[Federal Register Volume 89, Number 37 (Friday, February 23, 2024)]
[Rules and Regulations]
[Pages 13961-13964]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2024-02798]


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DEPARTMENT OF DEFENSE

GENERAL SERVICES ADMINISTRATION

NATIONAL AERONAUTICS AND SPACE ADMINISTRATION

48 CFR Parts 22, 25, and 52

[FAC 2024-03; FAR Case 2023-012; Item II; Docket No. FAR-2023-0012; 
Sequence No. 1]
RIN 9000-AO62


Federal Acquisition Regulation: Trade Agreements Thresholds

AGENCY: Department of Defense (DoD), General Services Administration 
(GSA), and National Aeronautics and Space Administration (NASA).

ACTION: Final rule.

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SUMMARY: DoD, GSA, and NASA are issuing a final rule amending the 
Federal Acquisition Regulation (FAR) to incorporate revised thresholds 
for application of the World Trade Organization Government Procurement 
Agreement and the Free Trade Agreements, as determined by the United 
States Trade Representative.

DATES: Effective date: February 23, 2024.

FOR FURTHER INFORMATION CONTACT: Mr. Michael O. Jackson, Procurement 
Analyst, at 202-208-4949 or by email at [email protected] for 
clarification of content. For information pertaining to status or 
publication schedules, contact the Regulatory Secretariat Division at 
202-501-4755 or [email protected]. Please cite FAC 2024-03, FAR case 
2023-012.

SUPPLEMENTARY INFORMATION: 

I. Background

    Approximately every two years, the trade agreements thresholds for 
the World Trade Organization Government Procurement Agreement (WTO GPA) 
and the free trade agreements (FTAs) are adjusted according to 
predetermined formulae under the agreements. These thresholds are 
effective as of January 1, 2024. On December 8, 2023 (88 FR 85718), the 
United States Trade Representative (USTR) published new procurement 
thresholds.
    The United States Trade Representative has specified the following 
new thresholds:

----------------------------------------------------------------------------------------------------------------
                                                                      Supply          Service      Construction
                                                                     contract        contract        contract
                         Trade agreement                           (equal to or    (equal to or    (equal to or
                                                                    exceeding)      exceeding)      exceeding)
----------------------------------------------------------------------------------------------------------------
WTO GPA                                                                 $174,000        $174,000      $6,708,000
FTAs:
    Australia FTA...............................................         102,280         102,280       6,708,000
    Bahrain FTA.................................................         174,000         174,000      13,296,489
    Dominican Republic-Central America-United States Free Trade          102,280         102,280       6,708,000
     Agreement (CAFTA-DR) (Costa Rica, Dominican Republic, El
     Salvador, Guatemala, Honduras, and Nicaragua)..............
    Chile FTA...................................................         102,280         102,280       6,708,000
    Colombia FTA................................................         102,280         102,280       6,708,000
    Korea FTA...................................................         100,000         100,000       6,708,000
    Morocco FTA.................................................         174,000         174,000       6,708,000
United States-Mexico-Canada Agreement (USMCA):
    --Mexico....................................................         102,280         102,280      13,296,489
    Oman FTA....................................................         174,000         174,000      13,296,489
    Panama FTA..................................................         174,000         174,000       6,708,000
    Peru FTA....................................................         174,000         174,000       6,708,000
    Singapore FTA...............................................         102,280         102,280       6,708,000
    Israeli Trade Act...........................................          50,000  ..............  ..............
----------------------------------------------------------------------------------------------------------------


[[Page 13962]]

