[Federal Register Volume 59, Number 3 (Wednesday, January 5, 1994)]
[Rules and Regulations]
[Pages 544-549]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 94-177]


[[Page Unknown]]

[Federal Register: January 5, 1994]


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DEPARTMENT OF DEFENSE

GENERAL SERVICES ADMINISTRATION

NATIONAL AERONAUTICS AND SPACE ADMINISTRATION

48 CFR Parts 5, 14, 15, 17, 25, and 52

[FAC 90-19; FAR Case 93-310]

 

Federal Acquisition Regulation; Implementation of the North 
American Free Trade Agreement Implementation Act

AGENCIES: Department of Defense (DOD), General Services Administration 
(GSA), and National Aeronautics and Space Administration (NASA).

ACTION: Interim rule with request for comment.

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SUMMARY: The Department of Defense, General Services Administration, 
and National Aeronautics and Space Administration have agreed to an 
interim rule implementing the North American Free Trade Agreement 
(NAFTA) Implementation Act.

DATES: Effective Date: January 1, 1994. This rule applies to 
solicitations issued on or after January 1, 1994.

    Comment Date: Comments should be submitted to the FAR Secretariat 
on or before March 7, 1994, to be considered in the formulation of a 
final rule.

ADDRESSES: Interested parties should submit written comments to: 
General Services Administration, FAR Secretariat (VRS), 18th & F 
Streets, NW., room 4037, Washington, DC 20405. Please cite FAC 90-19, 
FAR case 93-310 in all correspondence related to this case.

FOR FURTHER INFORMATION CONTACT:
Mr. Peter O'Such at (202) 501-1759 in reference to this FAR case. For 
general information, contact the FAR Secretariat, room 4037, GSA 
Building, Washington, DC 20405 (202) 501-4755. Please cite FAC 90-19, 
FAR case 93-310.

SUPPLEMENTARY INFORMATION:

A. Background

    Chapter Ten of NAFTA requires the three NAFTA countries (the United 
States, Canada, and Mexico) to eliminate ``buy national'' restrictions 
on non-defense related purchases, by their responsible Federal 
Governments, of goods and services provided by firms in North America. 
NAFTA applies to most United States Government agencies. The Canadian 
Free Trade Agreement is suspended while NAFTA remains in effect.
    As required by NAFTA, specified agencies must evaluate certain 
NAFTA country end products offers without regard to the restrictions of 
the Buy American Act or the Balance of Payments Program. This 
evaluation method will apply to offers of Canadian end products under 
supply contracts with an estimated value above $25,000 and Mexican end 
products under supply contracts with an estimated value of $50,000 or 
more, except for the Department of Energy's Power Marketing 
Administrations, where the estimated acquisition value is $250,000 or 
more. This evaluation method also will apply to construction contracts 
with an estimated acquisition value of $6,500,000 or more, except for 
the Department of Energy's Power Marketing Administration, where the 
estimated acquisition value is $8,000,000 or more.
    The applicable rule of origin for NAFTA country end products under 
the agreement is that of ``substantial transformation'', which means an 
article that is wholly the growth, product, or manufacture of a NAFTA 
country or has been substantially transformed in a NAFTA country into a 
new and different article may be offered.
    This rule also--
    (1) Designates NAFTA country end products as eligible products 
under the Trade Agreements Act, as implemented in Trade Agreements 
under the FAR;
    (2) Adds language to require that, when an overseas procurement for 
performance overseas is subject to NAFTA, it will be synopsized in 
accordance with agency procedures;
    (3) Revises the prescriptions for the provisions, Submission of 
Offers in the English Language, and Submission of Offers in U.S. 
Currency, to clarify and include NAFTA;
    (4) Updates the list of designated countries in FAR 25.401 to add 
``Portugal'' and revise ``Upper Volta'' to ``Burkina Faso'';
    (5) Includes the new threshold of $182,000 for application of the 
Trade Agreements Act and the European Community (EC) Agreement, which 
is effective January 1, 1994;
    (6) Updates FAR 25.407 list of agencies covered by the Agreements 
on EC and NAFTA; and
    (7) Makes clarifications to the interim rule published in FAC 90-18 
(58 FR 31140), at FAR 25.407, to implement the Memorandum of 
Understanding between the United States of America and the European 
Economic Community on Government Procurement and NAFTA.

