[Federal Register Volume 69, Number 100 (Monday, May 24, 2004)]
[Proposed Rules]
[Pages 29631-29633]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 04-11596]



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Part II





Department of Defense

General Services Administration

National Aeronautics and Space Administration





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48 CFR Parts 25



Federal Acquisition Regulation; Nonavailable Articles-Policy; Proposed 
Rule

Federal Register / Vol. 69, No. 100 / Monday, May 24, 2004 / Proposed 
Rules

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DEPARTMENT OF DEFENSE

GENERAL SERVICES ADMINISTRATION

NATIONAL AERONAUTICS AND SPACE ADMINISTRATION

48 CFR Part 25

[FAR Case 2003-021]
RIN 9000-AJ95


Federal Acquisition Regulation; Nonavailable Articles-Policy

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

ACTION: Proposed rule.

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SUMMARY: The Civilian Agency Acquisition Council and the Defense 
Acquisition Regulations Council (Councils) are proposing to amend the 
Federal Acquisition Regulation (FAR) to clarify the intent of the list 
of items determined to be nonavailable for purposes of the Buy American 
Act, and emphasize the need to conduct market research, appropriate to 
the circumstances, for potential domestic sources.

DATES: Interested parties should submit comments in writing on or 
before July 23, 2004, to be considered in the formulation of a final 
rule.

ADDRESSES: Submit printed comments to General Services Administration, 
FAR Secretariat (MVA), 1800 F Street, NW., Room 4035, ATTN: Laurie 
Duarte, Washington, DC 20405. Submit electronic comments via the 
Internet to the U.S. Government's rulemaking website at http://www.regulations.gov, or to GSA's e-mailbox at farcase.2003-021@gsa.gov.
    Please submit comments only and cite FAR case 2003-021 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 FAR case 2003-021.

SUPPLEMENTARY INFORMATION:

A. Background

    This rule proposes to amend FAR Subpart 25.1 in order to clarify 
the intent of the list of nonavailable items at FAR 25.104(a), and to 
emphasize the need to conduct market research, appropriate to the 
circumstances, for potential domestic sources, when acquiring an 
article on the list.
    The Buy American Act (41 U.S.C. 10a-10d) restricts the purchase of 
articles for public use in the United States that are not mined, 
produced, or manufactured in the United States. The Buy American Act 
provides an exception for articles of a class or kind not mined, 
produced, or manufactured in the United States in sufficient and 
reasonably available commercial quantities and of a satisfactory 
quality. FAR 25.103(b)(1) provides a determination that articles listed 
at FAR 25.104(a) meet the conditions of this exception.
    The established list of articles identified in FAR 25.104(a) is a 
wide-ranging mix of natural resources, compounds, materials, and other 
items of supply. Although some articles on the list have no known 
domestic production sources (e.g., quartz crystals or vanilla beans), 
many of the articles are known to have some domestic production 
sources, but those sources have been determined in the past to be 
inadequate to meet total U.S. Government and nongovernment demand. 
Examples of such articles range from goat and kidskins (negligible 
domestic production), to crude iodine (5 percent of U.S. demand), to 
bismuth (not in excess of 50 percent of U.S. demand). The Councils 
invite comment on the appropriateness of including items on the 
nonavailability list for which there are domestic sources that can meet 
50 percent of total U.S. demand.
    The proposed rule adds introductory text at 25.103(b) to explain 
that the nonavailability exception to the Buy American Act does not 
mean that these items are completely nonavailable from U.S. sources, 
but that they are of a class or kind that is not mined, produced or 
manufactured in the United States in sufficient and reasonably 
available commercial quantities and of a satisfactory quality.
    The proposed rule also relocates the information on how to handle 
potential deletions from the list (currently at 25.104(b)) to the same 
section that discusses possible additions to the list (25.103(b)).
    The current FAR allows the contracting officer to rely on the list, 
unless the contracting officer learns before the time designated for 
receipt of bids in sealed bidding or final offers in negotiation, that 
an article on the list is available in sufficient and reasonably 
available quantities of a satisfactory quality. The contracting officer 
must then amend the solicitation if purchasing the article, or if 
purchasing an end product that could contain such an article as a 
component, and must specify in all new solicitations that the article 
is available domestically and that offerors and contractors may not 
treat foreign components of the same class or kind as domestic 
components. In addition, the contracting officer must submit a copy of 
supporting documentation to the appropriate council identified in 
1.201-1 in accordance with agency procedures, for possible removal of 
the article from the list.
    Because market conditions may change, and items on the list may be 
available in sufficient quantity and quality for a particular 
acquisition, even though not in a quantity sufficient to meet total 
U.S. demand, the proposed rule requires a more proactive role for the 
agency. It requires the agency to conduct a level of market research 
appropriate to the circumstances, including seeking of domestic 
sources, before acquisition of an article on the list as an end 
product, a significant component (valued at more than 50 percent of the 
value of all the components), or a construction material. The proposed 
rule does not require the contracting officer to do market research 
seeking domestic sources for articles on the list of nonavailable 
articles that are minor components of an end item.
    The proposed rule also contains the requirements for publication of 
the nonavailability list at least once every 5 years, with an 
invitation to the public to submit unsolicited recommendations in the 
interim, with sufficient documentation to permit evaluation.
    A FAR notice 2004-N1, List of Nonavailable Articles Under the Buy 
American Act, requesting public comment on the domestic availability of 
items on the list has recently been published in the Federal Register 
at 69 FR 28104, May 18, 2004.
    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 Councils do not expect this proposed rule to have a significant 
economic impact on a substantial number of small entities within the 
meaning of the Regulatory Flexibility Act, 5 U.S.C. 601, et seq., 
because it is a clarification of existing policies, except for 
requiring a more proactive approach to market research by the 
Government. An Initial Regulatory Flexibility Analysis has, therefore, 
not been performed. We invite comments from small businesses and other 
interested parties. The Councils will