II. Discussion and Analysis

    This final rule implements the new thresholds in FAR subpart 25.4, 
Trade Agreements, and other sections in the FAR that include trade 
agreements thresholds (i.e., FAR 22.1503, 25.202, 25.402, 25.603, 
25.1101, and 25.1102).
    A group of FTAs have been at the $92,319 threshold and are 
increasing to $102,280. This group includes the Australia, Chile, 
Colombia, and Singapore FTAs, CAFTA-DR, and Mexico in the USMCA. The 
2024 threshold change places these FTAs above the $100,000 Korea FTA 
threshold, instead of beneath it. These new thresholds do not work with 
the pre-existing framework in the FAR. The Korea FTA at $100,000 and 
above previously fit alongside the Australia FTA/CAFTA-DR group at 
$92,319 and above, but this will no longer be so because there can no 
longer be any values that are less than the Korea FTA threshold, but 
greater than the Australia FTA/CAFTA-DR group threshold. Three primary 
changes were made to fix the framework.
    1. At FAR 25.1101, the prescription for Alternate II of FAR 52.225-
3, Buy American--Free Trade Agreements--Israeli Trade Act, is changed 
so that it no longer applies to the Australia FTA/CAFTA-DR group, but 
instead only to the Israeli Trade Act. There are no changes to the 
Alternate II language.
    2. At FAR 25.1101, the prescription for Alternate III of FAR 
52.225-3 is changed so that it only applies to the Korea FTA and 
Israeli Trade Act. Application of the Australia FTA/CAFTA-DR group 
moves into the base clause of FAR 52.225-3.
    3. A change to the Alternate III language was needed due to the 
change in the prescription. DoD, GSA, and NASA deleted the definition 
of ``Bahraini, Moroccan, Omani, Panamanian, or Peruvian end product,'' 
and in its place added a definition of ``Korean end product.'' DoD, 
GSA, and NASA also added a corresponding change in the prescription and 
Alternate III of FAR 52.225-4, Buy American--Free Trade Agreements--
Israeli Trade Act Certificate.
    In addition, changes are required to the provisions at FAR 52.204-
8, Annual Representations and Certifications, and 52.212-3, Offeror 
Representations and Certifications--Commercial Products and Commercial 
Services, and to the clause at FAR 52.222-19, Child Labor--Cooperation 
with Authorities and Remedies, with conforming changes to the clause 
dates in FAR 52.212-5, Contract Terms and Conditions Required to 
Implement Statutes or Executive Orders--Commercial Products and 
Commercial Services, and FAR 52.213-4, Terms and Conditions--Simplified 
Acquisitions (Other Than Commercial Products and Commercial Services).

III. Publication of This Final Rule for Public Comment Is Not Required 
by Statute

    The statute that applies to the publication of the FAR is 41 U.S.C. 
1707. Subsection (a)(1) of 41 U.S.C. 1707 requires that a procurement 
policy, regulation, procedure, or form (including an amendment or 
modification thereof) must be published for public comment if it 
relates to the expenditure of appropriated funds and has either a 
significant effect beyond the internal operating procedures of the 
agency issuing the policy, regulation, procedure, or form, or has a 
significant cost or administrative impact on contractors or offerors. 
This final rule is not required to be published for public comment, 
because it only adjusts the thresholds according to predetermined 
formulae to adjust for changes in economic conditions, thus maintaining 
the status quo, without significant effect beyond the internal 
operating procedures of the Government and without a significant cost 
or administrative impact on contractors or offerors.

IV. Expected Impact of the Rule

    This final rule will adjust the thresholds for application of the 
WTO GPA and FTAs, as determined by the USTR. For acquisitions covered 
by the WTO GPA or FTAs, the USTR has waived the Buy American statute 
and other discriminatory provisions for eligible products. As a result, 
eligible products and services will receive equal consideration with 
domestic offers if the estimated value of the contract meets or exceeds 
the new thresholds set by the USTR. This rule is not expected to 
significantly impact domestic offerors or offerors covered by the WTO 
GPA or a FTA because the threshold adjustments made under this rule 
simply accommodate changes in economic conditions, while maintaining 
the status quo.

V. Applicability to Contracts at or Below the Simplified Acquisition 
Threshold (SAT) and for Commercial Products (Including Commercially 
Available Off-the-Shelf (COTS) Items), or for Commercial Services

    This rule amends the FAR to make minor revisions in the thresholds 
for application of the WTO GPA and the FTAs. The revisions do not add 
any new burdens or, except for the thresholds changes themselves, 
impact applicability of clauses and provisions at or below the 
simplified acquisition threshold, to acquisitions of commercial 
products (including commercially available off-the-shelf items), or to 
acquisitions of commercial services.

VI. Executive Orders 12866 and 13563

    Executive Orders (E.O.s) 12866 (as amended by E.O. 14094) and 13563 
direct agencies to assess the costs and benefits of available 
regulatory alternatives and, if regulation is necessary, to select 
regulatory approaches that maximize net benefits (including potential 
economic, environmental, public health and safety effects, distributive 
impacts, and equity). E.O. 13563 emphasizes the importance of 
quantifying both costs and benefits, of reducing costs, of harmonizing 
rules, and of promoting flexibility. This is not a significant 
regulatory action and, therefore, was not subject to review under 
Section 6(b) of E.O. 12866, Regulatory Planning and Review, dated 
September 30, 1993.