B. Regulatory Flexibility Act

    The interim rule may 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 rule 
waives the Buy American Act for certain Mexican and Canadian products. 
An Initial Regulatory Flexibility Analysis (IRFA) has been prepared and 
will be provided to the Chief Counsel for Advocacy for the Small 
Business Administration. A copy of the IRFA may be obtained from the 
FAR Secretariat. Comments are invited. Comments from small entities 
concerning the affected FAR subpart will be considered in accordance 
with 5 U.S.C. 610. Such comments must be submitted separately and cite 
5 U.S.C. 601, et seq. (FAR Case 93-310), in correspondence.

C. Paperwork Reduction Act

    The Paperwork Reduction Act (Pub. L. 96-511) is deemed to apply 
because the new provision at 52.225-20 requires offerors to list the 
line item number and country of origin for any end product other than a 
domestic end product. Accordingly, a request for clearance of a new 
information collection requirement concerning the NAFTA Act is being 
submitted to the Office of Management and Budget under 44 U.S.C. 3501, 
et seq. Public comments concerning this requirement are invited through 
an OMB clearance request appearing in the Federal Register at 58 FR 
68636, December 28, 1993.

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 compelling reasons exist to promulgate this interim rule 
without prior opportunity for public comment. This action is necessary 
because the NAFTA Implementation Act, signed into law on December 8, 
1993, becomes effective on January 1, 1994. However, pursuant to Public 
Law 98-577 and Federal Acquisition Regulation 1.501, public comments 
received in response to this interim rule will be considered in 
formulating the final rule.

List of Subjects in 48 CFR Parts 5, 14, 15, 17, 25, and 52

    Government procurement.

    Dated: December 30, 1993.
Shirley Scott,
Acting Director, Office of Federal Acquisition Policy.

    Unless otherwise specified, all Federal Acquisition Regulation 
(FAR) and other directive material contained in FAC 90-19 is effective 
January 1, 1994.

    Dated: December 21, 1993.
Eleanor R. Spector,
Director, Defense Procurement, Department of Defense (DOD).
    Dated: December 20, 1993.
Richard H. Hopf, III,
Associate Administrator for Acquisition Policy, General Services 
Administration.
    Dated: December 21, 1993.
Deidre A. Lee,
Associate Administrator for Procurement, NASA.
    Therefore, 48 CFR parts 5, 14, 15, 17, 25, and 52 are amended as 
set forth below:
    1. The authority citation for 48 CFR parts 5, 14, 15, 17, 25, and 
52 continues to read as follows:

    Authority: 40 U.S.C. 486(c); 10 U.S.C. chapter 137; and 42 
U.S.C. 2473(c).

PART 5--PUBLICIZING CONTRACT ACTIONS

    2. Section 5.202 is amended in paragraph (a)(12) by adding a third 
sentence to read as follows:


5.202  Exceptions.

    (a) * * *
    (12) * * * This exception also does not apply to North American 
Free Trade Agreement contract actions, which will be synopsized in 
accordance with agency regulations.
* * * * *

PART 14--SEALED BIDDING

    3. Section 14.201-6 is amended by revising paragraphs (x) and (y) 
to read as follows:


14.201-6  Solicitation provisions.

* * * * *
    (x) The provision at 52.214-34, Submission of Offers in the English 
Language, is required in solicitations subject to the Trade Agreements 
Act or the North American Free Trade Agreement Implementation Act (see 
25.408(d)). It may be included in other solicitations when the 
contracting officer decides that it is necessary.
    (y) The provision at 52.214-35, Submission of Offers in U.S. 
Currency, is required in solicitations subject to the Trade Agreements 
Act or the North American Free Trade Agreement Implementation Act (see 
25.408(d)). It may be included in other solicitations when the 
contracting officer decides that it is necessary.
    4. Section 14.408-1 is amended by revising the introductory text of 
paragraph (a)(2) to read as follows:


14.408-1  Award of unclassified contracts.

