[Federal Register Volume 89, Number 59 (Tuesday, March 26, 2024)]
[Rules and Regulations]
[Pages 20871-20874]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2024-06006]


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DEPARTMENT OF DEFENSE

Defense Acquisition Regulations System

48 CFR Parts 225 and 252

[Docket DARS-2024-0008]
RIN 0750-AL92


Defense Federal Acquisition Regulation Supplement: Trade 
Agreements Thresholds (DFARS Case 2023-D023)

AGENCY: Defense Acquisition Regulations System, Department of Defense 
(DoD).

ACTION: Final rule.

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SUMMARY: DoD is issuing a final rule amending the Defense Federal 
Acquisition Regulation Supplement (DFARS) 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 March 26, 2024.

FOR FURTHER INFORMATION CONTACT: Ms. Kimberly Bass, 703-717-3446.

SUPPLEMENTARY INFORMATION:

I. Background

    This rule adjusts thresholds for application of the World Trade 
Organization (WTO) Government Procurement Agreement (GPA) and Free 
Trade Agreements (FTAs) as determined by the United States Trade 
Representative (USTR). The trade agreements thresholds are adjusted 
every two years according to predetermined formulae set forth in the 
agreements. The USTR has specified the following new thresholds in the 
Federal Register (88 FR 85718), which are being implemented in this 
rule:

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


[[Page 20872]]

    For several FTAs (i.e., Australia, Chile, Colombia, Singapore, 
CAFTA-DR, and Mexico), the thresholds for supply contracts have 
increased from $92,319 to $102,280. This increase causes these 
thresholds to exceed the Korea FTA threshold of $100,000, where in the 
past they were below the Korea FTA threshold. As a result, the new 
threshold amounts no longer align with the language used in the 
prescriptions at DFARS 225.1101 for some of the alternate contract 
clauses at DFARS 252.225-7036, Buy American--Free Trade Agreements--
Balance of Payments Program, as well as the text of the contract clause 
at DFARS 252.225-7017, Photovoltaic Devices, and the solicitation 
provision at DFARS 252.225-7018, Photovoltaic Devices--Certificate. 
Therefore, the corresponding text in these locations has been adjusted 
to accommodate the new thresholds.

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

    The statute that applies to the publication of the Federal 
Acquisition Regulation (FAR) is 41 U.S.C. 1707, Publication of Proposed 
Regulations. Subsection (a)(1) of the statute 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 account for changes in economic conditions, thus 
maintaining the status quo, without significant effect beyond the 
internal operating procedures of the Government.

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

    This final rule amends the DFARS to revise thresholds for 
application of the WTO GPA and the FTA. However, this final rule does 
not impose any new requirements, or impact the applicability of 
solicitation provisions or contract clauses, for contracts at or below 
the SAT, for commercial products including COTS items, or for 
commercial services.

IV. Executive Orders 12866 and 13563

    Executive Orders (E.O.s) 12866 and 13563 direct agencies to assess 
all 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, as amended.

V. Congressional Review Act

    As required by the Congressional Review Act (5 U.S.C. 801-808) 
before an interim or final rule takes effect, DoD will submit a copy of 
the interim or final rule with the form, Submission of Federal Rules 
under the Congressional Review Act, to the U.S. Senate, the U.S. House 
of Representatives, and the Comptroller General of the United States. A 
major rule under the Congressional Review Act cannot take effect until 
60 days after it is published in the Federal Register. The Office of 
Information and Regulatory Affairs has determined that this rule is not 
a major rule as defined by 5 U.S.C. 804.

VI. Regulatory Flexibility Act

    The Regulatory Flexibility Act does not apply to this rule because 
this final rule does not constitute a significant DFARS revision within 
the meaning of FAR 1.501-1 (48 CFR 1.501-1), and 41 U.S.C. 1707 does 
not require publication for public comment.

VII. Paperwork Reduction Act

    The Paperwork Reduction Act (44 U.S.C. chapter 35) applies to this 
final rule, because the final rule affects the prescriptions for use of 
the information collection requirements in the solicitation provision 
at DFARS 252.225-7035, Buy American-Free Trade Agreements-Balance of 
Payments Program Certificate, and the information collection 
requirements in the solicitation provision at DFARS 252.225-7018, 
Photovoltaic Devices--Certificate. However, these changes to the DFARS 
do not impose additional information collection requirements to the 
paperwork burden previously approved by the Office of Management and 
Budget (OMB) under OMB Control Number 0704-0229, entitled ``DFARS Part 
225, Foreign Acquisition and related clauses,'' because the threshold 
changes are in line with inflation and maintain the status quo.

