[Federal Register Volume 67, Number 83 (Tuesday, April 30, 2002)]
[Rules and Regulations]
[Pages 21534-21537]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 02-10370]


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DEPARTMENT OF DEFENSE

GENERAL SERVICES ADMINISTRATION

NATIONAL AERONAUTICS AND SPACE ADMINISTRATION

48 CFR Parts 13, 25, and 52

[FAC 2001-07; FAR Case 1999-616; Item II]
RIN 9000-AI90


Federal Acquisition Regulation; Revisions to Balance of Payments 
Program

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

ACTION: Final rule.

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SUMMARY: The Civilian Agency Acquisition Council and the Defense 
Acquisition Regulations Council (Councils) have agreed on a final rule 
amending the Federal Acquisition Regulation (FAR) to remove the 
language pertaining to the Balance of Payments Program.

DATES: Effective Date: May 15, 2002.

FOR FURTHER INFORMATION CONTACT: The FAR Secretariat, Room 4035, GS 
Building, Washington DC, 20405, (202) 501-4755, for information 
pertaining to status or publication schedules. For clarification of 
content, contact Ms. Cecelia L. Davis, Procurement Analyst, at (202) 
219-0202. Please cite FAC 2001-07, FAR case 1999-616.

SUPPLEMENTARY INFORMATION:

A. Background

    This final rule amends FAR part 25, Foreign Acquisition, to remove 
subpart 25.3, Balance of Payments Program, and makes conforming changes 
to FAR parts 13 and 52. This revision will reduce the administrative 
burdens on both the Government and the public, without significant 
impact on our international balance of payments.
    DoD, GSA, and NASA published a proposed rule in the Federal 
Register at 65 FR 54936, September 11, 2000. One public comment was 
received. The commenter raised three specific issues: (1) This rule is 
a significant rule under E.O. 12866 and represents a major rule; (2) 
concern that no effort was made to coordinate the proposed changes and 
elimination of the Balance of Payments Program with the Department of 
Commerce; and (3) industry would be adversely impacted by the 
elimination of the Balance of Payments Program by the deletion of FAR 
25.3. In response to these concerns, this rule is not deemed a 
significant rule nor a major rule and not subject to review under 
section 6(b) of Executive Order 12866, Regulatory Planning and Review, 
dated September 30, 1993. This rule applies primarily to civilian 
agency acquisitions of supplies valued at more than $100,000, but not 
more than $186,000, for use outside the United States. Few acquisitions 
meet all of these limitations. In reference to the coordination issue 
with the Department of Commerce, the Department of Commerce has a 
representative on the Civilian Agency Acquisition Council and raised no 
objection when the proposed rule was discussed and agreed upon. In 
addressing the commenter's economic concerns, it appears the commenter 
is unaware that the Balance of Payments Program will be continued 
within the Department of Defense, and is unaware of the DFARS case that 
has been opened to address this program.
    Civilian agencies have limited overseas purchases and given the 
small range of products and services to which the Balance of Payments 
Program applies, the benefits derived from applying the Balance of 
Payments Program to Civilian agency procurements does not equal the 
time and effort expended. The Councils, with the recommendations of the 
International Acquisition Committee, thoroughly considered this comment 
before agreeing to convert the proposed rule to a final rule without 
change.
    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 Department of Defense, the General Services Administration, and 
the National Aeronautics and Space Administration certify that this 
final rule will not 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 applies 
primarily to civilian agency acquisitions of supplies valued at more 
than $100,000, but not more than $186,000, for use outside the United 
States. Few acquisitions meet all of these limitations.

C. Paperwork Reduction Act

    The Paperwork Reduction Act does apply; however, these changes to 
the FAR will reduce information collection requirements to the 
paperwork burden previously approved under OMB Control Numbers 9000-
0023, 9000-0130, and 9000-0141 by approximately 1,121 hours.

