[Federal Register Volume 71, Number 124 (Wednesday, June 28, 2006)]
[Rules and Regulations]
[Pages 36935-36938]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 06-5707]


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DEPARTMENT OF DEFENSE

GENERAL SERVICES ADMINISTRATION

NATIONAL AERONAUTICS AND SPACE ADMINISTRATION

48 CFR Parts 25 and 52

[FAC 2005-10; FAR Case 2006-006; Item V; Docket 2006-0020, Sequence 10]
RIN 9000-AK49


Federal Acquisition Regulation; FAR Case 2006-006, Free Trade 
Agreements--El Salvador, Honduras, and Nicaragua

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 the 
Dominican Republic-Central America-United States Free Trade Agreement 
with respect to El Salvador, Honduras, and Nicaragua.

[[Page 36936]]


DATES: Effective Date: June 28, 2006.
    Comment Date: Interested parties should submit written comments to 
the FAR Secretariat on or before August 28, 2006 to be considered in 
the formulation of a final rule.

ADDRESSES: Submit comments identified by FAC 2005-10, FAR case 2006-006 
by any of the following methods:
     Federal eRulemaking Portal: http://www.regulations.gov. 
Follow the instructions for submitting comments.
     Agency Web site: http://www.acquisition.gov/far/ProposedRules/comments.htm. Click on the FAR case number to submit 
comments.
     E-mail: [email protected]. Include FAC 2005-10, FAR 
case 2006-006, in the subject line of the message.
     Fax: 202-501-4067.
     Mail: General Services Administration, Regulatory 
Secretariat (VIR), 1800 F Street, NW, Room 4035, ATTN: Laurieann 
Duarte, Washington, DC 20405.
    Instructions: Please submit comments only and cite FAC 2005-10, FAR 
case 2006-006, in all correspondence related to this case. All comments 
received will be posted without change to http://www.acquisition.gov/far/ProposedRules/comments.htm, including any personal and/or business 
confidential information provided.

FOR FURTHER INFORMATION CONTACT For clarification of content, contact 
Ms. Gloria Sochon, Procurement Analyst, at (202) 219-0311. Please cite 
FAC 2005-10, FAR case 2006-006. For information pertaining to status or 
publication schedules, contact the FAR Secretariat at (202) 501-4755.

SUPPLEMENTARY INFORMATION:

A. Background

    This rule amends FAR Part 25 and the clauses at 52.212-3, Offeror 
Representations and Certifications--Commercial Items, 52.212-5, 
Contract Terms and Conditions Required to Implement Statutes or 
Executive Orders--Commercial Items, 52.225-3, Buy American Act--Free 
Trade Agreements--Israeli Trade Act, 52.225-4, Buy American Act--Free 
Trade Agreements--Israeli Trade Act Certificate, 52.225-5, Trade 
Agreements, 52.225-11, Buy American Act--Construction Materials under 
Trade Agreements, and 52.225-12, Notice of Buy American Act 
Requirement--Construction Materials under Trade Agreements, to 
implement the Dominican Republic--Central America--United States Free 
Trade Agreement (CAFTA-DR) with respect to El Salvador, Honduras, and 
Nicaragua. Congress approved the CAFTA-DR in the Dominican Republic--
Central America--United States Free Trade Agreement Implementation Act 
(Public Law 109-53). Other signatory countries to the CAFTA-DR are 
Costa Rica, the Dominican Republic, and Guatemala. These regulations 
will be amended when the CAFTA-DR takes effect for these other 
countries. The CAFTA-DR waives the applicability of the Buy American 
Act for some foreign supplies and construction materials from El 
Salvador, Honduras, and Nicaragua and specifies procurement procedures 
designed to ensure fairness in the acquisition of supplies and 
services.
    The excluded services for the CAFTA-DR are the same as for the 
Chile FTA and NAFTA. For supply and service contracts, the CAFTA-DR has 
the same threshold as the other FTAs ($64,786), except the Morocco FTA 
and the NAFTA with respect to supply contracts involving Canada. For 
construction contracts, CAFTA-DR has the same threshold as the Chile 
FTA, Morocco FTA, Singapore FTA, and the WTO GPA ($7,407,000), lower 
than the NAFTA threshold of $8,422,165.
    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 goods and services of El 
Salvador, Honduras, and Nicaragua, the Councils do not anticipate 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 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 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 2005-10, 
FAR case 2006-006), in correspondence.

C. Paperwork Reduction Act

    The Paperwork Reduction Act does not apply because the 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.

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 urgent and compelling reasons exist to promulgate this 
interim rule without prior opportunity for public comment. This action 
is necessary because the CAFTA-DR took effect with respect to El 
Salvador on March 1, 2006, and took effect with respect to Honduras and 
Nicaragua on April 1, 2006. 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 25 and 52

    Government procurement.

    Dated: June 20, 2006.
Ralph De Stefano,
Director, Contract Policy Division.

