[Federal Register Volume 74, Number 157 (Monday, August 17, 2009)]
[Rules and Regulations]
[Pages 41346-41351]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: E9-19647]



[[Page 41346]]

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DEPARTMENT OF HOMELAND SECURITY

48 CFR Parts 3025 and 3052

[Docket No. DHS-2009-0081]
RIN 1601-AA57


Revision of Department of Homeland Security Acquisition 
Regulation; Restrictions on Foreign Acquisition (HSAR Case 2009-004)

AGENCY: Office of the Chief Procurement Officer, DHS.

ACTION: Interim rule with requests for comments.

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SUMMARY: The Department of Homeland Security (DHS) is amending its 
Homeland Security Acquisition Regulation (HSAR) parts 3025 and 3052 to 
reflect a statutory change limiting the acquisition of products 
containing textiles from sources outside the United States.

DATES: Effective Date: August 17, 2009.
    Comment Date: Comments and related material submitted 
electronically must be submitted to the Federal eRulemaking Portal 
http://www.regulations.gov on or before September 16, 2009. Comments 
and related material submitted by mail must reach the Department of 
Homeland Security, Office of the Chief Procurement Officer, Acquisition 
Policy and Legislation Branch at the address shown below on or before 
September 16, 2009, to be considered in the formation of the final 
rule.

ADDRESSES: You may submit comments identified by DHS docket number DHS-
2009-0081, using any one of the following methods:
    (1) Via the Internet at the Federal eRulemaking Portal: http://www.regulations.gov. Follow the instructions for submitting comments.
    (2) By mail to the Department of Homeland Security, Office of the 
Chief Procurement Officer, Acquisition Policy and Legislation Branch, 
ATTN: Jeremy Olson, 245 Murray Drive, Bldg. 410 (RDS), Washington, DC 
20528.

FOR FURTHER INFORMATION CONTACT: Jeremy Olson, Department of Homeland 
Security, Office of the Chief Procurement Officer, Acquisition Policy 
and Legislation Branch, (202) 447-5197.

SUPPLEMENTARY INFORMATION: 
I. Request for Comments
II. Background
III. Discussion of Interim Rule
IV. Regulatory Requirements
    A. Small Entity Analysis
    B. Executive Order 12866 (Regulatory Planning and Review)
    C. Assistance for Small Entities
    D. Collection of Information
    E. Determination to Issue an Interim Rule

I. Request for Comments

    We encourage you to participate in this rulemaking by submitting 
comments and related materials. Comments and related materials should 
be organized by HSAR Part, and indicate the specific section or 
sections of the interim rule that is being commented on. All comments 
received will be posted without change to http://www.regulations.gov, 
including any personal information provided. See ADDRESSES above for 
information on how to submit comments. If you submit comments by mail, 
please submit them in an unbound format, no larger than 8\1/2\ by 11 
inches, suitable for copying and electronic filing. You may submit 
comments either by mail or via the Internet as identified in the 
ADDRESSES section above; but to avoid duplication, DHS requests that 
you submit comments and materials by only one method. If you would like 
DHS to acknowledge receipt of comments submitted by mail, please 
enclose a self-addressed, stamped postcard or envelope. DHS will 
consider all comments and materials received during the comment period. 
We may change the final rule in view of them.
    Viewing comments and documents: To view comments and read 
background documents related to this rulemaking, go to http://www.regulations.gov, type the docket number for this rulemaking, DHS-
2009-0081, into the ``Search Documents'' field and click on ``Go>>.'' 
Individuals without Internet access can make alternate arrangements for 
viewing comments and documents related to this rulemaking by contacting 
DHS at the FOR FURTHER INFORMATION CONTACT information above.

