[Federal Register Volume 74, Number 113 (Monday, June 15, 2009)]
[Rules and Regulations]
[Pages 28426-28430]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: E9-13978]


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DEPARTMENT OF DEFENSE

GENERAL SERVICES ADMINISTRATION

NATIONAL AERONAUTICS AND SPACE ADMINISTRATION

48 CFR Parts 25 and 52

[FAC 2005-33; FAR Case 2008-036; Item I; Docket 2009-0019, Sequence 1]
RIN 9000-AL23


Federal Acquisition Regulation; FAR Case 2008-036, Trade 
Agreements--Costa Rica, Oman, and Peru

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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[[Page 28427]]

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 Costa Rica, the United States-Oman Free Trade 
Agreement, and the United States-Peru Trade Promotion Agreement.

DATES: Effective Date: June 15, 2009.
    Comment Date: Interested parties should submit written comments to 
the Regulatory Secretariat on or before August 14, 2009 to be 
considered in the formulation of a final rule.

ADDRESSES: Submit comments identified by FAC 2005-33, FAR case 2008-
036, by any of the following methods:
     Regulations.gov: http://www.regulations.gov.
    Submit comments via the Federal eRulemaking portal by inputting 
``FAR Case 2008-036'' under the heading ``Comment or Submission''. 
Select the link ``Send a Comment or Submission'' that corresponds with 
FAR Case 2008-036. Follow the instructions provided to complete the 
``Public Comment and Submission Form''. Please include your name, 
company name (if any), and ``FAR Case 2008-036'' on your attached 
document.
     Fax: 202-501-4067.
     Mail: General Services Administration, Regulatory 
Secretariat (VPR), 1800 F Street, NW., Room 4041, ATTN: Hada Flowers, 
Washington, DC 20405.
    Instructions: Please submit comments only and cite FAC 2005-33, FAR 
case 2008-036, 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, Procurement Analyst, at (202) 208-6925. For 
information pertaining to status or publication schedules, contact the 
Regulatory Secretariat at (202) 501-4755. Please cite FAC 2005-33, FAR 
case 2008-036.

SUPPLEMENTARY INFORMATION:

A. Background

    This rule amends FAR Part 25 and the corresponding clauses in Part 
52 to implement the Dominican Republic--Central America--United States 
Free Trade Agreement (CAFTA-DR) with respect to Costa Rica, the United 
States-Oman Free Trade Agreement, and the United States-Peru Trade 
Promotion Agreement.
    Congress approved these trade agreements in the Dominican 
Republic--Central America--United States Free Trade Agreement 
Implementation Act (Pub. L. 109-53), the United States-Oman Free Trade 
Agreement Implementation Act (Pub. L. 109-283) (19 U.S.C. 3805 note), 
and the United States-Peru Trade Promotion Agreement Implementation Act 
(Pub. L. 110-138) (19 U.S.C. 3805 note). These Acts waive the 
applicability of the Buy American Act for some foreign supplies and 
construction materials from Costa Rica, Oman, and Peru and specify 
procurement procedures designed to ensure fairness in the acquisition 
of supplies and services.
    This interim rule adds Costa Rica, Oman, and Peru to the definition 
of ``Free Trade Agreement country.'' The rule also deletes Costa Rica 
from the definition of ``Caribbean Basin country'' because, in 
accordance with Section 201(a)(3) of 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.
    The excluded services for the Oman and Peru FTAs are the same as 
for the Bahrain FTA, CAFTA-DR, Chile FTA, and NAFTA. Costa Rica has the 
same thresholds as the other CAFTA-DR countries.
    The threshold for supply and service contracts of the Oman and Peru 
FTAs is $194,000. Like the Morocco and Bahrain FTAs, the Oman and Peru 
FTA thresholds for supplies and services is higher than the thresholds 
for the other FTAs. Therefore, Omani and Peruvian end products are not 
covered by the Buy American Act--Free Trade Agreements--Israeli Trade 
Act provision and clause (FAR 52.225-3 and 52.225-4).
    For construction contracts, the Oman FTA threshold is $8,817,449 
and the Peru FTA threshold is $7,443,000. Like NAFTA and the Bahrain 
FTA, the Omani threshold for construction is higher than the thresholds 
of the other FTAs. Therefore Omani construction material, along with 
Bahrainian and Mexican construction material, is excluded from coverage 
under the Buy American Act--Construction Materials under the Trade 
Agreements provision and clause for acquisitions less than $8,817,449 
(52.225-11 Alternate I and 52.225-12 Alternate II, respectively). 
Canadian construction material is not excluded, because it is covered 
under the World Trade Organization Government Procurement Agreement.
    This is a significant regulatory action and, therefore, was 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

