[Federal Register Volume 75, Number 3 (Wednesday, January 6, 2010)]
[Proposed Rules]
[Pages 832-838]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: E9-30292]


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DEPARTMENT OF DEFENSE

Defense Acquisition Regulations System

48 CFR Parts 225 and 252


Defense Federal Acquisition Regulation Supplement; Foreign 
Participation in Acquisitions in Support of Operations in Afghanistan 
(DFARS Case 2009-D012)

AGENCY: Department of Defense (DoD).

ACTION: Proposed rule with request for comment.

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SUMMARY: DoD is proposing to amend the Defense Federal Acquisition 
Regulation Supplement (DFARS) to implement: Waiver of the section 
302(a) of the Trade Agreements Act of 1979, as amended, which prohibits 
acquisitions of products or services from non-designated countries, in 
order to allow acquisition from the nine South Caucasus/Central and 
South Asian (SC/CASA) states; and Determination of inapplicability of 
the Balance of Payments Program evaluation factor to offers of products 
(other than arms, ammunition, or war materials) from the SC/CASA states 
to support operations in Afghanistan.

DATES: Comment date: Comments on the proposed rule should be submitted 
in writing to the address shown below on or before March 9, 2009 to be 
considered in the formulation of the final rule.

ADDRESSES: You may submit comments, identified by DFARS Case 2009-D012, 
using any of the following methods:
     Federal eRulemaking Portal: http://www.regulations.gov.
    Follow the instructions for submitting comments.
     E-mail: [email protected]. Include DFARS Case 2009-D012 in the 
subject line of the message.
     Fax: (703) 602-7887.
     Mail: Defense Acquisition Regulations System, Attn: Ms. 
Amy Williams, OUSD (AT&L) DPAP (DARS), IMD 3D139, 3062 Defense 
Pentagon, Washington, DC 20301-3062.
     Hand Delivery/Courier: Defense Acquisition Regulations 
System, Crystal Square 4, Suite 200A, 241 18th Street, Arlington, VA 
22202-3402.
    Comments received generally will be posted without change to http://www.regulations.gov, including any personal information provided.

FOR FURTHER INFORMATION CONTACT: Ms. Amy Williams, (703) 602-0328.

SUPPLEMENTARY INFORMATION:

A. Background

    On July 9, 2009, the Deputy Secretary of Defense issued a waiver of 
the procurement prohibition of Section 302(a) of the Trade Agreements 
Act of 1979 with regard to acquisitions by the Department of Defense or 
by the General Services Administration, on behalf of DoD, in support of 
operations in Afghanistan. This waiver applies to offers of products 
and services from the following nine South Caucasus/Central and South 
Asian (SC/CASA) states: Armenia, Azerbaijan, Georgia, Kazakhstan, 
Kyrgyzstan, Pakistan, Tajikistan, Turkmenistan, and Uzbekistan. This 
waiver was authorized by the United States Trade Representative by 
letter of June 2, 2009.
    In addition, the Deputy Secretary of Defense also made a 
determination that it would be inconsistent with the public interest to 
apply the provisions of the Balance of Payments Program to offers of 
products (other than arms, ammunition, or war materials) and 
construction materials from these SC/CASA states acquired in direct 
support of operations in Afghanistan. For purposes of this rule, the 
term ``products other than arms, ammunition, or war materials'' equates 
to the products listed at DFARS 225.401-70.
    The draft proposed rule adds a new section 225.7704 to Subpart 
225.77, Acquisitions in Support of Operations in Iraq or Afghanistan, 
to specifically address the two determinations by the Deputy Secretary 
of Defense relating to acquisitions in support of operations in 
Afghanistan.
    More specifically, in order to implement the waiver of the Trade 
Agreements Act of 1979 prohibition on acquisitions of products or 
services from non-designated countries, the proposed rule--
     Adds in the subpart on Trade Agreements (225.401 and 
225.403) cross references to 225.7704-1;
     Adds alternates to the trade agreements provision and 
clause (252.225-7020 and -7021, with conforming changes to the 
provision and clause prescriptions at 225.1101 paragraphs (5) and (6)); 
and
     Adds a requirement to the clauses at 252.225-7021 and 
252.225-7045 that the contractor shall inform its government of its 
participation in the acquisition and that it generally will not have 
such opportunity in the future unless its government provides 
reciprocal procurement opportunities to U.S. products and services and 
suppliers of such products and services.
    In order to implement the determination of the inapplicability of 
the Balance of Payments Program to end products and construction 
material from the SC/CASA states, the proposed rule--
     Modifies Subpart 225.5, to provide that whenever the 
acquisition is in support of operations in Afghanistan, offers of end 
products (other than arms, ammunition, and war materials) from SC/CASA 
states shall be treated the same as qualifying country offers;
     Modifies Subpart 225.75, Balance of Payments Program, to 
provide exceptions in 225.7501(b)(1)(iii) and (b)(2), with cross 
references to 225.7704-2;
     Adds alternates to the Balance of Payments Program 
provisions and clauses at 252.225-7000, -7001, -7035, -7036-7044, and -
7045, with conforming changes to the provision and clause prescriptions 
at 225.1101 paragraphs (1), (2), (10), and (11) and 225.7503.
    Other changes:
     Definitions of ``South Caucasus/Central and South Asian 
(SC/CASA) state,'' SC/CASA state construction material, and ``SC/CASA 
state end product'' have been added at 225.003, because these terms are 
used in more than one subpart.
     Conforming change were made to the clause dates in 
252.212-7001.
     A correction is made to Alternate I of 252.225-7035 to 
delete the phrase