VII. Congressional Review Act

    Pursuant to the Congressional Review Act, DoD, GSA, and NASA will 
send this rule to each House of the Congress and to the Comptroller 
General of the United States. The Office of Information and Regulatory 
Affairs (OIRA) in the Office of Management and Budget has determined 
that this rule does not meet the definition in 5 U.S.C. 804(2).

VIII. Regulatory Flexibility Act

    Because a notice of proposed rulemaking and an opportunity for 
public comment are not required to be given for this rule under 41 
U.S.C. 1707(a)(1) (see section III of this preamble), the analytical 
requirements of the Regulatory Flexibility Act (5 U.S.C. 601-612) are 
not applicable. Accordingly, no regulatory flexibility analysis is 
required, and none has been prepared.

IX. Paperwork Reduction Act

    This rule affects the information collection requirements in the 
provisions at FAR 52.225-2, 52.225-4, 52.225-6, and 52.225-10, and the 
clauses at FAR 52.225-9, 52.225-11, 52.225-21, and 52.225-23, currently 
approved under OMB Control Number 9000-0024, entitled ``Buy American 
Act, Trade Agreements, and Duty-Free Entry,'' in accordance with the 
Paperwork Reduction Act (44 U.S.C. 3501-3521). The impact, however, is 
negligible, because the threshold changes are in line with inflation 
and

[[Page 13963]]

maintain the status quo. As a result, there is no change to the 
estimated burden.

List of Subjects in 48 CFR Parts 22, 25, and 52

    Government procurement.

William F. Clark,
Director, Office of Government-wide Acquisition Policy, Office of 
Acquisition Policy, Office of Government-wide Policy.
    Therefore, DoD, GSA, and NASA amend 48 CFR parts 22, 25, and 52 as 
set forth below:

0
1. The authority citation for 48 CFR parts 22, 25, and 52 continues to 
read as follows:

    Authority:  40 U.S.C. 121(c); 10 U.S.C. chapter 4 and 10 U.S.C. 
chapter 137 legacy provisions (see 10 U.S.C. 3016); and 51 U.S.C. 
20113.

PART 22--APPLICATION OF LABOR LAWS TO GOVERNMENT ACQUISITIONS


22.1503   [Amended]

0
2. Amend section 22.1503 by--
0
(a) Removing from paragraph (b)(2) ``$92,319'' and adding ``$102,280'' 
in its place; and
0
(b) Removing from paragraph (b)(3) ``$183,000'' and adding ``$174,000'' 
in its place.

PART 25--FOREIGN ACQUISITION


25.202   [Amended]

0
3. Amend section 25.202 by removing from paragraph (c) ``$7,032,000'' 
and adding ``$6,708,000'' in its place.

0
4. Amend section 25.402 in paragraph (b) by revising table 1 to read as 
follows:


25.402  General.

* * * * *
    (b) * * *

                                            Table 1 to Paragraph (b)
----------------------------------------------------------------------------------------------------------------
                                                                      Supply          Service      Construction
                                                                     contract        contract        contract
                         Trade agreement                           (equal to or    (equal to or    (equal to or
                                                                    exceeding)      exceeding)      exceeding)
----------------------------------------------------------------------------------------------------------------
WTO GPA.........................................................        $174,000        $174,000      $6,708,000
FTAs:
    Australia FTA...............................................         102,280         102,280       6,708,000
    Bahrain FTA.................................................         174,000         174,000      13,296,489
    CAFTA-DR (Costa Rica, Dominican Republic, El Salvador,               102,280         102,280       6,708,000
     Guatemala, Honduras, and Nicaragua)........................
    Chile FTA...................................................         102,280         102,280       6,708,000
    Colombia FTA................................................         102,280         102,280       6,708,000
    Korea FTA...................................................         100,000         100,000       6,708,000
    Morocco FTA.................................................         174,000         174,000       6,708,000
USMCA:
    --Mexico....................................................         102,280         102,280      13,296,489
    Oman FTA....................................................         174,000         174,000      13,296,489
    Panama FTA..................................................         174,000         174,000       6,708,000
    Peru FTA....................................................         174,000         174,000       6,708,000
    Singapore FTA...............................................         102,280         102,280       6,708,000
    Israeli Trade Act...........................................          50,000  ..............  ..............
----------------------------------------------------------------------------------------------------------------

25.603  [Amended]

0
5. Amend section 25.603 by removing from paragraph (c)(1) 
``$7,032,000'' and adding ``$6,708,000'' in its place.


