[Federal Register Volume 69, Number 4 (Wednesday, January 7, 2004)]
[Rules and Regulations]
[Pages 1051-1057]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 04-178]


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DEPARTMENT OF DEFENSE

GENERAL SERVICES ADMINISTRATION

NATIONAL AERONAUTICS AND SPACE ADMINISTRATION

48 CFR Parts 5, 12, 13, 14, 17, 19, 22, 25, and 52

[FAC 2001-19; FAR Case 2003-016; Item II]
RIN 9000-AJ87


Federal Acquisition Regulation; Free Trade Agreements--Chile and 
Singapore, and Trade Agreements Thresholds

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

ACTION: Interim rule with request for comments.

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SUMMARY: The Civilian Agency Acquisition Council and the Defense 
Acquisition Regulations Council (Councils) have agreed on an interim 
rule amending the Federal Acquisition Regulation (FAR) to implement new 
Free Trade Agreements with Chile and Singapore, as approved by 
Congress. These Free Trade Agreements are scheduled to go into effect 
January 1, 2004. The interim rule also implements new dollar thresholds 
for application of trade agreements, as published by the U.S. Trade 
Representative in the Federal Register at 68 FR 70861, December 19, 
2003.

DATES: Effective Date: January 1, 2004.
    Comment Date: Interested parties should submit comments to the FAR 
Secretariat at the address shown below on or before March 8, 2004, to 
be considered in the formulation of a final rule.

ADDRESSES: Submit written comments to--General Services Administration, 
FAR Secretariat (MVA), 1800 F Street, NW., Room 4035, Attn: Ms. Laurie 
Duarte, Washington, DC 20405.
    Submit electronic comments via the Internet to [email protected].

    Please submit comments only and cite FAC 2001-19, FAR case 2003-
016, in all correspondence related to this case.

FOR FURTHER INFORMATION CONTACT: The FAR Secretariat at (202) 501-4755, 
for information pertaining to status or publication schedules. For 
clarification of content, contact Ms. Cecelia Davis, Procurement 
Analyst, at (202) 219-0202. Please cite FAC 2001-19, FAR case 2003-016.

SUPPLEMENTARY INFORMATION: 

[[Page 1052]]

A. Background

    This rule amends the FAR to implement new Free Trade Agreements 
with Chile and Singapore, as approved by Congress (Pub. L. 108-77 and 
108-78). The Free Trade Agreements with Chile and Singapore waive the 
applicability of the Buy American Act for some foreign supplies and 
construction materials from Chile and Singapore, and specify 
procurement procedures designed to ensure fairness, applicable to the 
acquisition of supplies and services (see the Government Procurement 
provisions at Chapters 9 and 13, respectively, of the trade 
agreements).
    FAR 25.400(a)(3) has been revised to create the new concept of 
``Free Trade Agreements,'' which includes the Chile Free Trade 
Agreement and the Singapore Free Trade Agreement, as well as the North 
American Free Trade Agreement (NAFTA). This list can be expanded as new 
Free Trade Agreements are negotiated. Likewise, definitions of ``Free 
Trade Agreement country'' and ``Free Trade Agreement country end 
product'' have replaced the definitions of ``NAFTA country'' and 
``NAFTA country end product'' (25.003).
    The interim rule modifies the term ``eligible product'' to include 
services, consistent with our trade agreements. Although services are 
not subject to the Buy American Act, the trade agreements require 
certain procedures in the acquisition of services, unless the service 
is excluded by the trade agreement (see FAR 25.401(b)). The interim 
rule directs the contracting officer to determine the origin of 
services by the country in which the firm providing the services is 
established (FAR 25.402(a)). This is an expansion of the concept 
formerly at FAR 25.405(c), which addressed only NAFTA country services. 
The purchase restriction under the Trade Agreements Act also applies to 
services (25.403(c)).
    Section 106 of Public Law 108-77 and Section 106 of Public Law 108-
78 provide for arbitration of certain claims. The United States is 
authorized to resolve any claim against the United States covered by 
the section of the applicable Free Trade Agreement relating to 
Investor-State Disputes Settlement, pursuant to the investor-state 
dispute settlement procedures set forth in the applicable section 
(section B of chapter 10 for Chile; section C of chapter 15 for 
Singapore). The Councils invite comment on appropriate implementation 
of this authorization. Sections 106 of the same public laws also 
require that after the new trade agreements become effective, contracts 
must specify the law that will apply to resolve any breach of contract 
claim. The statement that ``United States law will apply to resolve any 
claim of breach of contract'' has been included in each of the trade 
agreements clauses (FAR 52.225-3, 52.225-5, and 52.225-11), rather than 
creating a separate clause.
    The threshold for applicability of the new Free Trade Agreements 
with Chile and Singapore is $58,550 for supplies and services, and 
$6,725,000 for construction contracts. Singapore was already a 
signatory to the Agreement on Government Procurement, and therefore 
already included as a designated country under the Trade Agreements Act 
(FAR 25.003), with thresholds of $175,000 for supplies or services and 
$6,725,000 for construction. This interim rule also amends FAR 22.1503, 
25.202, 25.601, 25.1103, and 52.222-19, to implement the new dollar 
threshold for applications of the Trade Agreements Act and NAFTA. 
Because of the increasing number of trade agreements and thresholds, 
the interim rule provides a table of the various thresholds at 
25.402(b).
    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 interim rule is not expected 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 Government procurement to the products of Chile and lowers the 
trade agreements threshold for the products of Singapore, the Councils 
do not think there will be any significant economic impact on U.S. 
small businesses. The Department of Defense only applies the trade 
agreements to the non-defense items listed at DFARS 225.401-70, and 
acquisitions under $100,000 that are set aside for small businesses are 
exempt. Therefore, an Initial Regulatory Flexibility Analysis has not 
been performed. The Councils will consider comments from small entities 
concerning the affected FAR Parts 5, 12, 13, 14, 17, 19, 22, 25, and 52 
in accordance with 5 U.S.C. 610. Interested parties must submit such 
comments separately and should cite 5 U.S.C. 601, et seq. (FAC 2001-19, 
FAR case 2003-016), in correspondence.