[[Page 833]]

``Australian or'' from paragraph (c)(2)(i). It was overlooked when the 
Free Trade Agreement with Australia was added that Alternate I also 
required revision (when only trade agreement with Canada is 
applicable).
     A correction is made to the paragraph number of Canadian 
end product of Alternate I 252.225-7036 to conform to changes to the 
paragraph number of ``Free Trade Agreement end product'' in the basic 
clause of 252.225-7036.
     A correction is made to Alternate I of 252.225-7045, to 
add in paragraph (b), line 4, that the Bahrain Free Trade Agreement 
does not apply.
    This rule was subject to Office of Management and Budget review 
under Executive Order 12866, dated September 30, 1993.

B. Regulatory Flexibility Act

    DoD 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 this rule only impacts acquisition that are in support of 
operations in Afghanistan. Therefore, DoD has not performed an initial 
regulatory flexibility analysis. DoD invites comments from small 
businesses and other interested parties on this issue. DoD also will 
consider comments from small entities concerning the affected FAR 
subparts in accordance with 5 U.S.C. 610. Such comments should be 
submitted separately and should cite DFARS Case 2009-D012.

C. Paperwork Reduction Act

    The Paperwork Reduction Act applies because the rule proposes to 
modify information collection requirements that have been approved by 
the Office of Management and Budget under 44 U.S.C. 3501, et seq. 
However, the impact on existing approved information collection 
requirements is expected to be negligible.
    In addition, this proposed rule contains a new information 
collection requirement that requires approval by the Office of 
Management and Budget under 44 U.S.C. 3501, et seq. DoD invites 
comments on the following aspects of the proposed rule: (a) Whether the 
collection of information is necessary for the proper performance of 
the functions of DoD, including whether the information will have 
practical utility; (b) the accuracy of the estimate of the burden of 
the information collection; (c) ways to enhance the quality, utility, 
and clarity of the information to be collected; and (d) ways to 
minimize the burden of the information collection on respondents, 
including the use of automated collection techniques or other forms of 
information technology. The following is a summary of the information 
collection requirement.
    Title: Defense Federal Acquisition Regulation Supplement (DFARS); 
Foreign Participation in Acquisitions in Support of Operations in 
Afghanistan.
    Type of Request: New collection.
    Number of Respondents: 100.
    Responses per Respondent: 1.
    Annual Responses: 100.
    Average Burden per Response: .25 hours.
    Annual Burden Hours: 25.
    Needs and Uses: DoD needs the contractors from South Caucasus/
Central and South Asian states to inform their governments regarding 
their participation in DoD acquisitions and also to advise their 
governments that they generally will not have such opportunities in the 
future unless their governments provide reciprocal procurement 
opportunities to U.S. products and services and suppliers of such 
products and services. This is necessary to comply with a condition of 
the waiver authority provided by the United States Trade Representative 
to the Secretary of Defense.
    Affected Public: Businesses or other for-profit institutions.
    Respondent's Obligation: Required to obtain or retain benefits.
    Frequency: On occasion.
    Written comments and recommendations on the proposed information 
collection should be sent to Ms. Jasmeet Seehra at the Office of 
Management and Budget, Desk Officer for DoD, Room 10236, New Executive 
Office Building, Washington, DC 20503, with a copy to the Defense 
Acquisition Regulations System, Attn: Ms. Amy Williams, OUSD (AT&L) 
DPAP (DARS), IMD 3D139, 3062 Defense Pentagon, Washington, DC 20301-
3062. Comments can be received from 30 to 60 days after the date of 
this notice, but comments to OMB will be most useful if received by OMB 
within 30 days after the date of this notice.
    To request more information on this proposed information collection 
or to obtain a copy of the proposal and associated collection 
instruments, please write to the Defense Acquisition Regulations 
System, Attn: Ms. Amy Williams, OUSD (AT&L) DPAP (DARS), IMD 3D139, 
3062 Defense Pentagon, Washington, DC 20301-3062.