II. Background

    The American Recovery and Reinvestment Act of 2009 (``Recovery 
Act''), Public Law 111-5, 123 Stat. 115, 165-166 (Feb. 17, 2009), 
contains restrictions on the Department's acquisition of certain 
foreign textile products. Specifically, the Recovery Act at section 
604, codified as 6 U.S.C. 453b, limits the Department's acquisition of 
foreign textile products under DHS contract actions entered into on or 
after August 16, 2009, using funds appropriated or otherwise made 
available to DHS on or before February 17, 2009, the date of the Act. 
DHS may not use those funds for the procurement of certain clothing and 
other textile items directly related to the national security interests 
of the United States if such items are not domestically grown, 
reprocessed, reused, or produced.
    Section 604 does, however, contain exceptions. The law requires DHS 
to apply these restrictions in a manner consistent with United States 
obligations under international agreements (such as free trade 
agreements and the World Trade Organization Agreement on Government 
Procurement). Moreover, restrictions on some of the covered textile 
items do not apply to commercial item acquisitions. Also, the Recovery 
Act's restriction on the Department's acquisition of covered foreign 
textiles does not apply to purchases for amounts not greater than the 
simplified acquisition threshold (SAT) (currently $100,000), when 
covered items of satisfactory quality and sufficient quantity cannot be 
procured as needed at United States market prices, when a covered item 
contains less than 10% non-compliant fibers, when the procurement is 
made by vessels in foreign waters, or for emergency procurements 
outside of the United States.
    This interim rule makes amendments to the Homeland Security 
Acquisition Regulation (HSAR) to add solicitation provisions, contract 
clauses and related policy statements implementing these requirements 
and exceptions for certain DHS contracts, option exercises and orders.

III. Discussion of Interim Rule

    This rulemaking revises 48 CFR part 3025, Foreign Acquisitions, and 
part 3052, Solicitation Provisions and Contract Clauses, to limit 
acquisition of covered items for certain DHS acquisitions above the 
simplified acquisition threshold, unless DHS determines that such items 
qualify for a statutory exception. The rulemaking also implements the 
aspect of the law that requires that the restriction be applied in a 
manner consistent with United States obligations under international 
agreements.
    The ``Buy American'' restriction in Section 604 of the Recovery Act 
only covers items ``directly related to the national security interests 
of the United States.'' The Act does not further define this qualifying 
phrase and the related congressional committee reports shed no further 
light on the scope, boundaries, or intention behind the phrase itself. 
The House of Representatives Conference Report describes section 604 
generally by stating: ``The conferees include and modify a provision, 
as proposed by the House, related to the procurement of apparel and 
textile products by the Department of Homeland Security. This language 
is modeled after the Berry Amendment (10 U.S.C. 2533a), which