C. Paperwork Reduction Act

    The Paperwork Reduction Act (Pub. L. 104-13) applies because the 
interim rule affects the certification and information collection 
requirements in the provisions at FAR 52.212-3, 52.225-4, 52.225-6, and 
52.225-11 currently approved under OMB clearances 9000-0130, 9000-0025, 
and 9000-0141, respectively. The impact, however, is negligible. In the 
certification provision FAR 52.225-4, Buy American Act--Free Trade 
Agreements--Israeli Trade Act Certificate, and the commercial item 
equivalent at FAR 52.212-3(g)(1), the offeror must now list offers of 
end products from Chile or Singapore as FTA country end products, 
rather than as ``other foreign end products.'' In the certification 
provision at 52.225-6, Trade Agreements Certificate, and the commercial 
equivalent at 52.212-3(4), Singapore was already a designated country 
under the Trade Agreements Act, but offerors no longer need to list 
products of Chile as ``other end products.'' However, offerors of the 
Chilean end products would have been unlikely to submit offers, because 
purchase of foreign products other than eligible products is prohibited 
by the Trade Agreements Act. In the clause at 52.225-11, Buy American 
Act--Construction Materials under Trade Agreements, an offeror planning 
to use Chilean construction material would no longer need to request a 
determination of inapplicability of the Buy American Act, thus also 
removing the need to submit the supporting data specified in paragraph 
(d) of the clause.

D. Request for Comments Regarding Paperwork Burden

    Submit comments, including suggestions for reducing this burden, 
not later than March 8, 2004, to: FAR Desk Officer, OMB, Room 10102, 
NEOB, Washington, DC 20503, and a copy to the General Services 
Administration, FAR Secretariat (MVR), 1800 F Street, NW., Room 4035, 
Washington, DC 20405.
    Public comments are particularly invited on: whether this 
collection of information is necessary for the proper performance of 
functions of the FAR, and will have practical utility; whether our 
estimate of the public burden of this collection of information is 
accurate, and based on valid assumptions and methodology; ways to 
enhance the quality, utility, and clarity of the information to be 
collected; and ways in which we can minimize the burden of the 
collection of information on those who are to respond, through the use 
of appropriate technological collection

[[Page 1053]]

techniques or other forms of information technology.
    Requester may obtain a copy of the justification from the General 
Services Administration, FAR Secretariat (MVA), Room 4035, Washington, 
DC 20405, telephone (202) 501-4755. Please cite OMB Control Number 
9000-0130, 9000-0025, and 9000-0141 in all correspondence.

E. 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 urgent and compelling reasons exist to promulgate this 
interim rule without prior opportunity for public comment. This action 
is necessary because the Free Trade Agreements with Chile and 
Singapore, as approved by Congress (Pub. L. 108-77 and 108-78), are 
scheduled to go into effect January 1, 2004. However, pursuant to 
Public Law 98-577 and FAR 1.501, the Councils will consider public 
comments received in response to this interim rule in the formation of 
the final rule.

List of Subjects in 48 CFR Parts 5, 12, 13, 14, 17, 19, 22, 25, and 
52

    Government procurement.

    Dated: December 30, 2003.
Laura Auletta,
Director, Acquisition Policy Division.

