[Federal Register Volume 86, Number 88 (Monday, May 10, 2021)]
[Rules and Regulations]
[Pages 24708-24710]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2021-09821]


=======================================================================
-----------------------------------------------------------------------

AGENCY FOR INTERNATIONAL DEVELOPMENT

22 CFR Part 228

[AID-2020-0004]
RIN 0412-AB09


Procurement of Certain Essential Medical Supplies To Address the 
COVID-19 Pandemic

AGENCY: Agency for International Development.

ACTION: Final rule; technical amendments.

-----------------------------------------------------------------------

SUMMARY: On October 23, 2020, the United States Agency for 
International Development (USAID) issued a Temporary Final Rule (TFR) 
amending our regulations to allow USAID to waive ``Source and 
Nationality'' rules to provide for increased flexibility, targeting, 
and speed of procurement of Essential Medical Supplies required to 
address the COVID-19 pandemic worldwide. The TFR was effective through 
April 30, 2021. This document reverts the amended sections to the text 
of those sections as they existed prior to the issuance of the TFR, 
with minor technical updates. This reversion to the original text is 
applicable upon the expiration of the TFR.

DATES: This rule is effective May 10, 2021. As stated in the October 
23, 2020, final rule, the TFR was effective from October 23, 2020, 
through April 30, 2021. The amendments in this rule are applicable 
beginning May 1, 2021, after the expiration of the TFR.

ADDRESSES: You may review the docket by searching for Docket ID [AID-
2020-0004], via the Federal eRulemaking Portal: http://www.regulations.gov.

FOR FURTHER INFORMATION CONTACT: Greg Marchand, Assistant General 
Counsel, Office of the General Counsel, USAID, 1300 Pennsylvania Ave. 
NW, Washington, DC 20523, 202-215-3409, [email protected].

SUPPLEMENTARY INFORMATION: This document affects 22 CFR 228.01, which 
was amended by the TFR published in the Federal Register on October 23, 
2020 (85 FR 67443) and subsequently corrected on December 16, 2020 (85 
FR 81390). The TFR and its subsequent correction revised the 
definitions in Sec.  228.01 by adding a new definition for ``Essential 
medical supplies.'' This document reinstates the definitions in Sec.  
228.01 exactly as they existed prior to the issuance of the TFR. This 
document also reverts 22 CFR 228.11 and 228.30, which were also amended 
by the TFR published in the Federal Register on October 23, 2020 (85 FR 
67443). The TFR amended these sections to create a

[[Page 24709]]

new approval requirement and basis for waivers for the source and 
nationality of essential medical supplies. This document reverts the 
language of both sections to the text as it existed prior to the 
issuance of the TFR, with minor technical updates.

List of Subjects in 22 CFR Part 228

    Government procurement.

    The Deputy General Counsel of USAID, Suk J. Jin, having reviewed 
and approved this document, is delegating the authority to 
electronically sign this document to Gregory A. Marchand, Assistant 
General Counsel for USAID, for purposes of publication in the Federal 
Register.

Gregory A. Marchand,
Assistant General Counsel, U.S. Agency for International Development.

    For reasons stated in the preamble, USAID amends 22 CFR part 228 as 
follows:

PART 228--RULES FOR PROCUREMENT OF COMMODITIES AND SERVICES 
FINANCED BY USAID

0
1. The authority citation for 22 CFR part 228 continues to read as 
follows:

    Authority:  Sec. 621, Pub. L. 87-195, 75 Stat. 445 (22 U.S.C. 
2381), as amended, E.O. 12163, Sept. 29, 1979, 44 FR 56673: 3 CFR 
1979 Comp., p. 435.


0
2. Revise Sec.  228.01 to read as follows:


Sec.  228.01  Definitions.