List of Subjects in 48 CFR Parts 225 and 252

    Government procurement.

Amy G. Williams,
Editor, Defense Acquisition Regulations System.

    Therefore, DoD proposes amending 48 CFR parts 225 and 252 as set 
forth below:
    1. The authority citation for 48 CFR parts 225 and 252 continues to 
read as follows:

    Authority:  41 U.S.C. 421 and 48 CFR Chapter 1.

PART 225--FOREIGN ACQUISITION


225.003  [Amended]

    2. Amend section 225.003 by:
    a. Redesignating existing paragraphs (12) and (13) as paragraph 
(15) and (16); and
    b. Adding new paragraphs (12), (13), and (14), and
    3. Amend section 225.401 by:
    a. Redesignating paragraphs (a)(2) introductory text and (a)(2)(A), 
(a)(2)(B), and (a)(2)(C) as paragraphs (a)(2)(A) introductory text and 
paragraphs (a)(2)(A)(1), (a)(2)(A)(2), and (a)(2)(A)(3), respectively; 
and
    b. Adding paragraph (a)(2)(B) to read as follows:


225.401  Exceptions.

    (a) * * *
    (2) * * *
    (B) Public interest exceptions for certain countries when acquiring 
products or services in support of operations in Afghanistan are in 
225.7704-1.
* * * * *
    4. Amend section 225.403 by adding paragraph (c)(iii) to read as 
follows:


225.403  World Trade Organization Government Procurement Agreement and 
Free Trade Agreements.

    (c) * * *
    (iii) The acquisition is in support of operations in Afghanistan 
(see 225.7704-1).
    5. Amend section 225.502 by adding introductory text to read as 
follows:


225.502  Application.

    Whenever the acquisition is in support of operations in 
Afghanistan, treat the offers of end products listed in 225.401-70 from 
South Caucasus or Central and South Asian states the same as qualifying 
country offers.
* * * * *
    6. Amend section 225.1101 by:
    a. Redesignating paragraph (1) as paragraph (1)(i);
    b. Adding paragraph (1)(ii);

[[Page 834]]

    c. Redesignating existing paragraphs (2) introductory text, (2)(i), 
(2)(ii), (2)(iii), (2)(iv) introductory text, (2)(iv)(A), (2)(iv)(B), 
and (2)(v) as paragraph (2)(i) introductory text, (2)(i)(A), (2)(i)(B), 
(2)(i)(C), (2)(i)(D) introductory text, (2)(i)(D)(1) and (2)(i)(D)(2), 
and (2)(i)(E) respectively;
    d. Adding paragraph (2)(ii);
    e. Redesignating paragraph (5) as paragraph (5)(i);
    f. Adding paragraph (5)(ii);
    e. Redesignating paragraph (6)(iii) as (6)(iv);
    f. Adding paragraph (6)(iii);
    g. Redesignating paragraph (10) as paragraph (10)(i);
    h. Adding paragraphs (10)(ii), (10)(iii), and (10)(iv); and
    i. Revising paragraphs (11)(i)(A) and (11)(i)(B) to read as 
follows:


225.1101  Acquisition of supplies.

    (1) * * *
    (ii) Use the provision with its Alternate I when the acquisition is 
of end products listed in 225.401-70 in support of operations in 
Afghanistan.
* * * * *
    (ii) Use the clause with its Alternate I when the acquisition is of 
end products listed in 225.401-70 in support of operations in 
Afghanistan.
* * * * *
    (5) * * *
    (ii) Use the provision with its Alternate I when the acquisition is 
of end products in support of operations in Afghanistan.
    (6) * * *
    (iii) Use the clause with its Alternate II when the acquisition is 
of end products in support of operations in Afghanistan and Alternate I 
is not applicable.
* * * * *
    (10) * * *
    (iii) Use the provision with its alternate II when the clause at 
252.225-7036 is used with its Alternate II.
    (iv) Use the provision with its Alternate III when the clause at 
252.225-7036 is used with its Alternate III.
    (11)(i) * * *
    (A) Use the basic clause when the estimated value equals or exceeds 
$67,826 except if the acquisition is of end products in support of 
operations in Afghanistan, use with its Alternate II.
    (B) Use the clause with its Alternate I when the estimated value 
equals or exceeds $25,000 but is less than $67,826 except if the 
acquisition is of end products in support of operations in Afghanistan, 
use with its Alternate III.
* * * * *
    7. Amend Section 225.7501 by:
    a. Redesignating existing paragraph (b)(1)(iii) as paragraph 
(b)(1)(iv);
    b. Adding paragraph (b)(1)(iii); and
    c. Revising paragraph (b)(2) to read as follows:


225.7501  Policy.

* * * * *
    (b) * * *
    (1) * * *
    (iii), If the acquisition is in support of operations in 
Afghanistan, a South Caucasus/Central and South Asian state end product 
listed in 225.401-70 (see 225.7704-2); or
* * * * *
    (2) The construction material is an eligible product or, if the 
acquisition is in support of operations in Afghanistan, the 
construction material is a South Caucasus/Central and South Asian state 
construction material (see 225.7704-2); or
* * * * *
    8. Amend section 225.7503 by:
    a. Redesignating paragraph (a) as paragraph (a)(1);
    b. Adding paragraph (a)(2);
    c. Revising paragraph (b) to read as follows:


225.7503  Contract clauses.

* * * * *
    (a) * * *
    (2) Use the clause with its Alternate I if the acquisition is in 
support of operations in Afghanistan.
    (b)(1) Use the clause at 252.225-7045, Balance of Payments 
Program--Construction Material Under Trade Agreements, in solicitations 
and contracts for construction to be performed outside the United 
States with a value of $7,443,000 or more, except as provided in 
paragraph (b)(4) of this section.
    (2) For acquisitions with a value of $7,443,000 or more, but less 
than $8,817,449, use the clause with its Alternate I unless the 
acquisition is in support of operations in Afghanistan, use the clause 
with its Alternate III.
    (3) If the acquisition is for construction with a value of more 
than $8,817,449 or more and is in support of operations in Afghanistan, 
use the clause with its Alternate II.
    (4) If the acquisition is for construction with a value of 
$7,443,000 or more, but less than $8,817,449, and is in support of 
operations in Afghanistan, use the clause with its Alternate III.
    9. Revise section 225.7700 to read as follows:


225.7700  Scope.

    (a) Section 886 and Section 892 of the National Defense 
Authorization Act for Fiscal Year 2008 (Pub. L. 110-181); and
    (b) The determinations by the Deputy Secretary of Defense regarding 
participation of the countries of the South Caucasus or Central and 
South Asia in acquisition in support of operations in Afghanistan.
    10. Add sections 225.7704, 225.7704-1, 225.7704-2, and 225.7704-3 
to read as follows:


225.7704  Acquisitions of products and services from South Caucasus/
Central and South Asian (SC/CASA) state in support of operations in 
Afghanistan.


225.7704-1  Applicability of trade agreements.

    As authorized by the United States Trade Representative, the 
Secretary of Defense has waived the prohibition in section 302(a) of 
the Trade Agreements Act (see Subpart 225.4) for acquisitions by DoD, 
and by GSA on behalf of DoD, of products and services from SC/CASA 
states in direct support of operations in Afghanistan.


225.7704-2  Applicability of balance of payments program.

    The Deputy Secretary of Defense has determined, because of 
importance to national security, that it would be inconsistent with the 
public interest to apply the provisions of the Balance of Payments 
Program (see Subpart 225.75) to offers of end products other than arms, 
ammunition, and war materials (i.e., end products listed in 225.401-70) 
and construction materials from the SC/CASA states that are being 
acquired by or on behalf of the DoD in direct support of operations in 
Afghanistan.


225.7704-3  Solicitation provisions and contract clauses.

    Appropriate solicitation provisions and contract clauses are 
prescribed as alternates to the Buy American-Trade Agreements-Balance 
of Payments Programs solicitation provisions and contract clauses 
prescribed at 225.1101 and 225.7503.

PART 252--SOLICITATION PROVISIONS AND CONTRACT CLAUSES

    11. Amend section 252.212-7001 by:
    a. Revising the clause date;
    b. Redesignating paragraph (b)(5) as paragraph (b)(5)(i);
    c. Adding paragraph (b)(5)(ii);
    d. Redesignating paragraph (b)(10) as paragraph (b)(10)(i);
    e. Revising new paragraph (b)(10)(i); and
    f. Adding paragraphs (b)(10)(ii), (b)(12)(iii), and (b)(12)(iv) to 
read as follows:

[[Page 835]]

252.212-7001  Contract Terms and Conditions Required To Implement 
Statutes or Executive Orders Applicable to Defense Acquisitions of 
Commercial Items.

