
0
c. By adding a new paragraph (a)(1);
0
d. By revising newly designated paragraph (a)(6);
0
e. In newly designated paragraphs (a)(7)(ii) and (a)(8)(ii), in the
first sentence of each, by removing ``or instrumentality'';
0
f. By revising paragraph (c);
0
g. In Alternate I by revising the date to read ``(OCT 2006)''; and
0
h. In Alternate I, in paragraph (a)(4)(ii), in the first sentence, by
removing ``or instrumentality''. The revised and added text reads as
follows:
Sec. 252.225-7036 Buy American Act--Free Trade Agreements--Balance of
Payments Program
* * * * *
Buy American Act--Free Trade Agreements--Balance of Payments Program
(Oct 2006)
(a) * * *
(1) Bahrainian end product means an article that--
(i) Is wholly the growth, product, or manufacture of Bahrain; or
(ii) In the case of an article that consists in whole or in part of
materials from another country, has been substantially transformed in
Bahrain 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) Free Trade Agreement country means Australia, Bahrain, Canada,
Chile, El Salvador, Guatemala, Honduras, Mexico, Morocco, Nicaragua, or
Singapore;
* * * * *
(c) The Contractor shall deliver under this contract only domestic
end products unless, in its offer, it specified delivery of qualifying
country end products, Free Trade Agreement country end products other
than Bahrainian end products or Moroccan end products, or other foreign
end products in the Buy American Act--Free Trade Agreements--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 Free Trade Agreement country end product other
than a Bahrainian end product or a Moroccan end product, the Contractor
shall deliver a qualifying country end product, a Free Trade Agreement
country end product other than a Bahrainian end product or a Moroccan
end product, or, at the Contractor's option, a domestic end product.
* * * * *
0
7. Section 252.225-7045 is amended as follows:
0
a. By revising the clause date;
0
b. In paragraph (a), in the definition of ``Designated country'', by
revising the parenthetical in paragraph (2) to read ``(Australia,
Bahrain, Canada, Chile, El Salvador, Guatemala, Honduras, Mexico,
Morocco, Nicaragua, or Singapore)'';
0
c. In paragraph (a), in the definition of ``Designated country'', by
removing ``Guatemala,'' from paragraph (4); and
0
d. By revising Alternate I to read as follows:
Sec. 252.225-7045 Balance of Payments Program--Construction Material
Under Trade Agreements
* * * * *
Balance of Payments Program--Construction Material under Trade
Agreements (Oct 2006)
* * * * *
Alternate I (Oct 2006)
As prescribed in 225.7503(b), add the following definition of
Bahrainian or Mexican construction material to paragraph (a) of the
basic clause, and substitute the following paragraphs (b) and (c) for
paragraphs (b) and (c) of the basic clause:
Bahrainian or Mexican construction material means a construction
material that--
(1) Is wholly the growth, product, or manufacture of Bahrain or
Mexico; or
(2) In the case of a construction material that consists in whole
or in part of materials from another country, has been substantially
transformed in Bahrain or Mexico into a new and different construction
material distinct from the materials from which it was transformed.
(b) This clause implements the Balance of Payments Program by
[[Page 58544]]
providing a preference for domestic construction material. In addition,
the Contracting Officer has determined that the WTO GPA and all Free
Trade Agreements except NAFTA apply to this acquisition. Therefore, the
Balance of Payments Program restrictions are waived for designated
country construction material other than Bahrainian or Mexican
construction material.
(c) The Contractor shall use only domestic or designated country
construction material other than Bahrainian or Mexican construction
material in performing this contract, except for--
(1) Construction material valued at or below the simplified
acquisition threshold in Part 2 of the Federal Acquisition Regulation;
or
(2) The construction material or components listed by the
Government as follows:
----------------------------------------------------------------
[Contracting Officer to list applicable excepted materials or
indicate ``none''].
[FR Doc. E6-16418 Filed 10-3-06; 8:45 am]
BILLING CODE 5001-08-P