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has required the Department of Defense to purchase domestically-
manufactured textiles and apparel.'' H. Conf. Rep. No. 111-116, p. 438 
(Feb 12, 2009). The Berry Amendment, however, does not employ the same 
``national security interests'' phrase. Moreover, other Recovery Act 
acquisition restrictions, including section 1605 (which 
contemporaneously provided Government-wide restrictions on the use of 
Recovery Act funds to construct, alter, maintain, or repair public 
buildings or works unless all iron, steel, and manufactured goods that 
are used are produced in the United States) likewise do not contain 
this phrase.
    Remarks from the floor of the House of Representatives concerning 
section 604 suggest deep concern ``that we could have people crossing 
the border illegally wearing [U.S. Customs and Border Protection] or 
[Transportation Security Administration] uniforms manufactured in 
foreign countries.'' 155 Cong. Rec. H620, H723 (Jan 28, 2009) (remarks 
of Committee on Homeland Security Chairman Hon. Bennie G. Thompson upon 
introduction of the Kissell amendment, which, with some adjustments, 
became section 604); cf. 153 Cong. Rec. H4646-H4655, H4651 (May 9, 
2007) (remarks of Congressman Hayes, who in debate on a proposed, 
similarly worded amendment in the previous Congress said it ``* * * 
provides the assurance that the Department of Homeland Security 
officials who work on the front lines of national security are the only 
people wearing these sensitive uniforms.'').
    Many different and diverse statutes, regulations and executive 
orders define the expressions ``national security'' and ``national 
security interests.'' The most common of these, used in connection with 
classification of information and personnel and facilities security, 
defines these terms to mean pertaining to ``the national defense or 
foreign relations of the United States.'' See, e.g., Executive Order 
12958, section 6.1(y) (term defined for order on classified national 
security information); 10 U.S.C. 801(16) (term defined for purposes of 
the Code of Military Justice). Other statutes employ other usages and 
definitions for these terms, which, when standing alone or when used 
with other words, fit the context and purpose of the particular 
statute. See, e.g., 8 U.S.C. 1189(d)(2) (when used to determine threats 
posed by foreign terrorist organizations, ``means the national defense, 
foreign relations, or economic interests of the United States''); 39 
CFR 233.3 (when used with respect to authorizing the use of U.S. Postal 
mail covers, ``protection of national security'' means to protect the 
United States from actual or potential threats to its security by a 
foreign power or its agents, including an attack or other grave, 
hostile act; sabotage, or international terrorism; or clandestine 
intelligence activities, including commercial espionage).
    DHS considered employing the most common definition of the 
expression--pertaining to the national defense or foreign relations of 
the United States--but, with the exception of possible isolated 
applications to the Coast Guard, found this definition imprecise and an 
awkward fit for DHS functions that acquire textiles because, in many 
instances, those DHS components are not designated by law as national 
defense or foreign relations agencies. DHS considered covering all 
items acquired by DHS as ``directly related to the national security 
interests of the United States,'' but ultimately rejected that approach 
because to do so would render the statutory words ``directly related to 
national security interests of the United States'' superfluous (i.e., 
omission of the qualifying phrase by lawmakers would have achieved the 
same result). DHS also notes that lawmakers are not reluctant to employ 
the expression ``homeland security'' to define the reach of a statute, 
and chose not do so in this instance. See, e.g., 6 U.S.C. 468 
(``homeland security missions'' of the Coast Guard defined), 6 U.S.C. 
482 (``homeland security information'' defined). Moreover, applying the 
expression to the entirety of textile items purchased by DHS, 
irrespective of function or use, would include any number of activities 
that, while worthwhile, would render the expression ``national security 
interests'' patently overbroad, equating it with any activity that 
contributes to the strength of the Nation by promoting the general 
welfare. See Cole v. Young, 351 U.S. 536, 544 (1956). In addition, the 
previously mentioned congressional floor remarks discussed the statute 
as principally pertaining to border and transportation security, with a 
potential for later expansion.
    DHS thus defines items ``directly related to national security 
interests'' at 48 CFR 3025.7001(e) as items ``intended for use in a 
Department of Homeland Security action protecting the nation from 
internal or external threats.'' This definition includes the following 
elements:
     ``Intended for use''--if an item is not acquired with the 
intention of being used in a manner related to national security 
interests, it is not covered, regardless of its eventual actual use;
     ``Use in a DHS action''-- if an item will not be used in a 
protective action performed by DHS, it is not covered (for example, 
drapes for a DHS action office would likely not qualify, but textile 
body armor likely would qualify);
     ``Protecting the nation from internal or external 
threats''--the intended DHS action must be a protective action (for 
example, patrolling the border is a protective action; parading for 
dignitaries is not).
    So defined, the interim regulatory provisions capture only the 
relevant aspects of the Recovery Act ``national security interests'' 
requirement, and in a manner consonant with the known legislative 
intent and DHS functions. The expression captures items, among other 
items, used in actions by DHS components with border, transportation, 
and maritime security functions, and any other DHS component, where 
ready access by hostile foreign State, organized non-State, or criminal 
actors to the items, their manufacturing method, or supply chain, would 
pose a significant risk of circumvention or cooption of a DHS 
protective action.
    Other provisions of the interim regulations reflect the Recovery 
Act's coverage of some textile items regardless of whether they are a 
commercial or a noncommercial item and other textile items only if they 
are noncommercial items. Interim 3025.7002-1(a)(1)-(2), consistent with 
sections 604(b) and (f), cover the following textile items regardless 
of whether they are commercial or noncommercial:
     3025.7002-1(a)(1)--clothing and the materials and 
components thereof, other than sensors, electronics, or other items 
added to, and not normally associated with, clothing (and the materials 
and components thereof); or
     3025.7002-1(a)(2)--tents, tarpaulins, covers, textile 
belts, bags, protective equipment (including but not limited to body 
armor), sleep systems, load carrying equipment (including but not 
limited to fieldpacks), textile marine equipment, parachutes, or 
bandages.
    Interim 3025.7002-1(b), consistent with Recovery Act sections 
604(b) and (f), only covers noncommercial textile items as follows:
     3025.7002-1(b)--cotton and other natural fiber products, 
woven silk or woven silk blends, spun silk yarn for cartridge cloth, 
synthetic fabric or coated synthetic fabric (including all textile 
fibers and yarns that are for use in such fabrics), canvas products, or 
wool (whether in the form of fiber or yarn or contained in fabrics, 
materials, or manufactured articles); or any item of individual 
equipment manufactured