Contract Terms and Conditions Required to Implement Statutes or 
Executive Orders Applicable to Defense Acquisitions of Commercial Items 
(Date)
* * * * *
    (b) * * *
    (5)(i)---- 252.225-7001, Buy American Act and Balance of Payments 
Program (JAN 2009) (41 U.S.C. 10a-10d, E.O. 10582).
    (ii) ---- Alternate I (DATE) of 252.225-7001.
* * * * *
    (10)(i) ---- 252.225-7021, Trade Agreements (DATE) (19 U.S.C. 2501-
2518 and 19 U.S.C. 3301 note).
    (ii)---- Alternate I (DATE) of 252.225-7021.
* * * * *
    (12)(i) ---- 252.225-7036, Buy American Act--Free Trade 
Agreements--Balance of Payments Program (MAR 2007) (41 U.S.C. 10a-10d 
and 19 U.S.C. 3301 note).
    (ii) ---- Alternate I (DATE) of 252.225-7036.
    (iii) ---- Alternate II (DATE) of 252.225-7036.
    (iv) ---- Alternate I II (DATE) of 252.225-7036.
* * * * *
    12. Amend section 252.225-7000 by revising the introductory text 
and adding Alternate I at the end of the section to read as follows:


252.225-7000  Buy American Act--Balance of Payments Program 
Certificate.

    As prescribed in 225.1101(1)(i), use the following provision:
* * * * *
Alternate I (Date)
    As prescribed in 225.1101(1)(ii), add the terms ``South Caucasus/
Central and South Asian (SC/CASA) state'' and ``SC/CASA state end 
product'' in paragraph (a) and replace the phrase ``qualifying country 
end products'' in paragraphs (b)(2) and (c)(2) with the phrase 
``qualifying country end products or SC/CASA state end products.''
    13. Amend section 252.225-7001 by revising the introductory text 
and adding Alternate I at the end of the section to read as follows:


252.225-7001  Buy American Act and Balance of Payments Program.

    As prescribed in 225.1101(2)(i), use the following clause:
* * * * *
Alternate I (Date)
    As prescribed in 225.1101(2)(ii), add the following definitions to 
paragraph (a) and substitute the following paragraphs (b) and (c) for 
paragraphs (b) and (c) of the basic clause:
    (a)(10) ``South Caucasus/Central and South Asian (SC/CASA) state'' 
means Armenia, Azerbaijan, Georgia, Kazakhstan, Kyrgyzstan, Pakistan, 
Tajikistan, Turkmenistan, or Uzbekistan.
    (11) ``SC/CASA state end product'' means an article that--
    (i) Is wholly the growth, product, or manufacture of an SC/CASA 
state; or
    (ii) In the case of an article that consists in whole or in part of 
materials from another country, has been substantially transformed in 
an SC/CASA state 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 its supply, provided that the value of those 
incidental services does not exceed the value of the product itself.
    (b) This clause implements the Balance of Payments Program. Unless 
otherwise specified, this clause applies to all line items in the 
contract.
    (c) The Contractor shall deliver only domestic end products unless, 
in its offer, it specified delivery of other end products in the Buy 
American Act Balance of Payments Program Certificate provision of the 
solicitation. If the Contractor certified in its offer that it will 
deliver a qualifying country end product or an SC/CASA state end 
product, the Contractor shall deliver a qualifying country end product 
an SC/CASA state end product, or, at the Contractor's option, a 
domestic end product.
* * * * *
    14. Amend section 252.225-7020 by revising the introductory text 
and adding Alternate I at the end of the section to read as follows:


252.225-7020  Trade Agreements Certificate.

    As prescribed in 225.1101(5)(i), use the following provision:
* * * * *
Alternate I (Date)
    As prescribed in 225.1101(5)(ii), substitute the following 
paragraphs (a), (b)(2) and (c) for paragraph (a), (b)(2) and (c) of the 
basic clause:
    (a) Definitions. ``Designated country end product,'' 
``nondesignated country end product,'' ``qualifying country end 
product,'' ``South Caucasus/Central and South Asian (SC/CASA) state,'' 
``SC/CASA state end product,'' and ``U.S.-made end product'' have the 
meanings given in the Trade Agreements clause of this solicitation.
    (b)(2) Will consider only offers of end products that are U.S.-
made, qualifying country, SC/CASA state, or designated country end 
products unless--
    (c) Certification and identification of country of origin.
    (1) For all line items subject to the Trade Agreements clause of 
this solicitation, the offeror certifies that each end product to be 
delivered under this contract, except those listed in paragraph 
(c)(2)(ii) of this provision, is a U.S.-made, qualifying country, SC/
CASA state, or designated country end product.
    (2)(i) The following supplies are SC/CASA state end products:


(Line Item Number)

(Country of Origin)
-----------------------------------------------------------------------

    (ii) The following are other nondesignated country end products:

(Line Item Number)
(Country of Origin)
    15. Amend section 252.225-7021 by revising the introductory text 
and adding Alternate I at the end of the section to read as follows:


252.225-7021  Trade Agreements.