    This 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 Costa 
Rica, Oman, and Peru, 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, the Councils have not performed an 
Initial Regulatory Flexibility Analysis. The Councils invite comments 
from small business concerns and other interested parties on this 
issue. The Councils will also consider comments from small entities 
concerning the affected FAR parts 25 and 52 in accordance with 5 U.S.C. 
610. Interested parties should submit such comments separately and 
should cite 5 U.S.C. 601, et seq. (FAR Case 2008-036), in 
correspondence.

C. Paperwork Reduction Act

    The Paperwork Reduction Act does apply, 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 9000-0136 (Commercial Item 
Acquisition: FAR Sections Affected: Part 12; 52.212-1, and 52.212-3), 
9000-0130 (Buy America Act, Trade Agreements Act Certificate: FAR 
Sections Affected: 52.225-4), 9000-0025 (Buy American Act, Trade 
Agreements Act Certificate: FAR Sections Affected: 52.225-6), and 9000-
0141 (Buy America Act--Construction: FAR Sections Affected: Subpart 
25.2, 52.225-9, and 52.225-11) respectively. While the FAR Secretariat 
believes this impact to be negligible, comments are invited on the 
burden and number of entities affected as part of this rulemaking.

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

[[Page 28428]]

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 these free trade agreements 
all took effect on January 1, 2009. However, pursuant to Pub. L. 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 9, 2009.
Al Matera,
Director, Office of Acquisition Policy.

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. Removing from the definition ``Caribbean Basin country'' the words 
``Costa Rica,'';
0
b. Revising paragraph (2) of the definition ``Designated country''; and 
removing from paragraph (4) the words ``Costa Rica''; and
0
c. Removing from the definition ``Free Trade Agreement country'' the 
words ``Chile, Dominican'' and adding ``Chile, Costa Rica, Dominican'' 
in their place, and removing the word ``Nicaragua, or'' and adding 
``Nicaragua, Oman, Peru, or'' in its place.
0
The revised text reads as follows:


25.003  Definitions.

* * * * *
    Designated country * * *
    (2) A Free Trade Agreement country (Australia, Bahrain, Canada, 
Chile, Costa Rica, Dominican Republic, El Salvador, Guatemala, 
Honduras, Mexico, Morocco, Nicaragua, Oman, Peru, or Singapore);
* * * * *
0
3. Amend section 25.400 by revising paragraphs (a)(2)(iii) through 
(a)(2)(vii), and adding paragraphs (a)(2)(viii) and (a)(2)(ix) to read 
as follows:


25.400  Scope of Subpart.

    (a) * * *
    (2) * * *
    (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) (19 U.S.C. 3805 
note));
    (iv) Australia FTA (the United States-Australia Free Trade 
Agreement, as approved by Congress in the United States-Australia Free 
Trade Agreement Implementation Act (Pub. L. 108-286) (19 U.S.C. 3805 
note));
    (v) Morocco FTA (The United States--Morocco Free Trade Agreement, 
as approved by Congress in the United States--Morocco Free Trade 
Agreement Implementation Act (Pub. L. 108-302) (19 U.S.C. 3805 note));
    (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) (19 U.S.C. 4001 note));
    (vii) Bahrain FTA (the United States-Bahrain Free Trade Agreement, 
as approved by Congress in the United States-Bahrain Free Trade 
Agreement Implementation Act (Pub. L. 109-169) (19 U.S.C. 3805 note));
    (viii) Oman FTA (the United States-Oman Free Trade Agreement, as 
approved by Congress in the United States-Oman Free Trade Agreement 
Implementation Act (Pub. L. 109-283) (19 U.S.C. 3805 note)); and
    (ix) Peru FTA (the United States-Peru Trade Promotion Agreement, as 
approved by Congress in the United States-Peru Trade Promotion 
Agreement Implementation Act (Pub. L. 110-138) (19 U.S.C. 3805 note));
* * * * *


