[Code of Federal Regulations]
[Title 48, Volume 1]
[Revised as of October 1, 2003]
From the U.S. Government Printing Office via GPO Access
[CITE: 48CFR25.403]

[Page 474-475]
 
            TITLE 48--FEDERAL ACQUISITION REGULATIONS SYSTEM
 
                CHAPTER 1--FEDERAL ACQUISITION REGULATION
 
PART 25_FOREIGN ACQUISITION--Table of Contents
 
                      Subpart 25.4_Trade Agreements
 
Sec.  25.403  Trade Agreements Act.

    (a) General. The Agreement on Government Procurement of the Trade 
Agreements Act--
    (1) Waives application of the Buy American Act to the end products 
and construction materials of designated countries;
    (2) Prohibits discriminatory practices based on foreign ownership;
    (3) Restricts purchases to end products identified in 25.403(c);
    (4) Requires certain procurement procedures designed to ensure 
fairness (see 25.408).
    (b) Thresholds. (1) Except as provided in 25.401, the Trade 
Agreements Act applies to an acquisition for supplies or services if the 
estimated value of the acquisition is $169,000 or more; the Trade 
Agreements Act applies to an acquisition for construction if the 
estimated value of the acquisition is $6,481,000 or more. These dollar 
thresholds are subject to revision by the U.S. Trade Representative 
approximately every 2 years (see Executive Order 12260).
    (2) To determine whether the Trade Agreements Act applies to the 
acquisition of products by lease, rental, or lease-purchase contract 
(including lease-to-ownership, or lease-with-option-to purchase), 
calculate the estimated acquisition value as follows:
    (i) If a fixed-term contract of 12 months or less is contemplated, 
use the total estimated value of the acquisition.
    (ii) If a fixed-term contract of more than 12 months is 
contemplated, use the total estimated value of the acquisition plus the 
estimated residual value of the leased equipment at the conclusion of 
the contemplated term of the contract.
    (iii) If an indefinite-term contract is contemplated, use the 
estimated monthly payment multiplied by the total number of months that 
ordering would be possible under the proposed contract, i.e., the 
initial ordering period plus any optional ordering periods.
    (iv) If there is any doubt as to the contemplated term of the 
contract, use the estimated monthly payment multiplied by 48.
    (3) The estimated value includes the value of all options.
    (4) If, in any 12-month period, recurring or multiple awards for the 
same type of product or products are anticipated, use the total 
estimated value of

[[Page 475]]

these projected awards to determine whether the Trade Agreements Act 
applies. Do not divide any acquisition with the intent of reducing the 
estimated value of the acquisition below the dollar threshold of the 
Trade Agreements Act.
    (c) Purchase restriction. (1) In acquisitions subject to the Trade 
Agreements Act, acquire only U.S.-made end products or eligible products 
(designated, Caribbean Basin, or NAFTA country end products) unless 
offers for such end products are either not received or are insufficient 
to fulfill the requirements.
    (2) This restriction does not apply to purchases by the Department 
of Defense from a country with which it has entered into a reciprocal 
agreement, as provided in departmental regulations.

[64 FR 72419, Dec. 27, 1999, as amended at 65 FR 36026, June 6, 2000; 67 
FR 21535, Apr. 30, 2002; 67 FR 56123, Aug. 30, 2002]