0
Therefore, DoD, GSA, and NASA amend 48 CFR parts 5, 12, 13, 14, 17, 19, 
22, 25, and 52 as set forth below:
0
1. The authority citation for 48 CFR parts 5, 12, 13, 14, 17, 19, 22, 
25, and 52 is revised to read as follows:

    Authority: 40 U.S.C. 121(c); 10 U.S.C. chapter 137; and 42 
U.S.C. 2473(c).

PART 5--PUBLICIZING CONTRACT ACTIONS


5.203  [Amended]

0
2. Amend section 5.203 in the first sentence of paragraph (h) by 
removing the words ``NAFTA or''; and adding ``or a Free Trade 
Agreement'' after the word ``Act''.

PART 12--ACQUISITION OF COMMERCIAL ITEMS


12.205  [Amended]

0
3. Amend section 12.205 in paragraph (c) by removing the words ``NAFTA 
or''; and adding ``or a Free Trade Agreement'' after the word ``Act''.

PART 13--SIMPLIFIED ACQUISITION PROCEDURES


13.302-5  [Amended]

0
4. Amend section 13.302-5 in paragraph (d)(3)(i) by removing the words 
``North American Free Trade Agreement'' and adding ``Free Trade 
Agreements'' in its place.

PART 14--SEALED BIDDING

0
5. Amend section 14.409-1 by revising paragraph (a)(2) introductory 
text to read as follows:


14.409-1  Award of unclassified contracts.

    (a)(1) * * *
    (2) For acquisitions subject to the Trade Agreements Act or a Free 
Trade Agreement (see 25.408(a)(5)), agencies must include in notices 
given unsuccessful bidders from designated or Free Trade Agreement 
countries--
* * * * *

PART 17--SPECIAL CONTRACTING METHODS


17.203  [Amended]

0
6. Amend section 17.203 in paragraph (h) by removing the words ``North 
American''.

PART 19--SMALL BUSINESS PROGRAMS


19.1103  [Amended]

0
7. Amend section 19.1103 in paragraph (a)(2) by removing ``25.403'' and 
adding ``Subpart 25.4'' in its place.


19.1307  [Amended]

0
8. Amend section 19.1307 in paragraph (b)(3) by removing ``25.403'' and 
adding ``Subpart 25.4'' in its place.

PART 22--APPLICATION OF LABOR LAWS TO GOVERNMENT ACQUISITIONS


22.1503  [Amended]

0
9. Amend section 22.1503 by--
0
a. Removing ``25.405'' from paragraph (b)(1) and adding ``Subpart 
25.4'' in its place;

0
b. Removing ``$56,190 or more (see 25.405)'' from paragraph (b)(3) and 
adding ``$58,550 or more (see Subpart 25.4)'' in its place; and
0
c. Removing ``$169,000'' from paragraph (b)(4) and adding ``$175,000'' 
in its place.

PART 25--FOREIGN ACQUISITION

0
10. Amend section 25.003 by--
0
a. Revising the definition ``Eligible product'';
0
b. Removing the definitions ``Mexican end product'', ``North American 
Free Trade Agreement country'', and ``North American Free Trade 
Agreement country end product''; and
0
c. Adding, in alphabetical order, the definitions ``Free Trade 
Agreement country'' and ``Free Trade Agreement country end product'' to 
read as follows:


25.003  Definitions.

* * * * *
    Eligible product means a foreign end product or service that, due 
to applicability of a trade agreement to a particular acquisition, is 
not subject to discriminatory treatment.
* * * * *
    Free Trade Agreement country means Canada, Chile, Mexico, or 
Singapore.
    Free Trade Agreement country end product means an article that--
    (1) Is wholly the growth, product, or manufacture of a Free Trade 
Agreement (FTA) country; or
    (2) In the case of an article that consists in whole or in part of 
materials from another country, has been substantially transformed in 
an FTA 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 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 the article, provided that the value of those 
incidental services does not exceed that of the article itself.
* * * * *

0
11. Amend section 25.202 by revising paragraph (c) to read as follows:


25.202  Exceptions.

* * * * *
    (c) Acquisitions under trade agreements. For construction contracts 
with an estimated acquisition value of $6,725,000 or more, see Subpart 
25.4.


25.204  [Amended]

0
12. Amend section 25.204 in paragraph (a) by removing ``NAFTA'' and 
adding ``Free Trade Agreement'' in its place.