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from or containing such fibers, yarns, fabrics, or materials.
    The interim regulations at 3025.7002-2 also reflect the 
circumstances wherein the Recovery Act excludes textile items from 
coverage or exempts covered items from the acquisition limitations; 
including,
     Acquisitions at or below the simplified acquisition 
threshold (currently $100,000), as expressed and defined in the Federal 
Acquisition Regulation (FAR).
     Acquisition of items not directly related to national 
security interests of the United States, as discussed above.
     Acquisitions of any of the items otherwise covered by 
(HSAR) 48 CFR 3025.7002-1, if the Chief Procurement Officer determines, 
based on procedures described in the interim regulation, that the item 
grown, reprocessed, reused, or produced in the United States cannot be 
acquired as and when needed in a satisfactory quality and sufficient 
quantity at United States market prices.
     Acquisitions of items listed as ``nonavailable articles'' 
in (FAR) 48 CFR 25.104, as provided in the ``availability exception'' 
at Recovery Act section 604(c).
     Emergency acquisitions by activities located outside the 
United States, as stated in the Recovery Act.
     Acquisitions by vessels in foreign waters, as stated in 
the Recovery Act.
     Acquisitions of incidental amounts of cotton, other 
natural fibers, wool or other item covered by (HSAR) 48 CFR 3025.7002-
1(a)-(b) incorporated in an end product. This is an amount for which 
the estimated value of the covered item is not more than 10 percent of 
the total price of the end product, as stated in the Recovery Act.
     As discussed more fully below, acquisitions of textile 
items otherwise covered by (HSAR) 48 CFR 3025.7002-1(a)-(b) for which 
restricting a procurement of the items to those that have been grown, 
reprocessed, reused, or produced in the United States would be 
inconsistent with United States obligations under international 
agreements.

Applicability of International Agreements

    The Recovery Act at section 604(k) requires that DHS implement the 
section ``consistent with United States obligations under international 
agreements.'' This means that to the extent that DHS and its components 
are subject to the various United States bilateral and plurilateral 
free trade agreements (FTAs) and the WTO Government Procurement 
Agreement (GPA), DHS textile acquisitions must be consistent with those 
obligations.
    The list of United States trade agreements relevant for procurement 
appear in the FAR at 48 CFR 25.400 (a) (1) and (2). The FAR at 48 CFR 
25.003 lists the signatories to the various free trade agreements in 
the definition of ``Free Trade Agreement country'' and lists the 
signatories to the GPA in the definition of ``World Trade Organization 
Government Procurement Agreement (WTO GPA) country.'' Items from a Free 
Trade Agreement country or a WTO GPA country are ``eligible products.''
    The United States has no obligations with respect to DHS 
procurements under the U.S.-Oman Free Trade Agreement. Procurements by 
the Transportation Security Administration (TSA) are excluded from all 
United States obligations, except with respect to the North American 
Free Trade Agreement (NAFTA) and the U.S.-Chile Free Trade Agreement. 
Accordingly, for all DHS components, except TSA as noted above, the 
interim requirements of new (HSAR) 48 CFR 3025.225 would be 
inapplicable to items that are eligible products under (FAR) 49 CFR 
Subpart 25.4. This means that TSA, except with regard to products from 
Canada, Chile or Mexico, would not use (FAR) 48 CFR Subpart 25.4 in its 
procurements to exempt an item from a designated country from the 
requirements of the Act, but all other DHS components would do so.
    The interim regulations provide that covered DHS components must 
apply (FAR) 48 CFR Subpart 25.4 to exempt eligible products from 
qualified countries if the procurement exceeds the GPA threshold or the 
relevant FTA threshold, noting that the Recovery Act foreign textiles 
acquisition limitation does not apply to procurements below the 
simplified acquisition threshold ($100,000). To the extent a 
procurement is for an eligible product from a country with a trade 
agreement threshold beneath the SAT (e.g., $67,826), the trade 
agreement and (FAR) 48 CFR Subpart 25.4 would apply to all procurements 
over the trade agreement threshold, and the requirements of HSAR 
3025.70 would not apply.
    The Recovery Act foreign textiles acquisition limitation applies to 
covered items from countries that are not GPA or FTA countries 
regardless of which DHS component makes the acquisition. The interim 
HSAR subpart applies for all DHS components if the country of origin 
for an item is not a WTO GPA country or a Free Trade Agreement country 
(see (FAR) 48 CFR 25.003 definitions). Under the interim regulations, 
DHS components cannot procure a covered textile item from a non-
designated country unless one of the other Recovery Act exceptions 
applies to the acquisition. Even if such exception applies, however, 
the acquisition may still be covered by the Buy American Act.