List of Subjects in 48 CFR Parts 225 and 252

    Government procurement.

Jennifer D. Johnson,
Editor/Publisher, Defense Acquisition Regulations System.

    Therefore, 48 CFR parts 225 and 252 are amended as follows:

0
1. The authority citation for 48 CFR parts 225 and 252 continues to 
read as follows:

    Authority:  41 U.S.C. 1303 and 48 CFR chapter 1.

PART 225--FOREIGN ACQUISITION

0
2. Amend section 225.1101--
0
a. By revising and republishing paragraphs (6) introductory text, 
(10)(i) introductory text, and (10)(i)(A) and (B);
0
b. By revising paragraph (10)(i)(C);
0
c. By revising and republishing paragraphs (10)(i)(D), (E), and (F), 
(10)(i)(G)(1), and (10)(i)(H)(1);
0
d. By revising paragraph (10)(i)(I)(1); and
0
e. By revising and republishing paragraphs (10)(i)(J)(1), 
(10)(i)(K)(1), and (10)(i)(L)(1).
    The revisions read as follows:


225.1101  Acquisition of supplies.

* * * * *
    (6) Except as provided in paragraph (6)(iv) of this section, use 
the basic or an alternate of the clause at 252.225-7021, Trade 
Agreements, instead of the clause at FAR 52.225-5, Trade Agreements, in 
solicitations and contracts, including solicitations and contracts 
using FAR part 12 procedures for the acquisition of commercial products 
and commercial services, if the World Trade Organization Government 
Procurement Agreement applies, i.e., the acquisition is of end products 
listed at 225.401-70, the value of the acquisition equals or exceeds 
$174,000, and none of the exceptions at 25.401(a) applies.
* * * * *
    (10)(i) Except as provided in paragraph (10)(ii) of this section, 
use the basic or an alternate of the clause at 252.225-7036, Buy 
American--Free Trade Agreements--Balance of Payments Program, instead 
of the clause at FAR 52.225-3, Buy American--Free Trade Agreements--
Israeli Trade Act, in solicitations and contracts, including 
solicitations and contracts using FAR part 12 procedures for the 
acquisition of commercial products and commercial services, for the 
items listed at 225.401-70, when the estimated value is less

[[Page 20873]]

than $174,000, unless an exception at FAR 25.401 or 225.401 applies.
    (A) Use the basic clause in solicitations and contracts when the 
estimated value equals or exceeds $100,000, but is less than $174,000, 
except if the acquisition is of end products in support of operations 
in Afghanistan.
    (B) Use the alternate I clause in solicitations and contracts when 
the estimated value is less than $102,280, except if the acquisition is 
of end products in support of operations in Afghanistan.
    (C) Use the alternate II clause in solicitations and contracts when 
the estimated value equals or exceeds $100,000 but is less than 
$174,000, and the acquisition is of end products in support of 
operations in Afghanistan.
    (D) Use the alternate III clause in solicitations and contracts 
when the estimated value is less than $102,280, and the acquisition is 
of end products in support of operations in Afghanistan.
    (E) Use the alternate IV clause in solicitations and contracts when 
the estimated value equals or exceeds $102,280 but is less than 
$174,000, except if the acquisition is of end products in support of 
operations in Afghanistan.
    (F) Use the alternate V clause in solicitations and contracts when 
the estimated value equals or exceeds $102,280 but is less than 
$174,000 and the acquisition is of end products in support of 
operations in Afghanistan.
    (G) * * *
    (1) The estimated value equals or exceeds $100,000 but is less than 
$174,000; and
* * * * *
    (H) * * *
    (1) The estimated value is less than $102,280; and
* * * * *
    (I) * * *
    (1) The estimated value equals or exceeds $100,000, but is less 
than $174,000;
* * * * *
    (J) * * *
    (1) The estimated value is less than $102,280;
* * * * *
    (K) * * *
    (1) The estimated value equals or exceeds $102,280 but is less than 
$174,000; and
* * * * *
    (L) * * *
    (1) The estimated value equals or exceeds $102,280 but is less than 
$174,000;
* * * * *


225.7017-3  [Amended]

0
3. Amend section 225.7017-3--
0
a. In paragraph (b) by removing ``$183,000'' and ``(see FAR 25.103(c)'' 
and adding ``$174,000'' and ``(see FAR 25.103(c))'' in their places, 
respectively;
0
b. In paragraph (c)(1) by removing ``valued at $25,000 or more''; and
0
c. In paragraph (c)(2) by removing ``$183,000'' and adding ``$174,000'' 
in its place.