    As prescribed in 225.1101(6)(i), use the following clause:
* * * * *
Alternate I (Date)
    As prescribed in 225.1101(5)(iii), add the following new 
definitions to paragraph (a), substitute the following paragraph (c) 
for paragraph (c) of the basic clause, and add the following paragraph 
(d):
    (a)(14) ``South Caucasus/Central and South Asian (SC/CASA) state'' 
means Armenia, Azerbaijan, Georgia, Kazakhstan, Kyrgyzstan, Pakistan, 
Tajikistan, Turkmenistan, or Uzbekistan.
    (15) ``SC/CASA state end product'' means an article that--
    (i) Is wholly the growth, product, or manufacture of an SC/CASA 
state; or
    (ii) In the case of an article that consists in whole or in part of 
materials from another country, has been substantially transformed in 
an SC/CASA state 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

[[Page 836]]

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 its supply, provided that the value of those incidental services 
does not exceed the value of the product itself.
    (c) The Contractor shall deliver under this contract only U.S.-
made, qualifying country, SC/CASA state, or designated country end 
products unless--
    (1) In its offer, the Contractor specified delivery of other 
nondesignated country end products in the Trade Agreements Certificate 
provision of the solicitation; and
    (2)(i) Offers of U.S.-made, qualifying country, SC/CASA state, or 
designated country end products from responsive, responsible offerors 
are either not received or are insufficient to fill the Government's 
requirements; or
    (ii) A national interest waiver has been granted. (d) The 
contractor shall inform its government of its participation in this 
acquisition and that it generally will not have such opportunity in the 
future unless its government provides reciprocal procurement 
opportunities to U.S. products and services and suppliers of such 
products and services.
    16. Amend section 252.225-7035 by revising the introductory text; 
revising Alternate I; and adding Alternate II and Alternate III at the 
end of the section to read as follows:


252.225-7035  Buy American Act--Free Trade Agreements--Balance of 
Payments Program Certificate.

    As prescribed in 225.1101(10)(i), use the following provision:
* * * * *
Alternate I (Date)
    As prescribed in 225.1101(10)(ii), substitute the phrase ``Canadian 
end product'' for the phrases ``Bahrainian end product,'' ``Free Trade 
Agreement country,'' ``Free Trade Agreement country end product,'' and 
``Moroccan end product'' in paragraph (a) of the basic provision; and 
substitute the phrase ``Canadian end products'' for the phrase ``Free 
Trade Agreement country end products other than Bahrainian end products 
or Moroccan end products'' in paragraphs (b)(2) and (c)(2)(ii) of the 
basic provision, and delete the phrase ``Australian or'' from paragraph 
(c)(2)(i) of the basic provision.
Alternate II (Date)
    As prescribed in 225.1101(10)(iii), add the terms ``South Caucasus/
Central and South Asian (SC/CASA) state'' and ``SC/CASA state end 
product'' in paragraph (a) and substitute the following paragraphs 
(b)(2) and (c)(2)(i) for paragraphs (b)(2) and (c)(2)(i) of the basic 
clause
    (b)(2) For line items subject to Free Trade Agreements, will 
evaluate offers of qualifying country end products, SC/CASA state end 
products, or Free Trade Agreement country end products other than 
Bahrainian end products or Moroccan end products without regard to the 
restrictions of the Buy American Act or the Balance of Payments 
Program.
    (c)(2)(i) The offeror certifies that the following supplies are 
qualifying country (except Australian or Canadian) or SC/CASA state end 
products:


(Line Item Number)

(Country of Origin)
-----------------------------------------------------------------------

Alternate III (Date)
    As prescribed in 225.1101(10)(iv), substitute the following 
paragraphs (a), (b)(2), (c)(2)(i), and (c)(2)(ii) for paragraphs (a), 
(b)(2), (c)(2)(i), and (c)(2)(ii) of the basic clause:
    (a) Definitions. ``Canadian end product,'' ``commercially available 
off-the-shelf (COTS) item,'' ``domestic end product,'' ``foreign end 
product,'' ``qualifying country end product,'' ``SC/CASA state end 
product,'' and ``United States'' have the meanings given in the Buy 
American Act--Free Trade Agreements--Balance of Payments Program clause 
of this solicitation.
    (b)(2) For line items subject to Free Trade Agreements, will 
evaluate offers of qualifying country end products, SC/CASA state end 
products, or Canadian end products without regard to the restrictions 
of the Buy American Act or the Balance of Payments Program.
    (c)(2)(i) The offeror certifies that the following supplies are 
qualifying country (except Canadian) or SC/CASA state end products:

(Line Item Number)
(Country of Origin)
-----------------------------------------------------------------------

    (c)(2)(ii) The offeror certifies that the following supplies are 
Canadian end products:

(Line Item Number)
(Country of Origin)
-----------------------------------------------------------------------

    17. Amend section 252.225-7036 by revising Alternate I; adding 
Alternate II and Alternate III at the end of the section to read as 
follows:


252.225-7036  Buy American Act--Free Trade Agreements--Balance of 
Payments Program.

