[Federal Register Volume 73, Number 147 (Wednesday, July 30, 2008)]
[Proposed Rules]
[Pages 44208-44210]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: E8-17373]



48 CFR Parts 525 and 552

[GSAR Case 2006-G520; Docket 2008-0007; Sequence 15]
RIN 3090-AI66

General Services Acquisition Regulation; GSAR Case 2006-G520; 
Rewrite of GSAR Part 525, Foreign Acquisition

AGENCY: Office of the Chief Acquisition Officer, General Services 
Administration (GSA).

ACTION: Proposed rule.


SUMMARY: The General Services Administration (GSA) is proposing to 
amend the General Services Acquisition Regulation (GSAR) to update the 
text addressing foreign acquisition. This rule is a result of the 
General Services Administration Acquisition Manual (GSAM) Rewrite 
initiative undertaken by GSA to revise the GSAM to maintain consistency 
with the FAR, and to implement streamlined and innovative acquisition 
procedures that contractors, offerors and GSA contracting personnel can 
utilize when entering into and administering contractual relationships. 
The GSAM incorporates the General Services Administration Acquisition 
Regulation (GSAR) as well as internal agency acquisition policy. GSA 

[[Page 44209]]

rewrite each part of the GSAR and GSAM, and as each part is rewritten, 
will publish it in the Federal Register.
    This part is a continuance in a series of revisions. It covers the 
rewrite of GSAR Part 525, Foreign Acquisition.

DATES: Interested parties should submit written comments to the 
Regulatory Secretariat on or before September 29, 2008 to be considered 
in the formulation of a final rule.

ADDRESSES: Submit comments identified by GSAR Case 2006-G520 by any of 
the following methods:
     Regulations.gov: http://www.regulations.gov.
    Submit comments via the Federal eRulemaking portal by inputting 
``GSAR Case 2006-G520'' under the heading ``Comment or Submission''. 
Select the link ``Send a Comment or Submission'' that corresponds with 
GSAR Case 2006-G520. Follow the instructions provided to complete the 
``Public Comment and Submission Form''. Please include your name, 
company name (if any), and ``GSAR Case 2006-G520'' on your attached 
     Fax: 202-501-4067.
     Mail: General Services Administration, Regulatory 
Secretariat (VPR), 1800 F Street, NW, Room 4041, ATTN: Laurieann 
Duarte, Washington, DC 20405.
    Instructions: Please submit comments only and cite GSAR Case 2006-
G520 in all correspondence related to this case. All comments received 
will be posted without change to http://www.regulations.gov, including 
any personal and/or business confidential information provided.

FOR FURTHER INFORMATION CONTACT For clarification of content, contact 
Ms. Meredith Murphy at (202) 208-6925. For information pertaining to 
the status or publication schedules, contact the Regulatory Secretariat 
(VPR), Room 4041, GS Building, Washington, DC 20405, (202) 501-4755. 
Please cite GSAR Case 2006-G520.