0
13. Amend section 25.400 by revising paragraph (a)(3) to read as 
follows:


25.400  Scope of subpart.

    (a) * * *
    (3) Free Trade Agreements (FTAs), consisting of--
    (i) NAFTA (the North American Free Trade Agreement, as approved by 
Congress in the North American Free Trade Agreement Implementation Act 
of 1993 (19 U.S.C. 3301 note));
    (ii) Chile FTA (the United States-Chile Free Trade Agreement, as 
approved by Congress in the United States-Chile Free

[[Page 1054]]

Trade Agreement Implementation Act (Pub. L. 108-77)); and
    (iii) Singapore FTA (the United States-Singapore Free Trade 
Agreement, as approved by Congress in the United States-Singapore Free 
Trade Agreement Implementation Act (Pub. L. 108-78));
* * * * *

0
14. Revise section 25.401 to read as follows:


25.401  Exceptions.

    (a) This subpart does not apply to--
    (1) Acquisitions set aside for small businesses;
    (2) Acquisitions of arms, ammunition, or war materials, or 
purchases indispensable for national security or for national defense 
purposes, including all services purchased in support of military 
forces located overseas;
    (3) Acquisitions of end products for resale;
    (4) Acquisitions under Subpart 8.6, Acquisition from Federal Prison 
Industries, Inc., and Subpart 8.7, Acquisition from Nonprofit Agencies 
Employing People Who Are Blind or Severely Disabled; and
    (5) Other acquisitions not using full and open competition, if 
authorized by Subpart 6.2 or 6.3, when the limitation of competition 
would preclude use of the procedures of this subpart (but see 6.303-
1(d)); or sole source acquisitions justified in accordance with 
13.501(a).
    (b) Acquisitions of the following services are excluded from 
coverage of the trade agreements indicated in parentheses. Federal 
Service Codes from the Federal Procurement Data System Product/Service 
Code Manual may also be indicated in parentheses for some services:
    (1) Automatic data processing (ADP) telecommunications and 
transmission services (D304), except enhanced (i.e., value-added) 
telecommunications services (Trade Agreements Act (TAA), all FTAs).
    (2) ADP teleprocessing and timesharing services (D305), 
telecommunications network management services (D316), automated news 
services, data services or other information services (D317), and other 
ADP and telecommunications services (D399) (Chile FTA, NAFTA).
    (3) Basic telecommunications network services, i.e., voice 
telephone services, packet-switched data transmission services, 
circuit-switched data transmission services, telex services, telegraph 
services, facsimile services, and private leased circuit services. This 
exclusion does not include information services, as defined in 47 
U.S.C. 153(20) (Singapore FTA).
    (4) Dredging (TAA, all FTAs).
    (5) Operation and management contracts of certain Government or 
privately owned facilities used for Government purposes, including 
Federally Funded Research and Development Centers (TAA, Singapore FTA).
    (6) Operation of all Department of Defense, Department of Energy, 
or the National Aeronautics and Space Administration facilities; and 
all Government-owned research and development facilities or Government-
owned environmental laboratories (Chile FTA and NAFTA).
    (7) Maintenance, repair, modification, rebuilding and installation 
of equipment related to ships (Chile FTA and NAFTA).
    (8) Nonnuclear ship repair (Chile FTA and NAFTA).
    (9) Research and development (TAA, all FTAs).
    (10) Transportation services (including launching services, but not 
including travel agent services) (TAA, all FTAs).
    (11) Utility services (TAA, all FTAs).

0
15. Revise section 25.402 to read as follows:


25.402  General.

    (a) The trade agreements waive the applicability of the Buy 
American Act for some foreign supplies and construction materials from 
certain countries. The Trade Agreements Act and FTAs specify 
procurement procedures designed to ensure fairness. When the 
restrictions of the Buy American Act are waived for eligible products, 
offers of those products (eligible offers) receive equal consideration 
with domestic offers. Under the Trade Agreements Act, only U.S.-made 
end products or U.S. services or eligible products, including services, 
may be acquired (also see 25.403(c)). The contracting officer shall 
determine the origin of services by the country in which the firm 
providing the services is established. See Subpart 25.5 for evaluation 
procedures for supply contracts subject to trade agreements.
    (b) The value of the acquisition is a determining factor in the 
applicability of trade agreements. Most of these dollar thresholds are 
subject to revision by the U.S. Trade Representative approximately 
every 2 years. The various thresholds are summarized as follows:

----------------------------------------------------------------------------------------------------------------
                                                             Supply contract  Service contract    Construction
                      Trade agreement                         (equal to or      (equal to or     contract (equal
                                                               exceeding)        exceeding)     to or exceeding)
----------------------------------------------------------------------------------------------------------------
TAA/CBTI*.................................................          $175,000          $175,000        $6,725,000
FTAs
    NAFTA--Canada.........................................            25,000            25,000         7,611,532
        --Mexico..........................................            58,550            58,550         7,611,532
    Chile FTA.............................................            58,550            58,550         6,725,000
    Singapore FTA.........................................            58,550            58,550         6,725,000
Israeli Trade Act.........................................            50,000  ................  ................
----------------------------------------------------------------------------------------------------------------
* TAA/CBTI=Trade Agreements Act/Caribbean Basin Trade Initiative.