* * * * *
Alternate I (Date)
    As prescribed in 225.1101(11)(i)(B), substitute the following 
paragraphs (a)(8) and (c) for paragraphs (a)(8) and (c) of the basic 
clause:
    (a)(8) * * *
Alternate II (Date)
    As prescribed in 225.1101(11)(i)(A), add the following new 
definitions to paragraph (a) and substitute the following paragraph (c) 
for paragraph (c) of the basic clause:
    (a)(14) ``South Caucasus/Central and South Asian (SC/CASA) state'' 
means Armenia, Azerbaijan, Georgia, Kazakhstan, Kyrgyzstan, Pakistan, 
Tajikistan, Turkmenistan, or Uzbekistan.
    (15) ``SC/CASA state end product'' means an article that--
    (i) Is wholly the growth, product, or manufacture of an SC/CASA 
state; or
    (ii) In the case of an article that consists in whole or in part of 
materials from another country, has been substantially transformed in 
an SC/CASA state 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 its supply, provided that the value of those 
incidental services does not exceed the value of the product itself.
    (c) The Contractor shall deliver under this contract only domestic 
end products unless, in its offer, it specified delivery of qualifying 
country end products, SC/CASA state end products, Free Trade Agreement 
country end products other than Bahrainian end products or Moroccan end 
products, or other foreign end products in the Buy American Act--Free 
Trade Agreements--Balance of Payments Program Certificate provision of 
the solicitation. If the Contractor certified in its offer that it will 
deliver a qualifying country end product, SC/CASA state end products, 
or a Free Trade Agreement country end product other than a Bahrainian 
end product or a Moroccan end product, the Contractor shall deliver a 
qualifying country end product, an SC/CASA state end product, a Free 
Trade Agreement country end product other than a Bahrainian end product 
or a Moroccan end product, or, at the Contractor's option, a domestic 
end product.

[[Page 837]]

Alternate III (Date)
    As prescribed in 225.1101(11)(i)(B), add the following definitions 
to paragraph (a) and substitute the following paragraph (c) for 
paragraph (c) of the basic clause,
    (a)(14) ``Canadian end product,'' means an article that--
    (i) Is wholly the growth, product, or manufacture of Canada; or
    (ii) In the case of an article that consists in whole or in part of 
materials from another country, has been substantially transformed in 
Canada 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 its supply, provided that the value of those 
incidental services does not exceed the value of the product itself.
    (15) ``South Caucasus/Central and South Asian (SC/CASA) state'' 
means Armenia, Azerbaijan, Georgia, Kazakhstan, Kyrgyzstan, Pakistan, 
Tajikistan, Turkmenistan, or Uzbekistan.
    (16) ``SC/CASA state end product'' means an article that--
    (i) Is wholly the growth, product, or manufacture of an SC/CASA 
state; or
    (ii) In the case of an article that consists in whole or in part of 
materials from another country, has been substantially transformed in 
an SC/CASA state 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 its supply, provided that the value of those 
incidental services does not exceed the value of the product itself.
    (c) The Contractor shall deliver under this contract only domestic 
end products unless, in its offer, it specified delivery of qualifying 
country end products, SC/CASA state end products, Canadian end 
products, or other foreign end products in the Buy American Act--Free 
Trade Agreements--Balance of Payments Program Certificate provision of 
the solicitation. If the Contractor certified in its offer that it will 
deliver a qualifying country end product, SC/CASA state end products, 
or a Canadian end product, the Contractor shall deliver a qualifying 
country end product, an SC/CASA state end product, a Canadian end 
product or, at the Contractor's option, a domestic end product.
    18. Amend section 252.225-7044 by adding Alternate I at the end of 
the section.


252.225-7044  Balance of Payments Program--Construction Material.