0
Therefore, DoD, GSA, and NASA amend 48 CFR parts 25 and 52 as set forth 
below:
0
1. The authority citation for 48 CFR parts 25 and 52 continues 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

0
2. Amend section 25.003 by--
0
a. Revising the definition ``Caribbean Basin country''
0
b. Revising paragraph (2) of the definition ``Designated country'' and 
removing from paragraph (4) of the definition ``El Salvador,'', 
``Honduras,'', and ``Nicaragua,'' and
0
c. Revising the definition ``Free Trade Agreement country''.
0
The revised text reads as follows:


25.003  Definitions.

* * * * *
    Caribbean Basin country means any of the following countries: 
Antigua and Barbuda, Aruba, Bahamas, Barbados, Belize, British Virgin 
Islands, Costa Rica, Dominica, Dominican Republic, Grenada, Guatemala, 
Guyana, Haiti,

[[Page 36937]]

Jamaica, Montserrat, Netherlands Antilles, St. Kitts and Nevis, St. 
Lucia, St. Vincent and the Grenadines, or Trinidad and Tobago.
* * * * *
    Designated country * * *
    (1) * * *
    (2) A Free Trade Agreement country (Australia, Canada, Chile, El 
Salvador, Honduras, Mexico, Morocco, Nicaragua, or Singapore);
* * * * *
    Free Trade Agreement country means Australia, Canada, Chile, El 
Salvador, Honduras, Mexico, Morocco, Nicaragua, or Singapore.
* * * * *
0
3. Amend section 25.400 by removing from the end of paragraph 
(a)(2)(iv) the word ``and'' adding at the end of paragraph (a)(2)(v) 
the word ``and''; and adding a new paragraph (a)(2)(vi) to read as 
follows:


25.400  Scope of Subpart.

    (a) * * *
    (2) * * *
    (i) * * *
    (vi) CAFTA-DR (The Dominican Republic-Central America-United States 
Free Trade Agreement, as approved by Congress in the Dominican 
Republic-Central America-United States Free Trade Agreement 
Implementation Act (Pub. L. 109-53);
* * * * *


25.401  [Amended]

0
4. Amend section 25.401 in paragraph (b), in the table heading, by 
removing from the third column ``NAFTA and Chile FTA'' and adding 
``NAFTA, CAFTA-DR, and Chile FTA'' in its place.


25.402  [Amended]

0
5. Amend section 25.402 in paragraph (b), in the table, by adding after 
``Australia FTA'' the entry ``CAFTA-DR (El Salvador, Honduras, and 
Nicaragua'') and in its corresponding line items ``64,786'', 
``64,786'', and ``7,407,000'', respectively.
0
6. Amend section 25.405 by adding a new sentence to the end of the 
paragraph to read as follows:


25.405  Caribbean Basin Trade Initiative.

    * * * In accordance with Section 201 (a)(3) of the Dominican 
Republic--Central America--United States Free Trade Implementation Act 
(Pub. L. 109-53), when the CAFTA-DR agreement enters into force with 
respect to a country, that country is no longer designated as a 
beneficiary country for purposes of the Caribbean Basin Economic 
Recovery Act, and is therefore no longer included in the definition of 
``Caribbean Basin country'' for purposes of the Caribbean Basin Trade 
Initiative.