IV. Regulatory Requirements

A. Small Entity Analysis

    Under the Regulatory Flexibility Act (5 U.S.C. 601-612), we have 
considered whether this interim rule would have a significant economic 
impact on a substantial number of small entities. The term ``small 
entities'' comprises small businesses, not-for-profit organizations 
that are independently owned and operated and are not dominant in their 
fields, and governmental jurisdictions with populations of less than 
50,000.
    The Federal Procurement Data System (FPDS) shows that during FY 
2008, DHS awarded 1,283 contract actions for textile products totaling 
$74,132,846. Of the 322 businesses that received these awards, 249 
(77%) were small businesses and 73 were identified as being ``other 
than small business.'' The total number of awards for products that 
originated in the United States was approximately 97% of the total 
number of awards. The total number of awards to small businesses for 
products that originated in the United States was approximately 98% 
(958 awards) of the total number of awards to small entities for 
textile products (981). FPDS data show only 23 awards were made to 
small businesses for textiles originating outside of the United States. 
Even if all of those awards for products that originated outside the 
United States would have been awarded to a small business that did not 
provide products originating in the United States, it would impact a 
very small proportion of awards to small businesses (2.3%). Also, based 
on this FPDS data, we estimate that these 23 awards were made to 12 
unique small businesses. FPDS further informs us that the majority of 
these 23 awards made to 12 unique small businesses were made because of 
``domestic nonavailability.'' As items determined to be unavailable in 
the United States are excluded from the scope of this rule, we estimate 
that fewer than 5 small businesses would have an award (or awards) 
impacted by this rule. Accordingly, the number and proportion of small 
entities potentially impacted by this rule are small and the amount of 
impact is not significant.
    Based on this analysis, DHS does not believe this interim rule will 
have a significant economic impact on a

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substantial number of small entities and that, other than the 
alternative interpretations discussed above related to national 
security interests, there are no additional significant alternatives to 
the interim rule that would minimize the impact of the interim rule on 
small entities. There are also no relevant Federal rules that 
duplicate, overlap, or conflict with the interim rule. DHS will, 
however, consider comments from small entities concerning the affected 
HSAR parts 3015, 3016, 3025, and 3052. Interested parties should submit 
such comments separately and should cite 5 U.S.C. 601, et seq. (HSAR 
Case 2007-004) in the comments.

B. Executive Order 12866 (Regulatory Planning and Review)

    This interim rule is a significant regulatory action under section 
3(f) of Executive Order 12866 and the Office of Management and Budget 
has reviewed it under that Order. An assessment of potential costs and 
benefits under section 6(a)(3) of that Order is included within the 
Small Entity Analysis, Section A., above.

C. Assistance for Small Entities

    Under section 213(a) of the Small Business Regulatory Enforcement 
Fairness Act of 1996 (Pub. L. 104-121), we want to assist small 
entities in understanding the interim rule so that they can better 
evaluate its effects on them and participate in the rulemaking. Small 
businesses may send comments on the actions of Federal employees who 
enforce, or otherwise determine compliance with, Federal regulations to 
the Small Business and Agriculture Regulatory Enforcement Ombudsman and 
the Regional Small Business Regulatory Fairness Boards. The Ombudsman 
evaluates these actions annually and rates each agency's responsiveness 
to small business. If you wish to comment on actions by DHS employees, 
call 1-888-REG-FAIR (1-888-734-3247). The DHS will not retaliate 
against small entities that question or complain about this interim 
rule or any DHS policy.

D. Collection of Information

    The Paperwork Reduction Act (Pub. L. 104-13) does not apply because 
the interim rule contains no information collection requirements. 
Accordingly, the Department will not submit a change request for any 
burdens concerning this interim rule to the Office of Management and 
Budget under 44 U.S.C. 3501, et seq.