List of Subjects in 48 CFR Parts 13, 25, and 52

    Government procurement.

    Dated: April 23, 2002.
Al Matera,
Director, Acquisition Policy Division.


    Therefore, DoD, GSA, and NASA amend 48 CFR parts 13, 25, and 52 as 
set forth below:
    1. The authority citation for 48 CFR parts 13, 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 13--SIMPLIFIED ACQUISITION PROCEDURES

    2. Amend section 13.302-5 by revising paragraph (d)(3)(i) to read 
as follows:


13.302-5  Clauses.

* * * * *
    (d) * * *
    (3)(i) When an acquisition for supplies for use within the United 
States cannot be set aside for small business concerns and trade 
agreements apply (see Subpart 25.4), substitute the clause at FAR 
52.225-3, Buy American Act--North American Free Trade Agreement--
Israeli Trade Act, used with Alternate I or Alternate II, if 
appropriate, instead of the clause at FAR 52.225-1, Buy American Act--
Supplies.
* * * * *

PART 25--FOREIGN ACQUISITION


25.000  [Amended]

    3. Amend section 25.000 by removing ``the Balance of Payments 
Program,''.

[[Page 21535]]

25.001  [Amended]

    4. Amend section 25.001 by removing paragraph (b) and redesignating 
paragraphs (c), (d), and (e) as paragraphs (b), (c), and (d), 
respectively; and by removing ``and the Balance of Payments Program'' 
from the first sentence of newly redesignated paragraph (b).


25.002  [Amended]

    5. Amend the table in section 25.002 as follows:
    a. In the first column by removing ``25.3 Balance of Payments 
Program'' and adding, in its place, ``25.3 [Reserved]''; and
    b. In the third and fifth columns by removing ``X'' and adding, in 
their place, ``--''.

    6. Amend section 25.003 by revising the definition ``Eligible 
product'' to read as follows:


25.003  Definitions.

* * * * *
    Eligible product means a foreign end product that is not subject to 
discriminatory treatment under the Buy American Act due to 
applicability of a trade agreement to a particular acquisition.
* * * * *

Subpart 25.3--[Reserved]

    7. Remove and reserve subpart 25.3.


25.402  [Amended]

    8. Amend section 25.402 in the first and fourth sentences by 
removing ``or the Balance of Payments Program''; and in the fourth 
sentence by removing the word ``such'' and inserting ``those'' in its 
place.


25.403  [Amended]

    9. Amend section 25.403 in paragraph (a)(1) by removing ``and the 
Balance of Payments Program''.


25.405  [Amended]

    10. Amend section 25.405 in the second sentence of paragraph (a) by 
removing ``or the Balance of Payments Program''.


25.406  [Amended]

    11. Amend section 25.406 by removing ``or the Balance of Payments 
Program''.


25.501  [Amended]

    12. Amend section 25.501 in paragraph (d) by removing ``and Balance 
of Payments Program''.


25.502  [Amended]

    13. Amend section 25.502--
    a. In the introductory text of paragraph (c) by removing ``or the 
Balance of Payments Program'';
    b. In paragraph (c)(3) by removing ``and the Balance of Payments 
Program provide'' and adding ``provides'' in its place;
    c. In the introductory text of paragraph (c)(4) by removing ``or 
25.304'';
    d. In paragraph (d)(2) by removing ``or Balance of Payments 
Program''; and
    e. In paragraph (d)(3) by removing ``and Balance of Payments 
Program''.

    14. Revise section 25.504 to read as follows:


25.504  Evaluation Examples.

    The following examples illustrate the application of the evaluation 
procedures in 25.502 and 25.503. The examples assume that the 
contracting officer has eliminated all offers that are unacceptable for 
reasons other than price or a trade agreement (see 25.502(a)(1)). The 
evaluation factor may change as provided in agency regulations.

    15. Amend section 25.504-1 by revising the section heading and 
paragraphs (b)(1) and (b)(2) to read as follows:


25.504-1  Buy American Act.