PART 52--SOLICITATION PROVISIONS AND CONTRACT CLAUSES

0
7. Amend section 52.212-3 by--
0
a. Revising the date of the clause;
0
b. Removing from paragraph (g)(1)(i) ``and ``United States'' and adding 
````Free Trade Agreement country,'' and ``United States'''' in its 
place;
0
c. Revising paragraph (g)(1)(ii); and
0
d. Revising the paragraph headings for (g)(2) and (g)(3) by removing 
the parenthetical ``(JAN 2004)''.
0
The revised text reads as follows:


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

* * * * *
    OFFEROR REPRESENTATIONS AND CERTIFICATIONS--COMMERCIAL ITEMS 
(JUN 2006)
* * * * *
    (g)(1) * * *
    (i) * * *
    (ii) The offeror certifies that the following supplies are Free 
Trade Agreement country end products (other than Moroccan end products) 
or Israeli end products as defined in the clause of this solicitation 
entitled ``Buy American Act--Free Trade Agreements--Israeli Trade 
Act'':
    Free Trade Agreement Country End Products (Other than Moroccan End 
Products) or Israeli End Products:

                                                   Line Item No.
                                            --------------------
                                            --------------------
                                            --------------------
 

    [List as necessary]
* * * * *


52.212-5  [Amended]

0
8. Amend section 52.212-5 by--
0
a. Revising the date of the clause to read ``(JUN 2006)'';
0
b. Removing from paragraph (b)(24)(i) ``(APR 2006)'' and adding ``(JUN 
2006)'' in its place and adding to the end of the paragraph ``, and 
109-53''; and
0
c. Removing from paragraph (b)(25) ``(APR 2006)'' and adding ``(JUN 
2006)'' in its place.
0
9. Amend section 52.225-3 by--
0
a. Revising the date of the clause;
0
b. Removing from paragraph (a) the definition ``End product of 
Australia, Canada, Chile, Mexico, or Singapore''; and adding, in 
alphabetical order, the definitions ``Free Trade Agreement country'', 
``Free Trade Agreement country end product'', and ``Moroccan end 
product''; and
0
c. Revising the last sentence in paragraph (c).
0
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 (JUN 
2006)
* * * * *
    Definitions. * * *
* * * * *
    Free Trade Agreement country means Australia, Canada, Chile, El 
Salvador, Honduras, Mexico, Morocco, Nicaragua, 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 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 a 
Free Trade Agreement 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.
* * * * *
    Moroccan end product means an article that--
    (1) Is wholly the growth, product, or manufacture of Morocco; 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 
Morocco 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

[[Page 36938]]

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) * * * If the Contractor specified in its offer that the 
Contractor would supply a Free Trade Agreement country end product 
(other than a Moroccan end product) or an Israeli end product, then the 
Contractor shall supply a Free Trade Agreement country end product 
(other than a Moroccan end product), an Israeli end product or, at the 
Contractor's option, a domestic end product.
* * * * *
0
10. Amend section 52.225-4 by--
0
a. Revising the date of the clause;
0
b. Revising the second sentence of paragraph (a); and
0
c. Revising paragraph (b).
0
The revised text reads as follows:


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

* * * * *
    BUY AMERICAN ACT--FREE TRADE AGREEMENTS--ISRAELI TRADE ACT 
CERTIFICATE (JUN 2006)
    (a) * * * The terms ``component,'' ``domestic end product,'' ``end 
product,'' ``foreign end product,'' ``Free Trade Agreement country,'' 
``Free Trade Agreement country end product,'' ``Israeli end product,'' 
``Moroccan end product,'' and ``United States'' are defined in the 
clause of this solicitation entitled ``Buy American Act--Free Trade 
Agreements--Israeli Trade Act.''
    (b) The offeror certifies that the following supplies are Free 
Trade Agreement country end products (other than Moroccan end products) 
or Israeli end products as defined in the clause of this solicitation 
entitled ``Buy American Act--Free Trade Agreements--Israeli Trade 
Act'':
    Free Trade Agreement Country End Products (Other than Moroccan End 
Products) or Israeli End Products:

                                                   Line Item No.
                                            --------------------
                                            --------------------
                                            --------------------
 

    [List as necessary]
* * * * *
0
11. Amend section 52.225-5 by--
0
a. Revising the date of the clause; and
0
b. In paragraph (a), in the definition ``Designated country'', revising 
paragraph (2), and removing from paragraph (4) ``El Salvador'', 
``Honduras,'', and ``Nicaragua,''.
0
The revised text reads as follows:


52.225-5  Trade Agreements.

* * * * *
    TRADE AGREEMENTS (JUN 2006)
* * * * *
    (a) Definitions. * * *
    Designated country * * *
    (1) * * *
    (2) Free Trade Agreement country (Australia, Canada, Chile, El 
Salvador, Honduras, Mexico, Morocco, Nicaragua, or Singapore).
* * * * *
0
12. Amend section 52.225-11 by--
0
a. Revising the date of the clause;
0
b. In paragraph (a), in the definition ``Designated country'', revising 
paragraph (2), and removing from paragraph (4) ``El Salvador,'' 
``Honduras,'' and Nicaragua,''; and
0
c. Revising Alternate I.
0
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 
(JUN 2006)
* * * * *
    (a) Definitions. * * *
    Designated country * * *
    (2) Free Trade Agreement country (Australia, Canada, Chile, El 
Salvador, Honduras, Mexico, Morocco, Nicaragua, or Singapore);
* * * * *
    Alternate I ``(JUN 2006)''. As prescribed in 25.1102(c)(3), add 
the following definition of ``Mexican 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:
    Mexican construction material means a construction material 
that--
    (1) Is wholly the growth, product, or manufacture of Mexico; 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 Mexico 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 WTO GPA and all the Free Trade Agreements 
except NAFTA apply to this acquisition. Therefore, the Buy American 
Act restrictions are waived for designated country construction 
materials other than Mexican construction materials.
    (2) The Contractor shall use only domestic or designated country 
construction material other than Mexican construction material in 
performing this contract, except as provided in paragraphs (b)(3) 
and (b)(4) of this clause.
0
13. In section 52.225-12, amend Alternate II by revising the 
introductory text; removing paragraph (a); and revising paragraph 
(d)(1) and the introductory text of paragraph (d)(3) to read as 
follows:


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

* * * * *
    Alternate II ``(JUN 2006)''. As prescribed in 25.1102(d)(3), add 
the definition of ``Mexican construction material'' to paragraph (a) 
and substitute the following paragraph (d) for paragraph (d) of the 
basic provision:
* * * * *
    (d) Alternate offers. (1) When an offer includes foreign 
construction material, except foreign construction material from a 
designated country other than Mexico, 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 or designated country construction 
material other than Mexican 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 or designated country construction 
material other than Mexican construction material. An offer based on 
use of the foreign construction material for which an exception was 
requested--
* * * * *
[FR Doc. 06-5707 Filed 6-27-06; 8:45 am]
BILLING CODE 6820-EP-S