0
16. Amend section 25.403 by--
0
a. Revising paragraph (a);
0
b. Removing paragraph (b)(1) and redesignating paragraphs (b)(2) 
through (b)(4) as (b)(1) through (b)(3); and
0
c. Revising paragraph (c) to read as follows:


25.403  Trade Agreements Act.

    (a) General. The Trade Agreements Act--
    (1) Authorizes waiver of 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) Requires certain procurement procedures designed to ensure 
fairness (see 25.408).
* * * * *
    (c) Purchase restriction. (1) In acquisitions subject to the Trade 
Agreements Act, acquire only U.S.-made end products or U.S. services, 
or eligible products (designated, Caribbean Basin, or FTA country end 
products or services) unless offers for such end products or services 
are either not received or are insufficient to fulfill the 
requirements.

[[Page 1055]]

    (2) This restriction does not apply to purchases of supplies by the 
Department of Defense from a country with which it has entered into a 
reciprocal agreement, as provided in departmental regulations.


25.404  [Amended]

0
17. Amend section 25.404 by adding the words ``and services'' after the 
words ``end products''.
0
18. In section 25.405, revise the section heading and text to read as 
follows:


25.405  Free Trade Agreements (FTAs).

    (a) General. Eligible products from FTA countries are entitled to 
the same nondiscriminatory treatment specified under the Trade 
Agreements Act (see 25.403(a)).
    (b) The FTAs do not prohibit the purchase of other foreign end 
products or services.


25.406  [Amended]

0
19. Amend section 25.406 by removing ``25.403(b)(1)'' from the first 
sentence and adding ``Subpart 25.4'' in its place.


25.408  [Amended]

0
20. Amend section 25.408 by--
0
a. Removing ``NAFTA'' from the introductory text of paragraph (a) and 
adding ``an FTA'' in its place;
0
b. Removing ``(5.207(e)) for contracts that are subject to the Trade 
Agreements Act'' from paragraph (a)(2); and
0
c. Removing ``NAFTA'' from paragraph (a)(5) and adding ``FTA'' in its 
place.


25.502  [Amended]

0
21. Amend section 25.502 by--
0
a. Removing ``25.401 and 25.403(b)'' from the introductory text of 
paragraph (b) and adding ``Subpart 25.4'' in its place;
0
b. Removing ``NAFTA'' from paragraphs (b)(1) and (b)(3) and adding 
``FTA'' in its place; and
0
c. Removing ``NAFTA'' from paragraph (c) introductory text and (c)(1) 
and adding ``an FTA'' in its place.


25.504-2  Trade Agreements Act/Caribbean Basin Trade Initiative/FTAs.

0
22. Revise the section heading of 25.504-2 to read as set forth above.


25.504-3  FTA/Israeli Trade Act.

0
23. Revise the section heading of 25.504-3 to read as set forth above.


25.601  [Amended]

0
24. Amend section 25.601 by--
0
a. Removing ``$169,000'' from paragraph (a)(1) and adding ``$175,000'' 
in its place;
0
b. Removing ``$6,481,000'' from paragraph (a)(2) and adding 
``$6,725,000'' in its place;
0
c. Removing ``$169,000'' from paragraph (a)(3)(ii) and adding 
``$175,000'' in its place; and
0
d. Removing ``25.403(b)'' from paragraph (b) and adding ``Subpart 
25.4'' in its place.


25.1002  [Amended]

0
25. Amend section 25.1002 in the first sentence of paragraph (a) by 
removing ``25.408(a)(3)'' and adding ``25.408(a)(4)'' in its place.

0
26. Amend section 25.1101 by--
0
a. Removing ``North American Free Trade Agreement'' from the 
introductory text of paragraph (b)(1)(i) and adding ``Free Trade 
Agreements'' in its place;
0
b. Removing ``$169,000'' from paragraph (b)(1)(i)(A) and adding 
``$175,000'' in its place;
0
c. Removing ``$56,190'' from paragraph (b)(1)(iii) and adding 
``$58,550'' in its place;
0
d. Removing ``North American Free Trade Agreement'' from paragraph 
(b)(2)(i) and adding ``Free Trade Agreements'' in its place; and 
removing ``$56,190'' from paragraph (b)(2)(iii) and adding ``$58,550'' 
in its place;
0
e. Removing ``$169,000'' and ``25.401 and 25.403'' from the first 
sentence of paragraph (c)(1) and adding ``$175,000'' and ``Subpart 
25.4'' in their place, respectively; and
0
f. Removing ``$169,000'' from paragraph (d) and adding ``$175,000'' in 
its place.