* * * * *
    (b)(1) Example 2.

------------------------------------------------------------------------
 
------------------------------------------------------------------------
Offer A..........................      $11,000  Domestic end product,
                                                 small business
Offer B..........................      $10,700  Domestic end product,
                                                 small business
Offer C..........................      $10,200  U.S.-made end product
                                                 (not domestic), small
                                                 business
------------------------------------------------------------------------

    (2) Analysis: This acquisition is for end products for use in the 
United States and is set aside for small business concerns. The Buy 
American Act applies. Perform the steps in 25.502(a). Offer C is 
evaluated as a foreign end product because it is the product of a small 
business but is not a domestic end product (see 25.502(c)(4)). After 
applying the 12 percent factor, the evaluated price of Offer C is 
$11,424. Award on Offer B at $10,700 (see 25.502(c)(4)(ii)).

    16. Amend section 25.1101 by revising paragraphs (a), (b), and 
(c)(1) to read as follows:


25.1101  Acquisition of supplies.

* * * * *
    (a)(1) Insert the clause at 52.225-1, Buy American Act--
    Supplies, in solicitations and contracts with a value exceeding 
$2,500 but not exceeding $25,000; and in solicitations and contracts 
with a value exceeding $25,000, if none of the clauses prescribed in 
paragraphs (b) and (c) of this section apply, except if--
    (i) The solicitation is restricted to domestic end products in 
accordance with Subpart 6.3;
    (ii) The acquisition is for supplies for use within the United 
States and an exception to the Buy American Act applies (e.g., 
nonavailability or public interest); or
    (iii) The acquisition is for supplies for use outside the United 
States.
    (2) Insert the provision at 52.225-2, Buy American Act Certificate, 
in solicitations containing the clause at 52.225-1.
    (b)(1)(i) Insert the clause at 52.225-3, Buy American Act--North 
American Free Trade Agreement--Israeli Trade Act, in solicitations and 
contracts if--
    (A) The acquisition is for supplies, or for services involving the 
furnishing of supplies, for use within the United States, and the value 
of the acquisition is more than $25,000, but is less than $177,000; and
    (B) No exception in 25.401 applies. For acquisitions of agencies 
not subject to the Israeli Trade Act (see 25.406), see agency 
regulations.
    (ii) If the acquisition value exceeds $25,000 but is less than 
$50,000, use the clause with its Alternate I.
    (iii) If the acquisition value is $50,000 or more but is less than 
$54,372, use the clause with its Alternate II.
    (2)(i) Insert the provision at 52.225-4, Buy American Act--North 
American Free Trade Agreement--Israeli Trade Act Certificate, in 
solicitations containing the clause at 52.225-3.
    (ii) If the acquisition value exceeds $25,000 but is less than 
$50,000, use the provision with its Alternate I.
    (iii) If the acquisition value is $50,000 or more but is less than 
$54,372, use the provision with its Alternate II.
    (c)(1) Insert the clause at 52.225-5, Trade Agreements, in 
solicitations and contracts valued at $177,000 or more, if the Trade 
Agreements Act applies (see 25.401 and 25.403) and the agency has 
determined that the restrictions of the

[[Page 21536]]

Buy American Act are not applicable to U.S.-made end products. If the 
agency has not made such a determination, the contracting officer must 
follow agency procedures.
* * * * *

    17. Amend section 25.1102 by revising the introductory text of 
paragraph (a), paragraph (b), the introductory text of paragraph (c), 
and paragraphs (d)(1) and (d)(2) to read as follows:


25.1102  Acquisition of construction.

    (a) Insert the clause at 52.225-9, Buy American Act--Construction 
Materials, in solicitations and contracts for construction that is 
performed in the United States valued at less than $6,806,000.
* * * * *
    (b)(1) Insert the provision at 52.225-10, Notice of Buy American 
Act Requirement--Construction Materials, in solicitations containing 
the clause at 52.225-9.
    (2) If insufficient time is available to process a determination 
regarding the inapplicability of the Buy American Act before receipt of 
offers, use the provision with its Alternate I.
    (c) Insert the clause at 52.225-11, Buy American Act-- Construction 
Materials under Trade Agreements, in solicitations and contracts for 
construction that is performed in the United States valued at 
$6,806,000 or more.
* * * * *
    (d)(1) Insert the provision at 52.225-12, Notice of Buy American 
Act Requirement--Construction Materials under Trade Agreements, in 
solicitations containing the clause at 52.225-11.
    (2) If insufficient time is available to process a determination 
regarding the inapplicability of the Buy American Act before receipt of 
offers, use the provision with its Alternate I.
* * * * *

PART 52--SOLICITATION PROVISIONS AND CONTRACT CLAUSES

    18. Amend section 52.212-3 by--
    a. Revising the date of the provision;
    b. Removing ``--Balance of Payments Program'' from the introductory 
text of paragraph (f) (twice), and from paragraph (f)(1);
    c. Removing ``--Balance of Payments Program'' from the introductory 
text of paragraph (g)(1) (twice), paragraphs (g)(1)(i), (g)(1)(ii), and 
(g)(1)(iii);
    d. Revising paragraphs (g)(2) and (g)(3); and
    e. Removing ``or the Balance of Payments Program'' from the second 
sentence of paragraph (g)(4)(iii). The revised text reads as follows:


52.212-3  Offeror Representations and Certifications--Commercial Items.

* * * * *

Offeror Representations and Certifications--Commercial Items (May 2002)

* * * * *
    (g) * * *
    (2) Buy American Act--North American Free Trade Agreements--
Israeli Trade Act Certificate, Alternate I (May 2002). If Alternate 
I to the clause at FAR 52.225-3 is included in this solicitation, 
substitute the following paragraph (g)(1)(ii) for paragraph 
(g)(1)(ii) of the basic provision:
    (g)(1)(ii) The offeror certifies that the following supplies are 
Canadian end products as defined in the clause of this solicitation 
entitled ``Buy American Act--North American Free Trade Agreement--
Israeli Trade Act'':

Canadian End Products:

Line Item No.

----------------------------------------------------------------------
----------------------------------------------------------------------
----------------------------------------------------------------------
    (List as necessary)
    (3) Buy American Act--North American Free Trade Agreements--Israeli 
Trade Act Certificate, Alternate II (May 2002). If Alternate II to the 
clause at FAR 52.225-3 is included in this solicitation, substitute the 
following paragraph (g)(1)(ii) for paragraph (g)(1)(ii) of the basic 
provision:
    (g)(1)(ii) The offeror certifies that the following supplies are 
Canadian end products or Israeli end products as defined in the clause 
of this solicitation entitled ``Buy American Act--North American Free 
Trade Agreement--Israeli Trade Act'':
Canadian or Israeli End Products:

Line Item No.
----------------------------------------------------------------------
----------------------------------------------------------------------
----------------------------------------------------------------------
Country of Origin
----------------------------------------------------------------------
----------------------------------------------------------------------
----------------------------------------------------------------------
    (List as necessary)
* * * * *

    19. Amend section 52.212-5 by revising the date of the clause and 
paragraphs (b)(18) and (b)(19)(i) to read as follows:


52.212-5  Contract Terms and Conditions Required To Implement Statutes 
or Executive Orders--Commercial Items.