    (a) * * *
    (2) For acquisitions subject to the Trade Agreements Act or the 
North American Free Trade Agreement (NAFTA) Implementation Act (see 
25.405(e)), agencies shall promptly, but in no event later than 7 
working days after award, give unsuccessful offerors from designated or 
NAFTA countries written notice stating--
* * * * *

PART 15--CONTRACTING BY NEGOTIATION

    5. Section 15.407 is amended by revising paragraphs (l) and (m) to 
read as follows:


15.407  Solicitation provisions.

* * * * *
    (l) The provision at 52.214-34, Submission of Offers in the English 
Language, is required in solicitations subject to the Trade Agreements 
Act or the North American Free Trade Agreement Implementation Act (see 
25.408(d)). It may be included in other solicitations when the 
contracting officer decides that it is necessary.
    (m) The provision at 52.214-35, Submission of Offers in U.S. 
Currency, is required in solicitations subject to the Trade Agreements 
Act or the North American Free Trade Agreement Implementation Act (see 
25.408(d)). It may be included in other solicitations when the 
contracting officer decides that it is necessary.
    6. Section 15.1001 is amended by revising paragraph (c)(2) to read 
as follows:


15.1001  Notifications to unsuccessful offerors.

* * * * *
    (c) * * *
    (2) For acquisitions subject to the Trade Agreements Act or the 
North American Free Trade Agreement (NAFTA) Implementation Act (see 
25.405(e)), the information in paragraph (c)(1) of this section shall 
be provided to unsuccessful offerors from designated or NAFTA countries 
promptly, but in no event later than seven working days after contract 
award.
* * * * *

PART 17--SPECIAL CONTRACTING METHODS

    7. Section 17.203 is amended by revising paragraph (h) to read as 
follows:


17.203  Solicitations.

* * * * *
    (h) See 25.402(a)(5) regarding use of options in calculating the 
estimated contract amount for application of the Trade Agreements Act 
and North American Free Trade Agreement thresholds.

PART 25--FOREIGN ACQUISITION


25.101  [Amended]

    8. Section 25.101 is amended in the definition Domestic end product 
by removing the last sentence.
    9. Section 25.109 is amended by revising paragraphs (d) and (f), 
redesignating paragraph (g)(2) as (g)(3), and adding a new paragraph 
(g)(2) to read as follows:


25.109  Solicitation provisions and contract clauses.

* * * * *
    (d) Except as provided in paragraph (g) of this section, or when 
the clause prescribed by paragraph (f) is used, or when the clause 
prescribed in 25.408(a)(4) is used, the contracting officer shall 
insert the clause at 52.225-3, Buy American Act-Supplies, in 
solicitations and contracts for the acquisition of supplies, or for 
services involving the furnishing of supplies, for use within the 
United States.
* * * * *
    (f) Except as provided in paragraph (g) of this section, the 
contracting officer shall insert the clause at 52.225-17, Buy American 
Act-Supplies under European Community Agreement, in solicitations and 
contracts for the acquisition of supplies, or for services involving 
the furnishing of supplies when the estimated acquisition value meets 
or exceeds $182,000 for the agencies listed at FAR 25.407, except for 
the Power Marketing Administrations' segment of the Department of 
Energy, where the estimated acquisition value is $450,000 of more.
    (g) * * *
    (2) The acquisition is made under the Trade Agreements Act (see 
subpart 25.4); or
* * * * *


25.202  [Amended]

    10. Section 25.202 is amended in paragraph (c) by removing 
``25.402(a)(4)'' and inserting ``25.402(a) (3) and (4)''.
    11. Section 25.205 is amended by revising paragraph (b) to read as 
follows:


25.205  Solicitation provision and contract clause.

* * * * *
    (b) For construction contracts with an estimated acquisition value 
of $6,500,000 ($8,000,000 for the Power Marketing Administrations) or 
more, to be awarded by agencies listed in 25.407, insert the clause at 
52.225-15, Buy American Act-Construction Materials under European 
Community and North American Free Trade Agreements, in solicitations 
and contracts for construction.
    12. Section 25.300 is amended by revising the second sentence to 
read as follows:


25.300  Scope of subpart.

    * * * The Balance of Payments Program restrictions have been waived 
with respect to the acquisition, in accordance with subpart 25.4, of 
certain products under the Trade Agreements Act of 1979 and the North 
American Free Trade Agreement (NAFTA) Implementation Act.