0
27. Amend section 25.1102 by--
0
a. Removing ``$6,481,000'' from paragraph (a) and the introductory text 
of paragraph (c) and adding ``$6,725,000'' in its place;
0
b. Removing ``NAFTA'' from paragraph (c)(1) and adding ``FTA'' in its 
place; and
0
c. Revising paragraphs (c)(3) and (d)(3) to read as follows:


25.1102  Acquisition of construction.

* * * * *
    (c) * * *
    (3) For acquisitions valued at $6,725,000 or more, but less than 
$7,611,532, use the clause with its Alternate I. List in paragraph 
(b)(3) of the clause all foreign construction material excepted from 
the requirements of the Buy American Act, other than designated country 
or Chilean construction material.
    (d) * * *
    (3) For acquisitions valued at $6,725,000 or more, but less than 
$7,611,532, use the clause with its Alternate II.


25.1103  [Amended]

0
28. Amend section 25.1103 in paragraph (c) by removing ``$169,000'' 
from paragraphs (c)(1)(i) and (c)(1)(ii)(B) and adding ``$175,000'' in 
its place.

PART 52--SOLICITATION PROVISIONS AND CONTRACT CLAUSES 52.212-3 
[Amended]

0
29. Amend section 52.212-3 by--
0
a. Revising the date of the provision to read ``(Jan 2004)'';
0
b. Removing ``North American Free Trade Agreement'' from paragraphs 
(g)(1) (twice) and (g)(1)(i) and adding ``Free Trade Agreements'' in 
its place;
0
c. Removing ``NAFTA'' from paragraph (g)(1)(ii) and adding ``FTA'' in 
its place, removing ``North American Free Trade Agreement'' and adding 
``Free Trade Agreements'' in its place, and removing ``NAFTA'' from the 
table heading and adding ``FTA'' in its place;
0
d. Removing ``North American Free Trade Agreement'' from paragraph 
(g)(1)(iii) and adding ``Free Trade Agreements'' in its place;
0
e. Removing from paragraph (g)(2) ``North American'', removing ``May 
2002'' and adding ``Jan 2004'' in its place, and removing ``North 
American Free Trade Agreement'' from paragraph (g)(1)(ii) and adding 
``Free Trade Agreements'' in its place;
0
f. Removing from paragraph (g)(3) ``North American'', removing ``May 
2002'' and adding ``Jan 2004'' in its place, and removing from 
paragraph (g)(1)(ii) ``North American Free Trade Agreement'' and adding 
``Free Trade Agreements'' in its place; and
0
g. Removing ``NAFTA'' from paragraphs (g)(4)(i), (g)(4)(ii), and 
(g)(4)(iii) (twice) and adding ``FTA'' in its place.

0
30. Amend section 52.212-5 by revising the date of the clause and 
paragraphs (b)(14), (b)(22), and (b)(23) 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 (Jan 2004)

* * * * *
    (b) * * *
    -- (14) 52.222-19, Child Labor--Cooperation with Authorities and 
Remedies (Jan 2004) (E.O. 13126).
* * * * *
    -- (22)(i) 52.225-3, Buy American Act--Free Trade Agreements--
Israeli Trade Act (Jan 2004) (41 U.S.C. 10a-10d, 19 U.S.C. 3301 
note, 19 U.S.C. 2112 note, Pub. L. 108-77, 108-78).
    -- (ii) Alternate I (Jan 2004) of 52.225-3.
    -- (iii) Alternate II (Jan 2004) of 52.225-3.

[[Page 1056]]

    -- (23) 52.225-5, Trade Agreements (Jan 2004) (19 U.S.C. 2501, 
et seq., 19 U.S.C. 3301 note).
* * * * *


52.213-4  [Amended]

0
31. Amend section 52.213-4 by revising the date of the clause to read 
``(Jan 2004)'', and by removing ``(Sept 2002)'' from paragraph 
(b)(1)(i) of the clause and adding ``(Jan 2004)'' in its place.


52.222-19  [Amended]

0
32. Amend section 52.222-19 by revising the date of the clause to read 
``(Jan 2004)''; removing ``$56,190'' from paragraph (a)(3) and adding 
``$58,550'' in its place; and removing ``$169,000'' from paragraph 
(a)(4) and adding ``$175,000'' in its place.

0
33. Amend section 52.225-3 by--
0
a. Revising the section and clause headings;
0
b. Removing the definitions ``North American Free Trade Agreement 
country'' and ``North American Free Trade Agreement country end 
product'' from paragraph (a); and adding, in alphabetical order, the 
definitions ``Free Trade Agreement country'' and ``Free Trade Agreement 
country end product'';
0
c. Removing paragraph (c) and redesignating paragraph (d) as (c) and 
revising it;
0
d. Adding paragraph (d);
0
e. Revising the introductory text of Alternate I; redesignating 
paragraph (d) of Alternate I as paragraph (c) and removing ``North 
American Free Trade Agreement'' and adding ``Free Trade Agreements'' in 
its place; and
0
f. Revising the introductory text of Alternate II; redesignating 
paragraph (d) of Alternate II as paragraph (c) and removing ``North 
American Free Trade Agreement'' and adding ``Free Trade Agreements'' in 
its place. The revised and added text reads as follows:


52.225-3  Buy American Act--Free Trade Agreements--Israeli Trade Act.