* * * * *
Contract Terms and Conditions Required To Implement Statutes or 
Executive Orders--Commercial Items (May 2002)
    (b) * * *
    __(18) 52.225-1, Buy American Act--Supplies (41 U.S.C. 10a-10d).
    __(19)(i) 52.225-3, Buy American Act--North American Free Trade 
Agreement--Israeli Trade Act (41 U.S.C. 10a-10d, 19 U.S.C. 3301 
note, 19 U.S.C. 2112 note).
* * * * *


52.213-4  [Amended]

    20. Amend section 52.213-4 in the clause heading by removing ``(APR 
2002)'' and adding ``(May 2002)'' in its place; and in paragraph 
(b)(1)(viii) by removing ``--Balance of Payments Program'', and by 
removing ``(Feb 2000)'' and adding ``(May 2002)'' in its place.
    21. Amend section 52.225-1 by revising the section and clause 
headings; by revising paragraph (b); and by removing ``--Balance of 
Payments Program'' from paragraph (d). The revised text reads as 
follows:


52.225-1  Buy American Act--Supplies.

Buy American Act--Supplies (May 2002)

* * * * *
    (b) The Buy American Act (41 U.S.C. 10a-10d) provides a 
preference for domestic end products for supplies acquired for use 
in the United States.
* * * * *

    22. Amend section 52.225-2 by revising the section and provision 
headings; and in paragraph (a) by removing ``-- Balance of Payments 
Program''. The revised text reads as follows:


52.225-2  Buy American Act Certificate.

* * * * *
Buy American Act Certificate (May 2002)

* * * * *

    23. Amend section 52.225-3 by--
    a. Revising the section and clause headings;
    b. Revising paragraph (c);
    c. Removing ``--Balance of Payments Program'' from the third 
sentence of paragraph (d); and
    d. Removing from Alternates I and II ``(Feb 2000)'' and adding 
``(May 2002)'' in their place; and removing ``-- Balance of Payment 
Program'' from paragraph (d). The revised text reads as follows:


52.225-3  Buy American Act--North American Free Trade Agreement--
Israeli Trade Act.

* * * * *


[[Page 21537]]



Buy American Act--North American Free Trade Agreement--Israeli Trade 
Act (May 2002)

* * * * *
    (c) Implementation. This clause implements the Buy American Act 
(41 U.S.C. 10a-10d), the North American Free Trade Agreement 
Implementation Act (NAFTA) (19 U.S.C. 3301 note), and the Israeli 
Free Trade Area Implementation Act of 1985 (Israeli Trade Act) (19 
U.S.C. 2112 note) by providing a preference for domestic end 
products, except for certain foreign end products that are NAFTA 
country end products or Israeli end products.
* * * * *


52.225-4  [Amended]

    24. Amend section 52.225-4 by removing ``--Balance of Payments 
Program'' from the section and provision headings, paragraphs (a), (b), 
and (c), and Alternates I and II; and by revising the dates of the 
provision heading and Alternates I and II to read ``(MAY 2002)''.
    25. Amend section 52.225-6 by revising the date of the provision 
and paragraph (c) to read as follows:


52.225-6  Trade Agreements Certificate.

* * * * *

Trade Agreements Certificate (May 2002)

* * * * *
    (c) The Government will evaluate offers in accordance with the 
policies and procedures of Part 25 of the Federal Acquisition 
Regulation. For line items subject to the Trade Agreements Act, the 
Government will evaluate offers of U.S.-made, designated country, 
Caribbean Basin country, or NAFTA country end products without 
regard to the restrictions of the Buy American Act. The Government 
will consider for award only offers of U.S.-made, designated 
country, Caribbean Basin country, or NAFTA country end products 
unless the Contracting Officer determines that there are no offers 
for those products or that the offers for those products are 
insufficient to fulfill the requirements of this solicitation.

(End of provision)

    26. Amend section 52.225-9 by--
    a. Revising the section and clause headings;
    b. Removing ``and the Balance of Payments Program'' from paragraph 
(b)(1);
    c. Revising paragraph (b)(3)(i); and
    d. Removing the words ``or Balance of Payments Program'' from 
paragraph (b)(3)(ii), the introductory text of paragraph (c), the first 
sentence of paragraph (c)(2), and in paragraph (c)(3) (twice). The 
revised text reads as follows:


52.225-9  Buy American Act--Construction Materials.