E. Determination To Issue an Interim Rule

    A determination has been made under the authority of the DHS Chief 
Procurement Officer that urgent and compelling reasons exist to 
promulgate this interim rule without prior opportunity for public 
comment. See 41 U.S.C. 418b(d); Department of Homeland Security 
Delegation No. 0700 (II.)(b). This action is necessary because the 
American Recovery and Reinvestment Act of 2009 became effective on 
enactment on February 17, 2009, and the DHS foreign textile acquisition 
limitations become applicable to contracts entered into after August 
16, 2009. Timely compliance with the Act is not possible if a final 
rule is promulgated after a thirty-day public comment period. Moreover, 
without effective HSAR provisions in place by August 16, 2009, there is 
an increased risk of inconsistent application of the Recovery Act 
section 604 requirements and a potential lack of public understanding 
and transparency as to the processes and procedures for complying with 
the statute. Pursuant to Public Law 98-577 and FAR 1.501, however, the 
Department 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 3025 and 3052

    Government procurement.

Richard Gunderson,
Acting Chief Procurement Officer, Department of Homeland Security.

0
Accordingly, DHS amends (HSAR) 48 CFR chapter 30 as follows:

CHAPTER 30--DEPARTMENT OF HOMELAND SECURITY

0
1. Add part 3025 to read as follows:

PART 3025--FOREIGN ACQUISITION

Subpart 3025.70--American Recovery and Reinvestment Act 
Restrictions on Foreign Acquisition

Sec.
3025.7000 Scope of subpart.
3025.7001 Definitions.
3025.7002 Restrictions on clothing, fabrics, and related items.
3025.7002-1 Restrictions.
3025.7002-2 Exceptions.
3025.7002-3 Specific application of trade agreements.
3025.7003 Contract clauses.

    Authority: 41 U.S.C. 418b(a) and (b).


3025.7000  Scope of subpart.

    This subpart contains restrictions on the acquisition of certain 
foreign textile products imposed by the American Recovery and 
Reinvestment Act of 2009 on contracts, exercising of an option and 
orders entered into on or after August 16, 2009 with funds appropriated 
or otherwise provided on or before February 17, 2009.


3025.7001  Definitions.

    As used in this subpart--
    (a) ``Commercial,'' as applied to an item described in (HSAR) 48 
CFR 3025.7002-1, means an item of supply, whether an end product or 
component, that meets the definition of ``commercial item'' set forth 
in (FAR) 48 CFR 2.101.
    (b) ``Component'' means any item supplied to the Government as part 
of an end product or of another component.
    (c) ``End product'' means supplies delivered under a line item of a 
contract.
    (d) ``Non-commercial,'' as applied to an item described in (HSAR) 
48 CFR 3025.7002-1, means an item of supply, whether an end product or 
component, that does not meet the definition of ``commercial item'' set 
forth in (FAR) 48 CFR 2.101.
    (e) ``Item directly related to national security interests'' means 
an item intended for use in a Department of Homeland Security action 
protecting the nation from internal or external threats, including 
protecting the nation's borders, transportation system, maritime domain 
or critical infrastructure, as determined by the contracting officer.


3025.7002  Restrictions on clothing, fabrics, and related items.


3025.7002-1  Restrictions.

    The following restrictions implement section 604 of the American 
Recovery and Reinvestment Act of 2009 and they apply to all types of 
actions, orders, exercising of an option and contracts. Except as 
provided in subsection (HSAR) 48 CFR 3025.7002-2, do not acquire, 
either as end products or components, any item listed in paragraphs (a) 
or (b) of this section, if the item is directly related to the national 
security interests of the United States and the item has not been 
grown, reprocessed, reused, or produced in the United States:
    (a) Commercial or non-commercial items--(1) Clothing and the 
materials and components thereof, other than sensors, electronics, or 
other items added to, and not normally associated with, clothing (and 
the materials and components thereof); or (2) Tents, tarpaulins, 
covers, textile belts, bags, protective equipment (such as body armor), 
sleep systems (sleeping bags), load carrying equipment (such as

[[Page 41350]]

fieldpacks), textile marine equipment, parachutes or bandages.
    (b) Non-commercial items--
    (1) Cotton and other natural fiber products.
    (2) Woven silk or woven silk blends.
    (3) Spun silk yarn for cartridge cloth.
    (4) Synthetic fabric or coated synthetic fabric (including all 
textile fibers and yarns that are for use in such fabrics).
    (5) Canvas products.
    (6) Wool (whether in the form of fiber or yarn or contained in 
fabrics, materials, or manufactured articles).
    (7) Any item of individual equipment manufactured from or 
containing any of the fibers, yarns, fabrics, or materials listed in 
this paragraph (b).