0
4. Amend section 225.7503--
0
a. By revising and republishing paragraphs (a) introductory text, (b) 
introductory text, (b)(1) through (4), and (b)(5)(i);
0
b. By revising paragraph (b)(6)(i); and
0
c. By revising and republishing paragraphs (b)(7)(i) and (b)(8)(i).
    The revisions read as follows:


225.7503  Contract clauses.

* * * * *
    (a) Use the basic or an alternate of the clause at 252.225-7044, 
Balance of Payments Program--Construction Material, in solicitations 
and contracts for construction to be performed outside the United 
States, including acquisitions of commercial products or commercial 
components, with an estimated value greater than the simplified 
acquisition threshold but less than $6,708,000.
* * * * *
    (b) Use the basic or an alternate of 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 an estimated value of 
$6,708,000 or more, including acquisitions of commercial products or 
commercial components.
    (1) Use the basic clause in solicitations and contracts with an 
estimated value of $13,296,489 or more, unless the acquisition is in 
support of operations in Afghanistan.
    (2) Use the alternate I clause in solicitations and contracts with 
an estimated value of $6,708,000 or more, but less than $13,296,489 
unless the acquisition is in support of operations in Afghanistan.
    (3) Use the alternate II clause in solicitations and contracts with 
an estimated value of $13,296,489 or more and is in support of 
operations in Afghanistan.
    (4) Use the alternate III clause in solicitations and contracts 
with an estimated value of $6,708,000 or more, but less than 
$13,296,489, and is in support of operations in Afghanistan.
    (5) * * *
    (i) The estimated value is $13,296,489 or more; and
* * * * *
    (6) * * *
    (i) The estimated value is $6,708,000 or more, but less than 
$13,296,489; and
* * * * *
    (7) * * *
    (i) The estimated value is $13,296,489 or more;
* * * * *
    (8) * * *
    (i) The estimated value is $6,708,000 or more but less than 
$13,296,489;
* * * * *

PART 252--SOLICITATION PROVISIONS AND CONTRACT CLAUSES


252.225-7017  [Amended]

0
5. Amend section 252.225-7017--
0
a. By removing the clause date ``(NOV 2023)'' and adding ``(MAR 2024)'' 
in its place;
0
b. In paragraph (c)(1) by removing ``$92,319'' and adding ``$100,000'' 
in its place;
0
c. In paragraph (c)(2) by removing ``$92,319 or more but less than 
$100,000'' and adding ``$100,000 or more but less than $102,280'' in 
its place; and
0
d. In paragraphs (c)(3) and (4) by removing ``$183,000'' and adding 
``$174,000'' in its place.

0
6. Amend section 252.225-7018--
0
a. By removing the provision date ``(NOV 2023)'' and adding ``(MAR 
2024)'' in its place; and
0
b. Revising and republishing paragraphs (b) through (d).
    The revisions read as follows:


252.225-7018  Photovoltaic Devices--Certificate.

* * * * *
    (b) Restrictions. The following restrictions apply, depending on 
the estimated aggregate value of photovoltaic devices to be utilized 
under a resultant contract:
    (1) If more than the micro-purchase threshold but less than 
$174,000, then the Government will not accept an offer specifying the 
use of other foreign photovoltaic devices in paragraph (d)(2)(ii), 
(d)(3)(ii), (d)(4)(ii), or (d)(5)(ii) of this provision, unless the 
Offeror documents to the satisfaction of the Contracting Officer that 
the price of the foreign photovoltaic device plus 50 percent is less 
than the price of a comparable domestic photovoltaic device.
    (2) If $174,000 or more, then the Government will consider only 
offers that utilize photovoltaic devices that are

[[Page 20874]]