* * * * *

Buy American Act--Construction Materials (May 2002)

* * * * *
    (b) * * *
    (3) * * *
    (i) The cost of domestic construction material would be 
unreasonable. The cost of a particular domestic construction 
material subject to the requirements of the Buy American Act is 
unreasonable when the cost of such material exceeds the cost of 
foreign material by more than 6 percent;
* * * * *
    (End of clause)


    27. Amend section 52.225-10 by--
    a. Revising the section and provision headings;
    b. Removing ``Balance of Payments Program--'' from paragraph (a);
    c. In the first and third sentences of paragraph (b) of the 
provision by removing ``or Balance of Payments Program'';
    d. In paragraph (c)(1) of the provision by removing ``or Balance of 
Payments Program''; and
    e. In Alternate I by removing ``(Feb 2000)'' and adding ``(May 
2002)'' in its place; and by removing from paragraph (b) of the 
Alternate ``or Balance of Payments Program''. The revised text reads as 
follows:


52.225-10  Notice of Buy American Act Requirement-- Construction 
Materials.

* * * * *

Notice of Buy American Act Requirement--Construction Materials (May 
2002)

* * * * *
    (End of provision)

    28. Amend section 52.225-11 by--
    a. Revising the section and clause headings;
    b. Removing the words ``and the Balance of Payments Program'' from 
paragraph (b)(1);
    c. Revising paragraph (b)(4)(i) of the clause;
    d. Removing the words ``or Balance of Payments Program'' from 
paragraph (b)(4)(ii), the introductory text of paragraph (c), the first 
sentence of paragraph (c)(2), and paragraph (c)(3) (twice); and
    e. Revising the date and paragraph (b)(1) of Alternate I. The 
revised text reads as follows:


52.225-11  Buy American Act--Construction Materials under Trade 
Agreements.

* * * * *

Buy American Act--Construction Materials Under Trade Agreements (May 
2002)

* * * * *
    (b) * * *
    (4) * * *
    (i) The cost of domestic construction material would be 
unreasonable. The cost of a particular domestic construction 
material subject to the restrictions of the Buy American Act is 
unreasonable when the cost of such material exceeds the cost of 
foreign material by more than 6 percent;
* * * * *
    (End of clause)

Alternate I (May 2002)

    (b) Construction materials. (1) This clause implements the Buy 
American Act (41 U.S.C. 10a-10d) by providing a preference for 
domestic construction material. In addition, the Contracting Officer 
has determined that the Trade Agreements Act applies to this 
acquisition. Therefore, the Buy American Act restrictions are waived 
for designated country construction materials.
* * * * *

    29. Amend section 52.225-12 by--
    a. Revising the section and provision headings;
    b. Removing ``Balance of Payments Program--'' from paragraph (a) of 
the provision;
    c. Removing ``or Balance of Payments Program'' from the first and 
third sentences of paragraph (b) of the provision;
    d. Removing ``or Balance of Payments Program'' from paragraph 
(c)(1) of the provision;
    e. Removing ``(Feb 2000)'' from Alternate I and adding ``(May 
2002)'' in its place, and by removing ``or Balance of Payments 
Program'' from paragraph (b) of the Alternate; and
    f. Removing ``(June 2000)'' from Alternate II and adding ``(May 
2002)'' in its place, and by removing ``Balance of Payments Program--'' 
from paragraph (a) of the Alternate. The revised text reads as follows:


52.225-12  Notice of Buy American Act Requirement-- Construction 
Materials under Trade Agreements.

* * * * *

Notice of Buy American Act Requirement--Construction Materials Under 
Trade Agreements (May 2002)

* * * * *
[FR Doc. 02-10370 Filed 4-29-02; 8:45 am]
BILLING CODE 6820-EP-P