3025.7002-2   Exceptions.

    Acquisitions in the following categories are not subject to the 
restrictions in (HSAR) 48 CFR 3025.7002-1:
    (a) Acquisitions at or below the simplified acquisition threshold.
    (b) Acquisition of items not directly related to national security 
interests of the United States.
    (c) Acquisitions of any of the items otherwise covered by (HSAR) 48 
CFR 3025.7002-1, if the Chief Procurement Officer determines that the 
item grown, reprocessed, reused, or produced in the United States 
cannot be acquired as and when needed in a satisfactory quality and 
sufficient quantity at United States market prices. When this exception 
is used--
    (1) Only the DHS Chief Procurement Officer is authorized to make 
the domestic nonavailability determination.
    (2) The DHS Component, not later than 7 days after the award of the 
contract, must post a notification that the exception has been applied 
on the Government-wide point of entry, which may be combined with any 
synopsis of award.
    (3) The supporting documentation for the CPO determination prepared 
by the DHS Component(s) shall include--
    (i) An analysis of alternatives that would not require a domestic 
nonavailability determination; and
    (ii) A written justification by the requiring activity, with 
specificity, why such alternatives are unacceptable.
    (d) Acquisitions of items listed in FAR 48 CFR 25.104.
    (e) Emergency acquisitions by activities located outside the United 
States.
    (f) Acquisitions by vessels in foreign waters.
    (g) Acquisitions of incidental amounts of cotton, other natural 
fibers, wool or other item covered by (HSAR) 48 CFR 3025.7002-1(a)-(b) 
incorporated in an end product, for which the estimated value of the 
item so covered is not more than 10 percent of the total price of the 
end product.
    (h) Acquisitions of items otherwise covered by (HSAR) 48 CFR 
3025.7002-1(a) and (b) for which restricting a procurement of the items 
to those that have been grown, reprocessed, reused, or produced in the 
United States would be inconsistent with United States obligations 
under international agreements. Acquisitions of products that are 
eligible products per (FAR) 48 CFR Subpart 25.4 are not covered by 
these restrictions; see (HSAR) 48 CFR 3025.7003-2 for specific 
application of trade agreements.


3025.7002-3   Specific application of trade agreements.

    (a) For covered items entitled to non-discriminatory treatment 
under the World Trade Organization Agreement on Government Procurement 
(WTO GPA), or any Free Trade Agreement (FTA) listed in (FAR) 48 CFR 
Subpart 25.4, this subpart is applied as follows--
    (1) For solicitations, orders, exercising of an option and 
contracts issued by any component other than Transportation Security 
Administration (TSA), in which any covered items will be procured with 
a value that is both above the simplified acquisition threshold, and 
below the applicable trade agreement threshold in (FAR) 48 CFR 25.402, 
apply (HSAR) 48 CFR 3025.7002-1. Section 3025.7002-2(h) will exclude 
eligible products of designated countries with FTA thresholds beneath 
the simplified acquisition threshold from coverage of section 604.
    (2) For solicitations, orders, exercising of an option and 
contracts issued by any component other than Transportation Security 
Administration (TSA), in which any covered items will be procured with 
a value exceeding $194,000 (or the superseding threshold upon updating 
of (FAR) 48 CFR 25.402), (HSAR) 48 CFR 3025.7002-1 does not apply if 
the items are eligible products per FAR 48 CFR Subpart 25.4; follow 
(FAR) 48 CFR part 25 instead.
    (3) For solicitations, orders, exercising of an option and 
contracts issued by TSA in which any covered items will be procured 
with a value exceeding the simplified acquisition threshold, (HSAR) 48 
CFR 3025.7002 applies to all covered items except those from Mexico, 
Canada or Chile because TSA is listed as a covered governmental entity 
in the North American Free Trade Agreement (NAFTA) and the U.S.-Chile 
Free Trade Agreement but TSA is excluded from all other trade 
agreements.
    (b) For covered items from a country that is not entitled to non-
discriminatory treatment under the WTO GPA, or any FTA listed in (FAR) 
48 CFR subpart 25.4, apply the restrictions of (HSAR) 48 CFR 3025.7002 
to all solicitations, orders, exercising of an option and contracts 
exceeding the simplified acquisition threshold in place of the Buy 
America Act policies at (FAR) 48 CFR Subpart 25.1.