25.305  [Amended]

    13. Section 25.305 is amended in paragraphs (a) and (c) by adding 
``or NAFTA'' after ``1979''.
    14. Section 25.400 is amended by revising paragraph (c) to read as 
follows:


25.400  Scope of subpart.

* * * * *
    (c) Acquisitions involving offers of Canadian or Mexican end 
products under the North American Free Trade Agreement (NAFTA), as 
approved by Congress in the NAFTA Implementation Act (Pub. L. 103-182, 
107 Stat. 2057);
* * * * *
    15. Section 25.401 is amended by revising the definitions for 
``Canadian end product'' and ``Eligible product''; amending the 
``designated country'' list by removing ``Upper Volta'' and adding in 
alphabetical order ``Burkina Faso'' and ``Portugal''; and adding in 
alphabetical order the definitions ``Mexican end product'', ``North 
American Free Trade Agreement (NAFTA) country'', ``NAFTA country 
construction material'', and ``NAFTA country end product'' to read as 
follows:


25.401  Definitions.

    Canadian end product, as used in this subpart, means an article 
that (a) is wholly the growth, product, or manufacture of Canada, or 
(b) in the case of an article which 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 includes 
services (except transportation services) incidental to its supply; 
provided, that the value of those incidental services does not exceed 
that of the product itself. It does not include service contracts as 
such.
* * * * *
    Eligible product, as used in this subpart, means a designated, 
North American Free Trade Agreement (NAFTA), or Caribbean Basin country 
end product.
* * * * *
    Mexican end product, as used in this subpart, means an article that 
(a) is wholly the growth, product, or manufacture of Mexico, or (b) in 
the case of an article which consists in whole or in part of materials 
from another country or instrumentality, has been substantially 
transformed in Mexico 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 includes services 
(except transportation services) incidental to its supply; provided, 
that the value of those incidental services does not exceed that of the 
product itself. It does not include service contracts as such.
    North American Free Trade Agreement (NAFTA) country, as used in 
this subpart, means Canada or Mexico.
    NAFTA country construction material, means a construction material 
that (a) is wholly the growth, product, or manufacture of a NAFTA 
country or (b) in the case of a construction material which 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 construction material distinct form the materials from which 
it was transformed.
    NAFTA country end product, as used in this subpart, means a 
Canadian end product or a Mexican end product.
    16. Section 25.402 is amended--
    (a) In paragraph (a)(1) by inserting a new sentence after the first 
sentence;
    (b) By revising paragraph (a)(3);
    (c) In the introductory text of paragraph (a)(4) by inserting 
``(European Community Agreement)'' after ``Procurement''; in (a)(4)(i) 
by revising ``25.406 or'' to read ``25.407''; and in (a)(4)(ii) by 
revising ``$176,000'' to read ``$182,000'';
    (d) In paragraphs (a)(5) introductory text and (a)(6) by inserting 
``or NAFTA'' after `'Act''; and
    (e) By removing ``country'' the first time it appears in the 
introductory text of paragraph (f) and the second time it appears in 
paragraph (f)(2) and inserting'', North American Free Trade 
Agreement,'' in their places.
    The revised text reads as follows:


25.402  Policy.

    (a)(1) * * * The current threshold is $182,000. * * *
* * * * *
    (3) As required by the North American Free Trade Agreement (NAFTA) 
Implementation Act (Pub. L. 103-182, 107 Stat. 2057), agencies shall 
evaluate offers of the following NAFTA country end products without 
regard to the restrictions of the Buy American Act (see subpart 25.1) 
or the Balance of Payments Program (see subpart 25.3):
    (i) NAFTA country construction materials under construction 
contracts with an estimated acquisition value of $6,500,000 or more for 
the agencies in 25.407, except for the Power Marketing Administration 
segments of the Department of Energy where the estimated acquisition 
value is $8,000,000 or more.
    (ii) Canadian end products under supply contracts with an estimated 
value above $25,000 and Mexican end products under supply contracts 
with an estimated value of $50,000 or more for the agencies in 25.407, 
except for the Power Marketing Administrations' segment of the 
Department of Energy, where the estimated acquisition value is $250,000 
or more.
* * * * *
    17. Section 25.403 is amended in paragraph (a) by removing ``Trade 
Agreements Act''; by revising paragraph (b); in paragraph (e) by 
inserting ``(3) and'' after ``25.402(a)''; in paragraph (h) by revising 
``25.402(a)(4)(ii)'' to read ``25.402(a)(3) and (4)''; and revising 
paragraph (l) to read as follows:


25.403  Exceptions.

* * * * *
    (b) Products of countries (1) not identified in 25.401 as 
designated, Caribbean Basin, or North American Free Trade Agreement 
countries, or (2) barred by 25.402(c);
* * * * *
    (l)(1) For purchases subject to North American Free Trade Agreement 
or the European Community Agreement, agencies not listed at 25.407;
    (2) For other purchases under this subpart, agencies not listed at 
25.406; or
* * * * *


25.405  [Amended]

    18. Section 25.405 is amended in the introductory text by inserting 
``or North American Free Trade Agreement (NAFTA)'' after ``Act''; in 
paragraph (d) by removing ``countries'' the first time it appears and 
inserting ``, NAFTA,'' in its place; and in paragraph (e) by inserting 
``or NAFTA'' after ``designated''.
    19. Section 25.406 is amended by revising the ``General Services 
Administration'' entry and adding in alphabetical order ``National 
Archives and Records Administration'' to read as follows:


25.406  Agencies covered by the Agreement on Government Procurement.

* * * * *
    General Services Administration (except Federal Supply Groups 51 
and 52 and Federal Supply Class 7340).
* * * * *
    National Archives and Records Administration.
* * * * *
    20. Section 25.407 is amended by revising the section heading; 
removing the introductory paragraph; redesignating paragraphs (a) thru 
(d) as (b) thru (e), and adding a new paragraph (a); changing ``is'' to 
``are'' in newly redesignated (d); and adding paragraphs (f) and (g) to 
read as follows:


25.407  Agencies covered by the European Community and North American 
Free Trade Agreements.

    (a) The agencies listed in 25.406.
* * * * *
    (f) Federal Housing Finance Board.
    (g) Office of Thrift Supervision.
    21. Section 25.408 is amended by removing ``Act'' following 
``Agreements'' from paragraph (a)(1) and (a)(2) the first time it 
appears; by removing ``and'' at the end of paragraph (a)(1); by 
removing the period at the end of paragraph (a)(2) and inserting a 
semicolon in its place; by adding new paragraphs (a)(3) and (a)(4); by 
revising paragraph (c); and in paragraph (d) by inserting ``or NAFTA'' 
following ``Act'' to read as follows:


25.408  Solicitation provision and contract clause.

    (a) * * *
    (3) The provision at 52.225-20, Buy American Act-North American 
Free Trade Agreement (NAFTA) Implementation Act-Balance of Payments 
Program Certificate, in solicitations containing the clause at 52.225-
21; and
    (4) The clause at 52.225-21, Buy American Act-North American Free 
Trade Agreement (NAFTA) Implementation Act-Balance of Payments Program, 
where the contracting officer has determined that the acquisition is 
not subject to the Trade Agreements Act but is subject to NAFTA.
* * * * *
    (c) The clause prescriptions at paragraph (a) of this section shall 
apply where any item under a multiple item solicitation is determined 
to be subject to the Trade Agreements Act or North American Free Trade 
Agreement Implementation Act. If the Acts do not apply to all of the 
items being solicited, the contracting officer shall indicate, in the 
schedule, those items that are exempt.
* * * * *