* * * * *
Alternate I (Date)
    As prescribed in 225.7503(a) 225.7503(a)(ii), add the following 
definitions to paragraph (a) and replace the phrase ``domestic 
construction material'' in the second sentence of paragraph (b) with 
the phrase ``domestic construction material or SC/CASA state 
construction material.''
    ``South Caucasus/Central and South Asian (SC/CASA) state'' means 
Armenia, Azerbaijan, Georgia, Kazakhstan, Kyrgyzstan, Pakistan, 
Tajikistan, Turkmenistan, or Uzbekistan.
    ``SC/CASA state construction material'' means construction material 
that--
    (i) Is wholly the growth, product, or manufacture of an SC/CASA 
state; or
    (ii) In the case of a construction material that consists in whole 
or in part of materials from another country, has been substantially 
transformed in an SC/CASA state into a new and different construction 
material distinct from the material from which it was transformed.
    19. Amend section 252.225-7045 by revising the clause date of 
Alternate I; revising paragraph (b) of Alernate I; and adding Alternate 
II and Alternate III to read as follows:


252.225-7045  Balance of Payments Program--Construction Material Under 
Trade Agreements.

* * * * *
Alternate I (Date). * * *
    (b) This clause implements the Balance of Payments Program by 
providing a preference for domestic construction material. In addition, 
the Contracting Officer has determined that the WTO GPA and all Free 
Trade Agreements except NAFTA and the Bahrain Free Trade Agreement 
apply to this acquisition. Therefore, the Balance of Payments Program 
restrictions are waived for designated country construction material 
other than Bahrainian or Mexican construction material.
* * * * *
Alternate II (Date)
    As prescribed in 225.7503(b)(iii), add the following definitions to 
paragraph (a); substitute the following paragraph (b) and the 
introductory text of paragraph (c) for paragraph (b) and the 
introductory text of paragraph (c) of the basic clause; and add the 
following paragraph (d): ``South Caucasus/Central and South Asian (SC/
CASA) state'' means Armenia, Azerbaijan, Georgia, Kazakhstan, 
Kyrgyzstan, Pakistan, Tajikistan, Turkmenistan, or Uzbekistan.
    ``SC/CASA state construction material'' means construction material 
that--
    (i) Is wholly the growth, product, or manufacture of an SC/CASA 
state; or
    (ii) In the case of a construction material that consists in whole 
or in part of materials from another country, has been substantially 
transformed in an SC/CASA state into a new and different construction 
material distinct from the material from which it was transformed.
    (b) This clause implements the Balance of Payments Program by 
providing a preference for domestic construction material. In addition, 
the Contracting Officer has determined that the WTO GPA, Free Trade 
Agreements, and other waivers relating to acquisitions in support of 
operations in Afghanistan apply to this acquisition. Therefore, the 
Balance of Payments Program restrictions are waived for SC/CASA state 
and designated country construction materials.
    (c) The Contractor shall use only domestic, SC/CASA state. or 
designated country construction material in performing this contract, 
except for--
    (d) The contractor shall inform its government of its participation 
in this acquisition and that it generally will not have such 
opportunity in the future unless its government provides reciprocal 
procurement opportunities to U.S. products and services and suppliers 
of such products and services.
    Alternate III (Date) As prescribed in 225.7503(b)(iv), add the 
following definitions to paragraph (a); substitute the following 
paragraph (b) and the introductory text of paragraph (c) for paragraph 
(b) and the introductory text of paragraph (c) of the basic clause; and 
add the following paragraph (d):
    ``South Caucasus/Central and South Asian (SC/CASA) state'' means 
Armenia, Azerbaijan, Georgia, Kazakhstan, Kyrgyzstan, Pakistan, 
Tajikistan, Turkmenistan, or Uzbekistan.
    ``SC/CASA state construction material'' means construction material 
that--

[[Page 838]]

    (i) Is wholly the growth, product, or manufacture of an SC/CASA 
state; or
    (ii) In the case of a construction material that consists in whole 
or in part of materials from another country, has been substantially 
transformed in an SC/CASA state into a new and different construction 
material distinct from the material from which it was transformed.
    (b) This clause implements the Balance of Payments Program by 
providing a preference for domestic construction material. In addition, 
the Contracting Officer has determined that the WTO GPA, all Free Trade 
Agreements except NAFTA and the Bahrain Free Trade Agreement, and other 
waivers relating to acquisitions in support of operations in 
Afghanistan apply to this acquisition. Therefore, the Balance of 
Payments Program restrictions are waived for SC/CASA state and 
designated country construction material other than Bahrainian or 
Mexican construction material.
    (c) The Contractor shall use only domestic, SC/CASA state, or 
designated country construction material other than Bahrainian or 
Mexican construction material in performing this contract, except for--
    (d) The contractor shall inform its government of its participation 
in this acquisition and that it generally will not have such 
opportunity in the future unless its government provides reciprocal 
procurement opportunities to U.S. products and services and suppliers 
of such products and services.

[FR Doc. E9-30292 Filed 1-5-10; 8:12 am]
BILLING CODE 5001-08-P