    As used in this part, the following terms shall have the following 
meanings:
    Advanced developing countries mean those countries that are 
categorized by the World Bank as upper middle income countries 
according to their gross national income per capita, except for those 
countries in which USAID provides assistance. USAID will maintain a 
list of advanced developing countries primarily based on the most 
recent World Bank determinations, and will make the list available in 
USAID's Automated Directives System, ADS 310. This list will include 
determinations made under Sec.  228.17.
    Available for purchase means for commodities, that the commodity is 
offered for sale in a country in the authorized principal geographic 
code at the time of purchase from the supplier, irrespective of the 
place of manufacture or production, unless it is a prohibited source 
country. If applicable, the commodity must also be able to be serviced, 
and, if warrantied, have a valid warranty. For services, available for 
purchase means the service is offered from a vendor which has complied 
with nationality and foreign government-owned organization requirements 
of this regulation, and is otherwise organized in a country in the 
authorized principal geographic code designated in an implementing 
instrument. This definition does not apply to procurements under the 
geographic Code 935, see Sec.  228.03, because that geographic code is 
for any country or area except for prohibited source countries.
    Commission means any payment or allowance by a supplier to any 
person for the contribution which that person has made to secure the 
sale or contract for the supplier or which that person makes to 
securing on a continuing basis similar sales or contracts for the 
supplier.
    Commodities or goods means any material, article, supply, good, or 
equipment.
    Commodity-related services means delivery services and/or 
incidental services.
    Cooperating country or recipient country means the country 
receiving the USAID assistance subject to this part, and includes all 
the countries receiving assistance under a regional program or project.
    Delivery means the transfer to, or for the account of, an importer 
of the right to possession of a commodity, or, with respect to a 
commodity-related service, the rendering to, or for the account of, an 
importer of any such service.
    Delivery service means any service customarily performed in a 
commercial export or import transaction which is necessary to affect a 
physical transfer of commodities to the cooperating/recipient country. 
Examples of such services are the following: export packing, local 
drayage in the source country (including waiting time at the dock), 
ocean and other freight, loading, heavy lift, wharfage, tollage, 
switching, dumping and trimming, lighterage, insurance, commodity 
inspection services, and services of a freight forwarder. ``Delivery 
service'' may also include work and materials necessary to meet USAID 
marking requirements.
    Developing countries means those countries that are categorized by 
the World Bank as low or lower middle income economies according to 
their gross national income per capita, and also includes all countries 
to which USAID provides assistance. USAID will maintain a list of 
developing countries primarily based on the most recent World Bank 
determinations, and will make the list available in USAID's Automated 
Directives System, ADS 310.
    Free Port or Bonded Warehouse is a special customs area with 
favorable customs regulations (or no customs duties and controls for 
transshipment).
    Implementing instrument means a binding relationship established 
between USAID and an outside party or parties to carry out USAID 
programs, by authorizing the use of USAID funds and/or nonfinancial 
resources for the procurement of services or commodities and/or 
commodity related services. Implementing instruments include specific 
conditions that apply to each such procurement. Examples of such 
instruments include contracts, grants, cooperating agreements, and 
interagency agreements.
    Incidental services means services such as installation, erection, 
maintenance, or upgrading of USAID-financed equipment, or the training 
of personnel in the maintenance, operation and use of such equipment, 
or similar services provided for the authorized disposition of such 
commodities.
    Long term lease means, for purposes of subpart B of this part, a 
single lease of more than 180 calendar days; or repetitive or 
intermittent leases under a single award within a one-year period, 
which cumulatively total more than 180 calendar days. A single lease 
may consist of lease of one or more of the same type of commodity 
within the same lease term.
    Motor vehicles means self-propelled vehicles with passenger 
carriage capacity, such as highway trucks, passenger cars and buses, 
motorcycles, scooters, motorized bicycles, ATVs, and utility vehicles. 
Excluded from this definition are ambulances, snowmobiles, industrial 
vehicles for materials handling and earthmoving, such as lift trucks, 
tractors, graders, scrapers, off-the-highway trucks (such as off-road 
dump trucks), boats, and other vehicles that are not designed for 
travel at normal road speeds (40 kilometers per hour and above).
    Mission means the USAID Mission, office or representative in a 
cooperating/recipient country.
    Nationality refers to the place of legal organization, ownership, 
citizenship, or lawful permanent residence (or equivalent immigration 
status to live and work on a continuing basis) of suppliers of 
commodities and services.
    Pharmaceutical means any substance intended for use in the 
diagnosis, cure, mitigation, treatment, or prevention of diseases in 
humans or animals; any substances (other than food) intended to affect 
the structure or any function of the body of humans or animals; and, 
any substance intended for use as a component in the above. The term 
includes drugs, vitamins, oral rehydration salts, biologicals, and some