25.401  [Amended]

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

0
5. Amend section 25.402 by revising the table following paragraph (b) 
to read as follows:


25.402  General.

* * * * *
    (b) * * *

 
----------------------------------------------------------------------------------------------------------------
                                                             Supply Contract  Service Contract    Construction
                      Trade Agreement                         (equal to or      (equal to or     Contract (equal
                                                               exceeding)        exceeding)     to or exceeding)
----------------------------------------------------------------------------------------------------------------
WTO GPA...................................................          $194,000          $194,000        $7,443,000
FTAs......................................................  ................  ................  ................
 Australia FTA............................................            67,826            67,826         7,443,000
 Bahrain FTA..............................................           194,000           194,000         8,817,449
 CAFTA-DR (Costa Rica, Dominican Republic, El Salvador,               67,826            67,826         7,443,000
 Guatemala, Honduras, and Nicaragua)......................
 Chile FTA................................................            67,826            67,826         7,443,000
 Morocco FTA..............................................           194,000           194,000         7,443,000
 NAFTA....................................................  ................  ................
 -Canada..................................................            25,000            67,826         8,817,449
 -Mexico..................................................            67,826            67,826         8,817,449
 Oman FTA.................................................           194,000           194,000         8,817,449
 Peru FTA.................................................           194,000           194,000         7,443,000
 Singapore FTA............................................            67,826            67,826         7,443,000
Israeli Trade Act.........................................            50,000                --                --
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[[Page 28429]]

PART 52--SOLICITATION PROVISIONS AND CONTRACT CLAUSES


52.212-3  [Amended]

0
6. Amend section 52.212-3 by revising the date of the provision to read 
``(JUN 2009)''; and by removing from paragraphs (g)(1)(i) and 
(g)(1)(ii) ``Bahrainian or Moroccan'' and adding ``Bahrainian, 
Moroccan, Omani, or Peruvian'' in its place each time it appears (three 
times).

0
7. Amend section 52.212-5 by revising the date of the clause, and 
paragraphs (b)(32)(i) and (b)(33) 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 (JUN 2009)
* * * * *
    (b) * * *
    ---- (32)(i) 52.225-3, Buy American Act--Free Trade Agreements--
Israeli Trade Act (JUN 2009) (41 U.S.C. 10a-10d, 19 U.S.C. 3301 
note, 19 U.S.C. 2112 note, 19 U.S.C. 3805 note, Pub. L. 108-77, 108-
78, 108-286, 108-302, 109-53, 109-169, 109-283, and 110-138).
* * * * *
    ---- (33) 52.225-5, Trade Agreements (JUN 2009) (19 U.S.C. 2501, 
et seq., 19 U.S.C. 3301 note).
* * * * *

0
8. Amend section 52.225-3 by--
0
a. Revising the date of the clause;
0
b. Revising the definitions ``Bahrainian or Moroccan end product'' and 
``Free Trade Agreement country''; and
0
c. Removing from paragraph (c) ``the Bahrain and Morocco FTAs'' and 
adding ``the Bahrain, Morocco, Oman, and Peru FTAs'' in its place, and 
removing ``other than a Bahrainian or Moroccan'' and adding ``other 
than a Bahrainian, Moroccan, Omani, or Peruvian'' in its place each 
time it appears (twice).
0
The revised 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 2009)
* * * * *
    (a) * * *
    Bahrainian, Moroccan, Omani, or Peruvian end product means an 
article that--
    (1) Is wholly the growth, product, or manufacture of Bahrain, 
Morocco, Oman, or Peru ; 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 Bahrain, Morocco, Oman, or Peru 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.
* * * * *
    Free Trade Agreement country means Australia, Bahrain, Canada, 
Chile, Costa Rica, Dominican Republic, El Salvador, Guatemala, 
Honduras, Mexico, Morocco, Nicaragua, Oman, Peru, or Singapore.
* * * * *


52.225-4  [Amended]

0
9. Amend section 52.225-4 by--
0
a. Revising the date of the provision to read ``(JUN 2009)''; and
0
b. Removing from paragraphs (a) and (b) ``Bahrainian or Moroccan'' and 
adding ``Bahrainian, Moroccan, Omani, or Peruvian'' in its place each 
time it appears (three times).