25.1003  [Amended]

    22. Section 25.1003 is amended in paragraphs (a)(2) and (b)(2) by 
revising ``$176,000'' to read ``$182,000''.

PART 52--SOLICITATION PROVISIONS AND CONTRACT CLAUSES


52.225-3  [Amended]

    23. Section 52.225-3 is amended by revising the date of the clause 
to read ``(JAN 1994)''; by removing the last sentence from the 
definition ``Domestic end product''; and removing the parenthetical 
following paragraph (b)(4).
    24. Section 52.225-8 is amended in the section and clause headings 
by removing ``Act'' following ``Agreements'', and revising the date of 
the clause heading to read ``(JAN 1994)''; in paragraph (a) by removing 
``Act'' following ``Agreements'', and inserting ``a North American Free 
Trade Agreement (NAFTA) country,'' following ``designated country,''; 
by revising the introductory text of paragraph (c) and paragraph 
(c)(1); and in paragraph (c)(2) by removing ``Act'' following 
``Agreements''. The revised text reads as follows:


Sec. 52.225-8  Buy American Act--Trade Agreements--Balance of Payments 
Program Certificate.

* * * * *

Buy American Act--Trade Agreements--Balance of Payments Program 
Certificate (Jan 1994)

* * * * *
    (c) Offers will be evaluated by giving certain preferences to 
domestic end products, designated country end products, NAFTA 
country end products, and Caribbean Basin country end products over 
other end products. In order to obtain these preferences in the 
evaluation of each excluded end product listed in paragraph (b) of 
this provision, offerors must identify and certify below those 
excluded end products that are designated or NAFTA country end 
products, or Caribbean Basin country end products. Products that are 
not identified and certified below will not be deemed designated 
country end products, NAFTA country end products, or Caribbean Basin 
country end products. Offerors must certify by inserting the 
applicable line item numbers in the following:
    (1) The offeror certifies that the following supplies qualify as 
``designated or NAFTA country end products'' as those terms are 
defined in the clause entitled ``Buy American Act--Trade 
Agreements--Balance of Payments Program:''

(Insert line item numbers)

* * * * *
    25. Section 52.225-9 is amended in the section and clause headings 
by removing ``Act'' following ``Agreements'', and revising the date of 
the clause heading to read ``(JAN 1994)''; by revising the introductory 
text of paragraph (a) and adding in alphabetical order the definitions 
``NAFTA country'', and ``NAFTA country end product''; and revising 
paragraph (b) to read as follows:


Sec. 52.225-9  Buy American Act--Trade Agreements--Balance of Payments 
Program.

* * * * *

Buy American Act--Trade Agreements--Balance of Payments Program (Jan 
1994)

    (a) This clause implements the Buy American Act (41 U.S.C. 10), 
the Trade Agreements Act of 1979 (19 U.S.C. 2501-2582), the North 
American Free Trade Agreement (NAFTA) Implementation Act (Pub. L. 
103-182, 107 Stat. 2057) and the Balance of Payments Program by 
providing a preference for domestic end products over foreign end 
products, except for certain foreign end products which meet the 
requirements for classification as designated, NAFTA, or Caribbean 
Basin country end products.
* * * * *
    NAFTA country, as used in this clause, means Canada or Mexico.
    NAFTA country end product, as used in this clause, means an 
article that (1) is wholly the growth, product, or manufacture of a 
NAFTA country, or (2) in the case of an article which 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 includes services (except 
transportation services) incidental to its supply; provided, that 
the value of those incidental services does not exceed that of the 
product itself. It does not include service contracts as such.
    (b) The Contracting Officer has determined that the Trade 
Agreements Act and NAFTA apply to this acquisition. Unless otherwise 
specified, the Acts apply to all items in the schedule. The 
Contractor agrees to deliver under this contract only domestic end 
products unless, in its offer, it specifies delivery of foreign end 
products in the provision entitled ``Buy American Act--Trade 
Agreements--Balance of Payments Program Certificate.'' An offer 
certifying that a designated, NAFTA, or Caribbean Basin country end 
product will be supplied requires the Contractor to supply a 
designated, NAFTA, or Caribbean Basin country end product or, at the 
Contractor's option, a domestic end product. Contractors may not 
supply a foreign end product for line items subject to the Trade 
Agreements Act unless the foreign end product is a designated, 
NAFTA, or Caribbean end product (see FAR 25.401), or unless a waiver 
is granted under section 302 of the Trade Agreements Act of 1979 
(see FAR 25.402(c)).
* * * * *
    26. Section 52.225-15 is amended in the section and clause headings 
by removing ``Agreement'' and inserting ``and North American Free Trade 
Agreements''; by revising the date of the clause heading to read ``(JAN 
1994)''; in paragraph (a) by adding in alphabetical order the 
definitions ``North American Free Trade Agreement (NAFTA) country'', 
and ``NAFTA country construction material''; and by revising paragraphs 
(b) and (c) to read as follows:


