[Federal Register: February 23, 2006 (Volume 71, Number 36)]
[Rules and Regulations]
[Page 9269-9271]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr23fe06-13]
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DEPARTMENT OF DEFENSE
Defense Acquisition Regulations System
48 CFR Parts 225 and 252
RIN 0750-AF29
Defense Federal Acquisition Regulation Supplement; Trade
Agreements Thresholds and Morocco Free Trade Agreement (DFARS Case
2005-D017)
AGENCY: Defense Acquisition Regulations System, Department of Defense
(DoD).
ACTION: Interim rule with request for comments.
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SUMMARY: DoD has issued an interim rule amending the Defense Federal
Acquisition Regulation Supplement (DFARS) to incorporate increased
thresholds for application of the World Trade Organization Government
Procurement Agreement and the Free Trade Agreements, as determined by
the United States Trade Representative. The rule also implements a new
Free Trade Agreement with Morocco and amends the list of end products
that are subject to trade agreements.
DATES: Effective Date: February 23, 2006.
Comment date: Comments on the interim rule should be submitted in
writing to the address shown below on or before April 24, 2006, to be
considered in the formation of the final rule.
ADDRESSES: You may submit comments, identified by DFARS Case 2005-D017,
using any of the following methods:
Federal eRulemaking Portal: http://www.regulations.gov.
Follow the instructions for submitting comments.
E-mail: dfars@osd.mil. Include DFARS Case 2005-D017 in the
subject line of the message.
Fax: (703) 602-0350.
Mail: Defense Acquisition Regulations System, Attn: Ms.
Amy Williams, OUSD (AT&L) DPAP (DARS), IMD 3C132, 3062 Defense
Pentagon, Washington, DC 20301-3062.
Hand Delivery/Courier: Defense Acquisition Regulations
System, Crystal Square 4, Suite 200A, 241 18th Street, Arlington, VA
22202-3402.
[[Page 9270]]
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 the clause prescriptions at DFARS 225.1101
and 225.7503 to reflect increased thresholds for application of the
trade agreements. Every 2 years, the trade agreements thresholds are
escalated according to a pre-determined formula set forth in the
agreements. The United States Trade Representative has specified the
following thresholds (70 FR 73510, December 12, 2005):
----------------------------------------------------------------------------------------------------------------
Supply Service Construction
contract contract contract
Trade agreement (equal to or (equal to or (equal to or
exceeding) exceeding) exceeding)
----------------------------------------------------------------------------------------------------------------
World Trade Organization Government Procurement Agreement....... $193,000 $193,000 $7,407,000
Free Trade Agreements (FTA):
Australia FTA............................................... 64,786 64,786 7,407,000
Chile FTA................................................... 64,786 64,786 7,407,000
Morocco FTA................................................. 193,000 193,000 7,407,000
Singapore FTA............................................... 64,786 64,786 7,407,000
NAFTA:
--Canada.................................................... 25,000 64,786 8,422,165
--Mexico.................................................... 64,786 64,786 8,422,165
----------------------------------------------------------------------------------------------------------------
In addition, this interim rule implements a new Free Trade
Agreement with Morocco as approved by Congress (Pub. L. 108-302). The
Morocco Free Trade Agreement waives the applicability of the Buy
American Act for some foreign supplies and construction materials from
Morocco, and specifies procurement procedures designed to ensure
fairness.
The World Trade Organization Government Procurement Agreement and
the other free trade agreements each list the items to which the trade
agreements do not apply when acquired by DoD. DFARS 225.401-70 lists
the end products that are subject to trade agreements if the value of
the acquisition is at or above the applicable dollar threshold. The
following items are not excluded for DoD from coverage by the trade
agreements and, therefore, have been added to the list at DFARS
225.401-70: Pins, needles, sewing kits, flag staffs, flagpoles,
flagstaff trucks, and tobacco products.
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., because the dollar
threshold changes are designed to keep pace with inflation and thus
maintain the status quo. Although the rule opens up DoD procurement to
the products of Morocco, 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 2005-D017.
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. However, there is no impact on the estimated
burden hours. The dollar threshold changes are in line with inflation
and maintain the status quo. Reporting of products from Morocco as Free
Trade Agreement end products rather than other foreign end products has
no impact on paperwork burden.
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 incorporates increased dollar thresholds for
application of the World Trade Organization Government Procurement
Agreement and the Free Trade Agreements, as determined by the United
States Trade Representative. In addition, the rule implements a new
Free Trade Agreement with Morocco, as approved by Congress (Pub. L.