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consider comments from small entities concerning the affected FAR part 
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. (FAR case 
2003-021), in correspondence.

C. Paperwork Reduction Act

    The Paperwork Reduction Act does not apply because the proposed 
changes to the FAR do not impose information collection requirements 
that require the approval of the Office of Management and Budget under 
44 U.S.C. 3501, et seq.

List of Subjects in 48 CFR Part 25

    Government procurement.

    Dated: May 13, 2004.
Laura Auletta,
Director, Acquisition Policy Division.
    Therefore, DoD, GSA, and NASA propose amending 48 CFR part 25 as 
set forth below:
    1. The authority citation for 48 CFR part 25 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 25--FOREIGN ACQUISITION

    2. Amend section 25.103 by revising paragraph (b) to read as 
follows:


25.103  Exceptions.

* * * * *
    (b) Nonavailability. The Buy American Act does not apply with 
respect to articles, materials, or supplies if articles, materials, or 
supplies of the class or kind to be acquired, either as end items or 
components, are not mined, produced, or manufactured in the United 
States in sufficient and reasonably available commercial quantities and 
of a satisfactory quality.
    (1) Class determinations. (i) A nonavailability determination has 
been made for the articles listed in 25.104. This determination does 
not necessarily mean that there is no domestic source for the listed 
items, but that domestic sources can only meet 50 percent or less of 
total U.S. Government and nongovernment demand.
    (ii) Before acquisition of an article on the list, the procuring 
agency is responsible to conduct market research appropriate to the 
circumstances, including seeking of domestic sources. This applies to 
acquisition of an article as--
    (A) An end product; or
    (B) A significant component (valued at more than 50 percent of the 
value of all the components).
    (iii) The determination in paragraph (b)(1)(i) of this section does 
not apply if the contracting officer learns at any time before the time 
designated for receipt of bids in sealed bidding or final offers in 
negotiation that an article on the list is available domestically in 
sufficient and reasonably available commercial quantities of a 
satisfactory quality to meet the requirements of the solicitation. The 
contracting officer must--
    (A) Ensure that the appropriate Buy American Act provision and 
clause are included in the solicitation (see 25.1101(a), 25.1101(b), or 
25.1102);
    (B) Specify in the solicitation that the article is available 
domestically and that offerors and contractors may not treat foreign 
components of the same class or kind as domestic components; and
    (C) Submit a copy of supporting documentation to the appropriate 
council identified in 1.201-1 in accordance with agency procedures, for 
possible removal of the article from the list.
    (2) Individual determinations. (i) The head of the contracting 
activity may make a determination that an article, material, or supply 
is not mined, produced, or manufactured in the United States in 
sufficient and reasonably available commercial quantities of a 
satisfactory quality.
    (ii) If the contracting officer considers that the nonavailability 
of an article is likely to affect future acquisitions, the contracting 
officer may submit a copy of the determination and supporting 
documentation to the appropriate council identified in 1.201-1 in 
accordance with agency procedures, for possible addition to the list in 
25.104.
    (3) A written determination is not required if all of the following 
conditions are present:
    (i) The acquisition was conducted through use of full and open 
competition.
    (ii) The acquisition was synopsized in accordance with 5.201.
    (iii) No offer for a domestic end product was received.
* * * * *
    3. Amend section 25.104 in paragraph (a) by removing ``25.103(b)'' 
and adding ``25.103(b)(1)(i)'' in its place; and revising paragraph (b) 
to read as follows:


25.104  Nonavailable articles.

* * * * *
    (b) This list will be published in the Federal Register for public 
comment no less frequently than once every five years. Unsolicited 
recommendations for deletions from this list may be submitted at any 
time, and should provide sufficient data and rationale to permit 
evaluation (see FAR 1.502).


25.202  [Amended]

    4. Amend section 25.202 in the last sentence of paragraph (a)(2) by 
removing ``25.104(b)'' and adding ``25.103(b)(1)'' in its place.
[FR Doc. 04-11596 Filed 5-21-04; 8:45 am]
BILLING CODE 6820-EP-S