0
10. Amend section 52.225-5 by--
0
a. Revising the date of the clause; and
0
b. Revising paragraph (2) in the definition ``Designated country''; and 
removing from paragraph (4) of that definition the words ``Costa 
Rica,''.
0
The revised text reads as follows:


52.225-5  Trade Agreements.

* * * * *
Trade Agreements (JUN 2009)
    (a) * * *
    Designated country * * *
    (2) A Free Trade Agreement country (Australia, Bahrain, Canada, 
Chile, Costa Rica, Dominican Republic, El Salvador, Guatemala, 
Honduras, Mexico, Morocco, Nicaragua, Oman, Peru, or Singapore);
* * * * *

0
11. Amend section 52.225-11 by--
0
a. Revising the date of the clause;
0
b. Amending paragraph (a) in the definition ``Designated country'' by--
0
1. Revising paragraph (2); and
0
2. Removing from paragraph (4) ``Costa Rica,'';
0
c. Amending Alternate I, by--
0
1. Revising the date of Alternate I;
0
2. Removing from the introductory paragraph text and in the definition 
``Bahrainian or Mexican construction material'' ``Bahrainian or 
Mexican'' and adding ``Bahrainian, Mexican, or Omani'' in its place 
(twice);
0
3. Removing from the definition ``Bahrainian or Mexican construction 
material'' in paragraphs (1) and (2) ``Bahrain or Mexico'' and adding 
``Bahrain, Mexico, or Oman'' in its place (twice);
0
4. Revising paragraph (b)(1); and
0
5. Removing from paragraph (b)(2) ``other than Bahrainian or Mexican'' 
and adding ``other than Bahrainian, Mexican, or Omani'' in its place.
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 
2009)
    (a) Definitions. * * *
* * * * *
    Designated country * * *
    (2) A Free Trade Agreement country (Australia, Bahrain, Canada, 
Chile, Costa Rica, Dominican Republic, El Salvador, Guatemala, 
Honduras, Mexico, Morocco, Nicaragua, Oman, Peru, or Singapore);
* * * * *
    Alternate I (JUN 2009). * * *
* * * * *
    (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 accordance with 41 U.S.C. 431, 
the component test of the Buy American Act is waived for 
construction material that is a COTS item (See FAR 12.505(a)(2)). In 
addition, the Contracting Officer has determined that the WTO GPA 
and all the Free Trade Agreements except the Bahrain FTA, NAFTA, and 
the Oman FTA apply to this acquisition. Therefore, the Buy American 
Act restrictions are waived for designated country construction 
materials other than Bahrainian, Mexican, or Omani construction 
materials.
* * * * *

0
12. Amend section 52.225-12 in Alternate II by--
0
a. Revising the date of Alternate II;
0
b. Removing from the introductory paragraph text ``Bahrainian or 
Mexican'' and adding ``Bahrainian, Mexican, or Omani'' in its place;
0
c. Revising paragraph (d)(1); and
0
d. Removing from paragraph (d)(3) ``Bahrainian or Mexican'' and adding 
``Bahrainian, Mexican, or Omani'' in its place.


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

* * * * *
    Alternate II (JUN 2009) * * *
    (d) Alternate offers. (1) When an offer includes foreign 
construction material, except foreign construction material from a 
designated country other than Bahrain, Mexico, or Oman 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

[[Page 28430]]

use of equivalent domestic or designated country construction 
material other than Bahrainian, Mexican, or Omani construction 
material.
* * * * *
[FR Doc. E9-13978 Filed 6-12-09; 8:45 am]
BILLING CODE 6820-EP-S