3025.7003   Contract clauses.

    Unless an exception under (HSAR) 48 CFR 3025.7002-2(a), (b), (e) or 
(f) applies, insert the clause at (HSAR) 48 CFR 3052.225-70, 
Requirement for Use of Certain Domestic Commodities, in solicitations, 
exercising of an option, contract modifications that add new items (or 
which make a cardinal change) and contracts with a value exceeding the 
simplified acquisition threshold when procuring any item covered under 
(HSAR) 48 CFR 3025.7002-1(a) or (b).

PART 3052--SOLICITATION PROVISIONS AND CONTRACT CLAUSES

0
2. The authority citation for part 3052 continues to read as follows:

    Authority: 41 U.S.C. 418b(a) and (b).


0
3. Add section 3052.225-70 to read as follows:


3052.225-70   Requirement for Use of Certain Domestic Commodities.

    As prescribed in (HSAR) 48 CFR 3025.7003, use the following clause:

Requirement for Use of Certain Domestic Commodities (AUG 2009)

    (a) Definitions. As used in this clause--
    (1) ``Commercial,'' as applied to an item described in 
subsection (b) of this clause, means an item of supply, whether an 
end product or component, that meets the definition of ``commercial 
item'' set forth in (FAR) 48 CFR 2.101.
    (2) ``Component'' means any item supplied to the Government as 
part of an end product or of another component.
    (3) ``End product'' means supplies delivered under a line item 
of this contract.
    (4) ``Non-commercial,'' as applied to an item described in 
subsections (b) or (c) of this clause, means an item of supply, 
whether an end product or component, that does not meet the 
definition of ``commercial item'' set forth in (FAR) 48 CFR 2.101.
    (5) ``Qualifying country'' means a country with a memorandum of 
understanding or international agreement with the United States 
under which DHS procurement is covered.
    (6) ``United States'' includes the possessions of the United 
States.

[[Page 41351]]

    (b) The Contractor shall deliver under this contract only such 
of the following commercial or non-commercial items, either as end 
products or components, that have been grown, reprocessed, reused, 
or produced in the United States:
    (1) Clothing and the materials and components thereof, other 
than sensors, electronics, or other items added to, and not normally 
associated with, clothing and the materials and components thereof; 
or
    (2) Tents, tarpaulins, covers, textile belts, bags, protective 
equipment (such as body armor), sleep systems, load carrying 
equipment (such as fieldpacks), textile marine equipment, parachutes 
or bandages.
    (c) The Contractor shall deliver under this contract only such 
of the following non-commercial items, either as end products or 
components, that have been grown, reprocessed, reused, or produced 
in the United States:
    (1) Cotton and other natural fiber products.
    (2) Woven silk or woven silk blends.
    (3) Spun silk yarn for cartridge cloth.
    (4) Synthetic fabric or coated synthetic fabric (including all 
textile fibers and yarns that are for use in such fabrics).
    (5) Canvas products.
    (6) Wool (whether in the form of fiber or yarn or contained in 
fabrics, materials, or manufactured articles).
    (7) Any item of individual equipment manufactured from or 
containing any of the fibers, yarns, fabrics, or materials listed in 
this paragraph (c).
    (d) This clause does not apply--
    (1) To items listed in (FAR) 48 CFR 25.104, or other items for 
which the Government has determined that a satisfactory quality and 
sufficient quantity cannot be acquired as and when needed at United 
States market prices;
    (2) To incidental amounts of cotton, other natural fibers, or 
wool incorporated in an end product, for which the estimated value 
of the cotton, other natural fibers, or wool is not more than 10 
percent of the total price of the end product; or
    (3) To items that are eligible products per (FAR) 48 CFR Subpart 
25.4.
    (End of clause.)

[FR Doc. E9-19647 Filed 8-13-09; 8:45 am]
BILLING CODE 9110-9B-P