25.1101   [Amended]

0
6. Amend section 25.1101 by--
0
a. Removing from paragraph (b)(1)(i)(A) ``$183,000'' and adding 
``$174,000'' in its place;
0
b. Removing from paragraph (b)(1)(ii) ``$92,319'' and adding 
``$100,000'' in its place;
0
c. Removing from paragraph (b)(1)(iii) ``$92,319'' and ``$100,000'' and 
adding ``$100,000'' and ``$102,280'' in their places, respectively;
0
d. Removing from paragraph (b)(2)(ii) ``$92,319'' and adding 
``$100,000'' in its place;
0
e. Removing from paragraph (b)(2)(iii) ``$92,319'' and ``$100,000'' and 
adding ``$100,000'' and ``$102,280'' in their places, respectively;
0
f. Removing from paragraph (c)(1) ``$183,000'' and adding ``$174,000'' 
in its place; and
0
g. Removing from paragraph (d) ``$183,000'' and adding ``$174,000'' in 
its place.


25.1102   [Amended]

0
7. Amend section 25.1102 by--
0
a. Removing from the introductory text of paragraphs (a) and (c) 
``$7,032,000'' and adding ``$6,708,000'' in their places; and
0
b. Removing from paragraphs (c)(3) and (d)(3) ``$7,032,000'' and 
``$12,001,460'' and adding ``$6,708,000'' and ``$13,296,489'' in their 
places, respectively.

PART 52--SOLICITATION PROVISIONS AND CONTRACT CLAUSES

0
8. Amend section 52.204-8 by--
0
a. Revising the date of the provision;
0
b. Removing from paragraph (c)(1)(xxi)(B) ``$92,319'' and adding 
``$100,000'' in its place; and
0
c. Removing from paragraph (c)(1)(xxi)(C) ``$92,319'' and ``$100,000'' 
and adding ``$100,000'' and ``$102,280'' in their places, respectively.
    The revision reads as follows:


52.204-8   Annual Representations and Certifications.

* * * * *

Annual Representations and Certifications (Feb 2024)

* * * * *

0
9. Amend section 52.212-3 by revising the date of the provision and 
paragraph (g)(3) to read as follows:


52.212-3   Offeror Representations and Certifications--Commercial 
Products and Commercial Services.

* * * * *

Offeror Representations and Certifications--Commercial Products and 
Commercial Services (Feb 2024)

* * * * *
    (g) * * *
    (3) Buy American-Free Trade Agreements-Israeli Trade Act 
Certificate, Alternate III. If Alternate III to the clause at 
52.225-3 is included in this solicitation, substitute the following 
paragraphs (g)(1)(i)(B) and (g)(1)(ii)

[[Page 13964]]

for paragraphs (g)(1)(i)(B) and (g)(1)(ii) of the basic provision:
    (g)(1)(i)(B) The terms ``Korean end product'', ``commercially 
available off-the-shelf (COTS) item,'' ``critical component,'' 
``domestic end product,'' ``end product,'' ``foreign end product,'' 
``Free Trade Agreement country,'' ``Free Trade Agreement country end 
product,'' ``Israeli end product,'' and ``United States'' are 
defined in the clause of this solicitation entitled ``Buy American--
Free Trade Agreements--Israeli Trade Act.''
    (g)(1)(ii) The Offeror certifies that the following supplies are 
Korean end products or Israeli end products as defined in the clause 
of this solicitation entitled ``Buy American--Free Trade 
Agreements--Israeli Trade Act'':
    Korean End Products or Israeli End Products:

------------------------------------------------------------------------
               Line Item No.                      Country of origin
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------------------------------------------------------------------------

    [List as necessary]
* * * * *

0
10. Amend section 52.212-5 by--
0
a. Revising the date of the clause;
0
b. Removing from paragraph (b)(32) ``(NOV 2023)'' and adding ``(FEB 
2024)'' in its place; and
0
c. Removing from paragraph (b)(53)(iv) ``(NOV 2023)'' and adding ``(FEB 
2025)'' in its place.
    The revision reads as follows:


52.212-5  Contract Terms and Conditions Required To Implement Statutes 
or Executive Orders--Commercial Products and Commercial Services.