108-302). The Morocco Free Trade Agreement waives the applicability of
the Buy American Act for some foreign supplies and construction
materials from Morocco and specifies procurement procedures designed to
ensure fairness. The increased dollar thresholds and the Morocco Free
Trade Agreement became effective on January 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 Parts 225 and 252
Government procurement.
Michele P. Peterson,
Editor, Defense Acquisition Regulations System.
0
Therefore, 48 CFR parts 225 and 252 are amended as follows:
0
1. The authority citation for 48 CFR parts 225 and 252 continues to
read as follows:
Authority: 41 U.S.C. 421 and 48 CFR Chapter 1.
PART 225--FOREIGN ACQUISITION
0
2. Section 225.401-70 is amended in the table by adding, in numerical
order, two new entries to read as follows:
Sec. 225.401-70 End products subject to trade agreements.
* * * * *
83 Pins, needles, and sewing kits (only part of 8315) and flag
staffs, flagpoles, and flagstaff trucks (only part of 8345)
* * * * *
[[Page 9271]]
89 Tobacco products (only 8975)
* * * * *
0
3. Section 225.1101 is amended by revising paragraph (10)(i) to read as
follows:
Sec. 225.1101 Acquisition of supplies.
* * * * *
(10)(i) Use the clause at 252.225-7036, Buy American Act--Free
Trade Agreements--Balance of Payments Program, instead of the clause at
FAR 52.225-3, Buy American Act--Free Trade Agreements--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
$193,000, and a Free Trade Agreement applies to the acquisition.
(A) Use the basic clause when the estimated value equals or exceeds
$64,786.
(B) Use the clause with its Alternate I when the estimated value
equals or exceeds $25,000 but is less than $64,786.
* * * * *
0
4. Section 225.7503 is revised to read as follows:
Sec. 225.7503 Contract clauses.
Unless the entire acquisition is exempt from the Balance of
Payments Program--
(a) Use the clause at 252.225-7044, Balance of Payments Program--
Construction Material, in solicitations and contracts for construction
to be performed outside the United States with a value greater than the
simplified acquisition threshold but less than $7,407,000.
(b) Use the clause at 252.225-7045, Balance of Payments Program--
Construction Material Under Trade Agreements, in solicitations and
contracts for construction to be performed outside the United States
with a value of $7,407,000 or more. For acquisitions with a value of
$7,407,000 or more, but less than $8,422,165, use the clause with its
Alternate I.
PART 252--SOLICITATION PROVISIONS AND CONTRACT CLAUSES
252.212-7001 [Amended]
0
5. Section 252.212-7001 is amended as follows:
0
a. By revising the clause date to read ``(FEB 2006)''; and
0
b. In paragraph (b), in entry ``252.225-7021'', by removing ``(DEC
2005)'' and adding in its place ``(FEB 2006)''.
0
6. Section 252.225-7021 is amended by revising the clause date and
paragraph (a)(3)(ii) to read as follows:
Sec. 252.225-7021 Trade agreements.
* * * * *
Trade Agreements (FEB 2006)
(a) * * *
(3) * * *
(ii) A Free Trade Agreement country (Australia, Canada, Chile,
Mexico, Morocco, or Singapore);
* * * * *
0
7. Section 252.225-7045 is amended as follows:
0
a. By revising the clause date;
0
b. In paragraph (a), by revising paragraph (2) of the definition of
``Designated country''; and
0
c. 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 (Feb 2006)
(a) * * *
Designated country means--
* * * * *
(2) A Free Trade Agreement country (Australia, Canada, Chile,
Mexico, Morocco, or Singapore);
* * * * *
Alternate I (Feb 2006). As prescribed in 225.7503(b), delete the
definitions of ``designated country'' and ``designated country
construction material'' from the definitions in paragraph (a) of the
basic clause, add the following definition of ``Australian, Chilean, or
Moroccan 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:
Australian, Chilean, or Moroccan construction material means a
construction material that--
(1) Is wholly the growth, product, or manufacture of Australia,
Chile, or Morocco; 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 Australia, Chile, or Morocco 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
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 WTO GPA
country, Australian, Chilean, or Moroccan, least developed country, or
Caribbean Basin country construction material.
(c) The Contractor shall use only domestic, WTO GPA country,
Australian, Chilean, or Moroccan, least developed country, or Caribbean
Basin country 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. 06-1635 Filed 2-22-06; 8:45 am]
BILLING CODE 5001-08-P