52.225-15  Buy American Act--Construction Materials under European 
Community and North American Free Trade Agreements.

* * * * *

Buy American Act--Construction Materials Under European Community and 
North American Free Trade Agreements (Jan 1994)

* * * * *
    North American Free Trade Agreement (NAFTA) country means Canada 
or Mexico.
    NAFTA country construction material means a construction 
material that (1) is wholly the growth, product, or manufacture of a 
NAFTA country, or (2) in the case of a construction material which 
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 construction material distinct from 
the materials from which it was transformed.
    (b) The Buy American Act (41 U.S.C. 10) provides that the 
Government give preference to domestic material. In addition, the 
Memorandum of Understanding between the United States of America and 
the European Economic Community on Government Procurement, and the 
North American Free Trade Agreement (NAFTA), provide that EC and 
NAFTA construction materials are exempted from application of the 
Buy American Act.
    (c) The Contractor agrees that only domestic construction 
materials, NAFTA country construction materials or EC construction 
materials will be used by the Contractor, subcontractors, 
materialmen and suppliers in the performance of this contract, 
except for other foreign construction materials, if any, listed in 
this contract.

(End of clause)

    27. Section 52.225-17 is amended in the clause heading by revising 
the date to read ``(JAN 1994)''; in the definition ``Domestic end 
product'' by removing the last sentence; by removing the parenthetical 
following paragraph (c)(4); and by adding paragraph (d) to read as 
follows:


52.225-17  Buy American Act--Supplies under European Community 
Agreement.

* * * * *

Buy American Act--Supplies Under European Community Agreement (Jan 
1994)

* * * * *
    (d) If this contract contains the clause at 52.225-21, Buy 
American Act--North American Free Trade Agreement (NAFTA) 
Implementation Act--Balance of Payments Program, the Contractor may 
deliver NAFTA country end products, notwithstanding the prohibition 
in paragraph (c).

(End of clause)

    28. Section 52.225-19 is amended in the clause heading by revising 
the date to read ``(JAN 1994)''; and by revising paragraph (b) to read 
as follows:


52.225-19  European Community Sanction for Services.

* * * * * *

European Community Sanction for Services (Jan 1994)

* * * * *
    (b) Agreement. The Contractor agrees not to perform services 
under this contract in a sanctioned member state of the EC. This 
does not apply to subcontracts.

(End of clause)

    29. Sections 52.225-20 and 52.225-21 are added to read as follows:


52.225-20  Buy American Act--North American Free Trade Agreement 
Implementation Act--Balance of Payments Program Certificate.