* * * * *

Contract Terms and Conditions Required To Implement Statutes or 
Executive Orders--Commercial Products and Commercial Services (FEB 
2024)

* * * * *

0
11. Amend section 52.213-4 by--
0
a. Revising the date of the clause; and
0
b. Removing from paragraph (b)(1)(iii) ``(NOV 2023)'' and adding ``(FEB 
2024)'' in its place.
    The revision reads as follows:


52.213-4   Terms and Conditions-Simplified Acquisitions (Other Than 
Commercial Products and Commercial Services).

* * * * *

Terms and Conditions--Simplified Acquisitions (Other Than Commercial 
Products and Commercial Services) (FEB 2024)

* * * * *

0
12. Amend section 52.222-19 by--
0
a. Revising the date of the clause; and
0
b. Removing from paragraph (a)(2) ``$92,319'' and adding ``$102,280'' 
in its place; and
    c. Removing from paragraph (a)(3) ``$183,000'' and adding 
``$174,000'' in its place.
    The revision reads as follows:


52.222-19   Child Labor--Cooperation With Authorities and Remedies.

* * * * *

Child Labor--Cooperation With Authorities and Remedies (FEB 2024)

* * * * *

0
13. Amend section 52.225-3 by revising Alternate III to read as 
follows:


52.225-3  Buy American--Free Trade Agreements--Israeli Trade Act.

* * * * *
    Alternate III (FEB 2024). As prescribed in 25.1101(b)(1)(iii), 
delete the definition of ``Bahraini, Moroccan, Omani, Panamanian, or 
Peruvian end product'' and add in its place the following definition of 
``Korean end product'' in paragraph (a) of the basic clause; and 
substitute the following paragraph (c) for paragraph (c) of the basic 
clause.
    Korean end product means an article that--
    (1) Is wholly the growth, product, or manufacture of Korea 
(Republic of); or
    (2) In the case of an article that consists in whole or in part of 
materials from another country, has been substantially transformed in 
Korea (Republic of) into a new and different article of commerce with a 
name, character, or use distinct from that of the article or articles 
from which it was transformed. The term refers to a product offered for 
purchase under a supply contract, but for purposes of calculating the 
value of the end product includes services (except transportation 
services) incidental to the article, provided that the value of those 
incidental services does not exceed that of the article itself.
    (c) Delivery of end products. 41 U.S.C. chapter 83 provides a 
preference for domestic end products for supplies acquired for use in 
the United States. In accordance with 41 U.S.C. 1907, the domestic 
content test of the Buy American statute is waived for an end product 
that is a COTS item (see 12.505(a)(1)), except that for an end product 
that consists wholly or predominantly of iron or steel or a combination 
of both, the domestic content test is applied only to the iron and 
steel content of the end product, excluding COTS fasteners. In 
addition, the Contracting Officer has determined that the Korea 
(Republic of) FTA and the Israeli Trade Act apply to this acquisition. 
Unless otherwise specified, these trade agreements apply to all items 
in the Schedule. The Contractor shall deliver under this contract only 
domestic end products except to the extent that, in its offer, it 
specified delivery of foreign end products in the provision entitled 
``Buy American--Free Trade Agreements--Israeli Trade Act Certificate.'' 
If the Contractor specified in its offer that the Contractor would 
supply a Korean end product or an Israeli end product, then the 
Contractor shall supply a Korean end product, an Israeli end product, 
or at the Contractor's option, a domestic end product.
* * * * *

0
14. Amend section 52.225-4 by revising Alternate III to read as 
follows:


52.225-4  Buy American--Free Trade Agreements--Israeli Trade Act 
Certificate.

* * * * *
    Alternate III (FEB 2024). As prescribed in 25.1101(b)(2)(iii), 
substitute the following paragraph (b) for paragraph (b) of the basic 
provision:
    (b) The Offeror certifies that the following supplies are Korean 
end products or Israeli end products as defined in the clause of this 
solicitation entitled ``Buy American--Free Trade Agreements--Israeli 
Trade Act'':
    Korean End Products or Israeli End Products:

------------------------------------------------------------------------
               Line Item No.                      Country of origin
------------------------------------------------------------------------
 
------------------------------------------------------------------------
 
------------------------------------------------------------------------
 
------------------------------------------------------------------------

    [List as necessary]

[FR Doc. 2024-02798 Filed 2-22-24; 8:45 am]
BILLING CODE 6820-EP-P