[[Page 24710]]

in-vitro diagnostic reagents/test kits; but does not include devices or 
their components, parts, or accessories. Contraceptives, including 
condoms, are not included in this definition.
    Prohibited sources means countries to which assistance is 
prohibited by the annual appropriations acts of Congress or other 
statutes, or those subject to other executive branch restrictions, such 
as applicable sanctions administered by the U.S. Treasury Department's 
Office of Foreign Assets Control. USAID maintains a list of prohibited 
sources, available in USAID's Automated Directives System, ADS 310.
    Recipients and contractors. Recipient has the same meaning as 
defined in 22 CFR 226.02, except that it shall include non-U.S. 
individuals, entities and organizations, as well as subrecipients. 
Contractors mean those entities which enter into a contract, as the 
term is defined in 48 CFR part 2, with the U.S. Government, and 
includes subcontractors.
    Services means the performance of identifiable tasks, rather than 
the delivery of an end item of supply.
    Source means the country from which a commodity is shipped to the 
cooperating/recipient country or the cooperating/recipient country 
itself if the commodity is located therein at the time of the purchase, 
irrespective of the place of manufacture or production, unless it is a 
prohibited source country. Where, however, a commodity is shipped from 
a free port or bonded warehouse in the form in which received therein, 
``source'' means the country from which the commodity was shipped to 
the free port or bonded warehouse.
    Supplier means any person or organization, governmental or 
otherwise, who furnishes services, commodities, and/or commodity 
related services, including delivery or incidental services, financed 
by USAID.
    United States means the United States of America, any State(s) of 
the United States, the District of Columbia, and areas of U.S. 
associated sovereignty, including commonwealths, territories, and 
possessions.
    USAID means the United States Agency for International Development 
or any successor agency, including when applicable, each USAID Mission 
or office abroad.
    USAID Principal Geographic Code means a USAID code which designates 
a country, a group of countries, or an otherwise defined area. The 
USAID principal geographic codes for purposes of procurement are 
described in Sec.  228.03.

0
3. Revise Sec.  228.11 to read as follows:


Sec.  228.11  Source of commodities.

    The source of all commodities financed with Federal program funds 
appropriated under the Foreign Assistance Act of 1961, as amended, 
shall be Code 937 (unless Code 935 or 110 are designated in the 
implementing instrument). Procurements of agricultural commodities, 
motor vehicles, and pharmaceuticals must also comply with the special 
procurement rules in Sec.  228.19. Recipients and contractors are 
prohibited from engaging suppliers of commodities in an authorized 
country to import commodities from a country outside of the authorized 
principal geographic codes for the purposes of circumventing the 
requirements of this section. Any violation of the prohibition in the 
preceding sentence will result in the disallowance by USAID of the cost 
of the procurement of the subject commodity.

0
4. Revise Sec.  228.30 to read as follows:


Sec.  228.30  General.

    USAID may waive the rules contained in subparts A, B, and C of this 
part (except for prohibited sources as defined in Sec.  228.01, and 
Sec. Sec.  228.21 and 228.22), in order to accomplish project or 
program objectives. For any waivers authorized, the principal 
geographic code shall be Code 935, any area or country but excluding 
prohibited sources. All waivers must be in writing, and where 
applicable, are limited to the term established by the waiver. All 
waiver decisions will be made solely on the basis of the following 
criteria:
    (a) Waivers to permit procurement outside of Code 937 or 110 must 
be based on a case by case determination that:
    (1) The provision of assistance requires commodities or services of 
the type that are not produced in and available for purchase in Code 
937 or 110;
    (2) It is important to permit procurement from a country not 
specified in Code 937 or 110 to meet unforeseen circumstances; or
    (3) To promote efficiency in the use of United States foreign 
assistance resources, including to avoid impairment of foreign 
assistance objectives.
    (b) Case by case waivers under paragraph (a) of this section may be 
made on the basis of a commodity or service type or category, rather 
than processing repeat, individual waivers for an identical or 
substantially similar commodity or service. Such waivers may be 
approved on a regional, country, or program basis. For purposes of 
paragraph (a)(1) of this section, ``produced in and available for 
purchase in'' shall have the same meaning as the definition of 
``available for purchase'' in Sec.  228.01. A waiver under paragraph 
(a)(1) of this section may also be based on the fact that a commodity 
is not available for purchase in Code 937 or 110 in sufficient, 
reasonable, and available quantities or sufficient and reasonable 
quality that is fit for the intended purpose.
    (c) A waiver to authorize procurement from outside the United 
States of agricultural commodities, motor vehicles, and pharmaceuticals 
must meet the requirements of Sec.  228.19.
    (d) Any individual transaction not exceeding $25,000 (excluding 
those covered by special procurement rules in Sec.  228.19, and 
excluding procurements from prohibited sources) does not require a 
waiver and is hereby authorized.

[FR Doc. 2021-09821 Filed 5-7-21; 8:45 am]
BILLING CODE 6116-02-P