    As prescribed in 25.408(a)(3), insert the following provision:

Buy American Act--North American Free Trade Agreement Implementation 
Act--Balance of Payments Program Certificate (Jan 1994)

    (a) The offeror hereby certifies that each end product, except 
those listed in paragraph (b) of this provision, is a domestic end 
product (as defined in the clause entitled ``Buy American Act--North 
American Free Trade Agreement (NAFTA) Implementation Act--Balance of 
Payments Program'') and that components of unknown origin have been 
considered to have been mined, produced, or manufactured outside the 
United States.
    (b) Excluded End Products:

------------------------------------------------------------------------
           Line item No.                      Country of origin         
------------------------------------------------------------------------
                                                                        
                                                                        
                           (List as necessary)                          
                                                                        
------------------------------------------------------------------------

    (c) Offers will be evaluated by giving certain preferences to 
domestic end products or NAFTA country end products over other end 
products. In order to obtain these preferences in the evaluation of 
each excluded end product listed in paragraph (b) of this provision, 
offerors must identify and certify below those excluded end products 
that are NAFTA country end products. Products that are not 
identified and certified below will not be deemed NAFTA country end 
products. Offerors must certify by inserting the applicable line 
item numbers in the following:
    (1) The offeror certifies that the following supplies qualify as 
``NAFTA country end products'' as that term is defined in the clause 
entitled ``Buy American Act--North American Free Trade Agreement 
Implementation Act--Balance of Payments Program:''

----------------------------------------------------------------------
(Insert line item numbers)

    (d) Offers will be evaluated in accordance with FAR part 25.

(End of provision)


52.225-21  Buy American Act--North American Free Trade Agreement 
Implementation Act--Balance of Payments Program.

    As prescribed in 25.408(a)(4), insert the following clause:

Buy American Act--North American Free Trade Agreement Implementation 
Act--Balance of Payments Program (Jan 1994)

    (a) Definitions. As used in this clause--
    Components means those articles, materials, and supplies 
incorporated directly into the end products.
    Domestic end product means (1) an unmanufactured end product 
mined or produced in the United States, or (2) an end product 
manufactured in the United States, if the cost of its components 
mined, produced, or manufactured in the United States exceeds 50 
percent of the cost of all its components. A component shall also be 
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 (i) determined by the 
Government, to be not mined, produced, or manufactured in the United 
States in sufficient and reasonably available commercial quantities 
of a satisfactory quality, or (ii) to which the agency head 
concerned has determined that it would be inconsistent with the 
public interest to apply the restrictions of the Buy American Act.
    End products means those articles, materials, and supplies to be 
acquired under this contract for public use.
    Foreign end product means an end product other than a domestic 
end product.
    North American Free Trade Agreement (NAFTA) country means Canada 
or Mexico.
    NAFTA country end product means an article that (1) is wholly 
the growth, product, or manufacture of a NAFTA country, or (2) in 
the case of an article which 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 includes services (except transportation 
services) incidental to its supply; provided, that the value of 
those incidental services does not exceed that of the product 
itself. It does not include service contracts as such.
    (b) This clause implements the Buy American Act (41 U.S.C. 10), 
the North American Free Trade Agreement Implementation Act (Pub. L. 
103-182, 107 Stat. 2057), and the Balance of Payments Program by 
providing a preference for domestic end products over foreign end 
products, except for certain foreign end products which meet the 
requirements for classification as NAFTA country end products.
    (c) The Contracting Officer has determined that the NAFTA 
applies to this acquisition. Unless otherwise specified, the Act 
applies to all items in the schedule. The Contractor agrees to 
deliver under this contract only domestic end products unless, in 
its offer, it specifies delivery of foreign end products in the 
provision entitled ``Buy American Act--North American Free Trade 
Agreement Implementation Act--Balance of Payments Program 
Certificate.'' An offer certifying that a NAFTA country end product 
will be supplied requires the Contractor to supply a NAFTA country 
end product or, at the Contractor's option, a domestic end product.
    (d) If the contract contains the clause at 52.225-17, Buy 
American Act--Supplies under European Community Agreement, the 
Contractor may deliver EC country end products notwithstanding the 
provisions of paragraph (c).
    (e) Offers will be evaluated in accordance with the policies and 
procedures of subpart 25.4 of the Federal Acquisition Regulation.

(End of clause)

[FR Doc. 94-177 Filed 1-4-94; 8:45 am]
BILLING CODE 6820-34-M