* * * * *

Buy American Act--Free Trade Agreements--Israeli Trade Act (Jan 2004)

* * * * *
    (a) * * *
    Free Trade Agreement country means Canada, Chile, Mexico, or 
Singapore.
    Free Trade Agreement country end product means an article that--
    (1) Is wholly the growth, product, or manufacture of a Free 
Trade Agreement (FTA) country; or
    (2) In the case of an article that consists in whole or in part 
of materials from another country, has been substantially 
transformed in an FTA 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 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 the article, 
provided that the value of those incidental services does not exceed 
that of the article itself.
* * * * *
    (c) Delivery of end products. The Contracting Officer has 
determined that FTAs and the Israeli Trade Act apply to this 
acquisition. Unless otherwise specified, these trade agreements 
apply to all items in the Schedule. The Contractor shall deliver 
under this contract only domestic end products except to the extent 
that, in its offer, it specified delivery of foreign end products in 
the provision entitled ``Buy American Act--Free Trade Agreements--
Israeli Trade Act Certificate.'' If the Contractor specified in its 
offer that the Contractor would supply an FTA country end product or 
an Israeli end product, then the Contractor shall supply an FTA 
country end product, an Israeli end product or, at the Contractor's 
option, a domestic end product.
    (d) United States law will apply to resolve any claim of breach 
of this contract.
    (End of clause)
    Alternate I (Jan 2004). As prescribed in 25.1101(b)(1)(ii), add 
the following definition to paragraph (a) of the basic clause, and 
substitute the following paragraph (c) for paragraph (c) of the 
basic clause:
* * * * *
    Alternate II (Jan 2004). As prescribed in 25.1101(b)(1)(iii), 
add the following definition to paragraph (a) of the basic clause, 
and substitute the following paragraph (c) for paragraph (c) of the 
basic clause:
* * * * *

0
34. Amend section 52.225-4 by--
0
a. Revising the section and clause headings;
0
b. Removing ``North American Free Trade Agreement'' from paragraph (a) 
and adding ``Free Trade Agreements'' in its place;
0
c. Removing ``NAFTA'' from paragraph (b) and adding ``FTA'' in its 
place, removing ``North American Free Trade Agreement'' and adding 
``Free Trade Agreements'' in its place, and removing ``NAFTA'' from the 
table heading and adding ``FTA'' in its place;
0
d. Removing ``North American Free Trade Agreement'' from paragraph (c) 
and adding ``Free Trade Agreements'' in its place;
0
e. Removing from the introductory text of Alternate I ``May 2002'' and 
adding ``Jan 2004'' in its place, and removing from paragraph (b) 
``North American Free Trade Agreement'' and adding ``Free Trade 
Agreements'' in its place; and
0
f. Removing from the introductory text of Alternate II ``May 2002'' and 
adding ``Jan 2004'' in its place, and removing from paragraph (b) 
``North American Free Trade Agreement'' and adding ``Free Trade 
Agreements'' in its place.
    The revised text reads as follows:


52.225-4  Buy American Act--Free Trade Agreements--Israeli Trade Act 
Certificate

* * * * *

Buy American Act--Free Trade Agreement--Israeli Trade Act Certificate 
(Jan 2004)

* * * * *

0
35. Amend section 52.225-5 by--
0
a. Revising the date of the clause;
0
b. Removing from paragraph (a) the definitions ``North American Free 
Trade Agreement country'' and ``North American Free Trade Agreement 
country end product''; and adding, in alphabetical order, the 
definitions ``Free Trade Agreement country'' and ``Free Trade Agreement 
country end product''
0
c. Removing paragraph (b);
0
d. Redesignating paragraph (c) as paragraph (b);
0
e. Amending the newly designated paragraph (b), in the first sentence 
by removing ``NAFTA'' and adding ``FTAs'' in its place, and in the last 
sentence removing ``NAFTA'' and adding ``FTA'' in its place; and
0
f. Adding a new paragraph (c) to read as follows:


52.225-5  Trade Agreements.