U.S.-made, qualifying country, or designated country photovoltaic 
devices.
    (c) Country in which a designated country photovoltaic device was 
wholly manufactured or was substantially transformed. If the estimated 
value of the photovoltaic devices to be utilized under a resultant 
contract exceeds $102,280, the Offeror's certification that such 
photovoltaic device (e.g., solar panel) is a designated country 
photovoltaic device shall be consistent with country of origin 
determinations by the U.S. Customs and Border Protection with regard to 
importation of the same or similar photovoltaic devices into the United 
States. If the Offeror is uncertain as to what the country of origin 
would be determined to be by the U.S. Customs and Border Protection, 
the Offeror shall request a determination from U.S. Customs and Border 
Protection. (See https://www.cbp.gov/trade/rulings.)
    (d) Certification and identification of country of origin. [The 
Offeror shall check the block and fill in the blank for one of the 
following paragraphs, based on the estimated value and the country of 
origin of photovoltaic devices to be utilized in performance of the 
contract:]
    (1) No photovoltaic devices will be utilized in performance of the 
contract, or such photovoltaic devices have an estimated value that 
does not exceed the micro-purchase threshold.
    (2) If more than the micro-purchase threshold but less than 
$100,000--
    __(i) The Offeror certifies that each photovoltaic device to be 
utilized in performance of the contract is a domestic photovoltaic 
device;
    __(ii) The Offeror certifies that each photovoltaic device to be 
utilized in performance of the contract is a qualifying country 
photovoltaic device [Offeror to specify country of origin___]; or
    __(iii) The foreign (other than qualifying country) photovoltaic 
devices to be utilized in performance of the contract are the product 
of ___. [Offeror to specify country of origin, if known, and provide 
documentation that the cost of a domestic photovoltaic device would be 
unreasonable in comparison to the cost of the proposed foreign 
photovoltaic device, i.e., that the price of the foreign photovoltaic 
device plus 50 percent is less than the price of a comparable domestic 
photovoltaic device.]
    (3) If less than $100,000--
    __(i) The Offeror certifies that each photovoltaic device to be 
utilized in performance of the contract is a domestic photovoltaic 
device;
    __(ii) The Offeror certifies that each photovoltaic device to be 
utilized in performance of the contract is a qualifying country 
photovoltaic device [Offeror to specify country of origin___]; or
    __(iii) The foreign photovoltaic devices to be utilized in 
performance of the contract are the product of___. [Offeror to specify 
country of origin, if known, and provide documentation that the cost of 
a domestic photovoltaic device would be unreasonable in comparison to 
the cost of the proposed foreign photovoltaic device, i.e., that the 
price of the foreign photovoltaic device plus 50 percent is less than 
the price of a comparable domestic photovoltaic device.]
    (4) If $100,000 or more but less than $102,280--
    __(i) The Offeror certifies that each photovoltaic device to be 
utilized in performance of the contract is a domestic photovoltaic 
device;
    __(ii) The Offeror certifies that each photovoltaic device to be 
utilized in performance of the contract is a Free Trade Agreement 
country photovoltaic device (other than a Bahraini, Korean, Moroccan, 
Panamanian, or Peruvian photovoltaic device) or a qualifying country 
photovoltaic device [Offeror to specify country of origin___]; or
    __(iii) The offered foreign photovoltaic devices (other than those 
from countries listed in paragraph (d)(4)(ii) of this provision) are 
the product of ___. [Offeror to specify country of origin, if known, 
and provide documentation that the cost of a domestic photovoltaic 
device would be unreasonable in comparison to the cost of the proposed 
foreign photovoltaic device, i.e. that the price of the foreign 
photovoltaic device plus 50 percent is less than the price of a 
comparable domestic photovoltaic device.]
    (5) If $100,000 or more but less than $174,000--
    __(i) The Offeror certifies that each photovoltaic device to be 
utilized in performance of the contract is a domestic photovoltaic 
device;
    __(ii) The Offeror certifies that each photovoltaic device to be 
utilized in performance of the contract is a Free Trade Agreement 
country photovoltaic device (other than a Bahraini, Moroccan, 
Panamanian, or Peruvian photovoltaic device) or a qualifying country 
photovoltaic device [Offeror to specify country of origin___]; or
    __(iii) The offered foreign photovoltaic devices (other than those 
from countries listed in paragraph (d)(5)(ii) of this provision) are 
the product of ___. Offeror to specify country of origin, if known, and 
provide documentation that the cost of a domestic photovoltaic device 
would be unreasonable in comparison to the cost of the proposed foreign 
photovoltaic device, i.e., that the price of the foreign photovoltaic 
device plus 50 percent is less than the price of a comparable domestic 
photovoltaic device.]
    (6) If $174,000 or more, the Offeror certifies that each 
photovoltaic device to be used in performance of the contract is--
    __(i) A U.S.-made photovoltaic device; or
    __(ii) A designated country photovoltaic device or a qualifying 
country photovoltaic device. [Offeror to specify country of origin___.]

[FR Doc. 2024-06006 Filed 3-25-24; 8:45 am]
BILLING CODE 6001-FR-P