A. Background

The GSAR Rewrite Project
    GSA published an Advance Notice of Proposed Rulemaking (ANPR) in 
the Federal Register at 71 FR 7910, February 15, 2006, with request for 
comments because GSA was beginning the review and update of the General 
Services Administration Acquisition Regulation (GSAR).
    This GSAR rewrite has--
     Considered comments received from the ANPR, published 
February 15, 2006.
     Changed ``you'' to ``contracting officer.''
     Maintained consistency with the FAR, but eliminated 
     Revised GSAR sections that are out of date, or which 
imposed inappropriate burdens on the Government or contractors, 
especially small businesses.
     Streamlined and simplified wherever possible.
    In addition, GSA has recently reorganized into two (2), rather than 
three (3), services. Therefore, the reorganization of the Federal 
Supply Service (FSS) and the Federal Technology Service (FTS) into the 
Federal Acquisition Service (FAS) was considered in the rewrite 
The Rewrite of Part 525
    Subpart 525.3, Balance of Payment Programs, is proposed for 
deletion because FAR Case 99-616, dated November 20, 2006, removed the 
corresponding FAR coverage. Subpart 525.5, Evaluating Foreign Offers--
Supply Contracts, and the related clause at 552.225-70, are proposed 
for deletion because they were replaced on January 25, 2007, by GSA 
Acquisition Letter V-07-02 with more current Berry Amendment coverage 
at Subpart 525.10, Additional Foreign Acquisition Regulations. Subpart 
525.6, Trade Sanctions, is proposed for deletion because Federal 
Acquisition Circular 2005-09, dated April 2006, removed the 
corresponding FAR coverage. Subpart 552.3, Provision and Clause 
Matrices, is being revised to delete reference to the clause at 
552.225-70 from the Matrix.
Discussion of Comments
    As a result of the ANPR, GSA received three comments pertaining to 
GSAR Part 525.
    Comment 1: One commenter suggested revising the GSAR to provide an 
exception to the Trade Agreements Act (and certain other domestic 
source requirements) for commercial off-the-shelf items.
    Response: The language of the statute does not authorize such 
exceptions to be made at the agency level.
    Comment 2: The second commenter stressed that, in the medical 
world, there are numerous products that either are already manufactured 
off-shore in non-designated countries or soon will be according to 
industry via market research. When these types of medical items begin 
to be produced off-shore, historically all competitors end up moving 
production shortly thereafter because of pricing pressures, and none of 
them or any future competitors initiate production in an acceptable 
country under the T.A.A. With this in mind, it is felt that exemptions 
to the T.A.A. via a non-availability determination should be allowed. 
The contracting officer making the non-availability determination (with 
approval from the appropriate individual) can continually monitor the 
availability of FedBizOpps sources sought announcements, SBA Pro-Net 
searches and possible other methods.
    Response: The statute authorizes a head of the contracting activity 
to make a non-availability determination on an individual item basis, 
and this authority is specifically addressed at 525.103(d). The 
procedure for requesting that an item be added to the List of 
Nonavailable Articles is at FAR 25.104.
    Comment 3: The third commenter suggests that GSA consider revising 
the GSAR to implement supplemental guidance to clarify the application 
of the Buy American Act (``BAA''), 41 U.S.C. 10a-10d and Executive 
order 10582, December 17, 1954, and the Trade Agreements Act (``TAA''), 
19 U.S.C. 2501 et seq., to FSS and GWAC Contracts. Contractors seek 
consistency in treatment under the law and applicable regulations. 
Knowing when the BAA and TAA apply and how their respective tests will 
be applied to products and services is of great importance to 
contractors. Contractors selling commercial items to the Federal 
Government generally do not manufacture their products based on the 
origin of supplies or manufacturing locations. The Government, however, 
requires such contractors to consider these things when they contract 
to sell commercial products to the Federal Government. Making it easier 
for contractors to know and understand how the rules will be applied 
can only improve the procurement system. This is particularly important 
because an inaccurate certification can result in loss of monies, 
contracts, serious civil and criminal penalties, or both. Currently 
there is uncertainty as to whether the BAA or TAA applies to a 
procurement. The TAA dollar value applicability threshold, which is set 
out in FAR 25.402, can vary according to whether the country of origin 
is a Free Trade Agreement (``FTA'') country and whether the contract is 
for supplies, services or construction.
    The commenter also stated that applicability of the Berry Amendment 
to orders placed under Schedule contracts was not clear.
    Response: The statute specifically makes the law (TAA or BAA) 
applicable to the total value of the acquisition, which the GSA Office 
of General Counsel has interpreted as meaning the total contract value, 
not the value of the

[[Page 44210]]

individual task order. Therefore, the TAA applies to each order issued 
under the Schedule contract.
    GSA issues Schedules for use by many Government agencies. By 
regulation, restrictions (such as the Berry Amendment) that are not 
applicable to all agencies are required to be placed in individual task 
orders to which they do apply, not in the basic Schedule contract.
    The commenter correctly states that GSA is not subject to the Berry 
Amendment. However, the statute is applicable to purchases ``made with 
DOD appropriated funds,'' without regard to which agency places the 
order. GSA Acquisition Letter V-07-02, Implementation of Berry 
Amendment Contracting Requirements for Assisted Acquisitions Using DOD 
Funds, dated January 25, 2007, requires the contracting officer for 
individual task orders to review the requirement and source of funds 
for Berry Amendment applicability and include the appropriate DFARS 
clause in the resulting procurement. In other words, any task order 
issued using DoD appropriated funds must include the Berry Amendment.
    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 General Services Administration does 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 there are no substantive changes. An 
Initial Regulatory Flexibility Analysis has, therefore, not been 
performed. We invite comments from small businesses and other 
interested parties. GSA will consider comments from small entities 
concerning the affected GSAR Parts 525 and 552 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. (GSAR case 2006-G520), in 

C. Paperwork Reduction Act

    The Paperwork Reduction Act does not apply because the proposed 
changes to the GSAM 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 Parts 525 and 552

    Government procurement.

    Dated: July 24, 2008.
Al Matera,
Director, Office of Acquisition Policy.
    Therefore, GSA proposes to amend 48 CFR parts 525 and 552 as set 
forth below:
    1. The authority citation for 48 CFR parts 525 and 552 is revised 
to read as follows:

    Authority:  40 U.S.C. 121(c).


Subpart 525.3 [Removed]

    2. Subpart 525.3 is removed.

Subpart 525.5 [Removed]

    3. Subpart 525.5 is removed.

Subpart 525.11 [Removed]

    4. Subpart 525.11 is removed.


552.225-70   [Removed]

    5. Section 552.225-70 is removed.
[FR Doc. E8-17373 Filed 7-29-08; 8:45 am]