* * * * *

Trade Agreements (Jan 2004)

    (a) Definitions. * * *
* * * * *
    Free Trade Agreement country means Canada, Chile, Mexico, or 
Singapore.
    Free Trade Agreement country end product means an article that--
    (1) Is wholly the growth, product, or manufacture of a Free 
Trade Agreement (FTA) country; or
    (2) In the case of an article that consists in whole or in part 
of materials from another country, has been substantially 
transformed in an FTA 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 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 the article, 
provided that the value of those incidental services does not exceed 
that of the article itself.
* * * * *
    (c) United States law will apply to resolve any claim of breach 
of this contract.
    (End of clause)

52.225-6  [Amended]

0
36. Amend section 52.225-6 by revising the date of the provision to 
read ``Jan 2004'', and in paragraphs (a), (b), and (c) (twice) by 
removing ``NAFTA'' and adding ``FTA'' in its place.

0
37. Amend section 52.225-11 by--

[[Page 1057]]

0
a. Revising the date of the clause;
0
b. Removing from paragraph (a) the definitions ``North American Free 
Trade Agreement country'' and ``North American Free Trade Agreement 
country construction material'' and adding, in alphabetical order, the 
definitions ``Free Trade Agreement country'' and ``Free Trade Agreement 
country construction material''
0
c. Revising paragraph (b)(1);
0
d. Amending paragraph (b)(2) by removing ``NAFTA'' and adding ``FTA'' 
in its place;
0
e. Adding a new paragraph (e); and
0
f. Revising Alternate I to read as follows:


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

* * * * *

Buy American Act--Construction Materials Under Trade Agreements (Jan 
2004)

    (a) Definitions.* * *
* * * * *
    Free Trade Agreement country means Canada, Chile, Mexico, or 
Singapore.
    Free Trade Agreement country construction material means a 
construction material that--
    (1) Is wholly the growth, product, or manufacture of a Free 
Trade Agreement (FTA) country; 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 a FTA country into a new and different 
construction material distinct from the materials from which it was 
transformed.
* * * * *
    (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 and Free Trade 
Agreements (FTAs) apply to this acquisition. Therefore, the Buy 
American Act restrictions are waived for designated country and FTA 
country construction materials.
* * * * *
    (e) United States law will apply to resolve any claim of breach 
of this contract.
    (End of clause)
    Alternate I (Jan 2004). As prescribed in 25.1102(c)(3), delete 
the definitions of ``Free Trade Agreement country'' and ``Free Trade 
Agreement country construction material'' from the definitions in 
paragraph (a) of the basic clause, add the following definition of 
``Chilean construction material'' to paragraph (a) of the basic 
clause, and substitute the following paragraphs (b)(1) and (b)(2) 
for paragraphs (b)(1) and (b)(2) of the basic clause:
    Chilean construction material means a construction material 
that--
    (1) Is wholly the growth, product, or manufacture of Chile; 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 Chile into a new and different 
construction material distinct from the materials from which it was 
transformed.
    (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, the Chile Free Trade 
Agreement, and the Singapore Free Trade Agreement apply to this 
acquisition. Therefore, the Buy American Act restrictions are waived 
for designated country and Chilean construction materials.
    (2) The Contractor shall use only domestic, designated country, 
or Chilean construction material in performing this contract, except 
as provided in paragraphs (b)(3) and (b)(4) of this clause.


0
38. Amend section 52.225-12 by--
0
a. Revising the date of the provision;
0
b. Removing ``NAFTA'' from paragraphs (a), (d)(1) (twice), and (d)(3) 
(twice) and adding ``FTA'' in its place; and
0
c. Revising the date, paragraphs (a), (d)(1), and the introductory text 
of (d)(3) of Alternate II to read as follows:


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

* * * * *

Notice of Buy American Requirement--Construction Materials Under Trade 
Agreements (Jan 2004)

* * * * *
    (End of provision)
    Alternate II (Jan 2004).* * *
    (a) Definitions. Chilean construction material, construction 
material, designated country construction material, domestic 
construction material, and foreign construction material, as used in 
this provision, are defined in the clause of this solicitation 
entitled ``Buy American Act--Construction Materials Under Trade 
Agreements'' (Federal Acquisition Regulation (FAR) clause 52.225-
11).
    (d) Alternate offers. (1) When an offer includes foreign 
construction material, other than designated country or Chilean 
construction material, that is not listed by the Government in this 
solicitation in paragraph (b)(3) of FAR clause 52.225-11, the 
offeror also may submit an alternate offer based on use of 
equivalent domestic, designated country, or Chilean construction 
material.
* * * * *
    (3) If the Government determines that a particular exception 
requested in accordance with paragraph (c) of FAR clause 52.225-11 
does not apply, the Government will evaluate only those offers based 
on use of the equivalent domestic, designated country, or Chilean 
construction material, and the offeror shall be required to furnish 
such domestic, designated country, or Chilean construction material. 
An offer based on use of the foreign construction material for which 
an exception was requested--

* * * * *
[FR Doc. 04-178 Filed 1-6-04; 8:45 am]
BILLING CODE 6820-EP-P